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 June 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)
                729-0222
              (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





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)
            
            32,259,775
              (Outstanding
                at July 27, 2007)









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





**TABLE
      OF CONTENTS**







PART
      I -
      FINANCIAL INFORMATION





PageItem
                1.
            Financial
                Statements (unaudited)Consolidated
                Balance Sheets; June 30, 2007 and December 31, 2006
            1Consolidated
                Statement of Operations; Three and Six Months endedJune
                30, 2007 and June 30, 2006
            2Consolidated
                Statement of Cash Flows; Six Months ended June 30, 2007and
                  June 30, 2006
            3Notes
                to Consolidated Financial Statements
            4Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operations
            9Item
                3.
            Controls
                and Procedures
            11PART
                II - OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            13Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            13Item
                3
            Default
                upon Senior Securities
            13Item
                4
            Submission
                of Matters to a Vote of Security Holders
            13Item
                5
            Other
                Information
            13Item
                6
            Exhibits
            13Signatures
            
            14











**PART
      I. FINANCIAL INFORMATION**





Item
      1.
      Financial Statements






OSAGE
                  EXPLORATION AND DEVELOPMENT, INC.CONSOLIDATED
                  BALANCE SHEETSAs
                  of December 31, 2006 and June 30, 2007December
                  31,
              
              June
                  30,2006
              
              2007(Unaudited)**ASSETS**Current
                  Assets:Cash
                  and cash equivalents
              
              $
              -
              
              $
              1,445,251Accounts
                  Receivable
              
              
              14,399
              
              
              24,483Total
                  Current Assets
              
              
              14,399
              
              
              1,469,734Property
                  and Equipment, at cost (Note 2):Oil
                  and gas properties and equipment
              
              
              103,177
              
              
              103,177Capitalized
                  asset retirement costs
              
              
              13,675
              
              
              13,675Other
                  property & equipment
              
              
              -
              
              
              17,717Less:
                  accumulated depletion, depreciation
              
              
              116,852
              
              
              134,569and
                  amortization
              
              
              (2,795
              )
              
              (6,064
              )114,057
              
              
              128,505Bank
                  CD pledged for Bond
              
              
              30,000
              
              
              30,000Deposits
                  (Note 3)
              
              
              82,000
              
              
              82,000Total
                  Assets
              
              $
              240,456
              
              $
              1,710,239**LIABILITIES
                  AND STOCKHOLDERS' EQUITY**Current
                  Liabilities:Accounts
                  payable
              
              $
              22,534
              
              $
              112,440Bank
                  overdraft
              
              
              4,138
              
              
              -Accrued
                  expenses
              
              
              20,307
              
              
              21,474Current
                  Maturity of Promissory Note (Note 6)
              
              
              -
              
              
              3,334Convertible
                  Debt, net of $185,976 and $47,256 ofunamortized
                  discount (Note 4 and 5)
              
              
              67,836
              
              
              202,744Total
                  Current Liabilities
              
              
              114,815
              
              
              339,992Promissory
                  Note, net of Current Maturity (Note 6)
              
              
              
              
              
              9,460Liability
                  for Asset Retirement Obligations (Note 10)
              
              
              15,043
              
              
              15,795Commitments
                  and Contingencies (Note 7)Stockholders'
                  Equity:Common
                  stock, $0.0001 par value, 190,000,000 sharesauthorized;
                  29,484,858 and 32,234,775 shares
              
              
              2,948
              
              
              3,223issued
                  and outstanding as of December 31, 2006and
                  June 30, 2007, respectively.Additional-Paid-in-Capital
              
              
              1,226,691
              
              
              3,123,616Stock
                  Purchase Notes Receivable
              
              
              (470,875
              )
              
              (470,625
              )Accumulated
                  Deficit
              
              
              (648,166
              )
              
              (1,311,222
              )110,598
              
              
              1,344,992Total
                  Liabilities and Stockholders' Equity
              
              $
              240,456
              
              $
              1,710,239The
                  accompanying notes are an integral part of these consolidated financial
                  statements.





