UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549





FORM
10-Q/A


Amendment
No. 1








x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the quarterly period ended March
31, 2008




o
              TRANSITION
      REPORT PURSUANT TO 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934


For the
transition period from ________ to  ________




Commission
file number:      000-51488




PETROSEARCH
ENERGY CORPORATION


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


NEVADA
            20-2033200(State
      or other jurisdiction of incorporation
      or organization)
            (IRS
      Employer Identification No.)




675
Bering Drive, Suite 200


Houston,
TX 77057


(Address
of principal executive offices)





(713)
961-9337


(Issuer’s
telephone number)








Indicate
by check mark whether the issuer: (i) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (ii)
has been subject to such filing requirements for the past 90 days.


Yes
      x
            No
      o





Indicate
by check mark whether the issuer is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company.  See
the definitions of “large accelerated filer”, “accelerated filer”, and “smaller
reporting company” in rule 12b-2 of the Exchange Act.





Large
      accelerated filer o
            Accelerated
      filer oNon-accelerated
      filer   o
            Smaller
      reporting Company x





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




State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date:  41,741,186 shares of $0.001 par value
common stock outstanding as of May 7, 2008










PETROSEARCH ENERGY CORPORATION





FORM
10-Q


For
The Quarter Ended March 31, 2008





INDEX








PagePART I - FINANCIAL
      INFORMATIONITEM
      1.
            
            FINANCIAL STATEMENTS
            
            2ITEM
      2.
            
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATIONS
            
            12ITEM
      4.
            
            CONTROLS AND PROCEDURES
            
            19PART II - OTHER
      INFORMATIONITEM
      2.
            
            UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS
            
            19ITEM
    6.
            
            EXHIBITS
            
            20SIGNATURES




Petrosearch
Energy Corporation is filing this Amendment No. 1 on Form 10-Q/A to its Form
10-Q for the quarter ended March 31, 2008 that was originally filed with the
Securities and Exchange Commission ("SEC") on May 15, 2008 (the "Original 10-Q")
to (i) add
additional disclosure relating to the Company’s production, and (ii)to
revise our certifications to conform to the exact form set forth in Item 601 of
Regulation S-B.





This
Amendment No. 1 continues to speak as of the date of the Original 10-Q, and we
have not updated the disclosure contained herein to reflect any events that
occurred at a later date other than that set forth above. All information
contained in this Amendment No. 1 is subject to updating and supplementing as
provided in our periodic reports filed with the SEC subsequent to the date of
the filing of the Original 10-Q.


1
 Index


ITEM 1.
            FINANCIAL
      STATEMENTS





PETROSEARCH
ENERGY CORPORATION


CONSOLIDATED
BALANCE SHEETS


March
31, 2008 and December 31, 2007





ASSETS
            
            March 31,
              2008
              (Unaudited)
            
            
            December 31,
      2007
              (See
      note)Current
      assets:Cash
            
            $
            5,216,689
            
            
            $
            8,033,611Accounts
      receivable:Joint
      owners-billed, net of allowance of $62,179 at March 31, 2008 and December
      31, 2007
            
            
            201,022
            
            
            
            203,671Joint
      owners-unbilled
            
            
            4,610
            
            
            
            3,568Oil
      and gas production sales
            
            
            223,628
            
            
            
            319,926Prepaid
      expenses and other current assets
            
            
            960,083
            
            
            
            987,155Total
      current assets
            
            
            6,606,032
            
            
            
            9,547,931Property
      and equipment:Oil
      and gas properties, full cost method of accounting:Properties
      subject to amortization
            
            
            28,285,808
            
            
            
            33,235,534Properties
      not subject to amortization
            
            
            7,910,670
            
            
            
            7,099,601Other
      property and equipment
            
            
            153,031
            
            
            
            153,031Total
            
            
            36,349,509
            
            
            
            40,488,166Less
      accumulated depreciation, depletion and amortization
            
            
            (3,358,567
            )
            
            
            (3,266,658
            )Total
      property and equipment, net
            
            
            32,990,942
            
            
            
            37,221,508Prepaid
      oil and gas costs
            
            
            51,580
            
            
            
            1,432,906Oil
      and Gas Properties pledged as collateral - Kallina
            
            
            6,801,460
            
            
            
            -Other
      assets
            
            
            717,918
            
            
            
            834,287Total
      assets
            
            $
            47,167,932
            
            
            $
            49,036,632





LIABILITIES AND
      STOCKHOLDERS’ EQUITYCurrent
      liabilities:Current
      portion of long-term debt
            
            $
            1,601,893
            
            
            $
            2,066,087Accounts
      payable
            
            
            375,547
            
            
            
            960,020Accrued
      liabilities for Barnett property costs
            
            
            2,743,786
            
            
            
            2,379,073Accrued
      liabilities
            
            
            1,551,017
            
            
            
            1,582,689Warrant
      liability
            
            
            252,429
            
            
            
            321,140Total
      current liabilities
            
            
            6,524,672
            
            
            
            7,309,009Long-term
      debt – Kallina
            
            
            6,947,651
            
            
            
            6,919,890Convertible
      debt
            
            
            14,366,580
            
            
            
            13,914,013Other
      long-term obligations
            
            
            731,443
            
            
            
            699,914Total
      liabilities
            
            
            28,570,346
            
            
            
            28,842,826Stockholders'
      equity:Preferred
      stock, par value $1.00 per share, 20,000,000 shares
      authorized:Series
      A  8% convertible preferred stock, 1,000,000 shares authorized;
      483,416 shares issued and outstanding at March 31, 2008 and December 31,
      2007
            
            
            483,416
            
            
            
            483,416Series
      B convertible preferred stock, 100,000 shares authorized; 43,000 shares
      issued and outstanding at March 31, 2008 and December 31,
    2007
            
            
            43,000
            
            
            
            43,000Common
      stock, par value $0.001 per share, 100,000,000 shares Authorized;
      41,238,926 and 40,941,841 shares issued and outstanding at March 31, 2008
      and December 31, 2007, respectively
            
            
            41,239
            
            
            
            40,941Additional
      paid-in capital
            
            
            33,484,462
            
            
            
            33,196,588Un-issued
      common stock
            
            
            582,876
            
            
            
            288,172Deferred
      compensation
            
            
            (157,813
            )
            
            
            -Accumulated
      deficit
            
            
            (15,879,594
            )
            
            
            (13,858,311
            )Total
      stockholders' equity
            
            
            18,597,586
            
            
            
            20,193,806Total
      liabilities and stockholders' equity
            
            $
            47,167,932
            
            
            $
            49,036,632





Note:  The
balance sheet at December 31, 2007 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. See accompanying notes to unaudited condensed consolidated
financial statements.


