----

----

|   |                                                                              |
|--------|-----------------------------------------------------------------------------------|
| [X]    | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| For the quarterly period ended June 30, 2012 |
|----------------------------------------------|

| [   ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT |
|-----------------|----------------------------------------------------------------------------|

| NEVADA                                                         | 52-2207080                       |
|----------------------------------------------------------------|----------------------------------|
| (State or other jurisdiction of incorporation or organization) | (IRS Employer IdentificationNo.) |

| Large accelerated filer  [  ] | Accelerated filer   [  ] |
|----------------------------------------------|----------------------------------------------|
| Non-accelerated filer  [  ]   | Smaller reporting company  [X]     |

----

| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
|---------------------------------------------------------|

----

| SIBERIAN ENERGY GROUP INC. (A Development Stage Company)       |   |        |        |   |         |   |
|----------------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|
|                                                           |   |        |        |   |         |   |
| Condensed Consolidated Balance Sheets                          |   | (Unaudited) |        |   |         |   |
|                                                           |   | June 30,    |        |   | December 31, |   |
|                                                           |   | 2012        |        |   | 2011         |   |
|                                                           |   |        |        |   |         |   |
| Assets                                                         |   |        |        |   |         |   |
| Current assets:                                                |   |        |        |   |         |   |
| Cash                                                           |   | $           | 747         |   |         | $      | 874 |   |
| Prepaid expenses and other receivables                         |   |        | 265,445     |   |         |   | 220,932 |   |
|      Total current assets             |   |        | 266,192     |   |         |   | 221,806 |   |
|                                                           |   |        |        |   |         |   |   |   |
| Investment in ZNG, Ltd., at equity                             |   |        | -           |   |         |   | - |   |
|                                                           |   |        |        |   |         |   |   |   |
| Investment in KNG, at equity                                   |   |        | -           |   |         |   | - |   |
|                                                           |   |        |        |   |         |   |   |   |
| Mineral properties, unproved                                   |   |        | 24,894,301  |   |         |   | 24,894,301 |   |
|                                                           |   |        |        |   |         |   |   |   |
| Oil and gas properties, unproved                               |   |        | -           |   |         |   | - |   |
|                                                           |   |        |        |   |         |   |   |   |
| Property and equipment, net                                    |   |        | -           |   |         |   | - |   |
|                                                           |   |        |        |   |         |   |   |   |
|                                                           |   | $           | 25,160,493  |   |         | $      | 25,116,107 |   |
|                                                           |   |        |        |   |         |   |   |   |
| Liabilities and Stockholders' Equity                           |   |        |        |   |         |   |   |   |
| Current liabilities:                                           |   |        |        |   |         |   |   |   |
| Accounts payable:                                              |   |        |        |   |         |   |   |   |
| Related party - stockholders                                   |   | $           | 446,631     |   |         | $      | 375,793 |   |
| Related party - Baltic Petroleum, interest at 14%              |   |        | 84,014      |   |         |   | 81,004 |   |
| Others                                                         |   |        | 159,430     |   |         |   | 111,031 |   |
| Accrued payroll                                                |   |        | 527,673     |   |         |   | 420,173 |   |
|      Total current liabilities        |   |        | 1,217,748   |   |         |   | 988,001 |   |
|                                                           |   |        |        |   |         |   |   |   |
| Loan payable                                                   |   |        | 694,487     |   |         |   | 624,348 |   |
|                                                           |   |        |        |   |         |   |   |   |
| Stockholders' equity:                                          |   |        |        |   |         |   |   |   |
| Preferred stock - authorized and unissued 10,000,000 shares,   |   |        |        |   |         |   |   |   |
|        $.001 par value           |   |        | -           |   |         |   | - |   |
| Common stock - authorized 100,000,000 shares, $.001 par value, |   |        |        |   |         |   |   |   |
|   67,367,659 issued and outstanding                  |   |        | 67,368      |   |         |   | 67,368 |   |
| Additional paid-in capital                                     |   |        | 40,159,038  |   |         |   | 40,159,038 |   |
| Accumulated deficit:                                           |   |        |        |   |         |   |   |   |
| Pre-development stage                                          |   |        | (449,785    | )      |         |   | (449,785 | ) |
| Development stage                                              |   |        | (16,537,118 | )      |         |   | (16,268,893 | ) |
| Accumulated other comprehensive income (loss)                  |   |        | 8,755       |   |         |   | (3,970 | ) |
|      Total stockholders' equity       |   |        | 23,248,258  |   |         |   | 23,503,758 |   |
|                                                           |   |        |        |   |         |   |   |   |
|                                                           |   | $           | 25,160,493  |   |         | $      | 25,116,107 |   |
|                                                           |   |        |        |   |         |   |   |   |
| See accompanying notes.                                        |   |        |        |   |         |   |   |   |

