---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2010

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: 333-107002

MANAS PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)

|Nevada                                                               | 91-1918324                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

Bahnhofstrasse 9, 6341 Baar,
Switzerland(Address of principal executive offices) (zip code)

41 (44) 718 10 30(Registrants telephone
number, including area code)

N/A(Former name, former address and former
fiscal year, if changed since last report)

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. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).[ ] Yes [ ] No

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer | [ ] |                                               | Accelerated filer         | [ ]
|----------------------- | --- | --------------------------------------------- | ------------------------- | ---
|Non-accelerated filer   | [ ] | (Do not check if a smaller reporting company) | Smaller reporting company | [X]

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

---

ii

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date:
122,883,866 shares of common stock as of May 17, 2010.

---

iii

TABLE OF CONTENTS

|PART
      IFINANCIAL INFORMATION                                                                        | 4 
|--------------------------------------------------------------------------------------------------------- | --
|Item
      1. Financial Statements                                                                        | 4 
|Item
      2. Managements Discussion and Analysis of Financial Condition and Results
      of Operations | 26
|Item
      3. Quantitative and Qualitative Disclosures about Market Risk                                  | 32
|Item
      4T. Controls and Procedures                                                                    | 32
|PART
      IIOTHER INFORMATION                                                                           | 33
|Item
      1. Legal Proceedings                                                                           | 33
|Item
      2. Unregistered Sales of Equity Securities and Use of Proceeds                                 | 33
|Item
      3. Defaults upon Senior Securities                                                             | 33
|Item
      4. Submission of Matters to a Vote of Security Holders                                         | 33
|Item
      5. Other Information                                                                           | 33
|Item
      6. Exhibits                                                                                    | 33
|SIGNATURES                                                                                                | 37

---

4

PART IFINANCIAL INFORMATION

Item 1. Financial Statements.

|MANAS PETROLEUM CORPORATION                
|-------------------------------------------
|(AN EXPLORATION STAGE COMPANY)             
|CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|UNAUDITED                                  
|                                           
|                                           
|CONDENSED CONSOLIDATED BALANCE SHEETS      

|                                                                                                                                                               |  | 03.31.2010 |  |  | 12.31.2009  |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- |  |  | ----------- | -
|                                                                                                                                                               |  | USD        |  |  | USD         |  
|                                                                                                                                                               |  |            |  |  |             |  
|ASSETS                                                                                                                                                         |  |            |  |  |             |  
|                                                                                                                                                               |  |            |  |  |             |  
|Cash and cash equivalents                                                                                                                                      |  | 2,301,163  |  |  | 804,663     |  
|Restricted cash                                                                                                                                                |  | 935,362    |  |  | 908,888     |  
|Accounts receivable                                                                                                                                            |  | 642,330    |  |  | 60,611      |  
|Other receivables                                                                                                                                              |  | 350,000    |  |  | -           |  
|Prepaid expenses                                                                                                                                               |  | 208,876    |  |  | 450,372     |  
|Total current
      assets                                                                                                                                     |  | 4,437,731  |  |  | 2,224,534   |  
|                                                                                                                                                               |  |            |  |  |             |  
|                                                                                                                                                               |  |            |  |  |             |  
|Debt issuance costs                                                                                                                                            |  | -          |  |  | 112,619     |  
|Tangible fixed assets                                                                                                                                          |  | 126,516    |  |  | 178,191     |  
|Investment in associate                                                                                                                                        |  | 238,304    |  |  | 238,304     |  
|Investment in associate (Petromanas)                                                                                                                           |  | 75,219,722 |  |  | -           |  
|Total non-current assets                                                                                                                                       |  | 75,584,542 |  |  | 529,114     |  
|                                                                                                                                                               |  |            |  |  |             |  
|TOTAL ASSETS                                                                                                                                                   |  | 80,022,274 |  |  | 2,753,648   |  
|                                                                                                                                                               |  |            |  |  |             |  
|LIABILITIES AND SHAREHOLDERS'
      EQUITY/(DEFICIT)                                                                                                           |  |            |  |  |             |  
|                                                                                                                                                               |  |            |  |  |             |  
|Accounts payable                                                                                                                                               |  | 542,473    |  |  | 610,581     |  
|Bank overdraft                                                                                                                                                 |  | -          |  |  | 196,154     |  
|Short-term loan                                                                                                                                                |  | -          |  |  | 917,698     |  
|Promissory notes to shareholders                                                                                                                               |  | -          |  |  | 540,646     |  
|Contingently convertible loan                                                                                                                                  |  | -          |  |  | 1,886,905   |  
|Debentures                                                                                                                                                     |  | -          |  |  | 3,887,179   |  
|Warrant liability                                                                                                                                              |  | 494,624    |  |  | 683,305     |  
|Accrued expenses Exploration costs                                                                                                                             |  | 311,460    |  |  | 713,992     |  
|Accrued expenses Professional fees                                                                                                                             |  | 64,503     |  |  | 220,449     |  
|Accrued expenses Interest                                                                                                                                      |  | -          |  |  | 82,749      |  
|Other accrued expenses                                                                                                                                         |  | 19,481     |  |  | 13,673      |  
|Total current
      liabilities                                                                                                                                |  | 1,432,541  |  |  | 9,753,331   |  
|                                                                                                                                                               |  |            |  |  |             |  
|Pension
      liabilities                                                                                                                                      |  | 29,504     |  |  | 29,504      |  
|Total non-current liabilities                                                                                                                                  |  | 29,504     |  |  | 29,504      |  
|                                                                                                                                                               |  |            |  |  |             |  
|TOTAL LIABILITIES                                                                                                                                              |  | 1,462,045  |  |  | 9,782,835   |  
|                                                                                                                                                               |  |            |  |  |             |  
|Common stock (300,000,000 shares
      authorized, USD 0.001 par value, 
      119'201'733 and 119'051'733 shares, respectively, issued
      and outstanding) |  | 119,202    |  |  | 119,052     |  
|Additional paid-in capital                                                                                                                                     |  | 52,110,317 |  |  | 49,532,367  |  
|Retained earnings/(deficit accumulated during the
      exploration stage)                                                                                     |  | 26,279,708 |  |  | (56,731,607 | )
|Accumulated other comprehensive income /
      (loss)                                                                                                          |  |            |  |  |             |  
|Currency
      translation adjustment                                                                                                                          |  | 51,001     |  |  | 51,001      |  
|Total shareholders' equity/(deficit)                                                                                                                           |  | 78,560,228 |  |  | (7,029,187  | )
|                                                                                                                                                               |  |            |  |  |             |  
|                                                                                                                                                               |  |            |  |  |             |  
|TOTAL
      LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)                                                                                                     |  | 80,022,274 |  |  | 2,753,648   |  

---

5

|MANAS PETROLEUM CORPORATION                                                          
|-------------------------------------------------------------------------------------
|(AN EXPLORATION STAGE COMPANY)                                                       
|CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                          
|UNAUDITED                                                                            
|                                                                                     
|                                                                                     
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
      COMPREHENSIVE INCOME/(LOSS)

|                                                                      |  | For the three months ended |   |  | Period from |  
|--------------------------------------------------------------------- |  | -------------------------- | - |  | ----------- | -
|                                                                      |  |                            |   |  |             |  
|                                                                      |  |                            |   |  |             |  
|                                                                      |  | 03.31.2010                 |   |  | 03.31.2009  |  
|                                                                      |  | USD                        |   |  | USD         |  
|OPERATING REVENUES                                                    |  |                            |   |  |             |  
|                                                                      |  |                            |   |  |             |  
|Other revenues                                                        |  | -                          |   |  | -           |  
|Total
      revenues                                                  |  | -                          |   |  | -           |  
|                                                                      |  |                            |   |  |             |  
|OPERATING EXPENSES                                                    |  |                            |   |  |             |  
|                                                                      |  |                            |   |  |             |  
|Personnel costs                                                       |  | (2,501,193                 | ) |  | (1,865,914  | )
|Exploration costs                                                     |  | (63,657                    | ) |  | (264,260    | )
|Depreciation                                                          |  | (16,209                    | ) |  | (16,495     | )
|Consulting fees                                                       |  | (417,423                   | ) |  | (126,785    | )
|Administrative
      costs                                            |  | (243,477                   | ) |  | (236,984    | )
|Total operating expenses                                              |  | (3,241,960                 | ) |  | (2,510,438  | )
|                                                                      |  |                            |   |  |             |  
|Gain from sale of investment                                          |  | -                          |   |  | -           |  
|Loss from sale of investment                                          |  | -                          |   |  | -           |  
|OPERATING INCOME/(LOSS)                                               |  | (3,241,960                 | ) |  | (2,510,438  | )
|                                                                      |  |                            |   |  |             |  
|NON-OPERATING INCOME / (EXPENSE)                                      |  |                            |   |  |             |  
|Exchange differences                                                  |  | (82,468                    | ) |  | 84,574      |  
|Changes in fair value of warrants                                     |  | 111,242                    |   |  | 500,165     |  
|Warrants issuance expense                                             |  | -                          |   |  | -           |  
|Gain from sale of subsidiary                                          |  | 57,850,918                 |   |  | -           |  
|Change in fair value of investment in associate                       |  | 28,812,901                 |   |  | -           |  
|Interest income                                                       |  | 50                         |   |  | 24,505      |  
|Interest expense                                                      |  | (321,310                   | ) |  | (307,990    | )
|Loss on extinguishment of debt                                        |  | (117,049                   | ) |  | -           |  
|Income/(Loss)
      before taxes and equity in net loss of associate  |  | 83,012,325                 |   |  | (2,209,184  | )
|                                                                      |  |                            |   |  |             |  
|Income taxes                                                          |  | (1,009                     | ) |  | (455        | )
|Equity in net loss of associate                                       |  | -                          |   |  | -           |  
|Net
      income/(loss)                                               |  | 83,011,315                 |   |  | (2,209,639  | )
|                                                                      |  |                            |   |  |             |  
|Net income / (loss) attributable to non-controlling
      interest    |  | -                          |   |  | -           |  
|Net income/(loss) attributable to Manas                               |  | 83,011,315                 |   |  | (2,209,639  | )
|                                                                      |  |                            |   |  |             |  
|Currency translation adjustment attributable to Manas                 |  | -                          |   |  | (18,042     | )
|Net
      comprehensive income/(loss) attributable to Manas           |  | 83,011,315                 |   |  | (2,227,681  | )
|Net comprehensive loss attributable to non-controlling
      interest |  | -                          |   |  | -           |  
|Net
      comprehensive income/(loss)                                 |  | 83,011,315                 |   |  | (2,227,681  | )
|                                                                      |  |                            |   |  |             |  
|Weighted average number of outstanding shares (basic)                 |  | 119,053,400                |   |  | 119,051,733 |  
|Weighted average number of outstanding shares (diluted)               |  | 133,606,613                |   |  | 119,051,733 |  
|                                                                      |  |                            |   |  |             |  
|Basic earnings / (loss) per share
      attributable to Manas         |  | 0.70                       |   |  | (0.02       | )
|Diluted earnings / (loss) per share attributable to
      Manas       |  | 0.62                       |   |  | (0.02       | )

---

6

|MANAS PETROLEUM CORPORATION                
|-------------------------------------------
|(AN EXPLORATION STAGE COMPANY)             
|CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|UNAUDITED                                  
|                                           
|                                           
|CONDENSED CONSOLIDATED CASH FLOW STATEMENT 

