----

**UNITED        STATES **

**SECURITIES        AND EXCHANGE COMMISSION **

**Washington,        D.C. 20549 **

**FORM        10-QSB **

**(Mark        One) **

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

**For        the quarterly period ended March 31, 2006 **

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

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

**333-64122        **

**(Commission        file number) **

**Blast        Energy Services, Inc. **

**(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) **

**(Former        name, former address and former fiscal year, if changed since last report)        **

**    Yes  **
**x**
**    No  **
** ̈**

**    Yes   **
** ̈        **
**No        **
**x**
** **

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

----

**Blast        Energy Services, Inc. **

**Index        **

|                      |                                                                                                                      |                             |
|---------------------------|---------------------------------------------------------------------------------------------------------------------------|----------------------------------|
|                      |                                                                                                                      | **Page****Number**               |
| PART I.              | FINANCIAL                  INFORMATION                                                                                    |                             |
|                      |                                                                                                                      |                             |
| Item                  1.  | Financial                  Statements                                                                                     | 3                                |
|                      |                                                                                                                      |                             |
| Item                  2.  | Management’s                  Discussion and Analysis of Financial Condition and Plan of                  Operation | 10                               |
|                      |                                                                                                                      |                             |
| Item                  3.  | Controls                  and Procedures                                                                                  | 12                               |
|                      |                                                                                                                      |                             |
| Part                  II. | OTHER                  INFORMATION                                                                                        |                             |
|                      |                                                                                                                      |                             |
| Item                  1.  | Legal                  Proceedings                                                                                        | 12                               |
|                      |                                                                                                                      |                             |
| Item                  2.  | Unregistered                  Sales of Equity Securities and Use of Proceeds                                              | 12                               |
|                      |                                                                                                                      |                             |
| Item                  4.  | Submission                  of Matters to a Vote of Security Holders                                                      |                     13 |
|                      |                                                                                                                      |                             |
| Item 6.              | Exhibits                  and Reports on Form 8-K                                                                         | 13                               |
|                      |                                                                                                                      |
| SIGNATURES                | 14                                                                                                                        |

----

**Blast        Energy Services, Inc. **

**PART        I. FINANCIAL INFORMATION **

**ITEM        1. Financial Statements **

|                                                                                                           |                     |
|----------------------------------------------------------------------------------------------------------------|--------------------------|
|                                                                                                           | **Page****Number**  |
| Balance                  Sheets as of March 31, 2006 and December 31, 2005                                     | 4                        |
|                                                                                                           |                     |
| Statements                  of Operations, for the three months ended March 31, 2006 and                  2005 | 5                        |
|                                                                                                           |                     |
| Statements                  of Cash Flow, for the three months ended March 31, 2006 and                  2005  | 6                        |
|                                                                                                           |                     |
| Notes                  to Financial Statements                                                                 | 7                        |

