** **

**UNITED STATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington,D. C. 20549**

# ** **

# **FORM 10-Q**

 

**ý****                                ****QUARTERLY REPORT UNDER SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

For the quarterly periodended    **March 31,2005**

 

OR

 

**o****                                ****TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

For the transition periodfrom                                          to                                          

 

Commission File Number **1-7796**

 

 

**TIPPERARYCORPORATION**

(Exact name of registrantas specified in its charter)

 

| **Texas**                                 | ** ** | **75-1236955**      |
|-------------------------------------------|------------|---------------------|
| (State or other  jurisdiction of          |       | (I.R.S. Employer    |
| incorporation or  organization)           |       | Identification No.) |
|                                      |       |                |
| **633 Seventeenth Street, Suite 1800**    |       |                |
| **Denver, Colorado**                      | ** ** | **80202**           |
| (Address of principal  executive offices) |       | (Zip Code)          |

 

**(303)293-9379**

(Issuer’s telephonenumber)

 

| **633 Seventeenth Street, Suite 1550**          |       |       |
|-------------------------------------------------|------------|------------|
| **Denver, Colorado**                            | ** ** | **80202**  |
| (Former address, if  changed since last report) |       | (Zip Code) |

 

Indicate by check mark whether the registrant (1) filed all reports requiredto be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.

Yes   ý    No    o

 

Indicate by check mark whether the registrant is an accelerated filer(as defined in Rule 12b-2 of the Exchange Act).

Yes    o    No    ý

 

Indicate the number of shares outstanding of each of the issuer’sclasses of common stock, as of the latest practicable date.

 

| **Class**                     | ** ** | **Outstanding  at May 11, 2005** |
|-------------------------------|------------|----------------------------------|
| Common Stock, $.02 par  value |       | 41,365,994 shares                |

 

 

----

 

**TIPPERARYCORPORATION AND SUBSIDIARIES**

 

 

Index toForm 10-Q

 

 
|          |                   |                                                         |   |
|---------------|------------------------|--------------------------------------------------------------|--------|
|          |                   |                                                         |   |
| PART  I.      | FINANCIAL  INFORMATION |                                                         |   |
|          |                   |                                                         |   |   |
|          | Item 1.                | Financial Statements                                         |   |   |
|          |                   |                                                         |   |   |
|          |                   | Consolidated Balance Sheets                                  |   |   |
|          |                   | March 31, 2005 and December 31, 2004                         |   |   |
|          |                   |                                                         |   |   |
|          |                   | Consolidated Statements of Operations                        |   |   |
|          |                   | Three months ended March 31, 2005 and 2004                   |   |   |
|          |                   |                                                         |   |   |
|          |                   | Consolidated  Statements of Stockholders’ Equity        |   |   |
|          |                   | Three  months ended March 31, 2005 and 2004                  |   |   |
|          |                   |                                                         |   |   |
|          |                   | Consolidated  Statements of Cash Flows                       |   |   |
|          |                   | Three  months ended March 31, 2005 and 2004                  |   |   |
|          |                   |                                                         |   |   |
|          |                   | Notes  to Consolidated Financial Statements                  |   |   |
|          |                   |                                                         |   |   |
|          | Item 2.                | Management’s Discussion and Analysis of                 |   |   |
|          |                   | Financial Condition and Results of  Operations               |   |   |
|          |                   |                                                         |   |   |
|          | Item 3.                | Quantitative and Qualitative Disclosure  About Market Risk   |   |   |
|          |                   |                                                         |   |   |
|          | Item 4.                | Controls and Procedures                                      |   |   |
|          |                   |                                                         |   |   |
| PART II.      | OTHER INFORMATION      |                                                         |   |
|          |                   |                                                         |   |   |
|          | Item  1.               | Legal  Proceedings                                           |   |   |
|          |                   |                                                         |   |   |
|          | Item 2.                | Unregistered Sales of Equity Securities  and Use of Proceeds |   |   |
|          |                   |                                                         |   |   |
|          | Item 6.                | Exhibits                                                     |   |   |
|          |                   |                                                         |   |   |
| SIGNATURES    |                   |                                                         |
|          |                   |                                                         |
| EXHIBIT INDEX |                   |                                                         |

 

----

 

# **PART I**- FINANCIAL INFORMATION

 

**Item1.  FinancialStatements**

 

**TIPPERARY CORPORATION AND SUBSIDIARIES**

Consolidated Balance Sheets

(dollars inthousands except per share data)

(unaudited)

 
| ** **                                                                                                            | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------|------------|---------------|------------|------------------|------------|
| ** **                                                                                                            | ** ** | **2005**      | ** ** | **2004**         | ** ** |
|                                                                                                                  |       |          |       |             |       |
| ASSETS                                                                                                                |       |          |       |             |       |
| Current assets:                                                                                                       |       |          |       |             |       |
| Cash and cash  equivalents                                                                                            |       | $             | 401        |             | $          | 3,698 |   |
| Receivables                                                                                                           |       | 2,129         |       | 2,156            |       |
| Other current  assets                                                                                                 |       | 314           |       | 436              |       |
| Total current  assets                                                                                                 |       | 2,844         |       | 6,290            |       |
|                                                                                                                  |       |          |       |             |       |
| Property, plant  and equipment, at cost:                                                                              |       |          |       |             |       |
| Oil and gas  properties, full cost method                                                                             |       | 149,014       |       | 145,141          |       |
| Other property  and equipment                                                                                         |       | 4,008         |       | 3,943            |       |
|                                                                                                                  |       | 153,022       |       | 149,084          |       |
|                                                                                                                  |       |          |       |             |       |
| Less accumulated  depreciation, depletion and amortization                                                            |       | (10,454       | )          | (9,833           | )          |
| Property, plant  and equipment, net                                                                                   |       | 142,568       |       | 139,251          |       |
|                                                                                                                  |       |          |       |             |       |
| Debt issuance  costs                                                                                                  |       | 5,030         |       | 4,661            |       |
| Other noncurrent  assets                                                                                              |       | 451           |       | 482              |       |
|                                                                                                                  |       | $             | 150,893    |             | $          | 150,684 |   |
|                                                                                                                  |       |          |       |             |       |
| LIABILITIES AND  STOCKHOLDERS’ EQUITY                                                                            |       |          |       |             |       |
| Current  liabilities:                                                                                                 |       |          |       |             |       |
| Accounts payable                                                                                                      |       | $             | 1,851      |             | $          | 1,664 |   |
| Accrued  liabilities                                                                                                  |       | 3,206         |       | 1,881            |       |
| Royalties  payable                                                                                                    |       | 222           |       | 193              |       |
| Total current  liabilities                                                                                            |       | 5,279         |       | 3,738            |       |
|                                                                                                                  |       |          |       |             |       |
| Long-term  debt-related parties                                                                                       |       | 18,000        |       | 17,000           |       |
| Long-term debt                                                                                                        |       | 92,237        |       | 91,352           |       |
| Future loan  underwriting fees                                                                                        |       | 670           |       | —           |       |
| Long-term asset  retirement obligation                                                                                |       | 287           |       | 273              |       |
|                                                                                                                  |       |          |       |             |       |
| Commitments and  contingencies (Note 6)                                                                               |       |          |       |             |       |
|                                                                                                                  |       |          |       |             |       |
| Stockholders’  equity                                                                                            |       |          |       |             |       |
| Preferred stock:                                                                                                      |       |          |       |             |       |
| Cumulative; par  value $1.00; 10,000,000 shares authorized; none issued                                               |       | —        |       | —           |       |
| Non-cumulative,  par value $1.00; 10,000,000 shares authorized; none issued                                           |       | —        |       | —           |       |
| Common stock;  par value $.02; 50,000,000 shares authorized;                                                          |       |          |       |             |       |
| 41,365,594  shares issued and 41,355,994 shares outstanding as of March 31, 2005 and  December 31, 2004, respectively |       | 827           |       | 827              |       |
| Capital in  excess of par value                                                                                       |       | 158,367       |       | 158,360          |       |
| Accumulated  deficit                                                                                                  |       | (132,314      | )          | (128,653         | )          |
| Accumulated  other comprehensive income                                                                               |       | 7,565         |       | 7,812            |       |
| Treasury stock,  at cost; 9,600 shares                                                                                |       | (25           | )          | (25              | )          |
| Total stockholders’  equity                                                                                      |       | 34,420        |       | 38,321           |       |
|                                                                                                                  |       | $             | 150,893    |             | $          | 150,684 |   |

# ** **

# **Seeaccompanying notes to Consolidated Financial Statements.**

# ** **

1

----

 

# **TIPPERARY CORPORATION AND SUBSIDIARIES**

ConsolidatedStatements of Operations

(in thousands,except per share data)

(unaudited)

 
| ** **                                             | ** ** | **Three months ended** | ** ** |
|--------------------------------------------------------|------------|------------------------|------------|
| ** **                                             | ** ** | **March 31,**          | ** ** |
| ** **                                             | ** ** | **2005**               | ** ** | **2004** | ** ** |
|                                                   |       |                   |       |   |   |
| Revenues                                               |       | $                      | 3,375      |   | $ | 1,168 |   |
|                                                   |       |                   |       |   |   |
| Costs and  expenses:                                   |       |                   |       |   |   |
| Operating                                              |       | 2,005                  |       | 1,394 |   |
| Depreciation,  depletion and amortization              |       | 704                    |       | 251 |   |
| Asset retirement  obligation accretion                 |       | 9                      |       | 9 |   |
| Impairment of  oil and gas properties                  |       | —                 |       | 150 |   |
| General and  administrative                            |       | 2,188                  |       | 2,044 |   |
| Total costs and  expenses                              |       | 4,906                  |       | 3,848 |   |
| Operating loss                                         |       | (1,531                 | )          | (2,680 | ) |
|                                                   |       |                   |       |   |   |
| Other income  (expense):                               |       |                   |       |   |   |
| Interest and  other income                             |       | 39                     |       | 38 |   |
| Interest expense                                       |       | (2,174                 | )          | (2,136 | ) |
| Foreign currency  exchange gain (loss)                 |       | 5                      |       | (3 | ) |
| Total other  expense                                   |       | (2,130                 | )          | (2,101 | ) |
| Loss before  income taxes                              |       | (3,661                 | )          | (4,781 | ) |
|                                                   |       |                   |       |   |   |
| Income tax  benefit                                    |       | —                 |       | — |   |
| Loss before  minority interest                         |       | (3,661                 | )          | (4,781 | ) |
|                                                   |       |                   |       |   |   |
| Minority  interest in loss of subsidiary               |       | —                 |       | 355 |   |
| Net loss                                               |       | $                      | (3,661     | ) | $ | (4,426 | ) |
|                                                   |       |                   |       |   |   |
| Net loss per  share-basic and diluted                  |       | $                      | (.09       | ) | $ | (.11 | ) |
|                                                   |       |                   |       |   |   |
| Weighted average  shares outstanding-basic and diluted |       | 41,356                 |       | 39,321 |   |

 

# **Seeaccompanying notes to Consolidated Financial Statements.**

 

2

----

 

**TIPPERARY CORPORATION AND SUBSIDIARIES**

ConsolidatedStatements of Stockholders’ Equity

(in thousands)

