UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 
 QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
AND EXCHANGE ACT OF 1934
 
 For
      the quarterly period ended March 31, 2005
    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 March 31, 2005 was
22,247,052.
  
  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
    9Item
      3.
    Quantitative
      and Qualitative Disclosures About Market Risk
    11Item
      4.
    Controls
      and Procedures
    11PART
      II -
    OTHER
      INFORMATION
    12Item
      2.
    Unregistered
      Sales of Equity Securities
    12Item
      6.
    Exhibits
    12SIGNATURES
    
    13
 
  
  **PART
      I -**
    **FINANCIAL
      INFORMATION**
 
 **Item
      1.**
    **Unaudited
      Consolidated Financial
Statements**
 
 **TRI-VALLEY
CORPORATION**
 **CONSOLIDATED
BALANCE SHEETS**
 
 
 **ASSETS**
 
 March
      31, 2005
    
    Dec.
      31, 2004(Unaudited)
    
    (Audited)Current
      AssetsCash
    
    $
    15,375,883
    
    $
    11,812,920Accounts
      receivable, trade
    
    
    413,211
    
    
    192,008Advance
      receivable
    
    
    -
    
    
    150,000Note
      receivable
    
    
    1,100,000Prepaid
      expenses
    
    
    86,029
    
    
    96,056Total
      Current Assets
    
    
    16,975,123
    
    
    12,250,984Property
      and Equipment, Net
    
    
    2,665,665
    
    
    1,778,208Other
      AssetsDeposits
    
    
    457,566
    
    
    200,407Investments
      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
    
    
    701,293
    
    
    444,134Total
      Assets
    
    $
    20,342,081
    
    $
    14,473,326
 
 The
accompanying notes are an integral part of these condensed financial
statements.
  
  **LIABILITIES
AND SHAREHOLDERS' EQUITY**
 
 March
      31,
      2005
    
    Dec.
      31, 2004(Unaudited)
    
    (Audited)CURRENT
      LIABILITIESNotes
      and contracts payable
    
    $
    1,025
    
    $
    9,985Trade
      accounts payable & accrued expenses
    
    
    1,248,414
    
    
    1,237,848Accounts
      payable to joint venture participants
    
    
    158,838
    
    
    100,115Advances
      from joint venture participants
    
    
    12,373,861
    
    
    6,321,676Total
      Current Liabilities
    
    
    13,782,138
    
    
    7,669,624Long-term
      Portion of Notes and Contracts Payable
    
    
    13,800
    
    
    6,799Total
      liabilities
    
    
    13,795,938
    
    
    7,676,423CommitmentsShareholders'
      EquityCommon
      stock, $.001 par value: 100,000,000 shares authorized; 22,247,052 and
      21,836,052 issued and outstanding at March 30, 2005 and Dec. 31, 2004,
      respectively
    
    
    22,247
    
    
    21,836Less:
      Common stock in treasury, at cost, 100,025 shares
    
    
    (13,370
    )
    
    (13,370
    )Subscription
      receivable
    
    
    -
    
    
    (750
    )Capital
      in excess of par value
    
    
    18,248,797
    
    
    15,125,607Accumulated
      deficit
    
    
    (11,711,531
    )
    
    (8,336,420
    )Total
      Shareholders' Equity
    
    
    6,546,143
    
    
    6,796,903Total
      Liabilities and Shareholders' Equity
    
    $
    20,342,081
    
    $
    14,473,326
 
 The
accompanying notes are an integral part of these condensed financial
statements.
  
  **TRI-VALLEY
CORPORATION**
 **CONSOLIDATED
STATEMENTS OF OPERATIONS**
 (Unaudited)
 
 For
      the Three MonthsEnded
      March 312005
    
    2004RevenuesSale
      of oil and gas
    
    $
    169,126
    
    $
    227,419Other
      income
    
    
    9,649
    
    
    13,493Sale
      of oil & gas prospects
    
    
    -
    
    
    1,145,000Interest
      income
    
    
    23,333
    
    
    369Total
      Revenues
    
    
    202,108
    
    
    1,386,281Cost
      and ExpensesOil
      and gas lease expense
    
    
    20,215
    
    
    18,070Mining
      exploration expenses
    
    
    2,198,246
    
    
    38,621Project
      geology, geophysics, land & administration
    
    
    192,407
    
    
    440,219Depletion,
      depreciation and amortization
    
    
    19,376
    
    
    7,233Interest
    
    
    347
    
    
    26,292General
      administrative
    
    
    1,146,628
    
    
    600,588Total
      Cost and Expenses
    
    
    3,577,219
    
    
    1,131,023Net
      Income (Loss)
    
    $
    (3,375,111
    
    $
    255,258Basic
      & Diluted Earnings per Share
    
    $
    (.15
    )
    $
    .01Weighted
      Average Number of Shares
    
    
    22,123,363
    
    
    20,099,627
 
 The
accompanying notes are an integral part of these condensed financial
statements.
  
  **TRI-VALLEY
CORPORATION**
 **CONSOLIDATED
STATEMENTS OF CASH FLOWS**
 (Unaudited)
 
 For
      the Three MonthsEnded
      March 31,2005
    
    2004Cash
      Flows from Operating ActivitiesNet
      profit/(loss)
    
    $
    (3,375,111
    )
    $
    255,258Adjustments
      to reconcile net income to net cash used from operating
      activities:Depreciation,
      depletion and amortization
    
    
    19,376
    
    
    7,233Non
      cash mining exploration expense
    
    
    2,010,000Changes
      in operating capital:Prepaids-(increase)decrease
    
    
    10,027
    
    
    (56,000
    )Deposits-(increase)
      decrease
    
    
    (257,159
    )Accounts
      receivable-(increase)decrease
    
    
    (71,204
    )
    
    37,255Trade
      accounts payable-increase(decrease)
    
    
    10,566
    
    
    192,286Accounts
      payable to joint ventureparticipants
      and related parties-increase(decrease)
    
    
    58,723
    
    
    (30,336
    )Advances
      from joint ventureParticipants-increase(decrease)
    
    
    6,052,185
    
    
    333,737Net
      Cash Provided/(Used) by Operating Activities
    
    
    4,457,403
    
    
    739,433Cash
      Flows Provided/ by (used in) Investing ActivitiesNote
      receivable
    
    
    (1,100,000
    )
    
    -Capital
      expenditures
    
    
    (906,832
    )
    
    12,761Net
      cash provided by (used in) Investing Activities
    
    
    (2,006,832
    )
    
    12,761Cash
      Flows from Financing ActivitiesPrincipal
      payments on long-term debt
    
    
    (1,958
    )
    
    (12,411
    )Proceeds
      from issuance of common stock
    
    
    1,114,350
    
    
    1,500Net
      Cash Provided/(Used) by Financing Activities
    
    
    1,112,392
    
    
    (10,911
    )Net
      Increase in Cash and Cash Equivalents
    
    
    3,562,963
    
    
    741,283Cash
      and Cash Equivalents at Beginning of Period
    
    
    11,812,920
    
    
    6,006,975Cash
      and Cash Equivalents at End of Period
    
    $
    15,375,883
    
    $
    6,748,258Supplemental
      Information:Cash
      paid for interest
    
    $
    347
    
    $
    26,292Cash
      paid for taxes
    
    $
    -
    
    $
    4,925
 
 
 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**
 **March
31, 2005 AND 2004**
 (Unaudited)
 
 **NOTE
      1 -**
    **DESCRIPTION
      OF BUSINESS AND BASIS OF
PRESENTATION**
 
 Description
of Business
 Tri-Valley
Corporation ("TVC" or the Company), a Delaware corporation formed in 1971, is in
the business of exploring, acquiring and developing petroleum and precious
metals properties and interests therein. Tri-Valley has three wholly owned
subsidiaries. Tri-Valley Oil & Gas Company ("TVOG") operates the oil &
gas activities, and derives the majority of its revenue from sale of oil and gas
properties. Tri-Valley Power Corporation (TVP) and Select Resources Corporation
(“SRC”) are two wholly owned subsidiaries. In November 2004 SRC, a Delaware
Company formed in 2004, entered into an agreement to form Alpha Minerals &
Chemicals, LLC (“Alpha”), a limited liability company in which SRC would hold
50% member interest. Neither TVP, SRC, nor Alpha engaged in material
transactions during 2004. Starting in 2005, SRC, through Alpha, started engaging
in mining and exploration activities which have been consolidated in the
accompanying financial statements.
 
 Basis
of Presentation
 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 March 31, 2005, 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 in the United States of America; and, therefore, should be
read in conjunction with the Company's Annual Report on Form 10-K/A, filed with
the Securities and Exchange Commission on April 29, 2005 for the year ended
December 31, 2004.
 
 Principles
of Consolidation
 The
accompanying financial statements are consolidated and include the financial
statements of the Company’s and its majority-owned subsidiaries, and those of
Alpha’s. T he
Company applied FASB Interpretation (FIN) No. 46, “Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51,” in assessing
consolidation. All
significant intercompany balances and transactions have been eliminated in
consolidation.
 
