----

**UNITED      STATES **

**SECURITIES      AND EXCHANGE COMMISSION **

**Washington,      D.C. 20549 **

**FORM        10-QSB/A **

**(Mark      One) **

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

**For      the quarterly period ended June 30, 2005 **

** ̈**
**TRANSITION      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT **

**For      the transition period from **
**            **
**      to **
**            **
** **

**333-64122      **

**(Commission      file number) **

**B**
**LAST**
**      E**
**NERGY**
**      S**
**ERVICES**
**,      I**
**NC**
**.      **

**(Exact      name of small business issuer as specified in its charter)**

|                                                                                                |                                                                   |
|-----------------------------------------------------------------------------------------------------|------------------------------------------------------------------------|
| **California**                                                                                      | **22-3755993**                                                         |
| **(State                or other jurisdiction of****incorporation                or organization)** | **(IRS                Employer****Identification                No.)** |

**14550      Torrey Chase Blvd, Suite 330 **

**Houston,      Texas 77014 **

**(Address      of principal executive offices) **

**(281)      453-2888 **

**(Issuer’s      telephone number) **

**Verdisys,      Inc. **

**(Former      name if changed since last report) **

**Transitional      Small Business Disclosure Format (check      one):    Yes  **
** ̈**
**          No  **
**x**
** **

----

**Explanatory        Note**

**Blast      Energy Services, Inc. **

**Index      **

|          |                                                                           |                     |
|---------------|--------------------------------------------------------------------------------|--------------------------|
|          |                                                                           | **Page****Number**  |
| PART I.  | FINANCIAL                INFORMATION                                           |                     |
|          |                                                                           |                     |
| Item 1.  | Financial                Statements                                            | 3                        |
|          |                                                                           |                     |
| Item 2.  | Management’s                Discussion and Analysis or Plan of Operation | 13                       |
|          |                                                                           |                     |
| Item 3.  | Controls                and Procedures                                         | 17                       |
|          |                                                                           |                     |
| Part II. | OTHER                INFORMATION                                               |                     |
|          |                                                                           |                     |
| Item 1.  | Legal                Proceedings                                               | 17                       |
|          |                                                                           |                     |
| Item 2.  | Unregistered                Sales of Equity Securities and Use of Proceeds     | 17                       |
|          |                                                                           |                     |
| Item 4.  | Submission                of Matters to a Vote of Security Holders             | 17                       |
|          |                                                                           |                     |
| Item 6.  | Exhibits                and Reports on Form 8-K                                | 18                       |
|          |                                                                           |
| SIGNATURES    | 20                                                                             |

----

**B**
**LAST**
**      E**
**NERGY**
**      S**
**ERVICES**
**,      I**
**NC**
**.      **

**(**
**FORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**PART      I. FINANCIAL INFORMATION **

**ITEM      1. Financial Statements **

|                                                                                                              |                     |
|-------------------------------------------------------------------------------------------------------------------|--------------------------|
|                                                                                                              | **Page****Number**  |
| Balance                Sheet as of June 30, 2005                                                                  | 4                        |
|                                                                                                              |                     |
| Statements                of Operations, for the three and six months ended June 30, 2005 and                2004 | 5                        |
|                                                                                                              |                     |
| Statements                of Cash Flows, for the six months ended June 30, 2005 and                2004           | 6                        |
|                                                                                                              |                     |
| Notes                to Financial Statements                                                                      | 7                        |