----

| SIBERIAN ENERGY GROUP INC. (A Development Stage Company)                 |   |          |       |   |         |       |       |
|--------------------------------------------------------------------------|--------|---------------|------------|--------|--------------|------------|------------|
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   | For the |   |
| Condensed Consolidated Statements of Operations and Comprehensive Income |   |          |       |   |         | cumulative |       |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   | period of |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   | Development |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   | Stage Activity- |   |
|                                                                     |   | For the three |       |   | For the six  |       |       | January 1, 2003 |   |
|                                                                     |   | months ended  |       |   | months ended |       |       | through |   |
|                                                                     |   | June 30,      |       |   | June 30,     |       |       | June 30, |   |   | June 30, |   |   | June 30, |   |
|                                                                     |   | 2012          |       |   | 2011         |       |       | 2012 |   |   | 2011 |   |   | 2012 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |
| Revenues and other income:                                               |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |
| Management fees from joint venture                                       |   | $             | -          |   |         | $          | -          |   |   | $ | - |   |   | $ | - |   |   | $ | 1,135,000 |   |
| Gain from entrance into joint venture                                    |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | 364,479 |   |
| Other                                                                    |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | 6,382 |   |
|   Total revenues and other income                                   |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | 1,505,861 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries                                                                 |   |          | 54,491     |   |         |       | 73,501     |   |   |   | 109,140 |   |   |   | 146,901 |   |   |   | 4,519,752 |   |
| Professional and consulting fees                                         |   |          | 28,170     |   |         |       | 65,050     |   |   |   | 76,543 |   |   |   | 137,521 |   |   |   | 5,653,886 |   |
| Rent and occupancy                                                       |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | 239,989 |   |
| Depreciation and amortization                                            |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | 105,502 |   |
| Finance charges and interest                                             |   |          | 21,527     |   |         |       | 5,895      |   |   |   | 42,118 |   |   |   | 7,394 |   |   |   | 221,752 |   |
| Marketing and other                                                      |   |          | 7,094      |   |         |       | 3,535      |   |   |   | 10,028 |   |   |   | 17,420 |   |   |   | 2,123,961 |   |
| Total expenses                                                           |   |          | 111,282    |   |         |       | 147,981    |   |   |   | 237,829 |   |   |   | 309,236 |   |   |   | 12,864,842 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency exchange (gain) loss                                    |   |          | 68,641     |   |         |       | (14,700    | ) |   |   | 30,396 |   |   |   | (14,700 | ) |   |   | 25,120 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from disposition of loan receivable - affiliate                     |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | 29,500 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from sale of investment                                             |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | 669,570 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss on deemed disposition of oil and                                    |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| gas properties, unproved                                                 |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | 3,928,000 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impairment charge on investment                                          |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | 525,947 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss before income taxes                                                 |   |          | 179,923    |   |         |       | 133,281    |   |   |   | 268,225 |   |   |   | 294,536 |   |   |   | 16,537,118 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes (benefit)                                     |   |          | -          |   |         |       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss (development stage)                                             |   |          | 179,923    |   |         |       | 133,281    |   |   |   | 268,225 |   |   |   | 294,536 |   |   |   | 16,537,118 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss, net of tax:                                    |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                  |   |          | 55,809     |   |         |       | 24         |   |   |   | 12,725 |   |   |   | 24 |   |   |   | 8,755 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive loss                                                       |   | $             | 124,114    |   |         | $          | 133,257    |   |   | $ | 255,500 |   |   | $ | 294,512 |   |   | $ | 16,528,363 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net loss per common share                              |   | $             | (0.00      | )      |         | $          | (0.00      | ) |   | $ | (0.00 | ) |   | $ | (0.02 | ) |   | $ | (1.95 | ) |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of basic and diluted common                      |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |
| shares outstanding                                                       |   |          | 67,367,659 |   |         |       | 37,139,881 |   |   |   | 67,367,659 |   |   |   | 18,803,018 |   |   |   | 8,501,678 |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes.                                                  |   |          |       |   |         |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| SIBERIAN ENERGY GROUP INC. (A Development Stage Company)                                        |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |
|-------------------------------------------------------------------------------------------------|--------|------------------------------------------------|---------|--------|-------------------------------------------------------|--------|--------|-------------|--------|--------|----------------------------|--------|--------|---------------|------------|--------|
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |
| Condensed Consolidated Statements of Stockholders' Equity                                       |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |
| For the cumulative period of Development Stage Activity - January 1, 2003 through June 30, 2012 |   |                                           |    |   |                                                  |   |   |        |   |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   | Accumulated   |       |   |   |   |
|                                                                                            |   | Common Stock                                   |    |   |         Additional |   |   | Other       |   |   |                       |   |
|                                                                                            |   |        Number of |    |   | Paid-In                                               |   |   | Accumulated |   |   |    Comprehensive |   |
|                                                                                            |   | Shares                                         |    |   | Par Value                                             |   |   | Capital     |   |   | Deficit                    |   |   | Income (Loss) |       |   | Total |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |
| Balance, January 1, 2003 (pre-development stage)                                                |   |                                           | 135,801 |   |                                                  | $      | 136    |        |   | $      | 434,962                    |   |   | $             | (449,785   | )      |   | $ | - |   |   | $ | (14,687 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Loss for the year - 2003                                                                        |   |                                           | -       |   |                                                  |   | -      |        |   |   | -                          |   |   |          | (422,516   | )      |   |   | - |   |   |   | (422,516 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Shares issued in acquisition (ZNG)                                                              |   |                                           | 14,286  |   |                                                  |   | 14     |        |   |   | (14                        | )      |   |          | -          |   |   |   | - |   |   |   | - |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2003                                                                      |   |                                           | 150,087 |   |                                                  | $      | 150    |        |   | $      | 434,948                    |   |   | $             | (872,301   | )      |   | $ | - |   |   | $ | (437,203 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Loss for the year - 2004                                                                        |   |                                           | -       |   |                                                  |   | -      |        |   |   | -                          |   |   |          | (833,567   | )      |   |   | - |   |   |   | (833,567 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                         |   |                                           | -       |   |                                                  |   | -      |        |   |   | -                          |   |   |          | -          |   |   |   | (53,120 | ) |   |   | (53,120 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Shares issued in acquisition (ZNG)                                                              |   |                                           | 49,286  |   |                                                  |   | 49     |        |   |   | 749,951                    |   |   |          | -          |   |   |   | - |   |   |   | 750,000 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Shares issued for professional services                                                         |   |                                           | 715     |   |                                                  |   | 1      |        |   |   | 9,999                      |   |   |          | -          |   |   |   | - |   |   |   | 10,000 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Other                                                                                           |   |                                           | -       |   |                                                  |   | -      |        |   |   | 34,426                     |   |   |          | -          |   |   |   | - |   |   |   | 34,426 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2004                                                                      |   |                                           | 200,088 |   |                                                  | $      | 200    |        |   | $      | 1,229,324                  |   |   | $             | (1,705,868 | )      |   | $ | (53,120 | ) |   | $ | (529,464 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Loss for the year - 2005                                                                        |   |                                           | -       |   |                                                  |   | -      |        |   |   | -                          |   |   |          | (1,153,686 | )      |   |   | - |   |   |   | (1,153,686 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                         |   |                                           | -       |   |                                                  |   | -      |        |   |   | -                          |   |   |          | -          |   |   |   | 50,614 |   |   |   | 50,614 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Shares issued for professional services                                                         |   |                                           | 5,500   |   |                                                  |   | 6      |        |   |   | 198,208                    |   |   |          | -          |   |   |   | - |   |   |   | 198,214 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Shares issued for accrued salaries                                                              |   |                                           | 24,286  |   |                                                  |   | 24     |        |   |   | 303,547                    |   |   |          | -          |   |   |   | - |   |   |   | 303,571 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Warrants granted for professional services                                                      |   |                                           | -       |   |                                                  |   | -      |        |   |   | 310,000                    |   |   |          | -          |   |   |   | - |   |   |   | 310,000 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2005                                                                      |   |                                           | 229,874 |   |                                                  | $      | 230    |        |   | $      | 2,041,079                  |   |   | $             | (2,859,554 | )      |   | $ | (2,506 | ) |   | $ | (820,751 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Loss for the year - 2006                                                                        |   |                                           | -       |   |                                                  |   | -      |        |   |   | -                          |   |   |          | (4,072,788 | )      |   |   | - |   |   |   | (4,072,788 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                         |   |                                           | -       |   |                                                  |   | -      |        |   |   | -                          |   |   |          | -          |   |   |   | (1,939 | ) |   |   | (1,939 | ) |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Shares issued for employee stock option plan and warrants                                       |   |                                           | 2,786   |   |                                                  |   | 3      |        |   |   | 45,497                     |   |   |          | -          |   |   |   | - |   |   |   | 45,500 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Shares issued for geological data                                                               |   |                                           | 27,143  |   |                                                  |   | 27     |        |   |   | 3,324,973                  |   |   |          | -          |   |   |   | - |   |   |   | 3,325,000 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Shares issued for professional services                                                         |   |                                           | 16,279  |   |                                                  |   | 16     |        |   |   | 2,121,444                  |   |   |          | -          |   |   |   | - |   |   |   | 2,121,460 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Warrants granted for professional services                                                      |   |                                           | -       |   |                                                  |   | -      |        |   |   | 1,201,960                  |   |   |          | -          |   |   |   | - |   |   |   | 1,201,960 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Shares cancelled                                                                                |   |                                           | (8,707  | )      |                                                  |   | (9     | )           |   |   | 9                          |   |   |          | -          |   |   |   | - |   |   |   | - |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2006                                                                      |   |                                           | 267,375 |   |                                                  | $      | 267    |        |   | $      | 8,734,962                  |   |   | $             | (6,932,342 | )      |   | $ | (4,445 | ) |   | $ | 1,798,442 |   |
|                                                                                            |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |
| See accompanying notes.                                                                         |   |                                           |    |   |                                                  |   |   |        |   |   |                       |   |   |          |       |   |   |   |   |   |   |   |   |   |

