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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 30, 2004
Commission File No. 0-6119

Tri-Valley Corporation
(Exact name of registrant as specified in its charter)

Delaware
84-0617433
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
  

5555 Business Park South, Suite 200, Bakersfield, California 93309
(Address of principal executive offices)

(661) 864-0500
(Registrant's telephone number, including area code)

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. Yes x No o


The number of shares of Registrant's common stock outstanding at September 30, 2004 was 20,774,552.

  
     
 

TRI-VALLEY CORPORATION

INDEX
   
Page 
PART I -
FINANCIAL INFORMATION
3
     
Item 1.
Consolidated Financial Statements
3
     
     
Item 2.
Management's Discussion and Analysis of Financial
  
 
Condition and Results of Operations
8
     
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
10
     
Item 4.
Controls and Procedures
10
     
     
PART II -
OTHER INFORMATION
10
     
Item 1.
Legal Proceedings
10
     
Item 2.
Changes in Securities
10
     
Item 6.
Exhibits and Reports on Form 8-K
11
     
SIGNATURES
 
12


  
  2  
 

PART I - FINANCIAL INFORMATION

Item 1. Unaudited Consolidated Financial Statements

TRI-VALLEY CORPORATION
CONSOLIDATED BALANCE SHEETS


ASSETS

   
Sept. 30, 2004
  
Dec. 31, 2003
  
   
(Unaudited)
  
(Audited)
  
           
Current Assets
          
Cash
  
$
8,483,566
  
$
6,006,975
  
Accounts receivable, trade
   
142,280
    
163,825
  
Prepaid expenses
    
68,029
    
12,029
  
               
Total Current Assets
    
8,693,875
    
6,182,829
  
               
Property and Equipment, Net
    
1,742,325
    
1,543,121
  
               
Other Assets
              
Deposits
    
372,105
    
372,105
  
Investments in partnerships
    
17,400
    
17,400
  
Other
    
13,913
    
13,913
  
Goodwill (net of accumulated amortization of $221,439 at December 31, 2003)
    
212,414
    
212,414
  
               
Total Other Assets
    
615,832
    
615,832
  
               
Total Assets
  
$
11,052,032
  
$
8,341,782
  

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

  
  3  
 

LIABILITIES AND SHAREHOLDERS' EQUITY

   
Sept. 30, 2004
  
Dec. 31, 2003
  
   
(Unaudited)
  
(Audited)
  
CURRENT LIABILITIES
          
Notes and contracts payable
  
$
2,425
 
$
9,985
 
Trade accounts payable & accrued expenses
    
401,669
   
724,784
 
Accounts payable to joint venture participants
    
87,018
   
91,275
 
Advances from joint venture participants
    
7,109,814
   
5,647,150
 
               
Total Current Liabilities
    
7,600,926
   
6,473,194
 
               
Long-term Portion of Notes and Contracts Payable
    
6,953
   
16,805
 
               
               
Commitments
              
               
Shareholders' Equity
              
Common stock, $.001 par value: 100,000,000 shares authorized; 20,774,552 and 20,097,627 issued and outstanding at Sept. 30, 2004 and Dec. 31, 2003, respectively
    
20,774
   
20,115
 
Less: Common stock in treasury, at cost, 100,025 shares
    
(13,370
)
  
(13,370
)
Capital in excess of par value
    
11,766,419
   
9,010,453
 
Accumulated deficit
    
(8,329,670
)
  
(7,165,415
)
               
Total Shareholders' Equity
    
3,444,153
   
1,851,783
 
               
Total Liabilities and Shareholders' Equity
  
$
11,052,032
 
$
8,341,782
 

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

  
  4  
 

TRI-VALLEY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

   
For the Three Months
  
For the Nine Months
  
   
Ended Sept. 30
  
Ended Sept. 30
  
   
2004
  
2003
  
2004
  
2003
  
Revenues
                  
Sale of oil and gas
  
$
193,537
 
$
215,041
 
$
615,805
 
$
685,096
 
Other income
    
14,863
   
15,857
   
52,674
   
36,930
 
Sale of oil & gas prospects
    
-0-
   
2,894,480
   
2,054,500
   
3,862,480
 
Interest income
    
14,606
   
11,684
   
21,218
   
19,707
 
Total Revenues
    
223,006
   
3,137,062
   
2,744,197
   
4,604,213
 
                           
Cost and Expenses
                          
Oil and gas lease expense
   
25,712
   
49,563
   
101,880
   
139,184
 
Mining exploration expenses
    
46,411
   
177,071
   
850,588
   
239,958
 
Project geology, geophysics, land & administration
    
197,900
    
2,418,593
   
1,437,979
   
3,616,235
 
Depletion, depreciation and amortization
    
7,233
   
7,233
   
21,699
   
21,699
 
Interest
    
421
   
620
   
32,961
   
2,000
 
General administrative
    
424,433
   
311,412
   
1,463,345
   
986,157
 
Total Cost and Expenses
    
702,110
   
2,964,492
   
3,908,452
   
5,005,233
 
                           
Net Income (Loss)
  
$
(479,104
)
$
172,570
  
$
(1,164,255
)
$
(401,020
)
Basic & Diluted Earnings per Share
  
$
(.02
)
$
(.00
)
$
(.06
)
$
(.02
)
Weighted Average Number of Shares
    
20,703,935
   
19,821,348
   
20,430,239
   
19,803,681
 

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

  
  5  
 

TRI-VALLEY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)