UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 FORM
10-Q
 
 
 (Mark
One)
 
 þ
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934
                For
      the quarterly period ended September 30,
      2009;ORo
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934
                For
      the transition period from ____________ to
  ____________.
 
 Commission
file number:   1-32158
 
 
 
 
 
 GEOGLOBAL
      RESOURCES INC.(Exact
      name of registrant as specified in its charter)Delaware
              
              33-0464753(State
      or other jurisdiction of incorporation or organization)
              
              (I.R.S.
      Employer Identification No.)Suite
      #310, 605 – 1 Street SW,   Calgary,
      Alberta,   Canada
              
              T2P
      3S9(Address
      of principal executive offices)
              
              (Zip
      Code)Registrant's
      telephone number, including area code:
              
              +1
      403-777-9250
 
 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
      þ
              NO
      o
 
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).
  YES
      o
              NO
      þ
 
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See definition of “accelerated filer and large accelerated
filer” in Rule 12b-2 of the Exchange Act.
  Large
      accelerated filer
              
              Accelerated
      filer
              þ
              Non-accelerated
      filer
              
              Smaller
      reporting company
 
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
  YES  o
              NO
      þ
 
 The
number of shares outstanding of the registrant’s common stock as of November 13,
2009 was 72,805,756
 
  
  GEOGLOBAL
RESOURCES INC.
 (a
development stage enterprise)
 QUARTERLY
REPORT ON FORM 10-Q
 
 TABLE OF CONTENTS
 
 Page
      No.PART
      I
                FINANCIAL
      INFORMATIONITEM 1.
              
              Financial
      StatementsCondensed Consolidated Balance Sheets as of September 30, 2009
      and December 31, 2008
              
              3Condensed Consolidated Statements of Operations and
      Comprehensive Loss for the three and nine months
      ended  September 30, 2009 and September 30, 2008 and for the
      period from inception on August 21, 2002 to September 30,
      2009
              
              4Consolidated Statements of Changes in Stockholders'
      Equity
              
              5Condensed Consolidated Statements of Cash Flows for the nine
      months ended September 30, 2009 and September 30, 2008 and for the period
      from inception on August 21, 2002 to September 30,
2009
              
              7Notes to the Condensed Consolidated Financial Statements as
      at September 30, 2009
              
              8ITEM 2.
              
              Management's Discussion and Analysis of Financial Condition
      and Results of Operations
              
              20ITEM 3.
              
              Quantitative and Qualitative Disclosures About Market
      Risk
              
              28ITEM 4.
              
              Controls and Procedures
              
              29PART
      II
                OTHER
      INFORMATIONITEM 1A.
              
              Risk Factors
              
              30ITEM 6.
              
              Exhibits
              
              34
 
 
 
  Page
2
 Table of Contents
  PART
I
 FINANCIAL
INFORMATION
 
 ITEM
1.                    FINANCIAL STATEMENTS
 
 GEOGLOBAL
      RESOURCES INC.
                (a
      development stage enterprise)
                CONDENSED
      CONSOLIDATED BALANCE SHEETSSeptember
      30, 2009
              
              
              December
      31, 2008(Unaudited)AssetsCurrentCash
      and cash equivalents
              
              
              18,324,561
              
              
              
              25,432,814Accounts
      receivable
              
              
              389,740
              
              
              
              229,642Prepaids
      and deposits
              
              
              171,847
              
              
              
              242,05918,886,148
              
              
              
              25,904,515Restricted
      deposits (note 4)
              
              
              6,925,000
              
              
              
              10,800,000Property
      and equipment (note 5)
              
              
              42,550,200
              
              
              
              35,160,81468,361,348
              
              
              
              71,865,329LiabilitiesCurrentAccounts
      payable
              
              
              5,706,369
              
              
              
              4,847,513Accrued
      liabilities
              
              
              1,551,787
              
              
              
              4,330,591Due
      to related companies (note 11)
              
              
              71,653
              
              
              
              32,9167,329,809
              
              
              
              9,211,020Asset
      retirement obligation (note 6)
              
              
              760,184
              
              
              
              633,5988,089,993
              
              
              
              9,844,618Stockholders'
      EquityCapital
      stockAuthorized125,000,000
      common shares with a par value of $0.001 each1,000,000
      preferred shares with a par value of $0.01 eachIssued72,805,756
      common shares (December 31, 2008 – 72,805,756)
              
              
              58,214
              
              
              
              58,214Additional
      paid-in capital
              
              
              87,772,960
              
              
              
              84,554,673Deficit
      accumulated during the development stage
              
              
              (27,559,819
              )
              
              
              (22,592,176
              )60,271,355
              
              
              
              62,020,71168,361,348
              
              
              
              71,865,329See
      Going Concern (note 2), Commitments (note 13) and Contingencies (note
      14).
                The
      accompanying notes are an integral part of these Condensed Consolidated
      Financial Statements.
 
  Page
3
 Table of Contents
  
 
 GEOGLOBAL
      RESOURCES INC.
                (a
      development stage enterprise)
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
      LOSS
                (Unaudited)Three
      months
                ended
                Sept
      30, 2009
              
              
              Three
      months
                ended
                Sept
      30, 2008
              
              
              Nine
      months
                ended
                Sept
      30, 2009
              
              
              Nine
      months
                ended
                Sept
      30, 2008
              
              
              Period
      from Inception,
                August
      21, 2002
                to
      Sept 30, 2009Revenue
      and other incomeOil
      sales
              
              
              300,394
              
              
              
              --
              
              
              
              490,442
              
              
              
              --
              
              
              
              490,442Interest
      income
              
              
              65,169
              
              
              
              230,006
              
              
              
              263,198
              
              
              
              921,857
              
              
              
              5,824,775Consulting
      fees recovered
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              66,025Equipment
      costs recovered
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              19,395Gain
      on sale of equipment
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              42,228365,563
              
              
              
              230,006
              
              
              
              753,640
              
              
              
              921,857
              
              
              
              6,442,865ExpensesOperating
              
              
              96,201
              
              
              
              --
              
              
              
              179,472
              
              
              
              --
              
              
              
              179,472General
      and administrative
              
              
              772,701
              
              
              
              583,136
              
              
              
              2,492,443
              
              
              
              1,753,113
              
              
              
              10,111,455Consulting
      fees
              
              
              170,017
              
              
              
              135,524
              
              
              
              522,513
              
              
              
              599,785
              
              
              
              6,425,229Professional
      fees
              
              
              145,955
              
              
              
              187,075
              
              
              
              594,301
              
              
              
              705,771
              
              
              
              3,474,121Accretion
      expense
              
              
              14,816
              
              
              
              8,490
              
              
              
              40,803
              
              
              
              23,358
              
              
              
              73,005Depletion
      and depreciation
              
              
              80,548
              
              
              
              12,932
              
              
              
              153,157
              
              
              
              38,496
              
              
              
              472,036Impairment
      of oil and gas
                properties
      (note 5)
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              3,765,015
              
              
              
              10,098,015Foreign
      exchange (gain) loss
              
              
              (14,370
              )
              
              
              38,829
              
              
              
              (15,406
              )
              
              
              60,591
              
              
              
              95,3511,265,868
              
              
              
              965,986
              
              
              
              3,967,283
              
              
              
              6,946,129
              
              
              
              30,928,684Net
      loss and comprehensive loss
                for
      the period
              
              
              (900,305
              )
              
              
              (735,980
              )
              
              
              (3,213,643
              )
              
              
              (6,024,272
              )
              
              
              (24,485,819
              )Warrant
      modification (note 9)
              
              
              --
              
              
              
              --
              
              
              
              (1,754,000
              )
              
              
              --
              
              
              
              (3,074,000
              )Net
      loss and comprehensive loss
                applicable
      to common stockholders
              
              
              (900,305
              )
              
              
              (735,980
              )
              
              
              (4,967,643
              )
              
              
              (6,024,272
              )
              
              
              (27,559,819
              )Basic
      and diluted net loss
                per
      share (note 12)
              
              
              (0.01
              )
              
              
              (0.01
              )
              
              
              (0.07
              )
              
              
              (0.09
              )Weighted
      average common shares
                outstanding
              
              
              67,805,756
              
              
              
              67,407,929
              
              
              
              67,805,756
              
              
              
              67,273,639
 
 The
accompanying notes are an integral part of these Condensed Consolidated
Financial Statements.
  Page
4
 Table of Contents
  
 
 GEOGLOBAL
      RESOURCES INC.
                (a
      development stage enterprise)
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                (Unaudited)Number
      of
                Shares
                #
              
              
              Capital Stock
                $
              
              
              Additional
                paid-in
      capital
                $
              
              
              Accumulated
                Deficit
                $
              
              
              Stockholders'
                Equity
                $Common
      shares issued on incorporation - Aug 21, 2002
              
              
              1,000
              
              
              
              64
              
              
              
              --
              
              
              
              --
              
              
              
              64Net
      loss and comprehensive loss for the period
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (13,813
              )
              
              
              (13,813
              )Balance
      at December 31, 2002
              
              
              1,000
              
              
              
              64
              
              
              
              --
              
              
              
              (13,813
              )
              
              
              (13,749
              )Capital
      stock of GeoGlobal at August 29, 2003
              
              
              14,656,688
              
              
              
              14,657
              
              
              
              --
              
              
              
              10,914,545
              
              
              
              10,929,202Elimination
      of GeoGlobal capital stock in recognition
                of
      reverse takeover
              
              
              (1,000
              )
              
              
              (14,657
              )
              
              
              --
              
              
              
              (10,914,545
              )
              
              
              (10,929,202
              )Common
      shares issued during 2003:On
      acquisition
              
              
              34,000,000
              
              
              
              34,000
              
              
              
              1,072,960
              
              
              
              --
              
              
              
              1,106,960Options
      exercised for cash
              
              
              396,668
              
              
              
              397
              
              
              
              101,253
              
              
              
              --
              
              
              
              101,650December
      2003 private placement financing
              
              
              6,000,000
              
              
              
              6,000
              
              
              
              5,994,000
              
              
              
              --
              
              
              
              6,000,000Share
      issuance costs on private placement
              
              
              --
              
              
              
              --
              
              
              
              (483,325
              )
              
              
              --
              
              
              
              (483,325
              )Share
      issuance costs on acquisition
              
              
              --
              
              
              
              --
              
              
              
              (66,850
              )
              
              
              --
              
              
              
              (66,850
              )Stock-based
      compensation
              
              
              --
              
              
              
              --
              
              
              
              62,913
              
              
              
              --
              
              
              
              62,913Net
      loss and comprehensive loss for the year
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (518,377
              )
              
              
              (518,377
              )Balance
      at December 31, 2003
              
              
              55,053,356
              
              
              
              40,461
              
              
              
              6,680,951
              
              
              
              (532,190
              )
              
              
              6,189,222Common
      shares issued during 2004:Options
      exercised for cash
              
              
              115,000
              
              
              
              115
              
              
              
              154,785
              
              
              
              --
              
              
              
              154,900Broker
      Warrants exercised for cash
              
              
              39,100
              
              
              
              39
              
              
              
              58,611
              
              
              
              --
              
              
              
              58,650Stock-based
      compensation
              
              
              --
              
              
              
              --
              
              
              
              350,255
              
              
              
              --
              
              
              
              350,255Net
      loss and comprehensive loss for the year
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (1,171,498
              )
              
              
              (1,171,498
              )Balance
      at December 31, 2004
              
              
              55,207,456
              
              
              
              40,615
              
              
              
              7,244,602
              
              
              
              (1,703,688
              )
              
              
              5,581,529Common
      shares issued during 2005:Options
      exercised for cash
              
              
              739,000
              
              
              
              739
              
              
              
              1,004,647
              
              
              
              --
              
              
              
              1,005,3862003
      Purchase Warrants exercised for cash
              
              
              2,214,500
              
              
              
              2,214
              
              
              
              5,534,036
              
              
              
              --
              
              
              
              5,536,250Broker
      Warrants exercised for cash
              
              
              540,900
              
              
              
              541
              
              
              
              810,809
              
              
              
              --
              
              
              
              811,350September
      2005 private placement financing
              
              
              4,252,400
              
              
              
              4,252
              
              
              
              27,636,348
              
              
              
              --
              
              
              
              27,640,600Share
      issuance costs on private placement
              
              
              --
              
              
              
              --
              
              
              
              (1,541,686
              )
              
              
              --
              
              
              
              (1,541,686
              )Stock-based
      compensation
              
              
              --
              
              
              
              --
              
              
              
              4,354,256
              
              
              
              --
              
              
              
              4,354,256Net
      loss and comprehensive loss for the year
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (3,162,660
              )
              
              
              (3,162,660
              )Balance
      at December 31, 2005
              
              
              62,954,256
              
              
              
              48,361
              
              
              
              45,043,012
              
              
              
              (4,866,348
              )
              
              
              40,225,025Common
      shares issued during 2006:Options
      exercised for cash
              
              
              2,284,000
              
              
              
              2,285
              
              
              
              2,706,895
              
              
              
              --
              
              
              
              2,709,180Options
      exercised for notes receivable
              
              
              184,500
              
              
              
              185
              
              
              
              249,525
              
              
              
              --
              
              
              
              249,7102003
      Purchase Warrants exercised for cash
              
              
              785,500
              
              
              
              786
              
              
              
              1,962,964
              
              
              
              --
              
              
              
              1,963,750Share
      issuance costs
              
              
              --
              
              
              
              --
              
              
              
              (74,010
              )
              
              
              --
              
              
              
              (74,010
              )Stock-based
      compensation
              
              
              --
              
              
              
              --
              
              
              
              3,012,514
              
              
              
              --
              
              
              
              3,012,514Net
      loss and comprehensive loss for the year
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (1,548,803
              )
              
              
              (1,548,803
              )Balance
      at December 31, 2006
              
              
              66,208,256
              
              
              
              51,617
              
              
              
              52,900,900
              
              
              
              (6,415,151
              )
              
              
              46,537,366Common
      shares issued during 2007:Options
      exercised for cash
              
              
              317,500
              
              
              
              317
              
              
              
              320,358
              
              
              
              --
              
              
              
              320,675June
      2007 private placement financing
              
              
              5,680,000
              
              
              
              5,680
              
              
              
              28,394,320
              
              
              
              --
              
              
              
              28,400,000Share
      issuance costs on private placement
              
              
              --
              
              
              
              --
              
              
              
              (2,612,973
              )
              
              
              --
              
              
              
              (2,612,973
              )2007
      Compensation Options
              
              
              --
              
              
              
              --
              
              
              
              705,456
              
              
              
              --
              
              
              
              705,4562005
      Stock Purchase Warrant modification
              
              
              --
              
              
              
              --
              
              
              
              1,320,000
              
              
              
              (1,320,000
              )
              
              
              --2005
      Compensation Option & Warrant modification
              
              
              --
              
              
              
              --
              
              
              
              240,000
              
              
              
              --
              
              
              
              240,000Stock-based
      compensation
              
              
              --
              
              
              
              --
              
              
              
              1,522,996
              
              
              
              --
              
              
              
              1,522,996Net
      loss and comprehensive loss for the year
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (1,543,110
              )
              
              
              (1,543,110
              )Balance
      as at December 31, 2007
              
              
              72,205,756
              
              
              
              57,614
              
              
              
              82,791,057
              
              
              
              (9,278,261
              )
              
              
              73,570,410
 
  Page
5
 Table of Contents
  
 GEOGLOBAL
      RESOURCES INC.
                (a
      development stage enterprise)
                CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS' EQUITY (continued)
                (Unaudited)Number
      of
                Shares
                #
              
              
              Capital Stock
                $
              
              
              Additional
                paid-in
      capital
                $
              
              
              Accumulated
                Deficit
                $
              
              
              Stockholders'
                Equity
                $Balance
      from December 31, 2007
              
              
              72,205,756
              
              
              
              57,614
              
              
              
              82,791,057
              
              
              
              (9,278,261
              )
              
              
              73,570,410Common
      shares issued during 2008:Options
      exercised for cash
              
              
              600,000
              
              
              
              600
              
              
              
              659,400
              
              
              
              --
              
              
              
              660,000Stock-based
      compensation
              
              
              --
              
              
              
              --
              
              
              
              1,104,216
              
              
              
              --
              
              
              
              1,104,216Net
      loss and comprehensive loss for the year
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (13,313,915
              )
              
              
              (13,313,915
              )Balance
      as at December 31, 2008
              
              
              72,805,756
              
              
              
              58,214
              
              
              
              84,554,673
              
              
              
              (22,592,176
              )
              
              
              62,020,711Transactions
      during the period:Compensation
      option and warrant
                modification
      (note 9)
              
              
              --
              
              
              
              --
              
              
              
              264,000
              
              
              
              --
              
              
              
              264,000Stock
      purchase warrant modification (note 9)
              
              
              --
              
              
              
              --
              
              
              
              1,754,000
              
              
              
              (1,754,000
              )
              
              
              --Stock-based
      compensation (note 10)
              
              
              --
              
              
              
              --
              
              
              
              1,200,287
              
              
              
              --
              
              
              
              1,200,287Net
      loss and comprehensive loss for the period
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (3,213,643
              )
              
              
              (3,213,643
              )Balance
      as at September 30, 2009
              
              
              72,805,756
              
              
              
              58,214
              
              
              
              87,772,960
              
              
              
              (27,559,819
              )
              
              
              60,271,355The
      accompanying notes are an integral part of these Condensed Consolidated
      Financial Statements.
 