1


OSAGE
                  EXPLORATION AND DEVELOPMENT, INC.CONSOLIDATED
                  STATEMENT OF OPERATIONSFor
                  the Three and Six Month EndedJune
                  30, 2007 and June 30, 2006 (Unaudited)Six
                  Months Ended June 30,
              
              Three
                  Months Ended June 30,2007
              
              2006
              
              2007
              
              2006(Unaudited)
              
              (Unaudited)
              
              (Unaudited)
              
              (Unaudited)Operating
                  RevenuesOil
                  & Gas Sales
              
              $
              162,700
              
              $
              47,372
              
              $
              92,443
              
              $
              32,207Total
                  Operating Revenues
              
              
              162,700
              
              
              47,372
              
              
              92,443
              
              
              32,207Operating
                  Costs and ExpensesOperating
                  Expenses
              
              
              49,731
              
              
              45,675
              
              
              27,422
              
              
              30,216Depreciation,
                  Depletion and Accretion
              
              
              3,269
              
              
              785
              
              
              2,240
              
              
              464General
                  and Administrative
              
              
              256,384
              
              
              281,896
              
              
              170,007
              
              
              207,312Total
                  Operating Costs and Expenses
              
              
              309,384
              
              
              328,356
              
              
              199,669
              
              
              237,992Operating
                  (Loss)
              
              
              (146,684
              )
              
              (280,984
              )
              
              (107,226
              )
              
              (205,785
              )Other
                  Income (Expenses):Interest
                  Income
              
              
              4,469
              
              
              1,112
              
              
              4,055
              
              
              981Interest
                  Expense
              
              
              (520,841
              )
              
              (26,440
              )
              
              (154,282
              )
              
              (21,745
              )(Loss)
                  before Income Taxes
              
              
              (663,056
              )
              
              (306,312
              )
              
              (257,453
              )
              
              (226,549
              )Provision
                  for Income Taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              -Net
                  (Loss)
              
              $
              (663,056
              )
              $
              (306,312
              )
              $
              (257,453
              )
              $
              (226,549
              )Basic
                  and Diluted Loss per Share
              
              $
              (0.02
              )
              $
              (0.07
              )
              $
              (0.01
              )
              $
              (0.03
              )Weighted
                  average number of common shareand
                  common share equivalents used tocompute
                  basic and dilluted Loss per Share
              
              
              30,353,494
              
              
              4,691,256
              
              
              30,917,193
              
              
              8,734,726The
                  accompanying notes are an integral part of these consolidated financial
                  statements.


2




OSAGE
                  EXPLORATION AND DEVELOPMENT, INC.CONSOLIDATED
                  STATEMENT OF CASH FLOWSFor
                  the Six Month Endedended
                  June 30, 2007 and June 30, 2006 (Unaudited)Six
                  Months Ended June 30,2007
              
              2006(Unaudited)
              
              (Unaudited)Cash
                  flows from Operating Activities:Net
                  (Loss)
              
              $
              (663,056
              )
              $
              (306,312
              )Adjustments
                  to reconcile net (loss) to net cashused
                  by operating activites:Beneficial
                  Conversion of Convertible Debenture
              
              
              203,383
              
              
              11,412Increase
                  in Accrued Interest
              
              
              1,167
              
              
              6,184Amortization
                  of shares issued with Secured Convertible Debenture
              
              
              202,744Amortization
                  of Warrants issued with Convertible Debenture
              
              
              111,481
              
              
              8,160Accretion
                  of Asset Retirment Obligation
              
              
              752
              
              
              684Provision
                  for depletion, depreciation and amortization
              
              
              3,269
              
              
              785Changes
                  in operating assets and liabitlies:(Increase)
                  in accounts receivable
              
              
              (10,084
              )
              
              (1,220
              )Increase/(decrease)
                  in accounts payable and accrued expenses
              
