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)
October 26, 2006
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.)
777 E. Sonterra Blvd., Suite 350
San Antonio, Texas		78258
(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 5.05:  Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics
Upon the recommendation of its Governance and Nominating Committee, the Company's Board of Directors, at its regularly scheduled meeting on October 26, 2006, adopted a new "Code of Business Conduct and Ethics" ("Code") applicable to all of the Company's employees, officers and directors. The new Code resulted from the Board and management's continuing review and evaluation of its corporate governance matters. It replaces the previous Code of Business Conduct and Ethics in its entirety which included many workplace policies the Board considered inappropriate in a Code of Conduct. The Code is attached hereto as Exhibit 14.1, and is posted on the Company's Web site at www.txco.com. The Code is incorporated herein by reference.
Item 7.01:  Regulation FD
The Registrant issued a press release on October 31, 2006, providing an operations update. The text of the press release has been provided as Exhibit 99.1 with this Form 8-K.
Item 9.01:  Financial Statements and Exhibits
	Exhibit Number	Description
	14.1	The Exploration Company of Delaware, Inc. Code of Business Conduct and Ethics, as adopted October 26, 2006.
	99.1	Press release issued October 31, 2006, entitled "The Exploration Company Reports Record Sales As Glen Rose Oil Output Continues Increase; Current Operations Updated"
The information contained in this report under Item 7.01, 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: October 31, 2006
THE EXPLORATION COMPANY OF DELAWARE, INC.
			/s/ P. Mark Stark
			P. Mark Stark
			Chief Financial Officer
			(Principal Accounting and Financial Officer)

EX-14

Exhibit 14.1

THE EXPLORATION COMPANY OF DELAWARE, INC.

CODE OF BUSINESS CONDUCT AND ETHICS

Introduction

             This Code of Business Conduct and Ethics covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide all employees, officers and directors of the Company. All of our employees, officers and directors must conduct themselves accordingly and seek to avoid even the appearance of improper behavior. The Code should also be provided to and followed by the Company's agents and representatives, including consultants.

             If a law conflicts with a policy in this Code, you must comply with the law; however, if a local custom or policy conflicts with this Code, you must comply with the Code. Any variances between local customs or policies and this Code should be brought to the attention of management or the directors. If you have any questions about these conflicts, you should ask your supervisor how to handle the situation.

             Those who violate the standards in this Code will be subject to disciplinary action. If you are in a situation that you believe may violate or lead to a violation of this Code, follow the guidelines described in Section 14 of this Code.

1.   Compliance with Laws, Rules and Regulations

             Obeying the law, both in letter and in spirit, is the foundation on which this Company's ethical standards are built. All employees, officers and directors must respect and obey the laws of the cities and states in which we operate and our country. Although not all employees, directors and officers are expected to know the details of these laws, it is important to know enough to determine when to seek advice from supervisors, managers or other appropriate personnel.

             The Company holds information and training sessions to promote compliance with laws, rules and regulations, including insider-trading laws.

2.   Conflicts of Interest

             A "conflict of interest" exists when a person's private interest interferes in any way with the interests of the Company. A conflict situation can arise when an employee, officer or director takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest may also arise when an employee, officer or director, or members of his or her family, receives improper personal benefits as a result of his or her position in the Company. Loans to, or guarantees of obligations of, employees, officers or directors or their family members may create conflicts of interest.

             It is almost always a conflict of interest for a Company employee, officer or director to work simultaneously for a competitor, customer or supplier. The best policy is to avoid any direct or indirect business connection with our customers, suppliers or competitors, except on our behalf.

             Conflicts of interest are prohibited as a matter of Company policy, except as approved by the Board of Directors. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with senior management or the Company's General Counsel. Any employee, officer or director who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager or other appropriate personnel or consult the procedures described in Section 14 of this Code.

3.   Insider Trading

             Employees who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of the Company's business. All non-public information about the Company should be considered confidential information. To use non-public information for personal financial benefit or to "tip" others who might make an investment decision to buy or sell Company stock on the basis of this information is not only unethical but also illegal. If you have any questions concerning this, please consult the Company's Policy on Insider Trading or the Company's Chief Financial Officer or General Counsel.

4.   Corporate Opportunities

             Employees, officers and directors are prohibited from taking for themselves personally opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors. No employee may use corporate property, information, or position for improper personal gain, and no employee may compete with the Company directly or indirectly. Employees, officers and directors owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

5.   Competition and Fair Dealing

             We seek to outperform our competition fairly and honestly. We seek competitive advantages through superior performance, never through unethical or illegal business practices. Stealing proprietary information, possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is prohibited. We should endeavor to respect the rights of and deal fairly with the Company's customers, suppliers, competitors and their employees. No employee, officer or director should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.

