8-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.    20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported)
March 14, 2005
THE EXPLORATION COMPANY OF DELAWARE, INC.
(Exact name of registrant as specified in its charter)
Delaware	0-9120		84-0793089
(State of	(Commission File		(IRS Employer
incorporation)	Number)		Identification No.)
500 North Loop 1604 East, Suite 250
San Antonio, Texas		78232
(Address of principal executive offices)		(Zip Code)
(210) 496-5300
(Registrant's telephone number,
including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the    registrant under any of the following provisions (see General Instruction A.2. below):
o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02:  Results of Operations and Financial Condition
The Company issues a press release on March 14, 2005, attached as Exhibit 99, reporting earnings for the year ended December 31, 2004.
The press release contained a discussion of Ebitdax, defined as earnings before income taxes, interest, depreciation, depletion, amortization, impairment, abandonment and exploration expense, and Ebitda, defined as Ebitdax less exploration expense. Ebitdax and Ebitda are "non-GAAP financial measures" as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended. The Company discussed Ebitdax and Ebitda for year ended December 31, 2004 and 2003. The required disclosures were posted to the Company's Web site, www.txco.com, which was referenced in the press release, with reconciliation to both "Net Income" and "Net Cash Provided by Operating Activities."
Item 9.01:  Financial Statements and Exhibits
	Exhibit Number	Description
	99	Press Release dated March 14, 2005, entitled "The Exploration Company Reports Record Reserves, Revenues, Operating Income, Cash Flow and Assets for 2004"
The information contained in this report under Item 2.02, including the exhibit, is intended to be furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: March 17, 2005
THE EXPLORATION COMPANY OF DELAWARE, INC.
			/s/ P. Mark Stark
			P. Mark Stark
			Chief Financial Officer
			(Principal Accounting and Financial Officer)

EX-99

			Exhibit 99
For Immediate Release		Contact Information
Monday, March 14, 2005		Investors: Roberto R. Thomae
		(210) 496-5300 ext. 214, bthomae@txco.com
		Media: Paul Hart
		(210) 496-5300 ext. 264, pdhart@txco.com
The Exploration Company Reports Record Reserves, Revenues, Operating Income, Cash Flow and Assets for 2004
SAN ANTONIO -- March 14, 2005 - The Exploration Company (Nasdaq:TXCO) today reported sharply higher earnings and record proved reserves for the year ended Dec. 31, 2004. Highlights include:
-   Proved reserves rose to 37.9 billion cubic feet equivalent (Bcfe), a 33 percent increase. -   Total revenues increased to $57.7 million, up 46 percent. -   Income from operations was a record $5.9 million, up more than 300 percent. -   Net cash provided in operating activities was $16.4 million, a 9 percent increase. -   Record year-over-year growth in Ebitda and Ebitdax. -   Assets rose to $114.2 million, 36 percent higher.
The Company reported net income of $2.8 million, or $0.10 per share, a significant increase from $40,877, or $0.002 per share, for 2003. All per-share amounts are on a diluted basis. Total revenues rose to a record $57.7 million, a 46 percent increase from $39.5 million in the prior year. TXCO's total assets rose to a record $114.2 million at year end, up 36 percent from $84.2 million at year-end 2003.
Cash flow, or net cash provided by operating activities, was a record $16.4 million, 9 percent above the $15.2 million recorded in 2003. Ebitda -- earnings before income taxes, interest expense, depreciation, depletion, amortization, impairment and abandonment expense -- was $18.1 million, or $0.67 per share, a 43 percent increase from $12.7 million, or $0.61 per share in the prior year. Ebitdax -- Ebitda plus exploration expense -- was $20.6 million, or $0.76 per share, up from $14.9 million, or $0.72 per share for 2003. See the Company's Web site at www.txco.com for a reconciliation of non-GAAP financial measures.
Overall, TXCO had record natural gas sales and gas gathering revenues, offset partially by lower crude oil sales. Commodity price realizations were $5.96 per thousand cubic feet (Mcf) for natural gas and $38.72 per barrel for crude oil.
Reserve Growth Continues      TXCO continued its ongoing trend of strong annual reserve growth in 2004 as it recorded net proved reserve additions of 9.5 Bcfe. Combined with annual production of 4.9 Bcfe, the Company's gross reserve additions for the year were 14.4 Bcfe. Estimated year-end proved oil and gas reserves were a record 37.9 Bcfe, a third above its 28.4 Bcfe at year-end 2003.
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          Since year-end 2000, TXCO's reserves have increased more than 575 percent. The Company achieved a 295 percent all-source reserve replacement rate in 2004. TXCO's reserve life index now stands at 7.7 years, up from 5.9 years at year-end 2003. Its reserve mix consists of 53 percent crude oil and 47 percent natural gas. Approximately 61 percent of TXCO's oil and gas reserves are proved developed. Additional information on the Company's reserve additions will be contained in its annual report on Form 10-K, to be filed on or about March 16.

