UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





**FORM
      10-QSB**





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


For
      the
      quarterly period ended September 30, 2007




o TRANSITION
      REPORT
      UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT


For
      the
      transition period from _____ to _____




**OSAGE
      EXPLORTION AND DEVELOPMENT, INC.**


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





Delaware
            0-52718
            26-0421736(State
                or other jurisdiction
              of
                incorporation or
              organization)
            (Commission
                File No.)
            (I.R.S.
                Employer
              Identification
                No.)





888
                Prospect Street, Suite 210
              La
                Jolla, CA 92037
              (Address
                of principal executive offices)
            
            (858)
                551-0194
              (Issuer’s
                telephone number)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 12 month (or for
      such shorter period that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days.


Yes x   No
o





Indicate
      by check mark whether the registrant is a shell company (as defined in section
      12b-2 of the Exchange Act)


Yes
o   No
x





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date.





Common
                Stock, par value $0.0001
              (Class)
            
            33,359,775
              (Outstanding
                at November 7, 2007)




i


**OSAGE
      EXPLORATION AND DEVELOPMENT, INC. AND SUBSIDIARY**





**TABLE
      OF CONTENTS**







PagePART
                I - FINANCIAL INFORMATIONItem
                1.
            Financial
                Statements (unaudited)Consolidated
                Balance Sheets; September 30, 2007 and December 31, 2006
            1Consolidated
                Statements of Operations; Three and Nine Months endedSeptember
                30, 2007 and September 30, 2006
            2Consolidated
                Statements of Cash Flows; Nine Months ended September 30, 2007and
                September 30, 2006
            3Notes
                to Consolidated Financial Statements
            4Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operations
            9Item
                3.
            Controls
                and Procedures
            13PART
                II - OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            14Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            14Item
                3
            Default
                upon Senior Securities
            14Item
                4
            Submission
                of Matters to a Vote of Security Holders
            14Item
                5
            Other
                Information
            14Item
                6
            Exhibits
            14Signatures
            15





ii


**PART
      I. FINANCIAL INFORMATION**





**Item
              1.**
            **Financial
                Statements**




OSAGE
        EXPLORATION AND DEVELOPMENT, INC.
 CONSOLIDATED
        BALANCE SHEETS
 As
        of
        December 31, 2006 and September 30, 2007


December
                  31,
              
              September
                  30,2006
              
              2007(Unaudited)**ASSETS**Current
                  Assets:Cash
                  and cash equivalents
              
              $
              -
              
              $
              902,431Prepaid
                  Expenses
              
              
              
              
              
              89,176Accounts
                  Receivable
              
              
              14,399
              
              
              19,608Deferred
                  Financing Costs
              
              
              
              
              
              44,933Total
                  Current Assets
              
              
              14,399
              
              
              1,056,148Property
                  and Equipment, at cost (Note 2):Oil
                  and gas properties and equipment
              
              
              103,177
              
              
              155,521Capitalized
                  asset retirement costs
              
              
              13,675
              
              
              13,675Other
                  property & equipment
              
              
              -
              
              
              17,717Less:
                  accumulated depletion, depreciation
              
              
              116,852
              
              
              186,913and
                  amortization
              
              
              (2,795
              )
              
              (8,242
              )114,057
              
              
              178,671Bank
                  CD pledged for Bond
              
              
              30,000
              
              
              30,000Bank
                  CD pledged for Letter of Credit (Note 6)
              
              
              
              
              
              145,226Colombian
                  Deposits (Note 4)
              
              
              
              
              
              1,116,791Deposits
                  (Note 5)
              
              
              82,000
              
              
              82,000Total
                  Assets
              
              $
              240,456
              
              $
              2,608,836**LIABILITIES
                  AND STOCKHOLDERS' EQUITY**Current
                  Liabilities:Accounts
                  payable
              
              $
              22,534
              
              $
              16,739Bank
                  overdraft
              
              
              4,138
              
              
              -Accrued
                  expenses
              
              
              20,307Current
                  Maturity of Promissory Note (Note 10)
              
              
              -
              
              
              3,412Convertible
                  Debt, net of $185,976 and $871,925 ofunamortized
                  discount (Note 7 and 9)
              
              
              67,836
              
              
              228,075Total
                  Current Liabilities
              
              
              114,815
              
              
              248,226Promissory
                  Note, net of Current Maturity (Note 10)
              
              
              
              
              
              8,547Liability
                  for Asset Retirement Obligations (Note 14)
              
              
              15,043
              
              
              16,171Commitments
                  and Contingencies (Note 11)Stockholders'
                  Equity:Common
                  stock, $0.0001 par value, 190,000,000 sharesauthorized;
                  29,484,858 and 33,359,775 shares
              
              
              2,948
              
              
              3,335issued
                  and outstanding as of December 31, 2006and
                  September 30, 2007, respectively.Additional-Paid-in-Capital
              
              
              1,226,691
              
              
              4,489,028Stock
                  Purchase Notes Receivable
              
              
              (470,875
              )
              
              (470,625
              )Accumulated
                  Deficit
              
              
              (648,166
              )
              
              (1,654,051
              )Accumulated
                  Other Comprehensive Loss -Currency
                  Translation Loss
              
              
              
              
              
              (31,795
              )110,598
              
              
              2,335,892Total
                  Liabilities and Stockholders' Equity
              
              $
              240,456
              
              $
              2,608,836




The
        accompanying notes are an integral part of these consolidated financial
        statements.
 1
 
  OSAGE
            EXPLORATION AND DEVELOPMENT, INC.
 CONSOLIDATED
            STATEMENTS OF OPERATIONS
 For
            the
            Three and Nine Months Ended
 September
            30, 2007 and September 30, 2006
  Nine
                      Months Ended September 30,
                  
                  Three
                      Months Ended September 30,2007
                  
                  2006
                  
                  2007
                  
                  2006(Unaudited)
                  
                  (Unaudited)
                  
                  (Unaudited)
                  
                  (Unaudited)Operating
                      RevenuesOil
                      & Gas Sales
                  
                  $
                  225,238
                  
                  $
                  72,187
                  
                  $
                  62,538
                  
                  $
                  24,815Total
                      Operating Revenues
                  
                  
                  225,238
                  
                  
                  72,187
                  
                  
                  62,538
                  
                  
                  24,815Operating
                      Costs and ExpensesOperating
                      Expenses
                  
                  
                  73,358
                  
                  
                  67,897
                  
                  
                  22,529
                  
                  
                  30,072Depreciation,
                      Depletion and Accretion
                  
                  
                  5,447
                  
                  
                  1,186
                  
                  
                  2,178
                  
                  
                  401General
                      and Administrative
                  
                  
                  401,748
                  
                  
                  391,081
                  
                  
                  143,546
                  
                  
                  101,334Total
                      Operating Costs and Expenses
                  
                  
                  480,553
                  
                  
                  460,164
                  
                  
                  168,253
                  
                  
                  131,807Operating
                      (Loss)
                  
