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**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-K/A-4**

| For                the Fiscal Year Ended December 31, 2006 | Commission                File No. 001-31852 |
|------------------------------------------------------------|----------------------------------------------|

**TRI-VALLEY      CORPORATION**

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

**4550      California Avenue, Suite 600, Bakersfield, California      93309**

**(661)      864-0500**

| Title                of each class            | Name                of exchange on which registered |
|-----------------------------------------------|-----------------------------------------------------|
| Common                Stock, $0.001 par value | American                Stock Exchange              |

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**TABLE      OF CONTENTS**

| **PART                I**   |                                                                                                                |   |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------|--------|
| **ITEM                1**   | **Business**                                                                                                        | 1      |
|                        | Competition                                                                                                         | 2      |
|                        | Governmental                Regulation                                                                              | 2      |
|                        | Environmental                Regulation                                                                             | 3      |
|                        | Employees                                                                                                           | 5      |
|                        | Available                Information                                                                                | 5      |
| **ITEM                1A**  | **Risk                Factors**                                                                                     | 5      |
| **ITEM                2**   | **Properties**                                                                                                      | 9      |
|                        | Oil                and Gas Operations                                                                               | 10     |
|                        | Minerals                Properties                                                                                  | 13     |
| **ITEM                4**   | **Submission                of Matters to a Vote of Security Holders**                                              | 14     |
|                        |                                                                                                                |   |
| **PART                II**  |                                                                                                                |   |
| **ITEM                5**   | **Market                Price of the Registrant's Common Stock and Related Security Holder                Matters** | 15     |
|                        | Performance                Graph                                                                                    | 15     |
|                        | Equity                Compensation Plan Information                                                                 | 16     |
|                        | Recent                Sales of Unregistered Securities                                                              | 16     |
| **ITEM                6**   | **Selected                Historical Financial Data**                                                               | 17     |
| **ITEM                7**   | **Management's                Discussion and Analysis of Financial Condition**                                      | 17     |
|                        | Notice                Regarding Forward-Looking Statements                                                          | 17     |
|                        | Overview                                                                                                            | 17     |
|                        | Critical                Accounting Policies                                                                         | 18     |
|                        | Other                Significant Accounting Polices                                                                 | 20     |
|                        | Rig                Operations                                                                                       | 21     |
|                        | Mining                Activity                                                                                      | 22     |
|                        | Results                of Operations                                                                                | 23     |
|                        | Financial                Condition                                                                                  | 24     |
|                        | Operating                Activities                                                                                 | 26     |
|                        | Investing                Activities                                                                                 | 27     |
|                        | Financing                Activities                                                                                 | 27     |
|                        | Liquidity                and Capital Resources                                                                      | 27     |
| **ITEM                8**   | **Financial                Statements**                                                                             | 29     |
| **ITEM                9A**  | **Controls                and Procedures**                                                                          | 66     |
|                        | Evaluation                of Disclosure Controls                                                                    | 66     |
|                        | Management’s                Report on Internal Control over Financial Reporting                               | 66     |
|                        |                                                                                                                |   |
| **PART                III** |                                                                                                                |   |
| **ITEM                10**  | **Directors                and Executive Officers of the Registrant**                                               | 69     |
| **ITEM                11**  | **Executive                Compensation**                                                                           | 73     |
|                        | Employment                Agreement with Our President                                                              | 74     |
|                        | Compensation                Committee Report                                                                        | 74     |
|                        | Aggregated                2006 Option Exercises and Year-End Values                                                 | 76     |
|                        | Compensation                of Directors                                                                            | 77     |
| **ITEM                12**  | **Security                Ownership of Certain Beneficial Owners and                Management**                    | 77     |
| **ITEM                13**  | **Certain                Relationships and Related Transactions**                                                   | 78     |
| **ITEM                14**  | **Principal                Accountant Fees and Services**                                                           | 79     |
| **ITEM                15**  | **Exhibits                and Financial Statement Schedules**                                                       | 79     |
|                        |                                                                                                                |   |
| **SIGNATURES**              | 80                                                                                                                  |

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**PART      I**

**ITEM      1  Business**

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

| ·   | Select                Resources Corporation (“Select”) was created in late 2004 to manage, grow                and operate Tri-Valley’s mineral interests. Select operates the Minerals                segment of our business lines.  Prior to November 2006, Select                owned 50% of Tri-Western Resources, LLC, a developer of industrial                mineral                operations.  Select sold its interest in Tri-Western Resources                to the other 50% joint venturer on November 15,                2006. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Great                Valley Production Services, LLC, (“GVPS”) was formed in 2006 to operate                oil production services, well work over and drilling rigs, primarily                for                TVOG.  Tri-Valley has sold 49% of the ownership interest to                private parties and has retained a 51% ownership interest in this                subsidiary.  Operations began in the third quarter of                2006.  However, from time to time TVOG may contract various                units to third parties when not immediately needed for TVOG                projects. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Great                Valley Drilling Company, LLC (“GVDC”) was formed in 2006 to operate oil                drilling rigs, primarily in Nevada where Tri-Valley has 17,000 acres                of                prospective oil leases.  However, because rig availability is so                extremely scarce in Nevada, GVDC has an exceptional opportunity to                do                contract drilling for third parties in both petroleum and geothermal                projects.  For the time being GVDC, whose operation began in the                first quarter of 2007, expects its primary activity will be contract                drilling for third parties. Tri-Valley has sold 49% of the ownership                interest to private parties and has retained a 51% ownership interest                in                this subsidiary. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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**Competition**

**Governmental      Regulation**

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**Environmental      Regulation**

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* *

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**Employees**

**Available      Information**

**ITEM      1A  Risk Factors**

**Risks      Involved in Oil and Gas Operations**

**Our      success depends heavily on market conditions and prices for oil and      gas**

**Estimating      oil and gas reserves leads to uncertain results and thus our estimates of value      of those reserves could be incorrect**

**Continued      production of oil and gas depends on our ability to find or acquire additional      reserves, which we may not be able to accomplish**

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**The      unavailability or high cost of drilling rigs, equipment, supplies, personnel      and      oil field services could adversely affect our ability to execute our exploration      and development plans on a timely basis and within our      budget.**

**Our      oil and gas reserves are concentrated in California**

**Oil      and gas drilling and production activities are subject to numerous mechanical      and environmental risks that could cause less production**

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**Drilling      is a speculative activity, because assessments of drilling prospects are      inexact**

**Governmental      regulations make production more difficult and production costs      higher**

**Risks      Involved in Our Mineral Exploration Business**

**Our      industrial mineral operations have not yet begun to realize significant      revenue**

**Our      mining operations may not be profitable.**

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**Our      operations may be adversely affected by risks and hazards associated with the      mining industry that may not be fully covered by      insurance.**

|   | • | Unanticipated                hydrologic conditions, including flooding and periodic interruptions                due                to inclement or hazardous weather                conditions. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Risks      Involved in Our Operations Generally**

**Forward      Looking Statements**

**ITEM      2  Properties**

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**Oil      and Gas Operations**

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|                             | BBL        | MCF     |
|----------------------------------|------------|---------|
|                             |       |    |   |   |
| December                31, 2006 | Oil        | 275,452 | Natural                Gas | 787,017 |
| December                31, 2005 | Oil        | 154,673 | Natural                Gas | 779,598 |
| December                31, 2004 | Condensate | 162     | Natural                Gas | 742,401 |

|                             | Year                Ended   | Year                Ended   | Year                Ended                                |
|----------------------------------|-----------------------------|-----------------------------|----------------------------------------------------------|
|                             | December                31, | December                31, | December                31,                              |
|                             | **2006**                    | **2005**                    | **2004**                                                 |
|                             |                        |                        |                                                     |
| Natural                Gas (MCF) | 86,177                      | 128,602                     | 126,942                                                  |
| Crude                Oil (BBL)   | 6,600                       | 17                          |          22 |

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|                            | Year                Ended   | Year                Ended   | Year                Ended   |
|---------------------------------|-----------------------------|-----------------------------|-----------------------------|
|                            | December                31, | December                31, | December                31, |
|                            | 2006                        | 2005                        | 2004                        |
|                            |                        |                        |                        |   |   |   |
|                            | Gas                (Mcf)    | Oil                (BBL)    | Gas                (Mcf)    | Oil* | Gas                (Mcf) | Oil* |
| Sales                Price      | $6.45                       | $57.10                      | $7.00                       | $44.34 | $5.66 | $40.60 |
|                            |                        |                        |                        |   |   |   |
| Production                Costs | $1.41                       | $15.23                      | $0.73                       | * | $1.14 | * |
|                            |                        |                        |                        |   |   |   |
| Net                Profit       | $5.04                       | $41.87                      | $6.27                       | * | $4.52 | * |

|           Wells                (1) |              Acres                (2) |
|--------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|
| Gross                                                                                | Net                                                                                                    | Gross | Net |
| 35                                                                                   | 10.62                                                                                                  | 2,852 | 778.67 |

| (1)   | "Gross"                wells represent the total number of producing wells in which we have                a                working interest.  "Net" wells represent the number of gross                producing wells multiplied by the percentages of the working interests,                which we own.  "Net wells" recognizes only those wells in which                we hold an earned working interest.  Working interests earned at                payout have not been included. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | "Gross"                acres represent the total acres in which we have a working interest;                "net"                acres represent the aggregate of the working interests, which we                own in                the gross acres. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        | Year                Ended   | Year                Ended   | Year                Ended   |
|-------------|-----------------------------|-----------------------------|-----------------------------|
|        | December                31, | December                31, | December                31, |
|        | ***2006***                  | ***2005***                  | ***2004***                  |
|        |                        |                        |                        |
| Exploratory |                        |                        |                        |
| Producing   | -0-                         | -0-                         | -0-                         |
| Dry         | -0-                         | 1                           | 1                           |
| Total       | -0-                         | 1                           | 1                           |
|        |                        |                        |                        |
| Development |                        |                        |                        |
| Producing   | -2-                         | -0-                         | -0-                         |
| Dry         | -0-                         | -0-                         | -0-                         |
| Total       | -2-                         | -0-                         | -0-                         |

| ***State*** |   | ***Gross                Acres*** |   | ***Net                Acres*** |
|-------------|--------|----------------------------------|--------|--------------------------------|
| California  |   | 21,321                           |   | 19,747                         |
| Nevada      |   | 18,559                           |   | 18,559                         |

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| Expires                in 2007 | 6,466                acres |
|--------------------------------|----------------------------|
| Expires                in 2008 | 4,524                acres |
| Expires                in 2009 | 3,193                acres |

**Minerals      Properties**

**Metals**

| ***State*** | ***Gross                Acres*** | ***Net                Acres*** |
|-------------|----------------------------------|--------------------------------|
| Alaska      | 28,720                           | 27,926                         |

| ***State*** | ***Gross                Acres*** | ***Net                Acres*** |
|-------------|----------------------------------|--------------------------------|
| Alaska      |    9,700          |    9,700        |

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**Industrial      Minerals**

**ITEM      4  Submission of Matters To A Vote Of Security      Holders**

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|                                                                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Measure                #1 - Election of Directors                                                                                                                 |
|                                                                                                                                                              |
|                                                                                                                                                              | **FOR** | **AGAINST** | **ABSTAIN** |
| F.                Lynn Blystone                                                                                                                                   | 19,502,183 | 29,669 |   |
| Milton                J. Carlson                                                                                                                                  | 19,446,236 | 85,616 |   |
| G.                Thomas Gamble                                                                                                                                   | 19,504,231 | 27,621 |   |
| Dennis                P. Lockhart                                                                                                                                 | 19,505,161 | 26,691 |   |
| Henry                Lowenstein                                                                                                                                   | 19,503,161 | 28,691 |   |
| William                H. Marumoto                                                                                                                                | 19,449,636 | 82,216 |   |
| Loren                J. Miller                                                                                                                                    | 19,505,515 | 26,337 |   |
|                                                                                                                                                              |   |   |   |
| Measure                #2 – Other Business – gave the Board of Directors discretion in other                matters to come before the annual meeting |
|                                                                                                                                                              |   |   |   |
|                                                                                                                                                              | 18,776,572 | 733,810 | 21,470 |
|                                                                                                                                                              |   |   |   |

**PART      II**

**ITEM      5  Market Price Of The Registrant's Common Stock And      Related  Security Holder Matters**

|                          |                            |                              |                         |
|-------------------------------|---------------------------------|-----------------------------------|------------------------------|
|                          | **Sales                Prices** | **Closing                Prices** |                         |
|                          | High                            | Low                               | High                         | Low |   |
| 2006                          |
| Fourth                Quarter | $10.20                          | $6.75                             | $10.07                       | $6.77 |   |
| Third                Quarter  | $8.01                           | $5.80                             | $7.49                        | $5.84 |   |
| Second                Quarter | $9.50                           | $5.52                             | $9.01                        | $5.63 |   |
| First                Quarter  | $8.77                           | $7.30                             | $8.69                        | $7.35 |   |
|                          |                            |                              |                         |   |   |
|                          | **Sales                Prices** | **Closing                Prices** |                         |
|                          | High                            | Low                               |     High | Low |   |
| 2005                          |
| Fourth                Quarter | $12.25                          | $5.52                             | $11.75                       | $6.14 |   |
| Third                Quarter  | $14.09                          | $8.51                             | $14.00                       | $8.99 |   |
| Second                Quarter | $14.30                          | $8.13                             | $14.30                       | $9.12 |   |
| First                Quarter  | $17.50                          | $7.70                             | $17.27                       | $7.90 |   |

**Performance      Graph**

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|                                      | December                31, |
|-------------------------------------------|-----------------------------|
|                                      | 2001                        | 2002 | 2003 | 2004 | 2005 | 2006 |
| **Tri-Valley                Corporation** | **100.00**                  | **87.50** | **275.00** | **764.38** | **486.25** | **593.13** |
| S                & P 500 Index        | 100.00                      | 76.63 | 96.85 | 105.56 | 108.73 | 123.54 |
| AMEX                Oil Index             | 100.00                      | 85.93 | 10.820 | 138.68 | 189.78 | 228.50 |
|                                      |                        |   |   |   |   |   |

**Equity      Compensation Plan Information**

|                                                                      | Total                securities to be issued upon exercise of outstanding options or vesting                of                restricted stock |   | Securities                remaining available for future issuance under equity compensation                plans                (excluding securities reflected in column (a)) |
|---------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Plan                category                                        | Number                                                                                                                                         |   | Weighted-average                exercise price                                                                                                                                 |   |
|                                                                      | (a)                                                                                                                                            |   | (b)                                                                                                                                                                            |   | (c) |
| Equity                compensation plans approved by security holders     | 2,581,850                                                                                                                                      |   | $2.95                                                                                                                                                                          |   | 824,000 |
|                                                                      |                                                                                                                                           |   |                                                                                                                                                                           |   |   |
| Equity                compensation plans not approved by security holders | 333,000                                                                                                                                        |   | $0.50                                                                                                                                                                          |   | - |
|                                                                      |                                                                                                                                           |   |                                                                                                                                                                           |   |   |
| Total                                                                     | 2,914,850                                                                                                                                      |   | $2.67                                                                                                                                                                          |   | 824,000 |

**Recent      Sales of Unregistered Securities**

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**ITEM      6 Selected Historical Financial Data**

|                                                                                                                                     |   | Year                Ended December 31, |       |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|------------|
|                                                                                                                                     |   | 2006                                   |       |   | 2005 |   |   | 2004 |   |   | 2003 |   |   | 2002 |   |
| Income                Statement Data:                                                                                                    |   |                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                                                                                 |   | $                                      | 4,936,723  |   |   | $ | 12,526,110 |   |   | $ | 4,498,670 |   |   | $ | 6,464,245 |   |   | $ | 6,284,908 |   |
| Operating                Income (Loss)                                                                                                   |   | $                                      | (5,881,276 | ) |   | $ | (4,919,707 | ) |   | $ | (1,097,999 | ) |   | $ | 456,109 |   |   | $ | 769,130 |   |
| Loss                from discontinued    operations                                                                  |   | $                                      | (4,774,840 | ) |   | $ | (4,810,364 | ) |   | $ | (73,006 | ) |   | $ | - |   |   | $ | - |   |
| Gain                on disposal of    discontinued                operations                                         |   | $                                      | 9,715,604  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Income                (loss)                before         minority                interest |   |                                   | (940,512   | ) |   |   | (9,730,071 | ) |   |   | (1,171,005 | ) |   |   | 456,109 |   |   |   | 769,130 |   |
| Minority                interest                                                                                                         |   |                                   | (27,341    | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|  Net                loss                                                                                                            |   | $                                      | (913,171   | ) |   | $ | (9,730,071 | ) |   | $ | (1,171,005 | ) |   | $ | 456,109 |   |   | $ | 769,130 |   |
| Basic                Earnings per share:                                                                                                 |   |                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing    operations                                                                    |   | $                                      | (0.25      | ) |   | $ | (0.22 | ) |   | $ | (0.05 | ) |   | $ | 0.02 |   |   | $ | 0.04 |   |
| Income                (loss) from dis-    continued                operations, net                                   |   | $                                      | 0.21       |   |   | $ | (0.21 | ) |   | $ | (0.01 | ) |   | $ | 0.00 |   |   | $ | 0.00 |   |
| Basic                Earnings Per Share                                                                                                  |   | $                                      | (0.04      | ) |   | $ | (0.43 | ) |   | $ | (0.06 | ) |   | $ | 0.02 |   |   | $ | 0.04 |   |
|                                                                                                                                     |   |                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                Sheet Data:                                                                                                       |   |                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property                and Equipment, net                                                                                               |   | $                                      | 12,076,043 |   |   | $ | 13,635,981 |   |   | $ | 1,778,208 |   |   | $ | 1,543,121 |   |   | $ | 1,974,501 |   |
| Total                Assets                                                                                                              |   | $                                      | 28,654,125 |   |   | $ | 19,738,730 |   |   | $ | 14,473,326 |   |   | $ | 8,341,782 |   |   | $ | 4,634,874 |   |
| Long                Term Obligations                                                                                                     |   | $                                      | 2,963,562  |   |   | $ | 4,528,365 |   |   | $ | 6,799 |   |   | $ | 16,805 |   |   | $ | 26,791 |   |
| Minority                Interest                                                                                                         |   |                                   | 5,410,746  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Stockholder's                Equity                                                                                                      |   | $                                      | 11,232,872 |   |   | $ | 7,572,720 |   |   | $ | 6,796,903 |   |   | $ | 1,851,783 |   |   | $ | 1,262,306 |   |
|                                                                                                                                     |   |                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

