UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q/A
 AMENDMENT
NO. 1 TO
 QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
AND EXCHANGE ACT OF 1934
 
 For
      the quarterly period ended June 30, 2004
    Commission
      File No. 0-6119
 
 **Tri-Valley
Corporation**
 (Exact
name of registrant as specified in its charter)
 
 **Delaware**
    **84-0617433**(State
      or other jurisdiction of
    (I.R.S.
      Employer Identification No.)incorporation
      or organization)
 
 **5555
Business Park South, Suite 200, Bakersfield, California
93309**
 (Address
of principal executive offices)
 
 **(661)
864-0500**
 (Registrant's
telephone number, including area code)
 
 Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No o
 
 
 The
number of shares of Registrant's common stock outstanding at June 30, 2004 was
20,267,127.
  
  TRI-VALLEY
CORPORATION
 
 INDEX
 PagePART
      I -
    FINANCIAL
      INFORMATION
    3Item
      1.
    Consolidated
      Financial Statements
    3Item
      2.
    Management's
      Discussion and Analysis of FinancialCondition
      and Results of Operations
    8Item
      3.
    Quantitative
      and Qualitative Disclosures About Market Risk
    10Item
      4.
    Controls
      and Procedures
    10PART
      II -
    OTHER
      INFORMATION
    10Item
      1.
    Legal
      Proceedings
    10Item
      2.
    Changes
      in Securities
    10Item
      6.
    Exhibits
      and Reports on Form 8-K
    11SIGNATURES
    
    12
 
  
  **PART
      I -**
    **FINANCIAL
      INFORMATION**
 
 **Item
      1.**
    **Unaudited
      Consolidated Financial
Statements**
 
 **TRI-VALLEY
CORPORATION**
 **CONSOLIDATED
BALANCE SHEETS**
 
 
 **ASSETS**
 
 June
      30, 2004
    Dec.
      31, 2003(Restated)
    (Restated)(Unaudited)
    (Audited)Current
      AssetsCash
    $6,949,798
    $6,006,975Accounts
      receivable, trade
    165,323
    163,825Prepaid
      expenses
    68,029
    12,029Total
      Current Assets
    7,183,150
    6,182,829Property
      and Equipment, Net
    1,560,609
    1,543,121Other
      AssetsDeposits
    372,105
    372,105Investments
      in partnerships
    17,400
    17,400Other
    13,913
    13,913Goodwill
      (net of accumulated amortization of $221,439 at December 31,
      2003)
    212,414
    212,414Total
      Other Assets
    615,832
    615,832Total
      Assets
    $9,359,591
    $8,341,782
 
 The
accompanying notes are an integral part of these condensed financial
statements.
  
  **LIABILITIES
AND SHAREHOLDERS' EQUITY**
 
 June30,
      2004
    Dec.
      31, 2003(Unaudited)
    (Audited)CURRENT
      LIABILITIESNotes
      and contracts payable
    $2,425
    $9,985Income
      taxes Payable
    -
    39,000Trade
      accounts payable & accrued expenses
    870,180
    685,784Accounts
      payable to joint venture participants
    100,743
    91,275Advances
      from joint venture participants
    6,493,382
    5,647,150Total
      Current Liabilities
    7,466,730
    6,473,194Long-term
      Portion of Notes and Contracts Payable
    9,479
    16,805Total
      Liabilities
    7,476,209
    6,489,999CommitmentsShareholders'
      EquityCommon
      stock, $.001 par value: 100,000,000 shares authorized; 20,267,127 and
      20,097,627 issued and outstanding at June 30, 2004 and Dec. 31, 2003,
      respectively
    20,267
    20,115Less:
      Common stock in treasury, at cost, 100,025 shares
    (13,370)
    (13,370)Capital
      in excess of par value
    9,727,051
    9,010,453Accumulated
      deficit
    (7,850,566)
    (7,165,415)Total
      Shareholders' Equity
    1,883,382
    1,851,783Total
      Liabilities and Shareholders' Equity
    $9,359,591
    $8,341,782
 
 The
accompanying notes are an integral part of these condensed financial
statements.
 
