UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





(Mark
One)


xQUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For
the Quarterly Period Ended July 31, 2009





oTRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For
the Transition Period from _________ to _________





Commission
file number:  000-51321







TRIANGLE
PETROLEUM CORPORATION


(Exact
name of registrant as specified in its charter)





Nevada
              
              98-0430762(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (IRS
      Employer
                Identification
      No.)





Suite
1250, 521 - 3 Avenue SW


Calgary,
Alberta


Canada
T2P 3T3


(Address
of Principal Executive Offices)





(403)
262-4471


(Registrant’s
telephone number, including area code)





(Former
name, former address and former fiscal year, if changed since last
report)





Indicate
by check mark whether the registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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. Yes x No
o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).   o
Yes  o
No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting
company.  See definitions of “large accelerated filer,” “accelerated
filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):




Large
      accelerated filer o
            Accelerated
      filer oNon-accelerated
      filer o
            Smaller
      reporting company x(Do
      not check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).Yes o   No
x





As of
September 1, 2009, there were 69,926,043 shares of registrant’s common stock
outstanding.





TRIANGLE
PETROLEUM CORPORATION AND SUBSIDIARIES





INDEX





PART
      I.
              FINANCIAL
      INFORMATIONITEM
      1.
              Financial
      Statements
              3Consolidated
      balance sheets at July 31, 2009 and January 31, 2009
      (unaudited)
              3Consolidated
      statements of operations for the three and six months ended July 31, 2009
      and 2008 (unaudited)
              4Consolidated
      statements of cash flows for the three and six months ended July 31, 2009
      and 2008 (unaudited)
              5Consolidated
      statements of stockholders’ equity for the three and six months ended July
      31, 2009 and 2008 (unaudited)
              6Notes
      to unaudited consolidated financial statements
              7 –
      11ITEM
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              12
      – 20ITEM
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              20ITEM
      4T.
              Controls
      and Procedures
              20PART
      II.
              OTHER
      INFORMATIONITEM
      1
              Legal
      proceedings
              22ITEM
      1A
              Risk
      factors
              22ITEM
      2
              Unregistered
      sales of equity securities and use of proceeds
              22ITEM
      3
              Defaults
      upon senior securities
              22ITEM
      4
              Submission
      of matters to a vote of security holders
              22ITEM
      5
              Other
      information
              22ITEM
      6
              Exhibits
              22SIGNATURES
              23




2





Triangle
Petroleum Corporation


Consolidated
Balance Sheets


(Expressed
in U.S. dollars)


(Unaudited)





July
      31,
                                  2009
                                  $
                                
                                
                                January
      31,
                                  2009
                                  $ASSETSCurrent
      AssetsCash
      and cash equivalents
                                
                                
                                5,520,030
                                
                                
                                
                                8,449,471Prepaid
      expenses
                                
                                
                                340,945
                                
                                
                                
                                339,839Other
      receivables
                                
                                
                                301,432
                                
                                
                                
                                998,511Total
      Current Assets
                                
                                
                                6,162,407
                                
                                
                                
                                9,787,821Property
      and Equipment
                                
                                
                                51,598
                                
                                
                                
                                39,765Oil
      and Gas Properties (Note 3)
                                
                                
                                18,135,879
                                
                                
                                
                                16,942,864Total
      Assets
                                
                                
                                24,349,884
                                
                                
                                
                                26,770,450LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      LiabilitiesAccounts
      payable
                                
                                
                                218,819
                                
                                
                                
                                2,123,079Accrued
      liabilities
                                
                                
                                33,697
                                
                                
                                
                                90,539Total
      Current Liabilities
                                
                                
                                252,516
                                
                                
                                
                                2,213,618Asset
      Retirement Obligations (Note 4)
                                
                                
                                927,235
                                
                                
                                
                                727,862Total
      Liabilities
                                
                                
                                1,179,751
                                
                                
                                
                                2,941,480Going
      Concern (Note 1)Commitment
      (Note 8)Stockholders’
      EquityCommon
      Stock (Note 5)Authorized:
      100,000,000 shares, par value $0.00001Issued:
      69,926,043 shares(January
      31, 2009 – 69,926,043 shares)
                                
                                
                                699
                                
                                
                                
                                699Additional
      Paid-In Capital (Note 5)
                                
                                
                                81,426,178
                                
                                
                                
                                81,155,715Warrants
      (Note 6)
                                
                                
                                4,237,100
                                
                                
                                
                                4,237,100Deficit
                                
                                
                                (62,493,844
                                )
                                
                                
                                (61,564,544
                                )Total
      Stockholders’ Equity
                                
                                
                                23,170,133
                                
                                
                                
                                23,828,970Total
      Liabilities and Stockholders’ Equity
                                
                                
                                24,349,884
                                
                                
                                
                                26,770,450




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




3





Triangle
Petroleum Corporation


Consolidated
Statements of Operations


(Expressed
in U.S. dollars)


(Unaudited)





Three
                              Months
                              Ended
                              July
      31,
                            
                            
                            Three
                              Months
                              Ended
                              July
      31,
                            
                            
                            Six
                              Months
                              Ended
                              July
      31,
                            
                            
                            Six
                              Months
                              Ended
                              July
      31,2009
                            
                            
                            2008
                            
                            
                            2009
                            
                            
                            2008$
                            
                            
                            $
                            
                            
                            $
                            
                            
                            $Revenue,
      net of royalties
                            
                            
                            29,183
                            
                            
                            
                            107,831
                            
                            
                            
                            63,087
                            
                            
                            
                            259,950Operating
      ExpensesOil
      and gas production
                            
                            
                            31,875
                            
                            
                            
                            4,154
                            
                            
                            
                            52,576
                            
                            
                            
                            63,381Depletion
      and accretion (Notes 3 and 4)
                            
                            
                            50,262
                            
                            
                            
                            23,268
                            
                            
                            
                            91,477
                            
                            
                            
                            93,567Depreciation
      – property and equipment
                            
                            
                            7,335
                            
                            
                            
                            9,988
                            
                            
                            
                            11,674
                            
                            
                            
                            19,747General
      and administrative (Note 7)
                            
                            
                            855,300
                            
                            
                            
                            1,142,684
                            
                            
                            
                            1,675,148
                            
                            
                            
                            2,343,402Gain
      on sale of assets
                            
                            
                            (124,621
                            )
                            
                            
                            (10,705
                            )
                            
                            
                            (124,621
                            )
                            
                            
                            (10,705
                            )Foreign
      exchange loss (gain)
                            
                            
                            (558,575
                            )
                            
                            
                            28,595
                            
                            
                            
                            (707,654
                            )
                            
                            
                            24,589261,576
                            
                            
                            
                            1,197,984
                            
                            
                            
                            998,600
                            
                            
                            
                            2,533,981Loss
      from Operations
                            
                            
                            (232,393
                            )
                            
                            
                            (1,090,153
                            )
                            
                            
                            (935,513
                            )
                            
                            
                            (2,274,031
                            )Other
      Income (Expense)Accretion
      of discounts on convertible debentures
                            
                            
                            -
                            
                            
                            
                            (791,042
                            )
                            
                            
                            -
                            
                            
                            
                            (2,006,400
                            )Amortization
      of debt issue costs
                            
                            
                            -
                            
                            
                            
                            (73,056
                            )
                            
                            
                            -
                            
                            
                            
                            (182,640
                            )Loss
      on debt extinguishment
                            
                            
                            -
                            
                            
                            
                            (160,662
                            )
                            
                            
                            -
                            
                            
                            
                            (160,662
                            )Interest
      expense
                            
                            
                            -
                            
                            
                            
                            (211,353
                            )
                            
                            
                            -
                            
                            
                            
                            (465,333
                            )Interest
      and royalty income
                            
                            
                            41
                            
                            
                            
                            65,014
                            
                            
                            
                            6,213
                            
                            
                            
                            82,229Unrealized
      gain on fair value of derivatives
                            
                            
                            -
                            
                            
                            
                            (125,741
                            )
                            
                            
                            -
                            
                            
                            
                            793,589Total
      Other Income (Expense)
                            
                            
                            41
                            
                            
                            
                            (1,296,840
                            )
                            
                            
                            6,213
                            
                            
                            
                            (1,939,217
                            )Loss
      for the Period
                            
                            
                            (232,352
                            )
                            
                            
                            (2,386,993
                            )
                            
                            
                            (929,300
                            )
                            
                            
                            (4,213,248
                            )Loss
      Per Share – Basic and Diluted
                            
                            
                            (0.003
                            )
                            