**ITEM      7 Management’s Discussion And Analysis Of Financial      Condition**

**Notice      Regarding Forward-Looking Statements**

**Overview**

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**Critical      Accounting Policies**

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*"Accounting for Asset      Retirement Obligations"*

***.***

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*Accounting for Stock-Based      Compensation—Transition and Disclosure*

**Other      Significant Accounting Policies**

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**Rig      Operations**

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**Mining      Activity**

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**Results      of Operations**

|                                                 |   | 2006   |   |   | 2005   |   |   | 2004   |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                 |   |   |   |   | $      |   | %      |   |   |   |   | $ |   | % |   |   |   |   | $ |   | % |
| Oil                and gas                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Sale                of oil and gas |   | $      | 1,030  |   |   |   | 21     | %      |   | $ | 901 |   |   |   | 7 | % |   | $ | 799 |   |   |   | 18 | % |
|    Royalty                income      |   |   | -      |   |   |   | -      |   |   |   | 1 |   |   |   | - |   |   |   | 1 |   |   |   | - |   |
|    Partnership                income  |   |   | 45     |   |   |   | 1      | %      |   |   | 30 |   |   |   | - |   |   |   | 30 |   |   |   | 1 | % |
|    Other                (1)           |   |   | 80     |   |   |   | 2      | %      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Interest                income     |   |   | 72     |   |   |   | 1      | %      |   |   | 119 |   |   |   | 1 | % |   |   | 46 |   |   |   | 1 | % |
| Total                oil and gas revenue             |   |   | 1,227  |   |   |   | 25     | %      |   |   | 1,051 |   |   |   | 8 | % |   |   | 876 |   |   |   | 20 | % |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rig                operations                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Rig                income          |   |   | 873    |   |   |   | 18     | %      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Other                (2)           |   |   | 160    |   |   |   | 3      | %      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                rig operations                  |   |   | 1,033  |   |   |   | 21     | %      |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Minerals                (3)                          |   |   | 179    |   |   |   | 4      | %      |   |   | 53 |   |   |   | - |   |   |   | 62 |   |   |   | - |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Drilling                and development              |   |   | 2,497  |   |   |   | 51     | %      |   |   | 11,422 |   |   |   | 92 | % |   |   | 3,560 |   |   |   | 80 | % |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                revenues                        |   | $      | 4,936  |   |   |   | 100    | %      |   | $ | 12,526 |   |   |   | 100 | % |   | $ | 4,498 |   |   |   | 100 | % |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

*See Item 2 –Properties.*

*.*

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|                                         |   | 2006   |   |   | 2005   |   |   | 2004   |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                         |   |   |   |   |   |   |   |   |   |
| Oil                and gas                   |   | $      | 830    |   |   | $      | (2,248 | )      |   | $ | 1,762 |   |
| Rig                operations                |   | $      | 307    |   |   |   | -      |   |   |   | - |   |
| Minerals                                     |   |   | (465   | )      |   |   | (3,610 | )      |   | $ | (1,030 | ) |
| Drilling                and development      |   |   | 507    |   |   |   | 2,155  |   |   |   | 259 |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                operating income (loss) |   | $      | 1,179  |   |   | $      | (3,704 | )      |   | $ | 991 |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |

**Financial      Condition**

----

|                                              | Payments                Due By Period             |
|---------------------------------------------------|---------------------------------------------------|
|                                              | Less                than 1year                    | 1-3                years | 3-5                years | After                5years | Total |
| Long                term debt(1)                  | $1,120,101                                        |   $   841,933 |  $  786,267 | $1,118,652 |  $                3,866,953 |
| Operating                lease commitments (2)    |        371,280 |        371,280 | 30,940 |  - |        773,500 |
| Total                contractual cash obligations |  $                1,491,381                  |     1,213,213 |  $  817,207 | $1,118,652 | $                4,640,453 |
|                                              |                                              |   |   |   |   |

| (1)   | Represents                cash obligations for principal payments and interest payments on                various                loans that are all secured by the asset financed. For further detail,                see                Note 4 to the Consolidated Financial                Statements. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Lease                agreement of new corporate headquarters in Bakersfield, California,                lease                terms are until March 2011 at a monthly payment of $15,470.  See                Note 11 to the Consolidated Financial                Statements. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Operating      Activities**

*“Shared Based Payment”*

----

**Investing      Activities**

**Financing      Activities**

**Liquidity      and Capital Resources**

----

| ·   | Cash                flow from operating activities, |
|--------------------|-----------------------------------------------------|

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

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

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

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

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

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

----

**ITEM      8: FINANCIAL STATEMENTS**

|                                                                              | Page   |
|-----------------------------------------------------------------------------------|--------|
|                                                                              |   |
| Report                of Independent Auditor                                      | 30     |
|                                                                              |   |
| Consolidated                Balance Sheets at December 31, 2006 and 2005          | 31     |
|                                                                              |   |
| Consolidated                Statements of Operations for the Years Ended          |   |
| December                31, 2006, 2005 and 2004                                   | 33     |
|                                                                              |   |
| Consolidated                Statements of Changes in Shareholders' Equity for the |   |
| Years                Ended December 31, 2006, 2005 and 2004                       | 34     |
|                                                                              |   |
| Consolidated                Statements of Cash Flows for the Years Ended          |   |
| December                31, 2006, 2005 and 2004                                   | 35     |
|                                                                              |   |
| Notes                to Consolidated Financial Statements                         | 37     |
|                                                                              |   |
| Supplemental                Information about Oil and Gas Producing               |   |
| Activities                (Unaudited)                                             | 61     |

----

**REPORT      OF INDEPENDENT REGISTERED**

**PUBLIC      ACCOUNTING FIRM**

*Internal Control—Integrated Framework*

----

**TRI-VALLEY      CORPORATION**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                        |   | December                31, |           |
|---------------------------------------------------------------------------------------------|--------|-----------------------------|----------------|
|                                                                                        |   | ___2006___                  |           |   | ___2005___ |   |
| **ASSETS**                                                                                  |   |                        |           |   |   |   |
| Current                assets                                                               |   |                        |           |   |   |   |
| Cash                                                                                        |   | $                           | 15,598,215     |   |   | $ | 4,876,921 |   |
| Accounts                receivable, trade                                                   |   |                        | 377,278        |   |   |   | 431,869 |   |
| Prepaid                expenses                                                             |   |                        | 42,529         |   |   |   | 42,529 |   |
|                                                                                        |   |                        |           |   |   |   |   |   |
| Total                current assets                                                         |   |                        | 16,018,022     |   |   |   | 5,351,319 |   |
|                                                                                        |   |                        |           |   |   |   |   |   |
| Property                and equipment, net                                                  |   |                        |           |   |   |   |   |   |
| Proved                properties                                                            |   |                        | 1,407,925      |   |   |   | 1,146,103 |   |
| Unproved                properties                                                          |   |                        | 2,792,340      |   |   |   | 3,009,564 |   |
| Rigs                                                                                        |   |                        | 5,371,593      |   |   |   | 215,000 |   |
| Other                property and equipment                                                 |   |                        | 2,504,185      |   |   |   | 9,265,314 |   |
|                                                                                        |   |                        |           |   |   |   |   |   |
| Total                property and equipment, net (Note 3)                                   |   |                        | 12,076,043     |   |   |   | 13,635,981 |   |
|                                                                                        |   |                        |           |   |   |   |   |   |
| Other                assets                                                                 |   |                        |           |   |   |   |   |   |
| Deposits                                                                                    |   |                        | 309,833        |   |   |   | 316,614 |   |
| Investments                in partnerships (Note 5)                                         |   |                        | 17,400         |   |   |   | 17,400 |   |
| Goodwill                                                                                    |   |                        | 212,414        |   |   |   | 212,414 |   |
| Other                                                                                       |   |                        | 20,413         |   |   |   | 205,002 |   |
|                                                                                        |   |                        |           |   |   |   |   |   |
| Total                other assets                                                           |   |                        | 560,060        |   |   |   | 751,430 |   |
|                                                                                        |   |                        |           |   |   |   |   |   |
| **          Total                assets** |   | **$**                       | **28,654,125** |   |   | **$** | **19,738,730** |   |
|                                                                                        |   |                        |           |   |   |   |   |   |
|                                                                                        |   |                        |           |   |   |   |   |   |

----

**TRI-VALLEY      CORPORATION**

**CONSOLIDATED      BALANCE SHEETS**

| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                                                 |   |                        |           |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|----------------|
|                                                                                                                                                                                                                                                                                                                                                          |   | December                31, |           |
|                                                                                                                                                                                                                                                                                                                                                          |   | ___2006___                  |           |   | ___2005___ |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |
| Current                liabilities                                                                                                                                                                                                                                                                                                                            |   |                        |           |   |   |   |
| Notes                payable                                                                                                                                                                                                                                                                                                                                  |   | $                           | 619,069        |   |   | $ | 966,649 |   |
| Notes                payable – related parties                                                                                                                                                                                                                                                                                                          |   |                        | 501,036        |   |   |   | - |   |
| Accounts                payable and accrued expenses                                                                                                                                                                                                                                                                                                          |   |                        | 2,237,116      |   |   |   | 1,190,604 |   |
| Amounts                payable to joint venture participants                                                                                                                                                                                                                                                                                                  |   |                        | 280,815        |   |   |   | 161,747 |   |
| Advances                from joint venture participants, net                                                                                                                                                                                                                                                                                                  |   |                        | 5,408,909      |   |   |   | 5,318,645 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
|     Total                current liabilities                                                                                                                                                                                                                                                                                              |   |                        | 9,046,945      |   |   |   | 7,637,645 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
| Non-Current                Liabilities                                                                                                                                                                                                                                                                                                                        |   |                        |           |   |   |   |   |   |
| Due                to joint ventures                                                                                                                                                                                                                                                                                                                          |   |                        | -              |   |   |   | 201,748 |   |
| Asset                Retirement Obligation                                                                                                                                                                                                                                                                                                                    |   |                        | 216,714        |   |   |   | 92,108 |   |
| Long-term                portion of notes payable – related parties                                                                                                                                                                                                                                                                                     |   |                        | 698,963        |   |   |   | - |   |
| Long-term                portion of notes payable                                                                                                                                                                                                                                                                                                             |   |                        | 2,047,885      |   |   |   | 4,234,509 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
| Total                non-current liabilities                                                                                                                                                                                                                                                                                                                  |   |                        | 2,963,562      |   |   |   | 4,528,365 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
|      Total                liabilities                                                                                                                                                                                                                                                                                                |   |                        | 12,010,507     |   |   |   | 12,166,010 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
| Minority                interest                                                                                                                                                                                                                                                                                                                              |   |                        | 5,410,746      |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
|  Stockholders’                equity                                                                                                                                                                                                                                                                                                               |   |                        |           |   |   |   |   |   |
| Common                stock, $.001 par value; 100,000,000 shares                                                                                                                                                                                                                                                                                              |   |                        |           |   |   |   |   |   |
| authorized;  23,546,655                and 22,806,176 issued and                                                                                                                                                                                                                                                                                    |   |                        |           |   |   |   |   |   |
|  outstanding                at December 31, 2006, and 2005                                                                                                                                                                                                                                                                                               |   |                        | 23,407         |   |   |   | 22,806 |   |
|            Less:                common stock in treasury, at cost,                                                                                                                                                                                                                                     |   |                        |           |   |   |   |   |   |
|   100,025                shares at December 31, 2006 and 2005.                                                                                                                                                                                                                                                                                      |   |                        | (13,370        | ) |   |   | (13,370 | ) |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
| Capital                in excess of par value                                                                                                                                                                                                                                                                                                                 |   |                        | 28,692,780     |   |   |   | 25,629,775 |   |
| Additional                paid in capital – warrants                                                                                                                                                                                                                                                                                                    |   |                        | 247,313        |   |   |   | - |   |
| Additional                paid in capital – stock options                                                                                                                                                                                                                                                                                               |   |                        | 1,262,404      |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
| Accumulated                deficit                                                                                                                                                                                                                                                                                                                            |   |                        | (18,979,662    | ) |   |   | (18,066,491 | ) |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
|     Total                stockholders’ equity                                                                                                                                                                                                                                                                                       |   |                        | 11,232,872     |   |   |   | 7,572,720 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |
| **           Total                liabilities, minority interest                and                            stockholder’s                equity** |   | **$**                       | **28,654,125** |   |   | **$** | **19,738,730** |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                        |           |   |   |   |   |   |

----

**TRI-VALLEY      CORPORATION**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

|                                                                                                           |   | __For                the Years Ended December 31,_ |           |
|----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|----------------|
|                                                                                                           |   | ___ 2006 ___                             |           |   | ___ 2005 ___ |   |   | ___ 2004 ___ |   |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |
| Revenues                                                                                                       |   |                                               |           |   |   |   |   |   |   |
| Sale                of oil and gas                                                                             |   | $                                                  | 1,029,606      |   |   | $ | 901,159 |   |   | $ | 799,474 |   |
| Rig                income                                                                                      |   |                                               | 873,368        |   |   |   | - |   |   |   | - |   |
| Royalty                income                                                                                  |   |                                               | -              |   |   |   | 883 |   |   |   | 674 |   |
| Partnership                income                                                                              |   |                                               | 45,000         |   |   |   | 30,000 |   |   |   | 30,000 |   |
| Interest                income                                                                                 |   |                                               | 72,707         |   |   |   | 118,608 |   |   |   | 45,990 |   |
| Drilling                and development                                                                        |   |                                               | 2,497,256      |   |   |   | 11,422,234 |   |   |   | 3,559,500 |   |
| Other                income                                                                                    |   |                                               | 418,786        |   |   |   | 53,226 |   |   |   | 63,032 |   |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |   |   |   |
| Total                revenues                                                                                  |   |                                               | 4,936,723      |   |   |   | 12,526,110 |   |   |   | 4,498,670 |   |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |   |   |   |
| Costs                and expenses                                                                              |   |                                               |           |   |   |   |   |   |   |   |   |   |
| Mining                exploration costs                                                                        |   |                                               | 510,583        |   |   |   | 4,112,717 |   |   |   | 994,151 |   |
| Production                costs                                                                                |   |                                               | 388,700        |   |   |   | 93,429 |   |   |   | 144,101 |   |
| Drilling                and development                                                                        |   |                                               | 1,799,792      |   |   |   | 9,267,621 |   |   |   | 2,224,793 |   |
| Rig                operating expenses                                                                          |   |                                               | 566,649        |   |   |   | - |   |   |   | - |   |
| General                and administrative                                                                      |   |                                               | 6,110,921      |   |   |   | 3,521,311 |   |   |   | 2,066,198 |   |
| Interest                                                                                                       |   |                                               | 396,672        |   |   |   | 118,047 |   |   |   | 33,332 |   |
| Depreciation,                depletion and amortization                                                        |   |                                               | 585,439        |   |   |   | 242,527 |   |   |   | 21,699 |   |
| Impairment                of acquisition costs                                                                 |   |                                               | 459,243        |   |   |   | 90,165 |   |   |   | 112,395 |   |
| Total                costs and expenses                                                                        |   |                                               | 10,817,999     |   |   |   | 17,445,817 |   |   |   | 5,596,669 |   |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations, before income taxes and discontinued                operations |   |                                               | (5,881,276     | ) |   |   | (4,919,707 | ) |   |   | (1,097,999 | ) |
| Tax                provision                                                                                   |   |                                               | -              |   |   |   | - |   |   |   | - |   |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations, before discontinued operations                                 |   |                                               | (5,881,276     | ) |   |   | (4,919,707 | ) |   |   | (1,097,999 | ) |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |   |   |   |
| Loss                from discontinued operations (Note 12)                                                     |   |                                               | (4,774,840     | ) |   |   | (4,810,364 | ) |   |   | (73,006 | ) |
| Gain                on disposal of discontinued operations (Note 12)                                           |   |                                               | 9,715,604      |   |   |   | - |   |   |   | - |   |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |   |   |   |
| **Loss                before minority interest**                                                               |   | $                                                  | (940,512       | ) |   | $ | (9,730,071 | ) |   | $ | (1,171,005 | ) |
| Minority                interest                                                                               |   | $                                                  | (27,341        | ) |   |   | - |   |   |   | - |   |
| Net                Loss                                                                                        |   | $                                                  | (913,171       | ) |   | $ | (9,730,071 | ) |   | $ | (1,171,005 | ) |
|  Basic                net loss per share:                                                                 |   |                                               |           |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations                                                                 |   | $                                                  | (0.25          | ) |   | $ | (0.22 | ) |   | $ | (0.05 | ) |
| Income                (loss)  from discontinued operations, net                                      |   | $                                                  | 0.21           |   |   | $ | (0.21 | ) |   | $ | (0.01 | ) |
| Basic                loss per common share                                                                     |   | $                                                  | (0.04          | ) |   | $ | (0.43 | ) |   | $ | (0.06 | ) |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |   |   |   |
| **Weighted                average number of shares outstanding**                                               |   | ** **                                         | **23,374,205** |   |   | ** ** | **22,426,580** |   |   | ** ** | **20,507,342** |   |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |   |   |   |
| **Potentially                dilutive shares outstanding**                                                     |   | ** **                                         | **26,377,537** |   |   | ** ** | **25,030,468** |   |   | ** ** | **23,060,942** |   |
|                                                                                                           |   |                                               |           |   |   |   |   |   |   |   |   |   |
| No                dilution is reported since net income is a loss per SFAS                128                  |   |                                               |           |   |   |   |   |   |   |

