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 JUNE 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 August 14, 2006



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







---

EURASIA ENERGY LIMITED





INDEX



PART 1.

FINANCIAL INFORMATION



Item 1.

Financial Statements



Balance Sheet as of June 30, 2006



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



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



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

June 30, 2006













Index



Balance Sheet

Statements of Operations

Statements of Stockholders Equity

Statements of Cash Flows

Notes to Financial Statements



---



|                                                                            |   |            
|--------------------------------------------------------------------------- | - | -----------
|EURASIA ENERGY LIMITED                                                     
|(formerly Pacific Alliance Ventures Ltd.)                                  
|(an exploration stage company)                                             
|                                                                            |   |            
|BALANCE SHEET                                                              
|(Unaudited)                                                                
|                                                                            |   |            
|                                                                            |   | June 30,   
|(Expressed in U.S. Dollars)                                                 |   | 2006       
|                                                                            |   |            
|                                                                            |   |            
|ASSETS                                                                      |   |            
|Current assets                                                              |   |            
|Cash and cash equivalents                                                   | $ | 716,134    
|Interest receivable                                                         |   | 1,694      
|Prepaid expenses                                                            |   | 13,799     
|Prepaid expenses, related party (Note 8)                                    |   | 9,508      
|Total Current Assets                                                        |   | 741,135    
|                                                                            |   |            
|Fixed assets, net                                                           |   | 74,194     
|                                                                            |   |            
|Total assets                                                                | $ | 815,329    
|                                                                            |   |            
|LIABILITIES AND STOCKHOLDERS' EQUITY                                        |   |            
|                                                                            |   |            
|Accounts payable and accrued expenses                                       | $ | 1,200      
|                                                                            |   |            
|                                                                            |   |            
|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                            |   | (3,816,329)
|                                                                            |   |            
|Total stockholders' equity                                                  |   | 814,129    
|                                                                            |   |            
|Total liabilities and stockholders' equity                                  | $ | 815,329    
|                                                                            |   |            
|                                                                            |   |            
|                                                                            |   |            
|                                                                            |   |            
|(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 Six Months ended June 30, 2006 and 2005, and for the Period from
|November 28, 2005 (the effective date of the exploration stage) through June 30, 2006    
|(Unaudited)                                                                              
|                                                                                          |   |                    |   |                  |   |             |   |            |   | Cumulative 
|                                                                                          |   | Three Months Ended |   | Six Months Ended |   | During the 
|                                                                                          |   | June 30,           |   | June 30,         |   | Exploration
|(Expressed in U.S. Dollars)                                                               |   | 2006               |   | 2005             |   | 2006        |   | 2005       |   | Stage      
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|Revenue                                                                                   | $ | -                  | $ | -                | $ | -           | $ | -          | $ | -          
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|Expenses                                                                                  |   |                    |   |                  |   |             |   |            |   |            
|Consulting                                                                                |   | 14,436             |   | -                |   | 14,436      |   | -          |   | 17,466     
|Data acquisition cost                                                                     |   | (700)              |   | -                |   | 19,300      |   | -          |   | 19,300     
|General and administrative                                                                |   | 60,193             |   | -                |   | 89,149      |   | -          |   | 91,606     
|Travel                                                                                    |   | 22,707             |   | -                |   | 25,707      |   | -          |   | 33,818     
|Stock-based compensation (Note 7(c))                                                      |   | 3,665,133          |   | -                |   | 3,665,133   |   | -          |   | 3,665,133  
|                                                                                          |   | 3,761,769          |   | -                |   | 3,813,725   | - | -          |   | 3,827,323  
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|Operating Loss                                                                            |   | (3,761,769)        |   | -                |   | (3,813,725) |   | -          |   | (3,827,323)
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|Other income and expenses                                                                 |   |                    |   |                  |   |             |   |            |   |            
|Interest income                                                                           |   | 8,232              |   | -                |   | 10,994      |   | -          |   | 10,994     
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|Loss from continuing operations                                                           |   | (3,753,537)        |   | -                |   | (3,802,731) |   | -          | $ | (3,816,329)
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|Discontinued operations                                                                   |   | -                  |   | (3,067)          |   | -           |   | (12,901)   |   |            
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|Net loss                                                                                  | $ | (3,753,537)        | $ | (3,067)          | $ | (3,802,731) | $ | (12,901)   |   |            
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|Net loss per common share                                                                 |   |                    |   |                  |   |             |   |            |   |            