(unaudited)

 
| ** **                               | ** ** | **Common  Stock** | ** ** | **Capital  in  excess of** | ** ** | **Accumulated** | ** ** | **Accumulated  Other  Comprehensive** | ** ** | **Treasury  Stock** | ** ** | ** ** | ** ** |
|------------------------------------------|------------|-------------------|------------|----------------------------|------------|-----------------|------------|---------------------------------------|------------|---------------------|------------|------------|------------|
| ** **                               | ** ** | **Shares**        | ** ** | **Amount**                 | ** ** | **par  value**  | ** ** | **Deficit**                           | ** ** | **Treasury  Stock** | ** ** | **Shares** | ** ** | **Amount** | ** ** | **Total** | ** ** |
| ** **                               | ** ** | ** **        | ** ** | ** **                 | ** ** | ** **      | ** ** | ** **                            | ** ** | ** **          | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Balance at  December 31, 2003       |       | 39,221            |       | $                          | 785        |            | $          | 149,970                               |       | $                   | (113,315   | )          | $          | 7,094 |   | 10 |   | $ | (25 | ) | $ | 44,509 |   |
|                                     |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   |   |   |
| Warrants granted  for services           |       | —            |       | —                     |       | 56              |       | —                                |       | —              |       | —     |       | — |   | 56 |   |
| Common stock  issued:                    |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   |   |   |
| Stock options  exercised                 |       | 100               |       | 2                          |       | 273             |       | —                                |       | —              |       | —     |       | — |   | 275 |   |
|                                     |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   |   |   |
| Comprehensive  loss:                     |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   |   |   |
| Net loss                                 |       | —            |       | —                     |       | —          |       | (4,426                                | )          | —              |       | —     |       | — |   | (4,426 | ) |
| Foreign currency  translation adjustment |       | —            |       | —                     |       | —          |       | —                                |       | 480                 |       | —     |       | — |   | 480 |   |
| Total  comprehensive loss                |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   | (3,946 | ) |
|                                     |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   |   |   |
| Balance at March  31, 2004               |       | 39,321            |       | $                          | 787        |            | $          | 150,299                               |       | $                   | (117,741   | )          | $          | 7,574 |   | 10 |   | $ | (25 | ) | $ | 40,894 |   |
|                                     |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   |   |   |
| Balance at  December 31, 2004       |       | 41,356            |       | $                          | 827        |            | $          | 158,360                               |       | $                   | (128,653   | )          | $          | 7,812 |   | 10 |   | $ | (25 | ) | $ | 38,321 |   |
| Warrants granted  for services           |       | —            |       | —                     |       | 7               |       | —                                |       | —              |       | —     |       | — |   | 7 |   |
|                                     |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   |   |   |
| Comprehensive  loss:                     |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   |   |   |
| Net loss                                 |       | —            |       | —                     |       | —          |       | (3,661                                | )          | —              |       | —     |       | — |   | (3,661 | ) |
| Foreign currency  translation adjustment |       | —            |       | —                     |       | —          |       | —                                |       | (247                | )          | —     |       | — |   | (247 | ) |
| Total  comprehensive loss                |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   | (3,908 | ) |
|                                     |       |              |       |                       |       |            |       |                                  |       |                |       |       |       |   |   |   |   |
| Balance at March  31, 2005               |       | 41,356            |       | $                          | 827        |            | $          | 158,367                               |       | $                   | (132,314   | )          | $          | 7,565 |   | 10 |   | $ | (25 | ) | $ | 34,420 |   |
|                                          |            |                   |            |                            |            |                 |            |                                       |            |                     |            |            |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

# **Seeaccompanying notes to Consolidated Financial Statements.**

 

3

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# **TIPPERARY CORPORATION AND SUBSIDIARIES**

ConsolidatedStatements of Cash Flows

(in thousands)

(unaudited)

 
| ** **                                                                   | ** ** | **Three months ended** | ** ** |
|------------------------------------------------------------------------------|------------|------------------------|------------|
| ** **                                                                   | ** ** | **March 31,**          | ** ** |
| ** **                                                                   | ** ** | **2005**               | ** ** | **2004** | ** ** |
|                                                                         |       |                   |       |   |   |
| Cash flows from  operating activities:                                       |       |                   |       |   |   |
| Net loss                                                                     |       | $                      | (3,661     | ) | $ | (4,426 | ) |
| Adjustments to  reconcile net loss to net cash used in operating activities: |       |                   |       |   |   |
| Depreciation,  depletion and amortization                                    |       | 704                    |       | 251 |   |
| Amortization of  debt issuance costs                                         |       | 266                    |       | 127 |   |
| Warrants granted  for services                                               |       | 7                      |       | 56 |   |
| Minority  interest in loss of subsidiary                                     |       | —                 |       | (355 | ) |
| Asset retirement  obligation accretion                                       |       | 9                      |       | 9 |   |
| Impairment of  oil and gas properties                                        |       | —                 |       | 150 |   |
| Accrued interest  added to principal                                         |       | 1,660                  |       | — |   |
| Changes in  current assets and current liabilities:                          |       |                   |       |   |   |
| Decrease in  receivables                                                     |       | 27                     |       | 182 |   |
| Decrease in  other current assets                                            |       | 122                    |       | 131 |   |
| Increase  (decrease) in accounts payable and accrued liabilities             |       | (261                   | )          | 169 |   |
| Increase (decrease)  in royalties payable                                    |       | 29                     |       | (4 | ) |
| Net cash used in  operating activities                                       |       | (1,098                 | )          | (3,710 | ) |
|                                                                         |       |                   |       |   |   |
| Cash flows from  investing activities:                                       |       |                   |       |   |   |
| Capital  expenditures                                                        |       | (3,282                 | )          | (4,209 | ) |
| Net cash used in  investing activities                                       |       | (3,282                 | )          | (4,209 | ) |
|                                                                         |       |                   |       |   |   |
| Cash flows from  financing activities:                                       |       |                   |       |   |   |
| Proceeds from  exercise of common stock options                              |       | —                 |       | 275 |   |
| Proceeds from  borrowings                                                    |       | 1,544                  |       | 7,568 |   |
| Principal  repayments                                                        |       | (470                   | )          | — |   |
| Debt issuance  costs                                                         |       | 23                     |       | (495 | ) |
| Net cash  provided by financing activities                                   |       | 1,097                  |       | 7,348 |   |
|                                                                         |       |                   |       |   |   |
| Effect of  exchange rate changes on cash                                     |       | (14                    | )          | (116 | ) |
|                                                                         |       |                   |       |   |   |
| Net decrease in  cash and cash equivalents                                   |       | (3,297                 | )          | (687 | ) |
|                                                                         |       |                   |       |   |   |
| Cash and cash  equivalents at beginning of period                            |       | 3,698                  |       | 2,996 |   |
|                                                                         |       |                   |       |   |   |
| Cash and cash equivalents  at end of period                                  |       | $                      | 401        |   | $ | 2,309 |   |

 

See accompanyingnotes to Consolidated Financial Statements.

 

4

----

 

**TIPPERARYCORPORATION AND SUBSIDIARIES**

**NOTES** TO CONSOLIDATED FINANCIALSTATEMENTS

**(Unaudited)**

 

 

**NOTE 1 –OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES**

 

## Basis of Presentation

 

In this quarterly report on Form 10-Q, unless thecontext requires otherwise, when we refer to “we,” “us,” “our,” “Tipperary,”and “the Company,” we are describing Tipperary Corporation and its subsidiarieson a consolidated basis.

 

In the opinion of management, the accompanyingunaudited Consolidated Financial Statements reflect all adjustments, consistingonly of normal recurring adjustments, which are necessary for a fair presentationof the financial position of Tipperary Corporation and its subsidiaries at March31, 2005, and the results of their operations for the three-month periods endedMarch 31, 2005 and 2004 and their cash flows for the three-month periods endedMarch 31, 2005 and 2004. The Consolidated Financial Statements include theaccounts of Tipperary Corporation and its wholly-owned subsidiaries, TipperaryOil and Gas Corporation, Tipperary CSG, Inc., Tipperary Queensland, Inc. andBurro Pipeline Corporation, and its 90%-owned subsidiary, Tipperary Oil and Gas(Australia) Pty Ltd (“TOGA”).  Allintercompany transactions and balances have been eliminated in consolidation.  The accounting policies followed by theCompany are included in Note 1 to the Consolidated Financial Statements in itsAnnual Report on Form 10-K for the year ended December 31, 2004.  These financial statements should be read inconjunction with the Form 10-K.

 

Impact of New Accounting Pronouncements

 

InDecember 2004, the Financial Accounting Standards Board (“FASB”)  issued a revision to SFAS No. 123, “Accountingfor Stock-Based Compensation,” SFAS No. 123R, “Share-Based Payment.” SFAS No.123R focuses primarily on transactions in which an entity exchanges its equityinstruments for employee services and generally establishes standards for theaccounting for transactions in which an entity obtains goods or services inshare-based payment transactions and is required to expense the value ofemployee stock options and similar awards. The Securities and Exchange Commission recently delayed theimplementation date for this pronouncement. The Company now expects to adopt SFAS No. 123R effective January 1, 2006using the modified prospective application. The Company does not expect SFAS No. 123R to have a material effect onthe Company’s Consolidated Financial Statements.

 

We have reviewed all other recently issued, but not yet adopted,accounting standards in order to determine their effects,  if any, on our results of operations orfinancial position.  Based on thatreview, we believe that none of these pronouncements will have a significanteffect on our current or future financial position or results of operations.

 

Revenue Recognition and Gas Imbalances

 

The Company recognizes naturalgas revenue from its interests in producing wells as natural gas is producedand sold from those wells. The Company uses the sales method of accounting forthese revenues. Under the sales method, revenues are recognized based on actualvolumes sold to purchasers. With natural gas production operations, jointowners may take more or less than the production volumes entitled to them underthe governing operating agreement. If excess takes of natural gas exceed theCompany’s remaining proved reserves for the property it records a natural gasimbalance in other liabilities.  As ofMarch 31, 2005  the Company hadtaken and sold more than its share of natural gas volumes produced from theComet Ridge project and was overproduced by approximately 1,761 MMcf (net ofroyalties). Based on the March 31, 2005 average sales price of $1.95 per Mcf,this overproduction represents approximately $3.4 million in gas revenues.At March 31, 2005, no liability has been recorded for the excess volumes taken,as they did not exceed the Company’s share of remaining proved reserves. Underthe terms of the governing gas balancing agreement, the Company may be requiredto reduce the monthly volumes it sells by up to 50% of TOGA’s entitled share ofsales, to enable underproduced parties to sell more than their entitled shareof the gas sales and cure the imbalance.

 

5

----

 

Stock-Based Compensation

 

SFAS Nos. 148 and No. 123 encourage, but do not require, companies torecord the compensation cost for stock-based employee compensation plans atfair value.  At March 31, 2005, theCompany had two stock-based employee option plans and warrants issued to directorsand employees.  The Company has chosen tocontinue to account for stock-based compensation using the intrinsic valuemethod prescribed in Accounting Principles Board Opinion No. 25, “Accountingfor Stock Issued to Employees,” (“APB 25”) and has applied the disclosureprovisions of SFAS Nos. 123 and 148. Accordingly, compensation cost for fixed stock options and warrants ismeasured as the excess, if any, of the quoted market price of the Company’sstock at the date of the grant over the amount a director or employee must payto acquire the stock.  Pro forma resultsas if the Company had adopted the cost recognition provisions of SFAS Nos. 148and 123 are presented below:

 
| ** **                                                                                       | ** ** | **Three Months Ended March 31,**          | ** ** |
|--------------------------------------------------------------------------------------------------|------------|-------------------------------------------|------------|
| ** **                                                                                       | ** ** | **2005**                                  | ** ** | **2004** | ** ** |
| ** **                                                                                       | ** ** | **(in thousands, except per share data)** | ** ** |
|                                                                                             |       |                                      |       |   |   |
| Net loss, as  reported                                                                           |       | $                                         | (3,661     | ) | $ | (4,426 | ) |
| Add:                                                                                             |       |                                      |       |   |   |
| Total  compensation cost included in reported net loss, net of $0 tax                            |       | —                                    |       | — |   |
| Deduct:                                                                                          |       |                                      |       |   |   |
| Total  compensation cost determined under fair value based method for all awards,  net of $0 tax |       | (117                                      | )          | (16 | ) |
|                                                                                             |       |                                      |       |   |   |
| Pro forma net  loss                                                                              |       | $                                         | (3,778     | ) | $ | (4,442 | ) |
| Loss per share                                                                                   |       |                                      |       |   |   |
| Basic and  diluted—as reported                                                              |       | $                                         | (.09       | ) | $ | (.11 | ) |
| Basic and  diluted—pro forma                                                                |       | $                                         | (.09       | ) | $ | (.11 | ) |

 

 

Foreign Currency

 

The functional currency of TOGA isthe Australian dollar. As the functional currency is the local currency, thecurrent rate method is used to translate TOGA’s Australian dollar financialstatements into U.S. dollars. All assets and liabilities are translated usingcurrent exchange rates, while revenues and expenses are translated at rates inexistence when the transactions occurred. The translation adjustment thatresults from using varying rates in the translation process is reported as acomponent of other comprehensive income (loss) and is accumulated and reportedas a separate component of stockholders’ equity in the Company’s Consolidated FinancialStatements.