----

| SIBERIAN ENERGY GROUP INC. (A Development Stage Company)                                        |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |
|-------------------------------------------------------------------------------------------------|--------|------------------------------------------------|---------|--------|-------------------------------------------------|--------|--------|-------------|--------|--------|---------------------------|--------|--------|--------------------------------------|-------------|--------|
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |
| Condensed Consolidated Statements of Stockholders' Equity                                       |   |                                           |    |   |                                            |   |   |        |   |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |
| For the cumulative period of Development Stage Activity - January 1, 2003 through June 30, 2012 |   |                                           |    |   |                                            |   |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |      Accumulated |        |
|                                                                                            |   | Common Stock                                   |    |   |        Additional |   |   | Other       |   |   |                      |   |
|                                                                                            |   |        Number of |    |   | Paid-In                                         |   |   | Accumulated |   |   |   Comprehensive |   |
|                                                                                            |   | Shares                                         |    |   | Par Value                                       |   |   | Capital     |   |   | Deficit                   |   |   | Income (Loss)                        |        |   | Total |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |
| Balance, December 31, 2006                                                                      |   |                                           | 267,375 |   |                                            | $      | 267    |        |   | $      | 8,734,962                 |   |   | $                                    | (6,932,342  | )      |   | $ | (4,445 | ) |   | $ | 1,798,442 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Loss for the year - 2007                                                                        |   |                                           | -       |   |                                            |   | -      |        |   |   | -                         |   |   |                                 | (2,060,487  | )      |   |   | - |   |   |   | (2,060,487 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                         |   |                                           | -       |   |                                            |   | -      |        |   |   | -                         |   |   |                                 | -           |   |   |   | (9,804 | ) |   |   | (9,804 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for employee stock option plan and warrants                                       |   |                                           | 8,100   |   |                                            |   | 8      |        |   |   | (8                        | )      |   |                                 | -           |   |   |   | - |   |   |   | - |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for geological data                                                               |   |                                           | 2,857   |   |                                            |   | 3      |        |   |   | 349,997                   |   |   |                                 | -           |   |   |   | - |   |   |   | 350,000 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for accrued salaries                                                              |   |                                           | 11,257  |   |                                            |   | 11     |        |   |   | 1,445,395                 |   |   |                                 | -           |   |   |   | - |   |   |   | 1,445,406 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for licenses                                                                      |   |                                           | 28,571  |   |                                            |   | 29     |        |   |   | 1,319,971                 |   |   |                                 | -           |   |   |   | - |   |   |   | 1,320,000 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for professional services                                                         |   |                                           | 10,215  |   |                                            |   | 10     |        |   |   | 1,071,100                 |   |   |                                 | -           |   |   |   | - |   |   |   | 1,071,110 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Warrants granted for professional services                                                      |   |                                           | -       |   |                                            |   | -      |        |   |   | 150,394                   |   |   |                                 | -           |   |   |   | - |   |   |   | 150,394 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2007                                                                      |   |                                           | 328,375 |   |                                            | $      | 328    |        |   | $      | 13,071,811                |   |   | $                                    | (8,992,829  | )      |   | $ | (14,249 | ) |   | $ | 4,065,061 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Loss for the year - 2008                                                                        |   |                                           | -       |   |                                            |   | -      |        |   |   | -                         |   |   |                                 | (5,863,560  | )      |   |   | - |   |   |   | (5,863,560 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                         |   |                                           | -       |   |                                            |   | -      |        |   |   | -                         |   |   |                                 | -           |   |   |   | 27,019 |   |   |   | 27,019 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for professional services and accrued salaries                                    |   |                                           | 2,213   |   |                                            |   | 2      |        |   |   | 41,748                    |   |   |                                 | -           |   |   |   | - |   |   |   | 41,750 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Warrants granted for professional services                                                      |   |                                           | -       |   |                                            |   | -      |        |   |   | 6,303                     |   |   |                                 | -           |   |   |   | - |   |   |   | 6,303 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for loan repayment and related interest                                           |   |                                           | 1,536   |   |                                            |   | 2      |        |   |   | 10,751                    |   |   |                                 | -           |   |   |   | - |   |   |   | 10,753 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                                                                      |   |                                           | 332,124 |   |                                            | $      | 332    |        |   | $      | 13,130,613                |   |   | $                                    | (14,856,389 | )      |   | $ | 12,770 |   |   | $ | (1,712,674 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Loss for the year - 2009                                                                        |   |                                           | -       |   |                                            |   | -      |        |   |   | -                         |   |   |                                 | (666,116    | )      |   |   | - |   |   |   | (666,116 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                         |   |                                           | -       |   |                                            |   | -      |        |   |   | -                         |   |   |                                 | -           |   |   |   | (19,714 | ) |   |   | (19,714 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for accrued salaries                                                              |   |                                           | 858     |   |                                            |   | 1      |        |   |   | 3,599                     |   |   |                                 | -           |   |   |   | - |   |   |   | 3,600 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Options vested to employees and directors                                                       |   |                                           | -       |   |                                            |   | -      |        |   |   | 45,852                    |   |   |                                 | -           |   |   |   | - |   |   |   | 45,852 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                                      |   |                                           | 332,982 |   |                                            | $      | 333    |        |   | $      | 13,180,064                |   |   | $                                    | (15,522,505 | )      |   | $ | (6,944 | ) |   | $ | (2,349,052 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Loss for the year - 2010                                                                        |   |                                           | -       |   |                                            |   | -      |        |   |   | -                         |   |   |                                 | (579,251    | )      |   |   | - |   |   |   | (579,251 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                         |   |                                           | -       |   |                                            |   | -      |        |   |   | -                         |   |   |                                 | -           |   |   |   | (7,146 | ) |   |   | (7,146 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for accounts payable and accrued salaries                                         |   |                                           | 331,748 |   |                                            |   | 332    |        |   |   | 2,554,127                 |   |   |                                 | -           |   |   |   | - |   |   |   | 2,554,459 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Shares issued for accounts payable and accrued salaries                                         |   |                                           | 2,929   |   |                                            |   | 3      |        |   |   | 22,547                    |   |   |                                 | -           |   |   |   | - |   |   |   | 22,550 |   |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010                                                                      |   |                                           | 667,659 |   |                                            | $      | 668    |        |   | $      | 15,756,738                |   |   | $                                    | (16,101,756 | )      |   | $ | (14,090 | ) |   | $ | (358,440 | ) |
|                                                                                            |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |
| See accompanying notes.                                                                         |   |                                           |    |   |                                            |   |   |        |   |   |                      |   |   |                                 |        |   |   |   |   |   |   |   |   |   |

