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)

May 4, 2007

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):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02:  Results of Operations and Financial Condition

The Company issued a press release on May 4, 2007, attached as Exhibit 99.1, reporting earnings for the quarter ended March 31, 2007, that also included an operation update.

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 quarters ended March 31, 2007 and 2006. 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." The reconciliation is attached as Exhibit 99.2.

In accordance with general instruction B.2 to Form 8-K, such information is being "furnished" and will not be deemed "filed" with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor will such information be deemed incorporated by reference in any other filing under the Securities Act of 1933.

Item 7.01:  Regulation FD

The press release, described in Item 2.02 and included as Exhibit 99.1 herewith, also contained an operations update for the Company's Maverick Basin operations. It also announced details for the conference call to be held later that day and the annual shareholders meeting to be held on May 11, 2007.

The information contained in this report under Item 7.01, including the exhibits, 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.

Item 9.01:  Financial Statements and Exhibits

Exhibit Number	Description
99.1	Press Release dated May 4, 2006, entitled "The Exploration Company Reports First-Quarter Results, Provides Operations Update"
99.2	Reconciliation of Non-GAAP Measures for first quarter 2007 and 2006

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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.

	THE EXPLORATION COMPANY OF DELAWARE, INC.
Dated: May 7, 2007	/s/ P. Mark Stark
	P. Mark Stark
	Chief Financial Officer
	(Principal Accounting and Financial Officer)

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated May 4, 2006, entitled "The Exploration Company Reports First-Quarter Results, Provides Operations Update"
99.2	Reconciliation of Non-GAAP Measures for first quarter 2007 and 2006

    ***

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EX-99

Exhibit 99.1

For Immediate Release	Contact Information
Friday, May 4, 2007	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 First-Quarter Results,

Provides Operations Update

SAN ANTONIO - March 12, 2007 - The Exploration Company (Nasdaq:TXCO) today reported financial results for the quarter ended March 31, 2007, and provided an update of current operations.

First-Quarter Results

TXCO recorded a quarterly net loss of $1.9 million, equal to $0.06 per share, compared with net income of $1.3 million, or $0.04 per share, for the year-earlier quarter. All per-share amounts are on a diluted basis. Total revenues were $11.2 million, compared with $16.0 million in the first quarter of 2006.

The Company's oil and gas revenues, $8.7 million, were below the $10.5 million reported in the year-earlier period due to $1.2 million in losses on derivatives designated as cash flow hedges, $1.1 million of which were non-cash in this period. Decreased oil and gas sales were also attributable to lower commodity prices received in the quarter and to essentially flat equivalent production on a quarter-over-quarter basis. As previously announced, oil sales volumes were adversely impacted by several factors, including unscheduled repairs that closed a third-party oil pipeline serving the Maverick Basin region, fourth-quarter 2006 drilling technique issues, and a seasonal drilling slowdown. TXCO's primary crude purchaser has added additional trucking capacity to partially offset the impact of the temporary pipeline closure.

For the 2007 quarter, the average sales price received for crude oil was $54.98 per barrel and $7.26 per thousand cubic feet (mcf) for natural gas. This compares to $58.94 per barrel and $8.06/mcf, respectively, in the 2006 quarter.

TXCO closed its acquisition of Output Exploration LLC on April 2, effectively doubling its proved reserves and increasing its sales volumes by more than 60 percent. Financial impact of the acquisition is not reflected in the first quarter and will be reflected in second-quarter 2007 earnings and operating results.

Operations Update

TXCO currently has six rigs operating in its core, Maverick Basin operations area. Four target the Glen Rose Porosity oil play, one a Glen Rose shoal for gas and one is drilling a San Miguel/Olmos prospect. At the end of April, TXCO had spudded or re-entered 25 Texas wells this year, including 15 wells begun during the first quarter. Seven of these wells are now on production, nine are completed and awaiting hook-up, two are to be re-completed, six are drilling and one was plugged and abandoned.

-- More --

Eleven Glen Rose Porosity wells have been spudded or re-entered this year. Five have been placed on production, two are in completion and four are drilling currently.

Porosity oil sales in the first quarter were 123,298 barrels, or 1,370 barrels of oil per day (bopd), a 16 percent increase from first-quarter 2006 but lower than in fourth-quarter 2006. Daily Porosity oil production for April increased to more than 2,100 bopd as new wells came on and as additional trucking capacity was added to offset constraints stemming from the temporary third-party pipeline curtailment mentioned above.