   
   **TRI-VALLEY
CORPORATION**
 **CONSOLIDATED
STATEMENTS OF OPERATIONS**
 (Unaudited)
 
 For
      the Three Months
    For
      the Six MonthsEnded
      June 30
    Ended
      June 302004
    2003
    2004
    2003(restated)
    
    (restated)RevenuesSale
      of oil and gas
    $194,849
    $203,408
    $422,268
    $470,055Other
      income
    24,318
    14,460
    37,811
    21,073Sale
      of oil & gas prospects
    909,500
    968,000
    2,054,500
    968,000Interest
      income
    6,243
    4,503
    6,612
    8,023Total
      Revenues
    1,134,910
    1,190,371
    2,521,191
    1,467,151Cost
      and ExpensesOil
      and gas lease expense
    58,098
    33,296
    76,168
    89,621Mining
      exploration expenses
    765,556
    32,580
    804,177
    62,887Project
      geology, geophysics, land & administration
    799,860
    908,622
    1,240,079
    1,197,641Depletion,
      depreciation and amortization
    7,233
    7,233
    14,466
    14,466Interest
    6,248
    667
    32,540
    1,380General
      administrative
    438,324
    360,156
    1,038,912
    674,745Total
      Cost and Expenses
    2,075,319
    1,342,554
    3,206,342
    2,040,741Net
      Income (Loss)
    $(940,409)
    $(152,183)
    $(685,151)
    $(573,590)Basic
      & Diluted Earnings per Share
    $(.05)
    $(.01)
    $(.03)
    $(.03)Weighted
      Average Number of Shares
    20,213,460
    19,786,014
    20,156,543
    19,786,014
 
 The
accompanying notes are an integral part of these condensed financial
statements.
 
   
   **TRI-VALLEY
CORPORATION**
 **CONSOLIDATED
STATEMENTS OF CASH FLOWS**
 (Unaudited)
 
 For
      the Six MonthsEnded
      June 30,2004
    2003(restated)Cash
      Flows from Operating ActivitiesNet
      profit/(loss)
    $(685,151)
    $(573,590)Adjustments
      to reconcile net income to net cash used from operating
      activities:Depreciation,
      depletion and amortization
    14,466
    14,466Non-cash
      mining exploration expense
    712,000Changes
      in operating capital:Prepaids-(increase)decrease
    (56,000)
    -0-Accounts
      receivable-(increase)decrease
    (1,498)
    (9,077)Trade
      accounts payable-increase(decrease)
    137,836
    139,418Accounts
      payable to joint ventureparticipants
      and related parties-increase(decrease)
    9,468
    (1,849)Advances
      from joint ventureParticipants-increase(decrease)
    846,232
    3,954,994Net
      Cash Provided/(Used) by Operating Activities
    977,353
    3,542,516Cash
      Flows Provided/(Used) by Investing ActivitiesCapital
      expenditures
    (31,954)
    (138,708)Cash
      Flows from Financing ActivitiesPrincipal
      payments on long-term debt
    (7,326)
    (18,306)Proceeds
      from issuance of common stock
    4,750
    104,200Net
      Cash Provided/(Used) by Financing Activities
    (2,576)
    85,894Net
      Increase in Cash and Cash Equivalents
    942,823
    3,489,702Cash
      and Cash Equivalents at Beginning of Period
    6,006,975
    1,936,294Cash
      and Cash Equivalents at End of Period
    $6,949,798
    $5,425,996Supplemental
      Information:Cash
      paid for interest
    $32,540
    $1,380Cash
      paid for taxes
    $5,169
    $5,446
 
 During
the six months ended June 30, 2004, Tri-Valley issued $712,000 (160,000 shares)
of common stock in exchange for mineral interests purchased from two individuals
(80,000 shares each) interest in the Richardson Alaska Gold mining claims, which
was recorded as mining exploration expense in the Statement of
Operations.
 
 The
accompanying notes are an integral part of these condensed financial
statements.
  
  **TRI-VALLEY
CORPORATION**
 **NOTES
TO CONDENSED FINANCIAL STATEMENTS**
 **FOR
THE THREE MONTHS ENDED**
 **June
30, 2004 AND 2003**
 (Unaudited)
 
 **NOTE
1 - BASIS OF PRESENTATION**
 
 Business
and Restatement
 The
financial information included herein is unaudited; however, such information
reflects all adjustments (consisting solely of normal recurring adjustments),
which are, in the opinion of management, necessary for a fair statement of
results for the interim periods. The results of operations for the three-month
period ended June 30, 2004, are not necessarily indicative of the results to be
expected for the full year.
 
 The
accompanying consolidated financial statements do not include footnotes and
certain financial presentations normally required under generally accepted
accounting principles; and, therefore, should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended December 31,
2003.
 
 
 **NOTE
2 - RESTATEMENTS OF PRIOR FINANCIAL INFORMATION**
 
 Amendment
No. 1 on Form 10-Q/A of the Company’s quarterly report on Form 10-Q for the
quarter ended June 30, 2004 includes unaudited restated financial information
for the three months ended June 30, 2004 and 2003. The original Form 10-Q was
filed with the Securities and Exchange Commission on August 13, 2004. The
purpose of the Amendment is to restate the Company’s previously reported
financial information for the three months ended March 31, 2004 due to change in
its revenue recognition policy relating to turnkey drilling revenue.
 
