---

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 June 30, 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 August 13, 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 | 27
|Item
      3. Quantitative and Qualitative Disclosures about Market Risk                                  | 33
|Item
      4T. Controls and Procedures                                                                    | 34
|PART
      IIOTHER INFORMATION                                                                           | 34
|Item
      1. Legal Proceedings                                                                           | 34
|Item
      2. Unregistered Sales of Equity Securities and Use of Proceeds                                 | 34
|Item
      3. Defaults upon Senior Securities                                                             | 34
|Item
      4. Submission of Matters to a Vote of Security Holders                                         | 35
|Item
      5. Other Information                                                                           | 35
|Item
      6. Exhibits                                                                                    | 35
|SIGNATURES                                                                                                | 39

---

4

PART IFINANCIAL INFORMATION

Item 1. Financial Statements.

MANAS PETROLEUM CORPORATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
  UNAUDITED

|CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                                          |  | 06.30.2010 |   |  | 12.31.2009  |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- | - |  | ----------- | -
|                                                                                                                                                               |  | USD        |   |  | USD         |  
|ASSETS                                                                                                                                                         |  |            |   |  |             |  
|                                                                                                                                                               |  |            |   |  |             |  
|Cash and cash equivalents                                                                                                                                      |  | 5,650,105  |   |  | 804,663     |  
|Restricted cash                                                                                                                                                |  | 33,524     |   |  | 908,888     |  
|Accounts receivable                                                                                                                                            |  | 91,794     |   |  | 60,611      |  
|Prepaid expenses                                                                                                                                               |  | 209,516    |   |  | 450,372     |  
|Total current assets                                                                                                                                           |  | 5,984,939  |   |  | 2,224,534   |  
|                                                                                                                                                               |  |            |   |  |             |  
|Debt issuance costs                                                                                                                                            |  | -          |   |  | 112,619     |  
|Tangible fixed
      assets                                                                                                                                    |  | 113,234    |   |  | 178,191     |  
|Investment in associate                                                                                                                                        |  | 238,304    |   |  | 238,304     |  
|Investment in
      associate (Petromanas)                                                                                                                     |  | 49,341,355 |   |  | -           |  
|Total non-current assets                                                                                                                                       |  | 49,692,893 |   |  | 529,114     |  
|                                                                                                                                                               |  |            |   |  |             |  
|                                                                                                                                                               |  |            |   |  |             |  
|TOTAL
      ASSETS                                                                                                                                             |  | 55,677,832 |   |  | 2,753,648   |  
|                                                                                                                                                               |  |            |   |  |             |  
|LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)                                                                                                                 |  |            |   |  |             |  
|                                                                                                                                                               |  |            |   |  |             |  
|Accounts payable                                                                                                                                               |  | 133,158    |   |  | 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                                                                                                                                              |  | -          |   |  | 683,305     |  
|Accrued expenses Exploration costs                                                                                                                             |  | -          |   |  | 713,992     |  
|Accrued expenses Professional fees                                                                                                                             |  | 62,226     |   |  | 220,449     |  
|Accrued expenses Interest                                                                                                                                      |  | -          |   |  | 82,749      |  
|Other accrued
      expenses                                                                                                                                   |  | 27,673     |   |  | 13,673      |  
|Refundable deposits                                                                                                                                            |  | 1,258,699  |   |  | -           |  
|Total current
      liabilities                                                                                                                                |  | 1,481,757  |   |  | 9,753,331   |  
|                                                                                                                                                               |  |            |   |  |             |  
|Pension
      liabilities                                                                                                                                      |  | 29,504     |   |  | 29,504      |  
|Total non-current liabilities                                                                                                                                  |  | 29,504     |   |  | 29,504      |  
|                                                                                                                                                               |  |            |   |  |             |  
|                                                                                                                                                               |  |            |   |  |             |  
|TOTAL
      LIABILITIES                                                                                                                                        |  | 1,511,261  |   |  | 9,782,835   |  
|                                                                                                                                                               |  |            |   |  |             |  
|Common stock (300,000,000 shares authorized, USD 0.001 par
      value, 
      122,883,866 and 119,051,733 shares, respectively, issued and
      outstanding) |  | 122,884    |   |  | 119,052     |  
|Additional paid-in capital                                                                                                                                     |  | 54,812,105 |   |  | 49,532,367  |  
|Retained earnings/(deficit accumulated during the
      exploration stage)                                                                                     |  | (819,418   | ) |  | (56,731,607 | )
|Accumulated other comprehensive income /
      (loss)                                                                                                          |  |            |   |  |             |  
|Currency
      translation adjustment                                                                                                                          |  | 51,001     |   |  | 51,001      |  
|Total shareholders' equity/(deficit)                                                                                                                           |  | 54,166,571 |   |  | (7,029,187  | )
|                                                                                                                                                               |  |            |   |  |             |  
|                                                                                                                                                               |  |            |   |  |             |  
|TOTAL
      LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)                                                                                                     |  | 55,677,832 |   |  | 2,753,648   |  

---

5

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

|                                                                      |  | For the three months ended |   |  | For the six months ended |   |  | Period from |  
|--------------------------------------------------------------------- |  | -------------------------- | - |  | ------------------------ | - |  | ----------- | -
|                                                                      |  |                            |   |  |                          |   |  |             |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|                                                                      |  | 06.30.2010                 |   |  | 06.30.2009               |   |  | 06.30.2010  |  
|                                                                      |  | USD                        |   |  | USD                      |   |  | USD         |  
|OPERATING REVENUES                                                    |  |                            |   |  |                          |   |  |             |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Other revenues                                                        |  | -                          |   |  | -                        |   |  | -           |  
|Total
      revenues                                                  |  | -                          |   |  | -                        |   |  | -           |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|OPERATING
      EXPENSES                                              |  |                            |   |  |                          |   |  |             |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Personnel costs                                                       |  | (536,937                   | ) |  | (1,652,000               | ) |  | (3,038,130  | )
|Exploration costs                                                     |  | (548,364                   | ) |  | (66,815                  | ) |  | (612,022    | )
|Depreciation                                                          |  | (13,585                    | ) |  | (45,563                  | ) |  | (29,794     | )
|Consulting fees                                                       |  | (243,596                   | ) |  | (427,345                 | ) |  | (661,019    | )
|Administrative
      costs                                            |  | (404,724                   | ) |  | (340,999                 | ) |  | (648,202    | )
|Total operating expenses                                              |  | (1,747,206                 | ) |  | (2,532,722               | ) |  | (4,989,167  | )
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Gain from sale of investment                                          |  | -                          |   |  | -                        |   |  | -           |  
|Loss from sale of investment                                          |  | -                          |   |  | -                        |   |  | -           |  
|OPERATING INCOME/(LOSS)                                               |  | (1,747,206                 | ) |  | (2,532,722               | ) |  | (4,989,167  | )
|                                                                      |  |                            |   |  |                          |   |  |             |  
|NON-OPERATING INCOME / (EXPENSE)                                      |  |                            |   |  |                          |   |  |             |  
|Exchange differences                                                  |  | 109,264                    |   |  | 50,935                   |   |  | 26,797      |  
|Changes in fair value of warrants                                     |  | 421,981                    |   |  | (13,902,391              | ) |  | 533,223     |  
|Warrants issuance expense                                             |  | -                          |   |  | -                        |   |  | -           |  
|Gain from sale of subsidiary                                          |  | -                          |   |  | -                        |   |  | 57,850,918  |  
|Change in fair value of investment in associate                       |  | (25,878,366                | ) |  | -                        |   |  | 2,934,535   |  
|Interest income                                                       |  | 401                        |   |  | 22,307                   |   |  | 451         |  
|Interest expense                                                      |  | (4,805                     | ) |  | (352,768                 | ) |  | (326,115    | )
|Loss on extinguishment of debt                                        |  | -                          |   |  | -                        |   |  | (117,049    | )
|Income/(Loss)
      before taxes and equity in net loss of associate  |  | (27,098,731                | ) |  | (16,714,639              | ) |  | 55,913,593  |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Income taxes                                                          |  | (395                       | ) |  | (1,482                   | ) |  | (1,405      | )
|Equity in net loss
      of associate                                 |  | -                          |   |  | -                        |   |  | -           |  
|Net income/(loss)                                                     |  | (27,099,126                | ) |  | (16,716,121              | ) |  | 55,912,188  |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Net income / (loss) attributable to non-controlling
      interest    |  | -                          |   |  | -                        |   |  | -           |  
|Net
      income/(loss) attributable to Manas                         |  | (27,099,126                | ) |  | (16,716,121              | ) |  | 55,912,188  |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Currency
      translation adjustment attributable to Manas           |  | -                          |   |  | -                        |   |  | -           |  
|Net comprehensive income/(loss) attributable to
      Manas           |  | (27,099,126                | ) |  | (16,716,121              | ) |  | 55,912,188  |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Net comprehensive loss attributable to non-controlling
      interest |  | -                          |   |  | -                        |   |  | -           |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Net comprehensive income/(loss)                                       |  | (27,099,126                | ) |  | (16,716,121              | ) |  | 55,912,188  |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Weighted average number of outstanding shares (basic)                 |  | 122,351,824                |   |  | 119,051,733              |   |  | 120,701,788 |  
|Weighted average number of outstanding shares (diluted)               |  | 122,351,824                |   |  | 119,051,733              |   |  | 129,747,586 |  
|                                                                      |  |                            |   |  |                          |   |  |             |  
|Basic earnings / (loss) per share
      attributable to Manas         |  | (0.22                      | ) |  | (0.14                    | ) |  | 0.46        |  
|Diluted
      earnings / (loss) per share attributable to Manas       |  | (0.22                      | ) |  | (0.14                    | ) |  | 0.43        |  

