<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 September 30, 2001
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 November 1, 2001, GREKA had 4,694,950 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 September 30, 2001
     (Unaudited) and December 31, 2000.............................................................     3
   Condensed Consolidated Statements of Operations for the Nine and
      Three Month Periods Ended September 30, 2001 and 2000 (Unaudited)............................     4
   Condensed Consolidated Statements of Cash Flows for the
      Nine Month Periods Ended September 30, 2001 and 2000 (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................................    15

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.........................................................................    15
Item 2.  Changes in Securities and Use of Proceeds.................................................    15
Item 3.  Defaults Upon Senior Securities...........................................................    16
Item 4.  Submission of Matters to a Vote of Security Holders.......................................    16
Item 5.  Other Information.........................................................................    16
Item 6.  Exhibits and Reports on Form 8-K..........................................................    16
SIGNATURE..........................................................................................    16
</TABLE>
<PAGE>

                        PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

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

<TABLE>
<CAPTION>
                                                                                 September 30,    December 31,
                                                                                     2001             2000
                                                                                     ----             ----
                                                                                  (Unaudited)
<S>                                                                              <C>              <C>
Current Assets
        Cash and cash equivalents                                                 $   2,144,745     $  4,837,699
        Accounts receivable trade, net of allowance for
          doubtful accounts of $938,472 (2001)
          and $827,144 (2000)                                                         7,966,075        5,951,051
        Inventories                                                                   3,490,321        3,814,992
        Other current assets                                                          1,459,274        5,160,062
                                                                                  -------------     ------------
                 Total Current Assets                                                15,060,415       19,763,804
                                                                                  -------------     ------------
Property and Equipment
        Investment in limestone property, at cost                                     4,092,144        3,675,973
        Oil and gas properties (full cost method)                                    61,140,976       38,838,169
        Land                                                                         17,247,744       17,247,744
        Plant and equipment                                                          28,605,552       27,398,506
                                                                                  =============     ============
                                                                                    111,086,416       87,160,392
        Less accumulated depreciation, depletion and
          amortization                                                              (12,737,307)      (9,978,770)
                                                                                  -------------     ------------

Property and Equipment, net                                                          98,349,109       77,181,622
Other Assets                                                                          4,304,998        1,867,859
                                                                                  -------------     ------------
                                                                                    117,714,522     $ 98,813,285
                                                                                  =============     ============

<CAPTION>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                                  September 30,     December 31,
                                                                                      2001              2000
                                                                                      ----              ----
<S>                                                                               <C>               <C>
Current Liabilities
        Accounts payable and accrued expenses                                       30,973,233      $ 13,742,245
        Current maturities of long term notes and notes payable                     24,798,698         8,580,110
        Short term borrowing                                                                 0           105,000
                                                                                  ------------      ------------
                 Total Current Liabilities                                          55,771,931        22,427,355
Long term debt, net of current portion                                              14,477,110        28,206,771
Other Liabilities                                                                    1,124,802         7,967,941
Stockholders' Equity
        Common Stock, no par value, 50,000,000 shares
          authorized, 4,580,374 (2001) 4,523,273 (2000)
          shares issued and outstanding                                             43,128,960        42,544,542
        Accumulated earnings (deficit)                                               3,211,719       (2,333,324)
                                                                                  ------------      ------------
        Total Stockholders' Equity                                                  46,340,679        40,211,218
Total Liabilities and Stockholders' Equity                                        $117,714,522      $ 98,813,285
                                                                                  ============      ============
</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 NINE AND THREE MONTH PERIODS ENDED SEPTEMBER 30
                                   UNAUDITED

<TABLE>
<CAPTION>
                                                      Nine Months Ended               Three Months Ended
                                                        September 30,                    September 30,
                                                        -------------                    -------------
                                                            2001            2000            2001          2000
                                                            ----            ----            ----          ----
<S>                                                  <C>             <C>             <C>           <C>
Revenues                                             $31,924,619     $35,499,816     $13,311,897   $12,119,901

                  Total Revenues                      31,924,619      35,499,816      13,311,897    12,119,901

Expenses
        Production costs                              17,755,931      17,924,676       9,246,408     5,581,173
        General and administrative                     5,821,375       5,205,888       1,692,949     2,031,354
        Profit sharing plan                              300,000         273,768              --        85,780
        Depletion, depreciation and
           Amortization                                2,758,582       2,745,755         969,513       880,330
        Other non-cash expense                                --       1,434,611              --       363,748
                                                     -----------     -----------     -----------   -----------
                  Total Expenses                      26,635,888      27,584,698      11,908,870     8,942,385