|                                                                              |  | For the three months ended |   |  | Period from |  
|----------------------------------------------------------------------------- |  | -------------------------- | - |  | ----------- | -
|                                                                              |  |                            |   |  |             |  
|                                                                              |  |                            |   |  |             |  
|                                                                              |  | 03.31.2010                 |   |  | 03.31.2009  |  
|                                                                              |  | USD                        |   |  | USD         |  
|                                                                              |  |                            |   |  |             |  
|OPERATING
      ACTIVITIES                                                    |  |                            |   |  |             |  
|                                                                              |  |                            |   |  |             |  
|Net income/(loss)                                                             |  | 83,011,315                 |   |  | (2,209,639  | )
|                                                                              |  |                            |   |  |             |  
|To reconcile
      net income/(loss) to net cash used in operating activities |  |                            |   |  |             |  
|                                                                              |  |                            |   |  |             |  
|Gain from sale of subsidiary                                                  |  | (57,850,918                | ) |  | -           |  
|Gain from sale of investment                                                  |  | -                          |   |  | -           |  
|Loss from sale of investment                                                  |  | -                          |   |  | -           |  
|Change in fair value of investment in
      associate                         |  | (28,812,901                | ) |  | -           |  
|Equity in net loss of associate                                               |  | -                          |   |  | -           |  
|Depreciation                                                                  |  | 16,209                     |   |  | 16,495      |  
|Amortization of debt issuance costs                                           |  | 112,619                    |   |  | 43,739      |  
|Warrant issuance expense / (income)                                           |  | (111,242                   | ) |  | (500,165    | )
|Exchange differences                                                          |  | 81,517                     |   |  | (84,574     | )
|Non cash adjustment to exploration costs                                      |  | (204,753                   | ) |  | -           |  
|Non cash interest income                                                      |  | (25,619                    | ) |  | -           |  
|Interest expense on contingently
      convertible loan                       |  | 29,893                     |   |  | 28,011      |  
|Loss on extinguishment of contingently convertible loan                       |  | 83,202                     |   |  | -           |  
|Interest expense on debentures                                                |  | 78,974                     |   |  | 97,265      |  
|Loss on extinguishment of debentures                                          |  | 33,847                     |   |  | -           |  
|Stock-based compensation                                                      |  | 2,412,161                  |   |  | 1,418,191   |  
|Decrease / (increase) in receivables and prepaid expenses                     |  | (342,199                   | ) |  | 45,798      |  
|(Decrease) / increase in accounts payables                                    |  | (41,156                    | ) |  | 61,812      |  
|(Decrease) / increase in accrued expenses                                     |  | (633,434                   | ) |  | 6,158       |  
|Change in pension liability                                                   |  | -                          |   |  | -           |  
|Cash flow (used
      in) / from operating activities                         |  | (2,162,485                 | ) |  | (1,076,907  | )
|                                                                              |  |                            |   |  |             |  
|INVESTING ACTIVITIES                                                          |  |                            |   |  |             |  
|                                                                              |  |                            |   |  |             |  
|Purchase of tangible fixed assets and computer software                       |  | (880                       | ) |  | -           |  
|Sale of tangible fixed assets and computer
      software                     |  | -                          |   |  | -           |  
|Proceeds from sale of investment                                              |  | 10,415,810                 |   |  | -           |  
|Decrease / (increase) restricted cash                                         |  | (26,127                    | ) |  | 2,214,398   |  
|Acquisition of
      investment in associate                                  |  | -                          |   |  | -           |  
|Cash flow (used in) / from investing activities                               |  | 10,388,802                 |   |  | 2,214,398   |  
|                                                                              |  |                            |   |  |             |  
|FINANCING ACTIVITIES                                                          |  |                            |   |  |             |  
|                                                                              |  |                            |   |  |             |  
|Contribution share capital founders                                           |  | -                          |   |  | -           |  
|Issuance of units                                                             |  | -                          |   |  | -           |  
|Issuance of contingently convertible loan                                     |  |                            |   |  |             |  
|Issuance of debentures                                                        |  |                            |   |  |             |  
|Issuance of promissory notes to
      shareholders                            |  |                            |   |  |             |  
|Repayment of contingently convertible loan                                    |  | (2,000,000                 | ) |  | -           |  
|Repayment of debentures                                                       |  | (4,000,000                 | ) |  | -           |  
|Repayment of promissory notes to shareholders                                 |  | (540,646                   | ) |  | -           |  
|Issuance of warrants                                                          |  | -                          |   |  | -           |  
|Proceeds from exercise of warrants                                            |  | 88,500                     |   |  | -           |  
|Cash arising on recapitalization                                              |  | -                          |   |  | -           |  
|Shareholder loan repaid                                                       |  | -                          |   |  | -           |  
|Shareholder loan raised                                                       |  | -                          |   |  | -           |  
|Repayment of bank loan                                                        |  | -                          |   |  | (1,220,000  | )
|Increase in bank loan                                                         |  | -                          |   |  | -           |  
|Increase in short-term loan                                                   |  | -                          |   |  | -           |  
|Payment of debt issuance costs                                                |  | -                          |   |  | -           |  
|(Decrease) /
      increase in bank overdraft                                 |  | (196,154                   | ) |  | -           |  
|Cash flow (used in) / from financing activities                               |  | (6,648,300                 | ) |  | (1,220,000  | )
|                                                                              |  |                            |   |  |             |  
|                                                                              |  |                            |   |  |             |  
|Net change in
      cash and cash equivalents                                 |  | 1,578,016                  |   |  | (82,509     | )
|                                                                              |  |                            |   |  |             |  
|Cash and cash equivalents at the beginning of the period                      |  | 804,663                    |   |  | 225,993     |  
|Currency translation effect on cash and cash equivalents                      |  | (81,516                    | ) |  | 1,299       |  
|Cash and cash
      equivalents at the end of the period                      |  | 2,301,163                  |   |  | 144,783     |  
|Supplement schedule of non-cash investing and financing
      activities:     |  |                            |   |  |             |  
|Forgiveness of debt by major shareholder                                      |  | -                          |   |  | -           |  
|Deferred consideration for interest in CJSC South Petroleum
      Co.         |  | -                          |   |  | -           |  
|Warrants issued to pay placement commission
      expenses                    |  | -                          |   |  | -           |  
|Debenture interest paid in common shares                                      |  | -                          |   |  | -           |  
|Forgiveness of advance payment from
      Petromanas Energy Inc.              |  | 917,698                    |   |  | -           |  
|Fair value of shares of investment in Petromanas                              |  | 46,406,821                 |   |  | -           |  
|Proceeds from sale yet to be paid recorded
      under other receivables      |  | 350,000                    |   |  | -           |  
|Forgiveness of receivable due from Manas Adriatic GmbH                        |  | (3,449,704)                | ) |  | -           |  

---



7

|MANAS PETROLEUM CORPORATION                                      
|-----------------------------------------------------------------
|(AN EXPLORATION STAGE COMPANY)                                   
|CONSOLIDATED FINANCIAL STATEMENTS                                
|                                                                 
|                                                                 
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY /
      (DEFICIT)

|                                            |  |                  |  |  |               |  |  |                  |   |  | Deficit     |   |  |                 |   |  |                             |  
|------------------------------------------- |  | ---------------- |  |  | ------------- |  |  | ---------------- | - |  | ----------- | - |  | --------------- | - |  | --------------------------- | -
|                                            |  |                  |  |  |               |  |  |                  |   |  | accumulated |   |  | **Accumulated** |   |  |                             |  
|                                            |  |                  |  |  |               |  |  |                  |   |  | during the  |   |  | Other Compre-   |   |  | Total share-                |  
|                                            |  |                  |  |  |               |  |  | Additional paid  |   |  | development |   |  | hensive Income  |   |  | **holders' equity
      /** |  
|SHAREHOLDERS' EQUITY / (DEFICIT)            |  | Number of Shares |  |  | Share Capital |  |  | in
      capital |   |  | stage       |   |  | (Loss)          |   |  | (deficit)                   |  
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|Balance May 25, 2004                        |  | -                |  |  | -             |  |  | -                |   |  | -           |   |  | -               |   |  | -                           |  
|Contribution share capital from founders    |  | 80,000,000       |  |  | 80,000        |  |  | 19               |   |  | -           |   |  | -               |   |  | 80,019                      |  
|Currency translation adjustment             |  | -                |  |  | -             |  |  | -                |   |  | -           |   |  | (77,082         | ) |  | (77,082                     | )
|Net loss for the period                     |  | -                |  |  | -             |  |  | -                |   |  | (601,032    | ) |  | -               |   |  | (601,032                    | )
|Balance December 31, 2004                   |  | 80,000,000       |  |  | 80,000        |  |  | 19               |   |  | (601,032    | ) |  | (77,082         | ) |  | (598,095                    | )
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|Balance January 1, 2005                     |  | 80,000,000       |  |  | 80,000        |  |  | 19               |   |  | (601,032    | ) |  | (77,082         | ) |  | (598,095                    | )
|Currency translation adjustment             |  | -                |  |  | -             |  |  | -                |   |  |             |   |  | 218,699         |   |  | 218,699                     |  
|Net loss for the year                       |  | -                |  |  | -             |  |  | -                |   |  | (1,993,932  | ) |  | -               |   |  | (1,993,932                  | )
|Balance December 31, 2005                   |  | 80,000,000       |  |  | 80,000        |  |  | 19               |   |  | (2,594,964  | ) |  | 141,617         |   |  | (2,373,328                  | )
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|Balance January 1, 2006                     |  | 80,000,000       |  |  | 80,000        |  |  | 19               |   |  | (2,594,964  | ) |  | 141,617         |   |  | (2,373,328                  | )
|Forgiveness of debt by major shareholder    |  | -                |  |  | -             |  |  | 1,466,052        |   |  | -           |   |  | -               |   |  | 1,466,052                   |  
|Currency translation adjustment             |  | -                |  |  | -             |  |  | -                |   |  | -           |   |  | (88,153         | ) |  | (88,153                     | )
|Net income for the year                     |  | -                |  |  | -             |  |  | -                |   |  | 1,516,004   |   |  | -               |   |  | 1,516,004                   |  
|Balance December 31, 2006                   |  | 80,000,000       |  |  | 80,000        |  |  | 1,466,071        |   |  | (1,078,960  | ) |  | 53,464          |   |  | 520,575                     |  
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|Balance January 1, 2007                     |  | 80,000,000       |  |  | 80,000        |  |  | 1,466,071        |   |  | (1,078,960  | ) |  | 53,464          |   |  | 520,575                     |  
|Recapitalization transaction (Note 1)       |  | 20,110,400       |  |  | 20,110        |  |  | (356,732         | ) |  | -           |   |  | -               |   |  | (336,622                    | )
|Stock-based compensation                    |  | 880,000          |  |  | 880           |  |  | 7,244,409        |   |  | -           |   |  | -               |   |  | 7,245,289                   |  
|Private placement of Units, issued for cash |  | 10,330,152       |  |  | 10,330        |  |  | 9,675,667        |   |  | -           |   |  | -               |   |  | 9,685,997                   |  
|Private placement of Units                  |  | 10,709           |  |  | 11            |  |  | (11              | ) |  | -           |   |  | -               |   |  | -                           |  
|Private placement of Units, issued for cash |  | 825,227          |  |  | 825           |  |  | 3,521,232        |   |  | -           |   |  | -               |   |  | 3,522,057                   |  
|Currency translation adjustment             |  | -                |  |  | -             |  |  | -                |   |  | -           |   |  | 3,069           |   |  | 3,069                       |  
|NetNet lossloss forfor thethe yearyear      |  | -                |  |  | -             |  |  | -                |   |  | (12,825,496 | ) |  | -               |   |  | (12,825,496                 | )
|Balance December 31, 2007                   |  | 112,156,488      |  |  | 112,156       |  |  | 21,550,636       |   |  | (13,904,456 | ) |  | 56,533          |   |  | 7,814,870                   |  
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|Balance January 1, 2008                     |  | 112,156,488      |  |  | 112,156       |  |  | 21,550,636       |   |  | (13,904,456 | ) |  | 56,533          |   |  | 7,814,870                   |  
|Stock-based compensation                    |  | 2,895,245        |  |  | 2,895         |  |  | 9,787,978        |   |  | -           |   |  | -               |   |  | 9,790,874                   |  
|Private placement of Units, issued for cash |  | 4,000,000        |  |  | 4,000         |  |  | 1,845,429        |   |  | -           |   |  | -               |   |  | 1,849,429                   |  
|Issuance of warrants                        |  | -                |  |  | -             |  |  | 10,110,346       |   |  | -           |   |  | -               |   |  | 10,110,346                  |  
|Beneficial Conversion Feature               |  | -                |  |  | -             |  |  | 557,989          |   |  | -           |   |  | -               |   |  | 557,989                     |  
|Currency translation adjustment             |  | -                |  |  | -             |  |  | -                |   |  | -           |   |  | (13,212         | ) |  | (13,212                     | )
|Net loss for the period                     |  | -                |  |  | -             |  |  | -                |   |  | (30,296,106 | ) |  | -               |   |  | (30,296,106                 | )
|Balance December 31, 2008                   |  | 119,051,733      |  |  | 119,052       |  |  | 43,852,378       |   |  | (44,200,563 | ) |  | 43,322          |   |  | (185,811                    | )
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|Balance January 1, 2009                     |  | 119,051,733      |  |  | 119,052       |  |  | 43,852,378       |   |  | (44,200,563 | ) |  | 43,322          |   |  | (185,811                    | )
|Adoption of ASC 815-40                      |  | -                |  |  | -             |  |  | (9,679,775       | ) |  | 9,086,971   |   |  | -               |   |  | (592,804                    | )
|Reclassification warrants                   |  | -                |  |  | -             |  |  | 10,883,811       |   |  | -           |   |  | -               |   |  | 10,883,811                  |  
|Stock-based compensation                    |  | -                |  |  | -             |  |  | 4,475,953        |   |  | -           |   |  | -               |   |  | 4,475,953                   |  
|Currency translation adjustment             |  | -                |  |  | -             |  |  | -                |   |  | -           |   |  | 7,679           |   |  | 7,679                       |  
|Net loss for the year                       |  | -                |  |  | -             |  |  | -                |   |  | (21,618,015 | ) |  | -               |   |  | (21,618,015                 | )
|Balance December 31, 2009                   |  | 119,051,733      |  |  | 119,052       |  |  | 49,532,367       |   |  | (56,731,607 | ) |  | 51,001          |   |  | (7,029,187                  | )
|                                            |  |                  |  |  |               |  |  |                  |   |  |             |   |  |                 |   |  |                             |  
|Balance January 1, 2010                     |  | 119,051,733      |  |  | 119,052       |  |  | 49,532,367       |   |  | (56,731,607 | ) |  | 51,001          |   |  | (7,029,187                  | )
|Exercise of warrants                        |  | 150,000          |  |  | 150           |  |  | 88,350           |   |  | -           |   |  | -               |   |  | 88,500                      |  
|Reclassification warrants                   |  | -                |  |  | -             |  |  | 77,439           |   |  | -           |   |  | -               |   |  | 77,439                      |  
|Stock-based compensation                    |  | -                |  |  | -             |  |  | 2,412,161        |   |  | -           |   |  | -               |   |  | 2,412,161                   |  
|Currency translation adjustment             |  | -                |  |  | -             |  |  | -                |   |  | -           |   |  | -               |   |  | -                           |  
|Net loss for the period                     |  | -                |  |  | -             |  |  | -                |   |  | 83,011,315  |   |  | -               |   |  | 83,011,315                  |  
|Balance March 31, 2010                      |  | 119,201,733      |  |  | 119,202       |  |  | 52,110,317       |   |  | 26,279,708  |   |  | 51,001          |   |  | 78,560,228                  |  

---

8

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial
statements of Manas Petroleum Corporation ("Manas" or the Company") and its
subsidiaries (Group) for the three months ended March 31, 2010 have been
prepared in accordance with U.S. generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by U.S. generally accepted accounting principles for
complete financial statements. These condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and the
notes thereto, included in the Group's Annual Report on Form 10-K for the year
ended December 31, 2009.

In terms of the oil and gas industry lifecycle, the Company
considers itself to be an exploration stage company. Since it has not realized
any revenues from its planned principal operations, the Company presents its
financial statements in conformity with accounting principles generally accepted
in the United States of America (US GAAP) that apply in establishing operating
enterprises, i.e. development stage companies. As an exploration stage
enterprise, the Company discloses the deficit accumulated during the exploration
stage and the cumulative statements of operations and cash flows from inception
to the current balance sheet date.