---

6

MANAS PETROLEUM CORPORATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
  UNAUDITED

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

|                                                              |  | For the six months ended |   |  | Period from |  
|------------------------------------------------------------- |  | ------------------------ | - |  | ----------- | -
|                                                              |  |                          |   |  |             |  
|                                                              |  |                          |   |  |             |  
|                                                              |  | 06.30.2010               |   |  | 06.30.2009  |  
|                                                              |  | USD                      |   |  | USD         |  
|OPERATING
      ACTIVITIES                                    |  |                          |   |  |             |  
|                                                              |  |                          |   |  |             |  
|Net income/(loss)                                             |  | 55,912,188               |   |  | (18,925,760 | )
|                                                              |  |                          |   |  |             |  
|                                                              |  |                          |   |  |             |  
|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               |  | (2,934,535               | ) |  | -           |  
|Equity in net loss of associate                               |  | -                        |   |  | -           |  
|Depreciation                                                  |  | 29,794                   |   |  | 62,059      |  
|Amortization of debt issuance costs                           |  | 112,619                  |   |  | 53,191      |  
|Warrant issuance expense / (income)                           |  | (533,223                 | ) |  | 13,402,226  |  
|Exchange differences                                          |  | (26,797                  | ) |  | (135,509    | )
|Non cash adjustment to exploration costs                      |  | (204,753                 | ) |  | -           |  
|Non cash interest income                                      |  | (25,619                  | ) |  | -           |  
|Interest expense on contingently convertible loan             |  | 29,893                   |   |  | 65,920      |  
|Loss on extinguishment of contingently
      convertible loan |  | 83,202                   |   |  | -           |  
|Interest expense on debentures                                |  | 78,974                   |   |  | 217,807     |  
|Loss on extinguishment of debentures                          |  | 33,847                   |   |  | -           |  
|Stock-based
      compensation                                |  | 2,872,529                |   |  | 2,780,648   |  
|Decrease / (increase) in receivables and prepaid expenses     |  | 207,698                  |   |  | 7,611       |  
|(Decrease) /
      increase in accounts payables              |  | (450,471                 | ) |  | (896,705    | )
|(Decrease) / increase in accrued expenses                     |  | (938,979                 | ) |  | (211,304    | )
|Change in pension
      liability                             |  | -                        |   |  | -           |  
|Cash flow (used in) / from operating activities               |  | (3,604,551               | ) |  | (3,579,816  | )
|                                                              |  |                          |   |  |             |  
|INVESTING ACTIVITIES                                          |  |                          |   |  |             |  
|                                                              |  |                          |   |  |             |  
|Purchase of tangible fixed assets and
      computer software |  | (1,182                   | ) |  | (24,040     | )
|Sale of tangible fixed assets and computer software           |  | -                        |   |  | -           |  
|Proceeds from sale of investment                              |  | 10,765,810               |   |  | -           |  
|Decrease / (increase) restricted cash                         |  | 875,711                  |   |  | 5,000,939   |  
|Acquisition of investment in associate                        |  | -                        |   |  | -           |  
|Cash flow (used
      in) / from investing activities         |  | 11,640,339               |   |  | 4,976,899   |  

---

7

|MANAS PETROLEUM CORPORATION                                 
|------------------------------------------------------------
|                                                            
|CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                 
|UNAUDITED                                                   
|                                                            
|CONDENSED CONSOLIDATED CASH FLOW STATEMENT
      (CONTINUED)

|                                                                          |  | For the six months ended |   |  | Period from |  
|------------------------------------------------------------------------- |  | ------------------------ | - |  | ----------- | -
|                                                                          |  |                          |   |  |             |  
|                                                                          |  |                          |   |  |             |  
|                                                                          |  | 06.30.2010               |   |  | 06.30.2009  |  
|                                                                          |  | USD                      |   |  | USD         |  
|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                                        |  | 2,260,958                |   |  | -           |  
|Cash arising on recapitalization                                          |  | -                        |   |  | -           |  
|Shareholder loan repaid                                                   |  | -                        |   |  | -           |  
|Shareholder loan raised                                                   |  | -                        |   |  | -           |  
|Repayment of bank loan                                                    |  | -                        |   |  | (1,220,000  | )
|Increase in bank loan                                                     |  | -                        |   |  | 1,000,000   |  
|Increase in short-term loan                                               |  | -                        |   |  | -           |  
|Payment of debt issuance costs                                            |  | -                        |   |  | -           |  
|(Decrease) / increase in bank overdraft                                   |  | (196,154                 | ) |  | -           |  
|Increase / (decrease) in refundable deposits                              |  | 1,258,699                |   |  | -           |  
|Cash flow (used
      in) / from financing activities                     |  | (3,217,143               | ) |  | (220,000    | )
|                                                                          |  |                          |   |  |             |  
|                                                                          |  |                          |   |  |             |  
|Net change in cash and cash equivalents                                   |  | 4,818,645                |   |  | 1,177,083   |  
|                                                                          |  |                          |   |  |             |  
|Cash and cash equivalents at the beginning
      of the period            |  | 804,663                  |   |  | 225,993     |  
|Currency
      translation effect on cash and cash equivalents            |  | 26,797                   |   |  | 33,482      |  
|Cash and cash equivalents at the end of the period                        |  | 5,650,105                |   |  | 1,436,558   |  
|                                                                          |  |                          |   |  |             |  
|                                                                          |  |                          |   |  |             |  
|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                  |   |  | -           |  
|Initial fair value
      of shares of investment in Petromanas            |  | 46,406,821               |   |  | -           |  
|Forgiveness of receivable due from Manas Adriatic GmbH                    |  | (3,449,704               | ) |  | -           |  

