UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-QSB





[xx]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006



Commission file Number:  0-50608



EURASIA ENERGY LIMITED

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



Nevada

(State or other jurisdiction of incorporation or organization)



98-0414501

(I.R.S. Employer Identification Number)



Downiehills, Blackhills, Peterhead

Aberdeenshire, AB42 3LB, U.K. Scotland

(Address of principal executive offices)



+44 (0)7881-814431

(Issuer's telephone number)







Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (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.  [ X ] Yes  [   ] No



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

(check one):  Yes [  ]    No [ X ]



State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:    20,315,135 common shares as of November 10, 2006



Transitional Small Business Disclosure Format (check one):  Yes [  ]    No [ X ]







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EURASIA ENERGY LIMITED





INDEX



PART 1.

FINANCIAL INFORMATION



Item 1.

Financial Statements



Balance Sheet as of September 30, 2006



Statements of Operations for the three and nine months ended September 30, 2006 and 2005 and for the period from November 28, 2005 (the effective date of the exploration stage) through September 30, 2006



Statements of Stockholders Equity for the nine months ended September 30, 2006 and for the period from November 28, 2005 (the effective date of the exploration stage) through September 30, 2006



Statements of Cash Flows for the nine months ended September 30, 2006 and 2005 and for the period from November 28, 2005 (the effective date of the exploration stage) through September 30, 2006



Notes to Financial Statements



Item 2

Plan of Operation



Item 3

Controls and Procedures



PART II.

OTHER INFORMATION



Item 1

Legal Proceedings



Item 2

Unregistered Sales of Equity Securities and Use of Proceeds



Item 3

Defaults Upon Senior Securities



Item 4

Submission of Matters to a Vote of Security Holders



Item 5

Other Information



Item 6

Exhibits and Reports on Form 8K





SIGNATURES







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EURASIA ENERGY LIMITED

(formerly Pacific Alliance Ventures Ltd.)

(An exploration stage company)



Financial Statements

(Expressed in U.S. Dollars)



(Unaudited)

September 30, 2006













Index



Balance Sheet

Statements of Operations

Statements of Stockholders Equity

Statements of Cash Flows

Notes to Financial Statements



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|                                                                            |   |              
|--------------------------------------------------------------------------- | - | -------------
|EURASIA ENERGY LIMITED                                                     
|(formerly Pacific Alliance Ventures Ltd.)                                  
|(an exploration stage company)                                             
|                                                                            |   |              
|BALANCE SHEET                                                              
|(Unaudited)                                                                
|                                                                            |   |              
|                                                                            |   | September 30,
|(Expressed in U.S. Dollars)                                                 |   | 2006         
|                                                                            |   |              
|                                                                            |   |              
|ASSETS                                                                      |   |              
|Current assets                                                              |   |              
|Cash and cash equivalents                                                   | $ | 637,994      
|Interest receivable                                                         |   | 1,510        
|Prepaid expenses                                                            |   | 13,673       
|Total current assets                                                        |   | 653,177      
|                                                                            |   |              
|Fixed assets, net                                                           |   | 70,350       
|                                                                            |   |              
|Total assets                                                                | $ | 723,527      
|                                                                            |   |              
|LIABILITIES AND STOCKHOLDERS' EQUITY                                        |   |              
|                                                                            |   |              
|Accounts payable and accrued expenses                                       | $ | 35,182       
|                                                                            |   |              
|                                                                            |   |              
|Common stock, par value $0.0005, authorized 100,000,000                     |   |              
|shares; issued and outstanding 20,315,135 shares                            |   | 10,158       
|Additional paid-in capital                                                  |   | 4,629,366    
|Accumulated deficit                                                         |   | (9,066)      
|Deficit accumulated during the exploration stage                            |   | (3,942,113)  
|                                                                            |   |              
|Total stockholders' equity                                                  |   | 688,345      
|                                                                            |   |              
|Total liabilities and stockholders' equity                                  | $ | 723,527      
|                                                                            |   |              
|                                                                            |   |              
|                                                                            |   |              
|                                                                            |   |              
|                                                                            |   |              
|(The accompanying notes are an integral part of these financial statements)





