FORM 10-Q

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


             (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2005

                                       OR

            ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                     for the transition period from ____ to ____

                         Commission file number 1-12108

                            CRIMSON EXPLORATION INC.
             (Exact name of Registrant as specified in its charter)

           Delaware                                           20-3037840
  (State or other jurisdiction                              (IRS Employer
       of incorporation)                                  Identification No.)

         480 North Sam Houston Parkway East
                   Suite 300
                Houston, Texas                                   77060
     (Address of principal executive offices)                 (zip code)

                                 (281) 820-1919
              (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
                                       ---    ---

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes     No X
                                                ---   ---

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes      No X
                                    ---     ---

The  number of shares  outstanding  of each of the  issuer's  classes  of common
stock,  as of the latest  practicable  date,  November 14, 2005,  was 28,938,144
shares of Class A Common Stock, $.001 par value.


<PAGE>


                            CRIMSON EXPLORATION INC.

                         FORM 10-Q FOR THE QUARTER ENDED
                               SEPTEMBER 30, 2005

<TABLE>
<CAPTION>

                                                                                                 Page of
                                                                                                 Form 10-Q
                                                                                                 ---------
<S>                                                                                                  <C>
Part I:  Financial Statements

Item 1.           Financial Statements
                    Consolidated Balance Sheets, September 30, 2005
                       and December 31, 2004                                                         3
                    Consolidated (unaudited) Statements of Operations-for the three
                       months and nine months ended September 30, 2005 and 2004                      5
                    Consolidated (unaudited) Statements of Cash Flows-for the nine
                       months ended September 30, 2005 and 2004                                      6
                  Notes to Consolidated Financial Statements                                         7

Item 2.           Management's Discussion and Analysis
                    of Financial Condition and Results
                    of Operations                                                                   13

Item 3.           Quantitative and Qualitative Disclosures about Market Risk                        17

Item 4.           Controls and Procedures                                                           17

Part II:          Other Information

Item 6.           Exhibits                                                                          18

Signatures                                                                                          19

</TABLE>

                                       2

<PAGE>


                          PART I. FINANCIAL INFORMATION
                          -----------------------------

ITEM 1.  FINANCIAL STATEMENTS.
-------  ---------------------

                            CRIMSON EXPLORATION INC.
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>

                                                                    September 30,           December 31,
                                                                         2005                   2004
                                                                     (Unaudited)              (Audited)
                                                                 ---------------------   --------------------
<S>                                                              <C>                     <C>
CURRENT ASSETS
     Cash and cash equivalents                                   $           356,008     $           411,377
     Accounts receivable - net of allowance
          for doubtful accounts of $-0- in 2005 and 2004                   3,410,791               1,674,448
     Prepaid expenses                                                        325,812                 128,717
                                                                 ---------------------   --------------------
               Total current assets                                        4,092,611               2,214,542
                                                                 ---------------------   --------------------


PROPERTY AND EQUIPMENT
     Oil and gas properties, using the successful efforts
           method of accounting                                           67,183,232              58,557,072
     Other property and equipment                                          1,421,660               1,437,206
      Less: accumulated depreciation, depletion and
          amortization                                                   (12,158,881)             (9,870,962)
                                                                 ---------------------   --------------------

     Net property and equipment                                           56,446,011              50,123,316
                                                                 ---------------------   --------------------

OTHER ASSETS
     Deposits                                                                  9,804                   9,804
     Investments                                                             228,453                 274,362
     Debt issue cost, net                                                    154,023               1,756,316
     Deferred tax asset, net                                               4,920,385                3,322,551
     Derivative instruments                                                        -                  175,273
                                                                 ---------------------   --------------------
               Total other assets                                          5,312,665                5,538,306
                                                                 ---------------------   --------------------

TOTAL ASSETS                                                     $        65,851,287     $         57,876,164
                                                                 =====================   ====================

</TABLE>

The Notes to  Consolidated  Financial  Statements  are an integral part of these
statements.


                                       3

<PAGE>


                            CRIMSON EXPLORATION INC.
                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                             September 30,           December 31,
                                                                                 2005                    2004
                                                                             (Unaudited)               (Audited)
                                                                          --------------------    --------------------
<S>                                                                       <C>                     <C>
CURRENT LIABILITIES
     Notes payable                                                        $            40,300     $        4,916,568
     Notes payable - related parties                                                        -              2,140,000
     Current portion of long-term debt                                                 81,181             22,686,254
     Current portion of long-term debt - related parties                                    -                112,192
     Accounts payable - trade                                                       4,452,176              4,654,561
     Accrued expenses                                                                 301,698                940,587
     Income taxes payable                                                                   -                118,255
     Derivative instruments                                                         4,498,617              1,680,800
                                                                          --------------------    --------------------
               Total current liabilities                                            9,373,972             37,249,217
                                                                          --------------------    --------------------

NONCURRENT LIABILITIES
     Long-term debt, net of current portion                                           378,234                 805,450
     Asset retirement obligations                                                   1,202,337               1,144,854
                                                                          --------------------    --------------------
               Total noncurrent liabilities                                         1,580,571               1,950,304
                                                                          --------------------    --------------------

OTHER LIABILITIES
     Derivative instruments                                                         1,721,571                       -
                                                                          --------------------    --------------------

               Total Liabilities                                                   12,676,114              39,199,521
                                                                          --------------------    --------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock                                                                    1,033                     253
     Common stock                                                                      28,938                  19,394
     Additional paid-in capital                                                    72,814,550              34,062,502
     Retained deficit                                                             (19,669,348)            (15,405,506)
                                                                          --------------------    --------------------
               Total stockholders' equity                                          53,175,173              18,676,643
                                                                          --------------------    --------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                $        65,851,287     $        57,876,164
                                                                          ====================    ====================

</TABLE>

The Notes to  Consolidated  Financial  Statements  are an integral part of these
statements.


                                       4

<PAGE>


                            CRIMSON EXPLORATION INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                  Three Months                      Nine Months
                                                              Ended September 30,               Ended September 30,
                                                            2005             2004             2005              2004
                                                       --------------   ---------------- --------------   ---------------
<S>                                                   <C>              <C>              <C>              <C>
OPERATING REVENUES
  Oil and gas sales                                   $    4,692,410   $    2,816,386   $   12,694,321   $     7,811,373
  Operating overhead and other income                         43,887          (13,440)          99,349            65,568
                                                       --------------   --------------   --------------   ---------------
         Total operating revenues                          4,736,297        2,802,946       12,793,670         7,876,941
                                                       --------------   --------------   --------------   ---------------

OPERATING EXPENSES
  Lease operating expenses                                 1,500,328        1,149,771        4,266,190         3,749,027
  Depreciation, depletion and amortization                   862,423          526,277        2,353,432         1,402,522
  Dry holes, abandoned property and impaired assets                -                -          391,339                 -
  Accretion expense                                           19,161           16,287           57,483            57,003
  General and administrative                                 973,062          568,439        2,526,191         1,442,072
                                                       --------------   --------------   --------------   ---------------
          Total operating expenses                         3,354,974        2,260,774        9,594,635         6,650,624
                                                       --------------   --------------   --------------   ---------------