 The
Company receives monies from third parties who participate in drilling oil and
gas wells and had previously recognized revenue and associated costs when the
drilling began, as long as drilling was completed by close of books based on
accrual accounting, due to the fact that the monies received was nonrefundable.
The Company changed its accounting policy in December 2003 to recognize turnkey
revenue and associated costs when oil or gas well is drilled to a target depth
and/or logged. As the result of this change, drilling revenue and related costs
decreased in third and fourth quarters of 2003, and increased in the first
quarter of 2004. The Company restated its 2003 financial statements.
 
 The
material effect of the restatement resulting from this accounting policy change
as of and for the three months ended June 30, 2004 is as follows:
 
 As
      Previously
    
    AsReported
    Adjustments
    Restated
    Reference(unaudited)
    
    (unaudited)Cost
      of oil and gas prospects sold
    $
      1,241,658
    $
      (441,798)
    $
      799,860
    [1]Total
      Cost and Expenses
    2,516,380
    (441,061)
    2,075,319Net
      income (loss) before income tax
    (1,381,470)
    441,061
    (940,409)Basic
      and diluted earnings (loss) percommon
      share and common equivalent
    (0.07)
    0.02
    (0.05)
  
  **NOTE
2 - RESTATEMENTS OF PRIOR FINANCIAL INFORMATION
(Continued)**
 
 As
      Previously
    
    AsReported
    Adjustments
    Restated
    Reference(unaudited)
    
    (unaudited)Prepaid
      expenses
    $
      12,029
    $
      56,000
    $
      68,029
    [2]Total
      Current Assets
    7,127,119
    56,031
    7,183,150**Total
      Assets**
    **9,297,954**
    **61,637**
    **9,359,591**Accounts
      payable & accrued expenses
    841,613
    28,567
    870,180
    [3]Advances
      from joint venture participants
    6,937,146
    (443,764)
    6,493,382Total
      Current Liabilities
    7,881,927
    (415,197)
    7,466,730Total
      liabilities
    7,891,406
    (415,197)
    7,476,209Accumulated
      deficit
    (8,327,400)
    476,834
    (7,850,566)
    [4]Total
      Shareholders' Equity
    1,406,548
    476,834
    1,883,382**Total
      Liabilities and Shareholders' Equity**
    **$
      9,297,954**
    **$
      61,637**
    **$
      9,359,591**
 
 The
restatements were due to the following changes:
 
 1.
    The
      cost of drilling was restated for the amount which was recognized in the
      first quarter of 2004.  2.
    The
      adjustment represents capitalization of expenditure previously
      expensed.  3.
    The
      amount represents miscellaneous expenses erroneously omitted from accrual
      in previously reported liabilities  4.
    The
      accumulated deficits were revised mainly to reflect the decrease in costs
      of oil and gas prospects sold.  The
restatements did not affect cash flow statement and statement of operations for
the sixth months ended June 30, 2004
 
 
 **NOTE
3 - PER SHARE COMPUTATIONS**
 
 Per share
computations are based upon the weighted-average number of common shares
outstanding during each year. Common stock equivalents are not included in the
computations since their effect would be anti-dilutive.
 
 **NOTE
4 - RECENT ACCOUNTING PRONOUNCEMENTS**
 
 In July
2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations” (SFAS 143). Under SFAS 143, the fair value of a liability for an
asset retirement obligation should be recorded in the period in which it is
incurred. Upon settlement of the liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss if the settled
amount differs from the liability recorded. SFAS 143 is effective for fiscal
years beginning after June 15, 2002. We have evaluated this guidance and have
determined this will not have a material impact on our financial position,
results of operations, or net cash flows.
 
 In June
2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit
or Disposal Activities" (SFAS 146). SFAS 146 addresses the financial accounting
and reporting for costs associated with exit or disposal activities. SFAS 146
states that a liability for a cost associated with an exit or disposal activity
shall be recognized and measured initially at its fair value in the period when
the liability is incurred. A liability is established only when present
obligations to others are determined. SFAS 146 does not apply to costs
associated with the retirement of long-lived assets covered in SFAS 143 (see
above). It applies to a cost associated with an exit activity that does not
involve an entity newly acquired in a business combination or with a disposal
activity covered by SFAS 144 (see above). We will apply SFAS 146 for exit or
disposal activities initiated after December 31, 2002. We have evaluated this
guidance and do not believe that it will have a material impact on our financial
position, results of operations, or net cash flows.
 