                            
                            (0.039
                            )
                            
                            
                            (0.013
                            )
                            
                            
                            (0.078
                            )Weighted
      Average Number of Shares Outstanding –    Basic and
      Diluted
                            
                            
                            69,926,000
                            
                            
                            
                            60,673,000
                            
                            
                            
                            69,926,000
                            
                            
                            
                            54,126,000




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




4





Triangle
Petroleum Corporation


Consolidated
Statements of Cash Flows


(Expressed
in U.S. dollars)


(Unaudited)





Three
      Months
                                Ended
                                July
      31, 2009
                              
                              
                              Three
      Months
                                Ended
                                July
      31, 2008
                              
                              
                              Six
      Months
                                Ended
                                July
      31, 2009,
                              
                              
                              Six
      Months
                                Ended
                                July
      31, 2008$
                              
                              
                              $
                              
                              
                              $
                              
                              
                              $Operating
      ActivitiesLoss
      for the period
                              
                              
                              (232,352
                              )
                              
                              
                              (2,386,993
                              )
                              
                              
                              (929,300
                              )
                              
                              
                              (4,213,248
                              )Adjustments
      to reconcile loss for the period to net cash used in operating
      activities:Accretion
      of discounts on convertible debentures
                              
                              
                              -
                              
                              
                              
                              791,042
                              
                              
                              
                              -
                              
                              
                              
                              2,006,400Amortization
      of debt issue costs
                              
                              
                              -
                              
                              
                              
                              73,056
                              
                              
                              
                              -
                              
                              
                              
                              182,640Depletion
      and accretion (Notes 3 and 4)
                              
                              
                              50,262
                              
                              
                              
                              23,268
                              
                              
                              
                              91,477
                              
                              
                              
                              93,567Depreciation
      – property and equipment
                              
                              
                              7,335
                              
                              
                              
                              9,988
                              
                              
                              
                              11,674
                              
                              
                              
                              19,747Stock-based
      compensation (Note 7)
                              
                              
                              135,543
                              
                              
                              
                              227,756
                              
                              
                              
                              270,463
                              
                              
                              
                              341,036Gain
      on sale of assets
                              
                              
                              (124,621
                              )
                              
                              
                              (10,705
                              )
                              
                              
                              (124,621
                              )
                              
                              
                              (10,705
                              )Loss
      on debt extinguishment
                              
                              
                              -
                              
                              
                              
                              160,662
                              
                              
                              
                              -
                              
                              
                              
                              160,662Unrealized
      gain on fair value of derivatives
                              
                              
                              -
                              
                              
                              
                              125,741
                              
                              
                              
                              -
                              
                              
                              
                              (793,589
                              )Unrealized
      foreign exchange changes
                              
                              
                              (547,225
                              )
                              
                              
                              -
                              
                              
                              
                              (709,812
                              )
                              
                              
                              -Asset
      retirement costs (Note 4)
                              
                              
                              -
                              
                              
                              
                              (200,937
                              )
                              
                              
                              (6,509
                              )
                              
                              
                              (371,637
                              )Changes
      in operating assets and liabilitiesUnrealized
      foreign exchange changes
                              
                              
                              3,664
                              
                              
                              
                              (1,583
                              )
                              
                              
                              (4,494
                              )
                              
                              
                              18,242Prepaid
      expenses
                              
                              
                              (1,745
                              )
                              
                              
                              102,925
                              
                              
                              
                              (23,621
                              )
                              
                              
                              54,639Other
      receivables
                              
                              
                              11,992
                              
                              
                              
                              1,222,469
                              
                              
                              
                              683,244
                              
                              
                              
                              1,109,526Accounts
      payable
                              
                              
                              (40,268
                              )
                              
                              
                              (501,737
                              )
                              
                              
                              (154,402
                              )
                              
                              
                              (295,071
                              )Accrued
      interest on convertible debentures
                              
                              
                              -
                              
                              
                              
                              (1,087,957
                              )
                              
                              
                              -
                              
                              
                              
                              (833,977
                              )Accrued
      liabilities
                              
                              
                              4,251
                              
                              
                              
                              (77,896
                              )
                              
                              
                              5,739
                              
                              
                              
                              (30,404
                              )Cash
      Used in Operating Activities
                              
                              
                              (733,164
                              )
                              
                              
                              (1,530,901
                              )
                              
                              
                              (890,162
                              )
                              
                              
                              (2,562,172
                              )Investing
      ActivitiesPurchase
      of property and equipment
                              
                              
                              (503
                              )
                              
                              
                              (2,216
                              )
                              
                              
                              (23,507
                              )
                              
                              
                              (3,941
                              )Oil
      and gas property expenditures (Note 3)
                              
                              
                              (586,952
                              )
                              
                              
                              (1,382,851
                              )
                              
                              
                              (2,144,778
                              )
                              
                              
                              (3,735,909
                              )Cash
      advances from partners
                              
                              
                              -
                              
                              
                              
                              2,567,084
                              
                              
                              
                              (677,843
                              )
                              
                              
                              2,567,084Proceeds
      received from sale of oil and gas properties
                              
                              
                              133,325
                              
                              
                              
                              3,908,998
                              
                              
                              
                              133,325
                              
                              
                              
                              3,908,998Cash
      Provided by (Used in) Investing Activities
                              
                              
                              (454,130
                              )
                              
                              
                              5,091,015
                              
                              
                              
                              (2,712,803
                              )
                              
                              
                              2,736,232Financing
      ActivitiesProceeds
      from issuance of common stock
                              
                              
                              -
                              
                              
                              
                              25,560,500
                              
                              
                              
                              -
                              
                              
                              
                              25,560,500Share
      issuance costs
                              
                              
                              -
                              
                              
                              
                              (2,022,587
                              )
                              
                              
                              -
                              
                              
                              
                              (2,022,587
                              )Convertible
      debenture repayment
                              
                              
                              -
                              
                              
                              
                              (4,800,000
                              )
                              
                              
                              -
                              
                              
                              
                              (4,800,000
                              )-Cash
      Provided by Financing Activities
                              
                              
                              -
                              
                              
                              
                              18,737,913
                              
                              
                              
                              -
                              
                              
                              
                              18,737,913-
                              
                              
                              
                              
                              
                              
                              
                              -Unrealized
      foreign exchange change on cash and cash equivalents
                              
                              
                              547,557
                              
                              
                              
                              -
                              
                              
                              
                              673,524
                              
                              
                              
                              -Increase
      (Decrease) in Cash and Cash Equivalents
                              
                              
                              (639,737
                              )
                              
                              
                              22,298,027
                              
                              
                              
                              (2,929,441
                              )
                              
                              
                              18,911,973Cash
      and Cash Equivalents – Beginning of Period
                              
                              
                              6,159,767
                              
                              
                              
                              1,195,535
                              
                              
                              
                              8,449,471
                              
                              
                              
                              4,581,589Cash
      and Cash Equivalents – End of Period
                              
                              
                              5,520,030
                              
                              
                              
                              23,493,562
                              
                              
                              
                              5,520,030
                              
                              
                              
                              23,493,562Cash
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              5,520,030
                              
                              
                              
                              110,315Cash
      equivalents
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              -
                              
                              
                              
                              23,383,247Non-cash
      Investing and Financing ActivitiesCommon
      stock issued for conversion of debentures
                              
                              
                              -
                              
                              
                              
                              625,000
                              
                              
                              
                              -
                              
                              
                              
                              2,100,140




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




5





Triangle
Petroleum Corporation


Statement
of Stockholders’ Equity


Six
Months Ended July 31, 2009


(Expressed
in U.S. dollars)


(Unaudited)





AdditionalCommon
      Stock
                    
                    
                    Paid-inShares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Warrants
                    
                    
                    Deficit
                    
                    
                    Total#
                    
                    
                    $
                    
                    
                    $
                    
                    
                    $
                    
                    
                    $
                    
                    
                    $Balance
      – January 31, 2009
                    
                    
                    69,926,043
                    
                    
                    
                    699
                    
                    
                    
                    81,155,715
                    
                    
                    
                    4,237,100
                    
                    
                    
                    (61,564,544
                    )
                    
                    
                    23,828,970Stock
      based compensation (Note 7)
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    270,463
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    270,463Net
      loss for the period
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (929,300
                    )
                    
                    
                    (929,300
                    )Balance
      – July 31, 2009
                    
                    
                    69,926,043
                    
                    
                    
                    699
                    
                    
                    
                    81,426,178
                    
                    
                    
                    4,237,100
                    
                    
                    
                    (62,493,844
                    )
                    