2
 Index


PETROSEARCH
ENERGY CORPORATION


UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


for
the three months ended March 31, 2008 and 2007





Three
      Months Ended
              March 31,2008
            
            
            2007Oil
      and gas production revenues
            
            $
            554,433
            
            
            $
            362,976Operating
      costs and expenses:Lease
      operating and production taxes
            
            
            329,417
            
            
            
            77,293Depreciation,
      depletion and amortization
            
            
            260,958
            
            
            
            178,647General
      and administrative
            
            
            747,240
            
            
            
            739,090Total
      costs and expenses
            
            
            1,337,615
            
            
            
            995,030Operating
      loss
            
            
            (783,182
            )
            
            
            (632,054
            )Other
      income (expense):Interest
      income
            
            
            56,425
            
            
            
            62,778Interest
      expense
            
            
            (681,862
            )
            
            
            (434,800
            )Amortization
      of financing costs and debt discount
            
            
            (681,375
            )
            
            
            (326,387
            )Change
      in value of warrant liability
            
            
            68,711
            
            
            
            (271,942
            )Total
      other income (expense)
            
            
            (1,238,101
            )
            
            
            (970,351
            )Net
      loss
            
            $
            (2,021,283
            )
            
            $
            (1,602,405
            )Basic
      and diluted net loss per common share
            
            $
            (0.05
            )
            
            $
            (0.04
            )Weighted
      average common shares
            
            
            41,229,401
            
            
            
            38,729,888




See
accompanying notes to unaudited condensed


consolidated
financial statements


3
 Index


PETROSEARCH
ENERGY CORPORATION


UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY


For
the three months ended March 31, 2008





Common Stock
            
            
            Series
      A
              Preferred Stock
            
            
            Series
      B
              Preferred Stock
            
            
            Additional
              Paid-In
            
            
            Unissued
              Common
            
            
            Deferred
      Compensation
            
            
            Accumulated
      Deficit
            
            
            Total
      Stock Holders
      EquityShares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            StockBalance
      at December 31, 2007
            
            
            40,941,841
            
            
            $
            40,941
            
            
            
            483,416
            
            
            $
            483,416
            
            
            
            43,000
            
            
            $
            43,000
            
            
            $
            33,196,588
            
            
            $
            288,172
            
            
            $
            -
            
            
            $
            (13,858,311
            )
            
            $
            20,193,806Issuance
      of common stock committed
            
            
            297,085
            
            
            
            298
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            287,874
            
            
            
            (288,172
            )
            
            
            
            
            
            
            
            
            
            
            -Common
      stock committed for board and employee compensation
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            181,250
            
            
            
            (181,250
            )
            
            
            
            
            
            
            -Common
      stock committed for interest expense
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            401,626
            
            
            
            
            
            
            
            
            
            
            
            401,626Amortization
      of deferred compensation
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            23,437
            
            
            
            
            
            
            
            23,437Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,021,283
            )
            
            
            (2,021,283
            )Balance
      at  March 31, 2008
            
            
            41,238,926
            
            
            $
            41,239
            
            
            
            483,416
            
            
            $
            483,416
            
            
            
            43,000
            
            
            $
            43,000
            
            
            $
            33,484,462
            
            
            $
            582,876
            
            
            $
            (157,813
            )
            
            $
            (15,879,594
            )
            
            $
            18,597,586





See
accompanying notes to unaudited condensed consolidated financial
statements




4
 Index




PETROSEARCH
ENERGY CORPORATION


UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


For
the three months ended March 31, 2008 and 2007





2008
            
            
            2007Cash
      flows from operating activities:Net
      loss
            
            $
            (2,021,283
            )
            
            $
            (1,602,405
            )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depletion,
      depreciation and amortization expense
            
            
            260,958
            
            
            
            178,647Stock-based
      compensation and interest expense
            
            
            425,063
            
            
            
            259,134Amortization
      of deferred rent
            
            
            (2,209
            )
            
            
            (1,227
            )Amortization
      of debt discount and beneficial conversion feature
            
            
            548,634
            
            
            
            279,581Amortization
      of financing costs
            
            
            132,741
            
            
            
            46,726Accretion
      of asset retirement obligation
            
            
            8,404
            
            
            
            8,607Change
      in value of warrant liability
            
            
            (68,711
            )
            
            
            271,942Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            97,905
            
            
            
            81,884Prepaid
      expenses and other assets
            
            
            10,700
            
            
            
            (333,342
            )Accounts
      payable and accrued liabilities
            
            
            (380,467
            )
            
            
            (456,587
            )Trade
      note payable
            
            
            -
            
            
            
            (118,955
            )Net
      cash used in operating activities
            
            
            (988,265
            )
            
            
            (1,385,995
            )Cash
      flows from investing activities:Capital
      expenditures, including purchases and development of
      properties
            
            
            (1,296,157
            )
            
            
            (1,256,630
            )Net
      cash used in investing activities
            
            
            (1,296,157
            )
            
            
            (1,256,630
            )Cash
      flows from financing activities:Proceeds
      from convertible debt
            
            
            -
            
            
            
            10,000,000Repayment
      of notes payable
            
            
            (532,500
            )
            
            
            (532,500
            )Net
      cash used or provided by financing activities
            
            
            (532,500
            )
            
            
            9,467,500Net
      increase (decrease) in cash and cash equivalents
            
            
            (2,816,922
            )
            
            
            6,824,875Cash
      and cash equivalents at beginning of period
            
            
            8,033,611
            
            
            
            3,715,618Cash
      and cash equivalents at end of period
            
            $
            5,216,689
            
            
            $
            10,540,493Supplemental
      disclosures of cash flow information:Interest
      paid
            
            $
            77,990
            
            
            $
            132,680Income
      taxes paid
            
            $
            -
            
            
            $
            -





See
accompanying notes to unaudited condensed consolidated financial
statements


5
 Index


PETROSEARCH
ENERGY CORPORATION


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





1.
            Interim Financial
      Statements





The
accompanying interim unaudited consolidated condensed financial statements have
been prepared without audit pursuant to the rules and regulations of the U.S.
Securities and Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted, pursuant to such rules and
regulations.  These unaudited consolidated condensed financial
statements should be read in conjunction with the audited financial statements
and notes thereto of Petrosearch Energy Corporation (the “Company”) for the year
ended December 31, 2007.  In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation of financial position, results of operations and cash
flows for the interim periods presented have been included.  Operating
results for the interim periods are not necessarily indicative of the results
that may be expected for the respective full year.





2.
            Income
      Taxes





The
Company uses the liability method in accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on differences
between financial reporting and income tax carrying amounts of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.  A valuation
allowance, if necessary, is provided against deferred tax assets, based upon
management's assessment as to their realization.





The
difference between the 35% federal statutory income tax rate and amounts shown
in the accompanying interim financial statements is primarily attributable to
the utilization of net operating loss carry-forwards and a valuation allowance
recorded against net deferred tax assets.





3.
            New Accounting
      Pronouncements





The
following new accounting pronouncements have been adopted in the first quarter
of 2008:





SFAS No.157, “Fair Value
Measurements.” In September 2006, the FASB issued SFAS No. 157,
which defines fair value, establishes a framework for measuring fair value in
GAAP, and expands disclosures about fair value measurements. SFAS No. 157
does not require any new fair value measurements. However, in some cases, the
application of SFAS No. 157 may change the Company’s current practice for
measuring and disclosing fair values under other accounting pronouncements that
require or permit fair value measurements. For the Company, SFAS No. 157 is
effective as of January 1, 2008 and must be applied prospectively except in
certain cases. The adoption of SFAS No. 157 did not materially affect the
Company’s consolidated results of operations, financial position or cash
flows.





