Toreador Resources (TRGL) 10-K/A 2008 FY Annual report (amended)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

Form 10-K/A

Amendment No. 1

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended: December 31, 2008
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-02517

Toreador Resources Corporation

(Exact name of Registrant as specified in its charter)

Delaware	75-0991164
(State or other jurisdiction of incorporation)	(I.R.S. Employer  Identification Number)
13760 Noel Road #1100 Dallas, Texas (Address of principal executive office)	75240 (Zip Code)

Registrant’s telephone number, including area code: (214) 559-3933

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each Class:	Name of each exchange on which registered:
COMMON STOCK, PAR VALUE $.15625 PER SHARE	NASDAQ GLOBAL MARKET

Securities registered pursuant to Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o  No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o  No x

Indicate by check 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

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

Large accelerated filer o Accelerated filer x Non-accelerated filer o(Do Not Check if a Smaller
Reporting Company) Smaller reporting company o

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

The aggregate market value of the voting and non-voting common equity of the registrant held by non-affiliates, computed by reference to the closing sales price of such stock, as of June 30, 2008 was $115,162,327. (For purposes of determination of the aggregate market value, only directors, executive officers and 10% or greater stockholders have been deemed affiliates.)

The number of shares outstanding of the registrant’s common stock, par value $.15625, as of April 16, 2009 was 20,227,261 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS

Explanatory Note about the Report
		Page
PART II
Item 8.	Financial Statements and Supplementary Data	1
PART IV
Item 15.	Exhibits and Financial Statement Schedules	1
SIGNATURES		2

Explanatory Note about the Report

Toreador Resources Corporation (“Toreador,” “we,” “us,” “our” or the “Company”) is filing this Amendment No. 1 on Form 10-K/A (“Amendment No. 1”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2008 originally filed with the Securities and Exchange Commission on March 16, 2009 (the “Form 10-K”) solely to add the conformed signature of its independent registered public accounting firm, Grant Thornton LLP, to the Report of Independent Registered Public Accounting Firm regarding Company’s internal control over financial reporting and the Report of Independent Registered Public Accounting Firm regarding the consolidated financial statements of the Company (each a “Report”) contained in Part IV, Item 15 of the Form 10-K, which are incorporated by reference into Part II, Item 8 of the Form 10-K. The conformed signature of Grant Thornton LLP was inadvertently omitted from the electronic version of Part IV, Item 15 of the Form 10-K although the Company had manually signed copies of each Report in its possession when the Form 10-K was filed.  When we filed the Form 10-K, we filed a conformed signature for Exhibit 23.1, the Grant Thornton consent, and had a manually signed copy of the consent when the Form 10-K was filed.

This Amendment No. 1 continues to describe the conditions as of the date of the original Form 10-K for the year ended December 31, 2008, and we have not updated the disclosures contained herein to reflect events that occurred at a later date. This Amendment No. 1 should be read in conjunction with our filings made with the Securities and Exchange Commission subsequent to the filing of the original Form 10-K, including any amendment to those filings. In addition, pursuant to the rules of the Securities and Exchange Commission, Exhibits 31.1, 31.2 and 32.1 of the original Form 10-K have been amended and new Exhibits 31.1, 31.2 and 32.1 are filed herewith to contain currently dated certifications from our President and Chief Executive Officer and our Senior Vice President—Chief Financial Officer.

PART II

Item 8.  Financial Statements and Supplementary Data.

The Report of Independent Registered Public Accounting Firm and Consolidated Financial Statements are set forth beginning on page F-1 of this Amendment No. 1 and are incorporated herein.

The financial statement schedules have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or the Notes to the Consolidated Financial Statements.

PART IV

ITEM 15.  Exhibits and Financial Statement Schedules.

(a)          The following documents are filed as part of this report:

1.             Index to Consolidated Financial Statements, Reports of Independent Registered Public Accounting Firm, Consolidated Balance Sheets as of December 31, 2008 and 2007, Consolidated Statements of Operations and Comprehensive Income (Loss) for the three years in the period ended December 31, 2008, Consolidated Statements of Changes in Stockholders’ Equity for each of the three years in the period ended December 31, 2008, Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2008, and Notes to Consolidated Financial Statements.

2.             The financial statement schedules have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or the Notes to Consolidated Financial Statements.

3.             Exhibits:  The exhibits required to be filed by this Item 15 are set forth in the Index to Exhibits accompanying this report.

1

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized.

	TOREADOR RESOURCES CORPORATION
	/s/ Charles J. Campise
	Charles J. Campise,
	Senior Vice President — Chief Financial Officer
April 16, 2009

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INDEX TO EXHIBITS

Exhibit Number	Description
2.1	Agreement for Purchase and Sale, dated December 17, 2003, by and among Toreador Resources Corporation and Tormin, Inc., as Sellers, and Black Stone Acquisitions Partners I, L.P., as Buyer (previously filed as Exhibit 2.1 to Toreador Resources Corporation Current Report on Form 8-K filed on January 15, 2004, File No. 0-2517, and incorporated herein by reference).
2.2	Quota Purchase Agreement between Pogo Overseas Production BV, as Seller, and Toreador Resources Corporation, as Purchaser, dated as of June 7, 2005 (previously filed as Exhibit 2.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on June 13, 2005, File No. 0-2517, and incorporated herein by reference).
2.3	Agreement for Purchase and Sale among Toreador Resources Corporation, Toreador Exploration & Production Inc. and Toreador Acquisition Corporation, as Sellers, and RTF Realty Inc., as Buyer dated August 2, 2007. (Certain of the exhibits and schedules have been omitted. An exhibit to the exhibit and schedules is contained in the Agreement for Purchase and Sale and the omitted exhibits and schedules are available to the Securities and Exchange Commission upon request) (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed on August 6, 2007, File No. 0-2517, and incorporated herein by reference).
2.4	Letter of Intent by and between Toreador Turkey Limited and Toreador Turkey Limited, Ankara Turkey Branch, and PETROL OFISI AS, dated August 8, 2008 (The attachments to the Letter of Intent have been omitted. A list of attachments is contained in the Letter of Intent and the attachments are available to the Securities and Exchange Commission upon request) (previously filed as Exhibit 2.1 to Toreador Resources Corporation Current Report on Form 8-K filed on August 13, 2008, File No. 0-2517, and incorporated herein by reference).
2.5	Assignment Agreement between PETROL OFISI AS, PETROL OFISI ARAMA URETIM SANAYI ve TICARET ANONIM SIRKETI and Toreador Turkey Limited, Toreador Turkey Limited, Ankara Turkey Branch and Toreador Resources Corporation, dated September 17, 2008 (The attachments to the Assignment Agreement have been omitted. A list of attachments is contained in the Assignment Agreement and the attachments are available to the Securities and Exchange Commission upon request) (previously filed as Exhibit 2.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 0-2517, and incorporated herein by reference).
2.6	Amendment Protocol dated January 30, 2009 relating to the Assignment Agreement between PETROL OFISI AS, PETROL OFISI ARAMA URETIM SANAYI ve TICARET ANONIM SIRKETI and Toreador Turkey Limited, Toreador Turkey Limited, Ankara Turkey Branch and Toreador Resources Corporation, dated September 17, 2008 (previously filed as Exhibit 2.1 to Toreador Resources Corporation Current Report on Form 8-K filed on February 4, 2009, File No. 0-2517, and incorporated herein by reference).
3.1	Restated Certificate of Incorporation, of Toreador Resources Corporation (previously filed as Exhibit 3.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on March 29, 2005, File No. 0-2517, and incorporated herein by reference).
3.2	Fourth Amended and Restated Bylaws of Toreador Resources Corporation (previously filed as Exhibit 3.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on November 13, 2007, File No. 0-2517, and incorporated herein by reference).
3.3	Certificate of Designation, Preferences and Rights of Series B Preferred Stock (previously filed as Exhibit 3.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on November 24, 2008, File No. 0-2517, and incorporated herein by reference).
4.1	Settlement Agreement, dated June 25, 1998, among the Gralee Persons, the Dane Falb Persons and Toreador Royalty Corporation (previously filed as Exhibit 4.1 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2004, File No. 0-2517, and incorporated herein by reference).
4.2	Warrant, dated July 22, 2004, issued by Toreador Resources Corporation to Nigel Lovett (previously filed as Exhibit 4.14 to Toreador Resources Corporation Registration Statement on Form S-3 filed with the Securities and Exchange Commission on August 20, 2004, File No. 0-2517, and incorporated herein by reference).
4.3	Warrant No. 39, issued by Toreador Resources Corporation to Rich Brand amending and replacing Warrant No. 30 (previously filed as Exhibit 4.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
4.4	Warrant No. 40, issued by Toreador Resources Corporation to Dianne Brand (previously filed as Exhibit 4.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).

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4.5	Registration Rights Agreement dated September 27, 2005 by and between Toreador Resources Corporation and UBS Securities LLC and the other initial purchasers named in the purchase agreement (previously filed as Exhibit 4.18 to the Registration Statement on Form S-3 (333-129628) filed with the Securities and Exchange Commission on November 10, 2005, File No. 0-2517, and incorporated herein by reference).
4.6	Indenture dated as of September 27, 2005 by and between Toreador Resources Corporation and The Bank of New York Trust Company, N.A. (previously filed as Exhibit 4.19 to the Registration Statement on Form S-3 (333-129628) filed with the Securities and Exchange Commission on November 10, 2005, File No. 0-2517, and incorporated herein by reference).
4.7	Registration Rights Agreement dated March 21, 2007 by and among Toreador Resources Corporation and the Buyers listed therein (previously filed as Exhibit 4.1 to Toreador Resources Corporation Current Report on Form 8-K filed on March 22, 2007, File No. 0-2571, and incorporated herein by reference).
4.8	Warrant to Purchase Common Stock of Toreador Resources Corporation dated July 11, 2005, by and between Toreador Resources Corporation and Natexis Banques Popularis (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on July 13, 2005, File No. 0-2517, and incorporated herein by reference).
4.9	First Amendment to Registration Rights Agreement dated as of February 15, 2008 by and among Toreador Resources Corporation, Capital Ventures International and Goldman, Sachs & Co. (previously filed as Exhibit 4.11 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).
4.10	Rights Agreement dated as of November 20, 2008 between Toreador Resources Corporation and American Stock Transfer, as Rights Agent (previously filed as Exhibit 4.1 to Toreador Resources Corporation Form 8-A filed on November 24, 2008, File No. 0-2517, and incorporated herein by reference).
5.1*	Legal Opinion of Kaya & Aksoy.
5.2*	Legal Opinion of PRK Partners/Bellak Law offices
10.1+	Toreador Royalty Corporation 1990 Stock Option Plan (previously filed as Exhibit 10.2 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2004, File No. 0-2517, and incorporated herein by reference).
10.2+	Amendment to Toreador Royalty Corporation 1990 Stock Option Plan, effective as of May 15, 1997 (previously filed as Exhibit 10.3 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2004, File No. 0-2517, and incorporated herein by reference).
10.3+	Toreador Royalty Corporation Amended and Restated 1990 Stock Option Plan, effective as of September 24, 1998 (previously filed as Exhibit 10.4 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2004, File No. 0-2517, and incorporated herein by reference).
10.4+	Amendment Number One to Toreador Resources Corporation Amended and Restated 1990 Stock Option Plan (previously filed as Exhibit 10.4 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).
10.5+	Amendment Number Two to Toreador Resources Corporation Amended and Restated 1990 Stock Option Plan (previously filed as Exhibit 10.5 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).
10.6+	Toreador Royalty Corporation 1994 Non-Employee Director Stock Option Plan, as amended (previously filed as Exhibit 10.7 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2004, File No. 0-2517, and incorporated herein by reference).
10.7+	Toreador Resources Corporation Amended and Restated 1994 Non-employee Director Stock Option Plan (previously filed as Exhibit 10.7 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).
10.8+	Toreador Resources Corporation 2002 Stock Option Plan (previously filed as Exhibit 10.8 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).
10.9+	Amendment Number One to the Toreador Resources Corporation 2002 Stock Option Plan (previously filed as Exhibit 10.9 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).
10.10+	Toreador Resources Corporation 2005 Long-Term Incentive Plan (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on May 23, 2005, File No. 0-2517, and incorporated herein by reference).
10.11+	Amendment to Toreador Resources Corporation 2005 Long-Term Incentive Plan (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on May 12, 2006, File No. 0-2517, and incorporated herein by reference).

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10.12+	Form of Employee Restricted Stock Award (previously filed as Exhibit 10.2 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on May 23, 2005, File No. 0-2517, and incorporated herein by reference).
10.13+	Form of 2005 Outside Director Restricted Stock Award (previously filed as Exhibit 10.3 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on May 23, 2005, File No. 0-2517, and incorporated herein by reference).
10.14+	Form of 2006 Outside Director Restricted Stock Award (previously filed as Exhibit 10.3 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on May 12, 2006, File No. 0-2517, and incorporated herein by reference).
10.15+	Summary Sheet: 2007 Director Compensation (previously filed as Exhibit 10.21 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2006, File No. 0-2517, and incorporated herein by reference).
10.16+	Herbert C. Williamson III Restricted Stock Award Agreement dated November 8, 2006 (previously filed as Exhibit 10.25 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2006, File No. 0-2517 and incorporated herein by reference).
10.17+	Nicholas Rostow Restricted Stock Award Agreement dated November 8, 2006 (previously filed as Exhibit 10.27 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2006, File No. 0-2517 and incorporated herein by reference).
10.18+	Employment Agreement of Nigel Lovett dated March 14, 2007 (previously filed as Exhibit 10.33 to Toreador Resources Corporation Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 8, 2007, No. 333-142731, and incorporated herein by reference).
10.19+	Employment Agreement of Michael FitzGerald dated March 14, 2007 (previously filed as Exhibit 10.34 to Toreador Resources Corporation Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on July 23, 2007, No. 333-142731, and incorporated herein by reference).
10.20+	Employment Agreement of Douglas Weir dated March 14, 2007 (previously filed as Exhibit 10.35 to Toreador Resources Corporation Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on July 23, 2007, No. 333-142731, and incorporated herein by reference).
10.21+	Employment Agreement of Edward Ramirez dated March 14, 2007 (previously filed as Exhibit 10.36 to Toreador Resources Corporation Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 8, 2007, No. 333-142731, and incorporated herein by reference).
10.22+	Employment Agreement of Charles Campise dated March 14, 2007 (previously filed as Exhibit 10.37 to Toreador Resources Corporation Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 8, 2007, No. 333-142731, and incorporated herein by reference).
10.23	Securities Purchase Agreement dated March 21, 2007 by and among Toreador Resources Corporation and the Buyers listed therein (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed on March 22, 2007, File No. 0-2157, and incorporated herein by reference).
10.24+	Form of Amendment to Form of 2005 Outside Director Restricted Stock Award (previously filed as Exhibit 10.41 to Toreador Resources Corporation Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 8, 2007, No. 333-142731, and incorporated herein by reference).
10.25+	Increase in Salaries of Michael FitzGerald and Edward Ramirez effective May 1, 2007 (previously filed as Exhibit 10.42 to Toreador Resources Corporation Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 8, 2007, No. 333-142731, and incorporated herein by reference).
10.26+	Form of Indemnification Agreement, dated as of April 25, 1995, between Toreador Royalty Corporation and certain of the members of our Board of Directors (previously filed as Exhibit 10.11 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2004, File No. 0-2517, and incorporated herein by reference).
10.27	Contract for the Supply of Crude Oil from the Parisian Basin, effective January 1, 1997, between Elf Antwar France and Midland Madison Petroleum Company (n/k/a Madison Energy France) (previously filed as Exhibit 10.43 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).
10.28	Purchase Agreement dated November 22, 2005 by and among Toreador Resources Corporation, UBS Securities LLC and the other initial Purchasers named in Exhibit A attached thereto (previously filed as Exhibit 10.2 to the Registration Statement on Form S-3 (333-129628) filed with the Securities and Exchange Commission on November 10, 2005, File No. 0-2517, and incorporated herein by reference).
10.29+	Summary Sheet — 2007 Charles J. Campise Annual Base Salary (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on June 18, 2007, File No. 0-2517, and incorporated herein by reference).