----

**TRI-VALLEY      CORPORATION**

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS’ EQUITY**

|                                                 |           |                |                    |                       | Additional                    |       |              |          |                         |
|------------------------------------------------------|----------------|---------------------|-------------------------|----------------------------|-------------------------------|------------|-------------------|---------------|------------------------------|
|                                                 |           |                |                    |                       | Paid                in        |       |              |          |                         |
|                                                 | Total          |                |                    | Capital                in  | Warrants                & | Common     | Accumu-           |          |                         |
|                                                 | Common         | Treasury            | Par                     | Excess                of   | Stock                         | Stock      | lated             | Treasury      | Stockholders’          |
|                                                 | Shares         | Shares              | Value                   | Par                Value   | Options                       | Receivable | Déficit      | Stock         | Equity                       |
|                                                 |           |                |                    |                       |                          |       |              |          |                         |
| Balance                at December 31, 2003          | 20,097,627     | 100,025             | $  20,115     | $                9,010,453 | -                             | -          | $(7,165,415)      | $(13,370)     | $   1,851,783 |
| Issuance                of common stock              | 1,738,425      | -                   | 1,721                   | 6,761,354                  | -                             | -          | -                 | -             | 6,763,075                    |
| Stock                issuance cost                   | -              | -                   | -                       | (646,200)                  | -                             | -          | -                 | -             | (646,200)                    |
| Common                stock receivable               | -              | -                   | -                       | -                          | -                             | (750)      | -                 | -             | (750)                        |
| Net                loss                              | -              | -                   | -                       | -                          | -                             | -          | (1,171,005)       | -             | (1,171,005)                  |
|                                                 |           |                |                    |                       |                          |       |              |          |                         |
| Balance                at December 31, 2004          | 21,836,052     | 100,025             | 21,836                  | 15,125,607                 | -                             | (750)      | (8,336,420)       | (13,370)      | 6,796,903                    |
|                                                 |           |                |                    |                       |                          |       |              |          |                         |
| Issuance                of common stock              | 970,124        | -                   | 970                     | 9,199,610                  | -                             | -          | -                 | -             | 9,200,580                    |
| Stock                issuance cost                   | -              |                |                    | (432,067)                  | -                             | -          | -                 | -             | (432,067)                    |
| Common                stock receivable               | -              |                |                    | -                          | -                             | 750        | -                 | -             | 750                          |
| Drilling                program equity               | -              |                |                    | 1,736,625                  | -                             | -          | -                 | -             | 1,736,625                    |
| Net                loss                              | -              |                |                    | -                          | -                             | -          | (9,730,071)       | -             | (9,730,071)                  |
|                                                 |           |                |                    |                       |                          |       |              |          |                         |
| Balance                at                            |           |                |                    |                       |                          |       |              |          |                         |
| December                31, 2005                     | 22,806,176     |   100,025 | $  22,806     | $25,629,775                | -                             | -          | $(18,066,491)     | $(13,370)     | $  7,572,720       |
|                                                 |           |                |                    |                       |                          |       |              |          |                         |
| Issuance                of common stock              | 740,479        |                | 601                     | 3,373,745                  | -                             | -          | -                 | -             | 3,374,346                    |
| Stock                issuance cost                   | -              | -                   | -                       | (310,740)                  | -                             | -          | -                 | -             | (310,740)                    |
| Warrants                (see note 10)                | -              | -                   | -                       | -                          | $  247,313          | -          | -                 | -             | 247,313                      |
| Stock                Based Compensation (see note 5) | -              | -                   | -                       | -                          | 1,262,404                     | -          |              |          | 1,262,404                    |
| Net                loss                              | -              | -                   | -                       | -                          | -                             | -          | (913,171)         |          | 913,171                      |
| **Balance                at**                        |           |                |                    |                       |                          |       |              |          |                         |
| **December                31, 2006**                 | **23,546,655** | **100,025**         | **$  23,407** | **$28,692,780**            | **$1,509,717**                | -          | **$(18,979,662)** | **$(13,370)** | **$  11,232,872**  |

----

**TRI-VALLEY      CORPORATION**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|                                                                                                                   |   | For                the Years Ended December 31, |       |
|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|------------|
|                                                                                                                   |   | 2006                                            |       |   | 2005 |   |   | 2004 |   |
|                                                                                                                   |   |                                            |       |   |   |   |   |   |   |
| CASH                PROVIDED (USED) BY OPERATING ACTIVITIES                                                            |   |                                            |       |   |   |   |   |   |   |
| Net                loss                                                                                                |   | $                                               | (913,171   | ) |   | $ | (9,730,071 | ) |   | $ | (1,171,005 | ) |
| Loss                from discontinued operations                                                                       |   |                                            | 4,774,840  |   |   |   | 4,810,364 |   |   |   | 73,006 |   |
| Gain                on disposal of discontinued operations, net                                                        |   |                                            | (9,715,604 | ) |   |   | - |   |   |   | - |   |
|                                                                                                                   |   |                                            |       |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations                                                                         |   |                                            | (5,853,935 | ) |   |   | (4,919,707 | ) |   |   | (1,097,999 | ) |
| Adjustments                to reconcile net (loss) to net cash                                                         |   |                                            |       |   |   |   |   |   |   |   |   |   |
| provided                (used) by operating activities:                                                                |   |                                            |       |   |   |   |   |   |   |   |   |   |
| Depreciation,                depletion, and amortization                                                               |   |                                            | 585,439    |   |   |   | 242,527 |   |   |   | 21,699 |   |
| Impairment,                dry hole and other disposals of property                                                    |   |                                            | 459,243    |   |   |   | 90,165 |   |   |   | 112,395 |   |
| Minority                interest                                                                                       |   |                                            | (27,341    | ) |   |   |   |   |   |   |   |   |
| Stock-based                compensation costs, net of taxes                                                            |   |                                            | 1,262,404  |   |   |   | - |   |   |   | - |   |
| Warrant                costs from issuance of restricted common stock                                                  |   |                                            | 247,313    |   |   |   | - |   |   |   | - |   |
| (Gain)                or loss on sale of property                                                                      |   |                                            | -          |   |   |   | 131,766 |   |   |   | - |   |
| Property,                mining claims & services paid with common stock                                           |   |                                            | -          |   |   |   | 5,666,575 |   |   |   | 804,180 |   |
| Changes                in operating capital:                                                                           |   |                                            |       |   |   |   |   |   |   |   |   |   |
| (Increase)                decrease in accounts receivable                                                              |   |                                            | 85,419     |   |   |   | (89,862 | ) |   |   | (28,183 | ) |
| (Increase)                decrease in prepaids                                                                         |   |                                            | -          |   |   |   | 53,527 |   |   |   | (31,719 | ) |
| (Increase)                decrease in deposits and other assets                                                        |   |                                            | (19,088    | ) |   |   | (14,874 | ) |   |   | 87,671 |   |
| Increase                (decrease) in income taxes payable                                                             |   |                                            | -          |   |   |   | - |   |   |   | (39,000 | ) |
| Increase                (decrease) in accounts payable and accrued expenses                                            |   |                                            | 635,880    |   |   |   | (445,454 | ) |   |   | 552,064 |   |
| Increase                (decrease) in amounts payable to joint venture participants and related                parties |   |                                            | (82,680    | ) |   |   | 263,380 |   |   |   | 8,840 |   |
| Increase                (decrease) in advances from joint venture                                                      |   |                                            |       |   |   |   |   |   |   |   |   |   |
| participants                                                                                                           |   |                                            | 90,264     |   |   |   | (1,003,031 | ) |   |   | 674,526 |   |
|                                                                                                                   |   |                                            |       |   |   |   |   |   |   |   |   |   |
| Net                cash provided by (used in) continuing operations                                                    |   |                                            | (2,617,082 | ) |   |   | (24,988 | ) |   |   | 1,064,474 |   |
| Net                cash provided by (used in) discontinued operations                                                  |   |                                            | 543,073    |   |   |   | (4,446,650 | ) |   |   | (41,287 | ) |
| Net                Cash Provided (Used) by Operating Activities                                                        |   |                                            | (2,074,009 | ) |   |   | (4,471,638 | ) |   |   | 1,023,187 |   |
|                                                                                                                   |   |                                            |       |   |   |   |   |   |   |   |   |   |
| CASH                PROVIDED (USED) BY INVESTING ACTIVITIES                                                            |   |                                            |       |   |   |   |   |   |   |   |   |   |
| Proceeds                from sale of property                                                                          |   |                                            | 461,752    |   |   |   | - |   |   |   | - |   |
| Proceeds                from sale of discontinued operations                                                           |   |                                            | 13,838,625 |   |   |   | - |   |   |   | - |   |
| Capital                expenditures                                                                                    |   |                                            | (5,760,034 | ) |   |   | (6,494,822 | ) |   |   | (242109 | ) |
| (Investment                in) advance to joint project                                                                |   |                                            | -          |   |   |   | - |   |   |   | (150,000 | ) |
|                                                                                                                   |   |                                            |       |   |   |   |   |   |   |   |   |   |
| Net                cash provided by (used in) continuing operations                                                    |   |                                            | 8,540,343  |   |   |   | (6,494,822 | ) |   |   | (392,109 | ) |
| Net                cash provided by (used in) discontinued operations                                                  |   |                                            | (225,042   | ) |   |   | (4,256,602 | ) |   |   | (127,072 | ) |
|                                                                                                                   |   |                                            |       |   |   |   |   |   |   |   |   |   |
| Net                Cash Provided (Used) by Investing Activities                                                        |   |                                            | 8,315,301  |   |   |   | (10,751,424 | ) |   |   | (519,181 | ) |
|                                                                                                                   |   |                                            |       |   |   |   |   |   |   |   |   |   |

----

**TRI-VALLEY      CORPORATION**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|                                                                                                |   | For                the Years Ended December 31, |           |
|-----------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|----------------|
|                                                                                                |   | 2006                                            |           |   | 2005 |   |   | 2004 |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |
| CASH                PROVIDED (USED) BY FINANCING ACTIVITIES                                         |   |                                            |           |   |   |   |   |   |   |
| Proceeds                from long-term debt                                                         |   |                                            | 1,017,559      |   |   |   | - |   |   |   | - |   |
| Proceeds                from long-term debt – related parties                                 |   |                                            | 1,200,000      |   |   |   | 3,666,765 |   |   |   | - |   |
| Principal                payments on long-term debt                                                 |   |                                            | (4,909,204     | ) |   |   | (311,673 | ) |   |   | (10,006 | ) |
| Net                proceeds from the sale of minority interest                                      |   |                                            | 5,438,087      |   |   |   | - |   |   |   | - |   |
|        Net                Proceeds from issuance of common stock |   |                                            | 2,442,890      |   |   |   | 3,101,938 |   |   |   | 5,310,224 |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
| Net                cash provided by (used in) continuing operations                                 |   |                                            | 5,189,332      |   |   |   | 6,457,030 |   |   |   | 5,301,939 |   |
| Net                cash provided by (used in) discontinued operations                               |   |                                            | (709,330       | ) |   |   | 1,830,033 |   |   |   | - |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
| Net                Cash Provided (Used) by Financing Activities                                     |   |                                            | 4,480,002      |   |   |   | 8,287,063 |   |   |   | 5,301,939 |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
| Net                Increase (Decrease) in Cash and Cash Equivalents                                 |   | $                                               | 10,721,294     |   |   | $ | (6,935,999 | ) |   | $ | 5,805,945 |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
| Cash                at Beginning of Year                                                            |   |                                            | 4,876,921      |   |   |   | 11,812,920 |   |   |   | 6,006,975 |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
| **Cash                at End of Year**                                                              |   | **$**                                           | **15,598,215** |   |   | **$** | **4,876,921** |   |   | **$** | **11,812,920** |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
| Interest                paid                                                                        |   | $                                               | 352,815        |   |   | $ | 377,943 |   |   | $ | 33,332 |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
| Income                taxes paid                                                                    |   | $                                               | -              |   |   | $ | - |   |   | $ | - |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
|       Property                & services paid with common stocks  |   | $                                               | 620,716        |   |   | $ | 2,662,075 |   |   | $ | 92,200 |   |
|                                                                                                |   |                                            |           |   |   |   |   |   |   |   |   |   |
|       Stock                issued to exchange mining claims           |   | $                                               | -              |   |   | $ | 3,004,500 |   |   | $ | 712,000 |   |

----

**TRI-VALLEY      CORPORATION**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE      1 – GENERAL**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

----

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

*"Accounting for Asset      Retirement Obligations"*

----

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

*“Goodwill and Other Intangible Assets”*

*Sale      of Oil and Gas*

*Drilling      and Development*

*Drilling      Agreements/Joint Ventures*

----

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

----

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

*“Accounting for Suspended Well Costs.”*

*Accounting for Conditional Asset Retirement Obligations*

|                                                      |        December                31, |   |     December                31,                      |   |      December                31,                                              |
|-----------------------------------------------------------|-----------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|
|                                                      | 2006                                                                  |   | 2005                                                                     |   | 2004                                                                                                   |
|                                                      |                                                                  |   |                                                                     |   |                                                                                                   |
| **Beginning                asset retirement obligations** | **$        92,108**           |   | **$           0** |   | **$               0**       |
|                                                      |                                                                  |   |                                                                     |   |                                                                                                   |
| Liabilities                assumed in acquisitions        |    111,364(2)                                          |   | 92,108(1)                                                                |   | 0                                                                                                      |
| Accretion                of discount                      |       13,242                            |   |                                                                     |   |                                                                                                   |
|                                                      |                                                                  |   |                                                                     |   |                                                                                                   |
| **Ending                asset retirement obligations**    | **$      216,714**                      |   | **$                92,108**                                              |   | ** $               0** |

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

| (1)   | The                Company’s portion of the liability for the plugging and abandonment of the                wells acquired from the Temblor Valley, Pleasant Valley and previous                acquisitions. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The                Company’s portion of the liability for the plugging and abandonment of the                wells acquired from the C & L/Crofton & Coffee lease, the Claflin                lease and the SP/Chevron lease. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Office                furniture and fixturesVehicle,                machinery & equipmentBuilding | 3                -                7 years5                -                10 years15                years |
|-------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

|                                                                                                                                                                 |                       | December                31,                               |   | December                31,                                                                                                      |   | December                31,                                                                                                      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|-----------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                 |                       | 2006                                                      |   | 2005                                                                                                                             |   | 2004                                                                                                                             |
|                                                                                                                                                                 |                       |                                                      |   |                                                                                                                             |   |                                                                                                                             |
| Net                Income                                                                                                                                            | As                reported |  $  (  913,171)                  |   | $  (9,730,071)                                                                                                         |   | $    (1,171,005)                                                                                             |
| Add:                Stock-based compensation expense included in reported net income,                net of                tax benefit                               |                       |         1,262,404 |   |                      -- |   |                      -- |
| Deduct:  Stock-based                compensation expense determined under fair value based method for                all                awards, net of tax |                       |        (1,262,404)     |   |               (631,000)                                    |   |                      -- |
|                                                                                                                                                                 | Pro                forma   | $   (913,171)                              |   |        $(10,361,071)                                                                          |   | $   (1,171,005)                                                                                                   |
|                                                                                                                                                                 |                       |                                                      |   |                                                                                                                             |   |                                                                                                                             |
| Earnings                per share                                                                                                                                    | As                reported | (0.04)                                                    |   |              (0.43)                                             |   |                 (0.06)                           |
|                                                                                                                                                                 | Pro                forma   | (0.04)                                                    |   |              (0.46)                                             |   |                 (0.06)                           |

*Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants      (APB14) *
*Accounting for Convertible Securities with Beneficial Conversion      Features or      Contingently Adjustable Conversion Ratios, (EITF 98-5) *
*Application of Issue No 98-5 to Certain Convertible Instruments and      (EITF      00-27)*

* *

----

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

**Recently      Issued Accounting Pronouncements**

*“Accounting for Conditional Asset Retirement      Obligations.”*
*“Accounting for Asset Retirement Obligations”, *

*Accounting Changes and Error      Corrections*

*Accounting for Certain Hybrid Financial      Instruments—an amendment of FASB Statements No. 133 and 140 *
*Application of Statement 133 to Beneficial Interests in Securitized      Financial Assets*

*“Accounting for Uncertainty in Income Taxes*

*“Fair Value      Measurements.”*

----

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

**Recently      Issued Accounting Pronouncements (Continued)**

*Considering      the Effects of Prior Year Misstatements when Quantifying Misstatements in      Current Year Financial Statements*

*The Fair Value Option for      Financial Assets and Financial Liabilities*

----

**NOTE      3 – PROPERTY AND EQUIPMENT**

|                                                                                                          |   | December                31, |           |
|---------------------------------------------------------------------------------------------------------------|--------|-----------------------------|----------------|
|                                                                                                          |   | 2006                        |           |   | 2005 |   |
| Oil                and gas – California                                                                 |   |                        |           |   |   |   |
| Proved                properties, gross                                                                       |   | $                           | 2,169,496      |   |   | $ | 1,795,653 |   |
| Accumulated                depletion                                                                          |   |                        | (761,571       | ) |   |   | (649,550 | ) |
| Proved                properties, net                                                                         |   |                        | 1,407,925      |   |   |   | 1,146,103 |   |
| Unproved                properties                                                                            |   |                        | 2,792,340      |   |   |   | 3,009,564 |   |
| Total                oil and gas properties                                                                   |   |                        | 4,200,265      |   |   |   | 4,155,667 |   |
|                                                                                                          |   |                        |           |   |   |   |   |   |
| Rigs                                                                                                          |   |                        | 5,444,646      |   |   |   | 215,000 |   |
|     Accumulated                depreciation                                               |   |                        | (73,053        | ) |   |   | - |   |
|               Total                Rigs |   |                        | 5,371,593      |   |   |   | 215,000 |   |
|                                                                                                          |   |                        |           |   |   |   |   |   |
| Other                property and equipment                                                                   |   |                        |           |   |   |   |   |   |
| Land                                                                                                          |   |                        | 21,281         |   |   |   | 21,281 |   |
| Building                                                                                                      |   |                        | 45,124         |   |   |   | 2,739,442 |   |
| Leasehold                improvements                                                                         |   |                        | -              |   |   |   | 577,619 |   |
| Machinery                and Equipment                                                                        |   |                        | 2,414,824      |   |   |   | 4,881,271 |   |
| Vehicles                                                                                                      |   |                        | 407,739        |   |   |   | 1,414,416 |   |
| Transmission                tower                                                                             |   |                        | 51,270         |   |   |   | 51,270 |   |
| Office                furniture and equipment                                                                 |   |                        | 159,241        |   |   |   | 202,587 |   |
|                                                                                                          |   |                        | 3,099,479      |   |   |   | 9,887,886 |   |
| Accumulated                depreciation                                                                       |   |                        | (595,294       | ) |   |   | (622,572 | ) |
| Total                other property and equipment, net                                                        |   |                        | 2,504,185      |   |   |   | 9,265,314 |   |
|                                                                                                          |   |                        |           |   |   |   |   |   |
| **Property                and equipment, net**                                                                |   | **$**                       | **12,076,043** |   |   | **$** | **13,635,981** |   |

----

**NOTE      4 – NOTES PAYABLE**

|                                                                                                                                                                                                                                                                                                        |   | December                31, |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|-----------|
|                                                                                                                                                                                                                                                                                                        |   | 2006                        |      |   | 2005 |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |
| Various                notes outstanding December 31, 2005 paid in full during 2006, with                interest rates ranging from 6.79% to 13.45% and remaining maturities                ranging from 1 to 9 years. Secured by equipment and an industrial                building                site. |   |                        | -         |   |   | $ | 3,691,262 |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |   |   |
| Note                payable to Rabobank dated October 5, 2005, secured by a vehicle,                interest                at 6.5%, payable in 60 monthly installments of $599.                                                                                                                            |   | $                           | 25,119    |   |   |   | 29,238 |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |   |   |
| Note                payable to Jim Burke Ford dated November 18,                                                                                                                                                                                                                                            |   |                        |      |   |   |   |   |   |
| 2005;                secured by a vehicle; interest at 6.49%; payable                                                                                                                                                                                                                                       |   |                        |      |   |   |   |   |   |
| in                60 monthly installments of $714.                                                                                                                                                                                                                                                     |   |                        | 30,520    |   |   |   | 35,893 |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |   |   |
| Note                payable to Sealaska Corporation dated July 15,                                                                                                                                                                                                                                          |   |                        |      |   |   |   |   |   |
| 2005;                secured by mining machines and equipment;                                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |
| imputed                interest at 7.5%; payable in 10 yearly                                                                                                                                                                                                                                               |   |                        |      |   |   |   |   |   |
| installments                of $200,000. Face amount was $2,000,000 before the imputed interest                discount of $627,184 which resulted in a principal amount of                $1,372,816.                                                                                                      |   |                        | 1,275,777 |   |   |   | 1,420,006 |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |   |   |
| Note                payable to Jim Burke Ford dated November 18,                                                                                                                                                                                                                                            |   |                        |      |   |   |   |   |   |
| 2005;                secured by a vehicle; interest at 6.49%; payable                                                                                                                                                                                                                                       |   |                        |      |   |   |   |   |   |
| in                60 monthly installments of $493.                                                                                                                                                                                                                                                          |   |                        | 20,351    |   |   |   | 24,759 |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |   |   |
| Note                payable to Three Way Chevrolet dated April 03, 2006; secured by a                vehicle;                interest at 5.90%; payable in 60 monthly installments of                $577.                                                                                                  |   |                        | 27,356    |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |   |   |
| Note                payable to Three Way Chevrolet dated February 24, 2006; secured by                a                vehicle; interest at 9.70%; payable in 60 monthly installments of                $1,324.                                                                                             |   |                        | 56,864    |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |   |   |
| Note                payable to Moss Family Trust dated February 14, 2006; secured by                100,000                shares of Tri Valley corporation unregistered restricted common stock;                interest at 12.00%; payable in 60 monthly installments of                $13,747.          |   |                        | 547,108   |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                        |   |                        |      |   |   |   |   |   |
| Note                payable to Moss Family Trust dated March 8, 2006; secured by 40,000                shares                of Tri Valley corporation unregistered restricted common stock; interest                at 12.00%; payable in 60 monthly installments of $5,728                                |   |                        | 227,961   |   |   |   | - |   |

----

| **NOTE                4 – NOTES PAYABLE (Continued)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                        |          |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | December                31, |          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2006                        |          |   | 2005   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                        |          |   |   |   |
| Note                payable to F. Lynn Blystone and Patricia L Blystone dated March 21,                2006;                secured by 6% overriding royalty interest in the Temblor Valley                Production; interest at 1.00% per month, payable on April 21, 2007.( also see note                5 –                related party transactions)  This note was paid in full in                2007                                                                                                                       |   |                        | 150,000       |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                        |          |   |   |   |   |   |
| Note                payable to Sun Valley Trust dated December 01, 2006; payable in 6                monthly                installments of $50,000. Unsecured                                                                                                                                                                                                                                                                                                                                                                                            |   |                        | 300,000       |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                        |          |   |   |   |   |   |
| Note                payable to Three Way Chevrolet dated September 11, 2006; secured                by a                vehicle; interest at 4.90%; payable in 60 monthly installments of                $927.                                                                                                                                                                                                                                                                                                                                            |   |                        | 46,994        |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                        |          |   |   |   |   |   |
| Note                payable to Three Way Chevrolet dated September 11, 2006; secured                by a                vehicle; interest at 6.90%; payable in 60 monthly installments of                $633.                                                                                                                                                                                                                                                                                                                                            |   |                        | 30,631        |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                        |          |   |   |   |   |   |
| Note                payable to Three Way Chevrolet dated October 31, 2006; secured by                a                vehicle; interest at 9.70%; payable in 60 monthly installments of                $1,679.43.                                                                                                                                                                                                                                                                                                                                         |   |                        | 78,272        |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                        |          |   |   |   |   |   |
| Note                payable to Gary D, Borgna and Julie R. Borgna, and Equipment 2000                dated                December 30, 2006; secured by Rig Equipment; imputed interest at                8.00%;                payable in 120 monthly installments of $9,100 and a payment of $300,000                paid January 3, 2007.  Face amount was $1,392,000 before the                discount of $342,000 which resulted in a principal amount of $1,050,000.                (also see note 5 – related party transactions) |   |                        | 1,050,000     |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                        |          |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                        | 3,866,953     |   |   |   | 5,201,158 |   |
| Less                current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                        | 1,120,105     |   |   |   | 966,649 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                        |          |   |   |   |   |   |
| Long-term                portion of notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **$**                       | **2,746,848** |   |   | **$**  | **4,234,509** |   |

| 2007      |      $          1,120,105                            |
|-----------|---------------------------------------------------------------------------------------------------------------------------------|
| 2008      |                     401,213 |
| 2009      | 440,720                                                                                                                         |
| 2010      | 481,970                                                                                                                         |
| 2011      | 304,293                                                                                                                         |
| 2012-2016 |                   1,118,652           |
|      |                                                                                                                            |
|      | $         3,866,953                                                                |

----

**NOTE      5 - RELATED PARTY TRANSACTIONS**

| Year |   | Expected                Life |   | Expected                Dividends |   | Expected                Volatility |   | Risk-Free                Interest Rates |
|------|--------|------------------------------|--------|-----------------------------------|--------|------------------------------------|--------|-----------------------------------------|
| 2006 |   | 8.8                          |   | None                              |   | 71%                                |   | 5.10                                    |

|                                    |   |                                |   |                                                |   |                                      |   |                          |                                                             |
|-----------------------------------------|--------|-------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------------------|--------|-------------------------------|------------------------------------------------------------------|
|                                    |   | Number                Outstanding   |   | Number                Outstanding & exercisable |   | Weighted-Average                          |   | Weighted-Average              | Intrinsic                Value(1)                at December 31, |
| Range                of Exercise Prices |   | at                December 31, 2006 |   | at                December 31, 2006                 |   | Remaining                Contractual Life |   | Exercise                Price | 2006(in                thousands)                                |
|                                    |   |                                |   |                                                |   |                                      |   |                          |                                                             |
| $.50                - $10.00            |   | 2,914,850                           |   | 2,674,850                                           |   | 3.6                years                  |   | $2.26                         | $19,340                                                          |
|                                    |   |                                |   |                                                |   |                                      |   |                          |                                                             |

|                                    |   |                                |   |                                                |   |                                      |   |                          |                                                             |
|-----------------------------------------|--------|-------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------------------|--------|-------------------------------|------------------------------------------------------------------|
|                                    |   | Number                Outstanding   |   | Number                Outstanding & exercisable |   | Weighted-Average                          |   | Weighted-Average              | Intrinsic                Value(2)                at December 31, |
| Range                of Exercise Prices |   | at                December 31, 2005 |   | at                December 31, 2005                 |   | Remaining                Contractual Life |   | Exercise                Price | 2005(in                thousands)                                |
|                                    |   |                                |   |                                                |   |                                      |   |                          |                                                             |
| $.50                - $10.00            |   | 2,757,600                           |   | 2,647,600                                           |   | 4.2                years                  |   | $1.70                         | $16,097                                                          |
|                                    |   |                                |   |                                                |   |                                      |   |                          |                                                             |

----

**NOTE      5 - RELATED PARTY TRANSACTIONS (continued)**

|                                    |   |                                |   |                                                |   |                                      |   |                          |                                                             |
|-----------------------------------------|--------|-------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------------------|--------|-------------------------------|------------------------------------------------------------------|
|                                    |   | Number                Outstanding   |   | Number                Outstanding & exercisable |   | Weighted-Average                          |   | Weighted-Average              | Intrinsic                Value(3)                at December 31, |
| Range                of Exercise Prices |   | at                December 31, 2004 |   | at                December 31, 2004                 |   | Remaining                Contractual Life |   | Exercise                Price | 2004(in                thousands)                                |
|                                    |   |                                |   |                                                |   |                                      |   |                          |                                                             |
| $.50                - $2.43             |   | 2,553,600                           |   | 2,553,600                                           |   | 5.2                years                  |   | $1.28                         | $27,960                                                          |

*Unrecognized      Compensation Expense*

|                                                                                                                                                                                                                                                                                | 2006                                                                                                    |   | 2005                                                                    |   | 2004                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                |                                                                                                    |   | Weighted-                                                               |   |                                                                                                    |   | Weighted- |   |   |   | Weighted- |
|                                                                                                                                                                                                                                                                                |                                                                                                    |   | Average                                                                 |   |                                                                                                    |   | Average |   |   |   | Average |
|                                                                                                                                                                                                                                                                                |                                                                                                    |   | Exercise                                                                |   |                                                                                                    |   | Exercise |   |   |   | Exercise |
|                                                                                                                                                                                                                                                                                | Shares                                                                                                  |   | Price                                                                   |   | Shares                                                                                                  |   | Price |   | Shares |   | Price |
| Fixed                Options                                                                                                                                                                                                                                                        |                                                                                                    |   |                                                                    |   |                                                                                                    |   |   |   |   |   |   |
| Outstanding                at beginning of year                                                                                                                                                                                                                                     |  2,757,600                                                                                         |   | $           2.03 |   |  2,553,600                                                                                         |   | $           1.28 |   |  3,018,600 |   | $       1.27 |
| Granted                                                                                                                                                                                                                                                                             | 445,000                                                                                                 |   | $           6.19 |   | 271,000                                                                                                 |   | $           5.82 |   |       - |   | $             - |
| Exercised                                                                                                                                                                                                                                                                           |       (287,750)                                                           |   | $           2.03 |   |       (67,000)                                                            |   | $           1.94 |   |    (465,000) |   | $       1.20 |
| Cancelled                                                                                                                                                                                                                                                                           |                  - |   |            -     |   |                  - |   |             - |   |                  - |   |            - |
|                                                                                                                                                                                                                                                                                |                                                                                                    |   |                                                                    |   |                                                                                                    |   |   |   |   |   |   |
| Outstanding                at end of year                                                                                                                                                                                                                                           | 2,914,850                                                                                               |   | $           2.67 |   | 2,757,600                                                                                               |   | $           2.03 |   | 2,553,600 |   | $      1.28 |
|                                                                                                                                                                                                                                                                                |                                                                                                    |   |                                                                    |   |                                                                                                    |   |   |   |   |   |   |
| Options                exercisable at year-end                                                                                                                                                                                                                                      | 2,674,850                                                                                               |   | $           2.26 |   | 2,647,600                                                                                               |   | $           1.70 |   | 2,553,600 |   | $      1.28 |
|                                                                                                                                                                                                                                                                                |                                                                                                    |   |                                                                    |   |                                                                                                    |   |   |   |   |   |   |
|                                  Weighted-average                fair value of options granted during the year |                                                                                                    |   |
|                                                                                                                                                                                                                                                                                | $          4.78                                       |   |                                                                    |   | $          3.32                                       |   |   |   | n/a |   |   |
|                                                                                                                                                                                                                                                                                |                                                                                                    |   |                                                                    |   |                                                                                                    |   |   |   |   |   |   |
| Available                for issuance                                                                                                                                                                                                                                               | 824,000                                                                                                 |   |                                                                    |   |  119,000                                                                                           |   |   |   |  390,000 |   |   |
|                                                                                                                                                                                                                                                                                |                                                                                                    |   |                                                                    |   |                                                                                                    |   |   |   |   |   |   |

