1116927--3/31/2010--GEOPETRO_RESOURCES

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Risks Related to Our Business As of December 31, 2009, we have gross capitalized costs totaling $70 million as proved and unproved oil and gas properties and gas processing plant whereas we have generated revenues of only $40 million since January 1, 2003 and revenues of only $4.1 million during the fiscal year ended December 31, 2009. We may be unable to integrate successfully the operations of the Madisonville Gas Treatment Plant with our operations and we may not realize all the anticipated benefits of the Madisonville Gas Treatment Plant. Even if we are able to successfully complete the expansion of the Madisonville Gas Treatment Plant from 18 MMcf/d to 68 MMcf/d, third parties may seek access to the plant through regulatory proceedings, which could limit our use of the Plant and disrupt our production operations. Substantially all of our current revenues are generated by our interest in the Madisonville Project. Delays or interruptions of the Madisonville Project natural gas drilling and production operations including, but not limited to, events beyond our control or the failure of third parties on which we rely to provide key services, could negatively impact our revenues. We do not own all of the land on which our pipelines and facilities are located, and we are therefore subject to the possibility of not being able to retain necessary land use and associated increased costs. If third-party pipelines and other facilities interconnected to our natural gas pipelines and processing facilities become partially or fully unavailable to transport natural gas, our revenues could be adversely affected. In excess of 90% of our revenues to date have been derived from sales by MGP to two customers. The loss of one or both these customers could have a material adverse impact on our oil and gas revenues. Unless we replace our oil and natural gas reserves, our reserves and production will decline. Our exploration and development drilling activities may not be commercially successful. The drilling of exploratory oil and natural gas wells is expensive, highly speculative and often unproductive. Our evaluations of the oil and gas prospects of our properties may be wrong. Our business may be harmed by failures of third party operators on which we rely. Our percentage share of oil and gas revenues from our Indonesian property is diminished by the terms of our production sharing contract in the Bengara Block. Drilling and completion equipment, services, supplies and personnel are scarce and may not be available when needed, which could significantly disrupt or delay our operations. Our working interest in properties, and our ability to realize any profits from such properties, will be diminished to the extent that we enter into farmout arrangements with unaffiliated third parties. Competition with other oil and natural gas exploration and development drilling companies for viable oil and natural gas properties may limit our success. Estimates of oil and natural gas reserves are inherently imprecise. Any material inaccuracies in these reserve estimates or underlying assumptions will affect materially the quantities and present value of our reserves. Competitive pressures may force us to implement new technologies at substantial cost and our limited financial resources may limit our ability to implement such technologies at the same rate as our competitors. We will require additional capital to fund our future activities. Our ability to pursue our business plan may be restricted by our access to additional financing. The volatility in crude oil and natural gas prices could adversely affect our financial results and ability to raise additional capital. Risks associated with recent economic trends have adversely affected, and could further adversely affect our financial performance. We are subject to a number of operational risks beyond our control against which we may not have, or be able to obtain insurance. A loss not covered by insurance could result in substantial expenses to us. We are subject to extensive government regulations that can change from time to time, compliance with which are costly and could negatively impact our production, operations and financial results. Our industry is subject to extensive environmental regulation that may limit our operations and negatively impact our production. The effects of future environmental legislation on our business is unknown but could be substantial. Potential regulations regarding climate change could alter the way we conduct our business. Should we fail to comply with all applicable FERC administered statutes, rules, regulations and orders, we could be subject to substantial penalties and fines. We may incur significant costs and liabilities as a result of pipeline integrity management program testing and any related pipeline repair or preventative or remedial measures. Political and/or economic conditions in Indonesia, Canada or the United States could change in manners that negatively affect our operations and prospects in those countries. Terrorist attacks could have an adverse effect on our oil and natural gas operations, especially overseas. We could lose our entire Production Sharing Contract ( PSC ), if BP Migas ascertains we have not discovered commercially producible hydrocarbons. We may not be able to sell our natural gas production in Indonesia, limiting our ability to obtain a return on our investment there. We could lose our ownership interests in our properties due to a title defect of which we are not presently aware. Our acquisition activities are subject to uncertainties and may not be successful nor provide a return to us on our investments. We are dependent upon our key officers and employees and our inability to retain and attract key personnel could significantly hinder our growth strategy and cause our business to fail. Some of our directors may become subject to conflicts of interest which could impair their abilities to act in our best interest. Our directors and officers hold significant positions in our shares and their interests may not always be aligned with those of our other shareholders. Our failure to manage internal or acquisition-based growth may cause operational difficulties and negatively affect our financial performance. Risks associated with recent economic trends could adversely affect our financial performance. Risks Related to Our Common Stock The shareholding position of holders of our common stock could be diluted by future issuances and conversions of other securities. Our results may be affected by fluctuations in currency exchange rates. Non- U.S. holders of our common shares may be subject to U.S. federal income tax on the sale of our common shares and purchasers may have IRS withholding requirements There is a limited public market for our common shares, and the ability of our shareholders to dispose of their common shares may be limited. Our stock price may fluctuate significantly. The sale of large numbers of our common stock may depress the market price of our common stock. We will continue to incur significant expenses as a result of being a public company, which may negatively impact our financial performance.

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1116927--3/31/2010--GEOPETRO_RESOURCES_CO