                  
                  (255,315
                  )
                  
                  (387,977
                  )
                  
                  (105,715
                  )
                  
                  (106,992
                  )Other
                      Income (Expenses):Interest
                      Income
                  
                  
                  46,702
                  
                  
                  1,498
                  
                  
                  42,233
                  
                  
                  385Interest
                      Expense
                  
                  
                  (797,272
                  )
                  
                  (51,886
                  )
                  
                  (276,431
                  )
                  
                  (25,446
                  )Other(Loss)
                      before Income Taxes
                  
                  
                  (1,005,885
                  )
                  
                  (438,365
                  )
                  
                  (339,913
                  )
                  
                  (132,053
                  )Provision
                      for Income Taxes
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Net
                      (Loss)
                  
                  $
                  (1,005,885
                  )
                  $
                  (438,365
                  )
                  $
                  (339,913
                  )
                  $
                  (132,053
                  )Other
                      Comprehensive Income, net of tax:Foreign
                      Currency Translation Adjustment
                  
                  
                  (31,795
                  )
                  
                  
                  
                  
                  (31,795
                  )Other
                      Comprehensive Income
                  
                  
                  (31,795
                  )
                  
                  0
                  
                  
                  (31,795
                  )
                  
                  0Comprehensive
                      (Loss)
                  
                  $
                  (1,037,680
                  )
                  $
                  (438,365
                  )
                  $
                  (371,708
                  )
                  $
                  (132,053
                  )Basic
                      and Diluted Loss per Share
                  
                  $
                  (0.03
                  )
                  $
                  (0.01
                  )
                  $
                  (0.01
                  )
                  $
                  (0.00
                  )Weighted
                      average number of common shareand
                      common share equivalents used tocompute
                      basic and dilluted Loss per Share
                  
                  
                  29,454,478
                  
                  
                  32,986,677
                  
                  
                  31,240,867
                  
                  
                  29,207,174
  The
            accompanying notes are an integral part of these consolidated financial
            statements.
  2




OSAGE
        EXPLORATION AND DEVELOPMENT, INC.


CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 For
        the
        Nine Month Ended
 September
        30, 2007 and September 30, 2006
  Nine
                  Months Ended September 30,2007
              
              2006(Unaudited)
              
              (Unaudited)Cash
                  flows from Operating Activities:Net
                  (Loss)
              
              $
              (1,005,885
              )
              $
              (438,365
              )Adjustments
                  to reconcile net (loss) to net cashused
                  by operating activites:Beneficial
                  Conversion of Convertible Debenture
              
              
              365,032
              
              
              22,775Increase
                  in Accrued Interest
              
              
              (20,307
              )
              
              11,997Accretion
                  of shares issued with Secured Convertible Debenture
              
              
              250,000Accretion
                  of Warrants issued with Convertible Debenture
              
              
              111,481
              
              
              16,088Accretion
                  of Asset Retirment Obligation
              
              
              1,128
              
              
              1,026Amortization
                  of Deferred Financing Cost
              
              
              10,067Issuance
                  of shares for Accrued Interest
              
              
              58,700Provision
                  for depletion, depreciation and amortization
              
              
              5,447
              
              
              1,186Changes
                  in operating assets and liabitlies:(Increase)
                  in accounts receivable
              
              
              (5,209
              )
              
              (359
              )(Increase)
                  in prepaid expenses
              
              
              (89,176
              )Increase/(Decrease)
                  in bank overdraft
              
              
              (4,138
              )Increase/(decrease)
                  in accounts payable and accrued expenses
              
              
              (5,795
              )
              
              (36,088
              )Net
                  cash used by operating activities
              
              
              (328,655
              )
              
              (421,740
              )Cash
                  flows from Investing Activities:Deposits
                  made on Oil & Gas Properties
              
              
              
              
              
              (82,000
              )Bank
                  CD pledged for Letter of Credit
              
              
              (144,000
              )Interest
                  earned on Bank CD pledged for Letter of Credit
              
              
              (1,226
              )Payments
                  for purchase of Oil & Gas Lease
              
              
              
              
              
              (14,000
              )Increase
                  in Colombian Deposits
              
              
              (1,116,791
              )Investments
                  made on Colombian Oil & Gas Properties
              
              
              (52,344
              )Capital
                  expenditures
              
              
              (17,717
              )Net
                  cash used in investing activities
              
              
              (1,332,078
              )
              
              (96,000
              )Cash
                  flows from Financing Activities:Proceeds
                  from issuance of Stock and Warrant Units
              
              
              860,250Proceeds
                  from issuance of Common Stock
              
              
              427,500Proceeds
                  from issuance of Secured Convertible Debenture
              
              
              250,000Proceeds
                  from issuance of Unsecured Convertible Promissory Note
              
              
              1,100,000Payment
                  of Debt Offering Costs
              
              
              (55,000
              )Proceeds
                  from issuance of Convertible Debentures
              
              
              
              
              
              349,000Proceeds
                  from sale of LLC interests
              
              
              
              
              
              130,000Payments
                  made on behalf of Company
              
              
              
              
              
              18,399Proceeds
                  from payment on Stock Purchase Notes Receivable
              
              
              250Proceeds
                  from issuance of Promissory Note
              
              
              13,046Payments
                  on Promissory Note
              
              
              (1,087
              )Net
                  cash provided by financing activities
              
              
              2,594,959
              
              
              497,399Effect
                  of exchange rate on cash and cash equivalents
              
              
              (31,795
              )Net
                  increase (decrease) in cash and cash equivalents
              
              
              902,431
              
              
              (20,341
              )Cash
                  and Cash equivalents beginning of the period
              
              
              -
              
              
              31,045Cash
                  and Cash equivalents at end of period
              
              $
              902,431
              
              $
              10,704SUPPLEMENTAL
                  CASH FLOW INFORMATION:Cash
                  Payments for Interest
              
              $
              21,171
              
              $
              -Cash
                  Payment for Taxes
              
              
              -
              
              
              -Non-Cash
                  Transactions:Shares
                  issued with Secured Convertible Debenture
              
              
              250,000Shares
                  issued upon conversion of Secured Convertible Debentureand
                  accrued interest
              
              
              275,000




The
        accompanying notes are an integral part of these consolidated financial
        statements.
 3





OSAGE
      EXPLORATION AND DEVELOPMENT, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


September
      30, 2007 (unaudited)





1.
      BASIS
      OF PRESENTATION





Osage
      Exploration and Development, Inc. (“Osage” or the “Company”) has prepared the
      accompanying unaudited consolidated financial statements in accordance with
      accounting principles generally accepted in the United States of America for
      interim financial information and pursuant to the rules and regulations of
      the
      Securities and Exchange Commission (“SEC”) instructions to Form 10-QSB and Item
      310(b) of regulation S-B. These financial statements should be read together
      with the financial statements and notes in the Company’s 2006 Form 10-SB filed
      with the SEC. Certain information and footnote disclosures normally included
      in
      financial statements prepared in accordance with accounting principles generally
      accepted in the United States of America have been condensed or omitted. The
      accompanying financial statements reflect all adjustments and disclosures,
      which, in the Company’s opinion, are necessary for fair presentation. All such
      adjustments are of a normal recurring nature. The results of operations for
      the
      interim periods are not necessarily indicative of the results of the entire
      year.