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10.30+	Form of 2007 Outside Director Restricted Stock Award Agreement (previously filed as Exhibit 10.56 to Toreador Resources Corporation Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on July 23, 2007, No. 333-142731, and incorporated herein by reference).
10.31	Amendment No. 1 dated August 9, 2007 to Loan and Guarantee Agreement dated December 28, 2006 between Toreador Resources Corporation, Toreador Turkey Ltd., Toreador Romania Ltd., Madison Oil France SAS, Toreador Energy France S.C.S., Toreador International Holding Limited Liability Company and Toreador International Finance Corporation (previously filed as Exhibit 10.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, File No. 0-2517, and incorporated hereby by reference).
10.32+	Form of Amendment to Restricted Stock Award Agreement for Employees (November 2007) (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed on January 25, 2008, File No. 0-2517, and incorporated herein by reference).
10.33+	Form of Restricted Stock Award Agreement for Employees (November 2007) (previously filed as Exhibit 10.2 to Toreador Resources Corporation Current Report on Form 8-K filed on January 25, 2008, File No. 0-2517, and incorporated herein by reference).
10.34+	Summary Sheet — 2008 Charles J. Campise Annual Base Salary (previously filed as Exhibit 10.53 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).
10.35+	Form of Amendment to Restricted Stock Agreement for Outside Directors (January 2008) (previously filed as Exhibit 10.54 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).
10.36+	Amendment No. 2 to the Toreador Resources Corporation 2005 Long-Term Incentive Plan (previously filed as Exhibit 10.3 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.37	Waiver Letter dated March 3, 2008 by International Finance Corporation in favor of Toreador Resources Corporation, Toreador Turkey Ltd., Toreador Romania Ltd., Madison Oil France SAS, Toreador Energy France S.C.S., and Toreador International Holding Limited Liability Company (previously filed as Exhibit 10.4 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.38+	Release Agreement by and between David M. Brewer and Toreador Resources Corporation dated March 24, 2008(previously filed as Exhibit 10.5 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference). (previously filed as Exhibit 10.5 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.39+	Employment Agreement of Nigel Lovett dated March 12, 2008 (previously filed as Exhibit 10.6 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.40+	Employment Agreement of Michael J. FitzGerald dated March 12, 2008 (previously filed as Exhibit 10.7 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.41+	Employment Agreement of Edward Ramirez dated March 12, 2008 (previously filed as Exhibit 10.8 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.42+	Employment Agreement of Charles Campise dated March 12, 2008 (previously filed as Exhibit 10.9 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.43+	2008 Discretionary Employee Bonus Policy (previously filed as Exhibit 10.10 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.44+	2008 Performance Goals and Payout Amounts (previously filed as Exhibit 10.11 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.45+	Summary Sheet — 2008 Director Compensation (previously filed as Exhibit 10.12 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).

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10.46	Waiver Letter dated May 3, 2008 by International Finance Corporation in favor of Toreador Resources Corporation, Toreador Turkey Ltd., Toreador Romania Ltd., Madison Oil France, SAS, Toreador Energy France S.C.S., and Toreador International Holding Limited Liability Company (previously filed as Exhibit 10.13 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 0-2517, and incorporated herein by reference).
10.47+	Form of Outside Director Stock Award Agreement (2008) (previously filed as Exhibit 10.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.48+	Nigel Lovett Nonqualified Stock Option Agreement dated May 15, 2008(previously filed as Exhibit 10.3 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.49+	Nigel Lovett Incentive Stock Option Agreement dated May 15, 2008 (previously filed as Exhibit 10.4 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.50+	Nigel Lovett Restricted Stock Agreement dated May 15, 2008 (previously filed as Exhibit 10.5 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.51+	Amendment No. 3 to Toreador Resources Corporation 2005 Long-Term Incentive Plan (previously filed as Exhibit 10.6 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.52+	Separation Agreement and Release dated June 27, 2008 by and between Toreador Resources Corporation and Michael J. FitzGerald (previously filed as Exhibit 10.7 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.53+	Separation Agreement and Release dated June 27, 2008 by and between Toreador Resources Corporation and Edward Ramirez (previously filed as Exhibit 10.8 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.54+	First Amendment dated July 3, 2008 to the Separation Agreement and Release between Edward Ramirez and Toreador Resources Corporation dated June 27, 2008 (previously filed as Exhibit 10.9 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.55	Parent Corporate Guaranty by PETROL OFISI AS in favor of Toreador Turkey Limited and Toreador Turkey Limited, Ankara Turkey Branch , dated September 17, 2008 (previously filed as Exhibit 10.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.56+	Form of Amendment to Employee Restricted Stock Agreement (August 2008) (previously filed as Exhibit 10.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.57+	Form of Employee Restricted Stock Agreement (August 2008) (previously filed as Exhibit 10.3 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.58+	Summary Sheet regarding changes in Director Compensation (July 2008) (previously filed as Exhibit 10.4 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 0-2517, and incorporated herein by reference).
10.59+	Settlement Agreement, dated January 22, 2009, among Toreador Resources Corporation, Nanes Balkany Partners I LP, John M. McLaughlin, Nigel J. Lovett, Craig M. McKenzie, Julien Balkany, and Peter Hill (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed on January 27, 2009, File No. 0-2517, and incorporated herein by reference).
10.60+	Resignation and Mutual Release Agreement, dated January 22, 2009, between Toreador Resources Corporation and John M. McLaughlin (previously filed as Exhibit 10.2 to Toreador Resources Corporation Current Report on Form 8-K filed on January 27, 2009, File No. 0-2517, and incorporated herein by reference).
10.61+	Separation and Mutual Release Agreement, dated January 22, 2009, between Toreador Resources Corporation and Nigel J. Lovett (previously filed as Exhibit 10.3 to Toreador Resources Corporation Current Report on Form 8-K filed on January 27, 2009, File No. 0-2517, and incorporated herein by reference).
10.62+	Form of McLaughlin/Lovett Indemnity Agreement, dated January 22, 2009, for John M. McLaughlin and Nigel J. Lovett (previously filed as Exhibit 10.4 to Toreador Resources Corporation Current Report on Form 8-K filed on January 27, 2009, File No. 0-2517, and incorporated herein by reference).
10.63+	Form of Director Indemnity Agreement, dated January 22, 2009, for current directors (previously filed as Exhibit 10.5 to Toreador Resources Corporation Current Report on Form 8-K filed on January 27, 2009, File No. 0-2517, and incorporated herein by reference).

7

10.64+	Letter Agreement, dated January 22, 2009, between Toreador Resources Corporation and Craig M. McKenzie (previously filed as Exhibit 10.6 to Toreador Resources Corporation Current Report on Form 8-K filed on January 27, 2009, File No. 0-2517, and incorporated herein by reference).
12.1*	Computation of Ratio of Earnings to Fixed Charges.
21.1*	Subsidiaries of Toreador Resources Corporation.
23.1**	Consent of Grant Thornton LLP
23.2**	Consent of LaRoche Petroleum Consultants, Ltd.
23.3*	Consent of Kaya & Aksoy, contained in Exhibit 5.1.
23.4*	Consent of PRK Partners/Bellak Law offices, contained in Exhibit 5.2
24.1*	Power of Attorney (included as part of the signature page).
31.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2**	Certification of Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer and Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	French Ministry Documentation (previously filed as Exhibit 99.1 to Toreador Resources Corporation Amended Annual Report on Form 10-K/A for the year ended December 31, 2006, File No. 0-2517, and incorporated herein by reference).
99.2	Summary of Hungarian Mining Law (previously filed as Exhibit 99.2 to Toreador Resources Corporation Amended Annual Report on Form 10-K/A for the year ended December 31, 2006, File No. 0-2517, and incorporated herein by reference).
99.3	Portions of Hungarian Mining Act (previously filed as Exhibit 99.3 to Toreador Resources Corporation Amended Annual Report on Form 10-K/A for the year ended December 31, 2006, File No. 0-2517, and incorporated herein by reference).
99.4	Portions of Governmental Decree Implementing the Hungarian Mining Act (previously filed as Exhibit 99.4 to Toreador Resources Corporation Amended Annual Report on Form 10-K/A for the year ended December 31, 2006, File No. 0-2517, and incorporated herein by reference).
99.5	Letter from Hungarian Mining Bureau dated August 13, 2007 (previously filed as Exhibit 99.5 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-2517, and incorporated herein by reference).

*Previously filed on March 16, 2009 as an exhibit to our original Annual Report on Form 10-K.

**Filed herewith

+Management contract or compensatory plan

8

Item 8.  Financial Statements

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Financial Statements
Consolidated Balance Sheets as of December 31, 2008 and 2007	F-4
Consolidated Statements of Operations and Comprehensive Income (Loss) for each of the three years in the period ended December 31, 2008	F-5
Consolidated Statements of Changes in Stockholders’ Equity for each of the three years in the period ended December 31, 2008	F-6
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2008	F-7
Notes to Consolidated Financial Statements	F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Toreador Resources Corporation

We have audited Toreador Resources Corporation (a Delaware Corporation) and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Annual Report on Internal Control Over Financial Reporting”. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Toreador Resources Corporation and subsidiaries as of December 31, 2008 and 2007, and the related statements of operations and comprehensive income (loss), changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2008 and our report dated March 16, 2009 expressed an unqualified opinion.

	/s/ GRANT THORNTON LLP
Houston, Texas
March 16, 2009

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Toreador Resources Corporation

We have audited the accompanying consolidated balance sheets of Toreador Resources Corporation (a Delaware corporation) and subsidiaries (the ‘Company”) as of December 31, 2008 and 2007, and the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Toreador Resources Corporation and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 16, 2009 expressed an unqualified opinion.

	/s/ GRANT THORNTON LLP
Houston, Texas
March 16, 2009

F-3

TOREADOR RESOURCES CORPORATION

CONSOLIDATED BALANCE SHEETS

	December 31,
	2008			2007
	(in thousands, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	19,457		$	12,721
Accounts receivable, net of allowance of $220 and $120	5,450			12,340
Oil and natural gas properties, net, held for sale	55,000			—
Other	5,280			3,912
Total current assets	85,187			28,973
Oil and natural gas properties, net, using successful efforts method of accounting	109,711			271,951
Investments	200			500
Restricted cash	2,922			10,818
Goodwill	3,838			4,942
Other assets	5,298			5,927
	$	207,156		$	323,111
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	16,929		$	18,280
Deferred lease payable	93			183
Fair value of oil and gas derivatives	—			192
Current portion of long-term debt	30,000			—
Income taxes payable	4,217			674
Total current liabilities	51,239			19,329
Accrued liabilities	501			522
Deferred lease payable	665			478
Long-term debt, net of current portion	—			30,000
Asset retirement obligations	8,065			7,339
Deferred income tax liabilities	13,851			15,368
Convertible subordinated notes	80,275			86,250
Total liabilities	154,596			159,286
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.15625 par value, 30,000,000 shares authorized; 20,984,360 and 20,566,470 shares issued	3,279			3,214
Additional paid-in capital	166,484			163,955
Accumulated deficit	(151,169		)	(42,564		)
Accumulated other comprehensive income	36,500			41,754
Treasury stock at cost, 721,027 shares	(2,534		)	(2,534		)
Total stockholders’ equity	52,560			163,825
	$	207,156		$	323,111

See accompanying notes to the consolidated financial statements.

F-4

TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	Year ended December 31,
	2008			2007			2006
	(in thousands, except per share data)
Revenue:
Oil and natural gas sales	$	62,374		$	41,691		$	33,328
Operating costs and expenses:
Lease operating expense	17,211			12,644			8,741
Exploration expense	5,806			14,742			3,946
Dry hole and abandonment	—			21,840			1,706
Depreciation, depletion and amortization	32,727			20,795			6,054
Asset retirement accretion	415			462			225
Impairment of oil and natural gas properties and intangible assets	85,233			13,446			—
General and administrative	15,487			17,313			9,505
Loss on oil and gas derivative contracts	1,781			1,005			—
Loss (gain) on sale of properties and other assets	123			(3,159		)	(436		)
Total operating costs and expenses	158,783			99,088			29,741
Operating income (loss)	(96,409		)	(57,397		)	3,587
Other income (expense):
Equity in earnings of unconsolidated investments	—			22			401
Foreign currency exchange loss	(486		)	(26,305		)	(605		)
Interest and other income	1,779			1,829			1,988
Gain on the extinguishment of debt	458			—			—
Interest expense	(7,849		)	(4,291		)	(891		)
Total other income (expense)	(6,098		)	(28,745		)	893
Income (loss) from continuing operations before income taxes	(102,507		)	(86,142		)	4,480
Income tax benefit (provision)	(6,076		)	4,676			(3,005		)
Income (loss) from continuing operations, net of tax	(108,583		)	(81,466		)	1,475
Income (loss) from discontinued operations, net of tax	(22		)	7,045			1,103
Net income (loss)	(108,605		)	(74,421		)	2,578
Preferred dividends	—			(162		)	(162		)
Income (loss) available to common shares	$	(108,605	)	$	(74,583	)	$	2,416
Basic income (loss) available to common shares per share from:
Continuing operations	$	(5.48	)	$	(4.45	)	$	0.09
Discontinued operations	—			0.38			0.07
	$	(5.48	)	$	(4.07	)	$	0.16
Diluted income (loss) available to common shares per share from:
Continuing operations	$	(5.48	)	$	(4.45	)	$	0.08
Discontinued operations	—			0.38			0.07
	$	(5.48	)	$	(4.07	)	$	0.15
Weighted average shares outstanding:
Basic	19,831			18,358			15,527
Diluted	19,831			18,358			15,884
Statement of Comprehensive Income (Loss)
Net income (loss)	$	(108,605	)	$	(74,421	)	$	2,578
Foreign currency translation adjustments	(5,254		)	38,431			6,687
Comprehensive income (loss)	$	(113,859	)	$	(35,990	)	$	9,265

See accompanying notes to the consolidated financial statements.

