UNITED
STATES SECURITIES AND EXCHANGE COMMISSION





Washington,
D.C. 20549








FORM
10-Q/A-1





AMENDMENT  NO.
1 TO THE


QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
AND EXCHANGE ACT OF 1934








For
      the quarterly period ended June 30, 2008
                Commission
      File No. 001-31852








Tri-Valley
Corporation


(Exact
name of registrant as specified in its charter)








Delaware
              84-0617433(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)








4550
California Avenue, Suite 600, 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





Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. (as defined in Rule 12b-2 of the
Exchange Act). (Check one):





Large
      accelerated filer
                        o
                        Accelerated
      filer
                        xNon-accelerated
      filer
                        o
                        Smaller
      reporting company
                        o








Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes o No x








The
number of shares of Registrant's common stock outstanding at July 11, 2008, was
27,012,589.







1





TRI-VALLEY
CORPORATION








INTRODUCTORY
STATEMENT





In the
second quarter of 2008, Tri-Valley Corporation reported an impairment loss on
its GVPS rigs and rig related equipment of $870,948.  There were
additional assets which should have been included in the sale of the rigs,
additional accumulated depreciation that was omitted, as well as items expensed
as General and Administrative that should have been capitalized, all affecting
the calculation of the impairment loss.  The combination of these
changes resulted in the impairment loss being overstated by $555,620, G & A
Expenses being overstated by $40,090, total property and equipment being
overstated by $595,710, resulting in our net loss being overstated by
$595,710.





Note 9 to
the Consolidated Financial Statements has been revised to properly reflect the
effects of the write down of the rigs and rig related equipment. The book value
of each group of assets is now correctly stated, along with the correct
impairment allocation.  Due to the impairment allocation being
calculated as a percentage of book value and the changes listed above affecting
book value, the impairment allocation was changed to better allocate the loss to
each group of assets.








INDEX





PagePART
      I -
                FINANCIAL
      INFORMATION
                3Item
      1.
                Consolidated Financial Statements
                3Item
      2.
                Management's Discussion and Analysis of Financial Condition
      and Results of Operations
                14Item
      3.
                Quantitative and Qualitative Disclosures about Market
      Risk
                21Item
      4.
                Controls and Procedures
                21PART
      II -
                OTHER
      INFORMATION
                21Item
      1A.
                Risk Factors
                21Item
      2.
                Unregistered Sales of Equity Securities
                22Item
      6.
                Exhibits
                22SIGNATURES
                23




2
 Index





PART
I





FINANCIAL
INFORMATION





Item1.
            Unaudited
      Consolidated Financial Statements





TRI-VALLEY
CORPORATION


CONSOLIDATED
BALANCE SHEETS








ASSETS


June 30, 2008
                    
                    
                    December 31, 2007(Unaudited)
                    
                    
                    (Audited)Current
      assetsCash
                    
                    $
                    2,590,505
                    
                    
                    $
                    3,955,610Cash
      restricted to OPUS I use
                    
                    
                    5,235,550
                    
                    
                    
                    3,712,083Accounts
      receivable, trade
                    
                    
                    4,096,669
                    
                    
                    
                    313,521Advances
      from joint venture participants, net
                    
                    
                    1,139,390
                    
                    
                    
                    -Prepaid
      expenses
                    
                    
                    12,029
                    
                    
                    
                    12,029Total
      current assets
                    
                    
                    13,074,143
                    
                    
                    
                    7,993,243Property
      and equipment, netProved
      properties
                    
                    
                    2,127,298
                    
                    
                    
                    2,143,907Unproved
      properties
                    
                    
                    4,443,369
                    
                    
                    
                    2,414,843Rigs
                    
                    
                    5,943,568
                    
                    
                    
                    6,731,758Other
      property and equipment
                    
                    
                    5,273,207
                    
                    
                    
                    4,942,145Total
      property and equipment, net
                    
                    
                    17,787,442
                    
                    
                    
                    16,232,653Other
      assetsDeposits
                    
                    
                    159,833
                    
                    
                    
                    338,772Invest
      in marketable securities (Note 4)
                    
                    
                    302,500
                    
                    
                    
                    440,000Investments
      in partnerships
                    
                    
                    17,400
                    
                    
                    
                    17,400Goodwill
                    
                    
                    212,414
                    
                    
                    
                    212,414Other
                    
                    
                    20,413
                    
                    
                    
                    20,413Total
      other assets
                    
                    
                    712,560
                    
                    
                    
                    1,028,999Total
      assets
                    
                    $
                    31,574,145
                    
                    
                    $
                    25,254,895








The
accompanying notes are an integral part of these consolidated financial
statements.





3
 Index





LIABILITIES AND
STOCKHOLDERS' EQUITY





June 30, 2008
                  
                  
                  December 31, 2007(Unaudited)
                  
                  
                  (Audited)Current
      liabilitiesNotes
      payable
                  
                  $
                  419,302
                  
                  
                  $
                  402,003Accounts
      payable and accrued expenses
                  
                  
                  10,989,719
                  
                  
                  
                  5,699,153Deferred
      revenue
                  
                  
                  828,524
                  
                  
                  
                  242,163Amounts
      payable to joint venture participants
                  
                  
                  3,001,152
                  
                  
                  
                  281,419Advances
      from joint venture participants, net
                  
                  
                  -
                  
                  
                  
                  3,671,927Total
      current liabilities
                  
                  
                  15,238,697
                  
                  
                  
                  10,296,665Non-Current
      LiabilitiesAsset
      retirement obligation
                  
                  
                  268,395
                  
                  
                  
                  240,394Long-term
      portion of notes payable
                  
                  
                  2,228,203
                  
                  
                  
                  2,355,707Total
      non-current liabilities
                  
                  
                  2,496,598
                  
                  
                  
                  2,596,101Total
      liabilities
                  
                  
                  17,735,295
                  
                  
                  
                  12,892,766Minority
      interest
                  
                  
                  -
                  
                  
                  
                  249,945Stockholders’
      equityCommon
      stock, $.001 par value; 100,000,000 shares authorized; 26,941,764 and
      25,077,184 issued and outstanding at June 30, 2008, and December 31, 2007,
      respectively
                  
                  
                  26,942
                  
                  
                  
                  25,077Less:
      common stock in treasury, at cost, 100,025 shares
                  
                  
                  (13,370
                  )
                  
                  
                  (13,370
                  )Capital
      in excess of par value
                  
                  
                  43,504,264
                  
                  
                  
                  37,090,714Additional
      paid in capital – warrants
                  
                  
                  782,729
                  
                  
                  
                  782,729Additional
      paid in capital - stock options
                  
                  
                  2,194,709
                  
                  
                  
                  1,800,642Accumulated
      deficit
                  
                  
                  (32,611,868
                  )
                  
                  
                  (27,586,553
                  )Accumulated
      other comprehensive income
                  
                  
                  (44,556
                  )
                  
                  
                  12,945Total
      stockholders' equity
                  
                  
                  13,838,850
                  
                  
                  
                  12,112,184Total
      liabilities, minority interest and stockholder's equity
                  
                  $
                  31,574,145
                  
                  
                  $
                  25,254,895








The
accompanying notes are an integral part of these consolidated financial
statements.





