UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-QSB


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

     For the quarterly period ended JUNE 30, 2006

[ ]  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                (IRS Employer Identification No.)
incorporation or organization)


                           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 registrant is a shell company (as defined in
Rule  12b-2  of  the  Exchange  Act).   Yes [ ]   No [X]

Check  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 [ ]

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:  31,104,570 Shares of $0.001 par value
Common Stock outstanding as of August 9, 2006


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


<PAGE>
                         PETROSEARCH ENERGY CORPORATION

                                   FORM 10-QSB
                       FOR THE QUARTER ENDED JUNE 30, 2006

                                      INDEX

PART I - FINANCIAL INFORMATION

  ITEM 1.    FINANCIAL STATEMENTS

  ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

  ITEM 3.    CONTROLS AND PROCEDURES


PART II - OTHER INFORMATION

  ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

  ITEM 6.    EXHIBITS


SIGNATURES


<PAGE>
ITEM 1.     FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                          PETROSEARCH ENERGY CORPORATION
                                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                       JUNE 30, 2006 AND DECEMBER 31, 2005


     ASSETS                                                                            JUNE 30,     DECEMBER 31,
     ------                                                                              2006          2005
                                                                                     (UNAUDITED)     (SEE NOTE)
                                                                                     ------------  --------------
<S>                                                                                  <C>           <C>
Current assets:
  Cash                                                                               $ 2,545,196   $   4,052,844
  Accounts receivable:
    Joint owners, net of allowance of $83,073                                          1,761,696       1,344,344
    Oil and gas production sales                                                         152,187           9,345
  Prepaid expenses                                                                       433,657         517,482
                                                                                     ----------------------------

      Total current assets                                                             4,892,736       5,924,015
                                                                                     ----------------------------

Property and equipment:
Oil and gas properties, full cost method of accounting:
    Properties subject to amortization                                                16,413,351      11,849,520
    Properties not subject to amortization                                             4,875,144       3,513,597
    Other property and equipment                                                         149,348         147,047
                                                                                     ----------------------------

    Total property and equipment                                                      21,437,843      15,510,164

  Less accumulated depreciation, depletion and amortization                           (2,100,627)     (1,966,000)
                                                                                     ----------------------------

    Property and equipment, net                                                       19,337,216      13,544,164

Prepaid oil and gas costs                                                                 87,454          81,603

Other assets                                                                              52,183          66,462
                                                                                     ----------------------------

      Total assets                                                                   $24,369,589   $  19,616,244
                                                                                     ============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
  Current portion of long-term debt                                                  $ 1,794,631   $     908,168
  Accounts payable                                                                     1,748,877         561,546
  Accrued liabilities                                                                    648,290         750,036
                                                                                     ----------------------------

  Total current liabilities                                                            4,191,798       2,219,750
                                                                                     ----------------------------
Long-term debt, net of current portion                                                 3,115,970       2,537,251
Other long-term obligations                                                              684,766         670,456
                                                                                     ----------------------------
      Total liabilities                                                                7,992,534       5,427,457

Stockholders' 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 June 30, 2006 and December 31, 2005                 483,416         483,416
    Series B convertible preferred stock, 100,000 shares authorized; 43,000 shares        43,000          43,000
    issued and outstanding at June 30, 2006 and December 31, 2005
  Common stock, par value $0.001 per share, 100,000,000 shares                            31,104          28,497
  Authorized; 31,104,570 and 28,497,761 shares issued and outstanding at June 30,
  2006 and December 31, 2005, respectively
  Additional paid-in capital                                                          21,347,515      18,089,828
  Unissued common stock                                                                        -         545,000
  Accumulated deficit                                                                 (5,527,980)     (5,000,954)
                                                                                     ----------------------------

      Total stockholders' equity                                                      16,377,055      14,188,787
                                                                                     ----------------------------

      Total liabilities and stockholders' equity                                     $24,369,589   $  19,616,244
                                                                                     ============  ==============
</TABLE>

Note: The balance sheet at December 31, 2005 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


<PAGE>
<TABLE>
<CAPTION>
                                 PETROSEARCH ENERGY CORPORATION
                              CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS AND  SIX MONTHS ENDED JUNE 30, 2006 AND 2005


                                                THREE MONTHS ENDED         SIX MONTHS ENDED
                                                     JUNE 30                    JUNE 30
                                                2006         2005          2006         2005
                                             -----------  -----------  ------------  -----------
<S>                                          <C>          <C>          <C>           <C>
Oil and gas production revenues              $  369,686   $  723,555   $   491,600   $1,377,719
                                             ---------------------------------------------------

Operating costs and expenses:
  Lease operating and production taxes          256,192      152,490       417,882      329,550
  Depreciation, depletion and amortization       97,247      151,488       134,628      485,947
  General and administrative                    572,773      758,466     1,295,321    1,396,546
                                             ---------------------------------------------------

    Total costs and expenses                    926,212    1,062,444     1,847,831    2,212,043
                                             ---------------------------------------------------

Operating loss                                 (556,526)    (338,889)   (1,356,231)    (834,324)
                                             ---------------------------------------------------

Other income (expense):
  Interest income                                13,491        2,284        33,083        2,700
  Interest expense                             (139,361)     (42,049)     (203,878)     (91,352)
  Gain on sale of investment                  1,000,000            -     1,000,000            -
                                             ---------------------------------------------------

    Total other income (expense)                874,130      (39,765)      829,205      (88,652)

      Net Income (Loss)                      $  317,604   $ (378,654)  $  (527,026)  $ (922,976)
                                             ===========  ===========  ============  ===========

Basic and diluted net income (loss) per
common share                                 $     0.01   $    (0.01)  $     (0.02)  $    (0.04)
                                             ===========  ===========  ============  ===========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements


<PAGE>
<TABLE>
<CAPTION>
                                                  PETROSEARCH ENERGY CORPORATION
                                          CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                              FOR THE SIX MONTHS ENDED JUNE 30, 2006


                                              SERIES A          SERIES B       ADDITIONAL   UNISSUED                  TOTAL STOCK
                         COMMON STOCK      PREFERRED STOCK   PREFERRED STOCK    PAID-IN      COMMON     ACCUMULATED     HOLDERS
                       SHARES    AMOUNT   SHARES    AMOUNT   SHARES  AMOUNT     CAPITAL       STOCK       DEFICIT        EQUITY
                     ----------  -------  -------  --------  ------  -------  -----------  ----------  -------------  ------------
<S>                  <C>         <C>      <C>      <C>       <C>     <C>      <C>          <C>         <C>            <C>
Balance at
December 31,         28,497,761  $28,497  483,416  $483,416  43,000  $43,000  $18,089,828  $ 545,000   $ (5,000,954)  $14,188,787
2005

Common stock
issued for cash       1,928,576    1,929                                        2,538,696                               2,540,625

Common stock
issued for oil and      500,000      500                                          544,500   (545,000)                         -0-
gas properties

Common stock
issued - exercise       178,233      178                                          174,491                                 174,669
of warrants