INCOME  FROM OPERATIONS                                    1,381,323          542,172        3,199,035         1,226,317
                                                       --------------   --------------   --------------   ---------------

OTHER INCOME AND EXPENSE
  Interest expense                                           (44,758)      (1,036,591)      (1,261,358)       (2,971,368)
  Other financing costs                                      (11,825)        (532,728)      (1,921,984)         (901,998)
  Loss from equity in investments                            (32,756)               -          (68,915)
  Gain (loss) on sale of assets                                  415       (1,891,707)         (38,501)       (2,118,516)
  Unrealized gain (loss) on derivative instruments        (3,319,955)      (1,862,729)      (4,714,661)       (3,013,131)
  Abandoned property                                               -                -                -          (326,512)
  Forgiveness of debt                                              -                -                -        12,475,612
                                                       --------------   --------------   --------------   ---------------
       Total other income and expense                     (3,408,879)      (5,323,755)      (8,005,419)        3,144,087
                                                       --------------   --------------   --------------   ---------------

INCOME (LOSS) BEFORE INCOME TAXES                         (2,027,556)      (4,781,583)      (4,806,384)        4,370,404

INCOME TAXES                                                 773,133                -        1,622,935
                                                       --------------   --------------   --------------  ---------------

NET INCOME (LOSS)                                         (1,254,423)      (4,781,583)      (3,183,449)        4,370,404

DIVIDENDS ON PREFERRED STOCK                                (934,499)        (124,375)      (2,632,280)          256,084
                                                       --------------   --------------   --------------   ---------------
NET INCOME (LOSS) AVAILABLE TO
  COMMON SHAREHOLDERS                                 $   (2,188,922)  $   (4,905,958)  $   (5,815,729)  $     4,114,320
                                                       ==============   ==============   ==============   ===============

NET INCOME (LOSS) PER COMMON SHARE:
 BASIC                                                $         (.08)  $         (.27)  $         (.22)  $           .22
                                                       ==============   ==============   ==============   ===============
       DILUTED                                        $         (.08)  $         (.27)  $         (.22)  $           .14
                                                       ==============   ==============   ==============   ===============

</TABLE>

The Notes to  Consolidated  Financial  Statements  are an integral part of these
statements


                                       5

<PAGE>


                            CRIMSON EXPLORATION INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                  Nine Months Ended September 30,
                                                                              -----------------------------------------
                                                                                     2005                   2004
                                                                              ------------------     ------------------
<S>                                                                          <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                                       $       (3,183,449)    $        4,370,404
     Adjustments to reconcile net income (loss) to net cash
          Provided by operating activities:
               Depreciation, depletion and amortization                               2,353,432              1,402,522
              Accretion expense                                                          57,483                 57,003
               Stock option expense                                                      54,800                      -
               Stock compensation expense                                                29,999                      -
               Debt issue cost expense                                                1,791,422                859,498
               Discount on note payable                                                 502,120                261,238
               Loss from equity  in investments                                          68,915                      -
               Deferred tax benefit                                                  (1,597,834)                     -
               Income tax payable                                                      (118,255)
               Forgiveness of debt                                                            -            (12,475,612)
               Note payable issued and charged to interest                                    -                 61,046
               Loss on sale of property and equipment                                    38,501              2,118,516
               Dry holes, abandoned property and impaired assets                              -                326,512
               Unrealized loss on derivative instruments                              4,714,661              3,013,131
                Increase  in accounts receivable - trade, net                        (1,725,094)               (46,077)
                Increase in prepaid expenses                                           (197,095)               (85,415)
                Decrease in accounts payable and accrued expenses                      (839,724)              (597,162)
                                                                              ------------------     ------------------
                         Net cash provided by (used in) operating activities          1,949,882               (734,396)
                                                                              ------------------     ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Proceeds from sale of property and equipment                                      101,905              1,200,350
      Capital expenditures                                                           (8,793,815)            (3,272,059)
                                                                              ------------------     ------------------
                         Net cash used in investing activities                       (8,691,910)            (2,071,709)
                                                                              ------------------     ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from sale of preferred stock, net                                      38,197,242              3,363,745
     Proceeds from common stock warrants exercised                                       45,200                      -
     Payments on debt                                                               (34,028,593)           (17,806,173)
     Proceeds from debt issuance                                                      3,320,000             19,880,258
     Debt issue cost                                                                   (165,849)            (2,123,788)
     Dividends paid                                                                    (681,341)                     -
                                                                              ------------------     ------------------
                         Net cash provided by financing activities                    6,686,659              3,314,042
                                                                              ------------------     ------------------

INCREASE (DECREASE)  IN CASH AND CASH EQUIVALENTS                                       (55,369)               507,937

CASH AND CASH EQUIVALENTS,
     Beginning of period                                                                411,377                483,618
                                                                              ------------------     ------------------

CASH AND CASH EQUIVALENTS,
     End of period                                                           $          356,008     $          991,555
                                                                              ==================     ==================

CASH PAID FOR INTEREST                                                       $        1,964,031     $        2,821,404
                                                                              ==================     ==================

</TABLE>

The Notes to  Consolidated  Financial  Statements  are an integral part of these
statements.


                                       6

<PAGE>


                    CRIMSON EXPLORATION INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2005 AND 2004
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

     During interim periods,  we follow the accounting policies set forth in our
     Annual  Report  on  Form  10-K  filed  with  the  Securities  and  Exchange
     Commission. Users of financial information produced for interim periods are
     encouraged  to refer to the  footnotes  contained in the Annual Report when
     reviewing interim financial results.

     On  June  29,  2005,  our  predecessor,   GulfWest  Energy  Inc.,  a  Texas
     corporation ("GulfWest"),  merged with and into Crimson Exploration Inc., a
     Delaware corporation ("Crimson"),  for the purpose of changing our state of
     incorporation   from  Texas  to  Delaware  (the   "Reincorporation").   The
     Reincorporation  was  accomplished  pursuant  to an  Agreement  and Plan of
     Merger, dated June 28, 2005, which was approved by GulfWest's  shareholders
     at the 2005 Annual Shareholders' Meeting held June 1, 2005.

     The  accompanying   financial   statements  include  the  Company  and  its
     wholly-owned  subsidiaries:  RigWest Well Service, Inc. formed September 5,
     1996;  GulfWest  Texas Company  formed  September  23, 1996;  DutchWest Oil
     Company formed July 28, 1997;  Southeast Texas Oil and Gas Company,  L.L.C.
     acquired  September 1, 1998;  SETEX Oil and Gas Company  formed  August 11,
     1998;  GulfWest Oil & Gas Company formed February 8, 1999; LTW Pipeline Co.
     formed April 19, 1999;  GulfWest  Development  Company  formed  November 9,
     2000; GulfWest Oil & Gas Company (Louisiana) LLC formed July 31, 2001; and,
     S.G.C.   Transmission,   LLC  formed   December  30,  1993.   All  material
     intercompany transactions and balances are eliminated upon consolidation.