                    
                    23,170,133





Triangle
Petroleum Corporation


Statement
of Stockholders’ Equity


Six
Months Ended July 31, 2008


(Expressed
in U.S. dollars)


(Unaudited)





AdditionalCommon
      Stock
                  
                  
                  Paid-inShares
                  
                  
                  Amount
                  
                  
                  Capital
                  
                  
                  Warrants
                  
                  
                  Deficit
                  
                  
                  Total#
                  
                  
                  $
                  
                  
                  $
                  
                  
                  $
                  
                  
                  $
                  
                  
                  $Balance
      – January 31, 2008
                  
                  
                  46,794,530
                  
                  
                  
                  468
                  
                  
                  
                  57,852,277
                  
                  
                  
                  -
                  
                  
                  
                  (47,794,059
                  )
                  
                  
                  10,058,686Issuance
      of common stock for cash pursuant to private placement at $1.40 per unit
      in June 2008
                  
                  
                  18,257,500
                  
                  
                  
                  183
                  
                  
                  
                  21,323,217
                  
                  
                  
                  4,237,100
                  
                  
                  
                  -
                  
                  
                  
                  25,560,500Share
      issuance costs
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (2,022,587
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (2,022,587
                  )Issuance
      of common stock on conversion of convertible debentures at a weighted
      average price of $0.88 per share
                  
                  
                  2,374,013
                  
                  
                  
                  23
                  
                  
                  
                  2,100,117
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,100,140Fair
      value of conversion feature of convertible debentures
      converted
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,039,906
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,039,906Stock
      based compensation (Note 7)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  341,036
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  341,036Net
      loss for the period
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (4,213,248
                  )
                  
                  
                  (4,213,248
                  )Balance
      – July 31, 2008
                  
                  
                  67,426,043
                  
                  
                  
                  674
                  
                  
                  
                  80,633,966
                  
                  
                  
                  4,237,100
                  
                  
                  
                  (52,007,307
                  )
                  
                  
                  32,864,433




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




6


Triangle
Petroleum Corporation


Notes to
the Consolidated Financial Statements


(Expressed
in U.S. dollars, except as noted)


(Unaudited)





Triangle
Petroleum Corporation, together with its consolidated subsidiaries (“Triangle”
or the “Company”), is an independent oil and gas company focused primarily on
the acquisition, exploration and development of resource properties consisting
mainly of shale gas reserves.  The Company’s primary exploration and
development acreage is located in the Horton Bluff formation of the Maritimes
Basin in Canada. The Company also has minor producing properties in the Fort
Worth Basin and in the Alberta Deep Basin.





1.
            Going
      Concern





The
Company is primarily engaged in the acquisition, exploration and development of
oil and gas resource properties and has a limited number of producing wells that
generate cash flows from operations. The Company has not generated significant
revenues from operations and has incurred significant losses since inception.
These factors, among others, raise substantial doubt about the Company’s ability
to continue as a going concern.





The
Company will have to raise additional funds through equity or debt offerings,
dispositions of assets or other means to fund general and administrative
expenses and to complete the exploration and development phase of its programs.
While the Company has been successful in raising funds in the past, there can be
no assurance that it will be able to do so in the future. The continuation of
the Company as a going concern is dependent upon its ability to obtain necessary
additional funds to continue operations and to determine the existence,
discovery and successful exploitation of economically recoverable reserves in
its resource properties, confirmation of the Company’s interests in the
underlying properties, and the attainment of profitable operations.





Failure
to obtain additional financing will result in the going concern assumption being
inappropriate and adjustments would be required to the carrying values of assets
and liabilities, the reported revenues and expenses, and the balance sheet
classifications used.





2.
            Accounting
      Policies





(a)   Basis
of Presentation





These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in U.S. dollars. These consolidated financial statements include the accounts of
the Company and its two wholly-owned subsidiaries, Elmworth Energy Corporation,
incorporated in the Province of Alberta, Canada, and Triangle USA Petroleum
Corporation, incorporated in the State of Colorado, USA. All significant
intercompany balances and transactions have been eliminated. The Company’s
fiscal year-end is January 31.





In the
opinion of management, the accompanying financial statements reflect all
adjustments necessary of a normal recurring nature to present fairly our
financial position at July 31, 2009 and our operations and cash flows for the
three and six month periods ended July 31, 2009 and 2008. In preparing the
accompanying financial statements, management has made certain estimates and
assumptions that affect reported amounts in the financial statements and
disclosures of contingencies. Actual results may differ from those estimates.
The results for interim periods are not necessarily indicative of annual
results.




Certain
reclassifications have been made to the prior period’s financial statements to
conform to the current period’s presentation. Certain disclosures have been
condensed or omitted from these financial statements. Accordingly, they should
be read in conjunction with the consolidated financial statements and notes
thereto included in our Annual Report on Form 10-K for the year ended January
31, 2009.





The
Company’s oil and gas operations are generally conducted jointly with others
and, as such, these financial statements reflect the Company’s proportionate
share of these operations.


7




Triangle
Petroleum Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in U.S. dollars, except as noted)
 (Unaudited)


2.
            Accounting
      Policies (continued)





(b)   Recently
Adopted Accounting Pronouncements





In
December 2007, the Financial Accounting Standard Board (FASB) revised the
Statement of Financial Accounting Standard (SFAS) No. 141, “Business
Combinations”. SFAS No. 141R requires an acquirer to be identified for all
business combinations and applies the same method of accounting for business
combinations – the acquisition method – to all transactions. In addition,
transaction costs associated with acquisitions are required to be expensed. The
revised statement was effective to business combinations in the year February 1,
2009. The adoption of this statement will impact business combinations, if any,
after February 1, 2009.





In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”. SFAS No. 160 requires the Company to report
non-controlling interest in subsidiaries as equity in the consolidated financial
statements; and all transactions between equity and non controlling interests as
equity. SFAS No. 160 was effective for the Company commencing on February 1,
2009. The adoption of this statement did not effect the Company's financial
statements.





In March
2008, the FASB has issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities”, which requires disclosures about how and
why an entity uses derivative instruments, how derivative instruments and
related hedged items are accounted for under SFAS No. 133, and how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance and cash flows. SFAS No. 161 was effective on February 1,
2009. The adoption of this statement did not effect the Company's financial
statements.





In May
2009, the FASB issued SFAS No. 165, “Subsequent Events”. SFAS No. 165 is
intended to establish general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued.  In particular, this
Statement sets forth the period after the balance sheet date during which
management of a reporting entity should evaluate events or transactions that may
occur for potential recognition or disclosure in the financial statements; the
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements; and the
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date. This Statement is effective for interim
and annual periods ending after June 15, 2009. The adoption of this standard did
not impact the second quarter financial statements except for disclosures with
respect to the financial statement approval date. Subsequent events have been
evaluated through September 1, 2009, the date at which the financial statements
were approved for distribution.





3.
            Oil
      and Gas Properties





Six
months ended July 31, 2009:





Costs
                                
                                
                                Accumulated
      Depletion
                                
                                
                                Net
      CarryingOpening
                                
                                
                                Additions
                                
                                
                                Closing
                                
                                
                                Opening
                                
                                
                                Depletion
                                
                                
                                Gain
                                
                                
                                Closing
                                
                                
                                Value$
                                
                                
                                $
                                
                                
                                $
                                
                                
                                $
                                
                                
                                $
                                
                                
                                $
                                
                                
                                $
                                
                                
                                $Proved
      Properties
                                
                                
                                12,775,959
                                
                                
                                
                                21,921
                                
                                
                                
                                12,797,880
                                
                                
                                
                                12,703,090
                                
                                
                                
                                30,345
                                
                                
                                
                                -
                                
                                
                                
                                12,733,435
                                
                                
                                
                                64,445Unproven
      Properties
                                
                                
                                34,746,896
                                
                                
                                
                                1,076,818
                                
                                
                                
                                35,823,714
                                
                                
                                
                                17,876,901
                                
                                
                                
                                -
                                
                                
                                
                                (124,621
                                )
                                
                                
                                17,752,280
                                
                                
                                
                                18,071,434Total
                                
                                
                                47,522,855
                                
                                
                                
                                1,098,739
                                
                                
                                
                                48,621,594
                                
                                
                                
                                30,579,991
                                
                                
                                
                                30,345
                                
                                
                                
                                (124,621
                                )
                                
                                
                                30,485,715
                                
                                
                                
                                18,135,879




8




Triangle
Petroleum Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in U.S. dollars, except as noted)
 (Unaudited)


3.
            Oil
      and Gas Properties (continued)





For the
six month period ended July 31, 2009, the Company’s net cash outflow for oil and
gas additions was $2,144,778, which includes $1,098,739 of additions incurred in
the period (net of $133,325 of disposition proceeds in the quarter) and
$1,057,464 of payments mainly for January 31, 2009 accounts payable related to
oil and gas additions.





