Edgar Filing: GEOGLOBAL RESOURCES INC.

form10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2009;
OR
o	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: 1-32158

GEOGLOBAL RESOURCES INC.
(Exact name of registrant as specified in its charter)
Delaware	33-0464753
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Suite #310, 605 – 1 Street SW, Calgary, Alberta, Canada		T2P 3S9
(Address of principal executive offices)		(Zip Code)
Registrant's telephone number, including area code:		+1 403-777-9250

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 þ

NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES o

NO þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o

NO þ

The number of shares outstanding of the registrant’s common stock as of November 13, 2009 was 72,805,756

GEOGLOBAL RESOURCES INC.

(a development stage enterprise)

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page No.

	PART I FINANCIAL INFORMATION

ITEM 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008	3

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2009 and September 30, 2008 and for the period from inception on August 21, 2002 to September 30, 2009	4

	Consolidated Statements of Changes in Stockholders' Equity	5

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and September 30, 2008 and for the period from inception on August 21, 2002 to September 30, 2009	7

	Notes to the Condensed Consolidated Financial Statements as at September 30, 2009	8

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	28

ITEM 4.	Controls and Procedures	29


	PART II OTHER INFORMATION

ITEM 1A.	Risk Factors	30

ITEM 6.	Exhibits	34

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PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GEOGLOBAL RESOURCES INC. (a development stage enterprise) CONDENSED CONSOLIDATED BALANCE SHEETS
	September 30, 2009			December 31, 2008
	(Unaudited)
Assets
Current
Cash and cash equivalents		18,324,561			25,432,814
Accounts receivable		389,740			229,642
Prepaids and deposits		171,847			242,059
		18,886,148			25,904,515

Restricted deposits (note 4)		6,925,000			10,800,000
Property and equipment (note 5)		42,550,200			35,160,814

		68,361,348			71,865,329

Liabilities
Current
Accounts payable		5,706,369			4,847,513
Accrued liabilities		1,551,787			4,330,591
Due to related companies (note 11)		71,653			32,916
		7,329,809			9,211,020

Asset retirement obligation (note 6)		760,184			633,598
		8,089,993			9,844,618
Stockholders' Equity
Capital stock
Authorized
125,000,000 common shares with a par value of $0.001 each
1,000,000 preferred shares with a par value of $0.01 each
Issued
72,805,756 common shares (December 31, 2008 – 72,805,756)		58,214			58,214
Additional paid-in capital		87,772,960			84,554,673
Deficit accumulated during the development stage		(27,559,819	)		(22,592,176	)
		60,271,355			62,020,711

		68,361,348			71,865,329
See Going Concern (note 2), Commitments (note 13) and Contingencies (note 14). The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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GEOGLOBAL RESOURCES INC. (a development stage enterprise) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)
	Three months ended Sept 30, 2009			Three months ended Sept 30, 2008			Nine months ended Sept 30, 2009			Nine months ended Sept 30, 2008			Period from Inception, August 21, 2002 to Sept 30, 2009

Revenue and other income
Oil sales		300,394			--			490,442			--			490,442
Interest income		65,169			230,006			263,198			921,857			5,824,775
Consulting fees recovered		--			--			--			--			66,025
Equipment costs recovered		--			--			--			--			19,395
Gain on sale of equipment		--			--			--			--			42,228
		365,563			230,006			753,640			921,857			6,442,865

Expenses
Operating		96,201			--			179,472			--			179,472
General and administrative		772,701			583,136			2,492,443			1,753,113			10,111,455
Consulting fees		170,017			135,524			522,513			599,785			6,425,229
Professional fees		145,955			187,075			594,301			705,771			3,474,121
Accretion expense		14,816			8,490			40,803			23,358			73,005
Depletion and depreciation		80,548			12,932			153,157			38,496			472,036
Impairment of oil and gas properties (note 5)		--			--			--			3,765,015			10,098,015
Foreign exchange (gain) loss		(14,370	)		38,829			(15,406	)		60,591			95,351
		1,265,868			965,986			3,967,283			6,946,129			30,928,684

Net loss and comprehensive loss for the period		(900,305	)		(735,980	)		(3,213,643	)		(6,024,272	)		(24,485,819	)

Warrant modification (note 9)		--			--			(1,754,000	)		--			(3,074,000	)

Net loss and comprehensive loss applicable to common stockholders		(900,305	)		(735,980	)		(4,967,643	)		(6,024,272	)		(27,559,819	)

Basic and diluted net loss per share (note 12)		(0.01	)		(0.01	)		(0.07	)		(0.09	)

Weighted average common shares outstanding		67,805,756			67,407,929			67,805,756			67,273,639

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

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GEOGLOBAL RESOURCES INC. (a development stage enterprise) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
	Number of Shares #			Capital Stock $			Additional paid-in capital $			Accumulated Deficit $			Stockholders' Equity $