     As a result of our April 27, 2004 refinancing,  we recorded  $11,884,145 in
     forgiveness of debt and a hedging liability of $591,467 was eliminated.  At
     December 31, 2004, we  reclassified  the  eliminated  hedging  liability to
     forgiveness of debt. This  reclassification is reflected in the nine months
     ended  September 30, 2004 period.  Certain other prior period  amounts have
     also been reclassified to conform with current year presentations.

     In management's  opinion,  the accompanying  interim  financial  statements
     contain  all  material  adjustments,  consisting  only of normal  recurring
     adjustments  necessary  to present  fairly  the  financial  condition,  the
     results of operations,  and the cash flows of Crimson  Exploration Inc. for
     the interim periods.

2.   NON-CASH INVESTING AND FINANCING ACTIVITIES

     During the nine month period ended September 30, 2005, we settled  $399,053
     in dividends by issuing 433,473 shares of common stock and we issued 29,100
     shares of  common  stock to  satisfy  and  record a $23,280  fee for a loan
     extension prior to the sale of the Series G Preferred Stock. In addition we
     recorded  $29,999 in director fee expense  associated  with the issuance of
     34,090  shares  of  common  stock  to  directors  under  the  new  Director
     Compensation  Plan. Also, on March 30, 2005 one of our employees  exercised
     25,000  common  stock  options for $11,250  which is recorded as an account
     receivable.  Under our  cashless  exercise  procedures,  the stock has been
     posted for sale by a broker  and the  receivable  will be settled  when the
     stock is sold ($9,100 of the receivable was settled in the third  quarter).
     Also accrued  compensation  of $56,350 was converted to additional  paid in
     capital when 87,500 options, accounted for under variable option accounting
     rules,  were exercised.  During the current year, we invested $23,006 in an
     oil and gas partnership by contributing our cost basis in undrilled oil and
     gas leases. In addition, we financed new field trucks for $45,724.

     During the nine month period  ended  September  30, 2004,  we issued a note
     payable for  $600,000 in exchange  for an account  payable for $538,954 and
     $61,046 in related interest expense was recorded. Also, in conjunction with
     the  refinancing  of debt in April 2004,  we issued  common stock  warrants


                                       7

<PAGE>


     valued at  $916,029  which  were  recorded  as a note  discount;  we issued
     $500,000 of preferred stock of a wholly owned subsidiary as a commission to
     a financial advisor;  we recorded a $360,000 payable for a loan termination
     fee and we obtained and recorded  $12,475,612 in debt forgiveness.  We also
     financed field trucks for $78,036 in 2004.

3.   DERIVATIVE INSTRUMENTS

     In the past we have entered into, and may in the future enter into, certain
     derivative arrangements with respect to portions of our oil and natural gas
     production to reduce our sensitivity to volatile  commodity prices.  During
     2005 and  2004,  we  entered  into  price  swaps  and put  agreements  with
     financial  institutions.  We believe  that these  derivative  arrangements,
     although not free of risk, allow us to achieve a more predictable cash flow
     and  to  reduce  exposure  to  price  fluctuations.   However,   derivative
     arrangements  limit the benefit to us of  increases  in the prices of crude
     oil and natural gas sales. Moreover, our derivative arrangements apply only
     to a portion of our  production  and provide only partial price  protection
     against  declines  in price.  Such  arrangements  may  expose us to risk of
     financial loss in certain circumstances.  We expect that the monthly volume
     of derivative  arrangements  will vary from time to time.  We  continuously
     reevaluate  our price hedging  program in light of increases in production,
     market  conditions,  commodity price  forecasts,  capital spending and debt
     service requirements.  The following derivatives were in place at September
     30, 2005.

<TABLE>
<CAPTION>

            Crude Oil                         Volume/ Month       Average Price/ Unit        Fair Value Asset
            ---------                         -------------       -------------------        ----------------
                                                                                                 (Liability)
                                                                                                 -----------
<S> <C>                             <C>        <C>                      <C>                   <C>
May 2004 thru October 2005           Swap      10,000 Bbls              $32.00                $        (340,973)
July 2005 thru October 2005          Swap       1,000 Bbls              $56.50                $          (9,697)
November 2005 thru December 2005     Swap      11,000 Bbls              $56.50                $        (217,352)
January 2006 thru March 2006        Collar     10,000 Bbls    Floor $50.00-$59.00 Ceiling     $        (291,090)
April 2006 thru December 2006       Collar      9,000 Bbls    Floor $50.00-$59.00 Ceiling     $        (795,708)
January 2007 thru  December 2007    Collar      3,000 Bbls    Floor $45.00-$59.45 Ceiling     $        (336,240)




           Natural Gas                        Volume/ Month       Average Price/ Unit        Fair Value Asset
           -----------                        -------------       -------------------        ----------------
                                                                                                 (Liability)
                                                                                                 -----------
June 2004 thru October 2005          Swap     60,000 MMBTU              $5.15                $         (330,030)
July 2005 thru October 2005          Swap     10,000 MMBTU              $7.45                $          (32,032)
November 2005 thru December 2005     Swap     70,000 MMBTU              $7.45                $         (680,267)
January 2006 thru December 2006     Collar    70,000 MMBTU     Floor $6.00-$8.25 Ceiling     $       (2,589,531)
January 2007 thru December 2007     Collar    20,000 MMBTU     Floor $6.00-$6.95 Ceiling     $         (597,268)

</TABLE>

     We also had the following  put options in place at September 30, 2005,  for
     the months reflected.

                     Crude Oil              Monthly Volume        Price per Bbl
                     ---------              --------------        -------------
      November 2005 thru April 2006           7,000 Bbls             $25.75 put
      May 2006 thru October 2006              6,000 Bbls             $25.75 put
      November 2006 thru April 2007           5,000 Bbls             $25.75 put

     The value of these put options was minimal.

     The following puts on natural gas were terminated effective April 1, 2005.

               Natural Gas                  Monthly Volume       Price per MMBTU
               -----------                  --------------       ---------------
      November 2005 thru April 2006          50,000 MMBTU            $4.50 put
       May 2006 thru October 2006            40,000 MMBTU            $4.50 put
      November 2006 thru April 2007          30,000 MMBTU            $4.50 put


                                       8

<PAGE>


     At the end of each reporting period we are required by SFAS 133 "Accounting
     for  Derivative  Instruments  and  Hedging  Activities,"  to  record on our
     balance sheet the marked to market valuation of our derivative instruments.
     As a result of these agreements, we recorded a non-cash charge to earnings,
     for  unsettled  contracts,  of  $4,714,661  for the nine month period ended
     September  30, 2005 and a charge of  $3,013,131  for the nine month  period
     ended  September  30,  2004.  The  estimated  change  in fair  value of the
     derivatives  is reported in Other Income and Expense as  unrealized  (gain)
     loss on derivative instruments.

     For settled  contracts,  we had a realized loss of $2,959,850  for the nine
     month period ended September 30, 2005 and a realized loss of $1,154,349 for
     the nine month period ended September 30,  2004.These  losses are reflected
     in our oil and gas sales in the Consolidated Statements of Operations.