In
      February 2008, the FASB issued Staff Position FAS 157-2, Effective
      Date of FASB Statement No. 157, which delayed the effective date of
      SFAS No. 157 for all non-financial assets and non-financial
      liabilities, except those that are measured at fair value on a recurring
      basis. FSP FAS 157-2 establishes January 1, 2009 as the
      effective date of SFAS No. 157 with respect to these fair value
      measurements for the Company. We do not currently expect the application
      of the fair value framework established by SFAS No. 157 to
      non-financial assets and liabilities measured on a non-recurring basis to
      have a material impact on our consolidated financial statements. However,
      the Company will continue to assess the potential effects of
      SFAS No. 157 as additional guidance becomes
      available.





SFAS No.159, “The Fair Value Option for
Financial Assets and Financial Liabilities.” In February 2007, the FASB
issued SFAS No. 159, which permits entities to choose to measure certain
financial instruments at fair value. For the Company, SFAS No. 159 is
effective as of January 1, 2008. The Company has determined it will not
elect fair value measurements for financial assets and financial liabilities
included in the scope of SFAS No. 159.


6
 Index


EITF 06-11 “Accounting for Income
Tax Benefits of Dividends on Share-Based Payment Awards.” In June 2007,
the FASB Emerging Issues Task Force (EITF) reached a consensus that a realized
income tax benefit from dividends or dividend equivalents that are charged to
retained earnings and are paid to employees for equity classified nonvested
equity shares, nonvested equity share units and outstanding equity share options
should be recognized as an increase to additional paid-in capital. The amount
recognized in additional paid-in capital for the realized income tax benefit
from dividends on those awards should be included in the pool of excess tax
benefits available to absorb tax deficiencies on share-based payment awards.
EITF 06-11 will be applied prospectively to the income tax benefits that result
from dividends on equity-classified employee share-based payment awards that are
declared after December 31, 2007. The effect of adopting EITF 06-11 on
January 1, 2008 was not materially to the Company’s consolidated results of
operations, financial position or cash flows.





4.
            Stock
      Warrants





The
Company has periodically issued incentive stock warrants to executives,
officers, directors and employees to provide additional incentives to promote
the success of the Company’s business and to enhance the ability to attract and
retain the services of qualified persons.  Warrants have also been
issued as part of capital financing transactions.  The issuances of
such warrants are approved by the Board of Directors.  The exercise
price of a warrant granted is determined by the fair market value of the stock
on the date of grant.  The Company issues shares of authorized common
stock upon the exercise of the warrant.





The
Company accounts for its stock warrant activity under the guidance provided by
Statement of Financial Accounting Standards No, 123R (“SFAS
123(R)”).  SFAS 123(R) requires all share-based payments to employees,
including grants of employee stock warrants, to be recognized as stock-based
compensation expense in the Company’s Consolidated Statements of Operations
based on their fair values.  For purposes of determining compensation
expense associated with stock warrants, the fair value of the Company’s stock
was determined based upon the Black-Scholes option pricing
model.





During
the first quarter of 2008, no warrants were issued.  For warrants
granted during the first quarter of 2007, the fair value of such warrants was
estimated at the date of grant using a Black-Scholes option-pricing model with
the following assumptions:








2007Dividend
      yield
            -0-Expected
      volatility
            105%Risk
      free interest
            4.52%Expected
      lives
            4
      years





The
Black-Scholes option valuation model was developed for use in estimating fair
value of traded options or warrants that have no vesting restrictions and are
fully transferable.  In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility.  Because the Company’s stock warrants have characteristics
significantly different from those of traded options/warrants, and because
changes in the subjective input assumptions can materially affect the fair value
estimate, in management’s opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its stock
warrants.





A summary
of the Company’s stock warrant activity and related information for the three
months ended March 31, 2008 follows:


7
 Index




Number
      ofSharesUnderWarrant
            
            
            ExercisePrice
            
            
            WeightedAverageExercisePrice
            
            WeightedAverageGrant
              Date
      FairValue($/share)(2)
            
            
            TotalIntrinsic
              ValueWarrantExercises(1)Warrants
      outstanding atDecember
      31, 2007
            
            
            20,304,828
            
            
            $
            .92-$2.00
            
            
            $
            1.41Issued
            
            
            -Exercised
            
            
            -Expired
            
            
            (150,000
            )
            
            $
            1.95
            
            
            $
            1.95Warrants
      outstanding atMarch
      31, 2008
            
            
            20,154,828
            
            
            $
            .92-$2.00
            
            
            $
            1.40





All
outstanding stock warrants are exercisable and fully vested at March 31,
2008.  A summary of outstanding stock warrants at March 31, 2008
follows:





Number
      ofCommonStockEquivalents
            
            ExpirationDate
            
            RemainingContractedLife(Years)
            
            WeightedAverageRemainingContractualTerm
      (Years)
            
            ExercisePrice
            
            WeightedAverageExercisePrice
            
            AggregateIntrinsicValue(1)20,000
            
            August
      2008
            
            
            .38
            
            
            
            $
            1.95
            
            $
            1.954,851,969
            
            November
      2008
            
            
            .63
            
            
            
            $
            0.98-$1.95
            
            $
            1.931,060,714
            
            February
      2010
            
            
            1.83
            
            
            
            $
            2.00
            
            $
            2.001,982,145
            
            November
      2010
            
            
            2.63
            
            
            
            $
            1.50
            
            $
            1.505,225,000
            
            January
      2011
            
            
            2.75
            
            
            
            $
            1.40
            
            $
            1.40575,000
            
            October
      2011
            
            
            3.54
            
            
            
            $
            .92
            
            $
            .926,440,000
            
            December
      2011
            
            
            3.67
            
            
            
            $
            .92
            
            $
            .9220,154,828
            
            
            
            
            
            
            2.49
            
            
            
            
            
            
            
            $-0-





(1)
            The
      intrinsic value of a warrant is the amount by which the current market
      value of the underlying stock exceeds the exercise price of the warrant,
      or the market price at the end of the period less the exercise
      price.


(2)
            The
      weighted average grant date fair value is determined by using the Black
      Scholes Option Pricing Model as described
above.





The
following table provides a detail of stock-based compensation incurred during
the three months ended March 31, 2008, and 2007:





2008
            
            
            2007Restricted
      stock – General and Administrative
            
            $
            -
            
            
            $
            82,726Restricted
      stock – Property Costs
            
            
            -
            
            
            
            -Committed
      restricted stock - Interest
            
            
            401,626
            
            
            
            131,408Committed
      restricted stock – General and Administrative
            
            
            181,250
            
            
            
            45,000Total
      stock-based compensation
            
            
            582,876
            
            
            
            259,134Less
      amounts capitalized
            
            
            (157,813
            )
            
            
            (88,750
            )Stock
      compensation expense, net of amounts capitalized
            
            $
            425,063
            
            
            $
            170,384





Amounts
capitalized in 2008 and 2007 are for prepaid expenses or unamortized deferred
compensation.  The above table excludes common stock issued for cash,
warrants issued in financing arrangements, debt discounts recorded in equity,
and common stock issued for exercise of warrants.