The Company, formerly known as Express Systems Corporation, was
incorporated in the State of Nevada on July 9, 1988. The Group has a focused
strategy on exploration and developing oil and gas resources in Central Asia
(Kyrgyz Republic and subsidiary in Republic of Tajikistan), in the Balkan Region
(subsidiary in Albania) as well as in Latin America (subsidiary in Chile).

On April 10, 2007, the Company completed the Exchange
Transaction whereby it acquired its then sole subsidiary DWM Petroleum AG, Baar
(DWM) pursuant to an exchange agreement signed in November 2006 whereby 100% of
the shares of DWM were exchanged for 80,000,000 common shares of the Company. As
part of the closing of this exchange transaction, the Company issued 800,000
shares as finders fees at the closing price of $3.20.

The acquisition of DWM has been accounted for as a merger of a
private operating company into a non-operating public shell. Consequently, the
Company is the continuing legal registrant for regulatory purposes and DWM is
treated as the continuing accounting acquirer for accounting and reporting
purposes. The assets and liabilities of DWM remained at historic cost. Under US
GAAP in transactions involving the merger of a private operating company into a
non-operating public shell, the transaction is equivalent to the issuance of
stock by DWM for the net monetary assets of the Company, accompanied by a
recapitalization. The accounting is identical to a reverse acquisition, except
that no goodwill or other intangibles are recorded.

2. GOING CONCERN

The condensed consolidated financial statements have been
prepared on the assumption that the Group will continue as a going concern.

On February 24, 2010, we signed a formal share purchase
agreement and completed the sale of all of the issued and outstanding shares of
Manas Adriatic to Petromanas Energy Inc. (TSXV: PMI, formerly WWI Resources
Ltd.). As consideration for these shares, DWM Petroleum received CDN$2,000,000
($1,937,396) in cash on March 3, 2010 and 100,000,000 WWI Resources common
shares, in addition to the $917,723 advanced from WWI Resources in December
2009. Pursuant to the purchase agreement, DWM Petroleum is entitled to receive an aggregate of up to an
additional 150,000,000 WWI Resources common shares as follows:

---

9

- 100,000,000 WWI Resources common shares upon completion of the first well
  on the Albanian project by Manas Adriatic, or on the date that is 16 months
  after the Closing Date, whichever occurs first;
- 25,000,000 WWI Resources common shares if, on or before the tenth
  anniversary of the Closing Date, Manas Adriatic receives a report prepared
  pursuant to Canadas National Instrument 51- 101, Standards of Disclosure for
  Oil and Gas Activities, confirming that the Albanian project has 2P reserves
  of not less than 50,000,000 barrels of oil (BOE); and
- if, on or before the tenth anniversary of the Closing Date, Manas Adriatic
  receives a report prepared pursuant to Canadas National Instrument 51-101,
  Standards of Disclosure for Oil and Gas Activities, confirming that the
  Albanian project has 2P reserves in excess of 50,000,000 BOEs, then for each
  50,000,000 BOEs over and above 50,000,000 BOEs, WWI Resources will be required
  to issue 500,000 WWI common shares to DWM Petroleum to a maximum of 25,000,000
  WWI Resources common shares.

In addition, at closing WWI Resources funded Manas Adriatic
with $8,500,000 to be used by Manas Adriatic to repay advances made by DWM
Petroleum and its predecessors in respect of the Albanian project. The proceeds
from this repayment by Manas Adriatic GmbH to DWM Petroleum AG have been used by
our company to repay all of our debt securities prior to maturity.

Our cash balance as of March 31, 2010 was $3,236,525, of which
$935,362 has been restricted for a bank guarantee for the first phase of our
work program in Albania (covering the seismic and geological and geographical
(G&G) costs in Albania) leaving a balance of $2,301,163. The Groups net
income since inception until March 31, 2010 were $ 17,211,438, which during the
three months period ended March 31, 2010, was positively affected by $57,850,918
gain from sale of Manas Adriatic GmbH and unrealized gain of $28,812,901 from
change in fair value of the investment in Petromanas. Without these two
positions, the Groups net loss since inception until March 31, 2010 would
amount to $69,452,381. Cash flow used in operating activities since inception
until March 31, 2010 amounts to $28,170,872.

Based on our business plan, in the next 12 months, we will need
$5,300,000 to fund our operations. In the month of April we have roughly
obtained $2,225,000 through warrants exercises and in May $875,000 through the
release of a bank guarantee and have sufficient working capital to fund
operations for the next twelve months.

Given our balance of cash and cash equivalents as of March 31,
2010 we do not expect to need additional funding from external sources to cover
our monthly burn rate of $200,000 and minimum commitments before April 2011.

In order to continue to implement the geological work program
for our projects particularly in Central Asia and to finance continuing
operations, the Group will require further funds. We expect these funds will be
raised through additional equity and/or debt financing. If we are not able to
raise the required funds, we would consider farming-out projects in order to
reduce our financial commitments. Any additional equity financing may be
dilutive to shareholders, and debt financing, if available, will increase
expenses and may involve restrictive covenants. The Company will be required to
raise additional capital on terms which are uncertain, especially under the
current capital market conditions. Under these circumstances, if the Company is
unable to obtain capital or is required to raise it on undesirable terms, it may
have a material adverse effect on the Company's financial condition.

---

10

3. ACCOUNTING POLICIES

The Groups condensed consolidated financial statements are
prepared in accordance with US GAAP. The preparation of financial statements in
conformity with US GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities and disclosures, if any,
of contingent assets and liabilities at the date of the financial statements.
Actual results could differ from these estimates.

The accompanying financial data as of March 31, 2010 and
December 31, 2009 and for the three months ended March 31, 2010 and 2009 and for
the period from inception, May 25, 2004, to March 31, 2010 has been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC).

The complete accounting policies followed by the Group are set
forth in Note 3 to the audited consolidated financial statements contained in
the Group's Annual Report on Form 10-K for the year ended December 31, 2009.

In the opinion of management, all adjustments (which include
normal recurring adjustments, except as disclosed herein) necessary to present a
fair statement of financial position as of March 31, 2010 and December 31, 2009,
results of operations for the three months ended March 31, 2010 and 2009 and for
the period from inception, May 25, 2004, to March 31, 2010, cash flows for the
three months ended March 31, 2010 and 2009 and for the period from inception,
May 25, 2004, to March 31, 2010 and statement of shareholders equity (deficit)
for the period from inception, May 25, 2004, to March 31, 2010, as applicable,
have been made. The results of operations for the three months ended March 31,
2010 are not necessarily indicative of the operating results for the full fiscal
year or any future periods.

4. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB issued FASB ASC 810-10 (prior
authoritative literature SFAS No. 167, Amendments to FASB Interpretation
(FIN) No. 46(R),) which changes how a reporting entity determines when an
entity that is insufficiently capitalized or is not controlled through voting
(or similar rights) should be consolidated. The determination of whether a
reporting entity is required to consolidate another entity is based on, among
other things, the other entitys purpose and design and the reporting entitys
ability to direct the activities of the other entity that most significantly
impact the other entitys economic performance. FASB ASC 810-10 will require a
reporting entity to provide additional disclosures about its involvement with
variable interest entities and any significant changes in risk exposure due to
that involvement. A reporting entity will be required to disclose how its
involvement with a variable interest entity affects the reporting entitys
financial statements. FASB ASC 810-10 is effective for fiscal years beginning
after November 15, 2009, and interim periods within those fiscal years. The
Company adopted FASB ASC 810-10 as of January 1, 2010 and its application had no
impact on the Companys condensed consolidated financial statements.

In April 2010, the FASB issued ASU 2010-13, "Compensation -
Stock Compensation (Topic 718) -Effect of Denominating the Exercise Price of a
Share-Based Payment Award in the Currency of the Market in Which the Underlying
Equity Security Trades." ASU 2010-13 provides amendments to Topic 718 to clarify
that an employee share-based payment award with an exercise price denominated in
the currency of a market in which a substantial portion of the entity's equity
securities trades should not be considered to contain a condition that is not a
market, performance, or service condition. Therefore, an entity would not
classify such an award as a liability if it otherwise qualifies as equity. The
amendments in ASU 2010-13 are effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2010. The adoption
of this standard will not have an effect on our results of operation or our
financial position.

---

11

In January 2010, the FASB issued ASU No. 2010-06, Improving
Disclosures about Fair Value Measurements, which requires additional
disclosures about the amounts of and reasons for significant transfers in and
out of Level 1 and Level 2 fair value measurements. This standard also clarifies
existing disclosure requirements related to the level of disaggregation of fair
value measurements for each class of assets and liabilities and disclosures
about inputs and valuation techniques used to measure fair value for both
recurring and non-recurring Level 2 and Level 3 measurements. The Company
included the required additional disclosure for Level 2 fair value measurements
as of the first quarter of 2010.

5. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

|                                |  |               |  |  |               |  |  |               |  |  |             |  |  | USD       |  |  |                | 
|------------------------------- |  | ------------- |  |  | ------------- |  |  | ------------- |  |  | ----------- |  |  | --------- |  |  | -------------- | 
|                                |  |               |  |  |               |  |  |               |  |  | USD (held   |  |  | TOTAL     |  |  | USD            | 
|                                |  | USD (held     |  |  | USD (held     |  |  | USD (held     |  |  | in other    |  |  | March 31, |  |  | TOTAL Dec      | 
|                                |  | in
      USD) |  |  | in
      EUR) |  |  | in
      CHF) |  |  | currencies) |  |  | 2010      |  |  | 31,
      2009 | 
|Bank and postal accounts        |  | 2,269,219     |  |  | 769           |  |  | 21,558        |  |  | 9,616       |  |  | 2,301,163 |  |  | 804,663        | 
|Cash and Cash
      Equivalents |  | 2,269,219     |  |  | 769           |  |  | 21,558        |  |  | 9,616       |  |  | 2,301,163 |  |  | 804,663        | 

Cash and cash equivalents are available at the Groups own
disposal, and there is no restriction or limitation on withdrawal and/or use of
these funds. The Groups cash equivalents are placed with high credit rated
financial institutions. The carrying amount of these assets approximates their
fair value.

6. TANGIBLE FIXED ASSETS

|2010                                        |  | Office Equipment & |   |  | Vehicles |   |  | Leasehold    |   |  | Total    |  
|------------------------------------------- |  | ------------------ | - |  | -------- | - |  | ------------ | - |  | -------- | -
|                                            |  | Furniture          |   |  |          |   |  | Improvements |   |  |          |  
|                                            |  | USD                |   |  | USD      |   |  | USD          |   |  | USD      |  
|Cost at January 1                           |  | 144,196            |   |  | 127,379  |   |  | 47,375       |   |  | 318,950  |  
|Additions                                   |  | 880                |   |  | -        |   |  | -            |   |  | 880      |  
|Deconsolidation of Manas Adriatic           |  | (27,526            | ) |  | (37,879  | ) |  | -            |   |  | (65,405  | )
|Cost at March
      31                      |  | 117,550            |   |  | 89,500   |   |  | 47,375       |   |  | 254,425  |  
|                                            |  |                    |   |  |          |   |  |              |   |  |          |  
|Accumulated
      depreciation at January 1 |  | (68,088            | ) |  | (53,077  | ) |  | (19,593      | ) |  | (140,758 | )
|Depreciation                                |  | (7,288             | ) |  | (6,552   | ) |  | (2,369       | ) |  | (16,209  | )
|Deconsolidation of
      Manas Adriatic     |  | 16,768             |   |  | 12,291   |   |  | -            |   |  | 29,059   |  
|Accumulated depreciation at March 31        |  | (58,608            | ) |  | (47,340  | ) |  | (21,962      | ) |  | (127,908 | )
|                                            |  |                    |   |  |          |   |  |              |   |  |          |  
|Net book value at March 31                  |  | 58,942             |   |  | 42,160   |   |  | 25,413       |   |  | 126,516  |  

Depreciation expense for the three months period ended March
31, 2010 and 2009 were $16,209 and $16,495, respectively.

---

12

7. STOCK COMPENSATION PROGRAM

On May 1, 2007 the Board of Directors approved the granting of
stock options according to a Nonqualified Stock Option Plan. This stock option
plan has the purpose (a) to ensure the retention of the services of existing
executive personnel, key employees, and Directors of the Company or its
affiliates; (b) to attract and retain competent new executive personnel, key
employees, consultants and Directors; (c) to provide incentive to all such
personnel, employees, consultants and Directors to devote their utmost effort
and skill to the advancement and betterment of the Company, by permitting them
to participate in the ownership of the Company and thereby in the success and
increased value of the Company; and (d) allowing vendors, service providers,
consultants, business associates, strategic partners, and others, with or that
the Board of Directors anticipates will have an important business relationship
with the Company or its affiliates, the opportunity to participate in the
ownership of the Company and thereby to have an interest in the success and
increased value of the Company.

This plan constitutes a single omnibus plan, the Nonqualified
Stock Option Plan (NQSO Plan) which provides grants of nonqualified stock
options (NQSOs). The maximum number of shares of common stock that may be
purchased under the plan is 20,000,000.

On February 24, 2010, we re-priced an aggregate of 4,350,000
stock options originally granted to three of our directors and/or officers on
May 2, 2007 from an original exercise price of $4.00 to $0.70. We also repriced
400,000 stock options granted to one of our directors and officers on June 25,
2007 from an original exercise price of $5.50 to $0.70.

On February 24, 2010, we granted stock options to a director of
one of our subsidiaries to purchase an aggregate of 1,000,000 shares of our
common stock at an exercise price of $0.70 per share for a term expiring
February 22, 2015. The options vest in 12 quarterly installments, subject to
proration to account for any partial calendar quarter at the beginning of the
vesting period, with the first installment to vest on the first day of the first
full calendar quarter after the date of the optionees stock option agreement,
and with each subsequent installment to vest on the first day of each calendar
quarter thereafter. The grant is subject to the execution of stock option
agreements by the optionees and the terms of our 2008 stock option plan.