----

**BLAST      ENERGY SERVICES, INC. **

**(F**
**ORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**BALANCE      SHEET **

**(Unaudited)      **

**June      30, 2005 **

|                                                                                                                                                      |   |           |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-------------|
| **Assets**                                                                                                                                                |   | **(Restated)** |        |
|                                                                                                                                                      |   |           |        |
| **Current                  Assets:**                                                                                                                      |   |           |             |   |
| Cash                                                                                                                                                      |   | $              | 78,604      |   |
| Accounts                  receivable, net of allowance for doubtful accounts of                  $10,736                                                  |   |           | 123,512     |   |
| License                  Receivable                                                                                                                       |   |           | 800,000     |   |
| Other                  current assets                                                                                                                     |   |           | 76,573      |   |
|                                                                                                                                                      |   |           |             |   |
| Total                  Current Assets                                                                                                                     |   |           | 1,078,689   |   |
|                                                                                                                                                      |   |           |        |   |
| **Equipment,**                  net of accumulated depreciation of $72,393                                                                                |   |           | 132,351     |   |
| **Construction                  in progress**                                                                                                             |   |           | 590,335     |   |
| **Drilling                  equipment held for sale**                                                                                                     |   |           | 129,000     |   |
|                                                                                                                                                      |   |           |             |   |
| Total                  Assets                                                                                                                             |   | $              | 1,930,375   |   |
|                                                                                                                                                      |   |           |             |   |
| **Liabilities                  and Stockholders’ Equity**                                                                                           |   |           |             |   |
|                                                                                                                                                      |   |           |        |   |
| **Current                  Liabilities:**                                                                                                                 |   |           |             |   |
| Accounts                  payable                                                                                                                         |   | $              | 706,055     |   |
| Accrued                  expenses                                                                                                                         |   |           | 1,165,861   |   |
| Advances                  - related parties                                                                                                               |   |           | 249,500     |   |
| Deferred                  revenue                                                                                                                         |   |           | 246,052     |   |
| Customer                  deposits                                                                                                                        |   |           | 76,850      |   |
| Notes                  payable - related parties, net of unamortized discount of                  $32,864                                                 |   |           | 167,136     |   |
| Notes                  payable - other, net of unamortized discount of $34,743                                                                            |   |           | 365,257     |   |
|                                                                                                                                                      |   |           |             |   |
| Total                  Current Liabilities                                                                                                                |   |           | 2,976,711   |   |
|                                                                                                                                                      |   |           |        |   |
| **Long                  Term Liabilities:**                                                                                                               |   |           |             |   |
| Deferred                  revenue, less current portion                                                                                                   |   |           | 27,120      |   |
|                                                                                                                                                      |   |           |             |   |
| Total                  Liabilities                                                                                                                        |   |           | 3,003,831   |   |
|                                                                                                                                                      |   |           |             |   |
| **Commitments                  & Contingencies**                                                                                                      |   |           |             |   |
|                                                                                                                                                      |   |           |        |   |
| **Stockholders’                  Equity:**                                                                                                          |   |           |             |   |
| Common                  Stock, $.001 par value, 100,000,000 shares authorized; 36,791,727                  shares                  issued and outstanding |   |           | 36,792      |   |
| Additional                  paid-in capital                                                                                                               |   |           | 27,729,163  |   |
| Accumulated                  deficit                                                                                                                      |   |           | (28,839,411 | ) |
|                                                                                                                                                      |   |           |             |   |
| Total                  Stockholders’ Equity                                                                                                         |   |           | (1,073,456  | ) |
|                                                                                                                                                      |   |           |             |   |
| Total                  Liabilities and Stockholders’ Equity                                                                                         |   | $              | 1,930,375   |   |
|                                                                                                                                                      |   |           |             |   |

