---

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 September 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

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2

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:
122,983,866 shares of common stock as of November 12, 2010.

---

3

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 | 30
|Item 3. Quantitative and Qualitative
      Disclosures about Market Risk                            | 37
|Item 4T. Controls and
      Procedures                                                              | 37
|PART IIOTHER INFORMATION                                                                           | 38
|Item 1. Legal
      Proceedings                                                                     | 38
|Item 2. Unregistered Sales of Equity
      Securities and Use of Proceeds                           | 38
|Item 3. Defaults upon
      Senior Securities                                                       | 38
|Item 4. (Removed and Reserved)                                                                      | 38
|Item 5. Other
      Information.                                                                    | 38
|Item 6. Exhibits                                                                                    | 39
|SIGNATURES                                                                                          | 43

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4

PART IFINANCIAL INFORMATION

Item 1. Financial Statements.

MANAS PETROLEUM CORPORATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
  UNAUDITED

**CONDENSED CONSOLIDATED BALANCE SHEETS**

|                                                                                                                                                        |  | 09.30.2010 |  |  | 12.31.2009  |  
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- |  |  | ----------- | -
|                                                                                                                                                        |  | USD        |  |  | USD         |  
|ASSETS                                                                                                                                                  |  |            |  |  |             |  
|                                                                                                                                                        |  |            |  |  |             |  
|Cash and cash equivalents                                                                                                                               |  | 3,318,465  |  |  | 804,663     |  
|Restricted cash                                                                                                                                         |  | 98,511     |  |  | 908,888     |  
|Accounts receivable                                                                                                                                     |  | 46,993     |  |  | 60,611      |  
|Prepaid expenses                                                                                                                                        |  | 522,647    |  |  | 450,372     |  
|Total current assets                                                                                                                                    |  | 3,986,616  |  |  | 2,224,534   |  
|                                                                                                                                                        |  |            |  |  |             |  
|Debt issuance costs                                                                                                                                     |  | -          |  |  | 112,619     |  
|Tangible fixed assets                                                                                                                                   |  | 100,038    |  |  | 178,191     |  
|Investment in associate                                                                                                                                 |  | 238,304    |  |  | 238,304     |  
|Investment in associate
      (Petromanas)                                                                                                              |  | 60,041,939 |  |  | -           |  
|Total non-current assets                                                                                                                                |  | 60,380,281 |  |  | 529,114     |  
|                                                                                                                                                        |  |            |  |  |             |  
|                                                                                                                                                        |  |            |  |  |             |  
|TOTAL ASSETS                                                                                                                                            |  | 64,366,898 |  |  | 2,753,648   |  
|                                                                                                                                                        |  |            |  |  |             |  
|LIABILITIES AND
      SHAREHOLDERS' EQUITY/(DEFICIT)                                                                                                    |  |            |  |  |             |  
|                                                                                                                                                        |  |            |  |  |             |  
|Accounts payable                                                                                                                                        |  | 211,166    |  |  | 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                                                                                                                |  | 100,576    |  |  | 220,449     |  
|Accrued expenses Interest                                                                                                                               |  | -          |  |  | 82,749      |  
|Other accrued expenses                                                                                                                                  |  | 62,838     |  |  | 13,673      |  
|Refundable deposits                                                                                                                                     |  | 53,962     |  |  | -           |  
|Total current liabilities                                                                                                                               |  | 428,543    |  |  | 9,753,331   |  
|                                                                                                                                                        |  |            |  |  |             |  
|Pension liabilities                                                                                                                                     |  | 29,504     |  |  | 29,504      |  
|Total non-current liabilities                                                                                                                           |  | 29,504     |  |  | 29,504      |  
|                                                                                                                                                        |  |            |  |  |             |  
|                                                                                                                                                        |  |            |  |  |             |  
|TOTAL LIABILITIES                                                                                                                                       |  | 458,047    |  |  | 9,782,835   |  
|                                                                                                                                                        |  |            |  |  |             |  
|Temporary equity
      (common stock USD 0.001 par value, 14'144'993 and 0 shares, respectively)                                                        |  | 5,516,547  |  |  | -           |  
|                                                                                                                                                        |  |            |  |  |             |  
|Common stock (300,000,000
      shares authorized, USD 0.001 par value, 122'983'866 and 119'051'733 shares,
      respectively, issued and outstanding) |  | 122,984    |  |  | 119,052     |  
|Additional paid-in capital                                                                                                                              |  | 49,419,525 |  |  | 49,532,367  |  
|Retained earnings/(deficit accumulated during the exploration stage)                                                                                    |  | 8,798,794  |  |  | (56,731,607 | )
|Accumulated other comprehensive income / (loss)                                                                                                         |  |            |  |  |             |  
|Currency translation adjustment                                                                                                                         |  | 51,001     |  |  | 51,001      |  
|Total shareholders' equity/(deficit)                                                                                                                    |  | 58,392,304 |  |  | (7,029,187  | )
|                                                                                                                                                        |  |            |  |  |             |  
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)                                                                                                    |  | 64,366,898 |  |  | 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 nine months ended |   |  | Period from |  
|--------------------------------------------------------------- |  | -------------------------- | - |  | ------------------------- | - |  | ----------- | -
|                                                                |  |                            |   |  |                           |   |  |             |  
|                                                                |  |                            |   |  |                           |   |  |             |  
|                                                                |  | 09.30.2010                 |   |  | 09.30.2009                |   |  | 09.30.2010  |  
|                                                                |  | USD                        |   |  | USD                       |   |  | USD         |  
|OPERATING REVENUES                                              |  |                            |   |  |                           |   |  |             |  
|                                                                |  |                            |   |  |                           |   |  |             |  
|Other revenues                                                  |  | -                          |   |  | -                         |   |  | -           |  
|Total revenues                                                  |  | -                          |   |  | -                         |   |  | -           |  
|                                                                |  |                            |   |  |                           |   |  |             |  
|OPERATING EXPENSES                                              |  |                            |   |  |                           |   |  |             |  
|Personnel costs                                                 |  | (255'045                   | ) |  | (1'080'601                | ) |  | (3'293'175  | )
|Exploration costs                                               |  | (268'345                   | ) |  | (539'468                  | ) |  | (880'367    | )
|Depreciation                                                    |  | (13'195                    | ) |  | (14'780                   | ) |  | (42'989     | )
|Consulting fees                                                 |  | (277'948                   | ) |  | (208'182                  | ) |  | (938'967    | )
|Administrative costs                                            |  | (295'737                   | ) |  | (539'821                  | ) |  | (943'939    | )
|Total operating expenses                                        |  | (1'110'270                 | ) |  | (2'382'852                | ) |  | (6'099'437  | )
|                                                                |  |                            |   |  |                           |   |  |             |  
|Gain from sale of
      investment                              |  | -                          |   |  | -                         |   |  | -           |  
|Loss from sale of investment                                    |  | -                          |   |  | -                         |   |  | -           |  
|OPERATING INCOME/(LOSS)                                         |  | (1'110'270                 | ) |  | (2'382'852                | ) |  | (6'099'437  | )
|                                                                |  |                            |   |  |                           |   |  |             |  
|NON-OPERATING INCOME / (EXPENSE)                                |  |                            |   |  |                           |   |  |             |  
|Exchange differences                                            |  | 31'175                     |   |  | 44'820                    |   |  | 57'971      |  
|Changes in fair value of warrants                               |  | -                          |   |  | 2'809'589                 |   |  | 533'223     |  
|Warrants issuance expense                                       |  | -                          |   |  | -                         |   |  | -           |  
|Gain from sale of
      subsidiary                              |  | -                          |   |  | -                         |   |  | 57'850'918  |  
|Change in fair value of investment in associate                 |  | 10'700'583                 |   |  | -                         |   |  | 13'635'118  |  
|Interest income                                                 |  | 728                        |   |  | 28'310                    |   |  | 1'180       |  
|Interest expense                                                |  | (3'379                     | ) |  | (366'736                  | ) |  | (329'494    | )
|Loss on extinguishment
      of debt                            |  | -                          |   |  | -                         |   |  | (117'049    | )
|Income/(Loss) before taxes and equity in net loss of associate  |  | 9'618'837                  |   |  | 133'131                   |   |  | 65'532'430  |  
|                                                                |  |                            |   |  |                           |   |  |             |  
|Income taxes                                                    |  | (624                       | ) |  | (356                      | ) |  | (2'028      | )
|Equity in net loss of associate                                 |  | -                          |   |  | -                         |   |  | -           |  
|Net income/(loss)                                               |  | 9'618'213                  |   |  | 132'775                   |   |  | 65'530'401  |  
|                                                                |  |                            |   |  |                           |   |  |             |  
|Net income / (loss) attributable to non-controlling interest    |  | -                          |   |  | -                         |   |  | -           |  
|Net income/(loss) attributable to Manas                         |  | 9'618'213                  |   |  | 132'775                   |   |  | 65'530'401  |  
|                                                                |  |                            |   |  |                           |   |  |             |  
|Currency translation adjustment attributable to Manas           |  | -                          |   |  | -                         |   |  | -           |  
|Net comprehensive income/(loss) attributable to Manas           |  | 9'618'213                  |   |  | 132'775                   |   |  | 65'530'401  |  
|                                                                |  |                            |   |  |                           |   |  |             |  
|Net comprehensive loss attributable to non-controlling interest |  | -                          |   |  | -                         |   |  | -           |  
|Net comprehensive income/(loss)                                 |  | 9'618'213                  |   |  | 132'775                   |   |  | 65'530'401  |  
|                                                                |  |                            |   |  |                           |   |  |             |  
|Weighted average number of outstanding shares (basic)           |  | 122'901'257                |   |  | 119'051'733               |   |  | 121'343'884 |  
|Weighted average number of outstanding shares (diluted)         |  | 124'729'875                |   |  | 121'242'439               |   |  | 125'678'549 |  
|                                                                |  |                            |   |  |                           |   |  |             |  
|Basic earnings / (loss) per share attributable to Manas         |  | 0.08                       |   |  | 0.00                      |   |  | 0.54        |  
|Diluted earnings / (loss) per share attributable to Manas       |  | 0.08                       |   |  | 0.00                      |   |  | 0.52        |  

