<PAGE>

                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

(Mark One)

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

                 For the quarterly period ended March 31, 2002

OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
     For the transition period from ____________ to ____________
Commission file number 0-20760

                           GREKA Energy Corporation
            (Exact name of registrant as specified in its charter)

           COLORADO                                               84-1091986
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                               Identification No)

                         630 Fifth Avenue, Suite 1501
                           New York, New York 10111
                                (212) 218-4680
         (Address, including zip code, and telephone number, including
            area code, of registrant's principal executive offices)
        (Former name, former address and former fiscal year, if changed
                              since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes  No

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. X Yes  No

                     APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

As of May 22, 2002, GREKA had 4,698,872 shares of Common Stock, no par value per
share, outstanding.
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C>
PART I - FINANCIAL INFORMATION..............................................   3
Item 1.  Financial Statements...............................................   3
   Condensed Consolidated Balance Sheets as of March 31, 2002
     (Unaudited) and December 31, 2002......................................   3
   Condensed Consolidated Statements of Operations for the
      Three Month Periods Ended March 31, 2002 and 2001 (Unaudited).........   4
   Condensed Consolidated Statements of Cash Flows for the
      Three Month Periods Ended March 31, 2002 and 2001 (Unaudited).........   5
   Notes to Condensed Consolidated Financial Statements (Unaudited).........   6

Item 2.  Management's Discussion and Analysis of Financial
   Condition and Results of Operation.......................................   9

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.........  13

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings..................................................  13
Item 2.  Changes in Securities and Use of Proceeds..........................  13
Item 3.  Defaults Upon Senior Securities....................................  13
Item 4.  Submission of Matters to a Vote of Security Holders................  13
Item 5.  Other Information..................................................  13
Item 6.  Exhibits and Reports on Form 8-K...................................  13
SIGNATURE
</TABLE>
<PAGE>

                        PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                   GREKA ENERGY CORPORATION AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                             FOR THE PERIODS ENDED

                                    ASSETS

<TABLE>
<CAPTION>
                                                                                 March 31,      December 31,
                                                                                   2002             2001
                                                                                ------------    ------------
                                                                                 (Unaudited)
<S>                                                                             <C>             <C>
Current Assets

Cash and cash equivalents                                                       $     51,054    $    422,103
Accounts receivable trade, net
     of allowance for doubtful accounts of
     $436,258 (2002) and $436,258 (2001)                                           2,025,316       3,618,368
 Inventories                                                                       2,153,014       1,796,520
Assets held for Sale                                                              32,277,872              --
Other current assets                                                               1,516,359       1,552,090
                                                                                ------------    ------------
                    Total Current Assets                                          38,023,615       7,389,081

Property and Equipment
     Investment in limestone property, at cost                                            --       3,675,973
     Oil and gas properties (full cost method)                                    24,401,410      46,928,312
     Undeveloped Oil and Gas Properties                                            4,601,899       7,347,113
     Land                                                                         17,247,745      17,247,744
     Plant and equipment                                                          26,896,383      29,823,908
                                                                                ============    ============
                                                                                $ 73,147,437    $105,023,050
     Less accumulated depletion, depreciation and
     Amortization                                                                (16,547,202)    (15,557,669)
                                                                                ------------    ------------
          Property and Equipment, net                                             56,600,235      89,465,381

Other Assets                                                                       2,660,296       3,194,985
                                                                                ------------    ------------
                    Total Assets                                                $ 97,284,146    $100,049,447
                                                                                ============    ============


                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued expenses                                           $ 23,608,419    $ 23,751,354
Current maturities of long-term notes and notes payable                           32,885,628      33,993,043
                                                                                ------------    ------------
                    Total Current Liabilities                                   $ 56,494,047    $ 57,744,397

Long-term debt, net of current Portion                                             9,673,107       9,139,395

Stockholder's Equity
          Common Stock, no par value, 50,000,000
                    Shares authorized and issued 4,698,368
                    (March 2002) and 4,694,953(December 2001)                     43,137,523      43,112,523
          Accumulated earnings (deficit)                                         (12,020,531)     (9,946,868)
                                                                                ------------    ------------
          Total Stockholders' Equity                                              31,116,992      33,165,655
                                                                                ------------    ------------
                                                                                  97,284,146     100,049,447
                                                                                ============    ============
</TABLE>