 
 
 **NOTE
5 -**  **MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION**  **AND
RESULTS OF OPERATIONS**
 
 Notice
Regarding Forward-Looking Statements
 This
report contains forward-looking statements. The words, "anticipate," "believe,"
"expect," "plan," "intend," "estimate," "project," "could," "may," "foresee,"
and similar expressions are intended to identify forward-looking statements.
These statements include information regarding expected development of the
Company's business, lending activities, relationship with customers, and
development in the oil and gas industry. Should one or more of these risks or
uncertainties occur, or should underlying assumptions prove incorrect, actual
results may vary materially and adversely from those anticipated, believed,
estimated or otherwise indicated.
 
 Petroleum
Activities
 In early
May 2004 a workover rig was moved in on Elk Ridge # 1-20 to artificially
fracture the Hay Sand formation. The work was completed successfully; however;
we were not able to get commercial production. We are working on several
stimulation concepts to hopefully obtain commercial rates.
 
 During
April 2004 the Company continued work on the Oil Lake well. The well has not
responded with commercial production and is currently idle.
 
 Petroleum
Activities (Continued)
 The Oil
Creek prospect was determined to be no longer a viable prospect. However, the
results of data analysis did identify a new prospect, the Los Gatos Creek
Prospect. The Oil Creek well will be retained for a potential water disposal
well in the event the Los Gatos Creek Prospect results in a new field
discovery.
 
 On June
28, 2004, a test frac was done on the EKHO #1 as a planning and design procedure
to obtain data for what will be a main frac. It appears this will be conducted
in September.
 
 Current
plans are to bring in a production/workover rig and (1) fish the tubing out of
the Martins-Severin #3 and either return it to production from the currently
sanded-up zone or to recomplete into one of the three remaining zones in the
well and to fracture the Martins-Severin #6 to both stimulate production and
remediate the sanding problems.
 
 On the
Pimental #1-15 we intend to hydraulically fracture stimulate the Ragged Valley
Sands to achieve commercial rates. These sands have never been effectively
produced in this Tracy Gas Field. This work is scheduled to be done sometime in
August.
 
 Precious
Metals Activities
 An
independent geologist visited our claim block in Alaska to view the work that
has been performed to date. This visit qualifies his independent report to be
used for U.S and Canadian stock exchange financings. This is part of the
procedure to continue our efforts to successfully spin-off our Richardson,
Alaska gold project into a new, stand alone mining Company.
 
 In the
second quarter, we repurchased two mineral interests in the Richardson gold
mining claims which we had sold to third parties in 1998 in order to consolidate
our interests in this property.
 
 Three
Months Ended June 30, 2004 As Compared With Three Months Ended June
30,
 2003
 In the
quarter ended June 30, 2004, revenue was $1,134,910 compared to $1,190,371 for
the same quarter in 2003. This decrease resulted from reduced gas production due
to certain wells being shut in for workovers and reduced revenue from sales of
prospects.
  
  **NOTE
5 -**  **MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION**  **AND
RESULTS OF OPERATIONS (Continued)**
 
 Three
Months Ended June 30, 2004 As Compared With Three Months Ended June
30,
 2003 (Continued)
 Costs and
expenses increased $732,765 for the period ending June 30, 2004, compared to the
same period in 2003. Oil & gas lease expenses were $24,802 higher this
quarter due to work performed on some of our producing wells. We repurchased
mineral interests on our Richardson, Alaska, gold mining claims which we had
sold to third parties in 1998, resulting in a $732,976 increase in mining
exploration expenses, compared to the same period last years. Project geology,
geophysics, land and administration expenses were $108,762 lower for the quarter
ended June 30, 2004, compared to the same quarter in 2003. This decrease was due
to our writing off costs of the EKHO Prospect that had previously been
capitalized. General and administration costs were $78,168 higher for the
quarter ended June 30, 2004, compared to the same quarter in 2003. The decrease
was due to expensing $31,558 of remaining costs of our litigation with Armstrong
Petroleum (see Part II, Item I) and additional insurance costs.
 
 For the
quarter ended June 30, 2004, we had a loss of $940,409, compared to a loss of
$152,183 for the quarter ended June 30, 2003.
 
 Six
Months Ended June 30, 2004 As Compared To The Six Months Ended June 30,
2003
 Revenue
increased by $1,054,040 during the first six months of the year compared to the
same period in 2003 due to change in accounting policy of turnkey drilling
revenue.
 
