U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

 [X] Annual report under Section 13 or 15(d) of the Securities Exchange 
     Act of 1934


                  For the fiscal year ended December 31, 1998.

 [ ] Transition report under Section 13 or 15(d) of the Securities Exchange 
     Act of 1934


              For the transition period from _______ to ________ .
                         Commission File Number: 0-9435

                        FIELDPOINT PETROLEUM CORPORATION
                        --------------------------------
                 (Name of Small Business Issuer in Its Charter)

      Colorado                                                84-0811034
      --------                                                ----------
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

1703 Edelweiss Drive
Cedar Park, Texas                                            78613
---------------------                                        -----
(Address of Principal Executive Offices)                     (Zip Code)

                                 (512) 250-8692
                                  -------------
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:
                                     (None)

         Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.01 Par Value
                          ----------------------------
                                 Title of Class

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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               
    ------    ------

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will 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-KSB or any  amendment to
this Form 10-KSB. [X]

The issuer's revenues for its most recent fiscal year were $606,764.

As of December 31, 1998,  4,613,259 shares of the Registrant's  common stock par
value $.01 per share, were outstanding. The aggregate market value of the voting
stock  held  by  non-affiliates  of  the  Registrant  at  March  26,  1999,  was
$1,518,672.

Documents Incorporated by Reference: None.





                                       1

<PAGE>

                                     PART I
ITEM 1- BUSINESS
        --------

General

FieldPoint Petroleum Corporation, (formerly Energy Production Company)a Colorado
corporation  (the  "Company"),  was formed on March 11, 1980, for the purpose of
identifying,  acquiring,  and enhancing the production of mature oil and natural
gas fields located primarily in the mid-continent and the Rocky Mountain region.
From 1980 the Company was engaged in oil and gas  operations,  and  beginning in
December  1986,  the  Company  divested  all of  its  oil  and  gas  assets  and
operations.  Since December 1986, the Company has not engaged in any oil and gas
operations  until the completion of the reverse  acquisition  described below on
December 31, 1997.

Reverse Acquisition - The Company entered into an Agreement dated as of December
22, 1997, with Bass Petroleum,  Inc., a Texas corporation  ("BPI"),  pursuant to
which, on December 31, 1997, the Company  acquired from the  shareholders of BPI
an aggregate of  8,655,625  shares of capital  stock of BPI, in exchange for the
issuance of 4,000,000  unregistered  shares of the Company's  common stock.  The
transaction  was  treated,  for  accounting  purposes,   as  an  acquisition  of
FieldPoint  Petroleum  Corporation  by  Bass  Petroleum,   Inc.  The  historical
information prior to December 31,1997  represents the production and activity of
BPI. On December  31,1997,  the Company changed its name from Energy  Production
Company to FieldPoint Petroleum Corporation.

Recent Acquisition and Development

On January 11,  1999,  the Company  entered  into an  agreement with  W.B. McKee
Securities  to act as  placement  agent in the  selling  of up to a  maximum  of
1,466,667 Units each  consisting of one share of the Company's  Common Stock and
one common stock warrant, with its exercise price of $1.25, (the "Warrants"), on
a "best  efforts all or none" basis with respect to the first 533,333 Units (the
"Minimum  Offering"),  and a "best  efforts" basis with respect to the remaining
933,3334 Units (the "Maximum  Offering") as more fully  described in the Private
Placement  Memorandum.  The purchase  price for the Units shall be (US) $.75 per
Unit. Proceeds from the offering will be used to fund the acquisition of certain
oil and gas  properties  from  Pontotoc  Production,  Inc.  As  outlined  in the
purchase  sale  agreement  between  the Company and  Pontotoc  Production  dated
January 8,1999.

Forward-Looking Statements

Certain  statements  contained in this document,  including  without  limitation
statements containing the words "believes," "anticipates," "intends," "expects,"
and words of similar import, constitute "forward-looking  statements" within the
meaning of the Private  Securities  Litigation Reform Act. Such  forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual  results,  performance  or  achievements  of the company to
materially  different  from any  future  results,  performance  or  achievements
expressed or implied by such forward-looking statements.






                                       2

<PAGE>


Business Strategy

The  Company's  business  strategy is to continue to expand its reserve base and
increase  production and cash flow through the  acquisition of producing oil and
gas  properties.  Such  acquisitions  will  be  based  on  an  analysis  of  the
properties'  current  cash flow and the  Company's  ability  to profit  from the
acquisition.  The Company's ideal  acquisition will include not only oil and gas
production, but also leasehold and other working interest in exploration areas.

The Company will also seek to identify  promising  areas for the  exploration of
oil and gas  through the use of outside  consultants  and the  expertise  of the
Company.  This identification  will include collecting and analyzing  geological
and  geophysical  data for  exploration  areas.  Once  promising  properties are
identified,  the  Company  will  attempt to acquire  the  properties  either for
drilling oil and natural gas wells,  using independent  contractors for drilling
operations, or for sale to third parties.

The Company recognizes that the ability to implement its business  strategies is
largely  dependent on the ability to raise  additional debt or equity capital to
fund future acquisition,  exploration,  drilling and development activities. The
Company's capital resources are discussed more thoroughly in Part II, Item 6, in
Management's Discussion and Analysis.

Operations

As of December 31, 1998, the Company had varying ownership  interest in 79 gross
productive wells (34.67 net) located in 2 states. The Company operates 59 of the
79 wells; the other wells are operated by independent  operators under contracts
that are standard in the industry.  It is a primary  objective of the Company to
operate most of the oil and gas properties in which it has an economic interest.
The Company believes,  with the responsibility and authority as operator,  it is
in better  position to control cost,  safety,  and timeliness of work as well as
other critical factors affecting the economics of a well.

Market for Oil and Gas

The demand for oil and gas is dependent upon a number of factors,  including the
availability of other domestic production,  crude oil imports, the proximity and
size of oil and gas pipelines in general, other transportation  facilities,  the
marketing  of  competitive  fuels,  and general  fluctuations  in the supply and
demand for oil and gas.  The Company  intends to sell all of its  production  to
traditional industry purchasers,  such as pipeline and crude oil companies,  who
have facilities to transport the oil and gas from the wellsite.

Competition

The oil and gas industry is highly competitive in all aspects.  The Company will
be  competing  with  major  oil  companies,  numerous  independent  oil  and gas
producers,  individual  proprietors,  and  investment  programs.  Many of  these
competitors possess financial and personnel resources substantially in excess of
those which are  available  to the Company  and may,  therefore,  be able to pay
greater amounts for desirable leases and define,  evaluate, bid for and purchase
a  greater  number of  potential  producing  prospects  that the  Company's  own
resources permit.  The Company's  ability to generate  resources will depend not
only on its ability to develop  existing  properties  but also on its ability to
identify  and acquire  proven and  unproven  acreage and  prospects  for further
exploration.

                                       3

<PAGE>

Environmental Matters and Government Regulations

The Company's  operations are subject to numerous federal,  state and local laws
and  regulations  controlling the discharge of materials into the environment or
otherwise  relating to the protection of the environment.  Such matters have not
had a material  effect on  operations  of the  Company to date,  but the Company
cannot predict whether such matters will have any material effect on its capital
expenditures, earnings or competitive position in the future.

The  production  and sale of crude oil and natural gas are currently  subject to
extensive  regulations  of both  federal and state  authorities.  At the federal
level, there are price  regulations,  windfall profits tax, and income tax laws.
At the state level, there are severance taxes, proration of production,  spacing
of wells,  prevention and clean-up of pollution and permits to drill and produce
oil and gas.  Although  compliance with their laws and regulations has not had a
material adverse effect on the Company's operations,  the Company cannot predict
whether its future operations will be adversely effected thereby.

Operational Hazards and Insurance

The  Company's  operations  are  subject to the usual  hazards  incident  to the
drilling and production of oil and gas, such as blowouts, cratering, explosions,
uncontrollable flows of oil, gas or well fluids, fires,  pollution,  releases of
toxic gas and other  environmental  hazards and risks.  These  hazards can cause
personal  injury and loss of life,  severe damage to and destruction of property
and equipment, pollution or environmental damage and suspension of operations.