Net loss                                                                                                   (527,026)     (527,026)
                     -------------------------------------------------------------------------------------------------------------

Balance at June
30, 2006             31,104,570  $31,104  483,416  $483,416  43,000  $43,000  $21,347,515  $    - 0-   $ (5,527,980)  $16,377,055
                     ==========  =======  =======  ========  ======  =======  ===========  ==========  =============  ============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements


<PAGE>
<TABLE>
<CAPTION>
                                     PETROSEARCH ENERGY CORPORATION
                                  CONSOLIDATED STATEMENT OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005


                                                                                 2006          2005
                                                                             ------------  ------------
<S>                                                                          <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS                                                                     $  (527,026)  $  (922,976)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:
  Depletion, depreciation and amortization expense                               178,934       523,447

CHANGES IN OPERATING ASSETS AND LIABILITIES:
  Accounts receivable                                                           (560,194)     (398,626)
  Prepaid expenses and other assets                                               85,790      (117,211)
  Accounts payable and accrued liabilities                                       817,413       (31,154)
                                                                             --------------------------

NET CASH USED IN OPERATING ACTIVITIES                                             (5,083)     (946,520)
                                                                             --------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures, including purchases and development of properties     (5,159,508)   (1,642,936)
  Prepayments for oil and gas properties, net                                     (5,851)            -
  Payments of accrued liabilities for oil and gas properties                    (500,000)            -
                                                                             --------------------------

NET CASH USED IN INVESTING ACTIVITIES                                         (5,665,359)   (1,642,936)
                                                                             --------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from the sale of common stock                                       2,540,625    10,656,336
  Proceeds from exercise of warrants                                             174,669             -
  Proceeds from notes payable                                                  1,800,000     1,250,000
  Repayment of notes payable                                                    (352,500)   (2,010,000)
                                                                             --------------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                      4,162,794     9,896,336
                                                                             --------------------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                          (1,507,648)    7,306,880

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                               4,052,844     1,100,568
                                                                             ------------  ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                   $ 2,545,196   $ 8,407,448
                                                                             ============  ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Interest paid                                                              $   232,817   $    59,736
                                                                             ============  ============

  Income taxes paid                                                          $         -   $         -
                                                                             ============  ============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements


<PAGE>
                         PETROSEARCH ENERGY CORPORATION
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1.   INTERIM  FINANCIAL  STATEMENTS
     --------------------------------

     The  accompanying unaudited interim 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,  2005.  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  34%  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.   INTERESTS  IN  OIL  AND  GAS  PROPERTIES
     ----------------------------------------

     BARNETT  SHALE  PROJECT,  5  COUNTIES,  TEXAS

     On February 6, 2006, the Company and Harding Company ("Harding") executed a
     certain  Program  Agreement  which  was thereafter substituted with a First
     Amended  and  Restated Program Agreement (the "Restated Program Agreement")
     which  provided  for the Company's participation in a Barnett Shale project
     covering  1.6  million  acres  in  five  counties  of  North Texas. Harding
     acquired  its  rights  in  the  project,  including  the  right to serve as
     operator, under a June 29, 2005 Lease Acquisition and Development Agreement
     between  Exxon  Mobil  Corporation  and Harding, and under a June 29, 2005.
     Memorandum  of  Understanding  Regarding Gas Evacuation from ExxonMobil and
     Harding  Barnett  Shale E & P Venture executed by Harding Company and Exxon
     Mobil  Corporation (collectively, the "ExxonMobil/Harding Agreements"). The
     ExxonMobil/Harding  Agreements  contain  a provision requiring ExxonMobil's
     consent  to  assignments  by  Harding  of  interests  in  the project and a
     provision  granting  to  ExxonMobil  a  preferential  purchase right should
     Harding  propose  to  enter  into  such  a  transaction.

     At the time of the execution of the Restated Program Agreement, Harding had
     not  obtained from ExxonMobil either the consent to transfer or a waiver of
     Exxon/Mobil's  preferential  purchase  right.  At the time of the Company's
     execution  of and initial funding under the Restated Program Agreement, the
     Company did not have a direct contractual relationship with ExxonMobil. The
     Company  believed  that  all conditions necessary to Harding's agreement to
     assign  and  convey  the  working interest in the project had been met. The
     Company  subsequently  learned  that  ExxonMobil  had  not  waived  the
     contingencies and that ExxonMobil desired to explore a possible alternative
     ownership  structure  beneficial  to  all  concerned  before  making  a
     determination  with  respect  to  its  preferential  right  to  purchase.


<PAGE>
     While  ExxonMobil's  decision was pending, ExxonMobil, Harding, the Company
     and  two  other  third  parties executed a non-binding "Heads of Agreement"
     document  setting  forth  general  parameters  of  an  integrated  venture
     contemplated  by  ExxonMobil, under which the leasehold and pipeline assets
     will be owned and developed by a single, newly-created entity. The Heads of
     Agreement  contemplates  that  the  parties  will  negotiate  and execute a
     definitive  agreement which sets forth the specific interests and rights of
     the  parties  in  the  operations,  the  leasehold assets and the gathering
     system  assets.

     On  June 8, 2006, prior to ExxonMobil's waiver of its preferential purchase
     rights,  ExxonMobil  and  Harding  Company  consummated  a  sale by Harding
     Company  to  ExxonMobil  of  10%  of the project assets for the cash sum of
     $15,000,000.  The  sale was made pursuant to an agreement that also amended
     certain  provisions  of  the  Harding/ExxonMobil  Agreements.

     ExxonMobil  waived its preferential right to purchase the interests covered
     by the Restated Program Agreement on June 30, 2006, and provided its formal
     consent  to  the  transfer  of  interest  to  Petrosearch on July 12, 2006.

     Subsequent  to  ExxonMobil's  waiver  of  its preferential purchase rights,
     Harding  delivered to the Company certain invoices for leasing and drilling
     activities in the project area, which the Company has subsequently disputed
     as  erroneous  and  unsupported  by  required  documentation, including the
     leasehold  assignments  to  which  the  Company  is  entitled.  The Company
     likewise  exercised  its  rights  under  the  Restated Program Agreement to
     participate  pro-rata in the June 8, 2006 sale of assets to ExxonMobil, and
     made  formal demand on Harding on July 21, 2006 for $7,407,000 or 49.38% of
     the  proceeds.  Harding  contested  the  Company's  right  to  exercise its
     "tagalong" rights as to the ExxonMobil sale transaction. As a result of the
     controversies  regarding  billing,  title  to  the leases and the Company's
     right  to  participate  in  the  sale of a portion of the project assets to
     ExxonMobil,  the  Company  filed  a  formal demand for arbitration with the
     American  Arbitration  Association  on  August  2, 2006. In addition to the
     Company's  efforts  to  recover  the sale proceeds, the Company expects the
     arbitration  proceedings  to  clarify  its  payment  obligations toward the
     leasing  and  drilling  activities  to  date.