----

| SIBERIAN ENERGY GROUP INC. (A Development Stage Company)                                        |
|-------------------------------------------------------------------------------------------------|
|                                                                                            |
| Condensed Consolidated Statements of Stockholders' Equity                                       |
|                                                                                            |
| For the cumulative period of Development Stage Activity - January 1, 2003 through June 30, 2012 |   |   |   |   |   |   |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                                            |   | Common Stock |   |   | Additional |   |   |   |   |   | Other |   |   |   |   |
|                                                                                            |   |         Number of |   |   | Paid-In |   |   | Accumulated |   |   |    Comprehensive |   |
|                                                                                            |   | Shares |   |   | Par Value |   |   | Capital |   |   | Deficit |   |   | Income (Loss) |   |   | Total |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010                                                                      |   |   | 667,659 |   |   | $ | 668 |   |   | $ | 15,756,738 |   |   | $ | (16,101,756 | ) |   | $ | (14,090 | ) |   | $ | (358,440 | ) |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss for the year - 2011                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (616,922 | ) |   |   | - |   |   |   | (616,922 | ) |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 10,120 |   |   |   | 10,120 |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in acquisition (RMC)                                                              |   |   | 65,200,000 |   |   |   | 65,200 |   |   |   | 24,058,800 |   |   |   | - |   |   |   | - |   |   |   | 24,124,000 |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for geological data                                                               |   |   | 1,500,000 |   |   |   | 1,500 |   |   |   | 343,500 |   |   |   | - |   |   |   | - |   |   |   | 345,000 |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2011                                                                      |   |   | 67,367,659 |   |   | $ | 67,368 |   |   | $ | 40,159,038 |   |   | $ | (16,718,678 | ) |   | $ | (3,970 | ) |   | $ | 23,503,758 |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss for the six months - 2012                                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (268,225 | ) |   |   | - |   |   |   | (268,225 | ) |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 12,725 |   |   |   | 12,725 |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, June 30, 2012                                                                          |   |   | 67,367,659 |   |   | $ | 67,368 |   |   | $ | 40,159,038 |   |   | $ | (16,986,903 | ) |   | $ | 8,755 |   |   | $ | 23,248,258 |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes.                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| SIBERIAN ENERGY GROUP INC. (A Development Stage Company)            |   |         |     |   |     |   |     |
|---------------------------------------------------------------------|--------|--------------|----------|--------|----------|--------|----------|
|                                                                |   |         |     |   |     |   |     | For the |   |
| Condensed Consolidated Statements of Cash Flows                     |   |         |     |   |     |   |     | cumulative |   |
|                                                                |   |         |     |   |     |   |     | period of |   |
|                                                                |   |         |     |   |     |   |     | Development |   |
|                                                                |   |         |     |   |     |   |     | Stage Activity- |   |
|                                                                |   |         |     |   |     |   |     | January 1, 2003 |   |
|                                                                |   | For the six  |     |   | through  |   |
|                                                                |   | months ended |     |   | June 30, |   |
|                                                                |   | June 30,     |     |   | June 30, |   |     |   |   |
|                                                                |   | 2012         |     |   | 2011     |   |     | 2012 |   |
|                                                                |   |         |     |   |     |   |     |   |   |
| Operating activities:                                               |   |         |     |   |     |   |     |   |   |
| Net loss (development stage)                                        |   | $            | (268,225 | )      |     | $      | (294,536 | ) |   | $ | (16,537,118 | ) |
| Depreciation and amortization                                       |   |         | -        |   |     |   | -        |   |   |   | 105,397 |   |
| Common stock and warrants issued                                    |   |         |     |   |     |   |     |   |   |   |   |   |
| for professional services and salaries and geological data          |   |         | -        |   |     |   | -        |   |   |   | 7,231,933 |   |
| Gain from entrance into joint venture                               |   |         | -        |   |     |   | -        |   |   |   | (364,479 | ) |
| Loss on disposition of office furniture                             |   |         | -        |   |     |   | 623      |   |   |   | 1,652 |   |
| Loss on sale of investment, including deconsolidation of subsidiary |   |         | -        |   |     |   | -        |   |   |   | 823,692 |   |
| Loss on deemed disposition of oil and gas properties, unproved      |   |         | -        |   |     |   | -        |   |   |   | 3,928,000 |   |
| Impairment charge on investment                                     |   |         | -        |   |     |   | -        |   |   |   | 525,947 |   |
| Changes in other current assets and                                 |   |         |     |   |     |   |     |   |   |   |   |   |
| current liabilities:                                                |   |         |     |   |     |   |     |   |   |   |   |   |
| Management fee receivable                                           |   |         | -        |   |     |   | -        |   |   |   | 110,000 |   |
| Prepaid expenses and other receivables                              |   |         | (44,513  | )      |     |   | 8,544    |   |   |   | (441,635 | ) |
| Accounts payable and accrued expenses                               |   |         | 229,747  |   |     |   | 284,324  |   |   |   | 5,378,195 |   |
| Net operating activities                                            |   |         | (82,991  | )      |     |   | (1,045   | ) |   |   | 761,584 |   |
|                                                                |   |         |     |   |     |   |     |   |   |   |   |   |
| Investing activities:                                               |   |         |     |   |     |   |     |   |   |   |   |   |
| Expenditures for licenses and related                               |   |         | -        |   |     |   | -        |   |   |   | (528,961 | ) |
| Expenditures for oil and gas properties                             |   |         | -        |   |     |   | -        |   |   |   | (770,750 | ) |
| Expenditures for property and equipment                             |   |         | -        |   |     |   | -        |   |   |   | (6,244 | ) |
| Proceeds of disposition of office furniture                         |   |         | -        |   |     |   | -        |   |   |   | 107 |   |
| Loan to affiliate                                                   |   |         | -        |   |     |   | -        |   |   |   | (29,500 | ) |
| Cash received in acquisition                                        |   |         | -        |   |     |   | 1,655    |   |   |   | 1,661 |   |
| Cash received from entrance into joint venture                      |   |         | -        |   |     |   | -        |   |   |   | 175,000 |   |
| Net investing activities                                            |   |         | -        |   |     |   | 1,655    |   |   |   | (1,158,687 | ) |
|                                                                |   |         |     |   |     |   |     |   |   |   |   |   |
| Financing activities:                                               |   |         |     |   |     |   |     |   |   |   |   |   |
| Net proceeds from loans                                             |   |         | 70,139   |   |     |   | -        |   |   |   | 309,169 |   |
| Common stock issued for employee stock option plan                  |   |         | -        |   |     |   | -        |   |   |   | 45,500 |   |
| Additional paid-in capital                                          |   |         | -        |   |     |   | -        |   |   |   | 34,426 |   |
| Net financing activities                                            |   |         | 70,139   |   |     |   | -        |   |   |   | 389,095 |   |
|                                                                |   |         |     |   |     |   |     |   |   |   |   |   |
| Effect of exchange rates on cash                                    |   |         | 12,725   |   |     |   | 24       |   |   |   | 8,755 |   |
|                                                                |   |         |     |   |     |   |     |   |   |   |   |   |
| Net change in cash                                                  |   |         | (127     | )      |     |   | 634      |   |   |   | 747 |   |
|                                                                |   |         |     |   |     |   |     |   |   |   |   |   |
| Cash - beginning                                                    |   |         | 874      |   |     |   | 467      |   |   |   | - |   |
|                                                                |   |         |     |   |     |   |     |   |   |   |   |   |
| Cash - ending                                                       |   | $            | 747      |   |     | $      | 1,101    |   |   | $ | 747 |   |
|                                                                |   |         |     |   |     |   |     |   |   |   |   |   |
| See accompanying notes.                                             |   |         |     |   |     |   |     |   |   |   |   |   |