F-5

TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Preferred Stock (Shares)		Preferred Stock ($)		Common Stock (Shares)	Common Stock ($)		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (loss)			Treasury Stock ($)			Deferred Compensation			Total Stockholders’ Equity
	(in thousands)
Balance at December 31, 2005	72		72		16,143	2,522		108,001			29,564			(3,364		)	(2,534		)	(1,902		)	132,359
Transfer deferred compensation to additional paid-in capital	—		—		—	—		(1,902		)	—			—			—			1,902			—
Cash payment of preferred dividends	—		—		—	—		—			(162		)	—			—			—			(162		)
Conversion of convertible debenture	—		—		120	19		791			—			—			—			—			810
Exercise of stock options	—		—		175	27		839			—			—			—			—			866
Issuance of restricted stock	—		—		214	33		(33		)	—			—			—			—			—
Exercise of warrants	—		—		4	1		33			—			—			—			—			34
Issuance of warrants	—		—		—	—		883			—			—			—			—			883
Tax benefit of stock option exercises	—		—		—	—		293			—			—			—			—			293
Stock option expense	—		—		—	—		66			—			—			—			—			66
Amortization of deferred stock compensation	—		—		—	—		2,737			—			—			—			—			2,737
Net income	—		—		—	—		—			2,578			—			—			—			2,578
Foreign currency translation adjustment	—		—		—	—		—			—			6,687			—			—			6,687
Balance at December 31, 2006	72		72		16,656	2,602		111,708			31,980			3,323			(2,534		)	—			147,151
Cash payment of preferred dividends	—		—		—	—					(162		)	—			—			—			(162		)
Exercise of stock options	—		—		321	50		1,574			—			—			—			—			1,624
Issuance of restricted stock	—		—		103	16		(16		)	—			—			—			—			—
Issuance of common stock	—		—		3,037	476		49,937			—			—			—			—			50,413
Stock option expense	—		—		—	—		49			—			—			—			—			49
Amortization of deferred stock compensation expense	—		—		—	—		3,982			—			—			—			—			3,982
Adoption of FIN 48	—		—		—	—		—			(45		)	—			—			—			(45		)
Conversion of preferred stock to common stock	(72	)	(72	)	450	70		2			—			—			—			—			—
Net loss	—		—		—	—		—			(74,421		)	—			—			—			(74,421		)
Foreign currency translation adjustments	—		—		—	—		—			—			38,431			—			—			38,431
Tax effect of restricted stock	—		—		—	—		(316		)	—			—			—			—			(316		)
Payment of equity issuance costs	—		—		—	—		(2,965		)	—			—			—			—			(2,965		)
Other	—		—		—	—		—			84			—			—			—			84
Balance at December 31, 2007	—		—		20,567	$	3,214	$	163,955		$	(42,564	)	$	41,754		$	(2,534	)	$	—		$	163,825
Exercise of stock options	—		—		189	29		716			—			—			—			—			745
Issuance of restricted stock	—		—		228	36		(36		)	—			—			—			—			—
Stock option expense	—		—		—	—		94			—			—			—			—			94
Amortization of deferred stock compensation	—		—		—	—		2,231			—			—			—			—			2,231
Net loss	—		—		—	—		—			(108,605		)	—			—			—			(108,605		)
Foreign currency translation adjustments	—		—		—	—		—			—			(5,254		)	—			—			(5,254		)
Tax effect of restricted stock	—		—		—	—		(444		)	—			—			—			—			(444		)
Other	—		—		—	—		(32		)	—			—			—			—			(32		)
Balance at December 31, 2008	—		—		20,984	$	3,279	$	166,484		$	(151,169	)	$	36,500		$	(2,534	)	$	—		$	52,560

See accompanying notes to the consolidated financial statements.

F-6

TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31
	2008			2007			2006
	(in thousands)
Cash flows from operating activities:
Net Income (loss)	$	(108,605	)	$	(74,421	)	$	2,578
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation, depletion and amortization	32,727			21,406			7,319
Asset retirement accretion expense	415			462			225
Amortization of deferred debt issuance costs	338			612			—
Issuance of warrants to non-employees	—			—			107
Impairment of oil and natural gas properties and intangible assets	85,233			13,446			345
Dry hole and abandonment costs	—			21,840			3,099
Deferred income taxes	—			(3,425		)	2,642
Unrealized loss on commodity derivatives	—			192			—
Allowance for doubtful accounts	100			120			—
Loss (gain) on sale of properties and equipment	123			343			(638		)
Gain on the sale of discontinued operations	—			(9,244		)	—
Gain on the extinguishment of debt	(458		)	—			—
Equity in earnings of unconsolidated investments	—			(22		)	(401		)
Stock-based compensation	2,325			4,031			2,803
Gain on sale of unconsolidated investments	—			(3,502		)	—
Change in operating assets and liabilities, net of acquisitions
Decrease (increase) in accounts receivable	6,791			(2,575		)	(1,027		)
Decrease (increase) in income taxes receivable	—			715			(655		)
Decrease (increase) in other current assets	(1,508		)	4,880			(4,596		)
Decrease in accounts payable and accrued liabilities	(1,243		)	(1,862		)	(1,322		)
Increase (decrease) in lease payable	(19		)	661			—
Decrease in other assets	31			118			—
Increase in income taxes payable	1,584			439			3,625
Net cash provided by (used in) operating activities	17,834			(25,786		)	14,104
Cash flows from investing activities:
Expenditures for property and equipment	(10,702		)	(90,644		)	(105,165		)
Restricted cash	7,896			10,636			(20,504		)
Proceeds from the sale of properties and equipment	—			21,002			1,672
Distributions from unconsolidated entities	—			60			250
Sale (purchase) of short-term investments	—			(500		)	40,000
Sale (purchase) of investments in unconsolidated entities	—			6,123			(257		)
Net cash used in investing activities	(2,806		)	(53,323		)	(84,004		)
Cash flows from financing activities:
Repayment of revolving credit facilities	—			—			(5,000		)
Net borrowings under revolving credit arrangements	—			3,450			26,550
Exercise of stock options	745			1,624			866
Proceeds from the exercise of warrants	—			—			34
Proceeds from issuance of common stock, net of issuance cost of $32, $2,965, and $0	(32		)	47,448			—
Tax benefit related to stock options	—			—			293
Payments of long term debt	(5,275		)	—			—
Payment of preferred dividends	—			(162		)	(162		)
Net cash provided by (used in) financing activities	(4,562		)	52,360			22,581
Net increase (decrease) in cash and cash equivalents	10,466			(26,749		)	(47,319		)
Effects of foreign currency translation on cash and cash equivalents	(3,730		)	26,806			6,870
Cash and cash equivalents, beginning of year	12,721			12,664			53,113
Cash and cash equivalents, end of year	$	19,457		$	12,721		$	12,664
Supplemental disclosures:
Cash paid during the period for interest, net of interest capitalized	$	5,626		$	2,927		$	—
Cash paid during the period for income taxes	$	3,058		$	2,761		$	2,414
Non-cash investing and financing activities
Conversion of preferred stock to common stock	$	—		$	72		$	—
Conversion of convertible debentures to common stock	$	—		$	—		$	810
Additions to oil and natural gas properties related to asset retirement obligations	$	1,294		$	1,964		$	882

See accompanying notes to the consolidated financial statements.

F-7

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF BUSINESS

Toreador Resources Corporation (“Toreador”) is an independent energy company engaged in foreign oil and natural gas exploration, development, production, leasing and acquisition activities in France, Turkey, Romania and Hungary. The accompanying consolidated financial statements are presented in U.S. dollars and in accordance with accounting principles generally accepted in the United States.

BASIS OF PRESENTATION

Toreador consolidates all of its majority-owned subsidiaries (collectively, “we,” “us,” “our,” or the “Company”). All intercompany accounts and transactions are eliminated in consolidation. We account for our investments in entities in which we hold less than a majority interest under the equity method.

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

The Company’s estimates of crude oil and natural gas reserves are the most significant estimates used. All of the reserve data in the Annual Report on Form 10-K for the year ended December 31, 2008 are estimates. Reservoir engineering is a subjective process of estimating underground accumulations of crude oil and natural gas. There are numerous uncertainties inherent in estimating quantities of proved crude oil and natural gas reserves. The accuracy of any reserve estimates is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, reserve estimates may be different from the quantities of crude oil and natural gas that are ultimately recovered.

Other items subject to estimates and assumptions include the carrying amounts of oil and natural gas properties, goodwill, asset retirement obligations and deferred income tax assets. Actual results could differ significantly from those estimates.

CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash and cash equivalents include cash on hand, amounts due from banks and all highly liquid investments with original maturities of three months or less. We believe we maintain our cash in bank deposit accounts, substantially all of which exceed federally insured limits. We have not experienced any losses in such accounts.

As of December 31, 2008 and 2007 we had $16.8 million and $10.7 million, respectively, on deposit in foreign banks.

RESTRICTED CASH

Restricted cash consists $2.9 million for letters of credit to secure additional permits in Hungary. The total amount is on deposit in a foreign bank. As of December 31, 2007 we had restricted cash of $8.7 million used to secure a bank “Letter Guarantee” that was issued as required under mediation proceedings with Micoperi, Srl and $2.1 million for a letter of credit to secure additional permits in Hungary.

CONCENTRATION OF CREDIT RISK AND ACCOUNTS RECEIVABLE

Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash, accounts receivable, and our hedging and derivative financial instruments. We place our cash with high credit quality financial institutions. We sell oil and natural gas to various customers. An allowance for doubtful accounts was established for

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accounts receivable in Romania in 2007. The balance of this allowance for doubtful accounts was $219,772 in 2008 and $120,000 in 2007. Substantially all of our accounts receivable are due from purchasers of oil and natural gas. We place our hedging and derivative financial instruments with financial institutions and other firms that we believe have high credit ratings. For a discussion of the credit risks associated with our hedging activities, please see “Derivative Financial Instruments” below.

We periodically review the collectability of accounts receivable and record a valuation allowance for those accounts which are, in our judgment, unlikely to be collected. We have not had any significant credit losses in the past and we believe our accounts receivable are fully collectable with the exception of the current allowance.

FINANCIAL INSTRUMENTS

The carrying amounts of financial instruments including cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued liabilities approximate fair value, at December 31, 2008 and 2007, due to the short-term nature or maturity of the instruments.

Long-term debt approximated fair value based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same maturities.

On December 31, 2008 the convertible subordinate notes which had a book value of $80.28 million, were trading at $770.00, which would equal a fair market value of approximately $61.8 million.

DERIVATIVE FINANCIAL INSTRUMENTS

We periodically utilize derivatives instruments such as futures and swaps for purposes of hedging our exposure to fluctuations in the price of crude oil and natural gas sales. We entered into futures and swap contracts for approximately 16,000 Bbls per month for the months of January 2008 through September 2008. This resulted in a fair value loss of $1.8 million. For the comparable period in 2007, we entered into futures and swap contracts for approximately 15,000 Bbls per month for the months of June 2007 through December 2008 and subsequently sold all contracts as of September 30, 2007 which resulted in a net loss of $813,000. As of December 31, 2008 we had no open commodity derivative contracts.

At December 31, 2007 we had the following open commodity contract with Total Oil Trading SA:

Type	Period	Barrels	Floor		Ceiling
Collar	January 1 — March 31, 2008	48,000	$	84.75	$	92.75

As of December 31, 2007, we recorded a net unrealized loss of $192,000 on the above open derivative contract. For the year ended December 31, 2007 we recognized a total derivative fair value loss of $1 million.

We have elected not to designate the derivative financial instruments to which we are a party as hedges, and accordingly, we record such contracts at fair value and recognize changes in such fair value in current earnings as they occur.

INVENTORIES

At December 31, 2008 and 2007, other current assets included $727,000, and $2.5 million of inventory, respectively. Those amounts consist of tubular goods and crude oil held in storage tanks. Inventories are stated at the lower of actual cost or market based on the average cost method.

ADVANCES PAID TO VENDORS

At December 31, 2008 and 2007, other current assets included $1.6 million and $0 of payments made to vendors in advance of performing the services or receiving the equipment.

OIL AND NATURAL GAS PROPERTIES

We follow the successful efforts method of accounting for oil and natural gas exploration and development expenditures. Under this method, costs of successful exploratory wells and all development wells are capitalized. Costs to drill exploratory wells that do not find proved reserves are expensed. Significant costs associated with the acquisition of oil

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and natural gas properties are capitalized. Upon sale or abandonment of units of property or the disposition of miscellaneous equipment, the cost is removed from the asset account, net of the accumulated depreciation or depletion, and the gain or loss is credited to or charged against operations.

Maintenance and repairs are charged to expense; betterments of property are capitalized and depreciated as described above.

We capitalize interest on major projects that require an extended period of time to complete. Interest capitalized in 2008, 2007 and 2006 was $1 million, $3.7 million, and $4.3 million, respectively.

We record furniture, fixtures and equipment at cost.

OIL AND NATURAL GAS PROPERTIES HELD FOR SALE

On September 17, 2008, we entered into an Assignment Agreement with Petrol Ofisi AS, a Turkish Company, to sell a 26.75% interest in the South Akcakoca sub-basin (“SASB”) assets, which was subsequently amended on January 30, 2009, for $55 million. These assets have been classified on the balance sheet as held for sale and are valued at lower of the book value or fair value less the cost to sale. Subsequent to the sale to Petrol Ofisi, the Company has retained a 10% working interest in the SASB assets.

DEPRECIATION, DEPLETION AND AMORTIZATION

We provide depreciation, depletion and amortization of our investment in producing oil and natural gas properties on the units-of-production method, based upon independent reserve engineers’ estimates of recoverable oil and natural gas reserves from the property. Depreciation expense for furniture, fixtures and equipment is generally calculated on a straight-line basis based upon estimated useful lives of three to seven years.

IMPAIRMENT OF ASSETS

We evaluate producing property costs for impairment and reduce such costs to fair value if the sum of expected undiscounted future cash flows is less than net book value pursuant to Statement of Financial Accounting Standard No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“Statement 144”). We assess impairment of non-producing leasehold costs and undeveloped mineral and royalty interests periodically on a property-by-property basis. We charge any impairment in value to expense in the period incurred.

Impairment charged in 2008 was $85.2 million compared to $13.4 million in 2007. The impairment was a result of the following:

(1)In 2008, the impairment charge in Turkey was a result of a decline in the fair market value of the Company’s interest in South Akcakoca Sub-Basin assets. In June 2008, we determined the fair market value based on a Letter of Intent to sell a 26.75% interest in the South Akcakoca Sub-Basin assets to Petrol Ofisi AS for $80.3 million. This sale price indicated that the fair value of our 36.75% working interest was approximately $103.8 million. The net book value of the Black Sea asset at June 30, 2008 was $157.3 million, resulting in an impairment of $53.5 million.

(2)In January 2009, the Company and Petrol Ofisi agreed to a revised purchase price of $55 million. This resulted in an impairment on assets held for sale, which is comprised of the 26.75% interest in the South Akcakoca Sub-basin assets, of $25.6 million.

(3)In December 2008, we incurred an additional $2.4 million impairment charge in Turkey for assets that were unrelated to the sale of South Akcakoca Sub-Basin assets. The impairment was a result of writing off an exploratory well where sufficient progress was not made to develop the area and a plan of development will not be prepared, by the operator, in the foreseeable future.

(4)We recorded an impairment charge of $2 million for the undeveloped leasehold costs in Trinidad, due to management’s decision to exit Trinidad and discontinue our association with our registered agent in the country.