The
      Company has incurred significant losses and had negative cash flow from
      operations in each of the last two years and the nine months ended September
      30,
      2007 and has an accumulated deficit of $1,654,051 (unaudited) at September
      30,
      2007 and $648,166 at December 31, 2006. Substantial portions of the losses
      are
      attributable to legal and professional fees as well as interest expense. The
      Company's operating plans require additional funds that may take the form of
      debt or equity financings. There can be no assurance that any additional funds
      will be available. The Company's ability to continue as a going concern is
      in
      substantial doubt and is dependent upon achieving a profitable level of
      operations and obtaining additional financing.





Management
      of our Company has undertaken steps as part of a plan to improve operations
      with
      the goal of sustaining our operations for the next twelve months and beyond.
      These steps include (a) increasing our current production, (b) controlling
      overhead and expenses and (c) raising additional capital and/or obtaining
      financing.





There
      can
      be no assurance the Company can successfully accomplish these steps and it
      is
      uncertain the Company will achieve a profitable level of operations and obtain
      additional financing. There can be no assurance that any additional financings
      will be available to the Company on satisfactory terms and conditions, if at
      all. In the event we are unable to continue as a going concern, we may elect
      or
      be required to seek protection from our creditors by filing a voluntary petition
      in bankruptcy or may be subject to an involuntary petition in bankruptcy. To
      date, management has not considered this alternative, nor does management view
      it as a likely occurrence.





These
      consolidated financial statements do not give effect to any adjustments which
      would be necessary should the Company be unable to continue as a going concern
      and therefore be required to realize its assets and discharge its liabilities
      in
      other than the normal course of business and at amounts different from those
      reflected in the accompanying consolidated financial statements.





IMPACT
      OF
      RECENT ACCOUNTING PRONOUNCEMENTS





**Recent
      Pronouncements**





Fair
      Value Measurements





In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards (“SFAS”) No. 157, *“* Fair
      Value Measurements, *”* which
      establishes a framework for measuring fair value, and expands disclosures about
      fair value measurements required under the accounting pronouncements, but does
      not change existing guidance as to whether or not an instrument is carried
      at
      fair value. Additionally, it establishes a fair value hierarchy that prioritizes
      the information used to develop those assumptions. SFAS No. 157 is effective
      for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and interim periods within those fiscal years. Earlier application is
      encouraged, provided that the reporting entity has not yet issued financial
      statements for fiscal year, including financial statements for an interim period
      within the fiscal year. The Company is currently evaluating the impact, if
      any,
      that SFAS No. 157 will have on its consolidated financial
      statements.





4


Defined
      Benefit Pension and Other Postretirement Plans





In
      September 2006, the FASB, issued SFAS No. 158, “Employers’ Accounting for
      Defined Benefit Pension and Other Postretirement Plans, an Amendment of FASB
      Statements No. 87, 88, 106, and 132R,” which requires employers to recognize the
      underfunded or overfunded status of a defined benefit postretirement plan as
      an
      asset or liability in its statement of financial position and to recognize
      changes in the funded status in the year in which the changes occur through
      accumulated other comprehensive income. Additionally, SFAS No. 158 requires
      employers to measure the funded status of a plan as of the date of its year-end
      statement of financial position. The new reporting requirements and related
      new
      footnote disclosure rules of SFAS No. 158 are effective for fiscal years ending
      after December 15, 2006. We adopted the provisions of SFAS No. 158 for the
      year
      end 2006, and the effect of recognizing the funded status in accumulated other
      comprehensive income was not significant. The new measurement date requirement
      applies for fiscal years ending after December 15, 2008.





Fair
      Value Option for Financial Assets and Financial Liabilities





In
      February of 2007 the FASB issued SFAS No. 159, “ The
      Fair
      Value Option for Financial Assets and Financial Liabilities —Including
      an amendment of FASB Statement No. 115.” The statement permits entities to
      choose to measure many financial instruments and certain other items at fair
      value. The objective is to improve financial reporting by providing entities
      with the opportunity to mitigate volatility in reported earnings caused by
      measuring related assets and liabilities differently without having to apply
      complex hedge accounting provisions. The statement is effective as of the
      beginning of an entity’s first fiscal year that begins after November 15, 2007.
      The Company is analyzing the potential accounting treatment.





Income
      Tax





The
      Company adopted the provisions of FASB Interpretation No. 48, Accounting for
      Uncertainty in Income Taxes, on January 1, 2007. As a result of the
      implementation of FIN 48, the company made a comprehensive review of its
      portfolio of tax positions in accordance with recognition standards established
      by FIN 48. As a result of the implementation of Interpretation 48, the Company
      recognized no material adjustments to liabilities or stockholders
      equity.





When
      tax
      returns are filed, it is highly certain that some positions taken would be
      sustained upon examination by the taxing authorities, while others are subject
      to uncertainty about the merits of the position taken or the amount of the
      position that would be ultimately sustained. The benefit of a tax position
      is
      recognized in the financial statements in the period during which, based on
      all
      available evidence, management believes it is more likely than not that the
      position will be sustained upon examination, including the resolution of appeals
      or litigation processes, if any. Tax positions taken are not offset or
      aggregated with other positions. Tax positions that meet the
      more-likely-than-not recognition threshold are measured as the largest amount
      of
      tax benefit that is more than 50 percent likely of being realized upon
      settlement with the applicable taxing authority. The portion of the benefits
      associated with tax positions taken that exceeds the amount measured as
      described above is reflected as a liability for unrecognized tax benefits in
      the
      accompanying balance sheets along with any associated interest and penalties
      that would be payable to the taxing authorities upon examination.





Interest
      associated with unrecognized tax benefits are classified as interest expense
      and
      penalties are classified in selling, general and administrative expenses in
      the
      statements of income.