----

| SIBERIAN ENERGY GROUP INC. (A Development Stage Company) |   |
|----------------------------------------------------------|--------|

| Notes to Condensed Consolidated Financial Statements |   |
|------------------------------------------------------|--------|
|                                                 |   |

----

| Restricted common shares issued for                            |   |   |   |
|----------------------------------------------------------------|--------|--------|--------|
|   oil and gas properties, unproved in 2006           |   |   | 27,143 |   |
| Restricted common shares issued in                             |   |   |   |   |
|   connection with license acquisition by KNG in 2007 |   |   | 28,571 |   |
| Restricted common shares issued in 2006                        |   |   | 2,857  |   |
| Total restricted common shares issued                          |   |   | 58,571 |   |
|                                                           |   |   |   |   |
| Stock warrants issued in 2006                                  |   |   |   |   |
| for purchase option                                            |   |   | 3,572  |   |

----

----

----

----

| RMC Shareholder Name           | Shares     | Percentage of Company’s Outstanding Shares* |
|--------------------------------|------------|---------------------------------------------------|
| The Abner Rosen Foundation (a) | 5,600,000  | 8.5%                                              |
| Jonathan P. Rosen (a)          | 5,600,000  | 8.5%                                              |
| Ferris Hill LLP (b)            | 1,800,000  | 2.7%                                              |
| Mikhail Frayman                | 200,000    | 0.3%                                              |
| Ilya Aharon                    | 4,400,000  | 6.7%                                              |
| Yohanan Aharon                 | 3,200,000  | 4.9%                                              |
| Ioulia Chipilevskaia           | 4,400,000  | 6.7%                                              |
| Rosa Shimonov                  | 4,000,000  | 6.1%                                              |
| Polina Matsuleva               | 8,800,000  | 13.4%                                             |
| Valeria Zagourski              | 7,200,000  | 10.9%                                             |
| Liudmila Radziminskaya         | 3,200,000  | 4.9%                                              |
| Olga Yulanova                  | 6,200,000  | 9.4%                                              |
| Yury Kolomiets                 | 6,600,000  | 10.0%                                             |
| Donatina Cordone               | 200,000    | 0.3%                                              |
| Oksana Danylych                | 3,800,000  | 5.8%                                              |
| Total                          | 65,200,000 | 99.0%                                             |

----

----

----

----

----

----

----

----

----

----

----

----

----

| o      | competitors with greater financial, technical and other resources, in the search for and the acquisition of attractive mineral properties; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                       |
| o      | our ability to select and acquire suitable producing properties or prospects for mineral exploration;                                      |
|   |                                                                                                                                       |
| o      | the accuracy of our reserve estimates, if any, which may be affected by the following factors beyond our control:                          |

|  - | declines in the market price of the various metals we may mine in the future; |
|---------|-------------------------------------------------------------------------------|
|    |                                                                          |
|  - | increased production or capital costs;                                        |
|    |                                                                          |
|  - | reduction in the grade or tonnage of the deposit;                             |
|    |                                                                          |
|  - | increase in the dilution of the ore; or                                       |
|    |                                                                          |
|  - | reduced recovery rates;                                                       |

| o      | risks and hazards associated with environmental hazards, political and country risks, civil unrest or terrorism, industrial accidents, labor disputes, unusual or unexpected geologic formations, cave-ins, explosive rock failures; and flooding and periodic interruptions due to inclement or hazardous weather conditions; and |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                               |
| o      | our failure to maintain insurance on certain risks associated with any exploration activities we may undertake in the future.                                                                                                                                                                                                      |

----

|  o | expected recovery rates of metals from the ore;       |
|---------|-------------------------------------------------------|
|  o | facility and equipment costs;                         |
|  o | capital and operating costs of a development project; |
|  o | future metals prices;                                 |
|  o | tax rates;                                            |
|  o | inflation rates;                                      |
|  o | political risks and regulatory climates; and          |
|  o | availability of credit.                               |