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(5)When recording the acquisition of Madison Oil in 2002, we recorded $833,000 of goodwill associated with the Turkish assets. We periodically review the value of goodwill to determine if an impairment is required. The review at December 31, 2008, indicated that the total amount recorded for goodwill should be impaired. The reason for this impairment is due to the fair value of the Turkish subsidiary, based on the discounted present value of the oil and gas reserves being less than the carrying value of the Turkish subsidiary. This resulted in an impairment charge of $833,000.

(6)In December 2008, we recorded an impairment in Romania of $600,000 due to the net book value of the oil and natural gas properties exceeding future cash flows.

(7)In April 2007, we sold our interest in ePsolutions for $3.4 million in cash and 50,000 shares of preferred stock with a value of $10.00 per share. Due to the rising cost of electricity and the deterioration of the deregulated electric market in Texas, ePsolutions has reduced their forecasted growth for the next several years. Accordingly, we have reduced our carrying value of our investment in ePsolutions by $300,000 which we believe more accurately reflects the current market value of this investment.

ASSET RETIREMENT OBLIGATIONS

We account for our asset retirement obligations in accordance with Statement No. 143, “Accounting for Asset Retirement Obligations” (“Statement 143”), which requires us to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, we either settle the obligation for its recorded amount or incur a gain or loss upon settlement.

The following table summarizes the changes in our asset retirement liability during the years ended December 31, 2008 and 2007:

	2008			2007
	(in thousands)
Asset retirement obligation January 1	$	7,339		$	4,519
Asset retirement accretion expense	415			462
Foreign currency exchange (gain) loss	(389		)	394
Change in estimates	873			1,964
Property additions	421			—
Property dispositions	(594		)	—
Asset retirement obligation at December 31	$	8,065		$	7,339

GOODWILL

We account for goodwill in accordance with Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangible Assets” (“Statement 142”). Under Statement 142, goodwill and indefinite-lived intangible assets are not amortized but are reviewed annually (or more frequently if impairment indicators arise) for impairment. Separable intangible assets that are not deemed to have an indefinite life are amortized over their useful lives. At December 31, 2008 and 2007 we did not have any intangible assets that did not have an indefinite life.

We review annually the value of goodwill recorded or more frequently if impairment indicators arise. We recognized $883,000, $0 and $0 goodwill impairment during 2008, 2007 and 2006 respectively. The impairment of goodwill was due to the fair value of the Turkish subsidiary, based on the discounted present value of the oil and gas reserves being less than the carrying value of the Turkish subsidiary. Goodwill was adjusted $222,000 in 2008 and $391,000 in 2007 for the foreign currency translation adjustment. The balance of goodwill at December 31, 2008 and 2007 is approximately $3.8 million and $4.9 million, respectively.

REVENUE RECOGNITION

Our French crude oil production accounts for the majority of our sales. We sell our French crude oil to Elf Antar France S.A. (“ELF”), and recognize the related revenues when the production is delivered to ELF’s refinery, typically via truck. At the time of delivery to the plant, title to the crude oil transfers to ELF. The terms of the contract with ELF state that

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the price received for oil sold will be the arithmetic mean of all average daily quotations of Dated Brent published in Platt’s Oil Market Wire for the month of production less a specified differential per barrel. The pricing of oil sales is done on the first day of the month following the month of production. In accordance with the terms of the contract, payment is made within six working days of the date of issue of the invoice. The contract with ELF is automatically extended for a period of one year unless either party cancels it in writing no later than six months prior to the beginning of the next year. We periodically review ELF’s payment timing to ensure that receivables from ELF for crude oil sales are collectible. In 2008, 2007 and 2006 sales to ELF represents approximately 55%, 62% and 67%, respectively, of the Company’s total revenue and approximately 18% and 21% of the Company’s accounts receivable at December 31, 2008 and 2007, respectively.

We recognize revenue for our remaining production when the quantities are delivered to or collected by the respective purchaser. Title to the produced quantities transfers to the purchaser at the time the purchaser collects or receives the quantities. Prices for such production are defined in sales contracts and are readily determinable based on certain publicly available indices. The purchasers of such production have historically made payment for crude oil and natural gas purchases within thirty and sixty days of the end of each production month, respectively. We periodically review the difference between the dates of production and the dates we collect payment for such production to ensure that receivables from those purchasers are collectible. Taxes associated with production are classified as lease operating expense.

STOCK-BASED COMPENSATION

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share Based Payment,” (“SFAS 123R”). SFAS 123R establishes the accounting for transactions in which an entity pays for employee services in share-based payment transactions. SFAS 123R requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The fair value of employee share options and similar instruments is estimated using option-pricing models adjusted for the unique characteristics of those instruments. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. The Company adopted SFAS 123R effective January 1, 2006, using the modified-prospective transition method. Under this method, compensation cost is recognized for awards granted and for awards modified, repurchased or cancelled in the period after adoption. Compensation cost is also recognized for the unvested portion of awards granted prior to adoption. The Company’s results for the year ended December 31, 2006, include an additional compensation expense of $65,916, that is included in general and administrative expenses relating to the adoption of SFAS 123R. Additionally, upon adoption of SFAS 123R, excess tax benefits related to stock option exercises of $293,000 were presented as a cash inflow from financing activities.

FOREIGN CURRENCY TRANSLATION

The functional currency of the countries in which we operate is the U.S. dollar in the United States, Turkey, Romania and Hungary and the Euro in France. Gains and losses resulting from the translation of Euros into U.S. dollars are included in other comprehensive income for the current period. Gains and losses resulting from the transactions in the New Turkish Lira in Turkey, the Lei in Romania and the Forint in Hungary are included in income available to common shares for the current period. We periodically review the operations of our entities to ensure the functional currency of each entity is the currency of the primary economic environment in which we operate. In October 2007, we made a change in accounting method regarding intercompany accounts receivable due from our subsidiaries in Turkey, Romania and Hungary. Pursuant to a Board of Directors’ resolution, we expect to be repaid the intercompany accounts receivable from our subsidiaries in Turkey, Romania and Hungary in the foreseeable future. Due to this resolution, subsequent to October 1, 2007, the change in intercompany accounts receivable balances is reflected in current earnings, as a foreign exchange gain or loss rather than accumulated other comprehensive income.

INCOME TAXES

We are subject to income taxes in the United States, France, Turkey, Hungary and Romania. The current provision for taxes on income consists primarily of income taxes based on the tax laws and rates of the countries in which operations were conducted during the periods presented. All interest and penalties related to income tax is charged to general and administrative expense. We compute our provision for deferred income taxes using the liability method. Under the liability method, deferred income tax assets and liabilities are determined based on differences between financial reporting and income tax basis of assets and liabilities and are measured using the enacted tax rates and laws. The measurement of deferred tax assets is adjusted by a valuation allowance, if necessary, to reduce the future tax benefits to the amount, based on available evidence it is more likely than not deferred tax assets will be realized. We made a commitment to be fully reinvested in our international subsidiaries.

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Effective January 1, 2007, we adopted the provisions of FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109 (FIN No. 48”). FIN No. 48 clarifies financial statement recognition and disclosure requirements for uncertain tax positions taken or expected to be taken in a tax return. Financial statement recognition of the tax position will be sustained upon examination, based on the technical merits of the position. Any interest and penalties related to uncertain tax positions are recorded as interest expense and general and administrative expenses, respectively. The adoption of FIN No. 48 did not have a significant effect on our reported financial position or earnings. See Note 9.

LEGAL FEES

We do not accrue for estimated legal fees or other related costs when accruing for loss contingencies, rather they are expensed as incurred.

DEFERRED DEBT ISSUE COST

Deferred debt issue costs are amortized on a straight line basis, which approximates the effective interest method over the term of the loan as a component of interest expense. Deferred debt issue costs, which are included in other assets, totaled approximately $4,073,000 and $4,652,000 net of accumulated amortization of $889,000 and $552,000 as of December 31, 2008 and 2007, respectively.

TREASURY STOCK

At December 31, 2008 and 2007 we had 721,027 shares of treasury stock valued at a historical cost of approximately $2.5 million or $3.47 a share.

NEW ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued Statement No. 157 “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. It applies whenever other standards require or permit assets or liabilities to be measured at fair value but it does not expand the use of fair value in any new circumstances. In November 2007, the FASB issued FSP No. 157-2 (“FASB No. 157-2”) to defer the effective date of SFAS 157 to fiscal year beginning after November 15, 2008, and the interim period for that fiscal year for all non-financial assets and liabilities, except those that are recognized or disclosed at fair value on a recurring basis. We are currently evaluating the impact of our adoption of FSP No. 157-2 which will be adopted effective January 1, 2009. The provisions of SFAS No. 157 that were not deferred were effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 157, effective January 1, 2008, did not have a significant effect on our reported financial position or earnings. In October 2008, the FASB issued FSP No. 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active” (FSP 157-3). FSP 157-3 clarifies the application of SFAS 157, which the Company adopted as of January 1, 2008, in cases where a market is not active. The Company has considered FSP 157-3 in its determination of estimated fair values as of December 31, 2008, and the impact was not material.

In February 2007, the FASB issued Statement 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement 115” (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure certain financial instruments and other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. Unrealized gains and losses on any items for which we elect the fair value measurement option are to be reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company elected not to measure any eligible items using the fair value option in accordance with SFAS No. 159 and therefore the adoption of SFAS No. 159, effective January 1, 2008, did not have an effect on our reported financial position or earnings.

In December 2007, the FASB issued Statement No. 141R, “Business Combinations” (“SFAS No. 141R”). Under SFAS No. 141R, a company is required to recognize the assets acquired, liabilities assumed, contractual contingencies, and any contingent consideration measured at their fair value at the acquisition date. It further requires that research and development assets acquired in a business combination that have no alternative future use are to be measured at their acquisition-date fair value and then immediately charged to expense, and that acquisition-related costs are to be recognized separately from the acquisition and expensed as incurred. Among other changes, this statement also requires that “negative goodwill” be recognized in earnings as a gain attributable to the acquisition, and any deferred tax benefits resultant in a business combination be recognized in income from continuing operations in the period of the combination. SFAS No. 141R

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is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning after December 15, 2008. We are currently determining the effect of adopting SFAS No. 141R.

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements” — an amendment of ARB No. 51 (“SFAS No. 160”). SFAS No. 160 amends ARB 51 to establish 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, which is sometimes referred to as minority interest, is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Among other requirements, this statement requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS No. 160 is effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2008. The effect of adopting SFAS No. 160 is not expected to have an effect on our reported financial position or earnings.

In March 2008, the FASB issued Statement No. 161 — “Disclosures about Derivative Instruments and Hedging Activities” — an Amendment of FASB Statement No. 133 (“SFAS No. 161”). This statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for under FASB Statement No. 133 and its related interpretations, and (iii) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for annual periods beginning after November 15, 2008. We are currently assessing the effect, if any, the adoption of SFAS No. 161 will have on our financial statements and related disclosures.

In May 2008, the FASB issued Statement No. 162 — “The Hierarchy of Generally Accepted Accounting Principles (“SFAS No. 162”). The new standard is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles for nongovernmental entities. SFAS No. 162 will be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. We are currently assessing the effect, if any, the adoption of SFAS No. 162 will have on our financial statements and related disclosures.

On December 31, 2008 the Securities and Exchange Commission (“SEC”) issued the final rule, “Modernization of Oil and Gas Reporting” (“Final Reporting Rule”). The Final Reporting Rule adopts revisions to the SEC’s oil and gas reporting disclosure requirements and is effective for annual reports on Forms 10-K for years ending on or after December 31, 2009. The revisions are intended to provide investors with a more meaningful and comprehensive understanding of oil and gas reserves to help investors evaluate their investments in oil and gas companies. The amendments are also designed to modernize the oil and gas disclosure requirements to align them with current practices and changes in technology. Revised requirements in the Final Reporting Rule include, but are not limited to:

·Oil and gas reserves must be reported using the un-weighted arithmetic average of the first day of the month price for each month within a 12 month period, rather than year-end prices;

·Companies will be allowed to report, on an optional basis, probable and possible reserves;

·Non-traditional reserves, such as oil and gas extracted from coal and shales, will be included in the definition of “oil and gas producing activities;”

·Companies will be permitted to use new technologies to determine proved reserves, as long as those technologies have been demonstrated empirically to lead to reliable conclusions with respect to reserve volumes;

·Companies will be required to disclose, in narrative form, additional details on their proved undeveloped reserves (“PUDs”), including the total quantity of PUDs at year end, and any material changes to PUDs that occurred during the year, investments and progress made to convert PUDs to developed oil and gas reserves and an explanation of the reasons why material concentrations of PUDs in individual fields or countries have remained undeveloped for five years or more after disclosure as PUDs; and

·Companies will be required to report the qualifications and measures taken to assure the independence and objectivity of any business entity or employee primarily responsible for preparing or auditing reserve estimates.

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We are currently evaluating the potential impact of adopting the Final Reporting Rule. The SEC is discussing the Final Reporting Rule with the FASB staff to align FASB accounting standards with the new SEC rules. These discussions may delay the required compliance date. Absent any change in the effective date, we will comply with the disclosure requirements in our annual report on Form 10-K for the year ended December 31, 2009.

In November 2008, the FASB ratified EITF 08-6, “Equity Method Investment Accounting Considerations” (EITF08-6”) which clarifies how to account for certain transactions involving equity method investments. The initial measurement, decreases in value and changes in the level of ownership of the equity method investment are addressed. EITF 08-6 is effective on a prospective basis for our fiscal year beginning January 1, 2009 and interim periods within the years. Early application by an entity that has previously adopted an alternative accounting policy is not permitted. Adoption is not expected to have a significant impact on our consolidated results of operations or cash flows.

In May 2008, the FASB issued FASB Staff Position (“FSP”) No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)” (“FSP APB No. 14-1”). FSP APB No. 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. FSP APB No. 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. FSP ABP No. 14-1 should be applied retrospectively for all periods presented. The Company is currently evaluating what impact the adoption of this pronouncement will have on its consolidated financial statements.

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NOTE 3 — EARNINGS PER SHARE

In accordance with the provisions of FASB Statement of Financial Accounting Standards No. 128, “Earnings per Share” (“Statement 128”), basic earnings per share are computed on the basis of the weighted-average number of common shares outstanding during the periods. Diluted earnings per share are computed based upon the weighted-average number of common shares plus the assumed issuance of common shares for all potentially dilutive securities.