Common shares issued on incorporation - Aug 21, 2002		1,000			64			--			--			64
Net loss and comprehensive loss for the period		--			--			--			(13,813	)		(13,813	)
Balance at December 31, 2002		1,000			64			--			(13,813	)		(13,749	)

Capital stock of GeoGlobal at August 29, 2003		14,656,688			14,657			--			10,914,545			10,929,202
Elimination of GeoGlobal capital stock in recognition of reverse takeover		(1,000	)		(14,657	)		--			(10,914,545	)		(10,929,202	)
Common shares issued during 2003:
On acquisition		34,000,000			34,000			1,072,960			--			1,106,960
Options exercised for cash		396,668			397			101,253			--			101,650
December 2003 private placement financing		6,000,000			6,000			5,994,000			--			6,000,000
Share issuance costs on private placement		--			--			(483,325	)		--			(483,325	)
Share issuance costs on acquisition		--			--			(66,850	)		--			(66,850	)
Stock-based compensation		--			--			62,913			--			62,913
Net loss and comprehensive loss for the year		--			--			--			(518,377	)		(518,377	)
Balance at December 31, 2003		55,053,356			40,461			6,680,951			(532,190	)		6,189,222

Common shares issued during 2004:
Options exercised for cash		115,000			115			154,785			--			154,900
Broker Warrants exercised for cash		39,100			39			58,611			--			58,650
Stock-based compensation		--			--			350,255			--			350,255
Net loss and comprehensive loss for the year		--			--			--			(1,171,498	)		(1,171,498	)
Balance at December 31, 2004		55,207,456			40,615			7,244,602			(1,703,688	)		5,581,529

Common shares issued during 2005:
Options exercised for cash		739,000			739			1,004,647			--			1,005,386
2003 Purchase Warrants exercised for cash		2,214,500			2,214			5,534,036			--			5,536,250
Broker Warrants exercised for cash		540,900			541			810,809			--			811,350
September 2005 private placement financing		4,252,400			4,252			27,636,348			--			27,640,600
Share issuance costs on private placement		--			--			(1,541,686	)		--			(1,541,686	)
Stock-based compensation		--			--			4,354,256			--			4,354,256
Net loss and comprehensive loss for the year		--			--			--			(3,162,660	)		(3,162,660	)
Balance at December 31, 2005		62,954,256			48,361			45,043,012			(4,866,348	)		40,225,025

Common shares issued during 2006:
Options exercised for cash		2,284,000			2,285			2,706,895			--			2,709,180
Options exercised for notes receivable		184,500			185			249,525			--			249,710
2003 Purchase Warrants exercised for cash		785,500			786			1,962,964			--			1,963,750
Share issuance costs		--			--			(74,010	)		--			(74,010	)
Stock-based compensation		--			--			3,012,514			--			3,012,514
Net loss and comprehensive loss for the year		--			--			--			(1,548,803	)		(1,548,803	)
Balance at December 31, 2006		66,208,256			51,617			52,900,900			(6,415,151	)		46,537,366

Common shares issued during 2007:
Options exercised for cash		317,500			317			320,358			--			320,675
June 2007 private placement financing		5,680,000			5,680			28,394,320			--			28,400,000
Share issuance costs on private placement		--			--			(2,612,973	)		--			(2,612,973	)
2007 Compensation Options		--			--			705,456			--			705,456
2005 Stock Purchase Warrant modification		--			--			1,320,000			(1,320,000	)		--
2005 Compensation Option & Warrant modification		--			--			240,000			--			240,000
Stock-based compensation		--			--			1,522,996			--			1,522,996
Net loss and comprehensive loss for the year		--			--			--			(1,543,110	)		(1,543,110	)
Balance as at December 31, 2007		72,205,756			57,614			82,791,057			(9,278,261	)		73,570,410

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GEOGLOBAL RESOURCES INC. (a development stage enterprise) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued) (Unaudited)
	Number of Shares #		Capital Stock $		Additional paid-in capital $		Accumulated Deficit $			Stockholders' Equity $

Balance from December 31, 2007		72,205,756		57,614		82,791,057		(9,278,261	)		73,570,410

Common shares issued during 2008:
Options exercised for cash		600,000		600		659,400		--			660,000
Stock-based compensation		--		--		1,104,216		--			1,104,216
Net loss and comprehensive loss for the year		--		--		--		(13,313,915	)		(13,313,915	)
Balance as at December 31, 2008		72,805,756		58,214		84,554,673		(22,592,176	)		62,020,711

Transactions during the period:
Compensation option and warrant modification (note 9)		--		--		264,000		--			264,000
Stock purchase warrant modification (note 9)		--		--		1,754,000		(1,754,000	)		--
Stock-based compensation (note 10)		--		--		1,200,287		--			1,200,287
Net loss and comprehensive loss for the period		--		--		--		(3,213,643	)		(3,213,643	)

Balance as at September 30, 2009		72,805,756		58,214		87,772,960		(27,559,819	)		60,271,355
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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GEOGLOBAL RESOURCES INC. (a development stage enterprise) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Nine months ended Sept 30, 2009			Nine months ended Sept 30, 2008			Period from Inception, August 21, 2002 to Sept 30, 2009