----

**BLAST        ENERGY SERVICES, INC. **

**BALANCE        SHEETS **

|                                                                                                                                                    |   | **March                  31,****2006** |        | **December                  31, 2005** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|-------------|----------------------------------------|--------|
| **Assets**                                                                                                                                              |   | (Unaudited)                            |        |                                   |   |
| Current                  Assets                                                                                                                         |   |                                   |        |                                   |   |   |   |
| Cash                                                                                                                                                    |   | $                                      | 325,871     |                                   | $      | 835,978 |   |
| Accounts                  Receivable, net of allowance for doubtful accounts of $10,290 and                  $10,290                                    |   |                                   | 123,333     |                                   |   | 156,437 |   |
| Other                  Assets                                                                                                                           |   |                                   | 199,303     |                                   |   | 231,413 |   |
| Current                  Assets                                                                                                                         |   |                                   | 648,507     |                                   |   | 1,223,828 |   |
|                                                                                                                                                    |   |                                   |        |                                   |   |   |   |
| Intangible                  assets, net of $48,750 and $27,857 accumulated                  amortization                                                |   |                                   | 1,121,250   |                                   |   | 1,142,143 |   |
| Equipment,                  net of $28,236 and $22,416 of accumulated depreciation                                                                      |   |                                   | 1,039,824   |                                   |   | 977,269 |   |
|                                                                                                                                                    |   |                                   |        |                                   |   |   |   |
| Total                  Assets                                                                                                                           |   | $                                      | 2,809,581   |                                   | $      | 3,343,240 |   |
|                                                                                                                                                    |   |                                   |        |                                   |   |   |   |
| **Liabilities                  and Stockholder’s Deficit**                                                                                        |   |                                   |        |                                   |   |   |   |
| Current                  Liabilities                                                                                                                    |   |                                   |        |                                   |   |   |   |
| Accounts                  payable                                                                                                                       |   | $                                      | 555,676     |                                   | $      | 622,396 |   |
| Accrued                  expenses                                                                                                                       |   |                                   | 524,201     |                                   |   | 533,842 |   |
| Deferred                  revenue                                                                                                                       |   |                                   | 99,417      |                                   |   | 131,425 |   |
| Notes                  payable-related parties, net of unamortized discount of $5,926                  and                  $14,814                     |   |                                   | 194,074     |                                   |   | 185,186 |   |
| Notes                  payable-other                                                                                                                    |   |                                   | 42,500      |                                   |   | 395,000 |   |
| Total                  Current Liabilities                                                                                                              |   |                                   | 1,415,868   |                                   |   | 1,867,849 |   |
|                                                                                                                                                    |   |                                   |        |                                   |   |   |   |
| Long                  Term Liabilities                                                                                                                  |   |                                   |        |                                   |   |   |   |
| Advances-related                  parties                                                                                                               |   |                                   | 1,000,000   |                                   |   | 1,000,000 |   |
| Note                  payable-other                                                                                                                     |   |                                   | 500,000     |                                   |   | 500,000 |   |
| Deferred                  revenue, less current portion                                                                                                 |   |                                   | 6,780       |                                   |   | 6,780 |   |
| Total                  Liabilities                                                                                                                      |   |                                   | 2,922,648   |                                   |   | 3,374,629 |   |
|                                                                                                                                                    |   |                                   |        |                                   |   |   |   |
| Commitments                  and Contingencies                                                                                                          |   |                                   | -           |                                   |   | - |   |
|                                                                                                                                                    |   |                                   |        |                                   |   |   |   |
| Stockholders’                  Deficit                                                                                                            |   |                                   |        |                                   |   |   |   |
| Common                  stock, $.001 par value, 100,000,000 shares authorized, 43,054,507                  and 42,060,477 shares issued and outstanding |   |                                   | 43,054      |                                   |   | 42,060 |   |
| Additional                  paid in capital                                                                                                             |   |                                   | 30,741,083  |                                   |   | 29,855,409 |   |
| Accumulated                  deficit                                                                                                                    |   |                                   | (30,897,204 | )                                      |   | (29,928,859 | ) |
|                                                                                                                                                    |   |                                   |        |                                   |   |   |   |
| Total                  Stockholders’ Deficit                                                                                                      |   |                                   | (113,067    | )                                      |   | (31,390 | ) |
|                                                                                                                                                    |   |                                   |        |                                   |   |   |   |
| Total                  Liabilities and Stockholders’ Deficit                                                                                      |   | $                                      | 2,809,581   |                                   | $      | 3,343,240 |   |