             To maintain the Company's valuable reputation, compliance with our quality processes and safety requirements is essential. In the context of ethics, quality requires that our production and services be designed to meet our obligations. All operations must be conducted in accordance with all applicable regulations. Compliance with all regulations and laws of governing or regulatory agencies should be given priority over the opportunity to profit or gain competitive advantage.

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             The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with suppliers and customers. No gift or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent unless it: (1) is not a cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe or payoff and (5) does not violate any laws or regulations. Please discuss with your supervisor any gifts or proposed gifts that you are not certain are appropriate.

6.   Discrimination and Harassment

             The diversity of the Company's employees is a tremendous asset. We are firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment of any kind. Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances.

7.   Health and Safety

             The Company strives to provide each employee with a safe and healthful work environment. Each employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.

             Violence and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of illegal drugs or alcohol in the workplace will not be tolerated.

8.   Record-Keeping

             The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions.

             All of the Company's books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company's transactions and must conform both to applicable legal requirements and to the Company's system of internal controls. Unrecorded or "off the books" funds or assets should not be maintained.

             Business records and communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos, and formal reports. Records should always be retained or destroyed according to the Company's record retention policies. In accordance with those policies, in the event of litigation or governmental investigation, please consult the Company's General Counsel.

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9.   Confidentiality

             Employees, officers and directors must maintain the confidentiality of confidential information entrusted to them by the Company or its suppliers and customers, except when disclosure is explicitly authorized or required by laws or regulations or approved by senior management. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed. It also includes information that suppliers and customers have entrusted to us. The obligation to preserve confidential information continues even after employment ends.

10.   Protection and Proper Use of Company Assets
All employees, officers and directors should endeavor to protect the Company's assets and ensure their efficient use. Theft, carelessness, and waste have a direct impact on the Company's profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Company equipment should not be used for non-Company business, though incidental personal use may be permitted.
The obligation of employees, officers and directors to protect the Company's assets includes its proprietary information. Proprietary information includes intellectual property such as seismic data or information, well data, trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, geological prospects and interpretations, engineering, geological, geophysical and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil or even criminal penalties.
11.   Payments to Government Personnel
The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country.
In addition, the U.S. government has a number of laws and regulations regarding business gratuities that may be accepted by U.S. government personnel. The promise, offer or delivery to an official or employee of the U.S. government of a gift, favor or other gratuity in violation of these rules would not only violate Company policy but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules. The Company's General Counsel can provide guidance to you in this area.
12.   Waivers of the Code of Business Conduct and Ethics
Any waiver of this Code for officers, directors, employees or consultants may be made only by the Board or the Governance and Nominating Committee of the Board and will be promptly disclosed if and as required by law or stock exchange regulation.
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13.   Reporting any Illegal or Unethical Behavior
Employees are encouraged to talk to supervisors, managers or other appropriate personnel about observed illegal or unethical behavior and when in doubt about the best course of action in a particular situation. It is the policy of the Company not to allow retaliation for reports of misconduct by others made in good faith by employees. Employees are expected to cooperate in internal investigations of misconduct.
14.   Compliance Procedures
We must all work to ensure prompt and consistent action against violations of this Code. However, in some situations it is difficult to know right from wrong. Since we cannot anticipate every situation that will arise, it is important that we have a way to approach a new question or problem. These are the steps to keep in mind:
-	Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.
-	Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.
-	Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
-	Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question and will appreciate being brought into the decision-making process. Remember that it is your supervisor's responsibility to help solve problems.
-	Seek help from Company resources. In the rare case where it may not be appropriate to discuss an issue with your supervisor, or where you do not feel comfortable approaching your supervisor with your question, discuss it with senior management, corporate counsel or the Human Resources Administrator.
-	You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The Company does not permit retaliation of any kind against employees for good faith reports of ethical violations.
-	Always ask first, act later: If you are unsure of what to do in any situation, seek guidance before you act.
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15.   Financial and Accounting Officers and Managers
Financial and Accounting Officers and Managers hold an important and elevated role in corporate governance. As part of the Corporate Leadership Team, Financial and Accounting Officers and Managers are vested with both the responsibility and authority to protect, balance, and preserve the interests of all of the Company's stakeholders, including shareholders, clients, employees, suppliers, and citizens of the communities in which business is conducted. Financial and Accounting Officers and Managers fulfill this responsibility by prescribing and enforcing the policies and procedures employed in the operation of the Company's financial organization, and by demonstrating the following:
-	Financial and Accounting Officers and Managers will exhibit and promote the highest standards of honest and ethical conduct through the establishment and operation of policies and procedures that:
-	Encourage professional integrity in all aspects of the financial organization, by eliminating inhibitions and barriers to responsible behavior, such as coercion, fear of reprisal, or alienation from the financial organization or the enterprise itself.
-	Prohibit and eliminate the occurrence of conflicts between what is in the best interest of the enterprise and what could result in material personal gain for a member of the financial organization, including Financial and Accounting Officers and Managers.
-	Provide a mechanism for members of the finance organization to inform senior management of deviations in practice from policies and procedures governing honest and ethical behavior.
-	Financial and Accounting Officers and Managers will establish and manage the enterprise transaction and reporting systems and procedures to ensure that:
-	Business transactions are properly authorized and completely and accurately recorded on the Company's books and records in accordance with Generally Accepted Accounting Principles (GAAP) and established company financial policy.
-	The retention or proper disposal of Company records shall be in accordance with applicable legal and regulatory requirements.
-	Periodic financial communications and reports will be delivered in a manner that facilitates a high degree of clarity of content and meaning so that readers and users can determine their significance and consequence.
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EX-99