  Page
6
 Table of Contents
  
 GEOGLOBAL
      RESOURCES INC.
                (a
      development stage enterprise)
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                (Unaudited)Nine
      months
                ended
                Sept
      30, 2009
              
              
              Nine
      months
                ended
                Sept
      30, 2008
              
              
              Period
      from Inception,
                August
      21, 2002
                to
      Sept 30, 2009Cash
      flows provided by (used in) operating activities:Net
      loss
              
              
              (3,213,643
              )
              
              
              (6,024,272
              )
              
              
              (24,485,819
              )Adjustments
      to reconcile net loss to net cash used
                in
      operating activities:Accretion
      expense
              
              
              40,803
              
              
              
              23,358
              
              
              
              73,005Asset
      impairment
              
              
              --
              
              
              
              3,765,015
              
              
              
              10,098,015Depletion
      and depreciation
              
              
              153,157
              
              
              
              38,496
              
              
              
              472,036Gain
      on sale of equipment
              
              
              --
              
              
              
              --
              
              
              
              (42,228
              )Stock-based
      compensation (note 10)
              
              
              730,576
              
              
              
              425,864
              
              
              
              6,642,478Compensation
      option & warrant  modification (note 9)
              
              
              264,000
              
              
              
              --
              
              
              
              504,000Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              (160,098
              )
              
              
              12,972
              
              
              
              (314,740
              )Prepaids
      and deposits
              
              
              70,212
              
              
              
              (29,221
              )
              
              
              (140,279
              )Accounts
      payable
              
              
              78,158
              
              
              
              (78,219
              )
              
              
              126,399Accrued
      liabilities
              
              
              (80,057
              )
              
              
              (384,700
              )
              
              
              281,601Due
      to related companies
              
              
              38,737
              
              
              
              (57,515
              )
              
              
              29,897(2,078,155
              )
              
              
              (2,308,222
              )
              
              
              (6,755,635
              )Cash
      flows provided by (used in) investing activities:Oil
      and natural gas property additions
              
              
              (6,969,946
              )
              
              
              (11,637,262
              )
              
              
              (44,800,281
              )Property
      and equipment additions
              
              
              (17,103
              )
              
              
              (15,028
              )
              
              
              (1,538,404
              )Proceeds
      on sale of equipment
              
              
              --
              
              
              
              --
              
              
              
              82,800Cash
      acquired on acquisition
              
              
              --
              
              
              
              --
              
              
              
              3,034,666Restricted
      deposits
              
              
              3,875,000
              
              
              
              (7,482,058
              )
              
              
              (8,095,000
              )Changes
      in investing assets and liabilities:Cash
      call receivable
              
              
              --
              
              
              
              --
              
              
              
              --Prepaids
      and deposits
              
              
              --
              
              
              
              (2,504
              )
              
              
              (31,568
              )Accounts
      payable
              
              
              780,698
              
              
              
              433,941
              
              
              
              5,530,962Accrued
      liabilities
              
              
              (2,698,747
              )
              
              
              765,171
              
              
              
              1,270,186(5,030,098
              )
              
              
              (17,937,740
              )
              
              
              (44,546,639
              )Cash
      flows provided by (used in) financing activities:Proceeds
      from issuance of common shares
              
              
              --
              
              
              
              662,000
              
              
              
              75,612,165Share
      issuance costs
              
              
              --
              
              
              
              --
              
              
              
              (4,073,388
              )Changes
      in financing liabilities:Note
      payable
              
              
              --
              
              
              
              --
              
              
              
              (2,000,000
              )Accounts
      payable
              
              
              --
              
              
              
              --
              
              
              
              61,078Due
      to related companies
              
              
              --
              
              
              
              --
              
              
              
              26,980--
              
              
              
              662,000
              
              
              
              69,626,835Net
      increase (decrease) in cash and cash equivalents
              
              
              (7,108,253
              )
              
              
              (19,583,962
              )
              
              
              18,324,561Cash
      and cash equivalents, beginning of the period
              
              
              25,432,814
              
              
              
              48,134,858
              
              
              
              --Cash
      and cash equivalents, end of the period
              
              
              18,324,561
              
              
              
              28,550,896
              
              
              
              18,324,561Cash
      and cash equivalentsCurrent
      bank accounts
              
              
              326,285
              
              
              
              511,428
              
              
              
              326,285Short
      term deposits
              
              
              17,998,276
              
              
              
              28,039,468
              
              
              
              17,998,27618,324,561
              
              
              
              28,550,896
              
              
              
              18,324,561
  The
accompanying notes are an integral part of these Condensed Consolidated
Financial Statements.
  Page
7
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes to the Condensed Consolidated Financial
Statements
 (Unaudited)
 September
30, 2009
  1.         Organization
and Nature of Operations
  The
Company is engaged primarily in the pursuit of petroleum and natural gas through
exploration and development in India.  Since inception, the efforts of
GeoGlobal have been devoted to the pursuit of Production Sharing Contracts with
the Gujarat State Petroleum Corporation, Oil India Limited among others, and the
Government of India and the development thereof.  The Company is a
Delaware corporation whose common stock is listed and traded on the NYSE/Amex
Exchange under the symbol GGR.
  On August
29, 2003 (the inception date), the Company commenced oil and gas exploration
activities.  As of September 30, 2009, the Company has not earned
significant revenue from its oil and gas operations.  Accordingly, the
Company’s activities are considered to be those of a “Development Stage
Enterprise”.  Among the disclosures required, are that the Company’s
financial statements be identified as those of a development stage
company.  In addition, the statements of operations and comprehensive
loss, stockholders equity (deficit) and cash flows are required to disclose all
activity since the Company’s date of inception.  The Company will
continue to prepare its financial statements and related disclosures as those of
a development stage enterprise until such time that the Company’s oil and gas
properties have generated significant revenues.  The Company has
evaluated subsequent events to November 16, 2009 which is the date these
financial statements were issued.
 
 2.         Going
Concern
  To date,
the Company has not earned significant revenue from its operations and is
considered to be in the development stage. The Company incurs negative cash
flows from operations, and at this time all exploration activities and overhead
expenses are financed by way of equity issuance and interest
income.  The recoverability of the costs incurred to date is uncertain
and dependent upon achieving commercial production or sale.
  The
Company's ability to continue as a going concern is dependent upon obtaining the
necessary financing to complete further exploration and development activities
and generate profitable operations from its oil and natural gas interests in the
future.  The Company’s current operations are dependent upon the
adequacy of its current assets to meet its current expenditure requirements and
the accuracy of management’s estimates of those requirements.  Should
those estimates be materially incorrect, the Company’s liability to continue as
a going concern may be impaired.  The Company's financial statements
as at and for the period ended September 30, 2009 have been prepared on a going
concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business. The Company
during the nine months ended September 30, 2009 incurred a net loss of
approximately $3.0 million, used approximately $2.1 million of cash flow in its
operating activities, used approximately $5.1 million in its investing
activities and had an accumulated deficit of approximately $27.3
million.  These matters raise doubt about the Company’s ability to
continue as a going concern.
  The
Company expects to incur expenditures to further its exploration programs and
the Company's existing cash balance and any cash flow from operating activities
may not be sufficient to satisfy its current obligations and meet its
exploration commitments of approximately $24.4 million over the next four years
of which, approximately $10.0 million is attributable to the twelve months
ending September 30, 2010.  The Company is considering various
alternatives to remedy any future shortfall in capital.  The Company
may deem it necessary to raise capital through equity markets, debt markets or
other financing arrangements, which could include the sale of oil and gas
interests, or participation arrangements in oil and gas interests, to raise
capital for continued exploration and development expenditures.  There
can be no assurance this capital will be available and if it is not, the Company
may be forced to substantially curtail or cease exploration block acquisition
and/or exploration expenditures.
  As at
September 30, 2009, the Company has working capital of approximately $11.8
million which is available for the Company's future operations.  In
addition, the Company has $6.9 million in restricted deposits pledged as
security against the minimum work programs which will be released upon
completion of the minimum work programs.
  Should
the going concern assumption not be appropriate and the Company is not able to
realize its assets and settle its liabilities, commitments (as described in note
13) and contingencies (as described in note 14) in the normal course of
operations, these condensed consolidated financial statements would require
adjustments to the amounts and classifications of assets and liabilities, and
these adjustments could be significant.
  These
condensed consolidated financial statements do not reflect the adjustments or
reclassifications of assets and liabilities that would be necessary if the
Company is unable to continue as a going concern.
 
  Page
8
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  3.         Significant
Accounting Policies
  Basis
of presentation
 The
accompanying condensed consolidated financial statements of the Company have not
been audited and are presented in United States dollars unless otherwise noted
and have been prepared by management in accordance with accounting principles
generally accepted in the United States of America.
  In the
opinion of management, these condensed consolidated financial statements reflect
all of the normal and recurring adjustments necessary to present fairly the
financial position at September 30, 2009, the results of operations for the
three and nine months ended and the cash flows for the nine months ended
September 30, 2009 and 2008 and for the period from inception of August 21, 2002
to September 30, 2009.  In preparing these accompanying condensed
consolidated financial statements, management has made certain estimates and
assumptions that affect reported amounts in the financial statements and related
disclosures.  The Company bases its estimates on various assumptions that
are believed to be reasonable under the circumstances.  Accordingly, actual
results may differ significantly from these estimates under different
assumptions or circumstances.
  Certain
information, accounting policies, 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 in this
Form 10-Q pursuant to certain rules and regulations of the Securities and
Exchange Commission. These condensed consolidated financial statements should be
read in conjunction with the audited consolidated financial statements and notes
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2008.  The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full
year.
  Use
of estimates
 The
preparation of the condensed consolidated financial statements in accordance
with accounting principles generally accepted in the United States 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 may differ from
these estimated amounts.
  Significant
estimates with regard to the condensed consolidated financial statements include
going concern assumption, the estimated carrying value of unproved properties,
the estimated cost and timing related to asset retirement obligations,
stock-based compensation, contingent liabilities and the realizability of
deferred tax assets.
  Recent
Accounting Pronouncements
 Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
Subtopic 810-10-65, Transition
Related to FASB Statement No. 160, Noncontrolling Interests in Consolidated
Financial Statements—an amendment of ARB No. 51 (formerly Statement of
Financial Accounting Standards (“SFAS”) No. 160, Noncontrolling Interests in
Consolidated Financial Statements) establishes accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in
a subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements.  In
addition, ASC Subtopic 810-10-65 requires expanded disclosures in the
consolidated financial statements that clearly identify and distinguish between
the interests of the parent’s owners and the interests of the noncontrolling
owners of a subsidiary.  This subtopic is effective for the fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008.  We adopted the provisions of ASC Subtopic
810-10-65 on January 1, 2009, with no material impact on our consolidated
financial statements.
  ASC Topic
805, Business
Combinations (formerly SFAS No. 141 (Revised 2007), Business Combinations,and
FASB Staff Position (“FSP”) SFAS 141(R)-1, Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from
Contingencies), provides that all business combinations are required to
be accounted for at fair value under the acquisition method of accounting, but
changes the method of applying the acquisition method from previous principles
in a number of ways.  Acquisition costs are no longer considered part
of the fair value of an acquisition and will generally be expensed as incurred,
noncontrolling interests are valued at fair value at the acquisition date,
in-process research and development is recorded at fair value as an
indefinite-lived intangible asset at the acquisition date, restructuring costs
associated with a business combination are generally expensed subsequent to the
acquisition date, and changes in deferred tax asset valuation allowances and
income tax uncertainties after the acquisition date generally will affect income
tax expense. Contingent assets acquired and liabilities assumed in a
business combination are to be recognized at fair value if fair value can be
reasonably estimated during the measurement period. We adopted the changes
to the provisions of ASC Topic 805 on January 1, 2009, with no material impact
on our consolidated financial statements.
   Page
9
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  3.         Significant
Accounting Policies (continued)
  ASC
Subtopic 820-10-65, Transition
Related to FSP FAS 157-4, Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly,provides additional guidance for
estimating fair value in accordance with ASC 820, Fair Value Measurements and
Disclosures, when the volume and level of activity for the asset or
liability have significantly decreased.  This subtopic re-emphasizes
that regardless of market conditions the fair value measurement is an exit price
concept as defined in ASC 820.  This subtopic clarifies and includes
additional factors to consider in determining whether there has been a
significant decrease in market activity for an asset or liability and provides
additional clarification on estimating fair value when the market activity for
an asset or liability has declined significantly.  The scope of this
subtopic does not include assets and liabilities measured under quoted prices in
active markets.  ASC Subtopic 820-10-65 is applied prospectively to
all fair value measurements where appropriate and will be effective for interim
and annual periods ending after June 15, 2009.  We adopted the
provisions of ASC Subtopic 820-10-65 effective April 1, 2009, with no material
impact on our consolidated financial statements.
  ASC Topic
825-10-65, Transition Related
to FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial
Instrumentsamends ASC Topic 825, Financial Instruments, to
require publicly-traded companies, as defined in ASC Topic 270, Interim
Reporting, to provide disclosures on the fair value of financial instruments in
interim financial statements.  ASC Topic 825-10-65 is effective for
interim periods ending after June 15, 2009.  We adopted the new
disclosure requirements in our second quarter 2009 financial statements with no
material impact on our consolidated financial statements.
  ASC
Subtopic 320-10-65, Transition
Related to FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments (formerly FSP SFAS 115-2 and SFAS 124-2,
Recognition and Presentation
of Other-Than-Temporary Impairments issued in April 2009), provides
transitional guidance for debt securities to make previous guidance more
operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in the financial
statements. Existing recognition and measurement guidance related to
other-than-temporary impairments of equity securities was not amended by this
subtopic.  This subtopic is effective for interim and annual periods ending
after June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009. We adopted the provisions of this subtopic effective April 1,
2009, with no material impact on our consolidated financial
statements.
  ASC Topic
855, Subsequent Events
(formerly SFAS No. 165, Subsequent Events issued May
2009) establishes (i) the period after the balance sheet date during which
management shall evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements; (ii) the circumstances
under which an entity shall recognize events or transactions occurring after the
balance sheet date in its financial statements; and (iii) the disclosures that
an entity shall make about events or transactions that occurred after the
balance sheet date. This topic is effective for interim or annual financial
periods ending after June 15, 2009, and shall be applied prospectively.  We
adopted the provisions of this topic effective April 1, 2009, with no material
impact on our consolidated financial statements.
  ASC
Topic 860, Transfers and
Servicing (formerly SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities-a replacement
of FASB Statement No. 125,as amended by SFAS No. 166, Accounting for Transfers of
Financial Assets – An Amendment of FASB Statement No. 140,issued in June
2009) amends prior principles to require more disclosure about transfers of
financial assets and the continuing exposure, retained by the transferor, to the
risks related to transferred financial assets, including securitization
transactions. It eliminates the concept of a “qualifying special-purpose
entity,” changes the requirements for derecognizing financial assets, and
requires additional disclosures.  It also enhances information
reported to users of financial statements by providing greater transparency
about transfers of financial assets and an entity’s continuing involvement in
transferred financial assets.  This topic will be effective at the
start of a reporting entity’s first fiscal year beginning after November 15,
2009.  Early application is not permitted.  We will adopt
the provisions of this topic effective January 1, 2010 and we do not expect the
adoption to have a material impact on our consolidated financial
statements.
  ASC
Subtopic 810-10-05, Consolidation – Variable Interest
Entities(formerly FASB Interpretation No. 46 (Revised December 2003),
Consolidation of Variable
Interest Entities,as amended by SFAS No.
167, Amendments to FASB
Interpretation No. 46(R) in June 2009), defines how a reporting entity
determines when an entity that is insufficiently capitalized or is not
controlled through voting (or similar rights) should be
consolidated.  This topic requires a reporting entity to provide
additional disclosures about its involvement with variable interest entities and
any significant changes in risk exposure due to that involvement.  A
reporting entity will be required to disclose how its involvement with a
variable interest entity affects the reporting entity’s financial
statements.  This statement will be effective at the start of a
reporting entity’s first fiscal year beginning after November 15,
2009.  Early application is not permitted.  We will adopt
the provisions of this subtopic prospectively effective January 1, 2010 and we
do not expect the adoption to have a material impact on our consolidated
financial statements.
   Page
10
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  3.           Significant
Accounting Policies (continued)
  ASC Topic
105, Generally Accepted
Accounting Principles (formerly SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles—a
replacement of FASB Statement No. 162), issued in June 2009, became the
source of authoritative U.S. generally accepted accounting principles (“GAAP”)
recognized by the FASB to be applied by nongovernmental
entities.  Rules and interpretive releases of the SEC under authority
of federal securities laws are also sources of authoritative GAAP for SEC
registrants.  On the effective date of this statement, the
codification superseded all then-existing non-SEC accounting and reporting
standards.  All other non-grandfathered non-SEC accounting literature
not included in the codification became non-authoritative.  This
statement is effective for financial statements issued for interim and annual
periods ending after September 15, 2009.  We adopted the provisions of
this topic in the third quarter of 2009, with no change to our consolidated
financial statements other than changes in reference to various authoritative
accounting pronouncements in our consolidated financial statements.
  In August
2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, Fair Value Measurements and
Disclosures – Measuring Liabilities and Fair Value, amending Subtopic
820-10, Fair Value
Measurement, to provide guidance on the manner in which the fair value of
liabilities should be determined.  This update provides clarification
that, in circumstances in which a quoted price in an active market for the
identical liability is not available, a reporting entity is required to measure
fair value using one or more of defined valuation techniques.  The
amendments in this update also clarify that when estimating the fair value of a
liability, a reporting entity is not required to include a separate input or
adjustment to other inputs relating to the existence of a restriction that
prevents the transfer of the liability.  We will adopt ASU No. 2009-05
in the fourth quarter of 2009, and we do not expect it will have a material
impact on our consolidated financial statements.
 