Cash flows provided by (used in) operating activities:
Net loss		(3,213,643	)		(6,024,272	)		(24,485,819	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion expense		40,803			23,358			73,005
Asset impairment		--			3,765,015			10,098,015
Depletion and depreciation		153,157			38,496			472,036
Gain on sale of equipment		--			--			(42,228	)
Stock-based compensation (note 10)		730,576			425,864			6,642,478
Compensation option & warrant modification (note 9)		264,000			--			504,000
Changes in operating assets and liabilities:
Accounts receivable		(160,098	)		12,972			(314,740	)
Prepaids and deposits		70,212			(29,221	)		(140,279	)
Accounts payable		78,158			(78,219	)		126,399
Accrued liabilities		(80,057	)		(384,700	)		281,601
Due to related companies		38,737			(57,515	)		29,897
		(2,078,155	)		(2,308,222	)		(6,755,635	)
Cash flows provided by (used in) investing activities:
Oil and natural gas property additions		(6,969,946	)		(11,637,262	)		(44,800,281	)
Property and equipment additions		(17,103	)		(15,028	)		(1,538,404	)
Proceeds on sale of equipment		--			--			82,800
Cash acquired on acquisition		--			--			3,034,666
Restricted deposits		3,875,000			(7,482,058	)		(8,095,000	)
Changes in investing assets and liabilities:
Cash call receivable		--			--			--
Prepaids and deposits		--			(2,504	)		(31,568	)
Accounts payable		780,698			433,941			5,530,962
Accrued liabilities		(2,698,747	)		765,171			1,270,186
		(5,030,098	)		(17,937,740	)		(44,546,639	)
Cash flows provided by (used in) financing activities:
Proceeds from issuance of common shares		--			662,000			75,612,165
Share issuance costs		--			--			(4,073,388	)
Changes in financing liabilities:
Note payable		--			--			(2,000,000	)
Accounts payable		--			--			61,078
Due to related companies		--			--			26,980
		--			662,000			69,626,835
Net increase (decrease) in cash and cash equivalents		(7,108,253	)		(19,583,962	)		18,324,561

Cash and cash equivalents, beginning of the period		25,432,814			48,134,858			--

Cash and cash equivalents, end of the period		18,324,561			28,550,896			18,324,561

Cash and cash equivalents
Current bank accounts		326,285			511,428			326,285
Short term deposits		17,998,276			28,039,468			17,998,276
		18,324,561			28,550,896			18,324,561

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

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GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

1. Organization and Nature of Operations

The Company is engaged primarily in the pursuit of petroleum and natural gas through exploration and development in India. Since inception, the efforts of GeoGlobal have been devoted to the pursuit of Production Sharing Contracts with the Gujarat State Petroleum Corporation, Oil India Limited among others, and the Government of India and the development thereof. The Company is a Delaware corporation whose common stock is listed and traded on the NYSE/Amex Exchange under the symbol GGR.

On August 29, 2003 (the inception date), the Company commenced oil and gas exploration activities. As of September 30, 2009, the Company has not earned significant revenue from its oil and gas operations. Accordingly, the Company’s activities are considered to be those of a “Development Stage Enterprise”. Among the disclosures required, are that the Company’s financial statements be identified as those of a development stage company. In addition, the statements of operations and comprehensive loss, stockholders equity (deficit) and cash flows are required to disclose all activity since the Company’s date of inception. The Company will continue to prepare its financial statements and related disclosures as those of a development stage enterprise until such time that the Company’s oil and gas properties have generated significant revenues. The Company has evaluated subsequent events to November 16, 2009 which is the date these financial statements were issued.

2. Going Concern

To date, the Company has not earned significant revenue from its operations and is considered to be in the development stage. The Company incurs negative cash flows from operations, and at this time all exploration activities and overhead expenses are financed by way of equity issuance and interest income. The recoverability of the costs incurred to date is uncertain and dependent upon achieving commercial production or sale.

The Company's ability to continue as a going concern is dependent upon obtaining the necessary financing to complete further exploration and development activities and generate profitable operations from its oil and natural gas interests in the future. The Company’s current operations are dependent upon the adequacy of its current assets to meet its current expenditure requirements and the accuracy of management’s estimates of those requirements. Should those estimates be materially incorrect, the Company’s liability to continue as a going concern may be impaired. The Company's financial statements as at and for the period ended September 30, 2009 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company during the nine months ended September 30, 2009 incurred a net loss of approximately $3.0 million, used approximately $2.1 million of cash flow in its operating activities, used approximately $5.1 million in its investing activities and had an accumulated deficit of approximately $27.3 million. These matters raise doubt about the Company’s ability to continue as a going concern.