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

                                       3
<PAGE>

                   GREKA ENERGY CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE THREE MONTH PERIODS ENDED MARCH 31
                                   UNAUDITED

<TABLE>
<CAPTION>
                                                   2002           2001
                                                -----------    -----------
<S>                                             <C>            <C>
Revenues
          Total Revenues                        $ 4,403,733    $6,989,830
Expenses
     Production costs                             2,259,135     2,908,711
     General and Administrative                   2,059,111     2,131,900
     Depletion, depreciation and amortization     1,010,644       709,187
                                                -----------    ----------
          Total Expenses                          5,328,890     5,749,798

Operating (loss) Income                            (925,157)    1,240,032

Other Income (Expense)
     Other Income, net                               72,179       680,323
     Interest expense                            (1,220,684)     (884,949)
                                                -----------    ----------
        Other Income (Expense), net              (1,148,505)     (204,626)

Provision for Income Tax                                 --       (17,268)
                                                -----------    ----------
Net (loss) Income                               $(2,073,662)   $1,018,138
                                                ===========    ==========
Net (loss) Income per Common Share - Basic           $(0.44)        $0.22
                                                ===========    ==========
     Basic Shares                                 4,697,547     4,539,605

Net (loss) Income per Common Share - Diluted    $     (0.44)   $     0.21

                                                ===========    ==========
     Diluted Shares                               4,697,547     4,925,459

</TABLE>

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

                                       4
<PAGE>

                   GREKA ENERGY CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE THREE MONTH PERIODS ENDED MARCH 31,
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                        2002           2001
                                                                     -----------    -----------
<S>                                                                  <C>            <C>
Cash flows from Operating Activities
     Net (loss) Income                                               $(2,073,663)   $ 1,018,136
     Adjustments to reconcile net loss to
      Net cash used in operating activities:

     Depletion, depreciation and Amortization                          1,010,644        709,187

     Changes in:
     Decrease (increase) accounts receivable                           1,593,053       (199,400)
     (Increase) decrease inventories                                    (356,493)    (2,111,185)
     (Increase) decrease other current assets                           (212,045)     2,616,536
     Decrease (increase) other assets                                    534,889     (2,248,627)
     Increase (decrease) accounts payable and accrued liabilities        (57,810)    (2,164,116)
                                                                     -----------    -----------

        Net Cash Provided by (Used in) in Operating Activities           438,575     (2,379,467)
                                                                     -----------    -----------

Cash Flows from Investing Activities

     Expenditure for property and equipment                             (501,165)    (5,354,709)
     Repayment from related party                                        247,776             --
                                                                     -----------    -----------
     Net Cash Used In Investing Activities                              (253,389)    (5,354,709)
                                                                     -----------    -----------
Cash Flows from Financing Activities

     Repayments of notes payable                                        (278,543)    (7,798,007)
     Proceeds from notes payable and long-term debt                           --     12,957,530
     Net Increase (decrease) in revolver loan                           (107,691)            --
     Exercise of stock options                                                --        112,875
     Proceeds from conversion of debentures                                   --        114,000
     Payment of financing charges                                       (170,000)            --
                                                                     -----------    -----------
Net Cash (Used In) Provided by Financing Activities                     (556,234)     5,386,398
                                                                     -----------    -----------
Net Decrease in Cash and
     Cash Equivalents                                                   (371,049)    (2,347,778)
Cash and Cash Equivalents at Beginning of Period                         422,103      4,837,699
                                                                     -----------    -----------
Cash and Cash Equivalents at End of Period                           $    51,054    $ 2,489,921
                                                                     ===========    ===========

Cash paid for:
     Interest                                                        $   657,793    $   863,290
                                                                     ===========    ===========
</TABLE>

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

                                       5
<PAGE>

                   GREKA ENERGY CORPORATION AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The accompanying unaudited condensed consolidated financial statements
have been prepared on a basis consistent with the accounting principles and
policies reflected in the financial statements for the year ended December 31,
2001, and should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's 2001 Form 10-K. In the
opinion of management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (which, except as otherwise
disclosed herein, consist of normal recurring accruals only) necessary to
present fairly the Company's consolidated financial position as of March 31,
2002, and the consolidated results of operations for the three month periods
ended March 31, 2002 and 2001, and the consolidated cash flows for the three
month periods ended March 31, 2002 and 2001.