The fair value of all of the options was determined using the
Black-Scholes option pricing model applying the weighted average assumptions
noted in the following table.

|                          |  | Three months period ended | 
|------------------------- |  | ------------------------- | 
|                          |  | March 31, 2010            | 
|Expected dividend yield   |  | 0%                        | 
|Expected
      volatility |  | 90%                       | 
|Risk-free interest rate   |  | 1.838%                    | 
|Expected term (in years)  |  | 3.5                       | 

* no options have been granted during the three months period
ended March 31, 2009

The expected volatility is based on a peer group of companies
in a similar or the same industry, and with whom the Company is of a comparable
size and life cycle stage, for a period equal to the expected term of the
options. During the three months ended March 31, 2010, the weighted average fair
value of options granted was $0.61 at the grant date.

The following table summarizes the Company's stock option
activity for the nine months ended March 31, 2010:



---

13

|                                 |  | **Shares under** |   |  | **Weighted-**            |  |  | **Weighted-**    |  |  | **Aggregate**       | 
|-------------------------------- |  | ---------------- | - |  | ------------------------ |  |  | ---------------- |  |  | ------------------- | 
|**Options**                      |  | **option**       |   |  | **average
    exercise** |  |  | **average**      |  |  | **intrinsic value** | 
|                                 |  |                  |   |  | price                    |  |  | remaining        |  |  |                     | 
|                                 |  |                  |   |  |                          |  |  | contractual term |  |  |                     | 
|Outstanding at December 31, 2009 |  | 10'150'000       |   |  | 2.12                     |  |  |                  |  |  |                     | 
|Cancellation (repricing)         |  | (4'750'000       | ) |  | 4.13                     |  |  |                  |  |  |                     | 
|Re-granted (repricing)           |  | 4'750'000        |   |  | 0.70                     |  |  |                  |  |  |                     | 
|Granted                          |  | 1'000'000        |   |  | 0.70                     |  |  |                  |  |  |                     | 
|Exercised                        |  | -                |   |  |                          |  |  |                  |  |  |                     | 
|Forfeited or expired             |  | -                |   |  |                          |  |  |                  |  |  |                     | 
|Outstanding at March 31, 2010    |  | 11'150'000       |   |  | 0.53                     |  |  | 5.06             |  |  | 1'897'000           | 
|Exercisable at March 31, 2010    |  | 6'190'144        |   |  | 0.60                     |  |  | 5.33             |  |  | 583'219             | 

For the three months period ended March 31, 2010 and 2009, the
Company recorded a total charge of $2,412,161 and $1,418,191 respectively, with
respect to equity awards granted under the stock compensation and stock option
plans. For the three months period ended March 31, 2010 $813,430 and $157,410
were recorded in personnel costs and consulting fees, respectively, and
$1,441,321 relate to the incremental fair value of the vested options due to the
repricing from February 24, 2010 which were recorded in personnel costs as well.
During the comparable period in 2009 the stock based compensation expenses all
of the charges were recorded in personnel costs.

A summary of the status of the Companys non-vested shares as
of March 31, 2010 and changes during the period is presented below:

|                               |  |              |   |  | Weighted-  | 
|------------------------------ |  | ------------ | - |  | ---------- | 
|                               |  |              |   |  | average    | 
|                               |  | Shares under |   |  | grant date | 
|Nonvested
      options        |  | option       |   |  | fair value | 
|Nonvested at December 31, 2009 |  | 4,838,097    |   |  | 0.35       | 
|Granted                        |  | 1,000,000    |   |  | 0.61       | 
|Vested                         |  | (878,241     | ) |  | 0.92       | 
|Forfeited                      |  | -            |   |  | 0.00       | 
|Nonvested at March 31, 2010    |  | 4,959,856    |   |  | 0.31       | 

As of March 31, 2010, there was $605,397 of total unrecognized
compensation cost related to non-vested share-based compensation arrangements
granted under the Plans. That cost is expected to be recognized over a
weighted-average period of 1.86 years.

8. DEBENTURE

On April 30, 2008, the Company successfully negotiated a
mezzanine tranche of bridge financing and raised $4,000,000 through the issuance
of 4,000 debenture notes (Debentures) of $1,000 each and 1,000,000 detachable
warrants. The warrants are exercisable to purchase the Companys unregistered
common shares at $2.10 per share and will expire on April 30, 2010. The net
proceeds after paying a finders fee were $3,790,000. The Debentures bear an
interest of 8% per annum payable twice a year (June and December) and are due
and payable in full two years from the date of issuance (April 30, 2010). The
Debentures can be prepaid along with any unpaid interest at the Companys
request without prepayment premium or penalty. The Debentures can be converted
into unregistered common shares at any time on demand of the holder at a
conversion price based upon the average price of the 20 days trading price prior
to conversion. The conversion price of 2,000 of the Debentures is subject to a
floor of $1.00 per share. Interest can be paid in the equivalent amount of
unregistered common shares of the Company. If the Company issues shares for proceeds in excess of $40,000,000,
then up to 50% of the proceeds are required to be used to pay down the
Debentures.

---

14

The aggregate proceeds received have been allocated between the
detachable warrants and the Debentures on a relative fair value basis.
Accordingly, $240,000 was credited to additional paid in capital with respect to
the warrants.

At the date of issuance the conversion price determined in
accordance with the Debenture agreement was less than the actual share price on
the issuance date. This resulted in a beneficial conversion feature of $557,989,
which has been amortized using the effective interest rate method and recorded
as part of interest expense over the term of the Debenture.

Debt issuance costs of $210,000 were incurred and will be
amortized over the term of the Debentures using the effective interest rate
method.

On March 9, 2010, we have prior to its maturity fully repaid
the principal and interest accrued.

For the three month period ended March 31, 2010 we had interest
expense on debentures of $78,974 and $97,265 for the comparable period in the
previous year. At March 31, 2010 and December 31, 2009, the unamortized debt
discount relating the Debentures amounted to $0 and $112,821, respectively. To
account for the unamortized debt discount prevailing at the date of settlement
we have recorded a loss on extinguishment of debenture of $33,847.

9. WARRANTS

In April 2008, the FASB issued FASB ASC 815-40 (Prior
authoritative literature:Emerging Issues Task Force (EITF) 07-05,
Determining whether an Instrument (or Embedded Feature) Is Indexed to an
Entitys Own Stock (EITF 07-05)). FASB ASC 815-40 provides guidance on
determining what types of instruments or embedded features in an instrument held
by a reporting entity can be considered indexed to its own stock for the purpose
of evaluating the first criteria of the scope exception in FASB ASC 815-10-15-74
(Prior authoritative literature: SFAS 133, paragraph 11(a)). FASB ASC
815-40 is effective for financial statements issued for fiscal years beginning
after December 15, 2008 (our fiscal year 2009). We adopted FASB ASC 815-40 on
the first day of our fiscal year 2009. Based on our analysis we determined that
69,966,707 out of the 73,966,707 warrants outstanding are not considered indexed
to the Companys own stock under FASB ASC 815-40 as the respective agreements
include reset features. Hence, we reclassified $592,804, comprising of an
adjustment of $(9,679,775) to additional paid in capital and $9,086,971 to
deficit accumulated during the exploration stage, from stockholders equity to a
short-term liability upon adoption. Additionally, the fair value of the warrants
subject to FASB ASC 815-40 are adjusted to fair market value at the end of each
reporting period. The impact of the adoption on net loss and on basic and
diluted loss per share for the periods ended March 31, 2009 was $500,165 and $0
respectively.

On April 10, 2009 17,526,881 Warrants from the Warrant A Equity
Series granted on April 10, 2007 expired unexercised.

On May 14, 2009 we asked each holder of the Warrants that had a
price protection clause to agree to amend their Warrants to delete the price
protection clause. As and when any of the holders of these Warrants agree to the
proposed amendment, we will provide them with an amended Warrant certificate
that shows the price protection clause as having been deleted. As of March 31,
2010, the following Warrant agreements have been amended and, in accordance with
FASB ASC 815-40, needed to be reclassified as stockholders equity:

---

15

|                               |  |                     |  |  |                    |  |  |                      |  |  |                      |  |   | Fair value at date of | 
|------------------------------ |  | ------------------- |  |  | ------------------ |  |  | -------------------- |  |  | -------------------- |  | - | --------------------- | 
|Warrant series                 |  | # of
      Warrants |  |  | Strike
      price |  |  | Grant
      date     |  |  | Expiry
      date    |  |   | reclassification      | 
|Warrant B Equity PP1           |  | 30,598,840          |  |  | 0.59               |  |  | April 10, 2007       |  |  | April 10, 2010       |  | $ | 8,101,860             | 
|Brokerage Warrant
      PP # 1 |  | 5,880,044           |  |  | 0.59               |  |  | April
      10, 2007 |  |  | April
      10, 2010 |  | $ | 1,930,710             | 
|Debenture Warrants             |  | 3,114,408           |  |  | 0.59               |  |  | April 30, 2008       |  |  | April 30, 2010       |  | $ | 722,288               | 
|Total warrants reclassified    |  |                     |  |  |                    |  |  |                      |  |  |                      |  | $ | 10,754,858            | 

|                                    |  |                   |  |  |                  |  |  |                    |  |   |                   |  |   | Fair value at date of | 
|----------------------------------- |  | ----------------- |  |  | ---------------- |  |  | ------------------ |  | - | ----------------- |  | - | --------------------- | 
|Warrant series 
      expired      |  | # of
    Warrants |  |  | Strike
    price |  |  | Grant
    date     |  |   | Expiry
    date   |  |   | reclassification      | 
|Brokerage Warrant PP # 2            |  | 139,958           |  |  | 0.59             |  |  | July 31, 2007      |  |   | July 31, 2009     |  | $ | 6,810                 | 
|Warrant Equity PP2
      31-07-2007 |  | 3,315,550         |  |  | 0.59             |  |  | July
    31, 2007  |  |   | July
    31, 2009 |  | $ | 199,582               | 
|Total                               |  |                   |  |  |                  |  |  |                    |  |   |                   |  | $ | 206,392               | 
|* expired unexercised July 31, 2009 |  |                   |  |  |                  |  |  |                    |  |   |                   |  |   |                       | 
|                                    |  |                   |  |  |                  |  |  |                    |  |   |                   |  |   |                       | 
|                                    |  |                   |  |  |                  |  |  | Total reclassified |  | $ | 10,961,250        | 

On July 31, 2009 7,692,798 Warrants from the Warrant Equity PP2
Series granted on July 31, 2007 expired unexercised.

On July 31, 2009 253,899 Warrants from the Brokerage Warrant
PP2 Series granted on July 31, 2007 expired unexercised.

As of March 31, 2010 and December 31, 2009, the Company had a
total of 48,343,129 and 48,493,129 warrants outstanding to purchase common
stock, respectively. Each warrant entitles the holder to purchase one share of
the Companys common stock. The Company has enough shares of common stock
authorized in the event that these warrants are exercised.

The following table summarizes information about the Companys
warrants outstanding as of March 31, 2010:

|Warrant
      series           |  | #
      of Warrants |  |  | Strike price |  |  | Grant date           |  |  | Expiry date          | 
|------------------------------ |  | ------------------- |  |  | ------------ |  |  | -------------------- |  |  | -------------------- | 
|Warrant B Equity PP1           |  | 34,903,763          |  |  | 0.59         |  |  | April 10, 2007       |  |  | April 10, 2010       | 
|Brokerage Warrant
      PP # 1 |  | 5,880,044           |  |  | 0.59         |  |  | April
      10, 2007 |  |  | April
      10, 2010 | 
|Debenture Warrants             |  | 3,559,322           |  |  | 0.59         |  |  | April 30, 2008       |  |  | April 30, 2010       | 
|Equity PP3 Sept
      2008     |  | 4,000,000           |  |  | 0.95         |  |  | September 1, 2008    |  |  | September 1, 2010    | 
|Total outstanding warrants     |  | 48,343,129          |  |  |              |  |  |                      |  |  |                      | 

The following table summarizes the Companys warrant activity
for the three months ended March 31, 2010:

|                                                             |  |              |   |  |               |   |  |                     |   |  | Weighted- | 
|------------------------------------------------------------ |  | ------------ | - |  | ------------- | - |  | ------------------- | - |  | --------- | 
|                                                             |  |              |   |  |               |   |  |                     |   |  | average   | 
|                                                             |  | Classifed as |   |  | Classified as |   |  |                     |   |  | exercise  | 
|Warrants                                                     |  | liability    |   |  | equity        |   |  | #
      of warrants |   |  | price     | 
|                                                             |  |              |   |  |               |   |  |                     |   |  |           | 
|Outstanding at December 31, 2009                             |  | 5,581,532    |   |  | 42,911,597    |   |  | 48,493,129          |   |  | 0.62      | 
|Granted                                                      |  | -            |   |  | -             |   |  | -                   |   |  |           | 
|Exercised                                                    |  | -            |   |  | (150,000      | ) |  | (150,000            | ) |  | 0.59      | 
|Reclassification
        upon amendment of warrant agreement |  | (681,695     | ) |  | 681,695       |   |  | -                   |   |  | 0.59      | 
|Forfeited or
        expired                                 |  | -            |   |  | -             |   |  | -                   |   |  | -         | 
|Outstanding at
        March 31, 2010                        |  | 4,899,837    |   |  | 43,443,292    |   |  | 48,343,129          |   |  | 0.62      | 

---

16

10. BANK LOAN/SHORT-TERM LOAN

On December 3, 2009, as part of ongoing negotiations on the
sale of the Albanian asset, WWI advanced $917,698 to the Company, which is due
on demand and free of interest. In case of a successful closing of the agreement
to sell the asset, the amount is considered part of the purchase price
consideration.

On December 31, 2009, we had a bank overdraft of $196,828 which
is due on demand and free of interest.

On February 24, 2010, our wholly-owned subsidiary DWM signed a
formal Share Purchase Agreement and completed the sale of all of the issued and
outstanding shares of Manas Adriatic to Petromanas Energy Inc. (Petromanas).
As a result of this transaction, the advanced $917,698 were deemed part of the
consideration and were recorded as a gain on sale on the income statement.

On March 3, 2010, we have repaid the bank overdraft of
$196,828.