 4.         Restricted
Deposits
  The
Company’s PSCs relating to exploration blocks onshore and offshore India contain
provisions whereby the joint venture participants must provide the Government of
India a bank guarantee in the amount of 35% of the participant's share of the
minimum work program for a particular phase, to be undertaken annually during
the budget period April 1 to March 31.  These bank guarantees have
been provided to the Government of India and serve as guarantees for the
performance of such minimum work programs and are in the form of irrevocable
letters of credit which are secured by term deposits of the Company in the same
amount.
  The term
deposits securing these bank guarantees are as follows:
  September
      30, 2009
                $
              
              
              December
      31, 2008
                $Exploration
      Blocks - IndiaMehsana
              
              
              160,000
              
              
              
              160,000Sanand/Miroli
              
              
              1,300,000
              
              
              
              1,300,000Ankleshwar
              
              
              1,490,000
              
              
              
              1,490,000Tarapur
              
              
              940,000
              
              
              
              940,000DS
      03
              
              
              450,000
              
              
              
              450,000DS
      04
              
              
              215,000
              
              
              
              215,000KG
      Onshore
              
              
              1,475,000
              
              
              
              3,695,000RJ
      20
              
              
              490,000
              
              
              
              1,475,000RJ
      21
              
              
              405,000
              
              
              
              1,075,0006,925,000
              
              
              
              10,800,000
 
  Page
11
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  5.         Property
and Equipment
  The
amounts capitalized as oil and natural gas properties were incurred for the
purchase, exploration and ongoing development of various properties in
India.
  September
      30, 2009
                $
              
              
              December
      31, 2008
                $Oil
      and natural gas properties (using the full-cost method)Proved
      properties
              
              
              5,268,846
              
              
              
              --Unproved
      properties
              
              
              46,477,369
              
              
              
              44,182,707Total
      oil and natural gas properties
              
              
              51,746,215
              
              
              
              44,182,707Building
              
              
              889,609
              
              
              
              889,609Computer,
      office and other equipment
              
              
              565,996
              
              
              
              548,893Total
      property and equipment
              
              
              53,201,820
              
              
              
              45,621,209Impairment
      of oil and natural gas properties
              
              
              (10,098,015
              )
              
              
              (10,098,015
              )Accumulated
      depletion and depreciation
              
              
              (553,605
              )
              
              
              (362,380
              )Total
      property and equipment, net
              
              
              42,550,200
              
              
              
              35,160,814
  The
Company’s oil and natural gas properties consist of contract interests in 10
exploration blocks held in India.
  The
Company has capitalized $807,584 (September 30, 2008 - $866,478) of general and
administrative expenses directly related to exploration
activities.  These amounts include $469,711 (September 30, 2008 -
$373,291) of capitalized stock-based compensation expense and capitalized
support equipment depreciation of $38,067 (September 30, 2008 -
$nil).
  Impairment
of Oil and Gas Properties
 The
Company performed a ceiling test calculation at September 30, 2009, to assess
the ceiling limitation of its proved oil properties.  The price of
crude oil was $62.95 and is based upon the Nigeria Bonny Light bench
mark.  At September 30, 2009, the Company’s net capitalized costs of
proved oil and natural gas properties did not exceed the ceiling
limitation.
  For the
nine months ended September 30, 2009, the Company charged $nil (September 30,
2008 - $3,765,015) to the statement of operations for impairment
charges.
 
 6.         Asset
Retirement Obligation
  Asset
retirement obligations are recorded for an obligation where the Company will be
required to retire, dismantle, abandon and restore tangible long-lived
assets.
  The
following table summarizes the changes in the asset retirement
obligation:
  September
      30, 2009
                $
              
              
              December
      31, 2008
                $Asset
      retirement obligation at beginning of period
              
              
              633,598
              
              
              
              318,922Liabilities
      incurred
              
              
              85,783
              
              
              
              282,474Accretion
      expense
              
              
              40,803
              
              
              
              32,202Asset
      retirement obligation at end of period
              
              
              760,184
              
              
              
              633,598
 
 7.         Fair
Value Measurements
  Periodically,
the Company utilizes cash equivalents held in guaranteed investment
certificates, terms deposits and bearer deposits notes to invest a portion of
its cash on hand.  These securities are carried at fair value on the
consolidated balance sheets, with the changes in the fair value included in the
consolidated statements of operations and comprehensive loss for the period in
which the change occurs.
  Fair
value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date (exit price).  A fair value hierarchy that
prioritizes the inputs used to measure fair value gives the highest priority to
unadjusted quoted prices in active markets for identical assets or liabilities
(level 1 measurement) and the lowest priority to unobservable inputs (level 3
measurement).
   Page
12
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  7.         Fair
Value Measurements (continued)
  The three
levels of the fair value hierarchy are defined as follows:
  Level 1 –
Quoted prices are available in active markets for identical assets or
liabilities as of the reporting date.  Active markets are those in
which transactions for the asset or liability occur in sufficient frequency and
volume to provide pricing information on an ongoing basis.
  Level 2 –
Pricing inputs are other than quoted prices in active markets included in level
1, which are either directly or indirectly observable as of the reported date
and includes those financial instruments that are valued using models or other
valuation methodologies.
  Level 3 –
Pricing inputs include significant inputs that are generally less observable
from objective sources.  These inputs may be used with internally
developed methodologies that result in management’s best estimate of fair
value.
  As at
September 30, 2009, the Company’s financial assets that are re-measured at fair
value on a recurring basis consisted of financial assets of $17,998,276 that are
classified as cash and cash equivalents and $6,925,000 that are classified as
restricted deposits in the Consolidated Balance Sheets.  These are
classified within Level 1 of the fair value hierarchy because they are valued
using quoted market prices for identical assets.
 
 8.         Escrowed
common stock
  In August
2003, the Company completed a transaction with GeoGlobal Resources (India) Inc.,
a corporation then wholly-owned by Mr. Jean Paul Roy, whereby the Company
acquired all of the outstanding capital stock of GeoGlobal Resources (India)
Inc. in exchange for 34.0 million shares of its Common Stock and a US$2.0
million promissory note which has been paid in full.  Of the 34.0 million
shares, 14.5 million shares were delivered to Mr. Roy at the closing of the
transaction and an aggregate of 19.5 million shares were held in
escrow.
  In August
2004, 14.5 million shares were released to Mr. Roy from escrow upon the
commencement of a drilling program on the KG Offshore Block.  The final 5.0
million shares remain in escrow and will be released only if a commercial
discovery as defined under the PSC is declared on the KG Offshore
Block.  Mr. Roy requested the release from escrow of the remaining 5.0
million shares and the Company’s Board of Directors is currently reviewing that
request.
 
 9.         Warrants
  From time
to time, the Company has issued compensation options, compensation warrants and
or warrants (collectively the “warrants”) in connection with financing
transactions.  The fair value of any warrants issued is recorded as a
reduction to share capital related to the financing transaction with a
corresponding increase recorded to Warrants.  The fair value of the
Warrants is determined using the Black–Scholes option pricing model and
management’s assumptions as disclosed.
  Activity
with respect to all warrants is presented below for the periods as
noted:
  September
      30, 2009
              
              
              December
      31, 2008Warrants
                #
              
              
              Weighted
      Average Exercise Price
                $
              
              
              Warrants
                #
              
              
              Weighted
      Average Exercise Price
                $Outstanding
      warrants at the beginning of period
              
              
              5,599,716
              
              
              
              7.91
              
              
              
              5,599,716
              
              
              
              7.91Warrants
      granted
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --Warrants
      exercised
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --Warrants
      outstanding at the end of period
              
              
              5,599,716
              
              
              
              7.91
              
              
              
              5,599,716
              
              
              
              7.91Exercisable
      at end of period
              
              
              5,599,716
              
              
              
              7.91
              
              
              
              5,599,716
              
              
              
              7.91
 
   Page
13
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  9.         Warrants
(continued)
  The
weighted average remaining life by exercise price as of September 30, 2009 is
summarized below:
  Warrants
              
              Outstanding
      and
                Exercisable
                #
              
              
              Weighted
      Average Remaining Life
                (Months)
              
              
              Weighted
      Average Exercise Price
                $Compensation
      Options
              
              
              535,944
              
              
              
              23.7
              
              
              
              5.55Compensation
      Warrants
              
              
              97,572
              
              
              
              23.7
              
              
              
              9.00Stock
      Purchase Warrants
              
              
              4,966,200
              
              
              
              23.7
              
              
              
              8.145,599,716
              
              
              
              23.7
              
              
              
              7.91
  The
warrants have certain terms and conditions as follows:
  On May
26, 2009, the Board of Directors approved a two year extension for all
Compensation Options, Compensation Warrants and Stock Purchase Warrants from
June 20, 2009 to June 20, 2011;
  Compensation
options enable the holder to purchase one fully-paid non-assessable common share
of the Company at a specified price up to June 20, 2011.  Certain
compensation options consist of one compensation option and one half of one
common share purchase warrant referred to as compensation warrants;
  Compensation
warrants enable the holder to purchase one fully-paid non-assessable common
share of the Company at a specified price up to June 20, 2011; and
  Warrants
enable the holder to purchase one fully-paid non-assessable common share of the
Company at a specified price up to June 20, 2011.
  The
Company has recorded the incremental difference in the fair value of these
instruments immediately prior to and after the modification.  The fair
value of the instruments was determined using a Black-Scholes option-pricing
model using the following assumptions as at the date of extension:
  June
      20, 2009Risk-free
      interest rate
              1.25%Expected
      life
              2.0
      yearsExpected
      volatility
              127.7%Expected
      dividend yield
              0%
  The
resulting incremental fair value of $1,754,000 associated with the Stock
Purchase Warrants held by shareholders was recorded as a charge to the deficit,
with a corresponding entry to additional paid-in capital.
  The
resulting incremental fair value of the Compensation Options and the
Compensation Option Warrants of $264,000 were recorded as charge to general and
administrative expense, with a corresponding entry to additional paid-in
capital.
 
 10.         Stock
Options
  The
Company's 2008 Stock Incentive Plan (2008 Plan)
 On July
29, 2008 at the Annual Meeting of Stockholders, the shareholders of the Company
approved the adoption of the 2008 Plan.  Under the terms of the 2008
Plan, 12,000,000 common shares have been reserved for issuance on exercise of
options granted under the 2008 Plan.  As at September 30, 2009, the
Company had 10,345,000 common shares remaining for the grant of options under
the 2008 Plan.  The Board of Directors of the Company may amend or
modify the 2008 Plan at any time, subject to any required stockholder
approval.  The 2008 Plan will terminate on the earliest of: (i) May
30, 2018; (ii) the date on which all shares available for issuance under the
2008 Plan have been issued as fully-vested shares; or, (iii) the termination of
all outstanding options in connection with certain changes in control or
ownership of the Company.
  Stock-based
Compensation
 The
Company recognizes compensation cost for stock-based compensation arrangements
with employees, non-employee consultants and non-employee directors based on
their grant date fair value using the Black-Scholes option-pricing model, such
cost to be expensed over the compensations’ respective vesting
periods.  For awards with graded vesting, in which portions of the
award vest in different periods, the Company recognizes compensation costs over
the vesting periods for each separate vested tranche.
   Page
14
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  10.         Stock
Options (continued)
  The
following table summarizes stock-based compensation for employees, non-employee
consultants and non-employee directors:
 Three
      months
                ended
                Sept
      30, 2009
              
              
              Three
      months
                ended
                Sept
      30, 2008
              
              
              Nine
      months
                ended
                Sept
      30, 2009
              
              
              Nine
      months
                ended
                Sept
      30, 2008
              
              
              Period
      from
                Inception
                August
      21, 2002
                to
      Sept 30, 2009$
              
              
              
              $
              
              
              
              $
              
              
              
              $
              
              
              
              $Stock-based
      compensationConsolidated
      Statements of OperationsGeneral
      and administrative
              
              
              113,969
              
              
              
              118,297
              
              
              
              693,139
              
              
              
              484,785
              
              
              
              3,345,989Consulting
      fees
              
              
              11,284
              
              
              
              (5,095
              )
              
              
              37,437
              
              
              
              (58,921
              )
              
              
              3,296,489125,253
              
              
              
              113,202
              
              
              
              730,576
              
              
              
              425,864
              
              
              
              6,642,478Consolidated
      Balance SheetsOil
      and gas interests
              
              
              90,968
              
              
              
              69,580
              
              
              
              469,711
              
              
              
              373,291
              
              
              
              4,964,959216,221
              
              
              
              182,782
              
              
              
              1,200,287
              
              
              
              799,155
              
              
              
              11,607,437
  At
September 30, 2009, the total compensation cost related to non-vested awards not
yet recognized was $523,586 (December 31, 2008 – $1,719,349) which will be
recognized over a weighted-average period of 1.5 years.  During the
nine months ended September 30, 2009, no options were
exercised.  During the nine months ended September 30, 2008, 600,000
options were exercised for total gross proceeds of $662,000.
  No income
tax benefit has been recognized relating to stock-based compensation expense and
no tax benefits have been realized from the exercise of stock
options.
  The fair
value of each option granted was estimated on the date of grant using the
Black-Scholes option-pricing model.  Weighted average assumptions used
in the valuation are disclosed in the following table:
  Three
      months
                ended
                Sept
      30, 2009
              
              
              Three
      months
                ended
                Sept
      30, 2008
              
              
              Nine
      months ended
                Sept
      30, 2009
              
              
              Nine
      months ended
                Sept
      30, 2008Fair
      value of stock options granted (per option)
              