---

6

MANAS PETROLEUM CORPORATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

|                                                                |  | For the nine months ended |   |  | Period from |  
|--------------------------------------------------------------- |  | ------------------------- | - |  | ----------- | -
|                                                                |  |                           |   |  |             |  
|                                                                |  |                           |   |  |             |  
|                                                                |  | 09.30.2010                |   |  | 09.30.2009  |  
|                                                                |  | USD                       |   |  | USD         |  
|OPERATING ACTIVITIES                                            |  |                           |   |  |             |  
|                                                                |  |                           |   |  |             |  
|Net income/(loss)                                               |  | 65'530'401                |   |  | (18'792'985 | )
|                                                                |  |                           |   |  |             |  
|                                                                |  |                           |   |  |             |  
|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           |  | (13'635'119               | ) |  | -           |  
|Equity in net loss of associate                                 |  | -                         |   |  | -           |  
|Depreciation                                                    |  | 42'989                    |   |  | 76'839      |  
|Amortization of debt issuance costs                             |  | 112'619                   |   |  | 97'270      |  
|Warrant issuance expense
      / (income)                       |  | (533'223                  | ) |  | 10'592'637  |  
|(Decrease) / increase in participation liabilities              |  | -                         |   |  | (432'564    | )
|Exchange differences                                            |  | (57'971                   | ) |  | (180'329    | )
|Non cash adjustment to exploration costs                        |  | (204'753                  | ) |  | -           |  
|Non cash interest
      income                                  |  | (25'619                   | ) |  | -           |  
|Interest expense on contingently convertible loan               |  | 29'893                    |   |  | 105'933     |  
|Loss on extinguishment
      of contingently convertible loan   |  | 83'202                    |   |  | -           |  
|Interest expense on debentures                                  |  | 78'974                    |   |  | 326'609     |  
|Loss on extinguishment
      of debentures                      |  | 33'847                    |   |  | -           |  
|Stock-based compensation                                        |  | 2'996'596                 |   |  | 3'604'815   |  
|Decrease / (increase)
      in receivables and prepaid expenses |  | (60'633                   | ) |  | (206'204    | )
|(Decrease) / increase in accounts payables                      |  | (372'462                  | ) |  | 28'263      |  
|(Decrease) / increase
      in accrued expenses                 |  | (865'464                  | ) |  | (242'887    | )
|Change in pension liability                                     |  | -                         |   |  | -           |  
|Cash flow (used
      in) / from operating activities           |  | (4'697'640                | ) |  | (5'022'603  | )
|                                                                |  |                           |   |  |             |  
|INVESTING ACTIVITIES                                            |  |                           |   |  |             |  
|                                                                |  |                           |   |  |             |  
|Purchase of tangible
      fixed assets and computer software   |  | (1'182                    | ) |  | (28'414     | )
|Sale of tangible fixed assets and computer software             |  | -                         |   |  | -           |  
|Proceeds from sale
      of investment                          |  | 10'765'810                |   |  | -           |  
|Decrease / (increase) restricted cash                           |  | 810'724                   |   |  | 4'932'325   |  
|Acquisition of investment
      in associate                    |  | -                         |   |  | -           |  
|Cash flow (used in) / from investing activities                 |  | 11'575'352                |   |  | 4'903'911   |  
|                                                                |  |                           |   |  |             |  
|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                                           |  | -                         |   |  | 1'300'000   |  
|Increase in short-term
      loan                               |  | -                         |   |  | -           |  
|Payment of debt issuance costs                                  |  | -                         |   |  | -           |  
|(Decrease) / increase
      in bank overdraft                   |  | (196'154                  | ) |  | -           |  
|Increase / (decrease) in refundable deposits                    |  | 53'962                    |   |  | -           |  
|Cash flow (used
      in) / from financing activities           |  | (4'421'880                | ) |  | 80'000      |  
|                                                                |  |                           |   |  |             |  
|                                                                |  |                           |   |  |             |  
|Net change in cash and cash equivalents                         |  | 2'455'832                 |   |  | (38'692     | )
|                                                                |  |                           |   |  |             |  
|Cash and cash equivalents at the beginning of the period        |  | 804'663                   |   |  | 225'993     |  
|Currency translation
      effect on cash and cash equivalents  |  | 57'971                    |   |  | 67'187      |  
|Cash and cash equivalents at the end of the period              |  | 3'318'465                 |   |  | 254'487     |  