4
 Index





TRI-VALLEY
CORPORATION


CONSOLIDATED
STATEMENTS OF OPERATIONS


(Unaudited)





For
      the Three Months
                  Ended
      June 30,
                
                
                For
      the Six Months
                  Ended
      June 30,2008
                
                
                2007
                
                
                2008
                
                
                2007RevenuesSale
      of oil and gas
                
                $
                1,245,950
                
                
                $
                168,015
                
                
                $
                1,628,374
                
                
                $
                332,201Gain
      on sale of asset (Note 8)
                
                
                79,972
                
                
                
                -
                
                
                
                661,222
                
                
                
                -Rig
      income
                
                
                567,078
                
                
                
                560,366
                
                
                
                1,122,384
                
                
                
                1,810,869Other
      income
                
                
                347,461
                
                
                
                571,329
                
                
                
                500,277
                
                
                
                672,940Interest
      income
                
                
                21,728
                
                
                
                106,240
                
                
                
                28,778
                
                
                
                200,307Total
      Revenues
                
                
                2,262,189
                
                
                
                1,405,950
                
                
                
                3,941,035
                
                
                
                3,016,317Costs
      and expensesOil
      and gas lease expense
                
                
                319,469
                
                
                
                116,098
                
                
                
                377,032
                
                
                
                204,493Mining
      exploration expenses
                
                
                126,471
                
                
                
                45,662
                
                
                
                130,371
                
                
                
                113,152Drilling
      and development
                
                
                -
                
                
                
                625,593
                
                
                
                -
                
                
                
                858,089Rig
      operations
                
                
                464,259
                
                
                
                335,450
                
                
                
                879,581
                
                
                
                780,008Depletion,
      depreciation and amortization
                
                
                357,186
                
                
                
                233,194
                
                
                
                714,370
                
                
                
                486,317Interest
                
                
                86,426
                
                
                
                71,770
                
                
                
                154,202
                
                
                
                148,666Impairment
      loss (Note 9)
                
                
                315,328
                
                
                
                -
                
                
                
                315,328
                
                
                
                246,862General
      and administrative
                
                
                3,338,008
                
                
                
                2,767,609
                
                
                
                6,226,763
                
                
                
                5,228,219Total
      costs and expenses
                
                
                5,007,147
                
                
                
                4,195,376
                
                
                
                8,797,647
                
                
                
                8,065,806Loss
      before minority interest
                
                
                (2,744,958
                )
                
                
                (2,789,426
                )
                
                
                (4,856,612
                )
                
                
                (5,049,489
                )Minority
      interest
                
                
                -
                
                
                
                -
                
                
                
                (3,769
                )
                
                
                -Net
      Loss
                
                
                (2,744,958
                )
                
                
                (2,789,426
                )
                
                
                (4,852,843
                )
                
                
                (5,049,489
                )Basic
      net loss per share:Loss
      from operations
                
                $
                (.10
                )
                
                $
                (.11
                )
                
                $
                (.18
                )
                
                $
                (.20
                )Basic
      loss per common share
                
                $
                (.10
                )
                
                $
                (.11
                )
                
                $
                (.18
                )
                
                $
                (.20
                )Weighted
      average number of shares outstanding
                
                
                26,731,656
                
                
                
                24,627,121
                
                
                
                26,521,549
                
                
                
                24,278,448Potentially
      dilutive shares outstanding
                
                
                29,459,573
                
                
                
                28,032,887
                
                
                
                29,510,391
                
                
                
                27,555,100





No
dilution is reported since net income is a loss per SFAS 128








The
accompanying notes are an integral part of these consolidated financial
statements.





5
 Index





TRI-VALLEY
CORPORATION


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)




For
      the Six MonthsEnded
      June 30,2008
                
                
                2007Cash
      Flows from Operating ActivitiesNet
      loss
                
                $
                (4,852,843
                )
                
                $
                (5,049,489
                )Adjustments
      to reconcile net income to net cash used from operating
      activities:Depreciation,
      depletion and amortization
                
                
                714,370
                
                
                
                486,317Impairment,
      dry hole and other disposals of property
                
                
                -
                
                
                
                258,862Loss
      on Impairment of Fixed Assets
                
                
                315,328
                
                
                
                -Minority
      interest
                
                
                (3,769
                )
                
                
                -Stock
      options
                
                
                394,067
                
                
                
                653,210Gain
      on sale of property
                
                
                (661,222
                )
                
                
                -Warrants
                
                
                -
                
                
                
                316,852Changes
      in operating capital:Increase
      in prepaids
                
                
                -
                
                
                
                (368,881
                )Decrease
      in deposits and other assets
                
                
                178,939
                
                
                
                150,000Increase
      in accounts receivable
                
                
                (3,783,148
                )
                
                
                (69,261
                )Increase
      (decrease) in accounts payable, deferred revenue and accrued
      expenses
                
                
                5,834,272
                
                
                
                (939,490
                )Increase
      (decrease) accounts payable to joint ventureparticipants
      and related parties
                
                
                2,719,733
                
                
                
                (142,206
                )Increase
      (decrease) in advances from joint venture participants
                
                
                (4,811,317
                )
                
                
                3,161,076Net
      Cash Used by Operating Activities
                
                
                (3,955,590
                )
                
                
                (1,543,010
                )Cash
      Flows from Investing Activities:Proceeds
      from sale of property
                
                
                2,587,500
                
                
                
                -Proceeds
      from the sale of marketable securities
                
                
                79,999
                
                
                
                -Investment
      in marketable securities
                
                
                -
                
                
                
                (380,000
                )Buy
      back of minority interest in GVPS
                
                
                (418,648
                )
                
                
                (1,494,000
                )Capital
      expenditures
                
                
                (4,482,764
                )
                
                
                (2,515,667
                )Net
      Cash Used by Investing Activities
                
                
                (2,233,913
                )
                
                
                (4,389,667
                )Cash
      Flows from Financing ActivitiesPrincipal
      payments on long-term debt
                
                
                (67,550
                )
                
                
                (3,847
                )Net
      proceeds from additional paid in capital – stock options
                
                
                293,514
                
                
                
                496,547Net
      proceeds from additional paid in capital – warrants
                
                
                -
                
                
                
                658,400Net
      proceeds from minority interest holders – Great Valley Drilling/Great
      Valley Production
                
                
                -
                
                
                
                (400,551
                )Stock
      issuance costs
                
                
                (939,885
                )
                
                
                (787,900
                )Net
      proceeds from issuance of common stock
                
                
                7,061,786
                
                
                
                5,934,956Net
      Cash Used by Financing Activities
                
                $
                6,347,865
                
                
                $
                5,897,605








The
accompanying notes are an integral part of these consolidated financial
statements.





6
 Index





TRI-VALLEY
CORPORATION


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)





For
      the Six Months
                    Ended
      June 30,2008
                  
                  
                  2007Net
      Increase in Cash and Cash Equivalents
                  
                  
                  158,362
                  
                  
                  
                  (35,072
                  )Cash
      and Cash Equivalents at Beginning of Period
                  
                  
                  7,667,693
                  
                  
                  
                  15,598,215Cash
      and Cash Equivalents at End of Period
                  
                  $
                  7,826,055
                  
                  
                  $
                  15,563,143






For
      the Six Months Ended June 30,2008
                  
                  
                  2007Supplemental
      Information:Cash
      paid for interest
                  
                  $
                  154,202
                  
                  
                  $
                  148,667








The
accompanying notes are an integral part of these consolidated financial
statements.





