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 June 30, 2003

                                       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 August 1, 2003, GREKA had
4,951,460 shares of Common Stock, no par value per share, outstanding.


<PAGE>




                                TABLE OF CONTENTS



                                                                         Page
                                                                         ----

PART I - FINANCIAL INFORMATION.............................................3

Item 1.  Financial Statements..............................................3
   Condensed Consolidated Balance Sheets as of June 30, 2003
      and December 31, 2002 (Unaudited)....................................3

   Condensed Consolidated Statements of Operations for the Six and
      Three Month Periods Ended June 30, 2003 and 2002
     (As restated - see Note8) (Unaudited) ................................4

   Condensed Consolidated Statements of Cash Flows for the
      Six Month Periods Ended June 30, 2003 and 2002
     (As restated - see Note 8)(Unaudited).................................5

   Notes to Condensed Consolidated Financial Statements (Unaudited)........6

Item 2.  Management's Discussion and Analysis of Financial
   Condition and Results of Operation.....................................10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.......17

Item 4.  Controls and Procedures .........................................17

PART II - OTHER INFORMATION
Item 1.  Legal Proceedings................................................17
Item 2.  Changes in Securities and Use of Proceeds........................18
Item 3.  Defaults Upon Senior Securities..................................18
Item 4.  Submission of Matters to a Vote of Security Holders..............18
Item 5.  Other Information................................................18
Item 6.  Exhibits and Reports on Form 8-K.................................18

SIGNATURE         ........................................................18



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<TABLE>
<CAPTION>



                                     PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                                GREKA ENERGY CORPORATION AND SUBSIDIARIES
                                    CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                                              As of As of
                                                                      June 30,                December 31,
                                                                        2003                      2002
                                                                    ------------              ------------
                                                                     (Unaudited)
               ASSETS

<S>                                                                 <C>                        <C>
Current Assets

Cash and cash equivalents                                           $   4,883,888             $   1,361,380
Accounts receivable trade, net
     of allowance for doubtful accounts of
     $129,357 (2003) and $451,581 (2002)                                4,298,915                 3,760,613

Inventories                                                             1,883,947                 1,363,506
Assets held for sale                                                         --                     460,000
Other current assets                                                    1,440,582                   896,621
                                                                    -------------             -------------
                    Total Current Assets                               12,507,332                 7,842,120

Property and Equipment
     Oil and gas properties (full cost method)                         49,668,560                46,361,062
     Unproven oil and gas properties                                    5,973,456                 5,014,703
     Land                                                              19,135,235                19,135,235
     Plant and equipment                                               24,128,679                22,764,807
                                                                    -------------             -------------
                                                                       98,905,930                93,275,807
     Less accumulated depletion, depreciation and
     amortization                                                     (16,333,769)              (14,407,101)
                                                                    -------------             -------------
          Property and Equipment, net                                  82,572,161                78,868,706

Other Assets                                                           11,173,544                10,877,792
                                                                    -------------             -------------
                    Total Assets                                    $ 106,253,037             $  97,588,618
                                                                    =============             =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable and accrued expenses                               $  12,271,612             $  13,097,897
Current maturities of long-term notes and notes payable                 5,546,689                 9,672,914
                                                                    -------------             -------------
                    Total Current Liabilities                          17,818,301                22,770,811


Long-term debt, net of current portion                                 65,929,910                47,664,622
Other Liabilities                                                       1,958,092
                                                                                                  1,101,705

Commitments and Contingencies (note 6)                                       --                        --

Stockholders' Equity
          Common Stock, no par value, 50,000,000                       44,404,253                44,404,253
                    shares authorized and 4,951,451
                    issued and outstanding
          Additional Paid-in Capital                                    1,676,604                 1,676,604
          Accumulated deficit                                         (25,534,122)              (20,029,377)
                                                                    -------------             -------------
          Total Stockholders' Equity                                   20,546,734                26,051,480
                                                                    -------------             -------------
                                                                    $ 106,253,037             $  97,588,618
                                                                    =============             =============


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

                                                   3
<PAGE>


                                        GREKA ENERGY CORPORATION AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



                                              Six Months Ended June 30,               Three Months Ended June 30,
                                             2003                 2002                 2003                2002
                                                              (As restated                            (As restated
                                                               See Note 8)                              See Note 8)
                                         ------------         ------------         ------------         ------------

Revenues                                 $ 16,248,158         $ 12,665,621         $  8,473,510         $  8,261,888
Expenses
     Production costs                       8,340,845            6,579,906            5,033,572            4,320,771
     Sales, general and
         administrative                     4,127,291            4,228,575            1,900,803            2,169,464
     Depletion, depreciation
         and amortization                   1,915,612            1,357,891            1,039,389              347,247
                                         ------------         ------------         ------------         ------------
          Total Expenses                   14,383,748           12,166,372            7,973,764            6,837,482
                                         ------------         ------------         ------------         ------------
Operating Income                            1,864,410              499,249              499,746            1,424,406