---



|                                                                                                |   |                    |   |                   |   |             |   |          |   |            
|----------------------------------------------------------------------------------------------- | - | ------------------ | - | ----------------- | - | ----------- | - | -------- | - | -----------
|EURASIA ENERGY LIMITED                                                                         
|(formerly Pacific Alliance Ventures Ltd.)                                                      
|(an exploration stage company)                                                                 
|                                                                                                |   |                    |   |                   |   |             |   |          |   |            
|STATEMENTS OF OPERATIONS                                                                       
|For the Three Months and Nine Months ended September 30, 2006 and 2005, and for the Period from
|November 28, 2005 (the effective date of the exploration stage) through September 30, 2006     
|(Unaudited)                                                                                    
|                                                                                                |   |                    |   |                   |   |             |   |          |   |            
|                                                                                                |   |                    |   |                   |   |             |   |          |   | Cumulative 
|                                                                                                |   | Three Months Ended |   | Nine Months Ended |   | During the 
|                                                                                                |   | September 30,      |   | September 30,     |   | Exploration
|(Expressed in U.S. Dollars)                                                                     |   | 2006               |   | 2005              |   | 2006        |   | 2005     |   | Stage      
|                                                                                                |   |                    |   |                   |   |             |   |          |   |            
|Revenue                                                                                         | $ | -                  | $ | -                 | $ | -           | $ | -        | $ | -          
|                                                                                                |   |                    |   |                   |   |             |   |          |   |            
|Expenses                                                                                        |   |                    |   |                   |   |             |   |          |   |            
|Consulting                                                                                      |   | 82,798             |   | -                 |   | 97,234      |   | -        |   | 100,264    
|Data acquisition cost                                                                           |   | -                  |   | -                 |   | 19,300      |   | -        |   | 19,300     
|General and administrative                                                                      |   | 35,224             |   | -                 |   | 124,373     |   | -        |   | 126,830    
|Travel                                                                                          |   | 15,576             |   | -                 |   | 41,283      |   | -        |   | 49,394     
|Stock-based compensation (Note 7(c))                                                            |   | -                  |   | -                 |   | 3,665,133   |   | -        |   | 3,665,133  
|                                                                                                |   | 133,598            |   | -                 |   | 3,947,323   | - | -        |   | 3,960,921  
|                                                                                                |   |                    |   |                   |   |             |   |          |   |            
|Operating Loss                                                                                  |   | (133,598)          |   | -                 |   | (3,947,323) |   | -        |   | (3,960,921)
|                                                                                                |   |                    |   |                   |   |             |   |          |   |            
|Other income and expenses                                                                       |   |                    |   |                   |   |             |   |          |   |            
|Interest income                                                                                 |   | 7,814              |   | -                 |   | 18,808      |   | -        |   | 18,808     
|                                                                                                |   |                    |   |                   |   |             |   |          |   |            
|Loss from continuing operations                                                                 |   | (125,784)          |   | -                 |   | (3,928,515) |   | -        |   | (3,942,113)
|                                                                                                |   |                    |   |                   |   |             |   |          |   |            
|Discontinued operations                                                                         |   | -                  |   | (8,383)           |   | -           |   | (21,276) |   | -          
|                                                                                                |   |                    |   |                   |   |             |   |          |   |            



---

- 6 -









|                                                                            |   |            |   |            |   |             |   |            |  |            
|--------------------------------------------------------------------------- | - | ---------- | - | ---------- | - | ----------- | - | ---------- |  | -----------
|Net loss                                                                    | $ | (125,784)  | $ | (8,383)    | $ | (3,928,515) | $ | (21,276)   |  | (3,942,113)
|                                                                            |   |            |   |            |   |             |   |            |  |            
|Net loss per common share                                                   |   |            |   |            |   |             |   |            |  |            
|(basic and fully diluted)                                                   |   |            |   |            |   |             |   |            |  |            
|Continuing operations                                                       | $ | (0.0062)   | $ | -          | $ | (0.1938)    | $ | -          |  |            
|Discontinued operations                                                     |   | -          |   | (0.0004)   |   | -           |   | (0.0011)   |  |            
|                                                                            |   |            |   |            |   |             |   |            |  |            
|Net loss per common share                                                   | $ | (0.0062)   | $ | (0.0004)   | $ | (0.1938)    | $ | (0.0011)   |  |            
|                                                                            |   |            |   |            |   |             |   |            |  |            
|Weighted average number of common                                           |   |            |   |            |   |             |   |            |  |            
|shares outstanding                                                          |   | 20,315,135 |   | 20,065,135 |   | 20,273,926  |   | 19,977,355 |  |            
|                                                                            |   |            |   |            |   |             |   |            |  |            
|                                                                            |   |            |   |            |   |             |   |            |  |            
|(The accompanying notes are an integral part of these financial statements)