			Exhibit 99.1
For Immediate Release		Contact Information
Tuesday, October 31, 2006		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 Sales As Glen Rose Oil Output Continues Increase; Current Operations Updated
SAN ANTONIO -- Oct. 31, 2006 -- The Exploration Company (Nasdaq:TXCO) today provided estimated oil and gas sales volumes for the third quarter and first nine months of 2006, and updated its current operations. Highlights include:
-  Record combined oil and gas sales for the third quarter and nine months.   -  A continuing quarterly rise in Glen Rose Porosity oil sales.   -  A total of 54 Texas wells drilled through late October.
TXCO's Glen Rose Porosity oil sales continued an ongoing trend of quarterly increases, rising to a record 215,410 barrels, 17 percent higher than second-quarter 2006 and 181 percent above the year-earlier period. Nine-month Porosity oil sales were 505,679 barrels, a 282 percent increase from 132,530 barrels for January-September 2005.

Estimated Glen Rose Porosity Quarterly Sales Volumes in Barrels
	3Q 2005	4Q 2005	1Q 2006	2Q 2006	3Q 2006*	CAGR
Cumulative barrels	76,760	96,320	106,550	183,720	215,410	+181%
Barrels of oil/day (BOPD)	834	1,047	1,184	2,019	2,341	+181%
*3rd Quarter 2006 unaudited CAGR=compound annual growth rate

     Net, third-quarter oil and gas sales were a record for a July-September period, averaging approximately 2,630 barrels of oil per day (BOPD) and 3.0 million cubic feet of natural gas per day (MMcfd), a combined rate of approximately 3,135 barrels of oil equivalent per day, 11 percent above second-quarter 2006 and 49 percent higher than in the 2005 third quarter. TXCO also set a record for oil and gas sales during its January-September period, rising more than 25 percent higher than during the first nine months of 2005.

TXCO Estimated Oil and Gas Sales Volumes*
	3Q 2006	3Q 2005	%Change	9 Mos. 2006	9 Mos. 2005	% Change
Natural gas/Mcf	278,477	498,842	-44.2%	864,123	1,902,342	-54.6%
Oil/Bbls	242,226	110,418	+119.4%	587,728	265,971	+121.0%
Barrels Oil Equivalent/BOE	288,639	193,558	+49.1%	731,749	583,028	+25.5%
*3rd Quarter and 9-month 2006 unaudited. Reflects sale to EnCana at Sept. 1, 2005  Mcf=thousand cubic feet, Bbls=barrels, BOE=barrels of oil equivalent

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Operations Update

     The Company has begun 54 wells in Texas this year, including 36 wells now on production, seven completed and awaiting hook-up, seven to be completed or re-completed and three drilling. In the Maverick Basin, 29 wells targeted the Glen Rose Porosity, 15 wells have been drilled to the Pena Creek San Miguel, four to the Georgetown, one each to a Glen Rose Shoal and Reef, one to the Pryor and one to the Pearsall, plus a disposal well. Additionally, a re-entry in the Marfa Basin of West Texas targeted the Barnett and Woodford shales. The Company's revised capital expenditure program calls for participation in 60-plus wells by year-end 2006, down from an initial target of 90-plus wells. The revision reflects the delayed start of steam injection in the San Miguel tar sand project and drilling to the Pearsall formation.