The Company expects to incur expenditures to further its exploration programs and the Company's existing cash balance and any cash flow from operating activities may not be sufficient to satisfy its current obligations and meet its exploration commitments of approximately $24.4 million over the next four years of which, approximately $10.0 million is attributable to the twelve months ending September 30, 2010. The Company is considering various alternatives to remedy any future shortfall in capital. The Company may deem it necessary to raise capital through equity markets, debt markets or other financing arrangements, which could include the sale of oil and gas interests, or participation arrangements in oil and gas interests, to raise capital for continued exploration and development expenditures. There can be no assurance this capital will be available and if it is not, the Company may be forced to substantially curtail or cease exploration block acquisition and/or exploration expenditures.

As at September 30, 2009, the Company has working capital of approximately $11.8 million which is available for the Company's future operations. In addition, the Company has $6.9 million in restricted deposits pledged as security against the minimum work programs which will be released upon completion of the minimum work programs.

Should the going concern assumption not be appropriate and the Company is not able to realize its assets and settle its liabilities, commitments (as described in note 13) and contingencies (as described in note 14) in the normal course of operations, these condensed consolidated financial statements would require adjustments to the amounts and classifications of assets and liabilities, and these adjustments could be significant.

These condensed consolidated financial statements do not reflect the adjustments or reclassifications of assets and liabilities that would be necessary if the Company is unable to continue as a going concern.

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GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

3. Significant Accounting Policies

Basis of presentation

The accompanying condensed consolidated financial statements of the Company have not been audited and are presented in United States dollars unless otherwise noted and have been prepared by management in accordance with accounting principles generally accepted in the United States of America.

In the opinion of management, these condensed consolidated financial statements reflect all of the normal and recurring adjustments necessary to present fairly the financial position at September 30, 2009, the results of operations for the three and nine months ended and the cash flows for the nine months ended September 30, 2009 and 2008 and for the period from inception of August 21, 2002 to September 30, 2009. In preparing these accompanying condensed consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and related disclosures. The Company bases its estimates on various assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or circumstances.

Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this Form 10-Q pursuant to certain rules and regulations of the Securities and Exchange Commission. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2008. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Use of estimates

The preparation of the condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimated amounts.

Significant estimates with regard to the condensed consolidated financial statements include going concern assumption, the estimated carrying value of unproved properties, the estimated cost and timing related to asset retirement obligations, stock-based compensation, contingent liabilities and the realizability of deferred tax assets.

Recent Accounting Pronouncements

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 810-10-65, Transition Related to FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (formerly Statement of Financial Accounting Standards (“SFAS”) No. 160, Noncontrolling Interests in Consolidated Financial Statements) establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. In addition, ASC Subtopic 810-10-65 requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s owners and the interests of the noncontrolling owners of a subsidiary. This subtopic is effective for the fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. We adopted the provisions of ASC Subtopic 810-10-65 on January 1, 2009, with no material impact on our consolidated financial statements.

ASC Topic 805, Business Combinations (formerly SFAS No. 141 (Revised 2007), Business Combinations, and FASB Staff Position (“FSP”) SFAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies), provides that all business combinations are required to be accounted for at fair value under the acquisition method of accounting, but changes the method of applying the acquisition method from previous principles in a number of ways. Acquisition costs are no longer considered part of the fair value of an acquisition and will generally be expensed as incurred, noncontrolling interests are valued at fair value at the acquisition date, in-process research and development is recorded at fair value as an indefinite-lived intangible asset at the acquisition date, restructuring costs associated with a business combination are generally expensed subsequent to the acquisition date, and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. Contingent assets acquired and liabilities assumed in a business combination are to be recognized at fair value if fair value can be reasonably estimated during the measurement period. We adopted the changes to the provisions of ASC Topic 805 on January 1, 2009, with no material impact on our consolidated financial statements.

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GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

3. Significant Accounting Policies (continued)

ASC Subtopic 820-10-65, Transition Related to FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, provides additional guidance for estimating fair value in accordance with ASC 820, Fair Value Measurements and Disclosures, when the volume and level of activity for the asset or liability have significantly decreased. This subtopic re-emphasizes that regardless of market conditions the fair value measurement is an exit price concept as defined in ASC 820. This subtopic clarifies and includes additional factors to consider in determining whether there has been a significant decrease in market activity for an asset or liability and provides additional clarification on estimating fair value when the market activity for an asset or liability has declined significantly. The scope of this subtopic does not include assets and liabilities measured under quoted prices in active markets. ASC Subtopic 820-10-65 is applied prospectively to all fair value measurements where appropriate and will be effective for interim and annual periods ending after June 15, 2009. We adopted the provisions of ASC Subtopic 820-10-65 effective April 1, 2009, with no material impact on our consolidated financial statements.

ASC Topic 825-10-65, Transition Related to FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments amends ASC Topic 825, Financial Instruments, to require publicly-traded companies, as defined in ASC Topic 270, Interim Reporting, to provide disclosures on the fair value of financial instruments in interim financial statements. ASC Topic 825-10-65 is effective for interim periods ending after June 15, 2009. We adopted the new disclosure requirements in our second quarter 2009 financial statements with no material impact on our consolidated financial statements.