	Year ended December 31,
	2008			2007			2006
	(in thousands, except per share data)
Basic earnings (loss) per share:
Numerator
Income (loss) from continuing operations, net of income tax	$	(108,583	)	$	(81,466	)	$	1,475
Less: dividends on preferred shares	—			162			162
Income (loss) from continuing operations, net of tax	(108,583		)	(81,628		)	1,313
Income (loss) from discontinued operations, net of tax	(22		)	7,045			1,103
Income (loss) available to common shares	$	(108,605	)	$	(74,583	)	$	2,416
Denominator
Common shares outstanding	19,831			18,358			15,527
Basic earnings (loss) available to common shares per share from:
Continuing operations	$	(5.48	)	$	(4.45	)	$	0.09
Discontinued operations	—			0.38			0.07
Basic income (loss) per share	$	(5.48	)	$	(4.07	)	$	0.16
Diluted earnings (loss) per share:
Numerator
Income (loss) from continuing operations, net of income tax	$	(108,583	)	$	(81,466	)	$	1,475
Less: dividends on preferred shares	—			162			162
Income (loss) from continuing operations, net of tax	(108,583		)	(81,628		)	1,313
Income (loss) from discontinued operations, net of tax	(22		)	7,045			1,103
	$	(108,605	)	$	(74,583	)	$	2,416
Denominator
Common shares outstanding	19,831			18,358			15,527
Stock options, restricted stock and warrants	—		(1)	—		(1)	357
Conversion of preferred shares	—		(2)	—		(2)	—		(2)
Conversion of 5.0% notes payable	—		(3)	—		(3)	—		(3)
Diluted shares outstanding	19,831			18,358			15,884
Diluted earnings (loss) available to common shares per share from:
Continuing operations	$	(5.48	)	$	(4.45	)	$	0.08
Discontinued operations	—			0.38			0.07
Diluted income (loss) per share	$	(5.48	)	$	(4.07	)	$	0.15
Anti-dilutive securities not included above are as follows:
Stock options, restricted stock and warrants	25			148			—
Preferred shares	—			450			450
Debentures	—			—			26
5% notes payable(3)	1,966			2,015			2,015

(1)Conversion of these securities would be antidilutive; therefore, there are no dilutive shares.

(2)Conversion of these securities would be antidilutive; therefore there are no dilutive shares. These securities were converted on or prior to December 31, 2007.

(3)Conversion of the 5% Senior Convertible Notes would be antidilutive therefore, there are no dilutive shares.

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TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 — ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

	December 31,
	2008		2007
	(in thousands)
Accrued oil and natural gas sales receivables, net of allowance of $220 and $120	$	3,726	$	3,154
Trade receivables	29		2,182
Joint interest billing	65		2,163
Recoverable VAT	1,219		4,221
Other accounts receivable	411		620
	$	5,450	$	12,340

Accrued oil and natural gas sales receivables are due from either purchasers of oil and gas or operators in oil and natural gas wells for which the Company owns an interest. Oil and natural gas sales are generally unsecured and such amounts are generally due within 30 days after the month of sale.

Trade receivables and joint interest billings are the amounts due from our joint interest partners and amounts due from contractors where we have paid for supplies on their behalf. These receivables are generally due within 15 days after receipt of monthly joint interest billing or they are offset against invoices from contractors when billed.

Other receivables and VAT at December 31, 2008 and 2007 consist of accrued interest receivable on time deposits, value added tax refunds and travel advances to employees.

NOTE 5 — OIL AND NATURAL GAS PROPERTIES

Oil and Natural Gas Properties consist of the following:

	December 31,
	2008			2007
	(in thousands)
Licenses and concessions	$	1,134		$	3,591
Non-producing leaseholds	18,306			184,067
Producing leaseholds and intangible drilling costs	244,167			154,437
Furniture, fixtures and office equipment	3,479			3,370
	267,086			345,465
Accumulated depreciation, depletion and amortization	(157,375		)	(73,514		)
Total oil and natural gas properties	$	109,711		$	271,951

The Company capitalizes exploratory well costs until a determination is made that the well has found proved reserves or is deemed noncommercial, in the latter case the well costs are immediately charged to exploration expense.

	December 31
	2008			2007
	(in thousands)
Capitalized exploratory well cost, beginning of the year	$	17,109		$	5,256
Additions to capitalized exploratory costs pending determination of proved reserves	377			17,109
Reclassified to dry hole costs	—			(5,256		)
Reclassified to assets held for sale	(12,728		)	—
Impairments	(2,441		)	—
Capitalized exploratory well costs, end of year	$	2,317		$	17,109

F-17

The following table provides an aging of capitalized exploratory well costs (suspended well costs), as of December 31, of each year, based on the date the drilling was completed:

	December 31
	2008		2007
	(in thousands)
Capitalized exploratory well cost that have been capitalized for a period of one year or less	$	—	$	17,109
Capitalized exploratory well costs that have been capitalized for a period greater than one year	2,317		—
Balance at end of year	$	2,317	$	17,109

The amount of exploratory well costs that have been capitalized for a period greater than one year include two wells drilled in 2007 that were drilled to test the outer limits of the shallow water wells drilled and currently on production in the Black Sea, offshore Turkey. The current operational plan calls for sub-sea completions and connection to an existing platform in late 2009 or early 2010.

NOTE 6 — INVESTMENTS IN UNCONSOLIDATED ENTITIES

In February 2004, we acquired 45% of ePsolutions. Based in Austin, Texas, ePsolutions is a software and energy services company in the electric industry and deregulated energy markets. ePsolutions is the developer of emPower system, a CIS, EDI and billing solution for energy companies within deregulated energy markets. We recorded equity in the earnings of ePsolutions of a gain of $41,000 in 2007 and a loss of $70,000 in 2006. In April 2007, we sold our interest in ePsolutions to ePsolutions for $3.4 million in cash and 50,000 shares of preferred stock with a value of $10.00 per share and recorded a gain on the sale of $2.3 million.

In June 2008 due to the rising cost of electricity and the deterioration of the deregulated electric market in Texas we reduced the carrying value of our investment by $300,000. We believe this more accurately reflects the current value of this investment.

In July 2000, we acquired 35% of EnergyNet.com, Inc. (“EnergyNet”), an Internet based oil and natural gas property auction company. We recorded equity in the earnings of EnergyNet of a loss of $45,000 in 2007 and a gain of $340,000 in 2006. We received a dividend from EnergyNet of $175,000 in 2006. In April 2007, we sold our interest in EnergyNet.com to EnergyNet.com for $2 million and recorded a gain on the sale of $1.1 million.

In April 2000, we acquired a 50% interest in Capstone Royalty, LLC (“Capstone”), a joint venture formed to acquire mineral interests at county auctions in west Texas and develop those interests. We recorded equity in the earnings of Capstone amounting to $26,000 in 2007 and $131,000 in 2006. We received a distribution from Capstone of $60,000 in 2007 and $75,000 in 2006. In April 2007, we sold our interest in Capstone Royalty, LLC to Capstone Royalty, LLC for $250,000 and recorded a gain on the sale of $124,000.

NOTE 7 — LONG-TERM DEBT

Long-term debt consisted of the following:

	December 31,
	2008			2007
	(in thousands)
Secured revolving facility with the International Finance Corporation	$	30,000		$	30,000
Convertible senior notes	80,275			86,250
	110,275			116,250
Less: current portion	(30,000		)	—
	$	80,275		$	116,250

CONVERTIBLE SENIOR NOTES DUE OCTOBER 1, 2025

On September 27, 2005, we issued $75 million of Convertible Senior Notes due October 1, 2025 (“Notes”) to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933. The Company also granted the initial purchasers the option to purchase an additional $11.25 million aggregate principal amount of Notes to cover over-allotments. The option was exercised on September 30, 2005. The total principal amount of Notes issued was $86.25 million and total

F-18

net proceeds were approximately $82.2 million. We incurred approximately $4.1 million of costs associated with the issuance of the Notes; these costs have been recorded in other assets on the balance sheet and are being amortized to interest expense using the straight-line interest rate method over the term of the Notes.

The net proceeds were used for general corporate purposes, including funding a portion of the Company’s 2005 and 2006 exploration and development activities.

The Notes bear interest at a rate of 5% per annum and can be converted into common stock at an initial conversion rate of 23.3596 shares of common stock per $1,000 principal amount of Notes, subject to adjustment in an event of a fundamental change, as defined, (equivalent to a conversion price of approximately $42.81 per share). The Company may redeem the Notes, in whole or in part, on or after October 6, 2008, and prior to October 1, 2010, for cash at a redemption price equal to 100% of the principal amount of Notes to be redeemed, plus any accrued and unpaid interest, if the closing price of its common stock exceeds 130% of the conversion price over a specified period. On or after October 1, 2010, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of Notes to be redeemed, plus any accrued and unpaid interest, irrespective of the price of our common stock. Holders may convert their Notes at any time prior to the close of business on the business day immediately preceding their stated maturity, and holders may, (i) upon the occurrence of certain fundamental changes, and also (ii) on October 1, 2010, October 1, 2015, and October 1, 2020, require the Company to repurchase all or a portion of their Notes for cash in an amount equal to 100% of the principal amount of such Notes, plus any accrued and unpaid interest. At December 31, 2008, the outstanding principal amount of the Notes was $80.3 million.

Due to our restating the consolidated financial statements for the years ended December 31, 2003, 2004 and 2005 and our consolidated financial statements for each of the quarters ended March 31 and June 30, 2006, we did not provide the trustee under the indenture of the Notes with copies of our annual reports, information, documents and other reports that we are required to file with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 within thirty (30) days of when such reports were required to be filed with the Securities and Exchange Commission.

On December 15, 2006, we received a notice from the trustee for failure to provide the trustee with a copy of our Form 10-Q for the nine month period ended September 30, 2006. Since we cured the covenant default within thirty (30) days after receiving the written notice from the trustee, an event of default did not occur.

The registration rights agreement covering the Notes provided for a penalty if the registration statement was filed and declared effective but thereafter ceased to be effective (a “Suspension Period”) for an aggregate of forty-five (45) days in any three month period or ninety (90) days in any twelve month period (an “Event Date”). Such penalty called for an additional 0.25% per annum in interest expense on the aggregate principal amount of the Notes for the first ninety (90) days following an Event Date and an additional 0.50% per annum in interest expense on the aggregate principal amount of the Notes thereafter, until such Suspension Period ended upon the registration statement again becoming effective or not being required to be effective pursuant to the registration rights agreement. Because we did not file our Quarterly Report on Form 10-Q for the nine month period ended September 30, 2006 in a timely manner, the registration statement for the Notes became ineffective and we entered a Suspension Period on November 15, 2006. Such Suspension Period ended on January 23, 2007 when we provided notice that the Form 10-Q had been filed and the Suspension Period was no longer in effect. Because the Suspension Period exceeded forty-five (45) days in any three month period, we paid approximately $14,375 in additional interest expense. On March 16, 2007, the date we filed our Form 10-K for the year ended December 31, 2006, we again entered a Suspension Period until all the Notes became eligible for sale pursuant to Rule 144(k) on September 30, 2007. On October 1, 2007, $155,000 was deposited with the trustee for the Notes as the penalty for any holders of the Notes who were eligible on October 1, 2007 to receive a pro rata portion of such payment. Such eligible holders had to have registered their Notes on the registration statement and still held those Notes on October 1, 2007. On April 1, 2008, we requested that the trustee return $150,957 which represents the unclaimed portion of the penalty and on April 3, 2008 we received the funds from the trustee. During the year we paid $4,043 of the penalty deposit to eligible holders of Notes.

On July 9, 2008, our Board of Directors authorized a program to repurchase up to $10 million of the Notes by December 31, 2008. During this period, we repurchased $6 million of the Notes for $5.3 million plus accrued interest of $109,347. Additionally, we expensed $241,965 of prepaid loan fees attributable to the repurchased notes. This resulted in a $458,535 gain on the early extinguishment of debt. The repurchases were made in the open market, or in privately negotiated transactions, subject to market conditions, applicable legal requirements and other factors.

F-19

SECURED REVOLVING FACILITY WITH THE INTERNATIONAL FINANCE CORPORATION

On December 28, 2006, we guaranteed the obligations of certain of our direct and indirect subsidiaries in a loan and guarantee agreement with the International Finance Corporation. The loan and guarantee agreement provides for the $25 million loan facility which is a secured revolving facility with a maximum facility amount of $25 million which maximum facility amount would have increased to $40 million when the projected total borrowing base amount exceeded $50 million. The $25 million facility was funded on March 2, 2007. The total proceeds received on March 2, 2007 were approximately $25 million, of which $11 million was used to retire the outstanding balance on the $15 million credit facility with Natixis Banques Populaires and the remaining $14 million of funds was used to finance our capital expenditures in Turkey and Romania. The loan and guarantee agreement also provided for a $10 million facility which was funded on December 28, 2006. In September 2007, we repaid $5 million on the $25 million facility from proceeds received on the U.S. oil and gas property sale. As of December 31, 2007, the International Finance Corporation reduced our borrowing base under both loans to $30 million from $35 million. Both the $25 million facility and $10 million facility were to fund our operations in Turkey and Romania.

Interest accrued on any loans under the $25 million facility at a rate of 2% over the six month LIBOR rate. Interest accrued on the $10 million facility at a rate of 1.5% over the six month LIBOR rate until the $25 million facility was funded after which the rate for the $10 million facility was lowered to 0.5% over the six month LIBOR rate. At December 31, 2008, the interest rate on the $10 million facility was 2.823% and the interest rate on the $25 million facility was 4.323%. Interest was to be paid on each June 15 and December 15.

The $25 million facility was secured as follows: (i) the lender has a first ranking security interest in (a) certain proceeds, receivables and contract rights relating to and from the sale of oil or gas production in France, Turkey and Romania and (b) funds held in certain bank accounts; (ii) the lender had an assignment of all rights and claims to any compensation or other special payments in respect of all concessions other than those arising in the normal course of operations payable by the government of Turkey and Romania; and (iii) the lender has a first ranking pledge (a) by Toreador International Holding, LLC of all its shares in the borrowers; (b) by Madison Oil France SAS of all its shares in Toreador France; and (c) by the Company of all its shares in Toreador International Holding, LLC.

On December 31, 2011, the maximum amount available under the $25 million facility would have begun to decrease by $5 million every six months from $40 million (assuming the projected borrowing base amount exceeds $50 million) until the final portion of the $25 million facility would have been due on December 15, 2014. On December 15, 2014, $5 million of the $10 million facility would have been required to be repaid with the remaining $5 million being due on June 15, 2015.

We were required to meet the following ratios on a consolidated basis: (i) the life of loan coverage ratio of not less than: (a) 1.2:1.0 in 2006 and 2007; (b) 1.3:1.0 in 2008; and (c) 1.4:1.0 in 2009 and each subsequent year thereafter; (ii) reserve tail ratio of not less than 25%; (iii) adjusted financial debt to EBITDAX (earnings before interest, taxes, depreciation and amortization and exploration expenses) ratio of not more than 3.0:1.0; (iv) liabilities to tangible net worth ratio of not more than 60:40; and (v) interest coverage ratio of not less than 3.0:1.0. On August 9, 2007, the ratios were amended to replace the adjusted financial debt to EBITDA ratio not being more than 3.0:1.0 with the adjusted financial debt to EBITDAX ratio not being more than 3.0:1.0 and the definition of interest coverage ratio was adjusted to substitute EBITDAX instead of EBITDA for calculation purposes. At December 31, 2007, we were not in compliance with the interest coverage ratio of not less than 3.0:1.0; the actual ratio was 2.8:1.0. The International Finance Corporation granted the Company a temporary waiver for the interest coverage ratio provided the Company maintained EBITDAX to net interest expense ratio of 2.7:1.0 until July 2, 2008 and EBITDA to net interest expense ratio of at least 2.7:1.0 during the remaining period of the waiver’s effectiveness. The waiver was effective until March 8, 2009.