Oil and Gas Property

         The Company periodically reviews the carrying value of its oil and gas
properties in accordance with requirements of the full cost method of
accounting. Under these rules, capitalized costs of oil and gas properties may
not exceed the present value of estimated future net revenues from proved
reserves, discounted at 10%, plus the lower of cost or fair market value of
unproved properties ("ceiling"). Application of this ceiling test generally
requires pricing future revenue at the prices in effect as of the end of each
reporting period and requires a writedown for accounting purposes if the ceiling
is exceeded.

Business Segments

         The Company's operations are in three industry segments: Integrated
Operations (California asphalt plant and E&P), E&P Americas, corporate and
other. Information about the Company's operation by segment as of and for the
three month periods ended March 31, 2002 and 2001, is as follows:

<TABLE>
<CAPTION>
Three Months                              Integrated       E&P      Corporate
Ended March 31, 2002                      Operations    Americas    and Other    Total
(in thousands)                            ----------    --------    ---------    -----
<S>                                       <C>           <C>         <C>         <C>
Oil and Gas Revenue                         $   996     $ 2,153     $(1,257)    $ 1,892
Asphalt Refinery Revenue                      2,512          --          --       2,512
Total Revenue                                 3,508       2,153      (1,257)      4,404
Oil Production Costs                            653         444        (929)        168
Asphalt Refinery Costs                        2,419          --        (328)      2,091
Gross Profit                                    436       1,709          --       2,145
Other Expenses                                  724         568         767       2,059
DD&A Expenses                                   413         562          36       1,011
Miscellaneous (Expense) Income                   --          81          (9)         72

Interest and other expenses                     469         537         215       1,221
Net (loss) Income before taxes               (1,170)        123      (1,027)     (2,074)
Provision for Taxes                              --          --          --          --
Net (loss) Income                           $(1,170)    $   123     $(1,027)    $(2,074)
                                            =======     =======     =======     =======

Capital Expenditure                             472          29          --         501
Identifiable Assets                          56,379      30,678      10,227      97,284
</TABLE>

                                       6
<PAGE>

<TABLE>
<CAPTION>
Three Months
Ended March 31, 2002                   Integrated       E&P      Corporate
(in thousands)                         Operations    Americas    and Other    Total
----------------------------------     ----------    --------    ---------    -----
<S>                                      <C>         <C>         <C>         <C>
Oil and Gas Revenue                      $ 2,474     $ 3,378     $(2,474)    $  3,378
Asphalt Plant Revenue                      3,611          --          --        3,611
Total Revenue                              6,085       3,378      (2,474)       6,989
Oil Production Costs                         558         942        (558)         942
Asphalt Plant Costs                        3,882          --      (1,916)       1,966
Gross Profit                               1,645       2,436          --        4,081
Other Expenses                               525         432       1,174        2,131
DD&A Expenses                                368         342          --          710
Miscellaneous Income                          --         680          --          680

Interest and other
     expenses                                575         255          55          885

Net income (loss) before Taxes               177       2,087      (1,229)       1,035
Provision for Taxes                           --          --          17          (17)
Net income (loss)                        $   177     $ 2,087     $(1,246)    $  1,018
                                         =======     =======     =======     ========

Capital Expenditures                       2,127       2,961         267        5,355

Identifiable Assets                       67,972      23,287      10,208      101,467
</TABLE>

Reclassifications

     Certain reclassifications have been made to prior year financial statements
to conform to the current year presentation.

Assets Held for Sale

     Consistent with the Company's previously announced restructure plan which
included the sale of certain E&P properties, the Company has classified all
assets for which there is a plan of sale in place, approved by management, and
which are likely to be sold within one year, as Assets Held for Sale on the
Consolidated Balance Sheet as of March 31, 2002.  Assets held for sale consisted
of our interest in a production sharing contract in West Java Exploration
Prospect, Jakarta, Indonesia, Potash Dome Field, Richfield East Dome Unit and
the Limestone property.