Other Income (Expense)
     Other Income (Expense), net              111,195              (25,035)              81,983              (97,215)
     Interest expense, net                 (7,446,976)          (2,881,017)          (3,893,500)          (1,660,332)
                                         ------------         ------------         ------------         ------------
     Other Income (Expense), net           (7,335,781)          (2,906,052)          (3,811,517)          (1,757,547)
                                         ------------         ------------         ------------         ------------
Loss before income taxes and
  cumulative effect of change
  in accounting principle                  (5,471,371)          (2,406,803)          (3,311,771)            (333,141)
Provision for Income Tax                         --                (14,722)                --                (14,722)
                                         ------------         ------------         ------------         ------------
Loss before cumulative effect of
  change in accounting principle           (5,471,371)          (2,421,525)          (3,311,771)            (347,863)
Cumulative effect of change in
  accounting principle (Note 2)               (33,375)                --                (33,375)                --
                                         ------------         ------------         ------------         ------------
Net Loss                                  $(5,504,746)        $ (2,421,525         $ (3,345,146)        $   (347,863)
                                         ============         ============         ============         ============
Net Loss per Common Share -
  Basic and Diluted:
  Loss before cumulative effect
  of change in accounting
  principle                              $      (1.10)        $      (0.51)        $      (0.67)        $      (0.07)
Cumulative effect of change
  in accounting principle                       (0.01)                --                  (0.01)                --
                                         ------------         ------------         ------------         ------------
Net loss                                 $      (1.11)        $      (0.51)        $      (0.68)        $      (0.07)
                                         ============         ============         ============         ============
     Basic and Dilute Shares                4,951,451            4,698,708            4,951,451            4,698,708




                              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 SIX MONTHS PERIODS ENDED JUNE 30,
                                                 (UNAUDITED)

                                                                           2003                    2002
                                                                                               (As restated
                                                                                                See Note 8)
                                                                       ------------            ------------
Cash flows from Operating Activities
     Net Loss                                                          $ (5,504,746)           $ (2,421,525)
     Adjustments to reconcile net loss to
      net cash provided by operating activities:

       Depletion, depreciation and amortization                           1,915,612               1,357,891
       Loss (gain) on sale of assets                                         (7,261)                764,292
       Cumulative effect of change in accounting principle                   33,375                    --

     Changes in:
     Increase in accounts receivable trade                                 (538,302)                (76,437)
     Increase in inventories                                               (520,441)               (601,526)
     (Increase) decrease in other current assets                           (543,961)                292,971
     Increase in other assets                                              (295,752)             (1,101,368)
     Decrease in accounts payable and accrued expenses                     (826,284)             (8,974,757)
     Increase in other liabilities                                          834,069                    --
                                                                       ------------            ------------

        Net Cash (Used in) Operating Activities                          (5,453,691)            (10,760,459)
                                                                       ------------            ------------

Cash Flows from Investing Activities

     Expenditure for property and equipment                              (5,630,123)            (13,614,141)
     Proceeds from the sale of property                                     467,260              20,065,757
     Repayment from related party                                              --                   247,776
                                                                       ------------            ------------
        Net Cash (Used in) Provided by Investing Activities              (5,162,863)              6,699,392
                                                                       ------------            ------------
Cash Flows from Financing Activities

     Proceeds from long-term debt                                        23,571,578              35,100,000
     Principal payments on notes payable and long-term debt              (9,548,999)            (29,571,307)
     Net increase in revolver loan                                        1,118,922               1,714,002
     Payment of financing charges                                        (1,002,439)             (2,842,127)
                                                                       ------------            ------------
        Net Cash Provided by Financing Activities                        14,139,062               4,400,568
                                                                       ------------            ------------
        Net increase in Cash and Cash Equivalents                         3,522,508                 339,501
Cash and Cash Equivalents at Beginning of Period                          1,361,380                 422,103
                                                                       ------------            ------------
Cash and Cash Equivalents at End of Period                             $  4,883,888            $    761,604
                                                                       ============            ============


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

                                             5
</TABLE>


<PAGE>



                    GREKA ENERGY CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - DESCRIPTION OF BUSINESS
--------------------------------

Greka Energy Corporation, a Colorado corporation ("GREKA" or the "Company") is
an independent integrated energy Company. The Company's oil and gas production,
exploration and development activities are concentrated on its properties in
California where the Company also owns and operates an asphalt refinery. The
Company supplies its asphalt refinery with equity oil, which is the crude oil
the Company produces from its surrounding heavy crude oil reserves, and it also
utilizes crude oil purchased from third party producers. In addition, GREKA has
interests in coal bed methane properties and production sharing contracts in
China.

The Company was privatized and delisted from trading on the NASDAQ in August
2003. GREKA was merged with Alexi Corporation, a wholly-owned subsidiary of
Alexi Holdings Limited, which for purposes of effecting the merger was
incorporated by Randeep S. Grewal, Greka's Chairman, CEO and President. Each
share of GREKA's common stock issued and outstanding prior to the merger has
been cancelled and converted into the right to receive $6.25 per share. This
consideration is payable in cash to the holder thereof upon surrender of the
GREKA stock certificate formerly representing such shares of GREKA's common
stock.

NOTE 2 - 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, 2002, and
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's 2002 Form 10-K and the Company's 2003
Form 10-Q for the period ended March 31, 2003. 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 June 30, 2003, and the consolidated results of
operations for the six and three month periods ended June 30, 2003 and 2002, and
the consolidated cash flows for the six month periods ended June 30, 2003 and
2002.

Oil and Gas Properties

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.

New Accounting Standards

Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for
Asset Retirement Obligations," addresses accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS No. 143 became effective on January 1,
2003. SFAS No. 143 requires that the fair value of a liability for an asset's
retirement obligation be recorded in the period in which it is incurred and the
corresponding cost capitalized by increasing the carrying amount of the related
long-lived asset. The liability is accreted to its then present value each

                                       6

<PAGE>


period, and the capitalized cost is depreciated over the useful life of the
related asset. If the liability is settled for an amount other than the recorded
amount, a gain or loss is recognized.

Effective January 1, 2003 the Company adopted SFAS No. 143 which resulted in an
increase to net oil and gas properties of $554,065 and additional liabilities
related to asset retirement obligations of $587,440. These entries reflect the
asset retirement obligation of GREKA had the provisions of SFAS No. 143 been
applied since inception. This resulted in a non-cash cumulative-effect decrease
to earnings of $33,375.