----

**BLAST          ENERGY SERVICES, INC.**

**STATEMENTS          OF OPERATIONS**

** **

|                                                   |   | **For                    the Three Months Ended****March                    31,** |       |
|--------------------------------------------------------|--------|-----------------------------------------------------------------------------------|------------|
|                                                   |   | **2006**                                                                          |       | **2005** |   |
|                                                   |   | **(Unaudited)**                                                                   |       | **(Restated)** |   |
| Revenue:                                               |   |                                                                              |       |   |   |   |   |
| Satellite                    Communications            |   | $                                                                                 | 291,961    |   | $ | 272,802 |   |
| Down-hole                    Solutions                 |   |                                                                              | -          |   |   | 14,981 |   |
| Total                    Revenue                       |   |                                                                              | 291,961    |   |   | 287,783 |   |
|                                                   |   |                                                                              |       |   |   |   |   |
| Cost                    of Services Provided:          |   |                                                                              |       |   |   |   |   |
| Satellite                    Communications            |   |                                                                              | 205,143    |   |   | 173,803 |   |
| Down-hole                    Solutions                 |   |                                                                              | 132,246    |   |   | 119,484 |   |
| Total                    Cost of Services Provided     |   |                                                                              | 337,389    |   |   | 293,287 |   |
|                                                   |   |                                                                              |       |   |   |   |   |
| Gross                    Margin (Deficit)              |   |                                                                              | (45,428    | ) |   | (5,504 | ) |
|                                                   |   |                                                                              |       |   |   |   |   |
| Operating                    Expenses:                 |   |                                                                              |       |   |   |   |   |
| Selling,                    general and administrative |   |                                                                              | 712,861    |   |   | 1,034,627 |   |
| Depreciation                    and amortization       |   |                                                                              | 26,713     |   |   | 29,810 |   |
| Bad                    debts                           |   |                                                                              | -          |   |   | 10,000 |   |
| Operating                    loss                      |   |                                                                              | (785,002   | ) |   | (1,079,941 | ) |
|                                                   |   |                                                                              |       |   |   |   |   |
| Other                    (Income) Expense:             |   |                                                                              |       |   |   | - |   |
| Other                    income                        |   |                                                                              | (42,533    | ) |   | - |   |
| Interest                    expense                    |   |                                                                              | 43,877     |   |   | 51,261 |   |
| Loss                    on extinguishment of debt      |   |                                                                              | 182,000    |   |   | - |   |
| Other                    Income                        |   |                                                                              | -          |   |   | (971 | ) |
| Interest                    income                     |   |                                                                              | -          |   |   | (4 | ) |
| Total                    other (income) expense        |   |                                                                              | 183,344    |   |   | 50,286 |   |
|                                                   |   |                                                                              |       |   |   |   |   |
| Net                    Loss                            |   | $                                                                                 | (968,346   | ) | $ | (1,130,227 | ) |
|                                                   |   |                                                                              |       |   |   |   |   |
| Basic                    and diluted loss per share    |   | $                                                                                 | (0.02      | ) | $ | (0.03 | ) |
| Weighted                    average shares outstanding |   |                                                                              | 42,695,063 |   |   | 34,404,860 |   |

----

**BLAST          ENERGY SERVICES, INC. **

**STATEMENTS          OF CASH FLOWS **

|                                                                                                                  |   | **For                      the Three Months Ended****March                      31,** |     |
|-----------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|----------|
|                                                                                                                  |   | **2006**                                                                         |     | **2005** |   |
|                                                                                                                  |   | **(Unaudited)**                                                                       |     | **(Restated)** |   |
| **Cash                      Flows From Operating Activities:**                                                        |   |                                                                                  |          |   |   |  |   |
| Net                      loss                                                                                         |   | $                                                                                     | (968,346 | ) | $ | (1,130,227 | ) |
| Adjustments                      to reconcile net loss to net cash used in operating                      activities: |   |                                                                                  |          |   |   |  |   |
| Stock                      issued for services or litigation                                                          |   |                                                                                  | 202,500  |   |   | 962,395 |   |
| Option                      and warrant expense                                                                       |   |                                                                                  | 93,458   |   |   | 25,000 |   |
| Amortization                      of note discount                                                                    |   |                                                                                  | 8,888    |   |   | 34,488 |   |
| Depreciation                      and amortization                                                                    |   |                                                                                  | 26,713   |   |   | 29,810 |   |
| Loss                      on extinguishment of debt                                                                   |   |                                                                                  | 182,000  |   |   | (971 | ) |
| Bad                      debts                                                                                        |   |                                                                                  | -        |   |   | 10,000 |   |
| Change                      in working capital items                                                                  |   |                                                                                  | (59,155  | ) |   | (19,306 | ) |
|                                                                                                                  |   |                                                                                  |          |   |   |  |   |
| Net                      Cash Used In Operating Activities                                                            |   |                                                                                  | (513,942 | ) |   | (88,811 | ) |
|                                                                                                                  |   |                                                                                  |          |   |   |  |   |
| **Cash                      Flows From Investing Activities:**                                                        |   |                                                                                  |          |   |   |  |   |
| Construction                      of equipment                                                                        |   |                                                                                  | (46,490  | ) |   | (250,000 | ) |
| Purchase                      of property and equipment                                                               |   |                                                                                  | (21,885  | ) |   | - |   |
|                                                                                                                  |   |                                                                                  |          |   |   |  |   |
| Net                      Cash Used In Investing Activities                                                            |   |                                                                                  | (68,375  | ) |   | (250,000 | ) |
|                                                                                                                  |   |                                                                                  |          |   |   |  |   |
| **Cash                      Flows From Financing Activities:**                                                        |   |                                                                                  |          |   |   |  |   |
| Proceeds                      from sale of stock                                                                      |   |                                                                                  | -        |   |   | 241,500 |   |
| Proceeds                      from exercise of options and warrants                                                   |   |                                                                                  | 74,710   |   |   | 250 |   |
| Payments                      on note payable                                                                         |   |                                                                                  | (2,500   | ) |   | - |   |
|                                                                                                                  |   |                                                                                  |          |   |   |  |   |
| Net                      Cash Provided By Financing Activities                                                        |   |                                                                                  | 72,210   |   |   | 241,750 |   |
|                                                                                                                  |   |                                                                                  |          |   |   |  |   |
| Net                      change in cash                                                                               |   |                                                                                  | (510,107 | ) |   | (97,061 | ) |
| Cash                      at beginning of period                                                                      |   |                                                                                  | 835,978  |   |   | 266,917 |   |
|                                                                                                                  |   |                                                                                  |          |   |   |  |   |
| Cash                      at end of period                                                                            |   | $                                                                                     | 325,871  |   | $ | 169,856 |   |
|                                                                                                                  |   |                                                                                  |          |   |   |  |   |
| **Non-Cash                      Transactions:**                                                                       |   |                                                                                  |          |   |   |  |   |
| Conversion                      of notes payable to common stock                                                      |   | $                                                                                     | 350,000  |   | $ | - |   |
| Shares                      issued for interest                                                                       |   | $                                                                                     | 11,000   |   | $ | - |   |
| Shares                      issued for extinguishment of debt                                                         |   | $                                                                                     | 182,000  |   | $ | - |   |
| Conversion                      of liabilities to common stock                                                        |   | $                                                                                     | -        |   | $ | 192,737 |   |
| Exchange                      of equipment for customer deposit                                                       |   | $                                                                                     | -        |   | $ | 175,000 |   |
| Exchange                      of equipment for accounts payable                                                       |   | $                                                                                     | -        |   | $ | 3,883 |   |