---

8

MANAS PETROLEUM CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY /
(DEFICIT)

|                                            |  |             |  |  |               |  |  |                 |   |  | Deficit     |   |  |                 |   |  |                     |  
|------------------------------------------- |  | ----------- |  |  | ------------- |  |  | --------------- | - |  | ----------- | - |  | --------------- | - |  | ------------------- | -
|                                            |  |             |  |  |               |  |  |                 |   |  | accumulated |   |  | **Accumulated** |   |  |                     |  
|                                            |  |             |  |  |               |  |  |                 |   |  | during the  |   |  | Other Compre-   |   |  | Total share-        |  
|                                            |  | Number of   |  |  |               |  |  | Additional      |   |  | development |   |  | hensive Income  |   |  | **holders' equity** |  
|SHAREHOLDERS' EQUITY /
      (DEFICIT)      |  | Shares      |  |  | Share Capital |  |  | paid-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               |  
|Net loss for the year                       |  | -           |  |  | -             |  |  | -               |   |  | (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                        |  | 3,832,133   |  |  | 3,832         |  |  | 2,257,127       |   |  | -           |   |  | -               |   |  | 2,260,958           |  
|FV adjustment of exercised warrants         |  | -           |  |  | -             |  |  | 72,643          |   |  | -           |   |  | -               |   |  | 72,643              |  
|Reclassification warrants                   |  | -           |  |  | -             |  |  | 77,439          |   |  | -           |   |  | -               |   |  | 77,439              |  
|Stock-based compensation                    |  | -           |  |  | -             |  |  | 2,872,529       |   |  | -           |   |  | -               |   |  | 2,872,529           |  
|Currency translation adjustment             |  | -           |  |  | -             |  |  | -               |   |  | -           |   |  | -               |   |  | -                   |  
|Net loss for the period                     |  | -           |  |  | -             |  |  | -               |   |  | 55,912,189  |   |  | -               |   |  | 55,912,189          |  
|Balance June
      30, 2010                 |  | 122,883,866 |  |  | 122,884       |  |  | 54,812,105      |   |  | (819,418    | ) |  | 51,001          |   |  | 54,166,571          |  

---

9

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 and six months ended June 30, 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

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.

On February 12, 2010 we signed a formal purchase agreement with
WWI Resources LTD. At closing, on February 24, 2010, WWI Resources changed its
name to Petromanas Energy Inc. (Petromanas, TSX-V: PMI). With the closing, DWM
completed the sale of all of the issued and outstanding shares of Manas Adriatic
GmbH (Manas Adriatic) to Petromanas. Manas Adriatic is the owner of three
on-shore oil and gas production sharing contracts containing six licenses
located in Albania. As consideration for these shares, DWM received
CAD$2,000,000 ($1,937,396) in cash on March 3, 2010, $350,000 on May 17, 2010
for compensation of operational expenses in Albania for January and February
2010 and 100,000,000 Petromanas common shares, in addition to the $917,723
advanced from Petromanas in December 2009. Pursuant to the purchase agreement,
DWM Petroleum is entitled to receive an aggregate of up to an additional
150,000,000 Petromanas common shares as follows:

---

10

- 100,000,000 Petromanas 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 Petromanas 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, Petromanas will be required to
  issue 500,000 Petromanas common shares to DWM Petroleum to a maximum of
  25,000,000 Petromanas common shares.

In addition, at closing Petromanas funded Manas Adriatic with
$8,500,000 to be used by Manas Adriatic to repay advances made by DWM 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.

On May 25, 2010, Petromanas issued to DWM Petroleum AG pursuant
to the amended share purchase agreement an additional 100,000,000 Petromanas
common shares. DWM now has ownership and control over 200,000,000 Petromanas
common shares and the right to acquire a further 50,000,000 common shares of
Petromanas according to the conditions described above. The 200,000,000 common
shares represent 32.36% of the issued and outstanding common shares of
Petromanas.

The Group follows a strategy focused on the exploration and
development of oil and gas resources in Central and East Asia (Kyrgyz Republic,
Republic of Tajikistan and Republic of Mongolia), in the Balkan Region
(participation in Petromanas Energy Inc. with activities in Albania) as well as
in Latin America (Chile).

2. GOING CONCERN

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

Our cash balance as of June 30, 2010 was $5,650,105. The
Groups total current assets as of the reporting date amounted to $5,984,939 and
total current liabilities were $1,481,757 resulting in a net working capital of
$ 4,503,182.

In addition, of the 200,000,000 common shares of Petromanas
held by the Group, 10,000,000 were freely tradable as of June 30, 2010. The
market value of these freely tradable shares was roughly $2,900,000.

Based on our business plan for the next 12 months, we will need
$4,700,000 to fund our operations.

Given our net working capital plus our freely tradable shares
of Petromanas, we do not expect to need additional funding from external sources
to cover our monthly burn rate of approximately $267,000 and minimum commitments
before July 2011.

---

11

In order to continue to implement the geological work program
for our projects particularly in Central and East 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.

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 June 30, 2010 and
December 31, 2009 and for the three and six months ended June 30, 2010 and 2009
and for the period from inception, May 25, 2004, to June 30, 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 June 30, 2010 and December 31, 2009,
results of operations for the three and six months ended June 30, 2010 and 2009
and for the period from inception, May 25, 2004, to June 30, 2010, cash flows
for the six months ended June 30, 2010 and 2009 and for the period from
inception, May 25, 2004, to June 30, 2010 and statement of shareholders equity
(deficit) for the period from inception, May 25, 2004, to June 30, 2010, as
applicable, have been made. The results of operations for the three and six
months ended June 30, 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.

---

12

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.

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

|                                |  |               |  |  |               |  |  |               |  |  | USD (held   |  |  |               |  |  |              | 
|------------------------------- |  | ------------- |  |  | ------------- |  |  | ------------- |  |  | ----------- |  |  | ------------- |  |  | ------------ | 
|                                |  | USD (held     |  |  | USD (held     |  |  | USD (held     |  |  | in other    |  |  | USD TOTAL     |  |  | USD TOTAL    | 
|                                |  | in
      USD) |  |  | in
      EUR) |  |  | in
      CHF) |  |  | currencies) |  |  | June 30, 2010 |  |  | Dec 31, 2009 | 
|Bank and postal accounts        |  | 5,625,345     |  |  | 133           |  |  | 17,924        |  |  | 6,703       |  |  | 5,650,105     |  |  | 804,663      | 
|Cash and Cash
      Equivalents |  | 5,625,345     |  |  | 133           |  |  | 17,924        |  |  | 6,703       |  |  | 5,650,105     |  |  | 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                                   |  | 1,182            |   |  | -        |   |  | -            |   |  | 1,182    |  
|Deconsolidation of Manas Adriatic           |  | (27,526          | ) |  | (37,879  | ) |  | -            |   |  | (65,405  | )
|Cost at June
      30                       |  | 117,852          |   |  | 89,500   |   |  | 47,375       |   |  | 254,727  |  
|                                            |  |                  |   |  |          |   |  |              |   |  |          |  
|Accumulated
      depreciation at January 1 |  | (68,088          | ) |  | (53,077  | ) |  | (19,593      | ) |  | (140,758 | )
|Depreciation                                |  | (13,155          | ) |  | (11,901  | ) |  | (4,738       | ) |  | (29,794  | )
|Deconsolidation of
      Manas Adriatic     |  | 16,768           |   |  | 12,291   |   |  | -            |   |  | 29,059   |  
|Accumulated depreciation at June 30         |  | (64,474          | ) |  | (52,687  | ) |  | (24,331      | ) |  | (141,493 | )
|                                            |  |                  |   |  |          |   |  |              |   |  |          |  
|Net book value at June 30                   |  | 53,378           |   |  | 36,813   |   |  | 23,044       |   |  | 113,234  |  

---

13

Depreciation expense for the six months period ended June 30,
2010 and 2009 was $29,794 and $62,059, respectively. Depreciation expense for
the three months period ended June 2010 and 2009 was $13,585 and $45,563,
respectively.