4.   STOCK BASED COMPENSATION

     In October 1995, SFAS No. 123, "Stock Based  Compensation,"  (SFAS 123) was
     issued.  This  statement  requires  that we choose  between  two  different
     methods of accounting  for stock options and warrants  issued to employees.
     The statement  defines a  fair-value-based  method of accounting  for stock
     options  and   warrants  but  allows  an  entity  to  continue  to  measure
     compensation  cost for stock  options  and  warrants  using the  accounting
     prescribed by APB Opinion No. 25 (APB 25),  "Accounting for Stock Issued to
     Employees." Use of the APB 25 accounting  method results in no compensation
     cost being  recognized  if options are granted at an exercise  price at the
     current  market value of the stock on the date of grant or higher.  We will
     continue to use the intrinsic value method under APB 25 but are required by
     SFAS 123 to make pro forma  disclosures  of net income  (loss) and earnings
     (loss) per share as if the fair value  method had been  applied in our 2005
     and 2004 financial statements.

     We use the Black Sholes option  pricing model to estimate the fair value of
     the options. If we had used the fair value method required by SFAS 123, our
     net loss and per share  information would approximate the following amounts
     for the periods ended September 30:

<TABLE>
<CAPTION>

Three Months                            2005                              2004
------------------------   -------------------------------   -------------------------------
<S>                       <C>              <C>              <C>              <C>
                           As Reported           Proforma    As Reported          Proforma
SFAS 123
    compensation cost     $            -   $      622,199   $            -   $      420,520
APB 25
    compensation cost     $       35,130   $      (35,130)  $            -   $            -
Net income (loss)         $   (2,188,872)  $   (2,775,941)  $   (4,905,958)  $   (5,326,208)
Income (loss) per
    common share,                      -                                 -                -
    Basic                 $         (.08)  $         (.10)  $         (.27)  $         (.29)
    Diluted               $         (.08)  $         (.10)  $         (.27)  $         (.29)
--------------------------------------------------------------------------------------------

Nine Months                             2005                              2004
------------------------   -------------------------------   -------------------------------
                           As Reported           Proforma    As Reported          Proforma
SFAS 123
    compensation cost     $            -   $    1,385,924   $            -   $      425,500
APB 25
    compensation cost     $       54,800   $      (54,800)  $            -   $            -
Net income (loss)         $   (5,815,729)  $   (7,146,853)  $    4,114,320   $    3,688,820
Income (loss) per
    common share,
    Basic                 $         (.22)  $         (.28)  $          .22   $          .20
    Diluted               $         (.22)  $         (.28)  $          .14   $          .12
--------------------------------------------------------------------------------------------

</TABLE>


                                       9

<PAGE>

     On December 16,  2004,  the  Financial  Accounting  Standards  Board (FASB)
     issued FASB Statement No. 123 (revised 2004), Share-Based Payments which is
     a  revision  of FASB No.  123,  Accounting  for  Stock-Based  Compensation.
     Statement  123 (R)  supercedes  APB  opinion No. 25,  Accounting  for Stock
     Issued to Employees,  and amends FASB  Statement No. 95,  Statement of Cash
     Flows.  Generally,  the  approach  in  Statement  123 (R) is similar to the
     approach  described in Statement 123.  However,  Statement 123 (R) requires
     all share-based  payments to employees,  including grants of employee stock
     options,  to be  recognized  in the  income  statement  based on their fair
     values.  Pro  forma  disclosure  will  no  longer  be an  alternative.  The
     effective date of this statement will be our first quarter of 2006.

5.   FINANCING ACTIVITY

     On April 27, 2004, we completed an $18,000,000  financing  package with new
     energy lenders.  We used  $15,700,000 in net proceeds from the financing to
     retire  existing debt of  $27,584,145,  resulting in forgiveness of debt of
     $12,475,612,  the elimination of a hedging  liability and the return to the
     Company  of  Series  F  Preferred  Stock  with  an  aggregate   liquidation
     preference  of  $1,000,000  (this  preferred  stock,  at the request of the
     Company,  was transferred by the previous lender to a financial  advisor to
     the Company and to two  affiliated  companies).  The taxable gain resulting
     from  these  transactions  will  be  completely  offset  by  available  net
     operating loss carryforwards for income tax purposes.  The term of the note
     was  eighteen  months and it bore  interest at the prime rate plus 11%. The
     rate  increased  by .75% per month  beginning in month ten. We paid the new
     lenders  $1,180,000  in cash fees and also issued them warrants to purchase
     2,035,621  shares  of our  common  stock at an  exercise  price of $.01 per
     share, expiring in five years (exercised in April, 2005). The warrants were
     subject to anti-dilution  provisions.  In connection with the February 2005
     transactions  described  below, the  anti-dilution  provisions were amended
     such that  additional  issuances  of stock  (other  than  issuances  to all
     holders)  would not trigger an adjustment to the number of shares  issuable
     upon exercise of the warrants.

     On January 7, 2005,  we amended our April 2004 credit  agreement  to extend
     the target date for  repayment  to February 28,  2005.  We  exercised  this
     option on January 26, 2005 and issued  29,100 shares of our common stock in
     connection with this amendment.

     On February 28, 2005, we sold in a private placement,  81,000 shares of our
     Series G Preferred Stock to OCM GW Holdings, LLC ("OCMGW") for an aggregate
     offering price of $40.5 million.  GulfWest Oil and Gas Company ("GWOG"),  a
     subsidiary of the Company, issued, in a private placement,  2,000 shares of
     our Series A  Preferred  Stock,  having a  liquidation  preference  of $1.0
     million,  to OCMGW for $1.5  million.  Net  proceeds  of the  offerings  of
     approximately  $38.2 million after  expenses were used for the repayment of
     substantially  all of our  outstanding  debt and other past due liabilities
     and for general corporate purposes.

     The  Series  G  Preferred  Stock  bears a  coupon  of 8% per  year,  has an
     aggregate  liquidation  preference of $40.5 million (excluding  accumulated
     undeclared dividends),  is convertible into common stock at $0.90 per share
     and is senior to all of our capital  stock.  For the first four years after
     issuance,  we may defer the payment of  dividends on the Series G Preferred
     Stock and these deferred dividends will also be convertible into our common
     stock at $0.90 per share.  In  addition,  the Series G  Preferred  Stock is
     entitled  to  nominate  and elect a majority of the members of our Board of
     Directors.

     In connection with these  recapitalization  transactions,  the terms of the
     Series A Preferred Stock were amended such that by March 15, 2005, all such
     stock would either convert into a newly created Series H Preferred Stock on
     a one for one basis or into common stock at a conversion price of $0.35 per
     share. The Series H Preferred Stock is required to be paid a dividend of 40
     shares of common stock per share of Series H Preferred  Stock per year.  At
     March  15,  2005,  holders  of 6,700  shares of  Series A  Preferred  Stock
     converted to Series H Preferred Stock and holders of 3,250 shares of Series
     A Preferred  Stock  converted  to an aggregate  4,642,859  shares of common
     stock. One Series H Preferred Stock holder converted its shares of Series H
     Preferred  Stock into 285,715  shares of common stock.  In April,  2005, an
     additional  1,250 shares  converted  into  1,785,714 of common  stock.  The
     outstanding   Series  H  Preferred  Stock  has  an  aggregate   liquidation
     preference of $2.625 million. The Series H Preferred Stock is senior to all
     of our capital stock other than Series G Preferred Stock.