---

7

Supplement schedule of non-cash investing and financing
activities:

|Forgiveness of debt by major shareholder                              |  | -          |   |  | - |  |  | 1'466'052  |  
|--------------------------------------------------------------------- |  | ---------- | - |  | - |  |  | ---------- | -
|Deferred consideration for interest in CJSC South Petroleum
      Co. |  | -          |   |  | - |  |  | 193'003    |  
|Warrants issued to pay placement commission expenses                  |  | -          |   |  | - |  |  | 2'689'910  |  
|Debenture interest paid in common shares                              |  | -          |   |  | - |  |  | 213'479    |  
|Forgiveness of advance payment from Petromanas Energy Inc.            |  | 917'698    |   |  | - |  |  | 917'698    |  
|Initial fair value of shares of investment in Petromanas              |  | 46'406'821 |   |  | - |  |  | 46'406'821 |  
|Forgiveness of receivable due from Manas Adriatic GmbH                |  | (3'449'704 | ) |  | - |  |  | (3'449'704 | )

---

8

MANAS PETROLEUM CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY / (DEFICIT)

|SHAREHOLDERS' EQUITY / (DEFICIT)                  | Number of Shares | Share Capital | Additional paid- in
      capital | Deficit accumulated during
      the development stage | Accumulated Other Compre-
      hensive Income (Loss) | Total share- holders' equity
      / (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                      | 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                         | -                                                      | -                                                     | 2,230,959                                     
|FV adjustment of exercised warrants               | -                | -             | 72,643                            | -                                                      | -                                                     | 72,643                                        
|Reclassification warrants                         | -                | -             | 77,439                            | -                                                      | -                                                     | 77,439                                        
|Stock-based compensation                          | 100,000          | 100           | 2,996,496                         | -                                                      | -                                                     | 2,996,596                                     
|Redeemable shares                                 | -                | -             | (5,516,547)                       | -                                                      | -                                                     | (5,516,547)                                   
|Currency translation adjustment                   | -                | -             | -                                 | -                                                      | -                                                     | -                                             
|Net income for the period                         | -                | -             | -                                 | 65,530,401                                             | -                                                     | 65,530,401                                    
|Balance September 30, 2010                        | 122,983,866      | 122,984       | 49,419,525                        | 8,798,794                                              | 51,001                                                | 58,392,304                                    

---

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 nine-month period ended September 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 32.29% 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) and in the Balkan Region
(participation in Petromanas Energy Inc. with activities in Albania).

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 September 30, 2010 was $3,318,465.

In addition to our cash balance, of the 200,000,000 common
shares of Petromanas held by the Group, 25,000,000 were freely tradable as of
September 30, 2010. The quoted market price of Petromanas shares on September
30, 2010 was CAD 0.35. Hence, the market value of the freely tradable shares was
over $8,000,000.

Based on our business plan for the next 12 months, we will need
$8,280,000 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 $265,000 and minimum commitments
  before October 2011.

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.

---

11

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 September 30, 2010 and
December 31, 2009 and for the three and nine-month periods ended September 30,
2010 and 2009 and for the period from inception, May 25, 2004, to September 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 September 30, 2010 and December 31,
2009, results of operations for the three and nine-month period ended September
30, 2010 and 2009 and for the period from inception, May 25, 2004, to September
30, 2010, cash flows for the nine-month periods ended September 30, 2010 and
2009 and for the period from inception, May 25, 2004, to September 30, 2010 and
statement of shareholders equity (deficit) for the period from inception, May
25, 2004, to September 30, 2010, as applicable, have been made. The results of
operations for the three and nine-month period ended September 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) | Sept 30, 2010 | Dec 31, 2009
|Bank and postal accounts        | 3'282'882     | 302           | 9'790         | 25'492      | 3'318'465     | 804'663     
|Cash
      and Cash Equivalents | 3'282'882     | 302           | 9'790         | 25'492      | 3'318'465     | 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
      September 30                  |  | 117'852          |   |  | 89'500   |   |  | 47'375       |   |  | 254'727  |  
|                                            |  |                  |   |  |          |   |  |              |   |  |          |  
|Accumulated
      depreciation at January 1 |  | (68'088          | ) |  | (53'077  | ) |  | (19'593      | ) |  | (140'758 | )
|Depreciation                                |  | (18'574          | ) |  | (17'308  | ) |  | (7'107       | ) |  | (42'989  | )
|Deconsolidation of
      Manas Adriatic     |  | 16'768           |   |  | 12'291   |   |  | -            |   |  | 29'059   |  
|Accumulated depreciation at September 30    |  | (69'894          | ) |  | (58'094  | ) |  | (26'700      | ) |  | (154'689 | )
|                                            |  |                  |   |  |          |   |  |              |   |  |          |  
|Net book value at September 30              |  | 47'958           |   |  | 31'406   |   |  | 20'675       |   |  | 100'038  |  

Depreciation expense for the nine-month period ended September
30, 2010 and 2009 was $42,989 and $76,839, respectively. Depreciation expense
for the three-month period ended September 2010 and 2009 was $13,585 and
$14,780, respectively.

---

13

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. On July 21, 2010, the consultant ceased to act as a consultant of
the company, his options were cancelled and we issued 150,000 warrants with the
same terms instead.

On September 14, 2010 we granted to one of our employees according to an  employment agreement dated May 1, 2010 100,000 vested shares of our common  stock, which are subject to a hold period until May 1, 2011. On the first day  of anniversary date beginning with May 1, 2011, he is to receive an additional 100,000  vested shares of our common stock until 2014. On May 1, 2015, he is to receive 200,000  vested shares of our common stock. All granted shares are subject to one-year  hold period from the date of each grant.

As of September 16, 2010, we granted stock options to a
director to purchase 500,000 shares of our common stock at an exercise price of
$0.52 per share and 500,000 shares of our common stock at an exercise price of
$0.65 per share until September 16, 2020. 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.

---

14

On September 16, 2010 the term of a director elapsed. His
non-vested options forfeited with that date and his vested options (i.e. 923,356
options with an exercise price of $0.26 and 400,000 options with an exercise
price of $0.70) remain exercisable for 90 days and expire on December 16,
2010.

The fair value of all of the options granted during the three
and nine-month periods ended September 30, 2010 and September 30, 2009 was
determined using the Black-Scholes option pricing model applying the weighted
average assumptions noted in the following table:

Nine months period ended
      Three months period endedSeptember 30,
      September 30,
      September 30,
      September 30,2010
      2009
      2010
      2009Expected dividend yield
      0%
      0%
      0%
      0%Expected volatility
      89%
      87%
      85%
      75%Risk-free interest rate
      1.735%
      1.463%
      1.825%
      2.750%Expected term (in years)
      4.59
      3.1
      6
      6


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 nine-month periods ended September 30, 2010 and 2009, the
weighted average fair value of options granted was $0.48 and $0.16 at the grant
date, respectively.