NOTE 2 - NET INCOME PER SHARE

         Basic earnings per share ("EPS") is calculated by dividing net income
by the weighted average number of shares of common stock outstanding during the
period. No dilution for any potentially dilutive securities is included. Diluted
EPS assumes the conversion of all potentially dilutive securities and is
calculated by dividing net income, as adjusted, by the weighted average number
of shares of common stock outstanding, plus all potentially dilutive securities.

                                     Three Months Ended
                                          March 31,
                                  ------------------------
                                     2002          2001
                                  ------------  ----------
Basic Earnings
 Net Income to Common Shares      $(2,073,662)  $1,018,138
                                  -----------   ----------
Net Income for Diluted Shares     $(2,073,662)  $1,018,138
                                  ===========   ==========

Weighted Average Outstanding        4,697,547    4,539,605

                                       7
<PAGE>

Additional Dilutive Securities
Options and warrants                       --      385,854
Total Weighted Average Shares
Outstanding and Diluted
   Securities                       4,697,547    4,925,459
                                  ===========   ==========

Basic EPS                         $     (0.44)  $     0.22
                                  ===========   ==========

Diluted EPS                       $     (0.44)  $     0.21
                                  ===========   ==========

The Company's convertible debt was anti-dilutive for the period ending March
31, 2002. All options at March 31, 2002 were also anti-dilutive due to the
Company's net loss.

NOTE 3 - INVENTORY

         Inventory includes material, labor and manufacturing overhead costs.
Due to the continuous manufacturing process, there is no significant work in
process at any time. Inventory consists of the following at March 31, 2002:

Raw Material ........................  $  920,588
Finished goods.......................   1,232,425
                                       ----------
   Total ............................  $2,153,013
                                       ==========

NOTE 4 - STATEMENT OF CASH FLOWS

         Following is certain supplemental information regarding cash flows for
the three-month periods ended March 31, 2002 and 2001:

                                              2002            2001
                                           ----------      ----------

         Interest paid                     $  657,793      $  863,290
         Income taxes paid                 $       --      $       --


NOTE 5 - CONTINGENCIES

     In 1995, the Company's predecessor agreed to acquire an oil and gas
interest in California on which the seller had drilled a number of non-producing
oil wells. The acquisition agreement required that the Company's predecessor
assume the obligation to abandon any wells that it did not return to production,
irrespective of whether certain consents of third parties necessary to transfer
the property to the Company were obtained. A third party whose consent was
required to transfer the property did not consent to the transfer. The third
party is holding the seller responsible for all remediation. The Company
believes it has no financial obligation to remediate this property because it
was never the owner of the property, never produced any oil or gas from the
property and was not associated with the site and the seller did not give its
predecessor any consideration to enter into the contract for the property. Since
May 2000, the Company commenced remediation on the subject property as directed
by the regulatory agency. Notwithstanding its compliance in proceeding with any
required remediation on seller's account, the Company is committed to hold the
seller accountable for the required obligations of the property. Through March
31, 2002, the Company has remediated 31 of 72 wells and related facilities on
the property for a cost of $1.5 million. This amount is recorded as a long-term
receivable, as the Company believes it is probable that such amount will be
recoverable from the seller. The Company has had informal discussions with the
seller, which to date have not produced positive results. Therefore, the Company
intends to pursue formal litigation for recovery. Based on future developments
with this litigation, it is reasonably possible that the Company's estimate of
recovery and ultimate liability could change in the near term and such change
could be material.

     GREKA's subsidiary owns an asphalt refinery in Santa Maria, California,
with which environmental remediation obligations are associated. The party who
sold the asphalt refinery to the Company's subsidiary performs all environmental
obligations that arose during and as a result of its operations of

                                       8
<PAGE>

the refinery prior to the acquisition. There could be additional environmental
issues, which may require material remediation efforts in the future.

     GREKA's subsidiaries, as is customary in the industry, are required to plug
and abandon wells and remediate facility sites on their properties after
production operations are completed. The cost of such operation will be
significant and will occur, from time to time, as properties are abandoned.

     There can be no assurance that material costs for remediation or other
environmental compliance will not be incurred in the future. The occurrence of
such environmental compliance costs could be materially adverse to the Company.
No assurance can be given that the costs of closure of any of the Company's
subsidiaries' other oil and gas properties would not have a material adverse
effect on the Company.

NOTE 6 - SUBSEQUENT EVENTS

     In April 2002, we closed a $5.1 million bridge facility to provide short-
term liquidity during the implementation of GREKA's restructuring.