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.

On June 2, 2010 we granted stock options to a consultant to
purchase an aggregate of 150,000 shares of our common stock at an exercise price
of $ 0.80 per share for a term expiring June 2, 2013. The options vest in 12
quarterly installments, subject to proration to account for any partial 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 fair value of all of the options granted during the three
and six months period ended June 30, 2010 and June 30, 2009 was determined using
the Black-Scholes option pricing model applying the weighted average assumptions
noted in the following table:

---

14

Six months period ended
    
    
    Three months period endedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009Expected dividend yield
    
    0%
    
    
    0%
    
    
    0%
    
    
    0%Expected volatility
    
    92%
    
    
    90%
    
    
    105%
    
    
    90%Risk-free interest rate
    
    1.737%
    
    
    1.170%
    
    
    1.060%
    
    
    1.170%Expected term (in years)
    
    3.37
    
    
    2.5
    
    
    2.5
    
    
    2.5


The expected volatility is based on a peer group of companies
in a similar or the same industry, and with which the Company is of a comparable
size and life cycle stage, for a period equal to the expected term of the
options. During the six months ended June 30, 2010 and 2009, the weighted
average fair value of options granted was $0.58 and $0.14 at the grant date,
respectively.

The following table summarizes the Company's stock option
activity for the six months ended June 30, 2010:

Weighted-averageWeighted-
    
    
    remainingaverage
    
    
    **contractual**
    
    
    AggregateShares under
    
    
    exercise
    
    
    term
    
    
    intrinsicOptions
    
    option
    
    
    price
    
    
    (years)
    
    
    valueOutstanding at December 31, 2009
    
    10,150,000
    
    
    2.12Cancellation (repricing)
    
    (4,750,000
    )
    
    4.13Re-granted (repricing)
    
    4,750,000
    
    
    0.70Granted
    
    1,150,000
    
    
    0.71Exercised
    
    0Forfeited or expired
    
    0Outstanding at June 30, 2010
    
    11,300,000
    
    
    0.53
    
    
    4.79
    
    
    1,452,000Exercisable at June 30, 2010
    
    6,886,296
    
    
    0.59
    
    
    4.60
    
    
    567,769


For the six months period ended June 30, 2010 and 2009, the
Company recorded a total charge of $2,872,529 and $2,780,648 respectively, with
respect to equity awards granted under the stock compensation and stock option
plans. For the six months period ended June 30, 2010 $2,665,656 and $206,873
were recorded in personnel costs and consulting fees, respectively. In personnel
cost included was $1,544,006 related to the incremental fair value of the vested
options due to the re-pricing on February 24, 2010. During the comparable period
in 2009 stock based compensation expenses of $2,728,375 were recorded in
personnel costs and $52,273 in consulting fees.

For the three months ended June 30, 2010 the Company recorded a
total charge of $460,368 with respect to equity awards granted under the stock
compensation and stock option plans, of which $410,905 was recorded in personnel
and $49,463 in consulting fees. For the three months ended June 30, 2009 the
Company recorded a total charge of $1,362,457 with respect to equity awards
granted under the stock compensation and stock option plans, of which $1,310,184
was recorded in personnel and $52,273 in consulting fees.

A summary of the status of the Companys non-vested shares as
of June 30, 2010 and changes during the period is presented below:

---

15

|                               |                     | Weighted-average     
|------------------------------ | ------------------- | ---------------------
|Nonvested
      options        | Shares under option | grant date fair value
|Nonvested at December 31, 2009 | 4,838,097           | 0.35                 
|Granted                        | 1,150,000           | 0.58                 
|Vested                         | (1,574,393)         | 0.79                 
|Forfeited                      | 0                   | 0.00                 
|Nonvested at June 30, 2010     | 4,413,704           | 0.26                 

As of June 30, 2010, there was $1,272,396 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 2.11 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 finders 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.

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 six month period ended June 30, 2010 we had interest
expense on debentures of $78,974 and $217,808 for the comparable period in the
previous year. For the three months periods ended June 30, 2010 and 2009 we had
interest expense of $0 and $120,543, respectively. At June 30, 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.

---

16

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 is adjusted to fair market value at the end of each
reporting period.

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 June 30,
2010, the following Warrant agreements have been amended and, in accordance with
FASB ASC 815-40, needed to be reclassified as stockholders equity:

|                                    |  |                     |  |  |                    |  |  |                      |  |  |                      |  |   | 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               | 
|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                               |  |                     |  |  |                    |  |  |                      |  |  |                      |  | $ | 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.

On April 10, 2010 2,357,556 Warrants from the Warrant B Equity
PP1 Series granted on April 10, 2007 were exercised and 32,696,207 expired
unexercised.

On April 10, 2010 89,831 Warrants from the Brokerage Warrant PP
1 Series granted on April 10, 2010 were exercised and 5,790,213 expired
unexercised.

On April 30, 2010 1,384,746 Warrants from the Debenture
Warrants Series granted on April 30, 2008 were exercised and 2,174,576 expired
unexercised.

---

17

As of June 30, 2010 and December 31, 2009, the Company had a
total of 4,000,000 and 48,343,129 respectively warrants outstanding to purchase
common stock. 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 June 30, 2010:

|Warrant series             |  | # of
      Warrants |  |  | Strike price |  |  | Grant
      date  |  |  | Expiry date       | 
|-------------------------- |  | ------------------- |  |  | ------------ |  |  | ----------------- |  |  | ----------------- | 
|Equity PP3 Sept 2008       |  | 4,000,000           |  |  | 0.95         |  |  | September 1, 2008 |  |  | September 1, 2010 | 
|Total warrants outstanding |  | 4,000,000           |  |  |              |  |  |                   |  |  |                   | 

The following table summarizes the Companys warrant activity
for the six months ended June 30, 2010:

|                                                     |  |                        |   |  |                      |   |  |                     |   |  | Weighted-average | 
|---------------------------------------------------- |  | ---------------------- | - |  | -------------------- | - |  | ------------------- | - |  | ---------------- | 
|Warrants                                             |  | Classifed as liability |   |  | Classified as equity |   |  | #
      of warrants |   |  | exercise price   | 
|Outstanding at December 31, 2009                     |  | 5,581,532              |   |  | 42,911,597           |   |  | 48,493,129          |   |  | 0.62             | 
|Reclassification upon amendment of warrant agreement |  | (681,695               | ) |  | 681,695              |   |  | -                   |   |  | 0.59             | 
|Granted                                              |  | -                      |   |  | -                    |   |  | -                   |   |  |                  | 
|Exercised                                            |  | (350,763               | ) |  | (3,481,370           | ) |  | (3,832,133          | ) |  | 0.59             | 
|Forfeited or expired                                 |  | (4,549,074             | ) |  | (36,111,922          | ) |  | (40,660,996         | ) |  | 0.59             | 
|Outstanding at June 30, 2010                         |  | -                      |   |  | 4,000,000            |   |  | 4,000,000           |   |  | 0.95             | 

The fair value of liability classified warrants that were
exercised during the three and six months periods ended June 30, 2010 of $72,643
was reclassified to additional paid-in capital.