Operating Income                                       5,288,731       7,915,118       1,403,027     3,177,516
Other Income (Expense)
        Miscellaneous Income                           3,601,079              --       2,707,717            --
        Interest (expense)                            (3,231,603)     (3,324,688)     (1,341,620)   (1,297,274)

        Loss on sale of Canadian property                     --        (991,439)             --      (991,439)
                                                     -----------     -----------     -----------   -----------
           Other Income (Expense), Net                   369,476      (4,316,127)      1,366,097    (2,288,713)

Income before Income Tax and cumulative
     effect of change in accounting method             5,658,207       3,598,991       2,769,124       888,803
Provision for Income Tax                                (113,164)       (281,970)        (55,382)     (116,785)
                                                     -----------     -----------     -----------   -----------
Income before cumulative effect of change in
     accounting method                                 5,545,043       3,317,021       2,713,742       772,018
Cumulative effect of change in accounting                     --        (853,109)             --            --
                                                     -----------     -----------     -----------   -----------
Net Income                                           $ 5,545,043     $ 2,463,912     $ 2,713,742   $   772,018
                                                     ===========     ===========     ===========   ===========
Net Income  per Common Share - Basic
Before cumulative effect of a change in
     accounting method                               $      1.22     $      0.77     $      0.59   $      0.18
Cumulative effect of a change in
     accounting method                                        --         ($0.20)              --            --
                                                     -----------     -----------     -----------   -----------
     Net Income                                      $      1.22     $      0.57     $      0.59   $      0.18
                                                     ===========     ===========     ===========   ===========
    Basic Shares                                       4,530,732       4,329,615       4,577,283     4,309,189
                                                     ===========     ===========     ===========   ===========
Net Income  per Common Share - Diluted
Before cumulative effect of a change in
     accounting method                               $      1.15     $      0.74     $      0.57   $      0.17
Cumulative effect of a change in accounting
     method                                                   --         ($0.18)              --            --
                                                     -----------     -----------     -----------   -----------
     Net Income                                      $      1.15     $      0.56     $      0.57         $0.17
                                                     ===========     ===========     ===========   ===========
    Diluted Shares                                     4,821,029       4,783,486       4,734,429     4,901,457
                                                     ===========     ===========     ===========   ===========
</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 NINE MONTH PERIODS ENDED SEPTEMBER 30,
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      2001           2000
                                                                                      ----           ----
<S>                                                                           <C>            <C>
Cash flows from Operating Activities
        Net Income                                                            $  5,545,043   $  2,463,912
        Adjustments to reconcile net
           Income to net cash provided by (used for)
           Operating activities
        Depletion, depreciation and
        Amortization                                                             2,758,582      2,745,755
        Cumulative effect of Accounting Change                                          --        853,109
        Loss on Sale of Canadian Property                                               --        991,439
        Net cash received from litigation settlements                            3.577.282
        Net Gain on Litigation Settlements                                      (3,365,111)

        Changes in:
        Accounts receivable                                                     (1,881,074)    (5,851,158)
          Other current assets                                                     963,210        719,490
        Other assets                                                            (1,030,139)      (611,910)
        Inventory                                                                  324,671       (624,062)
        Accounts payable and accrued
           Liabilities                                                           1,192,315        397,944
                                                                              ------------   ------------

             Net Cash Provided by Operating Activities                           8,084,779      2,332,643

Cash Flows from Investing Activities
        Expenditures for property and equipment                                (13,996,078)    (6,107,308)
        Loan made to related party                                                (500,000)
        Loan repayment from related party                                          750,000
        Proceeds from sale of property                                                  --      1,417,056
                                                                              ------------   ------------
        Net Cash Used In
           Investing Activities                                                (13,746,078)    (4,690,252)
                                                                              ------------   ------------
Cash Flows from Financing Activities
        Proceeds from notes payable and
           long-term debt                                                       13,269,530     10,114,965
        Principal payments on notes
           payable and long-term debt                                          (13,223,007)    (7,775,150)
        Net increase in revolver loan                                            2,590,474      3,189,140
        Proceeds from exercise of stock options                                    527,500             --

        Purchase of Treasury Stock                                                (196,152)      (500,000)
        Redeem Debentures                                                               --        (75,000)
                                                                              ------------   ------------
Net Cash Provided by Financing
         Activities                                                              2,968,345      4,953,955
                                                                              ------------   ------------
Net Increase (Decrease) in Cash and
         Cash Equivalents                                                       (2,692,954)     2,560,346
Cash and Cash Equivalents at Beginning
        of Period                                                                4,837,699         97,319
                                                                              ------------   ------------
Cash and Cash Equivalents at End of Period                                    $  2,144,745   $  2,657,665
                                                                              ============   ============
</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, 2000, and
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's 2000 Form 10-K/A. 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 September 30, 2001, and the
consolidated results of operations for the nine and three month periods ended
September 30, 2001 and 2000, and the consolidated cash flows for the nine month
periods ended September 30, 2001 and 2000.

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, and E&P
International which is included under Corporate and Other. Information about the
Company's operation by segment as of and for the three and nine month periods
ended September 30, 2001 and 2000, is as follows:

<TABLE>
<CAPTION>
Three Months
Ended September 30, 2001                     Integrated       E&P       Corporate
(in thousands)                               Operations     Americas    and other     Total
---------------------------------------      ----------     --------    ---------    -------
<S>                                          <C>            <C>         <C>          <C>
Oil and Gas Revenue....................      $    2,039     $  3,923    $  (2,039)   $  3,923
Asphalt Plant Revenue..................           9,552           --         (163)      9,389
Total Revenue..........................          11,591        3,923       (2,202)     13,312
Oil Production Costs...................           1,379        1,440       (1,379)      1,440
Asphalt Plant Costs....................           8,629           --         (823)      7,806
Gross Profit...........................           1,582        2,482           --       4,064
Other Expenses.........................             337          728           628      1,693
DD&A Expenses..........................             386          475           109        970
Miscellaneous Income...................              --          545         2,163      2,708
Interest and other expenses............             683          202           457      1,342
Net income (loss) before Taxes.........             176        1,622           969      2,768
Provision for Taxes....................              --           --            55         55
Net income (loss)......................      $      176     $  1,622    $      914   $  2,712
                                             ==========     ========    ==========   ========
Capital Expenditures...................      $      434     $  5,187    $    1,023   $  6,644

Nine Months
Ended September 30, 2001                     Integrated       E&P       Corporate
(in thousands)                               Operations     Americas    and other     Total
---------------------------------------      ----------     --------    ---------    -------
Oil and Gas Revenue....................      $    7,301     $ 12,368    $  (7,301)   $ 12,368
Asphalt Plant Revenue..................          19,719           --         (163)     19,556
Total Revenue..........................          27,020       12,368       (7,464)     31,924
Oil Production Costs...................           2,631        3,605       (2,631)      3,605
Asphalt Plant Costs....................          18,983           --       (4,833)     14,150
Gross Profit...........................           5,406        8,763           --      14,169
Other Expenses.........................           1,332        1,697        3,093       6,121
DD&A Expenses..........................           1,208        1,442          108       2,759
Miscellaneous Income...................              --        1,438        2,163       3,601
Interest and other income expenses.....           1,867          748          617       3,232
Net income (loss) before Taxes.........             999        6,314       (1,655)      5,658
Provision for Taxes....................              --           --          113         113
Net income (loss)......................      $      999    $   6,314    $  (1,768)      5,545
                                             ==========    =========    =========    =========
EBITDA.................................      $    4,074    $   8,504    $    (930)   $ 11,648
EBIT...................................      $    2,866    $   7,062    $  (1,038)   $  8,890
Capital Expenditures...................           3,545       13,797        1,023      18,365
Identifiable Assets....................          60,212       40,284       17,347     117,843
</TABLE>

                                       6
<PAGE>

<TABLE>
<CAPTION>
Three Months                       Integrated        E&P            E&P         Corporate
Ended September 30, 2000           Operations      Americas    International    and other         Total
-------------------------          ----------     ----------   -------------    ----------      ----------
<S>                                <C>            <C>          <C>              <C>             <C>
Oil and Gas Revenue                $    2,664     $    3,706     $        0     $   (2,665)     $    3,705
Refinery Revenue                        8,415              0              0              0           8,415
Total Revenue                          11,079          3,706              0         (2,665)         12,120
Production Costs                          702            861              0              0           1,563
Refinery Costs                          6,695              0              0         (2,665)          4,030
Gross Profit                            3,695          2,845              0              0           6,539
Other Expenses                            421            404              0          1,206           2,031
Net Profit Sharing Plan                     0              0              0             86              86
DD&A Expenses                             426            454              0              0             880
Other Non Cash Expenses                   364              0              0              0             364
Interest and other  expenses              742            210              0            346           1,297
Provision for Taxes                         0              0              0            117             117
Loss on Sale of Canadian Property           0              0              0            991             991
Net income (loss)                  $    1,741     $    1,777     $        0     $   (2,746)     $    (772)
                                   ==========     ==========     ==========     ==========      ==========
EBITDA                                  3,273          2,441              0         (1,292)          4,422
EBIT                                    2,483          1,987              0         (1,292)          3,178
</TABLE>

<TABLE>
<CAPTION>
Nine Months                        Integrated        E&P            E&P         Corporate
Ended September 30, 2000           Operations      Americas    International    and other         Total
-------------------------          ----------     ----------   -------------    ----------      ----------
<S>                                <C>            <C>          <C>              <C>             <C>
Oil and Gas Revenue                $    6,822     $    9,961     $      422     $   (6,822)     $   10,383
Refinery Revenue                       25,117              0              0              0          25,117
Total Revenue                          31,939          9,961            422         (6,822)         35,500
Production Costs                        2,063          2,580             84              0           4,727
Refinery Costs                         20,020              0              0         (6,822)         13,198
Gross Profit                            9,856          7,381            338              0          17,575
Other Expenses                          1,587          1,274            104          2,241           5,206
Net Profit Sharing Plan                     0              0              0            275             275
DD&A Expenses                           1,432          1,237             76              0           2,746
Other Expenses                          1,464              0              0              0           1,464
Provision for Taxes                         0              0              0            282             282
Loss Due to Accounting Change             853              0              0              0             853
Loss on Sale of Canadian Property           0              0              0            991             991
Interest and other expenses             1,955            279             27          1,063           3,325
Net income (loss)                  $    2,594     $    4,591     $      131     $   (1,852)         $2,464
                                   ==========     ==========     ==========     ==========      ==========
EBITDA                                  8,269          6,107            234         (3,788)         10,822
EBIT                                    6,373          4,870            158         (3,788)          6,613
Capital Expenditures               $    1,118     $    2,575     $      965     $    1,649      $    6,307
Identifiable Assets                $   62,117     $   17,227     $    1,695     $   16,017      $   97,056
</TABLE>


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.

<TABLE>
<CAPTION>
                                             Nine Months Ended                         Three Months Ended
                                               September 30,                              September 30,
                                     ----------------------------------        ----------------------------------
                                          2001                 2000                 2001                 2000
                                     -------------        -------------        -------------        -------------
<S>                                  <C>                  <C>                  <C>                  <C>
Basic Earnings
  Net Income to Common Shares        $   5,545,043        $   2,463,912        $   2,713,742        $     772,018
                                     =============        =============        =============        =============
Weighted Average Shares
  outstanding ...............            4,530,732            4,329,615            4,577,283            4,309,189

Dilutive stock options ......              290,647              453,871              157,146              592,268

Fully diluted shares ........            4,821,029            4,783,486            4,734,429            4,901,457
                                     =============        =============        =============        =============

Basic EPS ...................        $        1.22        $        0.57        $        0.59        $        0.18
                                     =============        =============        =============        =============
Diluted EPS .................        $        1.15        $        0.56        $        0.57        $        0.17
                                     =============        =============        =============        =============
</TABLE>

The Company's convertible debt was anti-dilutive for the periods ending
September 30, 2001 and 2000.

                                       7
<PAGE>

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 September 30, 2001:


Raw Material ......................  $1,220,169
Finished goods ....................   2,270,152
                                     ----------
   Total ..........................  $3,490,321
                                     ==========

NOTE 4 - STATEMENT OF CASH FLOWS

     Following is certain supplemental information regarding cash flows for the
nine-month periods ended September 30, 2001 and 2000:

                                2001              2000
                             ----------        ----------

Interest paid .......        $ 2,919,166       $2,415,518
Income taxes paid ...        $         0       $        0


NOTE 5 - CONTINGENCIES

     In 1995, the Company's predecessor agreed to acquire an oil and gas
interest in California on which a number of out of production oil wells had been
drilled by the seller. 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 September 30, 2001, 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 that 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 plant in Santa Maria, California, with
which environmental remediation obligations are associated. The party who sold
the asphalt plant to the Company's subsidiary performs all environmental
obligations that arose during and as a result of its operations of the plant
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 may 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.

                                       8
<PAGE>

NOTE 6 - ACQUISITION ACTIVITIES

     In September 2001, for a value of approximately $8 million, all interests
of Omimex Resources, Inc. in the Richfield East Dome Unit, Orange County,
California, were transferred to GREKA increasing our working interest to 99% and
net revenue interest to 77% for this operated property. The value of the
acquired interest was determined by the Company's engineers based on an
acquisition price of $3.96 per BOE on total proved reserves.(See Note 8 -
"Litigation")

NOTE 7 - DIVESTITURE ACTIVITIES

     As reported in GREKA's 2000 Annual Report on Form 10-K/A, for approximately
$10 million, the Company sold its Colombian assets in 1999 subject to a look-
back provision and valuation threshold which, by the Company's calculation, had
been met. In March 2000, we exercised our option to re-purchase the Colombian
assets in exchange for payment of $12.0 million, reassignment of certain
California assets acquired from the buyer, and adjustments for related capital
expenditures. The buyer refused to close resulting in a legal dispute. In lieu
of pursuing the re-purchase of this non-core asset, the Company chose to settle
these matters with the buyer which resulted in an additional $14 million fiscal
benefit to the Company that included $6 million cash and California assets
valued at approximately $8 million. This settlement provided us with $24 million
total value from the final disposition of our interests in Colombia. (See Note
8 - "Litigation")

NOTE 8 - LITIGATION

     The matter previously reported in GREKA's 2000 Annual Report on Form 10-K/A
as Sabacol, Inc. v. Omimex Resources, Inc., Omimex de Colombia, Ltd., and Omimex
International Corporation dba Omimex Petroleum, Inc. (C.A. No. BC224339,
California Superior Court, Los Angeles, County, February 2000) was settled in
September 2001 resulting in a dismissal of the litigation. As announced by the
Company in September 2001, the Company estimated its aggregate value of the
combined sale and settlement to be approximately $24 million, consisting of $6
million in cash and approximately $8 million in California property in addition
to the $10 million purchase price paid by Omimex to the Company in 1999 when the
Company sold its Colombian assets.

     The matter previously reported in GREKA's Quarterly Report on Form 10-Q for
the period ending March 31, 2001 as J.K. Petroleum, Inc. v. Saba Petroleum, Inc.
and Greka Energy Corporation (Case No. 00CC15589, Orange County California
Superior Court, December 2000) was settled in September 2001 for an immaterial
sum resulting in a dismissal of the litigation.

     The matter previously reported in GREKA's 2000 Annual Report on Form 10-K/A
as RGC International Investors, LDC v. GREKA Energy Corporation, et al. (C.A.
No. 17674NC, Delaware Chancery Court, December 1999) was decided by the court in
August 2001 with a judgment for the plaintiff of $13.25 million. Subsequently,
in October 2001, GREKA Energy waived its right to appeal the judgment and paid
the plaintiff $11.5 million under a settlement agreement in exchange for a
complete dismissal of the matter.

NOTE 9 - GMAC CREDIT AGREEMENT

     The Company's loan with GMAC was classified as current due to a technical
non-compliance with certain covenants of the credit agreement. As a result and
in accordance with GAAP, this amount is required to be classified as current.
The Company continues to maintain its ongoing, good relationship with GMAC and
continues to receive advances from GMAC under its working capital line.
Notwithstanding, the Company is currently working on refinancing of all its
current debt to be concluded in the near future.

NOTE 10 - SUBSEQUENT EVENTS

     In October 2001, our subsidiary entered into an amendment to the credit and
guarantee agreement with the Bank of Texas, N.A. providing an additional advance
of $7.5 million against the revolving credit line secured by our subsidiaries'
interests in additional North American oil and gas properties and real estate.
The proceeds were paid to reduce the current debt of GREKA.

     In October 2001, the matter of Crown Asphalt Distribution LLC, et al. v.
Santa Maria Refining Company, et al. (Case No. CV99-895 DOC (Anx), United States
District Court, Central District of California, Southern Division, July 1999)
was settled resulting in a dismissal of the litigation. The results of this
settlement were accounted for in the nine months ending September 30, 2001 in
Other Expense.

                                       9
<PAGE>

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.

     We are an independent integrated energy company focused on exploiting oil
and gas production, exploration and development activities. In addition to
owning and operating an asphalt plant in California, we have oil and gas
production, exploration and development activities in North America and the Far
East, with primary areas of activity in California, Louisiana and China. We
operate over 90% of our reserves with working interests varying from 75% to 100%
in most of the fields. The asphalt plant and all the heavy oil fields in the
Santa Maria Valley, California are wholly owned and the integration of
operations of these assets reduces our exposure to commodity price swings due to
the relative stability of asphalt prices. In addition, we have production
sharing contracts in China and Indonesia.

     Our asphalt plant ran at approximately 9,000 Bbls per day of throughput as
recently as 1992. We expect that our plant can attain its rated capacity of
10,000 Bbls per day of throughput. For the year ended December 31, 2000, we
utilized approximately 33% of this rated capacity. As a result of the under-
utilization of our plant's capacity, as well as favorable economics attributable
to increased equity throughput at the plant, we are the logical buyer of heavy
oil reserves in the central California region. During 2001, we plan to spend
approximately $5,000,000 in Integrated Operations.

     During 2000, we were able to substantially increase natural gas production
at our Louisiana Fields as a result of our well reworking program. During 2001,
we plan to spend approximately $16,000,000 on E&P Americas' properties to
further develop our oil and gas position in Louisiana. We intend to continue to
exploit and develop other existing low-cost, low-risk proved reserves we own. In
addition, we will seek to acquire similar properties.

     We also have a 49% working interest in a production-sharing contract with
and approved by the China United Coalbed Methane Corporation Ltd. The Chinese
Ministry of Foreign Trade and Economic Cooperation that covers a total area of
380,534 acres. The 30-year contract provides that we as operator will drill at
least five coalbed methane wells over a three-year term. Two production test
wells have been drilled and both were successful. We will continue to look for
high potential international prospects in areas with attractive terms that do
not require significant capital commitments by us.

     During 1999 and 2000, our capital expenditures on oil and gas activities
totaled approximately $2,092,000 and $13,602,000, respectively. The
discretionary capital expenditures are budgeted to be $22,000,000 during 2001 of
which $18,265,000 was spent as of September 30, 2001. Further spending, however,
is dependent upon market conditions, drilling results, and financing of which
there can be no assurance.

     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

                                       10
<PAGE>

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,
*    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:
*    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

                                       11
<PAGE>

     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 September 30, 2001 and cash flows of GREKA reported herein are
reasonably indicative of the expected future quarterly results of operations and
cash flows of GREKA for similar three month periods, since the results of
operations of the Company's asphalt plant are somewhat seasonal due to seasonal
fluctuations in the asphalt market. Asphalt sales have been generally higher in
the 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 of Three Month Periods Ended September 30, 2001 and 2000

     Revenues increased from $12,119,901 for the third quarter of 2000 to
$13,311,897 for the third quarter 2001. This 10% increase is the net effect of
an increase in the volume of sales by $2.7 million from the asphalt plant by 31%
or 381 MBOE compared to 296 MBOE in 2000, due to a stronger demand for asphalt
in our market over the same period last year. This was offset by a decrease in
the average selling price of asphalt products from $29.02 in 2000 to $25.09 in
2001, or a net decline in revenue of $1.5 million over 2000. Crude oil and gas
sales had practically no impact on revenue since both volumes and prices were
comparable to last year.

     Production and product costs increased from $5,581,173 for the third
quarter of 2000 to $9,246,408 for the third quarter of 2001 primarily as a
result of 31% increase in volume of asphalt products sold. Production cost per
BOE increased from $12.36 in the third quarter of 2000 to $16.81 in 2001 as a
result of higher operating costs and feedstock prices at the asphalt plant when
compared to 2000.

     General and administrative expenses decreased from $2,031,354 for the third
quarter of 2000 to $1,692,949 for the third quarter of 2001 primarily as a
result of decrease in legal and audit fees related to the period.

     There was no additional Net profit sharing accrual for the third quarter of
2001 compared to $85,780 for the third quarter 2000.

                                       12
<PAGE>

     The Company's operating income decreased from $7,915,118 in the third
quarter of 2000 to $5,2881,731 in the third quarter of 2001 primarily as a
result of higher operating cost and feedstock prices for the asphalt plant.

     Depreciation, depletion and amortization increased from $880,330 for the
third quarter of 2000 to $969,513 for the third quarter of 2001 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.

     Interest expense increased from $1,297,274 for the third quarter of 2000 to
$1,341,620 for the third quarter of 2001 primarily as a result of increase in
the revolver loan.

     During the three months ended September 30, 2001, the Company had other
income of $2,707,717 of which $9,706 represents a revision of net liabilities
for items resolved to the Company's benefit in the current period which were
recorded in connection with the Saba acquisition. In addition, the Company
recognized a net gain of $2,698,011 related to the resolution of all outstanding
material litigation.

     Net income increased from $772,018 for the third quarter of 2000 to
$2,713,747 for the third quarter of 2001 as a result of other income discussed
above.

Comparison of Nine Month Periods Ended September 30, 2001 and 2000

     Revenues decreased from $35,499,816 for the first nine months of 2000 to
$31,924,619 for the first nine months of 2001 primarily as a result of lower
asphalt product sales.

     Production and product costs decreased from $17,924,676 for the first nine
months of 2000 to $17,755,931 for the first nine months of 2001 primarily as a
result of lower volume of asphalt products which was somewhat offset by higher
prices. Production cost per BOE decreased from $13.58 in the first nine months
of 2000 to $13.51 in the first nine months of 2001.

     General and administrative expenses increased from $5,205,888 for the first
nine months of 2000 to $5,821,375 for the first nine months of 2001 primarily as
a result of increase in the number of personnel and litigation expenses. As a
result of the settlement of all outstanding material litigation management
expects future periods will reflect a substantial decrease in general and
administrative expenses related to litigation.

     The Company's operating income decreased from $7,915,118 in the first nine
months of 2000 to $5,288,731 in the first nine months of 2001 primarily as a
result of lower asphalt product sales due to first quarter six-week shutdown of
the asphalt plant for major maintenance, coupled with a normal second quarter
sales trend compared to an unusual and an exceptional second quarter 2000 sales
trend.

     Depreciation, depletion and amortization increased slightly from $2,745,755
for the first nine months of 2000 to $2,758,582 for the first nine months of
2001 primarily as a result of lower production volume in the Integrated
Operations division offset by an increase in the rate of depreciation, depletion
and amortization per barrel.

     Interest expense decreased from $3,324,688 for the first nine months of
2000 to $3,231,603 for the first nine months of 2001 primarily as a result of
lower interest rates on the average outstanding balance interest-bearing debt.

     During the nine months ended September 30, 2001, the Company had other
income of $3,601,079 of which $189,415 represents a revision of net liabilities
for items resolved to the Company's benefit in the current period which were
recorded in connection with the Saba acquisition. In addition, the Company
recognized a net gain of $3,411,664 related to the resolution of all outstanding
material litigation.

     Other income of $3,601,079 represents adjustments of $853,109 during the
first six months as previously discussed and adjustments of $2,707,000 during
the current quarter mostly related to the resolution of all outstanding material
litigation.

     Net income increased from $2,463,912 for the first nine months of 2000 to
$5,545,043 for the first nine months of 2001. The first nine months of 2000 was
negatively impacted by $2,426,050 relating to a non-cash expense charge and
cumulative effect of change in accounting, coupled with other income of
$3,601,079 realized in 2001.

                                       13
<PAGE>

Liquidity and Capital Resources

     The working capital deficit at September 30, 2001 of $40,711,516 increased
by $38,047,965 from a working capital deficit of $2,663,551 at December 31,
2000. Current assets decreased by $4,703,389 from $19,763,804 at December 31,
2000 to $15,060,415 at September 30, 2001 which includes a decrease of
$2,692,954 in cash and cash equivalents from $4,837,699 at December 31, 2000 to
$2,144,745 at September 30, 2001 primarily as a result of variance in cash
inflow realized from divestiture of non-core assets as discussed in Note 7.
Operating activities at the Integrated Operations Division result in higher net
cash flow in the fourth quarter when compared to the first quarter.
Approximately $3,490,321 of asphalt plant raw material and finished product
inventory resulted from asphalt plant operations at September 30, 2001. Current
liabilities increased from $22,247,355 at December 31, 2000 to $55,771,931 at
September 30, 2001, an increase of $33,345,516 principally as a result of the
RGC litigation settlement discussed in Note 8 and the GAAP requirement to
classify as current all of the Company's outstanding debt with GMAC as
discussed in Note 9.

     In an effort to reduce its working capital deficit, to date the Company has
reduced its current liabilities by $11.5 million pursuant to a cash payment in
October 2001 to RGC as discussed in Note 8. The Company expects to sell
for cash its non-core E&P assets in the mid-continent prior to the year ending
December 31, 2001 to further improve its working capital. The Company is
currently working on refinancing all of its current debt which will result in
the reclassification of all non-current portions of our debt as long term. We
expect to conclude the refinancing in the next term.

Cash Flows

     Cash provided by or used in operations increased from an inflow of
$2,332,643 for the nine months ended September 30, 2000 to an inflow of
$8,084,779 for the nine months ended September 30, 2001. Net income for the
period provided $5,545,043 of cash inflow.

     The Company's net cash flows used in investing activities increased from a
net outflow of $4,690,252 for the nine months ended September 30, 2000 to a net
outflow of $13,746,078 for the nine months ended September 30, 2001. This change
was primarily attributable to increased activity by the Company in its well
workover program.

     The Company's net cash provided by financing activities was $4,953,955 for
the nine months ended September 30, 2000 compared to net cash provided by
financing activities of $2,968,345 for the nine months ended September 30, 2001.

     During the third quarter of 2001, the Company advanced $500,000 on a
Company authorized loan of $500,000 due on April 30, 2002 to a related party.

Capital Expenditures

     Our growth is focused on acquisitions that are strategic and in accordance
with our business plan. It is intended that these acquisitions will be achieved
concurrent with the closing of adequate financing. Historically, we have relied
on cash flow from operations to finance discretionary capital expenditures. For
2001, we have budgeted $22,000,000 for our capital expenditure expenses to be
funded by our cash flow and current credit facility. Almost all the capital
expenditures are discretionary and 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.

     The Company is current on all its interest payments, and has sufficient
cash flow for all of its operating and foreseen capital requirements.

Financing and Debt Restructuring Activities

     No activities occurred in the three month period ending September 30, 2001.

     In October 2001, our subsidiary entered into an amendment to the credit and
guarantee agreement with the Bank of Texas, N.A. providing an additional advance
of $7.5 million against the revolving credit line secured by our subsidiaries'
interests in additional North American oil and gas properties and real estate.
The proceeds were paid to reduce the current debt of GREKA.

Acquisition of Core California Assets

     In September 2001, for a value of approximately $8 million, all interests
of Omimex Resources, Inc. in the Richfield East Dome Unit, Orange County,
California,

                                       14
<PAGE>

were transferred to GREKA increasing our working interest to 99% and net revenue
interest to 77% for this operated property. (See Part II; Item 1-"Legal
Proceedings")

Divestiture of Non-Core Colombian Assets

     As reported in GREKA's 2000 Annual Report on Form 10-K/A, for approximately
$10 million, the Company sold its Colombian assets in 1999 subject to a look-
back provision and valuation threshold which, by the Company's calculation, had
been met. In March 2000, we exercised our option to re-purchase the Colombian
assets in exchange for payment of $12.0 million, reassignment of certain
California assets acquired from the buyer, and adjustments for related capital
expenditures. The buyer refused to close resulting in a legal dispute. In lieu
of pursuing the re-purchase of this non-core asset, the Company chose to settle
these matters with the buyer which resulted in an additional $14 million fiscal
benefit to the Company that included $6 million cash and California assets
valued at approximately $8 million. This settlement provided us with
approximately $24 million total value from the final disposition of our
interests in Colombia. (See Item 1-"Legal Proceedings")

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 September 30, 2001, 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.

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.

     The following material developments occurred during the quarter ended
September 30, 2001 with respect to the legal proceedings reported in the GREKA
Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000:

     The matter previously reported in GREKA's 2000 Annual Report on Form 10-K/A
as Sabacol, Inc. v. Omimex Resources, Inc., Omimex de Colombia, Ltd., and Omimex
International Corporation dba Omimex Petroleum, Inc. (C.A. No. BC224339,
California Superior Court, Los Angeles, County, February 2000) was settled in
September 2001 resulting in a dismissal. As announced by the Company in
September 2001, the Company estimated its aggregate value of the combined sale
and settlement to be approximately $24 million, consisting of $6 million in cash
and approximately $8 million in California property in addition to the $10
million purchase price paid by Omimex to the Company in 1999 when the Company
sold its Colombian assets.

     The matter previously reported in GREKA's Quarterly Report on Form 10-Q for
the period ending March 31, 2001 as J.K. Petroleum, Inc. v. Saba Petroleum, Inc.
and Greka Energy Corporation (Case No. 00CC15589, Orange County California
Superior Court, December 2000) was settled in September 2001 for an immaterial
sum resulting in a dismissal of the litigation.

     The matter previously reported in GREKA's 2000 Annual Report on Form 10-K/A
as RGC International Investors, LDC v. GREKA Energy Corporation, et al. (C.A.
No. 17674NC, Delaware Chancery Court, December 1999) was decided by the court in
August 2001 with a judgment for the plaintiff of $13.25 million. In October
2001, GREKA Energy waived its right to appeal the judgment and paid the
plaintiff $11.5 million under a settlement agreement in exchange for a complete
dismissal of the matter.

     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.

     In July 2001, the Company announced a repurchase program to buy back up to
10% of its outstanding common stock, which repurchase is subject to market
conditions and will occur through open market purchases or privately negotiated
transactions at prices and on terms acceptable to management.

                                       15
<PAGE>

Item 3.   Defaults Upon Senior Securities.

     None

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

     None.

Item 5.   Other Information.

     None.

Item 6.   Exhibits 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
     following Reports on Form 8-K:

             Current Report on Form 8-K dated July 5, 2001 which reported events
             under Item 5, Other Events.

                                   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: November 19, 2001                      By: /s/ Randeep S. Grewal
                                                --------------------------------
                                             Randeep S. Grewal, Chairman and
                                             Chief Executive Officer


Date: November 19, 2001                      By: /s/ Max Elghandour
                                                ------------------
                                             Max Elghandour,
                                             Chief Financial Officer

                                       16