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|                                                                                           |              |                 |                     |                       |                         |                  
|------------------------------------------------------------------------------------------ | ------------ | --------------- | ------------------- | --------------------- | ----------------------- | -----------------
|EURASIA ENERGY LIMITED                                                                    
|(formerly Pacific Alliance Ventures Ltd.)                                                 
|(an exploration stage company)                                                            
|                                                                                           |              |                 |                     |                       |                         |                  
|STATEMENTS OF STOCKHOLDERS' EQUITY                                                        
|                                                                                           |              |                 |                     |                       |                         |                  
|For the Nine Months ended September 30, 2006 and for the Period from                      
|November 28, 2005 (the effective date of the exploration stage) through September 30, 2006
|(Unaudited)                                                                               
|                                                                                           |              |                 |                     |                       |                         |                  
|                                                                                           |              |                 |                     |                       | Deficit                 |                  
|                                                                                           |              |                 |                     |                       | Accumulated             |                  
|                                                                                           |              |                 |                     |                       | During the              | Total            
|                                                                                           | Common Stock | Additional      | Accumulated         | Exploration           | Stockholders'          
|(Expressed in U.S. Dollars)                                                                | Shares       | Amount          | paid-in capital     | Deficit               | Stage                   | Equity           
|                                                                                           |              |                 |                     |                       |                         |                  
|Balance, November 28, 2005                                                                 | 20,065,135   | $        10,033 | $           214,358 | $            13,301   | $                     - | $         237,692
|                                                                                           |              |                 |                     |                       |                         |                  
|Net loss for the period ended December 31, 2005                                            | -            | -               | -                   | (22,367)              | (13,598)                | (35,965)         
|                                                                                           |              |                 |                     |                       |                         |                  
|Balance, December 31, 2005                                                                 | 20,065,135   | 10,033          | 214,358             | (9,066)               | (13,598)                | 201,727          
|                                                                                           |              |                 |                     |                       |                         |                  
|Issuance of common stock and warrants, February 2006                                       | 250,000      | 125             | 749,875             | -                     | -                       | 750,000          
|                                                                                           |              |                 |                     |                       |                         |                  
|Stock-based compensation expense                                                           | -            | -               | 3,665,133           | -                     | -                       | 3,665,133        
|                                                                                           |              |                 |                     |                       |                         |                  
|Net loss for the period ended September 30, 2006                                           | -            | -               | -                   | -                     | (3,928,515)             | (3,928,515)      
|                                                                                           |              |                 |                     |                       |                         |                  
|Balance, September 30, 2006                                                                | 20,315,135   | $        10,158 | $        4,629,366  | $             (9,066) | $       (3,942,113)     | $         688,345
|                                                                                           |              |                 |                     |                       |                         |                  
|(The accompanying notes are an integral part of these financial statements)               



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|                                                                                           |   |                    |   |             |   |            
|------------------------------------------------------------------------------------------ | - | ------------------ | - | ----------- | - | -----------
|EURASIA ENERGY LIMITED                                                                    
|(formerly Pacific Alliance Ventures Ltd.)                                                 
|(an exploration stage company)                                                            
|                                                                                           |   |                    |   |             |   |            
|STATEMENTS OF CASH FLOWS                                                                  
|For the Nine Months ended September 30, 2006 and 2005, and for the Period from            
|November 28, 2005 (the effective date of the exploration stage) through September 30, 2006
|(Unaudited)                                                                               
|                                                                                           |   |                    |   |             |   |            
|                                                                                           |   |                    |   |             |   | Cumulative 
|                                                                                           |   | Nine months ended  |   | During the 
|                                                                                           |   | September 30, 2006 |   | Exploration
|(Expressed in U.S. Dollars)                                                                |   | 2006               |   | 2005        |   | Stage      
|                                                                                           |   |                    |   |             |   |            
|Cash flows from (used in) operating activities                                             |   |                    |   |             |   |            
|Net Loss                                                                                   | $ | (3,928,515)        | $ | (21,276)    | $ | (3,942,113)
|Adjustments to reconcile net loss to                                                       |   |                    |   |             |   |            
|net cash flows from operating activities                                                   |   |                    |   |             |   |            
|Stock-based compensation                                                                   |   | 3,665,133          |   | -           |   | 3,665,133  
|Depreciation                                                                               |   | 6,525              |   | -           |   | 6,525      
|Change in operating assets and liabilities                                                 |   |                    |   |             |   |            
|Decrease in accounts receivable, related party                                             |   | 5,000              |   | 3,185       |   | 5,000      
|Increase in interest receivable                                                            |   | (1,510)            |   | -           |   | (1,510)    
|Decrease (Increase) in prepaid expenses                                                    |   | (13,673)           |   | 1,029       |   | (13,673)   
|Increase in accounts payable and accrued expenses                                          |   | 34,582             |   | 28          |   | 34,582     
|Net cash used in operating activities                                                      |   | (232,458)          |   | (17,034)    |   | (246,056)  
|                                                                                           |   |                    |   |             |   |            
|Cash flows from investing activities                                                       |   |                    |   |             |   |            
|Fixed assets addition                                                                      |   | (76,875)           |   | -           |   | (76,875)   
|Net cash used in investing activities                                                      |   | (76,875)           |   | -           |   | (76,875)   
|                                                                                           |   |                    |   |             |   |            
|Cash flows from financing activities                                                       |   |                    |   |             |   |            
|Proceeds from issuance of common stock                                                     |   | 750,000            |   | 127,467     |   | 750,000    
|Net cash provided by financing activities                                                  |   | 750,000            |   | 127,467     |   | 750,000    
|                                                                                           |   |                    |   |             |   |            
|Increase in cash and cash equivalents                                                      |   | 440,667            |   | 110,433     |   | 427,069    
|                                                                                           |   |                    |   |             |   |            
|Cash and cash equivalents, beginning of period                                             |   | 197,327            |   | 106,010     |   | 210,925    
|                                                                                           |   |                    |   |             |   |            
|Cash and cash equivalents, end of period                                                   | $ | 637,994            | $ | 216,443     | $ | 637,994    
|                                                                                           |   |                    |   |             |   |            
|Cash and cash equivalents, consist of:                                                     |   |                    |   |             |   |            