At March 31, 2008, we were not in compliance with the adjusted financial debt to EBITDAX ratio threshold of not more than 3.0:1.0; the actual ratio was 4.5:1.00. The International Finance Corporation granted the Company a temporary waiver on the condition that the Company maintains the adjusted financial debt to EBITDA ratio for the (i) quarter ending March 31, 2008 of 4.5:1.0; (ii) quarter ending June 30, 2008 of 4.0:1.0; (iii) quarter ending September 30, 2008 of 3.5:1.0, and (iv) quarter ending December 31, 2008 of 3.25:1.0. We must also be compliant with the original requirement of adjusted financial debt to EBITDA of not more than 3.0:1.0 starting from the end of the first quarter ending March 31, 2009. The waiver is effective until April 1, 2009.

At December 31, 2008, we were not in compliance with the liabilities to tangible net worth ratio of not more than 60:40, however we did not request a waiver from the IFC as the facility was subsequently retired on March 3, 2009 as explained below.

F-20

We were subject to certain negative covenants, including, but not limited to, the following: (i) subject to certain exceptions, paying dividends; (ii) subject to certain exceptions, incurring debt, making guarantees or creating or permitting to exist any liens, (iii) subject to certain exceptions, making or permitting to exist loans or advances to, or deposits, with other persons or investments in any person or enterprise; (iv) subject to certain exceptions, selling, transferring, leasing or otherwise disposing of all or a material part of our borrowing base assets; and (v) subject to certain exceptions, undertaking or permitting any merger, spin-off, consolidation or reorganization.

Included in interest expense for the year ended December 31, 2008, is $701,625 of additional compensation due to the IFC related to the prior year. This amount should have been recognized as additional interest expense in the prior year. Management does not believe the error had a material effect on the financial results for the year ended December 31, 2007 or that the correction of the error in the current period will have a material effect on the financial results for the year ended December 31, 2008. Also included in interest expense for the year ended December 31, 2008 is an estimate of $2.1 million to be paid in 2009 relating to 2008 operations.

On March 3, 2009, we repaid the facility with the International Finance Corporation with the proceeds from our sale of 26.75% of our 36.75% interest in the Black Sea Project. The total amount of the payment was $36.4 million, which was comprised of $30 million principal, $5.9 million additional compensation, as defined in the Loan and Guarantee Agreement among Toreador Resources Corporation and the International Finance Corporation dated December 28, 2006, due under the $10 million facility and $500,000 for accrued interest and fees.

The following table summarizes the principal maturities under our long-term debt arrangements at December 31, 2008, (in thousands):

	2009		2010		2011		2012		2013		Thereafter		Total
Long-term debt	$	30,000	$	—	$	—	$	—	$	—	$	80,275	$	110,275

NOTE 8 — CAPITAL

On March 23, 2007, we closed a $45 million private placement of equity. In the transaction, we issued an aggregate of 2,710,843 shares of common stock to six institutional investors, providing us with $45 million of gross proceeds at closing. We also granted the investors the right to purchase an additional $8.1 million aggregate amount of common stock within the next 30-day period. On April 24, 2007, two of the institutional investors exercised their warrants for an aggregate of 326,104 additional shares of common stock, providing us with approximately $5.4 million of gross proceeds. The net proceeds from the private placement totaled approximately $47 million and were used to help fund our 2007 exploration and development activities.

In connection with the private placement, we entered into a registration rights agreement with the investors. The registration rights agreement provided that we would file a registration statement with the Securities and Exchange Commission covering the resale of the common stock within 60 days after the closing date. If the registration statement was not filed with the Securities and Exchange Commission within such time, we had to pay 1.0% of the aggregate purchase price, an additional 1.0% on the one month anniversary of the 60th day after closing if the registration statement had not been filed by such date and an additional 2.0% of the aggregate purchase price for each 30 day period after the one month anniversary if the registration statement was not filed by such date. We filed the registration statement with the Securities and Exchange Commission on May 8, 2007. If the registration statement was not declared effective by the Securities and Exchange Commission within 150 days after the closing date, we had to pay 1.0% of the aggregate purchase price, an additional 1.0% on the one month anniversary of the 150th day after the closing if the registration statement had not been declared effective by the Securities and Exchange Commission by such date and an additional 2.0% of the aggregate purchase price for each 30 day period after the one month anniversary if the registration statement was not declared effective by such date. The registration statement was declared effective July 26, 2007. Now that the registration statement has been declared effective by the Securities and Exchange Commission, if, subject to certain exceptions, future sales cannot be made pursuant to the registration statement after 60 days has elapsed, we must pay 1.0% of the aggregate purchase price on the date sales cannot be made pursuant to the registration statement, an additional 1% on the one month anniversary of the date sales are not permitted under the registration statement if sales are not permitted under the registration statement by such date and an additional 2.0% of the aggregate purchase price for each 30 day period after the one month anniversary if sales under the registration statement are not permitted by such date. Any one month or 30 day periods during which we cure the violation will cause the payment for such period to be made on a pro rata basis. As a result of the change in the resale restrictions under Rule 144, effective February 15, 2008, we amended the registration rights agreement to provide that we do not have to keep

F-21

the registration statement effective if the holders of the shares covered by the registration rights agreement can sell all of the shares pursuant to Rule 144.

We account for registration rights agreements containing a contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, in accordance with EITF Issue No. 00-19-2, “Accounting for Registration Payment Arrangements”. Under this approach, the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement shall be recognized and measured separately in accordance with “FAS No. 5, Accounting for Contingencies” and “FASB Interpretation No. 14, Reasonable Estimation of the Amount of a Loss”.

Toreador had zero shares of nonvoting Series A-1 Convertible Preferred Stock outstanding at December 31, 2008 and 2007. At the option of the holder, the Series A-1 Convertible Preferred Stock were convertible into common shares at a price of $4.00 per common share (conversion would amount to 450,000 Toreador common shares at December 31, 2007). The Series A-1 Convertible Preferred Stock accrues dividends at an annual rate of $2.25 per share payable quarterly in cash. At any time on or after November 1, 2007, we could elect to redeem for cash any or all shares of Series A-1 Convertible Preferred Stock. The optional redemption price per share was the sum of (1) $25.00 per share of the Series A-1 Convertible Preferred Stock plus (2) any accrued unpaid dividends, and such sum was multiplied by a declining multiplier. The multiplier was 105% until October 31, 2008, 104% until October 31, 2009, 103% until October 31, 2010, 102% until October 31, 2011, 101% until October 31, 2012, and 100% thereafter. In December 2007, all the Series A-1 Convertible Preferred Stock was converted into common shares.

On July 22, 2004, we issued warrants for the purchase of 40,000 shares of our common stock at $8.20 per share. The warrant was issued pursuant to the terms of the letter agreement dated July 19, 2004. At December 31, 2008 there were 36,400 warrants outstanding all of which expire on July 22, 2009. We recognized $58,410 in expense relating to the issuance of the warrants.

On July 11, 2005, we issued warrants for the purchase of 50,000 shares of our common stock at $27.40 per share. The warrants were issued pursuant to the terms of the Fee Letter, dated February 21, 2005, between the Company, Natexis Banques Populaires and Madison Energy France. At December 31, 2008 all 50,000 warrants were outstanding and expire on December 23, 2009. In 2006, we recognized $836,000 in expense relating to the issuance of the warrants.

On January 3, 2006, we issued warrants for the purchase of 10,000 shares of our common stock at $27.65 per share. The warrant was issued pursuant to the terms of the Engagement Letter, dated January 3, 2006, between the Company and ParCon Consulting. At December 31, 2008 all 10,000 warrants were outstanding and expire on January 3, 2011. We recognized $106,800 of expense in 2006 relating to the issuance of the warrants.

NOTE 9 — INCOME TAXES

The Company’s provision (benefit) for income taxes consists of the following at December 31:

	2008			2007			2006
	(in thousands)
Current:
U.S. Federal	$	(5	)	$	(31	)	$	(581	)
U.S. State	(115		)	323			(7		)
Foreign	7,526			2,409			1,156
Deferred:
U.S. Federal	(443		)	(32		)	135
Foreign	(887		)	(3,393		)	2,944
	$	6,076		$	(724	)	$	3,647
The tax provision (benefit) has been allocated between continuing operations and discontinued operations as follows:
Provision (benefit) allocated to:
Continuing operations	$	6,076		$	(4,676	)	$	3,005
Discontinued operations	—			3,952			642
	$	6,076		$	(724	)	$	3,647

F-22

The primary reasons for the difference between tax expense at the statutory federal income tax rate and our provision for income taxes were:

	2008			2007			2006
	(in thousands)
Statutory tax at 34%	$	(34,860	)	$	(25,549	)	$	2,113
Rate differences related to foreign operations	13,706			6,479			584
Use of NOL carryforwards	—			—			(121		)
Reduction in Turkish net operating loss	—			—			143
State income tax, net	(76		)	213			(5		)
Foreign currency gain (loss) not taxable in foreign jurisdictions	498			4,497			265
Effect of rate changes in foreign countries	—			—			(1,062		)
Adjustments to valuation allowance	26,440			14,172			1,846
Other	368			(536		)	(116		)
	$	6,076		$	(724	)	$	3,647

F-23

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2008 and 2007 were as follows:

	December 31,
	2008			2007
	(in thousands)
Deferred tax assets:
Net operating loss carryforward — United States	$	15,005		$	8,620
Net operating loss carryforward — State	135			135
Net operating loss carryforward — Foreign	9,617			12,265
Restricted stock	565			689
Impairment — Foreign	16,468			4,571
Impairment — US	5,453			—
Other	690			475
Gross deferred tax assets	47,933			26,755
Valuation allowance	(46,984		)	(20,900		)
Net deferred tax assets	$	949		$	5,855
Deferred tax liabilities:
Differences in oil and gas property capitalization and depletion methods — Foreign	(13,851		)	(20,768		)
Unrealized foreign currency translation gains	(949		)	(455		)
Gross deferred tax liabilities	(14,800		)	(21,223		)
Net deferred tax liabilities	$	(13,851	)	$	(15,368	)

During 2008 the Company increased its tax valuation allowance by $26 million due to our expectation that tax benefits will not be realized in the future in the amount of $7 million related to U.S. operations and $19 million related to Turkish operations.

At December 31, 2008, Toreador had the following carryforwards available to reduce future taxable income (in thousands):

Jurisdiction	Expiry	Amount
United States	2010 — 2023	$	44,132
Hungary	Unlimited	38,656
Turkey	2008 — 2012	12,956
France	Unlimited	2,523

Realization of net operating loss carryforwards depends on our ability to generate taxable income within the carryforward period. Due to uncertainty related to the Company’s ability to generate taxable income in the respective countries sufficient to realize all of our deferred tax assets we have recorded the following valuation allowances:

	December 31,
	2008		2007
	(in thousands)
United States	$	15,005	$	8,755
Turkey	2,591		—
Hungary	6,185		6,024
France	841		841
	$	24,622	$	15,620

Future net operating loss carryforwards for which a valuation allowance has been provided will be realized when taxable income amounts below are generated in the following countries:

F-24

	Required Taxable Income
United States	$	44,132
Turkey	12,956
Hungary	38,656
France	2,523

A portion of the Hungarian net operating loss was acquired in a purchase; therefore realization of $25 million of the Hungarian net operating loss will be credited to oil and natural gas properties rather than a credit to income tax expense.

Under APB 23, Accounting for Income Taxes — Special Areas, we have elected to treat our foreign earnings as permanently reinvested outside the US and are not providing US tax expense on those earnings. However, Romania and Turkey both have US branches which are not permanently reinvested outside the US. Consequently the US tax on their earnings is reflected in consolidated income tax expense at the US tax rate of 34%.

We adopted FIN No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN No. 48”) on January 1, 2007. As a result of the adoption the Company recognized an increase in the liability for unrecognized tax benefits of approximately $45,000, which was accounted for as a decrease to the January 1, 2007 balance of retained earnings. As of the date of adoption and after the impact of recognizing the increase in liability noted above, our unrecognized tax benefits totaled approximately $357,000, the disallowance of which would not materially affect the effective income tax rate. There are no tax positions for which a material change in the unrecognized tax benefit liability is reasonably possible in the next 12 months.

We recognize potential accrued interest and penalties related to unrecognized tax benefits within our global operations in income tax expense. In conjunction with the adoption of FIN No. 48, we recognized approximately $28,000 for the accrual of interest and penalties at January 1, 2007 which is included as a component of $357,000 unrecognized tax benefit noted above. During the year 2008 we recognized $0 in potential interest and penalties associated with uncertain tax positions. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision.

The following table summarizes the changes in our liability for unrecognized tax benefits for the year ended December 31, 2008:

Unrecognized tax benefit at January 1, 2008	$	326
Tax Year Closed	(5		)
Unrecognized tax benefit at December 31, 2008	$	321

We have not paid any significant interest or penalties associated with our income taxes, but classify both interest expense and penalties as part of our income tax expense.

The Company files several state and foreign tax returns, many of which remain open for examination for five years.

NOTE 10 — BENEFIT PLANS

We have a 401(k) retirement savings plan. Employees are eligible to defer portions of their salaries, limited by Internal Revenue Service regulations. The Company is subject to the 3% safe harbor rule and contributed $95,000 in 2008 and $115,000 in 2007. Discretionary employer matches are determined annually by the board of directors and such discretionary matches amounted to $0 in 2008, $112,500 in 2007 and $74,000 in 2006.

NOTE 11 — STOCK COMPENSATION PLANS

We have granted stock options to key employees and outside directors of Toreador as described below.

In May 1990, we adopted the 1990 Stock Option Plan (“1990 Plan”). The 1990 Plan, as amended and restated, provides for grants of up to 1,000,000 stock options to employees and directors at exercise prices greater than or equal to market on the date of the grant.

In December 2001, we adopted the 2002 Stock Option Plan (“2002 Plan”). The 2002 Plan provides for grants of up to 500,000 stock options to employees and outside directors at exercise prices greater than or equal to market on the date of the grant.

F-25

In September 1994, we adopted the 1994 Non-employee Director Stock Option Plan (“1994 Plan”). The 1994 Plan, as amended and restated, provides for grants of up to 500,000 stock options to non-employee directors of Toreador at exercise prices greater than or equal to market on the date of the grant.

The Board of Directors grants options under our plans periodically. Generally, option grants are exercisable in equal increments over a three-year period, and have a maximum term of 10 years.

A summary of stock option transactions is as follows:

	2008				2007				2006
	Shares		Weighted Average Exercise Price		Shares		Weighted  Average  Exercise  Price		Shares		Weighted  Average  Exercise  Price
Outstanding at January 1	338,170		$	4.85	673,870		$	5.13	858,940		$	5.07
Granted	100,000		7.88		—		—		—		—
Exercised	(189,800	)	3.93		(320,700	)	5.06		(175,070	)	4.95
Forfeited	—		—		(15,000	)	13.18		(10,000	)	3.10
Outstanding at December 31	248,370		6.77		338,170		4.85		673,870		5.13
Exercisable at December 31	148,370		6.02		334,837		4.73		660,536		4.90

The intrinsic value of the options exercised in 2008 was $979,609. For the year ended December 31, 2008, 2007 and 2006 we received cash from stock option exercises of $745,000, $1.6 million and $866,000, respectively. During 2008, 3,333 shares vested. As of December 31, 2008, the total compensation cost related to non-vested stock options not yet recognized is approximately $255,000. This amount will be recognized as compensation expense over the next 29 months.