          TXCO's reserve estimates were prepared by DeGolyer and MacNaughton of Dallas, an independent reservoir engineering firm, in accordance with SEC and Financial Accounting Standards Board requirements.

Management's Perspective

          "The year of 2004 was a good one for us," said President and CEO James E. Sigmon. "We overcame many challenges as we pursued greater shareholder value via the drillbit by developing the Maverick Basin's potential. Obstacles included multiple severe weather events that interrupted field operations, a key partner's corporate restructuring, tight rig availability and pipeline connection delays.

          "We begin 2005 with strong momentum," he added. "We have four rigs running now compared with only two at this point a year ago. The 174,000-acre lease acquisition we announced in February expands our Maverick Basin acreage block to an impressive 727,000 gross acres and allows us to accelerate the exploration and development of many promising plays, including our successful Georgetown and Glen Rose zones. I'm very optimistic we will continue our rising trends of record revenues, production and reserves going forward. We are turning the corner on numerous geologic horizons where we have demonstrated repeatable success, taking them from exploration to solid developmental drilling programs."

About The Exploration Company

          The Exploration Company is an independent oil and gas enterprise with interests primarily in the Maverick Basin of Southwest Texas. The Company has a consistent record of long-term growth in its proved oil and gas reserves, leasehold acreage position, production and cash flow through its established exploration and development programs. Its business strategy is to build shareholder value by acquiring undeveloped mineral interests and internally develop a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. The Company accounts for its oil and gas operations under the successful efforts method of accounting and trades its common stock on the Nasdaq Stock Market under the symbol "TXCO."

Forward-Looking Statements

          Statements in this press release that are not historical, including statements regarding TXCO's or management's intentions, hopes, beliefs, expectations, representations, projections, estimations, plans or predictions of the future, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include those relating to oil and gas prices, capital expenditures, production levels, drilling plans, including the timing, number and cost of wells to be drilled, projects and expected response, and establishment of reserves. It is important to note that actual results may differ materially from the results predicted in any such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the costs of exploring and developing new oil and natural gas reserve s, the price for which such reserves can be sold, environmental concerns affecting the drilling of oil and natural gas wells, as well as general market conditions, competition and pricing. More information

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about potential factors that could affect the company's operating and financial results is included in TXCO's annual report on Form 10-K for the year ended December 31, 2003, and its Form 10-Q for the quarter and year-to-date period ended Sept. 30, 2004. This and all previously filed documents are on file at the Securities and Exchange Commission and can be viewed on TXCO's website at www.txco.com. Copies are available without charge, upon request from the Company.

(Financial Information and Selected Operational Tables Follow)