The Company  maintains  insurance of various types to cover its operations.  The
Company's  insurance  does not cover every  potential risk  associated  with the
drilling  and  production  of  oil  and  gas.  In  particular,  coverage  is not
obtainable  for certain  types of  environmental  hazards.  The  occurrence of a
significant  adverse  event,  the  risks  of  which  are not  fully  covered  by
insurance,  could  have a material  adverse  effect on the  Company's  financial
condition and results of  operations.  Moreover,  no assurance can be given that
the Company will be able to maintain  adequate  insurance in the future at rates
it considers reasonable.

Administration

Office Facilities- The office space for the Company's  executive offices at 1703
Edelweiss Drive,  Cedar Park, Texas 78613, is currently provided by the majority
shareholder at a cost of $1000.00 per month as of December 31, 1998.

Employees-  As of March 15,  1998,  the  Company  had 2  employees,  the Company
considers its relationship with its employees satisfactory.

ITEM 2- PROPERTIES
        ----------

Principal Oil and Gas Interest

West Allen Field  Pontotoc  County  Oklahoma  is a  producing  oil and gas field
located  approximately 100 miles south of Oklahoma City,  Oklahoma.  The Company
has a 9.50% working  interest in the Butler and Diamond  lease,  the leases have
multiple   wellbores   which  the  Company  has  plans  to  participate  in  the
recompletion of behind pipe zones.


                                       4

<PAGE>


Giddings Field Fayette  County Texas is the prolific  Austin Chalk field located
in various counties  surrounding the city of Giddings,  Texas. In February 1998,
the  company  acquired a 97%  working  interest  in the Shade  lease.  The lease
currently  has 3  producing  oil and gas wells with a daily  production  rate of
approximately  120 Mcfe net to the Company.  Oil and Gas are  produced  from the
Austin chalk formation;  the Company will evaluate whether  additional  reserves
can be developed by use of horizontal well technology.

Big  Muddy  Field  Converse  County  Wyoming  is a  producing  oilfield  located
approximately thirty miles south of Casper, Wyoming. FieldPoint Petroleum owns a
100% working  interest in  the Elkhorn and J.C. Kinney lease which consists of 3
oil wells producing out of the Wallcreek and Dakota  formations at depth ranging
in general from approximately 3,200 feet to approximately 4,000 feet.

Serbin  Field Lee and  Bastrop  Counties  Texas is an oil and gas field  located
approximately 50 miles east of Austin and 100 miles west of Houston. The Company
has a working  interest in 74 producing oil and gas wells with a production rate
for 1997 of  approximately  100  barrels of oil  equivalent  ("BOE")  net to the
Company.  Oil and gas are produced  from the Taylor Sand at depths  ranging from
approximately  5,300 feet to  approximately  5,600 feet; it is a 46-gravity  oil
sand.





Production

The  table  below  sets  forth oil and gas  production  from the  Company's  net
interest in producing properties for each of its last two fiscal years.

                                            Oil and Gas Production

Quantities                                1998                   1997
                                          ----                   ----
         Oil (Bbls)                      28,788                 25,846
         Gas (Mcf)                       89,127                 67,683

Average Sales Price
         Oil ($/Bbl)                     $11.96                 $19.51
         Gas ($/Mcf)                      $1.50                  $2.00

Average Production Cost ($/BOE)           $6.31                  $5.25


The Company's oil and gas  production is sold on the spot market and the Company
does not have any  production  that is  subject  to firm  commitment  contracts.
During the year ended  December 31, 1998,  purchases by each of four  customers,
Dorado Oil Company, Conoco, GPM Gas Corporation, and Aquila Pipeline Corporation
represented more than 10% of the total Company  revenues.  Neither of these four
customers,  or any other  customers of the Company,  has a firm sales  agreement
with the Company. The Company believes that it would be able to locate alternate
customers in the event of the loss of one or all of these customers.





                                       5

<PAGE>


Productive Wells
                                Productive Wells
                                ----------------


                               Oil                                Gas
State                Gross(1)       Net(2)              Gross(1)       Net(2)
-----                -----          ---                 -----          ---
Oklahoma                                                  -             -
Texas                  69           28.29                 7            3.8
Wyoming                 3            2.58                 -             -       
---------            -----          -----               -----          ---
         Total         72           30.87                 7            3.8


Drilling Activity

The Company had no drilling activity in each of the last two fiscal years.



Reserves

The following reserve related  information for years ended December 31, 1997 and
1998, is based on estimates prepared by an independent  petroleum engineer.  The
Company's  reserve estimates are developed using geological and engineering data
and interest and burdens information developed by the Company. Reserve estimates
are  inherently  imprecise  and are  continually  subject to revisions  based on
production history, results of additional exploration and development, prices of
oil and gas, and other factors.  The notes following the table should be read in
connection with the reserve estimates.

                                                       Estimated Proved Reserves
                                                            At December 31,(3)

                                                        1998              1997
                                                       ------------------------
Proved Developed Reserves (Bbls)                       153,076           192,047
Proved Developed Reserves (Mcf)                        488,947           436,717
Total Proved Crude Oil Equivalents (BOE)(4)            234,567           264,833
Present Value of Estimated Future Net Revenues
(in thousands), discounted at 10%                     $523,000          $994,000


Reference should be made to the supplemental oil and gas information included in
this form 10-KSB for additional  information  pertaining to the Company's proved
oil and gas reserves as of the end of each of the last two fiscal years. 

-----------------------
(1) A gross well or acre is a well or acre in which a working interest is owned.
The  number  of gross  wells is the  total  number  of wells in which a  working
interest  is owned.  The number of gross  acres is the total  number of acres in
which a working interest is owned.
(2) A net well or acre is deemed to exist when the sum of  fractional  ownership
working interests in gross wells or acres equals one. The number of net wells or
acres is the sum of the  fractional  working  interests  owned in gross wells or
acres expressed as whole numbers and fractions thereof.


(3) The Company's  annual reserve  reports are prepared as of December 31, which
is the end of the Company's fiscal year.
(4) Gas is converted to barrel of oil  equivalent at 6,000 cubic feet equals one
barrel.


                                       6

<PAGE>

                                                                                
Acreage                                                                         
                                                                                
The  following  tables  set  forth the  gross  and net  acres of  developed  and
undeveloped  oil and gas leases in which the Company had  working  interest  and
royalty interest as of December 31, 1998. The category of "Undeveloped  Acreage"
in the table includes  leasehold  interest that already may have been classified
as containing proved undeveloped reserves.

                             Developed(1)               Undeveloped(2)
State                  Gross(3)         Net(4)       Gross(3)         Net(4)
------                 -----            ---          -----            ---
Oklahoma                -                -            200              19
Texas                  1560             390          1360             1000
Wyoming                 200             173           400              350
---------              ----             ---          -----            ----
         Total         1760             560          1960             1369


ITEM 3-LEGAL PROCEEDINGS
       -----------------

The Company is a party to a lawsuit  arising in the ordinary course of business.
In the opinion of management, final judgement or settlement, if any, that may be
awarded or entered into in  connection  with this suit would not have a material
adverse effect on the Company's financial position or results of operations.

ITEM 4-SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
       ---------------------------------------------------

None.


                                     PART II

ITEM 5-MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
       --------------------------------------------------------

The Company's Common Stock is traded in the  over-the-counter  market and listed
on the  Bulletin  Board  under the  symbol  "FPPC."  Prior to  January  1998 the
Company's  symbol was "ENEU." Also prior to January 1998,  the Company's  Common
Stock experienced only limited trading and its prices were quoted irregularly in
the National Quotation Bureau's "Pink Sheets." Information  regarding bid prices
and closing bids has been  obtained  from the  National  Quotation  Bureau.  The
following quotations,  where quotes were available, reflect inter-dealer prices,
without retail mark-up, markdown or commission and may not necessarily represent
actual transactions.

