----

----

**FORM      10-QSB**

**Commission      File Number 0-13111**

**ANALYTICAL      SURVEYS, INC.**

| **Colorado**                                                                                    |   | **84-0846389**                                                        |
|-------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|
| (*State                or other jurisdiction of**incorporation                or organization*) |   | (*IRS                Employer**Identification                Number*) |
|                                                                                            |
| **8610                N. NEW BRAUNFELS, SUITE 205, SAN ANTONIO, TEXAS                78217**    |
| (*Address                of principal executive offices*)                                       |
|                                                                                            |
| **(210)                657-1500**                                                               |
| (*Registrant’s                telephone number, including area code*)                     |

----

**TABLE      OF CONTENTS**

|                   |                                                                            | PAGE   |
|------------------------|---------------------------------------------------------------------------------|--------|
| PART                1. | FINANCIAL                INFORMATION                                            |   |
|                   |                                                                            |   |
| Item                1. | Financial                Statements                                             | 3      |
|                   |                                                                            |   |
| Item                2. | Management’s                Discussion and Analysis or Plan of Operations | 14     |
|                   |                                                                            |   |
| Item                3. | Controls                and Procedures                                          | 21     |
|                   |                                                                            |   |
| PART                2. | OTHER                INFORMATION                                                |   |
|                   |                                                                            |   |
| Item                1. | Legal                Proceedings                                                | 22     |
|                   |                                                                            |   |
| Item                2. | Unregistered                Sales of Securities and Use of Proceeds             | 22     |
|                   |                                                                            |   |
| Item                3. | Defaults                Upon Senior Securities                                  | 22     |
|                   |                                                                            |   |
| Item                4. | Submissions                of Matters to a Vote of Security Holders             | 22     |
|                   |                                                                            |   |
| Item                5. | Other                Information                                                | 22     |
|                   |                                                                            |   |
| Item                6. | Exhibits                                                                        |   |
|                   |                                                                            |   |
| SIGNATURES             | 23                                                                              |

----

**Part      I**

**Financial      Information**

**Item      1. Financial Statements**

**ANALYTICAL      SURVEYS, INC.**

**CONSOLIDATED      BALANCE SHEETS**

**(In      thousands)**

| **Assets**                                                                                                                                                                                                        |   |   | **June                30,****2007** |   |   | **September                30,****2006** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------|--------|--------|------------------------------------------|--------|
| Current                assets:                                                                                                                                                                                    |   |   | (Unaudited)                         |   |   |                                          |   |
| Cash                and cash equivalents                                                                                                                                                                          |   | $      | 378                                 |   | $      | 1,357                                    |   |
| Accounts                receivable, net of allowance for doubtful accounts of $0 and $50                at June                30, 2007 and September 30, 2006, respectively                                      |   |   | 218                                 |   |   | 1,322                                    |   |
| Revenue                earned in excess of billings, net                                                                                                                                                          |   |   | —                             |   |   | 49                                       |   |
| Prepaid                expenses and other                                                                                                                                                                         |   |   | 40                                  |   |   | 93                                       |   |
| Deferred                financing costs                                                                                                                                                                           |   |   | 76                                  |   |   | 133                                      |   |
| Total                current assets                                                                                                                                                                               |   |   | 712                                 |   |   | 2,954                                    |   |
| Oil                and natural gas properties and equipment; full cost method of                accounting                                                                                                        |   |   | 1,667                               |   |   | 2,019                                    |   |
| Less                accumulated depletion                                                                                                                                                                         |   |   | (54                                 | )      |   | —                                  |   |
| Net                oil and natural gas properties and equipment                                                                                                                                                   |   |   | 1,613                               |   |   | 2,019                                    |   |
| Equipment                and leasehold improvements, at cost:                                                                                                                                                     |   |   |                                     |   |   |                                          |   |
| Equipment                                                                                                                                                                                                         |   |   | 198                                 |   |   | 570                                      |   |
| Furniture                and fixtures                                                                                                                                                                             |   |   | 36                                  |   |   | 98                                       |   |
| Leasehold                improvements                                                                                                                                                                             |   |   | 8                                   |   |   | 1                                        |   |
|                                                                                                                                                                                                              |   |   | 242                                 |   |   | 669                                      |   |
| Less                accumulated depreciation and amortization                                                                                                                                                     |   |   | (212                                | )      |   | (605                                     | )      |
| Net                equipment and leasehold improvements                                                                                                                                                           |   |   | 30                                  |   |   | 64                                       |   |
| Total                assets                                                                                                                                                                                       |   | $      | 2,355                               |   | $      | 5,037                                    |   |
| **Liabilities                and Stockholders’ Equity**                                                                                                                                                     |   |   |                                     |   |   |                                          |   |
| Current                liabilities:                                                                                                                                                                               |   |   |                                     |   |   |                                          |   |
| Senior                secured convertible note, net of discount                                                                                                                                                   |   | $      | 1,530                               |   | $      | 1,957                                    |   |
| Current                portion of capital lease obligations                                                                                                                                                       |   |   | 16                                  |   |   | 16                                       |   |
| Billings                in excess of revenue earned                                                                                                                                                               |   |   | —                             |   |   | 99                                       |   |
| Accounts                payable                                                                                                                                                                                   |   |   | 243                                 |   |   | 45                                       |   |
| Accrued                liabilities                                                                                                                                                                                |   |   | 165                                 |   |   | 239                                      |   |
| Accrued                payroll and related benefits                                                                                                                                                               |   |   | 56                                  |   |   | 132                                      |   |
| Total                current liabilities                                                                                                                                                                          |   |   | 2,010                               |   |   | 2,488                                    |   |
| Long-term                debt:                                                                                                                                                                                    |   |   |                                     |   |   |                                          |   |
| Capital                lease obligations, less current portion                                                                                                                                                    |   |   | 1                                   |   |   | 13                                       |   |
| Asset                retirement obligations                                                                                                                                                                       |   |   | 6                                   |   |   | —                                  |   |
| Total                long-term liabilities                                                                                                                                                                        |   |   | 7                                   |   |   | 13                                       |   |
| Total                liabilities                                                                                                                                                                                  |   |   | 2,017                               |   |   | 2,501                                    |   |
| Commitments                and contingencies                                                                                                                                                                      |   |   | —                             |   |   | —                                  |   |
| Stockholders’                equity:                                                                                                                                                                        |   |   |                                     |   |   |                                          |   |
| Convertible                preferred stock, no par value; authorized 2,500 shares; 280 issued                and                outstanding at June 30, 2007, and September 30, 2006,                respectively |   |   | 261                                 |   |   | 261                                      |   |
| Common                stock, no par value; authorized 100,000 shares; 3,789 and 3,779 shares                issued and outstanding at June 30, 2007, and September 30, 2006,                respectively          |   |   | 36,593                              |   |   | 36,341                                   |   |
| Accumulated                deficit                                                                                                                                                                                |   |   | (36,516                             | )      |   | (34,066                                  | )      |
| Total                stockholders’ equity                                                                                                                                                                   |   |   | 338                                 |   |   | 2,536                                    |   |
| Total                liabilities and stockholders’ equity                                                                                                                                                   |   | $      | 2,355                               |   | $      | 5,037                                    |   |