 Costs and
expenses were $3,206,342 for the period ending June 30, 2004 compared to
$2,040,741 for the comparable period in 2003. Mining exploration expenses were
$741,290 higher due to expensing of mining interest we bought back on our
Richardson gold mining claims. Project geology, geophysics, land and
administration were $42,438 higher due to expensing costs related to the EKHO
Project. General and administrative costs were $364,167 higher than in 2003.
These increased costs were due to expenses related to the Armstrong lawsuit, a
$30,000 increase in consulting fees, higher directors and officers’ liability
insurance premiums and higher investor relations costs.
 
 For the
six months we had a loss of $685,151 compared to a loss of $573,590 for the same
six month period in 2003.
 
 Capital
Resources and Liquidity
 We have
funded our oil and gas exploration activities primarily with proceeds raised
through privately placed drilling programs. We make decisions on the amount of
capital expenditures for drilling as funds become available for that purpose. We
do not, as a rule, rely on borrowings to fund drilling operations or other
activities.
 
 Current
assets were $7,183,150 at June 30, 2004, compared to $6,182,829 as of December
31, 2003. This is due to an increase of cash related to investments in our
OPUS-I drilling program.
 
 Current
liabilities were $7,466,730 for the six months ended June 30, 2004, compared to
$6,473,194 for the period ended December 31, 2003. This increase is due to
advances from joint venture participants in our drilling programs for drilling
activities in our limited liability drilling program, and accrued expenses
related to the Armstrong lawsuit.
 
 OPERATING
ACTIVITIES. We had a positive cash flow of $977,353 for the six months ended
June 30, 2004 compared to a positive cash flow of $3,542,516 for the same period
in 2003. This difference is due to fewer advances from joint venture partners
and our year to date operating loss. Our primary source of funds is comprised of
selling prospects and oil and gas sales.
 
 INVESTING
ACTIVITIES. In the first six months of 2004 we had $31,954 in capital
expenditures. This was the result of lease acquisitions.
 
 FINANCING
ACTIVITIES. Net cash provided by financing activities was ($2,576) for the six
months ended June 30, 2004. This was due to payments on autos of ($7,326) and
issuance of common stock of $4,750.
 
 
 **NOTE
6 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK**
 
 Tri-Valley
Corporation does not engage in hedging activities and does not use commodity
futures or forward contracts in its cash management functions.
 
 
 **NOTE
7 - CONTROLS AND PROCEDURES**
 
 As of
June 30, 2004, an evaluation was performed under the supervision and with the
participation of the Company's management, including the Company's CEO and CFO,
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures. Based on that evaluation, the Company's management,
including the CEO and CFO, concluded that the Company's disclosure controls and
procedures were effective as of June 30, 2004. There have been no significant
changes in the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to June 30, 2004.
 
 **NOTE
8 - CHANGES IN SECURITIES**
 
 During
the second quarter of 2004, we issued 1,500 shares for aggregate consideration
of $750 ($.50 per share) upon exercise of options by an ex-employee of the
Company. We also issued 160,000 shares to two private individuals to repurchase
all their right, title and interest in mining claims near Richardson, Alaska,
which we had sold to them in 1998. These shares were valued at $712,000 ($4.45
per share), which was the closing price of our stock on the American Stock
Exchange on the date of issuance. All of these shares were not registered under
the Securities Act of 1933 and were sold in reliance on the exemption from
registration requirements provided by Section 4(2) of that statute.
 
 
 **NOTE
9 - COMMITMENTS AND CONTINGENCIES**
 
 In
November 2002, a judgment of $141,500 was awarded to Armstrong Petroleum against
Tri-Valley Corporation. We appealed the decision to the appellate court who
ultimately confirmed the trial court's decision. In the second quarter of 2004,
the California Supreme Court declined to hear our appeal. We previously expensed
$212,985, and we expensed another $31,558 in the second quarter for a total of
$244,543. We will pay this amount in the third quarter of 2004. We had
previously reserved an amount on our balance sheet under deposits which is more
than sufficient to cover the costs attributable to the judgment.
 
  
  **Item
      2.**
    **Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations**
 
 **Business
Review**
 
 Notice
Regarding Forward-Looking Statements
 
 This
report contains forward-looking statements. The words, “anticipate,” “believe,”
“expect,” “plan,” “intend,” “estimate,” “project,” “could,” “may,” “foresee,”
and similar expressions are intended to identify forward-looking statements.
These statements include information regarding expected development of the
Company’s business, lending activities, relationship with customers, and
development in the oil and gas industry. Should one or more of these risks or
uncertainties occur, or should underlying assumptions prove incorrect, actual
results may vary materially and adversely from those anticipated, believed,
estimated or otherwise indicated.
 