----------------------
(1) Developed acreage is acreage spaced for or assignable to productive wells.  
(2)  Undeveloped  acreage is oil and gas  acreage  on which  wells have not been
drilled or to which no Proved  Reserves other than Proved  Undeveloped  Reserves
have been attributed.                                                           
(3) A gross well or acre is a well or acre in which a working interest is owned.
The  number  of gross  wells is the  total  number  of wells in which a  working
interest  is owned.  The number of gross  acres is the total  number of acres in
which a working interest is owned.                                              
(4)A net well or acre is deemed to exist  when the sum of  fractional  ownership
working interests in gross wells or acres equals one. The number of net wells or
acres is the sum of the  fractional  working  interests  owned in gross wells or
acres expressed as whole numbers and fractions thereof.                         




                                       7

<PAGE>


     FISCAL 1997                             CLOSING BID
     -----------                             -----------

                                    HIGH                      LOW
                                    ----                      ---
First Quarter                      .0001                     .0001
Second Quarter                     .0001                     .0001
Third Quarter                      .0001                     .0001
Fourth Quarter                     .0001                     .0001

     FISCAL 1998
     -----------
                                    HIGH                      LOW
                                    ----                      ---
First Quarter                      .8125                     .3750
Second Quarter                    1.5625                     .8125
Third Quarter                     1.7500                     .8125
Fourth Quarter                    1.3750                     .8750

At March 26, 1999, the  approximate  number of shareholders of record was 1,020.
The Company has not paid any  dividends  on its Common Stock and does not expect
to do so in the foreseeable future.

Recent Sales of Unregistered Securities

During the fiscal year ended  December  1997,  the Company  issued the following
securities without registration under the Securities Act of 1933, as amended.

On December 31, 1997,  pursuant to a Plan of Exchange (the "Plan") by and among,
the Company,  Bass  Petroleum,  Inc.  (BPI),  and the  shareholders  of BPI, the
Company issued an aggregate 4,000,000 unregistered shares to the shareholders of
BPI. The shares were issued on a pro rata basis, in exchange for an aggregate of
8,655,625 shares of capital stock of BPI.

As to the  issuance of  securities  identified  above,  the Company  relied upon
Section 4(2) of the  Securities  Act in claiming  exemption  from the registered
requirement of the Securities  Act. All the persons to whom the securities  were
issued had full  information  concerning the business and affairs of the Company
and acquired the shares for investment purposes.  Certificates  representing the
securities  issued  bear  a  restrictive  legend  prohibiting  transfer  of  the
securities except in compliance with applicable securities laws.

ITEM 6-MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
       ---------------------------------------------------------

The  following  discussion  should  be read in  conjunction  with the  Company's
Financial Statements,  and respective notes thereto,  included elsewhere herein.
The  information  below  should  not be  construed  to imply  that  the  results
discussed  herein  will  necessarily  continue  into  the  future  or  that  any
conclusion  reached herein will  necessarily  be indicative of actual  operating
results  in the  future.  Such  discussion  represents  only  the  best  present
assessment of the management of FieldPoint Petroleum Corporation.


                                       8

<PAGE>


Overview

FieldPoint  Petroleum  Corporation  derives  its  revenues  from  its  operating
activities  including sales of oil and gas and operating oil and gas properties.
The Company's  capital for  investment in producing oil and gas  properties  has
been provided by cash flow from operating  activities  and from bank  financing.
The Company categorizes its operating expenses into the categories of production
expenses  and  other  expenses.  Due to cost  associated  with  operations,  the
Company's net expenses for the year ended  December 31, 1998 were  substantially
higher than net expenses for the year ended December 31, 1997.


   Comparison of Year Ended December 31, 1998 to Year Ended December 31, 1997
   --------------------------------------------------------------------------

Results of Operation

Revenues  decreased 18% or $132,646 to $606,764 for the year ended  December 31,
1998, from the comparable 1997 period.  Oil production  volumes increased by 11%
at the same time the  average  price per barrel  decreased  39%  during  1998 to
$11.96 verse the comparable 1997 period average price of $19.51 per barrel. Also
in 1998, the gas production  volume increased by 31% while the average price per
Mcf was $1.50, a 25% decrease from the 1997 comparable.




                                                 Year Ended December 31,
                                             1997                       1997  
                                             ----                       ----
Oil Production                              28,788                     25,846
Average Sales Price Per Bbl ($/Bbl)         $11.96                     $19.51

Gas Production                              89,127                     67,683
Average Sales Price Per Mcf ($/Mcf)          $1.50                      $2.00


Production  expenses  increased  41% or $80,688 to  $275,519  for the year ended
December  31,  1998,  from  the  comparable  1997  period.  This  was due to the
additional  operations  in  Wyoming,  repair of a casing  leak,  and  additional
workovers in the form of remedial  repairs.  Depletion and depreciation  expense
increased 35% or $44,091 to $169,323 for the year ended December 31, 1998,  from
the comparable 1997 period.  The increase in depletion and  depreciation was due
to increased  levels of  production  and an increase in oil and gas  properties.
General  and  administrative   overhead  cost  remained  relatively  stable  and
increased 2% or $6,129 to $312,266 for the 1998 period verse the 1997 comparable
period.

Net other expenses for the year ended December 31, 1998, was $50,374 compared to
net other  expenses of $69,443 for 1997.  This  decrease  was  primarily  due to
expenses related to the reverse acquisition in 1997.

The  Company's  net income  decreased  by $183,746 to a loss of $159,763 for the
year ended December 31, 1998, from the comparable  1997 period.  The decrease in
net income was primarily due to lower prices received for oil and gas sales.


                                       9

<PAGE>

Liquidity and Capital Resources

Cash flow from operating  activities  was a negative  $36,272 for the year ended
December 31, 1998,  compared to a positive  $67,591 for the year ended  December
31, 1997. The decrease in cash flow from operating  activities was primarily due
to the net loss for the year ended December 31, 1998.

Cash flow used by investing activities was $441,944 in the period ended December
31, 1998,  compared to $99,996 for December 31, 1997.  This is primarily  due to
increased  purchases of oil and gas properties in 1998. Cash flow from financing
activities  was  $431,131 for the period  ended  December 31, 1998,  compared to
$23,408 for the same period in 1997. This was due to increases in long-term debt
used to fund purchases of oil and gas properties.

The  worldwide  crude oil prices  continued to  fluctuate  in 1998.  The Company
cannot  predict  how prices  will vary  during  1999 and what  effect  they will
ultimately have on the Company.  However,  management  believes that the Company
will be able to generate  sufficient  cash from  operations  to service its bank
debt  and  provide  for  maintaining  current  production  of its  oil  and  gas
properties.

Commitments  for future capital  expenditures  were not material at December 31,
1998. The timing of most capital  expenditures  for new operations is relatively
discretionary.  Therefore,  the Company can plan  expenditures  to coincide with
available funds in order to minimize business risks.


Capital Requirements

Management believes the Company will be able to meet its current operating needs
through internally generated cash from operations.  Management believes that oil
and gas property  investing  activities in 1999 can be financed  through cash on
hand,  cash  from  operating  activities,   and  bank  borrowing.   The  Company
anticipates  continued  investments in proven oil and gas properties in 1999. If
bank credit is not available,  the Company may not be able to continue to invest
in strategic oil and gas properties.  The Company cannot predict how oil and gas
prices will fluctuate  during 1999 and what effect they will  ultimately have on
the Company,  but Management  believes that the Company will be able to generate
sufficient  cash  from  operations  to  service  its bank debt and  provide  for
maintaining current production of its oil and gas properties. The Company had no
significant commitments for capital expenditures at December 31, 1998.

Year 2000 Compliance

The Company is  assessing  the impact of year the 2000 issue on its  operations,
including the development and implementation of project plans and cost estimates
required to make its information systems Year 2000 compliant.  Based on existing
information,  the Company believes that anticipated spending necessary to become
Year 2000 compliant will not have a material  effect on the financial  position,
cash flows or results of operations  of the Company.  There can be no assurance,
however, as to the ultimate effect of the Year 2000 issue on the Company.