5.
            Related Party
      Transactions





During
the three months ended March 31, 2008 there were no related party
transactions.


8
 Index


6.
            Non-Cash Investing and
      Financing Activities





During
the three months ended March 31, 2008 and 2007, the Company engaged in non-cash
financing and investing activities as follows:





Three
      Months Ended
              March 31,2008
            
            
            2007Reduction
      of prepaid drilling for development of oil and gas
    Properties
            
            $
            1,668,979
            
            
            
            -Increase
      in accounts payable and accrued liabilities for property costs and prepaid
      drilling costs
            
            $
            326,183
            
            
            $
            841,605Change
      in property costs associated with asset retirement
    obligation
            
            $
            25,808
            
            
            
            -Beneficial
      conversion feature on convertible debt
            
            
            -
            
            
            $
            2,667,968Issuance
      of warrants with debt
            
            
            -
            
            
            $
            2,667,968Issuance
      of convertible debt for financing costs
            
            
            -
            
            
            $
            450,000





7.
            Earnings Per
      Share





The
Company has adopted SFAS No. 128, which provides for calculation of "Basic" and
"Diluted" earnings per share.  Basic earnings per share includes no
dilution and is computed by dividing net income available to common shareholders
by the weighted average common shares outstanding for the
period.  Diluted earnings per share reflect the potential dilution of
securities that could share in the earnings of an entity similar to fully
diluted earnings per share. Following is a reconciliation of the numerators and
denominators of the basic and diluted EPS computations for the three months
ended March 31, 2008 and 2007:





Three
      Months Ended
              March 31,2008
            
            
            2007Net
      income (loss)
            
            $
            (2,021,283
            )
            
            $
            (1,602,405
            )Less:
      Preferred stock dividends (1)
            
            
            (9,668
            )
            
            
            (9,668
            )Net
      income (loss) available to common stockholders
            
            $
            (2,030,951
            )
            
            $
            (1,612,073
            )Weighted
      average shares of common stock
            
            
            41,229,401
            
            
            
            38,729,888Basic
      and diluted net income (loss) per share
            
            $
            (0.05
            )
            
            $
            (0.04
            )





(1)
Dividends are undeclared





For the
three month periods ended March 31, 2008 and March 31, 2007 potential dilutive
securities had an anti-dilutive effect and were not included in the calculation
of diluted net loss per common share.  For the three months ended
March 31, 2008, these securities included preferred stock convertible into
94,418 common shares and debt convertible into 18,378,571 common
shares.  For the three months ended March 31, 2007, these securities
included in-the-money warrants for the purchase of 1,513,922 common shares,
preferred stock convertible into 94,418 common shares, and debt convertible into
10,450,000 shares.


9
 Index


8.
            Legal
      Proceedings





On April
11, 2007, the Company was served with a lawsuit filed against it titled Cause
No. 2007-16502; D. John Ogren, R. Bradford Perry and Chester Smitherman v.
Petrosearch Corporation; 133rdJudicial District Court, Harris County, Texas.  The plaintiffs
are three (3) Series A Preferred shareholders who derived their original shares
from Texas Commercial Resources, Inc. (“TCRI”) and became Series A Preferred
shareholders of Petrosearch Energy Corporation as a result of the prior
mergers.  The plaintiffs have alleged that Petrosearch Corporation
(and TCRI, its predecessor) failed to pay accrued, cumulative dividends and
refused to allow conversion of their Series A Preferred Stock into Common
Stock.    The plaintiffs have alleged breach of contract,
fraud and violation of Section 33 of the Texas Securities Act and have requested
the award of actual and exemplary damages, interest and attorneys’
fees.   The lawsuit likewise requests the Court to compel the
payment of accrued dividends and the examination of the Company’s books and
records. The Company denies the factual allegations made in the lawsuit and
intend to vigorously defend against the claims made therein.  An
estimate of possible loss or range of possible loss cannot be made at this
time.  The Company is in the process of discovery in the lawsuit at
this time.





The
Company currently is not a party to any other material pending legal
proceedings.





9.
            Fair Value
      Measurements




As
described in Note 3, the Company adopted FAS 157 on January 1, 2008. FAS
157, among other things, defines fair value, establishes a consistent framework
for measuring fair value and expands disclosure for each major asset and
liability category measured at fair value on either a recurring or nonrecurring
basis. FAS 157 clarifies that fair value is an exit price, representing the
amount that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants. As such, fair value
is a market-based measurement that should be determined based on assumptions
that market participants would use in pricing an asset or liability. As a
basis for considering such assumptions, FAS 157 establishes a three-tier fair
value hierarchy, which prioritizes the inputs used in measuring fair value as
follows:





Level
      1.
            Observable
      inputs such as quoted prices in active markets for identical assets or
      liabilities;Level
      2.
            Inputs,
      other than quoted prices included within Level 1, that are observable
      either directly or indirectly; andLevel
      3.
            Unobservable
      inputs in which there is little or no market data, which require the
      reporting entity to develop its own
assumptions.





As of
March 31, 2008, the Company’s assets and liabilities that are measured at fair
value on a recurring basis include the following:





Fair
      Value Measurements UsingTotal
            
            Quoted
      Prices inActive
      Markets(Level
      1)
            
            SignificantOtherObservableInputs(Level
      2)
            
            
            SignificantUnobservableInputs(Level
      3)Warrant
      liability
            
            $
            252,429
            
            —
            
            $
            252,429
            
            
            
            —


10
 Index


10.
            Subsequent
      Events





Project
Financing





In May
2008 the Company received a full release of all the liens, security interests,
rights, claims and benefits of every kind in, on and under the November 2006
Secured Term Note with Laurus Master Fund, Ltd, as well as that same release on
all the other collateral documents associated with that
financing.  The November 2006 financing was specifically recourse to
the Kallina 46#1 well and the associated lease acreage only.  The debt
related to the Laurus financing will be extinguished on the financial statements
of the Company in May, 2008 as well as any interest that was charged in relation
to the Note will be derecognized in that same period.  Including
interest, the estimated gain on extinguishment of this debt is approximately $1
million, which will be recorded in the second quarter of 2008 as ordinary
income.  It was decided in April 2006 that the Kallina 46#1 well was
uneconomic and the decision was made that the well needed to be plugged and
abandoned.





As part
of this transaction, the Company has conveyed their interest in the Kallina 46#1
well and the associated lease acreage to a third party along with the Company’s
interest in the Pintail #1 well, Pintail Flats #1 well and the associated
acreage of Pintail and Pintail Flats.  The Company has also
transferred operatorship of all the existing and future wells in this SW Garwood
Prospect to the third party. In exchange for the conveyance of the wells and
acreage and the transfer of operatorship, the Company received nominal cash
consideration, as well as the third party has assumed the liability of plugging
the Kallina 46#1 well.