              
              89,906
              
              
              (14,624
              )Net
                  cash used by operating activities
              
              
              (60,438
              )
              
              (294,931
              )Cash
                  flows from Investing Activities:Deposits
                  made on Oil & Gas Properties
              
              
              
              
              
              (82,000
              )Capital
                  expenditures
              
              
              (4,671
              )Net
                  cash used in investing activities
              
              
              (4,671
              )
              
              (82,000
              )Cash
                  flows from Financing Activities:Proceeds
                  from issuance of Stock and Warrant Units
              
              
              837,000Proceeds
                  from issuance of Common Stock
              
              
              427,500Proceeds
                  from issuance of Secured Convertible Debenture
              
              
              250,000Proceeds
                  from issuance of Convertible Debentures
              
              
              
              
              
              234,000Proceeds
                  from sale of LLC interests
              
              
              
              
              
              100,000Payments
                  made on behalf of Company
              
              
              
              
              
              16,913Decrease
                  in bank overdraft
              
              
              (4,138
              )Proceeds
                  from payment on Stock Purchase Notes Receivable
              
              
              250Payments
                  on Promissory Note
              
              
              (252
              )Net
                  cash provided by financing activities
              
              
              1,510,360
              
              
              350,913Net
                  increase (decrease) in cash and cash equivalents
              
              
              1,445,251
              
              
              (26,018
              )Cash
                  and Cash equivalents beginning of period
              
              
              -
              
              
              31,045Cash
                  and Cash equivalents at end of period
              
              $
              1,445,251
              
              $
              5,027SUPPLEMENTAL
                  CASH FLOW INFORMATION:Cash
                  Payments for Interest
              
              $
              1,314
              
              $
              -Cash
                  Payment for Taxes
              
              
              -
              
              
              -Non-Cash
                  Transactions:Shares
                  issued with Secured Convertible Debenture
              
              
              250,000Purchase
                  of truck for promissory note
              
              
              13,046The
                  accompanying notes are an integral part of these consolidated financial
                  statements.


3


OSAGE
      EXPLORATION AND DEVELOPMENT, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


June
      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 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
      Securities and Exchange Commission. 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 six months ended June 30,
      2007
      and has an accumulated deficit of $1,311,222 (unaudited) at June 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 FASB issued 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.




2  .
      OIL AND
      GAS PROPERTIES





5


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





December
                31, 2006
            
            June
                30, 2007(Audited)
            
            (unaudited)Properties
                subject to amortization
            
            $
            103,177
            
            $
            103,177Properties
                not subject to amortization
            
            
            0
            
            
            0Capitalized
                asset retirement costs
            
            
            13,675
            
            
            13,675Accumulated
                depreciation and depletion
            
            
            (2,795
            )
            
            (4,120
            )Oil
                and gas properties, net
            
            $
            114,057
            
            $
            112,732





At
      June
      30, 2007, all of these assets collateralized the Company's Secured Convertible
      Debenture issued February 17, 2007 maturing July 31, 2007 (See Note 5).





Depreciation
      and depletion expense totaled $3,269 and $785 for the six months ended June
      30,
      2007 and 2006, respectively and $2,240 and $464 for the three months ended
      June
      30, 2007 and 2006, respectively.





3.
      DEPOSITS





In
      January 2006 we acquired approximately 85% of the working interest of a natural
      gas property consisting of 640 acres with proven undeveloped reserves located
      in
      Hansford County, Texas, for a total consideration of $82,000.   The
      agreement stipulates that if we do not acquire a contiguous lease by June 1,
      2007 at a cost of $48,000 and another contiguous lease by August 1, 2007 at
      a
      cost of $80,000, the seller shall have the right to refund 90% of the initial
      purchase price and void the agreement. In addition, we are required to place
      $445,810 in escrow for drilling and completion of the first test well by August
      15, 2007 with actual commencement of drilling prior to September 15, 2007.
        If the funding of the first test well is not completed by August 15,
      2007, the seller shall have the right to refund 90% of all payments received
      and
      void the agreement. We have not acquired the contiguous lease as of July 31,
      2007 and have not yet been informed by the seller that he will refund 90% of
      the
      initial purchase price and void the agreement.