7
 Index





TRI-VALLEY
CORPORATION


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE SIX MONTHS ENDED


June
30, 2008 and 2007


(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 metal and
mineral properties and interests therein.





The
Company identifies reportable segments by product.  The Company
includes revenues from both external customers and revenues from transactions
with other operating segments in its measure of segment profit or
loss.  The Company also includes interest revenue, DD&A, and other
operating expenses in its measure of segment profit or loss.  The
results of these four segments are presented in Note 7 to the Consolidated
Financial Statements.





The
Company’s four industry segments are:





-
            Oil and gas operations
      include our share of revenues from oil and gas wells on which Tri-Valley
      Oil and Gas Company serves as operator, royalty income and production
      revenue from other partnerships in which we have operating or
      non-operating interests.  It also includes revenues for
      consulting services for oil and gas related
  activities.





-
            Rig operations began in
      2006, when the Company acquired drilling rigs and began operating them
      through subsidiaries Great Valley Production Services, LLC, and Great
      Valley Drilling Company, LLC.  Rig operations include income
      from rental of oil field equipment and income received from refurbishing
      and selling oilfield equipment.





-
            Minerals include the
      Company’s mining and mineral prospects and operations, and expenses
      associated with those operations.





-
            Drilling and
      development includes revenues received from oil and gas drilling
      and development operations performed for joint venture partners, including
      the Opus-I drilling partnership.





The
Company has five subsidiaries:





·
            Tri-Valley
      Oil & Gas Company (“TVOG”) operates the oil & gas
      activities.  TVOG derives the majority of its revenue from oil
      and gas drilling and turnkey development. TVOG primarily generates its own
      exploration prospects from its internal database, and also screens
      prospects from other geologists and companies.  TVOG generates
      these geological “plays” within a certain geographic area of mutual
      interest.  The prospect is then presented to potential
      co-ventures.  The company deals with both accredited individual
      investors and energy industry companies.  TVOG serves as the
      operator of these co-ventures. TVOG operates both the oil and gas
      production segment and the drilling and development segment of our
      business lines.





·
            Select
      Resources Corporation (“Select”) was created in late 2004 to manage, grow
      and operate the minerals segment of our business
  lines.





·
            Great
      Valley Production Services, LLC, (“GVPS”) was formed in 2006 to operate
      oil production services, well work over and drilling rigs, primarily for
      TVOG.  Tri-Valley currently owns 100% of GVPS.  In
      July of 2008, the drilling rigs were sold so that going forward the
      primary operations of GVPS will be to refurbish oilfield equipment for use
      in the Company’s operations and for sale to outside third
      parties.





8
 Index





·
            Great
      Valley Drilling Company, LLC (“GVDC”) was formed in 2006 to operate oil
      drilling rigs, primarily in Nevada where Tri-Valley has 17,000 acres of
      prospective oil leases.  However, because rig availability is
      scarce in Nevada, GVDC has an opportunity to do contract drilling for
      third parties in both petroleum and geothermal projects.  For
      the time being GVDC, whose operation began in the first quarter of 2007,
      expects its primary activity will be contract drilling for third parties.
      GVDC is 100% owned by TVC.





·
            Tri-Valley
      Power Corporation is inactive at the present
  time.








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 six-month
period ended June 30, 2008, 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 our Annual Report on Form 10-K, filed with the
Securities and Exchange Commission on March 14, 2008, for the year ended
December 31, 2007.





Principles of
Consolidation





The
consolidated financial statements include the accounts of the Company, its
wholly owned subsidiaries, TVOG, Select, GVDC, GVPS, Tri-Valley Power
Corporation, since their inception.  Other partnerships in which the
Company has an operating or nonoperating interest in which the Company is not
the primary beneficiary and owns less than 51%, are proportionately
combined.  This includes Opus I, Martins-Severin, Martins-Severin
Deep, and Tri-Valley Exploration 1971-1 partnerships.  All material
intra and intercompany accounts and transactions have been eliminated in
combination and consolidation.








NOTE
2 - 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
3 – SUMMARY OF RECENTLY ISSUED ACCOUNTING PRONOUCEMENTS





Accounting for Uncertainty
in Income Taxes





In July
2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
No. 48, “Accounting for
Uncertainty in Income Taxes – An interpretation of FASB Statement No.
109” (“FIN 48”). This Interpretation provides a comprehensive model for the
financial statement recognition, measurement, presentation and disclosure of
uncertain tax positions taken or expected to be taken in income tax returns. We
adopted this Interpretation in 2007 with no effect to the Company and the
adoption has not had a material impact on our financial position or results of
operations.





Fair Value
Measurements





In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.”
This Statement replaces multiple existing definitions of fair value with a
single definition, establishes a consistent framework for measuring fair value
and expands financial statement disclosures regarding fair value measurements.
This Statement applies only to fair





9
 Index





NOTE
3 - Recently Issued Accounting Pronouncements (Continued)





value
measurements that already are required or permitted by other accounting
standards and does not require any new fair value measurements. SFAS No. 157 is
effective for fiscal years beginning subsequent to November 15, 2007. We adopted
this Statement in the first quarter of 2008, and we do not expect the adoption
to have a material impact on our financial position or results of
operations.





The Fair Value Option for
Financial Assets and Financial Liabilities





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities,” which permits an entity to measure
certain financial assets and financial liabilities at fair value. The objective
of SFAS No. 159 is to improve financial reporting by allowing entities to
mitigate volatility in reported earnings caused by the measurement of related
assets and liabilities using different attributes, without having to apply
complex hedge accounting provisions. Under SFAS No. 159, entities that elect the
fair value option (by instrument) will report unrealized gains and losses in
earnings at each subsequent reporting date. The fair value option election is
irrevocable, unless a new election date occurs. SFAS No. 159 establishes
presentation and disclosure requirements to help financial statement users
understand the effect of the entity’s election on its earnings, but does not
eliminate disclosure requirements of other accounting standards. Assets and
liabilities that are measured at fair value must be displayed on the face of the
balance sheet. The Company adopted this statement effective beginning January 1,
2008, and we do not expect the adoption to have a material impact on our
financial position or results of operations.





Noncontrolling Interest in
Consolidated Financial Statements





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements — An Amendment of ARB No. 51”.
SFAS No. 160 establishes new accounting and reporting standards for a
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. Specifically, this statement requires the recognition of a
noncontrolling interest (minority interest) as equity in the consolidated
financial statements. The amount of net income attributable to a noncontrolling
interest will be included in consolidated net income on the face of the income
statement. SFAS No. 160 requires that changes in a parent’s ownership
interest in a subsidiary that do not result in deconsolidation are equity
transactions if the parent retains its controlling financial interest. In
addition, this statement requires that a parent recognize a gain or loss when a
subsidiary is deconsolidated. Such gain or loss will be measured using the fair
value of the noncontrolling equity investment on the deconsolidation date. SFAS
No. 160 also includes expanded disclosures regarding the interests of the
parent and its noncontrolling interest. SFAS No. 160 is effective for
fiscal years beginning on or after December 15, 2008 and earlier adoption is
prohibited. We do not expect the adoption of SFAS No. 160 to have a
material impact on our financial position or results of operations.