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- 9 -









|                                                                            |   |         |   |         |   |        
|--------------------------------------------------------------------------- | - | ------- | - | ------- | - | -------
|Cash                                                                        | $ | 57,994  | $ | 216,443 | $ | 57,994 
|Short term deposit                                                          |   | 580,000 |   | -       |   | 580,000
|                                                                            | $ | 637,994 | $ | 216,443 | $ | 637,994
|                                                                            |   |         |   |         |   |        
|                                                                            |   |         |   |         |   |        
|Supplemental Information:                                                   |   |         |   |         |   |        
|                                                                            |   |         |   |         |   |        
|Cash paid for income taxes                                                  | $ | -       | $ | 50      | $ | -      
|Cash paid for interest                                                      | $ | -       | $ | -       | $ | -      
|                                                                            |   |         |   |         |   |        
|                                                                            |   |         |   |         |   |        
|(The accompanying notes are an integral part of these financial statements)











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EURASIA ENERGY LIMITED

(formerly Pacific Alliance Ventures Ltd.)

(an exploration stage company)



Notes to Financial Statements

September 30, 2006

(Unaudited)



Note 1 - Organization



Eurasia Energy Limited ("the Company") (formerly Pacific Alliance Ventures Ltd.) (an exploration stage company) was a marketing and advertising service provider during 2005. The Company designed marketing and advertising campaigns for corporate clients wishing to increase awareness of their products, services, corporate image and general corporate branding.  The Company conducted its business through offices in Phoenix, Arizona, and Vancouver, British Columbia.



On November 28, 2005, the Company signed a memorandum of understanding (MOU) with the State Oil Company of the Azerbaijan Republic ("SOCAR") which grants the Company the exclusive right to negotiate an Exploration, Rehabilitation, Development and Production Sharing Agreement ("ERDPSA") for a 600 square kilometer oil and gas block (the "Block") in the Republic of Azerbaijan. The effective date of the MOU is December 7, 2005. The Block is located in the shallow coastal waters of the Azerbaijan sector of the Caspian Sea approximately 70 kilometers south of the Azerbaijan capital of Baku.



Under the terms of the MOU, the Company has 12 months to negotiate and sign the ERDPSA with SOCAR.  The MOU stipulates that SOCAR will provide the Company with all existing data relevant to the Block within 60 days from the effective date of the MOU.



This transaction changed the Company's principal business activity and the Company changed its name to better reflect the Company's plan of operations.  As such, these financial statements have been prepared treating the Company as an exploration stage company, effective November 28, 2005.  Accordingly, all activity of the marketing and advertising services is presented as discontinued operations in these financial statements. See also Note 11 on the related law suit.



The Company's offices in Aberdeenshire, Scotland and Vancouver, B.C. are currently provided on a rent free basis by the President and Chief Executive Officer and Chief Financial Officer of the Company, respectively. Due to limited Company operations, any facilities expenses are not material and have not been recognized in these financial statements.



Note 2 - Basis of Presentation - Going Concern Uncertainties



The Company is an exploration stage company as defined by Financial Accounting Standards Board Statement No. 7. The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in United States, which contemplate continuation of the Company as a going concern.  However, the Company has limited operations and has sustained operating losses in recent years resulting in an accumulated deficit. In view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon the continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements, and the success of its future operations.



The Company has incurred losses from operations and has an accumulated deficit of $3,942,113 from the date of inception of the exploration stage (November 28, 2005) to September 30, 2006. The Company's ability to continue as a going concern is in substantial doubt and is dependent upon obtaining additional financing and/or



---

achieving a sustainable profitable level of operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



To meet the objectives in its Plan of Operations, the Company raised $750,000 pursuant to a non-brokered private placement of 250,000 units at $3.00 per unit during the first quarter of 2006. Each unit consists of one share of common stock and one share purchase warrant for acquiring one additional share of common stock for $4.00 per share until February 15, 2007. The Company may seek additional equity as necessary and it expects to raise funds through private or public equity investment in order to support existing operations and expand the range of its business. There is no assurance that such additional funds will be available for the Company on acceptable terms, if at all.