              $
              0.69
              
              
              $
              3.08
              
              
              $
              0.49
              
              
              $
              3.08Risk-free
      interest rate
              
              
              2.0%
              
              
              
              4.1%
              
              
              
              1.6%
              
              
              
              4.1%Volatility
              
              
              115%
              
              
              
              93%
              
              
              
              110%
              
              
              
              93%Expected
      life
              
              4.8
      years
              
              
              10
      years
              
              
              3.5
      years
              
              
              10
      yearsDividend
      yield
              
              
              0%
              
              
              
              0%
              
              
              
              0%
              
              
              
              0%
  Stock
option table
 Activity
with respect to all stock options is presented below for the periods as
noted:
  September
      30, 2009
              
              
              December
      31, 2008Shares
                #
              
              
              Weighted
      Average Exercise Price
                $
              
              
              Shares
                #
              
              
              Weighted
      Average Exercise Price
                $Outstanding
      options at beginning of period
              
              
              5,325,000
              
              
              
              3.67
              
              
              
              4,470,000
              
              
              
              4.04Options
      granted
              
              
              280,000
              
              
              
              1.15
              
              
              
              1,575,000
              
              
              
              1.94Options
      exercised
              
              
              --
              
              
              
              --
              
              
              
              (600,000
              )
              
              
              1.10Options
      expired
              
              
              (35,000
              )
              
              
              6.45
              
              
              
              (110,000
              )
              
              
              6.50Forfeitures
      and other adjustments
              
              
              --
              
              
              
              --
              
              
              
              (10,000
              )
              
              
              7.52Options
      outstanding at end of period
              
              
              5,570,000
              
              
              
              3.55
              
              
              
              5,325,000
              
              
              
              3.69Outstanding
      aggregate intrinsic value
              
              $
              2,100
              
              
              
              
              
              
              $
              --Exercisable
      at end of period
              
              
              4,592,500
              
              
              
              3.97
              
              
              
              3,610,000
              
              
              
              4.37Exercisable
      aggregate intrinsic value
              
              $
              1,400
              
              
              
              
              
              
              $
              --
  Page
15
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  10.           Stock
Options (continued)
  The
weighted average remaining life by exercise price as of September 30, 2009 is
summarized below:
  Range of Exercise Prices
                $
              
              
              Outstanding
      Shares
                #
              
              
              Weighted
      Average Remaining Life
                Months
              
              
              Exercisable
      Shares
                #
              
              
              Weighted
      Average Exercise Price
                $1.00
      - 2.99
              
              
              
              1,655,000
              
              
              
              41.0
              
              
              
              677,500
              
              
              
              1.703.00
      - 4.99
              
              
              
              2,375,000
              
              
              
              49.0
              
              
              
              2,375,000
              
              
              
              3.885.00
      - 5.99
              
              
              
              1,490,000
              
              
              
              34.1
              
              
              
              1,490,000
              
              
              
              5.046.00
      - 6.99
              
              
              
              50,000
              
              
              
              72.1
              
              
              
              50,000
              
              
              
              6.815,570,000
              
              
              
              42.9
              
              
              
              4,592,500
              
              
              
              3.97
 
 11.         Related
Party Transactions
  Related
party transactions are measured at the exchange amount which is the amount of
consideration established and agreed by the related parties.
  Roy
Group (Mauritius) Inc. (RGM)
 In March
2003, the Company entered into a Participating Interest Agreement with RGM (a
party related by a common officer and director of the Company, who is also a
principal shareholder of the Company), whereby the Company assigned and holds in
trust for RGM 50% of the benefits and obligations of the production sharing
contract covering the KG Offshore Block leaving the Company with a net 5%
participating interest in the KG Offshore Block.  The assignment of
this interest is subject to approval by the Government of India.
  Under the
terms of the Participating Interest Agreement and until approval by the
Government of India, the Company retains the exclusive right to deal with the
other partners to the KG Offshore Block and is entitled to make all decisions
regarding the interest assigned to RGM.  The Company has a right of
set-off against sums owing to it by RGM.  In the event that the Indian
government consent is delayed or denied, resulting in either RGM or the Company
being denied an economic benefit it would have realized under the Participating
Interest Agreement, the parties agreed to amend the Participating Interest
Agreement or take other reasonable steps to assure that an equitable result is
achieved consistent with the parties' intentions contained in the Participating
Interest Agreement.
  Roy
Group (Barbados) Inc. (Roy Group)
 Roy Group
is related to the Company by common management and is controlled by an officer
and director of the Company who is also a principal shareholder of the
Company.  On August 29, 2003, the Company entered into a Technical
Services Agreement with Roy Group to provide services to the Company as assigned
by the Company and to bring new oil and gas opportunities to the
Company.  The term of the agreement, as amended, extends through
December 31, 2009 and continues for successive periods of one year
thereafter.  Roy Group receives consideration of $350,000 per year, as
outlined and recorded below:
  Three
      months
                ended
                Sept
      30, 2009
              
              
              Three
      months
                ended
                Sept
      30, 2008
              
              
              Nine
      months
                ended
                Sept
      30, 2009
              
              
              Nine
      months
                ended
                Sept
      30, 2008
              
              
              Period
      from
                Inception,
                August
      21, 2002
                to
      Sept 30, 2009$
              
              
              
              $
              
              
              
              $
              
              
              
              $
              
              
              
              $Consolidated
      Statements of Operations
                and
      Comprehensive LossConsulting
      fees
              
              
              65,625
              
              
              
              43,750
              
              
              
              196,875
              
              
              
              131,250
              
              
              
              640,524Consolidated
      Balance SheetsOil
      & gas interests
              
              
              21,875
              
              
              
              43,750
              
              
              
              65,625
              
              
              
              131,250
              
              
              
              1,315,29187,500
              
              
              
              87,500
              
              
              
              262,500
              
              
              
              262,500
              
              
              
              1,955,815
  At
September 30, 2009, the Company owed Roy Group $34,817 (December 31, 2008 -
$35,800) for services provided pursuant to the Technical Services Agreement and
expenses incurred on behalf of the Company.  These amounts bear no
interest and have no set terms of repayment.
   Page
16
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  11.         Related
Party Transactions (continued)
  D.I.
Investments Ltd. (DI)
 DI is
related to the Company by common management and is controlled by an officer and
director of the Company.  DI charges consulting fees for management,
financial and accounting services rendered, as outlined and recorded
below:
  Three
      months
                ended
                Sept
      30, 2009
              
              
              Three
      months
                ended
                Sept
      30, 2008
              
              
              Nine
      months
                ended
                Sept
      30, 2009
              
              
              Nine
      months
                ended
                Sept
      30, 2008
              
              
              Period
      from
                Inception,
                August
      21, 2002
                to
      Sept 30, 2009$
              
              
              
              $
              
              
              
              $
              
              
              
              $
              
              
              
              $Consolidated
      Statements of Operations
                and
      Comprehensive LossConsulting
      fees
              
              
              53,188
              
              
              
              53,188
              
              
              
              159,562
              
              
              
              159,563
              
              
              
              1,074,027
  At
September 30, 2009, the Company owed DI $31,000 (December 31, 2008 – the Company
was owed $16,629) as a result of services provided and expenses incurred on
behalf of the Company.  These amounts bear no interest and have no set
terms of repayment.
  Amicus
Services Inc. (Amicus)
 Amicus is
related to the Company by virtue of being controlled by a brother of an officer
and director of the Company.  Amicus charged consulting fees for IT
and computer related services rendered, as outlined below:
  Three
      months
                ended
                Sept
      30, 2009
              
              
              Three
      months
                ended
                Sept
      30, 2008
              
              
              Nine
      months
                ended
                Sept
      30, 2009
              
              
              Nine
      months
                ended
                Sept
      30, 2008
              
              
              Period
      from
                Inception,
                August
      21, 2002
                to
      Sept 30, 2009$
              
              
              
              $
              
              
              
              $
              
              
              
              $
              
              
              
              $Consolidated
      Statements of Operations
                and
      Comprehensive LossConsulting
      fees
              
              
              8,321
              
              
              
              25,217
              
              
              
              32,298
              
              
              
              67,534
              
              
              
              317,209
  The
Company recognized compensation cost or recovery of compensation cost for
stock-based compensation arrangements with the principal of Amicus as outlined
and recorded below:
  Consolidated
      Statements of Operations
                and
      Comprehensive LossConsulting
      fees
              
              
              4,063
              
              
              
              (2,830
              )
              
              
              14,565
              
              
              
              (35,168
              )
              
              
              600,190
  At
September 30, 2009, the Company owed Amicus $5,836 (December 31, 2008 - $13,745)
as a result of services provided and expenses incurred on behalf of the
Company.  These amounts bear no interest and have no set terms of
repayment.
 
  Page
17
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  12.         Per
Share Amounts
  The
following table presents the reconciliation between basic and diluted income per
share:
  Three
      months
                ended
                Sept
      30, 2009
              
              
              Three
      months
                ended
                Sept
      30, 2008
              
              
              Nine
      months
                ended
                Sept
      30, 2009
              
              
              Nine
      months
                ended
                Sept
      30, 2008$
              
              
              
              $
              
              
              
              $
              
              
              
              $Net
      loss and comprehensive loss for the period
              
              
              900,305
              
              
              
              735,980
              
              
              
              3,213,643
              
              
              
              6,024,272Stock
      purchase warrant modification
              
              
              --
              
              
              
              --
              
              
              
              1,754,000
              
              
              
              --Net
      loss and comprehensive loss applicable to
                common
      stockholders
              
              
              900,305
              
              
              
              735,980
              
              
              
              4,967,643
              
              
              
              6,024,272Weighted
      average number of common shares outstanding:Basic
      and diluted
              
              
              67,805,756
              
              
              
              67,407,929
              
              
              
              67,805,756
              
              
              
              67,273,639Per
      share amountsBasic
      and diluted
              
              
              0.01
              
              
              
              0.01
              
              
              
              0.07
              
              
              
              0.09Securities
      excluded from denominator as anti-dilutive:Stock
      options
              
              
              5,570,000
              
              
              
              3,960,000
              
              
              
              5,570,000
              
              
              
              3,960,000Warrants
              
              
              4,966,200
              
              
              
              4,966,200
              
              
              
              4,966,200
              
              
              
              4,966,200Compensation
      options
              
              
              535,944
              
              
              
              535,944
              
              
              
              535,944
              
              
              
              535,944Compensation
      option warrants
              
              
              97,572
              
              
              
              97,572
              
              
              
              97,572
              
              
              
              97,57211,169,716
              
              
              
              9,559,716
              
              
              
              11,169,716
              
              
              
              9,559,716
  In
calculating the weighted average number of common shares outstanding, the
5,000,000 shares which were held in escrow at September 30, 2009 have been
excluded.
 
 13.           Commitments
  Pursuant
to current production sharing contracts, the Company is required to perform
minimum exploration activities that include various types of surveys,
acquisition and processing of seismic data and drilling of exploration
wells.  These obligations have not been provided for in the financial
statements.  The Company has an office lease commitment in Calgary,
Canada until February 2013.
  The
anticipated payments due under these agreements in effect are as
follows:
  Operating
      Leases
              
              
              Production
      Sharing Contracts$
              
              
              
              $2009
              
              
              30,000
              
              
              
              2,025,0002010
              
              
              132,000
              
              
              
              10,586,0002011
              
              
              159,000
              
              
              
              9,990,0002012
              
              
              159,000
              
              
              
              1,840,0002013
              
              
              13,000
              
              
              
              --Thereafter
              
              
              --
              
              
              
              --493,000
              
              
              
              24,441,000
  The
Company has applied to increase its participating interest under a certain
production sharing contract from 10% to 25%.  If this application is
approved, the Company’s commitments would increase by $1.1 million in 2009, $4.4
million in 2010, $6.1 million in 2011 and $1.4 million in 2012.  To
date, the approval has not been granted.
 
  Page
18
 Table of Contents
 GeoGlobal
Resources Inc.
 (a
development stage enterprise)
 Notes
to the Condensed Consolidated Financial Statements
 (Unaudited)
 September
30, 2009
  14.         Contingencies
  GSPC
Dispute
 The
Company has been advised by GSPC, that GSPC is seeking payment of the amount by
which the exploration costs attributable to the Company under the PSC relating
to the KG Offshore Block exceeds the amount that GSPC deems it is obligated to
pay on behalf of the Company (including the net 5% participating interest of
RGM) under the terms of the Carried Interest Agreement.  GSPC asserts
that the Company is required to pay 10% of the exploration expenses over and
above gross costs of $59.23 million (10% being $5.923 million).
  Based
upon the most recent correspondence from GSPC dated November 28, 2008, GSPC is
seeking payment in the amount of Rs. 365.9 crore (or approximately $78.7
million) plus interest as of September 30, 2008, of which, 50% is for the
account of RGM.  We estimate the amount of GSPC’s claim as at
September 30, 2009 to be approximately $143.0 million plus
interest.  The Company disputes this assertion of GSPC.
  The
Company has advised GSPC that, under the terms of the Carried Interest
Agreement, the PSC, and the Joint Operating Agreement dated August 7, 2003, GSPC
has no right to seek the payment and that it believes the payment GSPC is
seeking is in breach of the Carried Interest Agreement.  The Company
further reminded GSPC, that the Company under the terms of the Carried Interest
Agreement shall be carried by GSPC for 100% of its entire share of any costs
during the exploration phase prior to the start of commercial
production.  The Company obtained the opinion of external Indian legal
counsel which supports management's position with respect to the
dispute.
  Based
upon a letter dated November 5, 2008 received from GSPC, the Company was advised
that the Minimum Work Program for all exploration phases of the KG Offshore
Block had been completed as of September 30, 2008 which has been noted by the
Directorate General of Hydrocarbons.  As such, GSPC advised the
Company that it has elected to undertake an additional work program over and
above the Minimum Work Program as either Joint Operations or as Exclusive
Operations under the terms of the PSC and that we must elect whether we wish to
participate in these future drilling activities over and above the Minimum Work
Program on this block or alternatively, GSPC would conduct these drilling
activities as Exclusive Operations as defined in the PSC.
  On
November 13, 2008, the Company advised GSPC that we exercised our right to
participate in the drilling operations proposed in the November 5, 2008 GSPC
letter as a Joint Operation under the terms of the PSC and Joint Operating
Agreement and further that this exercise was done pursuant to the terms of the
Carried Interest Agreement.
  The
Company intends to vigorously protect its contractual rights in accordance with
the dispute resolution process under the Carried Interest Agreement, the PSC and
the Joint Operating Agreement as may be appropriate.  In September
2007, the Company commenced discussions with GSPC in an effort to reach an
amicable resolution however, as at November 13, 2009, no agreement has been
reached.
  Other
Matters
 The
Company has recently determined it may be in breach of certain regulatory
requirements, and is currently taking immediate steps to remedy the
matter.  Non-compliance with these regulations may result in a
discretionary financial penalty to the Company.  Management believes the
outcome pertaining to such matters at this time is not determinable, and as such
no provision has been made in these interim condensed consolidated financial
statements.  The Company is of the understanding that the range of the
possible penalty is anywhere from $nil to $6.3 million.
 
  Page
19
 Table of Contents
  ITEM 2.
              MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS OF OPERATIONS
  Overview
 GeoGlobal
Resources Inc. is engaged, through our subsidiaries and ventures in which we are
a participant, in the exploration for and development of oil and natural gas
reserves.  We initiated these activities in 2003.  We and
our joint participants have been granted exploration rights pursuant to PSCs we
have entered into with the Government of India.  At present, these
activities are being undertaken in four geological basins offshore and onshore
in locations where reserves of oil or natural gas are believed by our management
to exist.  These areas are as follows:
  ·
              The
      Krishna Godavari Basin offshore and onshore in the State of Andhra Pradesh
      in eastern India;
 ·
              The
      Cambay Basin onshore in the State of Gujarat in western
    India;
 ·
              The
      Deccan Syneclise Basin onshore in the State of Maharashtra in west central
      India; and
 ·
              The
      Rajasthan Basin onshore in the State of Rajasthan in north western
      India.
  To date,
we have not earned significant revenue from these activities and are considered
to be in the development stage under Financial Accounting Standards Board
Statement of Accounting Standards No. 7.  The recoverability of the
costs we have incurred to date is uncertain and dependent upon us achieving
commercial production and sale of hydrocarbons, our ability to obtain sufficient
financing to fulfill our obligations under the PSCs in India and upon future
profitable operations.
  All of
the exploration activities in which we are a participant should be considered
highly speculative.
  All
dollar amounts stated in this Quarterly Report are stated in United States
dollars.
  All
meterage of drilled wells referred to in this Quarterly Report are measured
depths unless otherwise stated.
  The
following discussion and analysis of our financial condition and results of
operation should be read in conjunction with, and is qualified in its entirety
by, the more detailed information including our Condensed Consolidated Financial
Statements and the related Notes appearing elsewhere in this Quarterly
Report.  This Quarterly Report contains forward-looking statements
that involve risks and uncertainties.  Our actual results may differ
materially from the results and business plans discussed in the forward-looking
statements.  Factors that may cause or contribute to such differences
include those discussed in "Risk Factors" in our Annual Report on Form 10-K for
the year ended December 31, 2008 as well as those discussed elsewhere in this
Quarterly Report.  For further information, refer to the Consolidated
Financial Statements and related Notes and the Management's Discussion and
Analysis thereto included in our Annual Report on Form 10-K for the year ended
December 31, 2008.
 