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets,"
became effective on January 1, 2002, and addresses accounting and reporting for
the impairment or disposal of long-lived assets. SFAS No. 144 supercedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for the
Long-Lived Assets to Be Disposed Of" and Accounting Principles Board ("ABP")
Opinion No. 30, "Reporting the Results of Operations-Reporting the Effects of
Disposal of Segment of a Business and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions." SFAS No. 144 retains the fundamental
provisions of SFAS No. 121 and expands the reporting of discontinued operations
to include all components of an entity with operations that can be distinguished
from the rest of the entity and that will be eliminated from the ongoing
operations of the entity in a disposal transaction. Adoption of this standard
had no impact on the Company's consolidated financial statements.

In April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No.
145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds the
provisions of SFAS No. 4 that require companies to classify certain gains and
losses from debt extinguishments as extraordinary items, eliminates the
provisions of SFAS No. 44 regarding transition to the Motor Carrier Act of 1980
and amends the provisions of SFAS No. 13 to require that certain lease
modifications be treated as sale leaseback transactions. The provisions of SFAS
No. 145 related to classification of debt extinguishments are effective for
fiscal years beginning after May 15, 2002. The provisions of SFAS No. 145
related to lease modifications are effective for transactions occurring after
May 15, 2002. The Company early adopted the provisions of SFAS No. 145, as
permitted, with respect to the classification of gains or losses from debt
extinguishment.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities" ("SFAS 146"). SFAS No. 146 addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)." SFAS No. 146
requires that a liability for costs associated with the exit or disposal of an
activity be recognized when the liability is incurred. This statement also
established that fair value is the objective for initial measurement of the
liability. The provisions of SFAS No. 146 are effective for exit or disposal
activities that are initiated after December 31, 2002. Adoption of this standard
had no impact on the Company's consolidated financial statements.

The FASB has issued SFAS No. 148 "Accounting for Stock-Based
Compensation-Transition and Disclosure." SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company has elected to continue to account for stock-based employee
compensation in accordance with APB Opinion No. 25, "Accounting for Stock Issued
to Employees," and related interpretations. Had the Company accounted for
stock-based employee compensation under the fair value method provided by SFAS
No. 123, there would have been no effect on the consolidated interim financial
statements as of June 30, 2003 and 2002.

                                       7

<PAGE>


In April 2003, the FASB issued SFAS no. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". This Statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain instruments embedded in other contracts and for hedging
activities under Statement No.133, "Accounting for Derivative Instruments and
Hedging Activities." This Statement:

     (i)  clarifies under what circumstances a contract with an initial net
          investment meets the characteristics of a derivative;
     (ii) clarifies when a derivative contains a financing component;
    (iii) amends the definition of an underlying; and
     (iv) amends certain other existing pronouncements.

The Company does not believe that implementation of this Statement will have a
significant impact on its results of operations, financial condition or cash
flows since the Company does not use derivative financial instruments for
speculative, trading or hedging purposes.

In May 2003, the FASB issued SFAS no. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify certain financial instruments as a liability
(or an asset in some circumstances) when there is an obligation to redeem the
issuer's shares and either requires or may require satisfaction of the
obligation by transferring assets, or satisfy the obligation by issuing
additional equity shares subject to certain criteria. This Statement is
effective for financial instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. It is to be implemented by reporting the
cumulative effect of a change in an accounting principle for financial
instruments created before the issuance date of the Statement and still existing
at the beginning of the interim period of adoption. The implementation of this
Statement did not have a significant impact on the Company's results of
operations, financial condition or cash flows.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees", which elaborates on the disclosures
to be made in interim and annual financial statements of a guarantor about its
obligations under certain guarantees that it has issued. It also clarifies that
a guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing a
guarantee. Initial recognition and measurement provisions of the Interpretation
are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The disclosure requirements are effective for financial
statements of interim or annual periods ending after December 15, 2002. Under
this Interpretation, at the inception of guarantees issued or modified after
December 31, 2002, the Company is required to record the fair value of the
guarantee as a liability, with the offsetting entry being recorded based on the
circumstances in which the guarantee was issued. The Company does not have any
third party guarantees outstanding other than certain guarantees issued in
connection with the Company's debt. Such debt is recorded on the Consolidated
Balance Sheet at June 30, 2003. The implementation of this Statement did not
have a significant impact on the Company's results of operations, financial
condition or cash flows.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an Interpretation of ARB 51". This Interpretation
requires that the primary beneficiary in a variable interest entity consolidate
the entity even if the primary beneficiary does not have a majority voting
interest. The consolidation requirements of this Interpretation are required to
be implemented for any variable interest entity created on or after January 31,
2003. In addition, the Interpretation requires disclosure of information
regarding guarantees or exposures to loss relating to any variable interest
entity existing prior to January 31, 2003 in financial statements issued after
January 31, 2003. The adoption of this Interpretation had no effect on the
Company's consolidated financial statements.

                                       8

<PAGE>


NOTE 3 - NET LOSS 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.

<TABLE>
<CAPTION>


                                                   Six Months Ended                  Three Months Ended
                                                       June 30,                           June 30,
                                           --------------------------------     --------------------------------
                                                2003                 2002            2003              2002
                                           --------------      ------------     -------------      -------------
Basic Earnings Per Share
<S>                                            <C>             <C>               <C>               <C>
  Net Loss Applicable to Common Shares         (5,504,746)     $ (2,421,525)     $ (3,345,146)     $    (347,863)
                                           ==============      ============      ============      =============
Weighted Average Common Shares
  Outstanding                                   4,951,451         4,698,415         4,951,451          4,698,708

Dilutive stock options                               --                --                --                 --

Diluted shares                                  4,951,451         4,698,415         4,951,451          4,698,708
                                           ==============      ============      ============      =============

Basic EPS                                  $        (1.11)     $      (0.51)     $      (0.68)     $       (0.07)
                                           ==============      ============      ============      =============
Diluted EPS                                $        (1.11)     $      (0.51)     $      (0.68)     $       (0.07)
                                           ==============      ============      ============      =============
</TABLE>


The Company's convertible debt, stock options and warrants (95,535 shares) were
not dilutive for the period ending June 30, 2003.