----

|   | (1)    | actual or anticipated variations in our results of operations; |
|--------|--------|----------------------------------------------------------------|
|   |   |                                                           |
|   | (2)    | our ability or inability to generate new revenues;             |
|   |   |                                                           |
|   | (3)    | the number of shares in our public float;                      |

----

|   | (4)    | increased competition;                                                           |
|--------|--------|----------------------------------------------------------------------------------|
|   |   |                                                                             |
|   | (5)    | the political atmosphere in Russia; and                                          |
|   |   |                                                                             |
|   | (6)    | conditions and trends in the market for precious metals and minerals in general. |

----

| Exhibit No.   | Description of Exhibit                                                                                                                                                                                                                                                                                   |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                                                                                                                                                                     |
| 3.1(a)        | Original Articles of Incorporation of the Company then called "Advanced Rehab Technology Corporation."                                                                                                                                                                                                   |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.2(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed March 9, 2001, changing the Company's name to "Talking Cards, Inc."                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.3(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed February 12, 2002, changing the Company's name to "Osterking Incorporated."                                                                                                                                                    |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.4(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed December 3, 2002, changing the Company's name to "17388 Corporation Inc."                                                                                                                                                      |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.5(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed May 5, 2003, changing the Company's name to "Trans Energy Group Inc."                                                                                                                                                          |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.6(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed December 3, 2003, changing the Company's name to "Siberian Energy Group Inc."                                                                                                                                                  |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.7 (b)  | Certificate of Amendment to the Company's Articles of Incorporation filed April 25, 2005, affecting a 1:2 reverse stock split, re-authorizing 100,000,000 shares of common stock, par value $0.001 per share, and authorizing 10,000,000 shares of preferred stock, par value $0.001 par value per share |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.8(c)        | Certificate of Amendment to Articles of Incorporation Affecting a 1:70 Reverse Stock Split                                                                                                                                                                                                               |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.9(d)        | Amended and Restated Bylaws                                                                                                                                                                                                                                                                              |
|          |                                                                                                                                                                                                                                                                                                     |
| 4.1(e)        | Siberian Energy Group Inc. 2010 Stock Incentive Plan                                                                                                                                                                                                                                                     |

| 10.1(1) | Option Agreement with Baltic Petroleum Limited dated April 28, 2005                            |
|---------|------------------------------------------------------------------------------------------------|
|    |                                                                                           |
| 10.2(1) | License Agreement between OOO Zauralneftegaz and Baltic Petroleum Limited dated April 28, 2005 |
|    |                                                                                           |

| 10.3(1) | Loan Agreement between OOO Zauralneftegaz and Baltic Petroleum Limited dated April 28, 2005                         |
|---------|---------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                |
| 10.4(1) | Guarantee by Siberian Energy Group, Inc. dated April 28, 2005                                                       |
|    |                                                                                                                |
| 10.5(1) | Pledge and Security Agreement between Siberian Energy Group, Inc. and Baltic Petroleum Limited dated April 28, 2005 |

| 10.6(2) | Option Agreement with Baltic Petroleum Limited dated April 28, 2005                            |
|---------|------------------------------------------------------------------------------------------------|
|    |                                                                                           |
| 10.7(2) | License Agreement between OOO Zauralneftegaz and Baltic Petroleum Limited dated April 28, 2005 |

----

| 10.8(2)        | Loan Agreement between OOO Zauralneftegaz and Baltic Petroleum Limited dated April 28, 2005                                  |
|----------------|------------------------------------------------------------------------------------------------------------------------------|
|           |                                                                                                                         |
| 10.9(2)        | Guarantee by Siberian Energy Group, Inc. dated April 28, 2005                                                                |
|           |                                                                                                                         |
| 10.10(2)       | Pledge and Security Agreement between Siberian Energy Group, Inc. and Baltic Petroleum Limited dated April 28, 2005          |
|           |                                                                                                                         |
| 10.11(3)       | Clarification to the Contract of Purchase and Sale of the Share in Charter Capital of LLC "Zauralneftegaz" dated 15 May 2004 |
|           |                                                                                                                         |
| 10.12(3)       | Agreement with Business - Standard (translated from Russian version)                                                    |
|  10.13(3) | Supplementary Agreement to Business - Standard Agreement (translated from Russian version)                                   |
|           |                                                                                                                         |
| 10.14(3)       | Supplementary Agreement No. 2 to Business - Standard Agreement (translated from Russian version)                             |

| 10.15(3) | Deed of Amendment between ZNG and BP                                                                                            |
|----------|---------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                            |
| 10.16(3) | Deed of Amendment between the Company and BP                                                                                    |
|     |                                                                                                                            |
| 10.17(4) | Joint Venture Shareholders' Agreement with Baltic Petroleum (E&P) Limited and Zauralneftegaz Limited dated October 14, 2005 |
|     |                                                                                                                            |
| 10.18(5) | Amendment to the Employment Agreement Dated August 1, 2003, with Elena Pochapski                                                |
|     |                                                                                                                            |
| 10.19(5) | Form of Waiver Agreement                                                                                                        |
|     |                                                                                                                            |
| 10.20(6) | Loan Agreement between OOO Zauralneftegaz and Caspian Finance Limited                                                           |
|     |                                                                                                                            |
| 10.21(6) | Deed of Novation between Baltic Petroleum Limited, Caspian Finance Limited and OOO Zauralneftegaz                               |
|     |                                                                                                                            |
| 10.22(6) | Deed of Release                                                                                                                 |
|     |                                                                                                                            |
| 10.23(6) | Release of Pledge                                                                                                               |

| 10.24(6) | Guarantee                                                                                                  |
|----------|------------------------------------------------------------------------------------------------------------|
|     |                                                                                                       |
| 10.25(6) | Debenture                                                                                                  |
|     |                                                                                                       |
| 10.26(6) | Agreement for the Pledge of the Participatory Interest in OOO Zauralneftegaz (Russian translation removed) |
|     |                                                                                                       |
| 10.27(6) | Sale and Purchase Agreement                                                                                |

| 10.28(8)     | Option Agreement with Key Brokerage         |
|--------------|---------------------------------------------|
|    |                                        |
| 10.29(8)     | Warrant Agreement with Key Brokerage        |
|         |                                        |
| 10.30(9)     | July 26, 2006 Deed of Agreement             |
|         |                                        |
| 10.31(10)    | Consulting Agreement with Business Standard |