                                       10

<PAGE>


     In addition, we amended the terms of our 9,000 shares of Series E Preferred
     Stock such that the coupon of 6% per year may be deferred for the next four
     years and these deferred dividends will be convertible into common stock at
     conversion price of $0.90 per share. The original liquidation preference of
     the Series E Preferred  Stock of $500 per share  remains  convertible  into
     common  stock at $2.00  per  share.  The  Series E  Preferred  Stock has an
     aggregate  liquidation  preference of $4.5 million  (excluding  accumulated
     undeclared  dividends),  and is senior to all of our common stock, of equal
     preference  with our Series D Preferred  Stock as to liquidation and junior
     to our Series G and Series H Preferred Stock.

     On May 17, 2005,  we executed a  promissory  note for the benefit of OCM GW
     Holdings, in the principal amount of $1 million,  payable on the earlier of
     July 17,  2005 or the day on which we are able to make draws under a credit
     facility  under which greater than $1 million may be borrowed.  Interest on
     the unpaid principal accrued at 4.59% per annum. We repaid the note in full
     on July 19, 2005 from borrowings  under our new $100 million senior secured
     revolving credit facility.

     On July 15, 2005, we entered into a $100 million senior  secured  revolving
     credit  facility with Wells Fargo Bank,  National  Association.  Borrowings
     under  the  new  credit  facility  will  be  subject  to a  borrowing  base
     limitation  based on our current  proved oil and gas reserves.  The initial
     borrowing  base is set at $20  million  and will be subject to  semi-annual
     redeterminations,  with the first  redetermination  to be December 1, 2005.
     The facility will be secured by a lien on all our assets, and the assets of
     our  subsidiaries,  as well as a security  interest in the stock of all our
     subsidiaries.  The  credit  facility  has a term of  three  years,  and all
     principal amounts,  together with all accrued and unpaid interest,  will be
     due and  payable in full on June 30,  2008.  Proceeds  from  extensions  of
     credit  under  the  facility  will  be  for  acquisitions  of oil  and  gas
     properties and for general corporate  purposes.  The facility also provides
     for the  issuance of  letters-of-credit  up to a $3 million  sub-limit.  On
     September  30,  2005,  the  outstanding  balance  under  our  facility  was
     $301,351. We incurred $165,388 in costs associated with the credit facility
     which are being amoritized over its life.

     Advances  under the facility  will be in the form of either base rate loans
     or Eurodollar  loans.  The interest rate on the base rate loans  fluctuates
     based upon the higher of (1) the lender's  "prime rate" and (2) the Federal
     Funds rate, plus a margin of 0.50%,  plus a margin of between 0.0% and 0.5%
     depending on the percent of the borrowing  base utilized at the time of the
     credit  extension.  The interest rate on the  Eurodollar  loans  fluctuates
     based upon the rate at which  Eurodollar  deposits in the London  Interbank
     market  ("Libor")  are quoted for the maturity  selected,  plus a margin of
     1.25% to 2.00%  depending on the percent of the borrowing  base utilized at
     the time of the credit  extension.  Eurodollar loans of one, three and nine
     months  may be  selected  by us. A  commitment  fee of 0.375% on the unused
     portion of the  borrowing  base will  accrue,  and be payable  quarterly in
     arrears.

     The credit agreement includes usual and customary affirmative covenants for
     credit  facilities  of this type and size,  as well as  customary  negative
     covenants,  including, among others, limitation on liens, hedging, mergers,
     asset  sales  or  dispositions,   payments  of  dividends,   incurrence  of
     additional  indebtedness,  certain  leases and  investments  outside of the
     ordinary  course of  business.  The credit  agreement  also  requires us to
     maintain a ratio of current assets to current liabilities,  except that any
     availability  under the borrowing base will be considered as an addition to
     current  assets,  and any  current  assets or  liabilities  resulting  from
     hedging  agreements  will be excluded,  of at least 1.0 to 1.0, an interest
     coverage ratio of EBITDAX  (earnings before interest,  taxes,  depreciation
     and amortization  and exploration  expense) to cash interest expense of 3.0
     to 1.0 and a  tangible  net  worth  of at least  $45  million,  subject  to
     adjustment  based on future  results of operations  and any sales of equity
     securities.   EBITDAX  and  tangible  net  worth  are  calculated   without
     consideration of unrealized  gains and losses related to stock  derivatives
     accounted for under  variable  accounting  rules for commodity  hedges.  At
     September 30, 2005 we were in compliance with the aforementioned  financial
     covenants.


                                       11

<PAGE>


     During  the  nine  month  period  ending  September  30,  2005 we  recorded
     $1,921,984 in expenses,  other than  interest,  related to these  financing
     activities.  Expenses  related to the April 27, 2004 financing,  retired on
     February 28, 2005,  included the  remaining  amortization  of $1,780,159 in
     debt issue  costs,  $100,000 for an extension of time and $25,000 in lender
     administrative  fees. Expenses recorded in association with the Wells Fargo
     debt facility were $16,825 in debt issue costs.



6.   OIL AND GAS PROPERTIES

     During the second  quarter,  Crimson  participated  for a non-operated  25%
     working  interest in the drilling of a development  well within the Mustang
     Island  749  Field.  The  Mustang  Island  749-L #2 was  drilled to a total
     measured  depth  of  10,600'  and a  completion  attempt  was  made  in the
     pre-drill  objective.  The  completion  is  still  underway,  but has  been
     interrupted due to limited equipment  availability resulting from Hurricane
     Rita. Results to date are not encouraging as water has possibly  encroached
     the objective reservoir from the field's previous downdip  completions.  An
     additional  shallower zone may warrant testing pending the final results of
     the  current  zone.   Recommencement  of  the  completion   operations  and
     determination  of final results are expected in the fourth quarter of 2005.
     Crimson's total net exposure in this well is approximately $2.9 million and
     will likely be reflected in the fourth quarter financial results.

7.   TAXES

     For the nine month  period  ended  September  30,  2005 we created  taxable
     income of approximately  $.6 million.  Adjusting for future tax benefits of
     approximately  $4.9  million,  and  applying a statutory  rate of 38%,  our
     deferred tax asset increased approximately $1.6 million. We expect to fully
     utilize this  increase in deferred  tax assets in the future.  Deferred tax
     assets are shown net of a $2.5 million valuation  allowance.  The valuation
     allowance  was  recorded  because  we expect we will not be able to use net
     operating  loss  carryforwards  of  approximately  $6.6  million due to the
     limitations of Internal Revenue Code Section 382.