Revolving
Credit Agreement





As of
April 1, 2008 the revolving credit facility with Fortuna Energy, LP became due
and a payment of $1,602,500 was paid in full to Fortuna.  As per the
revolving credit agreement, as part of being paid back in full, Fortuna Energy
returned to the Company all of the overriding royalties issued to Fortuna
Energy.  The main override relates to a 2% override in the Company’s
North Dakota, Gruman project.


11
 Index


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





FORWARD
LOOKING STATEMENTS




Statements
contained herein and the information incorporated by reference herein may be
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements can be
identified by the use of forward-looking terminology such as, but not limited
to, "may," "will," "expect," "anticipate," "estimate," "would be," "believe," or
"continue" or the negative or other variations of comparable
terminology.  We intend such forward-looking statements to be covered
by the safe harbor provisions applicable to forward-looking statements contained
in Section 21E of the Exchange Act. Such statements (none of which is intended
as a guarantee of performance) are subject to certain assumptions, risks and
uncertainties, which could cause our actual future results, achievements or
transactions to differ materially from those projected or anticipated. Such
risks and uncertainties are set forth herein.





Forward-looking
statements include statements concerning plans, objectives, goals, strategies,
future events, or performance and underlying assumptions and other statements,
which are other than statements of historical facts. These statements are
subject to uncertainties and risks including, but not limited to, product and
service demands and acceptance, changes in technology, economic conditions, the
impact of competition and pricing, and government regulation and approvals.
Petrosearch cautions that assumptions, expectations, projections, intentions, or
beliefs about future events may, and often do, vary from actual results and the
differences can be material. Some of the key factors which could cause actual
results to vary from those Petrosearch expects include changes in natural gas
and oil prices, the timing of planned capital expenditures, availability of
acquisitions, uncertainties in estimating proved reserves and forecasting
production results, operational factors affecting the commencement or
maintenance of producing wells, the condition of the capital markets generally,
as well as our ability to access them, and uncertainties regarding environmental
regulations or litigation and other legal or regulatory developments affecting
our business.





Our
expectations, beliefs and projections are expressed in good faith and are
believed to have a reasonable basis, including without limitation, our
examination of historical operating trends, data contained in our records and
other data available from third parties. There can be no assurance, however,
that our expectations, beliefs or projections will result, be achieved, or be
accomplished. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.  We undertake no duty to update these forward-looking
statements.





OVERVIEW
– CORPORATE STRATEGY





We
believe we have been successful over the past two years with our plan of
improving the quality of our portfolio of oil and gas assets, as well as putting
financings together to enable us to develop these assets.  We have
high graded our portfolio of projects, acquired assets that have multiple years
of growth potential and have secured effective financings to continue to develop
these projects.  Our inventory of assets allows for us to effectively
align our financing needs with the capital needs of the project, therefore,
allowing us to efficiently manage the amount and timing of our capital
expenditures.  Our two main assets are resource plays, which will
allow us to re-invest our capital into our projects to enhance the rates of
return, revenue growth and reserve growth.  We have also completed the
disposition of non-core assets that did not meet our risk/reward
parameters.  We believe the continued execution of this plan will
enable us to continue to focus on the development of our high quality properties
into 2008.  Management believes the development of our core assets
should have a significant impact on our production, revenues and cash flows in
the future.





LIQUIDITY
AND CAPITAL RESOURCES





Since
inception, we have primarily financed our operating and investing cash flow
needs through private offerings of equity securities, sales of crude oil and
natural gas, and the use of debt instruments such as convertible notes and
revolving credit facilities.  The proceeds from, and the utilization
of, all these methods have been, and Management believes will continue to be,
sufficient to keep the operations funded and the business plan moving
forward.  We plan to continue to utilize these methods to access
capital in order to implement our business plan, which we believe will be an
effective vehicle to carry out our business plan.


12
 Index


Convertible
Securities





On
November 9, 2007 we executed, with a group of accredited investors, a series of
Note and Warrant Purchase Agreements for the sale of  $8,100,000, 8%
Senior Secured Convertible Promissory Notes and three year warrants to purchase
1,928,571 shares of our common stock at an exercise price of $1.50 per share for
total gross proceeds to us of $8,100,000.   Upon closing the
transaction, we also issued the Convertible Note and the Warrant, and executed a
Pledge and Security Agreement and a Registration Rights Agreement.





On
February 1, 2007, we executed a Note and Warrant Purchase Agreement for the sale
of a $10,000,000 8% Senior Secured Convertible Promissory Note with RCH Petro
Investors, LP (“RCH”) and a four year warrant to purchase 5,000,000 shares of
our common stock at an exercise price of $1.40 per share for total gross
proceeds to us of $10,000,000.   We completed the transaction and
received funding on February 7, 2007.  Upon closing, we issued the
Convertible Note and the Warrant, and executed a Pledge and Security Agreement
and a Registration Rights Agreement. This convertible note precludes the Company
from incurring indebtedness in excess of fifty percent (50%) of the PV-10 value
of the Company’s total proved reserves, plus the fair market value of the leases
and pipeline assets associated with the Company’s Barnett Shale
assets.





Private
Equity Placements





In
December 2006, we completed sales of $3.2 million of our common stock in a
private offering.  We received net proceeds of approximately $3.0
million which were to be used for general corporate purposes.





In
February 2006, we completed sales of $2.7 million of our common stock in a
private offering.  We received net proceeds of approximately $2.56
million which were to be used for general corporate purposes, including the
drilling of projects in our prospect inventory.





Project
Financings





In
November 2006, we signed a Securities Purchase Agreement and Secured Term Note
with Laurus Master Fund, Ltd to provide financing for the drilling of our
Kallina 46 #1 well and payment of the future completion costs for the Kallina 46
#1 well.   We formed a subsidiary, Garwood Petrosearch Inc., to
hold our interest in the Kallina Lease and the Kallina 46 #1
well.  Also, as a part of the financing arrangement,
Garwood  issued Laurus a Warrant to acquire, upon payout of the Note
indebtedness, 45% of Garwood’s outstanding common stock such that upon exercise
of the Warrant, Garwood would be owned 55% by us and 45% by Laurus.





In May
2008 the Company received a full release of all the liens, security interests,
rights, claims and benefits of every kind in, on and under the November 2006
Secured Term Note with Laurus Master Fund, Ltd, as well as that same release on
all the other collateral documents associated with that
financing.  The November 2006 financing was specifically recourse to
the Kallina 46#1 well and the associated lease acreage only.  The debt
related to the Laurus financing will be extinguished on the financial statements
of the Company in May, 2008 as well as any interest that was charged in relation
to the Note will be reversed in that same period.   It was
decided in April 2006 that the Kallina 46#1 well was uneconomic and the decision
was made that the well needed to be plugged and abandoned.