5


2  .
      OIL AND
      GAS PROPERTIES





Oil
      and
      gas properties consisted of the following as of December 31, 2006 and September
      30, 2007:





December
                31, 2006
            
            September
                30, 2007(unaudited)Properties
                subject to amortization
            
            $
            103,177
            
            $
            103,177Properties
                not subject to amortization
            
            
            0
            
            
            52,344Capitalized
                asset retirement costs
            
            
            13,675
            
            
            13,675Accumulated
                depreciation and depletion
            
            
            (2,795
            )
            
            (5,535
            )Oil
                and gas properties, net
            
            $
            114,057
            
            $
            163,661





Depreciation
      and depletion expense totaled $5,447 and $1,186 for the nine months ended
      September 30, 2007 and 2006, respectively and $2,178 and $401 for the three
      months ended September 30, 2007 and 2006, respectively.





3.
      GEOGRAPHICAL INFORMATION





The
      following table sets forth revenues for the periods reported and assets by
      geographic location:





United
                States
            
            Colombia
            
            ConsolidatedSeptember
                30, 2007:Revenues
            
            $
            225,238
            
            $
            0
            
            $
            225,238Long
                Lived Assets
            
            
            126,327
            
            
            52,344
            
            $
            178,671September
                30, 2006:Revenues
            
            $
            72,187
            
            $
            0
            
            $
            72,187Long
                Lived Assets
            
            
            101,373
            
            
            0
            
            
            101,373





4.
      COLOMBIAN DEPOSITS





In
      June
      2007, we entered into an agreement (the “Agreement”) with Gold Oil, Plc (“Gold”)
      and Empesa Petrolera de Servicios y Asesorias, S.A. (“Empesa), whereby we
      farmed-in to the approximately 165 square mile Rosablanca concession in Colombia
      awarded by the Agencia Nacional de Hidrocarburos (“ANH”) to Gold in June 2007.
      In August 2007, we (i) paid $1,200,000 to Gold representing the funds that
      Gold
      had previously issued to a trust established by the ANH to use for drilling
      the
      first well for the Rosablanaca concession and (ii) issued a letter of credit
      in
      the amount of $144,000 for the benefit of Gold’s bank in Colombia representing
      the guarantee required by the ANH. We anticipate that the total cost of drilling
      the first well to be approximately $2,500,000 to $3,000,000, of which $1,200,000
      has already been deposited in trust with the ANH to be used for the first well.
      The balance in the trust deposit account as of September 30, 2007 is $1,116,791.





5.
      DEPOSITS





In
      January 2006, we placed a deposit totaling $82,000 on approximately 85% of
      the
      working interest of a natural gas property consisting of 640 acres with proved
      undeveloped reserves located in Hansford County, Texas. The agreement was
      amended in March 2007 stipulating that unless we acquired a contiguous lease
      by
      June 1, 2007 at a cost of $48,000, a second contiguous lease by August 1, 2007
      for $80,000 and place $445,180 in escrow for drilling and completing the first
      well with actual commencement of drilling prior to September 15, 2007, the
      seller shall have the right to refund 90% of the initial purchase price and
      void
      the agreement. In September 2007, the seller provided us with an extension
      until
      June 30, 2008 to fulfill all of our obligations under the agreement. Until
      we
      raise additional capital, we do not anticipate further investments in this
      project and as such, the agreement may be voided by the seller at any time
      after
      June 30, 2008.





6.
      BANK
      CD PLEDGED FOR LETTER OF CREDIT





In
      August
      2007, we placed $144,000 as a certificate of deposit with a bank as collateral
      for the $144,000 letter of credit required by the ANH as more fully described
      in
      footnote 4 above. If we do not complete drilling and testing of the first well
      in the Rosablanca concession by July 3, 2008, and we do not receive extensions
      from the ANH, we may lose our entire interest in the concession and the $144,000
      letter of credit we previously issued. The balance, including accrued interest,
      in the Bank CD as of September 30, 2007 is $145,226





6


7.
      CONVERTIBLE DEBENTURES





From
      February 2006 through October 2006, we issued Convertible Debentures with
      three-year detachable warrants to accredited investors for gross proceeds of
      $349,000. The Convertible Debentures mature one year from issuance, carried
      a
      10% interest rate and were convertible at $1.20 per share for $263,000 of the
      Convertible Debentures, $0.75 as to $50,000 of the Convertible Debentures and
      $0.80 as to $36,000 of the Convertible Debentures. As of December 31, 2006,
      we
      had $349,000 of Convertible Debentures outstanding and accrued interest of
      $20,302. All of the Convertible Debentures, including accrued interest on
      $337,000 of the Convertible Debentures, converted in January and February 2007
      into 362,417 shares of our Common Stock. In May 2007, we paid $1,200 of interest
      on $12,000 of the Convertible Debentures.





Pursuant
      to EITF 98-5, "Accounting for Convertible Securities with Beneficial Conversion
      Features or Contingently Adjustable Conversion Ratios" and EITF 00-27,
“Application of Issue No. 98-5 in Certain Convertible Instruments,” based on
      relative fair values of the warrant and the debt, the proceeds from the debt
      were allocated to the warrant and the debt on a relative fair value basis.
      We
      recorded $209,014 upon the issuance of the Convertible Debentures attributable
      to the beneficial conversion feature as additional paid in capital. The discount
      was being amortized using the effective interest rate method over the term
      of
      the indebtedness. The warrants are exercisable for a period of three years
      with
      an exercise price of $2.40, for $299,000 of the Convertible Debentures, and
      $1.50 as to $50,000 of the Convertible Debenture. Using the Black Scholes
      pricing model, with volatility of 80.0%, risk-free rate of 4.61% to 5.15% and
      a
      0% dividend yield, the warrants were determined to have a fair value of $138,604
      and were recorded as additional paid in capital. The discount was being
      amortized using the effective interest rate method over the term of the
      indebtedness. The balance of the unamortized discount at the date of conversion
      was expensed.





8.
      SECURED CONVERTIBLE DEBENTURE





On
      February 16, 2007, we issued a $250,000 Secured Convertible Debenture and
      300,000 shares of common stock to an institutional investor for gross proceeds
      of $250,000. The Secured Convertible Debenture matured July 31, 2007, had a
      10%
      interest rate with a minimum interest amount of $25,000 due at Maturity, and
      was
      convertible, in whole or in part, into shares of common stock at a conversion
      price $0.25 per share. The shares issued in conjunction with the Secured
      Convertible Debenture were valued at $250,000 based on the price of the stock
      issued at the most recent private placement offering and were recorded as
      additional pain in capital. The discount of $250,000 was being amortized using
      the effective interest rate method over the term of the indebtedness. Pursuant
      to EITF 98-5, "Accounting for Convertible Securities with Beneficial Conversion
      Features or Contingently Adjustable Conversion Ratios", we recorded an interest
      expense of $0 upon the issuance of the Secured Convertible Debentures
      attributable to the beneficial conversion feature as the value of the shares
      exceeded the face value of the Secured Convertible Debenture. In July 31, 2007,
      the Secured Convertible Debenture along with accrued interest converted into
      1,100,000 shares of common stock.