 
 **NOTE
2 - RESTATEMENTS OF PRIOR FINANCIAL INFORMATION**
 
 2004
Restatement
 Amendment
No. 1 on Form 10-K/A of the Company’s annual report on Form 10-K for the year
ended December 31, 2004 includes restated financial information for the years
ended December 31, 2004 and 2003. The original Form 10-K was filed with the
Securities and Exchange Commission on March 31, 2005. The purpose of the
Amendment is to restate the Company’s previously reported general and
administrative expense to adjust downward compensation expenses due to use of an
incorrect stock price in calculating the cost of issuing stock to directors as
compensation.
 
 The
following sets forth the significant effects of the aforementioned restatements
to the Company’s consolidated financial statements for the fiscal year ended
December 31, 2004:
 
 As
      Previously
    
    
    
    AsReported
    
    Adjustment
    
    RestatedGeneral
      and administrative
    
    
    2,208,457
    
    
    (105,000
    )
    
    2,103,457**Total
      Cost and Expenses**
    
    
    **5,774,675**
    
    
    **(105,000**
    **)**
    
    **5,669,675****Net
      income (loss)**
    
    
    **(1,276,005**
    **)**
    
    **105,000**
    
    
    **(1,171,005**
    **)****Capital
      in excess of par value**
    
    
    **15,230,607**
    
    
    **(105,000**
    **)**
    
    **15,125,607****Accumulated
      deficit**
    
    
    **(8,441,420**
    **)**
    
    **105,000**
    
    
    **(8,336,420**
    **)**
 
 
 **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**
 
 On
December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB
Statement No. 123 (revised 2004), “Share-Based Payment” (Statement 123R), which
is a revision of FASB Statement No. 123, “Accounting for Stock-Based
Compensation.” Statement 123R supersedes APB Opinion No. 25, “Accounting for
Stock Issued to Employees,” and amends FASB Statement No. 95, “Statement of Cash
Flows.” Statement 123R requires a public company to measure the cost of employee
services received in exchange for an award of equity instruments, including
stock options, based on the grant-date fair value of the award, with limited
exceptions. That cost will be recognized over the period during which the
employee is required to provide service in exchange for the award, which is
typically the vesting period. Statement 123R eliminates the alternative to use
Opinion 25’s intrinsic value method of accounting that was provided in Statement
123 as originally issued.
 
 The
Company expects to adopt Statement 123R on July 1, 2005. Statement 123R permits
public companies to adopt its requirements using one of two
methods:
 
 1.
       A “modified prospective” method in
which compensation cost is recognized beginning with the effective date (a)
based on the requirements of Statement 123R for all share-based payments granted
after the effective date and (b) based on the requirements of Statement 123 for
all awards granted to employees prior to the effective date of Statement 123R
that remain unvested on the effective date.
 
 2.        A
“modified retrospective” method which includes the requirements of the modified
prospective method described above, but also permits entities to restate its
previously issued financial statements to include in its income statement
amounts previously recognized under Statement 123 for purposes of pro forma
disclosures for either (a) all prior periods presented or (b) prior interim
periods of the year of adoption.
 
 The
Company plans to adopt Statement 123R using the modified-prospective
method.
 
 As
permitted by Statement 123, the Company currently accounts for share-based
payments to employees using Opinion 25’s intrinsic value method and, as such,
generally recognizes no compensation cost for employee stock options. The
adoption of Statement 123R’s fair-value method will impact the Company’s results
of operations, although the impact of adoption of Statement 123R cannot be
predicted at this time because it will depend on levels of share-based payments
granted in the future.
 
 In April
2005, the Securities and Exchange Commission announced the adoption of a new
rule that amends the effective date of FAS 123R. The effective date of the
new standard under these new rules for the Company’s consolidated financial
statements is January 1, 2006. Adoption of this statement will have a
significant impact on our consolidated financial statements as we will be
required to expense the fair value of our stock option grants and stock
purchases under our employee stock option plan rather than disclose the impact
on our consolidated net income within our footnotes, as is our current practice.
 
 In
December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary
Assets — An Amendment of APB Opinion No. 29, Accounting for
Nonmonetary Transactions” (SFAS 153). SFAS 153 eliminates the
exception from fair value measurement for nonmonetary exchanges of similar
productive assets in paragraph 21(b) of APB Opinion No. 29,
“Accounting for Nonmonetary Transactions,” and replaces it with an exception for
exchanges that do not have commercial substance. SFAS 153 specifies that a
nonmonetary exchange has commercial substance if the future cash flows of the
entity are expected to change significantly as a result of the exchange. This
standard is effective for fiscal periods beginning after June 15, 2005. We
believe that the adoption of SFAS 153 will not have a material impact on
our consolidated statement of income or financial condition.
 
 
 
 
 
 **NOTE
4 - RECENT ACCOUNTING PRONOUNCEMENTS (continued)**
 
 The FASB
issued an Exposure Draft, “Qualifying Special-Purpose Entities and Isolation of
Transferred Assets—an amendment of FASB Statement No. 140.” This proposal
would, among other things, change the requirements that an entity must meet to
be considered a QSPE. The FASB has announced that it expects to issue in the
third calendar quarter of 2005 a revised exposure draft that would include all
of the proposed amendments to FASB Statement No. 140.  The Company is
monitoring the status of this exposure draft to assess its impact on its
consolidated financial statements.
 
 In March
2005, the FASB issued Interpretation No. 47, "Accounting for Conditional Asset
Retirement Obligations - an interpretation of FASB Statement No. 143," (FIN 47)
which clarifies the term "conditional asset retirement obligation" used in SFAS
No. 143, "Accounting for Asset Retirement Obligations," and specifically when an
entity would have sufficient information to reasonably estimate the fair value
of an asset retirement obligation. The Company is required to adopt FIN 47 no
later than December 31, 2005. The Company does not expect the adoption of FIN 47
to have a material impact on its consolidated results of operations and
financial condition.
 
 
 **NOTE
5 - SHORT-TERM NOTE RECEIVABLE**
 
 In the
quarter ended March 31, 2005 the Company had a note receivable of $1,100,000
from an individual in relation to an anticipated mill site purchase. The
purchase/sale transaction was in escrow as of March 31, 2005, and the repayment
of the note will be applied to the mill site purchase price.
 
 
 **NOTE
6 --CHANGES IN SECURITIES**
 
 In
January 2005 the Company issued 200,000 shares of common stock in exchange for
mining and exploration rights. The total amounted to $2,010,000. The Company
issued 160,000 shares of common stock for $1,165,000 in a private placement.
Three employees exercised employee stock option issued in previous year to
purchase 51,000 shares of common stock totaling $122,000. Stock issuance costs
totaled to $173,400 for the quarter ended March 31, 2005.
 
 **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.
 
 
 
 
 
 
 
 
 
 
 
 **Item
      2.**
    **(Continued)**
 
 Petroleum
Activities
 
 In the
first quarter of 2005 Tri-Valley Oil & Gas Company (TVOG) performed a
horizontal re-drill of the Sunrise-Mayel. The Company has run casing and is
planning on hydraulically fracturing the well in the third week of
May.
 
 TVOG
successfully fractured the Vedder Sand in the Ekho #1 deep well. This is the
deepest well ever fractured on the west coast. Currently the well is back
flowing the fracturing fluid. The program design envisions successive fracs to
achieve a web of formation fractures sufficient to enable oil and gas to flow
into the well bore at commercial rates. So far, the results of the initial frac
suggest that at least one more frac may be in order and the Company will make a
determination on that after all test results are complete, probably sometime in
the second quarter.
 
 The
Company is planning to begin drilling in the Railroad Valley in Nevada towards
the middle of May. The first well is planned to be a 45 to 60 day drill and
completion time frame.
 
 The
Sunridge Oil Prospect was drilled in April and is awaiting
completion.
 
 Tri-Valley
Corporation announced at the end of the first quarter that it had entered into
an agreement to acquire Pleasant Valley Energy Corporation, a private holder of
leases containing proven undeveloped reserves. The Pleasant Valley acquisition
closed on May 5, 2005, and Tri-Valley plans to immediately begin a rework,
exploitation and exploration program aimed at boosting cash flow and increasing
asset value.
 
 Mining
Activities
 
 In
December 2004, Tri-Valley Corporation formed a new wholly owned subsidiary,
Select Resources Corporation (“SRC”). SRC will house and operate our precious
metals operations. Initially SRC will have the Richardson, Alaska 42 square mile
gold mining claims. These claims will be transferred to SRC from Tri-Valley in
the second quarter of 2005. SRC has acquired an additional 5,300 acres of State
of Alaska mining claims in the vicinity of its 4,800 acre Shorty Creek, Alaska
claim block. This is located about 60 miles northwest of Fairbanks, Alaska. The
Shorty Creek claims lie in the Livengood Mining District, which has produced
over 600,000 ounces of gold from placer gold deposits in the
district.
 