ASC Subtopic 320-10-65, Transition Related to FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (formerly FSP SFAS 115-2 and SFAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments issued in April 2009), provides transitional guidance for debt securities to make previous guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. Existing recognition and measurement guidance related to other-than-temporary impairments of equity securities was not amended by this subtopic. This subtopic is effective for interim and annual periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. We adopted the provisions of this subtopic effective April 1, 2009, with no material impact on our consolidated financial statements.

ASC Topic 855, Subsequent Events (formerly SFAS No. 165, Subsequent Events issued May 2009) establishes (i) the period after the balance sheet date during which management shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; (ii) the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements; and (iii) the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. This topic is effective for interim or annual financial periods ending after June 15, 2009, and shall be applied prospectively. We adopted the provisions of this topic effective April 1, 2009, with no material impact on our consolidated financial statements.

ASC Topic 860, Transfers and Servicing (formerly SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities-a replacement of FASB Statement No. 125, as amended by SFAS No. 166, Accounting for Transfers of Financial Assets – An Amendment of FASB Statement No. 140, issued in June 2009) amends prior principles to require more disclosure about transfers of financial assets and the continuing exposure, retained by the transferor, to the risks related to transferred financial assets, including securitization transactions. It eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures. It also enhances information reported to users of financial statements by providing greater transparency about transfers of financial assets and an entity’s continuing involvement in transferred financial assets. This topic will be effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009. Early application is not permitted. We will adopt the provisions of this topic effective January 1, 2010 and we do not expect the adoption to have a material impact on our consolidated financial statements.

ASC Subtopic 810-10-05, Consolidation – Variable Interest Entities (formerly FASB Interpretation No. 46 (Revised December 2003), Consolidation of Variable Interest Entities, as amended by SFAS No. 167, Amendments to FASB Interpretation No. 46(R) in June 2009), defines how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. This topic requires a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity will be required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements. This statement will be effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009. Early application is not permitted. We will adopt the provisions of this subtopic prospectively effective January 1, 2010 and we do not expect the adoption to have a material impact on our consolidated financial statements.

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Table of Contents

GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

3. Significant Accounting Policies (continued)

ASC Topic 105, Generally Accepted Accounting Principles (formerly SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162), issued in June 2009, became the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this statement, the codification superseded all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the codification became non-authoritative. This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We adopted the provisions of this topic in the third quarter of 2009, with no change to our consolidated financial statements other than changes in reference to various authoritative accounting pronouncements in our consolidated financial statements.

In August 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, Fair Value Measurements and Disclosures – Measuring Liabilities and Fair Value, amending Subtopic 820-10, Fair Value Measurement, to provide guidance on the manner in which the fair value of liabilities should be determined. This update provides clarification that, in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of defined valuation techniques. The amendments in this update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. We will adopt ASU No. 2009-05 in the fourth quarter of 2009, and we do not expect it will have a material impact on our consolidated financial statements.

4. Restricted Deposits

The Company’s PSCs relating to exploration blocks onshore and offshore India contain provisions whereby the joint venture participants must provide the Government of India a bank guarantee in the amount of 35% of the participant's share of the minimum work program for a particular phase, to be undertaken annually during the budget period April 1 to March 31. These bank guarantees have been provided to the Government of India and serve as guarantees for the performance of such minimum work programs and are in the form of irrevocable letters of credit which are secured by term deposits of the Company in the same amount.

The term deposits securing these bank guarantees are as follows:

	September 30, 2009 $		December 31, 2008 $
Exploration Blocks - India
Mehsana		160,000		160,000
Sanand/Miroli		1,300,000		1,300,000
Ankleshwar		1,490,000		1,490,000
Tarapur		940,000		940,000
DS 03		450,000		450,000
DS 04		215,000		215,000
KG Onshore		1,475,000		3,695,000
RJ 20		490,000		1,475,000
RJ 21		405,000		1,075,000
		6,925,000		10,800,000

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Table of Contents

GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

5. Property and Equipment

The amounts capitalized as oil and natural gas properties were incurred for the purchase, exploration and ongoing development of various properties in India.

	September 30, 2009 $			December 31, 2008 $
Oil and natural gas properties (using the full-cost method)
Proved properties		5,268,846			--
Unproved properties		46,477,369			44,182,707
Total oil and natural gas properties		51,746,215			44,182,707

Building		889,609			889,609
Computer, office and other equipment		565,996			548,893

Total property and equipment		53,201,820			45,621,209
Impairment of oil and natural gas properties		(10,098,015	)		(10,098,015	)
Accumulated depletion and depreciation		(553,605	)		(362,380	)

Total property and equipment, net		42,550,200			35,160,814

The Company’s oil and natural gas properties consist of contract interests in 10 exploration blocks held in India.

The Company has capitalized $807,584 (September 30, 2008 - $866,478) of general and administrative expenses directly related to exploration activities. These amounts include $469,711 (September 30, 2008 - $373,291) of capitalized stock-based compensation expense and capitalized support equipment depreciation of $38,067 (September 30, 2008 - $nil).