ITEM 7-FINANCIAL STATEMENTS
       --------------------

The  information  required is included in this report as set forth in the "Index
to Financial Statements."


                                       10

<PAGE>

                          Index to Financial Statements
                          -----------------------------

Independent Auditor's Report                                           F-1
Consolidated Balance Sheets                                            F-2
Consolidated Statements of Operations                                  F-3
Consolidated Statements of Stockholders' Equity                        F-4
Consolidated Statements of Cash Flows                                  F-5
Notes to Consolidated Financial Statements                             F-6-F-13
Supplemental Oil and Gas Information (Unaudited)                       F-14-F-16


ITEM 8-CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
       DISCLOSURE
       -------------------------------------------------------------------------
None.

                                    PART III

ITEM 9-DIRECTORS,  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
       WITH SECTION 16(a) OF THE EXCHANGE ACT
       -------------------------------------------------------------------------

(a)  Identification  of Directors and Executive  Officers.  The following  table
     sets forth the names and ages of the Directors  and  Executive  Officers of
     the  Company,  all  positions  and offices  with the  Company  held by such
     person, and the time during which each such person has served:

Name                 Age    Position with Company              Period Served
----                 ---    ---------------------              ------------- 
Ray D. Reaves        37     Director, President, Chairman,     May 1997-present
                            Chief Executive Officer and
                            Chief Financial Officer
Roger D. Bryant      56     Director                           July 1997-present
Robert A. Manogue    74     Director                           July 1997-present

Mr. Reaves,  age 37, has been Chairman,  Director,  President,  Chief  Executive
Officer and Chief  Financial  Officer of the  Company  since May 22,  1997.  Mr.
Reaves has also served as Chairman,  Chief  Executive  Officer,  Chief Financial
Officer and Director of BPI from October 1989 to the present and as President of
Field Point Inc., a private investment firm.

Mr.  Reaves will serve until the next meeting of the  shareholders  or until his
successor(s) have been duly elected and qualified.

Roger D.  Bryant,  age 56, has been a Director of the  Company  since July 1997.
From November 1994 to present,  Bryant has been President of Canmax Corporation.
From May 1993 to October 1994, Bryant was President of Network Data Corporation.
From January  1993 to May 1993,  he served as Senior Vice  President,  Corporate
Development,  of Network Data  Corporation.  From  January 1993 to May 1993,  he
served  as  Senior  Vice  President,  Corporate  Development,  of  Network  Data
Corporation.  From May 1991 to July  1992,  he served as  President  of  Dresser
Industries,  Inc., Wayne Division, a leading international  manufacturer of fuel
dispensing  equipment.  Additionally,  from August 1989 to May 1991,  Bryant was
President of Schlumberger Limited, Retail Petroleum Systems Division,  U.S.A., a
division of Schlumberger Corporation.


                                       11

<PAGE>

Robert A.  Manogue,  age 74, has been a Director of the Company since July 1997.
Since 1982, Manogue has been retired and has been involved in house construction
in Albuquerque,  New Mexico under R.A. Manogue Construction.  From 1976 to 1982,
Manogue was President of C.P. Clare  International N.V. in Brussels,  Belgium, a
$50 million  subsidiary of General  Instruments  Corporation.  He also served as
Vice President of Marketing for Emerson  Electric  Company,  a manufacturer  and
marketer of consumer and industrial products, from 1971 to 1976.

(b)  Identification  of Significant  Employees.  The Company does not employ any
     persons,  other than its  President,  who make or are  expected to make any
     significant contributions to the business of the Company.
(c)  Family  Relationships.  There is no family relationship between any present
     director, executive officer or person nominated or chosen by the Company to
     become a director or executive officer.
(d)  Involvement in Certain Legal Proceedings.  No present director or executive
     officer  of the  Company  has been the  subject  of any  civil or  criminal
     proceeding during the past five years which is material to an evaluation of
     his  integrity  or ability to serve as an officer or  director,  nor is any
     such person the subject of any order,  judgment or decree of any federal or
     state  authority  which is material to an  evaluation  of his  abilities or
     integrity.

ITEM 10-EXECUTIVE COMPENSATION
        ----------------------

The following table sets forth in summary form the compensation  received during
each of the Company's last three completed fiscal years by each of the Company's
Chief Executive Officer and President. No employee of the Company received total
salary and bonus exceeding $100,000 during the last three fiscal years.

                                                                   Long-Term
    Name and                                                       Compensation
Principal Position        Fiscal Year      Salary      Bonus        Options (#)
--------------------------------------------------------------------------------
Ray D. Reaves             1998             $90,000                     --
 Chief Executive Officer  1997             $72,000                   200,000
 and President            1996             $72,000     $25,000         --

Option Grants Table

The following table sets forth information concerning individual grants of stock
options  made during the fiscal years ended  December 31, 1997 and 1998,  to the
Company's Officers and Directors.

Name                   Options Granted (#)     Price ($/sh.)    Expiration Date
--------------------------------------------------------------------------------
Ray D. Reaves           200,000                    $.10            12/31/2001
    President and CEO

Roger D. Bryant         100,000                    $.10             12/31/2001
    Director

Robert A. Manogue       100,000                    $.10             12/31/2001
    Director

Kelly Latz                5,000                    $.88             12/31/1999
    Corporate Secretary



                                       12

<PAGE>

ITEM 11-SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table  sets  forth  the  persons  known  to the  Company  to own
beneficially more than five percent of the outstanding shares of Common Stock as
of December 31, 1998 and  information  as of December 31, 1998,  with respect to
the  ownership of Common Stock by each  director  and  executive  officer of the
Company.  In all cases,  the owners have sole voting and investment  powers with
respect to the shares.


Name and Address of                 Amount and Nature
Beneficial Owner                    of Beneficial Owner        Percent of Class
----------------                    -------------------        ----------------
Bass Petroleum, Inc.                    210,000                       4.8%
1703 Edelweiss Drive
Cedar Park, Texas 78613

Mildred Babich                          325,801                       7.4%
4225 Clear Lake
Ft. Worth, Texas 76109

Peter Babich                            323,490                       7.3%
3310 Parkside Rd.
Flint, Michigan 48503

The Delray Trust                        604,928                      13.7%
3606 Belle Grove
Sugar Land, Texas 77479

Ray D. Reaves                         2,811,625(1)                   61.2%
1703 Edelweiss Drive
Cedar Park, Texas 78613

Robert A. Manogue                       377,277(2)                    8.3%
1703 Edelweiss Drive
Cedar Park, Texas 78613

Roger D. Bryant                         100,000(3)                    2.2%
1703 Edelweiss Drive
Cedar Park, Texas 78613

All Officers and Directors            3,288,902                      68.7%
     as a Group (3 persons)

------------------------
(1)Includes  (i) shares  beneficially  owned  based on position  with BPI;  (ii)
estimated shares received in Reverse Acquisition in exchange for common stock of
BPI owned by Mr. Reaves;  and (iii) 200,000 shares of Common Stock underlying an
option  granted  to Mr.  Reaves by BPI,  which  option  has been  assumed by the
Company.                                                                        
(2)  Includes  (i)  shares  owned by a  partnership  of which Mr.  Manogue  is a
partner;  and (ii) 100,000  shares of Common Stock  underlying  an option of BPI
granted to Mr. Manogue by BPI, which option has been assumed by the Company.    
(3) Includes  100,000 shares of Common Stock underlying an option granted to Mr.
Bryant.                                                                         



                                       13

<PAGE>



ITEM 12-CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In August 1994, the Company  entered into a lease agreement with the controlling
shareholder,  Ray D. Reaves,  to rent office space.  The lease extended  through
July 31, 1997,  and has continued  thereafter  on a  month-to-month  basis.  The
monthly rent was $750 until December 31, 1997 and $1,000 thereafter.