Proved
Properties





At July
31, 2009, the carrying value of the Company’s proved properties was $64,445
(January 31, 2009 - $72,869), which were all located in the Alberta Deep Basin
of Canada. For the three month period ended July 31, 2009, depletion expense was
$7,854 (2008 - $18,200) in Canada and $nil (2008 - $nil) in the United States.
For the six month period ended July 31, 2009, depletion expense was $15,891
(2008 - $45,106) in Canada and $14,454 (2008 - $5,922) in the United
States.





Unproven
Properties





All of
the Company’s unproven properties are not subject to depletion.





In June
2009, the Company sold its 25% working interest in 17,307 acres in the Nugget
area of Colorado (Rocky Mountains project) for cash of $83,325 and recovered a
drilling deposit in the Fayetteville area of Arkansas for cash of $50,000. The
net book value of the U.S. properties at the time of sale was $8,704. As such,
the Company recorded a gain on sale of assets of $124,621.





In June
2009, the Company acquired an additional 30% working interest in the Windsor
Block of the Maritimes Basin in Nova Scotia from Contact Exploration Inc.
(“Contact”) for a cash payment of C$270,000 (US$244,750). The Company also
agreed to provide Contact a 5.75% non-convertible gross overriding royalty
interest and assumed the liabilities related to Contact's former working
interest.





The
Company's unproven acquisition and exploration costs were distributed in the
following geographic areas:





July
      31, 2009
                        $
                      
                      
                      January
      31, 2009
                        $Windsor
      Block of Maritimes Basin  (Nova Scotia)
                      
                      
                      17,947,965
                      
                      
                      
                      16,818,586Western
      Canadian Shale (Alberta and B.C.)
                      
                      
                      123,469
                      
                      
                      
                      51,409Total
      unproven acquisition and exploration costs
                      
                      
                      18,071,434
                      
                      
                      
                      16,869,995





4.
            Asset
      Retirement Obligations





Six
      Months
                          July
      31, 2009
                          $
                        
                        
                        Six
      Months
                          July
      31, 2008
                          $Balance,
      beginning of period
                        
                        
                        727,862
                        
                        
                        
                        1,003,353Liabilities
      incurred
                        
                        
                        144,750
                        
                        
                        
                        45,450Liabilities
      settled as part of disposition
                        
                        
                        -
                        
                        
                        
                        (137,429
                        )Liabilities
      settled in cash
                        
                        
                        (6,509
                        )
                        
                        
                        (371,637
                        )Accretion
                        
                        
                        61,132
                        
                        
                        
                        42,539Balance,
      end of period
                        
                        
                        927,235
                        
                        
                        
                        582,276




9




Triangle
Petroleum Corporation


Notes to
the Consolidated Financial Statements


(Expressed
in U.S. dollars, except as noted)


(Unaudited)





5.
            Common
      Stock





Shares
                              
                              
                              Common
                                Stock
                              
                              
                              Additional
                                Paid-
                                In
      Capital#
                              
                              
                              $
                              
                              
                              $January
      31, 2009
                              
                              
                              69,926,043
                              
                              
                              
                              699
                              
                              
                              
                              81,155,715Stock based compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              270,463July 31, 2009
                              
                              
                              69,926,043
                              
                              
                              
                              699
                              
                              
                              
                              81,426,178





6.
            Warrants





As at
July 31, 2009, the Company had 9,128,750 warrants outstanding that can be
exercised into 9,128,750 shares of common stock at a price of $2.25 per share,
which expire on June 3, 2010. The warrants were granted on June 3, 2008, at
which time they had a relative fair value compared to the common stock issued of
$4,237,100.





7.
            Stock
      Options





The
weighted average grant date fair value of stock options granted during the three
and six month periods ended July 31, 2009 was $0.213. No stock options were
exercised during the three and six month periods ended July 31, 2009. During the
three and six month periods ended July 31, 2009, the Company recorded
stock-based compensation of $135,463 and $270,463 (2008 - $227,756 and
$341,036), respectively, as general and administrative expense.





A summary
of the Company’s stock options outstanding is as follows:





Options
                                                #
                                              
                                              
                                              Weighted
                                                Average
                                                Exercise
      Price
                                                $
                                              
                                              Aggregate
                                                Intrinsic
                                                Value
                                                $Outstanding,
      January 31, 2009
                                              
                                              
                                              4,985,000
                                              
                                              
                                              
                                              1.14Granted
                                              
                                              
                                              250,000
                                              
                                              
                                              
                                              0.27Forfeited
                                              
                                              
                                              (100,000
                                              )
                                              
                                              
                                              0.24Outstanding, July 31, 2009
                                              
                                              
                                              5,135,000
                                              
                                              
                                              
                                              1.11
                                              
                                              Exercisable, July 31, 2009
                                              
                                              
                                              1,855,000
                                              
                                              
                                              
                                              2.18
                                              
                                              





The
weighted average remaining contractual life of stock options outstanding as of
July 31, 2009 was 3.8 years.





As at
July 31, 2009, there was $839,735 of total unrecognized compensation costs
related to non-vested share-based compensation arrangements which are expected
to be recognized over a weighted-average period of 26 months.


10


Triangle
Petroleum Corporation


Notes to
the Consolidated Financial Statements


(Expressed
in U.S. dollars, except as noted)


(Unaudited)





7.
            Stock
      Options (continued)





A summary
of the status of the Company’s non-vested share options as of July 31, 2009, and
changes during the six month period ended July 31, 2009, is presented
below:





Options
                        #
                      
                      
                      Weighted
      Average
                        Grant-Date
      Fair Value
                        $Non-vested
      at January 31, 2009
                      
                      
                      3,525,000
                      
                      
                      
                      0.31Granted
                      
                      
                      250,000
                      
                      
                      
                      0.21Vested
                      
                      
                      (395,000
                      )
                      
                      
                      0.73Forfeited
                      
                      
                      (100,000
                      )
                      
                      
                      0.09Non-vested at July 31, 2009
                      
                      
                      3,280,000
                      
                      
                      
                      0.26





8.
            Commitment





The
Company entered into a 10-year production lease for 474,625 gross acres on the
Windsor Block in Nova Scotia, Canada on April 15, 2009. During the first five
years of the lease, Triangle has agreed to continue to evaluate the Windsor
Block by drilling seven wells, completing three wells previously drilled and
acquiring seismic, which was estimated to cost C$12.7 million gross
(approximately US$11.8 million). At the end of the fifth year of the lease,
areas of the block not adequately drilled or otherwise evaluated may be subject
to surrender. Furthermore, at the end of the second year of the lease, a
technical report is required to be provided to and assessed by the Nova Scotia
government to maintain certain lands.





During
the first year of the lease, the Company has agreed to perform completion
operations on the three wells drilled in the prior year and acquire seismic,
which was estimated to cost C$2,000,000 gross. The Company posted a C$200,000
gross refundable deposit related to the first year commitment; should the
Company not perform the work, a portion or all of the deposit could be
forfeited. As of July 31, 2009, two of the three required well completions have
been performed, the third is in progress and permitting commenced for the
seismic program.


11





ITEM
2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS





This
Management's Discussion and Analysis of Financial Condition and Results of
Operations includes a number of forward-looking statements that reflect
Management's current views with respect to future events and financial
performance. You can identify these statements by forward-looking words such as
“may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or
similar words.  Those statements include statements regarding the
intent, belief or current expectations of us and members of our management team
as well as the assumptions on which such statements are based. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risk and uncertainties, and that
actual results may differ materially from those contemplated by such
forward-looking statements.





Readers
are urged to carefully review and consider the various disclosures made by us in
this report and in our other reports filed with the Securities and Exchange
Commission. The following Management’s Discussion and Analysis of Financial
Condition and Results of Operations of the Company should be read in conjunction
with the Consolidated Financial Statements and notes related thereto included in
this Quarterly Report on Form 10-Q.
Important  factors  currently  known  to
Management  could  cause  actual  results  to
differ  materially  from  those in
forward-looking  statements.  We undertake no obligation to
update or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes in the future operating results
over time. We believe that our assumptions are based upon reasonable data
derived from and known about our business and operations.  No
assurances are made that actual results of operations or the results of our
future activities will not differ materially from our
assumptions.  Factors that could cause differences include, but are
not limited to, expected market demand for our products, fluctuations in pricing
for materials, and competition.