Impairment of Oil and Gas Properties

The Company performed a ceiling test calculation at September 30, 2009, to assess the ceiling limitation of its proved oil properties. The price of crude oil was $62.95 and is based upon the Nigeria Bonny Light bench mark. At September 30, 2009, the Company’s net capitalized costs of proved oil and natural gas properties did not exceed the ceiling limitation.

For the nine months ended September 30, 2009, the Company charged $nil (September 30, 2008 - $3,765,015) to the statement of operations for impairment charges.

6. Asset Retirement Obligation

Asset retirement obligations are recorded for an obligation where the Company will be required to retire, dismantle, abandon and restore tangible long-lived assets.

The following table summarizes the changes in the asset retirement obligation:

	September 30, 2009 $		December 31, 2008 $

Asset retirement obligation at beginning of period		633,598		318,922
Liabilities incurred		85,783		282,474
Accretion expense		40,803		32,202

Asset retirement obligation at end of period		760,184		633,598

7. Fair Value Measurements

Periodically, the Company utilizes cash equivalents held in guaranteed investment certificates, terms deposits and bearer deposits notes to invest a portion of its cash on hand. These securities are carried at fair value on the consolidated balance sheets, with the changes in the fair value included in the consolidated statements of operations and comprehensive loss for the period in which the change occurs.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A fair value hierarchy that prioritizes the inputs used to measure fair value gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

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Table of Contents

GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

7. Fair Value Measurements (continued)

The three levels of the fair value hierarchy are defined as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

As at September 30, 2009, the Company’s financial assets that are re-measured at fair value on a recurring basis consisted of financial assets of $17,998,276 that are classified as cash and cash equivalents and $6,925,000 that are classified as restricted deposits in the Consolidated Balance Sheets. These are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices for identical assets.

8. Escrowed common stock

In August 2003, the Company completed a transaction with GeoGlobal Resources (India) Inc., a corporation then wholly-owned by Mr. Jean Paul Roy, whereby the Company acquired all of the outstanding capital stock of GeoGlobal Resources (India) Inc. in exchange for 34.0 million shares of its Common Stock and a US$2.0 million promissory note which has been paid in full. Of the 34.0 million shares, 14.5 million shares were delivered to Mr. Roy at the closing of the transaction and an aggregate of 19.5 million shares were held in escrow.

In August 2004, 14.5 million shares were released to Mr. Roy from escrow upon the commencement of a drilling program on the KG Offshore Block. The final 5.0 million shares remain in escrow and will be released only if a commercial discovery as defined under the PSC is declared on the KG Offshore Block. Mr. Roy requested the release from escrow of the remaining 5.0 million shares and the Company’s Board of Directors is currently reviewing that request.

9. Warrants

From time to time, the Company has issued compensation options, compensation warrants and or warrants (collectively the “warrants”) in connection with financing transactions. The fair value of any warrants issued is recorded as a reduction to share capital related to the financing transaction with a corresponding increase recorded to Warrants. The fair value of the Warrants is determined using the Black–Scholes option pricing model and management’s assumptions as disclosed.

Activity with respect to all warrants is presented below for the periods as noted:

	September 30, 2009				December 31, 2008
	Warrants #		Weighted Average Exercise Price $		Warrants #		Weighted Average Exercise Price $

Outstanding warrants at the beginning of period		5,599,716		7.91		5,599,716		7.91
Warrants granted		--		--		--		--
Warrants exercised		--		--		--		--
Warrants outstanding at the end of period		5,599,716		7.91		5,599,716		7.91

Exercisable at end of period		5,599,716		7.91		5,599,716		7.91

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Table of Contents

GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

9. Warrants (continued)

The weighted average remaining life by exercise price as of September 30, 2009 is summarized below:

Warrants	Outstanding and Exercisable #		Weighted Average Remaining Life (Months)		Weighted Average Exercise Price $
Compensation Options		535,944		23.7		5.55
Compensation Warrants		97,572		23.7		9.00
Stock Purchase Warrants		4,966,200		23.7		8.14
		5,599,716		23.7		7.91

The warrants have certain terms and conditions as follows:

On May 26, 2009, the Board of Directors approved a two year extension for all Compensation Options, Compensation Warrants and Stock Purchase Warrants from June 20, 2009 to June 20, 2011;

Compensation options enable the holder to purchase one fully-paid non-assessable common share of the Company at a specified price up to June 20, 2011. Certain compensation options consist of one compensation option and one half of one common share purchase warrant referred to as compensation warrants;

Compensation warrants enable the holder to purchase one fully-paid non-assessable common share of the Company at a specified price up to June 20, 2011; and

Warrants enable the holder to purchase one fully-paid non-assessable common share of the Company at a specified price up to June 20, 2011.