     SOUTHWEST  GARWOOD  PROJECT,  COLORADO  COUNTY,  TEXAS
     ------------------------------------------------------

     On  December  30, 2005 the Company, joined by its subsidiaries, Petrosearch
     Operating  Company, LLC, Buena Vista Petrosearch, LLC, Pursuit Petrosearch,
     LLC,  Rocky  Mountain  Petrosearch, LLC and Great Buffalo Petrosearch, LLC,
     entered  into  an Agreement with Rock Energy Partners Operating, LP ("REP")
     and Rock Energy Partners, LP for the purpose of making certain compromises,
     amendments  and  stipulations regarding the joint venture activities of the
     parties  and  regarding the existing Right of First Refusal Agreement which
     was  effectively  terminated  by  the  Agreement in favor of a new Right of
     First  Refusal  Agreement.  With regard to the Garwood Prospect in Colorado
     County,  Texas,  the Company and REP stipulated that during 2006, REP would
     expend,  net to its interests, at least $8,000,000, as to operations on the
     Garwood  leases. The contractual funding commitment was intended to cover a
     new  well  on  the Kallina lease (to be commenced, by July 1, 2006) and the
     re-entry of the Kallina #2 Well that was plugged in June 1989. The new well
     was  timely  commenced on Section 46 as the Kallina 46 #1 Well. In June and
     July 2006, Petrosearch Operating Company, LLC invoiced to REP its aggregate
     expenditures,  totaling $5,606,700 through July 10, 2006. REP failed to pay
     either  invoice and was formally notified of its default by the Company and
     formally  notified  by  Petrosearch Operating Company, LLC of the Company's
     intent  to  file  a  statutory mechanic's lien to secure the payment of the
     debt.  Total costs of the well are expected to be approximately $7,500,000.
     The  company  is  in  discussions  with  REP  to resolve the default issue;
     however,  if  it  is  unable to do so, the Company will pursue all remedies
     legally  available  under  the  December  30,  2005 Agreement and the Joint
     Operating  Agreement  governing  the  project.


<PAGE>
4.   STOCK  WARRANTS
     ---------------

     In  the  past, the Company has periodically issued incentive stock warrants
     to  officers,  executives, directors, and consultants 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. The
     issuance  of such warrants has been 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.

     In  December 2004, the FASB issued SFAS 123(R), which is a revision of SFAS
     123.  SFAS 123(R) requires all share-based payments to employees, including
     grants  of  employee  stock  options,  to  be  recognized  as  stock-based
     compensation expense in the Company's Consolidated Statements of Operations
     based  on  their  fair  values.  Proforma  disclosure  is  no  longer  an
     alternative,  as  was  permitted  by  SFAS  123.  Until the adoption of the
     provisions of SFAS 123(R) on January 1, 2006, the Company elected to follow
     Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees"  (APB  25)  and  related  Interpretations  in accounting for its
     employee  stock  options  and  warrants  because the alternative fair value
     accounting  provided  for  under  FASB  Statement  No. 123, "Accounting for
     Stock-Based  Compensation",  required  use  of option valuation models that
     were  not  developed for use in valuing employee stock options or warrants.
     Under APB 25, if the exercise price of the Company's employee stock options
     is greater than or equal to the market price of the underlying stock on the
     date  of  grant,  no  compensation  expense  was  recognized.

     Currently,  the Company has no plans to issue stock warrants to any parties
     other  than  in  financing  arrangements  with third parties. Consequently,
     based  on  current  plans,  the adoption of SFAS 123(R)'s fair value method
     will  not  have  a  significant  impact  on the Company's future results of
     operations  or  financial  position.  The  adoption  of SFAS 123(R) has not
     resulted in any compensation charges in 2006 related to options outstanding
     at  December 31, 2005, because all employee stock options were vested as of
     December  31,  2005.  There was no compensation expense related to warrants
     during  the  three  month  periods  ended  June  30,  2006  and  2005.

     Although  it  is  no  longer  required, due to the adoption of SFAS 123(R),
     proforma  information  regarding  net  income  and  earnings  per share was
     required  by  Statement 123 and 148 (included for purposes of 2005 proforma
     comparison),  and  has  been determined as if the Company had accounted for
     its  employee  stock  warrants  under  the  fair  value  method  of  these
     Statements. For warrants granted to employees or directors during the three
     months  ended  June  30, 2006 and 2005, the fair value of such warrants was
     estimated  at  the date of grant using a Black-Scholes option-pricing model
     with  the  following  assumptions:

<TABLE>
<CAPTION>
                            JUNE 30,      JUNE 30,
                              2006          2005
                          ------------  -------------
<S>                       <C>           <C>
     Dividend yield          - 0 -          - 0 -

     Expected volatility      70%           180 %

     Risk free interest      3.00%      2.25% - 2.50%

     Expected lives       2 - 4 years    3 - 4 years
</TABLE>

     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 employee stock
     warrants  have characteristics significantly different from those of traded
     options,  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  employee  stock  warrants.

     For  purposes  of  proforma  disclosures,  the  estimated fair value of the
     warrants is included in expense over the vesting period or expected life of
     the  warrant.


<PAGE>
<TABLE>
<CAPTION>
                                                     SIX MONTHS ENDED    SIX MONTHS ENDED
                                                      JUNE 30, 2006       JUNE 30, 2005
                                                    ------------------  ------------------
<S>                                                 <C>                 <C>
     Net income (loss), as reported                 $        (527,026)  $        (922,976)

     Less stock-based compensation calculated in
     accordance with SFAS 123                                       -            (830,175)
                                                    ------------------  ------------------
     Proforma net loss                              $        (527,026)  $      (1,753,151)
                                                    ==================  ==================
     Basic and fully diluted net income (loss) per
     common share, as reported                      $           (0.02)  $           (0.04)
                                                    ==================  ==================
     Basic and fully diluted proforma net loss per
     common share                                   $           (0.02)  $           (0.08)
                                                    ==================  ==================
</TABLE>

     A summary of the Company's warrant activity and related information for the
     six  months  ended  June  30,  2006  follows:

<TABLE>
<CAPTION>
                                                         WEIGHTED
                               NUMBER OF                  AVERAGE
                             SHARES UNDER    EXERCISE    EXERCISE
                                WARRANT        PRICE       PRICE
                             -------------  -----------  ---------
<S>                          <C>            <C>          <C>
     Balance outstanding at
       December 31, 2005        8,495,058   $0.98-$9.75  $    3.57

       Issued                   1,060,714   $      2.00  $    2.00
       Exercised                 (178,233)  $      0.98  $    0.98
                             -------------

     Balance outstanding at
       June 30, 2006            9,377,539   $0.98-$9.75  $    3.44
                             =============
</TABLE>

     A  summary  of  outstanding  stock warrants at June 30, 2006 is as follows:

<TABLE>
<CAPTION>
                                                               WEIGHTED
       NUMBER OF                     REMAINING                  AVERAGE
     COMMON STOCK                    CONTRACTED    EXERCISE    EXERCISE
      EQUIVALENTS  EXPIRATION DATE  LIFE (YEARS)     PRICE       PRICE
     ------------  ---------------  ------------  -----------  ---------
<S>                <C>              <C>           <C>          <C>
          452,542      August 2006           .17  $      0.98  $    0.98
          615,385   September 2006           .19  $      1.63  $    1.63
        1,076,922    November 2006           .42  $      9.75  $    9.75
          211,541    February 2007          1.67  $      9.75  $    9.75
           30,770       March 2007           .75  $      9.75  $    9.75
          300,004       April 2007           .84  $      9.75  $    9.75
          161,538         May 2007           .92  $6.50-$9.75  $    7.27
           76,923        July 2007          1.00  $5.20-$6.50  $    6.24
          269,231   September 2007          1.17  $4.88-$5.20  $    5.15
          100,000    November 2007          1.42  $      2.00  $    2.00
          150,000       March 2008          1.75  $      1.95  $    1.95
           20,000      August 2008          2.12  $      1.95  $    1.95
        4,851,969    November 2008          2.42  $      1.95  $    1.93
        1,060,714    February 2009          2.66  $      2.00  $    2.00
     ------------

       9,377,539
     ============
</TABLE>


<PAGE>
5.   RELATED  PARTY  TRANSACTIONS
     ----------------------------

     During  the  three  months  ended June 30, 2006 there were no related party
     transactions.

6.   NON-CASH  INVESTING  AND  FINANCING  ACTIVITIES
     -----------------------------------------------

     During  the six months ended June 30, 2006 and 2005, the Company engaged in
     non-cash  financing  and  investing  activities  as  follows:

<TABLE>
<CAPTION>
                                                                      2006      2005
                                                                    --------  --------
<S>                                                                 <C>       <C>
     Increase in liabilities for property costs                     $768,172  $414,968
                                                                    ========  ========

     Issuance of common stock committed for oil and gas properties  $545,000  $      -
                                                                    ========  ========
</TABLE>

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
     and  six  months  ended  June  30,  2006  and  2005:

<TABLE>
<CAPTION>
                                  Three Months Ended           Six Months Ended
                                       June 30,                    June 30,
                                  2006          2005          2006          2005
                              ------------------------------------------------------
<S>                           <C>           <C>           <C>           <C>
Basic EPS:
Net income (loss)             $   317,604   $  (378,654)  $  (527,026)  $  (922,976)
Less: Preferred stock
dividends                          (9,668)       (9,668)      (19,336)      (19,336)
                              ------------------------------------------------------
Net income (loss) available
to common stockholders        $   307,936   $  (388,322)  $  (546,362)  $  (942,312)
                              ======================================================

Weighted average shares
of common stock                31,093,846    26,914,086    30,234,355    22,675,116
                              ======================================================

Basic net income (loss)
per share                     $      0.01   $     (0.01)  $     (0.02)  $     (0.04)
                              ======================================================

Diluted EPS:
Income (loss) available to
common stockholders           $   307,936   $  (388,322)  $  (546,362)  $  (942,312)
Plus assumed conversions            9,668         9,668        19,336        19,336
                              ------------------------------------------------------
Net income (loss) used for
diluted EPS                   $   317,604   $  (378,654)  $  (527,026)  $  (922,976)
                              ======================================================

Weighted average shares
of common stock                31,093,846    26,914,086    30,234,355    22,675,116
Plus effect of dilutive
securities:
Warrants                           84,546             -             -             -
Convertible preferred stock        94,465             -             -             -
                              ------------------------------------------------------
Weighted average shares
used for Diluted EPS           31,272,857    26,914,086    30,234,355    22,675,116
                              ======================================================

Diluted net income (loss)
per share                     $      0.01   $     (0.01)  $     (0.02)  $     (0.04)
                              ======================================================
</TABLE>


<PAGE>
     For the six month period ended June 30, 2006, potential dilutive securities
     had  an  anti-dilutive  effect  and were not included in the calculation of
     diluted  net  loss per common share. These securities included in-the-money
     warrants  for  the  purchase  of  126,421 common shares and preferred stock
     convertible  into  94,465 common shares. For the three and six months ended
     June  30,  2005,  these  securities  included in-the-money warrants for the
     purchase  of  876,923  common  shares  and preferred stock convertible into
     94,465  common  shares.

8.   OTHER  INCOME
     -------------

     On May 5, 2006 the Company sold its 1,500,000 shares of Texcomm Stock for a
     total  of  $1,000,000.  The  Company  acquired  the shares in November 2003
     pursuant  to  a  merger  and  a  sale  of  a  subsidiary.

9.   SUBSEQUENT  EVENTS
     ------------------

     Please  see  Footnote  number  3.  INTERESTS  IN OIL AND GAS PROPERTIES for
                                        ------------------------------------
     subsequent  events  related to the Barnett Shale Project, 5 Counties, Texas
     and  the  Southwest  Garwood  Project,  Colorado  County,  Texas.


<PAGE>
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

                           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

We  continue  to  implement  our  business  plan  which  is to find high quality
prospects  and  projects  and  provide  the  capital,  along with the technical,
operational  and  administrative  support  and  management  oversight, needed to
develop  the  projects.  We  have  increased  our SEC PV-10 proved reserves from
$13.7  million as of December 31, 2004 to $46.5 million as of December 31, 2005.
We  have  also  successfully  improved  the  quality  of  our portfolio and have
acquired  assets  that  have  multiple  year  growth  potential that allow us to
efficiently  control  the  amount  and  timing  of  our  capital  expenditures

In  late  2005  and  early  2006, we entered into two agreements for significant
resource projects that we believe will have a major impact on our future growth.
The  first project includes the purchase on November 15, 2005, of a 100% working
interest in a waterflood project consisting of 1,755 acres in the Quinduno Field
located  in  Roberts  County,  Texas.  The  second  project is the Barnett Shale
project,  a joint venture with ExxonMobil, Harding Company a two other partners.

In  2006,  our  goal  has  been  to focus on the development of our high quality
properties  which  we  believe will have a significant impact on our production,
revenues  and  cash  flows.  However,  in  early 2006 we encountered a temporary
delay in one of our large resource plays, the Barnett Shale Project.  This delay
not  only caused a slowdown in the development of the Barnett Shale Project, but
due  to  uncertainties  at  the  time, delayed our financing programs which also
impacted  our  ability to develop the other projects in


<PAGE>
our  inventory. However, by receiving the waiver of preferential purchase right,
and  the  consent  to  purchase  an  interest in the project from ExxonMobil (as
discussed  below)  the  uncertainty  around our participation in the project has
been  eliminated.  We believe the quality of this project and our other projects
will  allow  us to raise the necessary capital to move forward with our business
plan.

LIQUIDITY  AND  CAPITAL  RESOURCES

Our  working capital at June 30, 2006, is $700,938.  The decrease in our working
capital  from  $3,704,265  at  December 31, 2005 to $700,938 at June 30, 2006 is
primarily  the  result  of  $5.9 million of capital expenditures for oil and gas
properties during the six months ended June 30, 2006, which led to a decrease in
our  cash  balance  and an increase in our accounts payable as of June 30, 2006.
The  decrease  in  cash  due  to payments for capital expenditures was partially
offset  by  proceeds  from  sale of common stock and exercise of warrants in the
total  amount  of  $2.7  million.