Note 3 - Presentation of Interim Information



The accompanying unaudited interim financial statements have been prepared in accordance with Form 10-QSB instructions and in the opinion of management of the Company, include all adjustments (which are normal recurring adjustments) considered necessary to present fairly the financial position as of September 30, 2006 and the results of operations for the nine months ended September 30, 2006 and 2005 and cash flows for the nine months ended September 30, 2006 and 2005. These results have been determined on the basis of generally accepted accounting principles in United States and practices and applied consistently with those used in the preparation of the Company's 2005 Annual Report on Form 10-KSB.



Certain information and footnote disclosures normally included in the financial statements presented in accordance with United States generally accepted accounting principles have been condensed or omitted.  It is suggested that the accompanying unaudited interim consolidated financial statements be read in conjunction with the annual financial statements and notes thereto incorporated by reference in the Company's 2005 Annual Report on Form 10-KSB.



Note 4  Stock-Based Compensation



Prior to January 1, 2006, the Company accounted for stock-based awards under the intrinsic value method, which followed the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees", and related Interpretations.  The intrinsic value method of accounting resulted in compensation expense for stock options to the extent that the exercise prices were set below the fair market price of the Company's stock at the date of grant.



As of January 1, 2006, the Company adopted SFAS No. 123(R) Share-Based Payment using the modified prospective method, which requires measurement of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest.  The fair value of stock options is determined using the Black-Scholes valuation model, which is consistent with the Company's valuation techniques previously utilized for options in footnote disclosures required under SFAS No. 123, "Accounting for Stock Based Compensation", as amended by SFAS No. 148, "Accounting for Stock Based Compensation Transition and Disclosure". $3,665,133 was recorded as stock-based compensation expenses for the nine-month period ended September 30, 2006 (Note 7(c)).



Note 5 - Discontinued Operations



Loss from discontinued operations in the statements of operations includes expenses of the Company prior to the change in business operations discussed in Note 1. Revenue in the three-month and nine-month periods ended September 30, 2006 of $nil (2005: $7,653) and $nil (2005: $59,853), respectively, are included in the loss from discontinued operations. As of September 30, 2006, all assets and all liabilities of the discontinued operations have been assumed by the continuing operations. Accordingly, no assets or liabilities have been classified as related to the discontinued operation as of September 30, 2006.





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Note 6 - Fixed Assets



Fixed assets are recorded at cost. Depreciation is computed using the straight-line method at the following rates, calculated to amortize the cost of the assets less their residual values over their estimated useful lives. Expenditures for betterments and additions are capitalized, while replacement, maintenance and repairs, which do not extend the lives of the respective assets, are charged to expense when incurred.



|                 |     |  |  | 
|---------------- | --- |  |  | 
|Motor vehicle    | 20%
|Office equipment | 20%







Fixed assets consist of the following:



|                               |         |  |  |        
|------------------------------ | ------- |  |  | -------
|Motor vehicle                  | $74,500
|Office equipment               | 2,375  
|                               |         |  |  | 76,875 
|Less: accumulated depreciation | (6,525)
|                               |         |  |  | $70,350





Depreciation charged to operations for the three-month and nine-month period ended September 30, 2006, and the period from inception to September 30, 2006, amounted to $3,844 (2005: $nil), $6,525 (2005: $nil), and $6,525, respectively.



Note 7 - Common Stock, Warrants and Options



(a) Common Stock



On February 15, 2006, the Company completed a non-brokered private placement of 250,000 units at $3 per unit for $750,000.  Each unit consists of one share of common stock and one share purchase warrant for acquiring one additional share of common stock for $4 per share until February 15, 2007.



The fair value of the warrants issued is approximately $318,000 estimated using the Black-Scholes option pricing model with assumptions as follows:



|                                                     |          
|---------------------------------------------------- | ---------
|Risk free interest
    rate                          | 4.7%     
|Expected life of the conversion feature in
    years | 1.00 year
|Expected
    volatility                              | 140.4%   
|Dividend per
    share                               | $0.00    





(b) Warrants



The movement of share purchase warrants can be summarized as follows:





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|                            |         |                |                 | 
|--------------------------- | ------- | -------------- | --------------- | 
|Weighted average           
|Number of
    warrants      |         | exercise price
|                            |         |                |                 | 
|Balance, December 31, 2005  | -       |                | $        
    -
|Issued                      | 250,000 |                | 4.00           
|Balance, September 30, 2006 | 250,000 |                | $    
    4.00 





(c) Options



The movement of options can be summarized as follows:



|                            |           |                |                | 
|--------------------------- | --------- | -------------- | -------------- | 
|Weighted average           
|Number of
      options     |           | exercise price
|                            |           |                |                | 
|Balance, December 31, 2005  | -         |                | $       
    -
|Issued                      | 1,500,000 |                | 3.00          
|Balance, September 30, 2006 | 1,500,000 |                | $   
    3.00 







On March 13, 2006, the 2006 Stock Option Plan ("Plan") was approved by the Board of Directors.  The Company has allotted 2,000,000 shares for issuance under the Plan.