As of March 31, 2010, we had no outstanding Bank
Loans/Short-Term Loans.

11. CONTINGENTLY CONVERTIBLE LOAN

On August 18, 2008, the Company issued contingently convertible
loans (the Loans) with a principal amount of $2,000,000 and disposed of 8% of
its interest in its operations in Mongolia related to Blocks 13 and 14 for
aggregate proceeds of $2,000,000. The net proceeds after paying finders fee were
$1,860,000. The Company is responsible for the Loan holders share of the
exploration costs attributable to Blocks 13 and 14 through phases 1, 2 and 3,
hereinafter referred to as the Participation Liability.

The Company has allocated part of the gross proceeds to a
Participation Liability for the exploration costs related to the 8% interest in
Blocks 13 and 14 in Mongolia provided to the unit holder. The Company has
estimated that there is a range of costs that could be incurred through
exploration phases 1, 2 and 3. The total minimum estimated spends for phase 1,
the only phase that is currently probable, is $4,000,000 and therefore, a
Participation Liability of $320,000 has been recorded. This liability was
reduced as expenses incurred and amounted to $0 as of December 31, 2009.

The Loans carry an interest rate of 8% per annum and all
principal and accrued interest is payable in full two years from the date of
issuance (August 18, 2010). The Loans are secured by the Groups assets in the
Kyrgyz Republic.

The principal and any accrued but unpaid interest on the Loans
are convertible, in whole or in part, at the option of the holders if the Group
conducts a public offering at the prevailing market price. The loan was
accounted for as a liability in accordance with FASB ASC 480-10-25 (Prior
authoritative literature:FAS150 Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity). Because the financial
instrument embodies a conditional obligation that the Company must or may settle
by issuing a variable number of equity shares and the monetary value of the
obligation is based on a fixed monetary amount known at inception.

---

17

The initial carrying amount of the Loans of $1,680,000 will be
accreted to the redemption amount of $2,000,000 over the term of the loans using
the effective interest method.

On March 9, 2010, we have prior to its maturity fully repaid
the principal and interest accrued.

For the three month period ended March 31, 2010 we had interest
expense on contingently convertible loan of $29,893 compared to $28,011 for the
comparable previous year period. At March 31, 2010 and December 31, 2009, the
unamortized debt discount relating the contingently convertible loan amounted to
$0 and $113,095, respectively. To account for the unamortized debt discount we
have recorded $83,202 in loss on extinguishment of contingently convertible
loan.

12. PROMISSORY NOTE

On December 5, 2008, the Company borrowed $540,646 from four
Directors at no discount to the principal amount by selling promissory notes to
shareholders (Shareholder Notes). The parties agreed that no interest shall
accrue on the Shareholder Notes unless the Company breaches the repayment
schedule. The repayment of the principal amount of the Shareholder Notes has to
occur if the Company raises greater than $1,000,000 in financing or 90 days
after written demand for repayment by the Shareholder Notes holder, whichever is
first. The Company may also repay any or all of the principal amount of the
Shareholder Notes at any time without notice, bonus or penalty. In the event
that the Company fails to make a payment when it is due, the Company will pay
interest on the outstanding principal amount of the Shareholder Notes at the
rate of 12% per annum until the Shareholder Notes are paid in full. On May 1,
2009, received $1,000,000 in financing. Therefore, as the payment falls due
immediately, but so far has not been paid yet, interest is being accrued.

For the three months ended March 31, 2010 and 2009, we recorded
$11,198 and $0 interest expense. On March 9, 2010, we have fully repaid the
principal of $540,646 and a total interest accrued of $54,568.

13. SALE OF MANAS ADRIATIC

On February 24, 2010, we signed a formal share purchase
agreement and completed the sale of all of the issued and outstanding shares of
Manas Adriatic to WWI Resources. As consideration for these shares, DWM
Petroleum received CDN$2,000,000 ($1,937,396) in cash on March 3, 2010 and
100,000,000 WWI Resources common shares. Pursuant to the purchase agreement, DWM
Petroleum is entitled to receive an aggregate of up to an additional 150,000,000
WWI Resources common shares as follows:

- 100,000,000 WWI Resources common shares upon completion of the first well
  on the Albanian project by Manas Adriatic, or on the date that is 16 months
  after the Closing Date, whichever occurs first;
- 25,000,000 WWI Resources common shares if, on or before the tenth
  anniversary of the Closing Date, Manas Adriatic receives a report prepared
  pursuant to Canadas National Instrument 51- 101, Standards of Disclosure for
  Oil and Gas Activities, confirming that the Albanian project has 2P reserves
  of not less than 50,000,000 barrels of oil (BOE); and

---

18

- if, on or before the tenth anniversary of the Closing Date, Manas Adriatic
  receives a report prepared pursuant to Canadas National Instrument 51-101,
  Standards of Disclosure for Oil and Gas Activities, confirming that the
  Albanian project has 2P reserves in excess of 50,000,000 BOEs, then for each
  50,000,000 BOEs over and above 50,000,000 BOEs, WWI Resources will be required
  to issue 500,000 WWI common shares to DWM Petroleum to a maximum of 25,000,000
  WWI Resources common shares.

In addition, at closing WWI Resources funded Manas Adriatic
with $8,500,000 to be used by Manas Adriatic to repay advances made by DWM
Petroleum and its predecessors in respect of the Albanian project.

At closing, WWI Resources changed its name to Petromanas Energy
Inc. (TSXV: PMI) and it appointed to its six member board of directors three
directors nominated by our company (Michael Velletta, Heinz Scholz and
Peter-Mark Vogel). In addition, and also at closing, the board of directors of
Petromanas appointed Erik Herlyn (our Chief Executive Officer) and Ari Muljana
(our Chief Financial Officer) as the Chief Executive Officer and Chief Financial
Officer, respectively, of Petromanas.

Contemporaneously with the completion of its purchase of Manas
Adriatic, Petromanas completed a private placement offering in which it sold
100,000,000 of its common shares for gross proceeds of CDN$25,000,000
(approximately $24,518,000). After adjustment for the 100,000,000 common shares
issued to DWM Petroleum at the completion of the sale of Manas Adriatic and the
100,000,000 common shares issued in this private placement, Petromanas had
328,231,466 common shares issued and outstanding, of which DWM Petroleum owns
100,000,000, or approximately 30.47% .

We have analyzed whether we have obtained control over
Petromanas by considering the resulting management of Petromanas, governing body
of Petromanas, undiluted and diluted voting interest, the terms of the exchange
of equity interest and the relative size of Petromans and Manas Adriatic. Based
on this analysis we concluded that:

- Manas Petroleum Corporation does not have majority voting interest in
  Petromanas (DWM, a wholly-owned subsidiary of Manas Petroleum Corporation,
  holds 100,000,000 outstanding shares of Petromanas, and another 100,000,000
  shares are issuable at the earlier of 16 months or the completion of the
  drilling of the first well in Albania, i.e. DWM holds 30.47% or 46.70% of
  Petromanas). We also determined that Manas shareholders do not represent the
  majority shareholders.
- Manas Petroleum Corporation does not have a majority in the Board, nor does
  it have the ability to appoint, elect or remove a Director
- Two out of three executive officers are current officers of Manas, which
  due to conflicts of interest are subject to change in near future.
- Regarding the terms of the exchange of equity interests we concluded that
  no assessment can be made concerning whether or not a significant premium was
  paid by either party
- Regarding the relative size of Petromanas and Manas Adriatic, we concluded
  that both entities are small and have not yet generated any revenue and that
  neither one of the entities is significantly larger than the other.

Based on the above, Manas Petroleum Corporation did not obtain
control over Petromanas.

The transaction therefore is accounted for in accordance with
ASC 810-10-40, which results in a derecognition of the subsidiary Manas Adriatic
GmbH in exchange for cash consideration received, liabilities assumed and
200,000,000 of Petromanas common shares. The shares of Petromanas are traded on
the TSX-V, which we deem an active market and we therefore believe that the
quoted market price of the Petromanas share (PMI.V) is generally a readily
determinable fair value and it can be taken as a basis for the calculation of
the fair value.

---

19

We reached this conclusion based on an assessment on the
following criteria:

- The shares are traded in a foreign market of breadth and scope comparable
  to the OTCBB, which according to ASC 820 provides readily determinable fair
  value for equity securities;
- Bid/ask-spreads are narrow; and
- Trading activity is regular and frequent.

Since the shares are held in escrow and are subject to a four
months holding period and an escrow release schedule, we deem the shares as a
Level 2 input for the calculation of the fair value in accordance with ASC 820
(Fair value measurements and disclosures). We apply an annual discount rate of
12% on the quoted market price based on the time before the shares become freely
tradable. The discount rate is an estimate of the cost of capital, based on
previous long-term debt the company has issued.

|Release
      Dates                        | Percentage of Total Escrowed Securities to be
      Released
|------------------------------------------ | ------------------------------------------------------------
|At the time of the Final Exchange Bulletin | 10% of the escrow securities                                
|6 months from the Final Exchange Bulletin  | 15% of the escrow securities                                
|12 months from the Final Exchange Bulletin | 15% of the escrow securities                                
|18 months from the Final Exchange Bulletin | 15% of the escrow securities                                
|24 months from the Final Exchange Bulletin | 15% of the escrow securities                                
|30 months from the Final Exchange Bulletin | 15% of the escrow securities                                
|36 months from the Final Exchange Bulletin | 15% of the escrow securities                                

Each escrowed and issued share entitles Manas Petroleum
Corporation to exercise voting rights and each escrowed and issued share
corresponds to one vote.

The 50,000,000 additional Petromanas common shares which are
issuable upon achievement of certain conditions (see above (i) and (ii)) will be
accounted for in accordance with ASC 450 (Contingencies). These are contingent
and will only be recognized when realized.

A gain on sale of asset is recognized on the statement of
operations under non-operating income and is calculated according to ASC
810-10-40 as the difference between the fair value of the consideration received
and the carrying amount of Manas Adriatic GmbHs assets and liabilities
resulting in a gain on sale of subsidiary:

|                                                                                                                                                         |                                                                                                                                                                                             | USD                                                                                                            
|-------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------
|Cash                                                                                                                                                     | CDN$ 2,000,000                                                                                                                                                                              | $1'937'396                                                                                                     
|Cash Advance Payment                                                                                                                                     |                                                                                                                                                                                             | $917'698                                                                                                       
|Cash Receivable subsequent to March 31,
      2010                                                                                                       | compensation for operational
      expenses for January and February in Albania to be born by Petromanas                                                                                    | $350'000                                                                                                       
|100,000,000 WWI Resources common shares received on March 3,
      2010                                                                                  | 100,000,000 times quoted market
      price at February 25, 2010 of CDN$0.30 (dilution of issuable 100,000,000
      shares below included) discounted by an effective discount of 16.23%*  | CDN$0.30 x 100,000,000 
      (USD / CAD : 0.94763 on Feb 25, 2010)
      on Feb 25, 2010) discounted by 16.23%
|                                                                                                                                                         |                                                                                                                                                                                             | $23'815'101                                                                                                    
|100,000,000 WWI
      Resources common shares that will
      be received the latest after 16 months after the Closing date and are not
      contingent | 100,000,000 times quoted market 
      price at February 25,
      2010 of CDN$0.30 (dilution of issuable 100,000,000 shares included)
      discounted by an effective discount of 20.53%* | CDN$0.30 x 100,000,000 
      (USD / CAD : 0.94763 on Feb 25, 2010) on Feb 25, 2010)
      discounted by 20.53%
|                                                                                                                                                        
|$22'591'720                                                                                                                                             
|50,000,000 WWI Resources common shares
      which are contingent.                                                                                       | These will be accounted for
      under ASC 450  that is an acceptable approach under EITF 09-4. As this is a
      gain contingency it will only be recorded when it can be realized.      | $0                                                                                                             
|Push down of past exploration costs
      incurred as per agreement                                                                                      |                                                                                                                                                                                             | $7'012'222                                                                                                     
|Forgiveness of IC payables                                                                                                                               |                                                                                                                                                                                             | Total liabilities Manas Adriatic GmbH $(11,949,704)
      Assumed liabilities by Petromanas $8,500,000         
|                                                                                                                                                         |                                                                                                                                                                                             | $(3'449'704)                                                                                                   
|Net liabilities of Manas Adriatic GmbH as
      of 2/24/2010                                                                                             |                                                                                                                                                                                             | $4'676'485                                                                                                     
|Gain on sale of subsidiary                                                                                                                               |                                                                                                                                                                                             | $57'850'918                                                                                                    

---

20

* The quoted market price on February 25, 2010 was CAD $0.39.
In calculating the fair value per share we have taken into account the dilution
effect of the additional 100,000,000 shares that are issuable 16 months after the
closing date the latest. Furthermore, the shares are subject to an escrow
agreement and their fair value was therefore discounted based on the escrow
release schedule. The annual interest rate applied to discount the diluted
quoted market price was 12% and represents cost of opportunity at which the
Company may raise debt.

In the period ended March 31, 2010, net cash proceeds from the
sale of Manas Adriatic GmbH amount to the total of CAD $2,000,000 ($1,937,396),
$8,500,000 to be used by Manas Adriatic to repay advances made by DWM Petroleum,
reduced by $21,586, the cash owned by Manas Adriatic consolidated as of February
24, 2010.

14. INVESTMENT IN PETROMANAS

On February 24, 2010, our wholly-owned subsidiary DWM signed a
formal Share Purchase Agreement and completed the sale of all of the issued and
outstanding shares of Manas Adriatic to Petromanas Energy Inc. (Petromanas).
As a result of this transaction, the Company owns 100,000,000 common shares of
Petromanas, received on March 3, 2010, and another 100,000,000 common shares
will be received upon completion of the first well on the Albanian project by
Manas Adriatic, or on the date that is 16 months after the closing date of the
transaction, whichever occurs first. As of this reporting date, DWM holds 30.47%
of Petromanas. Refer to Note 13 for details on the initial measurement. Due to
timing differences in regulatory reporting we have elected the fair value option
in accordance with ASC 820 for the subsequent measurement of the equity
investment in Petromanas. The Petromanas financials are not readily available as
of this balance sheet date and therefore the summarized financial information of
the associate as required under APB18 is not disclosed herein. The shares of
Petromanas are traded on the TSX-V, which we deem an active market and we
therefore believe that the quoted market price of the Petromanas share (PMI.V)
is generally a readily determinable fair value and it can be taken as a basis
for the calculation of the fair value. Since the shares are held in escrow and
are subject to a four months holding period and an escrow release schedule, we deem the
shares a Level 2 input for the calculation of the fair value in accordance with
ASC 820 (Fair value measurements and disclosures). We apply an annual discount
rate of 12% on the quoted market price based on the time before the shares
become freely tradable. The discount rate is an estimate of the cost of capital,
based on previous long-term debt the company has issued.