The Company has recorded the incremental difference in the fair value of these instruments immediately prior to and after the modification. The fair value of the instruments was determined using a Black-Scholes option-pricing model using the following assumptions as at the date of extension:

	June 20, 2009
Risk-free interest rate	1.25%
Expected life	2.0 years
Expected volatility	127.7%
Expected dividend yield	0%

The resulting incremental fair value of $1,754,000 associated with the Stock Purchase Warrants held by shareholders was recorded as a charge to the deficit, with a corresponding entry to additional paid-in capital.

The resulting incremental fair value of the Compensation Options and the Compensation Option Warrants of $264,000 were recorded as charge to general and administrative expense, with a corresponding entry to additional paid-in capital.

10. Stock Options

The Company's 2008 Stock Incentive Plan (2008 Plan)

On July 29, 2008 at the Annual Meeting of Stockholders, the shareholders of the Company approved the adoption of the 2008 Plan. Under the terms of the 2008 Plan, 12,000,000 common shares have been reserved for issuance on exercise of options granted under the 2008 Plan. As at September 30, 2009, the Company had 10,345,000 common shares remaining for the grant of options under the 2008 Plan. The Board of Directors of the Company may amend or modify the 2008 Plan at any time, subject to any required stockholder approval. The 2008 Plan will terminate on the earliest of: (i) May 30, 2018; (ii) the date on which all shares available for issuance under the 2008 Plan have been issued as fully-vested shares; or, (iii) the termination of all outstanding options in connection with certain changes in control or ownership of the Company.

Stock-based Compensation

The Company recognizes compensation cost for stock-based compensation arrangements with employees, non-employee consultants and non-employee directors based on their grant date fair value using the Black-Scholes option-pricing model, such cost to be expensed over the compensations’ respective vesting periods. For awards with graded vesting, in which portions of the award vest in different periods, the Company recognizes compensation costs over the vesting periods for each separate vested tranche.

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Table of Contents

GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

10. Stock Options (continued)

The following table summarizes stock-based compensation for employees, non-employee consultants and non-employee directors:

	Three months ended Sept 30, 2009		Three months ended Sept 30, 2008			Nine months ended Sept 30, 2009		Nine months ended Sept 30, 2008			Period from Inception August 21, 2002 to Sept 30, 2009
	$		$			$		$			$
Stock-based compensation
Consolidated Statements of Operations
General and administrative		113,969		118,297			693,139		484,785			3,345,989
Consulting fees		11,284		(5,095	)		37,437		(58,921	)		3,296,489
		125,253		113,202			730,576		425,864			6,642,478
Consolidated Balance Sheets
Oil and gas interests		90,968		69,580			469,711		373,291			4,964,959
		216,221		182,782			1,200,287		799,155			11,607,437

At September 30, 2009, the total compensation cost related to non-vested awards not yet recognized was $523,586 (December 31, 2008 – $1,719,349) which will be recognized over a weighted-average period of 1.5 years. During the nine months ended September 30, 2009, no options were exercised. During the nine months ended September 30, 2008, 600,000 options were exercised for total gross proceeds of $662,000.

No income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from the exercise of stock options.

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model. Weighted average assumptions used in the valuation are disclosed in the following table:

	Three months ended Sept 30, 2009		Three months ended Sept 30, 2008		Nine months ended Sept 30, 2009		Nine months ended Sept 30, 2008
Fair value of stock options granted (per option)	$	0.69	$	3.08	$	0.49	$	3.08
Risk-free interest rate		2.0%		4.1%		1.6%		4.1%
Volatility		115%		93%		110%		93%
Expected life	4.8 years		10 years		3.5 years		10 years
Dividend yield		0%		0%		0%		0%

Stock option table

Activity with respect to all stock options is presented below for the periods as noted:

	September 30, 2009					December 31, 2008
	Shares #			Weighted Average Exercise Price $		Shares #			Weighted Average Exercise Price $
Outstanding options at beginning of period		5,325,000			3.67		4,470,000			4.04
Options granted		280,000			1.15		1,575,000			1.94
Options exercised		--			--		(600,000	)		1.10
Options expired		(35,000	)		6.45		(110,000	)		6.50
Forfeitures and other adjustments		--			--		(10,000	)		7.52
Options outstanding at end of period		5,570,000			3.55		5,325,000			3.69

Outstanding aggregate intrinsic value	$	2,100				$	--

Exercisable at end of period		4,592,500			3.97		3,610,000			4.37

Exercisable aggregate intrinsic value	$	1,400				$	--

Page 15

Table of Contents

GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

10. Stock Options (continued)

The weighted average remaining life by exercise price as of September 30, 2009 is summarized below:

Range of Exercise Prices $		Outstanding Shares #		Weighted Average Remaining Life Months		Exercisable Shares #		Weighted Average Exercise Price $
	1.00 - 2.99		1,655,000		41.0		677,500		1.70
	3.00 - 4.99		2,375,000		49.0		2,375,000		3.88
	5.00 - 5.99		1,490,000		34.1		1,490,000		5.04
	6.00 - 6.99		50,000		72.1		50,000		6.81
			5,570,000		42.9		4,592,500		3.97

11. Related Party Transactions

Related party transactions are measured at the exchange amount which is the amount of consideration established and agreed by the related parties.