Overview





We are an
exploration company focused on emerging shale gas opportunities.  Our
corporate strategy is to utilize our U.S. shale gas experience to secure early
stage shale gas projects in Canada.  In conjunction with this
strategy, we have screened and participated in various projects in North America
with numerous potential joint venture partners. These project areas include
the Barnett Shale trend in Texas (three producing wells), the Fayetteville Shale
trend in Arkansas, the Beech Hill Block in New Brunswick and the Windsor Block
in Nova Scotia.  We have also participated in conventional oil and gas
plays in the province of Alberta (two producing wells) and the states of
Montana, Colorado and Wyoming.





We have
selected the Windsor Block in Nova Scotia as our core project, which is focused
on a shale gas opportunity located in the Maritimes Basin of Eastern Canada. We
intend to execute our operating plan in order to realize the full value of the
land base that has been established in the Maritimes Basin.  We are
also in the process of evaluating a potential secondary shale gas project in
Western Canada. All other projects are currently designated as non-core due
to our desire to focus our limited manpower resources on the one core
project.





Prior to
May 2005, we were known as Peloton Resources Inc., a mining exploration company.
Peloton was actively searching for ore bodies containing gold in British
Columbia. A consultant was hired to assess the economic viability of exploring
for and developing gold reserves on Peloton’s properties. Based upon his report,
Peloton decided to abandon all mining activities and to change its focus towards
oil and gas exploration. In connection with the shift in operational focus, we
changed our name to Triangle Petroleum Corporation.





Plan
of Operations





During
the first half of fiscal 2010, we finalized the Windsor Block production lease
(April 15, 2009), tested one of the exploration wells that was completed in
2008, completed the remaining two exploration wells drilled in 2008 and retested
the two wells drilled in 2007. For the balance of fiscal 2010, we plan on
continuing the technical evaluation of the five wells drilled to date on the
Windsor Block, including further completion operations and testing of the
exploration wells that were drilled in 2008, acquiring additional seismic, and
searching for one or more new joint venture partners to join us in the next
phase of our Windsor Block exploration program. Once we have more certainty on
the terms of a new joint venture partner, we plan to revise our work program and
budget for the remainder of the 2010 fiscal year. We intend to allocate our
available working capital to the Windsor Block as described
above.  However, there may be circumstances where, for sound business
reasons, a reallocation of the funds may be necessary.  Furthermore,
while we intend to use our working capital as described above, our current
working capital is not sufficient to complete the anticipated exploration
program.


12





Properties





All of
our oil and gas properties are located in the United States and
Canada.





Core
Property





Eastern Canadian
Shale Gas Project –Windsor Block–We have an 87% working
interest in 474,625 gross acres (412,924 net acres) in the Windsor Sub-Basin of
the Maritimes Basin located in the Province of Nova Scotia, Canada and serve as
operator of the Windsor Block; Zodiac Exploration Corp. has earned a 13% working
interest in the Windsor Block. We acquired an additional 30% working interest in
the Windsor Block in June 2009 from Contact Exploration Inc. (“Contact”) in
exchange for agreeing to provide Contact a 5.75% non-convertible gross
overriding royalty interest. Contact also received a cash payment of C$270,000
(approximately US$245,000) and we assumed the liabilities related to Contact's
former working interest. Up to April 15, 2009, the land was governed by an
exploration agreement. On April 15, 2009, the Windsor Block exploration
agreement was transferred to a 10-year production lease. Under the terms of this
lease:





·
            The
      production lease grants rights to 474,625 gross acres (412,924 net acres),
      covering substantially all of the land which we had leased previously
      under the terms of the exploration agreement. Fringe acreage deemed
      non-prospective was voluntarily
surrendered;


·
            We
      hold rights to conventional oil and gas within the lease, which includes
      shale gas, in the Windsor and Horton Groups, excluding natural gas from
      coal. We believe coals are not prospective within the Windsor
      Block;


·
            To
      retain rights to this land block, we have agreed to continue to evaluate
      the lands during the first five years of the lease by drilling seven
      wells, completing three exploration wells previously drilled, and
      acquiring seismic, which was estimated to cost C$12.7 million gross. These
      wells are to be distributed across the land block to fully evaluate
      conventional and shale resources. In addition to annual progress reporting
      to maintain the lease in good standing, on the second anniversary of the
      lease, we are obliged to provide a detailed report to the Nova Scotia
      government to assess our evaluation activities to maintain certain
      lands.  After the fifth anniversary, leased areas not adequately
      drilled or otherwise evaluated may be subject to
  surrender;


·
            During
      the first year of the lease, we agreed to complete the three exploration
      wells that were drilled in the prior year and acquire seismic, which was
      estimated to cost C$2 million gross. A C$200,000 gross refundable deposit
      was posted related to the first year commitment; should the work not be
      competed, a portion or all of the deposit could be
    forfeited;


·
            Current
      royalty rates are set at 10% in Nova Scotia;
and


·
            Tenure
      on some or all of the lands is eligible for renewal after the first 10
      years, based on the establishment of commercial production and/or the
      satisfaction of certain drilling and evaluation
  criteria.





From May
2007 to June 2008, we executed the first phase of the Windsor Block exploration
program consisting of a 2D and 3D seismic program, geological studies, and
drilling and completing two vertical test wells (Kennetcook #1 and Kennetcook
#2). From July 2008 to March 2009, we executed the second phase of the Windsor
Block shale gas exploration program consisting of drilling three vertical
exploration wells (N-14-A, O-61-C and E-38-A) and completing one of these wells
(N-14-A).





During
the first quarter of fiscal 2010, we tested the N-14-A well, which was completed
in early December 2008 with a four-stage perforation and fracture treatment. The
frac flowback operations were suspended in April 2009 after the well recovered
15% of load fluid but negligible gas production.  Subsequent analysis
indicates an unusually high insitu stress regime in the immediate vicinity of
the well, likely due to proximity to a major fault, which contributed to
fracture ineffectiveness. Completion operations on the O-61-C well commenced in
March 2009 and continued into early May. Several tight sand and carbonate
intervals were perforated but not fracture-treated. We obtained useful
geological information from the well that will help guide subsequent exploration
efforts. No hydrocarbons flowed from the well.


13





During
the second quarter of fiscal 2010, operations on the E-38-A well moved forward
with three zones having been perforated and treated with diagnostic
“micro-fracs.”  Engineering data from these tests are currently being
evaluated. E-38-A evaluates an area of the Windsor Block which is structurally
and geologically distinct from previous wells drilled in the field.Also in the second
quarter, the two wells drilled in 2007, Kennetcook #1 and Kennetcook #2, were
re-entered to isolate and test individual zones to identify the “gassiest”
intervals in each well. From these tests, it appears the fracture treatments
undertaken previously have commingled multiple zones together, making it
difficult to separate gas from water in the subsurface.





Other
Properties





Western Canadian
Shale Project–
We continue to actively position ourselves for an entry into potential shale gas
plays in Alberta and British Columbia. Our objective is to potentially establish
an initial land position and to commence an exploration program in 2009 or 2010.
To date, we have undertaken in-depth technical studies of several prospective
shale horizons using our proprietary shale knowledge and experience, and have
identified prospective areas where we believe we may have a technical and
business advantage. A joint venture partner will be added at the appropriate
time to provide funding and mitigate exploration risk. This approach is
consistent with the strategy we employed to establish our position in the
Windsor Block in Nova Scotia.




Non-Core
Producing Properties –We are producing from two wells in the Alberta
Deep Basin of Canada and three low working interest shale gas wells in the
Barnett Shale trend of the Fort Worth Basin of Texas, U.S.





Non-Core
Undeveloped Properties–In June 2009, we sold 4,327 non-operated net acres in the U.S. Rocky
Mountains for gross proceeds of $83,325. We currently have 9,852non-operated net acres
in the Fayetteville Shale trend (Arkoma Basin – Arkansas, U.S.), 4,747non-operated net acres
in the U.S. Rocky Mountains and 3,656 net acres in the Alberta Deep Basin of
Canada. In fiscal 2009, there was no exploration activity on these undeveloped
land positions and there continues to be no exploration activity planned for
these projects in fiscal 2010.