----

| 10.32(11) | Addition to the Loan Agreement of November 9, 2005                                                                  |
|-----------|---------------------------------------------------------------------------------------------------------------------|
|      |                                                                                                                |
| 10.33(11) | Gross Overriding Royalty Agreement                                                                                  |
|      |                                                                                                                |
| 10.34(12) | Amendment No. 2 to the Employment Agreement Dated August 1, 2003 with Elena Pochapski                               |
|      |                                                                                                                |
| 10.35(13) | Deed of Variation to the Loan Agreement Dated 9th of November 2005, Entered into in June 2007                       |
|      |                                                                                                                |
| 10.36(15) | Agreement of Purchase and Sale with Limited Liability Company Neftebitum, Sergey V. Prokopiev, and Oleg G. Shelepov |
|      |                                                                                                                |
| 10.37(15) | Operating Agreement with Limited Liability Company Neftebitum                                                       |
|      |                                                                                                                |
| 10.38(16) | One Year Extension to the Employment Agreement of August 1, 2004 with David Zaikin                                  |
|      |                                                                                                                |
| 10.39(16) | One Year Extension to the Employment Agreement of August 1, 2004 with Elena Pochapski                               |

| 10.40(16) | Stock Option Agreement for David Zaikin                                      |
|-----------|------------------------------------------------------------------------------|
|      |                                                                         |
| 10.41(16) | Stock Option Agreement for Elena Pochapski                                   |
|      |                                                                         |
| 10.42(17) | Extension of Employment Agreement of David Zaikin                            |
|      |                                                                         |
| 10.43(17) | Extension of Employment Agreement of Elena Pochapski                         |
|      |                                                                         |
| 10.44(18) | Form of Debt Conversion Agreement                                            |
|      |                                                                         |
| 10.45(18) | Extension of Employment Agreement of David Zaikin                            |
|      |                                                                         |
| 10.46(18) | Extension of Employment Agreement of Elena Pochapski                         |
|      |                                                                         |
| 10.47(19) | Share Exchange Agreement with Rare Minerals Corporation and its Shareholders |
|      |                                                                         |
| 10.48(19) | Exploration License (Translated From Russian)                                |
|      |                                                                         |
| 10.50(20) | Data Purchase Agreement                                                      |

| 10.51(20) | Extension of Employment Agreement of David Zaikin    |
|-----------|------------------------------------------------------|
|      |                                                 |
| 10.52(20) | Extension of Employment Agreement of Elena Pochapski |
|      |                                                 |
| 10.53(14) | Loan Agreement                                       |
|      |                                                 |
| 10.54(14) | Addition to Loan Agreement                           |
|      |                                                 |
| 21.1(21)  | Subsidiaries                                         |

| 31.1*   | Certificate of the Chief Executive Officer and Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                        |
| 32.1*   | Certificate of the Chief Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   |
|    |                                                                                                                                        |
| 99.1(7) | Glossary                                                                                                                                    |

----

|      |                                                   |
|-----------|--------------------------------------------------------|
| 101.INS** | XBRL Instance Document                                 |
|      |                                                   |
| 101.SCH** | XBRL Taxonomy Extension Schema Document                |
|      |                                                   |
| 101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document  |
|      |                                                   |
| 101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document   |
|      |                                                   |
| 101.LAB** | XBRL Taxonomy Extension Label Linkbase Document        |
|      |                                                   |
| 101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |

| ** Pursuant to Rule 405(a)(2) of Regulation S-T, the Company will furnish the XBRL Interactive Data Files with detailed footnote tagging as Exhibit 101 in an amendment to this Form 10-Q within the permitted 30-day grace period for the first quarterly period in which detailed footnote tagging is required after the filing date of this Form 10-Q. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                         | SIBERIAN ENERGY GROUP INC.                                               |
|------------------------------|--------------------------------------------------------------------------|
|                         |                                                                     |
| DATED:  August 20, 2012 | /s/ Eran Forman                                                          |
|                         | Eran Forman                                                              |
|                         | Chief Executive Officer                                                  |
|                         | (Principal Executive Officer and Principal Financial/Accounting Officer) |
|                         |                                                                     |

----

| Exhibit No.   | Description of Exhibit                                                                                                                                                                                                                                                                                   |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                                                                                                                                                                     |
| 3.1(a)        | Original Articles of Incorporation of the Company then called "Advanced Rehab Technology Corporation."                                                                                                                                                                                                   |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.2(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed March 9, 2001, changing the Company's name to "Talking Cards, Inc."                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.3(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed February 12, 2002, changing the Company's name to "Osterking Incorporated."                                                                                                                                                    |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.4(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed December 3, 2002, changing the Company's name to "17388 Corporation Inc."                                                                                                                                                      |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.5(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed May 5, 2003, changing the Company's name to "Trans Energy Group Inc."                                                                                                                                                          |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.6(b)        | Certificate of Amendment to the Company's Articles of Incorporation filed December 3, 2003, changing the Company's name to "Siberian Energy Group Inc."                                                                                                                                                  |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.7 (b)  | Certificate of Amendment to the Company's Articles of Incorporation filed April 25, 2005, affecting a 1:2 reverse stock split, re-authorizing 100,000,000 shares of common stock, par value $0.001 per share, and authorizing 10,000,000 shares of preferred stock, par value $0.001 par value per share |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.8(c)        | Certificate of Amendment to Articles of Incorporation Affecting a 1:70 Reverse Stock Split                                                                                                                                                                                                               |
|          |                                                                                                                                                                                                                                                                                                     |
| 3.9(d)        | Amended and Restated Bylaws                                                                                                                                                                                                                                                                              |
|          |                                                                                                                                                                                                                                                                                                     |
| 4.1(e)        | Siberian Energy Group Inc. 2010 Stock Incentive Plan                                                                                                                                                                                                                                                     |

| 10.1(1) | Option Agreement with Baltic Petroleum Limited dated April 28, 2005                            |
|---------|------------------------------------------------------------------------------------------------|
|    |                                                                                           |
| 10.2(1) | License Agreement between OOO Zauralneftegaz and Baltic Petroleum Limited dated April 28, 2005 |
|    |                                                                                           |

| 10.3(1) | Loan Agreement between OOO Zauralneftegaz and Baltic Petroleum Limited dated April 28, 2005                         |
|---------|---------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                |
| 10.4(1) | Guarantee by Siberian Energy Group, Inc. dated April 28, 2005                                                       |
|    |                                                                                                                |
| 10.5(1) | Pledge and Security Agreement between Siberian Energy Group, Inc. and Baltic Petroleum Limited dated April 28, 2005 |

| 10.6(2) | Option Agreement with Baltic Petroleum Limited dated April 28, 2005                            |
|---------|------------------------------------------------------------------------------------------------|
|    |                                                                                           |
| 10.7(2) | License Agreement between OOO Zauralneftegaz and Baltic Petroleum Limited dated April 28, 2005 |