The following table summarizes the Company's stock option
activity for the nine-month period ended September 30, 2010:

|                                  |  |              |   |  |           |  |  | Weighted-   |  |  |           | 
|--------------------------------- |  | ------------ | - |  | --------- |  |  | ----------- |  |  | --------- | 
|                                  |  |              |   |  |           |  |  | average     |  |  |           | 
|                                  |  |              |   |  | Weighted- |  |  | remaining   |  |  |           | 
|                                  |  |              |   |  | average   |  |  | contractual |  |  | Aggregate | 
|                                  |  | Shares under |   |  | exercise  |  |  | term        |  |  | intrinsic | 
|Options                           |  | option       |   |  | price     |  |  | (years)     |  |  | value     | 
|Outstanding at December 31, 2009  |  | 10'150'000   |   |  | 2.12      |  |  |             |  |  |           | 
|Cancellation (repricing)          |  | (4'750'000   | ) |  | 4.13      |  |  |             |  |  |           | 
|Re-granted (repricing)            |  | 4'750'000    |   |  | 0.70      |  |  |             |  |  |           | 
|Granted                           |  | 2'150'000    |   |  | 0.65      |  |  |             |  |  |           | 
|Reclassified as warrants          |  | (150'000     | ) |  | 0.80      |  |  |             |  |  |           | 
|Exercised                         |  | 0            |   |  |           |  |  |             |  |  |           | 
|Forfeited or expired              |  | (1'076'645   | ) |  | 0.26      |  |  |             |  |  |           | 
|Outstanding at September 30, 2010 |  | 11'073'355   |   |  | 0.53      |  |  | 4.92        |  |  | 1'291'000 | 
|Exercisable at September 30, 2010 |  | 7'403'104    |   |  | 0.58      |  |  | 3.72        |  |  | 598'117   | 

For the nine-month periods ended September 30, 2010 and 2009,
the Company recorded a total charge of $2,996,596 and $3,604,815 respectively,
with respect to equity awards granted under the stock compensation and stock
option plans. For the nine-month period ended September 30, 2010 $2,740,137 and
$256,459 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 $3,532,685 were
recorded in personnel costs and $72,130 in consulting fees.

For the three-month period ended September 30, 2010 the Company
recorded a total charge of $124,067 with respect to equity awards granted under
the stock compensation and stock option plans, of which $74,481 was recorded in personnel and $49,586 in consulting
fees. For the three-month period ended September 30, 2009 the Company recorded a
total charge of $804,310 with respect to equity awards granted under the stock
compensation and stock option plans, of which $784,453 was recorded in personnel
and $19,857 in consulting fees.

---

15

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

|                                |  |                     |   |  | Weighted-average      | 
|------------------------------- |  | ------------------- | - |  | --------------------- | 
|Nonvested options               |  | Shares under option |   |  | grant date fair value | 
|Nonvested at December 31, 2009  |  | 4'838'097           |   |  | 0.35                  | 
|Granted                         |  | 2'150'000           |   |  | 0.48                  | 
|Vested                          |  | (2'097'391          | ) |  | 0.65                  | 
|Reclassified as warrants        |  | (143'810            | ) |  | 0.14                  | 
|Forfeited                       |  | (1'076'645          | ) |  | 0.37                  | 
|Nonvested at September 30, 2010 |  | 3'670'251           |   |  | 0.32                  | 

A summary of the status of the Companys  share grants as of September 30, 2010 and changes during the period
is presented below:

|                                      |  |          |   |  | Weighted-average grant | 
|------------------------------------- |  | -------- | - |  | ---------------------- | 
|Nonvested shares                      |  | Shares   |   |  | date fair value        | 
|Nonvested at December 31, 2009        |  | -        |   |  | -                      | 
|Granted                               |  | 700,000  |   |  | 0.36                   | 
|Vested                                |  | (100,000 | ) |  | 0.36                   | 
|Forfeited                             |  | -        |   |  | -                      | 
|Nonvested at September 30,
      2010 |  | 600,000  |   |  | 0.36                   | 

As of September 30, 2010, there was $1,401,231 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 2.74 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.

---

16

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 nine month period ended September 30, 2010 we had
interest expense on debentures of $78,974 and $326,609 for the comparable period
in the previous year. For the three-month periods ended September 30, 2010 and
2009 we had interest expense of $0 and $108,801, respectively. At September 30,
2010 and December 31, 2009, the unamortized debt discount relating the
Debentures amounted to $0 and $224,852, respectively. To account for the
unamortized debt discount prevailing at the date of settlement we have recorded
a loss on extinguishment of debenture of $33,847.

9. WARRANTS

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

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17

|                                    |  |                     |  |  |              |  |  |                      |  |  |                      |  |   | 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.

On September 1, 2010 4,000,000 Warrants from the Equity PP3
Series granted on September 1, 2008 expired unexercised.

On June 2, 2010, we granted a consultant, stock options 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 in consideration for the
consulting services provided by him. On July 21, 2010, the consultant ceased to
act as a consultant of the company. His options were cancelled and we issued
150,000 warrants with the same terms instead.

As of September 30, 2010 and December 31, 2009, the Company had
150,000 respectively 48,343,129 warrants outstanding to purchase common
stock.

The following table summarizes information about the Companys
warrants outstanding as of September 30, 2010:

Warrant series
    # of
      Warrants
    Strike price
    Grant
      date
    Expiry dateGrant
    150'000
    0.8
    June 2, 2010
    June 2, 2013Total warrants outstanding
    150'000


The following table summarizes the Companys warrant activity
for the nine-month period ended September 30, 2010:

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18

Classifed as
      
      
      Classified as
    
    
    
    
    
    Weighted-averageWarrants
    
      liability
    
    
      equity
    
    
    #
      of warrants
    
    
    exercise priceOutstanding at December 31,
      2009
    
    5'581'532
    
    
    42'911'597
    
    
    48'493'129
    
    
    0.62Reclassification upon amendment ofwarrant agreement
    
    (681'695
    )
    
    681'695
    
    
    -
    
    
    0.59Granted
    
    -
    
    
    150'000
    
    
    150'000
    
    
    0.80Exercised
    
    (350'763
    )
    
    (3'481'370
    )
    
    (3'832'133
    )
    
    0.59Forfeited or expired
    
    (4'549'074
    )
    
    (40'111'922
    )
    
    (44'660'996
    )
    
    0.59Outstanding at September 30,
      2010
    
    -
    
    
    150'000
    
    
    150'000
    
    
    0.80


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

In connection with the warrants granted on July 21, 2010 we
expensed during the three-month period ended September 30, 2010 $39,839 as
consultant expense (included in stock based compensation).

For the three-month periods ended September 30, 2010 and 2009
we recorded in warrants expense $0 and $2,809,589 respectively.

For the nine-month periods ended September 30, 2010 and 2009 we
recorded in warrants expense $533,223 and $(10,592,637) respectively.

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 was deemed
part of the consideration and was recorded as a gain on sale on the income
statement.

As of September 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.

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.

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19

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 nine month period ended September 30, 2010 we had
interest expense on contingently convertible loan of $29,893 compared to
$105,933 for the comparable previous year period. For the three-month periods
ended September 30, 2010 and 2009 we had interest expense on contingently
convertible loan of $0 and $40,013, respectively. At September 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 nine-month period ended
September 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 nine-month periods ended September 30, 2010 and 2009,
we recorded $11,198 and $27,017 interest expense.