For stock options granted the following table represents the weighted-average exercise prices and the weighted-average fair value based upon whether or not the exercise price of the option was greater than, less than or equal to the market price of the stock on the grant date:

Year	Option Type	Shares	Weighted- Average Exercise Price		Weighted- Average Fair Value
2008	Exercise price equal to market price	100,000	$	7.88	$	3.61

The option was valued using Black-Scholes, with an expected volatility of .666, expected life of three years and a risk free interest rate of 2.70%.

The following table summarizes information about the fixed price stock options outstanding at December 31, 2008:

		Number Outstanding				Number Exercisable				Weighted Average Remaining
Exercise Price		Shares	Intrinsic Value			Shares	Intrinsic  Value			Contractual Life in Years
			(in thousands)				(in thousands)
$	3.00	5,000	$	12		5,000	$	12		0.42
3.10		20,000	48			20,000	48			4.47
3.12		4,420	11			4,420	11			1.72
3.88		5,000	8			5,000	8			0.82
4.12		15,000	21			15,000	21			3.41
4.96		10,000	5			10,000	5			5.39
5.50		56,450	(1		)	56,450	(1		)	5.32
5.95		15,000	(7		)	15,000	(7		)	2.38
7.88		100,000	(239		)	—	—			9.38
13.75		7,500	(62		)	7,500	(62		)	5.88
16.90		10,000	(114		)	10,000	(114		)	6.38
		248,370	(318		)	148,370	(79		)	4.14

F-26

At December 31, 2008, there were 20,208, remaining shares available for grant under the plans collectively.

In May 2005, stockholders approved the Toreador Resources Corporation 2005 Long-Term Incentive Plan (the “Plan”). The Plan, as amended, authorizes the issuance of up to 750,000 shares of the Company’s common stock to key employees, key consultants and outside directors of the Company. The Board of Directors has authorized a total of 314,184 shares of restricted stock be granted to employees and non-employee directors. The compensation cost is measured by the difference between the quoted market price of the stock at the date of grant and the price, if any, to be paid by an employee and is recognized as an expense over the period the recipient performs related services. The restricted stock grants vest over a one to four year period depending on the grant and the weighted average price of the stock on the date of the grants was $8.08 for the year ended December 31, 2008. Stock compensation expense of $2.3 million and $3.9 million is included in the Statement of Operations for the years ended December 31, 2008 and 2007, which represents the cost recognized from the date of the grants through December 31, 2008 and 2007. During 2008, 172,463 shares vested having a fair value of approximately $1.5 million on the date of vesting. As of December 31, 2008, the total compensation cost related to non-vested restricted stock grants not yet recognized is approximately $2 million. This amount will be recognized as compensation expense over the next 24 months.

For the years ended December 31, 2008 and 2007 we recognized a current tax benefit related to restricted stock grants of approximately $0 and $0 and a deferred tax benefit of approximately $443,000 and $1.3 million, respectively.

The following table summarizes the changes in outstanding restricted stock grants along with their related grant-date fair values for the year ended December 31, 2008:

	Shares		Weighted Average Grant-Date Fair Value
Non-vested at January 1, 2008	222,599		$	25.91
Shares granted	314,184		8.08
Shares vested	(172,465	)	16.56
Shares forfeited	(86,094	)	26.38
Non-vested at December 31,2008	278,224		$	11.63

NOTE 12 — COMMITMENTS AND CONTINGENCIES

We lease our office space under non-cancelable operating leases that escalate annually, expiring during 2009 through 2014. The following is a schedule of minimum future rentals under our non-cancelable operating leases as of December 31, 2008 (in thousands):

2009	$	770
2010	816
2011	827
2012	681
2013	636
Thereafter	453
	$	4,183

Net rent expense totaled $952,000 in 2008, $818,000 in 2007 and $699,000 in 2006.

Black Sea Incidents.  In October 2005, in an incident involving a vessel owned by Micoperi Srl, the Ayazli 2 and Ayazli 3 wells were damaged, and subsequently had to be re-drilled. We and our co-venturers made a claim in respect of the cost of re-drilling and repeating flow-testing. The amount claimed was approximately $10.8 million before interest, subject to adjustment when the actual cost of flow-testing the re-drilled wells was known. In addition, we and our co-venturers claimed to recover back from Micoperi a sum of about $8.2 million paid to Micoperi under the contract between us, our co-venturers and Micoperi. Micoperi made a cross-claim for about $7.1 million in respect of sums allegedly due to Micoperi under the contract between us, our co-venturers and Micoperi. Micoperi also asserted a claim that the arrest of the vessel “MICOPERI 30” at Palermo, Italy was wrongful and asserted a claim for damages in respect of such allegedly wrongful arrest. We and our co-ventures received security from Micoperi by way of a letter of undertaking from their insurers, and provided security to Micoperi in respect of their cross-claims by way of a bank guarantee of $8.2 million. The claims and cross-claims were subject to the jurisdiction of the English Court; however, neither side commenced any court proceedings. All the amounts

F-27

stated above are gross and our share was equal to 36.75%. Following mediation in London, an agreement was reached on November 14, 2008 between Toreador, our co-venturers and Micoperi, whereby a full settlement of all claims related to the 2005 incident were reached. The settlement’s net proceeds to us were approximately $1.4 million and we were released of all cross-claims from Micoperi regarding the 2005 incident.

The Company has indemnified a third party vendor for any claims made related to this incident. However, the Company believes the possibility of a claim being asserted is remote.

In 2005, two separate incidents occurred offshore Turkey in the Black Sea, which resulted in the sinking of two caissions and the loss of three natural gas wells. The Company has not been requested to or ordered by any governmental or regulatory body to remove the caissions. Therefore, the Company believes that the likelihood of receiving such a request or order is remote and no liability has been recorded.

From time to time, we are named as a defendant in other legal proceedings arising in the normal course of business. In our opinion, the final judgment or settlement, if any, which may be awarded with any suit or claim would not have a material adverse effect on our financial position.

NOTE 13 — RELATED PARTY TRANSACTIONS

William I. Lee (deceased), was a former director of the Company and the majority owner of Wilco Properties, Inc (“Wilco”). The Company subleased office space to Wilco pursuant to a sub-lease agreement. We recorded reductions to rent expense totaling $0 in 2008, $25,000 in 2007 and $50,000 in 2006 related to the sublease with Wilco. We had an informal agreement with Wilco under which one of the two companies incurs, on behalf of the other, certain miscellaneous expenses that were subsequently reimbursed by the other company. As of December 31, 2008 the informal lease agreement has been terminated and no amounts are owed or are due to the company.

On November 1, 2002, pursuant to a private placement we issued $925,000 of Series A-1 Convertible Preferred Stock to certain of our directors or entities controlled by certain of our directors. In connection with the securities purchase agreements, Toreador entered into a registration rights agreement effective November 1, 2002, among Toreador and the purchasers which provides for the registration of the common stock issuable upon conversion of the Series A-1 Convertible Preferred Stock. During 2003, pursuant to private placements we issued 41,000 shares of our Series A-1 Convertible Preferred Stock for the total amount of $1,025,000 to William I. Lee and Wilco as follows: (i) in October 2003, 34,000 shares were issued to William I. Lee and Wilco, an entity controlled by Mr. Lee; and (ii) in December 2003, 7,000 shares were issued to Wilco. The Series A-1 Convertible Preferred Stock was governed by a certificate of designation. The Series A-1 Convertible Preferred Stock was sold for a face value of $25.00 per share, and pays an annual cash dividend of $2.25 per share that result in an annual yield of 9.0%. At the option of the holder, the Series A-1 Convertible Preferred Stock was convertible into common shares at a price of $4.00 per common share. The $4.00 conversion price was higher than the market price of our common stock at the time of issuances. The Series A-1 Convertible Preferred Stock was redeemable at our option, in whole or in part, at any time on or after November 1, 2007. The optional redemption price per share was the sum of (1) $25.00 per share of the Series A-1 Convertible Preferred Stock plus (2) any accrued unpaid dividends, and such sum is multiplied by a declining multiplier. The multiplier is 105% until October 31, 2008, 104% until October 31, 2009, 103% until October 31, 2010, 102% until October 31, 2011, 101% until October 31, 2012, and 100% thereafter. In connection with the securities purchase agreements entered into with William I. Lee and Wilco, Toreador granted certain “piggy-back” registration rights relating to the common stock issuable upon conversion of the Series A-1 Convertible Preferred Stock. The sale of the Series A-1 Convertible Preferred Stock was effected in reliance upon the exemption from securities registration afforded by the provisions of Section 4(2) of the Securities Act of 1933, as amended, and Regulation D as promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended. In December 2007, all the series A-1 Convertible Preferred Stock was converted into common shares.

NOTE 14 — DISCONTINUED OPERATIONS

On June 14, 2007, the Board of Directors authorized management to sell all oil and natural gas properties in the United States. The sale of these properties completed the divestiture of the company’s non-core domestic assets and allows us to focus exclusively on our international operations. The sale was closed on September 1, 2007. The sales price was $19.1 million which resulted in a pre-tax gain of $9.2 million. Prior year financial statements for 2007 and 2006 have been adjusted to present the operations of the U.S. properties as a discontinued operation. The table below compares discontinued operations for the years ended December 31, 2008, 2007 and 2006:

F-28

	Year ended December 31,
	2008			2007			2006
Revenue:
Oil and natural gas sales	$	—		$	4,489		$	7,070
Operating costs and expenses:
Lease operating expense	22			1,592			2,200
Exploration expense	—			105			—
Depreciation, depletion and amortization	—			611			1,265
Dry hole expense	—			103			1,393
Impairment	—			—			345
General and administrative expense	—			325			324
Gain on sale of properties and other assets	—			(9,244		)	(202		)
Total operating costs and expenses	(22		)	(6,508		)	5,325
Operating income	(22		)	10,997			1,745
Income tax provision	—			(3,952		)	(642		)
Income (loss) from discontinued operations	$	(22	)	$	7,045		$	1,103

NOTE 15 — INFORMATION ABOUT OIL AND NATURAL GAS PRODUCING ACTIVITIES AND OPERATING SEGMENTS

We have operations in only one industry segment, the oil and natural gas exploration and production industry. We are structured along geographic operating segments or regions. As a result, we have reportable operations in the United States, Western Europe (France) and Eastern Europe (Hungary, Romania and Turkey). Geographic operating segment income tax expenses have been determined based on statutory rates existing in the various tax jurisdictions where we have oil and natural gas producing activities.

We allocate a portion of certain United States based employees salaries to our foreign subsidiaries. The amount allocated is based on an estimate of the time that employee has spent working on that on that subsidiary. We periodically review these percentages to make sure that our assumptions are still valid.

F-29

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables provide the geographic operating segment data required by Statement of Financial Accounting Standards No. 131, “Disclosure about Segments of an Enterprise and Related Information”. The United States segment data for the years ended December 31, 2008, 2007, and 2006 has been adjusted to reflect the sale of oil and natural gas properties in the United States as of September 1, 2007 (see Note 14).

	United States			France			Turkey			Hungary			Romania			Total
	(In thousands)
For the year ended December 31, 2008
Revenues:
Oil and natural gas sales	$	52		$	34,096		$	25,668		$	—		$	2,558		$	62,374
Costs and expenses:
Lease operating	—			9,263			3,477			7			4,464			17,211
Exploration expense	1,080			144			2,655			1,397			530			5,806
Depreciation, depletion and amortization	307			4,687			27,164			94			890			33,142
Impairment of oil and natural gas properties and intangible assets	2,282			—			82,340			—			611			85,233
General and administrative	11,746			1,295			2,018			428			—			15,487
(Gain) loss on sale of properties and other assets	—			—			—			—			123			123
Loss on sale of oil and gas derivative contracts	—			1,781			—			—			—			1,781
Total costs and expenses	15,415			17,170			117,654			1,926			6,618			158,783
Operating income (loss)	(15,363		)	16,926			(91,986		)	(1,926		)	(4,060		)	(96,409		)
Other income (expense)	(3,154		)	72			(5,434		)	920			1,498			(6,098		)
Income (loss) before income taxes	(18,517		)	16,998			(97,420		)	(1,006		)	(2,562		)	(102,507		)
Benefit (provision) for income taxes	563			(6,066		)	(573		)	—			—			(6,076		)
Income (loss) from continuing operations, net of tax	$	(17,954	)	$	10,932		$	(97,993	)	$	(1,006	)	$	(2,562	)	$	(108,583	)
Selected assets:
Properties and equipment	$	1,860		$	108,669		$	115,057		$	17,618		$	23,882		$	267,086
Properties and equipment held for sale	—			—			55,000			—			—			55,000
Accumulated depreciation, depletion, and amortization	(1,163		)	(36,613		)	(95,318		)	(399		)	(23,882		)	(157,375		)
Oil and natural gas properties, net	$	697		$	72,056		$	74,739		$	17,219		$	—		$	164,711
Goodwill	$	—		$	3,838		$	—		$	—		$	—		$	3,838
Total assets	$	276,434		$	93,691		$	(69,537	)	$	1,974		$	(33,046	)	$	269,516
Expenditures for additions to long-lived assets:
Development costs	$	—		$	431		$	8,649		$	1,487		$	—		$	10,567
Exploration costs	—			—			575			—			—			575
Other	10			—			241			163			—			414
Total expenditures for long-lived assets	$	10		$	431		$	9,465		$	1,650		$	—		$	11,556

F-30

	United States			France			Turkey			Hungary			Romania			Total
	(In thousands)
For the year ended December 31, 2007
Revenues:
Oil and natural gas sales	$	34		$	25,873		$	11,857		$	—		$	3,927		$	41,691
Costs and expenses:
Lease operating	—			7,344			2,644			—			2,656			12,644
Exploration expense	2,668			855			2,568			2,224			6,427			14,742
Depreciation, depletion and amortization	265			4,137			10,088			65			6,702			21,257
Dry hole cost	—			3,847			4,500			3,484			10,009			21,840
Impairment of oil and natural gas properties and intangible assets	—			—			—			—			13,446			13,446
General and administrative	9,675			2,832			3,727			543			536			17,313
(Gain) loss on sale of properties and other assets	(3,155		)	—			(4		)	—			—			(3,159		)
Loss on sale of oil and gas derivative contracts	1,005			—			—			—			—			1,005
Total costs and expenses	10,458			19,015			23,523			6,316			39,776			99,088
Operating income (loss)	(10,424		)	6,858			(11,666		)	(6,316		)	(35,849		)	(57,397		)
Other income (expense)	(1,914		)	(470		)	(23,495		)	(2,562		)	(304		)	(28,745		)
Income (loss) before income taxes	(12,338		)	6,388			(35,161		)	(8,878		)	(36,153		)	(86,142		)
Benefit (provision) for income taxes	3,692			(2,290		)	3,274			—			—			4,676
Income (loss) from continuing operations, net of tax	$	(8,646	)	$	4,098		$	(31,887	)	$	(8,878	)	$	(36,153	)	$	(81,466	)
Selected assets:
Properties and equipment	$	3,905		$	115,666		$	185,844		$	15,968		$	24,082		$	345,465
Accumulated depreciation, depletion, and amortization	(928		)	(37,660		)	(12,342		)	(376		)	(22,208		)	(73,514		)
Oil and natural gas properties, net	$	2,977		$	78,006		$	173,502		$	15,592		$	1,874		$	271,951
Goodwill	$	—		$	4,059		$	883		$	—		$	—		$	4,942
Total assets	$	298,949		$	83,683		$	31,417		$	693		$	(29,271	)	$	385,471
Expenditures for additions to long-lived assets:
Development costs	$	—		$	—		$	59,086		$	1,672		$	2,381		$	63,139
Exploration costs	—			3,847			4,500			3,484			10,009			21,840
Other	398			—			36			—			115			549
Total expenditures for long-lived assets	$	398		$	3,847		$	63,622		$	5,156		$	12,505		$	85,528