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 corporate bonds 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 attract high
quality  projects.

FINANCING  OPPORTUNITIES

We  are  currently  in  discussions  with  several investment groups which could
result in additional sources of capital which will enable us to develop the high
quality  projects  in  our  inventory.

PRIVATE  PLACEMENTS

In  February  2006,  we completed sales of $2.7 million of our common stock in a
private offering.  We received net proceeds of approximately $2.54 million which
are  to  be  used  for  general  corporate  purposes,  including the drilling of
projects  in  our  prospect  inventory.

REVOLVING  CREDIT  AGREEMENT

On  September  29,  2005,  the  Company  entered  into  an  amended and restated
revolving credit agreement to borrow up to $10,000,000 over a two-year period to
October  1,  2007,  from  a private, non-public entity. As of June 30, 2006, the
balance  outstanding  under  the  line  of  credit  agreement  was  $4,910,601,
$1,794,631  of  which  is  due  in  the  next  twelve  months.

PROJECT  FINANCING  AND  RIGHT  OF  FIRST  REFUSAL

On  January  11,  2006,  we  entered into an Agreement with Rock Energy Partners
("Rock")  covering  the  geographic  areas  of  current  operations in Jefferson
County,  Mississippi  and Colorado County, Texas affecting the Company and Rock,
including  agreements  and  stipulations  regarding  future  operations in those
geographic  areas,  the  terms  under  which  future exploration and development
participation  opportunities shall be offered by the Company to Rock, and agreed
procedures  for  conducting  internal audits and accounting reconciliations.  As
part of the transaction with Rock, the parties have executed an Amended Right of
First  Refusal  Agreement (the "Amended ROFR") which replaces the previous Right
of  First  Refusal  Agreement  between the Company and Rock which was entered in
March  2004  (the  "ROFR").

The  Amended  ROFR  does  not cover every Company project.  It covers only those
projects  in  which  the Company intends to participate for ten percent (10%) or
more  and  only  those  projects  which  the  Company  elects  to offer to Rock.
However, the Company is obligated to offer enough projects to Rock in order that
Rock  can  meet  its  minimum  funding  commitment equal to $3,000,000 per year,
without  the  right  to  carry  over  to  any  subsequent  year  as  credit  its
expenditures  above  the minimum required commitment for that year.  The Amended
ROFR  also  limits  Rock's  percentage  participation  to  the  range


<PAGE>
between  ten percent (10%) minimum participation and forty percent (40%) maximum
participation.   The  initial  term  of  the  Amended  ROFR  is  one year, until
December  31, 2006, but shall be automatically extended from year-to-year if one
of  the  following  events  occurs: 1) Rock meets its minimum $3,000,000 funding
requirements  in  a  year;  2)  the  Company  fails  to offer to Rock sufficient
prospects  such  that mathematically, acceptance of one half of them by Rock and
participation  to  the  extent  of 25% of the Company's available interest would
theoretically permitted Rock to achieve its minimum capital expenditures for the
year,  and 3) more than one half of the prospects offered by the Company to Rock
in  a  year  are offered during October, November and December of that year.  In
addition  to  these  Amended ROFR requirements, Rock is also obligated to expend
during  calendar  year  2006,  a  minimum  of $8,000,000, which the parties have
determined  will  be utilized for the drilling of the Kallina #46-1 well and the
proposed  recompletion  of  the  Kallina  #2  well to test the deep Wilcox zone.

Please  see  CURRENT  PROJECTS  AND  CAPITAL  REQUIREMENTS, SW GARWOOD, COLORADO
COUNTY,  TEXAS  herein for an update on the Kallina #46-1 well recently drilled.

DRILLING  PARTNERSHIPS

We  continue  to  strive to develop relationships with institutional or high net
worth  individuals  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

BARNETT  SHALE  PROJECT  - In February 2006, we entered into a First Amended and
Restated  Program Agreement (the "First Amended and Restated Program Agreement")
with  Harding  Company (Dallas, Texas) which provides for our participation with
Harding Company and other oil and gas companies in the development of an Area of
Mutual Interest representing a total of 1.6 million acres of Barnett Shale lands
located  in  five  North Texas Counties. As of this filing, two horizontal wells
have  been  drilled  in  Tarrant County and one in Ellis County; these wells are
waiting  completion  pending hookup to a gas gathering system. A fourth well was
spudded  July  17  in Tarrant County and is currently being drilled. The venture
continues  to  lease  acreage and is completing initial gathering facilities.

On  June  8,  2006,  prior  to  ExxonMobil's waiver of its preferential purchase
rights  (as  previously disclosed), ExxonMobil and Harding Company consummated a
sale  by Harding Company to ExxonMobil of 10% of the project assets for the cash
sum of $15,000,000. The sale was made pursuant to an agreement that also amended
certain  provisions  of  the  Harding/ExxonMobil  Agreements.

ExxonMobil  waived  its  preferential right to purchase the interests covered by
the Restated Program Agreement on June 30, 2006, and provided its formal consent
to  the  transfer  of  interest  to  Petrosearch  on  July  12,  2006.

Subsequent  to  ExxonMobil's waiver of its preferential purchase rights, Harding
delivered to the Company certain invoices for leasing and drilling activities in
the  project  area, which the Company has subsequently disputed as erroneous and
unsupported  by  required  documentation, including the leasehold assignments to
which  the  Company is entitled. The Company likewise exercised its rights under
the  Restated Program Agreement to participate pro-rata in the June 8, 2006 sale
of  assets to ExxonMobil, and made formal demand on Harding on July 21, 2006 for
$7,407,000  or  49.38% of the proceeds. Harding contested the Company's right to
exercise  its  "tagalong"  rights  as  to  the ExxonMobil sale transaction. As a
result  of  the  controversies  regarding  billing,  title to the leases and the
Company's right to participate in the sale of a portion of the project assets to
ExxonMobil,  the Company filed a formal demand for arbitration with the American
Arbitration  Association on August 2, 2006. In addition to the Company's efforts
to recover the sale proceeds, the Company expects the arbitration proceedings to
clarify  its  payment  obligations toward the leasing and drilling activities to
date.  This  project  is  subject  to  the pending resolution of all matters (as
discussed  herein)  relating to the First Amended and Restated Program Agreement
between  us  and  Harding  as  well  as the restructuring of the project into an
integrated  venture  under which the leasehold and pipeline assets will be owned
and  developed  by  a  single  newly-created  entity.