----

| 10.8(2)        | Loan Agreement between OOO Zauralneftegaz and Baltic Petroleum Limited dated April 28, 2005                                  |
|----------------|------------------------------------------------------------------------------------------------------------------------------|
|           |                                                                                                                         |
| 10.9(2)        | Guarantee by Siberian Energy Group, Inc. dated April 28, 2005                                                                |
|           |                                                                                                                         |
| 10.10(2)       | Pledge and Security Agreement between Siberian Energy Group, Inc. and Baltic Petroleum Limited dated April 28, 2005          |
|           |                                                                                                                         |
| 10.11(3)       | Clarification to the Contract of Purchase and Sale of the Share in Charter Capital of LLC "Zauralneftegaz" dated 15 May 2004 |
|           |                                                                                                                         |
| 10.12(3)       | Agreement with Business - Standard (translated from Russian version)                                                    |
|  10.13(3) | Supplementary Agreement to Business - Standard Agreement (translated from Russian version)                                   |
|           |                                                                                                                         |
| 10.14(3)       | Supplementary Agreement No. 2 to Business - Standard Agreement (translated from Russian version)                             |

| 10.15(3) | Deed of Amendment between ZNG and BP                                                                                            |
|----------|---------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                            |
| 10.16(3) | Deed of Amendment between the Company and BP                                                                                    |
|     |                                                                                                                            |
| 10.17(4) | Joint Venture Shareholders' Agreement with Baltic Petroleum (E&P) Limited and Zauralneftegaz Limited dated October 14, 2005 |
|     |                                                                                                                            |
| 10.18(5) | Amendment to the Employment Agreement Dated August 1, 2003, with Elena Pochapski                                                |
|     |                                                                                                                            |
| 10.19(5) | Form of Waiver Agreement                                                                                                        |
|     |                                                                                                                            |
| 10.20(6) | Loan Agreement between OOO Zauralneftegaz and Caspian Finance Limited                                                           |
|     |                                                                                                                            |
| 10.21(6) | Deed of Novation between Baltic Petroleum Limited, Caspian Finance Limited and OOO Zauralneftegaz                               |
|     |                                                                                                                            |
| 10.22(6) | Deed of Release                                                                                                                 |
|     |                                                                                                                            |
| 10.23(6) | Release of Pledge                                                                                                               |

| 10.24(6) | Guarantee                                                                                                  |
|----------|------------------------------------------------------------------------------------------------------------|
|     |                                                                                                       |
| 10.25(6) | Debenture                                                                                                  |
|     |                                                                                                       |
| 10.26(6) | Agreement for the Pledge of the Participatory Interest in OOO Zauralneftegaz (Russian translation removed) |
|     |                                                                                                       |
| 10.27(6) | Sale and Purchase Agreement                                                                                |

| 10.28(8)     | Option Agreement with Key Brokerage         |
|--------------|---------------------------------------------|
|    |                                        |
| 10.29(8)     | Warrant Agreement with Key Brokerage        |
|         |                                        |
| 10.30(9)     | July 26, 2006 Deed of Agreement             |
|         |                                        |
| 10.31(10)    | Consulting Agreement with Business Standard |

----

| 10.32(11) | Addition to the Loan Agreement of November 9, 2005                                                                  |
|-----------|---------------------------------------------------------------------------------------------------------------------|
|      |                                                                                                                |
| 10.33(11) | Gross Overriding Royalty Agreement                                                                                  |
|      |                                                                                                                |
| 10.34(12) | Amendment No. 2 to the Employment Agreement Dated August 1, 2003 with Elena Pochapski                               |
|      |                                                                                                                |
| 10.35(13) | Deed of Variation to the Loan Agreement Dated 9th of November 2005, Entered into in June 2007                       |
|      |                                                                                                                |
| 10.36(15) | Agreement of Purchase and Sale with Limited Liability Company Neftebitum, Sergey V. Prokopiev, and Oleg G. Shelepov |
|      |                                                                                                                |
| 10.37(15) | Operating Agreement with Limited Liability Company Neftebitum                                                       |
|      |                                                                                                                |
| 10.38(16) | One Year Extension to the Employment Agreement of August 1, 2004 with David Zaikin                                  |
|      |                                                                                                                |
| 10.39(16) | One Year Extension to the Employment Agreement of August 1, 2004 with Elena Pochapski                               |

| 10.40(16) | Stock Option Agreement for David Zaikin                                      |
|-----------|------------------------------------------------------------------------------|
|      |                                                                         |
| 10.41(16) | Stock Option Agreement for Elena Pochapski                                   |
|      |                                                                         |
| 10.42(17) | Extension of Employment Agreement of David Zaikin                            |
|      |                                                                         |
| 10.43(17) | Extension of Employment Agreement of Elena Pochapski                         |
|      |                                                                         |
| 10.44(18) | Form of Debt Conversion Agreement                                            |
|      |                                                                         |
| 10.45(18) | Extension of Employment Agreement of David Zaikin                            |
|      |                                                                         |
| 10.46(18) | Extension of Employment Agreement of Elena Pochapski                         |
|      |                                                                         |
| 10.47(19) | Share Exchange Agreement with Rare Minerals Corporation and its Shareholders |
|      |                                                                         |
| 10.48(19) | Exploration License (Translated From Russian)                                |
|      |                                                                         |
| 10.50(20) | Data Purchase Agreement                                                      |

| 10.51(20) | Extension of Employment Agreement of David Zaikin    |
|-----------|------------------------------------------------------|
|      |                                                 |
| 10.52(20) | Extension of Employment Agreement of Elena Pochapski |
|      |                                                 |
| 10.53(14) | Loan Agreement                                       |
|      |                                                 |
| 10.54(14) | Addition to Loan Agreement                           |
|      |                                                 |
| 21.1(21)  | Subsidiaries                                         |

----

| 31.1*   | Certificate of the Chief Executive Officer and Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002 |
|---------|----------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                   |
| 32.1*   | Certificate of the Chief Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   |
|    |                                                                                                                                   |
| 99.1(7) | Glossary                                                                                                                               |
| 101.INS** | XBRL Instance Document                                 |
|-----------|--------------------------------------------------------|
|      |                                                   |
| 101.SCH** | XBRL Taxonomy Extension Schema Document                |
|      |                                                   |
| 101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document  |
|      |                                                   |
| 101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document   |
|      |                                                   |
| 101.LAB** | XBRL Taxonomy Extension Label Linkbase Document        |
|      |                                                   |
| 101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |

| ** Pursuant to Rule 405(a)(2) of Regulation S-T, the Company will furnish the XBRL Interactive Data Files with detailed footnote tagging as Exhibit 101 in an amendment to this Form 10-Q within the permitted 30-day grace period for the first quarterly period in which detailed footnote tagging is required after the filing date of this Form 10-Q. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----