----

**BLAST      ENERGY SERVICES, INC. **

**(F**
**ORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**STATEMENTS      OF OPERATIONS **

**(Unaudited)      **

|                                                  |   |                                                                               |           |                                                                       |   |           |   |           |           |
|-------------------------------------------------------|--------|------------------------------------------------------------------------------------|----------------|----------------------------------------------------------------------------|--------|----------------|--------|----------------|----------------|
|                                                  |   | **For                  the Three Months Ended****June                  30,**  |           | **For                  the Six Months Ended****June                  30,** |   |
|                                                  |   | **2005**                                                                      |           | **2004**                                                              |   | **2005**  |   | **2004**  |           |
| **Revenue:**                                          |   |                                                                               | **(Restated)** |                                                                       |   |                |   |           | **(Restated)** |   |   |  |   |
| Satellite                  Communications             |   | $                                                                                  | 235,973        |                                                                       | $      | 162,519        |   | $              | 508,775        |   | $ | 254,269 |   |
| Downhole                  Services                    |   |                                                                               | 4,010          |                                                                       |   | 158,756        |   |           | 18,991         |   |   | 272,914 |   |
|                                                  |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| Total                  Revenue                        |   |                                                                               | 239,983        |                                                                       |   | 321,275        |   |           | 527,766        |   |   | 527,183 |   |
|                                                  |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| **Cost                  of Services Provided:**       |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| Satellite                  Communications             |   |                                                                               | 211,315        |                                                                       |   | 154,598        |   |           | 385,118        |   |   | 318,676 |   |
| Downhole                  Services                    |   |                                                                               | 118,068        |                                                                       |   | 167,816        |   |           | 237,552        |   |   | 423,078 |   |
|                                                  |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| Total                  Cost of Services Provided      |   |                                                                               | 329,383        |                                                                       |   | 322,414        |   |           | 622,670        |   |   | 741,754 |   |
|                                                  |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| **Gross                  Deficit**                    |   |                                                                               | (89,400        | )                                                                          |   | (1,139         | )      |           | (94,904        | ) |   | (214,571 | ) |
|                                                  |   |                                                                               |           |                                                                       |   |           |   |           |           |   |   |   |   |
| **Operating                  Expenses:**              |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| Selling,                  general and administrative  |   |                                                                               | 487,337        |                                                                       |   | 903,014        |   |           | 1,521,964      |   |   | 2,845,463 |   |
| Depreciation                  and amortization        |   |                                                                               | 20,219         |                                                                       |   | 136,108        |   |           | 49,488         |   |   | 265,931 |   |
| Bad                  debts                            |   |                                                                               | —        |                                                                       |   | —        |   |           | 10,000         |   |   | — |   |
|                                                  |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| **Operating                  Loss**                   |   |                                                                               | (596,956       | )                                                                          |   | (1,040,261     | )      |           | (1,676,356     | ) |   | (3,325,965 | ) |
|                                                  |   |                                                                               |           |                                                                       |   |           |   |           |           |   |   |   |   |
| **Other                  (Income) Expense:**          |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| Interest                  expense                     |   |                                                                               | 45,601         |                                                                       |   | 6,309          |   |           | 96,862         |   |   | 39,879 |   |
| Gain                  on sale                         |   |                                                                               | —        |                                                                       |   | —        |   |           | (971           | ) |   | — |   |
| Interest                  income                      |   |                                                                               | —        |                                                                       |   | (8             | )      |           | (4             | ) |   | (18 | ) |
|                                                  |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| Total                  other (income) expense         |   |                                                                               | 45,601         |                                                                       |   | 6,301          |   |           | 95,887         |   |   | 39,861 |   |
|                                                  |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| **Net                  Loss**                         |   | $                                                                                  | (642,557       | )                                                                          | $      | (1,046,562     | )      | $              | (1,772,243     | ) | $ | (3,365,826 | ) |
|                                                  |   |                                                                               |                |                                                                       |   |                |   |           |                |   |   |  |   |
| Basic                  and diluted net loss per share |   | $                                                                                  | (0.02          | )                                                                          | $      | (0.04          | )      | $              | (0.05          | ) | $ | (0.11 | ) |
| Weighted                  average shares outstanding  |   |                                                                               | 36,067,903     |                                                                       |   | 31,313,963     |   |           | 35,440,245     |   |   | 30,716,019 |   |