On April 14, 2006, the Company granted 1,500,000 stock options at a price of $3 per share to its directors, employees and consultants expiring on April 14, 2011. The stock options are vested immediately.



The fair value of the options granted in the period ended September 30, 2006 was estimated at $2.44 by using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, expected volatility of 121.2%, risk-free interest rates of 4.97%, and expected lives of 5 years.



The weighted average remaining contractual life of the outstanding stock options at September 30, 2006 is 4.54 years.



During the three-month and nine-month periods ended September 30, 2006, compensation expense of$nil and $3,665,133, respectively, were recognized for options previously granted and vesting over time using the Black-Scholes option pricing model with the assumptions disclosed in the annual audited consolidated financial statements and the interim quarterly financial statements.



Note 8 - Related Party Transactions



As of September 30, 2006, the Company made a cash advance of $12,619 to the Chief Executive Officer for payment of ongoing expenses being incurred by the Company in Baku, Azerbaijan.



During the three-month and nine-month periods ended September 30, 2006, the Company paid director fees of $2,500 and $5,000 respectively to one director.



During the three-month and nine-month periods ended September 30, 2006, the Company paid corporate and administrative service charges of $4,198 and $13,052 respectively to a law firm of which a director of the Company is the owner.



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Note 9 - Earnings Per Share



Basic earnings or loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of shares outstanding during the period of the financial statements. On February 21, 2005, the Board of Directors approved a 2 for 1 forward split of the Company's stock. The accompanying financial statements are presented on a post-split basis. The loss per share for the periods ended September 30, 2006 and 2005, have been adjusted accordingly. Diluted earnings or loss per share are based on the weighted average number of common shares outstanding and dilutive common stock equivalents. All loss per share amounts in the financial statements are basic loss per share because the inclusion of stock options and warrants outstanding would be antidilutive.



Note 10 - New Accounting Pronouncements



In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes, (FIN 48).  FIN 48 clarifies the accounting for uncertainty in income taxes and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 is effective for financial statements as of January 1, 2007.  The Company has not yet determined the impact of applying FIN 48.



In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements(FAS 157). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements but does not require any new fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company has not yet determined the impact of applying FAS 157.



In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans, (FAS 158). FAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income.  FAS 158 is effective for financial statements as of December 31, 2006.  The Company has not yet determined the impact of applying FAS158.



Note 11  Contingent Liabilities



The Company and its Chief Executive Officer, Nicholas W. Baxter, have been named in a law suit commenced in the Court of Session in Edinburgh, Scotland. The Company and Mr. Baxter have been sued by Arawak Energy Corporation (Arawak) and its wholly owned subsidiary, Commonwealth Oil & Gas Company Limited (Commonwealth).  Mr. Baxter was a director of Arawak until May 5, 2003. Mr. Baxter was periodically a director of Commonwealth until February, 2006. The Company is not associated with or connected to Arawak or Commonwealth in any business or contractual context. Arawak and Commonwealth allege that in the course of his directorship, Mr. Baxter breached his fiduciary duty as a director and accessed and used confidential information relating to Arawak and Commonwealth oil and gas properties in Azerbaijan for the purpose of securing the Companys MOU for its Block in Azerbaijan. The Company has been made a party to the action as an alleged knowing recipient of confidential information and of a commercial opportunity diverted to it in breach of fiduciary duty. Arawak and Commonwealth are seeking US$17.2 million in damages from Mr. Baxter, a declaration that the Company holds its MOU in trust for the benefit of Arawak and Commonwealth and an accounting of profits up to US$100 million or alternatively damages against Mr. Baxter and the Company for breach of confidence in the same amount. The Company and Mr. Baxter have retained joint counsel and will be filing an appearance and defense in due course.



The allegations of misappropriation of confidential information by Mr. Baxter and the Company and of breach of fiduciary duty by Mr. Baxter with the knowledge of the Company are completely rejected both on the facts



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and on the law. The Company will aggressively defend the action by Arawak and Commonwealth while continuing to advance its interests in Azerbaijan with the negotiation and execution of the ERDPSA. The Company has sufficient cash on hand to finance all of its development work in Azerbaijan and to pay the costs associated with the Arawak/Commonwealth lawsuit.



No liability has been recorded in these financial statements.



Note 12  Subsequent Events



On October 12, 2006, the Company granted 35,000 stock options at a price of $1 per share to a consultant expiring on May 31, 2007. The stock options are vested immediately.



The exercise price of the 1,500,000 stock options granted on April 14, 2006 was changed from $3 to $1 per share on October 12, 2006. The fair value of the re-priced options was estimated at $0.70 by using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, expected volatility of 144.8%, risk-free interest rates of 4.74%, and expected lives of 4.5 years.