----

**ANALYTICAL      SURVEYS, INC.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**(In      thousands, except per share amounts)**

**(Unaudited**

|                                                                                                           |   | **Three                Months Ended**  | **Nine                Months****Ended** |
|----------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|-----------------------------------------|
|                                                                                                           |   | **June                30,**            | **June                30,**             |
|                                                                                                           |   |                                        | **2007**                                |   |   | **2006** |   |   | **2007** |   |   | **2006** |   |
|                                                                                                           |   |                                        |                                         |   |   |   |   |   |  |   |   |   |   |
| Revenues:                                                                                                      |   |                                        |                                         |   |   |   |   |   |  |   |   |   |   |
| GIS                services                                                                                    |   | $                                           | 48                                      |   | $ | 1,044 |   | $ | 348 |   | $ | 3,787 |   |
| Oil                and gas                                                                                     |   |                                        | 64                                      |   |   | 5 |   |   | 93 |   |   | 5 |   |
| Total                revenues                                                                                  |   |                                        | 112                                     |   |   | 1,049 |   |   | 441 |   |   | 3,792 |   |
|                                                                                                           |   |                                        |                                         |   |   |  |   |   |  |   |   |  |   |
| Costs                and expenses:                                                                             |   |                                        |                                         |   |   |  |   |   |  |   |   |  |   |
| Salaries,                wages and benefits                                                                    |   |                                        | 129                                     |   |   | 748 |   |   | 547 |   |   | 2,405 |   |
| Subcontractor                costs                                                                             |   |                                        | —                                 |   |   | 43 |   |   | — |   |   | 457 |   |
| Lease                operating expenses                                                                        |   |                                        | 14                                      |   |   | — |   |   | 26 |   |   | — |   |
| Impairment                of Oil and Gas Properties                                                            |   |                                        | 1,001                                   |   |   | — |   |   | 1,001 |   |   | — |   |
| General                and administrative                                                                      |   |                                        | 159                                     |   |   | 285 |   |   | 588 |   |   | 955 |   |
| Depreciation,                depletion and amortization                                                        |   |                                        | 40                                      |   |   | 15 |   |   | 70 |   |   | 52 |   |
| Total                operating costs                                                                           |   |                                        | 1,343                                   |   |   | 1,091 |   |   | 2,232 |   |   | 3,869 |   |
| Loss                from operations                                                                            |   |                                        | (1,231                                  | ) |   | (42 | ) |   | (1,791 | ) |   | (77 | ) |
| Other                income (expense):                                                                         |   |                                        |                                         |   |   |  |   |   |  |   |   |  |   |
| Interest                expense, net                                                                           |   |                                        | (171                                    | ) |   | (23 | ) |   | (428 | ) |   | (78 | ) |
| Gain                (loss) on sale of assets                                                                   |   |                                        | (3                                      | ) |   | — |   |   | (31 | ) |   | 3 |   |
| Gain                on extinguishment of debt                                                                  |   |                                        | —                                 |   |   | — |   |   | — |   |   | 61 |   |
| Other                expense, net                                                                              |   |                                        | —                                 |   |   | (11 | ) |   | (185 | ) |   | (10 | ) |
| Total                other expense, net                                                                        |   |                                        | (174                                    | ) |   | (34 | ) |   | (644 | ) |   | (24 | ) |
| Loss                before income taxes                                                                        |   |                                        | (1,405                                  | ) |   | (76 | ) |   | (2,435 | ) |   | (101 | ) |
| Provision                for income taxes                                                                      |   |                                        | —                                 |   |   | — |   |   | — |   |   | — |   |
| Net                loss                                                                                        |   |                                        | (1,405                                  | ) |   | (76 | ) |   | (2,435 | ) |   | (101 | ) |
| Deemed                dividend associated with beneficial conversion feature of preferred                stock |   |                                        | —                                 |   |   | — |   |   | — |   |   | (30 | ) |
| Dividends                on preferred stock                                                                    |   |                                        | (5                                      | ) |   | (6 | ) |   | (15 | ) |   | (13 | ) |
| Net                loss available to common stockholders                                                       |   | $                                           | (1,410                                  | ) | $ | (82 | ) | $ | (2,450 | ) | $ | (144 | ) |
|                                                                                                           |   |                                        |                                         |   |   |  |   |   |  |   |   |  |   |
| Basic                and diluted net loss per common share                                                     |   | $                                           | (0.37                                   | ) | $ | (0.02 | ) | $ | (0.65 | ) | $ | (0.03 | ) |
| Preferred                stock dividends                                                                       |   |                                        | —                                 |   |   | — |   |   | — |   |   | (0.01 | ) |
| Basic                and diluted net loss per common share available to common                shareholders     |   | $                                           | (0.37                                   | ) | $ | (0.02 | ) | $ | (0.65 | ) | $ | (0.04 | ) |
|                                                                                                           |   |                                        |                                         |   |   |  |   |   |  |   |   |  |   |
| Weighted                average common shares:                                                                 |   |                                        |                                         |   |   |  |   |   |  |   |   |  |   |
| Basic                                                                                                          |   |                                        | 3,789                                   |   |   | 3,724 |   |   | 3,783 |   |   | 3,250 |   |
| Diluted                                                                                                        |   |                                        | 3,789                                   |   |   | 3,724 |   |   | 3,783 |   |   | 3,250 |   |