9.
      UNSECURED CONVERTIBLE PROMISSORY NOTE





In
      July
      2007, we issued a $1,100,000 unsecured convertible promissory note (“Unsecured
      Convertible Promissory Note”) to one institutional investor for gross proceeds
      of $1,100,000. The Unsecured Convertible Promissory Note matures September
      30,
      2008, has an 8% interest rate, payable in cash quarterly, and is convertible,
      in
      whole or in part, into units, with each unit (“Unit”) priced at $1.00 and
      consisting of one share of common stock and one warrant, exercisable at $1.25
      per share maturing three years from issuance. We may prepay the Unsecured
      Convertible Promissory Note at any time prior to maturity with no penalty.
      We
      may, but only at maturity, elect to repay the Unsecured Convertible Promissory
      Note in Units valued at $1.00 per Unit. Pursuant to EITF 98-5, "Accounting
      for
      Convertible Securities with Beneficial Conversion Features or Contingently
      Adjustable Conversion Ratios" and EITF 00-27, “Application of Issue No. 98-5 in
      Certain Convertible Instruments,” we recorded $1,067,274 upon the issuance of
      the Unsecured Convertible Promissory Note attributable to the beneficial
      conversion feature as additional paid in capital. The discount is being
      amortized using the effective interest rate method over the term of the
      indebtedness.





7


10.
      PROMISSORY NOTE





On
      April
      27, 2007, we purchased a truck to be used by our pumper in our Oklahoma
      properties by issuing a promissory note (the “Promissory Note”) to a bank
      secured by the truck. The Promissory Note matures October 27, 2010, has a
      variable interest rate of Prime plus 1.0%, and has monthly principal and
      interest payments totaling $366. As of September 30, 2007, the interest rate
      on
      the Promissory Note was 9.25%.





The
      following table summarizes the balance of the note at September 30,
      2007:




Promissory
                Note Outstanding at September 30, 2007
            
            $
            11,959Less
                Current Portion
            
            
            3,412$
            8,547





11.
      COMMITMENTS AND CONTINGENCIES





ENVIRONMENT





Osage,
      as
      owner and operator of oil and gas properties, is subject to various Colombian
      and U.S. federal, state, and local laws and regulations relating to discharge
      of
      materials into, and protection of, the environment. These laws and regulations
      may, among other things, impose liability on the owner of real property and
      the
      lessee under oil and gas leases for the cost of pollution clean-up resulting
      from operations, subject the owner/lessee to liability for pollution damages
      and
      impose restrictions on the injection of liquids into subsurface strata.





Although
      Company environmental policies and practices are designed to ensure compliance
      with these laws and regulations, future developments and increasing stringent
      regulations could require the Company to make additional unforeseen
      environmental expenditures





The
      Company maintains insurance coverage that it believes is customary in the
      industry, although it is not fully insured against all environmental
      risks.





The
      Company is not aware of any environmental claims existing as of September 30,
      2007 that would have a material impact on its consolidated financial position
      or
      results of operations. There can be no assurance, however, that current
      regulatory requirements will not change, or past non-compliance with
      environmental laws will not be discovered on the Company's
      property.





Pursuant
      to our Agreement with Gold and Empesa, we are considered the operators of the
      concession and will pay all costs associated with drilling and testing of the
      first well on the Rosablanca project. If we do not complete drilling and testing
      of the first well by July 3, 2008, and we do not receive extensions from the
      ANH, we may lose our entire interest in the concession and the $144,000 letter
      of credit we previously issued. However, we would be entitled to receive the
      balance of the $1,200,000 deposit ($1,116,791 as of September 30, 2007) that
      we
      have in trust with the ANH. After drilling the first well, we are required
      to
      provide the ANH with a budget and program for drilling successive wells. The
      concession with the ANH shall remain in effect as long as we meet our time
      obligations to drill each well that we present to the ANH. We anticipate that
      we
      will need to raise additional capital to complete the first well.





LAND
      RENTALS AND OPERATING LEASES





The
      Company leases office facilities and equipment under month-to-month operating
      leases. As such, as of September 30, 2007, the Company did not have any future
      minimum rental payments required under operating leases.





Rental
      expense charged to operations totaled $8,625 and $1,908 for the nine months
      ended September 30, 2007 and 2006, respectively, and $3,075 and $1,908 for
      the
      three months ended September 30, 2007 and 2006, respectively.





8


12.
      EQUITY TRANSACTIONS





Unit
      Offering


In
      June
      and July 2007, for gross proceeds of $925,000, we issued 925,000 shares of
      common stock and 1,387,500 warrants, exercisable at $1.50 per share expiring
      on
      September 30, 2010 to two accredited investors and one institutional investor.





Common
      Stock Offering


In
      April
      and May 2007, for gross proceeds of $475,000, we issued 1,187,500 shares of
      our
      common stock at a price per share of $0.40 to nine accredited investors and
      entities.





13.
      MAJOR
      CUSTOMERS





During
      the nine months ended September 30, 2007 and 2006, as well as the quarter ended
      September 30, 2007 and 2006, one customer, Sunoco, Inc., accounted for 100.0%
      of
      our total oil and gas sales.





14.
      ASSET
      RETIREMENT OBLIGATIONS





The
      Company recognizes a liability at discounted fair value for the future
      retirement of tangible long-lived assets and associated assets retirement cost
      associated with the petroleum and natural gas properties. The fair value of
      the
      liability is capitalized as part of the cost of the related asset and amortized
      to expense over its useful life. The liability accretes until the date of
      expected settlement of the retirement obligations. The related accretion expense
      is recognized in the statement of operations. The provision will be revised
      for
      the effect of any changes to timing related to cash flow or undiscounted
      abandonment costs. Actual expenditures incurred for the purpose of site
      reclamation are charged to the asset retirement obligations to the extent that
      the liability exists on the balance sheet. Differences between the actual costs
      incurred and the fair value of the liability recorded are recognized in income
      in the period the actual costs are incurred.