 

The cumulative foreign currencytranslation adjustment (net of $0 tax because of the Company’s net operatingloss carryforwards) as of March 31, 2005 and December 31, 2004 totaled $7.6million and $7.8 million, respectively.

 

Liquidity and Operations

 

The Company anticipates fundingoperations and capital expenditures in Australia and the United States for 2005using (a) cash on hand at March 31, 2005, (b) net gas revenues,(c) approximately $25 million ($32 million AUD) in available longterm borrowings from the Company’s Australian senior credit facility and(d) a commitment from Slough to provide funds for operations, workingcapital and board-approved capital expenditures through April 2006.  The Company’s majority shareholder, SloughEstates USA Inc. (“Slough”), intends to divest all or a portion of itsownership interest in the near term. While Slough has committed to support the Company with long-term loans or equitycontributions through April 2006, theCompany does not know what alternative financing or equity investments will beavailable from other parties after any divestiture occurs.  Any alternative financing the Company mayobtain after Slough’s divestiture could have terms less favorable than currentterms provided by Slough.

 

6

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The Company anticipates havingsufficient production history from its Frenchman and Republican project wellsby late 2005 which should allow the Company to be able to support a limitedamount of borrowing for further development of these projects or partialrepayment of existing Slough debt. In order to fund discretionary domesticcapital expenditures in 2005 in excess of these cash resources, the Companyanticipates that it will require alternative sources of capital. Additionalsources of funding may include additional debt financings and asset sales.  However, in the event that sufficient fundingcannot be obtained, the Company will be required to curtail plannedexpenditures and may have to sell additional acreage and/or relinquish acreage.

 

**NOTE 2 - RELATED PARTY TRANSACTIONS**

 

At March 31, 2005, theCompany owed Slough and Slough Trading Estates Limited (“STEL”), a UnitedKingdom company that is the parent of Slough, approximately $18.0 million.

 

As of March 31, 2005, the Companyhad one credit facility agreement with STEL with an outstanding balance of$13.0 million.  No additional funds maycurrently be borrowed under this facility. The Company may repay the loan in whole or in part without prepaymentpenalties.  The credit facility bearsinterest at 13% per annum and is due April 2, 2012.  STEL may demand repayment prior to thematurity date on 18-months notice.  Solong as the STEL indebtedness exists, the Company may not obtain any additionalthird party indebtedness, either secured or unsecured, or make a prioritypayment of any obligation, without first obtaining written approval from STEL.

 

In 2002 and in the first quarterof 2005, the Company borrowed $4 million and $1 million,respectively, from Slough which is evidenced by a note payable dated May 13,2005 that bears interest at LIBOR plus 3.5% (6.22% as of March 31, 2005) and ispayable in full on April 30, 2006.  Thenote also relates to an additional $4.4 million to be borrowed in the secondquarter of 2005.

 

Slough Estates plc, STEL’sparent, has guaranteed for a period up to five years through June 2009 theCompany’s $150.0 million AUD bank credit facility  that closed in June 2004.  As consideration for the guarantee, theCompany pays 1% per annum on the daily outstanding balance of the debtguaranteed.  For the three month periodended March 31, 2005, the Company paid guarantee fees of $221,000.

 

For the three month periods endedMarch 31, 2005 and 2004, approximately $484,000 and $2.4 million, respectively,in interest and fees were paid collectively to Slough and STEL under thefinancing agreements discussed herein.

 

Slough has committed to providefunds to the Company in the form of long-term loans or equity contributionsthrough April 2006 to be used for operations, working capital andboard-approved capital expenditures.

 

**NOTE 3 – COMET RIDGE PROJECT FINANCING**

 

On June9, 2004, TOGA entered into a $150.0 million AUD senior credit facilityagreement comprised of a recourse portion and a non-recourse portion with twomajor Australian financial institutions for the purpose of paying in full TOGA’sborrowings of $100.0 million AUD from STEL and to fund TOGA’s operations andits share of development costs of the Comet Ridge coalseam gas project inQueensland, Australia.  Funds from thefacility are expected to be available over five years and repayable in variableportions beginning in 2007 and concluding in 2014.  The interest rate for the facility (6.34% perannum as of March 31, 2005) varies with the Australian inter-bank rate plusother factors.  Commitment fees of 0.425%per annum of committed but undrawn funds, as defined by the credit facility,are payable semi-annually.  The facilityis collateralized by, among other things, TOGA’s common stock and virtually allof the Company’s consolidated interest in the Comet Ridge project and isguaranteed through June 9, 2009 by Slough Estates plc (See Note 2).  The facility contains certain restrictivecovenants, including maintenance of certain ratios. While Slough isguaranteeing the full debt, as it was at March 31, 2005, the Company’s covenantobligations relate primarily to reporting requirements.  At March 31, 2005, the Company had met allrequired covenants.  When all or aportion of the debt is no longer guaranteed, the Company will be obligated tomaintain certain financial ratios in addition to the current reportingrequirement covenants.  The U.S. dollarvalue of the outstanding balance of this facility as of March 31, 2005 wasapproximately $92.2 million (approximately $119 million AUD), includinginterest due which will be paid with funds borrowed from the facility of $1.7million (approximately $2.1 million AUD). TOGA incurred approximately $4.8 million in debt issuance costs on thisfacility, which TOGA has deferred and is amortizing over five years.  TOGA has accrued an additional $670,000 forthe present value of deferred underwriting fees to be paid by June 9,2009.  These costs relate to future loanunderwriting fees the Company will pay upon conversion of the senior credit

 

7

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facilityfrom recourse to non-recourse debt.  Duringthe first quarter of 2005, TOGA paid interest and commitment fees ofapproximately $128,000 and $-0-, respectively on this facility and added$1,660,000 of accrued interest to the principal of this facility.

 

**NOTE 4 - LOSS PER SHARE**

 

The following table sets forth the computation of basic and dilutedloss per share (“EPS”) (in thousands except per share data):

 
| ** **                                                                             | ** ** | **Three Months  Ended March 31,** | ** ** |
|----------------------------------------------------------------------------------------|------------|-----------------------------------|------------|
| ** **                                                                             | ** ** | **2005**                          | ** ** | **2004** | ** ** |
|                                                                                   |       |                              |       |   |   |
| Numerator:                                                                             |       |                              |       |   |   |
|                                                                                   |       |                              |       |   |   |
| Net loss                                                                               |       | $                                 | (3,661     | ) | $ | (4,426 | ) |
|                                                                                   |       |                              |       |   |   |
| Denominator:                                                                           |       |                              |       |   |   |
| Weighted-average  shares outstanding                                                   |       | 41,356                            |       | 39,321 |   |
| Effect of  dilutive securities:                                                        |       |                              |       |   |   |
| Assumed exercise  of dilutive options and warrants                                     |       | —                            |       | — |   |
|                                                                                   |       |                              |       |   |   |
| Weighted-average  shares and dilutive potential common shares                          |       | 41,356                            |       | 39,321 |   |
|                                                                                   |       |                              |       |   |   |
| Basic and  diluted loss per share                                                      |       | $                                 | (.09       | ) | $ | (.11 | ) |
|                                                                                   |       |                              |       |   |   |
| Total options  and warrants which could potentially dilute basic EPS in future periods |       | 3,929                             |       | 3,523 |   |

 

**NOTE 5 – MINORITY INTEREST IN TOGA**

 

For the three month period ended March 31, 2005, the 10% minorityinterest share of TOGA’s net loss totaled $166,000.  As the minority interest in TOGA’s net equity(excluding the cumulative foreign currency translation adjustment), at December31, 2004 was zero, the Company recognized 100% of TOGA’s net loss for thequarter. The entire minority interest share of TOGA’s net loss was recognizedby the Company.  The Company willcontinue recognizing 100% of TOGA’s net losses until TOGA becomesprofitable.  The Company will record 100%of TOGA’s net income until it has recouped the minority interest’s share ofTOGA’s net losses. Such share totaled $901,000 at March 31, 2005.

 

8

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**NOTE 6 - COMMITMENTS AND CONTINGENCIES**

 

The Company’s business activitiesare subject to federal, state and local environmental laws and regulations aswell as similar laws and regulations in the Commonwealth of Australia and theState of Queensland, Australia. In the fourth quarter of 2003, the Queenslandgovernment notified the Company that exploration and production of gas fromunder national park lands would be limited to using surface facilities locatedoutside the parks. If gas reserves are discovered under park lands, they wouldbe recovered to the extent possible using directional drilling from drill sitesadjacent to park lands. Directional drilling is currently used to produce somecoalseam and conventional gas in the U.S. and Australia.  Management believes  the technique can be used effectively atComet Ridge to recover a substantial portion of any reserves that ultimatelywould have been recoverable from drilling within the parks.  During 2005 the Company has drilled twohorizontal wells and is evaluating the effectiveness of the drilling.  Management does not expect these newrequirements to significantly increase future exploration, development andoperating costs per Mcf sold. Three of the Company’s productive wells and oneATP 526 exploration well were previously permitted on park lands. Under currentgovernment policy, the four wells are to be plugged and abandoned, and thesurface area reclaimed at an estimated cost to the Company of $100,000. TheCompany expects to recover these wells’ reserves using directional drilling.The amount of any reserves that may ultimately be determined to be under parklands is not currently known. The Company will continue to monitorenvironmental compliance. There can be no assurance that environmental laws andregulations will not become more stringent in the future or that the Companywill not incur significant costs in the future to comply with such laws andregulations.

 

The Company is subject to variousother possible contingencies which arise primarily from interpretation offederal and state laws and regulations affecting the oil and gas industry.Although management believes it has complied with the various laws andregulations, administrative rulings and interpretations thereof, additionalcosts could be incurred as new interpretations and regulations are issued.

 

**NOTE 7 - OPERATIONS BY GEOGRAPHIC AREA**

 

Segment information has been prepared in accordance with SFAS No. 131, “DisclosuresAbout Segments of an Enterprise and Related Information.”  The Company has two geographic reportingsegments, Australia and the United States. General and administrative expense, interest expense and interest andother income are not allocated to segments. The segment data presented below was prepared on the same basis as theConsolidated Financial Statements. Reportable business segment information as of March 31, 2005 and 2004,and for the three months ended March 31, 2005 and 2004 is as follows (inthousands):

 

**As of and for the three months ended March 31, 2005**

** **
| ** **                          | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** | **Non-  Segmented  Ite****ms(1)** | ** ** | **Total** | ** ** |
|-------------------------------------|----------------------------|------------|-------------------|------------|------------|------------|------------|-----------------------------------|------------|-----------|------------|
| ** **                          | **Gas and Oil Operations** | ** ** |
| ** **                          | **Australia**              | ** ** | **United States** | ** ** | **Total**  | ** ** |
| Revenues                            |                       | $          | 3,374             |       | $          | 1          |       | $                                 | 3,375      |      | $          | — |   | $ | 3,375 |   |
| Income (loss)  before income taxes  |                       | $          | 1,110             |       | $          | (402       | )          | $                                 | 708        |      | $          | (4,369 | ) | $ | (3,661 | ) |
| Property, plant  and equipment, net |                       | $          | 130,123           |       | $          | 11,950     |       | $                                 | 142,073    |      | $          | 495 |   | $ | 142,568 |   |

----

(1)    Income (loss) before income taxes reconciling items include$2.2 million of general and administrative expenses, $51,000 of corporatedepreciation and $2.2 million of interest expense.  Property, plant and equipment, net, includes$495,000 of corporate office equipment, computer hardware and software.