THE EXPLORATION COMPANY Condensed Consolidated Balance Sheets (Unaudited)
	December 31
	2004	2003
Assets
Current Assets
Cash and equivalents	$3,118,328	$  6,180,560
Accounts receivable:
Joint interest owners	1,736,944	564,116
Oil and gas sales	7,248,429	4,273,849
Prepaid expenses and other	934,016	718,853
Total Current Assets	13,037,717	11,737,378
Property and Equipment, net - successful efforts   method of accounting for oil and gas properties	94,836,476	66,155,827
Other Assets
Deferred tax asset	5,232,718	5,232,718
Other assets	1,130,413	1,080,290
Total Other Assets	6,363,131	6,313,008
Total Assets	$114,237,324	$84,206,213
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THE EXPLORATION COMPANY Condensed Consolidated Balance Sheets (Unaudited)
	December 31
	2004		2003
Liabilities And Stockholders' Equity
Current Liabilities
Accounts payable, trade	$10,389,119		$ 8,186,705
Other payables and accrued liabilities	5,449,553		3,709,016
Undistributed revenue	1,062,000		416,399
Current portion of long-term debt	1,666,466		1,752,286
Total Current Liabilities	18,567,138		14,064,406
Long-Term Liabilities
Long-term debt, net of current portion	17,099,237		15,425,598
Redeemable preferred stock, Series B      (redemption value - $16 million)	10,991,308		10,135,335
Accrued dividends - preferred stock	217,728		57,732
Asset retirement obligation	1,679,600		1,537,600
Total Long-Term Liabilities	29,987,873		27,156,265
Minority Interest in Consolidated Subsidiaries	-		193,441
Stockholders' Equity
Preferred stock; authorized 10,000,000 shares,     issued and outstanding 16,000 shares	- -		- -
Common stock, par value $0.01 per share; authorized     50,000,000 shares, issued 28,110,363 and 22,242,849     shares, and outstanding 28,010,563 and 22,143,049	281,103		222,428
Additional paid-in capital	84,010,730		63,976,021
Accumulated deficit	(18,363,513	)	(21,160,341	)
Less treasury stock, at cost, 99,800 shares	(246,007	)	(246,007	)
Total Stockholders' Equity	65,682,313		42,792,101
Total Liabilities and Stockholders' Equity	$114,237,324		$84,206,213
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THE EXPLORATION COMPANY Condensed Consolidated Statements of Operations (Unaudited)
	Years Ended December 31
	2004		2003		2002
Revenues
Oil and gas sales	$30,181,581		$24,390,767		$16,049,798
Gas gathering operations	27,535,689		15,145,154		2,596,955
Other operating income	18,062		9,281		311,611
Total Revenues	57,735,332		39,545,202		18,958,364
Costs and Expenses
Lease operations	5,460,372		4,408,205		4,081,162
Production taxes	1,588,387		1,501,041		973,078
Exploration expenses	2,448,800		2,187,216		1,567,098
Impairment and abandonments	2,354,553		2,522,548		1,246,495
Gas gathering operations	25,291,780		15,136,279		2,625,313
Depreciation, depletion and amortization	9,851,485		8,627,678		6,500,625
General and administrative	4,852,513		3,716,439		2,025,440
Total Costs and Expenses	51,847,890		38,099,406		19,019,211
Income (loss) from operations	5,887,442		1,445,796		(60,847	)
Other Income (Expense)
Interest income	31,771		26,626		46,663
Interest expense	(2,909,550	)	(1,365,233	)	(273,213	)
Loan fee amortization	(82,732	)	(17,604	)	(14,507	)
Derivative fair value loss	(18,623	)	-		-
Total Other Expense	(2,979,134	)	(1,356,211	)	(241,057	)
Income (loss) before income taxes, minority interest and   cumulative effect of change in accounting principle	2,908,308		89,585		(301,904	)
Minority interest in income (loss) of subsidiaries	34,889		75,292		(84,066	)
Income (loss) before income taxes and cumulative effect   of change in accounting principle	2,943,197		164,877		(385,970	)
Income tax (expense) benefit	(146,369	)	(50,000	)	75,000
Cumulative effect of change in accounting principle, net of tax	-		(74,000	)	-
Net Income (Loss)	$2,796,828		$      40,877		$    (310,970	)
Earnings (Loss) Per Share:
Basic earnings (loss) before cumulative effect of change in      accounting principle	$        0.11		$        0.01		$        (0.02	)
Cumulative effect of change in accounting principle	-		(0.01	)	-
Basic Earnings (Loss) Per Share	$        0.11		$        0.00		$        (0.02	)
Diluted earnings (loss) before cumulative effect of change in      accounting principle	$        0.10		$        0.01		$        (0.02	)
Cumulative effect of change in accounting principle	-		(0.01	)	-
Diluted Earnings (Loss) Per Share	$        0.10		$        0.00		$        (0.02	)
Weighted average number of common   shares outstanding:
Basic	26,066,299		20,781,223		19,080,847
Diluted	26,971,440		21,295,257		19,080,847
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THE EXPLORATION COMPANY Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
			Additional
	Common Stock		Paid-in	Accumulated		Treasury
	Shares	Amount	Capital	Deficit		Stock		Total