----

**BLAST        ENERGY SERVICES, INC.**

**NOTES        TO FINANCIAL STATEMENTS**

**NOTE        1 - BASIS OF PRESENTATION**

*Reclassifications.*
* *

**NOTE        2 - GOING CONCERN**

**NOTE        3 - STOCK OPTIONS AND WARRANTS **

|                                                          | **For                  the Three Months Ended March 31, 2005** |
|---------------------------------------------------------------|----------------------------------------------------------------|
| Net                  loss as reported                         | $                  (1,130,227)                                 |
| Less:                  stock based compensation determined    |                                                           |
| Under                  fair value based method                | (81,569)                                                       |
| Pro                  forma net loss                           | $                  (1,211,796)                                 |
| Basic                  and diluted net loss per common share: |                                                           |
| As                  reported                                  | $                  (.03)                                       |
| Pro                  forma                                    | $                  (.04)                                       |

----

**NOTE        4 - EQUIPMENT **

**NOTE        5 - INTELLECTUAL PROPERTY (“IP”)**

**NOTE        6 - STOCKHOLDERS EQUITY**

----

**NOTE        7 - NOTES PAYABLE **

**NOTE        8 - BUSINESS SEGMENTS**

|                                              |   |                                                                                         |     |     |   |
|---------------------------------------------------|--------|----------------------------------------------------------------------------------------------|----------|----------|--------|
|                                              |   | **For the Three Months Ended****March                   31,**  |     |
|                                              |   | **2006**                                                                                     |     | **2005** |   |
| Revenues                  from external customers |   |                                                                                         |     |     |   |   |   |
| Satellite                  communications         |   | $                                                                                            | 291,961  |     | $      | 272,802 |   |
| Down-hole                  services               |   |                                                                                         | -        |     |   | 14,981 |   |
|                                              |   |                                                                                         |     |     |   |   |   |
|                                              |   | $                                                                                            | 291,961  |     | $      | 287,783 |   |
|                                              |   |                                                                                         |     |     |   |   |   |
| Operating                  profit (loss) 1        |   |                                                                                         |     |     |   |   |   |
| Satellite                  communications         |   | $                                                                                            | 80,743   |     | $      | 48,217 |   |
| Down-hole                  services               |   |                                                                                         | (180,319 | )        |   | (233,512 | ) |
| Corporate                                         |   |                                                                                         | (685,426 | )        |   | (894,646 | ) |
|                                              |   |                                                                                         |     |     |   |   |   |
|                                              |   | $                                                                                            | (785,002 | )        | $      | (1,079,941 | ) |