There
      are
      no legally restricted assets for the settlement of asset retirement obligations.
      A reconciliation of the Company's asset retirement obligations for the periods
      presented is as follows:





Year
                Ended
            
            Nine
                Months Ended September 30,December
                31
              2006
            
            2007
              (unaudited)
            
            2006
              (unaudited)Beginning
                Balance
            
            $
            13,675
            
            $
            15,043
            
            $
            13,675Incurred
                during the periodAdditions
                for new wellsAccretion
                expense
            
            
            1,368
            
            
            1,128
            
            
            1,026Ending
                Balance
            
            $
            15,043
            
            $
            16,171
            
            $
            14,701





**Item
              2.**
            **Management’s
                Discussion and Analysis or Plan of
                Operation.**





This
      report contains forward-looking statements within the meaning of Section 27A
      of
      the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
      1934 that include, among others, statements of: expectations, anticipations,
      beliefs, estimations, projections, and other similar matters that are not
      historical facts, including such matters as: future capital requirements,
      development and exploration expenditures (including the amount and nature
      thereof), drilling of wells, reserve estimates (including estimates of future
      net revenues associated with such reserves and the present value of such future
      net revenues), future production of oil and gas, repayment of debt, business
      strategies, and expansion and growth of business operations. These statements
      are based on certain assumptions and analyses made by our management in light
      of
      past experience and perception of: historical trends, current conditions,
      expected future developments, and other factors that our management believes
      are
      appropriate under the circumstances. We caution the reader that these
      forward-looking statements are subject to risks and uncertainties, including
      those associated with the financial environment, the regulatory environment,
      and
      trend projections, that could cause actual events or results to differ
      materially from those expressed or implied by the statements. Such risks and
      uncertainties include those risks and uncertainties identified
      below.





9


Significant
      factors that could prevent us from achieving our stated goals include: declines
      in the market prices for oil and gas, adverse changes in the regulatory
      environment affecting us, the inherent risks involved in the evaluation of
      properties targeted for acquisition, our dependence on key personnel, the
      availability of capital resources at terms acceptable to us, the uncertainty
      of
      estimates of proved reserves and future net cash flows, the risk and related
      cost of replacing produced reserves, the high risk in exploratory drilling
      and
      competition. You should consider the cautionary statements contained or referred
      to in this report in connection with any subsequent written or oral
      forward-looking statements that may be issued. We undertake no obligation to
      release publicly any revisions to any forward-looking statement to reflect
      events or circumstances after the date hereof or to reflect the occurrence
      of
      unanticipated events.





In
      June
      2007, we entered into an agreement with Gold and Empesa, whereby we farmed-in
      to
      the approximately 165 square mile Rosablanca concession in Colombia awarded
      by
      the ANH to Gold in June, 2007. Under the Agreement, we are the operators of
      the
      concession and will pay all costs associated with drilling and testing of the
      first well on the Rosablanca project. Revenues generated from the first well
      will be allocated 50% to us, 40% to Gold and 10% to Empesa. If we do not
      complete drilling and testing of the first well by July 3, 2008, we will lose
      our entire interest in the concession. On each additional well, we will
      contribute 50% of the costs, Gold will contribute 40% of the costs and Empesa
      will contribute 10% of the costs. Revenues will be allocated according to the
      above percentages. If any party doesn’t contribute its share of the costs, its
      revenue interest will automatically be transferred to the party that provides
      the capital. In August 2007, we (i) paid $1,200,000 to Gold representing the
      funds that Gold had previously issued to a trust established by the ANH to
      use
      for drilling the first well for the Rosablanaca concession and (ii) issued
      a
      letter of credit in the amount of $144,000 for the benefit of Gold’s bank in
      Colombia representing the guarantee required by the ANH. We anticipate that
      the
      total cost of drilling the first well to be approximately $2,500,000 to
      $3,000,000, of which $1,200,000 has already been deposited in trust with the
      ANH
      to be used for the first well. In accordance with the ANH, we must spend at
      least $1,200,000 on expenses relating to the first well, the amount already
      deposited in trust, by July 3, 2008. If we do not complete drilling and testing
      of the first well by July 3, 2008, and we do not receive extensions from the
      ANH, we may lose our entire interest in the concession and the $144,000 letter
      of credit we previously issued.





We
      anticipate that we will need to raise a minimum of $1,000,000 to drill the
      first
      well and anticipate that we will begin drilling in the first quarter of 2008.
      We
      intend to focus most of our management and capital resources towards the
      Rosablanca project as well as other opportunities in Colombia. In order to
      minimize our development risk, we intend to raise $5,000,000 to allow us the
      ability to drill more than one well. If we are unsuccessful in raising
      additional capital, we may not be in a position to complete the first well
      in
      our Rosablanca project.


We
      have
      incurred $73,358 and $67,897 in the nine months ended September 30, 2007and
      September 30, 2006, respectively, in operating expenses in order to try to
      increase production at the Osage property. The major source of funds for these
      costs was the sale of oil from the Osage property.





We
      have
      made a deposit of $82,000 on a property in Hansford County, Texas. We are
      obligated to incur an additional $573,810 for the property by June 30,
      2008consisting of purchasing of additional contiguous leases and depositing
      funds in escrow for drilling and completion of the first well. If we do not
      fulfill our obligations, the seller may void the agreement at any time after
      June 30, 2008 and return 90% of all payments received. We do not anticipate
      incurring additional expenses on this property until we have raised sufficient
      capital for our Rosablanca project and as such, we may lose 10% of our initial
      funding.





As
      of
      September 30, 2007, we have a note receivable due December 2009 totaling
      $470,625 that was issued in conjunction with a change of control in December
      2006, of which $239,250 of the note receivable is from related parties. If
      we do
      not collect this note, it could have a material impact on our cash and impair
      our ability to execute our business plan.





10


We
      have
      undertaken steps as part of a plan to improve operations with the goal of
      sustaining our operations for the next twelve months and beyond. These steps
      include (a) raising additional capital and/or obtaining financing, (b)
      increasing our current production in the Osage property and (c) controlling
      overhead and expenses.





There
      can
      be no assurance that we will successfully accomplish these steps and it is
      uncertain we will achieve a profitable level of operations and/or obtain
      additional financing. There can be no assurance that any additional financings
      will be available to us on satisfactory terms and conditions, if at all. In
      the
      event we are unable to continue as a going concern, we may elect or be required
      to seek protection from our creditors by filing a voluntary petition in
      bankruptcy or may be subject to an involuntary petition in bankruptcy. To date,
      management has not considered this alternative, nor does management view it
      as a
      likely occurrence.





**Liquidity
      and Capital Resources**





At
      September 30, 2007, we had working capital of $807,922 consisting primarily
      of
      $902,431 in cash and cash equivalents, $89,176 of prepaid expenses, $44,933
      of
      deferred financing costs related to the $1,100,000 Unsecured Convertible
      Debenture and $19,608 of accounts receivable, offset by $228,075 of the
      Unsecured Convertible Debenture, representing $1,100,000 face value less
      $871,925 of unamortized discount, and $16,739 of accounts payable and accrued
      expenses.





We
      have
      raised in excess of $2,500,000 in gross proceeds through various debt and equity
      financings since January 1, 2007 and have used the majority of the net proceeds
      for costs related to our Rosablanca project in Colombia, as well as for working
      capital purposes and professional fees.