10. BANK OVERDRAFT/SHORT-TERM LOAN

On December 31, 2009, we had a bank overdraft of $196,828 which
is due on demand and free of interest. On March 3, 2010, we have repaid the bank
overdraft of $196,828.

On December 3, 2009, as part of ongoing negotiations on the
sale of the Albanian assets, Petromanas 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 February 12, 2010 we signed a formal share purchase agreement
with WWI Resources LTD. At closing, WWI Resources changed its name to Petromanas
Energy Inc. (Petromanas, TSXV: PMI). On February 24, 2010, we completed the
sale of all of the issued and outstanding shares of Manas Adriatic to
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.

As of June 30, 2010, we had no outstanding Bank
Overdraft/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 finders 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.

---

18

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.

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 six month period ended June 30, 2010 we had interest
expense on contingently convertible loan of $29,893 compared to $65,920 for the
comparable previous year period. For the three months periods ended June 30,
2010 and 2009 we had interest expense on contingently convertible loan of $0 and
$37,909, respectively. At June 30, 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 for the six months period ended June 30, 2010 $83,202 and $0 for the
comparable period of the previous year, respectively 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 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, the Company
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.

On March 9, 2010, we have fully repaid the principal of
$540,646 and a total interest accrued of $54,568. For the six months ended June
30, 2010 and 2009, we recorded $11,198 and $10,665 interest expense.

---

19

13. SALE OF MANAS ADRIATIC

On February 12, 2010 we signed a formal share purchase
agreement with WWI Resources LTD. At closing, WWI Resources changed its name to
Petromanas Energy Inc. (Petromanas, TSXV: PMI). On February 24, 2010, we
completed the sale of all of the issued and outstanding shares of Manas Adriatic
to Petromanas.

As consideration for these shares, DWM Petroleum received
CAD$2,000,000 ($1,937,396) in cash on March 3, 2010, $350,000 on May 17, 2010
for compensation of operational expenses in Albania for January and February
2010 and 100,000,000 Petromanas common shares in addition to the $917,723
advanced from Petromanas in December 2009. Pursuant to the purchase agreement,
DWM Petroleum is entitled to receive an aggregate of up to an additional
150,000,000 Petromanas common shares as follows:

- 100,000,000 Petromanas 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 Petromanas 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, Petromanas will be required to
  issue 500,000 Petromanas common shares to DWM Petroleum to a maximum of
  25,000,000 Petromanas common shares.

In addition, at closing Petromanas 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, Petromanas 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 CAD $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 undiluted and diluted voting interests, board members,
executive officers, 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

---

20

- 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 de-recognition of the subsidiary Manas
Adriatic GmbH in exchange for cash received, liabilities assumed and 200,000,000
of Petromanas common shares issued.

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.

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 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
      ReleasedAt the time of the Final Exchange Bulletin
    10% of the escrow securities6 months from the Final Exchange Bulletin
    15% of the escrow securities12 months from the Final Exchange Bulletin
    15% of the escrow securities18 months from the Final Exchange Bulletin
    15% of the escrow securities24 months from the Final Exchange Bulletin
    15% of the escrow securities30 months from the Final Exchange Bulletin
    15% of the escrow securities36 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.

---

21

Of the 200,000,000 common shares of Petromanas held by the
Group, 10,000,000 were freely tradable as of June 30, 2010. The market value of
these freely tradable shares was roughly $2,900,000.

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                                                                                                                                               |  | CAD$ 2,000,000                                                                                                                                                                                   |  | $1,937,396                                               
|Cash Advance Payment                                                                                                                               |  |                                                                                                                                                                                                  |  | $917,698                                                 
|                                                                                                                                                  
|Cash Receipt on May 17, 2010                                                                                                                       |  | compensation for
      operational expenses for January and February in Albania to be borne 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 CAD$0.30 (dilution of issuable
      100,000,000 shares below included) discounted by an effective discount of
      16.23%* |  | CAD$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 CAD$0.30 (dilution of issuable
      100,000,000 shares included) discounted by an effective discount of
      20.53%*       |  | CAD$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                                              
|                                                                                                                                                  

---

22

* 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 six month period ended June 30, 2010, net cash proceeds
from the sale of Manas Adriatic GmbH amounted 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 and $350,000 for compensation of operational expenses in Albania
for January and February 2010 reduced by $21,586, the cash owned by Manas
Adriatic consolidated as of February 24, 2010.

14. INVESTMENT IN PETROMANAS

On February 12, 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.

Pursuant to an Amending Agreement dated May 25, 2010,
Petromanas has issued to DWM an additional 100,000,000 common shares. The shares
are subject to a hold period expiring June 24, 2011 and bear a legend to that
effect.

DWM now has ownership and control over 200,000,000 common
shares of Petromanas and the right to acquire a further 50,000,000 common shares
upon certain conditions. The 200,000,000 common shares represent 32.36% of the
issued and outstanding common shares of Petromanas.

Refer to Note 13 for details on the initial measurement of the
shares.

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 hold
period of four and thirteen months, respectively 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.

The quoted market price of Petromanas on June 30, 2010 was CAD
$0.30.

In order to calculate the fair value of our investment in
Petromanas we have discounted the market price of the shares based on the escrow
release schedule. The effective discount applied on the quoted market price of
the restricted shares is 13.8% .

---

23

During the six months ended June 30, 2010, we have recorded
$2,934,535 unrealized gain on investment in Petromanas. During the three months
period ended June, 2010 we expensed $25,878,366 unrealized loss on our
investment in Petromanas.

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
|-------------------------------------------------------- | --------------------- | ------------- | ------------
|Company                                                  | Country               | June 30, 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                | 32.36%        | 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 that was sold in February
      2010                                                                                   
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(2)  | Founded in 2007                                                                                                                                   
|(3)  | Petroleum Energy Inc. participation 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 in 2009 by DWM
      Petroleum AG (formerly Manas Gobi LLC)                                                  
|(10) | Manas Adriatic GmbH was founded in 2009 by DWM Petroleum
      AG 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:

|Affiliates                                                                                                                                                |  | Six months period ended       |   |  | Three months period ended       | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | - |  | ------------------------------- | 
|                                                                                                                                                          |  | June 30, 2010                 |   |  | June 30, 2009                   | 
|                                                                                                                                                          |  | USD                           |   |  | USD                             | 
|Management services performed to Petromanas*                                                                                                              |  | (80,382                       | ) |  | -                               | 
|* Services invoiced or accrued and recorded as
      contra-expense in personnel cost and administrative cost                                             |  |                               |   |  |                                 | 
|                                                                                                                                                          |  |                               |   |  |                                 | 
|                                                                                                                                                          |  |                               |   |  |                                 | 
|Board of directors                                                                                                                                        |  | Six months
      period ended |   |  | Three months
      period ended | 
|                                                                                                                                                          |  | June 30, 2010                 |   |  | June 30, 2009                   | 
|                                                                                                                                                          |  | USD                           |   |  | USD                             | 
|Payments to
      directors for office rent                                                                                                               |  | 12,000                        |   |  | 24,923                          | 
|Payments to related companies controlled by
      directors                                                                                               |  |                               |   |  |                                 | 
|for rendered
      consulting services                                                                                                                    |  | 134,407                       |   |  | 190,700                         | 
|Interest on Promissory notes from directors*                                                                                                              |  | 4,843                         |   |  | 4,612                           | 
|Interest on
      Promissory notes from former directors*                                                                                                 |  | 6,355                         |   |  | 6,053                           | 
|                                                                                                                                                          |  |                               |   |  |                                 | 
|                                                                                                                                                          |  | As of June 30, 2010           |   |  | As of Dec 31, 2009              | 
|                                                                                                                                                          |  | 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.