----

**ANALYTICAL      SURVEYS, INC.**

**CONSOLIDATED      STATEMENT OF STOCKHOLDERS’ EQUITY**

**For      the Nine Months Ended June 30, 2007**

**(In      thousands)**

**(Unaudited)**

|                                                                                                                |   | **Convertible****Preferred                Stock** | **Common                Stock** |   | **Accumulated** |       |   | **Total                Stockholders’** |       |
|---------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|---------------------------------|--------|-----------------|------------|--------|----------------------------------------------|------------|
|                                                                                                                |   |                                              | **Shares**                 |   |            | **Amount** |   |                                         | **Shares** |   |   | **Amount** |   |   | **Deficit** |   |   | **Equity** |   |
| Balances                at September 30, 2006                                                                       |   |                                              | 280                             |   | $               | 261        |   |                                         | 3,779      |   | $ | 36,341 |   | $ | (34,066 | ) | $ | 2,536 |   |
| Amortization                of stock-based compensation                                                             |   |                                              | —                         |   |            | —    |   |                                         | —    |   |   | 13 |   |   | — |   |   | 13 |   |
| Registration                costs for Class E Warrants and Senior Notes                                             |   |                                              | —                         |   |            | —    |   |                                         | —    |   |   | (38 | ) |   | — |   |   | (38 | ) |
| Warrants                issued pursuant to Convertible Notes                                                        |   |                                              | —                         |   |            | —    |   |                                         | —    |   |   | 272 |   |   | — |   |   | 272 |   |
| Partial                conversion of Convertible Note, net of discount and preferred financing                costs |   |                                              | —                         |   |            | —    |   |                                         | 10         |   |   | 5 |   |   | — |   |   | 5 |   |
| Dividends                on preferred stock                                                                         |   |                                              | —                         |   |            | —    |   |                                         | —    |   |   | — |   |   | (15 | ) |   | (15 | ) |
| Net                loss                                                                                             |   |                                              | —                         |   |            | —    |   |                                         | —    |   |   | — |   |   | (2,435 | ) |   | (2,435 | ) |
| Balances                at June 30, 2007                                                                            |   |                                              | 280                             |   | $               | 261        |   |                                         | 3,789      |   | $ | 36,593 |   | $ | (36,516 | ) | $ | 338 |   |