 Petroleum
Activities
 
 In early
May 2004 a workover rig was moved in on Elk Ridge # 1-20 to artificially
fracture the Hay Sand formation. The work was completed successfully however; we
were not able to get commercial production. We are working on several
stimulation concepts to hopefully obtain commercial rates.
 
 During
April 2004 the Company continued work on the Oil Lake well. The well has not
responded with commercial production and is currently idle.
 
 The Oil
Creek prospect was determined to be no longer a viable prospect. However, the
results of data analysis did identify a new prospect, the Los Gatos Creek
Prospect. The Oil Creek well will be retained for a potential water disposal
well in the event the Los Gatos Creek Prospect results in a new field
discovery.
 
 On June
28, 2004, a test frac was done on the EKHO #1 as a planning and design procedure
to obtain data for what will be a main frac. It appears this will be conducted
in September.
 
 Current
plans are to bring in a production/workover rig and (1) fish the tubing out of
the Martins-Severin #3 and either return it to production from the currently
sanded-up zone or to recomplete into one of the three remaining zones in the
well and to fracture the Martins-Severin #6 to both stimulate production and
remediate the sanding problems.
 
 On the
Pimental #1-15 we intend to hydraulically fracture stimulate the Ragged Valley
Sands to achieve commercial rates. These sands have never been effectively
produced in this Tracy Gas Field. This work is scheduled to be done sometime in
August.
 
 Precious
Metals Activities
 
 An
independent geologist visited our claim block in Alaska to view the work that
has been performed to date. This visit qualifies his independent report to be
used for U.S and Canadian stock exchange financings. This is part of the
procedure to continue our efforts to successfully spin-off our Richardson,
Alaska gold project into a new, stand alone mining company. In the second
quarter, we repurchased two mineral interests in the Richardson gold mining
claims which we had sold to third parties in 1998 in order to consolidate our
interests in this property.
 
  
  
 **Item
      2.**
    **(Continued)**
 
 Three
Months Ended June 30, 2004 as compared with Three Months ended June 30,
2003
 
 In the
quarter ended June 30, 2004, revenue was $1,134,910 compared to $1,190,371 for
the same quarter in 2003. This decrease resulted from reduced gas production due
to certain wells being shut in for workovers and reduced revenue from sales of
prospects.
 
 Costs and
expenses increased $732,765 for the period ending June 30, 2004, compared to the
same period in 2003. Oil & gas lease expenses were $24,802 higher this
quarter due to work performed on some of our producing wells. We repurchased
mineral interests on our Richardson, Alaska, gold mining claims which we had
sold to third parties in 1998, resulting in a $732,796 increase in mining
exploration expenses, compared to the same period last year. Project geology,
geophysics, land and administration expenses were $108,762 less for the quarter
ended June 30, 2004, compared to the same quarter in 2003. This decrease was due
to reduced prospect generation. General and administrative costs were $78,168
higher for the quarter ended June 30, 2004, compared to the same quarter in
2003. The increase was due to expensing $31,558 of remaining costs of our
litigation with Armstrong Petroleum ( *see
Part II, Item I* ) and
additional insurance costs.
 
 For the
quarter ended June 30, 2004, we had a loss of $940,409, compared to a loss of
$152,183 for the quarter ended June 30, 2003.
 
 Six
Months ended June 30, 2004 as compared to the Six Months ended June 30,
2003
 
 Revenue
increased during the first six months of the year compared to the same period in
2003 due to turnkey drilling of the Elk Ridge well.
 
 Costs and
expenses were $3,206,342 for the period ending June 30, 2004 compared to
$2,040,741 for the comparable period in 2003. Mining exploration expenses were
$741,290 higher due to expensing of mining interest we bought back on our
Richardson gold mining claims. Project geology, geophysics, land and
administration were $42,438 higher due to expensing costs related to the EKHO
Project. General and administrative costs were $364,167 higher than in 2003.
These increased costs were due to expenses related to the Armstrong lawsuit, a
$30,000 increase in consulting fees, higher directors and officers liability
insurance premiums and higher investor relations costs.
 
 For the
six months we had a loss of $685,151 compared to a loss of $573,590 for the same
six month period in 2003.
 
 Capital
Resources and Liquidity
 
 We have
funded our oil and gas exploration activities primarily with proceeds raised
through privately placed drilling programs. We make decisions on the amount of
capital expenditures for drilling as funds become available for that purpose. We
do not, as a rule, rely on borrowings to fund drilling operations or other
activities.
 
 Current
assets were $7,183,150 at June 30, 2004, compared to $6,182,829 as of December
31, 2003. This is due to an increase of cash related to investments in our
OPUS-I drilling program.
 