The Hierarchy of Generally
Accepted Accounting Principles




In
May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. The new standard becomes effective 60 days following the
SEC’s approval of the Public Company Accounting Oversight Board amendments to AU
Section 411. SFAS No. 162 is not expected to have a material impact on
our consolidated financial position or results of operations.








NOTE
4 – INVESTMENT





In the
second quarter of 2007, the Company received 150,000 stock options for Duluth
Metals common stock for providing executive and geological services for Duluth
Metals.  The stock options are exercisable at $0.30
Canadian.  During the fourth quarter of 2007, the options were
exercised and converted into stock at a cost of $47,055. During the second
quarter, 30,000 shares of stock were sold at an average price of $2.82
Canadian.  The market value of the stock on June 30, 2008, was $2.53
Canadian.  The Company follows the provisions of Statement of
Financial Accounting Standards No. 115 (SFAS 115), “Accounting for Certain Investments
in Debt and Equity Securities.” SFAS 115 requires companies to classify
their investments as trading, available-for-sale or held-to-maturity. The
Company’s securities consist of stock which has been classified as
available-for-sale. These are recorded in the financial statements at fair
market value and any unrealized gains (losses) will be reported as a component
of shareholder equity. At June 30, 2008, the cost basis net of write-downs,
unrealized gains, unrealized losses and fair market value of the Company's
holdings are as follows:





10
 Index








June
      30, 2008Net
      cost of equities
                          
                          $
                          341,644Unrealized
      Losses
                          
                          
                          (39,144
                          )Fair
      Market Value
                          
                          $
                          302,500





SFAS 115
requires that for each individual security classified as available-for-sale, a
company shall determine whether a decline in fair value below the cost basis is
other than temporary. If the decline in fair value is judged as such, the cost
basis of the individual security shall be written down to fair value as a new
cost basis and the amount of the write-down shall be reflected in other
comprehensive income of the equity section. At June 30, 2008, the company's
marketable securities had a fair market value of $302,500.  The
unrealized loss of $28,500 for the second quarter of 2008 is reported as other
comprehensive income bringing the net unrealized loss inception to date to
$39,144.





This
investment was translated into U.S. Dollars in accordance with SFAS
No. 52,“Foreign Currency
Translation.”  The investment was translated at the rate of
exchange on the balance sheet date.








NOTE
5 - CHANGES IN SECURITIES





Common
Stock





During
the second quarter of 2008, the Company issued 950,575 shares of common stock.
An employee exercised employee stock options issued in previous years to
purchase 10,500 shares of common stock totaling $5,250.  A former
officer exercised his stock options in a cashless exercise and was issued
412,920 shares of common stock.    The remaining 527,155
shares were issued in private placements at prices of $5.00 to $8.00 per share,
for a total consideration of $ 2,981,002. Total stock issuance cost for the
second quarter was $544,485.








NOTE
6 – STOCK BASED COMPENSATION EXPENSE





Stock Based
Compensation





Compensation
expense charged against income for stock based awards in the second quarter of
2008 and 2007 was $186,104 and $401,411, pre-tax, respectively, and is included
in general and administrative expense in the Consolidated Statement of
Operations.





For
further information regarding stock based compensation, please refer to Note 5
of the Notes to the Consolidated Financial Statements in the Annual Report on
Form 10-K for the year ended December 31, 2007.








NOTE
7 - FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS





The
Company reports operating segments according to SFAS No. 131, “Disclosure about Segments of an
Enterprise and Related Information.”





11
 Index





The
Company identifies four principal industry segments by products and services,
which are described in Note 1
– Description of Business and Basis of Presentation – Description of
Business.  The Company includes revenues from both external
customers and revenues from transactions with other operating segments in its
measure of segment profit or loss.





The
following table sets forth our revenues by segment for the six months ended June
30, 2008 and the six months ended June 30, 2007, in thousands:





Three
      Months Ended June 30
                                
                                
                                Six
      Months Ended June 302008
                                
                                
                                2007
                                
                                
                                2008
                                
                                
                                2007Sales
      and Other RevenuesOil
      & Gas
                                
                                $
                                1,508
                                
                                
                                $
                                302
                                
                                
                                $
                                2,531
                                
                                
                                $
                                594Rigs
      & refurbishing operations
                                
                                
                                611
                                
                                
                                
                                631
                                
                                
                                
                                1,267
                                
                                
                                
                                1,944Minerals
                                
                                
                                143
                                
                                
                                
                                473
                                
                                
                                
                                143
                                
                                
                                
                                478Consolidated
      Sales and Other Revenues
                                
                                $
                                2,262
                                
                                
                                $
                                1,406
                                
                                
                                $
                                3,941
                                
                                
                                $
                                3,016








The
following table sets forth our operating income (loss)by segment, in
thousands:





Three
      Months Ended June 30
                                      
                                      
                                      Six
      Months Ended June 302008
                                      
                                      
                                      2007
                                      
                                      
                                      2008
                                      
                                      
                                      2007Operating
      income (loss)Oil
      & Gas
                                      
                                      $
                                      (1,508
                                      )
                                      
                                      $
                                      (2,343
                                      )
                                      
                                      $
                                      (3,064
                                      )
                                      
                                      $
                                      (3,825
                                      )Rigs
      & refurbishing operations
                                      
                                      
                                      (933
                                      )
                                      
                                      
                                      (512
                                      )
                                      
                                      
                                      (1,081
                                      )
                                      
                                      
                                      (323
                                      )Minerals
                                      
                                      
                                      (31
                                      )
                                      
                                      
                                      179
                                      
                                      
                                      
                                      (168
                                      )
                                      
                                      
                                      (151
                                      )Non-segmented
                                      
                                      
                                      (273
                                      )
                                      
                                      
                                      (113
                                      )
                                      
                                      
                                      (540
                                      )
                                      
                                      
                                      (750
                                      )Total
      income
                                      
                                      
                                      (2,745
                                      )
                                      
                                      
                                      (2,789
                                      )
                                      
                                      
                                      (4,853
                                      )
                                      
                                      
                                      (5,049
                                      )








The
following table summarizes our total assets, in thousands:





June
      30, 2008
                  
                  
                  December 31, 2007Total
      AssetsOil
      & Gas
                  
                  $
                  25,692
                  
                  
                  $
                  18,191Rigs
      & refurbishing operations
                  
                  
                  3,777
                  
                  
                  
                  4,703Minerals
                  
                  
                  2,105
                  
                  
                  
                  2,361Consolidated
      Total Assets
                  
                  $
                  31,574
                  
                  
                  $
                  25,255








NOTE
8 – RELATED PARTY TRANSACTIONS





During
the second quarter TVOG rebuilt a steam generator and sold a 75% interest to the
Opus I partnership at a fair market value of $562,500.  TVOG also sold
a 75% interest in a rebuilt heater treater to the OPUS I partnership at a fair
market value of $337,500.  These assets are being operated by
Tri-Valley Corporation on Opus I/TVOG properties.  The gain recognized
on these sales was $79,972.