----

**ANALYTICAL      SURVEYS, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(In      thousands)**

**(Unaudited)**

|                                                                                                                       |   | **Nine                Months Ended** |     |
|----------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|----------|
|                                                                                                                       |   | **June                30,**     |
|                                                                                                                       |   |                                 | **2007** |   |   | **2006** |   |
| Cash                flows from operating activities:                                                                       |   |                                 |          |   |   |  |   |
| Net                loss                                                                                                    |   | $                                    | (2,435   | ) | $ | (101 | ) |
| Adjustments                to reconcile net loss to net cash provided by operating                activities:              |   |                                 |          |   |   |  |   |
| Depreciation,                depletion and amortization                                                                    |   |                                 | 68       |   |   | 52 |   |
| Amortization                of stock-based compensation expenses                                                           |   |                                 | 13       |   |   | — |   |
| Accretion                of interest on convertible note                                                                   |   |                                 | 202      |   |   | 3 |   |
| Amortization                of deferred financing costs                                                                    |   |                                 | 240      |   |   | 10 |   |
| Accretion                of interest expense on redeemable preferred stock                                                 |   |                                 | —  |   |   | 52 |   |
| Gain                on extinguishment of debt                                                                              |   |                                 | —  |   |   | (61 | ) |
| Gain                (loss) on disposal of assets                                                                           |   |                                 | 31       |   |   | (3 | ) |
| Impairment                of oil and gas properties                                                                        |   |                                 | 1,001    |   |   | — |   |
| Changes                in operating assets and liabilities:                                                                |   |                                 |          |   |   |  |   |
| Accounts                receivable                                                                                         |   |                                 | 1,104    |   |   | (43 | ) |
| Revenue                earned in excess of billings, net                                                                   |   |                                 | 49       |   |   | 990 |   |
| Prepaid                expenses and other                                                                                  |   |                                 | 53       |   |   | (13 | ) |
| Billings                in excess of revenue earned                                                                        |   |                                 | (99      | ) |   | (207 | ) |
| Accounts                payable and accrued liabilities                                                                    |   |                                 | 124      |   |   | (719 | ) |
| Accrued                payroll and related benefits                                                                        |   |                                 | (76      | ) |   | (367 | ) |
| Net                cash provided by (used in) operating activities                                                         |   |                                 | 275      |   |   | (407 | ) |
| Cash                flows from investing activities:                                                                       |   |                                 |          |   |   |  |   |
| Purchase                of equipment and leasehold improvements                                                            |   |                                 | (20      | ) |   | (11 | ) |
| Investment                in oil and gas properties                                                                        |   |                                 | (912     | ) |   | (1,826 | ) |
| Cash                proceeds from sale of assets                                                                           |   |                                 | 277      |   |   | 4 |   |
| Net                cash used in investing activities                                                                       |   |                                 | (655     | ) |   | (1,833 | ) |
| Cash                flows from financing activities:                                                                       |   |                                 |          |   |   |  |   |
| Principal                payments on long-term debt                                                                        |   |                                 | (12      | ) |   | (7 | ) |
| Issuance                of convertible preferred stock and warrants                                                        |   |                                 | —  |   |   | 760 |   |
| Dividends                paid on preferred stock                                                                           |   |                                 | (15      | ) |   | — |   |
| Principal                payment on convertible note                                                                       |   |                                 | (2,000   | ) |   | — |   |
| Issuance                of convertible note, net of expenses                                                               |   |                                 | 1,466    |   |   | 1,751 |   |
| Fees                associated with issuance of common and preferred stock                                                 |   |                                 | —  |   |   | (76 | ) |
| Fees                associated with registration of warrants                                                               |   |                                 | (38      | ) |   | — |   |
| Net                cash provided by (used in) financing activities                                                         |   |                                 | (599     | ) |   | 2,428 |   |
| Net                increase (decrease) in cash                                                                             |   |                                 | (979     | ) |   | 188 |   |
| Cash                and cash equivalents at beginning of period                                                            |   |                                 | 1,357    |   |   | 622 |   |
| Cash                and cash equivalents at end of period                                                                  |   | $                                    | 378      |   | $ | 810 |   |
| Supplemental                disclosures of cash flow information:                                                          |   |                                 |          |   |   |  |   |
| Cash                paid for interest                                                                                      |   | $                                    | 119      |   | $ | — |   |
| Non-cash                financing activities:                                                                              |   |                                 |          |   |   |  |   |
| Issuance                of common stock in exchange for redeemable preferred stock                                         |   | $                                    | —  |   | $ | 300 |   |
| Issuance                of common stock in exchange for convertible preferred                stock                         |   | $                                    | —  |   | $ | 447 |   |
| Issuance                of common stock for equipment and oil and gas working                interests                     |   | $                                    | —  |   | $ | 200 |   |
| Issuance                of common stock for consulting and legal services                                                  |   | $                                    | —  |   | $ | 103 |   |
| Accretion                of interest on redeemable preferred stock                                                         |   | $                                    | —  |   | $ | 16 |   |
| Deemed                dividend associated with beneficial conversion feature of convertible                preferred stock |   | $                                    | —  |   | $ | 30 |   |
| Accrual                of dividends on convertible preferred stock                                                         |   | $                                    | 15       |   | $ | 13 |   |
| Warrants                issued related to convertible debt                                                                 |   | $                                    | 272      |   | $ | — |   |
| Partial                conversion of convertible note                                                                      |   | $                                    | 5        |   | $ | — |   |

----

**ANALYTICAL      SURVEYS, INC.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**June      30, 2007**

**(Unaudited)**

**1.**
**Description      of Business**

**2.**
**Going      Concern**

**3.******Summary      of Significant Accounting Policies****

***Revenue      Recognition.***

----

***Stock      Based Compensation.***
*Accounting      for Stock Issued to Employees”*
*Accounting      for Stock-Based Compensation--Transition and Disclosure"*
*“Accounting      for Stock-Based Compensation”*