----

**BLAST      ENERGY SERVICES, INC. **

**(F**
**ORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**STATEMENTS      OF CASH FLOWS **

**(Unaudited)      **

|                                                                                                          |   |                                                                             |           |           |   |
|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|----------------|----------------|--------|
|                                                                                                          |   | **For                  the Six Months Ended****June                  30,**  |           |
|                                                                                                          |   | **2005**                                                                    |           | **2004**  |   |
| **Cash                  Flows From Operating Activities:**                                                    |   |                                                                             | **(Restated)** |           |   |  |   |
| Net                  loss                                                                                     |   | $                                                                                | (1,772,243     | )              | $      | (3,365,826 | ) |
| Adjustments                  to reconcile net loss to net cash used in operating                  activities: |   |                                                                             |                |           |   |  |   |
| Stock                  issued for services or litigation                                                      |   |                                                                             | 1,029,361      |           |   | 735,192 |   |
| Option                  and warrant expense                                                                   |   |                                                                             | 50,000         |           |   | 160,198 |   |
| Amortization                  of note discount                                                                |   |                                                                             | 64,837         |           |   | 4,397 |   |
| Depreciation                  and amortization                                                                |   |                                                                             | 49,488         |           |   | 265,931 |   |
| Gain                  on sale of property                                                                     |   |                                                                             | (971           | )              |   | — |   |
| Bad                  debts                                                                                    |   |                                                                             | 10,000         |           |   | — |   |
| Change                  in working capital items                                                              |   |                                                                             | 480,300        |           |   | 818,212 |   |
|                                                                                                          |   |                                                                             |                |           |   |  |   |
| Net                  Cash Used In Operating Activities                                                        |   |                                                                             | (89,228        | )              |   | (1,381,896 | ) |
|                                                                                                          |   |                                                                             |                |           |   |  |   |
| **Cash                  Flows From Investing Activities:**                                                    |   |                                                                             |                |           |   |  |   |
| Construction                  of equipment                                                                    |   |                                                                             | (590,335       | )              |   | — |   |
|                                                                                                          |   |                                                                             |                |           |   |  |   |
| Net                  Cash Used In Investing Activities                                                        |   |                                                                             | (590,335       | )              |   | — |   |
|                                                                                                          |   |                                                                             |                |           |   |  |   |
| **Cash                  Flows From Financing Activities:**                                                    |   |                                                                             |                |           |   |  |   |
| Proceeds                  from sale of stock                                                                  |   |                                                                             | 241,500        |           |   | 359,000 |   |
| Proceeds                  from exercise of options and warrants                                               |   |                                                                             | 250            |           |   | 81,217 |   |
| Advance                  on future financing                                                                  |   |                                                                             | 249,500        |           |   | — |   |
| Proceeds                  from notes payable to stockholders                                                  |   |                                                                             | —        |           |   | 235,000 |   |
| Payments                  on note payable related to license                                                  |   |                                                                             | —        |           |   | (500,000 | ) |
|                                                                                                          |   |                                                                             |                |           |   |  |   |
| Net                  Cash Provided By Financing Activities                                                    |   |                                                                             | 491,250        |           |   | 175,217 |   |
|                                                                                                          |   |                                                                             |                |           |   |  |   |
| Net                  change in cash                                                                           |   |                                                                             | (188,313       | )              |   | (1,206,679 | ) |
| Cash                  at beginning of period                                                                  |   |                                                                             | 266,917        |           |   | 1,373,627 |   |
|                                                                                                          |   |                                                                             |                |           |   |  |   |
| Cash                  at end of period                                                                        |   | $                                                                                | 78,604         |           | $      | 166,948 |   |
|                                                                                                          |   |                                                                             |                |           |   |  |   |
| **Non-Cash                  Transactions:**                                                                   |   |                                                                             |                |           |   |  |   |
| Conversion                  of liabilities to common stock                                                    |   | $                                                                                | 253,287        |           | $      | — |   |
| Exchange                  of equipment for customer deposit                                                   |   | $                                                                                | 175,000        |           | $      | — |   |
| Exchange                  of equipment for accounts payable                                                   |   | $                                                                                | 3,883          |           | $      | — |   |
| Conversion                  of notes payable and accrued interest to common stock                             |   | $                                                                                | 200,044        |           | $      | 1,184,808 |   |
| Discount                  on notes payable                                                                    |   | $                                                                                | —        |           | $      | 35,157 |   |

----

**BLAST      ENERGY SERVICES, INC. **

**(F**
**ORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**NOTES      TO FINANCIAL STATEMENTS **

**NOTE      1 - BASIS OF PRESENTATION **

*Reclassifications.      *

**NOTE      2 - GOING CONCERN **

**NOTE      3 - STOCK OPTIONS **

*Accounting      for Stock-Based Compensation*
*Accounting      for Stock Issued to Employees*
*Accounting      for Equity Investments That Are Issued to Non-Employees for Acquiring, or in      Conjunction with Selling Goods or Services*

----

**BLAST      ENERGY SERVICES, INC. **

**(F**
**ORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**NOTES      TO FINANCIAL STATEMENTS **

|                                                                                                      |   |                                                                                  |     |                                                                             |   |           |   |           |       |
|-----------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|----------|----------------------------------------------------------------------------------|--------|----------------|--------|----------------|------------|
|                                                                                                      |   | **For the Three Months Ended****June                  30,**  |     | **For                  the Six Months Ended****June                  30,**  |   |
|                                                                                                      |   | **2005**                                                                         |     | **2004**                                                                    |   | **2005**  |   | **2004**  |       |
| Net                  loss as reported                                                                     |   | $                                                                                     | (642,557 | )                                                                                | $      | (1,046,562     | )      | $              | (1,772,243 | ) | $ | (3,365,826 | ) |
| Less:                  stock based compensation determined under fair value based                  method |   |                                                                                  | (84,171  | )                                                                                |   | (379,610       | )      |           | (165,804   | ) |   | (912,145 | ) |
|                                                                                                      |   |                                                                                  |          |                                                                             |   |                |   |           |            |   |   |  |   |
| Pro                  forma net loss                                                                       |   | $                                                                                     | (726,728 | )                                                                                | $      | (1,426,172     | )      | $              | (1,938,047 | ) | $ | (4,277,971 | ) |
|                                                                                                      |   |                                                                                  |          |                                                                             |   |                |   |           |            |   |   |  |   |
| Basic                  and diluted net loss per common share:                                             |   |                                                                                  |          |                                                                             |   |                |   |           |            |   |   |  |   |
| As                  reported                                                                              |   | $                                                                                     | (.02     | )                                                                                | $      | (.04           | )      | $              | (0.05      | ) | $ | (.11 | ) |
| Pro                  forma                                                                                |   | $                                                                                     | (.02     | )                                                                                | $      | (.05           | )      | $              | (0.05      | ) | $ | (.13 | ) |