     In April 2002, we paid in full the loan obligation in the principal amount
of $2,390,000 to IPH, thereby releasing collateral of all issued and outstanding
shares of capital stock of a GREKA subsidiary.

     In April 2002, we sold our interest in the Manila Village Field located in
Jefferson Parish, south Louisiana.

     In May 2002, the balance totaling $252,224, of the loan to a related party
was repaid in full. The original loan amount of the loan was $500,000.

Item 2.   Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Overview

     GREKA's predecessor was formed in 1988 and commenced oil and gas operations
in 1992 as Petro Union, Inc. Current management acquired control of Petro Union
in August 1997 and re-directed the company's operations to the present strategy.
Following the acquisition of Saba Petroleum Company in March of 1999, the
company changed its name to GREKA Energy Corporation.

     In March 2002, we announced a restructuring of our business to focus on the
integration of our Central California operations, which assets include our
asphalt refinery and interests in heavy oil fields.  GREKA's proactive and
aggressive restructuring plan is designed to provide increased profitability and
cash flow stability.

     We have established a strategy that capitalizes on our asset base to
enhance shareholder value as follows:

          Integrated Operations

          Operations of GREKA are planned to focus on the integration of our
subsidiaries' Santa Maria (California) assets, including an asphalt refinery and
interests in heavy oil fields. The hedged operations are targeted to capitalize
on the stable asphalt market in California by providing a balance of equity and
third party feedstock (heavy oil) into the refinery. The integration of the
refinery (100% owned) with the interests in the heavy oil producing fields (100%
working interest) has successfully provided a stable ongoing hedge to GREKA on
each equity barrel since June 1999. GREKA's strategy in these integrated assets
is to proceed with acquisitions that enhance the long-term feedstock supply to
the refinery and to cost-efficiently boost production rates from the potential
drilling locations identified in the Santa Maria Valley area of central
California. We anticipate that the profitability from these integrated
operations will not be affected by volatile oil prices. It is also anticipated
that, by using our equity barrels to supply the refinery, working capital
requirements should be lower and cash flow should be enhanced. The continued
stability of the price of asphalt, coupled with reduced costs for processing and
lifting, should create substantial value for GREKA's shareholders.

          During 2001, the throughput at the Company's asphalt refinery averaged
approximately 2,370 BBL per day of the potential 10,000 BBL per day plant
allowable capacity.  Of this throughput, the Company's subsidiaries supplied an
average of approximately 46%, or 1,090 BBL per day, from their production in
California, and we plan to focus on increasing our feedstock during 2002.

          In March 2002, we announced as part of GREKA's unique business
strategy in its integrated assets that we had closed into escrow our acquisition
of Vintage Petroleum, Inc.'s oil and gas producing

                                       9
<PAGE>

properties and facilities in the Santa Maria Valley of Central California.
Subject to customary terms and conditions, a final closing out of escrow
effective December 1, 2001 is scheduled to occur by May 31, 2002. During this
escrow period, Vintage will continue to operate the properties while the crude
will be delivered to GREKA's asphalt refinery, ramping up from approximately 800
BBL per day to approximately 2,000 BBL per day as of April 1st. This acquisition
will increase the current equity throughput at the refinery from approximately
1,200 BBL per day to approximately 3,200 BBL per day.

          Divestiture of E&P Assets

          In March 2002, we announced GREKA's determination that our traditional
exploitation and production assets are inconsistent with our restructured
business strategy going forward.  During second quarter 2002, we plan to sell
GREKA's interests in these assets primarily including the Potash Field,
Plaquemines Parish, Louisiana; Richfield East Dome Unit, Orange County,
California; and PRC 91, Orange County, California.  The Company is further
pursuing the sale of our exploration interests in Indonesia and a limestone
reserve in Indiana.  In March 2002, the Company, which has a 75% interest in the
block, entered into an agreement to sell its exploration interests in Indonesia.
The sale requires the customary consent by Pertamina, the Indonesian state-owned
oil company that has been requested and is currently pending.