*Share      Based Payment”*

To      compute compensation expense in fiscal 2007, we estimated the fair value of      each      option award on the date of grant using the Black-Scholes model. The      Black-Scholes model incorporates variable assumptions which include: the      expected volatility, which is based on the historical volatility of our traded      stock. the expected term calculated using the simplified method permitted by      the      Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 107.;      the expected dividend yield based on historical patterns and peer group      performance; and the risk free rate, based on the U.S. Treasury yield curve      at      the time of the grant corresponding to the expected term. We have not      historically declared a dividend on our common stock and do not anticipate      that      we will declare a dividend in the foreseeable future and therefore used a      dividend yield of zero. We used historical data to estimate option exercise      and      employee terminations within the valuation model. The fair value of options      at      the date of grant was estimated using the Black-Scholes option-pricing model      with assumptions as follows: volatility, 91.585%, risk-free interest rate,      4.5%,      dividend yield, 0.0% and weighted-average expected life of the options, 3      years.

|                                                     |   |   | **Number                        of Options (thousands)**  |   |   | **Weighted                        Average Exercise Price** |   |   | **Aggregate                        Intrinsic Value** |   |
|----------------------------------------------------------|--------|--------|----------------------------------------------------------------|--------|--------|------------------------------------------------------------|--------|--------|------------------------------------------------------|--------|
|                                                     |   |   |                                                                |   |   |                                                            |   |   |                                                 |   |
| Outstanding                        at September 30, 2006 |   |   | 521                                                            |   | $      | 1.46                                                       |   |   |                                                      |   |
| Granted                                                  |   |   | 135                                                            |   |   | 0.54                                                       |   |   |                                                      |   |
| Exercised                                                |   |   | —                                                        |   |   | —                                                    |   |   |                                                      |   |
| Forfeited                                                |   |   | (71                                                            | )      |   | 1.22                                                       |   |   |                                                      |   |
| Outstanding                        at June 30, 2007      |   |   | 585                                                            |   | $      | 1.06                                                       |   |   | 0.0                                                  |   |

----

| **Range                of****Exercise****Price** |   | **Number****Outstanding****at****June                30,****2007** |    | **Weighted****Average****Exercise****Price** |   | **Weighted****Average****Remaining****Contractual****Life                (years)** |   | **Number****Exercisable****at                June 30,****2007** |   | **Weighted****Average****Exercise****Price** |   |
|--------------------------------------------------|--------|--------------------------------------------------------------------|---------|----------------------------------------------|--------|------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|----------------------------------------------|--------|
| $0.00                - 0.75                      |   |                                                               | 330,000 |                                         | $      | 0.64                                                                               |   |                                                            | 6.25   |                                         |   | 225,000 |   | $ | 0.69 |   |
| 0.76                - 1.50                       |   |                                                               | 180,000 |                                         |   | 1.31                                                                               |   |                                                            | 6.82   |                                         |   | 176,250 |   |   | 1.30 |   |
| 1.51                - 2.25                       |   |                                                               | 20,000  |                                         |   | 2.11                                                                               |   |                                                            | 7.18   |                                         |   | 20,000 |   |   | 2.11 |   |
| 2.26                - 3.00                       |   |                                                               | 55,000  |                                         |   | 2.38                                                                               |   |                                                            | 7.67   |                                         |   | 55,000 |   |   | 2.38 |   |
| $                0.00 - 3.00                     |   |                                                               | 585,000 |                                         | $      | 1.06                                                                               |   |                                                            | 6.59   |                                         |   | 476,250 |   | $ | 1.17 |   |

|                                                 |   |   | **Non-Vested****Shares**  |   |   | **Weighted                Average Exercise Price** |   |
|------------------------------------------------------|--------|--------|--------------------------------|--------|--------|----------------------------------------------------|--------|
| Non-exercisable                at September 30, 2006 |   |   | 37,500                         |   | $      | 1.94                                               |   |
| Granted                                              |   |   | 135,000                        |   |   | 0.54                                               |   |
| Became                exercisable                    |   |   | (33,750                        | )      |   | 1.99                                               |   |
| Forfeited                                            |   |   | (30,000                        | )      |   | 0.58                                               |   |
| Non-exercisable                at June 30, 2007      |   |   | 108,750                        |   | $      | 0.58                                               |   |

|                                        |   |   | **Three                Months Ended****June                30, 2006**  |   |   | **Nine                Months Ended****June                30, 2006** |   |
|----------------------------------------|--------|--------|-----------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------|--------|
| Dividend                yield          |   |   | 0                                                                           | %      |   | 0                                                                    | %      |
| Anticipated                volatility  |   |   | 122                                                                         | %      |   | 92                - 122                                              | %      |
| Risk-free                interest rate |   |   | 4.0                                                                         | %      |   | 4.0                                                                  | %      |
| Expected                lives          |   |   | 3.5                years                                                    |   |   | 2                - 3.5 years                                         |   |

----

|                                                                                                    |   |                                                              | **Three                Months Ended**  |   |   | **Nine                Months Ended** |   |
|----------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|---------------------------------------------|--------|--------|--------------------------------------|--------|
|                                                                                                    |   |                                                              | **June                30, 2006**       |   |   | **June                30, 2006**     |   |
|                                                                                                    |   | **(in                thousands except per share earnings)**  |
| Net                loss available to common shareholders as reported                               |   | $                                                                 | (82                                         | )      | $      | (144                                 | )      |
| Add:                Stock-based employee compensation included in reported net                loss |   |                                                              | —                                     |   |   | —                              |   |
| Less:                Pro forma option expense                                                      |   |                                                              | (47                                         | )      |   | (67                                  | )      |
| Pro                forma net loss                                                                  |   | $                                                                 | (129                                        | )      | $      | (211                                 | )      |
|                                                                                               |   |                                                              |                                             |   |   |                                      |   |
| Basic                net loss per share, as reported                                               |   | $                                                                 | (0.02                                       | )      | $      | (0.04                                | )      |
| Less:                Pro forma option expense                                                      |   |                                                              | (0.01                                       | )      |   | (0.02                                | )      |
| Pro                forma basic net loss per share                                                  |   | $                                                                 | (0.03                                       | )      | $      | (0.06                                | )      |
|                                                                                               |   |                                                              |                                             |   |   |                                      |   |
| Diluted                net loss per share, as reported                                             |   | $                                                                 | (0.02                                       | )      | $      | (0.04                                | )      |
| Less:                Pro forma option expense                                                      |   |                                                              | (0.01                                       | )      |   | (0.02                                | )      |
| Pro                forma diluted net loss per share                                                |   | $                                                                 | (0.03                                       | )      | $      | (0.06                                | )      |