8.   STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                               NUMBER OF SHARES
                                           ------------------------
                                            PREFERRED     COMMON      COMMON    PREFERRED     ADDITIONAL       RETAINED
                                              STOCK       STOCK       STOCK       STOCK    PAID-IN CAPITAL      DEFICIT
                                           ---------------------------------------------------------------------------------
<S>                                             <C>     <C>         <C>         <C>         <C>             <C>
BALANCE DECEMBER 31, 2004                       25,290  19,393,969  $   19,394  $      253  $   34,062,502  $   (15,405,506)
Common stock issued for services and fees                   63,190          63                      53,216
Preferred stock issued
  Series A                                       2,000                                  20       1,499,980
  Series G                                      81,000                                 810      36,696,431
Preferred stock conversions
  Series A to common stock                      (3,250)  4,642,859       4,643         (33)         (4,610)
  Series F to common stock                        (340)    170,000         170          (3)           (167)
  Series H to common stock                      (1,450)  2,071,429       2,071         (14)         (2,057)
Common stock dividends paid
  Series A Preferred                                       356,250         357                     330,957
  Series H Preferred                                        77,223          77                      67,661
Options and warrants exercised                           2,163,224       2,163                     110,637
Current year loss                                                                                                (3,183,449)
Dividends paid on preferred stock                                                                                (1,080,393)
                                           ----------------------------------------------------------------  ---------------
BALANCE SEPTEMBER 30, 2005                     103,250  28,938,144  $   28,938  $    1,033  $   72,814,550  $   (19,669,348)
                                           =================================================================================

</TABLE>

     Dividends  on all  classes  of our  preferred  stock are  cumulative  until
     declared as payable by our Board of Directors. Our Series E Preferred Stock
     accumulates  at 6% per annum  payable  in cash,  Series G  Preferred  Stock
     accumulates  at 8% per annum  payable in cash and Series H Preferred  Stock
     accumulates  at 40 shares  of our  common  stock per share of the  Series H
     Preferred Stock per annum. Our Series D Preferred Stock bears no dividends.


                                       12

<PAGE>


The following table sets forth the accumulated value of undeclared  dividends of
our preferred stock at September 30, 2005.

Series E Preferred Stock                    $         159,041
Series G Preferred Stock                            1,908,493
Series H Preferred Stock                               57,397
                                             -----------------
                                            $       2,124,931
                                             =================

     The Series E and Series G dividends are  convertible to our common stock at
     $.90 per common  share.  The  Series H  Preferred  Stock has no  conversion
     feature for unpaid dividends. These dividends call for payment of 10 common
     shares per quarter for each preferred share. Payments are current.

     ITEM 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
     -------  ------------------------------------------------------------------
              RESULTS OF OPERATIONS
              ---------------------

     Overview.
     ---------
     We are primarily engaged in the acquisition,  development, exploitation and
     production of crude oil and natural gas, primarily in the onshore producing
     regions of the United States.  Our focus is on increasing  production  from
     our existing  properties  through  further  exploitation,  development  and
     exploration, and on acquiring additional interests in undeveloped crude oil
     and  natural  gas  properties.  Our gross  revenues  are  derived  from the
     following sources:

     1.   Oil and gas  sales  that are  proceeds  from the sale of crude oil and
          natural gas production to midstream  purchasers.  This represents over
          98% of our gross revenues.

     2.   Operating  overhead and other income that  consists of  administrative
          fees received for operating  crude oil and natural gas  properties for
          other working  interest  owners,  and for  marketing and  transporting
          natural gas for those owners.  This also includes  earnings from other
          miscellaneous activities.

     The following is a discussion of our  consolidated  results of  operations,
     financial condition and capital resources.  You should read this discussion
     in conjunction  with our  Consolidated  Financial  Statements and the Notes
     thereto contained elsewhere herein.

     Results of Operations.
     ----------------------

     The factors which most  significantly  affect our results of operations are
     (1) the sales price of crude oil and natural  gas,  (2) oil and gas hedging
     agreements,  (3) the level of total sales  volumes of crude oil and natural
     gas, (4) the cost and  efficiency  of  operating  our own  properties,  (5)
     depletion  and  depreciation  of oil and gas  property  costs  and  related
     equipment,  (6) the level of and interest rates on borrowings,  and (7) the
     level  and  success  of  acquiring  or  finding  new   reserves,   and  the
     acquisition,  finding  and  development  costs  incurred  in  adding  these
     reserves.

     We  consider  depletion  and  depreciation  of oil and gas  properties  and
     related support equipment to be critical accounting  estimates,  based upon
     estimates of total recoverable oil and gas reserves.

     The  estimates  of oil and gas  reserves  utilized  in the  calculation  of
     depletion and  depreciation  are estimated in  accordance  with  guidelines
     established  by the  Securities  and Exchange  Commission and the Financial
     Accounting  Standards  Board,  which  require  that  reserve  estimates  be
     prepared under existing economic and operating conditions with no provision
     for price and cost  escalations  over  prices and costs  existing at period
     end, except by contractual arrangements.

     We emphasize that reserve estimates are inherently imprecise.  Accordingly,
     the  estimates are expected to change as more current  information  becomes
     available.  Our policy is to amortize  capitalized oil and gas costs on the


                                       13

<PAGE>


     unit of  production  method,  based upon  these  reserve  estimates.  It is
     reasonably possible that the estimates of future cash inflows, future gross
     revenues, the amount of oil and gas reserves, the remaining estimated lives
     of the oil and gas properties,  or any combination of the above will change
     in the future.

     Comparative  results of operations for the periods  indicated are discussed
     below.

     Three-Month  Period Ended September 30, 2005 compared to Three Month Period
     Ended September 30, 2004.

     Revenues

     Oil and Gas Sales.  During  the third  quarter,  revenues  from the sale of
     crude  oil and  natural  gas,  net of  realized  losses  from  our  hedging
     instruments,  increased 67% from  $2,816,400 in 2004 to $4,692,400 in 2005.
     Losses realized on our hedges during the 2005 quarter were $961,500 for oil
     and $528,600  for gas,  compared to $356,300 for oil and $95,400 for gas in
     the 2004 quarter.  The  significant  increase in revenues was due to higher
     oil and gas sales  volumes and higher crude oil and natural gas prices,  as
     further described below.

     In the third  quarter of 2005,  our sales  volumes  were 46,034  barrels of
     crude  oil  and  390,890  Mcf  of  natural  gas,  or  667,094  natural  gas
     equivalents  (mcfe) compared to 40,733 barrels of crude oil and 272,611 Mcf
     of natural  gas, or 517,009 Mcfe in the third  quarter of 2004.  On a daily
     basis we  produced  an average  of 7,251 Mcfe in the third  quarter of 2005
     compared  to a daily  average  of 5,620  Mcfe in the 2004  quarter.  Higher
     natural  gas and  crude  oil  sales  volumes  were a direct  result  of the
     development  program  we began in late 2004,  and  continued  in 2005.  The
     development program included our drilling and completing 2 new gas wells in
     east Texas in early 2005, the completion of workover and facility  projects
     at our Grand Lake and  Lacassine  fields in  southwest  Louisiana,  and the
     workover of wells in east and south Texas. These successful new oil and gas
     well completions not only offset the loss of production from property sales
     in 2004,  but also  allowed us to achieve the 29%  increase  in  production
     despite  the  shut-in of  approximately  4,500  Mcfepd  from the effects of
     Hurricane Rita, for the last eleven days of September 2005.