 Current
liabilities were $7,476,209 for the six months ended June 30, 2004, compared to
$6,489,999 for the period ended December 31, 2003. This increase is due to
advances from joint venture participants in our drilling programs for drilling
activities in our limited liability drilling program, and accrued expenses
related to the Armstrong lawsuit.
 
 **Operating
Activities.** We had a
positive cash flow of $977,353 for the six months ended June 30, 2004 compared
to a positive cash flow of $3,542,516 for the same period in 2003. This
difference is due to less advances from joint venture partners and our year to
date operating loss. Our primary source of funds is comprised of selling
prospects and oil and gas sales.
 
 **Investing
Activities.** In the
first six months of 2004 we used $31,954 in capital expenditures. This was the
result of lease acquisitions.
 
 **Financing
Activities.** Net cash
provided by financing activities was ($2,576) for the six months ended June 30,
2004. This was due to payments on autos of ($7,326) and issuance of common stock
of $4,750.
 
 **Item
3.** **Quantitative
and Qualitative Disclosures About Market Risk**
 
 Tri-Valley
Corporation does not engage in hedging activities and does not use commodity
futures or forward contracts in its cash management functions.
 
 **Item
4.** **Controls
and Procedures**
 
 As of
June 30, 2004, an evaluation was performed under the supervision and with the
participation of the Company’s management, including the Company’s CEO and CFO,
of the effectiveness of the design and operation of the Company’s disclosure
controls and procedures. Based on that evaluation, the Company’s management,
including the CEO and CFO, concluded that the Company’s disclosure controls and
procedures were effective as of June 30, 2004. There have been no significant
changes in the Company’s internal controls or in other factors that could
significantly affect internal controls subsequent to June 30, 2004.
 
 **PART
      II -**
    **OTHER
      INFORMATION**
 
 **Item
1.**  **Legal
Proceedings**
 
 In
November 2002, a judgment of $141,500 was awarded to Armstrong Petroleum against
Tri-Valley Corporation. We appealed the decision to the appellate court who
ultimately confirmed the trial court's decision. In the second quarter of 2004,
the California Supreme Court declined to hear our appeal. We previously expensed
$212,985, and we expensed another $31,558 in the second quarter for a total of
$244,543. We will pay this amount in the third quarter of 2004. We had
previously reserved an amount on our balance sheet under deposits which is more
than sufficient to cover the costs attributable to the judgment.
 
 **Item
2.**  **Changes
in Securities**
 
 During
the second quarter of 2004, we issued 1,500 shares for aggregate consideration
of $750 ($.50 per share) upon exercise of options by an ex-employee of the
Company. We also issued 160,000 shares to two private individuals to repurchase
all their right, title and interest in mining claims near Richardson, Alaska,
which we had sold to them in 1998. These shares were valued at $712,000 ($4.45
per share), which was the closing price of our stock on the American Stock
Exchange on the date of issuance. All of these shares were not registered under
the Securities Act of 1933 and were sold in reliance on the exemption from
registration requirements provided by Section 4(2) of that statute.
 
 **Item
      6.**
    **Exhibits**
 (a)
    Exhibits 31.1 Rule
13a-14(a)/15d-14(a) Certification
 31.2 Rule
13a-14(a)/15d-14(a) Certification
 32.1 18
U.S.C. § 1350 Certification
 32.2 18
U.S.C. § 1350 Certification
  
  
 **SIGNATURES**
 
 
 Pursuant
to the requirement 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.
 
 TRI-VALLEY
      CORPORATION
 
 
 March
      28, 2005
    /s/
      F. Lynn BlystoneF.
      Lynn BlystonePresident
      and Chief Executive Officer
 
 
 March
      28, 2005
    /s/
      Thomas J. CunninghamThomas
      J. CunninghamSecretary,
      Treasurer, Chief Financial Officer
 