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. Our working interest reduces to 90% at payout, including
the  cost of acquisition. Proved reserves are estimated by Ryder Scott to be 2.0
MMbo  and  1.1 Bcf of gas with an SEC  PV-10 value of $33.7 million (at December
31,  2005).  The  purchase  price (in November 2005) equated to $3.37 per proved
barrel  of  oil  equivalent  (boe)  based on a conversion factor of 6 Mcf/bo. As
operator,  we  intend  to  extract the reserves through conventional water flood
technology.  The  first  phase  of  the  project  began  in  March 2006 with the
drilling  of  a  new  well,  the Maddox #42, for production, to a depth of 4,495
feet.  The  well was completed April 13, 2006 in a small, previously unseen zone
below  the  water  flood  target;  initial  production  was  encouraging  but
subsequently  declined to a less than commercial rate. We plan to recomplete the
well in the water flood zone at a depth of 4100 feet. We have an ongoing program
to  enter  each  of  the  20  wells  that have not been plugged. So far, we have
entered  7 of these older wells to determine their mechanical status and produce
whatever oil or gas we can while working on the water flood design. Two of these
wells  have  been  equipped  and are now producing. We are presently preparing a
detailed  study  and  development  plan  for  the  field.

SW  GARWOOD,  COLORADO  COUNTY,  TEXAS  -  ON June 9, 2006 the Company signed an
agreement  with  all other working and overriding royalty interest owners in the
Project  to  resolve  certain  discrepancies  and  issues  that existed from the
original  agreement signed in 2004.  All reversionary working interests will now
occur  at  the  time each individual well pays out instead of at project payout.
Of  the  2,402  acres in the prospect, the Company now has: 20% heads-up working
interest  in  approximately  240  acres;  16.00%


<PAGE>
working  interest after payout on a well by well basis in 1,718 acres; and 21.5%
working interest after payout on a well by well basis in 444 acres.  Pursuant to
the  agreement  discussed  above, we do not have any capital requirements in the
first  3  wells  drilled,  nor any of the other wells, with the exception of any
wells  drilled  on  the 240 acres where we hold a 20% heads up working interest.

The initial well on this prospect, the Pintail #1, completed in the Upper Wilcox
in  December  2004,  paid  out  in  April  of this year.  As of payout, we began
participating  in  the production from the well with a 16% working interest. The
well  is currently producing approximately 385 Mcfd and 7 bopd; We have recently
installed  a  gas  compressor to increase production to an anticipated 600 Mcfd.

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. Completion
problems  resulting  from  the  fracture  treatment  resulted  in  the  well
under-performing  (at about 210 Mcfd) compared to expectations from the zone. We
have completed a fracture stimulation in an uphole zone at 15,100 feet. The well
is flowing back frac fluids with a 2000 mcfpd gas rate into the sales line as of
August  3,  2006.  We  have a 16% working interest in the well after payout. The
well  has  2  additional  potentially productive zones in the Lower Wilcox and 3
additional  potentially  productive  zones  in  the  Upper  Wilcox.

The Kallina 46 # 1, the third well on the prospect, was spudded on June 17, 2006
and  reached  a  total  depth  of  16,230  feet  on August 6. There are multiple
potentially productive Wilcox sands from 10,400 feet to 16,100 feet. The well is
expected to exploit the same sands as are being produced by the Pintail Flats #1
and those targeted in two recent wells drilled by Petrohawk Energy Corp. and one
well  drilled  recently  by Cabot Oil & Gas Corp. immediately to the west of the
Kallina  46  #1  location.  We  have a 16% back-in interest after payout in this
well.  In June and July, 2006, our subsidiary Petrosearch Operating Company, LLC
invoiced  to  its  drilling  Partner, Rock Energy Operating Partners, LP ("REP")
aggregate  expenditures totaling $5,606,700 through July 10, 2006. REP failed to
pay  the  amount  due  and  was  formally  notified of its default by us and was
formally  notified by Petrosearch Operating Company, LLC of our intent to file a
statutory  mechanic's lien to secure the payment of the debt. Total costs of the
well will be approximately $7,500,000. We are in discussions with REP to resolve
the  default  issue;  however,  if  we  are  unable  to do so we will pursue all
remedies  legally  available under the December 30, 2005 Agreement and the Joint
Operating  Agreement  governing  the  project.

Our  net  proved  reserves for this project as of December 31, 2005 estimated by
Ryder  Scott  Company  are  1.2  Mbo  and  642  MMcf  of  natural  gas

BUENA  VISTA,  JEFFERSON  COUNTY,  MISSISSIPPI  -  The  Phillips-Burkley # 1, an
exploratory  gas well on a leasehold position of 7,481 acres, has been funded by
our drilling partner. We are the operator and have a 50% working interest in the
well  and  the  acreage.

We  fracture  stimulated  and  tested  approximately  80  feet  of  potentially
productive sands at the base of the Hosston zone without establishing commercial
production  in  the  well  during 2005.  The presence of gas was established but
production  rates  were  non-commercial.  These sands have been abandoned and in
May  of  2006,  new  perforations  were  made  in a single 19 foot thick sand at
approximately  15,312  feet.  During  initial  unloading  of the well bore after
perforating,  the well flared natural gas at non-commercial rates. Data is being
evaluated  to  determine  if  fracture  stimulation  is  warranted.

AIRPORT  PROSPECT,  WOODWARD  COUNTY,  OKLAHOMA  -  We  farmed out this 640-acre
prospect in November 2005 and retained a 10% working interest. The initial well,
the  Corbett  N  13  #1 was spudded on March 7, 2006, and reached total depth of
8,323  feet  in  the Morrow Sands on March 27, 2006. Three sands were perforated
and  tested  gas.  This  well  was  completed in June 2006 at an initial rate of
approximately  500  Mcfd,  and  the  operator is currently testing the gas sales
line.  We  believe our remaining 4 prospects in the basin continue to have merit
and  should  be  exploited  during the primary term of their leases.  On June 9,
2006  we  entered  into  an agreement that increased our net revenue interest in
4,647  gross  acres  on  these  4  prospects  by 5.25%.  We also entered into an
agreement  with  a  third party to farm out these leases, plus an additional 480
gross  acres in a sixth prospect, so as to accelerate the exploitation of all of
the  remaining  leases.  We  believe  these prospects could support as many as 8
additional  locations.


<PAGE>
GRUMAN PROSPECT, STARK COUNTY, NORTH DAKOTA - In September 2005, we purchased an
additional  21.25%  working  interesting  this project  giving us an 85% working
interest  in  this Lodgepole Reef oil well. On March 28, 2006, we spudded a well
(the  Gruman  18-3)  intended  to be either an increased density well or a water
injection  well up dip of the Gruman 18-1. The well reached total depth of 9.890
feet  on  April  14,  2006, and has been completed as an injection well. 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.  Injection  volumes and pressures will be supplemented
with  an  electric submersible or beam pump. Initial response at the Gruman 18-1
is  expected  within  60  to  90  days  of the start of water injection with oil
production  increasing from the current rate of approximately 70 bopd equivalent
to  a  target  rate of 200+ bopd equivalent.  We are in the process of obtaining
the  required  regulatory  permits  to  commence  the  water  injection.

Proved  developed  reserves  in  the  prospect  to  our  share of the well as of
December  31,  2005,  were 309 Mbo and 82 MMcf of natural gas, as estimated by a
third  party  engineering  firm,  McCartney  Engineering,  LLC.