|(basic and fully diluted)                                                                 |   |                    |   |                  |   |             |   |            |   |            
|Continuing operations                                                                     | $ | (0.1848)           | $ | -                | $ | (0.1878)    | $ | -          |   |            
|Discontinued operations                                                                   |   |                    |   | (0.0002)         |   | -           |   | (0.0006)   |   |            
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|Net loss per common share                                                                 | $ | (0.1848)           | $ | (0.0002)         | $ | (0.1878)    | $ | (0.0006)   |   |            
|Weighted average number of common                                                         |   |                    |   |                  |   |             |   |            |   |            
|shares outstanding                                                                        |   | 20,315,135         |   | 20,053,929       |   | 20,252,980  |   | 19,932,738 |   |            
|                                                                                          |   |                    |   |                  |   |             |   |            |   |            
|(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 STOCKHOLDERS' EQUITY                                                   
|                                                                                      |              |                 |                     |                       |                         |                  
|For the Six Months ended June 30, 2006 and for the Period from                       
|November 28, 2005 (the effective date of the exploration stage) through June 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,                                                | 250,000      | 125             | 749,875             | -                     | -                       | 750,000          
|February 2006                                                                         |              |                 |                     |                       |                         |                  
|                                                                                      |              |                 |                     |                       |                         |                  
|Stock-based compensation expense                                                      | -            | -               | 3,665,133           | -                     | -                       | 3,665,133        
|                                                                                      |              |                 |                     |                       |                         |                  
|Net loss for the period ended June 30, 2006                                           | -            | -               | -                   | -                     | (3,802,731)             | (3,802,731)      
|                                                                                      |              |                 |                     |                       |                         |                  
|Balance, June 30, 2006                                                                | 20,315,135   | $        10,158 | $        4,629,366  | $             (9,066) | $       (3,816,329)     | $         814,129
|                                                                                      |              |                 |                     |                       |                         |                  
|(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 CASH FLOWS                                                             
|For the Six Months ended June 30, 2006 and 2005, and for the Period from             
|November 28, 2005 (the effective date of the exploration stage) through June 30, 2006
|(Unaudited)                                                                          
|                                                                                      |   |                  |   |             |   |            
|                                                                                      |   |                  |   |             |   | Cumulative 
|                                                                                      |   | Six months ended |   | During the 
|                                                                                      |   | June 30, 2006    |   | Exploration
|(Expressed in U.S. Dollars)                                                           |   | 2006             |   | 2005        |   | Stage      
|                                                                                      |   |                  |   |             |   |            
|Cash flows from (used in) operating activities                                        |   |                  |   |             |   |            
|Net Loss                                                                              | $ | (3,802,731)      | $ | (12,901)    | $ | (3,816,329)
|Adjustments to reconcile net loss to                                                  |   |                  |   |             |   |            
|net cash flows from operating activities                                              |   |                  |   |             |   |            
|Stock-based compensation                                                              |   | 3,665,133        |   | -           |   | 3,665,133  
|Depreciation                                                                          |   | 2,681            |   | -           |   | 2,681      
|Change in operating assets and liabilities                                            |   |                  |   |             |   |            
|Decrease in accounts receivable, related party                                        |   | 5,000            |   | -           |   | 5,000      
|Increase in interest receivable                                                       |   | (1,694)          |   | -           |   | (1,694)    
|Increase in prepaid expenses                                                          |   | (13,799)         |   | -           |   | (13,799)   
|Increase in prepaid expenses, related party                                           |   | (9,508)          |   | -           |   | (9,508)    
|Increase in accounts payable and accrued liabilities                                  |   | 600              |   | 77          |   | 600        
|Net cash used in operating activities                                                 |   | (154,318)        |   | (12,824)    |   | (167,916)  
|                                                                                      |   |                  |   |             |   |            
|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          |   | 127,468     |   | 750,000    
|Net cash provided by financing activities                                             |   | 750,000          |   | 127,468     |   | 750,000    
|                                                                                      |   |                  |   |             |   |            
|Increase in cash and cash equivalents                                                 |   | 518,807          |   | 114,644     |   | 505,209    
|                                                                                      |   |                  |   |             |   |            
|Cash and cash equivalents, beginning of period                                        |   | 197,327          |   | 106,010     |   | 210,925    
|                                                                                      |   |                  |   |             |   |            
|Cash and cash equivalents, end of period                                              | $ | 716,134          | $ | 220,654     | $ | 716,134    
|                                                                                      |   |                  |   |             |   |            
|Cash and cash equivalents, consist of:                                                |   |                  |   |             |   |            
|Cash                                                                                  | $ | 16,134           | $ | 220,654     | $ | 16,134     