 

9

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**As of andfor the three months ended March 31, 2004**

 
| ** **                          | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** | **Non-  Segmented  Items(1)** | ** ** | **Total** | ** ** |
|-------------------------------------|----------------------------|------------|-------------------|------------|------------|------------|------------|-------------------------------|------------|-----------|------------|
| ** **                          | **Gas and Oil Operations** | ** ** |
| ** **                          | **Australia**              | ** ** | **United States** | ** ** | **Total**  | ** ** |
|                                |                       |       |              |       |       |       |       |                          |       |      |       |
| Revenues                            |                       | $          | 1,166             |       | $          | 2          |       | $                             | 1,168      |      | $          | — |   | $ | 1,168 |   |
| Loss before  income taxes           |                       | $          | (215              | )          | $          | (407       | )          | $                             | (622       | )         | $          | (4,159 | ) | $ | (4,781 | ) |
| Property, plant  and equipment, net |                       | $          | 113,903           |       | $          | 7,510      |       | $                             | 121,413    |      | $          | 421 |   | $ | 121,834 |   |
|                                     |                            |            |                   |            |            |            |            |                               |            |           |            |  |  |  |  |  |  |  |

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(1)    Loss before income taxes reconciling items include $2.0million of general and administrative expenses, $14,000 of corporatedepreciation and $2.1 million of interest expense.  Property, plant and equipment, net, includes$421,000 of corporate office equipment, computer hardware and software.

 

**NOTE 8 –PROPERTY, PLANT AND EQUIPMENT**

 

A summary ofproperty, plant and equipment follows:

 
| ** **                                                 | ** ** | **March 31, 2005** | ** ** | **December 31, 2004** | ** ** |
|------------------------------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                                                 | ** ** | **(in thousands)** | ** ** |
|                                                       |       |               |       |                  |       |
| Evaluated oil  and gas properties:                         |       |               |       |                  |       |
| Australian  properties                                     |       | 124,590            |       | 121,376               |       |
| Domestic  properties                                       |       | 2,335              |       | 2,068                 |       |
| Unevaluated oil  and gas properties:                       |       |               |       |                  |       |
| Australian  properties                                     |       | 12,474             |       | 13,236                |       |
| Domestic  properties                                       |       | 9,615              |       | 8,461                 |       |
| Oil and gas  properties                                    |       | 149,014            |       | 145,141               |       |
| Other property  and equipment                              |       | 4,008              |       | 3,943                 |       |
|                                                       |       | 153,022            |       | 149,084               |       |
| Less accumulated  depreciation, depletion and amortization |       | (10,454            | )          | (9,833                | )          |
| Property, plant  and equipment, net                        |       | $                  | 142,568    |                  | $          | 139,251 |   |
|                                                            |            |                    |            |                       |            |  |  |

 

 

**NOTE 9 – STATEMENT OF CASH FLOWS SUPPLEMENTALINFORMATION**

** **
| ** **                                         | ** ** | **Three Months Ended  March 31,** | ** ** |
|----------------------------------------------------|------------|----------------------------------------|------------|
| ** **                                         | ** ** | **2005**                               | ** ** | **2004** | ** ** |
| ** **                                         | ** ** | **(in thousands)**                     | ** ** |
|                                               |       |                                   |       |   |   |
| Cash paid during  the period for interest          |       | $                                      | 572        |   | $ | 2,418 |   |
| Non-cash  investing and financing activities— |       |                                   |       |   |   |
| Net increase in  payables for capital expenditures |       | $                                      | 1,774      |   | $ | 177 |   |

 

10

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**Item 2.    Management’s Discussionand Analysis of Financial Condition and Results of Operations**

 

Information within this report containsforward-looking statements within the meaning of the Private SecuritiesLitigation Reform Act of 1995 that are based on management’s beliefs,assumptions, current expectations, estimates and projections about the oil andgas industry, the world economy and about the Company itself.  Words such as “may,” “will,” “expect,” “anticipate,”“estimate” or “continue,” or comparable words are intended to identify suchforward-looking statements. In addition, all statements other than statementsof historical facts that address activities that we expect or anticipate willor may occur in the future are forward-looking statements.  These statements are not guarantees of futureperformance and involve certain risks, uncertainties and assumptions that aredifficult to predict with regard to timing, extent, likelihood and degree ofoccurrence.  Therefore, actual resultsand outcomes may materially differ from what may be expressed or forecasted insuch forward-looking statements. Furthermore, we undertake no obligation toupdate, amend or clarify forward-looking statements, whether as a result of newinformation, future events or otherwise. Readers are encouraged to read our SECfilings, particularly our Form 10-K for the year ended December 31, 2004, formeaningful cautionary language and discussion of risk factors disclosing whyactual results may vary materially from those anticipated by management.

 

***Overview***

 

*Australia*

 

Our activities in Australia are conductedsubstantially through our 90%-owned Australian subsidiary, Tipperary Oil &Gas (Australia) Pty Ltd (“TOGA”).  As of March31, 2005, Tipperary owned a 75.25% undivided capital-bearing interest in theComet Ridge project in Queensland, Australia. Of this interest TOGA holds 65% and other Tipperary entities hold10.25%.  This project comprisesapproximately 1,230,500 acres in the Bowen Basin, which includes five petroleumleases (“PL”) covering approximately 287,500 acres, Authority to Prospect (“ATP”)526 covering approximately 712,000 acres, ATP 653 covering approximately 96,000acres and ATP 745 covering approximately 135,000 acres.  We also hold 100% of ATP 655, which is nearthe Comet Ridge project and covers approximately 77,000 acres.

 

An ATP allows the holder to undertake a range ofexploration activities, including geophysical surveys, field mapping andexploratory drilling. Each ATP requires the expenditure of an amount ofexploration costs as determined by Queensland’s Department of Natural Resourcesand Mines (“Queensland DNRM”) and is generally subject to renewal every fouryears. Once a petroleum resource is identified, the holder of an ATP may applyfor a petroleum lease, which provides the lessee with the ability to conductadditional exploration, development and production activities.

 

Upon expiration of an ATP,legislation and policy of the Queensland DNRM allow the ATP holder to apply torenew the ATP for an additional four year period.  ATP 526 was renewedeffective November 1, 2004 for another four year exploration term, expiring onOctober 31, 2008.  No relinquishment was required at the time of renewal,however a series of relinquishments are mandatory during the current term.Recent changes to legislation have changed several fundamental aspects of ATPmanagement, especially those concerning relinquishment and the ability to varyconditions of an ATP.  These changes have also resulted in Tipperary’sacreage being administered under different Acts.  ATP 526, and all thePetroleum Leases, are administered under the Petroleum Act 1923 as before,except that the Act has been substantially amended effective December 31, 2004. ATPs 653, 655 and 745 which have initial terms expiring on September 30, 2006,October 31,  2007 and October 31, 2007respectively, are now administered under the Petroleum and Gas (Production andSafety) Act 2004, which was enacted on December 31, 2004.  Renewal ofthese ATPs can be for a 12 year period under the new Act, when renewal becomesdue.

 

With respect to ATP 653, we filed and received avariance to combine year two expenditure requirements with those of year threeand to drill a horizontal well, eliminating the obligation to drill twoconventional wells. The horizontal well was partially drilled in January 2005,and we anticipate drilling operations to continue in late 2005.  We have completed expenditure requirementsfor ATPs 745 and 655.  The terms of theATP 526 renewal do not require exploration expenditures during 2005.

 

Our gas marketing in eastern Australia has beenprimarily focused on obtaining long-term gas sales agreements that provide fiveto 15 years of firm sales typically starting in 2006 to 2008.  However, short-term sales contracts haverecently

 

11

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been utilized and are being pursued.  During 2004, our Australian natural gas saleswere made to four purchasers under various short and long-term contracts.  We are under contract to provide gas volumesto the same four purchasers in 2005.

 

The followingtables summarize gross gas production by quarter and well status on the CometRidge project as of March 31, 2005.  Weare expanding the capacity of our metering equipment, compressors andfacilities to a sales capacity of approximately 45 MMcf per day by mid-year2005.

 

**CometRidge Operations Review**

** **
| ** **                              | ** ** | **For the Quarter Ended** | ** ** |
|-----------------------------------------|------------|---------------------------|------------|
| ** **                              | ** ** | **June 30,  2004**        | ** ** | **September 30,  2004** | ** ** | **December 31,  2004** | ** ** | **March 31,  2005** | ** ** |
|                                    |       |                      |       |   |   |   |   |   |   |
| **Gross  Average Daily Volumes (MMCF)** |       |                      |       |   |   |   |   |   |   |
| Sold                                    |       | 15                        |       | 23 |   | 28 |   | 28 |   |
| Flared                                  |       | 4                         |       | 2 |   | 1 |   | 1 |   |
| Used for  compression fuel              |       | 2                         |       | 3 |   | 3 |   | 3 |   |
| Produced                                |       | 21                        |       | 28 |   | 32 |   | 32 |   |

** **
| ** **                         | ** ** | **Number of Wells  At March 31,  2005** | ** ** |
|------------------------------------|------------|-----------------------------------------|------------|
| ** **                         | ** ** | ** **                              | ** ** |
| **Well  Status**                   |       |                                    |       |
| Selling•                      |       | 49                                      |       |
| Dewatering or  temporarily shut-in |       | 27                                      |       |
|                               |       |                                    |       |
| Producing                          |       | 76                                      |       |
| Being evaluated                    |       | 24                                      |       |
| Injection/monitoring  wells        |       | 2                                       |       |
| To be plugged  and abandoned       |       | 2                                       |       |
| Plugged and  abandoned             |       | 3                                       |       |
|                               |       |                                    |       |
| Total drilled                      |       | 107                                     |       |

 

We drilled one exploratory and one development well onthe Comet Ridge project during the first quarter of 2005.  Both of these wells were drilledhorizontally.  The development well wassuccessfully completed, and it tested over one million cubic feet of gas perday.  Drilling of the exploratory wellwas interrupted by difficulties encountered while drilling.  We expect this well will be re-entered inlate 2005.  The 2005 drilling wassubstantially funded with borrowings from the Australian bank credit facility.

 

In December 2004, we signed a 23-month extension tothe five-year Energex Retail Pty Ltd (“Energex”) gas supply contract.  The extension expires on April 30, 2007.  The new contract is similar in terms to theexisting contract.  On December 23, 2004,we entered into an agreement to supply gas to Orica Australia Pty Ltd(“Orica”), an unrelated party.  Thecontract commences on June 26, 2006 for a term of 10 years and provides thatOrica will purchase a minimum of 3,000 and a maximum of 4,800 Mcf of gas perday.  On December 30, 2004, we enteredinto an agreement to supply natural gas to Santos QNT Pty Ltd (“Santos”).  The contract began on January 1, 2005 for aterm of 21 months and provides that Santos will purchase a minimum of 7,700 anda maximum of 9,700 Mcf of gas per day. We have entered into additional agreements with Energex and CS Energywhereby they may purchase gas under spot sale arrangements.  We have a gas sales agreement with OriginEnergy Retail Limited (“OERL”), a subsidiary of Origin Energy Limited, tosupply approximately 9 Bcf per year, or approximately 25,000 Mcf of gas per daynet to the Company’s interest, for 13 years beginning May 2007.  Origin Energy Limited is a large Australianintegrated energy company which, through subsidiaries, owns nearly 24% of theComet Ridge project.  All of the thirdparty working interest owners in the Comet Ridge project have elected toparticipate in the sales agreement we entered into with OERL and the salesagreements entered into with Energex, Orica and Santos in December 2004.

 

12

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We believe that current andanticipated development drilling programs on the Comet Ridge project willenable it to satisfy its gas supply delivery commitments, although this cannotbe assured.