---

24

16. COMMITMENTS & CONTINGENT LIABILITIES

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

In the ordinary course of business, the associates,
subsidiaries or branches in the Kyrgyz Republic, Republic of Tajikistan,
Mongolia and Chile 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 associates, subsidiaries or branches in
the Kyrgyz Republic, Republic of Tajikistan, Mongolia and Chile.

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 June 30, 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 June 30, 2010, there had been no legal actions against the
associates, subsidiaries or branches in the Kyrgyz Republic, Republic of
Tajikistan, Mongolia and Chile.

Management believes that the Group, including associates,
subsidiaries or branches in the Kyrgyz Republic, Republic of Tajikistan,
Mongolia and Chile 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 4 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.

---

25

Six months period ended
    
    
    Three months period endedPension expense
    
    June 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009USD
    
    
    USD
    
    
    USD
    
    
    USDNet service cost
    
    2,001
    
    
    14,626
    
    
    1,000
    
    
    7,313Interest cost
    
    3,373
    
    
    9,376
    
    
    1,687
    
    
    4,688Expected return on assets
    
    (2,615
    )
    
    (7,037
    )
    
    (1,307
    )
    
    (3,511
    )Amortization of net (gain)/loss
    
    -
    
    
    -
    
    
    -
    
    
    -Net periodic pension cost
    
    2,759
    
    
    16,965
    
    
    1,380
    
    
    8,490


During the six months period ended June 30, 2010 and 2009 the
Company made cash contributions of $55,021 and approximately $22,200,
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 June 30, 2010 are classified in one of the three categories as
follows:

Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsInvestment Petromanas (Note 14)
    $
    -
    
    $
    49,341,355
    
    $
    -
    
    $
    49,341,355Total Assets
    $
    -
    
    $
    49,341,355
    
    $
    -
    
    $
    49,341,355LiabilitiesWarrants (Note 9)
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -Total Liabilities
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -


The following table summarizes the changes in the fair value of
the Companys level 2 financial assets and liabilities for the period ending
June 30, 2010:

Balance at January 1, 2010
    -Total gains (losses) realized and
      unrealized:Included in earnings
    2,934,534
    2)Included in other
      comprehensive income
    -Purchase, sale, or settlement
    46,406,821
    1)Net transfer in / (out) of level 2
    -Balance at June 30, 2010
    49,341,355


1) Sale of Manas Adriatic GmbH (refer to Note 13)2)
Recorded in change 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
June 30, 2010:

|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 | (533,223) | 1)
|Included in other comprehensive income                              | -         |   
|Purchase, sale, or settlement                                       | (72,643)  | 2)
|Net transfer in / (out) of level 2                                  | (77,439)  | 3)
|Balance at June 30, 2010                                            | -         |   

1) Recorded in Change in fair value of warrants.
2) Recorded in additional paid-in capital due to warrant exercise
3) Reclassification as equity instrument

---

26

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:

Six months period endedJune 30, 2010
      
      
      June 30, 2009Basic weighted average shares outstanding
      
      120,701,788
      
      
      119,051,733Effect of common stock
        equivalents*- stock options
        and non-vested stockunder employee compensation plans
      
      3,184,496
      
      
      -- warrants
      
      5,861,302
      
      
      -- contingently convertible loan
      
      -
      
      
      -Diluted weighted average shares outstanding*
      
      129,747,586
      
      
      119,051,733*For periods in which losses are presented,
        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


20. SUBSEQUENT EVENT(S)

Effective July 15, 2010, Erik Herlyn, our President, Chief
Executive Officer, Secretary and a director of our company, has resigned from
his positions of President, Chief Executive Officer and Secretary. There were no
disagreements between Mr. Herlyn and our company. Mr. Herlyn continues to serve
our company as a member of our board of directors. The termination agreement
does not stipulate a severance payment.

Also effective July 15, 2010, we have appointed Peter-Mark
Vogel to act as our interim President and Chief Executive Officer.

On July 21, 2010 we cancelled the 150,000 stock options granted
on June 2, 2010 and issued 150,000 warrants to purchase an aggregate of 150,000
shares of our common stock at an exercise price of $ 0.80 per share for a term
expiring June 2, 2013 instead.

---

27

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 AG, a Swiss company, Manas Petroleum AG, 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
32.36% 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.

---

28

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 follow a strategy focused on the exploration and development
of oil and gas resources in Central and East Asia (Kyrgyz Republic, Republic of
Tajikistan and Republic of Mongolia), in the Balkan Region (participation in
Petromanas Energy Inc. with activities in Albania) as well as in Latin America
(Chile). In terms of the oil and gas industry, we are active in the initial
phase of petroleum operations that include generation of prospects and drilling
of exploration wells. 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 July
2011 and to implement our growth strategy.

The Six Months Ended June 30, 2010 Compared to the Six
Months Ended June 30, 2009

Results of Operations

For the six months period ended June 30, 2010 we had a net
income of $55,912,188 as compared to a net loss of $18,925,760 for the
comparable period ended June 30, 2009. This increase is mainly due to the gain
from the sale of our subsidiary in Albania of $57,850,918 and the difference of
the changes in fair value of warrants of $13,935,449 ($533,223 during the six
months period ended June 20, 2010 and ($13,402,226) for the corresponding period
in 2009). In addition, our investment in Petromanas positively contributed
$2,934,535.

For the six months period ended June 30, 2010 our operating
expenses decreased to $4,989,167 from $5,043,161 reported for the same period in
2009. This is a decrease of 1% or $53,994. Lower personnel costs were offset by
higher exploration costs, increased consulting fees and higher legal, audit and
accounting fees.

Personnel costs

For the six months period ended June 30, 2010 personnel costs
decreased to $3,038,130 from $3,515,853 for the corresponding period in 2009.
This decrease of 14% or $477,723 in the six months period comparison is mainly a
result of reduced personnel.

Exploration costs

For the six months ended June 30, 2010 we incurred exploration
costs of $612,022 as compared to $331,075 for the corresponding period in 2009.
This increase of 85% or $280,947 is mainly attributable to increased exploration
activity in Mongolia.

Consulting fees

For the six months ended June 30, 2010 we incurred consulting
fees in the amount of $661,019 as compared to consulting fees of $554,130 for
the period ended June 30, 2009. This increase of 19% or $106,889 is mainly
attributable to a non-cash charge for stock options for a consultant
(approximately $140,000).

---

29

Administrative costs

For the six months ended June 30, 2010, our administrative
costs increased to $648,202 from $580,044. This increase of 12% or $68,158 is
primarily due to higher legal, audit and accounting fees paid in the context of
the sale of our Albanian assets.

Non-operating income/expense

Non-operating income for the six months ended June 30, 2010
increased to an income of $60,902,760 from an expense of $13,880,663 for the
corresponding period in 2009. This increase of $74,783,423 is mainly due to the
gain from the sale of our subsidiary in Albania of $57,850,918 and the
difference of the changes in fair value of warrants of $13,935,449 ($533,223
during the six months period ended June 30, 2010 and ($13,402,226) for the
corresponding period in 2009). In addition, the change in fair value of our
investment in Petromanas positively contributed $2,934,535 to non-operating
income.

The Three Months Ended June 30, 2010 Compared to the
Three Months Ended June 30, 2009

Results of Operations

For the three months period ended June 30, 2010 we had a net
loss of $27,099,126 as compared to a net loss of $16,716,121 for the comparable
period in 2009. This increase of $10,383,005 is mainly due to a reduction in the
fair value of our investment in Petromanas, which accounted for $25,878,366, and
the difference in the changes in fair value of warrants of $14,324,372 ($421,981
during the six months period ended June 20, 2010 and ($13,902,391) for the
corresponding period in 2009).