**4.**
**Impact      of Accounting Pronouncements**

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

**5.**
**Oil      and Natural Gas Properties and Equipment**

----

**6.**
**Debt**

| **Long-Term                Debt**                                |   |   | **June                30,****2007** |   |   | **September                30, 2006** |   |
|------------------------------------------------------------------|--------|--------|-------------------------------------|--------|--------|---------------------------------------|--------|
| Senior                secured convertible notes, net of discount |   | $      | 1,530                               |   | $      | 1,957                                 |   |
| Capital                lease obligations                         |   |   | 17                                  |   |   | 29                                    |   |
| Asset                retirement obligations                      |   |   | 6                                   |   |   | —                               |   |
|                                                             |   |   | 1,553                               |   |   | 1,986                                 |   |
| Less                current portion                              |   |   | (1,546                              | )      |   | (1,973                                | )      |
|                                                             |   | $      | 7                                   |   | $      | 13                                    |   |

----

**7.**
**Convertible      Preferred Stock**

**8.**
**Segment      Information**

|                                                            |   |   | **GIS****Services**  |   |   | **Energy****Division** |   |   | **Non-****Segment** |   |   | **Total** |   |
|------------------------------------------------------------|--------|--------|---------------------------|--------|--------|------------------------|--------|--------|---------------------|--------|--------|-----------|--------|
| **Three                  months ended June 30, 2007**      |   |   |                           |   |   |                        |   |   |                     |   |   |           |   |
| Operations                                                 |   |   |                           |   |   |                        |   |   |                     |   |   |           |   |
| Revenues                                                   |   | $      | 48                        |   | $      | 64                     |   | $      | —             |   | $      | 112       |   |
| Loss                  from operations                      |   |   | (66                       | )      |   | (1,165                 | )      |   | —             |   |   | (1,231    | )      |
| Interest                  expense, net                     |   |   | —                   |   |   | —                |   |   | (171                | )      |   | (171      | )      |
| Other                                                      |   |   | —                   |   |   | —                |   |   | (3                  | )      |   | (3        | )      |
| Net                  loss                                  |   |   |                           |   |   |                        |   |   |                     |   | $      | (1,405    | )      |
| Capital                  expenditures                      |   | $      | —                   |   | $      | 240                    |   | $      | 6                   |   | $      | 246       |   |
| Depreciation,                  depletion, and amortization |   | $      | 4                         |   | $      | 34                     |   | $      | 2                   |   | $      | 40        |   |
|                                                       |   |   |                      |   |   |                   |   |   |                |   |   |      |   |
| **Three                  months ended June 30, 2006**      |   |   |                           |   |   |                        |   |   |                     |   |   |           |   |
| Operations                                                 |   |   |                           |   |   |                        |   |   |                     |   |   |           |   |
| Revenues                                                   |   | $      | 1,044                     |   | $      | 5                      |   | $      | —             |   | $      | 1,049     |   |
| Loss                  from operations                      |   |   | (5                        | )      |   | (37                    | )      |   | —             |   |   | (42       | )      |
| Interest                  expense, net                     |   |   | —                   |   |   | —                |   |   | (23                 | )      |   | (23       | )      |
| Other                                                      |   |   | —                   |   |   | —                |   |   | (11                 | )      |   | (11       | )      |
| Net                  loss                                  |   |   |                           |   |   |                        |   |   |                     |   | $      | (76       | )      |
| Capital                  expenditures                      |   | $      | 5                         |   | $      | 1423                   |   | $      | —             |   | $      | 1428      |   |
| Depreciation,                  depletion, and amortization |   | $      | —                   |   | $      | 13                     |   | $      | 2                   |   | $      | 15        |   |
|                                                       |   |   |                      |   |   |                   |   |   |                |   |   |      |   |