 

*United States*

 

Our assets in the United Statesconsist primarily of natural gas exploration and development leaseholds inColorado and Nebraska, which are described below by project area.  The four projects in eastern Colorado andwestern Nebraska principally target conventional, natural gas in the Niobraraformation.

 

*Frenchman* — We hold a 25% interest in 159,000 acres and 100% in3,000 acres in the Frenchman project in eastern Colorado.  The Houston Exploration Company (“HoustonExploration”) holds the remaining 75% interest in the 159,000 acres and is theoperator of that portion of the acreage. As of May 1, 2005, we have drilled a total of 14 wells on theproject.  We have successfully completed elevenwells in the 100%-owned area of the project and anticipate we will drill sixadditional 100%-owned wells in 2005 at a cost to us of approximately $1,200,000.  In February 2005, Tipperary completed a gasgathering system at a cost of approximately $350,000.  In late May 2005 we expect to begin sellinggas from the four 100% wells which are connected.  We expect the June 2005 net sales volumes toapproximate 1.4 MMcf per day.  We alsoexpect five additional 100% wells to be connected to the gathering system byJune 30, 2005.  With additionalcompression capacity and future drilling, net sales volumes are expected to beapproximately 3 MMcfd later in 2005.

 

*Republican* — We hold a 20% interest in the Republican project ineastern Colorado.  Total gross acreage inthis project approximates 170,000 acres. Houston Exploration holds theremaining 80% interest and is the operator of the project.  Through May 1, 2005, a total of 39 wells havebeen drilled on the project of which 32 wells were completed and seven wereplugged and abandoned.  An additional 15wells are planned to be drilled in the second quarter of 2005 at an estimatednet cost to us of $600,000.  In the firstquarter of 2005, we participated with Houston Exploration in a 3D seismicprogram covering 99,000 gross acres at a net cost to us of $726,000.  We expect gas sales to begin in mid 2005.

 

*Lay Creek* — We hold a 50% working interest in Lay Creek, acoalseam gas project in western Colorado. The project includes variousleasehold interests covering over 92,000 gross acres. Koch Exploration Company(“Koch”) holds the remaining 50% working interest and operates theproject.  We are currently evaluating thegas and water production from pilot wells in order to determine economicviability of the production.  We areinvestigating pipeline connections and are evaluating the possibility ofselling gas in 2005.  We are also showingthe acreage to other companies which may have an interest in participating infuture drilling.

 

*Stateline* — We hold a 25% interest in the Stateline project inwestern Nebraska.  Total gross acreage inthe project is approximately 113,000 acres. Lance Oil & Gas Company, Inc. (“Lance”) holds the remaining 75%interest and is the operator of the project. In the first half of 2004, preliminary 2-D seismic operations wereconducted at a cost to us of approximately $100,000.  The acquisition of 3D seismic data began inFebruary 2005 at a cost to us of approximately $160,000.  We have identified drill sites through theseismic evaluation and anticipate drilling will begin in the third quarter of2005.

 

*Sand Hill* — During late 2003, we acquired leasehold acreage inwestern Nebraska totaling approximately 51,000 gross acres, the “Sand Hill”project.  This acreage is located in thevicinity of our Frenchman, Republican and Stateline projects. We currently hold100% of the acreage but may sell an interest to an industry partner.  Alternatively, we may elect to explore anddevelop this project independently. During the fourth quarter of 2004, we conducted limited 2-D seismicoperations on the Sand Hill project and are currently evaluating those results.

 

***Financial Condition, Liquidity and Capital Resources***

 

We had cash and cash equivalents of $401,000 as of March 31, 2005,compared to approximately $3.7 million as of December 31, 2004.  We have funded operations and capitalexpenditures for the three months ended March 31, 2005, using primarily (a) $3.7million of cash on hand  at December 31,2004, (b) borrowings from our Australian senior credit facility and (c)borrowings from Slough.

 

13

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We anticipatefunding operations and capital expenditures in Australia and the United Statesfor 2005 using (a) cash on hand at March 31, 2005, (b) net gasrevenues, (c) approximately $25 million ($32 million AUD) in availablelong term borrowings from our Australian senior credit facility and (d) acommitment from Slough to provide funds for operations, working capital, and board-approvedcapital expenditures through April 2006. Our majority shareholder, Slough intends to divest all or a portion ofits ownership interest in the near term. While Slough has committed to support us with long-term loans orequity contributions through April 2006, wedo not know what alternative financing or equity investments will be availablefrom other parties after any divestiture occurs.  Any alternative financing we may obtain afterSlough’s divestiture could have terms less favorable than current termsprovided by Slough.

 

We anticipate having sufficientproduction history from our Frenchman and Republican project wells by late 2005to be able to borrow against these assets.  In order to fund discretionary domesticcapital expenditures in 2005 in excess of these cash resources, we anticipatethat we will require alternative sources of capital. Additional sources offunding may include additional debt financings and asset sales.  However, in the event that sufficient fundingcannot be obtained, we will be required to curtail planned expenditures and mayhave to sell additional acreage and/or relinquish acreage.

 

Net cash used by operating activities was $1.1 million during the threemonths ended March 31, 2005, compared to $3.7 million of cash used during thesame period last year.  The decrease innet cash used for operations in the first quarter of 2005 compared with thesame period in 2004 resulted primarily from higher gas revenues.

 

The table below provides an analysis of cash used for capitalexpenditures during the three months ended March 31, 2005.

 

**Capital Expenditures Activity**

**(in thousands)**

 
| Australia:                                    |   |   |   |
|-----------------------------------------------|--------|--------|--------|
| Comet Ridge  drilling and completion          |   | 1,887  |   |
| Comet Ridge  facilities and equipment         |   | 298    |   |
| ATP 655  exploration                          |   | 217    |   |
| Other                                         |   | 30     |   |
| Domestic:                                     |   |   |   |
| Republican  drilling and completion           |   | 332    |   |
| Frenchman  facilities, equipment and drilling |   | 291    |   |
| Stateline  seismic acquisition                |   | 103    |   |
| Other                                         |   | 124    |   |
|                                          |   |   |   |
| Total                                         |   | $      | 3,282  |   |
|                                               |        |        |        |  |

 

Included within the first quarter 2005 capital spending was $253,000 ofcapitalized interest expense associated with our Australian and domesticproperties.  Capital expenditures for thefirst quarter in 2005 were funded principally under TOGA’s credit facility withAustralian financial institutions.

 

14

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The Company has variouscommitments in addition to its long-term debt. The following table summarizes the Company’s contractual obligations atMarch 31, 2005 (in thousands):

 
| **Contractual Obligation**         | ** ** | **Total** | ** ** | **2005** | ** ** | **2006** | ** ** | **2007** | ** ** | **2008** | ** ** | **Thereafter** | ** ** |
|------------------------------------|------------|-----------|------------|----------|------------|----------|------------|----------|------------|----------|------------|----------------|------------|
|                               |       |      |       |     |       |     |       |     |       |     |       |           |       |
| Long-term  debt(1)                 |       | $         | 110,237    |     | $          | —   |       | $        | 5,000      |     | $          | —         |       | $ | — |   | $ | 105,237 |   |
| Interest(2)                        |       | $         | 54,368     |     | $          | 5,908    |       | $        | 7,824      |     | $          | 8,058          |       | $ | 8,250 |   | $ | 24,328 |   |
| Operating leases  for office space |       | $         | 1,507      |     | $          | 255      |       | $        | 363        |     | $          | 370            |       | $ | 247 |   | $ | 272 |   |
| Operating leases  for equipment    |       | $         | 5,464      |     | $          | 1,073    |       | $        | 1,250      |     | $          | 1,215          |       | $ | 1,102 |   | $ | 824 |   |
| Petroleum lease  expenditures(3)   |       | $         | 2,035      |     | $          | 935      |       | $        | 550        |     | $          | 275            |       | $ | 275 |   | $ | — |   |

----

(1)     Senior credit facility and debtpayable to Slough and STEL.

(2)     Based on March 31, 2005 weightedaverage interest rate of 6.34% and anticipated debt repayment.

(3)     Petroleum lease expenditures canbe reduced or eliminated by governmental royalties paid on gas sales.

 

15

----

 

***Results of Operations -Comparison of the Three Months Ended March 31, 2005 and 2004***

 

We incurred a net loss of approximately $3.7 millionfor the three months ended March 31, 2005 compared to a net loss of approximately$4.4 million for the three months ended March 31, 2004.  The lower net loss for the three months endedMarch 31, 2005 was primarily due to higher gas revenues, partially offset byhigher operating costs and depreciation, depletion and amortization.  The table below provides a comparison ofoperations for the three months ended March 31, 2005 with those of the prioryear’s quarter.  The table is intended toprovide a comparative review of significant operational items.  Accordingly, nominal differences may existfrom the amounts presented in the accompanying Consolidated FinancialStatements.  Certain prior period amountsmay have been reclassified to ensure comparability.

 
| ** **                                                       | ** ** | **Three Months Ended March 31,**                                   | ** ** | ** ** | ** ** | ** **               | ** ** |
|------------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|------------|------------|--------------------------|------------|
| ** **                                                       | ** ** | **2005**                                                           | ** ** | **2004**   | ** ** | **Increase  (Decrease)** | ** ** | **%****Increase  (%Decrease)** | ** ** |
| ** **                                                       | ** ** | **($ in thousands, except average per Mcf prices and costs)** | ** ** |
| **Worldwide  operations:**                                       |       |                                                               |       |       |       |                     |       |   |   |
|                                                             |       |                                                               |       |       |       |                     |       |   |   |
| Gas revenue                                                      |       | $                                                                  | 3,375      |       | $          | 1,168                    |       | $ | 2,207 |   | 189 | % |
| Gas volumes  (MMcf)                                              |       | 1,732                                                              |       | 651        |       | 1,081                    |       | 166 | % |
| Average gas  price per Mcf                                       |       | $                                                                  | 1.95       |       | $          | 1.79                     |       | $ | 0.16 |   | 9 | % |
| Operating  expenses                                              |       | $                                                                  | 2,005      |       | $          | 1,394                    |       | $ | 611 |   | 44 | % |
| Average  operating costs per Mcf sold                            |       | $                                                                  | 1.16       |       | $          | 2.14                     |       | $ | (0.98 | ) | (46 | )% |
| General and  administrative                                      |       | $                                                                  | 2,188      |       | $          | 2,044                    |       | $ | 144 |   | 7 | % |
| Depreciation,  depletion and amortization (“DD&A”) |       | $                                                                  | 704        |       | $          | 251                      |       | $ | 453 |   | 180 | % |
| Impairment                                                       |       | $                                                                  | —     |       | $          | 150                      |       | $ | (150 | ) | (100 | )% |
| Interest expense                                                 |       | $                                                                  | 2,174      |       | $          | 2,136                    |       | $ | 38 |   | 2 | % |
|                                                             |       |                                                               |       |       |       |                     |       |   |   |
| **Australia  operations:**                                       |       |                                                               |       |       |       |                     |       |   |   |
|                                                             |       |                                                               |       |       |       |                     |       |   |   |
| Gas revenue                                                      |       | $                                                                  | 3,374      |       | $          | 1,166                    |       | $ | 2,208 |   | 189 | % |
| Gas volumes  (MMcf)                                              |       | 1,732                                                              |       | 650        |       | 1,082                    |       | 166 | % |
| Average gas  price per Mcf                                       |       | $                                                                  | 1.95       |       | $          | 1.79                     |       | $ | 0.16 |   | 9 | % |
| Operating  expenses                                              |       | $                                                                  | 1,608      |       | $          | 1,140                    |       | $ | 468 |   | 41 | % |
| Average  operating costs per Mcf sold                            |       | $                                                                  | 0.93       |       | $          | 1.75                     |       | $ | (0.82 | ) | (47 | )% |
| Oil and Gas  property DD&A                                   |       | $                                                                  | 653        |       | $          | 203                      |       | $ | 450 |   | 222 | % |
| Other DD&A                                                   |       | $                                                                  | 37         |       | $          | 35                       |       | $ | 2 |   | 6 | % |
| Oil and  Gas DD&A rate per Mcf sold                     |       | $                                                                  | 0.38       |       | $          | 0.31                     |       | $ | 0.07 |   | 23 | % |
|                                                             |       |                                                               |       |       |       |                     |       |   |   |
| **Domestic  operations:**                                        |       |                                                               |       |       |       |                     |       |   |   |
|                                                             |       |                                                               |       |       |       |                     |       |   |   |
| Gas revenue                                                      |       | $                                                                  | 1          |       | $          | 2                        |       | $ | (1 | ) | (50 | )% |
| Gas volumes  (MMcf)                                              |       | —                                                             |       | 1          |       | (1                       | )          | (100 | )% |
| Average gas  price per Mcf                                       |       | $                                                                  | 5.31       |       | $          | 4.00                     |       | $ | 1.31 |   | 33 | % |
| Operating  expenses                                              |       | $                                                                  | 397        |       | $          | 254                      |       | $ | 143 |   | 56 | % |
| Average  operating costs per Mcf sold(1)                         |       | $                                                                  | 5.41       |       | $          | 2.27                     |       | $ | 3.14 |   | 138 | % |
| Impairment                                                       |       | $                                                                  | —     |       | $          | 150                      |       | $ | (150 | ) | (100 | )% |
| Other DD&A                                                   |       | $                                                                  | 14         |       | $          | 14                       |       | $ | — |   | 0 | % |

----

(1)          Average operating costs per Mcf for the quarter is forour sole producing property.  For a moremeaningful comparison of operating costs per Mcf, significant operating costsassociated with non-producing properties in the dewatering stage have beenexcluded.