12
 Index





NOTE
9 – SALE OF RIG ASSETS & IMPAIRMENT





In June
2008, GVPS entered into a purchase and sale agreement to sell rigs and rig
related equipment to Excalibur Well Services Corporation.  The
agreement stated that GVPS would sell the rigs and related equipment to
Excalibur for $4,800,000, if the transaction closed on or before July 18,
2008.  Excalibur gave $500,000 as a non-refundable deposit to GVPS and
that the agreed price would increase to $5,300,000 if the transaction did not
close on or before July 18, 2008.  Since GVPS was committed to the
sale the equipment at a price of $4,800,000 an impairment loss of $315,328 was
recognized in the second quarter to write down the subject assets to the agreed
selling price.





The
impairment represents the difference between the net carrying costs and the
estimated selling price less cost to dispose for the rig and related
equipment.  Based on estimates, management believes that additional
impairments in the future are not likely.  Management believes that
the agreement to sell these assets will be finalized during the third quarter of
2008.





Property
held for sale consists of the following:


Original Carrying
      Amount
                  
                  
                  Impairment
                  
                  
                  Adjusted
      Carrying ValueDrilling
      Rigs
                  
                  $
                  4,441,850
                  
                  
                  $
                  (278,804
                  )
                  
                  $
                  4,163,046Drilling
      Rig Equipment
                  
                  
                  560,746
                  
                  
                  
                  (30,410
                  )
                  
                  
                  530,336Vehicles
                  
                  
                  112,732
                  
                  
                  
                  (6,114
                  )
                  
                  
                  106,618Total
                  
                  $
                  5,115,328
                  
                  
                  $
                  (315,328
                  )
                  
                  $
                  4,800,000








Outstanding
liabilities related to these assets totaled $364,124.








NOTE
10 – SUBSEQUENT EVENTS





On July
18, 2008 the sale of our rig and related assets was completed at a sales price
of $4,800,000.  The assets were written down to the sales price in the
second quarter, recognizing an impairment loss.





13
 Index





Item
      2.
            Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations





Notice
Regarding Forward-Looking Statements





This
report contains forward-looking statements. The words, "anticipate," "believe,"
"expect," "plan," "intend," "estimate," "project," "could," "may," "foresee,"
and similar expressions are intended to identify forward-looking statements.
These statements include information regarding expected development of
Tri-Valley'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.





Results
of Operations





Three
months ended June 30, 2008 Compared to three months ended June 30,
2007





For the
quarter ended June 30, 2008, revenue was $2.3 million, compared to $1.4 million
in the second quarter of 2007, an increase of $0.9 million. We had an operating
loss of about $2.7 million in the second quarter of 2008, compared to a loss of
$2.8 million in the second quarter of 2007.





Revenues





The
Company identifies reportable segments by products and services.  The
Company includes revenues from both external customers and revenues from
transactions with other operating segments in its measure of segment profit or
loss.  The Company also allocates interest revenue and expense,
DD&A, and other operating expenses in its measure of segment profit or
loss.  The following table sets forth our revenues by segment for the
second quarter of 2008 and 2007, in thousands.





Three
      Months
                                                          Ended
      June 30
                                                        
                                                        
                                                        Increase/
                                                        
                                                        
                                                        Percentage2008
                                                        
                                                        
                                                        2007
                                                        
                                                        
                                                        (decrease)
                                                        
                                                        
                                                        Change%Oil
      and gas
                                                        
                                                        $
                                                        1,508
                                                        
                                                        
                                                        $
                                                        302
                                                        
                                                        
                                                        $
                                                        1,206
                                                        
                                                        
                                                        
                                                        399Rig
      & refurbishing operations
                                                        
                                                        
                                                        611
                                                        
                                                        
                                                        
                                                        631
                                                        
                                                        
                                                        
                                                        (20
                                                        )
                                                        
                                                        
                                                        (3
                                                        )Minerals
                                                        
                                                        
                                                        143
                                                        
                                                        
                                                        
                                                        473
                                                        
                                                        
                                                        
                                                        (330
                                                        )
                                                        
                                                        
                                                        (70
                                                        )Total
      revenues
                                                        
                                                        $
                                                        2,262
                                                        
                                                        
                                                        $
                                                        1,406
                                                        
                                                        
                                                        $
                                                        856
                                                        
                                                        
                                                        
                                                        61








Oil and
gas revenues in the second quarter of 2008 included approximately $1.25 million
from the sale of oil and gas, compared to $168,000 in the second quarter of
2007. This also represents a
quarter-over-quarter increase of 642%. The increase resulted from both
significantly increased oil and gas production and increased commodity
pricing.





The
primary oil and gas activities during the second quarter of 2008 represented an
ongoing rapid build-up of operations per our “Operation Catapult” initiative
which is focused on rapidly accelerating production of oil and gas and resultant
operating cash flow, and investment returns to our Partners and Shareholders. In
summary, key activity included the completion of Phase I drilling for the TVOG
Opus I Drilling Program LP, progressive cyclic steaming of heavy oil wells,
ongoing conversion of temporary to permanent facilities, installation of a fuel
gas line and test headers, a variety of remedial work on existing wellbores,
additional new perforated zones on existing wells, additional field-level
staffing to handle our uplift, and continued, prudent progression of the
existing asset exploitation programs. The Company expects that the oil and gas
production will continue to grow increasing revenues and that the operating
income of this segment will be improved by year-end 2008.





14
 Index





Operating Income
(Loss)





The
following table sets forth our operating income (loss) by segment in the second
quarter of 2008 and 2007, in thousands.





Three
      Months
                    Ended
      June 30,
                    2008
                  
                  
                  Three
      Months
                    Ended
      June 30,
                    2007
                  
                  
                  Increase
      (Decrease)
                  
                  
                  Percentage
      Change (%)Total
      operating incomeOil
      & Gas
                  
                  $
                  (1,508
                  )
                  
                  $
                  (2,343
                  )
                  
                  
                  835
                  
                  
                  
                  36Rig
      & refurbishing operations
                  
                  
                  (933
                  )
                  
                  
                  (512
                  )
                  
                  
                  (421
                  )
                  
                  
                  (82
                  )Minerals
                  
                  
                  (31
                  )
                  
                  
                  179
                  
                  
                  
                  (210
                  )
                  
                  
                  (117
                  )Non-segmented
                  
                  
                  (273
                  )
                  
                  
                  (113
                  )
                  
                  
                  (160
                  )
                  
                  
                  (141
                  )Total
      income
                  
                  $
                  (2,745
                  )
                  
                  $
                  (2,789
                  )
                  
                  $
                  44
                  
                  
                  
                  (2
                  )





Income
for the quarter ended June 30, 2008 was a loss of $2.7 million, compared to $2.8
million loss in the second quarter of 2007, a decrease in the loss of $0.1
million.





Second
quarter operations results continue to exceed targeted volumes, schedules and
economic projections.





Six
months ended June 30, 2008 Compared to six months ended June 30,
2007





For the
six months ended June 30, 2008, revenue was $3.9 million, compared to $3.0
million in the first six months of 2007, an increase of $0.9 million. We had an
operating loss of about $4.9 million in the first six months of 2008, compared
to a loss of $5.0 million in the first six months of 2007.