Results
of operations for the three and six months ended July 31, 2009 compared to the
three and six months ended July 31, 2008





Daily Sales Volumes, Working
Interest before royalties





Three Months
                                              Ended
                                              July 31, 2009
                                            
                                            
                                            Three Months
                                              Ended
                                              July 31, 2008
                                            
                                            
                                            Six Months
                                              Ended
                                              July 31, 2009
                                            
                                            
                                            Six Months
                                              Ended
                                              July 31, 2008Barnett
      Shale in Texas, USA
                                            
                                            Mcf/day
                                            
                                            
                                            56
                                            
                                            
                                            
                                            35
                                            
                                            
                                            
                                            56
                                            
                                            
                                            
                                            70Deep Basin in Alberta,
    Canada
                                            
                                            Mcf/day
                                            
                                            
                                            62
                                            
                                            
                                            
                                            100
                                            
                                            
                                            
                                            66
                                            
                                            
                                            
                                            122Total Company
                                            
                                            Mcf/day
                                            
                                            
                                            118
                                            
                                            
                                            
                                            135
                                            
                                            
                                            
                                            122
                                            
                                            
                                            
                                            192Total Company
                                            
                                            Boe/day*
                                            
                                            
                                            20
                                            
                                            
                                            
                                            23
                                            
                                            
                                            
                                            20
                                            
                                            
                                            
                                            32





*
Thousand Cubic Feet (“Mcf”) converted into Barrel of Oil Equivalent (“Boe”) on a
basis of 6:1


14





Net Operating
Results





Three Months
                                  Ended
                                  July 31, 2009
                                
                                
                                Three Months
                                  Ended
                                  July 31, 2008
                                
                                
                                Six Months
                                  Ended
                                  July 31, 2009
                                
                                
                                Six Months
                                  Ended
                                  July 31, 2008Volumes
                                
                                Mcf
                                
                                
                                10,825
                                
                                
                                
                                12,250
                                
                                
                                
                                22,140
                                
                                
                                
                                34,905Price
                                
                                $/Mcf
                                
                                
                                3.19
                                
                                
                                
                                10.53
                                
                                
                                
                                3.43
                                
                                
                                
                                9.05Revenue
                                
                                
                                
                                $
                                34,584
                                
                                
                                $
                                128,939
                                
                                
                                $
                                75,984
                                
                                
                                $
                                315,962Royalties
                                
                                
                                
                                
                                5,401
                                
                                
                                
                                21,108
                                
                                
                                
                                12,897
                                
                                
                                
                                56,012Revenue,
      net of royalties
                                
                                
                                
                                
                                29,183
                                
                                
                                
                                107,831
                                
                                
                                
                                63,087
                                
                                
                                
                                259,950Production expenses
                                
                                
                                
                                
                                31,875
                                
                                
                                
                                4,154
                                
                                
                                
                                52,576
                                
                                
                                
                                63,381Net
                                
                                
                                
                                $
                                (2,692
                                )
                                
                                $
                                103,677
                                
                                
                                $
                                10,511
                                
                                
                                $
                                196,569





For the
three and six month periods ended July 31, 2009, we realized $34,584 and
$75,984, respectively, in revenue from sales of natural gas and natural gas
liquids, as compared to $128,939 and $315,962 in the same periods of the prior
year. Revenue decreased mainly due to reduced natural gas prices and reduced
production volumes. Royalties as a percent of revenue were 16% and 17% for the
three and six month periods ended July 31, 2009, respectively, which was
consistent with 16% and 18% in the same periods of the prior year. Production
expenses related to this revenue were $17.67/Boe and $14.25/Boe for the three
and six month periods ended July 31, 2009, respectively, compared to $2.03/Boe
and $10.89/Boe in the same periods of the prior year; the increase in the per
Boe rate in the three and six month period ended July 31, 2009 was mainly due to
the higher non-routine maintenance costs of wells.





Depletion, Depreciation and Accretion





Three Months
                              Ended
                              July 31, 2009
                            
                            
                            Three Months
                              Ended
                              July 31, 2008
                            
                            
                            Six Months
                              Ended
                              July 31, 2009
                            
                            
                            Six Months
                              Ended
                              July 31, 2008Depletion
      – oil and gas properties
                            
                            $
                            7,854
                            
                            
                            $
                            13,557
                            
                            
                            $
                            30,345
                            
                            
                            $
                            51,028Accretion
                            
                            
                            42,408
                            
                            
                            
                            9,711
                            
                            
                            
                            61,132
                            
                            
                            
                            42,539Depletion
      and Accretion
                            
                            
                            50,262
                            
                            
                            
                            23,268
                            
                            
                            
                            91,477
                            
                            
                            
                            93,567Depreciation – property and
      equipment
                            
                            
                            7,335
                            
                            
                            
                            9,988
                            
                            
                            
                            11,674
                            
                            
                            
                            19,747Total
                            
                            $
                            57,597
                            
                            
                            $
                            33,256
                            
                            
                            $
                            103,151
                            
                            
                            $
                            113,314Depletion per BOE
                            
                            $
                            4.35
                            
                            
                            $
                            6.64
                            
                            
                            $
                            8.22
                            
                            
                            $
                            8.77





Unproven
property costs of $18,071,434 (January 31, 2009 – $16,869,995) were excluded
from costs subject to depletion at July 31, 2009. Depletion expense per Boe
related to oil and gas properties in the three and six month periods ended July
31, 2009 decreased as compared with the same period of the prior year mainly as
a result of the ceiling test write-downs on proved properties in the previous
year which decreased the depletion base.


15





General and Administrative
(“G&A”)





Three Months
                        Ended
                        July 31, 2009
                      
                      
                      Three Months
                        Ended
                        July 31, 2008
                      
                      
                      Six Months
                        Ended
                        July 31, 2009
                      
                      
                      Six Months
                        Ended
                        July 31, 2008Salaries,
      benefits and consulting fees
                      
                      $
                      462,076
                      
                      
                      $
                      558,182
                      
                      
                      $
                      764,983
                      
                      
                      $
                      958,109Office
      costs
                      
                      
                      142,278
                      
                      
                      
                      191,552
                      
                      
                      
                      303,127
                      
                      
                      
                      458,709Professional
      fees
                      
                      
                      42,910
                      
                      
                      
                      23,559
                      
                      
                      
                      183,848
                      
                      
                      
                      288,725Public
      company costs
                      
                      
                      92,962
                      
                      
                      
                      172,122
                      
                      
                      
                      185,055
                      
                      
                      
                      329,001Operating
      overhead recoveries
                      
                      
                      (20,469
                      )
                      
                      
                      (30,487
                      )
                      
                      
                      (32,328
                      )
                      
                      
                      (32,178
                      )Stock-based compensation
                      
                      
                      135,543
                      
                      
                      
                      227,756
                      
                      
                      
                      270,463
                      
                      
                      
                      341,036Total G&A
                      
                      $
                      855,300
                      
                      
                      $
                      1,142,684
                      
                      
                      $
                      1,675,148
                      
                      
                      $
                      2,343,402





G&A
expenses decreased in the three and six month periods ended July 31, 2009
compared to the same period of the prior year primarily due to management
implementing cost reductions and the strengthening of the U.S. dollar versus the
Canadian dollar.





·
            Salaries,
      benefits and consulting fees, which are primarily incurred in Canadian
      dollars, decreased in the three and six month periods $96,106 and
      $193,126, respectively, mainly due to reduced staff and consultants of
      $27,000 and $61,000, respectively, and the strengthening of the U.S.
      dollar versus the Canadian dollar by 12% and 18%, respectively, causing a
      decrease of $61,000 and $146,000,
respectively;


·
            Office
      costs, which are primarily incurred in Canadian dollars, decreased in the
      three and six month periods $49,274 and $155,582, respectively, mainly due
      to reduced software, insurance and travel costs of $19,000 and $74,000,
      respectively, and the strengthening of the U.S. dollar versus the Canadian
      dollar by 12% and 18%, respectively, causing a decrease of $21,000 and
      $70,000, respectively;


·
            Professional
      fees, which are primarily incurred in Canadian dollars, decreased in the
      six month period $104,877 mainly due to reduced audit and accounting fees
      of $83,000, which were higher in the prior year due to non-recurring audit
      and accounting fees for restatements of financial statements, and the
      strengthening of the U.S. dollar versus the Canadian dollar by 18% causing
      a $44,000 decrease, which was offset by increased legal fees of $22,000
      due to the TSX Venture listing late in the prior year. Professional fees
      increased in the three month period $19,351 mainly due to increased
      reserve evaluation fees of $16,000 and increased legal fees of $6,000 due
      to the TSX Venture listing late in the prior year;
  and


·
            Public
      company costs decreased in the three and six month periods $79,160 and
      $143,946, respectively, mainly due to reduced investor relation costs of
      $66,000 and $137,000, respectively.  Public company costs
      consist mainly of fees for investor relations and also include directors'
      fees, press release and Securities Exchange Commission (“SEC”) filing
      costs, printing costs and transfer agent
fees.