As part
of this transaction, the Company has conveyed their interest in the Kallina 46#1
well and the associated lease acreage to a third party along with the Company’s
interest in the Pintail #1 well, Pintail Flats #1 well and the associated
acreage of Pintail and Pintail Flats.  Also as a part of this
transaction, the Company has transferred operatorship of all the existing and
future wells in this SW Garwood Prospect to the third party. In exchange for the
conveyance of the wells and acreage and the transfer of operatorship, the
Company received nominal cash consideration as well as the third party has
assumed the liability of plugging the Kallina 46#1 well.


13
 Index


Revolving
Credit Agreement





On
October 16, 2006, we amended our existing revolving credit facility with Fortuna
Energy, LP.   The principal available under the revolving
borrowing base remained $10,000,000.  Under the terms of the
transaction, Fortuna advanced us $780,000 for the purpose of paying amounts due
for the Barnett Shale Project.  As part of the financing, we provided
Fortuna additional collateral.  In addition, we agreed to issue to
Fortuna 475,000 five year warrants with a strike price of $0.92 per
share.  The Warrants contain a “put” provision which allows Fortuna to
“put” the warrants to the Company at a price of $0.65 per share for two (2)
years, which “put” period shall commence 180 days after issuance. Additionally,
as part of the transaction, we agreed to issue 100,000 new warrants, which
expire 5 years from the date of issue, at a price of $0.92 per share to replace
100,000 warrants previously issued to Fortuna at a price of $2.00 per share,
which were previously set to expire on November 1, 2007.




As of
April 1, 2008 the revolving credit facility became due and a payment of
$1,602,500 was paid in full to Fortuna Energy.  As per the revolving
credit agreement, as part of being paid back in full, Fortuna Energy returned to
the Company all of the overriding royalties issued to Fortuna
Energy.  The main override relates to a 2% override in the Company’s
North Dakota, Gruman project.




Joint
Ventures





We
continue to strive to develop relationships with institutions to participate in
our prospects.  Management believes this will reduce our capital risk
and increase the diversity of the projects in which we use our own
capital.  We intend to establish these drilling partnership
relationships with terms that are standard in the oil and gas
industry.





CURRENT
PROJECTS AND CAPITAL REQUIREMENTS





CORE
PROPERTIES:





Barnett Shale Project -- Our
Barnett ShaleProject is part of the
Barnett Shale natural gas play in the Fort Worth Basin, which is arguably one of
the most exciting plays to emerge in the lower 48 states in the past decade. In
December 2006, through our wholly owned subsidiary, Barnett Petrosearch LLC, we
joined in the formation of a partnership, DDJET Limited LLP (“Partnership”), for
the development of the integrated venture. We own a 5.54% interest in the
Partnership along with partners Metroplex Barnett Shale LLC (a wholly owned
subsidiary of Exxon Mobil Corporation), which directs operations, and Cinco
County Barnett Shale LLC (a privately held Dallas-based company).





The
Partnership’s assets include all leases acquired to-date within an 8-county
contract area, comprising approximately 2 million acres that was established
under a previous agreement among affiliates of the three partners. Partnership
assets also include associated facilities that include nearly 100 miles of
pipeline and an option on a separate pipeline right-of-way. Approximately 35
miles of gas pipeline facilities have been completed and are operational. We
believe our ownership of these pipeline assets is a strategic advantage in this
urban area.  .





As of May
7, 2008, 14 Partnership wells (seven in Ellis County and seven in Tarrant
County) have been completed and are selling gas through the Partnership-owned
pipeline. The cumulative production rate of these 14 completed wells continues
to meet our expectations.  An additional well, in Tarrant County, has
been drilled and awaiting completion; and one well, also in Tarrant County is
being drilled.  As of December 31, 2007 our independent reserve
engineers, Cawley, Gillespie and Associates, Inc. estimated our net share of
proved natural gas reserves at 1.9 Bcfe (Only includes 9 producing wells at that
time).





On
February 29, 2008 we announced that we executed an authorization for the general
partner of the Partnership to immediately commence a sales marketing program to
interested potential purchasing parties in order to fully assess the current
market value of the Partnership.  We have no obligation to sell our
Partnership interest and retain all of our rights under the Partnership
agreement in the event of a proposed sale by the partners in which the Company
chooses not to participate.We
continue to have one drilling rig running in the Barnett Shale and continue to
acquire strategic leasehold acreage in the area of interest.


14
 Index


Our Board
of Directors has retained Friedman, Billings, Ramsey & Co., Inc. (“FBR”) to
advise them in connection with a review of strategic alternatives that may be
available to the Company in connection with the possible Partnership
divestiture. The marketing of the Partnership interests presents us with various
options which include: 1) selling our interest in the Partnership at an
acceptable price; 2) utilizing certain preferential rights afforded to us under
the Partnership Agreement to acquire all or a part of the non-Company interests
which the Company could pursue by venturing with a strategic industry or
financial partner; or 3) retaining our current position in the Partnership with
new and/or existing partners.  To date, the Company and FBR have held
confidential discussions with a limited number of potential strategic and
financial partners and expect to continue the investigation of available options
as the Partnership sales process moves forward.





North Texas/Panhandle Water Flood
Project -In November 2005, we acquired a 100% working interest in 1,755
acres in the Quinduno Field in Roberts County, Texas, in the Anadarko Basin. The
project is focused on infill drilling and the implementation of a water flood on
the property. Our leases at Quinduno have a large established resource base of
over 23 million barrels of original oil in place.  Since its discovery
in 1953, approximately 5.1 million barrels have been produced using primary
production.





One
infill well has been drilled to date. We have an ongoing program to enter each
of the 19 old wells that have not been plugged. So far, we have entered nine of
these older wells to determine their mechanical status and establish potential
productivity or injectivity. Two of these wells have been equipped and are now
capable of producing and two more have been converted for water
injection.  Further, the first of the plugged wells is in the process
of being re-entered and also is expected to be converted for water injection. We
have prepared a detailed study and development plan for the field. As of
December 31, 2007, our independent engineers, Ryder Scott, estimated our net
share of proved oil reserves extractable by water flood at 1.5 million barrels
of oil equivalent.  Slightly deeper than the water flood zone, the
Moore County Limestone formation has undrilled exploration potential that may be
tested in a future well.





To
provide adequate water for injection, in November 2006 we executed a water
supply agreement with a landowner in the leasehold, which allows us to draw
fresh water from the aquifer underlying the landowner’s property. In that same
month, we received approval from the Panhandle Groundwater Authority District
(“PGAD”) to produce up to 5,000 barrels per day from the aquifer for use in the
flood.  We received the approval from the PGAD over the protest filed
with the PGAD by the Canadian River Municipal Water Authority (“CRMWA”)
attempting to preserve the freshwater for local municipal use only in the area
in which we own the rights to the fresh water.  We also applied to the
Texas Railroad Commission to amend a previously granted saltwater injection
permit to include fresh water injection. On January 5, 2007 we received a letter
from the Texas Railroad Commission (“TRRC”) informing us of a protest by CRMWA
contesting our application for fresh water injection in the Quinduno Field water
flood.   However, as of November 7, 2007, CRMWA has withdrawn
their protest and request for hearing as part of an agreement with CRMWA that
addresses their concerns with our use of fresh water for enhanced oil
recovery.