For the three months period ended June 30, 2010 our operating
expenses decreased to $1,747,206 from $2,532,722 reported for the same period in
2009. This decrease of 31% or $ 785,516 in our total operating expenses is
mainly attributable to lower personnel costs and lower consulting fees.

Personnel costs

For the three months period ended June 30, 2010 our personnel
costs decreased to $536,937 from $1,652,000 for the corresponding period in
2009. This decrease of 67% or $1,115,063 in the three months period comparison
is mainly the consequence of lower charges related to equity awards granted
under the stock compensation and stock option plans. For such grants $410,905
were recorded during the quarter ended June 30, 2010 versus $1,310,184 for the
comparable period in 2009.

Exploration costs

For the three months ended June 30, 2010 we incurred
exploration costs of $548,364 as compared to $66,815 for the corresponding
period in 2009. This increase of 821% or $481,549 is mainly attributable to
increased exploration activities in Mongolia.

Consulting fees

For the three months ended June 30, 2010 we paid consulting
fees in the amount of $243,596 as compared to consulting fees of $427,345 for
the period ended June 30, 2009. This decrease of 43% or $183,749 is mainly
attributable to the deconsolidation of our assets in Albania which accounted for
$143,000 in the comparable period of the previous year.

---

30

Administrative costs

For the three months ended June 30, 2010, we recorded
administrative costs of $404,724 compared to $340,999 for the three months ended
June, 2009. This increase of 19% and $63,725 is mainly attributable to higher
legal, audit and accounting fees.

Non-operating income/expense

Non-operating expense for the three months ended June 30, 2010
increased from $14,181,917 for the corresponding period in 2009 to $25,351,525.
This increase of $11,169,608 is mainly due to a loss in fair value of our
investment in Petromanas of $25,878,366 and the difference in the changes in
fair value of warrants of $14,324,372 ($421,981 during the three months period
ended June 20, 2010 and ($13,902,391) for the corresponding period in 2009).

Liquidity and Capital Resources

Our cash balance as of June 30, 2010 was $5,650,105. Our total
current assets as of June 30, 2010 amounted to $5,984,939 and total current
liabilities were $1,481,757 resulting in a net working capital of $4,503,182. In
addition, of the 200,000,000 common shares of Petromanas held by us, 10,000,000
were freely tradable as of June 30, 2010. The market value of these freely
tradable shares was roughly $2,900,000.

Our capital commitments are disclosed in this quarterly report
on Form 10-Q for three and six months ended June 30, 2010 as well as in our
annual report on form 10-K for the year ended December 31, 2009. There have been
no material changes in these commitments since June 30, 2010.

Operating Activities

Net cash outflow from operating activities of $3,604,551 for
the six months ended June 30, 2010 has slightly increased from net cash outflow
of $3,579,816 in the comparable period for 2009.

Investing Activities

Net cash inflow from investing activities of $11,640,339 for
the six months ended June 30, 2010 has increased from a net cash inflow of
$4,976,899 in the comparable period for 2009. This increase is mainly
attributable to proceeds from sale of investment of $10,765,810. In the
comparable period of the previous year $5,000,939 through the reduction of the
bank guarantee in Albania and the reduction of the amount on the escrow account
in Mongolia positively affected our cash inflow from investing activities.

Financing Activities

Net cash outflow from financing activities of $3,217,143 for
the six months ended June 30, 2010 has changed from a net cash outflow of
$220,000 in the comparable period for 2009. During the six months period ended
June, 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 $2,260,958.

---

31

Cash Flows

|                                                            |   | Six Months Ended |  
|----------------------------------------------------------- | - | ---------------- | -
|                                                            |   | June 30          |  
|                                                            |   | 2010             |  
|Net cash (used in) Operating Activities                     | $ | (3,604,551       | )
|Net cash provided by (used in) Investing
      Activities   | $ | 11,640,339       |  
|Net cash provided by (used in) Financing Activities         | $ | (3,217,143       | )
|Change in Cash and Cash Equivalents During
      the Period | $ | 4,818,645        |  

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Cash Requirements

According to our business plan we estimate our cash needs for
the next 12 months be as follows:

Expense
    
    AmountGeological & Geophysical
    
    1,500,000General &
      Administrative
    
    2,700,000Financing
    
    -Legal
    
    300,000Audit
    
    200,000Open Commitments
    
    -Total Expenses planned for next 12 months
    
    4,700,000


As an operator, we have geological and geophysical commitments
for the next 12 months in Mongolia amounting to $1,500,000. In Tajikistan the
costs for the seismic program are expected to be approximately US $3.0 million;
these costs are currently being funded by Santos International Ventures Pty Ltd.
("Santos"), a wholly owned subsidiary of Santos Limited, which is the operator
of the project pursuant to a farm out agreement. In the Kyrgyz Republic, the
operational costs including seismic are fully carried by Santos. Also, as we are
not the operator of the Chilean project, we have no geological or geophysical
commitments for that project for the next 12 months. The Albanian investment was
sold during the first quarter of 2010 without further financial commitments from
us.

Going Concern

The consolidated financial statements have been prepared on the
assumption that we will continue as a going concern. For the three and six
months ended June 30, 2010, we had a net loss of $27,099,126 and a net income of
$55,912,188, respectively. The net loss for the three months period ended June
30, 2010 is mainly attributable to a reduction in the fair value of our
investment in Petromanas which accounted for $25,878,366. For the six months
period ended June 30, 2010 net income is mainly attributable to the gain from
sale of our subsidiary of $57,850,918.

Our accumulated net loss since inception until June 30, 2010
was $9,887,689. Accumulated cash flows used in operating activities since
inception until June 30, 2010 amounted to $29,612,938.

---

32

Our cash balance as of June 30, 2010 was $5,650,105. Our total
current assets as of June 30, 2010 amounted to $5,984,939 and total current
liabilities were $1,481,757 resulting in a net working capital of
$4,503,182.

In addition, of the 200,000,000 common shares of Petromanas
held by the Group, 10,000,000 were freely tradable as of June 30, 2010. The
market value of these freely tradable shares was roughly $2,900,000.

Based on our business plan for the next 12 months, we will need
$4,700,000 to fund our operations.

Given our net working capital plus our freely tradable shares
of Petromanas, we do not expect to need additional funding from external sources
to cover our monthly burn rate of approximately $267,000 and minimum commitments
before July 2011.

In order to continue our operations beyond July 2011 and
execute the strategy to develop our assets, we will require further funds.

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. For
further detail, please refer to the Notes 13 and 14 to the financial
statements.

During the first half-year of 2010 Petromanas Energy Inc., in
which we now hold a 32.36% interest, continued its exploration activities:

The technical team has finalized the planning of the seismic
acquisition in block E in Albania.105 km of 2D seismic acquisition is
progressing as planned and expected to be completed by October 2010. This is to
further determine the structural definition of the West Rova, Rova and Papri
prospects and adds to around 1,300 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 production sharing contract 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
and B. 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 determine the structural definition of the South Shpiragu
1, South Shpiragu 2 prospects and the Krasi lead.

The new seismic in blocks 2 and 3 is expected to be tied to the
existing Shpiragu well in order to allow a time-depth correlation of the South
Shpiragu prospects.