 Tri-Valley
Corporation has bought out the majority of royalty interests in the Richardson
claim block using its unregistered, restricted common stock, and expects to
complete the remaining buyouts by the end of the third quarter of
2005.
 
 SRC has
signed its first major deal which is an industrial minerals joint venture with
Trans-Western Materials LLC of San Diego, California. This new venture is named
Alpha Minerals and Chemicals, LLC (“ALPHA”). It is in the process of assembling
mining and milling equipment and expects to be in production by the end of the
second quarter. SRC had funded approximately $1,250,000 to the Alpha
venture.
 
 SRC is in
the process of acquiring a 10 acre industrial site with a rail spur and 117,000
square feet of plant, warehouse and office space to house its industrial mineral
joint venture operations. This purchase is for $2,500,000. The funds will be
guaranteed by Tri-Valley Corporation.
 
 Three
Months Ended March 31, 200 5 as
compared with Three Months ended March 31, 2004
 
 For the
quarter ended March 31, 2005 revenue was $1,184,173 less than the same period in
2004. Sale of oil and gas was $58, 293 less due to two wells being idle pending
work over. Sale of oil and gas prospects was $1,145,000 less as no prospects
were sold in the first quarter. Interest income was $22,964 greater due to
additional cash earning interest, this increase was due to the sale of common
stock in private transactions.
 
 Costs and
expenses were $2,446,196 greater for the period ending March 31, 2005 compared
to the same period in 2004. Mining expenses were $2,159,625 more this quarter
due to the purchase of royalty burdens on the Richardson, Alaska gold mining
claim block of $2,010,000 and work performed by SRC on geological activity.
Project geology , geophysics, land and administration was $247,812 less due to
reduced work on the Opus partnership. General and administrative costs increased
by $546, 040 due to consulting expenses and other activity related to the
formation of SRC and its participation in Alpha .
 
 
 **Item
      2.**
    **(Continued)**
 
 Capital
Resources and Liability
 
 Our oil
and gas activities are largely funded by selling interests in our private
limited drilling partnership. We do not borrow to fund drilling activities. Our
drilling activity relies on our ability to raise money through our drilling
partnership.
 
 Current
assets were $16,975,123 at Mach 31, 2005 compared to $12,250,984 for the same
period in 2004. This increase is due to advances from joint venture partners,
funds from private placement of our common stock and a note receivable related
to an industrial site that SRC is acquiring. Property and equipment is $887,457
more this quarter due to acquisition of equipment for SRC and Alpha . Deposits
increased $257,159 due to deposits on the equipment that is being acquired by
SRC and Alpha.
 
 Current
liabilities are $6,112,514 more this quarter compared to the same quarter in
2004 due to an increase in advances from joint venture participants related to
the Opus drilling partnership
 
 OPERATING
ACTIVITIES. We had a positive cash flow of $4,457,403 for the three months ended
March 31, 2005 compared to $739,433 for the same period in 2004. This increase
is due to an increase in advances from joint venture participants.
 
 INVESTING
ACTIVITIES. Cash used in investing activities was $2,006,832 for the first three
months of 2005. This was due to a note receivable related to the acquisition of
an industrial property and expenditures related to equipment acquisitions and
deposits on equipment for SRC and Alpha.
 
 FINANCING
ACTIVITIES. Net cash provide by financing activities was $1,112,392 for this
quarter. This is due to proceeds from issuance of common stock.
 
 **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**
 
 DISCLOSURE
CONTROLS
 
 As of
March 31, 2005, 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 March 31, 2005.
 
 CHANGES
IN INTERNAL CONTROLS-1 ST QUARTER
REMEDIATION
 
 During
the latter part of 2004 we discovered and corrected two entry errors in prior
financial statements. We corrected those items and restated our financial
statements accordingly. In reviewing our internal control over financial
reporting we identified what management believes were several material
weaknesses. During the first quarter of 2005 we implemented a formal remediation
program designed to correct identified and reported material weaknesses and
deficiencies in a complete and expeditious manner with the objective of
eliminating risks to financial reporting and strengthening internal
controls.
 
 Major
remediation activities achieved during first quarter include and are ongoing in
the second quarter:
 
 We hired
a Senior Accountant with over 20 years of oil and gas accounting experience, a
degree in accounting and a masters degree in finance.
 
 Currently
a risk assessment process is being implemented which includes internal control
assertion definitions, review and periodic testing validation in concert with an
independent outside accounting firm separate from our auditing firm and using
specialists in internal controls.
 
 
 **Item
4.** **Controls
and Procedures (Continued)**
 
 Flow
charts and narratives are being developed to document operational processes,
financial reporting activities, remediation changes and other internal controls.
 
 A policy
and procedures manual is being concurrently prepared to further detail process
and internal control specifics and will be monitored and updated as
appropriate.
 
 The
current accounting solution and organizational structure are being modified to
strengthen internal controls and mitigate potential risk to financial
reporting.
 
 Second
quarter efforts are being focused on strengthening internal control over
financial reporting and investigating potential risks through formal remediation
activities. Management is communicating with both the Audit Committee and Board
of Directors to provide scheduled remediation updates. All company internal
controls are scheduled for retesting in the end of second quarter.
 
 **PART
II - OTHER INFORMATION**
 
 
 **Item
2.**  **Unregistered
Sales of Equity Securities**
 
 On
January 12, 2005, one individual investor exercised warrants to purchase 35,000
shares of restricted stock at $6.50. The closing price per share of our stock on
January 12, 2005 was $10.16. On January 7, 2005 we issued 200,000 shares of
stock to an individual to acquire royalty interest on our Alaska mining claim
block. The closing price per shares of our stock on January 7, 2005 was
$10.05.
 
 **Item
6.**  **Exhibits**
 
 (a)
    Exhibits 10.1
Agreement by and between Tri-Valley Corporation and Select Resource Corporation
and Trans-Western Materials LLC.
 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
 
 
 
 
 May 06,
2005  /s/
F. Lynn Blystone
 F. Lynn
Blystone
 President
and Chief Executive Officer
 
 
 May 06,
2005   /s/
Thomas J. Cunningham
 Thomas J.
Cunningham
 Secretary,
Treasurer, Chief Financial Officer
 
  
  **Exhibit
10.1**
 
 **[TRI-VALLEY
CORPORATION HAS REQUESTED CONFIDENTIAL TREATMENT OF CERTAIN PORTIONS OF THIS
AGREEMENT. A COMPLETE COPY OF THE AGREEMENT HAS BEEN FILED WITH THE SECRETARY OF
THE SECURITIES AND EXCHANGE COMMISSION.]**
 