General
and administrative expenses were $6.2 million for the first six months ended
June 30, 2008, compared to $5.2 million for the first six months of 2007, an
increase of $1.0 million.  $0.4 million of this increase was due to
non-recurring expenses associated with the buy back of the minority interest of
GVPS.  The remaining $0.6 million increase was due to the increase in
oil and gas and rig operations and refurbishing segments activity level and
increased staff over the same period last year.





Revenues





The
Company identifies reportable segments by products and services.  The
Company includes revenues from both external customers and revenues from
transactions with other operating segments in its measure of segment profit or
loss.  The Company also allocates interest revenue and expense,
DD&A, and other operating expenses in its measure of segment profit or
loss.  The following table sets forth our revenues by segment for the
first six months of 2008 and 2007, in thousands.





Six
      Months
                      Ended
      June 30
                    
                    
                    Increase/
                    
                    
                    Percentage2008
                    
                    
                    2007
                    
                    
                    (decrease)
                    
                    
                    Change%Oil
      and gas
                    
                    $
                    2,531
                    
                    
                    $
                    594
                    
                    
                    $
                    1,937
                    
                    
                    
                    326Rig
      & refurbishing operations
                    
                    
                    1,267
                    
                    
                    
                    1,944
                    
                    
                    
                    (677
                    )
                    
                    
                    (35
                    )Minerals
                    
                    
                    143
                    
                    
                    
                    478
                    
                    
                    
                    (335
                    )
                    
                    
                    (70
                    )Total
      revenues
                    
                    $
                    3,941
                    
                    
                    $
                    3,016
                    
                    
                    $
                    925
                    
                    
                    
                    31





15
 Index





Operating Income
(Loss)





The
following table sets forth our operating income (loss) by segment for the first
six months of 2008 and 2007, in thousands.





Six Months Ended
                    June
      30, 2008
                  
                  
                  Six Months Ended
                    June
      30, 2007
                  
                  
                  Increase
      (Decrease)
                  
                  
                  Percentage
      ChangeTotal
      operating incomeOil
      & Gas
                  
                  $
                  (3,064
                  )
                  
                  $
                  (3,825
                  )
                  
                  
                  761
                  
                  
                  
                  20Rig
      & refurbishing operations
                  
                  
                  (1,081
                  )
                  
                  
                  (323
                  )
                  
                  
                  (758
                  )
                  
                  
                  (235
                  )Minerals
                  
                  
                  (168
                  )
                  
                  
                  (151
                  )
                  
                  
                  (17
                  )
                  
                  
                  (11
                  )Non-segmented
                  
                  
                  (540
                  )
                  
                  
                  (750
                  )
                  
                  
                  210
                  
                  
                  
                  28Total
      operating income
                  
                  $
                  (4,853
                  )
                  
                  $
                  (5,049
                  )
                  
                  $
                  (196
                  )
                  
                  
                  (4
                  )





Income
for the six months ended June 30, 2008 was a loss of $4.85 million, compared to
$5.05 million loss in the first six months of 2007, a decrease in the loss of
$0.2 million.








Oil
and Gas





Pleasant Valley Field, Ventura
County, CA: The initial, Phase I horizontal drilling campaign on the
“Hunsucker Lease” was completed in mid-April with the drilling and completion of
the PV-8 well, representing the seventh horizontal well drilled and completed to
date. Cyclic steaming operations continued effectively with two of our 12.5
mmbtu/hr refurbished steam generators with all horizontal wells experiencing at
least one steam cycle, and others experiencing up to three complete steam cycles
with significantly increasing oil rates observed per successive cycle and
improving cumulative Steam-Oil Ratios.  PV-1, the initial horizontal
drill well and most mature steamed well has experienced an outstanding
cumulative Steam-Oil ratio near unity through three steam
cycles.  Another quarterly high point was the successful Ventura
County APCD source testing of both aforementioned steam generators which beat
strict County emission standards.





Consistent
with our ongoing efforts to convert from temporary to permanent facilities and
further optimize lifting costs and cost structure, a fuel gas line to support
steam generation was commissioned and fully operating this quarter. Although
trucking of our oil has proven to be problem-free, an oil sales line is also
currently being accelerated to simplify our operations, reduce risk, and
mitigate potential sales interruptions.





Based on
initial field performance over six months, a revised, detailed field operations
philosophy was established and has resulted in, among other key decisions,
alternating steaming and production of geographical regions of the field to
accelerate heating of the thick, continuous Vaca Tar Sand. In addition, to also
accelerate reservoir heating and production, limited pumping cycles have been
employed early on in deference to re-steaming after post-steaming flow periods
cease. The field development plan and performance to date was reviewed and
validated by Dr. S. M. Farouq Ali, a globally renowned
industry thermal development expert.  This review resulted in
confirmation of existing operating and provided insight into future expectations
in the field.





PV2, the
single deep vertical well, continues to produce with favorable results on rod
pump after adding additional uphole intervals in this well.  As part
of our ongoing lease expansion plans, TVOG executed lease development agreements
with the DOGGR and the Lessor to develop and re-exploit an offset Lenox Ranch
lease which also contains twenty existing idle wellbores that were previously on
short term cyclic steam injection. It is noteworthy that our reservoir mapping
on this lease indicates a better reservoir structure than the existing Hunsucker
lease development. These wells will be re-entered and returned to production
with steam injection as appropriate and a drilling location will be constructed
to accommodate horizontal drill wells commensurate with the Hunsucker Lease
development. We are progressing on acquiring additional offset lease
acquisitions.





16
 Index





As of the
date of this quarterly report, all of the above horizontal wells remain on
confidential status with the California Division of Oil, Gas and Geothermal
Resources as to public disclosure of production rates and volumes.





Moffat Ranch,Madera County,CA: Our first newly drilled
well, 48X-7, remains on high, sustained, low watercut gas production from a
single gas zone which represents only one of fourteen identified potentially
commercial zones in the well. To mitigate any production interruptions, a gas
compressor was mobilized to the field in anticipation of gas compression needs
due to higher, and fluctuating line pressures in the area, but has not yet been
required to be placed in full time service. Remedial well work to restore
existing idle wells to production continued, and one gas well was converted to
plunger lift.  An additional offset, idle wellbore and associated
facilities was acquired during the quarter and will be returned to production in
the near term from a previously produced interval.  This well also
contains the producing zone of 48X-7 and will be completed after evaluating the
existing interval for productive capacity.





As of the
date of this quarterly report, the production rates and volumes of the 48X-7, as
reported to the California Division of Oil, Gas and Geothermal Resources, remain
confidential.





Belridge Field,Kern County,CA: The waterflood pilot
project continued in the quarter, has proven to be effective, and is responding
as expected.  A new water injector is being permitted and will be
drilled in the near term to expand the waterflood pilot. Cyclic steaming
operations on the D-352 well with our third refurbished steam generator
continued with favorable results. Uphole Etchegoin perforations added in
D-188 well in the first quarter continue to produce at a high oil rate with low
watercut, however, offset perforations in D-540 were unsuccessful in matching
the D-188 results.  Similar perforations will be added in D-24 in the
near term to assess its productive potential. All well test headers have been
installed and commissioned which has resulted in improved understanding of field
production and the development of a detailed field operations philosophy to
increase off take and improve well reliability and uptime time
forward.  Individual well test results, available for the first time
since we acquired the field, indicates a large potential production uplift in
the field.