Kyrgyz  Republic

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.The operations during the  second quarter of 2010 can be summarized as follows:

- Safety:  zero lost time injuries
- Kyrgyzstan  drilling manager in-country
- Scouting  of proposed drill location (Ala Buka West #1)
- Drilling  program road and bridge audit
- Conducted  drill rig tender
- Conducted  drill rig audits
- Conducted  expression of interest and received preliminary quotes for site construction  services
- Received  quotes for long lead items (casing, wellheads, liner hangers)
- Preparation  of service contracts
- Drill  well planning for Ala Buka West#1 (prop), North Auchi #1 (prop):
- Geological and geophysical prognosis
- Hazard assessment
- Evaluation program
- Engineering well design
- Preliminary well budget
- Processing  of 20 km seismic acquired in the Tuzluk license area
- Reprocessing  of 2007-2008 seismic into 2010 dataset in Tuzluk license area
- Interpretation  and integration of new seismic into mapping in Tuzluk license area
- Co-ordinated  aid donation to Osh Relief fund, on behalf of international business community

---

33

Following the deadly  ousting of the Bakiyev government on April 8, 2010, amidst claims of  widespread  abuse of power and  corruption, an interim government led by Roza Otunbayeva (former Soviet  Minister to Malaysia, Kyrgyz Foreign Minister to US, Canada and Britain),  assumed control in the Kyrgyz Republic. Former President Bakiyev signed an  official resignation letter on April 15, 2010, and left the country, after  unsuccessful attempts to rally supporters in his home province of Djalalabad in  the south of the country (Fergana Basin operations area). Following violent  protests in Djalababad on May 19, 2010, and in Batken between May 26, 2010 and  May 31, 2010, a state of emergency was declared in Osh following rioting and deadly  inter-ethnic clashes on June 10 and 11, 2010. Tensions in the south remain  high, the UN and multiple NGOs are active. South Petroleum continues to monitor  the security situation in the south. Parliamentary elections are scheduled for  October 2010.

Seismic acquisition was  successfully acquired in the first quarter of 2010 in the Tuzluk license area,  across the border into Tajikistan. We believe that data quality is excellent  and objectives relating to definition of the Tuzluk share of the North Auchi  prospect are being met. The data was processed through the second quarter of  2010, and final migrations are due in the early third quarter of 2010. Interim  interpretation and mapping are on-going.

Preparations  for drilling operations were scaled back in the wake of the unrest of the country.  In concert with the current situation and the lead  time on service tendering and rig, material and services for drilling, we  expect that there will be a slight delay concerning the drilling of the  proposed Ala Buka West well.

Tajikistan

Somon Oil, in which we hold a 90% interest, contracted the  Kazak crew “Dank” to perform a seismic project

- Safety: zero lost time injuries
- Technical database compilation and integration
- Initial preparation of production sharing  agreement. Scheduled completion and commencement of negotiations with Tajik  government at the end the second quarter of 2010
- 2D seismic acquisition in the Novobod-Obchai  Kalachi and Northwest license areas, amounted to:
- 104 km recorded in March 2010
- 105 km recorded in May 2010
- 11 km recorded in June 2010 and survey complete  (June 4, 2010)
- Processing of complete 342.87 km, 30% complete at  the end June. Estimated completion in late August.
- Processing project included reprocessing of ~70 km  2007-2008 seismic into 2010 dataset in southern license area
- Commencement of interpretation and integration of  new seismic into mapping; completion of final mapping and prospect and lead  definition scheduled for the end of September 2010
- Scouting of proposed drill locations (Chkalovsk #1,  North Auchi #1)
- Drill well planning for Chkalovsk #1 (prop), North  Auchi #1 (prop):
- Geological and geophysical prognosis
- Preliminary engineering well design
- Preliminary well budget

The  seismic acquisition that commencedin the southern license areas (and locally across the Kyrgyz-Tajik  border) on February 13, 2010 was completed  on June 4, 2010. The survey was conducted safely and performance of  the Kazakh contractor, DANK and the local sub-contractor, Tajikgeofizika, was  of high standard. We experienced some equipment deficiencies, which we do not  expect to experience in the subsequent seismic acquisitions that we may conduct.  Unseasonal high rainfall also resulted in some retardation of the schedule.  Permitting processes (the survey was conducted during the cropping season) were  significantly improved in comparison with the 2007-2008 acquisition, with  satisfactory results.

Data quality is generally good to excellent. Objectives  relating to definition (to drill ready status) of the Chkalovsk and North Auchi  prospects is likely to be met following final processing and mapping, on  current indications. Objectives relating to lead definition in the West Digmai  area appear disappointing at this stage, however, the same part of the dataset  is encouraging with respect to the Yangiabad area (additional prospectivity).  Lines additional to the initial program in the northwest license area are of good  quality (field data and initial stacks) and have been valuable in terms of the  contribution to understanding of the technical issues and prospectivity in the  area.

The data was in processing through the second  quarter, and final migrations are due late August 2010. Interim  interpretation and mapping are on-going.

Preparation  of the production sharing agreement is on-going, and scheduled for initial  government interactions in the third quarter of 2010. The finalization and  ratification of the production sharing agreement is the last hurdle in order  for Santos to exercise their farm-in option agreed at the end of June 2007.

---

34

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.

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.

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 is expected to 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 from 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 June 30, 2010 that have materially
affected, or are reasonably likely to materially affect our internal control
over financial reporting.

---

35

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.

On July 21, 2010 we cancelled stock options to purchase an
aggregate of 150,000 shares of our common stock granted to a consultant on June
2, 2010 and issued warrants to purchase an aggregate of 150,000 shares of our
common stock at an exercise price of $0.80 per share for a term expiring June 2,
2013 instead. The warrants vest in quarterly installments equal to one-twelfth
of the total number of warrants; subject, however, to proration to account for
any partial calendar quarter at the beginning of the vesting period. The first
installment became exercisable on July 1, 2010 and each subsequent installment
becomes exercisable on the first day of each successive calendar quarter
thereafter. We issued these warrants to one U.S. person (as that term is defined
in Regulation S of the Securities Act of 1933) relying on Section 4(2) of the
Securities Act of 1933 and/or Rule 506 promulgated pursuant to the Securities
Act of 1933.

Item 3. Defaults upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

We entered into a termination agreement dated July 31, 2010
with Erik Herlyn, one of our directors and our former President, Chief Executive
Officer and Secretary, which terminated the employment agreement dated June 25,
2007 between Mr. Herlyn and us.

Item 6. Exhibits.

Exhibit Number
    Description(3)
    Articles of Incorporation and Bylaws3.1
    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 Indentures4.1
    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 Contracts10.1
    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)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)


---

36

Exhibit Number
    Description10.11
    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)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)


---

37

ExhibitNumber
    Description10.30
    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)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)10.44*
    Termination Agreement dated July 31, 2010 with Erik
      Herlyn


---

38

Exhibit Number
    Description(14)
    Code of Ethics14.1
    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)
    Subsidiaries21.1
    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, 32.36%
      interest(31)
    Rule 13a-14 Certifications31.1*
    Section 302 Certification of Chief Executive
      Officer31.2*
    Section 302 Certification of Chief Financial
      Officer(32)
    Section 1350 Certifications32.1*
    Section 906 Certification of Chief Executive
      Officer32.2*
    Section 906 Certification of Chief Financial
      Officer


* Filed herewith.

---

39

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/ Peter-Mark Vogel                                  
| | Peter-Mark Vogel                                           
| | Chief Executive Officer and President                      
| | (Principal Executive Officer)                              
| |                                                            
| | Date: August 13, 2010                                      
| |                                                            
| | By
  /s/ Ari Muljana                                       
| | Ari Muljana                                                
| | Chief Financial Officer and Treasurer                      
| | (Principal Financial Officer and Principal
      Accounting
| | Officer)                                                   
| |                                                            
| | Date: August 13, 2010                                      

---