 Glossary
of Certain Defined Terms:
 GSPC –
means Gujarat State Petroleum Corporation Limited, a company organized under the
laws of India.
 PSC –
means Production Sharing Contract.
 NELP –
means National Exploration Licensing Policy.
 MMscfd –
means million standard cubic feet per day.
 
 Results
of Operations for the Three and Nine months ended September 30, 2009 and
2008
 For the
quarter ended September 30, 2009, we incurred a net loss of $675,305 compared
with a net loss of $735,980 for the quarter ended September 30,
2008.
  For the
nine months ended September 30, 2009, we incurred a net loss of $2,988,643
compared with a net loss of $6,024,272 for the nine months ended September 30,
2008.  The $3.0 million decrease was due to a $3.8 million impairment
of our oil and gas properties under full cost accounting guidelines that was
charged to the Statements of Operations in the second quarter of 2008 offset by
an $800,000 increase in our expenses for the nine months ended September 30,
2009.   No impairment expense was incurred in 2009.
  Three
      months
                ended
                September
      30, 2009
              
              
              Three
      months
                ended
                September
      30, 2008
              
              
              Nine
      months
                ended
                September
      30, 2009
              
              
              Nine
      months
                ended
                September
      30, 2008Oil
      Production (barrels)
              
              
              4,536
              
              
              
              --
              
              
              
              7,634
              
              
              
              --Oil
      Sales (barrels)
              
              
              4,556
              
              
              
              --
              
              
              
              7,580
              
              
              
              --Average
      Oil Price
              
              $
              65.94
              
              
              
              --
              
              
              $
              64.71
              
              
              
              --Oil
      Revenues
              
              $
              300,000
              
              
              
              --
              
              
              $
              490,000
              
              
              
              --Operating
      Costs per Barrel
              
              $
              21.12
              
              
              
              --
              
              
              $
              23.68
              
              
              
              --Depletion
      per Barrel
              
              $
              14.43
              
              
              
              --
              
              
              $
              14.31
              
              
              
              --
  Page
20
 Table of Contents
  Oil
Sales
 All of
our revenues are derived from the production of crude oil in
India.  With the approval of the Tarapur 1 field development plan by
the Management Committee, three wells began production in mid May 2009 and a
further two wells began production in September 2009.  There are
twelve additional wells which are drilled, tested and awaiting tie-in to the oil
tank storage facilities.  Revenues are currently based on the spot
price based on the Nigeria Bonny Light Crude bench mark.  Through
September 30, 2009, these revenues are reflected in accounts receivable in the
balance sheet.  To date, none of our production has been
hedged.  In addition to the crude oil production, a minimal amount of
natural gas was produced and flared off.  Upon the tie-in and
production from additional wells, it is the intention that the natural gas will
be contained and sold.
  Interest
Income
 Interest
income during the three months ended September 30, 2009 was $65,000 compared
with $230,000 for the same period in 2008.  This decrease is primarily
attributed to a lower interest rate earned on our short term investments as well
as lower cash balances and restricted deposits available for
investment.  The average cash balance and restricted deposits during
the third quarter of 2009 was $27.3 million compared with $39.9 million in the
third quarter of 2008.
  Interest
income during the nine months ended September 30, 2009 was $263,000 compared
with $922,000 for the same period in 2008.  Interest rates earned on
our short-term investments declined significantly during the nine months ended
September 30, 2008.  In addition to lower interest rates, the average
cash balance and restricted deposits during the nine months was $30.7 million
compared with $46.1 million in the nine months ended September 30,
2008.
  Operating
 Operating
costs for the three months ended September 30, 2009 are estimated to be $96,000
or $21.12 per barrel, as a result of our first production in the Tarapur 1
field.  The operating cost estimate includes handling and processing
charges, transportation costs and utilities, and contain a fixed and variable
portion.   During the three months ended September 30, 2008, we did
not incur any operating costs.
  Operating
costs for the nine months ended September 30, 2009 are estimated to be $179,000
or $23.68 per barrel, as a result of our first production in the Tarapur 1
field.  During the nine months ended September 30, 2008, we did not incur
any operating costs.
  General and
Administrative
 For the
three months ended September 30, 2009, our general and administrative expenses
increased to $773,000 from $583,000 for the three months ended September 30,
2008.  Significant items included in general and administrative
expenses include administrative salaries and related stock-based compensation
costs, directors’ fees, rental and office costs, an accrual for potential
financial penalties, insurance and public company costs including shareholder
relations, listing and filing fees and transfer agent fees and
services.
  For the
nine months ended September 30, 2009, our general and administrative expenses
increased to $2,492,000 from $1,753,000 for the same period in
2008.    In the second quarter of 2009, our Board of
Directors approved a two year extension to compensation options and compensation
warrants that were set to expire on June 22, 2009.  A fair value of
$264,000 relating to the extension of compensation options and compensation
warrants was charged to the statement of operations.   Along with
the compensation options and compensation warrants extension costs, stock-based
compensation costs of $693,000 for the nine months ended September 30, 2009
compared with $485,000 for the nine months ended September 30, 2008 and an
accrual for potential financial penalties account for the majority of the
change.  Other significant costs, including salaries, travel and bank
guarantee fees remained fairly consistent with the nine months ended September
30, 2008.
  Consulting
Fees
 Consulting
fees for the three months ended September 30, 2009, were $170,000, an increase
from $135,000 when compared to the three months ended September 30,
2008.  Significant items included in consulting fee expenses include a
portion of costs paid to Roy Group (Barbados) Inc. for Chief Executive Officer
services, costs paid to D.I. Investments Inc. for Chief Financial Officer
services and the related health care costs and other consulting costs as
incurred.
  In the
third quarter of 2009 and 2008, we incurred costs of $87,500 to Roy Group
(Barbados) Inc.  We expensed 75% (2008 – 50%) of the costs paid to Roy
Group (Barbados) Inc. for CEO related duties and other general corporate
affairs.  The remaining 25% (2008 – 50%) was capitalized for technical
geological services.  We evaluate the payment of these costs annually
to determine the appropriate allocation.  Costs paid to D.I.
Investments Inc. remained consistent at $53,000.
  Consulting
fees for the nine months ended September 30, 2009, were $522,000, a decrease
from $600,000 when compared to the nine months ended September 30,
2008.  In the nine months ended 2008, we incurred a onetime cost of
$75,000 paid to a broker in an effort to market and sell our Egypt
blocks.
  In the
nine months ended September 30, 2009 and 2008, we incurred costs of $262,500 to
Roy Group (Barbados) Inc.   We expensed 75% (2008 – 50%) of the
costs paid to Roy Group (Barbados) Inc. for CEO related duties and other general
corporate affairs.  The remaining 25% (2008 – 50%) was capitalized for
technical geological services.  We evaluate the payment of these costs
annually to determine the appropriate allocation.  Costs paid to D.I.
Investments Inc. remained consistent at $160,000.
   Page
21
 Table of Contents
  Professional
Fees
 Professional
fees for the three months ended September 30, 2009 were $146,000, a decrease
from $187,000 when compared to the three months ended September 30,
2008.  Professional fees include general council, audit and review
costs and tax advisors to assist with compliance.
  Professional
fees for the nine months ended September 30, 2009 were $594,000 compared with
$706,000 for the nine months ended September 30, 2008.  During the
nine months ended September 30, 2009, we completed a multiyear financial
restatement and recorded costs of $238,000.  Further, we engaged
various tax advisors to complete a review of our corporate structure with a goal
to ensure tax strategy and efficiency across all jurisdictions.  These
tax related costs have partially offset the saving from the prior years’
restatement of our previously filed annual reports.  We continue to
incur costs relating to a review of our corporate structure.
  Impairment
 There
were no impairment charges during the three or nine months ended September 30,
2009.  During the nine months ended September 30, 2008, an impairment
charge of $3,765,000 was charged to the statements of operations relating to
Egyptian, Oman and Yemen operations in the second quarter.
  Other
 We
capitalized certain overhead costs directly related to our exploration
activities in India.  During the three months ended September 30,
2009, we capitalized overhead costs totaling $156,000 as compared to $207,852
during the three months ended September 30, 2008.  Included in the
amounts above are stock-based compensation costs of $91,000 for the three months
ended September 30, 2009 compared with $70,000 for the three months ended
September 30, 2008.
  During
the nine months ended September 30, 2009, these capitalized overhead costs were
$807,000 as compared to $866,478 during the nine months ended September 30,
2008.  Included in the amounts above are stock-based compensation
costs of $470,000 for the nine months ended September 30, 2009 compared with
$373,000 for the nine months ended September 30, 2008.
  The
treatment of capitalized overhead costs remained consistent with the comparable
quarter and includes costs relating to personnel, consultants, their travel,
necessary resources and stock-based compensation directly associated with the
advancement of our oil and gas interests.
 
 Reserve
Report
 As a
result of the approval of the Tarapur 1 field development plan by the Management
Committee and the completion of an independent reserve study by Chapman
Petroleum Engineering Ltd. out of Calgary, Alberta, Canada, we claimed our
proved reserves in the Tarapur 1 field as at September 30, 2009 of 245,000 net
barrels of crude oil compared to nil at December 31, 2008.
 
 Liquidity
 Liquidity
is a measure of a company's ability to meet potential cash requirements. We have
historically met our capital requirements through the issuance of common stock
as well as proceeds from the exercise of warrants and options to purchase common
equity.
  Our
ability to continue as a going concern is dependent upon obtaining the necessary
financing to complete further exploration and development activities and
generate profitable operations from our oil and natural gas interests in the
future. Our current operations are dependent upon the adequacy of our current
assets to meet our current expenditure requirements and the accuracy of
management’s estimates of those requirements.  Should those estimates
be materially incorrect, our liability to continue as a going concern may be
impaired.  Our condensed consolidated financial statements as at and
for the nine months ended September 30, 2009 have been prepared on a going
concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business.  We
have incurred a history of operating losses and negative cash flows from
operations.  These matters may raise doubt about our ability to
continue as a going concern.
  At
September 30, 2009, our cash and cash equivalents were $18.3 million (December
31, 2008 - $25.4 million).  The majority of this balance is being held
in US funds.  Approximately $18.0 million is held in term deposits
earning interest that will contribute towards covering a portion of our
administrative costs and overhead throughout the next fiscal year.  We
have working capital of approximately $11.8 million which is available for our
future operations.  In addition, we have $6.9 million in restricted
deposits pledged as security against the minimum work program for the budget
year April 1, 2009 through March 31, 2010 on our exploration blocks, which will
be released back to cash upon completion of the minimum work program at March
31, 2010.  It is expected that approximately $3.7 million will remain
in restricted deposits that will be pledged for the minimum work program for the
budget year April 1, 2010 to March 31, 2011.
  We expect
to incur expenditures to further our exploration programs.  Our
existing cash balance and any cash flow to be generated from operating
activities may not be sufficient to satisfy our current obligations and meet our
exploration commitments of approximately $24.4 million over the next four years
of which, approximately $10.0 million is attributable to the twelve months
ending September 30, 2009.
   Page
22
 Table of Contents
  We are
considering various alternatives with respect to raising additional capital to
remedy any future shortfall in capital but to date have made no specific plans
or arrangements.  We may deem it necessary to raise capital through
equity markets, debt markets or other financing arrangements which could include
the sale of oil as gas interests, or participation arrangements in oil and gas
interests, to raise capital for continued exploration and development
expenditures.  Because of the early stage of our operations and our
absence of any material quantities of oil and natural gas reserves, there can be
no assurance this capital will be available and if it is not, we may be forced
to substantially curtail or cease exploration block acquisition and/or
exploration and development expenditures. We believe that our available cash
resources will be sufficient to maintain our current level of activities through
the next fiscal year.
  Should
the going concern assumption not be appropriate and we are not able to realize
our assets and settle our liabilities, commitments and contingencies, as more
fully described in these condensed consolidated financial statements in the
normal course of operations, our consolidated financial statements would require
adjustments to the amounts and classifications of assets and liabilities, and
these adjustments could be significant.  These condensed consolidated
financial statements do not reflect the adjustments or reclassifications of
assets and liabilities that would be necessary if we are unable to continue as a
going concern.
  We
believe at this time that the outcome of the GSPC Carried Interest dispute will
not have a material effect on our liquidity.
  Our cash
and cash equivalents decreased by $7.1 million to $18.3 million from $25.4
million at December 31, 2008.  The primary result of the decrease in
funds can be attributed to the following activities:
  Our net
cash used in operating activities during the nine months ended September 30,
2009 was $2.1 million as compared to $2.3 million for the nine months ended
September 30, 2008.  The use of cash is mainly related to general and
administrative costs, consulting fees and professional fees combined with lower
interest income earned on our short-term investments during the nine months
ended September 30, 2009.
  Cash used
by investing activities during the nine months ended September 30, 2009 was $5.0
million as compared to $17.9 million during the nine months ended September 30,
2008.  This decrease is a result of cash payments to our joint venture
partners for increased oil and gas activities in 2008 as compared to 2009 which
was then off-set by a reduction of our restricted deposits totaling $3.9
million.  The restricted deposits were returned to cash and cash
equivalents which are now available for general corporate purposes.
  No cash
was provided by financing activities for the nine months ended September 30,
2009.  Cash provided by financing activities for the nine months ended
September 30, 2008 was $662,000 pursuant to the exercise of 600,000
options.
 
 Capital
Resources
 We expect
our exploration and development activities pursuant to the PSCs we are a party
to, and the related drilling activities in the 10 exploration blocks that we
hold an interest in, will continue through September 2010 in accordance with the
terms of those agreements.  During the period October 1, 2009 to
September 30, 2010, based on the estimated current budgets, we anticipate
drilling approximately one exploratory well in the KG Offshore Block, one
exploratory well in the Sanand/Miroli Block, four exploration wells in the
Ankleshwar Block, six exploratory wells in the Rajasthan Block and two
exploratory wells in the KG Onshore Block.  Additional expenditures
may be incurred in connection with additional exploratory, appraisal and
development wells we may participate in.  Also, if we increase our
participating interest in the KG Onshore Block to 25%, our obligations to fund
exploratory drilling on the block will increase.
  In
addition, we may seek to participate in joint ventures bidding for the award of
further PSCs for exploration blocks expected to be awarded by the Government of
India in the future.  As of November 13, 2009, we have no specific
plans to bid or join with others in bidding for any specific PSCs in India and
elsewhere.  We expect that our interest in any such ventures would
involve a minority participating interest in the venture.  In
addition, as opportunities arise, we may seek to acquire minority participating
interests in exploration blocks where PSCs have been heretofore
awarded.  The acquisition of any such interests would be subject to
the execution of a definitive agreement and obtaining the requisite government
consents and other approvals.
  In
addition, although there are no present plans in this regard, we may require
additional funds for the possible acquisition of further minority participating
interests in PSCs in drilling blocks heretofore awarded and that we may
hereafter propose to enter into in India and possibly elsewhere. We believe it
can be expected that our interest in further or additional PSCs would be a
participating interest.  As the holder of a participating interest in
any such activities, it can be expected that we will be required to contribute
capital to any such ventures in proportion to our percentage
interest.
  As of
November 13, 2009, the scope of any possible such activities has not been
definitively established and, accordingly, we are unable to state the amount of
any funds that may be required for these purposes. As a result, no specific
plans or arrangements have been made to raise additional capital and we have not
entered into any agreements in that regard. We expect that if we seek to raise
additional capital it will be through the sale of equity securities, debt or
other financing arrangements.  We are unable to estimate the terms on
which any such capital may be raised, the price per share or possible number of
shares involved or the terms of any agreements to raise capital under other
arrangements.
  Page
23
 Table of Contents
  Off-balance
Sheet Arrangements
 None.
 