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20

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 completion of the
  drilling of the first well in Albania, i.e. DWM holds 30.47% or 46.70% of Petromanas. We also determined that Manas
  shareholders do not represent the majority shareholders.

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21

- 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.

---

22

Of the 200,000,000 common shares of Petromanas held by the
Group, 25,000,000 were freely tradable as of September 30, 2010. The market
value of these freely tradable shares was over $8,000,000.

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:

USDCash
    CAD $2,000,000
    $1'937'396Cash Advance Payment
      
    $917'698Cash Receipt on May 17, 2010
    compensation for operational expenses for
      January and February in Albania to be borne by Petromanas
    $350'000100,000,000 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%
      $23'815'101100,000,000 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$0.30x100,000,000
      (USD/CAD:0.94763 on Feb 25, 2010) on Feb 25, 2010) discounted by
      20.53%                                                                           
      $22'591'72050,000,000 WWI Resources common shares which
      are contingent.
    These will be accounted for under ASC450 that
      is an acceptable approach under EITF094. As this is again contingency it
      will only be recorded when it can be realized.
    $0Push down of past explorationc osts incurred
      as per agreement
      
    $7'012'222Forgiveness 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
      
    $4'676'485Gainonsaleof subsidiary
      
      $57'850'918


---

23

*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 nine month period ended September 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 32.29% of the
issued and outstanding common shares of Petromanas.

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

As of June 30, 2010, Petromanas had roughly $73 million (CAD
$75,574,724) cash and cash equivalents available and approximately $73.5 million
(CAD $76,146,695) working capital. Petromanas has sufficient cash to settle its
outstanding liabilities and to complete its Albanian exploration and development
programs. As of June 30, 2010, Petromanas had 618,131,466 common shares
outstanding, of which 200,000,000 are owned by the Company. For details on
Petromanas financial status please refer to www.sedar.com.

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 as
of September 30, 2010 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.

---

24

The quoted market price of Petromanas on September 30, 2010 was
CAD $0.35.

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 11.7% .

During the nine-month period ended September 30, 2010, we have
recorded $13,635,119 unrealized gain on investment in Petromanas. During the
three-month period ended September 30, 2010 we have recorded $10,700,583
unrealized gain 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               | Sep 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                | 32.29%       | 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:

---

25

|Affiliates                                   |  | nine months period ended |   |  | Three months period ended | 
|-------------------------------------------- |  | ------------------------ | - |  | ------------------------- | 
|                                             |  | Sept 30, 2010            |   |  | Sept 30, 2009             | 
|                                             |  | USD                      |   |  | USD                       | 
|Management services performed to Petromanas* |  | (145'662                 | ) |  | -                         | 

* Services invoiced or accrued and recorded as contra-expense
in personnel cost and administrative cost

|Board of directors                                                                           |  | nine months period ended |  |  | Three months period ended | 
|-------------------------------------------------------------------------------------------- |  | ------------------------ |  |  | ------------------------- | 
|                                                                                             |  | Sept 30, 2010            |  |  | Sept 30, 2009             | 
|                                                                                             |  | USD                      |  |  | USD                       | 
|Payments to directors for office rent                                                        |  | 18'000                   |  |  | 30'923                    | 
|Payments to related
      companies controlled by directors for rendered consulting services |  | 214'714                  |  |  | 262'700                   | 
|Interest on Promissory notes from directors*                                                 |  | 4'843                    |  |  | 4'612                     | 
|Interest on Promissory
      notes from former directors*                                    |  | 6'355                    |  |  | 6'053                     | 

|                                              |  | As of Sept 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.

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 September 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. Management regards the likelihood of a litigation as
remote.

At September 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.

---

26

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.

Nine
        months period ended
      
      
      Three
        months period endedPension expense
      
      September 30, 2010
      
      
      September 30, 2009
      
      
      September 30, 2010
      
      
      September 30, 2009USD
      
      
      USD
      
      
      USD
      
      
      USDNet service cost
      
      3'001
      
      
      21'939
      
      
      1'000
      
      
      7'313Interest cost
      
      5'060
      
      
      14'064
      
      
      1'687
      
      
      4'688Expected return on assets
      
      (3'922
      )
      
      (10'555
      )
      
      (1'307
      )
      
      (3'518
      )Amortization of net (gain)/loss
      
      -
      
      
      -
      
      
      -
      
      
      -Net periodic pension cost
      
      4'139
      
      
      25'448
      
      
      1'380
      
      
      8'483


During the nine-month periods ended September 30, 2010 and 2009
the Company made cash contributions of $55,021 and approximately $58,300,
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
157Fair 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 September 30, 2010 are classified in one
of the three categories as follows:

|                                |   | Level 1 |  |   | Level 2    |  |   | Level 3 |  |   | Total      | 
|------------------------------- | - | ------- |  | - | ---------- |  | - | ------- |  | - | ---------- | 
|                                |   |         |  |   |            |  |   |         |  |   |            | 
|Assets                          |   |         |  |   |            |  |   |         |  |   |            | 
|Investment Petromanas (Note 14) | $ | -       |  | $ | 60'041'939 |  | $ | -       |  | $ | 60'041'939 | 
|Total Assets                    | $ | -       |  | $ | 60'041'939 |  | $ | -       |  | $ | 60'041'939 | 

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

---

27

|Balance at January 1, 2010                    |  | -          |  |    
|--------------------------------------------- |  | ---------- |  | ---
|Total gains (losses) realized and unrealized: |  |            |  |    
|Included in
      earnings                    |  | 13'635'118 |  | 2 )
|Included in other comprehensive
      income  |  | -          |  |    
|Purchase, sale, or settlement                 |  | 46'406'821 |  | 1 )
|Net transfer in / (out) of level 2            |  | -          |  |    
|Balance at September 30, 2010                 |  | 60'041'939 |  |    

|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
September 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 3                                        |  | (77'439  | ) | 3 )
|Balance at September 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                               

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 is presented in the table below:

---

28

|                                                                                                                                                                                                                                                               |  | Nine
      months period ended |  |  | Three
      months period ended | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ |  |  | ------------------------------- | 
|                                                                                                                                                                                                                                                               |  |                                |  |  |                                 | 
|                                                                                                                                                                                                                                                               |  | Sep 30, 2010                   |  |  | Sep 30, 2009                    | 
|Basic weighted average shares outstanding                                                                                                                                                                                                                      |  | 121'343'884                    |  |  | 119'051'733                     | 
|Effect of common stock
      equivalents*                                                                                                                                                                                                                      |  |                                |  |  |                                 | 
|-
      stock options and non-vested stock 
                  
      under employee compensation plans                                                                                                                                                         |  | 3'385'991                      |  |  | -                               | 
|- warrants                                                                                                                                                                                                                                                     |  | -                              |  |  | -                               | 
|- contingently convertible
      loan                                                                                                                                                                                                                          |  | -                              |  |  | -                               | 
|Diluted weighted average shares outstanding*                                                                                                                                                                                                                   |  | 124'729'875                    |  |  | 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. SHARE PLACEMENT/PURCHASE AGREEMENT

On September 26, 2010, we entered into a share
placement/purchase agreement with Alexander Becker, a holder of 14,144,993
shares of our common stock. Mr. Becker has expressed an interest in selling all
of his shares of our common stock to a third party or back to our company. The
share placement/purchase agreement provides that in the event any of Mr.
Becker's shares of our common stock are not placed with buyers within 6 months
from September 26, 2010, we will be obligated to purchase such shares from Mr.
Becker.