----

| **Nine                  months ended June 30, 2007**       |   |   |         |   |   |         |   |   |         |   |   |        |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
| Operations                                                 |   |   |         |   |   |         |   |   |         |   |   |        |   |
| Revenues                                                   |   | $      | 348     |   | $      | 93      |   | $      | — |   | $      | 441    |   |
| Loss                  from operations                      |   |   | (137    | )      |   | (1,654  | )      |   | — |   |   | (1,791 | )      |
| Interest                  expense, net                     |   |   | — |   |   | — |   |   | (428    | )      |   | (428   | )      |
| Other                                                      |   |   | — |   |   | — |   |   | (216    | )      |   | (216   | )      |
| Net                  loss                                  |   |   |         |   |   |         |   |   |         |   | $      | (2,435 | )      |
| Capital                  expenditures                      |   | $      | — |   | $      | 912     |   | $      | 20      |   | $      | 942    |   |
| Depreciation,                  depletion, and amortization |   | $      | 12      |   | $      | 54      |   | $      | 12      |   | $      | 70     |   |
|                                                       |   |   |    |   |   |    |   |   |    |   |   |   |   |
| **Nine                  months ended June 30, 2006**       |   |   |         |   |   |         |   |   |         |   |   |        |   |
| Operations                                                 |   |   |         |   |   |         |   |   |         |   |   |        |   |
| Revenues                                                   |   | $      | 3,782   |   | $      | 5       |   | $      | — |   | $      | 3,787  |   |
| Loss                  from operations                      |   |   | 15      |   |   | (92     | )      |   | — |   |   | (77    | )      |
| Interest                  expense, net                     |   |   | — |   |   | — |   |   | (78     | )      |   | (78    | )      |
| Gain                  on extinguishment of debt            |   |   | — |   |   | — |   |   | 61      |   |   | 61     |   |
| Other                                                      |   |   | — |   |   | — |   |   | (212    | )      |   | (7     | )      |
| Net                  loss                                  |   |   |         |   |   |         |   |   |         |   | $      | (101   | )      |
| Capital                  expenditures                      |   | $      | 11      |   | $      | 1826    |   | $      | — |   | $      | 1,937  |   |
| Depreciation,                  depletion, and amortization |   | $      | — |   | $      | 44      |   | $      | 8       |   | $      | 52     |   |
|                                                       |   |   |    |   |   |    |   |   |    |   |   |   |   |
| **Assets                  at June 30, 2007**               |   |   |    |   |   |    |   |   |    |   |   |   |   |
| Segment                  assets                            |   | $      | 32      |   | $      | 1,809   |   | $      | — |   | $      | 1,841  |   |
| Non-segment                  assets                        |   |   | — |   |   | — |   |   | 514     |   |   | 514    |   |
| Consolidated                  assets                       |   |   |    |   |   |    |   |   |    |   | $      | 2,355  |   |
|                                                       |   |   |    |   |   |    |   |   |    |   |   |   |   |
| **Assets                  at June 30, 2006**               |   |   |    |   |   |    |   |   |    |   |   |   |   |
| Segment                  assets                            |   | $      | 2,302   |   | $      | 2,026   |   | $      | — |   | $      | 4,328  |   |
| Non-segment                  assets                        |   |   | — |   |   | — |   |   | 1,161   |   |   | 1,161  |   |
| Consolidated                  assets                       |   |   |    |   |   |    |   |   |    |   | $      | 5,489  |   |

**9.**
**Litigation      and Other Contingencies**

**10.**
**Concentration      of Credit Risk**

----

**Item      2. Management’s Discussion And Analysis Or Plan Of      Operations**

**Overview**

----

----

**Critical      Accounting Policies**

**Revenue      Recognition.**

----

**Oil      and Gas Properties. **

**Valuation      of Accounts Receivable. **

**Litigation.      **
*Accounting      for Contingencies*

**Income      Taxes. **

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

----

**Results      of Operations **

|                                                     |   | **Three                Months Ended**  | **Nine                Months Ended** |
|----------------------------------------------------------|--------|---------------------------------------------|--------------------------------------|
|                                                          |   | **June                30,**            | **June                30,**          |
|                                                     |   |                                        | **2007**                             |   |   | **2006** |   |   | **2007** |   |   | **2006** |   |
| **PERCENTAGE                OF REVENUES**:               |   |                                        |                                      |   |   |  |   |   |  |   |   |  |   |
| Revenues                                                 |   |                                        | 100.0                                | % |   | 100.0 | % |   | 100.0 | % |   | 100.0 | % |
| Costs                and expenses                        |   |                                        |                                      |   |   |  |   |   |  |   |   |  |   |
| Salaries,                wages and related benefits      |   |                                        | 115.2                                |   |   | 71.3 |   |   | 124.0 |   |   | 63.4 |   |
| Lease                operating expenses                  |   |                                        | 12.5                                 |   |   | — |   |   | 5.9 |   |   | — |   |
| Impairment                of oil and gas properties      |   |                                        | 893.7                                |   |   | — |   |   | 227.0 |   |   | — |   |
| Subcontractor                costs                       |   |                                        | —                              |   |   | 4.1 |   |   | — |   |   | 12.1 |   |
| General                and administrative                |   |                                        | 142.0                                |   |   | 27.2 |   |   | 133.3 |   |   | 25.2 |   |
| Depreciation,                depletion and amortization  |   |                                        | 35.7                                 |   |   | 1.4 |   |   | 15.9 |   |   | 1.4 |   |
|                                                     |   |                                        |                                      |   |   |  |   |   |  |   |   |  |   |
| Loss                from operations                      |   |                                        | (1,099.1                             | ) |   | (4.0 | ) |   | (406.1 | ) |   | (2.1 | ) |
|                                                     |   |                                        |                                      |   |   |  |   |   |  |   |   |  |   |
| Other                expense, net                        |   |                                        | (155.4                               | ) |   | (3.2 | ) |   | (146.0 | ) |   | (0.6 | ) |
|                                                     |   |                                        |                                      |   |   |  |   |   |  |   |   |  |   |
| Earnings                (loss) before income taxes       |   |                                        | (1,254.5                             | ) |   | (7.2 | ) |   | (552.1 | ) |   | (2.7 | ) |
| Provision                for income taxes                |   |                                        | —                              |   |   | — |   |   | — |   |   | — |   |
| Net                earnings (loss)                       |   |                                        | (1,254.5                             | ) |   | (7.2 | ) |   | (552.1 | ) |   | (2.7 | ) |
| Dividends                on preferred stock              |   |                                        | (4.5                                 | ) |   | (0.6 | ) |   | (3.4 | ) |   | (1.1 | ) |
| Net                loss available to common shareholders |   |                                        | (1,259.0                             | )% |   | (7.8 | )% |   | (555.5 | )% |   | (3.8 | )% |