During 1997,  the Company  acquired  various oil and gas interest from a company
owned by the  controlling  shareholder  for $88,000.  During  1996,  the Company
acquired an oil and gas well from its controlling shareholder, Ray D. Reaves for
$44,000. As partial  considerations,  the Company retired a note receivable from
Ray D. Reaves of $38,000, which had arisen from a cash advance in 1994.

At December 31, 1998, the Company had a liability to its majority stockholder of
$15,000 for short-term, non-interest bearing operating expenses.

At December 31, 1998, the Company had notes payable to two  stockholders  in the
amount of $220,000.

ITEM 13-EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     Financial  Statements  of the  Company  as set forth  under  Item 7 of this
     Report on Form 10-KSB

     3.1  Articles of Incorporation  (incorporated by reference to Amendment No.
          1 to Form S-2 dated August 1, 1980.)

     3.2(b) Articles of Amendment of Articles of  Incorporation,  dated December
          31, 1997  (incorporated  by reference to the  Company's  10KSB for the
          year ended December 31, 1997.)

     3.3  Bylaws (incorporated by reference to Amendment No. 1 to Form S-2 dated
          August 1, 1980.)

     4.1  Plan  of  Exchange   (incorporated   by  reference  to  the  Company's
          definitive proxy statement dated December 8, 1997).

(b)  Reports on Form 8-K

     There  were no  reports  on Form 8-K filed by the  Company  during the last
     quarter of its fiscal year.



                                       14


<PAGE>



                                   SIGNATURES


In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                        FIELDPOINT PETROLEUM CORPORATION
                        --------------------------------
                                  (Registrant)

         By:      /s/ Ray Reaves   
                  ----------------------                                    
                  Ray Reaves, President

         Date:    3/30/99  
                  -------

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.

         By:      /s/ Ray Reaves   
                  ----------------------                                     
                  Ray Reaves, President, Chief Executive Officer, Director, 
                  Chairman, Chief Financial Officer

         Date:    3/30/99  
                  -------

                  SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH
                 REPORTS FILED PURSUANT TO SECTION 15(d) OF THE
                      EXCHANGE ACT BY NON-REPORTING ISSUERS

No annual  report or proxy  material  has been sent to security  holders.  Proxy
material,  which is to be furnished to security holders subsequent to the filing
of the annual report on this form,  shall be furnished to the Commission when it
is sent to security holders.

















                                       15

<PAGE>
                     

                          INDEPENDENT AUDITOR'S REPORT




Board of Directors and Stockholders
FieldPoint Petroleum Corporation
Austin, Texas

We have  audited the  accompanying  consolidated  balance  sheets of  FieldPoint
Petroleum  Corporation  as of  December  31,  1998  and  1997,  and the  related
consolidated statements of operations,  changes in stockholders= equity and cash
flows for the years then ended. These consolidated  financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits 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 FieldPoint Petroleum
Corporation  as of December 31, 1998 and 1997, and the results of its operations
and its cash  flows for the years  then  ended,  in  conformity  with  generally
accepted accounting principles.




HEIN + ASSOCIATES LLP


Dallas, Texas
January 20, 1999




                                       F-1



<PAGE>

<TABLE>

<CAPTION>

                        FIELDPOINT PETROLEUM CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                                                          DECEMBER 31,
                                                                                 --------------------------
                                                                                     1998           1997
                                                                                 -----------    -----------
<S>                                                                               <C>           <C>
CURRENT ASSETS:
  Cash                                                                           $     1,375    $    48,457
  Trading securities                                                                   2,880          2,880
  Accounts receivable:
       Due from investor                                                               9,000           --
       Oil and gas sales                                                              50,026         73,159
       Joint interest billings, less allowance for doubtful
       account of $20,000 and $0, respectively                                        67,225         61,392
   Income taxes recoverable                                                           48,000           --
   Prepaid expenses                                                                    2,535          1,635
                                                                                 -----------    -----------
                      Total current assets                                           181,041        187,523

PROPERTY AND EQUIPMENT:
   Oil and gas properties (successful efforts method):
      Unproved leasehold costs                                                       180,000           --
      Proved leasehold costs                                                       1,115,176        954,995
      Lease and well equipment                                                       172,860         95,504
   Furniture and equipment                                                            31,432         30,758
   Transportation equipment                                                           74,945         74,945
   Less accumulated depletion and  depreciation                                     (523,258)      (353,935)
                                                                                 -----------    -----------
                  Net property and equipment                                       1,051,155        802,267

EARNEST MONEY DEPOSIT                                                                 40,000           --

OTHER ASSETS                                                                          16,815         20,000
                                                                                 -----------    -----------
                           Total assets                                          $ 1,289,011    $ 1,009,790
                                                                                 ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Current portion of long-term debt                                             $   449,500    $   160,544
   Accounts payable and accrued expenses                                             128,347        111,255
   Oil and gas revenues payable                                                       62,538         96,512
   Due to related party                                                               15,000           --
                                                                                 -----------    -----------
                  Total current liabilities                                          655,385        368,311

LONG-TERM DEBT, net of current portion                                               374,070        255,877

COMMITMENTS (Note 9)

STOCKHOLDERS= EQUITY:
   Common stock, $.01 par value, 75,000,000 shares authorized;
   4,613,259 and 4,413,259 shares issued and outstanding, respectively                46,132         44,132
   Additional paid-in capital                                                        117,723         83,906
   Treasury stock, 210,000 shares, at cost                                            (2,100)          --
   Retained earnings                                                                  97,801        257,564
                                                                                 -----------    -----------
                  Total stockholders' equity                                         259,556        385,602
                                                                                 -----------    -----------

                  Total liabilities and stockholders' equity                     $ 1,289,011    $ 1,009,790
                                                                                 ===========    ===========

</TABLE>


             See accompanying notes to these financial statements.

                                       F-2

<PAGE>


                        FIELDPOINT PETROLEUM CORPORATION
                                                                 
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                YEARS ENDED DECEMBER 31,
                                              --------------------------
                                                  1998           1997
                                              -----------    -----------
REVENUE:
   Oil and gas sales                          $   443,448    $   561,875
   Well operational and pumping fees              163,316        175,535
   Other
                                                     --            2,000
                                              -----------    -----------
       Total revenue                              606,764        739,410

COSTS AND EXPENSES:
   Production expense                             275,519        194,831
   Depletion and depreciation                     169,323        125,232
   General and administrative                     312,266        306,137
                                              -----------    -----------
       Total costs and expenses                   757,108        626,200
OTHER INCOME (EXPENSE):
   Gain on sale of assets                             875          3,235
   Acquisition expenses                              --          (45,000)
   Interest expense, net                          (56,351)       (33,830)
   Miscellaneous                                    5,102          6,152
                                              -----------    -----------
       Total other income (expense)               (50,374)       (69,443)      
                                              -----------    -----------
INCOME (LOSS) BEFORE INCOME TAXES                (200,718)        43,767

INCOME TAX BENEFIT (PROVISION) - CURRENT           40,955       (19,784)
                                              -----------    -----------
NET INCOME (LOSS)                             $  (159,763)   $    23,983
                                              ===========    ===========
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE   $      (.04)   $       .01
                                              ===========    ===========
WEIGHTED AVERAGE SHARES OUTSTANDING             4,211,592      4,137,399
                                              ===========    ===========

             See accompanying notes to these financial statements.