4.
      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
      is 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.





5.
      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 matures July 31, 2007, has a
      10%
      interest rate with a minimum interest amount of $25,000 due at Maturity, and
      is
      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 is 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.





6


6.
      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 $365.89. As of June 30, 2007, the interest rate
      on
      the Promissory Note was 9.25%.





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




Promissory
                Note Outstanding at June 30, 2007
            
            $
            12,794Less
                Current Portion
            
            
            3,334$
            9,460





7.
      COMMITMENTS AND CONTINGENCIES





ENVIRONMENT





Osage,
      as
      owner and operator of oil and gas properties, is subject to various 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 June 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.





LAND
      RENTALS AND OPERATING LEASES





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





Rental
      expense charged to operations totaled $5,550 and $ 0 for the six months ended
      June 30, 2007 and 2006, respectively, and $3,050 and $ 0 for the three months
      ended June 30, 2007 and 2006, respectively.





8.
      EQUITY
      TRANSACTIONS





Unit
      Offering


In
      June
      2007, for gross proceeds of $900,000, we issued 900,000 shares of common stock
      and 1,350,000 warrants, exercisable at $1.50 per share expiring on June 30,
      2010
      to one accredited investor and one institutional investor.





7


Common
      Stock Offering


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





In
      all
      instances of the above sales, the sales were made under the exemption from
      registration provided by Regulation D, Rule 506. We paid commissions totaling
      $110,500 to Viewpoint Securities, LLC for these equity transactions.





9.
      MAJOR
      CUSTOMERS





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





10.
      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
            
            Six
                Months Ended June 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
            
            
            752
            
            
            684Ending
                Balance
            
            $
            15,043
            
            $
            15,795
            
            $
            14,359





11.
      SUBSEQUENT EVENTS





In
      July
      2007, for gross proceeds of $25,000, we issued 25,000 shares of common stock
      and
      37,500 warrants, exercisable at $1.25 per share expiring on June 30, 2010 to
      one
      accredited investor.





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.





8


In
      all
      instances of the above sales, the sales were made under the exemption from
      registration provided by Regulation D, Rule 506. The sales were made by
      Viewpoint Securities, LLC which received commissions totaling $56,750.




**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.





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.





**Liquidity
      and Capital Resources**





At
      June
      30, 2007, we had working capital of $1,129,742 consisting primarily of
      $1,445,251 in cash and cash equivalents and $24,483 of accounts receivable,
      offset by $202,744 of the Secured Convertible Debenture and $112,440 of accounts
      payable and accrued expenses. In April and May 2007, we issued 1,187,500 shares
      of our common stock at $0.40 per share for total gross proceeds of $475,000.
      In
      June 2007, we issued 900,000 shares of our common stock and 1,350,000 warrants
      to purchase shares of our common stock at $1.25 per share expiring June 30,
      2010
      for total gross proceeds of $900,000.





In
      July
      2007, for gross proceeds of $25,000, we issued 25,000 shares of common stock
      and
      37,500 warrants, exercisable at $1.25 per share expiring on June 30, 2010 to
      one
      accredited investor. In addition, in July 2007, we issued a $1,100,000 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 expiring three years from issuance. We have used the net proceeds
      from
      the issuance of the common stock offering, the Senior Convertible Debenture,
      the
      unit offering and the Unsecured Convertible Promissory Note for working capital
      purposes, for professional fees and for due diligence expenses related to
      acquiring additional leases.