---

21

The quoted market price of Petromanas on March 31, 2010 was CAD
$0.60. In calculating the fair value per share we have taken into account the
dilution effect of the additional 100,000,000 shares that are issuable 16 months
after the closing date the latest. Furthermore, the shares are subject to an
escrow agreement and their fair value was therefore discounted based on the
escrow release schedule. The effective discount applied on the quoted market
price of the restricted shares is 16.7% .

During the three months ended March 31, 2010, we have recorded
$28,812,901 unrealized gain on investment.

15. RELATED PARTY DISCLOSURE

The consolidated financial statements include the financial
statements of Manas Petroleum Corporation and the entities listed in the
following table:

|                                                         |  |                       |  |  | Equity share |  |  | Equity share | 
|-------------------------------------------------------- |  | --------------------- |  |  | ------------ |  |  | ------------ | 
|                                                         |  | Country               |  |  | Mar 31, 2010 |  |  | Dec 31, 2009 | 
|DWM Petroleum AG, Baar (1)                               |  | Switzerland           |  |  | 100%         |  |  | 100%         | 
|Manas Petroleum
      AG, Baar (2)                       |  | Switzerland           |  |  | 100%         |  |  | 100%         | 
|Petromanas Energy Inc., Vancouver (3)                    |  | Canada                |  |  | 30%          |  |  | n/a          | 
|CJSC South
      Petroleum Company, Jalalabat (4)        |  | Kyrgyz
      Republic |  |  | 25%          |  |  | 25%          | 
|CJSC Somon Oil Company, Dushanbe (5)                     |  | Rep of Tajikistan     |  |  | 90%          |  |  | 90%          | 
|Manas Petroleum of
      Chile Corporation, Victoria (6) |  | Canada                |  |  | 100%         |  |  | 100%         | 
|Manas Management Services Ltd., Nassau (7)               |  | Bahamas               |  |  | 100%         |  |  | 100%         | 
|Manas Chile
      Energia Limitada, Santiago (8)         |  | Chile                 |  |  | 100%         |  |  | 100%         | 
|Gobi Energy Partners LLC, Ulaan Baator (9)               |  | Mongolia              |  |  | 84%          |  |  | 84%          | 
|Manas Adriatic
      GmbH, Baar (10)                     |  | Switzerland           |  |  | n/a          |  |  | 100%         | 

(1) Included Branch in Albania was sold in February 2010
(2) Founded in 2007(3) Petroleum Energy Inc. 30.47% share resulted from
partial sale of Manas Adriatic GmbH; equity method investee that is not
consolidated (4) CJSC South Petroleum Company was founded by DWM Petroleum
AG; equity method investee that is not consolidated (5) CJSC Somon Oil
Company was founded by DWM Petroleum AG(6) Founded in 2008 (7) Founded
in 2008(8) Manas Chile Energia Limitada was founded by Manas Management
Services Ltd.; founded in 2008(9) Gobi Energy Partners LLC was founded by
DWM Petroleum AG (former Manas Gobi LLC); founded in 2009 (10) Manas
Adriatic GmbH was founded by DWM Petreleum AG in 2009 and sold in 2010

Ownership and voting right percentages in the subsidiaries
stated above are identical to the equity share.

The following table provides the total amount of transactions,
which have been entered into with related parties for the relevant financial
period:

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22

|Board of directors                                                                           |  | 01.01.-03.31.10 |  |  | 01.01.-03.31.09 | 
|-------------------------------------------------------------------------------------------- |  | --------------- |  |  | --------------- | 
|                                                                                             |  | USD             |  |  | USD             | 
|Payments to directors for office rent                                                        |  | 6,000           |  |  | 14,923          | 
|Payments to related companies controlled by directors for
      rendered consulting services |  | 76,708          |  |  | 89,700          | 
|Interest on
      Promissory notes from directors*                                           |  | 4,843           |  |  | -               | 
|Interest on Promissory notes from former directors*                                          |  | 6,355           |  |  | -               | 
|                                                                                             |  | 03.31.10        |  |  | 12.31.09        | 
|                                                                                             |  | USD             |  |  | USD             | 
|Promissory notes
      from directors*                                                       |  | -               |  |  | 233,812         | 
|Promissory notes from former directors*                                                      |  | -               |  |  | 306,834         | 

* The promissory notes principal and accrued interest were
repaid during the first quarter in 2010. No interest accrued prior to May 1,
2009.

16. COMMITMENTS & CONTINGENT LIABILITIES

Legal actions and claims (Kyrgyz Republic, Republic of
Tajikistan, Chile and Albania)

In the ordinary course of business, the associate/subsidiaries
or branches in the Kyrgyz Republic, Republic of Tajikistan, Mongolia, Chile and
Albania may be subject to legal actions and complaints. Management believes that
the ultimate liability, if any, arising from such actions or complaints will not
have a material adverse effect on the financial condition or the results of
future operations of the associate/subsidiaries in the Kyrgyz Republic, Republic
of Tajikistan, Mongolia, Chile and Albania.

During the initial phase of applying for our Chilean
Exploration license, a joint bidding group was formed with Manas, IPR and Energy
Focus. Each had a one-third interest. Of its own accord, Energy Focus left the
bidding group. Energy Focus prepared a side letter, which was signed by Manas
and IPR. By the terms of this side letter, Energy Focus was granted the option
to rejoin the consortium under certain conditions.

Even though Energy Focus has been asked many times to join the
group by contributing its prorated share of capital, they have failed to do so.
Despite this, Energy Focus claims that they are entitled to participate in the
consortium at any future time, not just under certain conditions. IPR and Manas
disagree with this interpretation.

No litigation has been commenced as of March 31, 2010. Manas
and IPR are firmly of the view that Energy Focus no longer has any right to join
the consortium, as the previously agreed-upon conditions are no longer valid.
While Energy Focus has not accepted this position, they have not commenced
litigation.

At March 31, 2010, there had been no legal actions against the
associate/subsidiaries or branches in the Kyrgyz Republic, Republic of
Tajikistan, Mongolia, Chile and Albania.

Management believes that the Group, including
associate/subsidiaries or branches in the Kyrgyz Republic, Republic of
Tajikistan, Mongolia, Chile and Albania are in substantial compliance with the
tax laws affecting its operations. However, the risk remains that relevant
authorities could take differing positions with regards to interpretative
issues.

17. PERSONNEL COSTS AND EMPLOYEE BENEFIT PLANS

Defined benefit plan

The Company maintains a Swiss defined benefit plan for 3 of its
employees. The plan is part of an independent collective fund which provides
pensions combined with life and disability insurance. The assets of the funded plan are held independently of the
Companys assets in a legally distinct and independent collective trust fund
which serves various unrelated employers. The funds benefit obligations are
fully reinsured by AXA Winterthur Insurance Company. The plan is valued by
independent actuaries using the projected unit credit method. The liabilities
correspond to the projected benefit obligations of which the discounted net
present value is calculated based on years of employment, expected salary
increases, and pension adjustments.

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23

|                                |  | Three months period ended |  
|------------------------------- |  | ------------------------- | -
|Pension expense                 |  | March 31, 2010            |  
|                                |  | USD                       |  
|Net service cost                |  | 1,000                     |  
|Interest cost                   |  | 1,687                     |  
|Expected return on assets       |  | (1,307                    | )
|Amortization of net (gain)/loss |  | -                         |  
|Net periodic pension cost       |  | 1,380                     |  

During the three months period ended March 31, 2010 and 2009
the Company made cash contributions of approximately $6,000 and $20,000,
respectively to its defined benefit pension plan. The company does not expect to
make any additional cash contributions to its defined benefit pension plans
during the remainder of 2010.

18. FAIR VALUE MEASUREMENT

FASB ASC 820 (Prior authoritative literature:SFAS 157
Fair Value Measurements) establishes a three-tier fair value hierarchy,
which prioritizes the inputs used in measuring fair value. These tiers include:
Level 1, defined as observable inputs such as quoted prices in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable; and Level 3, defined as unobservable
inputs in which little or no market data exists, therefore requiring an entity
to develop its own assumptions. Financial assets and liabilities carried at fair
value as of March 31, 2010 are classified in one of the three categories as
follows:

|                                |   | **Level 1** |  |   | **Level 2** |  |   | Level 3 |  |   | Total      | 
|------------------------------- | - | ----------- |  | - | ----------- |  | - | ------- |  | - | ---------- | 
|                                |   |             |  |   |             |  |   |         |  |   |            | 
|Assets                          |   |             |  |   |             |  |   |         |  |   |            | 
|Investment Petromanas (Note 14) | $ | -           |  | $ | 75,219,722  |  | $ | -       |  | $ | 75,219,722 | 
|Total Assets                    | $ | -           |  | $ | 75,219,722  |  | $ | -       |  | $ | 75,219,722 | 
|                                |   |             |  |   |             |  |   |         |  |   |            | 
|Liabilities                     |   |             |  |   |             |  |   |         |  |   |            | 
|Warrants (Note 9)               | $ | -           |  | $ | -           |  | $ | 494,624 |  | $ | 494,624    | 
|Total Liabilities               | $ | -           |  | $ | -           |  | $ | 494,624 |  | $ | 494,624    | 

The following table summarizes the changes in the fair value of
the Companys level 2 financial assets and liabilities for the period ending
March 31, 2010:

|Balance at January 1, 2010                    |  | -              |  |  |    | 
|--------------------------------------------- |  | -------------- |  |  | -- | 
|Total gains (losses) realized and unrealized: |  |                |  |  |    | 
|Included in earnings                          |  | 28'812'901     |  |  | 2) | 
|Included in other comprehensive income        |  | -              |  |  |    | 
|Purchase, sale, or settlement                 |  | 46'406'821     |  |  | 1) | 
|Net transfer in / (out) of level 2            |  | -              |  |  |    | 
|**Balance at March 31,
      2010**           |  | **75'219'722** |  |  |    | 

---

24

1) Sale of Manas Adriatic GmbH (refer to Note 13)2)
Recorded inchange in fair value of investment in associate (refer to Note
14)

The following table summarizes the changes in the fair value of
the Companys level 3 financial assets and liabilities for the period ending
March 31, 2010:

Fair Value Measurement Using Level 3 Inputs

|Balance at January 1, 2010                                                | $ | 683,305   |   |  |   |  
|------------------------------------------------------------------------- | - | --------- | - |  | - | -
|Total gains (losses) realized and unrealized:                             |   |           |   |  |   |  
|Included in earnings,
      as a part of change in fair value of warrants |   | ($111,242 | ) |  | 1 | )
|Included in other comprehensive income                                    |   | -         |   |  |   |  
|Purchase, sale, or settlement                                             |   | ($77,439  | ) |  | 2 | )
|Net transfer in / (out) of level 3                                        |   | -         |   |  |   |  
|Balance at March 31, 2010                                                 | $ | 494,624   |   |  |   |  

1) Recorded in Change in fair value of warrants. 2)
Reclassification as equity instrument.

19. EARNINGS PER SHARE

Basic earnings per share are calculated using the Companys
weighted-average outstanding common shares. When the effects are not
anti-dilutive, diluted earnings per share is calculated using the
weighted-average outstanding common shares, participating securities and the
dilutive effect of all other stock-based compensation awards as determined under
the treasury stock method.

A reconciliation of shares used in calculating basic and
diluted earnings per share follows:

|                                                  |  | Three months period ended | 
|------------------------------------------------- |  | ------------------------- | 
|                                                  |  |                           | 
|                                                  |  | March 31, 2010            | 
|Basic weighted average shares outstanding         |  | 119,053,400               | 
|Effect of common
      stock equivalents*         |  |                           | 
|- stock options under employee compensation plans |  | 3,609,376                 | 
|- warrants                                        |  | 10,943,837                | 
|- contingently
      convertible loan             |  | -                         | 
|Diluted weighted average shares outstanding*      |  | 133,606,613               | 

*For the three months period ended March 31, 2009 and the
period from inception to March 31, 2010, dilutive earnings per share
calculations do not differ from basic earnings per share because the effects of
any potential common stock equivalents are anti-dilutive and therefore not
included in the calculation of dilutive earnings per share.

---

25

20. SUBSEQUENT EVENT(S)

There were no material events subsequent to March 31, 2010.

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26

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

Forward-Looking Statements

This quarterly report contains forward-looking statements.
Forward-looking statements are statements that relate to future events or future
financial performance. In some cases, you can identify forward looking
statements by the use of terminology such as may, should, intend,
expect, plan, anticipate, believe, estimate, project, predict,
potential, or continue or the negative of these terms or other comparable
terminology. These statements speak only as of the date of this quarterly
report. Examples of forward-looking statements made in this quarterly report
include statements pertaining to, among other things:

- the quantity of potential natural gas and crude oil resources;
- potential natural gas and crude oil production levels;
- capital expenditure programs;
- projections of market prices and costs;
- supply and demand for natural gas and crude oil;
- our need for, and our ability to raise, capital; and
- treatment under governmental regulatory regimes and tax laws.

These statements are only predictions and involve known and
unknown risks, uncertainties and other factors, including:

- our ability to establish or find resources or reserves;
- volatility in market prices for natural gas and crude oil;
- liabilities inherent in natural gas and crude oil operations;
- uncertainties associated with estimating natural gas and crude oil
  resources or reserves;
- competition for, among other things, capital, resources, undeveloped lands
  and skilled personnel;
- political instability or changes of laws in the countries in which we
  operate and risks of terrorist attacks;
- incorrect assessments of the value of acquisitions;
- geological, technical, drilling and processing problems; and
- other factors discussed under the section entitled Risk Factors in our
  annual report on Form 10-K filed on March 18, 2010.