                                       F-3


<PAGE>

<TABLE>

<CAPTION>

                        FIELDPOINT PETROLEUM CORPORATION


                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS= EQUITY

            FOR THE PERIOD FROM JANUARY 1, 1997 TO DECEMBER 31, 1998

                                                                                                  
                                                   Common Stock          Treasury  Stock        Additional             
                                              ---------------------   ----------------------    Paid-In      Retained              
                                                Shares       Amount    Shares       Amount       Capital     Earnings      Total
                                              ---------   ---------   ---------    ---------    ---------    ---------    ---------
<S>                                           <C>         <C>         <C>          <C>         <C>           <C>           <C>


BALANCES, January 1, 1997                     4,000,000   $  40,000        --      $    --      $  88,038    $ 233,581    $ 361,619

Purchase of common stock for cash in May 1997   223,040       2,230        --           --         (2,230)        --           --
Issuance of common stock to acquire net 
     assets of Energy Production Company        190,219       1,902        --           --         (1,902)        --           --

Net income for the year                            --          --          --           --           --         23,983       23,983
                                              ---------   ---------   ---------    ---------    ---------    ---------    ---------

BALANCES, December 31, 1997                   4,413,259      44,132        --           --         83,906      257,564      385,602

Record value of treasury shares                    --          --       214,000       (2,140)       2,140         --           --
Issuance of options to consultant                  --          --          --           --          9,732         --          9,732
Exercise of options by former director          200,000       2,000        --           --         18,000         --         20,000
Sale of treasury stock                             --          --        (4,000)          40        3,945         --          3,985

Net loss for year                                  --          --          --           --           --       (159,763)    (159,763)
                                              ---------   ---------   ---------    ---------    ---------    ---------    ---------

BALANCES, December 31, 1998                   4,613,259   $  46,132     210,000    $  (2,100)   $ 117,723    $  97,801    $ 259,556
                                              =========   =========   =========    =========    =========    =========    =========
</TABLE>


             See accompanying notes to these financial statements.

                                       F-4

<PAGE>

<TABLE>

<CAPTION>

                        FIELDPOINT PETROLEUM CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                      YEARS ENDED DECEMBER 31,
                                                                      ------------------------
                                                                         1998         1997
<S>                                                                    <C>          <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                                 $(159,763)   $  23,983
     Adjustments to reconcile to net cash from operating activities:
        Depletion and depreciation                                       169,323      125,232
        Gain on sale of assets                                              (875)      (3,235)
        Options issued for services                                        9,732         --
     Changes in assets and liabilities:
            Accounts receivable                                            2,033        4,470
            Income taxes recoverable                                     (48,000)        --
            Prepaid expenses and other assets                             (6,815)       5,000
            Accounts payable and accrued expenses                         17,092       13,913
            Oil and gas revenues payable                                 (33,974)     (26,426)
            Federal income taxes payable                                    --        (47,022)
            Due to related party                                          15,000      (27,733)
            Other                                                            (25)        (591)
                                                                       ---------    ---------

            Net cash (used) provided by operating activities             (36,272)      67,591

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sales of equipment                                         --         11,000
   Purchase of oil and gas properties                                   (411,270)    (163,270)
   Purchase of furniture and equipment                                      (674)     (47,726)
   Increase in earnest money deposit                                     (40,000)        --
   Decrease in restricted cash                                            10,000      100,000
                                                                       ---------    ---------
            Net cash used by investing activities                       (441,944)     (99,996)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term debt                                          595,000      272,421
   Repayments of long-term debt                                         (187,851)    (249,013)
   Proceeds from sales of common stock                                    20,000         --
   Proceeds from sales of treasury stock                                   3,985         --
                                                                       ---------    ---------

            Net cash provided by financing activities                    431,134       23,408
                                                                       ---------    ---------

NET DECREASE IN CASH                                                     (47,082)      (8,997)

CASH, beginning of the year                                               48,457       57,454
                                                                       ---------    ---------
CASH, end of the year                                                  $   1,375    $  48,457
                                                                       =========    =========

SUPPLEMENTAL INFORMATION:
   Cash paid during the year for interest                              $  58,462    $  41,219
                                                                       =========    =========
   Cash paid during the year for income taxes                          $   7,045    $  18,000
                                                                       =========    =========
   Oil and gas properties acquired for forgiveness of receivables      $   6,267    $  13,247
                                                                       =========    =========

</TABLE>

  See accompanying notes to these financial statements.
                                       F-5

<PAGE>


                        FIELDPOINT PETROLEUM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                     

1.   Summary of Significant Accounting Policies
     ------------------------------------------

     Organization and Nature of Operations
     -------------------------------------
     FieldPoint Petroleum  Corporation (the "Company") is incorporated under the
     laws of the state of Colorado.  The Company is engaged in the  acquisition,
     operation and development of oil and gas  properties,  which are located in
     South-Central  Texas and Wyoming as of December 31, 1998.  The Company also
     has a working  interest  in  unproved  leasehold  acreage in Oklahoma as of
     December 31, 1998.

     The Company began  operations  as Bass  Petroleum,  Inc.  (Bass) in October
     1989. On December 31, 1997,  the  shareholders  of Bass exchanged all their
     shares for approximately 97% (including the 6% of EPC previously  purchased
     by Bass) of Energy  Production  Company (EPC), a public  company,  and Bass
     became a  wholly-owned  subsidiary  of EPC (see Note 2). The  management of
     Bass became the  management of the combined  company.  Concurrent  with the
     transaction,   the  Company  changed  its  name  to  FieldPoint   Petroleum
     Corporation and declared a 75 to 1 reverse stock split. Although EPC is the
     acquiring  entity for legal purposes,  Bass was considered the acquirer for
     accounting  purposes,  and the financial statements of the combined company
     reflect the  historical  accounts of Bass and include the operations of EPC
     beginning May 22, 1997.  However,  because EPC is the acquiring  entity for
     legal purposes,  all stockholders'  equity  information in the accompanying
     financial  statements  and  footnotes has been restated to conform to EPC's
     capital  structure.  The Company  changed its name to FieldPoint  Petroleum
     Corporation following the share exchange with EPC.

     Cash and Cash Equivalents
     -------------------------
     The Company considers all highly liquid debt instruments  purchased with an
     original maturity of three months or less to be cash equivalents.

     Oil and Gas Producing Operations
     --------------------------------
     The Company uses the  successful  efforts  method of accounting for its oil
     and gas producing activities.  Costs incurred by the Company related to the
     acquisition of oil and gas  properties and the cost of drilling  successful
     wells are  capitalized.  Costs  incurred  to  maintain  wells  and  related
     equipment  and lease and well  operating  costs are  charged  to expense as
     incurred. Gains and losses arising from sales of properties are included in
     income.   Unproved  properties  are  assessed   periodically  for  possible
     impairment. Any impaired amounts are charged to expense. The Company had no
     impaired unproved properties as of December 31, 1998.

     Capitalized  amounts  attributable  to proved  oil and gas  properties  are
     depleted  by  the  unit-of-production  method  based  on  proved  reserves.
     Depreciation and depletion  expense for oil and gas producing  property and
     related  equipment  was $152,093 and $111,820 for the years ended  December
     31, 1998 and 1997, respectively.

     Capitalized  costs are  evaluated  for  impairment  based on an analysis of
     undiscounted future net cash flows in accordance with Financial  Accounting
     Standards  Board  Statement  No. 121, "Accounting  for the  Impairment  of
     Long-Lived  Assets  and  for  Long-Lived  Assets  to Be  Disposed  Of".  If
     impairment  is indicated,  the asset is written down to its estimated  fair
     value based on expected future discounted cash flows.

     

                                       F-6

<PAGE>


                        FIELDPOINT PETROLEUM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                
     Joint Interest Billings Receivable and Oil and Gas Revenue Payable 
     ------------------------------------------------------------------


     Joint interest billings  receivable  represent amounts receivable for lease
     operating  expenses and other costs due from third party  working  interest
     owners in the wells that the Company operates. The receivable is recognized
     when the cost is incurred and the related  payable and the Company's  share
     of the cost is recorded.                            

     Oil and gas revenue payable  represents  amounts due to third party revenue
     interest  owners for their share of oil and gas revenue  collected on their
     behalf by the Company.  The payable is recorded when the Company recognizes
     oil and gas sales and records the related oil and gas sales receivable.