Net
      cash
      used by operating activities totaled $60,438 for the six months ended June
      30,
      2007 compared to cash used by operating activities of $294,931 for the six
      months ended June 30, 2006. The major component of the net cash used in
      operating activities in the six months ended June 30, 2007 was the net loss
      of
      $663,056, offset by $202,744 for the amortization of the value of the shares
      issued in February 2007 with the Secured Convertible Debenture and $203,383
      and
      $111,481 write-off of the unamortized beneficial conversion feature and value
      of
      the warrants, respectively, issued with the Convertible Debentures that
      converted into shares of common stock in January and February 2007. The major
      component of the net cash used in operating activities in the six months ended
      June 30, 2006 was the net loss of $306,312.





9


Net
      cash
      used in investing activities totaled $4,671 and $82,000 for the six months
      ended
      June 30, 2007 and June 30, 2006, respectively. Net cash used in investing
      activities in the six months ended June 30, 2007 consisted of the purchase
      computer equipment, while net cash used in investing activities for the six
      months ended June 30, 2006 consisted of the deposit made on the Hansford
      Property in Texas.





Net
      cash
      provided by financing activities totaled $1,510,360 for the six months ended
      June 30, 2007 and consisted primarily of $837,000, net of commissions, from
      the
      issuance of 900,000 units, consisting of 900,000 shares and 1,350,000 warrants,
      $427,500, net of commissions, from the issuance of common stock at $0.40 per
      share and the proceeds of the $250,000 Secured Convertible Debenture due July
      31, 2007. Net cash provided by financing activities of $350,913 for the six
      months ended June 30, 2006 consisted primarily of $234,000 from the issuance
      of
      the Convertible Debentures and $100,000 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
      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.





**Quantitative
      and Qualitative Disclosures about Market Risk**


We
      have
      no material exposure to interest rate changes.





**Results
      of Operations**





**Six
      Months ended June 30, 2007 compared to Six Months ended June 30,
      2006**


Revenues
      from oil sales were $162,700 ,
      an
      increase of $115,328 ,
      or
      243.5% ,
      in the
      six months ended June 30, 2007 compared to $47,372


of
      revenues in the six months ended June 30, 2006. On a barrel of oil equivalent
      ("BOE") basis, our total production increased to3,565 BOE in the six months
      ended June 30, 2007 compared to 948 BOE in the six months ended June 30, 2006
      due to our secondary recovery efforts we undertook in 2006. Our average price
      per BOE decreased to $60.51 in the six months ended June 30, 2007 from $66.28
      in
      the six months ended June 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 $49,731, representing average operating expense per BOE of
      $13.95 for the six months ended June 30, 2007. For the six months ended June
      30,
      2006, our operating expenses were $45,675, or an average operating expense
      per
      BOE of $48.18. The decrease in the average operating expenses per BOE is due
      principally to the increase in production.





General
      and administrative expenses were $256,384 and
      $281,896 in
      the
      six months ended June 30, 2007 and June 30, 2006, respectively. The $25,512
      decrease is primarily due to a decrease of $92,679 in salary expense, offset
      by
      an increase of $32,406 in professional and legal fees and an increase of $26,249
      in travel expenses.





Depreciation,
      depletion and accretion were $3,269 in the six months ended June 30, 2007
      compared to $785 in the six months ended June 30, 2006, primarily due to the
      increase in production.





10


Loss
      from
      operations was $146,684 and
      $280,984 for
      the
      six months ended June 30, 2007 and June 30, 2006, respectively.





Interest
      expense was $520,841 and $26,440 in the six months ended June 30, 2007 and
      June
      30, 2006, respectively. Interest expense in the six months ended June 30, 2007
      consisted primarily of $202,744 amortization of the value of the shares issued
      with the $250,000 Secured Convertible Debentures, $169,683 for the beneficial
      conversion feature of the Convertible Debentures and $111,481 for the value
      of
      the warrants issued with the Convertible Debentures. Interest expenses for
      the
      six months ended June 30, 2006 consisted primarily of $11,412 and $8,160 of
      the
      beneficial conversion feature and the value of the warrants, respectively,
      of
      the Convertible Debentures.