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PLAN OF OPERATION



The following Plan of Operation contains forward-looking statements that involve risks and uncertainties, as described below.  Eurasia Energy Limited (the Company, we, or us) actual results could differ materially from those anticipated in these forward-looking statements.  The following discussion should be read in conjunction with the unaudited financial statements and notes thereto and the Plan of Operation included in this Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006.



Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.



Forward-Looking Statements



This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.



Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.



We are engaged in oil and gas exploration.  We have entered into a memorandum of understanding (MOU) with the State Oil Company of the Azerbaijan Republic (SOCAR) which grants our company the exclusive right to negotiate an Exploration, Rehabilitation, Development and Production Sharing Agreement (ERDPSA) for a 600 square kilometer oil and gas block (the Block) in the Republic of Azerbaijan.  The effective date of the MOU is December 7, 2005.  The Block includes the producing Alyat-Deniz oil and gas field and seven additional exploration structures namely, the Hamamdag-Deniz, Garasu, Sangi-Mugan, Ulfat, Aran-Deniz, Dashly and Sabayil structures.  The Block is located in the shallow coastal waters of the Azerbaijan sector of the Caspian Sea approximately 70 kilometers south of the Azerbaijan capital of Baku.



During the quarter ended September 30, 2006, we completed all field work necessary to conclude the development plan for our Block.  Two visits were made to the Azerbaijan capital of Baku in September, 2006 by management of Eurasia and Eurasias consultants, TRACS International Consultancy Ltd. (TRACS) and Genesis Oil and Gas Consultants Ltd. (Genesis).  During the first site visit, management and TRACS met with SOCARs head office personnel, and the geologists and petroleum engineers working for (a) SOCARs offshore exploration unit responsible for the Block and (b) SOCARs offshore field development, production and maintenance unit responsible for the Alyat producing field and the non-producing Garasu field.  Discussions focused on the analysis of data and information supplied by SOCAR to date and identified further information and data regarding geology, structure of the fields, exploration targets and drilling and production history of wells drilled to date.  There were also initial discussions regarding the current and historic costs of developing and operating the producing fields on the Block as the basis for future economic estimates and negotiations for the ERDPSA.



The second site visit to Baku occurred at the end of September, 2006.  Management and TRACS were accompanied by a specialist facilities engineer from Genesis.  The main purpose of this visit was to inspect the







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offshore platforms and oil and gas producing facilities in the Alyat field, and SOCARs on-shore oil and gas terminal serving the field.  SOCAR provided Eurasias team with a supply vessel and crew for the trip to the offshore Alyat field.  The team had the opportunity to inspect various oil and gas producing platforms, gas injection, treatment separation and distribution facilities as well as the recently completed well number 87 and the recently spudded well number 88.  The Eurasia team also visited a SOCAR oil and gas terminal which receives, treats, stores and delivers oil and gas from a number of SOCAR offshore and onshore fields.  The team inspected the terminals complete installation from the landfall of the pipelines coming from the Alyat field to the oil and gas export delivery points.  This inspection included oil separation and treatment plants and storage tanks.



Photographs from the site visits will be posted on Eurasias website, www.eurasiaenergy.com within the next month.  Eurasia expects its development plan for the Block to be completed by the end of October.  Management of Eurasia will be returning to Baku in early November to attend scheduled meetings with SOCAR for the purpose of negotiating the main principles of the ERDPSA.



Notable offshore projects in Azerbaijan include the Azeri-Chirag-Guneshli field estimated to hold reserves in excess of 5 billion barrels of oil, and the Shah Deniz field estimated to contain more than 400 billion cubic metres of gas.  Both fields are being developed by consortia headed by BP and include other major international companies including SOCAR, Exxon, Unocal, Devon Energy, Amerada Hess, TPAO, Statoil, Lukoil and Itochu.  Oil and gas will be delivered to world markets by the Baku-Tbilisi-Ceyhan (BTC) export oil pipeline to the port of Ceyhan on Turkey's Mediterranean coast, and the South Caucasus Gas Pipeline (SCP) to Turkey.  In total 17 projects are at various stages of development onshore and offshore Azerbaijan, involving 27 foreign companies from 13 countries.



Our companys entry into the MOU with SOCAR and change of business did not result in the issuance of any equity or debt securities by our company.  The transaction did not constitute a reverse takeover or back door listing.



We do not expect any changes in the number of our employees over the next 12 months.  We will not be purchasing any plant or significant equipment over the next 24 months.  We have sufficient funds on hand for the next 24 months and these funds will allow us to execute the Plan of Operation described in this Form 10QSB.  Our current management team will satisfy our requirements for the next 24 months.  Our President and C.E.O., Mr. Nicholas W. Baxter, spends approximately 50 hours per month on our company's affairs.  Our C.F.O., Mr. Gerald R. Tuskey, spends approximately 50 hours per month on our company's affairs.