NOTE 4 - 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:


                                 June 30, 2003      December 31, 2003
                                 -------------      ----------------
Raw Material                      $1,014,653           $  209,167
Finished goods                       869,294            1,154,339
                                  ----------           ----------

Total                             $1,883,947           $1,363,506
                                  ========             ==========

NOTE 5 - STATEMENT OF CASH FLOWS
--------------------------------

Following is certain supplemental information regarding cash flows for the six
month periods ended June 30, 2003 and 2002:


                                                    2003                 2002
                                                 ----------           ----------
Interest paid                                    $4,165,533           $2,112,661

                                       9

<PAGE>


NOTE 6 - COMMITMENTS AND 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. 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 the Company's 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 a regulatory agency as operator of record.
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 June 30, 2003, the Company has
remediated 43 of 72 wells and related facilities on the property for a cost of
approximately $3 million. This amount is recorded in other assets (long-term),
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.

People of State of California, et al. v. Greka SMV, Inc. (Case No. 1114292,
Superior Court of State of California, County of Santa Barbara, Santa Maria
Division, December 2002). Plaintiffs brought an action against one of GREKA's
subsidiaries seeking damages of approximately $1 million for alleged statutory
violations relating to a fire caused by a third party who, ignoring GREKA's
instructions, entered GREKA's operations which were being conducted in
accordance with common industry practice. GREKA has submitted this matter as an
insurance claim, and plans to vigorously defend all claims asserted.

Union Oil Company of California, dba Unocal v. GREKA, et al. (Case No. 1125964,
Superior Court of State of California, County of Santa Barbara, Santa Maria
Division, December 2002). Plaintiff brought an action against GREKA and its
subsidiaries seeking damages of approximately $6.25 million for alleged breach
of contract claiming that, as successor-in-interest to Saba Petroleum Company
under the terms of the contract, the Company failed to abandon a certain number
of wells or provide an acceptable abandonment plan, and failed to have in place
instruments securing the abandonment. GREKA plans to vigorously defend all
claims asserted.

One of GREKA's subsidiaries owns an asphalt refinery in Santa Maria, California,
with which environmental remediation obligations are associated. There could be
additional environmental issues that may require material remediation efforts in
the future.

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's financial condition or results of operations.

NOTE 7 - SUBSEQUENT EVENT
-------------------------

The Company has generated negative cash flow from operations, primarily as a
result of the impact of financing costs, and had negative working capital as of
December 31, 2002 and June 30, 2003. The Company's continuation as a going
concern was dependent upon its ability to successfully refinance its debt and

                                       10

<PAGE>


reduce its interest burden and implement its strategies consistent with its
restructuring plans. In September 2003 concurrent with its privatization, the
Company refinanced its existing debt and procured working capital at lower
interest rates and longer maturities with the funding of a $112.5 million loan.

NOTE 8 - RESTATEMENT OF QUARTERLY INFORMATION
---------------------------------------------

During the second quarter of 2002, the Company had recorded a gain of $3.1
million on the sale of the Potash Field, Plaquemines Parish, Louisiana based on
the significance of the reserves sold. After completion of the year-end reserve
analysis by independent reservoir engineers that resulted in a 110% increase in
proved reserves at December 31, 2002 versus December 31, 2001, the Company
determined the Potash sale did not significantly alter the relationship between
capitalized costs and proved reserves. As a result, in the fourth quarter of
2002, the Company reversed the gain and reduced its oil and gas capitalized
costs by $3.1 million.

A summary of the significant effects of the restatement is as follows:
<TABLE>
<CAPTION>


                                         Six Months Ended June 30, 2002             Three Months Ended June 30,2002
                                         Previously               As                 Previously             As
                                          Reported             Restated              Reported             Restated

<S>                                       <C>                    <C>                 <C>                    <C>
Other Income (Expense)                    3,117,890              (25,035)            3,045,711              (97,215)
Net Income (Loss)                           721,400           (2,421,525)            2,795,063             (347,863)
Basic and Diluted Earnings
  per common share:
      Net Income (Loss)                  $     0.15           $    (0.51)           $     0.59           $    (0.07)

</TABLE>

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.

GREKA Energy Corporation is an independent integrated energy Company. Our oil
and gas production, exploration and development activities are concentrated in
our properties in California where we also own and operate an asphalt refinery.
We supply our asphalt refinery with equity oil, which is the crude oil we
produce from our surrounding heavy crude oil reserves, and we also utilize crude
oil purchased from third party producers. We believe that our vertically
integrated operations reduce our exposure to material volatile swings in crude
oil prices. Historically we have also engaged in oil and gas exploration,
development and production from our properties in Louisiana, Texas and New
Mexico which operations have substantially been sold as part of our strategic,
internal reorganization. In addition, we have interests in coalbed methane
properties and production sharing contracts in China.

     We conduct our operations through two divisions:

     o    Integrated Operations
     o    International Operations

                                       11

<PAGE>


     Integrated Operations. Our wholly owned and operated consolidated assets in
central California include substantial oil in place, over 1,200 wells, extensive
pipeline and production facilities, and an infrastructure including 3 work-over
rigs, approximately 17,700 mineral acres, approximately 3,300 acres of real
estate, a 1-acre island connected to land by a 2,700' causeway containing the
gas and oil pipelines and facilitating vehicular access, and an asphalt
refinery.