 

16

----

 

Revenues and SalesVolumes

 

The 189% increase in our operating revenues was primarily due tosignificantly greater sales volumes from our Australian Comet Ridgeproject.  In 2004, Comet Ridge salesvolumes were reduced due to decreased delivery requirements from Energex, oursole customer.

 

During the first quarter of 2005, we had minimal domestic revenue.  Domestic revenues and volumes in 2005 and 2004relate to small, retained interests in properties producing in the Powder RiverBasin in Wyoming.  We expect to beginselling gas from our Frenchman project in eastern Colorado in late May 2005.  Initial gas sales are expected to beapproximately 1.7 MMcf per day.

 

Costs and Expenses

 

Operating expenses in Australia were higher principally due to gastransportation costs associated with our 2005 gas sales contracts.  During the first quarter of 2004, our gascontracts did not have any gas transportation costs.  Operating expenses in Australia alsoincreased due to increased gas compression and field activity costs associatedwith significantly greater gas sales volumes. Australian oil and gas property DD&A increased by 222% primarily dueto increased Comet Ridge sales volumes.

 

Domestic operating expenses in the first quarter of 2005 and 2004 are principallyattributable to the Lay Creek coal-seam gas project where the wells are in thedewatering phase.

 

The impairment expense of $150,000 in 2004 was attributed tounsuccessful exploration costs incurred on wells on the Frenchman prospect.

 

General and administrative (“G&A”) expenses for the first quarterof 2005 increased 7% compared to the three months ended March 31, 2004.  The anticipated decline in legal expenses dueto the end of the Tri-Star litigation was offset by higher consulting costsassociated with the Slough equity sale and higher employee costs.

 

Other Income (Expense)

 

Interest expense increased by 2% as the reduced cost associated withlower interest rates obtained under the Australian bank debt were offset byincreased loan balances.

 

**Item 3.    Quantitative and QualitativeDisclosure About Market Risk**

 

Market risk is the potential loss arising from adverse changes in marketrates and prices, such as foreign currency exchange, interest rates andcommodity prices.  We do not usefinancial instruments to any degree to manage foreign currency, interest rateor commodity risk and do not hold or issue financial instruments to any degreefor trading purposes. Our Australian debt facility and a portion of our debtpayable to Slough have  variable interestrates.  Fluctuations in the interest ratecould increase or decrease our interest expense.  At March 31, 2005, we had approximately $95.6million in outstanding variable rate debt. If the interest rate for our variable rate debt increased or decreasedby 1%, our annual interest expense would increase or decrease by approximately$1.0 million.  In addition, at March 31,2005, we were exposed to some market risk with respect to foreign currency andnatural gas prices; however, management does not believe such risk to bematerial.

 

17

----

 

**Item 4.  Controls andProcedures**

 

As of the end of the period covered by this report, weevaluated, under the supervision and with the participation of our management,including our Chief Executive Officer and Chief Financial Officer, theeffectiveness of the design and operation of our disclosure controls andprocedures over financial reporting pursuant to Rule 13a-15 and 15d-15 of theSecurities Exchange Act of 1934. Based upon that evaluation, our ChiefExecutive Officer and our Chief Financial Officer concluded that our disclosurecontrols and procedures over financial reporting are adequate and effective atthe reasonable assurance level in timely alerting them to material informationrequired to be included in this quarterly report on Form 10-Q.

 

Disclosure controls and procedures, no matter how welldesigned and implemented, can provide only reasonable assurance of achieving anentity’s disclosure objectives. The likelihood of achieving such objectives isaffected by limitations inherent in disclosure controls and procedures. Theselimitations include the fact that human judgment in decision-making can befaulty and that breakdowns in internal control can occur because of humanfailures such as simple errors or mistakes or because of intentionalcircumvention of the established process.

 

During the period covered by this report, there havebeen no changes in our internal controls over financial reporting or in otherfactors, which could significantly affect internal controls over financialreporting.

 

18

----

 

**PART II****- OTHER INFORMATION**

 

Item 1.    Legal Proceedings

 

                Nomaterial proceedings.

 

Item 2.  Unregistered Sales of Equity Securities and Useof Proceeds

 

                None.

 

Item 6.    Exhibits

 

The following exhibits are filed herewith:

 

                
| **Numbers** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.1         |       | Restated Articles of  Incorporation of Tipperary Corporation adopted May 6, 1993, originally  filed as Exhibit 3.9 to Amendment No. 1 to Registration Statement  on Form S-1 filed with the Commission on June 29, 1993, and  incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                              |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.2         |       | Restated Corporate Bylaws of  Tipperary Corporation adopted June 28, 1993, originally filed as  Exhibit 3.10 to Amendment No. 1 to Registration Statement on  Form S-1 filed with the Commission on June 29, 1993, and  incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                    |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.3         |       | Articles of Amendment of the  Articles of Incorporation of Tipperary Corporation adopted January 25,  2000, originally filed as Exhibit 3.11 to Form 10-QSB for the  quarterly period ended December 31, 1999, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                                                                                                             |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.1         |       | Credit Facility Agreement dated  March 21, 2003 for AUD$27.5 million between Tipperary  Oil & Gas Australia Pty Ltd (ACN 077536871), the borrower, Tipperary  Corporation, the Guarantor and Slough Trading Estate Limited, the lender,  originally filed as Exhibit 4.77 to Form 10-Q for the  quarterly period ended March 31, 2003, and incorporated herein by  reference.                                                                                                                                                                                                                                                       |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.2         |       | Credit Facility Agreement dated  March 21, 2003 for U.S.$8.5 million between Tipperary Corporation,  the borrower and Slough Trading Estate Limited, the lender, originally filed  as Exhibit 4.78 to Form 10-Q for the quarterly period ended  March 31, 2003, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                        |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.4         |       | Promissory Note dated March 15,  2005, in the amount of $5.0 million issued by Tipperary Corporation to Slough  Estates USA Inc., filed as Exhibit 4.4 to Form 10-K filed with the Commission  on March 24, 2005, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                               |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.5         |       | Letters of Variation dated  November 25, 2003, July 2, 2004, August 3, 2004 and September 3, 2004,  increasing the amount borrowed from Slough Trading Estate Limited from U.S.  $8.5 million to U.S. $13.0 million related to the Credit Facility Agreement  dated march 21, 2003, for U.S. $8.5 million, filed as Exhibit 4.5 to Form  10-K filed with the Commission on March 24, 2005, and incorporated herein by  reference.                                                                                                                                                                                                                                     |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.6         |       | Comet Ridge Project Facilities  Agreement and related agreements dated June 9, 2004, including the Comet  Ridge Project TOGA/TCSG Deed of Security of which a portion on Page 59 of  this agreement noted by “***” has been omitted pursuant to a request for  confidential treatment, and such material has been filed separately with the  Securities and Exchange Commission under Rule 246-2 of the Securities  Exchange Act of 1934. Agreements originally filed as Exhibits 4.79(a),  4.79(b), 4.79(c), 4.79(d), 4.79(e), 4.79(f), 4.79(g) and 4.79(h) to Form 8-k  filed with the Commission on June 30, 2004 and incorporated herein by  reference. |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.7         |       | Stock Purchase Agreement dated  September 20, 2004, including the Registration Rights Agreement originally  filed as Exhibit 4.79 to Form 8-K filed with the Commission on September 24,  2004 and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                                                  |

 

19

----

 
| 10.1   |   | Tipperary Corporation 1997 Long-Term  Incentive Plan filed as Exhibit A to the Proxy Statement for its Annual  Meeting of Shareholders held on January 28, 1997, originally filed as  Exhibit 10.51 to Form 10-Q dated December 31, 1996, and  incorporated herein by reference.                                                                                                                                                                                                                                                                                                                     |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.2   |   | Warrant to Purchase common  stock dated December 22, 1998, issued to Slough Estates USA Inc.,  originally filed as Exhibit 10.58 to Form 10-Q for the  quarterly period ended December 31, 1998, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.3   |   | Warrant to Purchase common  stock dated December 23, 1999, issued to Slough Estates USA Inc.,  originally filed as Exhibit 10.60 to Form 10-QSB for the  quarterly period ended December 31, 1999, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.4   |   | Warrant to Purchase common  stock dated February 9, 2000, issued to James H. Marshall, originally  filed as Exhibit 10.70 to Form 10-QSB for the quarterly  period ended March 31, 2000, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.5   |   | Warrant to Purchase common  stock dated February 9, 2000, issued to James F. Knott, originally filed  as Exhibit 10.71 to Form 10-QSB for the quarterly period  ended March 31, 2000, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.6   |   | Gas Supply Agreement between  Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536 871) and Energex  Retail Pty Ltd (ACN 078 849 055) dated June 23, 2000. Confidential  portions of this agreement noted by “***” have been omitted and filed  separately with the Securities and Exchange Commission pursuant to a request  for confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934,  originally filed as Exhibit 10.76 to Form 10-QSB for the  quarterly period ended June 30, 2000, and incorporated herein by  reference.                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.7   |   | Warrant to Purchase common  stock dated May 3, 2000, issued to Charles T. Maxwell, originally filed  as Exhibit 10.77 to Form 10-KSB(A) for the transition  period ended December 31, 2000, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.8   |   | Warrant to Purchase common  stock dated November 30, 2000, issued to D. Leroy Sample, originally  filed as Exhibit 10.79 to Form 10-KSB(A) for the  transition period ended December 31, 2000, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.9   |   | Purchase and Sale Agreement  dated May 4, 2001, by and between Tipperary Oil & Gas  Corporation and Koch Exploration Company, originally filed as  Exhibit 10.80 to Form S-3, SEC File No. 333-59052,  filed with the Commission on July 26, 2001, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.10  |   | Gas Sales Agreement between  Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536 871) as Seller  and Queensland Fertilizer Assets Limited (ACN 011 062 294) as Buyer, dated  September 28, 2001. Confidential portions of this agreement noted by  “***” have been omitted and filed separately with the Securities and Exchange  Commission pursuant to a request for confidentiality under Rule 24b-2 of the  Securities Exchange Act of 1934, originally filed as Exhibit 10.81 to  Form 8-K filed with the Commission on October 18, 2001, and  incorporated herein by reference. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.11  |   | Employment Agreement dated  September 18, 2001 between Tipperary Corporation and David L. Bradshaw,  originally filed as Exhibit 10.82 to Form 8-K filed with the  Commission on October 18, 2001, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.12  |   | Warrant to Purchase common  stock dated January 30, 2002, issued to Jeff T. Obourn, originally filed  as Exhibit 10.83 to Form 10-KSB for the year ended  December 31, 2001, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.13  |   | First Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated May 30, 2002, originally filed as Exhibit 10.87 to  Form 10-QSB for the quarterly period ended June 30, 2002, and  incorporated herein by reference.                                                                                                                                                                                                                                            |