Exploration, Production and Exploitation

          We plan to focus on our existing concessions in strategic locations,
such as China, where GREKA believes there is a significant, long-term demand for
energy and a niche advantage for the Company. GREKA plans to continuously pursue
new, emerging opportunities in the energy business to identify and evaluate
niche markets for our proprietary drilling technology. Two specific niche
targets are coal bed methane projects and gas storage. These opportunities
should provide significant upside from the use of short radius horizontal
laterals.

     We use the full cost method of accounting for oil and natural gas property
acquisition, exploration and development activities. Under this method, all
productive and non-productive costs incurred in connection with the acquisition
of, exploration for and development of oil and natural gas reserves are
capitalized. Capitalized costs included lease acquisitions, geological and
geophysical work, delayed rentals and the costs of drilling, completing and
equipping oil and gas wells. Gains or losses are recognized only upon sales or
dispositions of significant amounts of oil and gas reserves. Proceeds from all
other sales or dispositions are treated as reductions to capitalized costs.

Cautionary Information About Forward-Looking Statements

     This document contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements, other than statements of historical facts, included in or
incorporated by reference into this Form 10-Q which address activities, events
or developments which the Company expects, believes or anticipates will or may
occur in the future are forward-looking statements. The words "believes,"
"intends," "expects," "anticipates," "projects," "estimates," "predicts" and
similar expressions are also intended to identify forward-looking statements.
These forward-looking statements include, among others, statements concerning:

*    the benefits expected to result from GREKA's 1999 acquisition of Saba
       discussed below, including
*    synergies in the form of increased revenues,
*    decreased expenses and avoided expenses and expenditures that are expected
       to be realized as a result of the Saba acquisition, and
*    the complementary nature of GREKA's horizontal drilling technology and
       certain oil reserves acquired with the acquisition of Saba, and other
       statements of:
*    expectations,
*    anticipations,
*    beliefs,
*    estimations,
*    projections, and

other similar matters that are not historical facts, including such matters as:

*    future capital,
*    development and exploration expenditures (including the timing, amount and
       nature thereof),
*    drilling and reworking of wells, reserve estimates (including estimates of
       future net revenues associated with such reserves and the present value
       of such future net revenues),
*    future production of oil and gas,
*    repayment of debt,

                                      10
<PAGE>

*    business strategies,
*    oil, gas and asphalt prices and demand,
*    exploitation and exploration prospects,
*    expansion and other development trends of the oil and gas industry, and
*    expansion and growth of business operations.

     These statements are based on certain assumptions and analyses made by the
management of GREKA in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances.

     GREKA cautions the reader that these forward-looking statements are subject
to risks and uncertainties including those associated with:

*    our ability to refinance our debt on favorable terms,
*    our ability to successfully restructure our operations,
*    the financial environment,
*    general economic, market and business conditions,
*    the regulatory environment,
*    business opportunities that may be presented to and pursued by GREKA,
*    changes in laws or regulations
*    exploitation and exploration successes,
*    availability to obtain additional financing on favorable conditions,
*    trend projections, and
*    other factors, many of which are beyond GREKA's control that could cause
       actual events or results to differ materially from those expressed or
       implied by the statements. Such risks and uncertainties include those
       risks and uncertainties identified in the Description of the Business and
       Management's Discussion and Analysis sections of this document and risk
       factors discussed from time to time in the Company's filings with the
       Securities and Exchange Commission.

     Significant factors that could prevent GREKA from achieving its stated
goals include:

*    the inability of GREKA to obtain financing for capital expenditures and
      acquisitions,
*    declines in the market prices for oil, gas and asphalt, and
*    adverse changes in the regulatory environment affecting GREKA.

     The cautionary statements contained or referred to in this document should
be considered in connection with any subsequent written or oral forward-looking
statements that may be issued by GREKA or persons acting on its or their behalf.
GREKA undertakes no obligation to release publicly any revisions to any forward-
looking statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.

Long-Term Potential

     Management believes that the results of operations for the three-month
period ended March 31, 2002 and cash flows of GREKA reported herein are not
reasonably indicative of the expected future quarterly results of operations and
cash flows of GREKA for similar three month periods, since the Company announced
a comprehensive restructuring plan on March 4, 2002 to divest its E&P assets and
concentrate on the Integrated Operations going forward. The first and second
quarters of 2002 will be transitional for the Company, and thereafter we will be
focused on our Integrated Operations. Furthermore, the asphalt sales are
somewhat seasonal due to seasonal fluctuations in asphalt consumption. Asphalt
sales are generally higher in the second and third quarter and lower in the
first quarter. Due to these seasonal fluctuations, results of operations for
interim quarterly periods may not be indicative of results, which may be
realized on an annual basis. The results of the Company as reported herein, and
which are demonstrative of the successful implementation of management's
business plan, continue to reflect the long-term potential of the Company.