     Oil and gas prices are reported  net of the realized  effect of our hedging
     agreements.  Prices  realized  were $38.58 per Bbl and $7.46 per Mcf in the
     third  quarter of 2005  compared to $32.72 per Bbl and $5.44 per Mcf in the
     third quarter of 2004. Prices before the effects of the hedging  agreements
     were  $59.47per Bbl and $8.81 per Mcf in the third quarter of 2005 compared
     to $41.47 per Bbl and $5.79 per Mcf in the third quarter of 2004.

     Costs and Expenses

     Lease Operating Expenses.  Overall,  lease operating expenses increased 30%
     from  $1,149,800  in 2004 to  $1,500,300  in 2005.  The increase was due to
     higher production taxes from higher revenues, increased expenses related to
     well repairs,  equipment  rentals and salt water disposal and higher vendor
     prices.

     On a per unit basis,  expenses  increased  from $ 2.22 per Mcfe in 2004, to
     $2.25 per Mcfe in 2005.  This  increase in per unit lifting cost was due to
     the  higher  aforementioned  costs and the  production  shut-in  due to the
     hurricane.

     Depreciation,  Depletion and Amortization  (DD&A).  DD&A increased 64% from
     $526,300 in 2004 to $862,400 in 2005 due to higher production volumes,  and
     from an  increase  in the DD&A rate per unit from $1.02 per Mcfe in 2004 to
     $1.29 per Mcfe in 2005.


                                       14

<PAGE>


     General and Administrative  (G&A) Expenses.  Our G&A expenses increased 71%
     from  $568,400 in 2004 to $973,100 in 2005 due to the recent  additions  to
     our  management  team to carry out our growth  plan.  On a per unit  basis,
     expenses increased from $1.10 per Mcfe in 2004 to $1.48 per Mcfe in 2005.

     Interest Expense. Interest expense decreased 96% from $1,036,600 in 2004 to
     $44,800 in 2005,  primarily due to the retirement of debt  associated  with
     our February 2005 recapitalization.

     Nine-Month  Period Ended  September 30, 2005 compared to Nine- Month Period
     Ended September 30, 2004.

     Revenues

     Oil and Gas Sales.  During  the nine month  period  ended  September  2005,
     revenues from the sale of crude oil and natural gas, net of realized losses
     from our hedging  instruments,  increased  63% from  $7,811,400  in 2004 to
     $12,694,300  in 2005.  Losses  realized  on our  hedges  during  2005  were
     $2,106,400  for oil and $853,400 for gas,  compared to $762,700 for oil and
     $391,600 for gas in 2004. The  significant  increase in revenues was due to
     higher oil and gas sales  volumes  and  higher  crude oil and  natural  gas
     prices, as further described below.

     For the period in 2005, our sales volumes were 138,513 barrels of crude oil
     and  1,155,562  Mcf of natural  gas, or 1,986,640  natural gas  equivalents
     (mcfe)  compared to 127,530 barrels of crude oil and 758,614 Mcf of natural
     gas, or 1,521,794 Mcfe in the 2004 period.  On a daily basis we produced an
     average of 7,277 Mcfe in the nine month period of 2005  compared to a daily
     average of 5,574 Mcfe in the 2004 period.  Higher natural gas and crude oil
     sales volumes were a direct result of the  development  program we began in
     late 2004,  and  expanded in 2005.  The  development  program  included our
     drilling and  completing  2 new gas wells in east Texas in early 2005,  the
     completion  of  workover  and  facility  projects  at our  Grand  Lake  and
     Lacassine fields in southwest  Louisiana,  and the workover of gas wells in
     east and south Texas. These successful new oil and gas well completions not
     only offset the loss of production from property sales in 2004 and the loss
     of  approximately  4,500 Mcfepd from the effects of Hurricane  Rita for the
     last eleven days of September 2005, and still allowed us to achieve the 31%
     increase in production.

     Oil and gas prices are reported  net of the realized  effect of our hedging
     agreements.  Prices  realized were $37.24 per Bbl and $6.52 per Mcf for the
     nine month  period of 2005  compared to $30.28 per Bbl and $5.22 per Mcf in
     the 2004 period.  Prices before the effects of the hedging  agreements were
     $52.45 per Bbl and $7.26 per Mcf for the nine month period of 2005 compared
     to $36.26 per Bbl and $5.74 per Mcf in the 2004 period.

     Costs and Expenses

     Lease Operating  Expenses.  Overall,  operating expenses increased 14% from
     $3,749,000 in 2004 to $4,266,200 in 2005. The increase was primarily due to
     higher  production  taxes  as a  result  of  increased  sales  volumes  and
     commodity prices.

     On a per unit basis,  expenses  decreased  from $2.46 per Mcfe in 2004,  to
     $2.15 per Mcfe in 2005. This decrease in lifting cost was due to the higher
     sales volumes.

     Depreciation,  Depletion and Amortization  (DD&A).  DD&A increased 68% from
     $1,402,500 in 2004 to $2,353,400 in 2005 due to higher production  volumes,
     and from an  increase  in the DD&A rate per unit from $.92 per Mcfe in 2004
     to $1.18 per Mcfe in 2005.

     General and Administrative  (G&A) Expenses.  Our G&A expenses increased 75%
     from  $1,442,100 in 2004 to $2,526,200 in 2005 due to the recent  additions
     to our  management  team to carry out our growth plan. On a per unit basis,
     expenses increased from $.95 per Mcfe in 2004 to $1.27 per Mcfe in 2005.


                                       15

<PAGE>


     Interest Expense. Interest expense decreased 58% from $2,971,400 in 2004 to
     $1,261,400 in 2005, primarily due to the retirement of debt associated with
     our February 2005 recapitalization.

     Financial Condition and Capital Resources
     -----------------------------------------

     At September 30, 2005, our current liabilities  exceeded our current assets
     by $5,281,361,  while at December 31, 2004 our current liabilities exceeded
     our current assets by $35,034,675.  Current  liabilities  include  non-cash
     marked to market  balances of $4,498,617 for the 2005 period and $1,680,800
     for the 2004 period.  The improvement was attributable to repayment of debt
     with  proceeds  from the  February  2005 sale of the  Series G and Series A
     Preferred  Stock. For the third quarter of 2005 we had a loss of $2,188,872
     compared  to a loss of  $4,905,958  for the same  period  in 2004.  The net
     income  generated  in 2004 was  primarily  attributed  to $12.5  million in
     forgiveness of debt income associated with our April 2004 refinancing.