 

20

----

 
| 10.14  |   | Second Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated September 1, 2002, originally filed as  Exhibit 10.88 to Form 10-QSB for the quarterly period ended  September 30, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                          |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.15  |   | Agreement by Tipperary Oil and  Gas (Australia) to provide portion of funds to allow Mitchell Drilling  Contractors Pty Ltd. (Mitchell) to purchase a new Soilmec Rig, enter into  drilling contract with Mitchell and extend agreement for hire with Mitchell,  dated October 7, 2002, originally filed as Exhibit 10.89 to Form 10-QSB  for the quarterly period ended September 30, 2002, and incorporated  herein by reference.                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.16  |   | Purchase and Sale agreement  dated November 27, 2002, between Tipperary Oil & Gas  Corporation as Seller and Kerr-McGee Rocky Mountain Corporation as  Buyer, originally filed as Exhibit 10.90 to Form 8-K filed  with the Commission on December 12, 2002, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.17  |   | Third Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated January 1, 2003, originally filed as Exhibit 10.91  to Form 10-KSB for the year ended December 31, 2002, and  incorporated herein by reference.                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.18  |   | Gas Supply Term Sheet between  Tipperary Oil & Gas (Australia) Pty Ltd (ABN 46 077 536 871) as  Seller and Origin Energy Retail Limited (ABN 22 078 868 425) as Buyer, dated  December 12, 2002. Confidential portions of this agreement noted by an  “*” have been omitted and filed separately with the Securities and Exchange  Commission pursuant to a request for confidentiality under Rule 24b-2  of the Securities Exchange Act of 1934, originally filed as  Exhibit 10.92 to Form 10-KSB for the year ended  December 31, 2002, and incorporated herein by reference.                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.19  |   | Warrant to Purchase common  stock dated February 3, 2003, issued to Jeff T. Obourn, originally filed  as Exhibit 10.93 to Form 10-KSB for the year ended  December 31, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.20  |   | Warrant to Purchase common  stock dated February 3, 2003, issued to David L. Bradshaw, originally  filed as Exhibit 10.94 to Form 10-KSB for the year ended  December 31, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21  |   | Warrant to Purchase common  stock dated February 3, 2003, issued to Kenneth L. Ancell, originally  filed as Exhibit 10.95 to Form 10-KSB for the year ended  December 31, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.22  |   | Employment Agreement dated  October 17, 2002, between Tipperary Corporation and Kenneth L. Ancell,  originally filed as Exhibit 10.96 to Form 10-KSB for the year  ended December 31, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23  |   | Fourth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated March 31, 2003, originally filed as Exhibit 10.97  to Form 10-Q for the quarterly period ended June 30, 2003,  and incorporated herein by reference.                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.24  |   | Fifth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated June 30, 2003. Confidential portions of this agreement  noted by an “*” have been omitted and filed separately with the Securities  and Exchange Commission pursuant to a request for confidentiality under  Rule 24b-2 of the Securities Exchange Act of 1934, originally  filed as Exhibit 10.98 to Form 10-Q for the quarterly period  ended September 30, 2003, and incorporated herein by reference. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25  |   | Sixth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated December 31, 2003, originally filed as Exhibit 10.99 to  Form 10-K for the year ended December 31, 2003, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                         |

 

21

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| 10.26  |   | Seventh Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536  871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294) as  Buyer, dated March 31, 2004, originally filed as Exhibit 10.98 to Form 10-Q  for the quarterly period ended March 31, 2004, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                          |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.27  |   | Settlement Agreement &  Mutual Release dated October 30, 2004, between Tipperary Corporation and  Tri-Star Petroleum, originally filed as Exhibit 10.101 to Form 8K filed with  Commission on November 4, 2004, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.28  |   | Eighth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536  871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294) as  Buyer, dated September 30, 2004, filed as Exhibit 10.28 to Form 10-K filed  with the Commission on March 24, 2005 and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.29  |   | Extension to Gas Supply  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ABN 46 077 536  871) as Seller and Energex Retail Pty ltd (ABN 97 078 849 055) as Buyer,  dated December 16, 2004, disclosed on Form 8-K filed with the Commission on  December 23, 2004. Confidential portions of this agreement noted by an “***”  have been omitted and filed separately with the Securities and Exchange  Commission pursuant to a request for confidentiality under Rule 24b-2 of the  Securities Exchange Act of 1934, filed as Exhibit 10.29 to Form 10-K filed  with the Commission on March 24, 2005 and incorporated herein by reference. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.30  |   | Gas Supply Agreement between  Tipperary Oil & Gas (Australia) Pty Ltd (ABN 46 077 536 871) as Seller  and Orica Australia Pty Ltd (ABN 99 004 117 828) as Buyer, dated December 23,  2004, disclosed on Form 8-K filed with the Commission on December 23, 2004.  Confidential portions of this agreement noted by an “***” have been omitted  and filed separately with the Securities and Exchange Commission pursuant to  a request for confidentiality under Rule 24b-2 of the Securities Exchange Act  of 1934, filed as Exhibit 10.30 to Form 10-K filed with the Commission on  March 24, 2005, and incorporated herein by reference.            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.31  |   | Gas Supply Agreement between  Tipperary Oil & Gas (Australia) Pty Ltd (ABN 46 077 536 871) as Seller  and Santos QNT Pty Ltd (ABN 33 083 077 196) as Buyer, dated December 30,  2004, disclosed on Form 8-K filed with the Commission on January 4, 2005.  Confidential portions of this agreement noted by an “***” have been omitted  and filed separately with the Securities and Exchange Commission pursuant to a  request for confidentiality under Rule 24b-2 of the Securities Exchange Act  of 1934, filed as Exhibit 10.31 to Form 10-K filed with the Commission on  March 24, 2005, and incorporated herein by reference.                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.32  |   | Extension to Employment  Agreement, between Tipperary Corporation and Jeff T. Obourn, dated January 6,  2005 and related Employment Agreement dated January 17, 2002, disclosed on  Form 8-K filed with the Commission on January 12, 2005, filed as Exhibit  10.32 to Form 10-K filed with the Commission on March 24, 2005, and  incorporated herein by reference.                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.33  |   | Financial Advisory and  Investment Banking Services Agreement between Tipperary Corporation and  Houlihan Lokey Howard & Zukin Capital, Inc., dated February 22, 2005,  disclosed on Form 8-K filed with the Commission on February 25, 2005, filed  as Exhibit 10.33 to Form 10-K filed with the Commission on March 24, 2005,  and incorporated herein by reference.                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.34  |   | Ninth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536  871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294) as  Buyer, dated December 31, 2004, filed as Exhibit 10.34 to Form 10-K filed  with the Commission on March 24, 2005, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.35  |   | Warrants to purchase common stock dated January 10,  2005 and approved April 26, 2005 and disclosed in Current Report on 8-K filed  on April 29, 2005. Warrants issued to Kenneth L. Ancell, David L. Bradshaw,  Jeff T. Obourn, Eugene I. Davis, Douglas Kramer, Charles T. Maxwell and D.  Leroy Sample and filed herewith.                                                                                                                                                                                                                                                                                                                                         |

 

22

----

 
| 10.36  |   | Change in control severance agreements approved  April 25, 2005 and disclosed in Current Report on 8-K filed on April 29,  2005. Agreements issued to David L. Bradshaw, Kenneth L. Ancell, Jeff T.  Obourn and Joseph Feiten and filed herewith. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                              |
| 31.1   |   | Certification of Chief Executive Officer under  Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                              |
| 31.2   |   | Certification of Chief Financial Officer under  Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                              |
| 32.1   |   | Certification of Chief Executive Officer of  Tipperary Corporation Pursuant to 18 U.S.C. §1350.                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                              |
| 32.2   |   | Certification of Chief Financial Officer of  Tipperary Corporation Pursuant to 18 U.S.C. §1350.                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                              |

 

23

----

 

**SIGNATURES**

 

 

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

 

 
| Tipperary Corporation |   |
|-----------------------|--------|
| Registrant            |

 

 

 
| Date:  | May 16, 2005 |   | By:    | \s\ David L. Bradshaw                                  |   |
|--------|--------------|--------|--------|--------------------------------------------------------|--------|
|   |         |   |   | David L. Bradshaw, President, Chief Executive  Officer |
|   |         |   |   | and Chairman of the Board of Directors                 |
|   |         |   |   |                                                   |
| Date:  | May 16, 2005 |   | By:    | \s\ Joseph B. Feiten                                   |   |
|   |         |   |   | Joseph B. Feiten, Chief Financial Officer and          |
|   |         |   |   | Principal Accounting Officer                           |

 

24

----

 

**EXHIBIT****INDEX**

 
| **Numbers** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.1         |       | Restated Articles of  Incorporation of Tipperary Corporation adopted May 6, 1993, originally  filed as Exhibit 3.9 to Amendment No. 1 to Registration Statement  on Form S-1 filed with the Commission on June 29, 1993, and  incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                              |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.2         |       | Restated Corporate Bylaws of  Tipperary Corporation adopted June 28, 1993, originally filed as  Exhibit 3.10 to Amendment No. 1 to Registration Statement on  Form S-1 filed with the Commission on June 29, 1993, and  incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                    |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.3         |       | Articles of Amendment of the  Articles of Incorporation of Tipperary Corporation adopted January 25,  2000, originally filed as Exhibit 3.11 to Form 10-QSB for the  quarterly period ended December 31, 1999, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                                                                                                             |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.1         |       | Credit Facility Agreement dated  March 21, 2003 for AUD$27.5 million between Tipperary  Oil & Gas Australia Pty Ltd (ACN 077536871), the borrower, Tipperary  Corporation, the Guarantor and Slough Trading Estate Limited, the lender,  originally filed as Exhibit 4.77 to Form 10-Q for the  quarterly period ended March 31, 2003, and incorporated herein by  reference.                                                                                                                                                                                                                                                       |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.2         |       | Credit Facility Agreement dated  March 21, 2003 for U.S.$8.5 million between Tipperary Corporation,  the borrower and Slough Trading Estate Limited, the lender, originally filed  as Exhibit 4.78 to Form 10-Q for the quarterly period ended  March 31, 2003, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                        |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.4         |       | Promissory Note dated March 15,  2005, in the amount of $5.0 million issued by Tipperary Corporation to Slough  Estates USA Inc., filed as Exhibit 4.4 to Form 10-K filed with the Commission  on March 24, 2005, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                               |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.5         |       | Letters of Variation dated  November 25, 2003, July 2, 2004, August 3, 2004 and September 3, 2004,  increasing the amount borrowed from Slough Trading Estate Limited from U.S.  $8.5 million to U.S. $13.0 million related to the Credit Facility Agreement  dated march 21, 2003, for U.S. $8.5 million, filed as Exhibit 4.5 to Form  10-K filed with the Commission on March 24, 2005, and incorporated herein by  reference.                                                                                                                                                                                                                                     |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.6         |       | Comet Ridge Project Facilities  Agreement and related agreements dated June 9, 2004, including the Comet  Ridge Project TOGA/TCSG Deed of Security of which a portion on Page 59 of  this agreement noted by “***” has been omitted pursuant to a request for  confidential treatment, and such material has been filed separately with the  Securities and Exchange Commission under Rule 246-2 of the Securities  Exchange Act of 1934. Agreements originally filed as Exhibits 4.79(a),  4.79(b), 4.79(c), 4.79(d), 4.79(e), 4.79(f), 4.79(g) and 4.79(h) to Form 8-k  filed with the Commission on June 30, 2004 and incorporated herein by  reference. |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.7         |       | Stock Purchase Agreement dated  September 20, 2004, including the Registration Rights Agreement originally  filed as Exhibit 4.79 to Form 8-K filed with the Commission on September 24,  2004 and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1        |       | Tipperary Corporation 1997 Long-Term  Incentive Plan filed as Exhibit A to the Proxy Statement for its Annual  Meeting of Shareholders held on January 28, 1997, originally filed as  Exhibit 10.51 to Form 10-Q dated December 31, 1996, and  incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                             |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2        |       | Warrant to Purchase common  stock dated December 22, 1998, issued to Slough Estates USA Inc.,  originally filed as Exhibit 10.58 to Form 10-Q for the  quarterly period ended December 31, 1998, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                                                                                                                           |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.3        |       | Warrant to Purchase common  stock dated December 23, 1999, issued to Slough Estates USA Inc.,  originally filed as Exhibit 10.60 to Form 10-QSB for the  quarterly period ended December 31, 1999, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                                                                                                                         |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4        |       | Warrant to Purchase common  stock dated February 9, 2000, issued to James H. Marshall, originally  filed as Exhibit 10.70 to Form 10-QSB for the quarterly  period ended March 31, 2000, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                                    |