The purchase deadline is April 26, 2011 and it can be extended on mutual  consent. The price of the shares is determined by the first offering. For free  trading shares it is the average closing price of the last ten trading days  prior to the closing minus a discount of 20 percent. For restricted shares it  is the average closing price of the last ten trading days prior to the closing  minus a discount of 25%.

As of  September 30, 2010 we have calculated the exposure, i.e. the maximum cash  obligation of the company according to ASC 480-10-S99 for all redeemable  shares. The average closing price of the shares ten days prior to September 30,  2010 was $0.52. Due to the fact that the redeemable shares were restricted as  of the balance sheet date, we have applied a discount of 25%. The following  table shows the Company’s exposure:

|Maximum number of shares to be purchased as
      of Sep 30, 2010 |  | 14,144,993 | 
|----------------------------------------------------------------- |  | ---------- | 
|Price  per share on Sep 30, 2010                                  |  | 0.39       | 
|ExposureonSeptember30,2010                                        |  | 5,516,547  | 

The company recognizes changes in the redemption value
immediately as they occur and adjusts the carrying value of the temporary equity
to equal the redemption value at each reporting date.

---

29

The Company classified its redeemable shares according to ASC
480-10-S99 under Temporary Equity. The following table shows the development of
Temporary Equity:

TemporaryEquity
    
    USDBalance December 31, 2009
    
    0Redeemable shares
    
    5,516,547BalanceSeptember30,2010
    
    5,516,547


21. SUBSEQUENT EVENT(S)

According to a share transfer agreement dated October 25, 2010
Mr. Becker sold 3,400,000 common shares at a price of $0.39 to a third party
investor. Hence, our maximum obligation to repurchase shares from Mr. Becker has
been reduced to 10,744,993 shares at a price of $0.39 on April 26, 2011 at the
latest. The companys exposure after this transaction can be summarized as
follows:

|Maximum number of shares to be purchased as
      of Oct 25, 2010 |  | 10,744,993 | 
|----------------------------------------------------------------- |  | ---------- | 
|Price per share to be paid on April 26, 2011                      |  | 0.39       | 
|ExposureonOctober25,2010                                          |  | 4,190,547  | 

On October 25, 2010 we formed Gobi Energy Partners GmbH as a
wholly-owned subsidiary of DWM Petroleum AG to hold Gobi Energy Partners LLC.
Currently, 26% of the beneficial title to Gobi Energy Partners GmbH is held in
trust for others.

---

30

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, Gobi
Energy Partners GmbH, a Swiss company, Gobi Energy Partners LLC, a Mongolian
company, and its 32.29% ownership interest in Petromanas Energy Inc., a British
Columbia company, and its 25% ownership interest in CJSC South Petroleum
Company, a Kyrgyz company, as the context may require.

---

31

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

Overview

We are in the business of exploring for oil and gas, primarily
in Central and East Asia and the Balkans. In particular, we focus on the
exploration of large under-thrust light oil prospects in areas where, though
there has often been shallow production, their deeper potential has yet to be
evaluated. If we discover sufficient reserves of oil or gas, we intend to
exploit them. Although we are currently focused primarily on projects located in
certain geographic regions, we remain open to attractive opportunities in other
areas. We do not have any known reserves on any of our properties.

We carry out operations both directly and through participation
in ventures with other oil and gas companies to which we have farmed out a
project. We are currently involved in projects in the Kyrgyz Republic, Albania,
Tajikistan and Mongolia. We are also involved in a project in Chile but we are
currently engaged in transferring our interest in that project to unrelated
third parties.

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

The Nine-Month Period Ended September 30, 2010 Compared
to the Nine-Month Period Ended September 30, 2009

Results of Operations

Net income for the nine-month period ended September 30, 2010
was $65,530,401 as compared to a net loss of $18,792,985 for the comparable
period ended September 30, 2009. This increase is basically attributable to
three components. Firstly, we realized a gain from the sale of our subsidiary in
Albania of $57,850,918. Secondly, the value of our investment in associate, i.e.
Petromanas, increased during this reporting period by $13,635,118. Thirdly, we
had a charge of $10,592,637 during the nine-month period ended September 30,
2009 due to changes in the fair value of warrants. For the nine-month period
ended September 30, 2010, we reported a gain of $533,223 due to changes in the
fair value of warrants. Operating expenses for the nine-month period ended
September 30, 2010 decreased to $6,099,437 from $7,426,013 reported for the same
period in 2009. This is a decrease of 18% or $1,326,576. This decrease is mainly
attributable to lower personnel costs and lower administrative costs.

Personnel costs

For the nine-month period ended September 30, 2010 personnel
costs decreased to $3,293,175 from $4,596,455 for the corresponding period in
2009. This decrease of 28% or $1,303,279 in the nine-month period comparison is
mainly a result of reduced personnel and the sale of our Albanian subsidiary.

Exploration costs

For the nine-month period ended September 30, 2010 we incurred
exploration costs of $880,367 as compared to $870,544 for the corresponding
period in 2009. This is an increase of 1% or $9,823 and relates to increased
exploration activity in Mongolia.

---

32

Consulting fees

For the nine-month period ended September 30, 2010 we incurred
consulting fees in the amount of $938,967 as compared to consulting fees of
$762,312 for the comparable period ended September 30, 2009. This increase of
23% or $176,655 is mainly attributable to a non-cash charge for stock options
for a consultant (approximately $140,000).

Administrative costs

For the nine-month period ended September 30, 2010, our
administrative costs decreased to $943,939 from $1,119,864. This decrease of 16%
or $175,925 is mainly due to a lower cost base following the sale of our
Albanian subsidiary.

Non-operating income/expense

Non-operating income for the nine-month period ended September
30, 2010 increased to income of $71,631,867 in contrast to an expense of
$11,364,680 for the corresponding period in 2009. This increase of $82,996,547
has three major components. Firstly, we recorded a gain from the sale of our
subsidiary in Albania of $57,850,918. Secondly, the value of our investment in
associate, i.e. Petromanas, increased during this reporting period by
$13,635,118. Thirdly, we had a charge of $10,592,637 during the nine-month
period ended September 30, 2009 due to changes in the fair value of warrants.
For the nine month period ended September 30, 2010, we reported a gain of
$533,223 due to changes in the fair value of warrants.

The Three-Month Period Ended September 30, 2010 Compared
to the Three-Month Period Ended September 30, 2009

Results of Operations

Net income for the three-month period ended September 30, 2010
was $9,618,213 as compared to a net income of $132,775 for the comparable period
in 2009. This increase of $9,485,706 is mainly due to an increase in the fair
value of our investment in Petromanas, which accounted for $10,098,881.

Operating Expenses for the three-month period ended September
30, 2010 decreased to $1,110,270 from $2,382,852 reported for the same period in
2009. This decrease of 53% or $1,272,582 in our total operating expenses is
mainly attributable to lower personnel costs and lower consulting fees.