----

**NOTE      5 - RELATED PARTY TRANSACTIONS (continued)**

|                                          |                            |   |                                                                          |
|-----------------------------------------------|---------------------------------|--------|-------------------------------------------------------------------------------|
|                                          | Number                of Shares |   | Weighted-Average                Grant-Date Fair Value                         |
|                                          |                            |   |                                                                          |
| Nonvested                at December 31, 2005 | 115,000                         |   | $     8.59                                           |
|                                          |                            |   |                                                                          |
| Granted                                       | 445,000                         |   | $     6.19                                           |
| Vested                                        |   (315,000)           |   | $     6.99                                           |
|                                          |                            |   |                                                                          |
| Nonvested                at December 31, 2006 | 245,000                         |   |         $    6.95 |

|                                                                                                                                                                                                                |                                                                                  |   | December                31,                                                           |   |                                                                      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|
|                                                                                                                                                                                                                | 2006                                                                                  |   | 2005                                                                                  |   | 2004                                                                      |
|                                                                                                                                                                                                                |                                                                                  |   |                                                                                  |   |                                                                      |
| Drilling                and development revenue                                                                                                                                                                     | $   2,497,256                                                          |   | $                11,422,234                                                           |   | $  3,559,500                                                    |
|                                                                                                                                                                                                                |                                                                                  |   |                                                                                  |   |                                                                      |
| Drilling                and development costs                                                                                                                                                                       | $   1,799,792                                                          |   | $   9,267,621                                                          |   | $  2,224,793                                                    |
|                                                                                                                                                                                                                |                                                                                  |   |                                                                                  |   |                                                                      |
| Advances                from joint venture participants,                net                                                                                                                                    | $   5,408,909                                                          |   | $   5,318,645                                                          |   | $  6,321,676                                                    |
|                                                                                                                                                                                                                |                                                                                  |   |                                                                                  |   |                                                                      |
|                                                                                                                                                                                                                |
| Oil                and gas income from the Tri-Valley Oil & Gas Exploration Programs                1971-1 for fiscal year ended December 31, 2006, 2005 and 2004 are                as                follows: |
|                                                                                                                                                                                                                |
|                                                                                                                                                                                                                |                                                                                  |   | December                31,                                                           |   |                                                                      |
|                                                                                                                                                                                                                |      2006                                                    |   | 2005                                                                                  |   | 2004                                                                      |
|                                                                                                                                                                                                                |                                                                                  |   |                                                                                  |   |                                                                      |
| Partnership                income,  net of expenses                                                                                                                                                       | $             45,000 |   | $             30,000 |   | $           30,000 |

----

**NOTE      5 - RELATED PARTY TRANSACTIONS (continued)**

**NOTE      6 – EARNINGS PER SHARE**

| Year |   | Full                Year Basic Earnings (Loss) Per Share |   | Weighted-Average                Shares Outstanding |   | Weighted-Average                Potentially Dilutive Shares Outstanding |
|------|--------|----------------------------------------------------------|--------|----------------------------------------------------|--------|-------------------------------------------------------------------------|
| 2006 |   | $    (0.04)                          |   | 23,374,205                                         |   | 26,377,537                                                              |
| 2005 |   | $    (0.43)                          |   | 22,426,580                                         |   | 25,030,468                                                              |
| 2004 |   | $    (0.06)                          |   | 20,507,342                                         |   | 23,060,942                                                              |

**NOTE      7 - INCOME TAXES**

|                                                         | December                31,                                                                                                          |   | December                31,                                                                                                                |   | December                31,                                                                                                          |
|--------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|
|                                                         | 2006                                                                                                                                 |   | 2005                                                                                                                                       |   | 2004                                                                                                                                 |
|                                                         |                                                                                                                                 |   |                                                                                                                                       |   |                                                                                                                                 |
| Deferred                tax assets:                          |                                                                                                                                 |   |                                                                                                                                       |   |                                                                                                                                 |
|   Net                operating loss carryforwards  | $     5,398,000                                                                                             |   | $      5,184,000                                                                                             |   | $        776,000                                                                             |
|   Statutory                depletion carryforwards |             496,000                                                      |   |             384,000                                                            |   |             356,000                                                      |
|                                                         |                                                                                                                                 |   |                                                                                                                                       |   |                                                                                                                                 |
| Total                deferred tax assets                     |          5,894,000                                                                      |   |        5,568,000                                                                                        |   |           1,132,000                                                                |
| Valuation                allowance                           |            (5,894,000)                                                        |   |      (5,568,000)                                                                                                  |   |            (1,132,000)                                                        |
|                                                         |                                                                                                                                 |   |                                                                                                                                       |   |                                                                                                                                 |
| **Net                deferred tax assets**                   | **$                     -** |   | **$                      -** |   | **$                     -** |

----

**NOTE      7 - INCOME TAXES (Continued)**

|                                                                     | December                31,                                                                                  | December                31,                                                                                        | December                31,                                                     |
|--------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|
|                                                                     | 2006                                                                                                         | 2005                                                                                                               | 2004                                                                            |
| Income                (loss) before tax                                  | $      (913,171)                                                               | $   (9,730,071)                                                                                     | $  (1,171,005)                                                        |
|                                                                     |                                                                                                         |                                                                                                               |                                                                            |
| Computed                "expected" tax (benefit)                         | $   (376,000)                                                                                 | $  (3,892,000)                                                                                           | $     (468,000)                                        |
| State                tax liability                                       |              -                              |              -                                    |              - |
|                                                                     |                                                                                                         |                                                                                                               |                                                                            |
| Utilization                (non-utilization) of operating loss carryover |    376,000                                                                                    |   3,892,000                                                                                              |   468,000                                                             |
| **Total                income tax provision**                            | **$                 -** | **$                  -** | **$            -**  |

**NOTE      8 - MAJOR CUSTOMERS**

**NOTE      9 - FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS**

*“Disclosure      about Segments of an Enterprise and Related Information”.*

| The                Company’s operations are classified into four principal industry                segments: |
|--------------------------------------------------------------------------------------------------------------------|
|                                                                                                               |   |
| -                                                                                                                  | *Oil                and gas operations* include our share of revenues from oil and gas                wells on which TVOG serves as operator, royalty income and production                revenue from other partnerships in which we have operating or                non-operating interests.  It also includes revenues for                consulting services for oil and gas related activities. |
|                                                                                                               |   |
| -                                                                                                                  | *Rig                operations* began in 2006, when the Company acquired drilling rigs and                began operating them through subsidiaries GVPS and GVDC.  Rig                operations include income from rental of oil field                equipment. |
|                                                                                                               |   |
| -                                                                                                                  | *Minerals*                include the Company’s mining and mineral prospects and operations, and                expenses associated with those operations.  In 2006, the Company                recorded minerals revenue from consulting services performed for                the                mining and minerals industry, which are included on the operating                statement as other income. |
|                                                                                                               |   |
| -                                                                                                                  | *Drilling                and development* includes revenues received from oil and gas drilling                and development operations performed for joint venture partners,                including                the Opus-I drilling partnership. |
|                                                                                                               |   |

----

**NOTE      9 - FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS      (Continued)**

|                                                                                                                                                                                                                                              |   | Oil                and Gas |       |   | Rig        |   |       |     |   |   | Drilling                and |   |   |   |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|------------|--------|------------|--------|------------|----------|--------|--------|-----------------------------|--------|--------|--------|------------|
|                                                                                                                                                                                                                                              |   | Production                 |       |   | Operations |   |       | Minerals |   |   | Development                 |   |   | Total  |       |
| Year                ended December 31, 2006                                                                                                                                                                                                       |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |
| Revenues                from external customers                                                                                                                                                                                                   |   | $                          | 1,154,721  |   |       | $      | 1,033,539  |     |   | $      | 178,500                     |   |   | $      | 2,497,256  |   |   | $ | 4,864,016 |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Interest                revenue                                                                                                                                                                                                                   |   | $                          | 72,707     |   |       | $      | -          |     |   | $      | -                           |   |   | $      | -          |   |   | $ | 72,707 |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Interest                expense                                                                                                                                                                                                                   |   | $                          | 26,834     |   |       | $      | 2,373      |     |   | $      | 267,465                     |   |   | $      | -          |   |   | $ | 396,672 |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Operating                income (loss)                                                                                                                                                                                                            |   | $                          | 830,475    |   |       | $      | 306,719    |     |   | $      | (465,153                    | )      |   | $      | 507,465    |   |   | $ | 1,179,506 |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Expenditures                for segment assets                                                                                                                                                                                                    |   | $                          | 1,146,146  |   |       | $      | 5,444,646  |     |   | $      | 15,000                      |   |   | $      | -          |   |   | $ | 6,605,792 |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Minority                interest                                                                                                                                                                                                                  |   |                       | -          |   |       | $      | (27,341    | )        |   |   | -                           |   |   |   | -          |   |   | $ | (27,341 | ) |
|  Depreciation,                depletion, and amortization                                                                                                                                                                                    |   | $                          | 159,289    |   |       | $      | 81,530     |     |   | $      | 344,620                     |   |   | $      | -          |   |   | $ | 585,439 |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Total                assets                                                                                                                                                                                                                       |   | $                          | 18,517,488 |   |       | $      | 7,853,046  |     |   | $      | 2,283,591                   |   |   | $      | -          |   |   | $ | 28,654,125 |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Estimated                income tax benefit (expense)                                                                                                                                                                                             |   | $                          | -          |   |       | $      | -          |     |   | $      | -                           |   |   | $      | -          |   |   | $ | - |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Net                income (loss)                                                                                                                                                                                                                  |   | $                          | (4,638,280 | )      |       | $      | (24,002    | )        |   | **$**  | **3,051,646**               | *****  |   | $      | 697,465    |   |   | $ | (913,171 | ) |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| * In                the fourth quarter we sold our interest in Tri-Western Resources                and an                associated industrial site for a net gain of $9,715,604. See note 12                for a pro forma schedule. |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Year                ended December 31, 2005                                                                                                                                                                                                       |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Revenues                from external customers                                                                                                                                                                                                   |   | $                          | 932,042    |   |       | $      | 200        |     |   | $      | 11,422,234                  |   |   | $      | 12,354,476 |   |   |   |   |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Interest                revenue                                                                                                                                                                                                                   |   | $                          | 118,609    |   |       | $      | 2,295      |     |   | $      | -                           |   |   | $      | 120,904    |   |   |   |   |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Interest                expense                                                                                                                                                                                                                   |   | $                          | 2,115      |   |       | $      | 375,829    |     |   | $      | -                           |   |   | $      | 377,944    |   |   |   |   |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Operating                income (loss)                                                                                                                                                                                                            |   | $                          | (2,248,486 | )      |       | $      | (3,610,142 | )        |   | $      | 2,154,613                   |   |   |   | (3,704,015 | ) |   |   |   |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Expenditures                for segment assets                                                                                                                                                                                                    |   | $                          | 1,260,884  |   |       | $      | 9,490,540  |     |   | $      | -                           |   |   | $      | 10,751,424 |   |   |   |   |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Depreciation,                depletion, and amortization                                                                                                                                                                                          |   | $                          | 58,319     |   |       | $      | 442,134    |     |   | $      | -                           |   |   | $      | 500,453    |   |   |   |   |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Total                assets                                                                                                                                                                                                                       |   | $                          | 8,427,037  |   |       | $      | 9,614,726  |     |   | $      | 1,696,967                   |   |   | $      | 19,738,730 |   |   |   |   |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Estimated                income tax benefit(expense)                                                                                                                                                                                              |   | $                          | -          |   |       | $      | -          |     |   | $      | -                           |   |   | $      | -          |   |   |   |   |   |
|                                                                                                                                                                                                                                              |   |                       |       |   |       |   |       |     |   |   |                        |   |   |   |       |   |   |   |   |   |
| Net                income (loss)                                                                                                                                                                                                                  |   | $                          | (5,615,595 | )      |       | $      | (6,269,089 | )        |   | $      | 2,154,613                   |   |   | $      | (9,730,071 | ) |   |   |   |   |

----

**NOTE      9 - FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS      (Continued)**

|                                                     |   | Oil                and Gas |       |   |     |   |       | Drilling                and |   |   |      |   |
|----------------------------------------------------------|--------|----------------------------|------------|--------|----------|--------|------------|-----------------------------|--------|--------|-----------|--------|
|                                                     |   | Production                 |       |   | Minerals |   |       | Development                 |   |   | Total     |   |
| Year                ended December 31, 2004              |   |                       |       |   |     |   |       |                        |   |   |      |   |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |
| Revenues                from external customers          |   | $                          | 830,148    |   |     | $      | -          |                        |   | $      | 3,559,500 |   |   | $ | 4,389,648 |   |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |   |   |   |   |
| Interest                revenue                          |   | $                          | 45,990     |   |     | $      | -          |                        |   | $      | -         |   |   | $ | 45,990 |   |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |   |   |   |   |
| Interest                expense                          |   | $                          | 33,332     |   |     | $      | -          |                        |   | $      | -         |   |   | $ | 33,332 |   |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |   |   |   |   |
| Operating                income (loss)                   |   | $                          | 1,761,815  |   |     | $      | (1,029,898 | )                           |   | $      | 258,939   |   |   | $ | 990,856 |   |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |   |   |   |   |
| Expenditures                for segment assets           |   | $                          | 369,181    |   |     | $      | -          |                        |   | $      | -         |   |   | $ | 369,181 |   |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |   |   |   |   |
| Depreciation,                depletion, and amortization |   | $                          | 21,699     |   |     | $      | -          |                        |   | $      | -         |   |   | $ | 21,699 |   |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |   |   |   |   |
| Total                assets                              |   | $                          | 14,473,326 |   |     | $      | -          |                        |   | $      | -         |   |   | $ | 14,473,326 |   |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |   |   |   |   |
| Estimated                income tax benefit (expense)    |   | $                          | -          |   |     | $      | -          |                        |   | $      | -         |   |   | $ | - |   |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |   |   |   |   |
| Net                income (loss)                         |   | $                          | (400,046   | )      |     | $      | (1,029,898 | )                           |   | $      | 258,939   |   |   | $ | (1,171,005 | ) |
|                                                     |   |                       |       |   |     |   |       |                        |   |   |      |   |   |   |   |   |

**NOTE      10 - COMMON STOCK and WARRANTS and MINORITY INTEREST**

| -   | During                the year various directors and employees of the Company exercised                stock                options previously granted.  The new shares issued pursuant to                the stock option plan amounted to 237,593 shares.  Cash                consideration received totaled to                $318,375. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | The                Company pledged 140,000 common shares as security of two notes                payable. |
|---------------|-----------------------------------------------------------------------------------------------------------|

| - | The                Company issued 5,000 shares to one employee in accordance with his                employment contract. |
|---|---------------------------------------------------------------------------------------------------------------------------|

| -   | The                Company issued 16,261 shares as a deposit to Sun Valley                Trust.  The stock was valued at $6.15 per share.  The                deposit was subsequently applied to the purchase price of three leases                at                the date of closing. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | The                Company issued 5,280 shares to a consultant for $43,042 in services                at an                agreed price of $8.15 per share. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | The                Company issued 54,870 shares as partial payment to purchase a drilling                rig                for Great Valley Drilling Company, LLC valued at $9.49 per share                for a                consideration of $520,716. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | The                Company issued 35,000 shares to a director who exercised warrants                at                $10.00 per share, for total cash consideration of                $350,000. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 55 |
|--------|----|

**NOTE      10 - COMMON STOCK and WARRANTS and MINORITY INTEREST      (Continued)**

| -   | The                remaining 281,475 shares were issued in private placements at prices                of                $7.00 to $8.60 per share for a total consideration of $2,054,719,                or a                weighted average price of $7.30. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | During                the year the common stock issuance cost amounted to approximately                $310,740. |
|---------------|------------------------------------------------------------------------------------------------------------------|

| - | One                private individual purchased 326,667 common stock shares for total                $3,015,005 during the year: 125,000 shares at $7.50 per share, 35,000                shares at $6.50 per share, 50,000 shares at $12.00 per share, and                16,667                shares at $15.00 per share, and 100,000 shares at $10.00 per                share |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | During                the year various directors and employees of the Company exercised                stock                options previously granted.  The new shares issued pursuant to                the stock option plan amounted to 67,000 shares.  Cash                consideration received totaled to                $130,000. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | The                Company issued 320,000 shares to four individuals to exchange mining                claims in Alaska.  The stocks ranged in value from $10.05 to                $7.75 per share at the time of the                exchange. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | The                Company issued total 8,000 shares to directors of the Company for                services                rendered during the year.  At the time of the issuance the                stocks were valued at $8.13 per                share. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | The                Company issued 5,000 shares to one employee in accordance with his                employment contract.  At the time of the issuance the stock was                valued at $10.02 per share. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | The                Company issued 200,000 shares as consideration to acquire Pleasant                Valley                Energy Corporation.  The stock was valued at $12.32 per share at                the date of closing. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | During                the year, the Company issued 13,457 shares to a consultant for services                rendered.  The stock was valued at $6.16 per                share. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants      (APB14) *
*Accounting for Convertible Securities with Beneficial Conversion      Features or      Contingently Adjustable Conversion Ratios, (EITF 98-5) *
*Application of Issue No 98-5 to Certain Convertible Instruments and      (EITF      00-27.  *
 convertible instruments using the Black-Scholes      valuation method, using the same assumptions used for valuing employee options      for purposes of