     On July 15, 2005, we entered into a $100 million senior  secured  revolving
     credit  facility with Wells Fargo Bank,  National  Association.  Borrowings
     under  the  new  credit  facility  will  be  subject  to a  borrowing  base
     limitation  based on our current  proved oil and gas reserves.  The initial
     borrowing  base is set at $20  million  and will be subject to  semi-annual
     redeterminations,  with the first  redetermination  to be December 1, 2005.
     The facility will be secured by a lien on all our assets, and the assets of
     our  subsidiaries,  as well as a security  interest in the stock of all our
     subsidiaries.  The  credit  facility  has a term of  three  years,  and all
     principal amounts,  together with all accrued and unpaid interest,  will be
     due and  payable in full on June 30,  2008.  Proceeds  from  extensions  of
     credit  under  the  facility  will  be  for  acquisitions  of oil  and  gas
     properties and for general corporate  purposes.  The facility also provides
     for the  issuance of  letters-of-credit  up to a $3 million  sub-limit.  On
     September  30,  2005,  the  outstanding  balance  under  our  facility  was
     $301,351.

     We anticipate that our cash flow from  operations and temporary  borrowings
     under our senior credit facility will provide  sufficient cash resources to
     meet our requirements for our operations, maintenance capital expenditures,
     debt service and working capital  requirements for at least the next twelve
     months.

     Risks Regarding Forward Looking Statements
     ------------------------------------------

     The Private Securities Litigation Reform Act of 1995 provides a safe harbor
     for  forward-looking  statements  made by us or on our behalf.  This report
     includes such  forward-looking  statements.  Such statements  include those
     concerning  our strategic  plans,  expectations  and  objectives for future
     operations. All statements included in this report that address activities,
     events or  developments  that we expect,  believe or anticipate will or may
     occur in the future are  forward-looking  statements.  These statements are
     based on  certain  assumptions  we have made  based on its  experience  and
     perception  of  historical  trends,  current  conditions,  expected  future
     developments  and  other  factors  we  believe  are  appropriate  under the
     circumstances.  Such  statements  are  subject to a number of  assumptions,
     risks and uncertainties,  many of which are beyond our control.  Statements
     regarding   future   production  are  subject  to  all  of  the  risks  and
     uncertainties  normally incident to the exploration for and development and
     production  of oil and gas.  These risks  include,  but are not limited to,
     inflation  or lack of  availability  of goods and  services,  environmental
     risks, drilling risks and regulatory changes, the ability of the purchasers
     of our  production to take  deliveries  and the  potential  lack of capital
     resources.  Investors  are  cautioned  that  any  such  statements  are not
     guarantees of future  performance  and that actual results or  developments
     may  differ   materially  from  those  projected  in  the   forward-looking
     statements.  Please  refer to our  annual  report on Form 10-K for the year
     ended December 31, 2004 for a further discussion of these risks.


                                       16

<PAGE>


     ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     ------- ----------------------------------------------------------

     The following  market rate  disclosures  should be read in conjunction with
     the quantitative disclosures about market risk contained in our 2004 Annual
     Report on Form 10-K, as well as with the consolidated  financial statements
     and notes thereto included in this quarterly report on Form 10-Q.

     All of our financial  instruments  are for purposes other than trading.  We
     only enter into derivative  financial  instruments in conjunction  with our
     oil and gas hedging activities.

     Hypothetical  changes in interest rates and prices chosen for the following
     stimulated  sensitivity  effects are  considered to be reasonably  possible
     near-term changes generally based on consideration of past fluctuations for
     each risk category. It is not possible to accurately predict future changes
     in  interest  rates and product  prices.  Accordingly,  these  hypothetical
     changes may not be an indicator of probable future fluctuations.

     Interest Rate Risk

     We are exposed to interest rate risk on debt with variable  interest rates.
     At September 30, 2005 we carried variable rate debt of $301,351  Assuming a
     one percentage point change at September 30, 2005 on our Company's variable
     rate debt, the annual pretax income would change by $3,014.

     Commodity Price Risk

     We hedge a portion of price risk  associated  with our oil and  natural gas
     sales through  contractual  arrangements which are classified as derivative
     instruments.  As of September 30, 2005, these derivative instruments had an
     estimated fair value liability of $6,220,108.  A hypothetical change in oil
     and gas prices  could have an effect on oil and gas futures  prices,  which
     are used to estimate the fair value of our derivative instruments. However,
     it is not practicable to estimate the resultant change, if any, in the fair
     value of our derivative instruments.


     ITEM 4. CONTROLS AND PROCEDURES
     ------- -----------------------

     As of September 30, 2005, our President,  Chief  Executive  Officer and our
     Senior Vice President,  Chief Financial Officer evaluated the effectiveness
     of the design and  operation  of our  disclosure  controls  and  procedures
     pursuant to Rule 13a-15(b)  under the  Securities  Exchange Act of 1934, as
     amended ("the Exchange Act").  Based upon this  evaluation,  they concluded
     that, subject to the limitations  described below, the Company's disclosure
     controls and procedures  offer  reasonable  assurance that the  information
     required to be  disclosed  by the Company in the reports it files under the
     Exchange Act is recorded,  processed,  summarized  and reported  within the
     time periods specified in the rules and forms adopted by the Securities and
     Exchange Commission.

     During the period  covered by this report,  there has been no change in the
     Company's  internal  controls  over  financial  reporting  that  materially
     affected, or is reasonably likely to materially affect, these controls.

     Limitations on the Effectiveness of Controls. Our management, including the
     Chief Executive  Officer and the Chief Financial  Officer,  does not expect
     that the  Company's  disclosure  controls and  procedures  will prevent all
     error and all fraud. A well conceived and operated  control system is based
     in part upon certain  assumptions about the likelihood of future events and
     can provide only reasonable, not absolute, assurance that the objectives of
     the control systems are met.  Further,  the design of a control system must
     reflect the fact that there are resource  constraints,  and the benefits of
     controls  must be  considered  relative to their costs.  There have been no
     significant changes in our internal controls or in other factors that could
     significantly affect internal controls subsequent to September 30, 2005.


                                       17

<PAGE>


                           PART II. OTHER INFORMATION

     ITEM 6. EXHIBITS.
     ------- ---------

          31.1 Certification  of Chief  Executive  Officer  pursuant to Exchange
               Rule  13a-14  (a)  as  adopted  pursuant  to  Section  302 of the
               Sarbanes-Oxley Act of 2002.

          31.2 Certification  of Chief  Financial  Officer  pursuant to Exchange
               Rule  13a-14  (a)  as  adopted  pursuant  to  Section  302 of the
               Sarbanes-Oxley Act of 2002.

          32   Certification  pursuant  to 18 U.S.C.  Section  1350  pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002.


                                       18

<PAGE>


                                   SIGNATURES

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


                            CRIMSON EXPLORATION INC.
                                  (Registrant)


Date:  November 14, 2005       By: /s/ Allan D. Keel
                                  ------------------------------------
                               Allan D. Keel
                               President and Chief Executive Officer

Date:  November 14, 2005       By: /s/ E. Joseph Grady
                                  ------------------------------------
                               E. Joseph Grady
                               Senior Vice President and Chief Financial Officer


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