     We own and operate an asphalt refinery located in Santa Maria, California.
Crude oil that we produce from our surrounding heavy crude oil reserves supplies
feedstock to the refinery. We supplement our equity oil production with third
party feedstock to achieve efficiencies through lower refinery operating costs
of finished product per unit. Our asphalt refinery produces 65% asphalt and 30%
gas oil, with the remainder produced as naphtha. We sell our asphalt to hot mix
asphalt producers, material supply companies and government agencies for use in
road surfacing applications, and we sell the gas oil and naphtha to end users
and refineries. The relatively stable price of asphalt and the low cost of our
oil compared to third party feedstock reduce our exposure to volatile swings in
crude oil prices and position us to effectively compete in the asphalt market.

     International Operations. Other than the Fengcheng Block in which we have a
49% operating working interest, we have a 60% operating working interest in five
coalbed methane ("CBM") exploration and development projects within the
Provinces of Jiangxi, Shanxi and Anhui, China.

Restatement

As discussed in Note 8 to the condensed consolidated financial statement
included in Item 1, the Company has restated its unaudited consolidated
financial statements for the three and six months ended June 30, 2002. The
Management Discussion and Analysis give effect to the restatement.

Business Strategy

We intend to implement a two-pronged strategy:

     Capitalize on Our California Market Position. Prior to 1992 our asphalt
refinery was owned and operated for approximately fifty years by Conoco and ran
between 9,000 to 11,000 Bbls per day of throughput. We expect that our refinery
can attain its rated capacity of 10,000 Bbls per day of throughput. Our strategy
in these vertically integrated assets is to enhance the long-term equity barrel
feedstock supply to the refinery and to cost-efficiently boost production from
the drilling locations identified in California. Our total throughput at the
asphalt refinery at June 30, 2003 was approximately 3,100 barrels per day or 31%
of the rated capacity. Approximately 95% of the throughput is equity barrels. In
our integrated business on a recurring basis, we are designed to be a relatively
fixed cost operation with an established infrastructure in place. Equity
production and throughput at the refinery increases ought to be realized without
significant infrastructural costs to us. In this division, we are focused on
organic production growth by returning to production the large inventory of
shut-in wells acquired in recent acquisitions.

     Major oil companies, such as Union Oil Company, Shell and Texaco, began
drilling in the Santa Maria, California basin in the early 1900's and built a
consolidated infrastructure of pipelines and facilities. Thousands of wells were
drilled discovering several productive oil and gas zones between 2,500 ft. and
8,500 ft. The shallower Sisquoc zone with heavier 6-12 gravity oil was passed
over in favor of the deeper Monterey zone which was generally at a depth below
5,000 ft. and the lightest oil zone carrying the highest margins. Thus, the
major oil companies primarily concentrated on the Monterey zone and largely
ignored the others. It is this enormous proven reserve base that provides a
specific road map for the Company to build a substantial production base. Our
objectives are to exploit through increased production both the gas reservoirs
for fuel self-sufficiency and the oil for asphalt production.

                                       12

<PAGE>


     Pursue High Potential International Prospects on a Longer-Term Basis. GREKA
is party to and operator under five, 30-year production sharing contracts
("PSCs") with China United Coalbed Methane Corporation Ltd. ("CUCBM") for CBM
exploitation in China within two development and three exploration blocks. The
combined total contract area within the Jiangxi, Shanxi and Anhui Provinces is
approximately 6,600 square kilometers (1.7 million acres) with average coalbed
thickness of 16.5 feet and potential reserves of 34.5 Tcf, as estimated by
CUCBM. GREKA has a 60% working interest in all PSCs other than the Fengcheng
Block in which it has a 49% working interest. The remaining working interest is
owned by CUCBM.

     Empowered by the State Council, CUCBM, a wholly state-owned Company, is the
only Company responsible for exploration, development, production and sales of
CBM in China. The signing of the four contracts brings the total number of CBM
PSCs signed by CUCBM with foreign companies to 18, five of which are with GREKA.
The total area covered by the 18 PSCs is over 31,000 sq km containing CBM
resources of approximately 3.4 trillion m3 (120 Tcf) of which GREKA's PSCs are
estimated at 30%, as estimated by CUCBM. Recent Accounting Pronouncements

Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for
Asset Retirement Obligations," addresses accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS No. 143 became effective on January 1,
2003. SFAS No. 143 requires that the fair value of a liability for an asset's
retirement obligation be recorded in the period in which it is incurred and the
corresponding cost capitalized by increasing the carrying amount of the related
long-lived asset. The liability is accreted to its then present value each
period, and the capitalized cost is depreciated over the useful life of the
related asset. If the liability is settled for an amount other than the recorded
amount, a gain or loss is recognized.

Effective January 1, 2003 the Company adopted SFAS No. 143 which resulted in an
increase to net oil and gas properties of $554,065 and additional liabilities
related to asset retirement obligations of $587,440. These entries reflect the
asset retirement obligation of GREKA had the provisions of SFAS No. 143 been
applied since inception. This resulted in a non-cash cumulative-effect decrease
to earnings of $33,375.

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets,"
became effective on January 1, 2002, and addresses accounting and reporting for
the impairment or disposal of long-lived assets. SFAS No. 144 supercedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for the
Long-Lived Assets to Be Disposed Of" and Accounting Principles Board ("ABP")
Opinion No. 30, "Reporting the Results of Operations-Reporting the Effects of
Disposal of Segment of a Business and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions." SFAS No. 144 retains the fundamental
provisions of SFAS No. 121 and expands the reporting of discontinued operations
to include all components of an entity with operations that can be distinguished
from the rest of the entity and that will be eliminated from the ongoing
operations of the entity in a disposal transaction. Adoption of this standard
had no impact on the Company's consolidated financial statements.