**NOTE      4 - EQUIPMENT & LATERAL DRILLING LICENSE **

----

**BLAST      ENERGY SERVICES, INC. **

**(F**
**ORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**NOTES      TO FINANCIAL STATEMENTS **

**NOTE      5 - ACCRUED EXPENSES **

|                                                    |   |   |       |
|---------------------------------------------------------|--------|--------|------------|
| **Description**                                         |   |   | **Amount** |   |
| Gryphon                stock registration delay penalty |   | $      | 500,000    |   |
| Accrued                payroll                          |   |   | 416,027    |   |
| Litigation                settlement                    |   |   | 55,000     |   |
| Director                fees                            |   |   | 76,500     |   |
| Interest                                                |   |   | 58,824     |   |
| Other                                                   |   |   | 59,510     |   |
|                                                    |   |   |            |   |
|                                                    |   | $      | 1,165,861  |   |

**NOTE      6 - ADVANCES - RELATED PARTIES **

**NOTE      7 - DEFERRED REVENUE **

**NOTE      8 - COMMITMENT **

**NOTE      9 - STOCKHOLDERS EQUITY **

----

**BLAST      ENERGY SERVICES, INC. **

**(F**
**ORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**NOTES      TO FINANCIAL STATEMENTS **

**NOTE      10 - LITIGATION **

----

**BLAST      ENERGY SERVICES, INC. **

**(F**
**ORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**NOTES      TO FINANCIAL STATEMENTS **

**NOTE      11 - BUSINESS SEGMENTS **

|                                            |   |                                                                                |     |                                                                         |   |           |   |           |       |
|-------------------------------------------------|--------|-------------------------------------------------------------------------------------|----------|------------------------------------------------------------------------------|--------|----------------|--------|----------------|------------|
|                                            |   | **For the Three Months Ended****June                30,**  |     | **For                the Six Months Ended****June                30,**  |   |
|                                            |   | **2005**                                                                       |     | **2004**                                                                |   | **2005**  |   | **2004**  |       |
| Revenues                from external customers |   |                                                                                |          |                                                                         |   |                |   |           |            |   |   |  |   |
| Downhole                services                |   | $                                                                                   | 4,010    |                                                                         | $      | 158,756        |   | $              | 18,991     |   | $ | 272,914 |   |
| Satellite                communications         |   |                                                                                | 235,973  |                                                                         |   | 162,519        |   |           | 508,775    |   |   | 254,269 |   |
|                                            |   |                                                                                |          |                                                                         |   |                |   |           |            |   |   |  |   |
|                                            |   | $                                                                                   | 239,983  |                                                                         | $      | 321,275        |   | $              | 527,766    |   | $ | 527,183 |   |
|                                            |   |                                                                                |          |                                                                         |   |                |   |           |            |   |   |  |   |
| Operating                profit (loss) 1        |   |                                                                                |          |                                                                         |   |                |   |           |            |   |   |  |   |
| Downhole                services                |   | $                                                                                   | (223,152 | )                                                                            | $      | (158,977       | )      | $              | (456,664   | ) | $ | (1,165,096 | ) |
| Satellite                communications         |   |                                                                                | 23,880   |                                                                         |   | 3,663          |   |           | 72,097     |   |   | (69,665 | ) |
| Corporate                                       |   |                                                                                | (477,969 | )                                                                            |   | (884,947       | )      |           | (1,460,953 | ) |   | (2,091,204 | ) |
|                                            |   |                                                                                |          |                                                                         |   |                |   |           |            |   |   |  |   |
|                                            |   | $                                                                                   | (677,241 | )                                                                            | $      | (1,040,261     | )      | $              | (1,845,520 | ) | $ | (3,325,965 | ) |