Net
      cash
      used by operating activities totaled $328,655 for the nine months ended
      September 30, 2007 compared to net cash used by operating activities of $421,740
      for the nine months ended September 30, 2006. The major components of the net
      cash used in operating activities in the nine months ended September 30, 2007
      were the net loss of $1,005,885 and the increase in prepaid expenses of $89,176,
      offset by $250,000 for the amortization of the value of the shares issued in
      February 2007 with the Secured Convertible Debenture and $365,032 and $111,481
      write-off of the unamortized beneficial conversion feature and value of the
      warrants, respectively, issued with the various debt financings. The major
      component of the net cash used in operating activities in the nine months ended
      September 30, 2006 was the net loss of $438,365.





Net
      cash
      used in investing activities totaled $1,332,078 and $96,000 for the nine months
      ended September 30, 2007 and September 30, 2006, respectively. Net cash used
      in
      investing activities in the nine months ended September 30, 2007 consisted
      primarily of the $1,116,791 increase in deposits in the trust account for our
      on
      Rosablanca project as well as $52,344for investments made in the Rosablanca
      project. Net cash used in investing activities for the nine months ended
      September 30, 2006 consisted primarily of the $82,000 deposit made on the
      Hansford property.





Net
      cash
      provided by financing activities totaled $2,594,959 for the nine months ended
      September 30, 2007 and consisted primarily of $1,100,000 from the issuance
      of
      Unsecured Convertible Promissory Note due September 30, 2008, $860,250 from
      the
      issuance of 925,000 units, consisting of 925,000 shares and 1,387,500 warrants,
      and $427,500 from the issuance of common stock and the proceeds of the $250,000
      Secured Convertible Debenture due July 31, 2007. Net cash provided by financing
      activities of $497,399 for the nine months ended September 30, 2006 consisted
      primarily of $349,000 from the issuance of the Convertible Debentures and
      $130,000 from the sale of LLC interests.





Net
      operating revenues from our oil production are very sensitive to changes in
      the
      price of oil making it very difficult for management to predict whether or
      not
      we will be profitable in the future.





We
      conduct no product research and development.





We
      operate our Osage County, Oklahoma properties through independent contractors
      that operate producing wells for several small oil companies.





We
      are
      responsible for any contamination of land we own or lease. However, there may
      be
      limitations on any potential contamination liabilities as well as claims for
      reimbursement from third parties.





We
      currently sell all of our current oil production to Sunoco, Inc. However, in
      the
      event this customer discontinued oil purchases, we believe we can replace this
      customer with other customers who would purchase the oil at terms standard
      in
      the industry.





11


**Quantitative
      and Qualitative Disclosures about Market Risk**




We
      have
      no material exposure to interest rate changes.





**Results
      of Operations**





**Nine
      Months ended September 30, 2007 compared to Nine Months ended September 30,
      2006**


Revenues
      from oil sales were $225,238 ,
      an
      increase of $153,051 ,
      or
      212.0% ,
      in the
      nine months ended September 30, 2007 compared to $72,187


of
      revenues in the nine months ended September 30, 2006. On a barrel of oil
      equivalent ("BOE") basis, our total production increased to 4,702 BOE in the
      nine months ended September 30, 2007 compared to 1,439 BOE in the nine months
      ended September 30, 2006 due to our secondary recovery efforts we undertook
      in
      2006. Our average price per BOE decreased to $63.52 in the nine months ended
      September 30, 2007 from $66.53 in the nine months ended September 30, 2006.





Our
      operating expenses, consisting primarily of payments to an independent pumper,
      electricity at the wells, repairs and maintenance as well as supplies and
      materials, were $73,358, representing average operating expense per BOE of
      $15.60 for the nine months ended September 30, 2007. For the nine months ended
      September 30, 2006, our operating expenses were $67,897, or an average operating
      expense per BOE of $47.18. The decrease in the average operating expenses per
      BOE is due principally to the increase in production in our Osage property.





General
      and administrative expenses were $401,748 and
      $391,081 in
      the
      nine months ended September 30, 2007 and September 30, 2006, respectively.
      The
      $10,667 increase consisted primarily of an increase of $89,456 in legal and
      professional fees, an increase of $56,168 in travel expenses related primarily
      to travel to Colombia and an increase of $20,658 in insurance expenses, offset
      by a decrease of $163,283 in salary expense.





Depreciation,
      depletion and accretion were $5,447 in the nine months ended September 30,
      2007
      compared to $1,186 in the nine months ended September 30, 2006, primarily due
      to
      the increase in production.





Loss
      from
      operations was $255,315 and
      $387,977 for
      the
      nine months ended September 30, 2007 and September 30, 2006,
      respectively.





Interest
      expense was $797,272 and $51,886 in the nine months ended September 30, 2007
      and
      September 30, 2006, respectively. Interest expense in the nine months ended
      September 30, 2007 consisted primarily of $365,032 for the beneficial conversion
      of the convertible debt, $250,000 amortization of the value of the shares issued
      with the $250,000 Secured Convertible Debentures and $111,481 for the value
      of
      the warrants issued with the Convertible Debentures. Interest expenses for
      the
      nine months ended September 30, 2006 consisted primarily of $22,775 and $16,088
      of the beneficial conversion feature and the value of the warrants,
      respectively, of the Convertible Debentures.





Net
      loss
      was $1,005,885 and $438,365 for the nine months ended September 30, 2007 and
      September 30, 2006, respectively.





Foreign
      currency translation loss was $31,795 and $0 for the nine months ended September
      30, 2007 and September 30, 2006, respectively. Comprehensive loss was $1,037,680
      and $438,365 for the nine months ended September 30, 2007 and September 30,
      2006, respectively.





**Quarter
      ended September 30, 2007 compared to Quarter ended September 30,
      2006**


Revenues
      from oil sales were $62,538, an increase of $37,723, or 152.0%, in the quarter
      ended September 30, 2007 compared to $24,815 of revenues in the quarter ended
      September 30, 2006. On a BOE basis, our total production increased to 1,137
      BOE
      in the quarter ended September 30, 2007 compared to 491 BOE in the quarter
      ended
      September 30, 2006 due to our secondary recovery efforts we undertook in 2006.
      Our average price per BOE increased to $72.95 in the quarter ended September
      30,
      2007 from $67.02 in the quarter ended September 30, 2006.





12


Our
      operating expenses, consisting primarily of payments to an independent pumper,
      electricity at the wells, repairs and maintenance as well as supplies and
      materials, were $22,529, representing average operating expense per BOE of
      $19.81 for the quarter ended September 30, 2007. For the quarter ended September
      30, 2006, our operating expenses were $30,072, or an average operating expense
      per BOE of $61.24. The decrease in the average operating expenses per BOE is
      due
      principally to the increase in production.