RODNEY  ISLAND,  TENSAS  PARISH,  LOUISIANA  -  In  October  2005,  we took over
operations  of  the  Harper  Z-1  well  on  the  Rodney Island prospect from the
previous operator after casing was set and cemented. As the current operator and
with the agreement of the other working interest owners, we initiated litigation
in February 2006 against the previous operator for non-payment of their share of
drilling and completion costs. Settlement discussions to resolve the dispute are
in  progress.

Downhole  mechanical  difficulties  hindered  our  attempt to complete the well,
which  was  directionally  drilled  to a measured depth of 11,701 feet (vertical
depth  =  9,373  feet)  and  logged  approximately  19  feet  of oil sand in the
Tuscaloosa  Massive  Sand.  We  are  now  finalizing  our  well  program and rig
selection  for  sidetracking  the well to improve wellbore conditions. Timing of
the  project  completion  is  indeterminate  due  to  the  ongoing  litigation.

Re-mapping  based  on  the additional data from the Harper Z-1 well indicates as
many  as  2 additional proved locations and 3 other identified locations.  Ryder
Scott  estimates  proved reserves net to our share as of December 31, 2005 to be
49.4 Mbo and 26 MMcf. We have a 25% working interest before payout in the Harper
Z-1  well  and  18.75% working interest after payout.  We have an 18.75% working
interest  in  all  additional  wells.

BURLESON  COUNTY,  TEXAS,  PROJECTS  - This is  a multi-well natural gas project
that  includes  a  total  of 15 development and step-out locations in the Austin
Chalk and Georgetown formations at approximately 10,000 feet vertical depth on a
targeted  leasehold position of approximately 11,000 acres, with 7,361 net acres
having  been  leased. Horizontal wells are planned with total measured length of
approximately  13,000  feet.  The  initial  well is planned to be spudded in the
third  quarter of 2006 with a second well planned in the fourth quarter of 2006.
We  have  a  37.5%  non-operated  working  interest  in  the  project.

MISSISSIPPI  TUSCALOOSA  PROJECTS  --  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.  Eight
locations  are  planned  to be drilled in 2007, ranging from 6,150 feet to 7,500
feet  in  depth.  Approximately  55%  of  the  required acreage has been leased.
Seismic  data  on  the prospects has been reprocessed and confirmed our original
geological  analysis. We own 100% of the prospects and will operate the project.

TAIT  PROJECTS  -  COLORADO COUNTY, TEXAS - The initial well on this natural gas
prospect,  the  Sealy  #1, was spudded April 25, 2006 and reached total depth in
the  Upper  Wilcox in May 2006. We determined all potential hydrocarbon zones in
the wellbore to be non-commercial and did not consent to a completion attempt by
the  operator  in the shallower Frio sands. However, data from this wellbore did
provide  support  for the geological interpretation of the shallower Yegua sands
between  2500  feet  and  3100 feet in which we have 2 identified locations. The
first  of  these  is  scheduled  to  be  drilled  at the end of this year or the
beginning  of  2007,  pending equipment availability. We have a 10% non-operated
working  interest  in  leases  totaling  1,250  acres  in  this  project.


<PAGE>
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.

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 JUNE 30, 2006 COMPARED TO THE THREE MONTHS ENDED JUNE
30,  2005

REVENUES

Consolidated  oil and gas production revenue for the quarter ended June 30, 2006
was  $369,686 versus $723,555 for the quarter ended June 30, 2005. This decrease
is  primarily  the  result of sale of our Blue Ridge Field property in Fort Bend
County,  Texas,  effective July 1, 2005, which accounted for $297,870 of revenue
during  the  second  quarter of 2005, and lower production from our North Dakota
well  in  the  second quarter of 2006 as compared to 2005.  In order to increase
our  future revenues, in April, 2006, we drilled a 9,900 foot well into the base
of  the  productive  reef  in  our  North  Dakota  Prospect  for  the purpose of
re-pressuring  the  reservoir and increasing the production of the well.  We are
in  the  process of obtaining the necessary permits to begin the water injection
process  which  will begin in the third quarter of 2006.  Further testing and/or
stimulation  will be performed as deemed necessary to achieve the desired future
injection  rates.

The  decrease  in revenue during the second quarter of 2006 was partially offset
by  revenue  from  the  following  sources:  1) the first well in the SW Garwood
project  reached  payout  in  the  second  quarter  of 2006 providing $14,405 of
revenue,  and  2)  completion of a well in the North Texas/Panhandle water flood
project  which resulted in $40,248 of revenue during the second quarter of 2006.
Production in the North Texas/Panhandle has since declined to levels less than a
commercial  rate, and we plan to recomplete the well to a depth of approximately
4,100  feet.

LEASE  OPERATING  AND  PRODUCTION  TAX  EXPENSE

Lease  operating and production tax expense for the quarters ended June 30, 2006
and 2005 were $256,192 and $152,490, 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.  Although  there  was  a  significant  decrease  in
production  from 2005 to 2006, the lease operating expenses increased because in
November  2005  we  added  approximately  30  existing wells associated with our
Quinduno  Field  Prospect,  Roberts  County,  Texas that require lease operating
costs  to  be  incurred  even  though  the wells have minimal production.  These
existing,  but  non-productive  wells are vital to the success of the waterflood
project  that  will  be  needed  to  realize the reserves in the Quinduno Field.

DEPLETION,  DEPRECIATION  AND  AMORTIZATION

Costs  for  depletion, depreciation and amortization for the quarters ended June
30,  2006,  and  2005, were $97,247 and $151,488 respectively.  This decrease is
attributable  to  both  lower  production in the second quarter of 2006 compared
with  the second quarter of 2005 and the significant increase in proved reserves
in  the  second  quarter  of  2006  compared  with  the  second quarter of 2005.
Production in the second quarter of 2005 was 14,814 boe as compared to 5,762 boe
in  the  second quarter of 2006.  The proved reserves increased to approximately
2.6  million  boe as of June 30, 2006 as opposed to approximately 580,000 boe as
of  June  30,  2005.  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  2006 was significantly lower than the depletion for the same period
in  2005.


<PAGE>
GENERAL  AND  ADMINISTRATIVE  EXPENSES

General  and  administrative  expenses  for the quarters ended June 30, 2006 and
2005,  were $572,773 and $758,466, respectively.  This variance can primarily be
attributed  to  a  decline  in  the number of  employees which resulted in lower
payroll  expense in the second quarter of 2006 as compared to the second quarter
of  2005.  The decrease can also be contributed to a decrease in management fees
and  fees  paid  to  third  party  technical  consultants.

NET  LOSS/INCOME  FROM  OPERATIONS

We  generated  a net operating loss of $(556,526) for the quarter ended June 30,
2006,  compared  to  net operating loss of $(338,889) for the quarter ended June
30,  2005.  The  $(217,637)  variance is primarily due to the fact that revenues
decreased  a  total of $353,869 from the same period in 2005 to 2006 offset by a
decrease in total costs and expenses of $136,232 from 2005 to the same period in
2006.