Personnel costs

For the three-month period ended September 30, 2010 our
personnel costs decreased to $255,045 from $1,080,601 for the corresponding
period in 2009. This decrease of 76% or $825,556 in the three-month 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
$74,481 were recorded during the quarter ended September 30, 2010 versus
$784,453 for the comparable period in 2009.

Exploration costs

For the three-month period ended September 30, 2010 we incurred
exploration costs of $268,345 as compared to $539,468 for the corresponding
period in 2009. This decrease of 50% or $271,123 is mainly attributable to the
sale of our Albanian subsidiary.

---

33

Consulting fees

For the three-month period ended September 30, 2010 we paid
consulting fees in the amount of $277,948 as compared to consulting fees of
$208,182 for the comparable period ended September 30, 2009. This is an increase
of 34% or $69,766. Higher stock-based compensation expenses were the major
driver of this increase.

Administrative costs

For the three-month period ended September 30, 2010, we
recorded administrative costs of $295,737 compared to $539,821 for the
three-month period ended September, 2009. This decrease of 45% and $244,084 is
mainly attributable to lower legal, audit and accounting fees.

Non-operating income/expense

Non-operating income for the three-month period ended September
30, 2010 increased from $2,515,983 for the corresponding period in 2009 to
$10,729,107. This increase of $8,213,124 is mainly due to a gain in fair value
of our investment in Petromanas of $10,700,583. On the other hand, we recorded
during the three month period ended September 30, 2009 an income in changes of
fair value of warrants of $2,809,589 and $0 for the corresponding period in
2010.

Liquidity and Capital Resources

Our cash balance as of September 30, 2010 was $3,318,465. Our
total current assets as of September 30, 2010 amounted to $3,986,616 and total
current liabilities were $428,543 resulting in net working capital of
$3,558,073. In addition, of the 200,000,000 common shares of Petromanas held by
us, 25,000,000 were freely tradable as of September 30, 2010. The market value
of these freely tradable shares was over $8,000,000.

Our capital commitments are disclosed in this quarterly report
on Form 10-Q for the three and nine month periods ended September 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 September 30,
2010.

Operating Activities

Net cash outflow from operating activities of $4,697,640 for
the nine-month period ended September 30, 2010 has slightly decreased from net
cash outflow of $5,022,603 in the comparable period for 2009.

Investing Activities

Net cash inflow from investing activities of $11,575,352 for
the nine-month period ended September 30, 2010 has increased from a net cash
inflow of $4,903,911 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 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 by
$4,932,325.

Financing Activities

Net cash outflow from financing activities of $4,421,880 for
the nine-month period ended September 30, 2010 has changed from a net cash
inflow of $80,000 in the comparable period for 2009. During the nine-month
period ended September 30, 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.

---

34

Cash Flows

|                                                            |  | Nine Months Ended |  
|----------------------------------------------------------- |  | ----------------- | -
|                                                            |  | September 30      |  
|                                                            |  | 2010              |  
|                                                            |  |                   |  
|Net Cash (used in) Operating Acticities                     |  | (4'697'640        | )
|Net Cash provided by (used in ) Investing Activities        |  | 11'575'352        |  
|Net Cash provided by (used in ) Financing Activities        |  | (4'421'880        | )
|                                                            |  |                   |  
|Change in Cash and Cash Equivalents during
      the Period |  | 2'455'832         |  

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 to be as follows:

Expense
    
    AmountGeological & Geophysical
    
    5'100'000General &
      Administrative
    
    2'600'000Financing
    
    -Legal
    
    330'000Audit
    
    250'000Open Commitments
    
    -Total Expenses planned for next 12 months
    
    8'280'000


As an operator, we have geological and geophysical commitments
for the next 12 months in Mongolia amounting to $5,100,000. In Tajikistan, the
costs for the seismic program are currently being funded by Santos International
Ventures Pty Ltd. ("Santos"), a wholly owned subsidiary of Santos Limited, which
is the operator of that 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 nine-month periods ended September 30, 2010,
we had a net income of $9,618,213 and a net income of $65,530,401, respectively.
The net income for the three-month period ended September 30, 2010 is mainly
attributable to an increase in the fair value of our investment in Petromanas
which accounted for $10,700,583. For the nine-month period ended
September 30, 2010 net income is mainly attributable to the gain from sale of
our subsidiary of $57,850,918 and the subsequent increase in fair value of this
investment of $13,653,118.

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35

Our accumulated net loss since inception until September 30,
2010 was $218,475. Accumulated cash flows used in operating activities since
inception until September 30, 2010 amounted to $30,706,027. Our cash balance as
of September 30, 2010 was $3,318,465. Our total current assets as of September
30, 2010 amounted to $3,986,616 and total current liabilities were $428,543
resulting in net working capital of $3,558,073.

In addition, of the 200,000,000 common shares of Petromanas
held by us, 25,000,000 were freely tradable as of September 30, 2010. The market
value on September 30, 2010 of these freely tradable shares was over
$8,000,000.

Based on our business plan, we will need $8,280,000 to fund our
operations for the next 12 months.

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 $275,000 and minimum commitments
  before October 2011.

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

Recent Developments

Since the end of our most recent fiscal year, following
developments have affected these operations.

Albania

On February 24, 2010, we completed the sale of all of the
issued and outstanding shares of Manas Adriatic, a wholly owned subsidiary of
DWM Petroleum AG, to Petromanas Energy Inc. pursuant to a written Share Purchase
Agreement. For further detail, please refer to Notes 13 and 14 to our financial
statements, which have been included in this quarterly report on Form 10-Q,
above.

During the nine-month period ended September 30, 2010,
Petromanas Energy Inc., in which we hold a 32.29% interest, continued its
exploration activities in Albania. Petromanas Energy Inc. has announced the
following exploration activities during this period:

The technical seismic acquisition of 105 km in block E in was
completed in November 2010. This is to further determine the structural
definition of the West Rova, Rova and Papri prospects and ads 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.

In addition Petromanas has 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. Petromanas
intends to tie the new seismic in blocks 2 and 3 to the existing Shpiragu well
in order to allow a time-depth correlation of the South Shpiragu prospects.

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36

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.

Cameral worksCameral 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 work within all license areas.

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

Preparation work for drilling operations

Preparations for drilling operations have been significantly
scaled back in the wake of recent unrest in the country. It is currently
unlikely that drilling of the proposed Ala Buka West well will commence until
2011.

Tajikistan

Somon Oil, in which we hold a 90% interest, contracted the
Kazak crew Dank to perform a seismic project which commenced on February 13,
2010 in the southern license areas and locally across the Kyrgyz-Tajik border.
This seismic acquisition was completed on June 4, 2010. Data quality is
generally good to excellent. Technical database compilation and integration is
ongoing. .

Chile

Pursuant to an agreement dated January 29, 2010, we have agreed
to assign our interest in our Chilean project in exchange for (i) the return of
all of the operational costs that we have invested in this project to date and
(ii) 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

On April 30, 2009, we formed Manasgobi Co. Ltd. as a
wholly-owned Mongolian subsidiary of DWM Petroleum AG to hold the license and to
fully operate our exploration in Mongolia. On November 12, 2009, we changed the
name of this company to Gobi Energy Partners LLC. On October 25, 2010, 2010, we
formed Gobi Energy Partners GmbH as a wholly-owned subsidiary of DWM Petroleum
AG to hold all of the ownership interest of Gobi Energy Partners LLC. We have
legal and beneficial title to 74% of the ownership interest of Gobi Energy
Partners GmbH. We hold legal title to the balance of 26% of the ownership
interest of Gobi Energy Partners GmbH in trust for two investor groups and one
Mongolian oil and gas company.