General
      and administrative expenses were $143,546 and $101,334 in the quarter ended
      September 30, 2007 and September 30, 2006, respectively. The $44,212 increase
      is
      primarily due to an increase of $57,074 in professional fees, $27,474 increase
      in travel expenses and $9,542 increase in insurance expense, offset by a
      decrease of $60,335 in officer salary and a decrease of $10,305 in other
      salaries.





Depreciation,
      depletion and accretion were $2,178 in the quarter ended September 30, 2007
      compared to$401 in the quarter ended September 30, 2006, primarily due to the
      increase in production.





Loss
      from
      operations was $105,715 and $106,992 for the quarter ended September 30, 2007
      and September 30, 2006, respectively.





Interest
      expense was $276,431 and $25,446 in the three months ended September 30, 2007
      and September 30, 2006, respectively. Interest expense in the three months
      ended
      September 30, 2007 consisted primarily of $195,349 for the beneficial conversion
      of the convertible debt and $47,256 amortization of the value of the shares
      issued with the $250,000 Secured Convertible Debentures. Interest expenses
      for
      the three months ended September 30, 2006 consisted primarily of $11,363 and
      $7,928 of the beneficial conversion feature and the value of the warrants,
      respectively, of the Convertible Debentures.





Net
      loss
      was $339,913 and $132,053 for the three months ended September 30, 2007 and
      September 30, 2006, respectively.





Foreign
      currency translation loss was $31,795 and $0 for the three months ended
      September 30, 2007 and September 30, 2006, respectively. Comprehensive loss
      was
      $339,913 and $132,053 for the three months ended September 30, 2007 and
      September 30, 2006, respectively.





**Item
              3.**
            **Controls
                and Procedures**





We
      maintain disclosure controls and procedures (as defined in Rules 13a-15(e)
      and
      15d-15(e) under the Securities Exchange Act of 1934, as amended the "Exchange
      Act) that are designed to ensure that information required to be disclosed
      in
      our reports filed under the Exchange Act, is recorded, processed, summarized
      and
      reported within the time periods specified in the Securities and Exchange
      Commission’s rules and forms, and that such information is accumulated and
      communicated to our management, including our Chief Executive Officer and
      Interim Chief Financial Officer, as appropriate, to allow timely decisions
      regarding required disclosure. In designing and evaluating the disclosure
      controls and procedures, management recognized that any controls and procedures,
      no matter how well designed and operated, can provide only reasonable assurance
      of achieving the desired control objectives, and management necessarily was
      required to apply its judgment in evaluating the cost-benefit relationship
      of
      possible controls and procedures.





We
      carried out an evaluation under the supervision and with the participation
      of
      management, including our Chief Executive Officer, of the effectiveness of
      the
      design and operation of our disclosure controls and procedures as of September
      30, 2007, the end of the period covered by this report. Based on that
      evaluation, our Chief Executive Officer concluded that our disclosure controls
      and procedures were effective at the reasonable assurance level as of September
      30, 2007.





There
      have been no changes in our internal control over financial reporting (as
      defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
      quarter ended September 30, 2007 that materially affected, or are reasonably
      likely to materially affect, our internal control over financial
      reporting.





13


**PART
      II - OTHER INFORMATION**





**Item
              1.**
            **Legal
                Proceedings**





We
      are
      not a party to, or the subject of, any material pending legal proceedings other
      than ordinary, routine litigation incidental to our business.





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





The
      following securities were sold by us during the quarter ended September 30,
      2007
      without registering the securities under the Securities Act.





Unit
      Offering


In
      July
      2007, for gross proceeds of $25,000, we issued 25,000 shares of common stock
      and
      37,500 warrants, exercisable at $1.50 per share maturing on September 30, 2010
      to one accredited investor.





Unsecured
      Convertible Debenture


In
      July
      2007, we issued a $1,100,000 unsecured convertible promissory note (“Unsecured
      Convertible Promissory Note”) to one institutional investor for gross proceeds
      of $1,100,000. The Unsecured Convertible Promissory Note matures September
      30,
      2008, has an 8% interest rate, payable in cash quarterly, and is convertible,
      in
      whole or in part, into units, with each unit (“Unit”) priced at $1.00 and
      consisting of one share of common stock and one warrant, exercisable at $1.25
      per share maturing three years from issuance. We may prepay the Unsecured
      Convertible Promissory Note at any time prior to maturity with no penalty.
      We
      may, but only at maturity, elect to repay the Unsecured Convertible Promissory
      Note in Units valued at $1.00 per Unit.





In
      all
      instances of the above sales, the shares were issued pursuant to an exemption
      from the registration requirements of the Securities Act of 1933, as amended
      (the "Securities Act") pursuant to Rule 506 of Regulation D and/or Section
      4(2)
      of the Securities Act. The sales were made by Viewpoint Securities, LLC which
      received commissions totaling $56,750.





**Item
              3**
            **Default
                upon Senior Securities**





None





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





None





**Item
              5**
            **Other
                Information**





None





**Item
              6**
            **Exhibits**





See
      Exhibit Index attached hereto.





14





**SIGNATURES**





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




**OSAGE
                EXPLORATION AND DEVELOPMENT, INC.**
              (Registrant)Date: 
                November 8, 2007
            By:
            /s/ Kim
                BradfordKim
                BradfordPresident
                and Chief Executive Officer


Date: 
                November 8, 2007
            By:
            /s/ Kim
                BradfordKim
                BradfordPrincipal
                Financial Officer




15


**EXHIBIT
      INDEX**





The
      following is a list of Exhibits required by Item 601 of Regulation S-B. Except
      for these exhibits indicated by an asterisk which are filed herewith, the
      remaining exhibits below are incorporated by reference to the exhibit previously
      filed by us as indicated.







**Exhibit
                No.**
            
            **Description**3.1
            
            Articles
                of Incorporation of Osage Exploration and Development, Inc.
                (1)3.2
            
            Bylaws
                of Osage Exploration and Development, Inc. (1)31.1
                (*)
            
            Certification
                pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 2002, signed by Kim Bradford, President
                and
                Chief Executive Officer (Principal Executive Officer)31.2
                (*)
            
            Certification
                pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 2002, signed by Kim Bradford, Chief Financial
                Officer (Principal Financial Officer).32.1
                (*)
            
            Certification
                pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002, signed by Kim Bradford, President
                and
                Chief Executive Officer (Principal Executive Officer and Principal
                Financial Officer).





(1)
            Incorporated
                herein by reference to Exhibit 3.1 to the Osage Exploration and
                Development, Inc. Form 10-SB Amendment No. 1 filed August 27,
                2007


(2)
            Incorporated
                herein by reference to Exhibit 3.2 to the Osage Exploration and
                Development, Inc. Form 10-SB Amendment No. 1 filed August 27,
                2007





16