Results of Operations

Comparison for the three-month periods ended March 31, 2001 and 2002.

          Revenues decreased from $6,989,830 for the first quarter 2001 to
$4,403,733 for the first quarter 2002. This 37% decrease primarily consists of a
44% decrease at E&P America from $3.4 million in 2001 to $1.9 million in 2002
and a 30% decrease at our Integrated Operations from $3.6 million in 2001 to
$2.5 million in 2002. The decrease of E&P was due to 18% decrease in volume of
oil and gas in BOE from 192,665 in 2001 to 157,381 in 2002, coupled with a
decrease of 59% in gas prices from $5.00 per MCF in 2001 to $2.06 in 2002 and a
decrease of 40% in the average oil and NGL price from $25.29 in 2001 to $15.22
in 2002;. The decrease in our Integrated Operations segment was due to 7%
decline in the volume sold from 127,833 Bbls of refined products sold in 2001 to
118,770 Bbls in 2002, coupled with a

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decrease of 31% on the weighted average prices for refined products from $27.49
in 2001 to $18.85 in 2002.

          Production and product cost decreased by 22% from $2,908,711 in the
first quarter 2001 to $2,259,135 in the first quarter 2002. The decrease is due
to an overall lower volume of production of 28%, consisting of a decrease of 43%
at the Integrated Operations from 136,107 Bbls in 2001 to 74,288 Bbls in 2002 of
oil and gas production in BOE and a decrease of 18% at the E&P Americas from
192,665 Bbls in 2001 to 157,381 Bbls in 2002 of oil and gas production in BOE.
Overall production and product cost per BOE decreased from $9.07 in 2001 to
$8.18 in 2002.

          General and administration expenses slightly decreased by 3% from
$2,131,900 for the first quarter 2001 to $2,059,111 for the first quarter 2002.

          Depreciation, depletion and amortization increased by 42% from
$709,187 in the first quarter 2001 to $1,010,644 for the first quarter 2002,
primarily as a result of higher depletion rates. The increase in the rate
results from a revision to both the full cost asset pool and the reserve
estimates.

          The Company's Operating Income (loss) decreased by 175% from income of
$1,240,032 in the first quarter 2001 to a loss of $925,157 in the first quarter
2002, primarily as a result of decreased revenues discussed above, coupled with
an increase in depreciation depletion and amortization expense.

          Interest expense increased by 38% from $884,949 for the first quarter
2001 to $1,220,685 for the first quarter 2002, due primarily to higher interest
rates charged on short-term borrowing. During the fourth quarter of 2001, the
Company obtained short-term financing of approximately $6.3 million at an
interest rates ranging from 9% to 15%. In 2001 and 2002, most of the Company's
debt accrued interest at the prime rate plus one hundred (100) to three hundred
(300) basis points.

          Other Income and Expense reflected an income of $72,179 in the first
quarter 2001 relating primarily to write-off of pre-acquisition unsubstantiated
liabilities..  In the first quarter 2002, the Company recognized $680,323 of
Income and accrued interest on  settlement of  a litigation.

          Net Income (loss) was lower by 300% from  income of $1,018,138 for the
first quarter 2001 to a loss of $2,073,662 for the first quarter 2002.  The loss
is due to lower revenues and higher depreciation, depletion and amortization and
interest expenses (discussed above) in 2002 when compared to 2001.

Liquidity and Capital Resources

          The working capital deficit at March 31, 2002 of $18,470,432 decreased
by $31,884,884 from a working capital deficit of $50,355,316 at December 31,
2001. This decrease was caused primarily by a change in current assets by
$30,634,534 from $7,389,081 at December 31, 2001 to $38,023,615 at March 31,
2002. The change relates to the reclassification of $32,277,872 of long-term
assets to assets held for sale in accordance with the Company's previously
announced divestiture of its traditional E&P assets. Current liabilities
decreased from $57,744,397 at December 31, 2001 to $56,494,047 at March 31,
2002. The Company is currently working on refinancing all of its current debt,
which will result in the reclassification of all non-current portions of the
Company's debt to long-term. The Company expects to conclude this refinancing in
the second quarter.