     Other Property
     --------------
     Other assets  classified as property and  equipment  are  primarily  office
     furniture and equipment and vehicles, and are carried at cost. Depreciation
     is provided  using the  straight-line  method over  estimated  useful lives
     ranging from five to seven  years.  Gain or loss on  retirement  or sale or
     other  disposition  of  assets  is  included  in  income  in the  period of
     disposition.  Depreciation  expense for other  property and  equipment  was
     $17,230  and  $13,412  for the  years  ended  December  31,  1998 and 1997,
     respectively.

     Earnings (Loss) Per Share
     -------------------------
     Basic earnings  (loss) per share is computed based on the weighted  average
     number of shares of common  stock  outstanding  during the period.  Diluted
     earnings (loss) per share takes common stock  equivalents  (such as options
     and warrants) into consideration.  As of December 31, 1998, the Company had
     outstanding  options  for  455,000  shares  of common  stock  which are not
     included in the dilutive  calculation  of earnings  (loss) per share as the
     effect would be antidilutive.

     Income Taxes
     ------------
     Income taxes are provided for the tax effects of  transactions  reported in
     the financial  statements and consist of taxes  currently due, if any, plus
     net deferred taxes related  primarily to  differences  between the bases of
     assets and liabilities for financial and income tax reporting. Deferred tax
     assets and  liabilities  represent  the future tax return  consequences  of
     those  differences,  which will  either be taxable or  deductible  when the
     assets and  liabilities  are  recovered  or  settled.  Deferred  tax assets
     include recognition of operating losses that are available to offset future
     taxable  income and tax credits that are  available to offset future income
     taxes. Valuation allowances are recognized to limit recognition of deferred
     tax  assets  where  appropriate.  Such  allowances  may  be  reversed  when
     circumstances  provide  evidence  that the  deferred  tax assets  will more
     likely than not be realized.

     Stock-Based Compensation
     ------------------------
     In January  1997,  the Company  adopted  Statement of Financial  Accounting
     Standards (SFAS) No. 123 "Accounting for Stock-Based  Compensation",  which
     requires  recognition  of the value of stock  options and warrants  granted
     based on an option  pricing model.  However,  as permitted by SFAS 123, the
     Company  continues  to account for stock  options and  warrants  granted to
     directors and employees pursuant to Accounting Principles Board Opinion No.
     25,   "Accounting   for   Stock   Issued   to   Employees",   and   related
     interpretations. See Note 7.



                                       F-7


<PAGE>


                        FIELDPOINT PETROLEUM CORPORATION
                                                
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                

     Use of Estimates and Certain Significant Estimates
     --------------------------------------------------
     The  preparation of the Company's  financial  statements in conformity with
     generally accepted accounting  principles requires the Company's management
     to make estimates and assumptions that affect the amounts reported in these
     financial  statements and accompanying  notes.  Actual results could differ
     from those estimates. Significant assumptions are required in the valuation
     of proved oil and gas  reserves,  which as  described  above may affect the
     amount  at  which  oil and gas  properties  are  recorded.  It is at  least
     reasonably  possible those  estimates could be revised in the near term and
     those revisions could be material.
                                  
     Reclassifications
     -----------------
     Certain  reclassifications  have been made to conform the December 31, 1997
     financial statements to the presentation in 1998. The reclassifications had
     no effect on net income.

2.   ACQUISITION OF ENERGY PRODUCTION COMPANY
     ----------------------------------------

     In May 1997,  Bass  acquired an 81%  interest  in EPC,  an inactive  public
     company.  Bass  acquired  approximately  54% of EPC from EPC's  controlling
     shareholder for $45,000 as well as an additional  ownership interest in EPC
     in the form of 44,300,000  newly-issued  common shares, in exchange for two
     oil and gas  properties  with a cost basis of $23,500,  and $5,000 in cash.
     The $45,000 cash  payment was charged  against  operations  during the year
     ended  December 31, 1997 as EPC had no  identifiable  assets at the time of
     acquisition.

     In October 1997,  EPC and Bass rescinded the sale of the  newly-issued  EPC
     common  shares to Bass.  Bass  returned  the shares to EPC in exchange  for
     return of the purchase price. After returning the shares, Bass owned 54% of
     EPC, or 223,040  shares  (which  represented  an  approximate  6% ownership
     interest after the reverse acquisition described below).

     In December 1997,  Bass  completed the reverse  acquisition as described in
     Note 1. After the reverse acquisition,  Bass and its shareholders owned 97%
     of the common stock of EPC.

     From 1980 to 1986,  EPC was  engaged in the  acquisition,  development  and
     operations of oil and gas properties. In December 1986, EPC began to divest
     its remaining oil and gas assets and operations and was relatively inactive
     since that time with no significant operating revenues or operations. Since
     1986, the only assets of EPC have been cash and related party  receivables.
     EPC had a substantial accumulated deficit as of the acquisition date.

     No pro forma financial statements have been prepared to reflect the results
     of  operations  as if EPC had been acquired at the beginning of the period,
     because EPC's operations were not material.

3.   ACQUISITION OF OIL AND GAS PROPERTIES
     --------------------------------------

     In February  1998,  the Company  acquired  interests  in certain  producing
     properties in Texas for  consideration  of $190,000.  The  acquisition  was
     financed with an extension of the  Company's  existing  borrowing  facility


                                       F-8

<PAGE>

     with a bank. The following  unaudited proforma  information is presented as
     if the  interests in the property had been acquired at the beginning of the
     respective periods.
                                                      Year Ended December 31,
                                                     ------------------------
                                                        1998           1997
                                                     ----------      ---------
        Revenues                                     $  626,366      $ 861,326
        Net income (loss)                            $ (145,443)     $  53,083
        Net income (loss) per share                  $     (.03)     $     .01

4.   Related Party Transactions
     --------------------------

     During 1997,  the Company  acquired  various oil and gas interests from its
majority stockholder for $88,000.

















                                      F-9


<PAGE>


                        FIELDPOINT PETROLEUM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        
     At  December  31,  1998,  the  Company  had a  liability  to  its  majority
     stockholder  of $15,000  for  short-term,  non-interest  bearing  operating
     expenses.

     In  August  1994,  the  Company  entered  into a lease  agreement  with the
     majority  stockholder  of the  Company  to rent  office  space.  The  lease
     extended  through  July  31,  1997  and  has  continued   thereafter  on  a
     month-to-month  basis.  The monthly rental was $750 until December 31, 1997
     and $1,000  thereafter.  Rent  expense was $12,000 and $9,000 for the years
     ended December 31, 1998 and 1997, respectively.

     At December 31, 1998, the Company had notes payable to two  stockholders in
     the amount of $220,000 as described in Note 5.

5.   LONG-TERM DEBT
     --------------

     Long-term debt at December 31, 1998 and 1997 consisted of the following:

<TABLE>

                                                                                     1998                1997
                                                                                     -----               ----
<S>                                                                                  <C>                 <C>

               Note payable to a bank,  interest at bank's  floating rate (8.75%
               at December 31, 1998), monthly payments of principal and interest
               of  $17,227,   until   maturity  in  June  2001.   This  note  is
               collateralized   by  certain  oil  and  gas   properties  and  is
               guaranteed by the majority stockholder of the Company.                $   470,601          $   375,000
               

               Note payable to a bank,  interest at bank's  floating rate (8.75%
               at December 31,  1998),  monthly  payments of principal of $3,788
               plus accrued interest, until maturity in March 2001. This note is
               collateralized   by  certain  oil  and  gas   properties  and  is
               guaranteed by the majority stockholder of the Company.                    102,273                 -

               Unsecured  note payable to a  stockholder,  interest at the prime
               rate (8.75% at December 31, 1998), principal and accrued interest
               due at maturity in February 1999.                                         180,000                 -

               Unsecured  note payable to a  stockholder,  interest at the prime
               rate (8.75% at December 31, 1998), principal and accrued interest
               due at maturity in March 1999.                                             40,000                  -

               Note payable to a bank,  interest at 10.25%,  monthly payments of
               principal and interest of $493 until  maturity in December  2000.
               This note is collateralized by a truck.                                    10,668               15,209