Roy Group (Mauritius) Inc. (RGM)

In March 2003, the Company entered into a Participating Interest Agreement with RGM (a party related by a common officer and director of the Company, who is also a principal shareholder of the Company), whereby the Company assigned and holds in trust for RGM 50% of the benefits and obligations of the production sharing contract covering the KG Offshore Block leaving the Company with a net 5% participating interest in the KG Offshore Block. The assignment of this interest is subject to approval by the Government of India.

Under the terms of the Participating Interest Agreement and until approval by the Government of India, the Company retains the exclusive right to deal with the other partners to the KG Offshore Block and is entitled to make all decisions regarding the interest assigned to RGM. The Company has a right of set-off against sums owing to it by RGM. In the event that the Indian government consent is delayed or denied, resulting in either RGM or the Company being denied an economic benefit it would have realized under the Participating Interest Agreement, the parties agreed to amend the Participating Interest Agreement or take other reasonable steps to assure that an equitable result is achieved consistent with the parties' intentions contained in the Participating Interest Agreement.

Roy Group (Barbados) Inc. (Roy Group)

Roy Group is related to the Company by common management and is controlled by an officer and director of the Company who is also a principal shareholder of the Company. On August 29, 2003, the Company entered into a Technical Services Agreement with Roy Group to provide services to the Company as assigned by the Company and to bring new oil and gas opportunities to the Company. The term of the agreement, as amended, extends through December 31, 2009 and continues for successive periods of one year thereafter. Roy Group receives consideration of $350,000 per year, as outlined and recorded below:

	Three months ended Sept 30, 2009		Three months ended Sept 30, 2008		Nine months ended Sept 30, 2009		Nine months ended Sept 30, 2008		Period from Inception, August 21, 2002 to Sept 30, 2009
	$		$		$		$		$
Consolidated Statements of Operations and Comprehensive Loss
Consulting fees		65,625		43,750		196,875		131,250		640,524
Consolidated Balance Sheets
Oil & gas interests		21,875		43,750		65,625		131,250		1,315,291
		87,500		87,500		262,500		262,500		1,955,815

At September 30, 2009, the Company owed Roy Group $34,817 (December 31, 2008 - $35,800) for services provided pursuant to the Technical Services Agreement and expenses incurred on behalf of the Company. These amounts bear no interest and have no set terms of repayment.

Page 16

Table of Contents

GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

11. Related Party Transactions (continued)

D.I. Investments Ltd. (DI)

DI is related to the Company by common management and is controlled by an officer and director of the Company. DI charges consulting fees for management, financial and accounting services rendered, as outlined and recorded below:

	Three months ended Sept 30, 2009		Three months ended Sept 30, 2008		Nine months ended Sept 30, 2009		Nine months ended Sept 30, 2008		Period from Inception, August 21, 2002 to Sept 30, 2009
	$		$		$		$		$
Consolidated Statements of Operations and Comprehensive Loss
Consulting fees		53,188		53,188		159,562		159,563		1,074,027

At September 30, 2009, the Company owed DI $31,000 (December 31, 2008 – the Company was owed $16,629) as a result of services provided and expenses incurred on behalf of the Company. These amounts bear no interest and have no set terms of repayment.

Amicus Services Inc. (Amicus)

Amicus is related to the Company by virtue of being controlled by a brother of an officer and director of the Company. Amicus charged consulting fees for IT and computer related services rendered, as outlined below:

	Three months ended Sept 30, 2009		Three months ended Sept 30, 2008		Nine months ended Sept 30, 2009		Nine months ended Sept 30, 2008		Period from Inception, August 21, 2002 to Sept 30, 2009
	$		$		$		$		$
Consolidated Statements of Operations and Comprehensive Loss
Consulting fees		8,321		25,217		32,298		67,534		317,209

The Company recognized compensation cost or recovery of compensation cost for stock-based compensation arrangements with the principal of Amicus as outlined and recorded below:

Consolidated Statements of Operations and Comprehensive Loss
Consulting fees			4,063				(2,830	)			14,565				(35,168	)			600,190

At September 30, 2009, the Company owed Amicus $5,836 (December 31, 2008 - $13,745) as a result of services provided and expenses incurred on behalf of the Company. These amounts bear no interest and have no set terms of repayment.

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Table of Contents

GeoGlobal Resources Inc.

(a development stage enterprise)

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

September 30, 2009

12. Per Share Amounts

The following table presents the reconciliation between basic and diluted income per share:

	Three months ended Sept 30, 2009			Three months ended Sept 30, 2008		Nine months ended Sept 30, 2009		Nine months ended Sept 30, 2008
	$			$		$		$

Net loss and comprehensive loss for the period		900,305			735,980		3,213,643		6,024,272
Stock purchase warrant modification		--			--		1,754,000		--
Net loss and comprehensive loss applicable to common stockholders		900,305	<