**Three      and Nine Months Ended June 30, 2007 and 2006**

**Revenues**

**Salaries,      Wages and Benefits.**

**Subcontractor      Costs.**

**Oil      and Gas Impairment:**

**General      and Administrative.**

**Depreciation,      Depletion and Amortization.**

**Interest      Expense, Net.**

----

**Other      Income (Expense).**

**Income      Taxes**

**Net      Loss Available to Common Shareholders.**

**Liquidity      and Capital Resources**

**Table      of Contractual Obligations.**

|                                                |   | **Fiscal                Year Ending September 30,** |     |   |   |     |   |   |     |
|-----------------------------------------------------|--------|-----------------------------------------------------|----------|--------|--------|----------|--------|--------|----------|
|                                                |   |                                                | **2007** |   |   | **2008** |   |   | **2009** |   |   | **2010** |   |   | **2011** |   |   | **Thereafter** |   |   | **Total** |   |
| Operating                leases                     |   | $                                                   | 12       |   | $      | 47       |   | $      | 49       |   | $ | 46 |   | $ | 47 |   | $ | 12 |   | $ | 213 |   |
| Capital                lease obligations            |   |                                                | 5        |   |   | 14       |   |   | —  |   |   | — |   |   | — |   |   | — |   |   | 19 |   |
| Senior                secured convertible notes     |   |                                                | 123      |   |   | 1,684    |   |   | —  |   |   | — |   |   | — |   |   | — |   |   | 1,807 |   |
| Interest                payments on preferred stock |   |                                                | 10       |   |   | 7        |   |   | —  |   |   | — |   |   | — |   |   | — |   |   | 17 |   |
| Total                                               |   | $                                                   | 150      |   | $      | 1,752    |   | $      | 49       |   | $ | 46 |   | $ | 47 |   | $ | 12 |   | $ | 2,056 |   |

| **Long-Term                Debt**                                |   | **June                30,**** 2007** |   | **September                30, ****2006** |   |
|------------------------------------------------------------------|--------|-------------------------------------------|--------|------------------------------------------------|--------|
| Senior                secured convertible notes, net of discount |   | $                                         | 1,530  |                                           | $      | 1,957 |   |
| Other                debt and capital lease obligations          |   |                                      | 17     |                                           |   | 29 |   |
| Asset                retirement obligations                      |   |                                      | 6      |                                           |   | — |   |
|                                                             |   |                                      | 1,553  |                                           |   | 1,986 |   |
| Less                current portion                              |   |                                      | (1,546 | )                                              |   | (1,973 | ) |
|                                                             |   | $                                         | 7      |                                           | $      | 13 |   |

----

|                                                            |   |   |      | **Conversion                Price** |   | **Common                Shares Issuable** |   |
|-----------------------------------------------------------------|--------|--------|-----------|-------------------------------------|--------|-------------------------------------------|--------|
| Series                A Convertible Preferred Stock             |   |   | 280,000   |                                | $      | 1.270                                     |   |   | 220,472 |   |
| Class                A Warrants                                 |   |   | 381,890   |                                |   | 1.340                                     |   |   | 381,890 |   |
| Class                B Warrants                                 |   |   | 381,890   |                                |   | 1.490                                     |   |   | 381,890 |   |
| Class                E Warrants                                 |   |   | 752,072   |                                |   | 1.186                                     |   |   | 752,072 |   |
| Note                Warrants issued in November 2006            |   |   | 2,564,029 |                                |   | 0.580                                     |   |   | 2,564,029 |   |
| Convertible                Notes                                |   | $      | 1,643,050 |                                |   | 0.695                                     |   |   | 2,367,151 |   |
| Total                shares issuable and weighted average price |   |   |      |                                | $      | 0.810                                     |   |   | 6,667,504 |   |

----

**Item      3. Controls and Procedures**

***(a)      Evaluation of disclosure controls and procedures***

***(b)      Changes in internal control over financial reporting.***

----

**Part      II**

**Other      Information**

**Item      1. Legal Proceedings**

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

**Item      3. Defaults Upon Senior Securities.**

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

**Item      5. Other Information.**

**Item      6. Exhibits.**

**Exhibits:      **

----

**SIGNATURES**

|                                    |                                 |                                             |
|-----------------------------------------|--------------------------------------|--------------------------------------------------|
|                                    |                                 |
|                               |                            |                                        |
| Date: August              14, 2007 | By:                        | /s/ Lori              A.              Jones |
|                                    | Lori              A. Jones           |
|                                    | Chief              Executive Officer |

----