 

25

----

 
| 10.5   |   | Warrant to Purchase common  stock dated February 9, 2000, issued to James F. Knott, originally filed  as Exhibit 10.71 to Form 10-QSB for the quarterly period  ended March 31, 2000, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.6   |   | Gas Supply Agreement between  Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536 871) and  Energex Retail Pty Ltd (ACN 078 849 055) dated June 23, 2000. Confidential  portions of this agreement noted by “***” have been omitted and filed  separately with the Securities and Exchange Commission pursuant to a request  for confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934,  originally filed as Exhibit 10.76 to Form 10-QSB for the  quarterly period ended June 30, 2000, and incorporated herein by  reference.                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.7   |   | Warrant to Purchase common  stock dated May 3, 2000, issued to Charles T. Maxwell, originally filed  as Exhibit 10.77 to Form 10-KSB(A) for the transition  period ended December 31, 2000, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.8   |   | Warrant to Purchase common  stock dated November 30, 2000, issued to D. Leroy Sample, originally  filed as Exhibit 10.79 to Form 10-KSB(A) for the  transition period ended December 31, 2000, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.9   |   | Purchase and Sale Agreement  dated May 4, 2001, by and between Tipperary Oil & Gas  Corporation and Koch Exploration Company, originally filed as  Exhibit 10.80 to Form S-3, SEC File No. 333-59052,  filed with the Commission on July 26, 2001, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.10  |   | Gas Sales Agreement between  Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536 871) as Seller  and Queensland Fertilizer Assets Limited (ACN 011 062 294) as Buyer, dated  September 28, 2001. Confidential portions of this agreement noted by  “***” have been omitted and filed separately with the Securities and Exchange  Commission pursuant to a request for confidentiality under Rule 24b-2 of the  Securities Exchange Act of 1934, originally filed as Exhibit 10.81 to  Form 8-K filed with the Commission on October 18, 2001, and  incorporated herein by reference. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.11  |   | Employment Agreement dated  September 18, 2001 between Tipperary Corporation and David L. Bradshaw,  originally filed as Exhibit 10.82 to Form 8-K filed with the  Commission on October 18, 2001, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.12  |   | Warrant to Purchase common  stock dated January 30, 2002, issued to Jeff T. Obourn, originally filed  as Exhibit 10.83 to Form 10-KSB for the year ended  December 31, 2001, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.13  |   | First Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated May 30, 2002, originally filed as Exhibit 10.87 to  Form 10-QSB for the quarterly period ended June 30, 2002, and  incorporated herein by reference.                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.14  |   | Second Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated September 1, 2002, originally filed as  Exhibit 10.88 to Form 10-QSB for the quarterly period ended  September 30, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.15  |   | Agreement by Tipperary Oil and  Gas (Australia) to provide portion of funds to allow Mitchell Drilling  Contractors Pty Ltd. (Mitchell) to purchase a new Soilmec Rig, enter into  drilling contract with Mitchell and extend agreement for hire with Mitchell,  dated October 7, 2002, originally filed as Exhibit 10.89 to  Form 10-QSB for the quarterly period ended September 30, 2002, and  incorporated herein by reference.                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.16  |   | Purchase and Sale agreement  dated November 27, 2002, between Tipperary Oil & Gas  Corporation as Seller and Kerr-McGee Rocky Mountain Corporation as  Buyer, originally filed as Exhibit 10.90 to Form 8-K filed  with the Commission on December 12, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                                                               |

 

26

----

 
| 10.17  |   | Third Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated January 1, 2003, originally filed as Exhibit 10.91  to Form 10-KSB for the year ended December 31, 2002, and  incorporated herein by reference.                                                                                                                                                                                                                                                                          |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.18  |   | Gas Supply Term Sheet between  Tipperary Oil & Gas (Australia) Pty Ltd (ABN 46 077 536 871) as Seller  and Origin Energy Retail Limited (ABN 22 078 868 425) as Buyer, dated  December 12, 2002. Confidential portions of this agreement noted by an  “*” have been omitted and filed separately with the Securities and Exchange  Commission pursuant to a request for confidentiality under Rule 24b-2  of the Securities Exchange Act of 1934, originally filed as  Exhibit 10.92 to Form 10-KSB for the year ended  December 31, 2002, and incorporated herein by reference.                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.19  |   | Warrant to Purchase common  stock dated February 3, 2003, issued to Jeff T. Obourn, originally filed  as Exhibit 10.93 to Form 10-KSB for the year ended  December 31, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.20  |   | Warrant to Purchase common  stock dated February 3, 2003, issued to David L. Bradshaw, originally  filed as Exhibit 10.94 to Form 10-KSB for the year ended  December 31, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21  |   | Warrant to Purchase common  stock dated February 3, 2003, issued to Kenneth L. Ancell, originally  filed as Exhibit 10.95 to Form 10-KSB for the year ended  December 31, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.22  |   | Employment Agreement dated  October 17, 2002, between Tipperary Corporation and Kenneth L. Ancell,  originally filed as Exhibit 10.96 to Form 10-KSB for the year  ended December 31, 2002, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23  |   | Fourth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated March 31, 2003, originally filed as Exhibit 10.97  to Form 10-Q for the quarterly period ended June 30, 2003,  and incorporated herein by reference.                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.24  |   | Fifth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated June 30, 2003. Confidential portions of this agreement  noted by an “*” have been omitted and filed separately with the Securities  and Exchange Commission pursuant to a request for confidentiality under  Rule 24b-2 of the Securities Exchange Act of 1934, originally  filed as Exhibit 10.98 to Form 10-Q for the quarterly period  ended September 30, 2003, and incorporated herein by reference. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25  |   | Sixth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077  536 871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294)  as Buyer, dated December 31, 2003, originally filed as Exhibit 10.99 to  Form 10-K for the year ended December 31, 2003, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.26  |   | Seventh Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536  871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294) as  Buyer, dated March 31, 2004, originally filed as Exhibit 10.98 to Form 10-Q  for the quarterly period ended March 31, 2004, and incorporated herein by  reference.                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.27  |   | Settlement Agreement &  Mutual Release dated October 30, 2004, between Tipperary Corporation and  Tri-Star Petroleum, originally filed as Exhibit 10.101 to Form 8K filed with  Commission on November 4, 2004, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                              |

 

27

----

 
| 10.28  |   | Eighth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536  871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294) as  Buyer, dated September 30, 2004, filed as Exhibit 10.28 to Form 10-K filed  with the Commission on March 24, 2005 and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                      |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.29  |   | Extension to Gas Supply  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ABN 46 077 536  871) as Seller and Energex Retail Pty ltd (ABN 97 078 849 055) as Buyer,  dated December 16, 2004, disclosed on Form 8-K filed with the Commission on  December 23, 2004. Confidential portions of this agreement noted by an “***”  have been omitted and filed separately with the Securities and Exchange  Commission pursuant to a request for confidentiality under Rule 24b-2 of the  Securities Exchange Act of 1934, filed as Exhibit 10.29 to Form 10-K filed  with the Commission on March 24, 2005 and incorporated herein by reference. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.30  |   | Gas Supply Agreement between  Tipperary Oil & Gas (Australia) Pty Ltd (ABN 46 077 536 871) as Seller  and Orica Australia Pty Ltd (ABN 99 004 117 828) as Buyer, dated December 23,  2004, disclosed on Form 8-K filed with the Commission on December 23, 2004.  Confidential portions of this agreement noted by an “***” have been omitted  and filed separately with the Securities and Exchange Commission pursuant to  a request for confidentiality under Rule 24b-2 of the Securities Exchange Act  of 1934, filed as Exhibit 10.30 to Form 10-K filed with the Commission on  March 24, 2005, and incorporated herein by reference.            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.31  |   | Gas Supply Agreement between  Tipperary Oil & Gas (Australia) Pty Ltd (ABN 46 077 536 871) as Seller  and Santos QNT Pty Ltd (ABN 33 083 077 196) as Buyer, dated December 30,  2004, disclosed on Form 8-K filed with the Commission on January 4, 2005.  Confidential portions of this agreement noted by an “***” have been omitted  and filed separately with the Securities and Exchange Commission pursuant to  a request for confidentiality under Rule 24b-2 of the Securities Exchange Act  of 1934, filed as Exhibit 10.31 to Form 10-K filed with the Commission on  March 24, 2005, and incorporated herein by reference.                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.32  |   | Extension to Employment  Agreement, between Tipperary Corporation and Jeff T. Obourn, dated January 6,  2005 and related Employment Agreement dated January 17, 2002, disclosed on  Form 8-K filed with the Commission on January 12, 2005, filed as Exhibit  10.32 to Form 10-K filed with the Commission on March 24, 2005, and  incorporated herein by reference.                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.33  |   | Financial Advisory and  Investment Banking Services Agreement between Tipperary Corporation and  Houlihan Lokey Howard & Zukin Capital, Inc., dated February 22, 2005,  disclosed on Form 8-K filed with the Commission on February 25, 2005, filed  as Exhibit 10.33 to Form 10-K filed with the Commission on March 24, 2005,  and incorporated herein by reference.                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.34  |   | Ninth Amendment to Gas Sales  Agreement between Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077 536  871) as Seller and Queensland Fertilizer Assets Limited (ACN 011 062 294) as  Buyer, dated December 31, 2004, filed as Exhibit 10.34 to Form 10-K filed  with the Commission on March 24, 2005, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.35  |   | Warrants to purchase common stock dated January 10,  2005 and approved April 26, 2005 and disclosed in Current Report on 8-K filed  on April 29, 2005. Warrants issued to Kenneth L. Ancell, David L. Bradshaw,  Jeff T. Obourn, Eugene I. Davis, Douglas Kramer, Charles T. Maxwell and D.  Leroy Sample and filed herewith.                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.36  |   | Change in control severance agreements approved  April 25, 2005 and disclosed in Current Report on 8-K filed on April 29,  2005. Agreements issued to David L. Bradshaw, Kenneth L. Ancell, Jeff T.  Obourn and Joseph Feiten and filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

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| 31.1   |   | Certification of Chief Executive Officer under  Section 302 of the Sarbanes-Oxley Act of 2002.       |
|--------|--------|------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                 |
| 31.2   |   | Certification of Chief Financial Officer under  Section 302 of the Sarbanes-Oxley Act of 2002.       |
|   |   |                                                                                                 |
| 32.1   |   | Certification of Chief Executive Officer of  Tipperary Corporation Pursuant to 18 U.S.C. §1350. |
|   |   |                                                                                                 |
| 32.2   |   | Certification of Chief Financial Officer of  Tipperary Corporation Pursuant to 18 U.S.C. §1350. |

 

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