Balance at December 31, 2001	17,496,849	$174,968	$44,017,983	$(20,890,248	)	$(246,007	)	$23,056,696
Common stock options exercised	113,000	1,130	171,625	-		-		172,755
Issuance of common stock  - net   of expenses of $946,112	2,499,667	24,997	14,026,896	- -		- -		14,051,893
Net loss for the year	-	-	-	(310,970	)	-		(310,970	)
Balance at December 31, 2002	20,109,516	201,095	58,216,504	(21,201,218	)	(246,007	)	36,970,374
Issuance of common stock - net   of expenses of $400,959	2,133,333	21,333	5,741,641	- -		- -		5,762,974
Other adjustments	-	-	17,876	-		-		17,876
Net income for the year	-	-	-	40,877		-		40,877
Balance at December 31, 2003	22,242,849	222,428	63,976,021	(21,160,341	)	(246,007	)	42,792,101
Issuance of common stock - net   of expenses of $1,237,168	5,867,514	58,675	19,797,376	- -		- -		19,856,051
Non-cash compensation	-	-	237,333	-		-		237,333
Net income for the year	-	-	-	2,796,828		-		2,796,828
Balance at December 31, 2004	28,110,363	$281,103	$84,010,730	$(18,363,513	)	$(246,007	)	$65,682,313
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THE EXPLORATION COMPANY Condensed Consolidated Statements of Cash Flows
	Years Ended December 31
	2004		2003		2002
Operating Activities
Net income (loss)	$2,796,828		$      40,877		$   (310,970	)
Adjustments to reconcile net income (loss) to     net cash provided by operating activities:
Depreciation, depletion and amortization	9,851,485		8,627,678		6,500,625
Impairments and abandonments	2,354,553		2,522,548		1,246,495
Minority interest in (income) loss of subsidiaries	(34,889	)	(75,292	)	84,066
Cumulative effect of change in accounting principle	-		74,000		-
Non-cash interest expense and accretion of liability           - redeemable preferred stock	1,015,969		677,002		-
Non-cash compensation expense	237,333		-		-
Non-cash hedging fair value gain	(133,972	)	-		-
Net cash provided by operating activities,         before changes in operating assets and liabilities	16,087,307		11,866,813		7,520,216
Changes in operating assets and liabilities:
Receivables	(4,147,408	)	280,305		(3,175,627	)
Prepaid expenses and other	(81,192	)	(215,677	)	(229,573	)
Accounts payable and accrued expenses	4, 588,552		3,226,251		3,274,414
Net cash provided by operating activities	16,447,259		15,157,692		7,389,430
Investing Activities
Development and purchases of oil and gas properties	(39,335,091	)	(36,071,216	)	(27,381,247	)
Purchase of other equipment	(224,092	)	(396,925	)	-
Proceeds from sale of oil and gas properties	-		-		200,000
Changes in minority interests	(158,552	)	185,886		(434,325	)
Other changes	-		-		(39,036	)
Net cash used by investing activities	(39,717,735	)	(36,282,255	)	(27,654,608	)
Financing Activities
Proceeds from issuance of redeemable preferred stock,      net of offering costs	-		9,229,931		-
Proceeds from long-term debt obligations	3,476,131		11,190,530		7,439,915
Payments on long-term debt obligations	(1,888,312	)	(1,229,876	)	(1,084,861	)
Proceeds from common stock transactions, net of expenses	18,620,425		5,780,850		14,224,648
Net cash provided by financing activities	20,208,244		24,971,435		20,579,702
Change in Cash and Equivalents	(3,062,232	)	3,846,872		314,524
Cash and Equivalents at Beginning of Year	6,180,560		2,333,688		2,019,164
Cash and Equivalents at End of Year	$3,118,328		$ 6,180,560		$ 2,333,688
Supplemental Disclosures:
Cash paid for interest	$ 3,011,322		$ 1,200,230		$    273,213
Cash paid for income taxes	-		-		-
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THE EXPLORATION COMPANY SELECTED OPERATING DATA
		Year Ended December 31
		2004		2003
Net cash provided in operating activities	$	16,447,259	$	15,157,692
Debt to asset ratio		30.4%		39.4%
Production
Oil:
Sales, in barrels		321,000		454,000
Average sales price per barrel	$	38.72	$	28.30
Natural Gas:
Sales, in Mcf		2,975,000		2,108,000
Average sales price per Mcf	$	5.96	$	5.48
Equivalent Basis:
Sales in Boe		817,100		805,400
Average sales price per Boe	$	36.94	$	30.28
Sales in Mcfe		4,902,900		4,832,300
Average sales price per Mcfe	$	6.16	$	5.05
Selected Operating Data
Sales volume - oil properties in barrels		297,500		441,700
Lifting costs-oil (Incl Prod & Sev Tax)	$	3,650,600	$	3,350,700
Lifting costs per barrel	$	12.27	$	7.59
Sales volume - gas properties in Mcf		2,910,600		2,096,600
Lifting costs-gas (Incl Prod & Sev Tax)	$	3,398,200	$	2,558,600
Lifting costs per Mcf	$	1.17	$	1.22
Sales volume - gas properties, excluding CBM		2,884,400		2,063,500
Lifting costs-gas (Incl Prod & Sev Tax) excluding CBM	$	2,919,800	$	2,103,200
Lifting costs per Mcf excluding CBM activities	$	1.01	$	1.02
Depletion cost per Boe	$	11.80	$	10.45
Depletion cost per Mcfe	$	1.97	$	1.74
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