In April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No.
145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds the
provisions of SFAS No. 4 that require companies to classify certain gains and
losses from debt extinguishments as extraordinary items, eliminates the
provisions of SFAS No. 44 regarding transition to the Motor Carrier Act of 1980
and amends the provisions of SFAS No. 13 to require that certain lease
modifications be treated as sale leaseback transactions. The provisions of SFAS
No. 145 related to classification of debt extinguishments are effective for
fiscal years beginning after May 15, 2002. The provisions of SFAS No. 145
related to lease modifications are effective for transactions occurring after

                                       13

<PAGE>


May 15, 2002. The Company early adopted the provision of SFAS No. 145, as
permitted, with respect to the classification of gains or losses from debt
extinguishments.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities" ("SFAS 146"). SFAS No. 146 addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)." SFAS No. 146
requires that a liability for costs associated with the exit or disposal of an
activity be recognized when the liability is incurred. This statement also
established that fair value is the objective for initial measurement of the
liability. The provisions of SFAS No. 146 are effective for exit or disposal
activities that are initiated after December 31, 2002. Adoption of this standard
had no impact on the Company's consolidated financial statements.

The FASB has issued SFAS No. 148 "Accounting for Stock-Based
Compensation-Transition and Disclosure." SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company has elected to continue to account for stock-based employee
compensation in accordance with APB Opinion No. 25, "Accounting for Stock Issued
to Employees," and related interpretations. Had the Company accounted for
stock-based employee compensation under the fair value method provided by SFAS
No. 123, there would have been no effect on the consolidated interim financial
statements as of June 30, 2003 and 2002.

In April 2003, the FASB issued SFAS no. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". This Statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain instruments embedded in other contracts and for hedging
activities under Statement No.133, "Accounting for Derivative Instruments and
Hedging Activities." This Statement:


     (v)  clarifies under what circumstances a contract with an initial net
          investment meets the characteristics of a derivative;
    (vi)  clarifies when a derivative contains a financing component;
   (vii)  amends the definition of an underlying; and
  (viii)  amends certain other existing pronouncements.

The Company does not believe that implementation of this Statement will have a
significant impact on its results of operations, financial condition or cash
flows since the Company does not use derivative financial instruments for
speculative, trading or hedging purposes.

In May 2003, the FASB issued SFAS no. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify certain financial instruments as a liability
(or an asset in some circumstances) when there is an obligation to redeem the
issuer's shares and either requires or may require satisfaction of the
obligation by transferring assets, or satisfy the obligation by issuing
additional equity shares subject to certain criteria. This Statement is
effective for financial instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. It is to be implemented by reporting the
cumulative effect of a change in an accounting principle for financial

                                       14

<PAGE>


instruments created before the issuance date of the Statement and still existing
at the beginning of the interim period of adoption. The implementation of this
Statement did not have a significant impact on the Company's results of
operations, financial condition or cash flows.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees", which elaborates on the disclosures
to be made in interim and annual financial statements of a guarantor about its
obligations under certain guarantees that it has issued. It also clarifies that
a guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing a
guarantee. Initial recognition and measurement provisions of the Interpretation
are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The disclosure requirements are effective for financial
statements of interim or annual periods ending after December 15, 2002. Under
this Interpretation, at the inception of guarantees issued or modified after
December 31, 2002, the Company is required to record the fair value of the
guarantee as a liability, with the offsetting entry being recorded based on the
circumstances in which the guarantee was issued. The Company does not have any
third party guarantees outstanding other than certain guarantees issued in
connection with the Company's debt. Such debt is recorded on the Consolidated
Balance Sheet at June 30, 2003.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an Interpretation of ARB 51". This Interpretation
requires that the primary beneficiary in a variable interest entity consolidate
the entity even if the primary beneficiary does not have a majority voting
interest. The consolidation requirements of this Interpretation are required to
be implemented for any variable interest entity created on or after January 31,
2003. In addition, the Interpretation requires disclosure of information
regarding guarantees or exposures to loss relating to any variable interest
entity existing prior to January 31, 2003 in financial statements issued after
January 31, 2003. The adoption of this Interpretation had no effect on the
Company's consolidated financial statements.

Critical Accounting Policies

Use of Estimates - The preparation of the consolidated financial statements in
conformity with accounting principles generally accepted in the United States of
America requires our management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the dates of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Our most
significant estimates involves the assessment of the amount of proved natural
gas and oil reserves and the estimate of future development and environmental
liabilities, such as plug and abandonment costs. Actual results could differ
from those estimates.

Full Cost Accounting - The Company uses the full cost method of accounting for
oil and natural gas property acquisition, exploration and development
activities. Under full cost accounting, all costs incurred in the acquisition,
exploration and development of oil and natural gas reserves are capitalized into
a "full cost pool". Capitalized costs included costs of all unproved properties,
and internal costs directly related to our natural gas and oil activities. The
Company amortizes these costs using the unit-of-production method. The depletion
rate is determined by dividing our total unamortized cost base by net equivalent
proved reserves at the beginning of the quarter. Unevaluated properties and
related costs are excluded from our amortization base until a determination is
made as to the existence of proved reserves. The amortization base includes
estimates for future development costs, as well as future abandonment and
dismantlement costs. Estimates of proved reserves are key components of our
depletion rate for natural gas and oil properties and our full cost ceiling test
limitation. 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. Because there are
numerous uncertainties inherent in the estimation process, actual results could
differ from the estimates.