**NOTE      12 - SUBSEQUENT EVENTS **

----

**BLAST      ENERGY SERVICES, INC. **

**(F**
**ORMERLY**
**      V**
**ERDISYS**
**,      I**
**NC**
**.)      **

**NOTES      TO FINANCIAL STATEMENTS **

**NOTE        13 - RESTATEMENT**

|                                             |   | **As                  reported** |      | **Adjustments** |   | **As                  restated** |   |
|--------------------------------------------------|--------|----------------------------------|-----------|-----------------|--------|----------------------------------|--------|
|                                             |   |                             |      |            |   |                             |   |
| License                  asset                   |   | $                                | 4,525,000 |            | $      | (4,525,000                       | )      | $ | - |   |
| Accumulated                  amortization        |   |                             | (717,790  | )               |   | 717,790                          |   |   | - |   |
| Net                  Book Value                  |   |                             | 3,807,210 |            |   | (3,807,210                       | )      |   | - |   |
|                                             |   |                             |      |            |   |                             |   |   |   |   |
| License                  receivable              |   |                             | -         |            |   | 800,000                          |   |   | 800,000 |   |
| Depreciation                  & amortization |   |                             | 102,410   |            |   | (75,228                          | )      |   | 27,183 |   |

----

**Item      2. Management’s Discussion and Analysis of Financial Condition and Plan of      Operations **

**Forward-Looking      Statements **

**Three      Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004**

*Satellite      Communications*

*Downhole      Services*

----

*Selling, General and Administrative*

|                                      |   |                                                                                |    |                       |   |    |   |
|-------------------------------------------|--------|-------------------------------------------------------------------------------------|---------|----------------------------|--------|---------|--------|
|                                      |   | **For The Three Months Ended****June                30,**  |    | **Increase****(Decrease)** |   |
|                                      |   | **2005**                                                                       |    | **2004**              |   |
| Payroll                and related costs  |   | $                                                                                   | 141,594 |                       | $      | 211,685 |   | $ | (70,091 | ) |
| Option                and warrant expense |   |                                                                                | 25,000  |                       |   | 69,348  |   |   | (44,348 | ) |
| Legal                fees                 |   |                                                                                | 124,190 |                       |   | 132,433 |   |   | (8,243 | ) |
| External                services          |   |                                                                                | 90,321  |                       |   | 135,123 |   |   | (44,802 | ) |
| Insurance                                 |   |                                                                                | 49,956  |                       |   | 113,973 |   |   | (64,017 | ) |
| Liquidated                damages         |   |                                                                                | — |                       |   | 150,000 |   |   | (150,000 | ) |
| Travel                & entertainment |   |                                                                                | 12,142  |                       |   | 30,364  |   |   | (18,222 | ) |
| Office                rent                |   |                                                                                | 8,401   |                       |   | 6,866   |   |   | 1,535 |   |
| Communications                            |   |                                                                                | 3,691   |                       |   | 16,454  |   |   | (12,763 | ) |
| Miscellaneous                             |   |                                                                                | 32,042  |                       |   | 36,768  |   |   | (4,726 | ) |
|                                      |   |                                                                                |         |                       |   |         |   |   |  |   |
|                                      |   | $                                                                                   | 487,337 |                       | $      | 903,014 |   | $ | (415,677 | ) |

*Net      Loss*

**Six      Months Ended June 30, 2005 Compared to the Six Months Ended June 30, 2004**

*Satellite      Communications*
* *

*Downhole      Services*
* *

----

*Selling,      General and Administrative*
* *

|                                      |   |                                                                         |      |                       |   |      |   |
|-------------------------------------------|--------|------------------------------------------------------------------------------|-----------|----------------------------|--------|-----------|--------|
|                                      |   | **For                The Six Months Ended****June                30,**  |      | **Increase****(Decrease)** |   |
|                                      |   | **2005**                                                                |      | **2004**              |   |
| Payroll                and related costs  |   | $                                                                            | 425,762   |                       | $      | 473,222   |   | $ | (47,460 | ) |
| Option                and warrant expense |   |                                                                         | 50,000    |                       |   | 149,447   |   |   | (99,447 | ) |
| License                fee                |   |                                                                         | —   |                       |   | 735,192   |   |   | (735,192 | ) |
| Legal                fees                 |   |                                                                         | 181,773   |                       |   | 263,177   |   |   | (81,404 | ) |
| External                services          |   |                                                                         | 191,565   |                       |   | 376,967   |   |   | (185,402 | ) |
| Insurance                                 |   |                                                                         | 91,741    |                       |   | 331,748   |   |   | (240,007 | ) |
| Liquidated                damages         |   |                                                                         | —   |                       |   | 400,000   |   |   | (400,000 | ) |
| Travel                & entertainment |   |                                                                         | 18,441    |                       |   | 79,016    |   |   | (60,575 | ) |
| Office                rent                |   |                                                                         | 17,044    |                       |   | 43,632    |   |   | (26,588 | ) |
| Communications                            |   |                                                                         | 5,293     |                       |   | 35,710    |   |   | (30,417 | ) |
| Class                action settlement    |   |                                                                         | 503,500   |                       |   | —   |   |   | 503,500 |   |
| Miscellaneous                             |   |                                                                         | 36,845    |                       |   | (42,648   | )      |   | 79,493 |   |
|                                      |   |                                                                         |           |                       |   |           |   |   |  |   |
|                                      |   | $                                                                            | 1,521,964 |                       | $      | 2,845,463 |   | $ | (1,323,499 | ) |