 **JOINT
VENTURE AGREEMENT**
 **BY
AND BETWEEN**
 **TRI-VALLEY
CORPORATION & SELECT RESOURCES CORPORATION**
 **AND**
 TRANS-WESTERN
MATERIALS, LLC
 **I.**
    **Introduction.** The
following is an Agreement (the “Agreement”) **between
Tri-Valley Corporation and its wholly owned subsidiary, Select Resources
Corporation (“SELECT”) and Trans-Western Materials, LLC (TWM) (individually the
“Party” and collectively the “Parties”)** setting
forth the terms and conditions under which SELECT and TWM are to form a join
venture to fund the development of two mineral projects, located in Kern County,
California, to operate an on-going business for the production and sale of
calcium and basalt industrial mineral products, and to expand to other
industrial mineral and construction aggregate projects as appropriate. This
Agreement shall become effective as of November 15, 2004.
 **II.**  **Formation
- New Company.**
 **A.**
    Purpose:**The parities hereto agree to form, fund, and operate a business enterprise
      for their mutual benefit and profit. The new enterprise will be formed for
      the purpose of mining calcium carbonate (also referred to as high grade
      calcium carbonate, calcite, calcite marble and/or marble; for purposes of
      this document it will be referenced henceforth as “calcium carbonate”) and
      basalt ore from mineral properties under a long-term lease by TWM,
      portions of which will be sub-leased to the new company as part of this
      Agreement, to convert those ores into construction grade materials and
      industrial and chemical grade industrial fillers, extenders, granules, and
      powders in quality and quantities to economically satisfy current and
      future customer demands**,**and
      to expand to other industrial mineral and construction aggregate projects
      as appropriate.** **B.**
    **Name
      of Company:**The new company will be named Alpha Mineral & Chemical, L.L.C. (hereto
      “Newco”) and will be operated in accordance and compliance with the
      requirements of a fully reporting public company to the U.S. Securities
      and Exchange Corporation. **C.**
    **State
      of Organization / Incorporation:**Newco
      shall be organized in the state of Delaware as a Limited Liability
      Company. **D.**
    **Corporate
      Objective**:
      Both Parties acknowledge that this is a for-profit enterprise, other than
      those requirements mandated by the local planning and zoning process, by
      legal requirement and/or legislative statute that the Parties will seek to
      maximize profits while exercising proper business ethics and professional
      judgment. It is also the objective of the parties to take Newco public
      when deemed appropriate by the Board of Directors. **E.**
    **Joint
      Interests**:
      The following is set out as the joint interest of the
    Parties: **1.**
    With
      the signing of this Agreement, all existing industrial mineral, decorative
      rock and construction aggregate material projects known to or controlled
      by TWM and SELECT will be treated as “corporate opportunities” for Newco
      under this Agreement until they have been presented for consideration by
      the management and/or Board of Newco. **2.**
    After
      the signing of this Agreement,all
      new industrial mineral, decorative rock and construction aggregate
      material projects will be treated as “corporate opportunities” for Newco
      under this Agreement until they have been presented for consideration by
      the management and/or Board of Newco.
      Newco will have sufficient time to review and assess all “corporate
      opportunities”, as appropriate for the mineral industry; no set time limit
      for review will be mandated. However, Newco will do its due diligence and
      provide its decision regarding the subject “corporate opportunity” in a
      timely manner. Newco will not intentionally delay in its due diligence
      assessment and final determination such as to impair said “corporate
      opportunity”. **3.**
    Should
      Newco determine not to pursue the development of a particular “corporate
      opportunity”, that opportunity shall no longer be considered a “corporate
      opportunity” for Newco. In that case, the “rejected opportunity” will no
      longer be pursued by Newco, and neither of the Parties, TWM or SELECT, may
      individually pursue the “corporate opportunity” without the expressed
      approval of the Board of Newco, as set forth below. **4.**
    In
      the case where a “corporate opportunity” has been rejected by Newco, and
      said opportunity was previously under the control, management or ownership
      of one of the Parties, TWM or SELECT, the “rejected opportunity” will
      revert to its prior control, management or ownership and will once again
      be the sole responsibility of the Party, TWM or SELECT, that brought the
      opportunity to Newco. In that case, the Party, TWM, or SELECT, with the
      control, management, or ownership of the opportunity may pursue the
      business development of the opportunity, if and only if it meets with the
      three following criteria. **a.**
    The
      property and/or project, including its products, will not be in
      competition with business activities of Newco; **b.**
    The
      property and/or project, will not require the services of Newco employees
      or personnel seconded to Newco from either TWM and/or SELECT, and will not
      distract said persons fromperforming
      their primary duties regarding the management, operation and development
      of Newco; and **c.**
    The
      properties and/or projects are identified as part of this Agreement. These
      are listed in Section III, Subsection A, Paragraph 2, Subparagraph
      (a). **5.**
    In
      the case of a new project or existing project being developed or partially
      developed using Newco resources or personnel, and where Newco decides to
      suspend or quit the development of said project, the project may be
      spun-off to one of the Parties or an employee. In order to do so, a super
      majority vote is required to release the project to one of the Parties or
      an employee for further development or sale. This release will be
      accompanied by a debt to Newco of 125% of the sunk cost to date on said
      project. **F.**
    **Board
      of Directors**:
      Newco shall have a seven-member Board of
Directors. **1.**
    During
      the period that SELECT has a balance outstanding on its original loan to
      Newco set forth in Section IV, Subsection A, Paragraph 1 below, SELECT
      will hold four (4) seats and TWM will hold three (3) seats on Newco’s
      Board of Directors. The Chairman of Tri-Valley Corporation, or its
      nominee, will hold the fourth seat held by SELECT. The Chairman shall have
      one vote out of a total of seven regarding decisions of the Board of
      Directors of Newco. **2.**
    Following
      repayment in full of the loan made by SELECT referred to above, both TWM
      and SELECT shall each have the right to elect three members of the Board.
      Those six members shall elect a seventh member of the Board who is a
      neutral person, not employed by, or aligned with, either TWM, SELECT,
      their affiliates, or any Board member of Newco. However, the individual so
      elected, as a seventh member of the Board will be knowledgeable in the
      area of business activities of Newco. The seventh member shall have one
      vote out of a total of seven regarding decisions of the Board of Directors
      of Newco. During the period when a seventh member of the Board is not
      elected, or in the case when the Parties cannot agree on a seventh Board
      member, then the corporation will operate with only six Board members.
      However all Board decisions will still require a simple majority or super
      majority (Section V, Subsection L, Paragraph 2) of the Board for
      passage. **3.**
    The
      seven members of the Board shall then nominate and elect from their number
      the Chairman of the Board of Newco. The Chairman shall serve at the
      pleasure of the remaining majority of the other six members of the Board
      for a period of two years, unless he/she resigns or is removed by a
      majority of the Board for good cause. The Chairman will have the
      responsibility of calling the meetings of the Board of Directors, acting
      in the general roles and responsibilities of the Chairman, and
      representing the company as the Chairman. **4.**
    At
      the end of each two-year term, the Chairmanship shall become subject to
      nomination for a person from among the seven members of the Board and
      elected to that position by a majority of the Board of Directors. A given
      individual may serve multiple terms as Chairman subject to the repeated
      nomination and election by a majority of the other six members of the
      Board of Directors. **G.**
    **Authorized
      Number of Membership Units or Shares:**Newco shall be authorized to issue 10,000,000 membership units or shares
      (“Shares”), to be vested as hereinafter set
forth. **1.**
    TWM
      shall be issued 5,000,000 Shares, or fifty percent (50%) of the authorized
      issue at the time of company formation in exchange for the contributions
      it makes, as hereinafter set forth. **2.**
    SELECT
      shall be issued 5,000,000 Shares, or fifty percent (50%) of the authorized
      issue at the time of company formation in exchange for the contributions
      it makes, as hereinafter set forth. **III.**  **Newco
Projects.**
 **A.** **Alpha
and Beta Projects:** Projects
for Newco will be divided into Alpha and Beta Projects for purposes of
contributions by and rights of SELECT and TWM under this Agreement.
 **1.**
    **Alpha
      Projects**:
      Alpha Projects for purposes of this Agreement shall consist of the
      development and operation of the*calcium carbonate project (the “* Project”) and * black basalt rock
      project (the “* Project”) for the production of industrial mineral,
      decorative rock and construction aggregate products produced and sold by
      Newco, as described below.
 *  (2 pages
omitted.)
 **2.**
    **Beta
      Projects**:
      Beta Projects shall consist of all other industrial mineral, decorative
      rock, and/or construction aggregates or material `projects that Newco
      decides to pursue and develop, that are not associated with the Alpha
      Projects. The Beta Projects include those listed below and all new
      projects. Newcois
      under no obligation to undertake any of these or other Beta Projects. The
      following is the current list of Beta Projects, which are known to or
      available to TWM that will be assessed by NEWCO. The first group (a) is
      presented as projects that are owned, controlled and/or managed by SELECT
      or TWM. The second group (b) is other opportunities known to the Parties
      at this time.
 