	United States			France			Turkey			Hungary			Romania			Total
	(In thousands)
For the year ended December 31, 2006
Revenues:
Oil and natural gas sales	$	20		$	27,274		$	3,834		$	—		$	2,200		$	33,328
Costs and expenses:
Lease operating	—			7,229			793			—			719			8,741
Exploration expense	1,883			432			799			184			648			3,946
Depreciation, depletion and amortization	264			3,119			748			59			2,089			6,279
Dry hole cost	—			—			—			1,706			—			1,706
General and administrative	5,720			1,905			807			516			557			9,505
(Gain) loss on sale of properties and other assets	—			—			(436		)	—			—			(436		)
Total costs and expenses	7,867			12,685			2,711			2,465			4,013			29,741
Operating income (loss)	(7,847		)	14,589			1,123			(2,465		)	(1,813		)	3,587
Other income (expense)	3,186			187			(1,055		)	(1,484		)	59			893
Income (loss) before income taxes	(4,661		)	14,776			68			(3,949		)	(1,754		)	4,480
Benefit (provision) for income taxes	1,020			(4,256		)	231			—			—			(3,005		)
Income (loss) from continuing operations, net of tax	$	(3,641	)	$	10,520		$	299		$	(3,949	)	$	(1,754	)	$	1,475
Selected assets:
Oil and natural gas properties	$	3,602		$	99,751		$	137,499		$	15,334		$	21,840		$	278,044
Accumulated depreciation, depletion, and amortization	(1,271		)	(30,439		)	(2,893		)	(283		)	(2,059		)	(36,945		)
Oil and natural gas properties, net	$	2,349		$	69,312		$	134,606		$	15,051		$	19,781		$	241,099
Investments in unconsolidated entities	$	2,659		$	—		$	—		$	—		$	—		$	2,659
Goodwill	$	—		$	3,632		$	919		$	—		$	—		$	4,551
Total assets	$	251,422		$	80,574		$	35,209		$	7,745		$	4,638		$	379,588
Expenditures for additions to long-lived assets:
Development costs	$	—		$	15,931		$	86,222		$	1,759		$	6,943		$	110,855
Exploration costs	—			—			—			6,249			7,320			13,569
Other	283			127			228			83			111			832
Total expenditures for long-lived assets	$	283		$	16,058		$	86,450		$	8,091		$	14,374		$	125,256

F-31

(1)Amounts reflect reclassifications to discontinued operations.

The following table reconciles the total assets for reportable segments to consolidated assets.

	December 31,
	2008			2007
	(in thousands)
Total assets for reportable segments	$	269,516		$	385,471
Elimination of intersegment receivables and investments	(62,360		)	(62,360		)
Total consolidated assets	$	207,156		$	323,111

NOTE 16 — SUBSEQUENT EVENT

On February 18, 2009 the Board of Directors has authorized management to engage Stellar Energy Advisors, based in London, UK, to manage an open bid process to sell its remaining 10% interest in the SASB, in addition to its onshore production and 2.7 million net acres in exploration licenses that are currently held. The Company will begin accounting for the Turkish segment as a discontinued operation in the first quarter of 2009.

On March 3, 2009 we completed the sale of a 26.75% interest in the South Akcakoca Sub-Basin (SASB) project associated licenses located in the Black Sea offshore Turkey, to Petrol Ofisi for $55 million. In accordance with the revised assignment announced on February 3, 2009, $50 million of the proceeds was paid by Petrol Ofisi on March 3, 2009, and the remaining $5 million will be paid unconditionally on September 1, 2009.

In accordance with the covenants of the International Finance Corporation revolving credit facility, proceeds of the Petrol Ofisi sale will be used to fully repay and retire the outstanding balance of $36.4 million, which includes $5.9 million of additional compensation, accrued interest and fees. Remaining proceeds will be used to retire a portion of the Notes and fund this year’s capital program to meet minimum commitments associated with the Company’s licenses.

NOTE 17 — SUPPLEMENTAL OIL AND NATURAL GAS RESERVES AND STANDARDIZED MEASURE INFORMATION (UNAUDITED)

We retain an independent engineering firm to provide annual year-end estimates of our future net recoverable oil and natural gas reserves. Estimated proved net recoverable reserves we have shown below include only those quantities that we can expect to be commercially recoverable at prices and costs in effect at the balance sheet dates under existing regulatory practices and with conventional equipment and operating methods. Proved developed reserves represent only those reserves that we may recover through existing wells. Proved undeveloped reserves include those reserves that we may recover from new wells on undrilled acreage or from existing wells on which we must make a relatively major expenditure for recompletion or secondary recovery operations.

F-32

Discounted future cash flow estimates like those shown below are not intended to represent estimates of the fair value of oil and natural gas properties. Estimates of fair value should also consider probable reserves, anticipated future oil and natural gas prices, interest rates, changes in development and production costs and risks associated with future production. Because of these and other considerations, any estimate of fair value is necessarily subjective and imprecise.

	France		Turkey		Romania		Hungary		Total
	Natural Gas (MMcf)
PROVED RESERVES
December 31, 2005	—		6,476		3,486		—		9,962
Revisions of previous estimates	—		(1,151	)	(1,185	)	—		(2,336	)
Extensions, discoveries and other additions	—		16,099		1,186		950		18,235
Sale of reserves	—		—		—		—		—
Production	—		—		(446	)	—		(446	)
December 31, 2006	—		21,424		3,041		950		25,415
Revisions of previous estimates	—		(8,215	)	(1,671	)	(950	)	(10,836	)
Extensions, discoveries and other additions	—		741		—		—		741
Sale of reserves	—		—		—		—		—
Production	—		(1,011	)	(598	)	—		(1,069	)
December 31, 2007	—		12,939		772		—		13,711
Revisions of previous estimates	—		(819	)	(310	)	950		(179	)
Extensions, discoveries and other additions	—		—		—		—		—
Sale of reserves	—		—		—		—		—
Production	—		(1,643	)	(376	)	—		(2,019	)
December 31, 2008	—		10,477		86		950		11,513
PROVED DEVELOPED
December 31, 2006	—		—		3,040		950		3,990
December 31, 2007	—		4,248		772		—		5,020
December 31, 2008	—		2,437		86		950		3,473
	Oil (MBbls)
PROVED RESERVES
December 31, 2005	10,978		639		24		—		11,641
Revisions of previous estimates	(906	)	95		4		—		(807	)
Extensions, discoveries and other additions	—		—		19		1		20
Sale of reserves	—		—		—		—		—
Production	(444	)	(69	)	(6	)	—		(519	)
December 31, 2006	9,628		665		41		1		10,335
Revisions of previous estimates	661		481		(27	)	(1	)	1,114
Extensions, discoveries and other additions	39		—		—		—		39
Sale of reserves	—		(30	)	—		—		(30	)
Production	(360	)	(67	)	(8	)	—		(435	)
December 31, 2007	9,968		1,049		6		—		11,023
Revisions of previous estimates	(4,694	)	(253	)	(2	)	1		(4,948	)
Extensions, discoveries and other additions	—		—		—		—		—
Sale of reserves	—		—		—		—		—
Production	(360	)	(55	)	(3	)	—		(418	)
December 31, 2008	4,914		741		1		1		5,657
PROVED DEVELOPED
December 31, 2006	6,770		405		41		1		7,217
December 31, 2007	7,170		808		6		—		7,984
December 31, 2008	4,385		500		1		1		4,887

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We have summarized the standardized measure of discounted future net cash flows related to our proved oil and natural gas reserves. We have based the following summary on a valuation of proved reserves using discounted cash flows based on year-end prices, costs and economic conditions and a 10% discount rate. The additions to proved reserves from purchase of reserves in place and new discoveries and extensions could vary significantly from year to year; additionally, the impact of changes to reflect current prices and costs of proved reserves in prior years could also be significant. Accordingly, investors should not view the information presented below as an estimate of the fair value of our oil and natural gas properties, nor should investors consider the information indicative of any trends.

For the year ended December 31, 2008, we had a downward reserve revision of 37.4%. At December 31, 2007 the price used for evaluating our oil reserves was $95.72 per barrel as compared to the December 31, 2008 price of $34.29 per barrel. This 62% decrease in oil price had a severe impact on the economic life of our wells, but also on the discounted present value at 10% and the standardized measure of proved reserves. This downward revision, which primarily affected our French oil reserves, was due to the following factors (i) decrease in economic life due to change in economics caused a net decrease of 1,682 MBbl; (ii) removing twelve proved undeveloped locations caused a net decrease 1,889 MBbl; (iii) negative reserve revisions resulted in a decrease in reserves of 405 MBbl; (iv) fourteen wells were shut-in resulting in a decrease of 401 MBbl; (v) three drilled locations in prior years resulted in one producing well which was non-commercial at December 31, 2008 causing a net decrease of 280 MBbl; (vi) one well was lost during workover operations causing a net decrease 37 MBbl; and (vii) 2008 production of 805 MBOE. In Hungary, we were able to secure a gas contract and were able to restore the reserves lost in 2007, this resulted in an increase of 159 MBOE and in Romania the poor performance of the field resulted in a decrease of 54 MBbl. In Turkey, we had downward revisions of 390 MBbl. which was due to a decrease in the economic life of the proved developed wells.

The prices of oil and natural gas at December 31, 2008, 2007, and 2006 used to estimate reserves in the table shown below, were $34.29, $95.72 and $57.75 per Bbl of oil, respectively, and $12.68, $8.91 and $6.98 per Mcf of natural gas, respectively.

	France		Turkey		Romania			Hungary		Total
	(In thousands)
As of and for the year ended December 31, 2006
Future cash inflows	$	551,139	$	185,815	$	21,163		$	5,732	$	763,849
Future production costs	214,474		20,407		5,198			1,658		241,737
Future development costs	33,580		20,757		159			800		55,296
Future income tax expense	95,067		7,114		(602		)	2,057		103,636
Future net cash flows	208,018		137,537		16,408			1,217		363,180
10% annual discount for estimated timing of cash flows	121,828		53,207		3,019			248		178,302
Standardized measure of discounted future net cash flows related to proved reserves	$	86,190	$	84,330	$	13,389		$	969	$	184,878
As of and for the year ended December 31, 2007
Future cash inflows	$	963,444	$	209,405	$	4,495		$	—	$	1,177,344
Future production costs	305,939		29,759		3,202			—		338,900
Future development costs	32,221		22,272		95			—		54,588
Future income tax expense	200,094		6,597		—			—		206,691
Future net cash flows	425,190		150,777		1,198			—		577,165
10% annual discount for estimated timing of cash flows	250,979		66,729		88			—		317,796
Standardized measure of discounted future net cash flows related to proved reserves	$	174,211	$	84,048	$	1,110		$	—	$	259,369
As of and for the year ended December 31, 2008
Future cash inflows	$	170,662	$	155,179	$	412		$	13,735	$	339,988
Future production costs	105,298		26,939		381			1,851		134,469
Future development costs	13,658		71,283		159			550		85,650
Future income tax expense	10,027		—		—			—		10,027
Future net cash flows(1)	41,679		56,957		(128		)	11,334		109,842
10% annual discount for estimated timing of cash flows	23,116		29,909		(7		)	2,056		55,074
Standardized measure of discounted future net cash flows related to proved reserves(1)	$	18,563	$	27,048	$	(121	)	$	9,278	$	54,768

(1)The negative values are due to plugging and abandonment costs incurred in the final year.

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The following are the principal sources of change in the standardized measure:

	France			Turkey			Romania			Hungary			Total
	(In thousands)
Balance at December 31, 2005	$	109,129		$	15,788		$	10,675		$	—		$	135,592
Sales of oil and natural gas, net	(20,201		)	(3,041		)	(1,481		)	—			(24,723		)
Net changes in prices and production costs	(6,102		)	7,074			2,987						3,959
Net change in development costs	(2,101		)	970			(130		)	(641		)	(1,902		)
Extensions and discoveries	—			65,127			5,159			3,267			73,553
Revisions of previous quantity estimates	(13,781		)	(2,355		)	(4,617		)	—			(20,753		)
Previously estimated development costs incurred	(2,132		)	—			(552		)	—			(2,684		)
Net change in income taxes	9,312			(3,445		)	1,262			(1,656		)	5,473
Accretion of discount	13,570			1,679			989			—			16,238
Other	(1,504		)	2,533			(905		)	—			124
Balance at December 31, 2006	86,190			84,330			13,387			970			184,877
Sales of oil and natural gas, net	(18,529		)	(9,213		)	(1,271		)	—			(29,013		)
Net changes in prices and production costs	120,639			38,613			(7,953		)	—			151,299
Net change in development costs	(266		)	(5,701		)	59			641			(5,267		)
Extensions and discoveries	1,076			3,930			—			—			5,006
Revisions of previous quantity estimates	18,303			(28,262		)	(2,726		)	(3,267		)	(15,952		)
Previously estimated development costs incurred	(1,992		)	(8,523		)	—			—			(10,515		)
Net change in income taxes	(42,760		)	257			448			1,656			(40,399		)
Accretion of discount	11,871			8,492			(841		)	—			19,522
Sale of reserves	—			(967		)	—			—			(967		)
Other	(321		)	1,092			7			—			778
Balance at December 31, 2007	174,211			84,048			1,110			—			259,369
Sales of oil and natural gas, net	(24,834		)	(22,191		)	1,906			—			(45,119		)
Net changes in prices and production costs	(212,520		)	(7,298		)	(481		)	—			(220,299		)
Net change in development costs	7,795			(30,943		)	(62		)	(451		)	(23,661		)
Extensions and discoveries	—			—			—			—			—
Revisions of previous quantity estimates	(26,219		)	(11,419		)	(105		)	9,737			(28,006		)
Previously estimated development costs incurred	—			(5,475		)	—			—			(5,475		)
Net change in income taxes	81,846			5,329			(2,712		)	38			84,501
Accretion of discount	26,260			8,938			111			—			35,309
Sale of reserves	—			—			—			—			—
Other	(7,976		)	6,059			112			(46		)	(1,851		)
Balance at December 31, 2008	$	18,563		$	27,048		$	(121	)	$	9,278		$	54,768

F-35