*Net      Loss*
* *

**Liquidity      and Capital Resources **

----

** **

**Subsequent      Events**

----

**Item      3. Controls and Procedures **

**Part      II. OTHER INFORMATION **

**Item      1. Legal Proceedings **

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

**Item      4. Submission of Matters to a Vote of Security Holders **

|                                                                                                                                                  |          |                              |              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|-----------------------------------|-------------------|
|                                                                                                                                                  | **YES**  | **WITHHELD AUTHORITY**  |
| *Proposal                One*                -                Election of Directors (voted upon as a block):                                          |          |                              |              |
| John                R. Block,                                                                                                                         | 21,699,672    | 502,405                           |
| Roger                P. (Pat) Herbert,                                                                                                                | 21,699,672    | 502,405                           |
| Joseph                J. Penbera, Ph.D.,                                                                                                              | 21,699,672    | 502,405                           |
| Frederick                R. Ruiz,                                                                                                                     | 21,699,672    | 502,405                           |
| O.                James Woodward III                                                                                                                  | 21,699,672    | 502,405                           |
|                                                                                                                                                  |          |                              |              |
|                                                                                                                                                  | **YES**  | **NO**                       | **ABSTAIN**  |
|                                                                                                                                                  |          |                              |              |
| *Proposal                Two*                -                Increase the number of authorized shares of common stock to                100,000,000: | 20,629,356    | 1,111,101                         | 461,620           |
|                                                                                                                                                  |          |                              |              |
| *Proposal                Three*                -                Change the Company’s name to Blast Energy Services, Inc:                        | 20,667,840    | 1,090,617                         | 443,620           |
|                                                                                                                                                  |          |                              |              |
| *Proposal                Four*                -                Approval of Independent Public Accountant (Malone & Bailey,                PC):    | 20,669,173    | 15,333                            | 1,517,571         |

----

**Item      6. Exhibits and Reports on Form 8-K **

|                         |                                                                                                                                                 |
|------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| June 10, 2005      | Press                Releases - Voting results of annual meeting of shareholders and new                trading symbol.                              |
|                         |                                                                                                                                                 |
| April                7, 2005 | Press                Release - Closing of Edge Capital Group, Inc. lawsuit settlement                and                receipt of $375,000 in cash. |