                                       15

<PAGE>


Inventories - The Company values its refinery inventory on the weighted average
cost method. The weighted average cost method is considered the preferable
method because the primary inventorable cost at the refinery is crude oil for
which the price can fluctuate significantly. The weighted average method
balances the impact of short term fluctuations in crude oil pricing on the
Company's refinery inventory levels.

Asset Retirement Obligation - The Company has significant obligations to remove
tangible equipment and restore land at the end of oil and gas production
operations. The Company's removal and restoration obligations are primarily
associated with plugging and abandoning wells and removal of significant
facilities. In 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 143 (SFAS No. 143), "Accounting
for Asset Retirement Obligations". SFAS No. 143 significantly changed the method
of accruing for costs associated with the retirement of fixed assets an entity
is legally obligated to incur. Primarily, the new statement requires the Company
to record a separate liability for asset retirement obligations that represents
the present value of the costs to be incurred. Estimating the future asset
removal costs is difficult and requires management to make estimates and
judgments because most of the removal obligations are many years in the future
and contracts and regulations often have vague descriptions of what constitutes
removal. Asset removal technologies and costs are constantly changing, as well
as regulatory, political, environmental, safety and public relations
considerations. Revisions to the asset retirement obligation recorded upon
adoption of SFAS No. 143 can potentially result from changes in assumptions used
to estimate the cash flow required to settle the obligations. Potential changes
include adjustments in estimated probabilities, amounts, and timing of the
settlement, as well as changes in the legal requirements of an asset retirement
obligation. Any such changes that result in upward and downward revisions in the
estimated cash flows will adjust the liability and the related capitalized asset
on a prospective basis. The Company adopted this statement effective January 1,
2003, as discussed in Note 2 of the Condensed Consolidated Financial Statements.

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,

                                       16

<PAGE>


     *    repayment of debt,
     *    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.
*inability to recover remediation costs recorded as other assets

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.

Comparison of Three Month Periods Ended June 30, 2003 and 2002

Revenues increased from $8,261,888 for the second quarter 2002 to $8,473,510 for
the second quarter 2003. This 2.6% increase primarily consists of oil and gas
sales from newly acquired properties, offset by lower refinery revenues. Crude
oil sales increased 49% from $1,161,558 for the second quarter 2002 to
$1,734,564 for the second quarter 2003. Refined product sales decreased 6.3%
from $6,935,913 for the second quarter 2002 to $6,498,309 for the second quarter
2003. Sales volumes of asphalt decreased 5.3% from 292,374 barrels in the second
quarter 2002 to 276,920 barrels in the second quarter 2003.

                                       17

<PAGE>


Production costs increased by 16.5% from $4,320,771 in the second quarter 2002
to $5,033,572 in the second quarter 2003, essentially due to added costs from
newly acquired properties.

Sales, general and administration expenses decreased by 12.4%, from $2,169,464
for the second quarter 2002 to $1,900,803 for the second quarter 2003 primarily
as a result of lower costs in our New York corporate office.

Depreciation, depletion and amortization increased by 200% from $347,247 for the
second quarter 2002 to $1,039,389 for the second quarter 2003 due to the
addition of properties acquired at the end of 2002.

The Company's Operating Income was reduced by 65% from an income of $1,424,406
in the second quarter 2002 to an income of $499,746 in the second quarter 2003,
primarily as a result of increased depreciation expense and production costs.

Interest expense increased by 135% from $1,660,332 for the second quarter 2002
to $3,893,500 for the second quarter 2003 due primarily to a 60% increase in
debt at the start of the respective quarters, and higher write-offs associated
with the cost of obtaining financing.

Other Income and Expense reflected a gain of $81,983 in the second quarter 2003.
In the second quarter 2002, the Company recognized a loss of $97,215.

Net Loss increased by 861% from a loss of $347,863 in the second quarter 2002 to
a loss of $3,345,146 for the second quarter 2003. The increase is primarily due
to higher financing costs and depreciation.

Comparison of Six Month Periods Ended June 30, 2003 and 2002

Revenues increased from $12,665,621 for the first half of 2002 to $16,248,158
for the first half 2003. This 28.3% increase primarily consists of sales of
equity crude previously shipped to the refinery. Crude oil sales increased 118%
from $3,053,882 for the first half 2002 to $6,648,001 for the first half 2003.
Refined product sales decreased 0.1% from $9,288,935 for the first half 2002 to
$9,282,745 for the first half 2003.

Production costs increased by 27% from $6,579,906 in the first half 2002 to
$8,340,845 in the first half 2003. The increase is due to the additional
producing properties acquired in June, 2002.

Sales, general and administration expenses decreased by 2.4%, from $4,228,575
for the first half 2002 to $4,127,291 for the first half 2003, primarily as a
result of reduced costs in the New York corporate office.

Depreciation, depletion and amortization increased by 41% from $1,357,891 for
the first half 2002 to $1,915,612 for the first half 2003 due to the additional
producing properties acquired after June, 2002.

The Company's Operating Income improved by 273% from income of $499,249 in the
first half 2002 to an income of $1,864,410 in the first half 2003, primarily as
a result of the acquisitions in 2002 (Vintage and Rincon) which resulted in
higher crude sales, and also an increase in prices.

Interest expense increased by 159% from $2,881,017 for the first half 2002 to
$7,446,976 for the first half 2003, due primarily to higher write-offs
associated with the cost of obtaining financing, a 42% increase in debt at June
30, 2003, and higher interest rates.

Other Income and Expense reflected a gain of $111,195 in the first half 2003. In
the first half 2002, the Company recognized a loss of $25,035.