**NOTE        9 - RESTATEMENT **

**NOTE        10 - SUBSEQUENT EVENTS**

----

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

**Forward-Looking        Statements **

**Three        Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005        **

*Satellite        Communications Services*
* *

*Down-hole        Solutions*
* *

----

*Selling,        General and Administrative*
* *

|                                              |   |                                                                                |   |                       |   |   |   |
|---------------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|----------------------------|--------|--------|--------|
|                                              |   | **For                  The Three Months Ended****March                  31,**  |   | **Increase****(Decrease)** |   |
|                                              |   | **2006**                                                                       |   | **2005**                   |   |
| Payroll                  and related costs        |   | $                                                                                   | 106    |                       | $      | 284    |   | $ | (178 | ) |
|                                              |   |                                                                                |   |                       |   |   |   |   |   |   |
| Option                  and warrant expense       |   |                                                                                | 93     |                       |   | 25     |   |   | 68 |   |
|                                              |   |                                                                                |   |                       |   |   |   |   |   |   |
| Legal                  & settlement costs     |   |                                                                                | 70     |                       |   | 561    |   |   | (491 | ) |
|                                              |   |                                                                                |   |                       |   |   |   |   |   |   |
| External                  services                |   |                                                                                | 315    |                       |   | 101    |   |   | 214 |   |
|                                              |   |                                                                                |   |                       |   |   |   |   |   |   |
| Insurance                                         |   |                                                                                | 54     |                       |   | 42     |   |   | 12 |   |
|                                              |   |                                                                                |   |                       |   |   |   |   |   |   |
| Travel                  & entertainment       |   |                                                                                | 47     |                       |   | 6      |   |   | 40 |   |
|                                              |   |                                                                                |   |                       |   |   |   |   |   |   |
| Office                  rent, Communications etc. |   |                                                                                | 28     |                       |   | 16     |   |   | 12 |   |
|                                              |   |                                                                                |        |                       |   |        |   |   |  |   |
|                                              |   | $                                                                                   | 713    |                       | $      | 1,035  |   | $ | (322 | ) |
|                                              |   |                                                                                |        |                       |   |        |   |   |  |   |

*Net        Loss*
* *

**Liquidity        and Capital Resources **

----

**Subsequent        Event **

**Item        3. Controls and Procedures **

**Part        II. OTHER INFORMATION **

**Item        1. Legal Proceedings **

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

----

**Each        of the above shares were issued pursuant to the exemption from registration        under the Securities Act of 1933 under the exemption afforded by Section        4(2)        thereunder.**

**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,                                                                                                                           | 29,219,562    | 32,460                            |
| Roger                  P. (Pat) Herbert,                                                                                                                  | 29,219,562    | 32,460                            |
| Scott                  W. Johnson                                                                                                                         | 29,219,562    | 32,460                            |
| Joseph                  J. Penbera, Ph.D.,                                                                                                                | 29,219,562    | 32,460                            |
| Jeffrey                  R. Pendergraft,                                                                                                                  | 29,219,562    | 32,460                            |
| Frederick                  R. Ruiz,                                                                                                                       | 29,219,562    | 32,460                            |
| O.                  James Woodward III                                                                                                                    | 29,219,562    | 32,460                            |
|                                                                                                                                                      |          |                              |              |
|                                                                                                                                                      | **YES**  | **NO**                       | **ABSTAIN**  |
| *Proposal                  Two*                  -                  Approval of Independent Public Accountant (Malone & Bailey,                  PC): | 28,344,834    | 874,353                           | 32,834            |
|                                                                                                                                                      |          |                              |              |

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

|                            |                                                                        |
|---------------------------------|-----------------------------------------------------------------------------|
| April                  26, 2006 | Blast                  Energy Services press release, dated April 20, 2006. |
|                            |                                                                        |

|   |                                                                                                     |
|--------|----------------------------------------------------------------------------------------------------------|
| 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        **

|                                |                                             |                                          |
|-------------------------------------|--------------------------------------------------|-----------------------------------------------|
|                                | **Blast                  Energy Services, Inc.** |
|                                |                                             |                                          |
|                                | By:                                              | /s/                  David M. Adams, COO      |
|                                |                                             | David                  M. Adams               |
|                                |                                             | Chief                  Operating Officer      |
|                                |                                             | Principal                  Executive Officer  |
|                                |                                             |                                          |
| Date:                  May 15, 2006 |                                             |                                          |
|                                |                                             |                                          |
|                                | By:                                              | /s/                  John O’Keefe, CFO  |
|                                |                                             | John                  O’Keefe           |
|                                |                                             | Chief                  Financial Officer      |
|                                |                                             | Principal                  Accounting Officer |
|                                |                                             |                                          |
| Date:                  May 15, 2006 |                                             |                                          |

----