 Contractual
Obligations
 Our
minimum exploration commitments under our production sharing contracts and other
future lease payments at September 30, 2009 were not substantially different
than at December 31, 2008.
 
 Critical
Accounting Estimates
 The
preparation of financial statements under generally accepted accounting
principles (GAAP) in the United States requires management to make estimates,
judgments 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.  On a regular basis we evaluate our assumptions, judgments
and estimates.  We also discuss our critical accounting estimates with
the Audit Committee of the Board of Directors.
  We
believe that the assumptions, judgments and estimates involved in the accounting
for oil and gas accounting and impairment, asset retirement obligation and
share-based payment arrangements have the greatest potential impact on our
condensed consolidated financial statements.  These areas are key
components of our results of operations and are based on complex rules which
require us to make judgments and estimates, so we consider these to be our
critical accounting estimates. Historically, our assumptions, judgments and
estimates relative to our critical accounting estimates have not differed
materially from actual results.
  Our
critical accounting estimates are disclosed in Item 7 of our 2008 Annual Report
on Form 10-K, filed with the Securities and Exchange Commission on March 27,
2009, and have not changed materially since the filing of that
document.
 
 Recent
Exploration Activities
 Below is
a summary description of information relating to certain material developments
to our exploration activities subsequent to the last update.  For
additional information and a more complete description of the PSCs to which we
are a party, reference should be made to our Annual Report on Form 10-K and our
Quarterly Reports on Form 10-Q as well as our Current Reports on Form
8-K.
 
 Krishna Godavari Offshore
Block
 Exploration
activities on the KG Offshore Block are as follows:
  GSPC as
operator has completed preparing the work program and budget for exploration
activities totalling approximately $287 million for the fiscal year April 1,
2009 to March 31, 2010.  The program includes costs already incurred
in the drilling of the KG#19, KG#21 and KG#33; the anticipated costs of drilling
the KG#20-SS well with the Essar Wildcat rig; and costs to interpret the
recently completed 240 square kilometre Q-Marine Seismic Data Acquisition over
the Deen Dayal structure.
  As at
November 13, 2009, a total of fifteen wells have been drilled on this
block.   Of these fifteen wells, four exploratory wells in the
northern portion of the block have been abandoned.
  Deen
Dayal West Field Development Plan
 On June
18, 2009, GSPC submitted the Deen Dayal West Field Development Plan in
accordance with the provisions of the Production Sharing Contract to the
Management Committee including the Government of India for
approval.
  On
November 11, 2009 it was announced that the Field Development Plan was approved
with the following details:
 ·
              Includes
      fifteen wells; four existing wells (KG#8, KG#15, KG#17 and KG#28) and
      eleven new development wells which include three slant wells and eight
      multilateral wells to be drilled.
 ·
              Production
      facilities to include:
 ·  Two
offshore platforms (one well head and one central processing);
 ·  20
kilometer long pipeline of 24 inch diameter up to landfall point;
and
 ·
              One
      onshore gas terminal to include a gas sweetening unit, gas dehydration
      unit, dew point depression unit, condensate stabilization unit, sulphur
      recovery unit and a captive power
unit.
 ·
              Delivery
      point for gas will be the outlet flange of delivery facility located at
      the onshore terminal at Mallavaram Village, near Yanam, Kakinada, Andhra
      Pradesh.
 ·
              First
      gas production to commence December
2011.
 ·
              GSPC
      as operator will apply for a 17 square kilometer mineral lease to cover
      this area.
  GSPC
estimated in the Field Development Plan that on a preliminary basis, the gross
costs for the production facilities will be approximately US$941 million and
US$860 million for the future development drilling costs.
  Under
current SEC Rules, at this time, GeoGlobal claims no reportable reserves on the
KG Offshore Block.
   Page
24
 Table of Contents
  Seven
wells (KG#21, KG#31, KG#16, KG#33, KG#22, KG#32 and KG#19) which do not form
part of the Deen Dayal West Field Development Plan are awaiting further
appraisal before the preparation and submission of a declaration of
commerciality pursuant to the PSC can be supported.
  KG#20-SS
Well
 The
KG#20-SS exploratory well commenced drilling using the Essar Wildcat self
propelled semi-submersible drilling rig.  The KG#20-SS is located
approximately 5.22 kilometers to the northeast of the KG#19 well in
approximately 150 meters of water.  The well is planned to be drilled
vertically to a depth of approximately 5,275 meters.  The objective of
the KG#20-SS is to explore four targets with a strong amplitude signature on
seismic in the Lower Cretaceous Sequence in glauconitic sands similar to that
which was encountered in the KG#19 well.
  As at
November 13, 2009 the KG#20-SS well continues to drill and is at approximately
4,000 meters in depth.
  KG#21Well
 The KG#21
exploratory well commenced drilling on September 22, 2008 using the Perro Negro
3 (PN-3) jack-up drilling rig.  The well is located approximately 1.36
kilometers northwest of the KG#8 discovery in approximately 60 meters of water
depth in the southwestern portion of the KG Offshore Block in the Deen Dayal
North-west fault block.  The well was slightly deviated and was
drilled to a depth of 5,656 meters being a total vertical depth of 5,467
meters.  The objective of the KG#21 location was two main targets with
the primary target being the Lower Cretaceous sequence which was unable to be
tested in the KG#31 exploratory well due to mechanical problems and the
secondary target being the Upper Cretaceous fan deposits.
  As at
November 13, 2009, with the successful completion of the drill stem tests, the
KG#21 well has been suspended and the PN-3 drilling rig has been
released.  Four drill stem tests were completed on the KG#21 well in
the Lower Cretaceous sequence over the 722 gross meter interval of 4,920.5 to
5,642.5 meters and one drill stem test over the interval 3,592.5 to 3,630 meters
in the Upper Cretaceous.  The results of these successful drill stem
tests were as follows:
  DST-1,
the first drill stem test was conducted by perforating 37.5 net meters over the
gross interval 5,593.7 to 5,642 meters.  This successful DST-1flowed
during clean-up, on a 36/64 inch choke at a stabilised rate of 20 MMscfd gas and
2,600 barrels per day water with 4,670 psi (pounds per square inch) flowing well
head pressure.  During the main flow, on a 20/64 inch choke, the well
flowed at a stabilised rate of 10 MMscfd gas and 1,200 barrels per day water
with 7,220 pounds per square inch flowing well head pressure.
  DST-2,
the second drill stem test was conducted by perforating 25 net meters over the
gross interval 5,517 to 5,567 meters. DST-2 flowed during clean-up, on a 24/64
inch choke at a stabilised rate of 1.5 MMscfd gas and 500 barrels per day water
with 1,000 psi flowing well head pressure.
  DST-3 was
conducted by perforating 20 net meters over the gross interval 5,425 to 5,474
meters.  DST-3 flowed during clean-up at a stabilised rate of 0.65
MMscfd of gas with 270 psi flowing well head pressure.
  DST-4 was
conducted by perforating 56 net meters over the gross interval 5,193 to 5,321
meters.  DST-4 flowed during clean-up at a stabilised rate of 1.0
MMscfd of gas with 530 psi flowing well head pressure.
  DST-5 is
currently being conducted in the Upper Cretaceous by perforating 15 net meters
over the gross interval 3,592.5 to 3,630 meters.  DST-5 flowed during
clean-up at a stabilised rate of 6.5 MMscfd gas and 600 barrels per day
condensate with 2,530 psi flowing well head pressure.
  KG#33Well
 The KG#33
appraisal well commenced drilling on November 4, 2008 using the Atwood Beacon
jack-up drilling rig.  The well is located approximately 6.5
kilometers northeast of the KG#8 discovery in approximately 109 meters of water
depth in the southeastern portion of the KG Offshore Block in the Deen Dayal
East fault block.  The well was directionally drilled to a total depth
of 5,126 meters being a total vertical depth of 4,596 meters.  The
objective of the KG#33 location is to explore the hydrocarbon potential of the
Lower Cretaceous sequence in the Deen Dayal East fault block and correlate to
the KG#16 discovery well.
  As at
November 13, 2009, with the successful completion of the drill stem tests on the
KG#33, the well has been suspended and the Atwood Beacon jack-up drilling rig
has been released.  Three drill stem tests were conducted on the KG#33
well over the 313 gross meter interval of 4,555 to 4,868 meters.
  DST-1,
the first drill stem test was conducted by perforating 5.0 net meters over the
gross interval 4,828 to 4,868 meters.  This DST-1 flowed during
clean-up, on a 20/64 inch choke, at a stabilised rate of 0.7 MMscfd gas with 800
pounds per square inch flowing well head pressure.  DST-1 was
subsequently stopped and the operator performed a hydraulic fracture over the
same 5 meter interval.  The result was DST-1A which had an increase in
flow through a 16/64 inch choke to a stabilized rate of 6.3 MMscfd gas with
5,500 psi flowing will head pressure.
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  DST-2 was
conducted by perforating a net interval of 34.5 meters over a gross interval
from 4,692 to 4,752 meters.  DST-2 recorded flow during clean-up, on a
16/64 inch choke at a stabilised rate of 0.9 MMscfd with a 700 psi flowing well
head pressure.
  DST-3 was
conducted by perforating a 5 meter interval from 4,596 to 4,601
meters.  A hydraulic fracture job was conducted over this interval
resulting in a stabilised flow during clean-up through a 24/64 inch choke of 4.8
MMscfd with a 1,730 flowing well head pressure.
  Carried Interest Dispute on
the KG Offshore Block
 GSPC, the
operator of the KG Offshore Block in which we have a net 5% carried interest,
has advised us that it is seeking from us our pro rata portion of the amount by
which the sums expended by GSPC under all phases for the Minimum Work Program as
set forth in the PSC for the KG Offshore Block in carrying out exploration
activities on the block exceeds the amount that GSPC deems to be our pro rata
portion of a financial commitment under all phases included in the parties’
joint bid for the award of the KG Offshore Block by the Government of
India.
  GSPC
contends that this excess amount is not within the terms of the Carried Interest
Agreement.  GSPC asserts that we are required to pay 10% of the
exploration expenses over and above gross costs of $59.23 million (10% being
$5.92 million) (including the net 5% interest of Roy Group (Mauritius) Inc.)
plus interest.
  Based
upon the most recent correspondence from GSPC dated November 28, 2008, GSPC
asserts that the amount payable is Rs. 365.9 crore (approximately $78.7 million)
plus interest as of September 30, 2008, of which 50% is for the account of Roy
Group (Mauritius) Inc..  We estimate that the amount of GSPC’s claim
as of September 30, 2009 to be approximately $143.0 million plus
interest.  We dispute this assertion of GSPC.
  We have
advised GSPC that, under the terms of the Carried Interest Agreement, the terms
of which are also incorporated into the PSC and the Joint Operating Agreement,
it has no right to seek the payment and that we believe the payment GSPC is
seeking is in breach of the Carried Interest Agreement.  We further
reminded GSPC that over the past six years we have fulfilled our obligations
under the Carried Interest Agreement to provide extensive technical assistance
without any further remuneration other than the carried interest, all in
accordance with the terms of the Carried Interest Agreement.  In
furtherance of our position, we have obtained the opinion of Indian legal
counsel who has advised us that, among other things, under the terms of the
agreements between the parties, and in particular the Carried Interest
Agreement, we are not liable to pay any amount to GSPC for either costs and
expenses incurred or otherwise before reaching the stage of commercial
production.
  We
continue to be of the view that, under the terms of the Carried Interest
Agreement, we have a carried interest in the exploration activities conducted by
the parties on the KG Offshore Block for 100% of our share (including the share
of Roy Group (Mauritius) Inc.) of costs during the exploration phase prior to
the start date of initial commercial production on the KG Offshore
Block.  To date, commercial production has not been achieved on the
block.  As such, we are of the view that the additional costs of
drilling future exploration wells over and above the Minimum Work Program on the
KG Offshore Block as proposed by GSPC under the PSC, shall be subject to the
Carried Interest Agreement and shall be carried by GSPC.
  We intend
to vigorously protect our contractual rights in accordance with the dispute
resolution process under the Carried Interest Agreement, the PSC and the Joint
Operating Agreement as may be appropriate.  In September 2007, we
commenced discussions with GSPC in an effort to reach an amicable resolution
however no agreement has been reached as of November 13, 2009.
  GSPC by
letter dated August 27, 2008 advised the Director General of Hydrocarbons that
the Minimum Work Program for all phases under the PSC relating to the KG
Offshore Block has been fulfilled.  On November 5, 2008 GSPC advised
us that the Minimum Work Program for all Exploration Phases of the KG Offshore
Block had been completed as of September 30, 2008 and same has been noted by
Directorate General of Hydrocarbons.  As such, GSPC advised us that it
has elected to undertake an additional work program over and above the Minimum
Work Program as either Joint Operations or as Exclusive Operations under the
terms of the PSC and that we must elect whether we wish to participate in these
future exploration activities over and above the Minimum Work Program on the KG
Offshore Block or alternatively, GSPC will conduct these drilling activities as
Exclusive Operations, as defined in the PSC.
  On
November 13, 2008 we advised GSPC that we exercised our right to participate in
the drilling operations proposed in the November 5, 2008 GSPC letter as a Joint
Operation under the terms of the PSC and Joint Operating
Agreement.  Further, we advised GSPC, among other things, that our
exercise was done pursuant to the terms of our Carried Interest Agreement with
GSPC, and as such we would be carried for 100% of all of our share of any costs
during the exploration phase prior to the start of initial commercial production
and that the Carried Interest Agreement extends through the exploration period
of the PSC.
  Krishna Godavari Onshore
Block
 In a
recent Technical Committee meeting held July 8, 2009, it was agreed among the
parties to pursue the 3D seismic and drilling commitments simultaneously, by
identifying prospects and locations based upon the available reprocessed 2D
seismic data and related geoscientific information allowing us the ability to
meet our Minimum Work Program commitment for Phase I within the necessary
timelines, being February 17, 2012.
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  Four
priority locations have been proposed by us and reviewed and agreed to by Oil
India Ltd. as operator.  All of these locations have multiple
prospects in both the shallower (Eocene – Miocene) and the deeper (Cretaceous –
Jurassic) zones.
  All
necessary steps are currently being undertaken by Oil India Ltd. as operator in
an effort to commence the drilling of the first of twelve exploration wells by
the first quarter of 2010.
  Tarapur
Block
 Tarapur
1 Discovery Area
 As
previously reported, in a meeting held on May 4, 2009, the Management Committee
approved the Tarapur 1 field development plan which covers an area of
approximately 2.14 square kilometers within the Tarapur 1 Discovery Area of
approximately 9.7 square kilometers and includes three existing discovery wells
(Tarapur 1, Tarapur P and Tarapur 5) and three development wells (TD-1, TD-2 and
TD-3).  Five of these six wells are tied into the oil tank storage
facilities by way of a gathering system.  A Chapman Petroleum
Engineering Ltd. reserve report for these six wells indicates total proved oil
reserves of 0.245 net MMSTB (million stock tank barrels) at December 31,
2008.
  First
production from the three discovery wells commenced in May 2009.  Two
development wells (TD-2 and TD-3) commenced production during the month of
September 2009 bring the total number of wells currently producing to
five.   Average gross production for the three months ending
September 30, 2009 from these wells was approximately 352 Bbls/d of oil for
total gross production since commencement of production to September 30, 2009 of
approximately 54,525 Bbls of oil.  The Company’s participating interest
share of this oil production is 14%.
  In
addition to the crude oil production, natural gas is being produced and flared
off.  GSPC as operator is building a new gas line in order to collect
and sell the gas.
  As at
November 13, 2009, there are twelve additional wells which are drilled, tested
and awaiting tie-in to the oil tank storage facilities.  GSPC as
operator is currently in the process of preparing and filing the necessary
declarations of commerciality and field development plans pursuant to the
provisions of the PSC in conjunction with building the gas pipeline in order to
bring these additional twelve wells within the Tarapur 1 Discovery Area onto
production.  It is the intention of GSPC to have all of these wells on
production before the end of the first quarter of 2010.
  Other
Areas of Tarapur Block
 Exploration
activities on the remaining areas of the Tarapur Block are conducted in three
separate areas based on their relative location on the block as
follows:
  ·
              Tarapur
      South As at
November 13, 2009, five wells have been drilled in the Tarapur South
area.  The five suspended wells are awaiting further testing and
appraisal before the submission of a declaration of commerciality pursuant to
the terms of the PSC.  The Tarapur South area is located approximately 40
kilometers to the southeast of the Tarapur 1 Discovery Area.
 ·
              Tarapur
      North
 As at
November 13, 2009, thirteen wells have been drilled and three previously drilled
wells have been re-entered in the Tarapur North area.  Of these sixteen
wells, seven have been reported by GSPC as oil discoveries and are currently
suspended along with two others, and seven have been abandoned.  The
nine suspended wells are awaiting further appraisal before the submission of a
declaration of commerciality pursuant to the terms of the PSC.  The
Tarapur North area is located adjacent to and extending approximately thirty
kilometers to the northeast of the Tarapur 1 Discovery Area.
 ·
              Tarapur
      East
 There are
no wells drilled to date in the Tarapur East area.  The consortium has
applied for an 18 month extension of the exploration phase to May 22, 2010 in
order to acquire 330 square kilometers of 3D seismic and drill five exploration
wells.  Approval for the extension is still pending.  The Tarapur East
area is located approximately forty kilometers to the east of the Tarapur 1
Discovery Area.
  GSPC, as
operator continues to prepare a work program and budget for the fiscal year
April 1, 2009 to March 31, 2010.  We believe the program will entail
the drilling of development wells to focus on increasing production from the
Tarapur Block however, no program or budget figures have been
provided.
  Sanand/Miroli
Block
 During
the nine months ended September 30, 2009 the M-8 exploratory well was drilled to
a total depth of 3,405 meters.  This well was the first of the two
well drilling commitment for Phase III.  As at November 13, 2009, GSPC
as operator is evaluating the location of the second exploratory well and is
also considering possible appraisal wells to be drilled and budgeted for the
fiscal year April 1, 2009 to March 31, 2010.
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  As at
November 13, 2009, nineteen wells have been drilled on this block.  Of
these nineteen wells, sixteen are exploration wells and three are appraisal
wells.  There is one exploratory well remaining to be drilled to
complete our Minimum Work Program commitment for the final phase of the
exploration period covering this block.
  Six wells
are discovery wells as reported by GSPC to the Director General of Hydrocarbons
under the terms of the PSC.  Eight wells are currently suspended
awaiting further appraisal and five wells have been abandoned.
  Ankleshwar
Block
 On
September 18, 2009, GSPC as operator applied for a twelve month extension of
Phase I to September 30, 2010 to complete the exploratory drilling commitments
under Phase I on this block, which approval is pending.  Drilling of
two exploratory wells (Ank-35 and Ank-38) commenced during the third quarter of
2009, leaving four exploratory wells remaining to be drilled under the Phase I
Minimum Work Program.  An appraisal well (Ank-21-A1) to further
appraise the Ank-21 oil discovery under the terms of the PSC also commenced
drilling during the third quarter of 2009.
  As at
November 13, 2009, ten exploratory wells and one appraisal well have been
drilled on this block.  Of the eleven wells, one has completed testing
and is suspended, six are being tested and four are to be
abandoned.
  Mehsana
Block
 During
the nine months ended September 30, 2009, the CB-3E well was drilled to a total
depth of 2,450 meters to appraise the CB-3A discovery.  As at November
13, 2009, the CB-3E well was tested and has been suspended as no significant
quantities of hydrocarbons have been noted.
  Jubilant
Offshore Drilling Pvt. Ltd. continues to await the approval from the Directorate
General of Hydrocarbons requesting an extension of six months to Phase I from
the date of approval of such request to complete a testing and stimulation
program on the remaining four existing wells (CB-3A, 4, 5A &
6).  As at November 13, 2009, this approval is pending.
  As at
November 13, 2009, eight wells have been drilled on this
block.   Of these eight wells, seven are exploration wells which
fulfill our Phase I Minimum Work Program commitment and one is an appraisal
well.
  DS03 and DS04
Blocks
 During
the nine months ended September 30, 2009, the field work for the acquisition,
processing and interpretation of the gravity magnetic survey on these blocks was
completed.  It is our intention as operator of the blocks to complete
a 12,000 line kilometer aeromagnetic survey before the end of the first quarter
2010.  This survey is awaiting approval from the Government of
India.
  RJ20 and RJ21
Blocks
 During
the nine months ended September 30, 2009, the consortium completed the
processing and interpretation of the recently acquired 3D seismic program of
approximately 1,300 square kilometers on both of these blocks.  We
have identified a number of drilling locations to commence drilling in the first
quarter of 2010 which are awaiting approval from Oil India Ltd. as
operator.
 