OTHER  INCOME  (EXPENSE)

The increase in interest expense from $42,049 in the quarter ended June 30, 2005
compared  to  $139,361  in  the quarter ended June 30, 2006 is attributable to a
higher  debt  lever  in  2006  and  an  increase  in  the interest rate when the
financing  arrangement  was  amended  in  the  fourth  quarter  of  2005.

The  $1,000,000  of income during the quarter ended June 30, 2006, is the result
of  the  sale  of  common  stock  held  in  a  publicly  traded  company.

FOR THE SIX MONTHS ENDED JUNE 30, 2006 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2005

REVENUES

Consolidated  oil  and  gas production revenue for the six months ended June 30,
2006  was  $491,600  versus  $1,377,719  for the six months ended June 30, 2005.
This  decrease  is primarily the result of sale of our Blue Ridge Field property
in Fort Bend County, Texas, effective July 1, 2005, which accounted for $552,998
of revenue during the six months ended 2005, and lower production from our North
Dakota well in the six months ended June 30, 2006 as compared to the same period
in  2005.  Our  North  Dakota  well  was  not producing from October, 2005 until
March,  2006  as  a  result of the pump being down. In April, 2006, we drilled a
9,900  foot  well  into  the  base  of  the  productive reef of our North Dakota
prospect  for  the  purpose  of  re-pressuring  the reservoir and increasing the
production  of  the  well.  We  are  in  the  process of obtaining the necessary
permits  to  begin  the  water  injection  process which will begin in the third
quarter  of  2006.  Further  testing  or stimulation will be performed as deemed
necessary  to  achieve  the  desired  future  injection  rates.

The decrease in revenue during the six months ended June 30, 2006, was partially
offset  by  revenue  from  the  following  sources:  1) the first well in the SW
Garwood  project  reached payout in the second quarter of 2006 providing $14,405
of revenue, and 2) completion of a well in the North Texas/Panhandle water flood
project  resulted  in  $41,013  of  revenue during the six months ended June, 30
2006.  Production in the North Texas/Panhandle has since declined to levels less
than  a  commercial  rate,  and  we  plan  to  recomplete the well to a depth of
approximately  4,100  feet.

LEASE  OPERATING  AND  PRODUCTION  TAX  EXPENSE

Lease  operating  and  production  tax expense for the six months ended June 30,
2006 and 2005 were $417,882 and $329,550 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.  Although there was a significant decrease in
production  from 2005 to 2006, the lease operating expenses increased because in
November  2005  we  added  approximately  30  existing wells associated with our
Quinduno  Field  Prospect,  Roberts  County,  Texas that require lease operating
costs  to  be  incurred  even  though  the wells have minimal production.  These
existing,  but  non-productive  wells are vital to the success of the waterflood
project  that  will  be  needed  to  realize the reserves in the Quinduno Field.


<PAGE>
DEPLETION,  DEPRECIATION  AND  AMORTIZATION

Costs for depletion, depreciation and amortization for the six months ended June
30,  2006,  and 2005, were $134,628 and $485,947 respectively.  This decrease is
attributable  to lower production in 2006 and the significant increase in proved
reserves  in 2006 compared with the first six months of 2005.  Production in the
first  six  months  of 2005 was 29,001 boe as compared to 7,306 boe in the first
six  months of 2006.  The proved reserves increased to approximately 2.6 million
boe as of June 30, 2006 as opposed to approximately 580,000 as of June 30, 2005.
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 six months of 2006 was
significantly  lower  than  the  depletion  for  the  same  period  in  2005.

GENERAL  AND  ADMINISTRATIVE  EXPENSES

General  and  administrative expenses for the six months ended June 30, 2006 and
2005,  were $1,295,321 and $1,396,546 respectively.  This variance can primarily
be  attributed  to  a decline in the number of employees which resulted in lower
payroll  expense  in  the six months ended June 30, 2006 as compared to the same
period  in  2005.  The  decrease  can  also  be  contributed  to  a  decrease in
management  fees  and  fees  paid  to  third  party  technical  consultants.

NET  LOSS/INCOME  FROM  OPERATIONS

We  generated a net operating loss of $(1,356,231) for the six months ended June
30,  2006, compared to net operating loss of $(834,324) for the six months ended
June 30, 2005.  The $(521,907) variance relates mainly to the fact that revenues
decreased  a  total of $886,119 from the same period in 2005 to 2006 offset by a
decrease in total costs and expenses of $364,212 from 2005 to the same period in
2006.

OTHER  INCOME  (EXPENSE)

The  increase  in interest expense from $91,352 in the six months ended June 30,
2005  compared to $203,878 in the six months ended June 30, 2006 is attributable
to  a  higher  debt  lever in 2006 and an increase in the interest rate when the
financing  arrangement  was  amended  in  the  fourth  quarter  of  2005.

The  $1,000,000  of  income  during  the  six months ended June 30, 2006, is the
result  of  the sale of common stock held in a company that had a basis of zero.

OFF-BALANCE  SHEET  ARRANGEMENTS

We  had  no  off-balance sheet arrangements during the fiscal quarter ended June
30,  2006.

ITEM  3.     CONTROLS  AND  PROCEDURES

     Richard  D.  Dole,  our  Chief Executive Officer, and David J. Collins, our
     Chief  Financial  Officer,  have concluded that our disclosure controls and
     procedures  are  appropriate  and  effective.  They  have  evaluated  these
     controls and procedures as of December 31, 2005. There have been no changes
     in  our  internal  control  over financial reporting during the last fiscal
     quarter that has materially affected, or is reasonably likely to materially
     affect  our  internal  control  over  financial  reporting.


PART  II--OTHER  INFORMATION

ITEM  2.     UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF  PROCEEDS

     During  the  quarter  ended  June  30,  2006,  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.  Each  person  was
     knowledgeable  about  our  operations  and  financial  condition.

     During  the  quarter ended June 30, 2006, we issued 36,270 shares of common
     stock  to  warrant  holders  for  the  exercise  of their previously issued
     warrants  at  $.98  per  share

     During the quarter ended March 31, 2006, we issued 141,963 shares of common
     stock  to  warrant  holders  for  the  exercise  of their previously issued
     warrants  at  $.98  per  share

     During the quarter ended March 31, 2006, we issued 500,000 shares of common
     stock  that  was committed at December 31, 2005 for the purchase of oil and
     gas  properties


ITEM 6.     EXHIBITS

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EXHIBIT NUMBER                  DESCRIPTION OF EXHIBIT
--------------  -------------------------------------------------------
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     31.1       Rule 13a-14(a) Certification of Chief Executive Officer

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     31.2       Rule 13a-14(a) Certification of Chief Financial Officer

-----------------------------------------------------------------------
     32.1       Section 1350 Certification of Chief Executive Officer

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     32.2       Section 1350 Certification of Chief Financial Officer

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<PAGE>
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:   AUGUST 14, 2006



By:  /s/ Richard Dole
     -----------------------------------------
     RICHARD DOLE
     CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN