Attached files

file filename
EX-32.1 - EXHIBIT 32.1 - TRI VALLEY CORPexh321.htm
EX-31.2 - EXHIBIT 31.2 - TRI VALLEY CORPexh312.htm
EX-31.1 - EXHIBIT 31.1 - TRI VALLEY CORPexh311.htm
EX-32.2 - EXHIBIT 32.2 - TRI VALLEY CORPexh322.htm



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 June 30, 2010
Commission File No. 001-31852
 

TRI-VALLEY CORPORATION
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or other jurisdiction of incorporation or organization)
 
94-1585250
(I.R.S. Employer Identification Number)
 
4550 California Avenue, Suite 600, Bakersfield, California 93309
(Address of Principal Executive Offices)

Registrant’s Telephone Number Including Area Code:   (661) 864-0500


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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer o         Accelerated filer x         Non-accelerated filer o         Smaller reporting company o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of July 28, 2010, the Registrant had 37,350,504 shares of common stock ($0.001 par value) outstanding.

 
 
 
 
 

 
 
 TRI-VALLEY CORPORATION
 
TABLE OF CONTENTS
 
 
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
11
     
ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk
16
     
ITEM 4.
Controls and Procedures
16
     
PART II.
OTHER INFORMATION
17
     
ITEM 1.
Legal Proceedings
17
     
ITEM 1A.
Risk Factors
18
     
ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
18
     
ITEM 5.
Other Information
18
     
ITEM 6.
Exhibits
18
     
 
SIGNATURES
19






















 

 

2
 
 

 
 

 PART I.   FINANCIAL INFORMATION

ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS

TRI-VALLEY CORPORATION
CONSOLIDATED BALANCE SHEET

ASSETS
           
   
June 30, 2010
   
December 31, 2009
 
   
(Unaudited)
   
(Audited)
 
             
Current Assets
           
   Cash
  $ 1,692,028     $ 290,926  
   Accounts Receivable TVOG Production Accrual
    890,505       33,623  
   Accounts Receivable - Trade
    44,391       63,151  
   Prepaid Expenses
    473,458       16,889  
   Accounts Receivable from Joint Venture Partners - Net
    646,314       1,432,785  
  Accounts Receivable - Other
    114,518       25,717  
                 
Total Current Assets
    3,861,214       1,863,091  
                 
Property and Equipment - Net
               
   Proved Properties
    25,265       25,265  
   Unproved Properties
    1,693,296       1,551,998  
   Rig
    1,093,829       1,132,847  
   Other Property and Equipment
    4,472,761       5,470,295  
 
               
Total Property and Equipment - Net
    7,285,151       8,180,405  
                 
Other Assets
               
   Deposits
    365,919       172,913  
   Investments in Joint Venture Partnerships
    23,284       17,400  
   Goodwill
    212,414       212,414  
   Other
    -       13,800  
                 
Total Other Assets
    601,617       416,527  
                 
Total Assets
  $ 11,747,982     $ 10,460,023  






The accompanying Notes are an integral part of these Consolidated Financial Statements.


 

 

3
 
 

 
 
 TRI-VALLEY CORPORATION
CONSOLIDATED BALANCE SHEET

LIABILITIES AND STOCKHOLDERS' EQUITY
           
             
   
June 30, 2010
   
December 31, 2009
 
   
(Unaudited)
   
(Audited)
 
             
Current Liabilities
           
    Notes Payable
  $ 389,142     $ 439,482  
   Trade -  Accounts Payable and Accrued Expenses
    4,247,635       5,962,774  
   Non-Trade Accounts Payable
    850,000       850,000  
                 
Total Current Liabilities
    5,486,777       7,252,256  
                 
Non-Current Liabilities
               
   Asset Retirement Obligation
    366,423       351,013  
   Long-Term Portion of Notes Payable
    1,298,565       1,395,649  
                 
Total Non-Current Liabilities
    1,664,988       1,746,662  
                 
Total Liabilities
    7,151,765       8,998,918  
                 
Stockholders' Equity
               
   Common Stock, $.001 par value; 100,000,000 shares
               
   authorized; 37,350,504* and 33,190,462 at June 30, 2010 and
               
   December 31, 2009, respectively.
    37,351       33,190  
   Less: Common Stock in Treasury, at cost; 120,025 shares
    (38,370)       (13,370)  
   Capital in Excess of Par Value
    56,977,612       51,469,228  
   Additional Paid in Capital - Warrants
    4,017,703          
   Additional Paid in Capital - Stock Options
    2,466,917       2,429,722  
   Accumulated Deficit
    (58,864,996)       (52,457,665)  
                 
Total Stockholders' Equity
    4,596,217       1,461,105  
                 
Total Liabilities and Stockholders' Equity
  $ 11,747,982     $ 10,460,023  

* As of June 30, 2010, the Company had received subscriptions to purchase an additional 94,790 shares, which had not been accepted because required subscription documents had not been received from the subscribers, and the necessary stock exchange approval has not been received.



The accompanying Notes are an integral part of these Consolidated Financial Statements.





 

 

4
 
 

 
 
TRI-VALLEY CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

             
   
For the Three Months Ended
June 30,
   
For the Six Months Ended
June 30,
 
   
2010
   
2009
   
2010
   
2009
 
Revenues
                       
   Sale of Oil and Gas
  $ 465,216     $ 311,097     $ 920,989     $ 617,693  
   Gain on Sale of Asset
    1,082,693       -       1,673,492       -  
   Partnership Income
    7,810       -       7,810       30,033  
   Other Income
    -       193,304       8,155       205,808  
   Interest Income
    904       5,312       2,019       15,950  
                                 
Total Revenues
  $ 1,556,623     $ 509,713     $ 2,612,465     $ 869,484  
                                 
Costs and Expenses
                               
   Production Costs
  $ 247,177     $ 632,946     $ 532,554     $ 1,058,846  
   Mining Exploration Expenses
    85,561       48,695       224,389       117,152  
   Depletion, Depreciation and Amortization
    168,904       445,370       334,292       895,562  
   Bad Debt Expense
    -       -       -       53,980  
   Interest Expense
    33,250       63,590       55,860       97,746  
   General and Administrative
    2,347,956       1,533,232       3,803,308       3,942,728  
   Warrant Expense
    2,855,454       -       4,017,703       -  
   Stock Option Expense
    24,278       -       51,690       -  
                                 
Total Costs and Expenses
  $ 5,762,580     $ 2,723,833     $ 9,019,796     $ 6,166,014  
                                 
Loss Before Minority Interest
  $ (4,205,957)     $ (2,214,119)     $ (6,407,331)     $ (5,296,530)  
                                 
Minority Interest
    -       (24,831)       -       (53,402)  
                                 
Net Loss
  $ (4,205,957)     $ (2,189,288)     $ (6,407,331)     $ (5,243,128)  
                                 
                                 
Basic Net Loss Per Share:
                               
   Loss from Operations
  $ (0.11)     $ (0.08)     $ (0.18)     $ (0.19)  
   Basic Loss Per Common Share
  $ (0.11)     $ (0.08)     $ (0.18)     $ (0.19)  
                                 
Weighted Average Number of Shares Outstanding
    36,902,102       27,614,867       35,039,904       27,536,111  
                                 
Weighted Potentially Dilutive Shares Outstanding
    40,851,924       30,100,334       36,550,615       30,112,944  
                                 



No dilution is reported since Net Income is a loss per ASC 260

The accompanying Notes are an integral part of these Consolidated Financial Statements.




 

 

5
 
 

 
 
TRI-VALLEY CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
       
   
For the Six Months Ended June 30,
 
   
2010
   
2009
 
             
Cash Flows from Operating Activities
           
   Net Loss
  $ (6,407,331)     $ (5,243,127)  
                 
Adjustments to Reconcile Net (Loss) to Net Cash
               
Provided/(Used) by Operating Activities
               
   Depreciation, Depletion and Amortization
    334,292       895,562  
   Minority Interest
    -       (53,403)  
   Warrant Expense
    4,017,703       -  
   Stock Options
    51,690       272,233  
   (Gain) or Loss on Sale of Property
    (1,673,492)       -  
   Bad Debt Expense
    -       53,980  
   Director Compensation
    95,400       -  
Changes in Operating Capital
            -  
   (Increase) or Decrease in Total Accounts Receivable
    (926,923)       769,468  
   (Increase) or Decrease in Total Other Assets
    (641,659)       (308,087)  
   Increase or (Decrease) in Accounts Payable, Deferred Revenue
               
      and Accrued Expenses
    (1,715,139)       2,170,039  
   Increase or (Decrease) in Accounts Payable to Joint Venture Partners
            -  
    and Related Parties
    (5,072,307)       (912,173)  
   (Increase) or Decrease in Accounts Receivable from Joint Venture Partners
    5,858,778       3,981,822  
              -  
Net Cash Provided/(Used) by Operating Activities
  $ (6,078,988)     $ 1,626,314  
                 
Cash Flows from Investing Activities
               
   Proceeds from the Sale of Property
    3,059,341       -  
   Capital Expenditures
    (809,476)       (465,096)  
                 
Net Cash Provided/(Used) by Investing Activities
  $ 2,249,865     $ (465,096)  
                 
Cash Flows from Financing Activities
               
   Principal Payments on Long-Term Debt
    (147,424)       (119,599)  
   Net Proceeds from the Issuance of Stock Options
    2,200       -  
   Net Proceeds from the Issuance of Common Stock
    5,414,945       19,301  
   Sale or (Purchase) of Treasury Stock
    (25,000)          
 
               
Net Cash Provided/(Used) by Financing Activities
  $ 5,244,721     $ (100,298)  
                 
Net Increase or (Decrease) in Cash and Cash Equivalents
    1,401,102       1,060,920  
Cash and Cash Equivalents at Beginning of Period
    290,926       2,000,787  
                 
Cash and Cash Equivalents at End of Period
  $ 1,692,028     $ 3,061,707  


The accompanying Notes are an integral part of these Consolidated Financial Statements.


 

 

6
 
 

 
 
TRI-VALLEY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
June 30, 2010, and 2009
(Unaudited)


NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS

Tri-Valley Corporation (“Tri-Valley”, “TVC”, or “the Company”) is a Delaware corporation which currently conducts its operations through five wholly-owned subsidiaries.  TVC’s principal offices are located at 4550 California Avenue, Suite 600, Bakersfield, California  93309; telephone (661) 864-0500.

The Company's five subsidiaries are:

 
Tri-Valley Oil & Gas Co. (“TVOG”) — conducts our hydrocarbon (crude oil and natural gas) business.  TVOG derives its revenue from oil and natural gas production.

 
Select Resources Corporation, Inc. (“Select”) — holds and maintains our precious metals and industrial minerals business.  Select holds and develops three major mineral assets in the State of Alaska.

 
Great Valley Production Services, LLC (“GVPS”) — conducts our oil production services, well workover services, and the business of refurbishment of oilfield equipment.

 
Great Valley Drilling Company, LLC (“GVDC”) — formed to own and operate a geothermal and oil drilling rig in the State of Nevada.

 
Tri-Valley Power Corporation — is inactive at the present time.

Tri-Valley's businesses are organized into four operating segments:

 
-
Oil and Gas Operations — This segment represents our oil and gas business.  During the first six months of 2010, this segment generated virtually all of the Company’s revenues from operations.

 
-
Rig Operations — This segment consists of drilling rig operations.

 
-
Minerals — This segment represents our precious metal and industrial mineral prospects.  In the past, it has generated revenues from pilot-scale mining projects and subcontracting exploration and business development projects.  This segment holds title to land or leases in the State of Alaska.  

 
-
Drilling and Development — This segment includes revenue received from crude oil and natural gas drilling and development operations performed for joint venture partners.


BASIS OF PRESENTATION

The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The results of operations for the six-month period ended June 30, 2010, are not necessarily indicative of the results to be expected for the full year.
 


7
 
 

 
 
NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Continued)

The accompanying consolidated financial statements do not include footnotes and certain financial presentations normally required under generally accepted accounting principles in the United States of America; and, therefore, should be read in conjunction with our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 29, 2010, for the year ended December 31, 2009.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, TVOG, Select, GVPS, GVDC, and Tri-Valley Power Corporation.  Other partnerships in which the Company has an operating or nonoperating interest, but in which the Company is not the primary beneficiary and owns less than 51%, are proportionately combined.    These include the TVC OPUS 1 Drilling Program, L.P., Martins-Severin, Martins-Severin Deep, and Tri-Valley Exploration 1971-1 Partnership.  All material intercompany accounts and transactions have been eliminated in combination and consolidation.

Reclassification

Certain reclassifications have been made to the prior year financial statements to be in conformity with fiscal year 2010 presentation.  Those reclassifications consisted of netting Accounts Receivable from Joint Venture Partners in Current Assets against Accounts Payable to Joint Venture Partners in Current Liabilities.  At June 30, 2010, the Company had net Accounts Receivable from Joint Venture Partners.

In the Company’s Consolidated Statement of Operations, Revenues from the Sale of Oil and Gas for the second quarters of 2010 and 2009, as well as, the first halves of both years, are reflected net of the diluent used to reduce the viscosity of our crude oil and increase the API gravity of the resulting blend, as per industry practice.  Likewise, Production Costs for the same periods have been stated net of the cost of the purchased diluent and associated transportation costs.

Finally, in Note 6 – Financial Information Relating to Industry Segments, we have eliminated a Non-Segmented Items allocation of Total Assets at June 30, 2010, and December 31, 2009.

NOTE 2 - PER SHARE COMPUTATIONS

Per share computations are based upon the weighted-average number of common shares outstanding during each period reported. As there were net losses at June 30, 2010, and 2009, common stock equivalents are not included in the computations, as their inclusion would be anti-dilutive.

NOTE 3 – SUMMARY OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-03, “Oil and Gas Reserve Estimation and Disclosures.”  This ASU amends the FASB’s Accounting Standards Codification (“ASC”) Topic 932, “Extractive Activities-Oil and Gas” to align the accounting requirements of Topic 932 with the U.S. Securities and Exchange Commission’s final rule, “Modernization of the Oil and Gas Reporting Requirements” issued on December 31, 2008.  In summary, the revisions in ASU 2010-03 modernize the disclosure rules to better align with current industry practices and expand the disclosure requirements for equity method investments so that more useful information is provided.  More specifically, the main provisions include the following:

 
An expanded definition of oil and gas producing activities to include nontraditional resources such as bitumen extracted from oil sands.
 
The use of an average of the first-day-of-the-month price for the 12-month period, rather than a year-end price for determining whether reserves can be produced economically.
 
Amended definitions of key terms such as “reliable technology” and “reasonable certainty” which are used in estimating proved oil and gas reserve quantities.
 
A requirement for disclosing separate information about reserve quantities and financial statement amounts for geographical areas representing 15 percent or more of proved reserves.
 
Clarification that an entity’s equity investments must be considered in determining whether it has significant oil and gas activities and a requirement to disclose equity method investments in the same level of detail as required for consolidated investments.

This ASU is effective for annual reporting periods ended on or after December 31, 2009, and it requires (1) the effect of the adoption to be included within each of the dollar amounts and quantities disclosed, (2) qualitative and quantitative disclosure of the estimated effect of adoption on each of the dollar amounts and quantities disclosed, if significant and practical to estimate and (3) the effect of adoption on the financial statements, if significant and practical to estimate.  Adoption of these requirements did significantly impact our reported reserves.
 
8
 
 

 
 
NOTE 4 - CHANGES IN SECURITIES

Common Stock

During the second quarter of 2010, 2,000 shares were issued to a former employee for stock options exercised and 30,000 shares of common stock were issued to our current six independent directors for services rendered in 2010.  3,846,157 shares were issued to six institutional investors in a registered direct offering at $1.30 per share for a total of $5.0 million in gross proceeds.  Also during the second quarter of 2010, we rescinded a stock subscription for 20,000 shares and refunded a total of $25,000.  As of June 30, 2010, the Company had received subscriptions to purchase an additional 94,790 shares, which had not been accepted because required subscription documents had not been received from the subscribers, and the necessary stock exchange approval has not been received.  Stock issuance cost for the second quarter of 2010 was $0.4 million.


NOTE 5 - STOCK-BASED COMPENSATION EXPENSE

Stock-Based Compensation Expense charged against income for stock-based awards in the second quarters of 2010 and 2009 was $24,278 and $167,227 pre-tax, respectively, and is included in the General and Administrative Expenses in the Consolidated Statements of Operations.  For further information regarding Stock-Based Compensation Expense, please refer to Note 2 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2009.


NOTE 6 - FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS

The Company reports operating segments according to ASC 280, “Disclosure about Segments of an Enterprise and Related Information.”

The Company identifies four principal, operating industry segments as described in Note 1 – Description of Business and Basis of Presentation, page 7.

The following table sets forth our Revenues by operating segment for the second quarters ended June 30, 2010, and 2009 and the six months ended June 30, 2010, and 2009 in millions of U.S. Dollars:

   
For Three Months Ended
   
For Three Months Ended
   
For Six Months Ended
   
For Six Months Ended
 
   
June 30, 2010
   
June 30, 2009
   
June 30, 2010
   
June 30, 2009
 
 Revenues
                       
    Oil and Gas Operations
  $ 1.60     $ 0.50     $ 2.60     $ 0.80  
    Rig Operations
    -       -       -       -  
    Minerals
    -       -       -       -  
    Non-Segmented Items
    -       -       -       -  
 Consolidated Revenues
  $ 1.60     $ 0.50     $ 2.60     $ 0.80  


The following table sets forth our Operating Income (Loss) by segment for the second quarters ended June 30, 2010, and 2009 and the six months ended June 30, 2010, and 2009, in millions of U.S. Dollars:

   
For Three Months Ended
   
For Three Months Ended
   
For Six Months Ended
   
For Six Months Ended
 
   
June 30, 2010
   
June 30, 2009
   
June 30, 2010
   
June 30, 2009
 
 Operating Income (Loss)
                       
    Oil and Gas Operations
  $ 1.30     $ (0.60)     $ 2.30     $ (0.90)  
    Rig Operations
    (0.30)       (0.20)       (0.40)       (0.50)  
    Minerals
    (0.10)       (0.10)       (0.30)       (0.30)  
    Non-Segmented Items
    (5.10)       (1.30)       (8.00)       (3.50)  
 Total Income (Loss)
  $ (4.20)     $ (2.20)     $ (6.40)     $ (5.20)  






9
 
 

 
 
NOTE 6 - FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS (Continued)

The following table summarizes our total assets, in millions of U.S. Dollars, at June 30, 2010, and December 31, 2009:

   
June 30,
   
December 31,
 
 Total Assets
 
2010
   
2009
 
 Oil and Gas Operations
  $ 8.60     $ 7.20  
 Rig Operations
    1.50       1.70  
 Minerals
    1.40       1.40  
 Drilling and Development
    0.20       0.20  
 Consolidated Total Assets
  $ 11.70     $ 10.50  

NOTE 7 - GOING CONCERN

The Company had a cash balance of $1.7 million at June 30, 2010, as compared with $0.3 million at December 31, 2009.  Total Current Assets increased $2.0 million from $1.9 million at December 31, 2009, to $3.9 million at June 30, 2010.  Total Current liabilities decreased from $7.2 million at the end of 2009 to $5.5 million at June 30, 2010, a decrease of $1.7 million.  See Note 11 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2009, for additional discussion.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company is dependent on raising additional capital; however, certain factors, such as the economic climate and interest rates, which directly affect the supply of capital, are beyond the Company’s control.  As such, the Company has no certainty that capital will be available when needed; and these conditions raise substantial doubt about its ability to continue as a going concern.

In December 2009, the Company engaged the services of an investment banking firm to act as financial advisor for Tri-Valley Corporation. During fiscal year 2010, the Company intends to market securities in discreet tranches or offerings with an aggregate value up to $15 million, and the Company closed its first tranche for $5.0 million on April 8, 2010.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


NOTE 8 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

At June 30, 2010, the Company had Non-Trade Accounts Payable of $850,000 which represented a related party payable to Mr. G. Thomas Gamble, Director and Chairman of the Board of Directors, and our largest shareholder.  This payable resulted from Mr. Gamble’s ordinary, intended purchase of the Company’s common stock.  When it was determined that the intended purchase of shares did not satisfy NYSE Amex, LLC, exchange requirements, the Company did not provide timely notice to Mr. Gamble. Upon such notification, the Company offered Mr. Gamble a refund of his investment funds.  The Company remains in negotiation with Mr. Gamble on this transaction.





















10
 
 

 
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Notice Regarding Forward-Looking Statements

This Report contains forward-looking statements. The words, "anticipate," "believe," "expect," "plan," "intend," "estimate," "project," "could," "may," "foresee," and similar expressions are intended to identify forward-looking statements. These statements include information regarding expected development of the Company's business, financing activities, relationship with customers, and developments in the oil and gas industry. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, actual results may vary materially and adversely from those anticipated, believed, estimated, or otherwise indicated.

The following is management’s discussion and analysis of certain significant factors that have affected aspects of our financial position and the results of operations during the periods included in the accompanying unaudited Consolidated Financial Statements.  You should read this in conjunction with the discussion under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and our audited Financial Statements for the year ended December 31, 2009, included in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 29, 2010, and the unaudited Consolidated Financial Statements included elsewhere in this Report.
 
The profitability of our operations in any particular accounting period will be directly related to the realized prices of crude oil and natural gas sold, the type and volume of crude oil and natural gas produced, and the results of development and exploitation activities. Realized prices for natural gas will fluctuate from one period to another due to regional market conditions and other factors, while oil prices will be predominantly influenced by global supply and demand. The aggregate amount of crude oil and gas produced may fluctuate based on the success of development and exploitation of oil and gas reserves pursuant to current reservoir management. We benefit from lower natural gas prices as we are a consumer of natural gas in our California operations.  The cost of natural gas used in our steaming operations, production rates, labor, equipment costs, maintenance expenses, and production taxes are expected to be the principal influences on operating costs. Accordingly, our results of operations may fluctuate from period to period based on the foregoing principal factors, among others.

Notable Second Quarter Items:

 
·
Closed a $5.0 million sale of common stock in a registered direct offering with institutional investors
 
·
Installed artificial lift on four additional oil wells at our Pleasant Valley project
 
·
Expanded 30-day steam cycles on two additional oil wells at our Pleasant Valley project
 
·
Initiated steam cycles on two existing oil wells at our Claflin property
 
·
Closed on the sale of the South Belridge and Shields-Arms leases for an aggregate price of $3.4 million, $0.9 million net  to Tri-Valley Corporation
 
·
Reduced past-due Trade Accounts Payable and Accrued Expenses by more than $1.0 million
 
·
Completed an NI 43-101 Report on our Shorty Creek gold exploration project in Alaska
 
·
Formed an Advisory Committee with partners who own or control a majority interest of the TVC OPUS 1 Drilling Program, L.P., to recommend a development and financing plan for the Pleasant Valley project
 
·
Reorganized management structure to strengthen the Company’s focus on accelerating oil revenue generation from existing assets
 
·
Joined the Russell Microcap Index


Notable Items and Expectations for the Third Quarter and Full Year 2010:
 
     Closing the balance of our planned $10.0 million financing for fiscal year 2010         
       ●  Expanding 30-day steam cycles on the three remaining oil wells at our Pleasant Valley project   
       ●    Completing the initial steam cycle on the remaining five oil wells at our Claflin property   
       ●   Converting an existing vertical well to salt water disposal well at our Pleasant Valley project
       ●   Recommending a development and financing plan for the Pleasant Valley project with the Advisory Committee of partners who own or control a majority interest of the TVC OPUS 1 Drilling Program, L.P.
       ●   Initiating drilling of a horizontal steam-injection well to start Steam Assisted Gravity Drainage (SAGD) process at our Pleasant Valley project
       ●   Drilling 10-15 new wells at our Claflin and Brea properties
       ●     Recompleting the Tilgreut Lease Number 1-18 at our Moffat Ranch property
     
     
     
     
     
11
 
 

 
RESULTS OF OPERATIONS

For The Three Months Ended June 30, 2010, Compared With The Three Months Ended June 30, 2009:

For the quarter ended June 30, 2010, Total Revenues were $1.6 million, compared with $0.5 million in the second quarter of 2009, an increase of $1.1 million. The $1.1 million increase in Total Revenues was primarily attributable to a gain on the sale of assets, although higher production and higher crude oil prices contributed to increased crude oil sales versus the second quarter of last year.  The Company had an Operating Loss of $4.2 million in the second quarter of 2010, compared with an Operating Loss of $2.2 million in the second quarter of 2009.  Total Costs and Expenses increased $3.0 million from the second quarter of 2009 to $5.8 million during the second quarter of 2010.  The increase of $3.0 million in Total Costs and Expenses between the two quarters was attributable to an increase in General and Administrative expenses of $0.8 million and a non-cash Warrant Expense of $2.9 million, partially offset by decreases in Production Costs and Depletion, Depreciation and Amortization of $0.4 million and $0.3 million, respectively.  The non-cash Warrant Expense of $2.9 million during the second quarter of 2010 resulted from a Black Scholes calculation of the expense related to the Series A and Series B Warrants purchased by a group of institutional investors under the terms of a Securities Purchase Agreement the Company executed on April 6, 2010, in a registered direct offering of $5.0 million of its common stock and warrants.  For additional information regarding the transaction, please refer to our Forms 8-K/A and 8-K, Section 1-- Registrant’s Business and Operations, Item 1.01 Entry into a Material Definitive Agreement, filed with the U.S. Securities and Exchange Commission on April 7, 2010, and April 6, 2010, respectively.

Revenues

The Company identifies reportable operating segments by the business or service provided.  The Company also allocates interest income and expense; depletion, depreciation, and amortization; and other operating expenses in its measure of operating segment profit or loss.  The following table sets forth our revenues and changes in revenues by segment for the second quarters of 2010 and 2009, in millions of U.S. Dollars:

                   
       
For Three Months Ended June 30,
     
               
Increase
       
   
2010
   
2009
   
(Decrease)
   
Change %
 
 Oil and Gas Operations
  $ 1.60     $ 0.50     $ 1.10       220 %
 Rig Operations
    -       -       -       0 %
 Minerals
    -       -       -       0 %
 Drilling and Development
    -       -       -       0 %
 Non-Segmented Items
    -       -       -       0 %
    Total Revenue
  $ 1.60     $ 0.50     $ 1.10       220 %


Operating Income (Loss)

The following table sets forth our Operating Loss and changes in Operating Loss by segment in the second quarters of 2010 and 2009, in millions of U.S. Dollars:

                   
   
For Three Months Ended June 30,                      (Increase)
     
   
2010
   
2009
   
Decrease
   
Change %
 
 Oil and Gas Operations
  $ 1.3     $ (0.6 )   $ 1.9       317 %
 Rig Operations
    (0.3 )     (0.2 )     (0.1 )     50 %
 Minerals
    (0.1 )     (0.1 )     -       0 %
 Non-Segmented Items
    (5.1 )     (1.3 )     (3.8 )     286 %
 Total Income (Loss):
  $ (4.2 )   $ (2.2 )   $ (2.0 )     89 %

12
 
 

 


Costs and Expenses

General and Administrative expenses were $2.3 million for the three months ended June 30, 2010, compared with $1.5 million for the three months ended June 30, 2009, an increase of $0.8 million, primarily attributable to legal representation and compliance expenses, consulting fees,  and severance benefits.  Despite increased production volumes and Total Revenues during the second quarter of 2010, Production Costs decreased $0.4 from the comparable quarter of 2009.  Depletion, Depreciation and Amortization decreased during the second quarter of 2010 by $0.3 million from the same period of 2009.  Second quarter 2010 non-cash Warrant Expense was $2.9 million, versus zero during the second quarter of 2009.   This Warrant Expense resulted from a Black Scholes calculation of the expense related to the Series A and Series B Warrants purchased by a group of institutional investors under the terms of a Securities Purchase Agreement the Company executed on April 6, 2010, in a registered direct offering of $5.0 million of its common stock and warrants.  For additional information regarding the transaction, please refer to our Forms 8-K/A and 8-K, Section 1-- Registrant’s Business and Operations, Item 1.01 Entry into a Material Definitive Agreement, filed with the U.S. Securities and Exchange Commission on April 7, 2010, and April 6, 2010, respectively.

OIL AND GAS OPERATIONS

Oil and Gas Operations Revenues during the second quarter of 2010 were approximately $1.5 million, compared with $0.5 million during the second quarter of 2009. The increase of $1.0 million resulted primarily from gains on the sale of assets, combined with an increase attributable to higher prices for our crude oil and higher production volumes during the second quarter of 2010. Although included for simplicity of presentation, the gain on the sale of assets is not considered true operating revenue. The Company expects that our Oil and Gas Operations should produce increasing revenues as a result of both increasing production and improved pricing and that the operating income of this segment should continue to improve throughout the remainder of the year as we continue to focus on reducing Production Costs.  Oil and Gas Operations was the only operating segment of the Company to generate significant Revenues during the second quarter of 2010.

Operating Income for Oil and Gas Operations for the second quarter of 2010 was $1.3 million, versus an Operating Loss of $0.6 million for the comparable period of 2009.  The change in Operating Income between the two quarters of $1.9 million was primarily attributable to the $1.1 million gain on the sale of assets cited earlier and to improvement Operating Income of $0.8 million from higher crude oil prices, higher production volumes, and reduced Production Costs during the second quarter of 2010 as compared with the same quarter in the prior year.

The Company continues to focus development on its Pleasant Valley project in the Oxnard Field in California and on its Claflin property in the Edison Field located east of Bakersfield, California.  As noted above in Notable Second Quarter Items, the Company installed artificial lift on four additional oil wells at its Pleasant Valley project and expanded 30-day steam cycles on two additional oil wells there during the second quarter of 2010.


RIG OPERATIONS

In 2006, we created two subsidiaries, Great Valley Production Services, LLC, and Great Valley Drilling Company, LLC.  At June 30, 2010, both companies were wholly-owned by the Company and inactive.  Our sole drilling rig remains idle, and we continue to explore its disposition.




















13
 
 

 
 
MINERALS

Metals

During the second quarter of 2010, the price of gold rose from $1,115.50 per ounce at March 31, 2010, to $1,244.00 per ounce at June 30, 2010, on the London afternoon fix, and reached a record high during this period.

Concerns over the viability of the single European currency, the Euro, as well as, perceptions by investors of fundamental weaknesses in several major European economies drove investment demand for gold during the second quarter of 2010.  The Company continues to maintain a strong focus on its gold exploration properties in the State of Alaska.

In November 2009, the Company retained the services of independent technical experts to produce Canadian National Instrument 43-101 Reports (NI 43-101), first on its Shorty Creek and, second on its Richardson, gold exploration projects in Alaska.  The 43-101 Report for Shorty Creek was completed during the second quarter of 2010, and the Report for Richardson is scheduled for completion during the fourth quarter of 2010.  NI 43-101 Reports conform to a set of rules and guidelines for reporting and displaying information related to mineral properties and are relied upon to fairly indicate economic potential for listing on Canadian stock exchanges, as well as, for project financing in other venues.

The NI 43-101 for the Shorty Creek Property was completed by independent geological consulting firm, Avalon Development Corporation, and identified a potentially large porphyry copper, gold, and molybdenum system covering an area approximately eight miles in diameter.

Industrial Minerals

The Admiral Calder calcium carbonate quarry in Alaska, wholly owned and managed by our subsidiary company, Select, remained in a care-and-maintenance status during the first half of 2010.  Select continued its market and operational assessment studies for the quarry's product.  In that respect, we completed our internal mine and economic model and contacted two potential customers.   Discussions are still progressing.  The high-grade product is considered to be in the top one percent of high whiteness and high brightness calcium carbonate deposits in the world and one of the few deposits to be located directly on tidewater.  On-site repair, maintenance and upgrade activities continued during the second quarter of 2010.


NON-SEGMENTED ITEMS

Non-Segmented Items primarily include Warrant and Stock Option Expenses, unallocated salaries and insurance expense, and Interest Expense. Non-Segmented Items increased from $1.3 million during the second quarter of 2009 to $5.1 million in the second quarter of 2010.  A majority of the $3.8 million increase between the comparable periods of 2010 and 2009 was attributable to non-cash Warrant Expense of $2.9 million and an increase in General and Administrative expenses of $0.9 million.   Offsetting the decrease in General and Administrative expenses was first quarter 2010 Warrant Expense of $1.2 million, versus zero during the first quarter of 2009.  This Warrant Expense resulted from a Black Scholes calculation of the expense related to the Series A and Series B Warrants purchased by a group of institutional investors under the terms of a Securities Purchase Agreement the Company executed on April 6, 2010, in a registered direct offering of $5.0 million of its common stock and warrants.  For additional information regarding the transaction, please refer to our Forms 8-K/A and 8-K, Section 1-- Registrant’s Business and Operations, Item 1.01 Entry into a Material Definitive Agreement, filed with the U.S Securities and Exchange Commission on April 7, 2010, and April 6, 2010, respectively.

FINANCIAL CONDITION, CAPITAL RESOURCES, AND LIQUIDITY

Total Current Assets were $3.9 million at June 30, 2010, $2.0 million higher than at year-end 2009. Cash increased from $0.3 million at December 31, 2009, to $1.7 million at June 30, 2010.

Accounts Receivable TVOG Production Accrual increased to $0.9 million at June 30, 2010, compared with less than $0.1 million at year-end 2009, as a result of higher production and sales during the second quarter of 2010. Prepaid Expenses increased $0.4 million from year-end 2009 primarily as a result of advanced royalty payments for our gold properties in Alaska and for our oil properties at Claflin and Pleasant Valley in California. Accounts Receivable from Joint Venture Partners decreased from $1.4 million at December 31, 2009, to $0.6 million at June 30, 2010.  Total Current Liabilities decreased $1.8 million from December 31, 2009, to $5.5 million at the end of the second quarter of this year, as the Company aggressively sought to reduce past due amounts with its vendors.  Non-Trade Accounts Payable remained unchanged at $0.8 million.
 
14
 
 

 
 
 Operating Activities

Net Cash Provided by Operating Activities was a negative $6.1 million for the six months ended June 30, 2010, compared with a positive figure of $1.6 million for the same reporting period in 2009. The change cash flow between the two periods was due principally to our Operating Loss, increases in Total Accounts Receivable and Total Other Assets, and a decrease in Accounts Payable, Deferred Revenue and Accrued Expenses.

Investing Activities

Net Cash Provided by Investing Activities was $2.2 million for the first six months of 2010 compared with a negative $0.5 million for the first six months of 2009. During the first half of 2010, the Company received $3.1 million from the sale of assets and spent $0.8 in capital expenditures for well maintenance and improvements. During the first half of 2009, we had capital expenditures of $0.5 million, again for well maintenance and improvements.

Financing Activities

Net Cash Provided by Financing Activities during the first half of 2010 was $5.2 million, compared with a negative $0.1 million for the same period of 2009. During the first six months of 2010, our Principal Payments on Long-Term Debt were $0.1 million, while Net Proceeds from the Issuance of Stock Options and Common Stock, less stock rescissions, were $5.4 million. During the same period in 2009, we received minimal Net Proceeds from the Issuance of Common Stock, and our Principal Payments on Long-Term Debt were not significantly different from those during the first six months of 2010.

Liquidity

The recoverability of our crude oil and natural gas reserves depends on future events, including obtaining adequate financing for our exploration and development program, successfully completing our planned drilling program, and achieving a level of operating revenues that is sufficient to support our cost structure.  The Company had cash balances of $1.7 million and $0.3 million at June 30, 2010, and December 31, 2009, respectively.  Total Current Liabilities at June 30, 2010, were $5.5 million versus $7.2 million at December 31, 2009.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company is dependent on raising additional capital; however, certain factors, such as the economic climate and interest rates, which directly affect the supply of capital, are beyond the Company’s control.  As such, the Company has no certainty that capital will be available when needed; and these conditions raise substantial doubt about its ability to continue as a going concern.

In December 2009, the Company engaged the services of an investment banking firm to act as financial advisor for Tri-Valley Corporation. During fiscal year 2010, the Company intends to market securities in discreet tranches or offerings with an aggregate value of up to $15 million.

Through the first quarter of 2010, the primary source of capital for the Company’s managed and operated projects had been investors in the TVC OPUS 1 Drilling Program, L.P. and the private placement of our common stock.  On April 6, 2010, the Company executed a Securities Purchase Agreement with a group of institutional investors to purchase $5.0 million of the Company’s common stock and warrants in a registered direct offering of securities.   For additional information regarding the transaction, please refer to our Forms 8-K/A and 8-K, Section 1-- Registrant’s Business and Operations, Item 1.01 Entry into a Material Definitive Agreement, filed with the  U.S. Securities and Exchange Commission on April 7, 2010, and April 6, 2010, respectively.  This transaction marked a milestone in the Company’s history as its first entrance into the registered public capital markets for financing.  Until the Company achieves profitability, we will remain dependent upon continued capital formation to cover a portion of our Operating and General and Administrative Expenses for fiscal 2010.

The Company has no off balance sheet arrangements.









15
 
 

 
 
ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Tri-Valley Corporation does not engage in hedging activities, nor does the Company employ commodity futures or forward contracts in its cash management functions.


ITEM 4.     CONTROLS AND PROCEDURES

In connection with the preparation of our Annual Report on Form 10-K for the year ended December 31, 2009, (“Annual Report”), management assessed the effectiveness of our disclosure controls and procedures and internal control over financial reporting.  This assessment is more fully described in Item 9a., Controls and Procedures, Evaluation of Disclosure Controls, of our Annual Report.  Based on that assessment, management identified material weaknesses in our internal controls.  Because of these material weaknesses, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2009, as discussed in Management’s Report on Internal Control in our Annual Report.

In connection with management’s assessment of our internal control over financial reporting, we identified material weaknesses in our internal control over financial reporting as of December 31, 2009, in the following areas; and management committed to aggressive remediation early during 2010:

 
Ÿ
Cash Management –During the first quarter of 2010, a new Treasury Management Account Structure was implemented with improved controls over authorizing and recording cash disbursements.  New procedures for reconciling all bank accounts monthly were implemented and followed.
 
Ÿ
Authorizing and Recording Equity Transactions –During the first quarter of 2010, new procedures were implemented and followed, ensuring that all equity transactions were reviewed and authorized by the Chief Financial Officer prior to recording.
 
Ÿ
Property, Plant and Equipment –During the first quarter of 2010, depreciation procedures were fully reviewed, and new procedures for properly recording expense for depreciable assets were implemented and followed.

As of March 31, 2010, a new evaluation was performed under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, Rule 13a-15(e) and Rule 15d-15(e)).

As a result of remediation of the material weaknesses in internal control over financial reporting cited above during the first quarter of 2010, at June 30, 2010, our management concluded that our disclosure controls and procedures remained effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms.

Our independent auditors have not tested or reviewed our new internal control over financial reporting as of the date of this Report.



 

















16
 
 

 
 
 PART II.   OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Other than ordinary routine litigation incidental to our business, certain additional material litigation follows:
 
Tri-Valley Corporation v. Hansen et al., No. 56-2009-00345844-CU-OR-VTA, Superior Court, Ventura County, California.
 
On May 29, 2009, we filed a quiet title action against the lessors of our Scholle-Livingston oil and gas leases (the “1934 Oil and Gas Leases”).  On July 2, 2009, the defendants filed a cross complaint.  Our lawsuit sought to quiet title to the 1934 Oil and Gas Leases by affirming the validity of the leases, and the cross complaint sought to terminate the leases.

On May 6, 2010, the parties entered into a Settlement Agreement and Release of Claims.  Certain key elements of this settlement agreement are:  (i) the 1934 Oil and Gas Leases were terminated, (ii) we entered into a Gas Pipeline and Use Agreement with the defendants, and (iii) the settlement expressly excluded any rights arising from separate leases of a 50% mineral interest in the property which we entered in 2009 (the “2009 Scholle Leases”), with a group of lessors related to the Scholle family (the “Scholle Heirs”).

During the week following the entry of the settlement agreement, the Hansen family filed another lawsuit, which is described below.

 
 
Hansen et al. v. Tri-Valley Corporation et al., No. 56-2010-00373549-CU-OR-VTA, Superior Court, Ventura County, California.
 
On May 11, 2010, plaintiffs filed a quiet title action against: (i) the Scholle Heirs with respect to a 50% mineral interest owned by the Scholle Heirs and (ii) us with respect to our 2009 Scholle Leases granted to us by the Scholle Heirs.  On July 9, 2010, we and the Scholle Heirs filed a cross-complaint for quiet title.   Our cross-complaint seeks to affirm the validity of the 50% mineral interest owned by the Scholle Heirs and to affirm the validity of our oil and gas leases from the Scholle Heirs, while plaintiffs’ complaint seeks to extinguish the mineral interest of the Scholle Heirs and to terminate our leases.   We believe that the 2009 Scholle Leases have significant and valuable heavy oil deposits. If the plaintiffs are successful in terminating the 2009 Scholle Leases, our potential for future development in the Pleasant Valley Field will be significantly impaired.
 
We are vigorously representing our interests in this lawsuit as we believe that we have valid claims and defenses.
 
 
 
Lenox v. Tri-Valley Corporation, No. 56-2009-00358492-CU-OR-VTA, Superior Court, Ventura County, California.
 
On September 25, 2009, the lessors of our Lenox and Snodgrass oil and gas leases (“Lenox/Snodgrass Leases”) filed a quiet title action against us. Our answer to the action was filed on November 6, 2009.  The principal relief sought by lessors is termination of our Lenox/Snodgrass Leases in our Pleasant Valley project.   We drilled one well and reworked several others on these leases.  Drilling and production operations on this property are suspended due to the pending litigation and waiting for the installation of an improved electric distribution system required by a local regulatory body. We believe that the Lenox/Snodgrass Leases have significant and valuable heavy oil deposits. If the plaintiffs are successful in terminating the Lenox/Snodgrass Leases, our potential for future development in the Pleasant Valley Field will be significantly impaired.
 
 
 
The court has extended the trial date to November 22, 2010.  We are vigorously representing our interests in this lawsuit as we believe that we have valid claims and defenses.
 
 
 
 







17
 
 

 
ITEM 1A.   RISK FACTORS

Please also refer to Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, filed with the U.S. Securities and Exchange Commission on March 29, 2010.

Currently pending lawsuits threaten to limit potential development of a significant and valuable heavy oil project.
 
There are currently two legal actions pending against us that may result in the termination of leases to properties in our Pleasant Valley project.  Please see Part II, Item 1. Legal Proceedings.  Drilling and production operations have not yet commenced on one of these properties due to the pending litigation.  Drilling and production operations on the other property are suspended due to the pending litigation and waiting for the installation of an improved electric distribution system required by a local regulatory body.  Our present intention is to develop these leases as part of our Pleasant Valley project.  We believe that the leases have significant and valuable heavy oil deposits. If the plaintiffs are successful in terminating the oil and gas leases, our potential for future development in the Pleasant Valley Field will be significantly impaired.  We are vigorously pursuing and defending these lawsuits, as we believe that we have valid claims and defenses.

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

During the second quarter of 2010, 30,000 shares of common stock were issued to our current six independent directors for services rendered in 2010.  These shares were issued in reliance on the exemption from securities registration requirements of the Securities Act of 1933 contained in Section 4 (2) thereof.  Also during the second quarter of 2010, we rescinded a stock subscription for 20,000 shares and refunded a total of $25,000.  As of June 30, 2010, the Company had received subscriptions to purchase an additional 94,790 shares, which had not been accepted because required subscription documents had not been received from the subscribers, and the necessary stock exchange approval has not been received.

ITEM 5.    OTHER INFORMATION

Executive Management Changes

On June 9, 2010, Mr. Michael P. Stark was appointed Vice President of Exploration, a position that had been vacant at the Company since 2008.  Mr. Stark has overall responsibility for the Company’s oil and gas exploration activities, including land management, and joined the executive management team reporting to Mr. Maston N. Cunningham, Chief Executive Officer and President.

On June 18, 2010, following the Company’s 2010 Annual Meeting of Shareholders, Mr. G. Thomas Gamble was re-elected Chairman of the Board of Directors; Mr. Maston N. Cunningham was re-elected Chief Executive Officer and President; and Mr. John E. Durbin was re-elected Chief Financial Officer, Treasurer, and Secretary.
 
On June 29, 2010, the Company announced additional organizational changes designed to strengthen the Company’s focus on accelerating crude oil revenue generation from existing assets.  Under the new structure, Mr. Maston N. Cunningham, Chief Executive Officer and President of Tri-Valley Corporation also became President of Tri-Valley Oil & Gas Co. (TVOG), replacing Mr. Joseph R. Kandle.  Mr. Kandle continues to serve as Senior Vice President, Corporate Development, for Tri-Valley Corporation, dedicating his full time to identifying new crude oil and natural gas opportunities, including the assessment of new technologies.

Additional changes announced on June 29, 2010, were a direct reporting relationship for Mr. James C. Kromer, Vice President of Operations for Tri-Valley Corporation to Mr. Cunningham.  The Company announced the consolidation of its minerals activities under Mr. Michael P. Stark, Vice President of Exploration, who also reports directly to Mr. Cunningham. And finally, Mr. John E. Durbin, Chief Financial Officer, assumed additional responsibilities for the human resources, administrative, and information technology functions of the Company; he reports directly to Mr. Cunningham.
 
ITEM 6.    EXHIBITS

Item                   Description

31.1
Rule 13a-14(a)/15d-14(a) Certification
31.2
Rule 13a-14(a)/15d-14(a) Certification
32.1
18 U.S.C. Section 1350 Certification
32.2
18 U.S.C. Section 1350 Certification


18
 
 

 

 SIGNATURES

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.


 
 
August 2, 2010
TRI-VALLEY CORPORATION
 
/s/ Maston N. Cunningham
    Maston N. Cunningham
    President and Chief Executive Officer
 
   
August 2, 2010
/s/ John E. Durbin
    John E. Durbin
    Chief Financial Officer
 
 
 
 
 
 
 
19