Recent Glen Rose wells include the Cage 1-28H (100 percent working interest), a Porosity well that went on production in mid April averaging 675 bopd and no water on a 12/64-inch choke with 650 pounds per square inch (psi) flowing tubing pressure. The Chittim 2-127 (47% WI), producing from the Glen Rose Shoal, tested at a rate of 1.1 million cubic feet of gas per day (mmcfd) on a 48/64-inch choke with 150 psi flowing tubing pressure. The well was placed on production in late April.

The Cage-West B 437 Unit 4-37H (100% WI), one of six horizontal Porosity wells TXCO drilled in late 2006 with laterals parallel to the formation's fracture system, was re-entered and re-completed with a conventional lateral perpendicular to the fracture pattern. The well was placed back on production in April and late in the month averaged 100 bopd and 332 barrels of water per day with 250 psi flowing tubing pressure on a 14/64-inch choke. TXCO plans to re-enter the remaining five wells this year.

TXCO's two-well San Miguel tar sands pilot project (50% WI) continues to evaluate the commercial potential of the large resource play, using a cyclic steam stimulation process. The pilot's first well is now in its second production phase while the second well has started its second steam-injection phase. Oil produced from the wells has been shipped to laboratories for analysis and pricing. TXCO plans to drill a new, 32-well production-size pilot with 21 of the wells in the project to be drilled this year and the remaining 11 wells to be drilled in early 2008.

Meanwhile, the Company has begun a separate pilot project (100% WI) to test the feasibility of producing 10-14° API gravity heavy oil from a separate shallow San Miguel zone using a series of horizontal well bores to heat the formation. The first phase of the project includes two horizontal wells and five vertical temperature monitoring wells, which will be converted to producing wells as the reservoir is heated.

Operations are ongoing on former Output Exploration properties in Texas and Oklahoma. TXCO currently is assimilating new staff, CAPEX budget and related operations. The Company currently expects to drill more than 30 wells this year on prospects acquired through Output.

Management's Perspective

"I'm pleased to see a run-up in activity in recent weeks as we move ahead with our record drilling program that we outlined for 2007," said Chairman, President and CEO James E. Sigmon. "Furthermore, we expect to see a jump in drilling activity in the current quarter following the closing of our Output Exploration acquisition on April 2. As we have noted before, the Output acquisition doubled TXCO's proved reserves, increased our daily production by approximately two-thirds, and offers us many new drilling prospects. Our first quarter results do not include any production increase from the Output acquisition.

-- More --

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"The first quarter is typically TXCO's slowest operating period each year. But with current trends, we remain confident that TXCO's proved reserves and production will continue to increase as we move ahead with a $85-90 million capital budget that calls for more than 100 new wells and re-entries in 2007."

Conference Call and Annual Meeting

TXCO will hold a conference call, scheduled for 11 a.m. EDT (10 a.m. CDT) today to further discuss its financial results and operations. The call will be broadcast live over the Internet at http://www.txco.com/concall.html. Or by telephone, call (877) 387-9209 in the U.S./Canada) or (706) 643-3820 for international callers. Passcode is 5957390.

A replay will be available through Sunday, May 6, 2007, at (800) 642-1687 (U.S./Canada) and (706) 645-9291 (International) with passcode 5957390, and for 30 days at http://www.txco.com/concall.html.

TXCO has scheduled its 2007 shareholders meeting for 10 a.m. CDT Friday, May 11, at the San Antonio Petroleum Club. All shareholders are invited to attend.

About The Exploration Company

TXCO is an independent oil and gas enterprise with interests in the Maverick Basin, the onshore Gulf Coast region, the Marfa Basin of Texas and the Midcontinent region of western Oklahoma. It 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. TXCO's 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. It 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 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 reserves, 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 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, 2006. This 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.