Edison Field, Shields & Arms
Lease,Kern
County,CA: Well work performed on
existing producers and the single injection well in the first quarter has
continued to yield a robust increase in daily production from this lease. Plans
to enhance production from our other Edison Field leases will occur in
2008.





Rio Vista,Solano County,CA: The Hanson well #2, which
was converted to plunger lift in the first quarter, continues to produce at high
gas rates thus indicating a successful long term application of the
technology.  Other Rio Vista area long term,
proved-developed-producing gas reserves continued at customary levels. This long
term, sustained production from our Rio Vista gas fields continues to add
sustained, low lifting cost production, and increasing cash flow in response to
recent higher gas prices.








Rig
& refurbishing operations





Revenues
from rig operations totaled $0.6 million in the second quarter of 2008, which
was all from drilling contracts and completion operations, which was the same as
the revenue from rig operations in the second quarter of 2007.  GVPS
did not realize operating revenue in the second quarter of 2008 due to taking
our rigs out of service to conduct comprehensive inspections and API
certifications to enable universal industry utilization of our fleet for third
party revenue generation.  The operating loss in the second quarter of
2008 was $0.9 million, compared to an operating loss of $0.5 million in the
second quarter of 2007, or an increase in the loss of $0.4
million.  $0.3 million of this loss was due to the write down of the
rig and rig related equipment that was sold.





GVPS was
established in 2006 in response to a then acute shortage of contractor supplied
production rig services in California. GVPS enabled TVOG to significantly
accelerate production via well work and newly drilled wells than afforded by
existing rig contractor rig availability.  However, since 2006 the
California rig supply has caught up to market demand.  GVPS began to
consider alliances with various production service firms to increase rig
availability for an increasing number of TVOG active and idle
wells.  In June 2008, GVPS agreed to sell all of its production and
drilling rigs and down hole tools to Excalibur Well Services, Inc. in exchange
for cash and a highly attractive, preferred client status for well
servicing.  The sale was completed in July 2008 for a price of $4.8
million.  GVPS recognized an impairment loss of $0.3 million in the
second quarter to write down the value of the assets being sold to the sales
price.  GVPS retained its fleet of 17 steam generators.





17
 Index





GVDC
drilled one petroleum well in Nevada for another operator during the second
quarter. The rig is presently idle and is looking for its next
jobs.  More than 120 petroleum and geothermal wells have been staked
or permitted for future drilling in Nevada.  We believe that GVDC’s
experience in Nevada provides a profitable opportunity for the business line in
2008 and beyond, and the Company has stepped up its marketing activity in
Nevada, Idaho and eastern Washington.  With engine modifications to
accommodate stricter air quality rules, the rig can also operate in
California.








Minerals
Activities





Revenues
from minerals activities in the second quarter of 2008 were $0.14 million
compared to $0.47 million in 2007, due to a decrease in consulting
revenue.  With the primary emphasis of the Company to boost oil and
gas production, the properties of Select Resources have been in a care and
maintenance status.  However, Jim Bush, formerly Vice President of
exploration for Tri-Valley Oil and Gas Co., has been named President of Select
Resources.  His charge is to activate and monetize the properties
through finding joint venture partners, spin-off or outright sale.





For the
second quarter, mineral programs consisted largely of assessing and compiling
geologic information collected in previous work programs associated with the
Calder, Richardson, and Shorty Creek properties in Alaska.  Select
also continued to pursue candidates for management and officer levels in the
company and consultants to assist in property development.  Select has
retained a nationally recognized consultant to assist in 1) the development of
the Admiral Calder mine in general, and 2) a business assessment for its
products.  Select continues to pursue returning the Admiral Calder mine to
a profitable undertaking, continues to explore adding uranium as a new commodity
of interest, and has reduced efforts directed towards acquiring new base metals
and industrial minerals properties.  More specific information is
provided in the following sections.





Industrial
Minerals





During
the second quarter, Select continued low-cost monitoring and security at the
Admiral Calder calcium carbonate mine in Alaska.  Select also worked (and
is still working) with consultants to provide independent confirmation of the
extent of and distribution of high-quality material in the deposit for upcoming
financial and/or operational decisions.  In addition to the ground
calcium carbonate (GCC) market, Select is further evaluating the site’s
potential to produce new product types that can competitively participate in new
(i.e. first-time for Calder) market categories.  These include gray
limestone, dimension stone, and ways to minimize and exploit mine waste (such as
using it for acid mine control at other mines).  Select continues to pursue
end users and calcium carbonate mining and processing companies as potential
partners to fund larger scale development and operations on the Admiral Calder
mine, or acquire the property altogether.  Putting the mine into a
revenue-generating status remains a Select priority.  In parallel with the
above, Select is reviewing candidates for a long-term position to head up the
development of this property.





Select
continues to maintain a number of industrial mineral projects in six western
states in a hold status, pending further review.  Commodities in these
projects include barite, sand & gravel, aggregate, limestone, dolomite,
calcium carbonate, cinder, and other industrial mineral
commodities.





Precious
Metals





Select
continues to solicit mining interests for the larger scale exploration on both
the Richardson and Shorty Creek properties, as well as identifying a field site
manager for both properties.   Select has contacted, and continues to
solicit, candidates for these positions.





Shorty
Creek has been described by the State Geologist of Alaska as perhaps the best
un-drilled gold exploration project in Alaska.





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 Index





The
Richardson District is arguably the most prospective gold exploration district
in Alaska and it remains under-explored.  Tri-Valley has found native
gold at 60 locations along a 20 mile swath suggesting the possibility of a huge
system.





Uranium





Select
Resources has begun soliciting and reviewing uranium opportunities in a very
targeted and selective manner.  Select is adhering rigorously to strict
high-end criteria for these properties.





Base
Metals





Base
Metals operations continue to be on hold.








Non-segmented
items





The
non-segmented items consist of stock option expense and interest
expense.  Non-segmented items decreased from $0.7 million in the first
six months of 2007, to $0.5 million in the first six months of
2008.  Stock option expense for the first six months of 2008 was $0.4
million, compared to $0.6 million for the first six months of 2007, a decrease
of $0.2 million.  Interest expense for the first six months of 2008
was $0.1 million, unchanged from the first six months of 2007.








Capital Resources and
Liquidity





In 2002
through the second quarter of 2008, our drilling activities have been largely
funded by selling interests in our OPUS I drilling partnership. We do not borrow
in order to fund drilling activities. Our continued drilling activity relies on
our ability to raise money for projects through drilling partnerships or other
joint ventures.





Current
assets were about $13.1 million at June 30, 2008, up from $8.0 million at year
end 2007, an increase of $5.1 million. Cash on hand was increased from $7.7
million at year end 2007 compared to $7.8 million at June 30, 2008. Current
liabilities increased to about $15.2 million at June 30, 2008, compared to $10.3
million at year end 2007, due primarily to an increase of $5.3 million in
accounts payable and accrued expenses which was caused by our recent increase in
drilling activity and a decrease of about $3.7 million in advances from joint
venture participants and an increase of $0.5 million in deferred revenue caused
mainly by the deposit on the sale of rigs and rig related equipment which closed
in the third quarter of 2008.