In
January 2008 we signed an agreement with Complete Production Services Inc.
(“CPS”), an international oilfield service company which provides that CPS, at
its sole expense, will design and construct a water treatment facility no later
than 90 days from the effective date of the agreement that will be capable of
treating all of our production water up to a maximum of 10,000 bbls per day and
likewise treat and provide to the Company a minimum of 5,000 bbls per day
of  production water from third party sources.  We, in turn,
have committed to be capable of injecting not less than 2,000 bbls of treated
water per day derived from third party production water within 30 days after the
facility is opened, and have further committed to be capable of injecting not
less than 5,000 bbls of treated water per day derived from third party
production water within 180 days after the facility opens, in addition to
re-injecting our own treated production water from the oil and gas lease it
operates.  We will be required to pay a scaled management fee to CPS
commencing on the date the facility opens on the basis of the volume of treated
and re-injected water derived from our production.  We are currently
applying to regulatory agencies to add more wells to the existing flood permit,
as required under the agreement, to ensure our ability to inject the volumes
that CPS will make available.  We do not anticipate any difficulty
with obtaining the approval.


15
 Index


We have
recently commenced the first phase of the water flood project which entails the
conversion to water injection of four existing wells.  These
conversions will allow us to begin enhanced oil recovery and to satisfy our
water injection obligations pursuant to the agreement signed with the
international oilfield service company that is constructing the water treatment
and supply facility on our lease.  That agreement requires us to be
capable of injecting 2,000 barrels of treated water within 30 days of the water
treatment facility being completed.  The facility is nearing
completion.





SW Garwood, Colorado County, Texas
– In May 2008 (as discussed herein) we have conveyed our interest in the
three drilled wells and the associated acreage in this SW Garwood prospect to a
third party.  As a part of that transaction, we also transferred
operatorship of all the existing and future wells in this SW Garwood prospect to
that third party. In exchange for the conveyance of the wells and acreage and
the transfer of operatorship, the Company received nominal cash consideration as
well as the third party’s assumption of the liability of plugging the Kallina
46#1 well.





The
Wilcox Trend, SWGarwood
field had three wells drilled.  The initial well on this prospect, the
Pintail #1, completed in the Upper Wilcox in December 2004, paid out in April of
2006.  As of payout and until the time of conveyance, we had
participated in the production from the well with a 16% working
interest.  The second well, the Pintail Flats #1, was completed and
fracture stimulated in May, 2005 from 15,950 feet to 16,010 feet in the Lower
Wilcox.  We have a 16% working interest in the well after
payout.  The Pintail Flats well had not reached payout as of the time
of the conveyance.  The third well, the Kallina 46 #1 reached its
targeted depth of 16,230 feet on August 6, 2006. We have attempted production
from several sands in the lower and middle Wilcox formations without achieving
commercial rates.  The decision has been made to plug and abandon the
well.  The third party to which the well was conveyed will be
responsible for the plugging of the Kallina well.





OTHER
PROJECT AREAS:





Gruman Prospect, Stark County, North
Dakota -On March 28, 2006, we spudded the Gruman 18-3 well intended to
be either an increased density well if it proved to be up dip of the Gruman 18-1
producing well or a water injection well if it was down dip. The well reached
total depth of 9,890 feet on April 14, 2006, and was completed as an injection
well.  In October 2006, we undertook certain remedial work on the
Gruman 18-1 which has improved the production on the well. The well is currently
producing approximately 55 bopd and 15 Mcfpd.  We continue to assess
the positive impact on the long term production.





On
February 1, 2007, we began injecting produced water into the Gruman 18-3 well.
The result has been to reduce the cost of operating the Gruman 18-1 by
eliminating the need to truck produced water to a disposal facility. We are
considering supplementing this injection with water from the Dakota for pressure
maintenance in the mound. We have established that the Gruman 18-3 is in
pressure communication with the Gruman 18-1. Further testing or stimulation may
be necessary to achieve the desired future injection rates. Proved developed
reserves in the prospect to our share of the well as of December 31, 2007, were
215 Mbo and 68 MMcf of natural gas, as estimated by a third party engineering
firm, McCartney Engineering, LLC.





Mississippi Tuscaloosa Prospects --We have identified five Tuscaloosa oil prospects in the Mississippi
Inland Salt Basin, in Yazoo County, comprising a maximum of 2,295 acres and up
to 18 potential drilling locations.  We are in discussions with a
potential industry partner to co-develop these prospects with
us.   Once a joint venture is established, we plan to initially
drill 8 locations, ranging from 6,150 feet to 7,500 feet in depth. Approximately
55% of the entire prospect acreage has been leased. We currently own 100% of the
prospect; however, we are in the final review of a draft of a farm out agreement
with an industry partner.





RESULTS
OF OPERATIONS





The
following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the financial statements and
accompanying notes and the other financial information appearing elsewhere in
this filing.


16
 Index


The
factors that most significantly affect our results of operations are: (i) the
sale prices of crude oil and natural gas; (ii) the amount of production sales;
and (iii) the amount of lease operating expenses. Sales of production and level
of borrowings are significantly impacted by our ability to maintain or increase
production and reserves from existing oil and gas properties through exploration
and development activities.





For
the three months ended March 31, 2008 compared to the three months ended March
31, 2007





Revenues





Consolidated
oil and gas production revenue for the three months ended March 31, 2008 was
$554,433 versus $362,976 for the three months ended March 31,
2007.  This represented a 53% increase in revenue in the first quarter
of 2008 over the first quarter of 2007.  As expected, this increase is
the result of $327,797 of revenue from the 14 producing wells in the Barnett
Shale.  During the first quarter of 2007, only 2 Barnett Shale wells
were producing $49,916 of revenue.  The effects of this increase were
partially offset by a decline in revenue from our Gruman North Dakota well of
approximately $29,000 or 16% and a decline in revenue of approximately $51,000
from one of our SW Garwood properties due to a required recompletion during the
first quarter of 2008.  The Gruman well continued to have pump and
motor assembly issues which caused the need for the motor assembly to be pulled
out of the well twice in the first quarter to be worked on, resulting in 42 days
where the well was not producing in that period.  We are currently in
the process of redesigning the pump and motor assembly in an attempt to
stabilize the production of the well.





See
below for revenue detail by property from the first quarter of 2008 compared to
the first quarter of 2007.