Accretion of Discounts on
Convertible Debentures




Agreement Date
                      
                      Three Months
                        Ended
                        July 31, 2009
                      
                      
                      Three Months
                        Ended
                        July 31, 2008
                      
                      
                      Six Months
                        Ended
                        July 31, 2009
                      
                      
                      Six Months
                        Ended
                        July 31, 2008December
      8, 2005
                      
                      $
                      -
                      
                      
                      $
                      186,764
                      
                      
                      $
                      -
                      
                      
                      $
                      813,337December 28, 2005
                      
                      
                      -
                      
                      
                      
                      604,278
                      
                      
                      
                      -
                      
                      
                      
                      1,193,063Total accretion of
discounts
                      
                      $
                      -
                      
                      
                      $
                      791,042
                      
                      
                      $
                      -
                      
                      
                      $
                      2,006,400





The
accretion of discounts was fully recognized in the prior year since the December
8, 2005 debentures were fully converted and repaid June 5, 2008 and the December
28, 2005 debentures were settled December 18, 2008.


16





Interest
Expense




Agreement Date
                      
                      Three Months
                        Ended
                        July 31, 2009
                      
                      
                      Three Months
                        Ended
                        July 31, 2008
                      
                      
                      Six Months
                        Ended
                        July 31, 2009
                      
                      
                      Six Months
                        Ended
                        July 31, 2008December
      8, 2005
                      
                      $
                      -
                      
                      
                      $
                      22,312
                      
                      
                      $
                      -
                      
                      
                      $
                      91,360December 28, 2005
                      
                      
                      -
                      
                      
                      
                      189,041
                      
                      
                      
                      -
                      
                      
                      
                      373,973Total interest expense
                      
                      $
                      -
                      
                      
                      $
                      211,353
                      
                      
                      $
                      -
                      
                      
                      $
                      465,333





There was
no interest expense in the current period since the December 8, 2005 debentures
were fully converted and repaid June 5, 2008 and the December 28, 2005
debentures were settled December 18, 2008.




Oil and Gas
Properties




Net Book Value
                        January 31,
                        2008
                      
                      
                      Additions
                      
                      
                      Depletion and
                        Impairment
                      
                      
                      Dispositions
                      
                      
                      Gain
                        (Loss)
                      
                      
                      Net Book
                        Value
                        July 31, 2009UnprovenWindsor
      Block Maritimes Shale – Nova Scotia, Canada
                      
                      $
                      16,818,586
                      
                      
                      $
                      1,129,379
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      17,947,965Western
      Canadian Shale – Alberta and B.C., Canada
                      
                      
                      51,409
                      
                      
                      
                      72,060
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      123,469Fayetteville
      and Rocky Mountains
                      
                      
                      -
                      
                      
                      
                      8,704
                      
                      
                      
                      -
                      
                      
                      
                      (133,325
                      )
                      
                      
                      124,621
                      
                      
                      
                      -ProvedCanada
                      
                      
                      72,869
                      
                      
                      
                      7,467
                      
                      
                      
                      (15,891
                      )
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      64,445U.S.A.
                      
                      
                      -
                      
                      
                      
                      14,454
                      
                      
                      
                      (14,454
                      )
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Net
                      
                      $
                      16,942,864
                      
                      
                      $
                      1,232,064
                      
                      
                      $
                      (30,345
                      )
                      
                      $
                      (133,325
                      )
                      
                      $
                      124,621
                      
                      
                      $
                      18,135,879





During
the six month period ended July 31, 2009, we focused on the Windsor Block and
spent $1,129,379 primarily for.


·
            completing
      the second phase of the Windsor Block exploration program consisting of
      testing the N-14-A well (approximately $163,000), completion operations on
      the O-61-C well (approximately $200,000), and completion operations on the
      E-38-A well (approximately
$123,000);


·
            retesting
      the Kennetcook #1 and #2 wells (approximately $214,000);
    and


·
            acquiring
      Contact’s 30% working interest in the Windsor Block for cash of $245,000
      and the assumption of future estimated non-cash asset retirement costs of
      $144,750. We also agreed to provide Contact a 5.75% non-convertible gross
      overriding royalty interest.





Net Cash Oil and Gas
Additions:


Six Months
                            Ended
                            July 31, 2009
                          
                          
                          Six Months
                            Ended
                            July 31, 2008Net
      additions, per above table
                          
                          $
                          1,232,064
                          
                          
                          $
                          1,743,591Non-cash
      ARO additions
                          
                          
                          (144,750
                          )
                          
                          
                          (45,450
                          )Non-cash
      ARO dispositions
                          
                          
                          -
                          
                          
                          
                          137,429Changes in investing working
      capital
                          
                          
                          1,057,464
                          
                          
                          
                          1,900,339Net oil and gas additions, per Statements of Cash
      Flows
                          
                          $
                          2,144,778
                          
                          
                          $
                          3,735,909




17





Liquidity
and Capital Resources




To date,
we have not generated significant revenues and have incurred significant
operating losses in every quarter. These factors among others raise substantial
doubt about our ability to continue as a going concern.




As at
July 31, 2009, we had working capital of $5,909,891, resulting primarily from
our cash of $5,520,030, prepaid expenses of $340,945 and other receivables of
$301,432, offset by payables and accrued liabilities of $252,516. For the six
month period ended July 31, 2009, we had net cash outflow from operating
activities before changes in working capital of $1,396,628, mainly related to
$1,404,685 of cash general and administrative expenses, which is equal to
general and administrative expenses net of non-cash stock based compensation
expense.





On April
15, 2009 we converted the Windsor Block exploration agreement to a 10 year
production lease on 474,625 gross acres (412,924 net acres) of land. During the
first five years of the lease, we agreed to continue to evaluate the Block by
drilling seven wells, completing three exploration wells previously drilled and
acquiring seismic at a total gross estimate cost of C$12.7 million. At the end
of the second year of the lease, a technical report is due and the Nova Scotia
government may request the surrender of certain lands they deem not adequately
evaluated. At the end of the fifth year of the lease, areas of the land block
not adequately drilled or otherwise evaluated may be subject to surrender.
During the first year of the lease, we have agreed to spend an estimated gross
C$2,000,000 to complete the three exploration wells drilled in the prior year
and to acquire seismic. We paid a C$200,000 gross refundable deposit related to
the first year commitment; should we not perform the work, a portion or all of
the deposit could be forfeited.





We expect
significant capital expenditures during the next 12 months for drilling programs
on our Canadian shale program, overhead and working capital purposes. There is a
risk that our joint venture partner in the Windsor Block will not be able to pay
for their portion (13%) of the well costs, which would slow down or stop
exploration on the Windsor Block. There is also a risk we may not secure a
new joint operating partner in the Windsor Block, which would slow down or stop
exploration on the Windsor Block. We will have to raise additional funds to
complete the exploration and development phase of our programs and, while we
have been successful in doing so in the past, there can be no assurance that we
will be able to do so in the future. Our continuation as a going concern for a
period longer than the 2010 fiscal year is dependent upon our ability to obtain
necessary additional funds to continue operations and to determine the
existence, discovery and successful exploitation of economically recoverable
reserves in our resource properties and the attainment of profitable
operations.




By
adjusting our operations to the current level of capitalization, we believe we
have sufficient capital resources to meet projected cash flow deficits in the
near term. However, if during that period, or thereafter, we are not successful
in generating sufficient liquidity from operations or in raising sufficient
capital resources, on terms acceptable to us, this could have a material adverse
effect on our business, results of operations, liquidity and financial
condition.




We
presently do not have any available credit, bank financing or other external
sources of liquidity. Due to our brief history and historical operating losses,
our operations have not been a source of liquidity. We will need to obtain
additional capital in order to expand operations and become profitable. In order
to obtain capital, we may need to sell additional shares of our common stock or
borrow funds from private lenders. There can be no assurance that we will be
successful in obtaining additional funding.




We will
still need additional capital in order to continue operations until we are able
to achieve positive operating cash flow. Additional capital is being sought, but
we cannot guarantee that we will be able to obtain such investments. Financing
transactions may include the issuance of equity or debt securities, obtaining
credit facilities, or other financing mechanisms. However, the trading price of
our common stock and a downturn in the North American stock and debt markets
could make it more difficult to obtain financing through the issuance of equity
or debt securities. Even if we are able to raise the funds required, it is
possible that we could incur unexpected costs and expenses, fail to collect
significant amounts owed to us, or experience unexpected cash requirements that
would force us to seek alternative financing. Furthermore, if we issue
additional equity or debt securities, stockholders may experience additional
dilution or the new equity securities may have rights, preferences or privileges
senior to those of existing holders of our common stock. If additional financing
is not available or is not available on acceptable terms, we will have to
curtail our operations.