Operating
Activities





We had a
negative cash flow of $4.0 million for the six months ended June 30, 2008
compared to a negative cash flow of $1.5 million for the same period in 2007,
the cash flow in the current period is due mainly to our loss from operations
being offset by our increase in accounts payable, deferred revenue and a
increase in advances from joint venture participants and an increase in our
accounts receivable. Our loss from operations was approximately $4.8 million for
the six months ended June 30, 2008 compared to a $5.0 million loss for the same
period in 2007.





The
largest component of cash flow in the first six months of 2008 was an increase
in accounts payable, deferred revenue and accrued expenses of $5.8 million
caused by the increase in our activity level,.  Accounts receivable
increased by $3.8 million.  Advances from joint venture participants
increased by $4.8 million and accounts payable to joint venture participants
decreased by $2.7 million.  The increase from advances from joint
venture participants was due to oil and gas sales payable from May and June
which had been accrued but not received by the company until
July.  The loss on impairment of fixed assets was $0.3 million. Gain
on the sale of fixed assets was $0.7 million and depreciation, depletion and
amortization was $0.7 million and stock option expense was $0.4
million.





19
 Index





Investing
Activities





Cash used
in investing activities was $2.2 million for the first six months of 2008
compared to $4.4 million for the first six months of 2007. $4.5 million was used
towards capital expenditures, primarily the drilling of new wells.  We
also received $2.6 million for the sale of three steam generators and a heater
treater. We used $0.4 million to buy back membership units in GVPS.





Financing
Activities





Net cash
provided by financing activities was $6.3 million for the first six months of
2008 compared to $5.9 million for the same period of 2007. We received $7.1
million from sales of restricted shares of common stock in privately negotiated
transactions including the exercise of stock options by employees. We used
$68,000 to pay down principal on long-term debt. We have not planned any private
placement of equity securities for the remainder of 2007, but we may continue to
receive funds from privately negotiated transactions. We do not have a targeted
or budgeted amount of equity financing activities.





Liquidity





The
recoverability of our oil and gas reserves depends on future events, including
obtaining adequate financing for our exploration and development program,
successfully completing our planned drilling program, and achieving a level of
operating revenues that is sufficient to support our cost
structure.  At various times in our history, it has been necessary for
us to raise additional capital through private placements of equity
financing.  When such a need has arisen, we have met it
successfully.  It is management’s belief that we will continue to be
able to meet our needs for additional capital as such needs arise in the
future.  We may need additional capital to pay for our share of costs
relating to the drilling prospects and development of those that are successful,
and to acquire additional oil and gas leases, drilling equipment and other
assets.  The total amount of our capital needs will be determined in
part by the number of prospects generated within our exploration program and by
the working interest that we retain in those prospects.





During
the remainder of 2008, we expect to expend approximately $11 million on drilling
activities. Funds for the majority of these activities will be provided by sales
of partnership interests in the Opus-I drilling partnership, which will still be
raising funds for development purposes.  Tri-Valley’s portion is
expected to be approximately $2 million.  We are evaluating and
finalizing results of recently drilled Pleasant Valley and Moffat Ranch in order
to design the optimum development plan for the property.  We expect to
drill additional wells there in 2008.  Our ability to complete our
planned drilling activities in 2008 depends on some factors beyond our control,
such as availability of equipment and personnel.  Our actual capital
commitments for fiscal year 2008 are less than $3 million, but to expend $11
million we will require additional capital from the OPUS partnership or other
outside parties.





During
the remainder of 2008, we expect expenditures of approximately $ 0.2 million on
mining activities, including mining lease and exploration expenses.





Should we
choose to make an acquisition of producing oil and gas properties, such an
acquisition would likely require that some portion of the purchase price be paid
in cash, and thus would create the need for additional
capital.  Additional capital could be obtained from a combination of
funding sources.  The potential funding sources include:





·
            Cash
      flow from operating activities,


·
            Borrowings
      from financial institutions (which we typically
  avoid),


·
            Debt
      offerings, which could increase our leverage and add to our need for cash
      to service such debt (which we typically
avoid),


·
            Additional
      offerings of our equity securities, which would cause dilution of our
      common stock,


·
            Sales
      of portions of our working interest in the prospects within our
      exploration program, which would reduce future revenues from its
      exploration program,


·
            Sale
      to an industry partner of a participation in our exploration
      program,


·
            Sale
      of all or a portion of our producing oil and gas properties, which would
      reduce future revenues.





20
 Index





Our
ability to raise additional capital will depend on the results of our operations
and the status of various capital and industry markets at the time such
additional capital is sought.  Accordingly, there can be no assurances
that capital will be available to us from any source or that, if available, it
will be on terms acceptable to us.  The Company has no off balance
sheet arrangements.








New Accounting
Pronouncements





See Note
3 to our unaudited consolidated financial statements.








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.








Item4.
            Controls
      and Procedures





As of
June 30, 2008, an evaluation was performed under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. These controls and procedures are based on
the definition of disclosure controls and procedures in Rule 13a-15(e) and Rule
15d-15(e) promulgated under the Securities Exchange Act of 1934.





Based on
that evaluation as of June 30, 2008, our management, including the CEO and CFO
concluded that our disclosure controls and procedures were effective to ensure
that the information required to be disclosed by us in the reports that we file
or submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms.





Management,
including our CEO and CFO, do not expect that our disclosure controls and
procedures or internal control over financial reporting will prevent all errors
and fraud. In designing and evaluating our control system, management recognized
that any control system, no matter how well designed and operated, can provide
only reasonable, not absolute, assurance of achieving the desired control
objectives. Further, the design of a control system must reflect the fact that
there are resource constraints, and management necessarily was required to apply
its judgment in evaluating the cost-benefit relationship of possible controls
and procedures. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any that may affect our operations have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake.





During
the second quarter of 2008, there were no changes in the Company's internal
control over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.








PART
II - OTHER INFORMATION





Item
      1A.
            Risk
      Factors





There
have been no material changes from the risk factors previously disclosed in our
Annual Report on Form 10-K for the fiscal year ended December 31,
2007.





21
 Index





Item2.
            Unregistered
      Sales of Equity Securities





During
the second quarter of 2008, the Company issued 527,155 shares of restricted
common stock to private investors at prices of $5.00 to $8.00 per share for a
total consideration of $2,981,002.





All of
these transactions were conducted in reliance on the exemption from registration
requirements of the Securities Act of 1933 contained in Section 4(2) of that
Act.








Item
      6.
            Exhibits





Item
                        
                        Description31.1
                        
                        Rule
      13a-14(a)/15d-14(a) Certification31.2
                        
                        Rule
      13a-14(a)/15d-14(a) Certification32.1
                        
                        18
      U.S.C. Section 1350 Certification32.2
                        
                        18
      U.S.C. Section 1350
Certification





22
 Index





Signatures








Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.








TRI-VALLEY
      CORPORATIONNovember
      5, 2008
                    /s/ F.
      Lynn BlystoneF.
      Lynn BlystoneChairman,
      President and CEONovember
      5, 2008
                    /s/ Arthur M. EvansArthur
      M. EvansChief
      Financial
Officer







23