These risks, as well as risks that we cannot currently
anticipate, could cause our companys or our industrys actual results, levels
of activity or performance to be materially different from any future results,
levels of activity or performance expressed or implied by these forward looking
statements.

Although we believe that the expectations reflected in the
forward looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance. Except as required by applicable law,
including the securities laws of the United States and Canada, we do not intend
to update any of the forward looking statements to conform these statements to
actual results.

As used in this quarterly report, the terms we, us, and
our refer to Manas Petroleum Corporation, its wholly-owned subsidiaries DWM
Petroleum A.G., a Swiss company, Manas Petroleum A.G., a Swiss company, Manas
Energia Chile Limitada, a Chilean company, Manas Petroleum of Chile Corporation,
a Canadian company, Manas Management Services Ltd., a Bahamian company and its
partially owned subsidiary CJSC Somon Oil Company, a Tajikistan company, its 30%
ownership interest in Petromanas Energy Inc., a Canadian company, and its 25%
ownership interest in CJSC South Petroleum Company, a Kyrgyz company, as the
context may require.

---

27

The following discussion and analysis provides a narrative
about our financial performance and condition that should be read in conjunction
with the unaudited consolidated financial statements and related notes thereto
included in this quarterly report.

Overview

We are an exploration stage company. Our growth strategy is
focused on petroleum exploration and development in selected Central Asian
countries of the former Soviet Union, in the Balkan Region and in Latin America.
Our goal is to increase shareholder value through the successful acquisition and
exploration of oil and gas resources. We do not have any known reserves on any
of our properties.

We have no operating income yet and, as a result, we might
depend upon funding from various sources to continue our operations beyond April
2011 and to implement our growth strategy.

The Three Months Ended March 31, 2010 Compared to the
Three Months Ended March 31, 2009

Results of Operations

For the three months period ended March 31, 2010 we had a net
income of $83,011,315 as compared to a net loss of $2,209,639 for the comparable
period ended March 31, 2009. This increase is mainly due to the gain from a sale
of our subsidiary in Albania and the change in fair value of in investment in
associate.

For the three months period ended March 31, 2010 our operating
expenses increased to $3,241,960 from $2,510,438 reported for the same period in
2009. The 29% increase in our total operating expenses is attributable to higher
personnel costs and increased consulting fees.

Personnel costs

For the three months period ended March 31, 2010 our personnel
costs increased to $2,501,193 from $1,865,914 for the corresponding period in
2009. This increase of 34% or $635,279 in the three months period comparison is
due to the repricing of stock options (approximately $1,400,000). On the other
hand lower personnel costs resulted from a general reduction of employees in the
organization (roughly $765,000).

Exploration costs

For the three months ended March 31, 2010 we incurred
exploration costs of $63,657 as compared to $264,260 for the corresponding
period in 2009. This decrease of 76% is attributable to less exploration
activity in Albania in the first quarter of 2010.

Non-operating income/expense

Non-operating income for the three months ended March 31, 2010
increased from $301,254 for the corresponding period in 2009 to $86,254,285.
This increase is mainly due to the gain from a sale of our subsidiary in Albania
of $57,850,918 and the change in fair value of investment in associate of
$28,812,901.

---

28

Consulting fees

For the three months ended March 31, 2010 we paid consulting
fees in the amount of $417,423 as compared to consulting fees of $126,785 for
the period ended March 31, 2009. This increase of 229% is mainly attributable to
a non-cash charge for stock options for a consultant (approximately $140,000)
and fees paid to a consultant in Tajikistan (roughly $80,000).

Administrative costs

For the three months ended March 31, 2010, our administrative
costs remained stable at $243,477 compared to $236,984 during the three months
ended March 31, 2009.

Liquidity and Capital Resources

Our cash balance as of March 31, 2010 was $3,236,525 of which
$935,362 were restricted to back bank guarantees for the first phase of our work
program in Albania, which includes seismic, geological and geophysical
explorations. Hence, cash and cash equivalents amounted to $2,301,163. This bank
guarantee was provided in the second quarter of 2010 by the new operator of the
Albanian asset, Petromanas, and resulted in the release of our bank
guarantee.

Our capital commitments are disclosed in this quarterly report
on Form 10-Q for three months ended March 31, 2010 as well as in our annual
report on form 10-K for the year ended December 31, 2009.

Operating Activities

Net cash outflow from operating activities of $2,162,485 for
the three months ended March 31, 2010 has increased from $1,076,907 in the
comparable period for 2009. This increased outflow is mainly due to the
settlement of payables outstanding of approximately $610,000, increased
consulting expenses of approximately $290,000 and the payment of accrued
interest in connection with the settlement of our outstanding debt instruments
of approximately $180,000.

Investing Activities

Net cash inflow from investing activities of $10,388,802 for
the three months ended March 31, 2010 has changed from a net cash inflow of
$2,214,398 in the comparable period for 2009. This increase is mainly due to the
proceeds from the sale of Manas Adriatic GmbH of $10,415,810, which comprises
net cash proceeds of CAD $2,000,000 ($1,937,396) and $8,500,000 liabilities
repaid by Petromanas, and was reduced by $21,586, the cash owned by Manas
Adriatic consolidated as of February 24, 2010.

In the corresponding period of 2009 we had a cash inflow from
the release of a bank guarantee.

Financing Activities

Net cash outflow from financing activities of $6,648,300 for
the three months ended March 31, 2010 has changed from a net cash outflow of
$1,220,000 in the comparable period for 2009. During the three months period
ended March 31, 2010 cash outflows resulted from repayment of contingently
convertible loans (i.e. $2,000,000), repayment of debentures (i.e. $4,000,000)
and repayment of promissory notes to shareholders (i.e. $540,646). In addition,
a bank overdraft of $196,154 was settled and proceeds from the exercise of
warrants positively affected cash flow from financing activities by $88,500. In
the comparable period in 2009, we have repaid a bank loan of $1,220,000.

---

29

Cash Flows

|                                                          |   | Three Months Ended |  
|--------------------------------------------------------- | - | ------------------ | -
|                                                          |   | March 31           |  
|                                                          |   | 2010               |  
|Net cash (used in) Operating Activities                   | $ | (2,162,485         | )
|Net cash provided by (used in) Investing Activities       | $ | 10,388,802         |  
|Net cash provided by (used in) Financing
      Activities | $ | (6,648,300         | )
|Change in Cash and Cash Equivalents During the Period     | $ | 1,578,016          |  

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Cash Requirements

We estimate our cash needs for the next 12 months to proceed
according to our business plan to be as follows:

|Expenses                                        | Amount   
|----------------------------------------------- | ---------
|Geological & Geophysical                        | 2,500,000
|General & Administrative                        | 2,300,000
|Legal                                           | 300,000  
|Audit                                           | 200,000  
|Open Commitments                                | -        
|Total Expenses planned for next 12
      months | 5,300,000

As an operator, we have geological and geophysical commitments
for the next 12 months in Mongolia amounting to $2,500,000. In Tajikistan
seismic is performed and fully carried by Santos since year end of 2009. In the
Kyrgyz Republic, the operational costs including seismic are fully carried by
our partner Santos. In Chile, we, as a non-operator, have no geological or
geophysical commitments in the next 12 months. Our Albanian investment has been
sold during the first quarter of 2010 without further financial commitments from
our side.

We had cash inflows from financing through the exercise of
warrants in the second quarter of 2010 amounting to roughly $2,225,000. In
addition, through the release of a bank guarantee $875,000 were made available
in the second quarter.

Given our position of cash and cash equivalents as of March 31,
2010 of $2,301,163 we are able to meet total cash requirements planned for the
next 12 months.

There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis, if and when it is needed, we will be forced to
scale down or perhaps even cease the operation of our business.

---

30

Going Concern

The consolidated financial statements have been prepared on the
assumption that we will continue as a going concern. For the three months ended
March 31, 2010, we had a net income of $83,011,315, which is mainly the result
of the gain in sale of investment and the change in fair value of investment in
associate.

The Groups net income since inception until March 31, 2010
was $17,211,438, which was positively affected by $57,850,918 gain from sale of
Manas Adriatic GmbH and unrealized gain of $28,812,901 from change in fair value
of the investment in Petromanas. Without these two positions, the Groups net
loss since inception until March 31, 2010 would amount to $69,452,381.

Our cash and cash equivalents balance as of March 31, 2010 was
$2,301,163. Based on our above estimated cash requirements we have sufficient
funds to continue our operations for the next 12 months, i.e. until April 2011.

In order to continue our operations beyond April 2011 and
execute the strategy to develop our assets, we will require further funds. We
expect to secure these additional funds through possible disposals or farm-outs
of our existing interests and we are currently in active negotiations with
interested parties for such transactions.

We intend to raise additional working capital through private
placements, public offerings, bank financing and/or advances from related
parties or shareholder loans as well as limit our financial obligations by
farming-out projects to third parties.

The continuation of business is dependent upon obtaining such
further financing. The issuance of additional equity securities could result in
a significant dilution in the equity interests of current or future
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase liabilities and future cash commitments.

There are no assurances that we will be able to complete the
disposals or farm-outs of our existing interests or to obtain additional
financing through either, private placements, public offerings and/or bank
financing necessary to support our working capital requirements. Nevertheless,
after making enquiries, and considering the uncertainties above, the directors
have a reasonable expectation that we will have adequate resources to continue
our operations for the foreseeable future.

We obtained roughly $2,225,000 from external sources through
the exercise of warrants and $875,000 from internal sources through the release
of bank guarantees. Given our balance of cash and cash equivalents as of March
31, 2010 we do not expect to need additional funding from external sources to
cover our annual burn rate and minimum commitments before April 2011.

Recent Developments

We are primarily focused on our operations in Albania, Kyrgyz
Republic, Tajikistan, Mongolia and Chile. Since the end of our most recent
fiscal year, following developments have affected these operations.

Albania

On February 24, 2010, we signed a Share Purchase Agreement and
completed the sale of all of the issued and outstanding shares of Manas
Adriatic, a wholly owned subsidiary of DWM Petroleum AG, to Petromanas. As
consideration for these shares, DWM Petroleum received CDN$2,000,000
($1,937,396) in cash on the closing date and 100,000,000 Petromanas common
shares. Pursuant to the purchase agreement, DWM Petroleum is entitled to receive
an aggregate of up to an additional 150,000,000 Petromanas common shares upon
the occurrence of certain events. For further detail, please refer to the Note
13 to the financial statements.

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31

During the first quarter of 2010 Petromanas Energy Inc., in
which we now hold a 30.46% interest, continued its exploration activities: The
technical team has finalized the planning of the acquisition of seismic in block
E in Albania. The seismic program is planned to consist of approximately 105 KM
of 2-D seismic to be acquired during the summer of 2010. This is to further
define the structural definition of the West Rova, Rova and Papri prospects and
ads to around 1300 KM of existing seismic previously acquired by Albpetrol and
Coparex and partially reprocessed by DWM Petroleum AG. The new seismic fulfils
the minimum work commitment of the first Exploration period of the PSC for
blocks D and E. We have released an updated tender for this work based on the
tender issued in 2008 for seismic in blocks A, B and D. Several scouting trips
were undertaken in order to trace the lines and to define the technology to be
applied.

In addition we have prepared a seismic program for blocks 2 and
3 in order to further define the structural definition of the South Shpiragu 1,
South Shpiragu 2 prospects and the Krasi lead. The new seismic in blocks 2 and 3
will be tied to the existing Shpiragu well in order to allow a time  depth
correlation of the South Shpiragu prospects.

Kyrgyz Republic

In Q1 2010 the closed Joined Stock Company South Petroleum
Company, in which we hold a 25% participating interest, continued its
geological studies within their five license areas.

Cameral works

Cameral works consisting of the drawing up of final reports on
Soh, Tuzluk and West Soh license areas to be submitted in April 2010 were
started.

South Petroleum Company processed and analyzed
geological-geophysical data of previous works within all license areas.

2D field seismic acquisition

South Petroleum company has contracted the Kazak seismic crew
Dank to realize further seismic work. As part of the Tajik seismic program,
around 20 KM of 2D seismic lines reaching into the Kyrgyz license area were
acquired in Q1 2010. South Petroleum Company fulfilled its seismic commitment in
the Tuzluk license area for 2010.

Preparation works for drilling operations

South Petroleum Company is planning to conduct drilling
operations within the Nanai license area during 2010. The structure to be tested
is the West Ala-Buka prospect. The drilling locations are defined based on
seismic woks conducted in 2008 and previously acquired seismic data.
Preparations were initiated to launch a tender for a drilling contractor. The
drilling location has been defined and preparation of the drill site is planned
to commence in May 2010.

Tajikistan

Somon Oil, in which Manas Petroleum holds a 90% interest,
contracted the Kazak crew Dank to perform a seismic project which commenced on
February 13, 2010. By March 31, 2010, around 65% of the program consisting of
total 250 KM linear kilometers was finalized.

Chile

We have signed an agreement dated January 29, 2010, pursuant to
which we have agreed to assign our interest in our Chilean project in exchange
for a return of all of the operational costs that we have invested in this
project to date and relief from all currently outstanding and future obligations
in respect of the project. The transfer of our participation in this Chilean
project to the new owners has been approved by the Chilean ministry and is now
subject to approval by the new parties.

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32

Mongolia

The team of geologists and geophysicists of the Ulan Bator
office has initiated the re-interpretation of existing geological data and is
planning an upcoming gravity survey. This is to further define the location of
lines for the seismic campaign on blocks 13 and 14 which will consist of around
300 linear KM. A plan for environmental protection and restoration to be
approved by the Ministry of Environment is currently prepared.

Data of in total 451 existing wells drilled in Zuunbayan and Tsagaan Els oil fields area and in Prospects were collected. All well data was translated from Russian and Mongolian into English for the analysis by international experts.