----

**NOTE      10 - COMMON STOCK and WARRANTS and MINORITY INTEREST      (Continued)**

* *

**NOTE      11 - COMMITMENTS AND CONTINGENCIES**

----

**NOTE      11 - COMMITMENTS AND CONTINGENCIES (Continued)**

| Total                Opus Contributions | $        48,791,688            |
|-----------------------------------------|------------------------------------------------------------------------|
| Total                Opus Expenditures  | $        44,075,092            |
| Remaining                advances       | $          4,716,596 |

| Interest                credited to joint account | $             388,814 |
|---------------------------------------------------|----------------------------------------------------------------------------------------|

**NOTE      12 – ACQUISITIONS AND DISPOSITIONS**

**The      C & L/Crofton & Coffee lease.**

**SP/Chevron      acquisition.  **

**Claflin      acquisition.  **

----

**TRI-VALLEY      CORPORATION**

**UNAUDITED      PROFORMA CONDENSED CONSOLIDATED STATEMENT OF LOSSES**

**DECEMBER      31, 2006**

|                                                             |   | For                the year ended December 31, 2006 |                  |
|------------------------------------------------------------------|--------|-----------------------------------------------------|-----------------------|
|                                                             |   | As                                                  |                  |   | Pro                Forma |   |   |   |   |
|                                                             |   | Presented                                           |                  |   | Adjustment |   |   | Pro                Forma |   |
| Total                Revenue                                     |   | $                                                   | 4,936,723             |   |   | $ | - |   |   | $ | 4,936,723 |   |
| Total                Costs and Expenses                          |   | $                                                   | 10,817,999            |   |   | $ | - |   |   | $ | 10,817,999 |   |
| Net                loss from continued operations                |   | $                                                   | (5,881,276            | ) |   | $ | - |   |   | $ | (5,881,276 | ) |
| Loss                from discontinued operations                 |   | $                                                   | (4,774,840            | ) |   | $ | (4,774,840 | ) |   | $ | - |   |
| Gain                from sell of discontinued operations         |   | $                                                   | 9,715,604             |   |   | $ | 9,715,604 |   |   | $ | - |   |
| Income                (loss) before minority interest            |   | $                                                   | (940,512              | ) |   | $ | 4,940,764 |   |   | $ | (5,881,276 | ) |
| Minority                interestNet                loss          |   |                                                | (27,341               | )  |   | $ | - 4,940,764 |   |   | $ |   |   |
|                                                             |   |                                                |  (913,171)  |   |   |   |   |   |   |   | (5,881,276)  |   |
|  Continued                operations loss per common share  |   | $                                                   | (0.25                 | ) |   | $ | - |   |   | $ | (0.25 | ) |
| Discontinued                operations earnings per common share |   | $                                                   | 0.21                  |   |   | $ | 0.21 |   |   | $ | 0.00 |   |
| Basic                loss per common share                       |   | $                                                   | (0.04                 | ) |   | $ | (0.21 | ) |   | $ | (0.25 | ) |
| Weighted                average number of shares outstanding     |   |                                                | 23,374,205            |   |   |   | - |   |   |   | 23,374,205 |   |
| Potentially                dilutive shares outstanding           |   |                                                | 26,377,537            |   |   |   | - |   |   |   | 26,377,537 |   |
|                                                             |   |                                                |                  |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                                |                  |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                                |                  |   |   |   |   |   |   |   |   |   |
|                                                             |   | For                the year ended December 31, 2005 |                  |
|                                                             |   | As                                                  |                  |   | Pro                Forma |   |   |   |   |   |
|                                                             |   | Presented                                           |                  |   | Adjustment |   |   | Pro                Forma |   |
| Total                Revenue                                     |   | $                                                   | 12,526,110            |   |   | $ | - |   |   | $ | 12,526,110 |   |
| Total                Costs and Expenses                          |   | $                                                   | 17,445,817            |   |   | $ | - |   |   | $ | 17,445,817 |   |
| Net                loss from continued operations                |   | $                                                   | (4,919,707            | ) |   | $ | - |   |   | $ | (4,919,707 | ) |
| Loss                from discontinued operations                 |   | $                                                   | (4,810,364            | ) |   | $ | (4,810,364 | ) |   | $ | - |   |
| Net                loss                                          |   | $                                                   | (9,730,071            | ) |   | $ | (4,810,364 | ) |   | $ | (4,919,707 | ) |
| Continued                operations loss per common share        |   | $                                                   | (0.43                 | ) |   | $ | 0.21 |   |   | $ | (0.22 | ) |
| Basic                loss per common share                       |   | $                                                   | (0.43                 | ) |   | $ | 0.21 |   |   | $ | (0.22 | ) |
| Weighted                average number of shares outstanding     |   |                                                | 22,426,580            |   |   |   | - |   |   |   | 22,426,580 |   |
| Potentially                dilutive shares outstanding           |   |                                                | 25,030,468            |   |   |   | - |   |   |   | 25,030,468 |   |
|                                                             |   |                                                |                  |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                                |                  |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                                |                  |   |   |   |   |   |   |   |   |   |
|                                                             |   | For                the year ended December 31, 2004 |                  |
|                                                             |   | As                                                  |                  |   | Pro                Forma |   |   |   |   |   |
|                                                             |   | Presented                                           |                  |   | Adjustment |   |   | Pro                Forma |   |
| Total                Revenue                                     |   | $                                                   | 4,498,670             |   |   | $ | - |   |   | $ | 4,498,670 |   |
| Total                Costs and Expenses                          |   | $                                                   | 5,596,669             |   |   | $ | - |   |   | $ | 5,596,669 |   |
| Net                loss from continued operations                |   | $                                                   | (1,097,999            | ) |   | $ | - |   |   | $ | (1,097,999 | ) |
| Loss                from discontinued operations                 |   | $                                                   | (73,006               | ) |   | $ | (73,006 | ) |   | $ | - |   |
| Net                loss                                          |   | $                                                   | (1,171,005            | ) |   | $ | (73,006 | ) |   | $ | (1,097,999 | ) |
| Continued                operations loss per common share        |   | $                                                   | (0.06                 | ) |   | $ | 0.01 |   |   | $ | (0.05 | ) |
| Basic                loss per common share                       |   | $                                                   | (0.06                 | ) |   | $ | 0.01 |   |   | $ | (0.05 | ) |
| Weighted                average number of shares outstanding     |   |                                                | 20,507,342            |   |   |   | - |   |   |   | 20,507,342 |   |
| Potentially                dilutive shares outstanding           |   |                                                | 23,060,942            |   |   |   | - |   |   |   | 23,060,942 |   |

----

**NOTE      13 – SUBSEQUENT EVENTS**

----

**SUPPLEMENTAL      INFORMATION (unaudited)**

|                                                                | December                31,                                           |   | December                31,                                           | December                31,                                           |
|---------------------------------------------------------------------|-----------------------------------------------------------------------|--------|-----------------------------------------------------------------------|-----------------------------------------------------------------------|
|                                                                | 2006                                                                  |   | 2005                                                                  | 2004                                                                  |
|                                                                |                                                                  |   |                                                                  |                                                                  |
| Aggregate                capitalized costs:                         |                                                                  |   |                                                                  |                                                                  |
| Proved                properties                                    | $       2,169,496                  |   | $        1,795,653            | $          752,705  |
| Unproved                properties                                  | 2,792,340                                                             |   | 3,009,564                                                             |          1,381,667       |
| Accumulated                depletion, depreciation and amortization |           (761,571) |   |           (649,550) |           (621,323) |
|                                                                |                                                                  |   |                                                                  |                                                                  |
| Net                capitalized assets                               | $       4,200,265                  |   | $       4,155,667                  | $       1,513,049                  |

|                                                                                                                   | December                31,                                                                                                      |   | December                31,                                                                                                | December                31,                                                |
|------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|
|                                                                                                                   | 2006                                                                                                                             |   | 2005                                                                                                                       | 2004                                                                       |
|                                                                                                                   |                                                                                                                             |   |                                                                                                                       |                                                                       |
| Acquisition                of producing  properties and productive and non-productive                acreage | $         400,000                                                                   |   |  $   1,736,625                                                                                         | $            - |
|                                                                                                                   |                                                                                                                             |   |                                                                                                                       |                                                                       |
| Exploration                costs and development activities                                                            | $                     - |   |   $                  - | $            - |

----

**Supplemental      Information (unaudited)**

|                                                        |   | December                31, |      |   | December                31, |   |     | December                31, |   |
|-------------------------------------------------------------|--------|-----------------------------|-----------|--------|-----------------------------|--------|----------|-----------------------------|--------|
|                                                        |   | 2006                        |      |   | 2005                        |   |     | 2004                        |   |
|                                                        |   |                        |      |   |                        |   |     |                        |   |
| Sales                to unaffiliated parties                |   | $                           | 1,074,606 |   |                        | $      | 932,042  |                        |   | $ | 830,148 |   |
| Production                costs                             |   |                        | (388,700  | )      |                        |   | (93,429  | )                           |   |   | (144,101 | ) |
| Depletion,                depreciation and amortization     |   |                        | (159,289  | )      |                        |   | (28,226  | )                           |   |   | (17,100 | ) |
|                                                        |   |                        | 526,617   |   |                        |   | 810,387  |                        |   |   | 668,947 |   |
| Income                tax expense                           |   |                        | (189,582  | )      |                        |   | (291,739 | )                           |   |   | (240,820 | ) |
|                                                        |   |                        |      |   |                        |   |     |                        |   |   |   |   |
| Results                of operations from activities before |   |                        |      |   |                        |   |     |                        |   |   |   |   |
| extraordinary                items (excluding corporate     |   |                        |      |   |                        |   |     |                        |   |   |   |   |
| Overhead                and interest costs)                 |   | $                           | 337,035   |   |                        | $      | 518,648  |                        |   | $ | 161,096 |   |

|                                                      | December                31, 2006 | December                31, 2005 | December                31, 2004                    |
|-----------------------------------------------------------|----------------------------------|----------------------------------|-----------------------------------------------------|
|                                                      | Oil                              | Gas                              | Oil                                                 | Gas | Oil | Gas |
|                                                      | (BBL)                            | (MCF)                            | (BBL)                                               | (MCF) | (BBL) | (MCF) |
|                                                      |                             |                             |                                                |   |   |   |
| Proved                developed and undeveloped reserves: |                             |                             |                                                |   |   |   |
| Beginning                of year                          | 218,030                     | 779,598                     | 162                                            | 742,401  | 162 | 1,251,548  |
| Revisions                (a), (b), (c)                    | (65,673)                         | 88,336                      | (144)                                               | 119,453  | - | (374,408) |
| Purchases                (d), (e)                         | 125,413                     | -                           | 218,029                                        | -  | - | -  |
| Improved                recovery (f), (g**)**             | 4,282                       | 5,260                       | -                                              | 46,346  | - | -  |
| Production                                                |   (6,600)              | (86,177)                         |        (17)      | (128,602) |      - |  (134,739) |
|                                                      |                             |                             |                                                |   |   |   |
| End                of year                                | 275,452                     | 787,017                     | 218,030                                        | 779,598  | 162 |    742,401  |
|                                                      |                             |                             |                                                |   |   |   |
| Proved                developed reserves:                 |                             |                             |                                                |   |   |   |
| Beginning                of year                          | 154,673                     | 779,598                     |        162  | 742,401  | 162 | 1,251,548  |
|                                                      |                             |                             |                                                |   |   |   |
| End                of year                                | 275,452                     | 787,017                     | 154,673                                        | 779,598  | 162 |    742,401  |
|                                                      |                             |                             |                                                |   |   |   |

----

**Supplemental      Information (Unaudited)**

| (1) | Estimates                are made of quantities of proved reserves and the future periods                during                which they are expected to be produced based on year-end economic                conditions. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The                estimated future production of proved reserves is priced on the basis                of                year-end prices. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The                resulting future gross revenue streams are reduced by estimated future                costs to develop and to produce proved reserves, based on year end                cost                estimates. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | The                resulting future net revenue streams are reduced to present value                amounts                by applying a ten percent discount. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Supplemental      Information (Unaudited)**

|                                                                   |   | December                31, |       |   | December                31, |   |       | December                31, |   |
|------------------------------------------------------------------------|--------|-----------------------------|------------|--------|-----------------------------|--------|------------|-----------------------------|--------|
|                                                                   |   | 2006                        |       |   | 2005                        |   |       | 2004                        |   |
|                                                                   |   |                        |       |   |                        |   |       |                        |   |
|                                                                   |   |                        |       |   |                        |   |       |                        |   |
| Future                cash in flows                                    |   | $                           | 19,415,065 |   |                        | $      | 19,154,814 |                        |   | $ | 5,248,091 |   |
| Future                production and development costs                 |   |                        | (5,858,187 | )      |                        |   | (4,292,152 | )                           |   |   | (989,549 | ) |
| Future                income tax expenses                              |   |                        | (722,868   | )      |                        |   | (659,464   | )                           |   |   | (1,357,948 | ) |
| Future                net cash flows                                   |   |                        | 12,834,010 |   |                        |   | 14,203,198 |                        |   |   | 2,900,595 |   |
| 10%                annual discount for estimated timing of cash flows  |   |                        | 6,712,715  |   |                        |   | 7,147,126  |                        |   |   | 942,358 |   |
| Standardized                measure of discounted future net cash flow |   | $                           | 6,121,295  |   |                        | $      | 7,056,072  |                        |   | $ | 1,958,238 |   |

|                                                                       |   | December                31, |          |   | December                31, |   |          | December                31, |   |
|----------------------------------------------------------------------------|--------|-----------------------------|---------------|--------|-----------------------------|--------|---------------|-----------------------------|--------|
|                                                                       |   | 2006                        |          |   | 2005                        |   |          | 2004                        |   |
|                                                                       |   |                        |          |   |                        |   |          |                        |   |
| Standardized                measure - beginning of period                  |   | $                           | 7,056,072     |   |                        | $      | 1,958,238     |                        |   | $ | 2,270,632 |   |
|                                                                       |   |                        |          |   |                        |   |          |                        |   |   |   |   |
| Sales                of oil and gas produced, net of production costs      |   |                        | (640,515      | )      |                        |   | (807,930      | )                           |   |   | (655,373 | ) |
| Revisions                of estimates of reserves provided in prior years: |   |                        |          |   |                        |   |          |                        |   |   |   |   |
|   Net                changes in prices                           |   |                        | (2,215,972    | )      |                        |   | 1,412,965     |                        |   |   | 1,705,515 |   |
|   Revisions                of previous quantity estimates        |   |                        | (2,512,220    | )      |                        |   | 1,630,965     |                        |   |   | - |   |
| Extensions                and discoveries                                  |   |                        | -             |   |                        |   | 11,345,272    |                        |   |   | 270,891 |   |
|   Property                acquisition                            |   |                        | 2,370,080     |   |                        |   | -             |                        |   |   | - |   |
| Accretion                of discount                                       |   |                        | 434,411       |   |                        |   | (6,204,768    | )                           |   |   | 248,494 |   |
| Changes                in production and development costs.                |   |                        | 1,566,035     |   |                        |   | (1,580,186    | )                           |   |   | (1,658,785 | ) |
| Net                change in income taxes                                  |   |                        | 63,404        |   |                        |   | (698,484      | )                           |   |   | 223,137 |   |
|                                                                       |   |                        |          |   |                        |   |          |                        |   |   |   |   |
| Net                increase (decrease)                                     |   |                        | (934,777      | )      |                        |   | 5,097,834     |                        |   |   | (312,394 | ) |
|                                                                       |   |                        |          |   |                        |   |          |                        |   |   |   |   |
| **Standardized                measure - end of period**                    |   | **$**                       | **6,121,295** |   |                        | **$**  | **7,056,072** |                        |   | **$** | **1,958,238** |   |

----

**Supplemental      Information (unaudited)**

|                                                                                                                                         |   | 2006    |       |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|------------|
|                                                                                                                                         |   | First   |       |   | Second |   |   | Third |   |   | Fourth |   |
|                                                                                                                                         |   | Quarter |       |   | Quarter |   |   | Quarter |   |   | Quarter |   |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |
| Operating                Revenues                                                                                                            |   | $       | 369,765    |   |   | $ | 978,340 |   |   | $ | 1,356,311 |   |   | $ | 2,532,307 |   |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Income (Loss)                                                                                                             |   | $       | (3,064,107 | ) |   | $ | (3,240,179 | ) |   | $ | (2,673,198 | ) |   | $ | 8,064,313 | * |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Income per Common Share - Basic                                                                                           |   | $       | (0.13      | ) |   | $ | (0.14 | ) |   | $ | (0.11 | ) |   | $ | 0.34 |   |
|                                                                                                                                         |   |    |       |
| *                In the fourth quarter we sold Tri-Western Resources and an associated                building for a net gain of $9,715,604. |   |
| See                note 12 to the Consolidated Financial Statements for a pro forma                schedule.                                 |   |
|                                                                                                                                         |   |    |       |
|                                                                                                                                         |   | 2005    |       |
|                                                                                                                                         |   | First   |       |   | Second |   |   | Third |   |   | Fourth |   |
|                                                                                                                                         |   | Quarter |       |   | Quarter |   |   | Quarter |   |   | Quarter |   |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                Revenues                                                                                                            |   | $       | 202,108    |   |   | $ | 1,846,630 |   |   | $ | 6,781,574 |   |   | $ | 3,698,294 |   |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Income (Loss)                                                                                                             |   | $       | (3,375,111 | ) |   | $ | (717,680 | ) |   | $ | (345,932 | ) |   | $ | (5,291,348 | ) |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Income (Loss) per Common Share                                                                                            |   | $       | (0.15      | ) |   | $ | (0.03 | ) |   | $ | (0.02 | ) |   | $ | (0.23 | ) |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                         |   | 2004    |       |
|                                                                                                                                         |   | First   |       |   | Second |   |   | Third |   |   | Fourth |   |
|                                                                                                                                         |   | Quarter |       |   | Quarter |   |   | Quarter |   |   | Quarter |   |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   | (restated) |   |   | (restated) |   |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                Revenues                                                                                                            |   | $       | 1,386,281  |   |   | $ | 1,134,910 |   |   | $ | 223,006 |   |   | $ | 1,754,473 |   |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Income (Loss)                                                                                                             |   | $       | 255,258    |   |   | $ | (940,409 | ) |   | $ | (479,104 | ) |   | $ | (6,750 | ) |
|                                                                                                                                         |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Income (Loss) per Common Share                                                                                            |   | $       | 0.01       |   |   | $ | (0.05 | ) |   | $ | (0.02 | ) |   | $ | (0.00 | ) |
|                                                                                                                                         |   |    |       |
|                                                                                                                                         |   |    |       |