Glen Rose Porosity

     The largest share of TXCO's 2006 drilling program has focused on the Glen Rose Porosity with 29 wells spudded to date, including 18 wells placed on production, one completed and awaiting hook-up, three in completion or re-completion, two currently drilling and four currently under evaluation as disposal wells. Two of the three wells now in completion are projected to go on production within the next 30 days. TXCO now expects to drill 34 Porosity wells this year, two more than originally projected, despite an annual November-to-January hunting season drilling moratorium that will limit activity on certain leases.

     The Comanche 1-113H re-entry (73 percent working interest) went on production in mid October flowing 443 BOPD and no water on a 10/64-inch choke with 650 pounds per square inch (psi) flowing tubing pressure. The Comanche 2-2 re-entry (73% WI) went on production at the end of September flowing 500 BOPD and no water on a 10/64-inch choke with 740 psi flowing tubing pressure. In mid October, the well averaged approximately 480 BOPD and no water on a 10/64-inch choke with 720 psi flowing tubing pressure.

     Meanwhile, the Cage 3-18 (100% WI) swabbed 102 barrels of oil in 24 hours while the Cage 5-25 (100% WI) flowed 482 barrels of oil with 101 barrels of water in 24 hours on a 20/64-inch choke with 250 psi flowing tubing pressure. Neither well maintained initial flow rates, unlike other Porosity wells. The Cage 3-18 is now on production with a pumping unit while the Cage 5-25 will be placed on production within 30 days after installation of a pumping unit.

Tar Sand

     The Company continues work on a two-well San Miguel tar sand pilot, which began steaming during the third quarter. Mechanical problems developed during the initial cyclic steam injection test, which delayed the pilot. The problems have been rectified and steam injection has resumed. The initial pilot injection test phase is designed to determine optimum steam-to-oil injection ratios. Initial production also will help establish benchmark pricing for upgraded oil. As the pilot proves successful, TXCO and its partner, a unit of Pearl Exploration and Production Ltd., Calgary, Alberta, plan to drill at least 35 additional tar sand wells by the end of 2007, including the 26 wells carried over from 2006. TXCO serves as operator and has a 50 percent working interest.

Pearsall

     Together with its partner, EnCana Oil & Gas (USA) Inc., the Company is now moving forward with its Pearsall shale delineation project. Spudded in late September, the Barclay 162-2 (50% WI) is now drilling. The well is the first of eight wells originally planned in 2006 targeting the gas-prone Pearsall formation. EnCana's extensive completion testing and evaluation process is expected to continue through year end while additional drilling activity in the Pearsall will follow in 2007.

Marfa Basin

     Testing is under way on the Simpson 1 (50% WI), a re-entry and the first well in TXCO's Marfa Basin shale play. The well targets the Woodford and/or Barnett shales.

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     The Company plans to spud a second Marfa Basin well in early 2007 and expects to further test the two formations utilizing horizontal drilling and advanced production stimulation technologies. Continental Resources Inc. of Enid, Okla., holds the remaining working interest and serves as operator on a 141,000-acre lease block.

Management's Perspective

     "We are on track for what looks to be our second-largest annual drilling program ever, allowing us to continue our ongoing trend of growing sales and reserves, despite the delays experienced in commencing our Pearsall shale play and our tar sand project's drilling program," said President and CEO James E. Sigmon. "In addition, our strong balance sheet, high oil price realizations and excellent cash flow will enable us to make the most of three growth catalysts -- the tar sand project, the Pearsall and the Marfa Basin -- providing the Company with the potential for further acceleration in growth as we move into what promises to be a very busy drilling program in 2007."

Earnings Announcement

     TXCO plans to release its third-quarter 2006 earnings statement on or before Nov. 3, 2006.

About The Exploration Company

     The Exploration Company is an independent oil and gas enterprise with interests primarily in the Maverick Basin of Southwest Texas and the Marfa Basin in West 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 developing 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 Nasdaq's Global Select 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 future budget and drilling plans, capital expenditures, production levels, the timing, number and cost of wells to be drilled, new 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 reserves, the price for which such reserves can be s old, environmental concerns affecting the drilling of oil and natural gas wells, as well as general market conditions, competition and pricing. More information 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 Dec. 31, 2005, and its Form 10-Q for the quarter ended June 30, 2006. These and all previously filed documents are on file at the Securities and Exchange Commission and can be viewed on TXCO's Web site at www.txco.com. Copies are available without charge upon request from the Company.

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