Item 3. Quantitative and Qualitative Disclosures about
Market Risk.

Not applicable.

Item 4T. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as that term
is defined in Rule 13a-15(e), promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934. Disclosure controls
and procedures include controls and procedures designed to ensure that
information required to be disclosed in our companys reports filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commissions
rules and forms, and that such information is accumulated and communicated to
our management, including our principal executive officer and our principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure.

As required by paragraph (b) of Rules 13a-15 under the
Securities Exchange Act of 1934, our management, with the participation of our
principal executive officer and our principal financial officer, evaluated our
companys disclosure controls and procedures as of the end of the period covered
by this quarterly report. Based on this evaluation, our principal executive
officer and our principal financial officer concluded that as of the end of the
period covered by this quarterly report, our disclosure controls and procedures
were not effective due to lack of US GAAP and SEC knowledge of responsible
people within our company. Specifically, we have determined that our internal
controls and procedures for timely filing of material events is insufficient due
to a lack of knowledge regarding U.S. generally accepted accounting principles
and the rules of the Securities and Exchange Commission by responsible people
within our company.

Changes in Internal Control over Financial
Reporting

There were no changes in our internal control over financial
reporting during the fiscal quarter ended March 31, 2010 that have materially
affected, or are reasonably likely to materially affect our internal control
over financial reporting.

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33

PART IIOTHER INFORMATION

Item 1. Legal Proceedings.

There are no material pending legal proceedings to which our
company or any of our subsidiaries is a party or of which any of our properties,
or the properties of any of our subsidiaries, is the subject. In addition, we do
not know of any such proceedings contemplated by any governmental
authorities.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds.

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits.

|Exhibit Number | Description                                                                                                                                                                                                                                                                     
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3)            | Articles of Incorporation and Bylaws                                                                                                                                                                                                                                            
|3.1            | Articles of Incorporation (incorporated by reference to
      an exhibit to our Registration Statement on Form SB-2 filed on July 14,
      2003)                                                                                                                               
|3.2            | Certificate of Amendment to Articles of Incorporation of
      Express Systems Corporation filed on April 2, 2007 (changing name to Manas
      Petroleum Corporation) (incorporated by reference to an exhibit to our
      Current Report on Form 8-K filed on April 17, 2007)
|3.3            | Amended and Restated Bylaws (incorporated by reference to
      an exhibit to our Current Report on Form 8-K filed on June 15, 2009)                                                                                                                                            
|(4)            | Instruments Defining the Rights of Security Holders,
      including Indentures                                                                                                                                                                                                 
|4.1            | Form of Debenture (incorporated by reference to an
      exhibit to our Current Report on Form 8-K filed on May 16, 2008)                                                                                                                                                       
|4.2            | Form of Loan Agreement (incorporated by reference to an
      exhibit to our Current Report on Form 8-K filed on August 25, 2008)                                                                                                                                               
|(10)           | Material Contracts                                                                                                                                                                                                                                                              
|10.1           | Share Exchange Agreement, dated November 23, 2006
      (incorporated by reference to an exhibit to our Current Report on Form 8-K
      filed on April 17, 2007)                                                                                                               
|10.2           | Form of Warrant B to Purchase Manas Petroleum Corporation
      Common Stock (incorporated  by reference to an exhibit to our
      Current Report on Form 8-K filed on April 17, 2007)                                                                                         
|10.3           | Yaroslav Bandurak employment agreement, dated April 1,
      2007 (incorporated by reference to an exhibit to our Current Report on
      Form 8-K filed on April 17, 2007)                                                                                                     
|10.4           | Farm-In Agreement, dated April 10, 2007 (incorporated by
      reference to an exhibit to our Current Report on Form 8-K filed on April
      17, 2007)                                                                                                                         
|10.5           | 2007 Omnibus Stock Option Plan (incorporated by reference
      to an exhibit to our Current Report on Form 8-K filed on April 17, 2007)                                                                                                                                        



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34

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                                                           
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.6           | Form of Debenture (incorporated by reference to an
      exhibit to our Current Report on Form 8-K filed on May 16, 2008)                                                                                                                                                                                                                             
|10.7           | Form of Warrants (incorporated by reference to an exhibit
      to our Current Report on Form 8-K filed on May 16, 2008)                                                                                                                                                                                                                              
|10.8           | Form of Subscription Agreement (incorporated by reference
      to an exhibit to our Current Report on Form 8-K filed on May 16, 2008)                                                                                                                                                                                                                
|10.9           | Form of Loan Agreement (incorporated by reference to an
      exhibit to our Current Report on Form 8-K filed on August 25, 2008)                                                                                                                                                                                                                     
|10.10          | Form of Securities Purchase Agreement, Including the Form
      of the Warrant (incorporated by reference to an exhibit to our Current
      Report on Form 8-K filed on September 15, 2008)                                                                                                                                                          
|10.11          | Letter Agreement  Phase 2 Work Period with Santos
      International Operations Pty. Ltd, dated August 19, 2008 (incorporated by
      reference to an exhibit to our Annual Report on Form 10-K filed on April
      15, 2009)                                                                                                                     
|10.12          | Side Letter Agreement  Phase 1 Completion and Cash
      Instead of Shares with Santos International Holdings Pty Ltd, dated
      November 24, 2008 (incorporated by reference to an exhibit to our Annual
      Report on Form 10-K filed on April 15, 2009)                                                                                       
|10.13          | Amended 2007 Omnibus Stock Option Plan (incorporated by
      reference to an exhibit to our Annual Report on Form 10-K filed on April
      15, 2009)                                                                                                                                                                                                
|10.14          | Production Sharing Contract for Exploration, Development
      and Production of Petroleum in Onshore Albania  Block A-B  between
      Ministry of Economy, Trade and Energy of Albania and DWM Petroleum dated
      July 31, 2007 (incorporated by reference to an exhibit to our Quarterly
      Report on Form 10-Q/A filed on July 24, 2009)
|10.15          | Production Sharing Contract for Exploration, Development
      and Production of Petroleum in Onshore Albania  Block D-E  between
      Ministry of Economy, Trade and Energy of Albania and DWM Petroleum dated
      July 31, 2007 (incorporated by reference to an exhibit to our Quarterly
      Report on Form 10-Q/A filed on July 24, 2009)
|10.16          | Promissory note issued to Heinz Scholz dated December 5,
      2008 (incorporated by reference to an exhibit to our Quarterly Report on
      Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                     
|10.17          | Promissory Note issued to Peter-Mark Vogel dated December
      5, 2008 (incorporated by reference to an exhibit to our Quarterly Report
      on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                 
|10.18          | Promissory note issued to Alexander Becker dated December
      5, 2008 (incorporated by reference to an exhibit to our Quarterly Report
      on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                 
|10.19          | Promissory note issued to Michael Velletta dated December
      5, 2008 (incorporated by reference to an exhibit to our Quarterly Report
      on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                 
|10.20          | Cancellation of Sub-Tenancy Contract with Heinz Scholz
      dated January 19, 2009 (incorporated by reference to an exhibit to our
      Quarterly Report on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                     
|10.21          | Consulting Frame Contract with Varuna AG dated February
      1, 2009 (incorporated by reference to an exhibit to our Quarterly Report
      on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                   
|10.22          | Termination Agreement with Thomas Flottmann dated January
      31, 2009 (incorporated by reference to an exhibit to our Quarterly Report
      on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                
|10.23          | Consulting Frame Contract with Thomas Flottmann dated
      January 22, 2009 (incorporated by reference to an exhibit to our Quarterly
      Report on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                            
|10.24          | Amendment to the Notice with Terms and Condition for the
      Termination of Employment Agreement with Rahul Sen Gupta dated February
      26, 2009 (incorporated by reference to an exhibit to our Quarterly Report
      on Form 10-Q/A filed on July 24, 2009)                                                                                   

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35

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                                                                
|-------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.25          | Amendment to the Termination Agreement with Rahul Sen
      Gupta dated March 31, 2009 (incorporated by reference to an exhibit to our
      Quarterly Report on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                       
|10.26          | Termination Agreement with Peter-Mark Vogel dated January
      30, 2009 (incorporated by reference to an exhibit to our Quarterly Report
      on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                     
|10.27          | Consulting Frame Contract with Peter-Mark Vogel dated
      March 26, 2009 (incorporated by reference to an exhibit to our Quarterly
      Report on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                   
|10.28          | Employment and Non-Competition Agreement with Erik Herlyn
      dated June 25, 2007 (incorporated by reference to an exhibit to our
      Quarterly Report on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                          
|10.29          | Amendment to Employment Agreement with Erik Herlyn dated
      May 14, 2008 (incorporated by reference to an exhibit to our Quarterly
      Report on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                  
|10.30          | Amendment to Employment Agreement with Yaruslav dated
      November 4, 2007 (incorporated by reference to an exhibit to our Quarterly
      Report on Form 10-Q/A filed on July 24, 2009)                                                                                                                                                                 
|10.31          | Production Sharing Contract for Contract Area Tsagaan
      Els-XIII between the Petroleum Authority of Mongolia and DWM Petroleum
      (incorporated by reference to an exhibit to our Quarterly Report on Form
      10-Q/A filed on July 24, 2009)                                                                                                     
|10.32          | Production Sharing Contract for Contract Area
      Zuunbayan-XIV between the Mineral Resources and Petroleum Authority of
      Mongolia and DWM Petroleum (incorporated by reference to an exhibit to our
      Quarterly Report on Form 10-Q/A filed on July 24, 2009)                                                                                  
|10.33          | Letter from AKBN regarding Production Sharing Contracts
      for Blocks A-B and D-E dated May 5, 2009 (incorporated by reference to an
      exhibit to our Quarterly Report on Form 10-Q/A filed on July 24, 2009)                                                                                                                                       
|10.34          | Employment Agreement between Ari Muljana and Manas
      Petroleum Corporation dated April 1, 2009 (incorporated by reference to an
      exhibit to our Registration Statement on Form S-1 filed on July 30, 2009)                                                                                                                                        
|10.35          | Consultancy Agreement dated November 21, 2008 with Dr.
      Richard Schenz (incorporated by  reference to an exhibit to our
      Current Report on Form 8-K filed on August 13, 2009)                                                                                                                                                                    
|10.36          | Non Statutory Stock Option Agreement dated August 10,
      2009 with Dr. Richard Schenz ($0.68) (incorporated by reference to an
      exhibit to our Current Report on Form 8-K filed on August 13, 2009)                                                                                                                                                
|10.37          | Non Statutory Stock Option Agreement dated August 10,
      2009 with Dr. Richard Schenz ($0.79) (incorporated by reference to an
      exhibit to our Current Report on Form 8-K filed on August 13, 2009)                                                                                                                                                
|10.38          | Production Sharing Contract for Exploration, Development
      and Production of Petroleum in Onshore Albania  Block 2-3  between
      Ministry of Economy, Trade and Energy of Albania and DWM Petroleum dated
      November 7, 2008 (incorporated by reference to an exhibit to our Quarterly
      Report on Form 10-Q filed on November 23, 2009)
|10.39          | Letter of Intent with WWI Resources Ltd. dated November
      19, 2009 (incorporated by reference to an exhibit to our Quarterly Report
      on Form 10-Q filed on November 23, 2009)                                                                                                                                                                     
|10.40          | Share Purchase Agreement dated February 12, 2010 between
      WWI Resources Ltd., DWM Petroleum AG and Manas Adriatic GmbH (incorporated
      by reference to an exhibit to our Current Report on Form 8-K filed on
      February 25, 2010)                                                                                                             
|10.41          | Form of Stock Option Agreement (Investor Relations)
      (incorporated by reference to an exhibit to our Annual Report on Form 10-K
      filed on March 18, 2010)                                                                                                                                                                                        
|10.42          | Form of Stock Option Agreement (Non-Investor Relations)
      (incorporated by reference to an exhibit to our Annual Report on Form 10-K
      filed on March 18, 2010)                                                                                                                                                                                    

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36

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.43          | Agreement dated January 29, 2010 relating to
      the assignment of the interest in the Chilean project (incorporated by
      reference to an exhibit to our Annual Report on Form 10-K filed on March
      18, 2010)                                                                                                                                                                                                                                                                                               
|(14)           | Code of Ethics                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|14.1           | Code of Ethics, adopted May 1, 2007
      (incorporated by reference to an exhibit to our Registration Statement on
      Form SB-2 filed on November 21, 2007)                                                                                                                                                                                                                                                                                                                                                        
|(21)           | Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|21.1           | Subsidiaries of Manas Petroleum Corporation
      CJSC Somon Oil, Dushanbe, Tajikistan, 90% interest DWM Petroleum
      A.G., Switzerland, 100% interest Manas Petroleum A.G., Switzerland,
      100% interest Manas Energia Limitada, Chile, 100% interest Manas
      Petroleum of Chile Corporation, Canada, 100% interest Manas Management
      Services Ltd., Bahamas, 100% interest Gobi Energy Partners, Mongolia,
      84% interest Petromanas Energy Inc., British Columbia, Canada, 30.74%
      interest
|(31)           | Rule 13a-14 Certifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|31.1*          | Section 302 Certification of Chief Executive
      Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|31.2*          | Section 302 Certification of Chief Financial
      Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(32)           | Section 1350 Certifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|32.1*          | Section 906 Certification of Chief Executive
      Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|32.2*          | Section 906 Certification of Chief Financial
      Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                             

* Filed herewith.

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37

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.

| | MANAS PETROLEUM CORPORATION                                
| | -----------------------------------------------------------
| |                                                            
| | By
    /s/ Erik Herlyn                                     
| | Erik Herlyn                                                
| | Chief Executive Officer                                    
| | (Principal Executive Officer)                              
| |                                                            
| | Date: May 17, 2010                                         
| |                                                            
| | By
    /s/ Ari Muljana                                     
| | Ari Muljana                                                
| | Chief Financial Officer and Treasurer                      
| | (Principal Financial Officer and Principal
      Accounting
| | Officer)                                                   
| |                                                            
| | Date: May 17, 2010                                         

---