Cash Flows

          Cash provided by (used in) operations increased from an outflow of
$2,379,467 for the three months ended March 31, 2001 to an inflow of $438,575
for the three months ended March 31, 2002. Net loss for the period used
$2,073,662 of cash inflow.

          The Company's net cash flow used in investing activities decreased
from a net outflow of $5,354,709 for the three months ended March 31, 2001 to a
net outflow of $253,389 for the three months ended March 31, 2002. The change is
primarily due to decreased capitalizable expenditure activities resulting from
the planned divestiture of the Company's traditional E&P assets.

          The Company's net cash provided by financing activities was $5,386,398
for the three months ended March 31, 2001 compared to net cash used in financing
activities of $556,234 for the three months ended March 31, 2002 as a result of
refinancing the Company's debt during the first quarter of 2001.

          During the first quarter of 2002, the Company received a repayment of
$247,776 from a related party on a Company authorized loan of $500,000 due on
April 30, 2002.

Capital Expenditures

     Our growth is focused on acquisitions that are strategic and in accordance
with our business plan. It is intended that such acquisitions will be achieved
concurrent with the closing of adequate

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financing. Historically, GREKA has relied on cash flow from operations to
finance operational capitalized expenditures. For 2002, GREKA has budgeted $30
million for our discretionary capitalized expenditures, which includes the
acquisition of Vintage properties for $18 million, to be funded by our cash flow
and credit facilities. We intend to implement our capital programs in the third
and fourth quarters to capitalize on the increased cash flows from the
seasonality in asphalt sales.

Financing and Debt Restructuring Activities

     In addition to eliminating the trade and bank debt related to our
traditional exploitation and production assets that are planned to be sold, we
announced in March 2002 GREKA's launch to completely restructure our debt. The
debt restructuring scheduled during the second quarter is intended to payoff all
remaining debt including debentures, fund the acquisition of the escrowed
Vintage Petroleum, Inc. properties, provide availability for targeted
acquisitions within the Integrated Operations' business plan, continued
development of our interests in China, and working capital.

Inflation

     GREKA does not believe that inflation will have a material impact on
GREKA's future operations.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk.

     To some extent, at March 31, 2002, the Company's operations were exposed to
market risks primarily as a result of changes in commodity prices and interest
rates. The Company does not use derivative financial instruments for speculative
or trading purposes.  (For a more comprehensive discussion related to
Quantitative and Qualitative Disclosures about Market Risk refer to GREKA's 2001
Annual Report on Form 10-K.)

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.

     There is no update to the matters previously reported in GREKA's 2001
Annual Report on Form 10-K.

     From time to time, the Company and its subsidiaries are a named party in
legal proceedings arising in the ordinary course of business. While the outcome
of such proceedings cannot be predicted with certainty, management does not
expect these matters to have a material adverse effect on the Company's
financial condition or results of operations.

Item 2.   Changes in Securities and Use of Proceeds.

     None.

Item 3.   Defaults Upon Senior Securities.

     See Part I, Item 3-"Legal Proceedings" of our Form 10-K for the year ended
     December 31, 2001.

Item 4.   Submission of Matters to a Vote of Security Holders.

     None.

Item 5.   Other Information.

     None.

Item 6.   Exhibits and Reports on Form 8-K.

(a)  Exhibits.  The following exhibits are furnished as part of this report:
     none.

(b)  During the quarter for which this report is filed, GREKA filed the

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     following Reports on Form 8-K:

          (1)  Current Reports on Form 8-K and 8-K/A dated December 26, 2001
which reported events under Item 4, Changes in Registrant's Certifying
Accountant.


                                   SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                      GREKA ENERGY CORPORATION

Date: May 23, 2002                    By: /s/ Randeep S. Grewal
                                          ----------------------
                                      Randeep S. Grewal, Chairman and
                                      Chief Executive Officer

Date: May 23, 2002             By: /s/ Max A. Elghandour
                                   ----------------------
                                      Max A. Elghandour,
                                      Chief Financial Officer