Net
      loss
      was $663,056 and $306,312 for the six months ended June 30, 2007 and June 30,
      2006, respectively. Net loss per share was $0.02 for the six months ended June
      30, 2007 and $0.07 for the six months ended June 30, 2006.





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


Revenues
      from oil sales were $92,443, an increase of $60,236, or 187.0%, in the quarter
      ended June 30, 2007 compared to $32,207 of revenues in the quarter ended March
      31, 2006. On a barrel of oil equivalent ("BOE") basis, our total production
      increased to 1,940 BOE in the quarter ended June 30, 2007 compared to 627 BOE
      in
      the quarter ended March 31, 2006 due to our secondary recovery efforts we
      undertook in 2006. Our average price per BOE decreased to $63.15 in the quarter
      ended June 30, 2007 from $68.16 in the quarter ended June 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 $27,422, representing average operating expense per BOE of
      $14.13 for the quarter ended June 30, 2007. For the quarter ended June 30,
      2006,
      our operating expenses were $30,216, or an average operating expense per BOE
      of
      $48.19. The decrease in the average operating expenses per BOE is due
      principally to the increase in production.





General
      and administrative expenses were $170,007 and $207,312 in the quarter ended
      June
      30, 2007 and June 30, 2006, respectively. The $37,305 decrease is primarily
      due
      to a decrease of $60,941 in salaries, offset by an increase of $31,778 in travel
      expenses and a $11,116 increase in insurance. .





Depreciation,
      depletion and accretion were $2,240 in the quarter ended June 30, 2007 compared
      to $464 in the quarter ended June 30, 2006, primarily due to the increase in
      production.





Loss
      from
      operations was $107,226 and $205,785 for the quarter ended June 30, 2007 and
      June 30, 2006, respectively.





Interest
      expense was $154,282 and $26,440 in the quarter ended June 30, 2007 and June
      30,
      2006, respectively. Interest expense in the quarter ended June 30, 2007
      consisted primarily of $138,720 for the amortization of the value of the shares
      issued with the $250,000 Secured Convertible Debentures, while interest expenses
      for the quarter ended June 30, 2007 consisted primarily of $9,558 and $6,851
      of
      the beneficial conversion feature and the value of the warrants, respectively,
      of the Convertible Debentures.





Net
      loss
      was $257,453 and $226,549 for the quarter ended June 30, 2007 and June 30,
      2006,
      respectively. Net loss per share was $0.01 for the quarter ended June 30, 2007
      and $0.03 for the quarter ended June 30, 2006.





**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 and Interim Chief Financial
      Officer, of the effectiveness of the design and operation of our disclosure
      controls and procedures as of June 30, 2007, the end of the period covered
      by
      this report. Based on that evaluation, our Chief Executive Officer and Interim
      Chief Financial Officer concluded that our disclosure controls and procedures
      were effective at the reasonable assurance level as of June 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 June 30, 2007 that materially affected, or are reasonably likely
      to materially affect, our internal control over financial
      reporting.


11


**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 June 30, 2007
      without registering the securities under the Securities Act.





Unit
      Offering


In
      June
      2007, for gross proceeds of $900,000, we issued 900,000 shares of common stock
      and 1,350,000 warrants, exercisable at $1.50 per share maturing on June 30,
      2010
      to one accredited investor and one institutional investor.





Common
      Stock Offering


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





In
      all
      instances of the above sales, the sales were made under the exemption from
      registration provided by Regulation D, Rule 506. We paid commissions totaling
      $110,500 to Viewpoint Securities, LLC for these equity transactions.





**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**





Exhibit
      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).





Exhibit
      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, Financial
      Officer (Principal Financial Officer).





Exhibit
      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.


12


**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: 
                July 30, 2007
            By:
            /s/ Kim
                BradfordKim
                BradfordPresident
                and Chief Executive Officer




Date: 
                July 30, 2007
            By:
            /s/ Kim
                BradfordKim
                Bradford
              Principal
                Financial Officer








13