  
  **Exhibit
31.1**
 I, F.
Lynn Blystone, President and Chief Executive Officer of Tri-Valley Corporation,
certify that:
 1.
    I
      have reviewed this quarterly report on Form 10-Q of Tri-Valley
      Corporation;
 2.
    Based
      on my knowledge, this report does not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this
      report;
 3.
    Based
      on my knowledge, the financial statements, and other financial information
      included in this report, fairly present in all material respects the
      financial condition, results of operations and cash flows of the
      registrant as of, and for, the periods presented in this report;
 4.
    The
      registrant's other certifying officer(s) and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15) for the registrant and
      have:
 a)
    designed
      such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure
      that material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;
 b)
    designed
      such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external
      purposes in accordance with generally accepted accounting
      principles;
 c)
    evaluated
      the effectiveness of the registrant’s disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of
      the disclosure controls and procedures, as of the end of the period
      covered by this report based on such evaluation;
and
 d)
    disclosed
      in this report any change in the registrant’s internal control over
      financial reporting that occurred during the registrant’s most recent
      fiscal quarter (the registrant’s fourth fiscal in the case of an annual
      report) that has materially affected, or is reasonably likely to
      materially affect, the registrant’s internal control over financial
      reporting; and
 5.
    The
      registrant's other certifying officers and I have disclosed, based on our
      most recent evaluation of internal control over financial reporting, to
      the registrant's auditors and the audit committee of registrant's board of
      directors (or persons performing the equivalent
  functions):
 a)
    all
      significant deficiencies and material weaknesses in the design or
      operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant's ability to record,
      process, summarize and report financial information;
and
 b)
    any
      fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal control
      over financial reporting.
 
 Date:
      March 28, 2005
    /s/F.
      Lynn BlystoneF.
      Lynn Blystone, President and Chief Executive
Officer
 
  
  **Exhibit
31.1**
 
 I, Thomas
J. Cunningham, Chief Financial Officer of Tri-Valley Corporation, certify
that:
 
 1.
    I
      have reviewed this quarterly report on Form 10-Q of Tri-Valley
      Corporation;
 2.
    Based
      on my knowledge, this report does not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this
      report;
 3.
    Based
      on my knowledge, the financial statements, and other financial information
      included in this report, fairly present in all material respects the
      financial condition, results of operations and cash flows of the
      registrant as of, and for, the periods presented in this report;
 4.
    The
      registrant's other certifying officer(s) and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15) for the registrant and
      have:
 a)
    designed
      such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure
      that material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;
 b)
    designed
      such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external
      purposes in accordance with generally accepted accounting
      principles;
 c)
    evaluated
      the effectiveness of the registrant’s disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of
      the disclosure controls and procedures, as of the end of the period
      covered by this report based on such evaluation;
and
 d)
    disclosed
      in this report any change in the registrant’s internal control over
      financial reporting that occurred during the registrant’s most recent
      fiscal quarter (the registrant’s fourth fiscal in the case of an annual
      report) that has materially affected, or is reasonably likely to
      materially affect, the registrant’s internal control over financial
      reporting; and
 5.
    The
      registrant's other certifying officers and I have disclosed, based on our
      most recent evaluation of internal control over financial reporting, to
      the registrant's auditors and the audit committee of registrant's board of
      directors (or persons performing the equivalent
  functions):
 a)
    all
      significant deficiencies and material weaknesses in the design or
      operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant's ability to record,
      process, summarize and report financial information;
and
 b)
    any
      fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal control
      over financial reporting.
 
 Date:
      March 28, 2005
    /s/Thomas
      J. CunninghamThomas
      J. Cunningham, Chief Financial Officer
 
  
  **Exhibit
32.1**
 
 **Certification
Pursuant to 18 U.S.C. § 1350**
 
 
 The
undersigned, F. Lynn Blystone, President and Chief Executive Officer of
Tri-Valley Corporation, a Delaware corporation (the "Company"), pursuant to 18
U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of
2002, hereby certifies that:
 
 (1)
    the
      Company's Quarterly Report on Form 10-Q for the quarter ended September
      30, 2004 (the "Report") fully complies with the requirements of Section
      13(a) of the Securities Exchange Act of 1934;
and
 
 (2)
    the
      information contained in the Report fairly presents, in all material
      respects, the financial condition and results of operations of the
      Company.
 
 Date:
      March 28, 2005
    /s/F.
      Lynn BlystoneF.
      Lynn Blystone, President and Chief Executive
Officer
 
 
  
  
 **Exhibit
32.2**
 
 **Certification
Pursuant to 18 U.S.C. § 1350**
 
 The
undersigned, Thomas J. Cunningham, Chief Financial Officer of Tri-Valley
Corporation, a Delaware corporation (the "Company"), pursuant to 18 U.S.C. 1350,
as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, hereby
certifies that:
 
 (1)
    the
      Company's Quarterly Report on Form 10-Q for the quarter ended September
      30, 2004 (the "Report") fully complies with the requirements of Section
      13(a) of the Securities Exchange Act of 1934;
and
 
 (2)
    the
      information contained in the Report fairly presents, in all material
      respects, the financial condition and results of operations of the
      Company.
 
 Date:
      March 28, 2005
    /s/Thomas
      J. CunninghamThomas
      J. Cunningham, Chief Financial Officer