 ITEM
3.                     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
 
 Market
risk is the potential loss arising from changes in market rates and
prices.  We are exposed to the impact of market fluctuations
associated with the following:
 
 Interest
Rate Risk
 We
consider our exposure to interest rate risk to be immaterial.  Interest
rate exposures relate entirely to our investment portfolio, as we do not have
short-term or long-term debt.  Our investment objectives are focused on
preservation of principal and liquidity.  We manage our exposure to market
risks by limiting investments to high quality bank issuers at short-term rates,
or government securities of the United States or Canadian federal governments
such as Guaranteed Investment Certificates or Treasury Bills.  We do not
hold any of these investments for trading purposes.  We do not hold equity
investments.  We do not expect any material loss from cash equivalents
and therefore we believe our interest rate exposure on invested funds is not
material.
 
 Foreign
Currency Exchange Risk
 Substantially,
all of our cash and cash equivalents are held in U.S. dollars or U.S. dollar
denominated securities.  Certain of our expenses are fixed or
denominated by foreign currencies including the Canadian dollar and the Indian
Rupees.  We are exposed to market risks associated with fluctuations
in foreign currency exchange rates related to our transactions denominated in
currencies other than the U.S. dollar.
  At
September 30, 2009, we had not entered into any market risk sensitive
instruments relating to our foreign currency exchange risk.
 
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28
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  Commodity
Price Risk
 With
respect to our oil and gas revenues, cash flow, profitability and future rate of
growth we achieve will be greatly dependent upon prevailing prices for oil and
natural gas.  Our ability to obtain or maintain any borrowing capacity
and to obtain additional capital on attractive terms is also expected to be
dependent on oil and natural gas prices.  Historically, oil and
natural gas prices are subject to wide fluctuations and market uncertainties due
to a variety of factors that are beyond our control.  These factors
include the level of global demand for petroleum products, international supply
of oil and gas, the establishment of and compliance with production quotas by
oil exporting countries, weather conditions, the price and availability of
alternative fuels, and overall world economic conditions.
  We cannot
predict future oil and natural gas prices with any degree of
certainty.  Lower oil and natural gas prices may not only decrease our
revenues on a per unit basis, but may also reduce the amount of oil and natural
gas we can produce economically, if any.  A substantial or extended
decline in oil and natural gas prices may materially affect our future business,
financial condition, results of operations, and capital resources and we may
require a reduction in the carrying value of our oil and gas
properties.  Similarly, an improvement in oil and gas prices can have
a favorable impact on our financial condition, results of operations and capital
resources, exploration and production costs and acquisition costs for additional
properties may also increase.
  At
September 30, 2009, we had not entered into any market risk sensitive
instruments as such term is defined in Item 305 of Regulation S-K, relating to
oil and natural gas.
 
 Trading
Risks
 We have
no market risk sensitive instruments held for trading purposes.
 
 ITEM
4.                     CONTROLS AND PROCEDURES
 
 Disclosure
Controls
 Our
management, with participation of our Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of our disclosure controls
and procedures as of September 30, 2009. Disclosure controls and procedures are
defined under SEC rules as controls and other procedures that are designed to
ensure that information required to be disclosed by a company in the reports
that it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by a company in the reports that it files or submits under the
Securities Exchange Act of 1934 is accumulated and communicated to the company's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate, to allow timely
decisions regarding required disclosure. There are inherent limitations to the
effectiveness of any system of disclosure controls and procedures, including the
possibility of human error and the circumvention or overriding of the controls
and procedures. Accordingly, even effective disclosure controls and procedures
can only provide reasonable assurance of achieving their control
objectives.
  Based on
the identification of the material weaknesses in our internal control over
financial reporting described in our Annual Report on Form 10-K for the year
ended December 31, 2008, the Chief Executive Officer and the Chief Financial
Officer have concluded that our disclosure controls and procedures were not
effective as of September 30, 2009, however, along with the Plan as disclosed in
our Form 10-K for the year ended December 31, 2008, we continue to take steps to
correct this situation.
 
 Changes
in Internal Controls
 During
the three months ended September 30, 2009, a Special Committee of one
independent director was appointed by the Board of Directors to interface with
senior management on a weekly basis and report back to the Board on a regular
basis.  The objective of the Special Committee is to oversee the
implementation of new controls designed to remediate some of the material
weaknesses as described in our Form 10-K for the year ended December 31,
2008.
  Although
we have implemented the above process, we are unable to conclude the material
weaknesses have been remediated as of September 30, 2009 until the new internal
controls operate for a sufficient period of time, are tested, and management
concludes that these controls are operating effectively.  We expect to
complete our analysis by the end of the fiscal year ending December 31,
2009.
  There
were no other changes in our internal control over financial reporting, as
defined in Rule 13a-15(f) under the Exchange Act, during the third quarter of
2009, that materially affected, or is reasonably likely to materially affect our
internal control over financial reporting.
 
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29
 Table of Contents
  PART
II
 OTHER
INFORMATION
 