                                       18

<PAGE>


Net Loss increased by 127% from $2,421,525 for the first half 2002 to a loss of
$5,504,746 for the first half 2003. The decrease is primarily due to higher
financing costs incurred as a result of the acquisition of producing properties.

Liquidity and Capital Resources

The working capital deficit at June 30, 2003 of $5,310,969 decreased by
$9,617,721 from a working capital deficit of $14,928,690 at December 31, 2002.
Current assets increased by $4,665,212 from $7,842,120 at December 31, 2002 to
$12,507,332 at June 30, 2003 which includes an increase of $3,522,508 in cash
and cash equivalents from $1,361,380 at December 31, 2002 to $4,883,888 at June
30, 2003. The increase in both the cash balance as well as current assets is due
primarily to funds obtained from additional financing. Current liabilities
decreased from $22,770,811 at December 31, 2002 to $17,818,301 at June 30, 2003,
primarily as a result of the decrease of the current portion of long term debt.
The Company expects to further reduce its working capital deficit in the next
quarters upon achieving higher volumes of crude and asphalt sales.
The Company has generated negative cash flow from operations, primarily as a
result of the impact of financing costs, and had negative working capital as of
December 31, 2002 and June 30, 2003. The Company's continuation as a going
concern was dependent upon its ability to successfully refinance its debt and
reduce its interest burden and implement its strategies consistent with its
restructuring plans. In September 2003 concurrent with its privatization, the
Company refinanced its existing debt and procured working capital at lower
interest rates and longer maturities with the funding of a $112.5 million loan.

Cash Flows

Cash used in operating activities decreased from an outflow of $10,760,459 for
the six months ended June 30, 2002 to an outflow of $5,453,691 for the six
months ended June 30, 2003. The decrease is primarily attributable to reductions
in accounts payable that required cash of $8,974,757 in 2002 compared to
$826,284 in 2003.

The Company's net cash flow used in investing activities decreased from a net
inflow of $6,699,392 for the six months ended June 30, 2002 to a net outflow of
$5,162,864 for the six months ended June 30, 2003. The change is primarily due
to the sale of producing properties in 2002, resulting in cash inflows of
$20,065,757, partially offset in 2003 by a reduction of expenditures for
property and equipment of $7,984,017.

The Company's net cash provided by financing activities was $4,400,568 for the
six months ended June 30, 2002 compared to $14,139,062 for the six months ended
June 30, 2003, primarily as a result of the funding of a $20,000,000 loan in
March, 2003.

Capital Expenditures

GREKA's 2003 discretionary capital expenditure budget for properties is
dependent upon the price for which its products are sold and upon the ability of
GREKA to obtain external financing. Subject to these variables and based on the
current asset base, we expect our cash flow and credit facilities to fund
approximately $10 million in 2003 for capital expenditures. The Company's 2003
capital expenditure program is designed to facilitate organic production
increases from the integrated operations. Capital expenditure projects
identified for 2003, namely workovers, redrills, recompletions, side-tracks, and
various facility enhancements, are scheduled throughout the year which resulted
in an expenditure of approximately $5,630,124 for the six month period ending
June 30, 2003.

                                       19

<PAGE>


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 June 30, 2003, 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, trading or hedging purposes. For a more comprehensive discussion
related to Quantitative and Qualitative Disclosures about Market Risk refer to
GREKA's 2002 Annual Report on Form 10-K. There are no significant changes since
December 31, 2002.

Item 4. Controls and Procedure.

The Company maintains "disclosure controls and procedures", as such term is
defined under Exchange Act Rule 13a-15(e), that are designed to ensure that
information required to be disclosed by the Company in the reports it files or
submits under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, and that
such information is accumulated and communicated to the Company's management,
including its Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.

An evaluation of the effectiveness of the Company's disclosure controls and
procedures as of June 30, 2003 was conducted under the supervision and with the
participation of the Company's Chief Executive Officer and Chief Financial
Officer. Based on that evaluation, the Company's Chief Executive Officer and
Chief Financial Officer have concluded that the Company's disclosure controls
and procedures were adequate and designed to ensure that material information
relating to the Company and its consolidated subsidiaries would be made known to
the Chief Executive Officer and Chief Financial Officer by others within those
entities, particularly during the periods when periodic reports under the
Exchange Act are being prepared. Furthermore, there has been no change in the
Company's internal control over financial reporting, identified in connection
with the evaluation of such control, that occurred during the Company's last
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.
Refer to the Certifications by the Company's Chief Executive Officer and Chief
Financial Officer filed as attachments to this report.

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

There is no update to the matters previously reported in GREKA's 2002 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.

None.

                                       20

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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)  The following exhibits are furnished as part of this report.

Exhibit            Description
-------            -----------

  31.1       Certification under Section 302 of the Sarbanes-Oxley Act of 2002

  32.1       Certification under Section 906 of the Sarbanes-Oxley Act of 2002


(b)  During the quarter for which this report is filed, GREKA filed the
     following Reports on Form 8-K:

(1) A Current Report on Form 8-K dated May 23, 2003 which reported events under
Item 5, Other Events.

(2) A Current Report on Form 8-K dated May 29, 2003 which reported events under
Item 5, Other Events.

(3) A Current Report on Form 8-K dated July 29, 2003 which reported events under
Item 5, Other Events.

Signature

Pursuant to 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.



GREKA ENERGY CORPORATION

Date: September 29, 2003            By:  /s/  Randeep S. Grewal
                                        ---------------------------------------
                                         Randeep S. Grewal, Chairman,
                                         Chief Executive Officer and President


Date: September 29, 2003            By:  /s/  Andrew deVegvar
                                        ----------------------------------------
                                        Andrew deVegvar,
                                        Chief Financial Officer