|                                     |                                                                                                                                                                                                                                                                                                                          |
|------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Exhibits**                             |                                                                                                                                                                                                                                                                                                                          |
|     4.1    | $800,000                Secured Promissory Note dated July 15, 2005 by and among Blast Energy                Services, Inc. and Berg McAfee Companies, LLC.Filed                July 26, 2005 with the SEC, Report on Form 8-K                                                                                                |
|                                     |                                                                                                                                                                                                                                                                                                                          |
|     4.2    | $200,000                Secured Subordinated Promissory Note dated July 15, 2005 by and among                Blast Energy Services, Inc. and Berg McAfee Companies, LLC.Filed                July 26, 2005 with the SEC, Report on Form 8-K                                                                                   |
|                                     |                                                                                                                                                                                                                                                                                                                          |
|     10.1   | Settlement                Agreement and Mutual Release dated January 19, 2005 by and among                Verdisys,                Inc., Eric McAfee, Edge Capital Group, Inc. and certain entities                affiliated with Robert Frazier, Sr.;Filed                February 4, 2005 with the SEC, Report on Form 8-K |
|                                     |                                                                                                                                                                                                                                                                                                                          |
|     10.2   | Assignment                of License Agreement dated March 8, 2005 by and among Verdisys, Inc.                and                Maxim TEP, Inc.;Filed                March 14, 2005 with the SEC, Report on Form 8-K                                                                                                         |
|                                     |                                                                                                                                                                                                                                                                                                                          |
|     10.3   | License                Agreement dated March 15, 2005, by and among Edge Capital Group,                Inc. or                its assignee and Verdisys, Inc.Filed                May 5, 2005 with the SEC, Report on Form 10-QSB.                                                                                            |
|                                     |                                                                                                                                                                                                                                                                                                                          |
|     10.4   | Abrasive                Fluid Jet Rig Construction Agreement dated March 17, 2005, by and                among                Verdisys, Inc. and Alberta Energy Holding Inc.Filed                May 5, 2005 with the SEC, Report on Form 10-QSB.                                                                             |
|                                     |                                                                                                                                                                                                                                                                                                                          |
|     10.5   | Drilling                Rig Development and Management Agreement dated April 12, 2005, by                and                between Verdisys, Inc. and Advanced Drilling Services, LLCFiled                May 5, 2005 with the SEC, Report on Form 10-QSB.                                                                   |
|                                     |                                                                                                                                                                                                                                                                                                                          |
| 10.6                           | Service                Proposal Apache Corporation and Verdisys, Inc. dated May 26,                2005.                                                                                                                                                                                                                      |
|                                     |                                                                                                                                                                                                                                                                                                                          |
|     10.7   | First                Amendment to the Assignment of License Agreement dated July 18, 2005                by                and among Blast Energy Services, Inc. and Maxim TEP, Inc.Filed                July 26, 2005 with the SEC, Report on Form 8-K                                                                       |
|                                     |                                                                                                                                                                                                                                                                                                                          |
|     10.8   | Second                Amendment to the Assignment of License Agreement dated July 21, 2005                by                and among Blast Energy Services, Inc. and Maxim TEP, Inc.Filed                July 26, 2005 with the SEC, Report on Form 8-K                                                                      |
|                                     |                                                                                                                                                                                                                                                                                                                          |
|     10.9   | Third                Amendment to the Assignment of License Agreement dated July 25, 2005                by                and among Blast Energy Services, Inc. and Maxim TEP, Inc.Filed                July 26, 2005 with the SEC, Report on Form 8-K                                                                       |
|                                     |                                                                                                                                                                                                                                                                                                                          |
| 10.10                                    | Fourth                Amendment to the Assignment of License Agreement dated July 29, 2005                by                and among Blast Energy Services, Inc. and Maxim TEP,                Inc.                                                                                                                          |
|                                     |                                                                                                                                                                                                                                                                                                                          |
| 10.11                                    | Fifth                Amendment to the Assignment of License Agreement dated August 5,                2005 by                and among Blast Energy Services, Inc. and Maxim TEP,                Inc.                                                                                                                          |
|                                     |                                                                                                                                                                                                                                                                                                                          |
| 10.12                                    | Letter                of Intent dated August 5, 2005 by and between Blast Energy Services,                Inc.                and RadTech North America.                                                                                                                                                                      |
|                                     |                                                                                                                                                                                                                                                                                                                          |
| *31.1                          | Certification                of Principal Executive Officer pursuant to Section 302                                                                                                                                                                                                                                           |
|                                     |                                                                                                                                                                                                                                                                                                                          |

----

| *31.2   | Certification                of Principal Accounting Officer pursuant to Section 302                 |
|-------------------|------------------------------------------------------------------------------------------------------|
|              |                                                                                                 |
| *32.1   | Certification                of Principal Executive Officer pursuant to Section 1350                 |
|              |                                                                                                 |
| *32.2   | Certification                of Principal Accounting Officer pursuant to Section                1350 |

----

**SIGNATURES      **

|                                |                              |                                        |
|-------------------------------------|-----------------------------------|---------------------------------------------|
|                                | **Verdisys,                Inc.** |
|                                |                              |                                        |
|                                | By:                               | /s/                David M. Adams, COO      |
|                                |                              | David                M. Adams               |
|                                |                              | Chief                Operating Officer      |
|                                |                              | Principal                Executive Officer  |
| Date:                March 29, 2006 |                              |                                        |
|                                |                              |                                        |
|                                | By:                               | /s/                John O’Keefe, CFO  |
|                                |                              | John                O’Keefe           |
|                                |                              | Chief                Financial Officer      |
|                                |                              | Principal                Accounting Officer |
| Date:                March 29, 2006 |                              |                                        |

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