2008
              1st
      Qtr
            
            
            %
      of
              Total
            
            
            2007
              1st
      Qtr
            
            
            %
      of
              TotalBarnett
      Shale
            
            $
            327,797
            
            
            
            59
            %
            
            $
            49,916
            
            
            
            14
            %Gruman
      - North Dakota
            
            
            151,292
            
            
            
            27
            %
            
            
            180,088
            
            
            
            50
            %SW
      Garwood
            
            
            14,584
            
            
            
            3
            %
            
            
            65,380
            
            
            
            18
            %Panhandle
      - Water Flood
            
            
            1,140
            
            
            
            0
            %
            
            
            4,245
            
            
            
            1
            %Oklahoma
            
            
            48,571
            
            
            
            9
            %
            
            
            34,727
            
            
            
            10
            %Other
            
            
            11,049
            
            
            
            2
            %
            
            
            28,620
            
            
            
            8
            %Total
            
            $
            554,433
            
            
            
            100
            %
            
            $
            362,976
            
            
            
            100
            %





To
further explain the increase in revenue from the first quarter of 2007 to the
first quarter of 2008, we have provided the following break-out of production
and prices for the two years.





1Q
      2008
            
            
            
            1Q2007Barrels
      of Oil
            
            
            2,006
            
            
            
            3,898Price
      per Barrel
            
            $
            94.52
            
            
            $
            53.41MCF
      of Gas
            
            
            46,071
            
            
            
            19,554Price
      per MCF
            
            $
            7.49
            
            
            $
            6.23





As
noted in the above table, the increase in oil and gas prices also played a role
in the increase in revenue since 2007.  The total effect on revenue
from the price increases was approximately $200,237.





Lease
Operating and Production Tax Expense


Lease
operating and production tax expenses for the quarters ended March 31, 2008 and
2007 were $329,417 and $77,293, respectively.  These expenses relate
to the costs that are incurred to operate and maintain our wells and related
production equipment, including the costs applicable to the operating costs of
support equipment and facilities.  Lease operating expenses increased
significantly due to 12 additional Barnett Shale wells coming on-line since the
first quarter of 2007.  In addition, repair and maintenance type work
was required on the Pintail and Gruman wells in the first quarter of 2008
causing total lease operating expenses for these two wells to increase by
approximately $104,000.


17
 Index


Depletion,
Depreciation and Amortization





Costs for
depletion, depreciation and amortization for the quarters ended March 31, 2008
and 2007, were $260,958 and $178,647, respectively.  The significant
increase is mainly due to a significant increase in the amortizable costs at
March 31, 2008 as compared to the same period in 2007 as well as an increase in
production.  Given the fact that depletion is calculated by
multiplying the net amortizable costs times the units of production in the
related period relative to the total proved reserves, the depletion amount for
the first quarter of 2008 was significantly higher than the depletion for the
same period in 2007.





General
and Administrative Expenses





General
and administrative expenses for the quarters ended March 31, 2008 and 2007, were
$747,240 and $739,090, respectively.  Although in total general and
administrative expense was consistent from quarter to quarter, legal expenses
and personnel costs were significantly different between the two
quarters.  Personnel costs decreased approximately $98,000 due to
bonuses in the first quarter of 2007 that did not occur in the first quarter of
2008.  On the other hand, legal expenses increased approximately
$147,000 due to ongoing litigation in 2008.  A summary listing of
general and administrative expenses is provided below.





1st
      Quarter
              2008
            
            
            1st
      Quarter
              2007Personnel
      Costs
            
            $
            298,485
            
            
            $
            396,585Travel,
      Meals, and Entertainment
            
            
            7,941
            
            
            
            11,337Corporate
      Expenses
            
            
            57,768
            
            
            
            64,095Accounting,
      Legal, and Professional Fees
            
            
            274,551
            
            
            
            117,246Third
      Party Consultants and Contractors
            
            
            41,115
            
            
            
            77,460Office
      Expenses
            
            
            58,239
            
            
            
            57,387Other
            
            
            9,141
            
            
            
            14,980Total
      General and Administrative
            
            $
            747,240
            
            
            $
            739,090





Net
Operating Loss





We
generated a net operating loss of $(783,182) or $(0.02) per share, for the
quarter ended March 31, 2008, compared to a net operating loss of $(632,054) or
$(0.02) per share, for the quarter ended March 31, 2007.  The
$(151,128) variance is related mainly to an increase in lease operating expense
that was not offset totally by the increase in revenue and an increase in
DD&A expense.





Other
Income (Expense)





The
$267,750 increase from $970,351 in Other Expense for the quarter ended March 31,
2007 to $1,238,101 in Other Expense for the quarter ended March 31, 2008 is due
to a significant increase in interest expense and amortization of debt discount
related to 1) the $10 million Convertible note issued in February of 2007, and
2) the $8.1 million convertible notes issued in November of 2007.  The
increase in interest expense and debt discount was partially offset by a change
in the value of the warrant liability from a decrease in the Company’s stock
price which resulted in $68,711 of income in the quarter ended March 31, 2008
compared to expense of $271,942 in the quarter ended March 31,
2007.





Off-Balance
Sheet Arrangements





We had no
off-balance sheet arrangements during the fiscal quarter ended March 31,
2008.


18
 Index


Item 4.
            Controls
      and Procedures





Evaluation
of Disclosure Controls and Procedures





Petrosearch
Energy Corporation’s Chief Executive Officer and Chief Financial Officer
performed an evaluation of the Company’s disclosure controls and procedures.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by an
issuer in the reports that it files or submits under the Securities Exchange Act
of 1934 is accumulated and communicated to the issuer’s management, including
its Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure. Based on this evaluation, the
Chief Executive Officer and Chief Financial Officer have concluded that the
Company’s disclosure controls and procedures are effective as of March 31,
2008.





Changes
in internal controls





There has
been no change in our internal control over financial reporting during the first
quarter ended March 31, 2008 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.





Limitations
on the Effectiveness of Internal Controls





Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. An internal control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the internal control. The design of
any system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.
Over time, control may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may
deteriorate.








PART
II--OTHER INFORMATION





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





During
the three months ended March 31, 2008 we completed the following transactions in
reliance upon exemptions from registration under the Securities Act of 1933, as
amended (the "Act") as provided in Section 4(2) thereof. All certificates issued
in connection with these transactions were endorsed with a restrictive legend
confirming that the securities could not be resold without registration under
the Act or an applicable exemption from the registration requirements of the
Act. We believe that each person was a “qualified” investor within the meaning
of the Act and had knowledge and experience in financial and business matters,
which allowed them to evaluate the merits and risks of our
securities.  We believe each person was knowledgeable about our
operations and financial condition.





On
January 4, 2008 we issued 297,086 restricted common shares valued at $288,172 to
12 of our convertible note holders for payment of quarterly interest relating to
the fourth quarter of 2007


19
 Index


Item 6.
            Exhibits








Exhibit
      Number
            Description
      of Exhibit31.1
            Rule
      13a-14(a) Certification of Chief Executive Officer31.2
            Rule
      13a-14(a) Certification of Chief Financial Officer32.1
            Section
      1350 Certification of Chief Executive Officer32.2
            Section
      1350 Certification of Chief Financial
Officer


20
 Index


SIGNATURES







In
accordance with the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.







Petrosearch
Energy Corporation





Date:  January 15,
2009








By:
            /s/ Richard DoleRichard
      DoleChief
      Executive Officer, President and ChairmanBy:
            /s/ David CollinsDavid
      CollinsChief
      Financial Officer, Chief Accounting Officerand
      Principal Financial Officer






21