---

- 8 -









|                                                                            |   |         |   |         |   |        
|--------------------------------------------------------------------------- | - | ------- | - | ------- | - | -------
|Short term deposit                                                          |   | 700,000 |   | -       |   | 700,000
|                                                                            | $ | 716,134 | $ | 220,654 | $ | 716,134
|                                                                            |   |         |   |         |   |        
|                                                                            |   |         |   |         |   |        
|Supplemental Information:                                                   |   |         |   |         |   |        
|                                                                            |   |         |   |         |   |        
|Cash paid for income taxes                                                  | $ | -       | $ | -       | $ | -      
|Cash paid for interest                                                      | $ | -       | $ | -       | $ | -      
|                                                                            |   |         |   |         |   |        
|                                                                            |   |         |   |         |   |        
|(The accompanying notes are an integral part of these financial statements)







---

EURASIA ENERGY LIMITED

(formerly Pacific Alliance Ventures Ltd.)

(an exploration stage company)



Notes to Financial Statements

June 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 for the exclusive right to negotiate an agreement for an oil and gas block in the Republic of Azerbaijan.



The Company has entered into 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.



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 $3,816,329 from the date of inception of the exploration stage (November 28, 2005) to June 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 June 30, 2006 and the results of operations for the six months ended June 30, 2006 and 2005 and cash flows for the six months ended June 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 - New Accounting Policies



(i) Share-based payment



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". Adoption of the new accounting policy does not have any impact on the Company as the Company did not have any stock options granted to employees before January 1, 2006.



(ii) 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%





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 six-month periods ended June 30, 2006 of $nil (2005: $26,200) and $nil (2005: $52,200), respectively, are included in the loss from discontinued operations. As of June 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 June 30, 2006.





Note 6 - Fixed Assets



Fixed assets consist of the following:



|                               |         |  |  |        
|------------------------------ | ------- |  |  | -------
|Motor vehicle                  | $74,500
|Office equipment               | 2,375  
|                               |         |  |  | 76,875 
|Less: accumulated depreciation | (2,681)
|                               |         |  |  | $74,194





Depreciation charged to operations for the three-month and six-month period ended June 30, 2006, and the period from inception to June 30, 2006, amounted to $2,681 (2005: $nil), $2,681 (2005: $nil), and $2,681, 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 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 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:



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





(c) Options



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



|                           |           |                |                | 
|-------------------------- | --------- | -------------- | -------------- | 
|Weighted average          
|Number of
      warrants   |           | exercise price
|                           |           |                |                | 
|Balance, December 31, 2005 | -         |                | $       
    -
|Issued                     | 1,500,000 |                | 3.00          
|Balance, June 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 June 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 June 30, 2006 is 4.79 years.



During the three-month and six-month periods ended June 30, 2006, compensation expense of$3,665,133 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 June 30, 2006, the Company made a cash advance of $9,508 to the Chief Executive Officer for payment of ongoing expenses being incurred by the Company in Baku, Azerbaijan.



During the three-month and six-month periods ended June 30, 2006, the Company paid director fee of $2,500 and $2,500 to a director, respectively.





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 June 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 July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109.  This Interpretation provides guidance for recognizing and measuring uncertain tax positions, as defined in Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes.  FIN No. 48 prescribes a threshold condition that a tax position must meet for any of the benefit of an uncertain tax position to be recognized in the financial statements.  Guidance is also provided regarding derecognition, classification and disclosure of uncertain tax positions. FIN No. 48 is effective for fiscal years beginning after December 15, 2006.  The Company does not expect that this Interpretation will have a material impact on their financial position, results of operations or cash flows.





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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 June 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.



Under the terms of the MOU, our company has 12 months to negotiate and sign the ERDPSA with SOCAR.  SOCAR has provided our company with all existing data relevant to the Block.  This data is being reviewed and assessed by our petroleum engineering consultants, TRACS International Consultancy Ltd. (TRACS).  TRACS project scope includes:  an assessment of the existing producing fields in the Block with consideration to volumes of hydrocarbons in place, identifying opportunities for further development, estimating production profiles, assessing the capacity and integrity of existing facilities and determining economic viability.  TRACS will also evaluate the potential exploration upside in the Block including an outline of an exploration and appraisal program, an outline for a notional development scheme and determining cost estimates for development.