(Financial Information and Selected Operational Tables Follow)

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THE EXPLORATION COMPANY

Condensed Consolidated Balance Sheets

(Unaudited)

($ in thousands)		March 31, 2007		December 31, 2006
Assets
Current Assets
Cash and equivalents	$		3,668	$	3,882
Accounts receivable, net			9,725		9,132
Federal income tax receivable			9,734		4,468
Prepaid expenses and other			3,297		887
Total Current Assets			26,424		18,369
Property and Equipment, net - successful efforts method of accounting for oil and gas properties			136,876		119,574
Other Assets
Deferred tax asset			513		5,310
Other assets			2,539		548
Total Other Assets			3,052		5,858
Total Assets	$		166,352	$	$143,801

4

THE EXPLORATION COMPANY

Condensed Consolidated Balance Sheets

(Unaudited)

($ in thousands)		March 31, 2007			December 31, 2006
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable, trade	$		10,611		$	7,969
Undistributed revenue			429			1,035
Notes payable			262			267
Derivative settlements payable			52			70
Accrued derivative obligation - short-term			125			321
Other payables and accrued liabilities			6,017			6,433
Total Current Liabilities			17,496			16,095
Long-Term Liabilities
Long-term debt			22,851			2,351
Asset retirement obligation			3,111			1,703
Total Long-Term Liabilities			25,962			4,054
Stockholders' Equity
Preferred stock, Series A & Series B; authorized 10,000,000 shares; issued and outstanding -0- shares			-			-
Common stock, par value $.01 per share; authorized 50,000,000 shares; issued 33,389,031 and 33,290,698 shares, outstanding 33,270,612 and 33,190,898 shares			334			333
Additional paid-in capital			122,618			122,108
Retained earnings			726			2,619
Accumulated other comprehensive loss, net of tax			(319	)		(1,162	)
Less treasury stock, at cost, 118,419 and 99,800 shares			(465	)		(246	)
Total Stockholders' Equity			122,894			123,652
Total Liabilities and Stockholders' Equity	$		166,352		$	143,801

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THE EXPLORATION COMPANY

Condensed Consolidated Statements Of Operations

(Unaudited)

		Three Months Ended			Three Months Ended
(in thousands, except earnings per share data)		March 31, 2007			March 31, 2006
Revenues
Oil and gas sales	$		8,725		$	10,469
Gas gathering operations			2,494			5,540
Other operating income			1			14
Total Revenues			11,220			16,023
Costs and Expenses
Lease operations			2,660			1,643
Production taxes			494			512
Exploration expenses			375			444
Impairment and abandonments			686			476
Gas gathering operations			2,881			5,751
Depreciation, depletion and amortization			4,916			2,726
General and administrative			1,804			1,672
Total Costs and Expenses			13,816			13,224
(Loss) Income from Operations			(2,596	)		2,799
Other Income (Expense)
Derivative mark-to-market loss			-			(6	)
Derivative settlements loss			-			(633	)
Interest expense			(277	)		(87	)
Interest income			26			38
Loan fee amortization			(10	)		(73	)
Total Other Income (Expense)			(261	)		(761	)
(Loss) income before income taxes			(2,857	)		2,038
Income tax (benefit) expense - current			(5,266	)
- deferred			4,301			763
Net (Loss) Income	$		(1,892	)	$	1,275
(Loss) Earnings Per Share
Basic (loss) earnings per share	$		(0.06	)	$	0.04
Diluted (loss) earnings per share	$		(0.06	)	$	0.04

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THE EXPLORATION COMPANY

Condensed Consolidated Statements Of Cash Flows

(Unaudited)

		Three Months Ended			Three Months Ended
(in thousands, except earnings per share data)		March 31, 2007			March 31, 2006
Operating Activities
Net (loss) income	$		(1,892	)	$	1,275
Adjustments to reconcile net income to    net cash provided by operating activities:
Depreciation, depletion and amortization			4,926			2,726
Impairment, abandonments and dry hole costs			965			476
Deferred tax expense			4,301
Non-cash stock compensation expense			226			252
Non-cash derivative mark-to-market loss			-			6
Non-cash change in components of other comprehensive income			1,143			-
Changes in operating assets and liabilities:
Receivables			(594	)		1,771
Prepaid expenses and other			(4,410	)		(320	)
Accounts payable and accrued expenses			1,615			(4,485	)
Current income taxes (receivable) payable			(5,280	)		(2,104	)
Net cash provided (used) by operating activities			1,000			(403	)
Investing Activities
Development and purchases of oil and gas properties			(20,950	)		(9,776	)
Purchase of other equipment			(825	)		(4,055	)
Proceeds from sale of assets			-			3
Net cash used by investing activities			(21,775	)		(13,828	)
Financing Activities
Proceeds from issuance of common stock, net of expenses			284			382
Purchase of treasury shares			(219	)		-
Proceeds from bank credit facility			20,500			9,300
Proceeds from installment and other obligations			119			-
Payments on installment and other obligations			(123	)		(102	)
Net cash provided (used) by financing activities			20,561			9,580
Change in Cash and Equivalents			(214	)		(4,651	)
Cash and equivalents at beginning of period			3,882			6,083
Cash and Equivalents at End of Period	$		3,668		$	1,432