 **a.**
    Projects
      owned, controlled or managed by a Party to this Agreement as of the date
      of signing: * (1 page
omitted.)
 **b.**
    Projects
      not owned, controlled or managed by a Party to this Agreement as of the
      date of signing: * (2
pages omitted.)
 (xiii)
    Other
      such projects that will be made available to Newco from time to
      time.
 **IV.**  **Contributions
of the Parties.**
 **A.**
    **SELECT
      Contributions:**SELECT
      shall be issued 5,000,000 Shares of Newco in exchange for the following
      contributions to the new enterprise:
 **1.**
    **The
      issue of 5,000,000 Shares of Newco shall be made in exchange for a loan
      commitment of $2,500,000 (US) in new funds and $150,000 (US) in historical
      contribution, for a total value of $2,650,000 (US) contributed by SELECT,
      in the form of a loan to be drawn as needed by Newco in accord with the
      budget attached hereto as Exhibit “B”, evidenced by a series of promissory
      notes, related to each drawdown, bearing interest at the rate of LIBOR
      plus 4%, repaid as participating loans, calculated as fifty percent (50%)
      of the cash flows of Newco prior to the calculation of net distributable
      cash flows, as defined below; or, in whole or part by way of “refinance
      loans” obtained by Newco hypothecating one or more of its Elk Corporation
      or other customer base load contracts, or a combination of payments from
      the cash flows of Newco prior to the calculation of net distributable cash
      flows and refinance loans. Refinance loans may be used for payment to
      SELECT by Newco so long as such refinance loans do not consume more than
      50% of the EBITDDA (Earnings Before Interest, Taxes, Depreciation,
      Depletion, and Amortization) of the company, as that term is hereinafter
      defined, unless a majority of the Board approves such loan payment.** **2.**
    The
      initial cash loan by SELECT to Newco shall be $650,000, in addition to the
      historical $150,000 for prior expenditures credited to SELECT’s account,
      on or about November 16, 2004. Said $650,000 shall be used to be used in
      accord with this Agreement of which $500,000 will be used by Newco as its
      initial working capital under the approved budget attached hereto as
      Exhibits “B.” The remainder of $150,000 shall be disbursed to TWM in
      accord with paragraph IV, Subsection B, Paragraph 2
  below. **3.**
    “Net
      Distributable Cash Flows” for purposes of this agreement shall mean the
      EBIT (Earnings Before Interest and Taxes). The EBIT is that amount of
      money earned by Newco equal to the EBITDDA less any debt service or lease
      payment, less any unusual expenses, equipment replacement, and maintenance
      reserves, as set forth in the Pro Forma Income, Expense and Financial
      Statements attached hereto as Exhibits “B” and
“C.” **4.**
    The
      business benefits and goodwill from the contribution of the contacts,
      office space, personnel, and expertise to include, but not limited to, the
      initial assignment of Dr. Henry Sandri to serve as Executive
      Director/Chief Executive Officer, and Mr. Thomas Cunningham to serve as
      Senior Director/ Secretary and Chief Financial Officer of Newco and
      together with Dr. Harold J. Noyes and Mr. F. Lynn Blystone to serve as
      members of the Board of Directors of Newco, with Mr. Blystone, or other
      such Tri-Valley Corporation’s nominee, serving as Newco’s initial
      Chairman. **B.**
    **TWM
      Contributions:** **1.**
    TWM
      shall be issued 5,000,000 Shares of Newco in exchange for mineral
      deposits, property rights, business opportunity, use of the existing
      mining permits and $2,500,000 in historical contributions of cash, and
      cash equivalents for a total of value of contributions of $2,500,000. For
      purposes of allocation of shareholdings in Newco, TWM will be credited
      with a cash value contribution of $2,500,000 for its current contribution
      of assets to Newco in the form of aparticipating
      loanto
      be repaid fromfifty percent (50%) of the earned income (EBITDDA) of Newco prior to the
      calculation of net distributable cash flowsfrom Beta Projects undertaken by Newco, until such loan is repaid in full
      including interest at the simple rate of LIBOR plus 4%. However no
      repayments will be made to TWM until the SELECT promissory notes are
      extinguished, except as noted below.
 **2.**
    The
      sum of $150,000 shall be paid to TWM on or about November 16, 2004 as a
      one time advanced principal payment by Newco from the proceeds of the
      SELECT loan to Newco as hereinabove set forth in Section IV Subsection A,
      Paragraph 2. Said principal payment shall be applied as a partial payment
      of said $2,500,000 TWM loan reducing the balance owed to TWM to
      $2,350,000. The remaining $2,350,000 of shall accrue simple interest at
      the stated rate of LIBOR plus 4% until repaid in full as hereinabove set
      forth.
 **3.**
    The
      mineral deposits, property rights, and use of the approved mining plans
      (permits) contributed by TWM to the Alpha Projects are more particularly
      described as follows: *(2
      pages omitted.)
 **i.**
    The
      business benefits and goodwill of the mill engineering, plant
      construction, equipment specification, and supply quotes from the
      following engineers and suppliers:
 *
 ·
    All
      other such work product of suppliers that have provided drawings and/or
      specification, quotes, or advisory services to TWM regarding the mining,
      milling, storage, and/or transport of calcium or basalt industrial mineral
      products. **j.**
    The
      business benefits and goodwill of the product research, market research,
      and customer contacts developed by TWM and its founders and officers
      regarding the demand for, pricing, and purchase of calcium and basalt
      industrial mineral products.
 **k.**
    The
      business benefits and goodwill of the expertise of the founders and
      executives of TWM to include the assignment of Mr. Marshall Pettit as
      Managing Director and Mr. E. E. (Wayne) Everett as Senior Director -
      Mining and Milling Operations of Newco, and together with Mr. Peter
      Tarnoff, will serve on the Board of Directors for
TWM.
 **V.**
    **General
      Terms and Conditions Related To This
Agreement:**
 **A.**
    **SELECT
      Loans to Newco**:
      SELECT will invest up to $2,500,000 million cash via a series of loans to
      Newco as needed to implement the business plan for the development of the
      Alpha Projects. Each loan will be evidenced by a promissory note to be
      paid back to SELECT with interest an annual simple rate of LIBOR plus 4%
      as hereinafter set forth, from fifty percent (50%) ofthe
      cash flows of Newco prior to the calculation of net distributable cash
      flowsfrom operations; or, from the proceeds of a bank loan secured by the
      hypothecation of one or more of the base load contracts with*,
      sale of contracts, other applicable means, or combination
      thereof.
 **B.**
    **SELECT
      Work Product:**SELECT has expended substantial funds in the investigation, consultation,
      and supportive due diligence work performed to determine the economic
      viability of the subject * calcite marble and Boron basalt industrial
      mineral project. The information developed as a result of this work has
      long-term benefits for the successful organization and operation of Newco.
      Therefore, SELECT will provide the work product developed by it to Newco
      in exchange for the sum of $150,000 to be added to the $2,500,000 loans,
      or portion thereof, made to Newco for the development of the Alpha
      Projects under this agreement. Said additional loan amount shall be repaid
      to SELECT with interest as hereinabove set forth.
 **C.**
    **Replacement
      Capital Reserve and Distribution of Cash Flows from
      Projects:**Twenty percent (20%) of Newco’s distributable cash flows from operations
      may be retained by the company in reserves subject to the approval of the
      majority of Board of Directors after Select and other debt service is
      paid. The remaining eighty percent (80%) shall be disbursed fifty percent
      (50%) each TWM and SELECT, subject to the following:
 **1.**  If the
funds to be distributed are associated with the Alpha Projects, then the
distribution of funds will be allocated 15% to *, 42.5% of funds to TWM and
42.5% of funds to SELECT. This distribution to * reflects the contractual
agreement between * and TWM that are being transferred to Newco.
 **2.**
    If
      the funds to be distributed are associated with Beta Projects, then the
      distribution of funds will be allocated 50% of funds to TWM and 50% of
      funds to SELECT.
 **D.**
    **Security
      for Loans:**Prior to the repayment of the loans to SELECT by Newco as hereinabove set
      forth, Newco will grant SELECT the standard security instruments,
      assignments of the*calcium
      carbonate ore deposit, the * ore deposits, mining equipment, rolling
      stock, and covenants associated with the protection of its
      loans.
 **E.**
    **Completion
      of Funding:**SELECT
      will have been deemed to have completed its funding commitment when either
      it has provided Newco a maximum of $2,500,000 per the funding commitment
      hereto referenced in the Agreement, or when it has provided Newco with
      sufficient funding for the Alpha Projects, including sufficient working
      capital for operating purposes, such that the Alpha Projects are operating
      as intended and two consecutive quarters of positive cash flows are
      generated, whichever comes first, but in no case is Select funding
      obligated to exceed $2,500.000. At that point, SELECT will have been
      deemed to be completed its funding commitment to Newco. Notwithstanding
      the above, SELECT’s funding commitment is intended as a one-time draw and
      not intended to recycle as a continual line of
credit. **F.**
    **Failure
      to Fund:**Should SELECT fail to fund the development of the Alpha Projects as herein
      set forth, up to $2,500,000, TWM shall have the first right, but not the
      obligation, to buy out SELECT’s fifty percent (50%) interest in Newco for
      a sum equal to one hundred and twenty-five percent (125%) of the actual
      cash invested and historical contribution, including outstanding interest,
      to the date of default by SELECT. TWM will have sixty (60) business days
      to purchase the outstanding interest of SELECT, unless otherwise
      negotiated. After such payment by TWM, SELECT will have no further
      financial or management interest in the Newco, nor will it be associated
      with, or have rights in or to, the Alpha or Beta Projects as those
      projects are set forth in this Agreement. Following such payment, neither
      TWM or its founders and officers will have any further obligation of any
      kind to SELECT. In the event that TWM is unable to purchase SELECT’s fifty
      percent interest (50%) in Newco, SELECT will have two
    options: 
 1.
    SELECT
      will have the option to sell its interest to a third-party.
 a.
    If
      the bona fide offer is less than the one hundred and twenty-five percent
      (125%) of the actual cash invested and historical contribution, including
      outstanding interest, to the date of default by SELECT, then TWM will be
      given sixty (60) business days to meet the price and purchase the
      interest.
 b.
    If
      the bona fide offer is equal to or greater than the one hundred and
      twenty-five percent (125%) of the actual cash invested and historical
      contribution, including outstanding interest, to the date of default by
      SELECT then SELECT will be allowed to complete the sale, provided that the
      purchaser commits to continue the investment in the Alpha Projects under
      the terms and conditions of this Agreement.
 2.
    SELECT
      will have the option to dilute its current interest in Newco based upon
      the actual amount invested to date against its committed investment. The
      formula for this under funding dilution will
be:
 Actual
amount invested to date by SELECT = X.
 Amount
pledged under this Agreement by SELECT = $2.5 million.
 SELECT
Under Funding Dilution = (X/$2.5 million) * (50%).
 For
example, if SELECT had funded $1.25 million and cannot go forward, and proceeds
with dilution, then its residual share of the project after dilution is as
follows:
 SELECT
Under Funding Dilution = 25% interest in Newco = ($1.25 million/$2.5 million) *
(50%).
 **G.**
    **Staged
      Repayment of the TWM Loan:**TWM
      is providing mineral resources, work product, the use of existing mining
      plans (permits) etc. in its possession prior to the formation of Newco, in
      order to support the successful development of the Alpha Project and Beta
      Projects. The Parties have valued these contributions hereto, at
      $2,500,000 for purposes of this agreement. Said $2,500,000 will be paid to
      TWM in two separate stages. **1.**
    The
      sum of $150,000 will be paid from the proceeds of the initial funding of
      $650,000 by SELECT on or about November 19, 2004 as set forth above. This
      $150,000 covers current out-of-pocket costs incurred by TWM in recent
      months in the form of property payments, consulting fees and services
      provided by third parties, equipment and supplies, and general
      expenses.
 **2.**
    The
      balance will be evidenced by a promissory note given to TWM at the time of
      execution of this agreement on or about November 16, 2004, bearing
      interest at the rate of LIBOR plus 4%. This total will equal $2,350,000.
      The principal and accrued interest thereon shall be paid to TWM from fifty
      percent (50%)of
      EBITDDA,
      as that term is defined in this Agreement, generated from the operations
      of Beta Projects, or from the proceeds of a “refinance loan(s)” provided
      by a bank or institutional loan secured by the hypothecation of one or
      more of the base load contracts of customers purchasing products produced
      by the Beta Projects, or the sale of such contracts at a market discount,
      or other such applicable means, or a combination thereof, so long as the
      repayment of such debt or its equivalent does not exceed the equivalent of
      50% of the net distributable income of the Beta Project(s), or other such
      amount as approved by the Board of
Directors.
 **H.**
    **Replacement
      Capital Reserve and the Distribution of Cash Flows from Beta Projects:**Of
      the net distributable cash flows generated by the Beta Project(s), twenty
      percent (20%) may be retained by the Newco as replacement capital reserves
      to be used for expansion of the company’s business, may be used for other
      company business, or may be distributed to the shareholders subject to a
      vote of the Board of Directors. The remaining eighty percent (80%) shall
      be distributed fifty percent (50%) to each TWM and SELECT unless otherwise
      directed by a super majority of Newco’s Board of Directors. **I.**
    **Support
      Services, Administrative Fees, Compensation for the Full Time Employees,
      Staff, and Management, and Payment of the General Overhead of
      Newco:** **1.**
    **Support
      Services and Administrative Fees:**SELECT
      and TWM shall each provide facilities, equipment, time, and organizational
      support (the Support Services) as required in the formation and on-going
      operations of Newco. Newco shall pay the sum of $500,000 per year each to
      SELECT and TWM as an administrative fee for providing such Support
      Services. Said sums shall be paid in eleven (11) equal monthly
      installments of $41,666, plus a twelfth (12th)
      payment of $41,674, to equal $500,000 each, in advance, from the date of
      initiation of operations of Newco expected to commence on or about
      November 15, 2004. Said sum shall be adjusted annually for increases or
      decreases in the cost of living as published annually by the U.S.
      Department of Commerce, or other such government agency tasked with that
      responsibility. Said $500,000 fee to each of the Parties may be reduced to
      $250,000 each for any given year, to achieve a break-even EBIT, provided
      that the amount reduced is evidenced by promissory notes given to the
      deferring Party to be repaid in the future from first EBITDDA earnings in
      subsequent years. Said notes will bear simple interest at a rate of LIBOR
      plus 4% per annum. **2.**
    **Payment
      for Full Time Employees, Staff, Management, and General Overhead of Newco:**Newco
      shall pay the costs of its full time employees, staff, management,
      seconded employees, consultants, direct operating expenses and general
      overhead firstly, from the working capital allocated in the Use of
      Proceeds and Budget attached hereto as Exhibits “A” and “B” during its
      start-up phase. Thereafter, from the revenues generated by it from the
      manufacture and sale of industrial mineral fillers, extenders, granules,
      powders, construction aggregates, and decorative rock produced by the
      Alpha Projects and any subsequent Beta Projects undertaken by the company,
      from corporate financings and corporate debt, and from any other sources
      available to Newco as a standard business
practice. **3.**
    **Compensation
      Standard:**Compensation
      of employees and staff shall not exceed the general pay scale, benefits,
      and bonus programs, if any, commensurate with industry standards and that
      required to hire and retain qualified personnel in accord with the annual
      business plan and budget for the company.
 