This work by TRACS will form the basis of the terms of the ERDPSA.



The opportunity for our company to be considered by SOCAR as a partner for development of the Block is attributable to the efforts of our President and Chief Executive Officer, Mr. Nicholas W. Baxter.  Mr. Baxter was appointed a director of our company on March 31, 2005 and was appointed President and C.E.O. on







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November 28, 2005.  Mr. Baxter is currently a resident of Aberdeenshire, Scotland.  Mr. Baxter has a 20 year career in international resource exploration and development.  Originally trained as a geophysicist, Mr. Baxter received a Bachelor of Science (Honors) from the University of Liverpool in 1975.  Mr. Baxter has worked on geophysical survey and exploration projects in the U.K., Europe, Africa and the Middle East.  From 1981 to 1985, Mr. Baxter was a director of Resource Technology plc, a geophysical equipment sales/services company.  Resource Technology plc went public on the USM in London in 1983 and graduated to the London Stock Exchange in 1984.  Mr. Baxter was a director of Ocean Marine Technologies Inc. from 1987 to 1990.  Ocean Marine Technologies Inc. was involved in offshore gold exploration and light manufacturing and went public on the Vancouver Stock Exchange in 1986.  From 1986 to 2002, Mr. Baxter was the Chief Operating Officer and a director of A&B Geoscience Corporation (now Arawak Energy Corporation).



In the early 1990s, Mr. Baxter was among the first western entrepreneurs to establish operations in Azerbaijan following the cessation of Soviet influence in the country.  In 1994, Mr. Baxter negotiated and managed the first marine seismic survey in the Caspian Sea by a western contractor.  This 2D seismic survey was conducted over a Block offshore Turkmenistan using an Azerbaijani vessel provided under an agreement with SOCAR.  Following the successful completion of this marine seismic survey and the development of a good working relationship with SOCAR, Mr. Baxter commenced negotiations on behalf of A&B Geoscience Corporation for exploration and development rights over an onshore oil and gas Block.  These efforts culminated in 1998 with the signing of the first onshore production sharing agreement in Azerbaijan by Commonwealth Gobustan Limited (a subsidiary of A&B Geoscience Corporation) and its partner, Union Texas Petroleum.  In 2002, an international oil trading firm purchased control of a majority interest in A&B Geoscience Corporation (now Arawak Energy Corporation).  Mr. Baxter ceased to be an officer and director of Arawak Energy Corporation in 2002.  Mr. Baxter is an original subscribing shareholder of our company and owns 15% of our currently issued common shares.



The Block includes the producing Alyat-Deniz oil and gas field and a string of seven prospective exploration structures trending in a south-easterly direction from the coast to seventy kilometers offshore. Water depths are predominantly up to twenty meters and reach a maximum of fifty meters at the far end of the Block.  The Alyat-Deniz field was discovered in 1983 and to date has produced approximately 12.5 million barrels of oil and 1 billion cubic meters of gas.  SOCAR estimates recent production to be approximately 750 barrels of oil and 100,000 cubic meters of gas per day from 14 wells, and remaining recoverable reserves from the Alyat-Deniz field of 15 million barrels of oil and 1 billion cubic meters of gas.  The main producing horizon is at 3,700-4,500 meters depth.  Available data includes low density Soviet-era seismic over the entire Block and well data from the Alyat-Deniz field and several other structures.  In addition, there is modern seismic and well data in onshore and offshore areas proximal to the Block that may be used for interpolation.



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







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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 June 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 June 30, 2006, the Company's disclosure 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



None







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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



In lieu of a meeting of stockholders, by consent resolutions dated April 3, 2006 of stockholders representing 59.80% of the issued and outstanding common shares of the Company, the stockholders re-appointed Gerald R. Tuskey, Nicholas W. Baxter and Roger Thomas as members of the board of directors until the next annual general meeting of the Companys stockholders.  The stockholders also re-appointed the firm of Peterson Sullivan, PLLC of Seattle, Washington, as its independent accountants for the fiscal year 2006/2007 and also approved the Companys audited financial statements for the year ended December 31, 2005.



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



During the Companys quarter ended June 30, 2006, the Company filed a Form 8K on April 6, 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:  August 14, 2006

Per:

/s/Gerald R. Tuskey

Gerald R. Tuskey,

C.F.O., Corporate Secretary and Director