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THE EXPLORATION COMPANY SELECTED OPERATING DATA
	Three Months Ended
($'s in thousands, except average prices)	Mar. 31, 2007		Mar. 31, 2006
Net cash provided (used) in operating activities	$	1,000	$	(403)
Ebitdax *		4,750		6,698
Ebitda *		4,375		6,254
Debt to asset ratio		13.9%		8.3%
Sales
Oil:
Sales, in mBbl		151		138
Average realized sales price per barrel, excluding hedging impact	$	54.98	$	58.94
Natural Gas:
Sales, in mmcf		221		293
Average realized sales price per mcf, excluding hedging impact	$	7.26	$	8.06
Equivalent Basis:
Sales in mBOE		188		186
Average realized sales price per BOE, excluding hedging impact	$	52.74	$	56.17
Sales in mmcfe		1,130		1,118
Average realized sales price per mcfe, excluding hedging impact	$	8.79	$	9.36
Other Operating Data
Total lifting costs	$	3,154	$	2,155
Total lifting costs per BOE	$	16.75	$	11.56
Total lifting costs per mcfe	$	2.79	$	1.93
Sales volume - oil properties - mBbl		149		136
Oil prop. lifting costs-oil (Incl Prod & Sev Tax)	$	2,516	$	1,642
Oil prop. lifting costs per barrel	$	16.90	$	12.08
Glen Rose Porosity sales volume - mBbl		123		107
Glen Rose Porosity lifting costs per barrel	$	12.57	$	7.07
Sales volume - gas properties - mmcf		209		268
Gas prop. lifting costs-gas (Incl Prod & Sev Tax)	$	606	$	512
Gas prop. lifting costs per mcf	$	2.90	$	1.91
Total depletion cost per BOE	$	25.62	$	14.39
Total depletion cost per mcfe	$	4.27	$	2.40
* Please see TXCO's Web site at www.txco.com for a reconciliation of these non-GAAP financial measures.

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EX-99.2

Exhibit 99.2

EBITDA and EBITDAX RECONCILIATION TO
NET INCOME AND NET CASH PROVIDED
PERIODS INDICATED
($ Thousands)	1Q07	1Q06
Net cash provided by operating activities per CF Stmt	1,000	(402)
Change in operating assets and liabilities	(8,669)	(5,211)
Operating CF before change in operating assets & liabilities	9,670	4,809
Deferred income taxes	(4,301)	-
Cash portion of net interest expense	251	50
Derivative settlements loss	1,143	633
Income tax	(965)	763
Exploration costs	375	444
Dry hole costs	(280)	-
Change in components of other comprehensive income	(1,143)	-
Ebitdax	4,750	6,698
Less: Exploration costs	375	444
Ebitda	4,375	6,254
Less:
Loss (Gain) on sale of assets	-	(0)
Income tax expense	(965)	763
Impairment & abandonments	686	476
Derivative Loss (Gain)	1,143	639
Interest, net	251	50
Non cash stock compensation	226	252
DD&A	4,926	2,800
Net Income (Loss)	(1,892)	1,275

EBITDAX is earnings before income taxes, interest, depreciation, depletion, amortization, impairment, abandonment and exploration expense. EBITDA equals EBITDAX less exploration expense. We believe EBITDA and EBITDAX provide a more complete analysis of TXCO’s operating performance and debt servicing ability relative to other companies, and of our ability to fund capital expenditure and working capital requirements.

These measures are widely used by investors and rating agencies. EBITDA, with certain negotiated adjustments, is referenced in TXCO’s financial covenants and required in reporting under our credit facility. EBITDA and EBITDAX are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for net income, income from operations, or cash flow provided by operating activities prepared in accordance with GAAP.

Columns / rows may not foot / cross-foot due to rounding.