 **J.**
    **Equity****Interest
      and First Right of Refusal to Purchase Shares:**SELECT
      and TWM shall grant to each other a first right of refusal to purchase any
      shares that are to be offered, given or assigned to any third-party, other
      than subsidiaries, affiliates, divisions of the corporations, and in the
      case of individual share holders, as in the case of TWM, its shareholders,
      their immediate family members, family trusts or family businesses, or,
      upon the event of a public offering. 
 **1.**
    The
      first right of refusal agreement shall require the offering or selling
      party (the Liquidating Shareholder) to provide other party to the
      Agreement (the Rights Holder) the right to acquire the shares offered for
      sale or exchanged on the same terms and conditions as is being offered to
      the third-party (other than to those parties referenced above in Section
      V, Subsection I of this Agreement).
 
 **2.**
    If
      an Exchange is contemplated, then a fair market monetary value shall be
      determined for the exchange property or, the Rights Holder shall have the
      opportunity to acquire the property to be exchanged and give it to the
      Liquidating Shareholder in exchange for the stock being
      liquidated.
 **3.**
    Under
      this agreement, the Liquidating Shareholder shall give written offer to
      the Rights Holder, delivered by U.S. registered mail or courier, to
      deliver the shares to be liquidated at a specific price per share and
      stating terms under which the transaction is to be
    concluded.
 **4.**
    The
      Rights Holder shall have thirty (30) business days to respond in writing,
      delivered by U.S. registered mail or courier that the Rights Holder elects
      to exercise his/her (its) right to acquire the shares pursuant to the
      written offer.
 **5.**
    Should
      the Rights Holder elect to acquire the shares offered, and then the Rights
      Holder shall have forty-five (45) business days to settle the transaction
      through a neutral escrow by exchanging cash or specified goods for the
      shares being liquidated.
 **6.**
    Should
      the Rights Holder elect not to acquire the shares offered, then the
      Liquidating Shareholder shall be free to settle the transaction with the
      third-party offeree on the same terms and conditions as those set forth in
      the written offer to the Rights Holder. Should the terms and conditions
      change in the transaction contemplated with the third-party offeree, then
      the Liquidating Shareholder shall make a new written offer to the Rights
      Holder following the same procedure as hereinabove set forth. This process
      shall be repeated until either the Rights Holder or the third-party
      offeree shall have closed the transaction; or, the Liquidating Shareholder
      shall determine to withdraw the offering to liquidate his/her (its)
      shareholdings.
 **K.**
    **Roles
      of the Parties to This Agreement, the Board of Directors, Managers, and
      Employees:** 
 **1.**
    **Executives,
      Managers, and Operations**:****Executives
      and managers of Newco, except for seconded employees, shall devote full
      and such time as may be required in the management and operation of
      Newco’s business and projects in order to accomplish the goals and
      objectives established for the company. They will not be paid overtime for
      time expended beyond eight hours per day in the performing their duties,
      unless a performance bonus is declared by a vote of the majority of the
      Board of Directors.
 **2.**
    **Goals,
      Strategies, and Tactics**:
      Newco will be operated by its Board of Directors, officers, managers, and
      employees in such a manner as to accomplish the goals and objectives set
      forth in the attached business plan and budget subject to the approval and
      authority of the Board of Directors. Each company goal will be supported
      by a clearly defined written strategy. The strategy will be supported by
      clearly defined tactics, which will in turn supported by specific
      objectives.
 **3.**
    **Five
      Year Business Goals**:
      The Board of Directors will establish specific five-year business goals
      for the company supported by specific year-by-year business objectives
      related to market position, annual profitability, and improved shareholder
      value. In addition, the Board of Directors will be responsible for
      providing the proper financial and managerial resources to accomplish the
      goals and objectives set by it.
 **4.**
    **Specific
      Objectives, Strategies, and Tactics**:
      Management and staff will develop specific objectives, strategies, and
      tactics, designed to accomplish the short and long-term goals set by the
      Board of Directors. Clearly defined management responsibilities, budgets,
      timelines, and reporting requirements shall be set forth in a written
      format focused upon accomplishing the defined objective(s) in a minimum of
      time, at a minimum of costs. Each objective will be supported by a
      well-defined strategy, which in turn will be supported by specific
      well-defined tactics. Each set of objects, strategies, and tactics will be
      designed and implemented in the most efficient manner possible to
      accomplish the Company’s short and long-term goals approved by the Board
      of Directors. All goals, objectives, strategies, and tactics will be
      reduced to clearly written, concise plans in which five resources,
      manpower, money, time, materials, and feedback (reporting method) are
      allocated together with specific individual and/or team responsibilities
      for implementation and accomplishment.
 **L.**
    **Required
      Vote of the Board of Directors:**Each member of the Board of Directors shall have one
  vote. **1.**
    **Simple
      Majority Vote**: A
      simple majority vote of the Board of Directors shall be required for all
      business decisions, except those set forth below for which a super
      majority of the votes of the Board of Directors shall be required.
      Standard business decisions requiring a simple majority decision include
      budget approval, plan approval, and operational business decisions. The
      Board of Directors, through a simple majority vote, will designate what
      authority is designated for the management of the Newco, including signing
      authority.
 **2.**
    **Required
      Super Majority Vote**: A
      vote of five-members of the Board of Directors or 71.4 % of a seven-person
      Board (or five-members of the Board of Directors or 83.3% of a six-person
      Board when there is no seventh member), shall constitute a super-majority
      of the Board and will be required for approval or disapproval of the
      following management decisions:
 **a.**
    To
      change the general business objectives and operational focus of the
      company. **b.**
    To
      increase, or decrease the salaries or declare bonuses for the executives
      and officers of the company from those set forth in this Agreement and in
      the general budget, except in the event Newco is operating at a deficit
      and salaries need to be reduced as part of a plan to balance the company
      budget, or other such emergency requirement. **c.**
    To
      sell all or part of the company, form a joint venture with another
      company, acquire, or merge with another company. **d.**
    To
      sell all or part of a specific project, form a joint venture with another
      company on a project, acquire a project, or merge a project with another
      company. **e.**
    To
      dissolve Newco. **f.**
    To
      agree on an internal dilution of one Party by the other Party due to under
      funding of a cash call. **g.**
    To
      list the company on a public exchange. **h.**
    To
      borrow money outside the normal course of business, as set forth in the
      approved business plan and budget. **i.**
    To
      undertake debt via a hypothecation of an existing contract or
      contracts. **j.**
    To
      admit third-party investors into the company or into specific
      projects. **k.**
    To
      take any action that might adversely affect any shareholder’s interests in
      the business. **l.**
    To
      retain more that twenty percent (20%) of the annual net cash flow
      (profits) of the company as “replacement capital
  reserve.” **m.**
    To
      eliminate a quarterly distribution of eighty percent (80%) of the
      company’s net cash flows after setting aside reasonable reserves for
      replacement of equipment, operating emergencies, debt service, employee
      benefits, land reclamation, geological exploration, and product
      research. 
 **n.**
    To
      change the requirement for a super-majority vote, or the provisions for
      its use or, otherwise modify its use from that set forth in this
      Agreement. **M.**
    **Profits:**Profits
      will be distributed as hereinabove set forth in this Agreement based on a
      Board of Directors’ decision, subject to the above qualifications and
      conditions requiring a super majority vote of the shares represented on
      the Board of Directors. It will not be in the interest of Newco to
      maintain a pool of earnings in excess of the company’s anticipated
      requirements or above average standards for the industrial minerals and