----

**ITEM      9A  Controls and Procedures**

**Evaluation      of Disclosure Controls**

**Management’s        Report on Internal Control over Financial Reporting**

----

| o   | Evaluation                of proved and unproved properties |
|---------------|-------------------------------------------------------------|

| o   | Loans                guaranteed with restricted common stock                (deposits); |
|---------------|-----------------------------------------------------------------------------------------|

| o   | Accounting                for income taxes; |
|---------------|---------------------------------------------|

| o   | Discontinued                operations from the sale of our interest in Tri-Western Resources;                and |
|---------------|-------------------------------------------------------------------------------------------------------------------|

| o   | Share-based                payment arrangements |
|---------------|-------------------------------------------------|

| ·   | Complete                a review, update and risk assessment of all of our financial controls                and                procedures; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide                additional training of financial                staff; |
|--------------------|-------------------------------------------------------------------------------|

| ·   | Purchase                additional research materials and                services; |
|--------------------|------------------------------------------------------------------------------------|

| ·   | Shorten                the financial closing process to allow more time for a thorough review,                and |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | Review                and institutes additional controls for each                weakness. |
|--------------------|--------------------------------------------------------------------------------------------|

----

*Internal Control—Integrated Framework*
*Internal      Control—Integrated Framework*

| BROWN                ARMSTRONG PAULDEN McCOWNSTARBUCK                THORNBURGH & KEETERACCOUNTANCY                CORPORATIONBakersfield,                CAMarch                29, 2007 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PART        III**

**ITEM      10  Directors and Executive Officers of the      Registrant**

|                                                    |   |   |   | Year                First         |   |                                          |
|---------------------------------------------------------|--------|--------|--------|-----------------------------------|--------|-----------------------------------------------|
|                                                    |   |   |   | Became                Director or |   | Position                With                  |
| Name                of Director                         |   | Age    |   | Executive                Officer  |   | Company                                       |
|                                                    |   |   |   |                              |   |                                          |
| F.                Lynn Blystone                         |   | 71     |   | 1974                              |   | President,                CEO, Director, TVC  |
|                                                    |   |   |   |                              |   | CEO                and Director, TVOG         |
|                                                    |   |   |   |                              |   | President,                CEO, Director, TVPC |
|                                                    |   |   |   |                              |   | CHOB,                CEO, Director Select     |
|                                                    |   |   |   |                              |   |                                          |
| Dennis                P. Lockhart(1)                    |   | 59     |   | 1982                              |   | Director                                      |
|                                                    |   |   |   |                              |   |                                          |
| Milton                J. Carlson(1)                (3)  |   | 76     |   | 1985                              |   | Director                                      |
|                                                    |   |   |   |                              |   |                                          |
| Loren                J. Miller(1)                       |   | 61     |   | 1992                              |   | Director                                      |
|                                                    |   |   |   |                              |   |                                          |
| Henry                Lowenstein, Ph.D(2)                |   | 52     |   | 2005                              |   | Director                                      |
|                                                    |   |   |   |                              |   |                                          |
| William                H.“Mo”Marumoto(2)(3) |   | 71     |   | 2005                              |   | Director                                      |
|                                                    |   |   |   |                              |   |                                          |
| G.                Thomas Gamble(2)                      |   | 45     |   | 2006                              |   | Director                                      |
|                                                    |   |   |   |                              |   |                                          |
| Thomas                J. Cunningham                     |   | 64     |   | 1997                              |   | VP,                CAO, Treasurer and         |
|                                                    |   |   |   |                              |   | Secretary,                TVC, TVOG, and TVPC |
|                                                    |   |   |   |                              |   | Director                Select                |
|                                                    |   |   |   |                              |   |                                          |
| Arthur                M. Evans                          |   | 58     |   | 2005                              |   | Chief                Financial Officer        |
|                                                    |   |   |   |                              |   |                                          |
| Joseph                R. Kandle                         |   | 64     |   | 1999                              |   | President,                TVOG                |
|                                                    |   |   |   |                              |   |                                          |
| Henry                J. “Rick” Sandri       |   | 54     |   | 2005                              |   | President,                Select              |

----

| **F.                Lynn Blystone - 71**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | President                and Chief Executive Officer of Tri-Valley Corporation and Tri-Valley                Power                Corporation, CEO of Tri-Valley Oil & Gas Company and Select Resources                Corporation, which are three wholly owned subsidiaries of Tri-Valley                Corporation - Bakersfield, California | 1974   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                 |   |
| Mr.                Blystone became president of Tri-Valley Corporation in October, 1981,                and                was nominally vice president from July to October, 1981.  His                background includes institution management, venture capital and various                management functions for a mainline pipeline contractor including                the                Trans Alaska Pipeline Project.  He has founded, run and sold                companies in several fields including Learjet charter, commercial                construction, municipal finance and land development.  He is                also president of a family corporation, Bandera Land Company, Inc.,                with                real estate interests in  Orange County California.  A                graduate of Whittier College, California, he did graduate work at                George                Williams College, Illinois in organization management.  He gives                full time to Tri-Valley and its subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **Dennis                P. Lockhart – 59**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Director                                                                                                                                                                                                                                                                                                                                             | 1982   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                 |   |
| Mr.                Lockhart is a professor of International Business at Georgetown                University.  He was previously Managing Partner of Zephyr                Management L.P., an international private equity investment fund                sponsor/manager headquartered in New York.  He remains a partner                in this firm.  He is also (non-executive) Chairman of the Small                Enterprise Assistance Funds (SEAF), a not-for-profit operator of                emerging                markets venture capital funds focused on the small and mid-sized                company                sector.  He is a director of CapitalSource Inc. (NYSE) and                SMELoan Asia/Maveo Systems (private, Hong Kong based).  In 2002                and 2003 he was an Adjunct Professor at the Johns Hopkins University                School of Advanced International Studies.  From 1988 to 2001, he                was President of Heller International Group Inc., a non-bank corporate                and                commercial finance company operating in 20 countries, and a director                of                the group’s parent, Heller Financial Inc.  From 1971 to 1988 he                held a variety of international and domestic positions at                Citibank/Citicorp (now Citigroup) including assignments in Lebanon,                Saudi                Arabia, Greece, Iran and the bank’s Latin American group in New                York.  In 1999, he was Chairman of the Advisory Committee of the                U.S. Export Import Bank.  He is a graduate of Stanford                University and The John Hopkins University School of Advanced                International Studies.  He also attended the Senior Executive                Program at the Sloan School of Management, Massachusetts Institute                of                Technology.  Mr. Lockhart is an independent member of our Board                of Directors.  Mr. Lockhart submitted his resignation from the                board of directors effective March 1, 2007. Mr. Lockhart has been                appointed the president and chief executive officer of the Federal                Reserve                Bank of Atlanta. As part of his new assignment, he was required to                resign                from his Board positions, including that of Tri-Valley, where he                served                for 25 years. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **Milton                J. Carlson – 76**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Director                                                                                                                                                                                                                                                                                                                                             | 1985   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                 |   |
| Since                1989, Mr. Carlson has been a principal in Earthsong Corporation,                which, in                part, consults on environmental matters and performs environmental                audits                for government agencies and public and private concerns.  Mr.                Carlson attended the University of Colorado at Boulder and the University                of Denver.  Mr. Carlson is an independent member of our Board of                Directors.  His former career experience included being                corporate secretary of Union Sugar, a unit of Sara Lee Corporation                and                chairman of the Energy End Users Committee of the California Manufacturers                Association.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                 |   |
| **Loren                J. Miller, CPA – 61**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Director                                                                                                                                                                                                                                                                                                                                             | 1992   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                 |   |
| Mr.                Miller has served in a treasury and other senior financial capacities                at                the Jankovich Company since 1994.  Prior to that he served                successively as vice president and chief financial officer of Hershey                Oil                Corporation from 1987 to 1990 and Mock Resources from 1991 to                1992.  Prior to that he was vice president and general manager                of Tosco Production Finance Corporation from 1975 to 1986 and was                a senior                auditor for the accounting firm of Touche Ross & Company from 1968 to                1973.  He is experienced in exploration, production, product                trading, refining and distribution as well as corporate                finance.  He holds a B.S. in accounting and a M.B.A. in finance                from the University of Southern California.  Mr. Miller is an                independent member of our Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 70                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **Henry                Lowenstein, Ph.D - 52**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Director                                                                                                                                                                                                                                                                                                                                             | 2005   |
| Dr.                Lowenstein is Dean of the School of Business and Public Administration                and                Professor of Management at California State University                Bakersfield.   Dr. Lowenstein has broad background in                management within business, academic, government and public service                organizations.   He is 2006 Chair of the California State                Universities Association of Business Deans, a director of the Western                Association of Collegiate Schools of Business, and serves on the                2005-06 World Nominating Committee for AACSB International. He previously                served as professor, department and division chairperson at universities                in Illinois, Virginia and West Virginia and is published in fields                of                human resource management, public policy and transportation.  In                business he served as Director of Education for Kemper                Group- Insurance and Financial Services, Director of Education for                Dominion Bankshares Corporation, and Vice President of Americana                Furniture, Inc.  Dr. Lowenstein previously served as a management                analyst for the Executive Office of the President of the United                States-Office of Management and Budget under the Gerald Ford                Administration.   He was a principal consultant to the Illinois                General Assembly in the 1980's on the restructuring of the                Chicago-area Mass Transit System, and, to the West Virginia                Legislature and Governor on higher education financing in the 1990's.                In                Bakersfield, he serves on the boards of the Historic Fox Theater                Foundation, and, the Minter Field Air Museum.  Dr. Lowenstein                received his Ph.D. in Labor and Industrial Relations from the University                of Illinois; an M.B.A. from George Washington University; and B.S.                in                Business Administration from Virginia Commonwealth University.  He                serves on Tri-Valley's Personnel Committee.  Dr. Lowenstein is an                independent member of our Board of Directors.                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                 |   |
| **William                H. “Mo” Marumoto - 71**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Director                                                                                                                                                                                                                                                                                                                                             | 2005   |
| Mr.                Marumoto has over 30 years experience in the executive and personnel                search profession as chairman and chief executive officer of his                own                retained search firm, The Interface Group Ltd.  Here he was                named to the Global Top 200 Executive Recruiters and several other                worldwide professional awards and recognitions, according to the                company.  He has 40 years experience in public, private and                academic sectors.  He worked for three years as presidential                aide in the Nixon White House.  Earlier he was assistant to the                secretary of health, education and welfare.  Mr. Marumoto has                been part of boards of numerous organizations, colleges, public agencies                and businesses.  In 2002 he was appointed by President George W.                Bush to the advisory committee of the John F. Kennedy Center for                the                Performing Arts.  Mr. Marumoto serves as Chair of our                Compensation committee and is an independent member of our Board                of                Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                 |   |
| **G.                Thomas Gamble - 45**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Director                                                                                                                                                                                                                                                                                                                                             | 2006   |
| A                graduate of UCLA, Mr. Gamble is a successful rancher and businessman                with                current active investments in agriculture, food processing, educational                services, oil, gas and minerals.  In 2003, the California State                Senate proclaimed privately owned Davies and Gamble, which produces                critically acclaimed wines in California’s Napa Valley, its Green                Entrepreneur Of The Year, and in 2005, Mozzarella Fresca, the nation’s                premier producer of fresh Italian cheeses, of which he is a director                and                original investor, received the Certificate of Special Congressional                Recognition as business of the year.  He is also a director and                original investor in Boston Reed College which provides educational                opportunities to busy adults seeking stable and growing careers in                the                California health care industry.  Mr. Gamble is an independent                member of our Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                 |   |
| **Thomas                J. Cunningham - 64**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Secretary,                Treasurer and Chief Administrative Officer of Tri-Valley Corporation,                and                its wholly owned subsidiaries, Tri-Valley Oil & Gas Company,                Tri-Valley Power Corporation and Select Resources                Corporation,Bakersfield,                California                | 1997   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                 |   |
| Named                as Tri-Valley Corporation’s treasurer and chief financial officer in                February 1997, and as corporate secretary on December 1998, promoted                to                Chief Administrative Officer in November 2005.  From 1987 to                1997 he was a self employed management consultant in finance, marketing                and human resources.  Prior to that he was executive vice                president, chief financial officer and director for Star Resources                from                1977 to 1987.  He was the controller for Tucker Drilling Company                from 1974 to 1977.  He has over 25 years experience in corporate                finance, Securities Exchange Commission public company reporting,                shareholder relations and employee benefits.  He received his                education from Angelo State University, Texas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| 71                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Arthur                M.  Evans, CPA, CMA, CFM - 58**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Chief                Financial Officer of Tri-Valley Corporation, and its wholly owned                subsidiaries, Tri-Valley Oil & Gas Company, Tri-Valley Power                Corporation, Select Resources Corporation and Great Valley Production                Services, Inc.Bakersfield,                California | 2005 |
|  Named                as Tri-Valley Corporation’s chief financial officer in November                2005.  Mr. Evans has a full range of accounting, mergers and                acquisitions and financial management experience in several industries                as                well as oil, gas and mining and with Fortune 500 companies as well                as                independents like Tri-Valley.  He held several senior financial                management positions with Getty Oil and Texaco.  He holds a B.S.                in accounting from Weber State University, a M.B.A. in finance from                Golden                State University and a M.S. in systems management from the University                of                Southern California.  His professional designations include                Certified Public Accountant, Certified Management Accountant and                Certified                Financial Manager.                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| **Joseph                R. Kandle - 64**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | President                and Chief Operating Officer Tri-Valley Oil & Gas Company, wholly owned                subsidiary of Tri-Valley Corporation Bakersfield,                California | 1998 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Mr.                Kandle was named as president of Tri-Valley Oil & Gas Co. February                1999 after joining the Company June 1998 as vice president - engineering.                From 1995 to 1998 he was employed as a petroleum engineer for R & R                Resources, self-employed as a consulting petroleum engineer from                1994 to                1995.  He was vice president - engineering for Atlantic Oil                Company from 1983 to 1994.  From 1981 to 1983 he was vice                president for Star Resources.  He was vice president and chief                engineer for Great Basins Petroleum from 1973 to 1981.  He began                his career with Mobil Oil (from 1965 to 1973) after graduating from                the                Montana School of Mines in 1965.                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| **Henry                J. Sandri – 54**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | President,                Select Resources Corporation, wholly owned subsidiary of Tri-Valley                CorporationBakersfield,                California | 2005 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Henry                J. "Rick" Sandri, Ph.D was promoted to president of Select Resources                Corporation in December 2005 after joining the company in November                2004 as                the executive vice president.  Dr. Sandri has held mid- and                senior-level positions in major mining and transportation companies                as                well as independent and consulting firms active in mining, transportation                and utility operations in numerous countries.  Dr. Sandri is a                broadly seasoned mining industry executive with international experience                in precious and base metals, gems and industrial minerals.  Dr.                Sandri holds a doctorate in mineral/energy economics and engineering                minor                from the Colorado School of Mines and undergraduate degrees in economics                from American University and Georgetown University, both in Washington,                D.C. |