DWM Petroleum, our wholly-owned subsidiary, is the record owner
of the licenses for Blocks 13 and 14 but it is the beneficial owner of only 74%
- the remaining 26% of the beneficial ownership of these licenses is held by DWM
Petroleum in trust for the same two investor groups and the Mongolian oil and
gas company that beneficially own, collectively, 26% of Gobi Energy Partners
GmbH.

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37

Blocks 13 and 14 cover an aggregate of over 20,000 square
kilometers (almost five million acres) of land located on Mongolias southern
border. DWM Petroleum AG has entered into production contracts with the
Mongolian government that provide for a five-year exploration period (with two
optional six month extensions allowed) that began on April 21, 2009, and a
twenty-year exploitation period (with two five year extensions allowed).

In 2010, a team of geologists and geophysicists from our office
in Ulan Bator initiated the reinterpretation of existing geological data and
planned for a gravity survey. This was to further define the location of lines
for the recently completed seismic campaign on blocks 13 and 14, in which we
acquired approximately 300 linear km. In addition, we prepared a plan for
environmental protection and restoration, which has yet to be approved by the
Ministry of Environment. Also data from a total of 451 existing wells drilled in
the 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.

On August 31, 2010, we entered into a contract with a DQE
International, a subsidiary of CNPC Daqing Petroleum, to acquire 300 km of 2D
seismic in our project on blocks 13 and 14 in Mongolia at a turn-key rate of
$3,500/km, with no stand-by fees, for an aggregate total of $1,050,000, payable
according to a specific schedule. We were required to provide a bank guarantee
over the outstanding amount, which is to be reduced according to the same
schedule.

DQE International, a subsidiary of CNPC Daqing Petroleum, is a
Chinese data acquisition company that has been in operation since the 1970s. It
has a total of 16 seismic crews, 76 drilling crews, 60 well logging crews and 10
cementing crews. This group has established a quality assurance system and all
its subsidiaries have passed ISO9000 Series authentication and established HSE
management system. The group has operated various projects in the Peoples
Republic of China and in the west of China. Internationally, the group has
operated in Venezuela, Sudan, Indonesia, Egypt, Iran and Mongolia.

On November 10, 2010, we announced the completion of the 2010
seismic acquisition program for block 13 and 14 without incident. We intend to
use the additional 300 km of 2D seismic data to improve our technical database
and our chance of drilling a successful exploration well. After interpretation
of the full dataset, we intend to decide whether we are ready to drill one or
more exploration wells or we need to acquire 3D seismic to define the drill
prospects in better detail. Depending on this decision, we hope to spud the
first well in 2011.

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.

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38

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 effective.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended September 30, 2010, we
implemented the following changes to our internal control over financial
reporting that have materially affected, or are reasonably likely to materially
affect our internal control over financial reporting:

- we hired a senior finance manager who is familiar with both US GAAP and the
  Securities and Exchange Commissions reporting requirements;
- key members of our staff have received instruction and on-the-job
  training on the principles of US GAAP and the Securities and Exchange
  Commissions reporting requirements;
- we trained key members of our staff to forward any material documents to
  our management and to inform our management of any material events in a timely
  manner so that we can make timely filing of our reports required to be filed
  under the Securities Exchange Act of 1934; and
- we have a new President and Chief Executive Officer, whose business and
  educational background is in finance. The business and educational background
  of our former President and Chief Executive Officer was in engineering.

PART IIOTHER INFORMATION

Item 1. Legal Proceedings.

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

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

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

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39

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)10.11
    Letter Agreement  Phase 2 Work Period with Santos
      International Operations Pty. Ltd, dated August 19, 2008 (incorporated by
      reference to an exhibit to our Annual Report on Form 10-K filed on April
      15, 2009)10.12
    Side Letter Agreement  Phase 1 Completion and Cash
      Instead of Shares with Santos International Holdings Pty Ltd, dated
      November 24, 2008 (incorporated by reference to an exhibit to our Annual
      Report on Form 10-K filed on April 15, 2009)10.13
    Amended 2007 Omnibus Stock Option Plan (incorporated by
      reference to an exhibit to our Annual Report on Form 10-K filed on April
      15, 2009)10.14
    Production Sharing Contract for Exploration, Development
      and Production of Petroleum in Onshore Albania  Block A-B  between
      Ministry of Economy, Trade and Energy of Albania and DWM Petroleum dated
      July 31, 2007 (incorporated by reference to an exhibit to our Quarterly
      Report on Form 10-Q/A filed on July 24, 2009)


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40

Exhibit Number
    Description10.15
    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)10.30
    Amendment to Employment Agreement with Yaruslav dated
      November 4, 2007 (incorporated by reference to an exhibit to our Quarterly
      Report on Form 10-Q/A filed on July 24, 2009)10.31
    Production Sharing Contract for Contract Area Tsagaan
      Els-XIII between the Petroleum Authority of Mongolia and DWM Petroleum
      (incorporated by reference to an exhibit to our Quarterly Report on Form
      10-Q/A filed on July 24, 2009)10.32
    Production Sharing Contract for Contract Area
      Zuunbayan-XIV between the Mineral Resources and Petroleum Authority of
      Mongolia and DWM Petroleum (incorporated by reference to an exhibit to our
      Quarterly Report on Form 10-Q/A filed on July 24, 2009)10.33
    Letter from AKBN regarding Production Sharing Contracts
      for Blocks A-B and D-E dated May 5, 2009 (incorporated by reference to an
      exhibit to our Quarterly Report on Form 10-Q/A filed on July 24, 2009)


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41

Exhibit Number
      Description10.34
      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
      Agreement between Gobi Energy
          Partners LLC and DQE International Tamsag (Mongol) LLC (incorporated
          by reference to an exhibit to our Current Report on Form 8-K filed on
          September 7, 2010)10.45*
      Appointment
          as Director dated September 16, 2010 by Dr. Werner Ladwein10.46*
      Share Placement/Purchase Agreement dated September 26, 2010 with Alexander Becker10.47*
      Employment
          and Non-Competition Agreement dated October 1, 2010 with Peter-Mark
          Vogel(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(31)
      Rule 13a-14 Certifications31.1*
      Section
          302 Certification of Chief Executive Officer31.2*
      Section
          302 Certification of Chief Financial Officer


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42

Exhibit Number
      Description(32)
      Section 1350 Certifications32.1*
      Section 906 Certification
        of Chief Executive Officer32.2*
      Section 906 Certification
        of Chief Financial Officer


* Filed herewith.

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43

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: November 15, 2010                                             
| |                                                                     
| |                                                                     
| | By                                                                  
| | /s/ Ari Muljana                                                     
| | Ari Muljana                                                         
| | Chief Financial Officer and Treasurer                               
| | (Principal Financial Officer and Principal
      Accounting Officer)
| |                                                                     
| | Date: November 15, 2010                                             

---