      mining industries. **N.**
    **Additional
      Project Funding:**Both Parties agree that for the continuation of the Alpha Projects
      (replacement capital for example) and for the Beta Projects, funding will
      be made available from the following sources: **1.**
    Cash
      flow from existing operations.
 **2.**
    Commercial
      debt from financial institutions or financial credit companies, which
      requires super majority approval from the Board of
    Directors.
 **3.**
    Equity
      sources, subject to the approval of the super majority of the Board of
      Directors.
 **O.**
    **Insufficient
      Operating Capital:**In
      the event that funding for required operations of Newco is insufficient
      from normal operations of the company, loans from SELECT under this
      Agreement, hypothecation of customer base-load contracts, bank
      lines-of-credit, or, other traditional sources as listed above, the
      Parties hereto can determine to resolve the problem by electing to
      implement one or a combination of the following
  strategies: **1.**
    **Internal
      Loans**:
      Funding can be sought from one or both Parties to this Agreement. In this
      case, the funding Party(s) will have the option of providing one or more
      loans to the Newco at the rate of LIBOR plus 10% per annum, to be repaid
      at a rate over time to be negotiated. Each Party may loan equal or unequal
      sums in accord with their negotiated agreement;
or; **2.**
    **Third-Party
      Dilution**:
      Dilution may occur by way of accepting an equity investment from a third
      party. There are two scenarios for third party
dilution: a.
    Joint
      Dilution: This is the case in which additional funds are required and both
      Parties to this Agreement will be diluted on an equal basis by the same
      amount or percent. Both Parties will be diluted on an equal basis via new
      third party equity investment(s), mergers, or joint ventures, using the
      standard dilution formula, as stated below:
 Prior
to Dilution : Both
Party 1 and Party 2 own 50% each of the shares of the corporation.
 Historic
Value of the Compan y: X, and
X/2 = A, and X/2 = B and A = B and A + B = X.
 Party 1
Value = A, and its percentage value in the corporation is calculated as
(A/X)*(100%).
 Party 2
Value = B, and its percentage value in the corporation is calculated as
(B/X)*(100%).
 Third
Party Investment : For
purposes of this example, the contribution to Newco by a third party investor
equals “Y. **”**
 After
Third Party Investment-Dilution : The new
ratio of percentage ownership in the Company is as follows:
 Party 1
value = ((A)/(X+Y))*(100%).
 Party 2
value = ((B)/(X+Y))*(100%).
 New
Investor = ((Y)/(X+Y))*(100%).
 **Example** : Newco
contributed value = $5 million, with TWM and SELECT each owning half of the
shares (50%), valued at $2.5 million each. A cash call of $2 million is not met
from operations and traditional sources of financing, so a New Investor offers
the $2 million in the form of an equity investment credited under the dilution
formula. After the equity contribution, Newco’s contributed value is now $7
million, and the proportionate share ownership of the Parties is: TWM = 35.7%
($2.5 million / $7 million * 100%), SELECT = 35.7% ($2.5 million / $7 million *
100%), and the New Investor = 28.6% ($2 million / $7 million * 100%).
 b.
    Individual
      Dilution: This is the case in which additional funds are required and one
      Party (the “diluted Party”) to this Agreement will be diluted and the
      other Party (the “investing Party”) will meet its financial obligations
      for the additional funds. The diluting Party will be diluted using the
      standard dilution formula, as stated below:
 Prior
to Dilution : Both
Party 1 and Party 2 own 50% each of the shares of the corporation.
 Historic
Value of the Compan y: X, and
X/2 = A, and X/2 = B and A = B and A + B = X.
 Diluting
Party 1 Value = A, and its percentage value in the corporation is calculated as
(A/X)*(100%).
 Investing
Party 2 Value = B, and its percentage value in the corporation is calculated as
(B/X)*(100%).
 Funding
Requirement : For
purposes of this example, the financial requirement to Newco equals “Y”, and the
funding requirement of each party is: Diluting Party 1 = (Y/2), and Investing
Party 2 = (Y/2), and if a new investor is diluting the Diluting Party, that
investor will invest the amount (Y/2) in lieu of Divesting Party’s
investment.
 After
Investment-Dilution : The new
ratio of percentage ownership in the Company is as follows:
 Diluting
Party 1 value = ((A)/(X+Y))*(100%).
 Investing
Party 2 value = (((B+(Y/2)))/(X+Y))*(100%).
 New
Investor = ((Y/2)/(X+Y))*(100%).
 **Example** : Newco
contributed value = $5 million, with TWM and SELECT each owning half of the
shares (50%), valued at $2.5 million each. A cash call of $2 million is not met
from operations and traditional sources of financing, so new funds are sought.
SELECT decides to fund its portion, $1 million, but TWM cannot meet its
obligation. A new investor offers the $1 million in the form of an equity
investment credited under the dilution formula relative to TWM’s cash call.
After the equity contribution, Newco’s contributed value is now $7 million, and
the proportionate share ownership of the Parties is: TWM = 35.7% ($2.5 million /
$7 million * 100%), SELECT = 50.0% ($3.5 million / $7 million * 100%), and the
New Investor = 14.3% ($1 million / $7 million * 100%).
 **3.**
    **Valuation
      of Newco for Dilution**:
      For purposes of this Agreement, Newco will have a value of $5,000,000,
      plus any additional net capital contributions as of that date, of which
      each of the Parties will have a 50% valuation position, assuming no
      dilution by either Party has taken place as of that
  date. **4.**
    **Sale
      of Newco**:
      The Parties hereto may elect to sell Newco in its entirety, in which case
      the net proceeds will be used to first pay the Company’s obligations in
      full to the extent possible, and distribute the remaining proceeds if any,
      to the shareholders of Newco in proportion to their
      shareholdings. **5.**
    **Dissolve
      Newco**:
      Provided the Company has no outstanding, unpaid obligations, the Parties
      hereto can elect to cease operations and dissolve Newco. In this case, the
      assets of the Company will either be sold and the proceeds divided between
      shareholders; or, the assets may be valued and divided equally and
      distributed to the shareholders. **6.**
    **Outstanding
      Obligations:**If
      the Company has outstanding and unpaid obligations, then the assets in
      part or whole shall be sold to the extent required to generate sufficient
      funds to first pay the outstanding and unpaid obligations of the Company
      to the extent possible; thereafter, the net balance of the sale proceeds
      together with any remaining assets, if any, will be divided equally and
      distributed to the shareholders in proportion to their shareholdings in
      which case both Parties would receive their proportional share of the
      remaining assets together with their proportionate share of any profits
      and/or losses from the disposition. **P.**
    **Sale
      or Dissolution of Newco:**In
      the event that sufficient operating capital is not obtained in a timely
      manner by one or more of the options set forth in Subsections N and O
      above, the Parties hereto agree to elect to sell and/or dissolve Newco in
      a manner and time frame to allow sufficient time to accomplish an orderly
      sale and/or dissolution to occur in a manner and time period to achieve
      the best possible results for the shareholders to resolve the initial and
      subsequent cash flow shortfall and to either make a profit, achieve a
      return of invested capital, or reduce to the extent possible, a loss of
      invested capital. **VI** .  **Miscellaneous:**
 **A**.
    **Notices**:
      All notices, requests, demands, claims, and other communications between
      the Parties hereunder shall be in writing. Any notice, request, demand,
      claim, or other communication hereunder shall be deemed duly given and
      received, if:
 **1**.
    Personally
      delivered by an officer of one Party to an officer of the other Party,
      when so delivered;
 **2**.
    When
      mailed by one Party to the other, the document or letter shall be deemed
      received three (3) business days after having been sent by registered or
      certified mail, return receipt requested, postage prepaid and addressed to
      the intended recipient as set forth below;
  **3**.
    Given
      and received by facsimile, once such notice or other communication is
      transmitted by one Party to the other at the facsimile number specified
      below and the appropriate answer back or telephonic confirmation is
      received, provided that such notice or other communication is promptly
      thereafter mailed in accordance with the provisions of Paragraph 2 above,
      or,
  **4**.
    Given
      and received when sent by one Party to the other through an overnight
      delivery service in circumstances under which such service guarantees next
      day delivery, the day following being so
sent.
  **5**.
    If
      sent by mail, registered mail, courier, or facsimile to the officers of
      the Parties to this Agreement at the addresses and communication numbers
      and set forth below:
 