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**ITEM      11  Executive Compensation**

| (a)                                         | (b)                                     | (                c                ) | (d)               | (e)                                   | (f)                                    | (g)                                       |                                    |
|---------------------------------------------|-----------------------------------------|-------------------------------------|-------------------|---------------------------------------|----------------------------------------|-------------------------------------------|-----------------------------------------|
|                                        |                                    |                                |              |                                  |                                   |                                      |                                    |
| Name                                        |  Fiscal                Year Ending |   Salary                  |   Bonus |  Stock                Awards (1) |  Option                Awards (2) | Company                401-K Contribution |  Total                Compensation |
|                                        |                                    |                                |              |                                  |                                   |                                      |                                    |
| F.                Lynn                      | 12/31/06                                | $159,000                            | $0                | $47,450                               | $0                                     | $4,770                                    | $211,220                                |
|   Blystone,                CEO    | 12/31/05                                | $159,000                            | $0                | $38,900                               | $0                                     | $2,782                                    | $200,682                                |
|                                        | 12/31/04                                | $108,900                            | $25,000           | $61,150                               | $0                                     | $0                                        | $195,050                                |
|                                        |                                    |                                |              |                                  |                                   |                                      |                                    |
| Thomas                                      | 12/31/06                                | $130,833                            | $0                | $0                                    | $0                                     | 3,925                                     | $134,758                                |
|   Cunningham,                CAO  | 12/31/05                                | $115,000                            | $0                | $0                                    | $0                                     | $2,012                                    | $117,012                                |
|                                        | 12/31/04                                | $  99,000                 | $0                | $0                                    | $0                                     | $0                                        | $  99,000                     |
|                                        |                                    |                                |              |                                  |                                   |                                      |                                    |
| Arthur                M.                    | 12/31/06                                | $120,000                            | $0                | $0                                    | $56,550                                | $3,600                                    | $180,150                                |
|   Evans,                CFO       | 12/31/05                                | $  15,000                 | $0                | $0                                    | $34,000                                | $450                                      | $  49,450                     |
|                                        |                                    |                                |              |                                  |                                   |                                      |                                    |
| Joseph  Kandle,                   | 12/31/06                                | $163,333                            | $0                | $0                                    | $0                                     | $5,875                                    | $169,208                                |
|    Pres.                TVOG | 12/31/05                                | $150,000                            | $0                | $0                                    | $0                                     | $2,625                                    | $152,625                                |
|                                        | 12/31/04                                | $  99,000                 | $0                | $0                                    | $0                                     | $0                                        | $  99,000                     |
|                                        |                                    |                                |              |                                  |                                   |                                      |                                    |
| Henry                J. Sandri,             | 12/31/06                                | $150,000                            | $0                | $0                                    | $22,550                                | $4,500                                    | $177,050                                |
|    Pres.                SRC  | 12/31/05                                | $144,250                            | $0                | $0                                    | $0                                     | $2,625                                    | $146,875                                |
|                                        | 12/31/04                                | $  30,000                 | $0                | $0                                    | $0                                     | $0                                        | $  30,000                     |

| (1)   | Stock                awards are valued at the closing market price on the date of                issuance. |
|-----------------|------------------------------------------------------------------------------------------------------------|

----

**Employment      Agreement with Our President**

**Employee      Pension, Profit Sharing or Other Retirement Plans**

**REPORT      OF THE COMPENSATION COMMITTEE**

**ON      ANNUAL COMPENSATION OF EXECUTIVE OFFICERS**

*Overview*

|   | • |   | competitive                to attract and retain the best officer                talent; |
|--------|---------|--------|------------------------------------------------------------------------------------------|

|   | • |   | affordable                to the Company and appropriately aligned with shareholder                interests; |
|--------|---------|--------|---------------------------------------------------------------------------------------------------------------|

|   | • |   | consistent                with the Company’s long-range business                plans; |
|--------|---------|--------|----------------------------------------------------------------------------------------------|

|   | • |   | designed                to consider individual value and contribution to the Company’s                success; |
|--------|---------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | • |   | sensitive                to, but not exclusively reliant upon, market                benchmarks; |
|--------|---------|--------|--------------------------------------------------------------------------------------------------|

----

|   | • |   | reasonably                sensitive to the needs of the Company’s executive officers, as those needs                change over time; and flexible with regard to the Company’s succession                planning objectives. |
|--------|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Base      Salaries*

*Section 162(m)*

----

**Aggregated      2006 Option Exercises and Year-End Values**

| **(                a )**                            | **(b)**                                                              | **(c)**                               | **(d)**                                                                                                                                            | **(e)**                                                                                                                                    |
|-----------------------------------------------------|----------------------------------------------------------------------|---------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|
| **Name**                                            | **Shares                Acquired****On                Exercise (#)** | **Value                Realized ($)** | **Number                of Securities****Underlying                Unexercised****Options                at FY End Exercisable/****Unexercisable** | **Value                of Unexercised In****The                Money Options at FY End ($)****Excercisable/                Unexercisable** |
|                                                |                                                                 |                                  |                                                                                                                                               |                                                                                                                                       |
| F.                Lynn Blystone                     | 68,750                                                               | $509,420                              | 776,850/0                                                                                                                                          | $6,338,381/0                                                                                                                               |
| Milton                Carlson                       | 23,000                                                               | $153,490                              | 240,000/0                                                                                                                                          | $1,944,600/0                                                                                                                               |
| Thomas                J. Cunningham                 | 0                                                                    | 0                                     | 523,000/0                                                                                                                                          | $4,308,520/0                                                                                                                               |
| Arthur                M. Evans                      | 0                                                                    | 0                                     | 45,000/0                                                                                                                                           | $18,250/0                                                                                                                                  |
| G.                Thomas Gamble                     | 20,000                                                               | 0                                     | 20,000/60,000                                                                                                                                      | $62,800/                $188,400                                                                                                           |
| Joseph                R. Kandle                     | 0                                                                    | 0                                     | 475,000/0                                                                                                                                          | $3,952,000/0                                                                                                                               |
| Dennis                P. Lockhart                   | 0                                                                    | 0                                     | 270,000                                                                                                                                            | $2,214,300/0                                                                                                                               |
| Henry                Lowenstein                     |                                                                 |                                  | 40,000/60000                                                                                                                                       | $125,600/                $188,400                                                                                                          |
| Loren                J.Miller                       | 0                                                                    | 0                                     | 0/0                                                                                                                                                | $0/0                                                                                                                                       |
| William                H. “Mo” Marumoto |                                                                 |                                  | 40,000/60000                                                                                                                                       | $125,600/                $188,400                                                                                                          |
| Henry                J. Sandri                      | 0                                                                    | 0                                     | 30,000/0                                                                                                                                           | $76,750/0                                                                                                                                  |
|                                                |                                                                 |                                  |                                                                                                                                               |                                                                                                                                       |

**Option        Grants During the Fiscal Year Ended December 31, 2006 to Named Executive        Officers**

|                        |   |                                  |   |   |                               |   |                              |   |   |                             |   |           |   |          |   |   |    |   |
|-----------------------------|--------|---------------------------------------|--------|--------|------------------------------------|--------|-----------------------------------|--------|--------|----------------------------------|--------|----------------|--------|---------------|--------|--------|---------|--------|
|                        |   |                                  |   |   | **%                of Total**      |   |                              |   |   | **Market                Value**  |   |           |   |
|                        |   | **Number                of Shares**   |   |   | **Options                Granted** |   | **Exercise                Price** |   |   | **of                Securities** |   |           |   |
|                        |   | **Underlying                Options** |   |   | **to                Employees**    |   | **Per                Share**      |   |   | **Underlying**                   |   | **Expiration** |   |
| **Name**                    |   | **Granted(1)**                        |   |   | **in                Fiscal Year**  |   | **($/Security)**                  |   |   | **Options(2)**                   |   | **Date**       |   |
|                        |   |                                  |   |   |                               |   |                              |   |   |                             |   |           |   |          |   |   |    |   |
| Arthur                Evans |   |                                  | 5,000  |   |                               |   | 4.2                               |   |   | $5.84                            |   |           |   |  $18,250 |   |   | 10/2015 |   |

|   |                                                                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    | The                options were granted August 15, 2006 and vested on December 31,                2006                                                                    |
|   |                                                                                                                                                                      |
| (2)    | Based                on the difference between the exercise price per share and the market                price of $9.49 per share as of December 31,                2006 |

----

**Compensation      of Directors**

| **(a)**                             | **(b)**                 | **(c)**                                       | **(d)**                                   | **(e)**                                              |
|-------------------------------------|-------------------------|-----------------------------------------------|-------------------------------------------|------------------------------------------------------|
| **Name**                            | **Fees**                | **Restricted                Shares (1)** | **Option                Awards (2)** | **Cost                to exercise Options (3)** |
|                                |                    |                                          |                                      |                                                 |
| Milton                Carlson       | $  9,600      | $18,740                                       | -                                         | -                                                    |
|                                |                    |                                          |                                      |                                                 |
| G.                Thomas Gamble     | $  6,000      | $18,740                                       | $122,500                                  | $127,000                                             |
|                                |                    |                                          |                                      |                                                 |
| Dennis                P. Lockhart   | $  9,100      | $18,740                                       | -                                         | -                                                    |
|                                |                    |                                          |                                      |                                                 |
| Dr.                Henry Lowenstein | $  6,000      | $18,740                                       | $221,000                                  | $254,000                                             |
|                                |                    |                                          |                                      |                                                 |
| Loren                J. Miller      | $                10,000 | $18,740                                       | -                                         | -                                                    |
|                                |                    |                                          |                                      |                                                 |
| William                Marumoto     | $  6,000      | $18,740                                       | $221,000                                  | $254,000                                             |

**ITEM      12  Security Ownership of Certain Beneficial Owners and      Management**

|                                                                                                           |   | **Number                of**                                             |   | **Percent                of** |
|----------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|-------------------------------|
| **Name                and Address**                                                                            |   | **Shares**                                                               |   | **Total**                     |
|                                                                                                           |   |                                                                     |   |                          |
| F.                Lynn BlystoneP.O.                Box 1105Bakersfield,                CA 93302                |   |           1,268,853(1) |   | 5.2%                          |
|                                                                                                           |   |                                                                     |   |                          |
| G.                Thomas Gamble1250                Church StreetSt.                Helena, CA  94574 |   |          1,601,667(2)       |   | 6.8%                          |

| (1)   | Includes                776,850 shares of stock Mr. Blystone has the right to acquire upon                the                exercise of options. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes                130,000 shares of stock Mr. Gamble has the right to acquire upon                the                exercise of warrants and options. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                        |   | **Number                of** |   | **Percent                of** |
|-------------------------------------------------------------|--------|------------------------------|--------|-------------------------------|
| **Directors                and Executive Officers**         |   | **Shares(1)**                |   | **Total(2)**                  |
|                                                        |   |                         |   |                          |
| F.                Lynn Blystone                             |   | 1,268,853                    |   | 5.2%                          |
|                                                        |   |                         |   |                          |
| Milton                J. Carlson                            |   | 345,000                      |   | 1.5%                          |
|                                                        |   |                         |   |                          |
| Thomas                J. Cunningham                         |   | 540,000                      |   | 2.2%                          |
|                                                        |   |                         |   |                          |
| Arthur                M. Evans                              |   | 45,000                       |   | 0.2%                          |
|                                                        |   |                         |   |                          |
| G.                Thomas Gamble                             |   | 1,601,667                    |   | 6.8%                          |
|                                                        |   |                         |   |                          |
| Joseph                R. Kandle                             |   | 500,000                      |   | 2.1%                          |
|                                                        |   |                         |   |                          |
| Dennis                P. Lockhart (3)                       |   | 347,191                      |   | 1.5%                          |
|                                                        |   |                         |   |                          |
| Henry                Lowenstein, Ph.D.                      |   | 100,200                      |   | 0.4%                          |
|                                                        |   |                         |   |                          |
| William                H. “Mo” Marumoto         |   | 100,000                      |   | 0.4%                          |
|                                                        |   |                         |   |                          |
| Loren                J. Miller                              |   | 308,800                      |   | 1.3%                          |
|                                                        |   |                         |   |                          |
| Henry                J. Sandri                              |   | 59,392                       |   | 0.3%                          |
|                                                        |   |                         |   |                          |
| Total                group (all directors and               |   |                         |   |                          |
|   Executive                officers - 11 persons) |   | 5,211,103                    |   | 19.9%                         |

| (1)   | Includes                shares which the listed shareholder has the right to acquire from                options                as follows:  F. Lynn Blystone 776,850, Milton J. Carlson                240,000, Thomas J. Cunningham 523,000, Arthur M. Evans 45,000, G.                Thomas                Gamble 130,000, Joseph R. Kandle 475,000; Dennis P. Lockhart 270,000;                Dr.                Henry Lowenstein 100,000, William H. ”Mo” Marumoto 100,000, Henry J.                Sandri 30,000 |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Based                on total outstanding shares of 23,461,785 as of December 31,                2006.  The persons named herein have sole voting and investment                power with respect to all shares of common stock shown as beneficially                owned by them, subject to community property laws where                applicable. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | In                connection with his new employment, (see Note 12 (Subsequent Events)                to                the Consolidated Financial Statements in Item 8) Mr. Lockhart elected                to                exercise all of his stock options on March 1,                2007. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM      13  Certain Relationships and Related      Transactions**

----

**ITEM      14  Principal Accountant Fees and Services**

| YEAR | AUDIT                SERVICES | TAX                SERVICES | AUDIT                RELATED |
|------|-------------------------------|-----------------------------|------------------------------|
| 2006 | $  85,417           | $43,925                     | $28,177                      |
| 2005 | $106,082                      | $13,639                     | $12,986                      |

**Policy      on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services      of      Independent Auditors**

**ITEM      15  Exhibits and Financial Statement Schedules**

| Exhibit |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  | Description                of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.1     | Amended                and Restated Certificate of Incorporation, incorporated by reference                to                Exhibit A of the Company’s 2000 Proxy Statement and Definitive Schedule                14A, filed with the SEC on July 26, 2000.                                                                                                                                                                                                                                                                                                                                                                 |
| 3.2     | Amended                and Restated Bylaws, incorporated by reference to Exhibit 3.3 of                the                Company's Form 10-KSB for the year ended December 31, 1999, filed                with the                SEC on March 24, 2000.                                                                                                                                                                                                                                                                                                                                                                           |
| 4.1     | Rights                Agreement, incorporated by reference to Exhibit 99.1 of the Company’s Form                10-KSB for the year ended December 31, 1999, filed with the SEC on                March                24, 2000.                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.1    | Employment                Agreement with F. Lynn Blystone, incorporated by reference to Exhibit                10.1                of the Company's Form 10-KSB/A, Amendment No. 3 to Form 10-KSB for                the                year ended December 31, 2000, filed with the SEC on December 14,                2001.                                                                                                                                                                                                                                                                                                       |
| 10.2    | Tri-Valley                Corporation 2005 Stock Option Plan, as amended, incorporated by reference                to Exhibit B of the Company’s 2005 Proxy Statement and Definitive Schedule                14A, filed with the SEC on August 29, 2005.                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3    | Purchase                and Sale Agreement between Brea Oil Company, Brea Properties, Inc.,                Kurt                Sickles, Geraldine M. Barker, as Trustee of the Barker Bypass Trust                under                the Barker Trust, dated January 21, 1999, Geraldine M. Barker and                Alexander W. Barker, as Co-Trustees of the Barker Trust dated January                21,                1999, and Tri-Valley Oil and Gas Co., incorporated by reference to                Exhibit                2.1 of the Company’s Form 8-K filed with the SEC on January 10,                2006. |
| 10.4    | Purchase                and Sale Agreement between Trans-Western Materials, Inc. and Select                Resources Corporation, Inc. dated July 18, 2006 and amendment dated                October 13, 2006 and Closing Statement between Select Resources                Corporation, Inc. and Trans-Western Materials, Inc. dated November                15,                2006, as amended October 13, 2006, incorporated by reference to Exhibit                10.4 of the Company’s Form 10-K filed with the SEC on April 2,                2007.                                                                  |
| 10.5    | Commercial                Property Purchase Agreement between Jung Uk Byum and Select Resources                Corporation, Inc. dated May 24, 2006 and amendment dated November                2, 2006,                incorporated by reference to Exhibit 10.5 of the Company’s Form 10-K filed                with the SEC on April 2, 2007.                                                                                                                                                                                                                                                                              |
| 14.1    | Code                of Business Conduct & Ethics, incorporated by reference to Exhibit                14.1 of the Company’s Form 10-K filed with the SEC on April 2,                2007                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 21.1    | Subsidiaries                of the Registrant, incorporated by reference to Exhibit 21.1 of the                Company’s Form 10-K filed with the SEC on April 2, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 79      |
| 31.1    | Certification                Pursuant to Rule 13a-14(a) /  15d-14(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.2    | Certification                Pursuant to Rule 13a-14(a) /  15d-14(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 32.1    | Certification                Pursuant to 18 U.S.C. §1350.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 32.2    | Certification                Pursuant to 18 U.S.C. §1350.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

**SIGNATURES**

| February                11, 2008 | By:  *F.                Lynn Blystone*                                                |
|----------------------------------|-------------------------------------------------------------------------------------------------|
|                             |        F.                Lynn Blystone                       |
|                             |        President,                Chief Executive Officer and |
|                             |        Director                                              |
|                             |                                                                                            |
|                             |                                                                                            |
| February                11, 2008 | By:  */s/                Arthur M. Evans*                                             |
|                             |        Arthur                M. Evans                        |
|                             |        Chief                Financial Officer                |

----