ITEM 3. - Controls and Procedures.



(a)

Evaluation of disclosure controls and procedures.



As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company carried out an evaluation under the supervision and with the participation of the Company's management, including the President and Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures as of September 30, 2006.  In designing and evaluating the Company's disclosure controls and procedures, the Company and its management recognize that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives.  Additionally, in evaluating and implementing possible controls and procedures, the Company's management was required to apply its reasonable judgment.  Furthermore, in the course of this evaluation, management considered certain internal control areas, in which we have made and are continuing to make changes to improve and enhance controls.  Based upon the required evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that as of September 30, 2006, the Company's disclosure







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controls and procedures were effective (at the "reasonable assurance" level mentioned above) to ensure that information required to be disclosed by the Company in the reports it files or submits 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.



From time-to-time, the Company and its management have conducted and will continue to conduct further reviews and, from time-to-time put in place additional documentation, of the Company's disclosure controls and procedures, as well as its internal control over financial reporting.  The Company may from time- to- time
make changes aimed at enhancing their effectiveness, as well as changes aimed at ensuring that the Company's systems evolve with, and meet the needs of, the Company's business.  These changes may include changes necessary or desirable to address recommendations of the Company's management, its counsel and/or its independent auditors, including any recommendations of its independent auditors arising out of their audits and reviews of the Company's financial statements.  These changes may include changes to the Company's own systems, as well as to the systems of businesses that the Company has acquired or that the Company may acquire in the future and will, if made, be intended to enhance the effectiveness of the Company's controls and procedures.  The Company is also continually striving to improve its management and operational efficiency and the Company expects that its efforts in that regard will from time to time directly or indirectly affect the Company's disclosure controls and procedures, as well as the Company's internal control over financial reporting.



(b)

Changes in internal controls.



There were no significant changes in the Company's internal controls or other factors that could significantly affect the Company's internal controls subsequent to the date of their evaluation.





PART II

OTHER INFORMATION



Item 1.

LEGAL PROCEEDINGS



Eurasia and its Chief Executive Officer, Nicholas W. Baxter have been named in a law suit commenced in the Court of Session in Edinburgh, Scotland.  Eurasia and Mr. Baxter have been sued by Arawak Energy Corporation (Arawak) and its wholly owned subsidiary, Commonwealth Oil & Gas Company Limited (Commonwealth).  Mr. Baxter was a director of Arawak until May 5, 2003.  Mr. Baxter was periodically a director of Commonwealth until February, 2006.  Eurasia is not associated with or connected to Arawak or Commonwealth in any business or contractual context.  Arawak and Commonwealth allege that in the course of his directorship, Mr. Baxter breached his fiduciary duty as a director and accessed and used confidential information relating to Arawak and Commonwealth oil and gas properties in Azerbaijan for the purpose of securing Eurasias MOU for its Block in Azerbaijan.  Eurasia has been made a party to the action as an alleged knowing recipient of confidential information and of a commercial opportunity diverted to it in breach of fiduciary duty.  Arawak and Commonwealth are seeking US$17.2 million in damages from Mr. Baxter, a declaration that Eurasia holds its MOU in trust for the benefit of Arawak and Commonwealth and an accounting of profits up to US$100 million or alternatively damages against Mr. Baxter and Eurasia for breach of confidence in the same amount.  Eurasia and Mr. Baxter have retained joint counsel and will be filing an appearance and defense in due course.



The allegations of misappropriation of confidential information by Mr. Baxter and Eurasia and of breach of fiduciary duty by Mr. Baxter with the knowledge of Eurasia are completely rejected both on the facts and on the law.  Unfortunately, this action serves to malign both the







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character of Eurasias management and the integrity of our project in Azerbaijan.  Eurasia will aggressively defend the action by Arawak and Commonwealth while continuing to advance its interests in Azerbaijan with the negotiation and execution of the ERDPSA.  Eurasia has sufficient cash on hand to finance all of its development work in Azerbaijan and to pay the costs associated with the Arawak/Commonwealth lawsuit.



Item 2

UNREGISTERED SALES OF EQUITY SECURITIES

AND USE OF PROCEEDS



None



Item 3

DEFAULTS UPON SENIOR SECURITIES



None



Item 4

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None



Item 5

OTHER INFORMATION



None



Item 6

EXHIBITS AND REPORTS ON FORM 8-K



(a)

Exhibits



31.1

Section 302 Certification of Chief Executive Officer

31.2

Section 302 Certification of Chief Financial Officer

32

Section 906 Certification



(b)

Reports on Form 8-K



The Company did not file any Form 8Ks during the quarter ended September 30, 2006.



SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



EURASIA ENERGY LIMITED







Dated:  November 10, 2006

Per:

/s/Gerald R. Tuskey

Gerald R. Tuskey,

C.F.O., Corporate Secretary and Director