 Select
Resources Corporation (SELECT)
 c/o
Tri-Valley Corporation
 5555
Business Park South, Suite 200
 Bakersfield,
CA 93309
 Telephone:  661-864-0500
 Facsimile:  661-864-0600
 Attention:
F. Lynn Blystone
 
 Trans-Western
Materials, L.L.C. (TWM)
 5242
Renaissance Avenue
 San
Diego, CA 92122
 Telephone:  805-452-1788
 Facsimile:  805-542-7017
 Attention:
Marshall Pettit
 
 B.
    Severability:**The
      invalidity or unenforceability of any particular provision of this
      Agreement will not affect the other provisions hereof, and this Agreement
      will be construed in all respects as if such invalid or unenforceable
      provision were omitted.**
 C.
    Counterparts;
      Facsimile:**This Agreement may be executed in any number of counterparts and via
      facsimile with the same effect as if all parties hereto had signed the
      same document. All counterparts will be construed together and will
      constitute one instrument.**
 **D.**
    **Governing
      Law and Arbitration:**Except as otherwise provided in this Agreement, any controversy or dispute
      arising out of this Agreement or breech thereof, the interpretation of any
      of the provisions thereof, or the action or inaction of one or the other
      Party hereunder to this Agreement shall be submitted to binding
      arbitration in Kern County, State of California, under the commercial
      arbitration rules then existing of JAMS or its successor. Any award or
      decision obtained from any such arbitration proceeding shall be final and
      binding on the Parties, and the judgment upon any award thus obtained may
      be rendered in any court having jurisdiction thereof. No action at law or
      in equity based upon any claim arising out of or related to this Agreement
      shall be instituted in any court by either Party to this Agreement except
      (i) to obtain preliminary injunctive relief or other temporary relief,
      (ii) an action to compel arbitration pursuant to this section, or (iii) an
      action to enforce any award obtained in an arbitration proceeding in
      accordance with this section. The award revenues by the arbitrator or
      arbitrators shall be final and judgment may be entered upon it in any
      court having jurisdiction thereof.
 **E.**
    **Choice
      of Law and Form:**This Agreement shall be interpreted under the laws of the State of
      California. Any litigation in regarding this Agreement shall be resolved
      in the courts of Kern County, State of California, subject to the
      Arbitration Clause above.
 **F.**
    **Attorney
      Fees:**In
      the event that any dispute between the Parties hereto or between Newco and
      its third party Shareholders, if any, or among the Shareholders and/or
      Managers of Newco should result in litigation or arbitration, the
      prevailing party in such dispute shall be entitled to recover from the
      other party all reasonable fees, costs and expenses of enforcing any right
      of the prevailing party, including reasonable attorneys’ fees and
      expenses
 **G.**
    **Confidentiality:**Both
      Parties shall hold all information concerning the Properties and
      Transaction in confidence and agree to hold in confidence the terms and
      conditions of this Agreement, except that the Parties may disclose such
      information to their respective owners, officers, directors, employees,
      insurance companies, legal counsel and similar third-parties who need to
      review the same in connection with the Transaction proposed hereby. The
      foregoing restrictions shall not apply to disclosures of information
      required by law or court order, or to information concerning the
      Properties and Transaction that is available to the general public other
      than through the disclosure by either of the Parties or its/ their agents
      in violation of this Agreement.
 **H.**
    **Binding
      Agreement:**This
      document is meant to serve as a legallybinding Agreement between the Parties hereto and shall serve as the
      foundation for the formation, by-laws, and operations of
      Newco.
 **I.**
    **Definitive
      Agreement:**This Agreement shall serve as the Agreement for the formation and
      operation of Newco. A formal operating agreement will be prepared by legal
      counsel for Newco hereto in the form of a Limited Liability Company
      Operating Agreement and related documents, reflecting the general terms
      and conditions of this Agreement and conforming to the applicable laws of
      the State of California**.**
 **J.**
    **Entire
      Agreement:**This Agreement and the Exhibits hereto constitute the entire agreement
      between the parties hereto with respect to the subject matter hereof, and
      supersedes all prior oral and written, and all contemporaneous oral,
      understandings, negotiations and agreements with respect to the subject
      matter hereof.****
  
  **THIS
DOCUMENT MAY BE SIGNED IN COUNTER PART AND DELIVERED TO THE RESPECTIVE PARTIES
BY FACSIMILE TRANSMISSION**
 
 This
Agreement is entered into by and between the undersigned Parties effective
November 16, 2004:
 
 **Select
Resources Corporation**
 
 By:  _____________________________
 F. Lynn
Blystone, President, and Chief Executive Officer
 Tri-Valley
Corporation
 And
 Chief
Executive Officer
 Select
Resources Corporation
 
 By:  ______________________________
 Thomas J.
Cunningham, Secretary, and Chief Financial Officer
 Tri-Valley
Corporation
 
 **Trans-Western
Materials, LLC**
 
 By:  ______________________________
 Marshall
W. Pettit, President and Executive Director
 Trans-Western
Materials, LLC
 
 By:  ______________________________
 Wayne
Everett, Vice President
 Trans-Western
Materials, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 **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:
      May 06, 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:
      May 06, 2005
    
    /s/Thomas
      J. CunninghamThomas
      J. Cunningham, Chief Financial 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 March 31, 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:
      May06,
      2005
    
    /s/Thomas
      J. CunninghamThomas
      J. Cunningham, Chief Financial Officer
 
 
 
 
 
 
 **Exhibit
32.2**
 
 **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 March 31, 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:
      May06,
      2005
    
    /s/F.
      Lynn BlystoneF.
      Lynn Blystone, President and Chief Executive
Officer
 
 
 
 
 
 * Information Omitted - Registrant has requested confidential treatment pursuant
to Rule 24b-2, and has filed a complete copy of this Agreement with the
Securities and Exchange Commission.
 * Information Omitted - Registrant has requested confidential treatment pursuant
to Rule 24b-2, and has filed a complete copy of this Agreement with the
Securities and Exchange Commission.
 * Information Omitted - Registrant has requested confidential treatment pursuant
to Rule 24b-2, and has filed a complete copy of this Agreement with the
Securities and Exchange Commission.
 * Information Omitted - Registrant has requested confidential treatment pursuant
to Rule 24b-2, and has filed a complete copy of this Agreement with the
Securities and Exchange Commission.
 * Information Omitted - Registrant has requested confidential treatment pursuant
to Rule 24b-2, and has filed a complete copy of this Agreement with the
Securities and Exchange Commission.