18




Critical
Accounting Policies




Use of
Estimates




The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires us to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. We base our estimates and assumptions on
current facts, historical experience and various other factors that we believe
to be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by us may differ materially and adversely from
our estimates. To the extent there are material differences between the
estimates and the actual results, future results of operations will be
affected.





Investment in Oil and Gas
Properties




We
utilize the full cost method to account for our investment in oil and gas
properties. Accordingly, all costs associated with acquisition and exploration
of oil and gas reserves, including such costs as leasehold acquisition costs,
interest costs relating to unproven properties, geological expenditures and
direct internal costs are capitalized into the full cost pool. We have
properties in two countries with proved reserves. For our proved oil and gas
reserves, capitalized costs, including estimated future costs to develop the
reserves and estimated abandonment costs, net of salvage, will be depleted on
the units-of-production method using estimates of proved reserves. Investments
in unproven properties and major development projects including capitalized
interest, if any, are not amortized until proved reserves associated with the
projects can be determined. If the future exploration of unproven properties is
determined uneconomical, the amounts of such properties are added to the
capitalized cost to be amortized. The capitalized costs included in the full
cost pool are subject to a ceiling test.




Asset Retirement
Obligations




We
recognize a liability for future retirement obligations associated with our oil
and gas properties. The estimated fair value of the asset retirement obligations
is based on the current estimated cost escalated at an inflation rate and
discounted at a credit adjusted risk-free rate. This liability is capitalized as
part of the cost of the related asset and amortized over its useful life. The
liability accretes until we settle the obligation. The costs are estimated by
management based on its knowledge of industry practices, current laws and past
experiences. The costs could increase significantly from management’s current
estimate.




Stock-Based
Compensation




We record
compensation expense in the consolidated financial statements for stock options
granted to employees, consultants and directors using the fair value method.
Fair values are determined using the Black Scholes option pricing model, which
is sensitive to the estimate of our stock price volatility and the options
expected life. Compensation costs are recognized over the vesting
period.


19





Recently Issued Accounting
Pronouncements





In 2008, the SEC adopted major
revisions to its required oil and gas reporting disclosures which become
effective as of January 1, 2010.  Among other things, the amendments
provide for the use of the 12-month average price, calculated as the unweighted
arithmetic average of the first-day-of-the-month price for each month within the
12-month period prior to the end of the reporting period for purposes of both
the disclosure and full-cost accounting rules.  With respect to
accounting pronouncements that currently make reference to a single-day pricing
regime with respect to oil and gas reserves, the SEC indicated that it was
communicating with the FASB staff to align the standards used in the FASB’s
pronouncements with the new 12-month average price and that it will consider
whether to delay the compliance date based on its discussions with the FASB. The
SEC expressed the view that the change from using single-day year-end price to
an average price should be treated as a change in accounting principle, or a
change in the method of applying an accounting principle, that is inseparable
from a change in accounting estimate and that the change would be considered a
change in accounting estimate pursuant to Statement of Financial Accounting
Standard No. 154 “Accounting Changes and Error Corrections” (SFAS 154) and
accounted for prospectively. The SEC further expressed the view that any
accounting change resulting from the changes in definitions and required pricing
assumptions in Rule 4-10 of Regulation S-X should be treated as a change in
accounting principle that is inseparable from a change in accounting estimate,
not requiring retroactive revision but requiring recognition in the independent
auditor’s report through the addition of an explanatory paragraph. We will not
be able to determine the impact of these amendments on our results of operation
or financial condition until the FASB issues its pronouncements.





ITEM
3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not
required under Regulation S-K for “smaller reporting companies.”





ITEM
4T - CONTROLS AND PROCEDURES





(a)
Evaluation of disclosure controls and procedures.





Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of our disclosure controls and
procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as
of July 31, 2009. In designing and evaluating the disclosure controls and
procedures, management recognizes that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives. In addition, the design of disclosure
controls and procedures must reflect the fact that there are resource
constraints and that management is required to apply its judgment in evaluating
the benefits of possible controls and procedures relative to their
costs.





Based
on our evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that, as a result of the material weaknesses described below, our
disclosure controls and procedures are not designed at a reasonable assurance
level and are ineffective to provide reasonable assurance that information we
are required to disclose in reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms, and that such
information is not accumulated nor communicated to our management, including our
Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure. The material weaknesses, which
relate to internal control over financial reporting, that were identified
are:





a)
            We
      did not have sufficient personnel in our accounting and financial
      reporting functions.  As a result, we were not able to achieve
      adequate segregation of duties and were not able to provide for adequate
      reviewing of the financial statements. This control deficiency, which is
      pervasive in nature, results in a reasonable possibility that material
      misstatements of the financial statements will not be prevented or
      detected on a timely basis; and





b)
            We
      did not maintain sufficient personnel with an appropriate level of
      technical accounting knowledge, experience, and training in the
      application of US GAAP commensurate with our complexity and our financial
      accounting and reporting requirements. This control deficiency is
      pervasive in nature and specifically resulted in us restating previously
      filed annual and quarterly financial statements as a result of errors in
      the accounting for convertible debentures and warrants. Further, there is
      a reasonable possibility that material misstatements of the consolidated
      financial statements including disclosures will not be prevented or
      detected on a timely basis as a
result.


20





Management
believes that hiring additional knowledgeable personnel with technical
accounting expertise will remedy the material weaknesses. Due to the fact that
our accounting staff consists of a Chief Financial Officer and accounting clerk,
additional personnel will also ensure the proper segregation of duties and
provide more checks and balances within the department. We believe this will
greatly decrease any control and procedure issues we may encounter in the
future. To compensate for the current limited number of personnel in the
accounting and reporting group, we focus on audit committee oversight and the
use of external consultants for complex accounting matters. Furthermore, we will
continue to engage consultants in the future as necessary in order to ensure
proper accounting treatment of complex transactions.





Management
will continue to monitor and evaluate the effectiveness of our disclosure
controls and procedures and our internal controls over financial reporting on an
ongoing basis and are committed to taking further action and implementing
additional enhancements or improvements, as necessary and as funds allow. As
part of this commitment, we will continue to assess our current personnel
resources and technical accounting expertise within the accounting function. As
our activities levels increase, we will look to increase our personnel resources
to increase segregation of duties and provide in-house non-routine or complex
accounting expertise. When funds are available to us and as operations increase,
we will hire additional knowledgeable personnel with technical accounting
expertise to further support our current accounting personnel, which management
estimates could cost approximately $100,000 per annum.





(b)
Changes in internal control over financial reporting.





We regularly
review our system of internal control over financial reporting and make changes
to our processes and systems to improve controls and increase efficiency, while
ensuring that we maintain an effective internal control environment. Changes may
include such activities as implementing new, more efficient systems,
consolidating activities, and migrating processes.





There
were no changes in our internal control over financial reporting that occurred
during the period covered by this Quarterly Report on Form 10-Q that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.


21


PART
II - OTHER INFORMATION





Item
1. Legal Proceedings.





From time
to time, we may become involved in various lawsuits and legal proceedings which
arise in the ordinary course of business. However, litigation is subject to
inherent uncertainties, and an adverse result in these or other matters may
arise from time to time that may harm our business. We are currently not aware
of any such legal proceedings or claims that we believe will have, individually
or in the aggregate, a material adverse affect on our business, financial
condition or operating results.





Item
1A. Risk Factors.





Not
required under Regulation S-K for “smaller reporting companies.”





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





10.01
            Overriding
      Royalty Agreement, dated as of June 10, 2009, by and between Elmworth
      Energy Corporation and Contact Exploration
Inc.





31.01
            Certification
      of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and
      15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002





31.02
            Certification
      of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and
      15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002





32.01
            Certifications
      of Chief Executive Officer and Chief Financial Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002




22




SIGNATURES




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





TRIANGLE
      PETROLEUM CORPORATIONDate:  September
      2, 2009
            By:
            /s/ MARK GUSTAFSONMark
      GustafsonChief
      Executive Officer (Principal Executive Officer)Date:  September
      2, 2009
            By:
            /s/ SHAUN TOKERShaun
      TokerChief
      Financial Officer (Principal Financial Officer and
              Principal
      Accounting Officer)


23