 ITEM
1A.                      RISK FACTORS
 
 Risks
relating to us are described in detail in Item 1A of our Annual Report on Form
10-K for the year ended December 31, 2008 filed on March 27,
2009.  Changes or additions to certain of those risk factors which may
be deemed to be material have been included in this quarterly
report.  Reference should be made to our Annual Report as well as to
the following for complete information regarding all risk factors material to
investors.
  We
Have A History Of Losses And Our Liquidity Position Imposes Risk To Our
Operations
 To date,
we have not earned any material revenues from our operations and we are
considered to be in the development stage of our operations.  We have
incurred negative cash flows from our operations, and at this time all
exploration activities and overhead expenses have been financed by way of the
issue and sale of equity securities and interest income on our cash
balances.  The recoverability of the costs we have incurred to date is
uncertain and is dependent upon achieving substantial commercial production or
sale.  Our prospects must be considered in light of the risks,
expenses and difficulties which are frequently encountered by companies in their
early stage of operations, particularly companies in the oil and gas exploration
industry.
  Our
ability to continue as a going concern is dependent upon obtaining the necessary
financing to complete further exploration and development activities and
generate profitable operations from oil and natural gas interests in the
future.  Our current operations are dependent upon the adequacy of our
current assets to meet our current expenditure requirements and the accuracy of
management’s estimates of those requirements.  Should those estimates
be materially incorrect, our liability to continue as a going concern may be
impaired.  Our condensed consolidated financial statements as at and
for the period ended September 30, 2009 have been prepared on a going concern
basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. During the nine
months ended September 30, 2009, we incurred a net loss of approximately $3.2
million, used approximately $2.1 million of cash flow in its operating
activities, used approximately $5.1 million in its investing activities and had
an accumulated deficit of approximately $27.6 million.  These matters
raise doubt about our ability to continue as a going concern.
  We expect
to incur substantial expenditures to further our exploration programs and our
existing cash balance and any cash flow from operating activities may not be
sufficient to satisfy the current obligations and meet our exploration
commitments.  We are considering various alternatives to remedy any
future shortfall in capital.  We may deem it necessary to raise
capital through equity markets, debt markets or other financing arrangements
which could include the sale of oil and gas interests, or participation
arrangements in oil and gas agreements, to raise capital for continued
exploration and development expenditures.  Because of the early stage
of our operations and our limited current revenues, there can be no assurance
this capital will be available and if it is not, we may be forced to
substantially curtail or cease exploration block acquisition and/or exploration
and development expenditures which could lead to our inability to meet all of
our commitments under all our PSCs.
  Should
the going concern assumption not be appropriate and we are not able to realize
our assets and settle our liabilities, commitments and contingencies, as more
fully described in our condensed consolidated financial statements in the normal
course of operations, our consolidated financial statements would require
adjustments to the amounts and classifications of assets and liabilities, and
these adjustments could be significant.  Our condensed consolidated
financial statements do not reflect the adjustments or reclassifications of
assets and liabilities that would be necessary if we are unable to continue as a
going concern.
  GSPC
Is Seeking a Payment From Us In the Amount Of Approximately $143.0 Million Plus
Interest As Of September 30, 2009 On Account Of GSPC’s Exploration Costs On the
KG Offshore Block
 GSPC, the
operator of the KG Offshore Block in which we have a net 5% carried interest,
has advised us that it is seeking from us our pro rata portion of the amount by
which the sums expended by GSPC under all phases for the Minimum Work Program as
set forth in the PSC for the KG Offshore Block in carrying out exploration
activities on the block exceeds the amount that GSPC deems to be our pro rata
portion of a financial commitment under all phases included in the parties’
joint bid for the award of the KG Offshore Block by the Government of
India.
  GSPC
contends that this excess amount is not within the terms of the Carried Interest
Agreement.  GSPC asserts that we are required to pay 10% of the
exploration expenses over and above gross costs of $59.23 million (10% being
$5.92 million) (including the net 5% interest of Roy Group (Mauritius) Inc.)
plus interest.
  Based
upon the most recent correspondence from GSPC dated November 28, 2008, GSPC
asserts that the amount payable is Rs. 365.9 crore (approximately $78.7 million)
plus interest as of September 30, 2008, of which 50% is for the account of Roy
Group (Mauritius) Inc..  We estimate that the amount of GSPC’s claim
as of September 30, 2009 to be approximately $143.0 million plus
interest.  We dispute this assertion of GSPC.
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  We have
advised GSPC that, under the terms of the Carried Interest Agreement, the terms
of which are also incorporated into the PSC and the Joint Operating Agreement,
it has no right to seek the payment and that we believe the payment GSPC is
seeking is in breach of the Carried Interest Agreement.  We further
reminded GSPC that over the past six years we have fulfilled our obligations
under the Carried Interest Agreement to provide extensive technical assistance
without any further remuneration other than the carried interest, all in
accordance with the terms of the Carried Interest Agreement.  In
furtherance of our position, we have obtained the opinion of Indian legal
counsel who has advised us that, among other things, under the terms of the
agreements between the parties, and in particular the Carried Interest
Agreement, we are not liable to pay any amount to GSPC for either costs and
expenses incurred or otherwise before reaching the stage of commercial
production.
  We
continue to be of the view that, under the terms of the Carried Interest
Agreement, we have a carried interest in the exploration activities conducted by
the parties on the KG Offshore Block for 100% of our share (including the share
of Roy Group (Mauritius) Inc.) of costs during the exploration phase prior to
the start date of initial commercial production on the KG Offshore
Block.  To date, commercial production has not been achieved on the
block.  As such, we are of the view that the proposed additional costs
of drilling future exploration wells over and above the Minimum Work Program on
the KG Offshore Block as proposed by GSPC under the PSC, shall be subject to the
Carried Interest Agreement and shall be carried by GSPC.
  We intend
to vigorously protect our contractual rights in accordance with the dispute
resolution process under the Carried Interest Agreement, the PSC and the Joint
Operating Agreement as may be appropriate.  However, there can be no
assurance that GSPC will not institute arbitration or other proceedings seeking
to recover the sum it claims we owe or otherwise contend we are in breach of the
PSC or that the effect of GSPC seeking payment of this sum may not hinder our
capital raising and other activities.  In September 2007, we commenced
discussions with GSPC in an effort to reach an amicable resolution however no
agreement has been reached as of November 13, 2009.
  GSPC by
letter dated August 27, 2008 advised the Director General of Hydrocarbons that
the Minimum Work Program for all phases under the PSC relating to the KG
Offshore Block has been fulfilled.  On November 5, 2008 GSPC advised
us that the Minimum Work Program for all Exploration Phases of the KG Offshore
Block had been completed as of September 30, 2008 and same has been noted by
Directorate General of Hydrocarbons.  As such, GSPC advised us that it
has elected to undertake an additional work program over and above the Minimum
Work Program as either Joint Operations or as Exclusive Operations under the
terms of the PSC and that we must elect whether we wish to participate in these
future exploration activities over and above the Minimum Work Program on the KG
Offshore Block or alternatively, GSPC will conduct these drilling activities as
Exclusive Operations, as defined in the PSC.
  On
November 13, 2008 we advised GSPC that we exercised our right to participate in
the drilling operations proposed in the November 5, 2008 GSPC letter as a Joint
Operation under the terms of the PSC and Joint Operating
Agreement.  Further, we advised GSPC, among other things, that our
exercise was done pursuant to the terms of our Carried Interest Agreement with
GSPC, and as such we would be carried for 100% of all of our share of any costs
during the exploration phase prior to the start of initial commercial production
and that the Carried Interest Agreement extends through the exploration period
of the PSC.
  Our
Internal Control Over Financial Reporting Was Not Effective As Of September 30,
2009 And Continuing Weaknesses In Our Internal Controls And Procedures Could
Have A Material Adverse Effect On Us
 During
our management’s assessment of the effectiveness of our internal control over
financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act in
connection with the preparation of our Annual Report on Form 10-K for the year
ended December 31, 2008 we identified material weaknesses in those controls as
identified in Item 9A. - Controls and Procedures of our Annual
Report.
  As a
result of management’s philosophy and operating style, we did not maintain an
effective control environment.  We did not effectively communicate and
emphasize controls and enforce corporate strategy and objectives, we did not
define roles and responsibilities for employees and management; we did not
effectively communicate and enforce policies and procedures for limiting
authorization of significant transactions; we did not have a formal process to
monitor the competencies and performance of consultants, employees and
management to ensure that roles and responsibilities are properly evaluated on a
timely basis; and, we did not have sufficient resources with appropriate
knowledge in generally accepted accounting principles to allow for an
independent review in complex areas of financial reporting.
  This
control deficiency, which is pervasive in nature, could contribute to a material
misstatement in the financial statements not being prevented or detected on a
timely basis.
  We have
limited accounting personnel with appropriate knowledge of generally accepted
accounting principles.  Specifically, internal controls did not
provide reasonable assurance that transactions related to the following areas
were accounted for in accordance with generally accepted accounting
principles:
  ·
              Impairment
      Assessment Under Full Cost Method of Accounting for Petroleum and Natural
      Gas Properties
  This
resulted in a material adjustment to our 2008 annual financial statements prior
to issuance.
  ·
              Income
      Taxes
 This did
not result in an adjustment to our 2008 annual financial
statements.
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  As a
result of these material weaknesses as at December 31, 2008, our Chief Executive
Officer and our Chief Financial Officer concluded that our internal control over
financial reporting and our disclosure controls and procedures continue to be
ineffective as of September 30, 2009, due to the conditions that led to the
identification of the material weaknesses.  We continue to take certain
steps to remediate these material weaknesses.  Although these actions
are continuing, we anticipate that these actions when fully completed and tested
will remediate the material weaknesses we identified and strengthen our internal
controls over financial reporting.  However we cannot assure you that
the finalized measures that we implement will effectively address such material
weaknesses or that additional material weaknesses may not develop in the
future.
  Remedying
the currently existing material weaknesses, as well as any additional
significant deficiencies or material weaknesses that we or our independent
auditors may identify in the future, may require us to incur significant costs
and expend significant time and management resources.  If we fail to
timely remedy any current or additional material weaknesses or significant
deficiencies that we or our auditors may identify or if we cannot produce
reliable financial reports, we may be unable to comply with our periodic
reporting requirements, accurately report our financial results, detect fraud or
comply with the requirements of Section 404 of the Sarbanes-Oxley Act all of
which could result in a loss of investor confidence in the accuracy, timeliness
and completeness of our financial reports. As a consequence, the market price of
our common stock could decline significantly, we may be unable to obtain
additional financing to operate and expand our business and financial condition
could be materially harmed.  In addition, we can give no assurance
that our independent auditors will agree with our management’s assessment of the
effectiveness of our internal control over financial reporting at that
time.
  We
Expect to Have Substantial Requirements For Additional Capital That May Be
Unavailable To Us Which Could Limit Our Ability To Participate In Our Existing
and Additional Ventures Or Pursue Other Opportunities.  Our Available
Capital is Limited
 In order
to participate under the terms of our PSCs and engage in development drilling
where discoveries believed to be commercial are made, as well as in further
joint venture arrangements leading to the possible grant of exploratory drilling
opportunities, we will be required to contribute or have available to us
material amounts of capital.  Under the terms of our Carried Interest
Agreement relating to the KG Offshore Block, after the start date of initial
commercial production on the KG Offshore Block, and under the terms of the nine
other PSCs we are parties to, we are required to bear our proportionate share of
costs during the exploration phases of those agreements.  There can be
no assurance that our currently available capital will be sufficient for these
purposes or that any additional capital that is required will be available to us
in the amounts and at the times required.  Such capital also may be
required to secure bonds in connection with the grant of exploration rights, to
conduct or participate in exploration activities or be engaged in both
exploration and development drilling and completion activities.  We
intend to seek the additional capital to meet our requirements from equity and
debt offerings of our securities or other financing arrangements which could
include sale of oil and gas interests, or participation arrangements in oil and
gas interests, to raise capital for continued exploration and development
expenditures.  Our ability to access additional capital will depend in
part on the success of the ventures in which we are a participant in locating
reserves of oil and gas and developing producing wells on the exploration
blocks, the results of our management in locating, negotiating and entering into
joint venture or other arrangements on terms considered acceptable, as well as
the status of the capital markets at the time such capital is
sought.
  There can
be no assurance that capital will be available to us from any source or that, if
available, it will be at prices or on terms acceptable to us.  Should
we be unable to access the capital markets or should sufficient capital not be
available at times we require it, our activities could be delayed or reduced
and, accordingly, any future exploration opportunities, revenues and operating
activities may be adversely affected and could also result in our breach of the
terms of a PSC which could result in the loss of our rights under the
contract.
  As of
September 30, 2009, we had cash and cash equivalents of approximately $18.3
million.  We believe that our available cash resources will be
sufficient to meet all our expenses and cash requirements during the next twelve
months for our present level of operations on the ten exploration blocks in
which we are currently a participant in.  Although exploration
activity budgets are subject to ongoing review and revision, our present
estimate of our commitments of capital pursuant to the terms of our PSCs
relating to our ten exploration blocks totals approximately $10.0 million to the
twelve months ending September 30, 2009.  We anticipate our
expenditures on the KG Onshore Block to be $2.2 million based upon a 10%
participating interest.  Upon receipt of approval from the Government
of India for the increase to a 25% participating interest, these expenditures
will increase to $3.3 million.  Our ability to meet these and possible
other expenditures is subject to the accuracy of our estimates.  Any
further PSCs we may seek to enter into or any expanded scope of our operations
or other transactions that we may enter into may require us to fund our
participation or capital expenditures with amounts of capital not currently
available to us.  We may be unsuccessful in raising the capital
necessary to meet these capital requirements.
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  We
Commenced Production From The Tarapur Field During The Second Quarter Of 2009
Which May Give Rise To Certain Additional Risks To Our Operations
 The
commencement of production in May 2009 from the Tarapur Field for our account
may give rise to certain additional risks as follows:
 ·
              Unless
      the Tarapur venture in which we are a participant successfully replaces
      the oil and natural gas reserves that are produced, reserves will decline,
      resulting eventually in a decrease in the quantities of oil and natural
      gas able to be produced and lower revenues and cash flow from operations.
      Reserves are expected to be replaced through exploitation, development and
      exploration.  Reserves may be unable to be replaced by
      exploitation, development and exploration activities at acceptable
      costs.  GSPC is the operator of the Tarapur
    Block.
 ·
              Our
      revenues, operating results, and cash flow from production of oil and gas
      depend substantially upon prevailing prices for oil and gas. Historically,
      oil and gas prices and markets have been volatile, and they are likely to
      continue to be volatile in the future.   A significant
      decrease in oil and gas prices could have a material adverse effect on our
      cash flow and profitability and would adversely affect our financial
      condition and the results of our operations.  Prices for oil and
      gas revenues fluctuate in response to relatively minor changes in the
      supply of and demand for oil and gas, market uncertainty and a variety of
      additional factors that are beyond our
control.
 ·
              Reserve
      information that we may provide will represent estimates based on reports
      prepared by our independent petroleum engineers, as well as internally
      generated reports. Petroleum engineering is not an exact
      science.  Information relating to proved oil and gas reserves is
      based upon engineering estimates derived after analysis of information we
      furnish or furnished to us by the operator of the
      property.  Estimates of economically recoverable oil and gas
      reserves and of future net cash flows necessarily depend upon a number of
      variable factors and assumptions, such as historical production from the
      area compared with production from other producing areas, the assumed
      effects of regulations by governmental agencies and assumptions concerning
      future oil and gas prices, future operating costs, severance and excise
      taxes, capital expenditures and workover and remedial costs, all of which
      may in fact vary considerably from actual results.  Oil and gas
      prices, which fluctuate over time, may also affect proved reserve
      estimates.  For these reasons, estimates of the economically
      recoverable quantities of oil and gas attributable to any particular group
      of properties, classifications of such reserves based on risk of recovery
      and estimates of the future net cash flows expected there from prepared by
      different engineers or by the same engineers at different times may vary
      substantially.  Actual production, revenues and expenditures
      with respect to our reserves will likely vary from estimates, and such
      variances may be material.  Either inaccuracies in estimates of
      proved undeveloped reserves or the inability to fund development could
      result in substantially reduced reserves.  In addition, the
      timing of receipt of estimated future net revenues from proved undeveloped
      reserves will be dependent upon the timing and implementation of drilling
      and development activities estimated by us for purposes of the reserve
      report.
 ·
              Quantities
      of proved reserves are estimated based on economic conditions in existence
      in the period of assessment. Lower oil and gas prices may have the impact
      of shortening the economic lives on certain fields because it becomes
      uneconomic to produce all recoverable reserves on such fields, thus
      reducing proved property reserve estimates. If such revisions in the
      estimated quantities of proved reserves occur, it will have the effect of
      increasing the rates of depreciation, depletion and amortization on the
      affected properties, which would decrease earnings or result in losses
      through higher depreciation, depletion and amortization expense. The
      revisions may also be sufficient to trigger impairment losses on certain
      properties that would result in a further non-cash charge to
      earnings.
  Cautionary
Statement For Purposes Of The “Safe Harbor” Provisions Of The Private Securities
Litigation Reform Act Of 1995
 With the
exception of historical matters, the matters discussed in this Report are
“forward-looking statements” as defined under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, that involve risks
and uncertainties.  Forward-looking statements made herein include,
but are not limited to:
 ·
              the
      statements in this Report regarding our plans and objectives relating to
      our future operations,
 ·
              plans
      and objectives regarding the exploration, development and production
      activities conducted on the exploration blocks in India in which we have
      interests,
 ·
              plans
      regarding drilling activities intended to be conducted through the
      ventures in which we are a participant, the success of those drilling
      activities and our ability and the ability of the ventures to complete any
      wells on the exploration blocks, to develop reserves of hydrocarbons in
      commercially marketable quantities, to establish facilities for the
      collection, distribution and marketing of hydrocarbons, to produce oil and
      natural gas in commercial quantities and to realize revenues from the
      sales of those hydrocarbons,
 ·
              our
      ability to maintain compliance with the terms and conditions of our PSCs,
      including the related work commitments, to obtain consents, waivers and
      extensions from the Director General of Hydrocarbons or Government of
      India as and when required, and our ability to fund those work
      commitments,
 ·
              our
      plans and objectives to join with others or to directly seek to enter into
      or acquire interests in additional PSCs with the Government of India and
      others,
 ·
              our
      assumptions, plans and expectations regarding our future capital
      requirements,
 ·
              our
      plans and intentions regarding our plans to raise additional
      capital,
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 ·
              the
      costs and expenses to be incurred in conducting exploration, well
      drilling, development and production activities, our estimates as to the
      anticipated annual costs of those activities and the adequacy of our
      capital to meet our requirements for our present and anticipated levels of
      activities are all forward-looking
statements.
  These
statements appear, among other places, in Part I under the caption “Item 2. -
Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and in Part II under the caption “Item 1A. - Risk
Factors”.  If our plans fail to materialize, your investment will be
in jeopardy.
 ·
              We
      cannot assure you that our assumptions or our business plans and
      objectives discussed herein will prove to be accurate or be able to be
      attained.
 ·
              We
      cannot assure you that any commercially recoverable quantities of
      hydrocarbon reserves will be discovered on the exploration blocks in which
      we have an interest.
 ·
              Our
      ability to realize revenues cannot be assured.  Our ability to
      successfully drill, test and complete producing wells cannot be
      assured.
 ·
              We
      cannot assure you that we will have available to us the capital required
      to meet our plans and objectives at the times and in the amounts required
      or we will have available to us the amounts we are required to fund under
      the terms of the PSCs we are a party
to.
 ·
              We
      cannot assure you that we will be successful in joining any further
      ventures seeking to be granted PSCs by the Government of India or that we
      will be successful in acquiring interests in existing
      ventures.
 ·
              We
      cannot assure you that we will obtain all required consents, waivers and
      extensions from the Director General of Hydrocarbons or Government of
      India as and when required to maintain compliance with our PSCs , that we
      may not be adversely affected by any delays we may experience in receiving
      those consents, waivers and extensions, that we may not incur liabilities
      under the PSCs for our failure to maintain compliance with and timely
      complete the related work programs, or that GSPC may not be successful in
      its efforts to obtain payment from us on account of exploration costs it
      has expended on the KG Offshore Block for which it asserts we are liable
      or otherwise seek to hold us in breach of that PSC or commence arbitration
      proceedings against us.
 ·
              We
      cannot assure you that the outcome of testing of one or more wells on the
      exploration blocks under our PSCs will be satisfactory and result in
      commercially-productive wells or that any further wells drilled will have
      commercially-successful results.
  An
investment in shares of our common stock involves a high degree of
risk.  There can be no assurance that the exploratory drilling to be
conducted on the exploration blocks in which we hold an interest will result in
any discovery of reserves of hydrocarbons or that any hydrocarbons that are
discovered will be in commercially recoverable quantities.  In
addition, the realization of any revenues from commercially recoverable
hydrocarbons is dependent upon the ability to deliver, store and market any
hydrocarbons that are discovered.
  Our
inability to meet our goals and objectives or the consequences to us from
adverse developments in general economic or capital market conditions, events
having international consequences, or military or terrorist activities could
have a material adverse effect on us.  We caution you that various
risk factors accompany those forward-looking statements and are described, among
other places, under the caption “Risk Factors” herein.  They are also
described in our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q
and our Current Reports on Form 8-K.  These risk factors could cause
our operating results, financial condition and ability to fulfill our plans to
differ materially from those expressed in any forward-looking statements made in
this Report and could adversely affect our financial condition and our ability
to pursue our business strategy and plans.  The company updates
forward-looking information related to operations, production and capital
spending on a quarterly basis and updates reserves, if any, on an annual
basis.
 
 
 ITEM 6.         EXHIBITS
 
 31.1*
              Certification of President and Chief Executive Officer
      Pursuant to Rule 13a-14(a)
  31.2*
              Certification of Chief Financial Officer Pursuant to
      Rule 13a-14(a)
  32.1*
              Certification of President and Chief Executive Officer
      Pursuant to Section 1350 (furnished, not
  filed)
  32.2*
              Certification of Chief Financial Officer Pursuant to
      Section 1350 (furnished, not
filed)
 
 * filed
or furnished herewith
  Page
34
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 SIGNATURES
 
 In
accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
 
 
 
 GEOGLOBAL
RESOURCES INC.
 
 
 November
16,
2009                             
 By:  /s/ Allan J. Kent
 -------------------------------
 Allan J. Kent
 Executive Vice President and Chief
Financial Officer
 (Signing on behalf of the
registrant and as
 Principal Financial and Accounting
Officer)
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35