               Note payable to a commercial  lender,  interest at 3.9%,  monthly
               payment of $214 of  principal  and  interest  until  maturity  in
               February  2002.  This note is collateralized by an automobile.              7,623                9,831

               Note payable to a commercial lender,  interest at 8.75%,  monthly
               payments of $420 of  principal  and  interest  until  maturity in
               October 2001. This note is collateralized by  a truck.                     12,405               16,381
                                                                                     -----------          ----------- 
                      Total                                                              823,570              416,421
                      Less current portion                                              (449,500)            (160,544)
                                                                                     -----------          ----------- 
                                                                                     $   374,070          $   255,877
                                                                                     ===========          ===========
</TABLE>


                                      F-10


<PAGE>


                        FIELDPOINT PETROLEUM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Maturities  of long-term  debt based on  contractual  requirements  for the
     years ending December 31, 1999 through 2002 are as follows:
                                                       

                                                        
                          1999            $ 449,500
                          2000              246,237
                          2001              127,426
                          2002                  407
                                          ---------
                                          $ 823,570
                        

6.    INCOME TAXES

     The  Company's  deferred tax assets and  (liabilities)  are composed of the
following at December 31, 1998 and 1997:

                                                         DECEMBER 31,
                                                     -------------------- 
                                                      1998        1997 
                                                     --------    --------
Deferred tax assets:
     Non-deductible acquisition cost                 $ 15,000    $ 17,000
     Other items                                        9,000      11,000      
                                                     --------    --------
                                                       24,000      28,000
                                                     --------    --------
Deferred tax liabilities:
     Difference in bases of oil and gas properties    (11,000)    (28,000)
                                                     --------    --------

Net asset before valuation allowance                   13,000        --
Valuation allowance                                   (13,000)       --
                                                     --------    --------
     Net asset                                       $   --      $   --
                                                     ========    ========

7.   Stock Based Compensation
     ------------------------

     Stock Options
     -------------
     In 1997, the Company granted 600,000 non-qualified stock options to certain
     directors to purchase the  Company's  common stock at $0.10 per share.  The
     options may be exercised  from  January 1, 1998 to December  31, 2001.  The
     amounts  and  terms  of the  options  were  not  affected  by  the  reverse
     acquisition described in Note 2.

     In January 1998, the Company granted 5,000  non-qualified  stock options to
     an officer. The options are exercisable at $0.88 per share until expiration
     in December 1999.

     In January 1998, the Company granted 50,000  non-qualified stock options to
     a consultant in exchange for services. The options are exercisable at $0.75
     per share until expiration in December 1999. The fair market value of these
     options, as determined by the Black-Scholes option pricing model, of $9,732
     was recorded as an expense during the year ended December 31, 1998.


                                      F-11

<PAGE>

<TABLE>

<CAPTION>

                        FIELDPOINT PETROLEUM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The  following is a summary of activity for the stock  options  granted for
     the years ended December 31, 1998 and 1997:


                                                         DECEMBER 31, 1998               DECEMBER 31, 1997
                                                  -----------------------------       ------------------------

                                                                       Weighted                       Weighted
                                                                       Average                        Average
                                                   Number              Exercise        Number         Exercise
                                                  of Shares            Price           of Shares        Price 
                                                  ---------            --------        ---------      --------
<S>                                               <C>                  <C>            <C>             <C>        <C>     

    Outstanding, beginning of year                 600,000             $ 0.10            -                -

         Canceled or expired                          -                   -              -                -
         Granted                                    55,000             $ 0.76          600,000        $  0.10
         Exercised                                (200,000)            $ 0.10            -                -        
                                                  --------             ------          -------        -------  
                                                                                        
    Outstanding and exercisable, end of year       455,000             $ 0.18          600,000        $  0.10
                                                  ========             ======          =======        =======

     If not previously exercised,  options outstanding at December 31, 1998 will
     expire as follows:

                                                                                       Weighted
                                                                                       Average
                                                                       Number          Exercise
                                                                       of Shares        Price
                                                                       ---------       --------
                                                                                            

                                      December 31, 1999                55,000          $  0.76
                                      December 31, 2001               400,000          $  0.10
                                                                      -------          -------
                                                           Total      455,000          $  0.18
                                                                      =======          =======

     Presented below is a comparison of the weighted average exercise prices and
     fair values of the Company's  common stock on the measurement  date for the
     stock options granted during fiscal years 1998 and 1997.


                                                                1998                                1997
                                                   ------------------------------      -------------------------------
                                                   Number      Exercise     Fair       Number      Exercise      Fair
                                                   of Shares   Price        Value      of Shares   Price         Value
                                                                                         

    Exercise price greater than market price        55,000      $ 0.76      $0.19       600,000    $ 0.10       $ 0.02
                                                   =======      ======      ======      =======    ======       ======
</TABLE>


     Pro Forma Stock-Based Compensation Disclosures
     ----------------------------------------------
     As discussed in Note 1, the Company  applies APB Opinion No. 25 and related
     interpretations  in  accounting  for its  stock  options.  Accordingly,  no
     compensation  cost has been  recognized  for grants of options to employees
     since the  exercise  prices  were not lower than the  market  prices of the
     Company's  common stock on the  measurement  date.  Had  compensation  been
     determined  based on the estimated fair value at the measurement  dates for
     awards under those plans consistent with the method  prescribed by SFAS No.
     123, the Company's December 31, 1998 and 1997 income and earnings per share
     would have been changed to the pro forma amounts indicated below.


                                      F-12


<PAGE>

                        FIELDPOINT PETROLEUM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                                        1998             1997
                                                      ---------        ---------
        Net income (loss):
             As reported                              $(159,763)       $  23,983
             Pro forma                                 (160,676)       $  14,155
        Net income (loss) per common share:
             As reported                              $   (0.04)       $   0.01
             Pro forma                                $   (0.04)           *

     *   Less than $0.01 per share

     The  estimated  fair value of each officer and director  option and warrant
     granted during fiscal year 1998 and 1997 was estimated on the date of grant
     using the Black-Scholes  option-pricing  model with the following  weighted
     average assumptions:

                                                        1998             1997
                                                      ---------        ---------
        Expected volatility                            126.3%              0%
        Risk-free interest rate                          6.5%           6.13%
        Expected dividends                                  -               -
        Expected terms (in years)                           2               5

8.   ENVIRONMENTAL ISSUES
     --------------------

     The Company is engaged in oil and gas  exploration  and  production and may
     become subject to certain liabilities as they relate to environmental clean
     up of well  sites or other  environmental  restoration  procedures  as they
     relate to the drilling of oil and gas wells and the operation  thereof.  In
     the Company's acquisition of existing or previously drilled well bores, the
     Company may not be aware of what environmental safeguards were taken at the
     time such wells were  drilled or during such time the wells were  operated.
     Should  it be  determined  that a  liability  exists  with  respect  to any
     environmental  clean  up or  restoration,  the  liability  to  cure  such a
     violation  could fall upon the Company.  No claim has been made, nor is the
     Company aware of any liability which the Company may have, as it relates to
     any  environmental  clean up,  restoration or the violation of any rules or
     regulations relating thereto.

9.   COMMITMENTS
     -----------

     As of December 31, 1998, the Company has a $10,000 open letter of credit in
     favor of the State of Wyoming as a plugging  bond.  The letter of credit is
     collateralized by a certificate of deposit in the same amount.

     The Company has entered into a letter of intent to purchase certain working
     interests in unproved leasehold acreage in Oklahoma.  The Company has given
     the seller a $40,000"good faith"  earnest money deposit as of December 31,
     1998.  The Company is committed to fund the purchase of $485,000 of working
     interest by April 30,  1999 or lose  $20,000 of the deposit and to fund the
     purchase of another  $425,000 of working  interest by June 30, 1999 or lose
     the remaining $20,000 of the deposit.



                                      F-13

<PAGE>

                        FIELDPOINT PETROLEUM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                       
10.  FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK

     The  Company's  financial  instruments  are cash,  amounts  receivable  and
     payable and long-term  debt.  Management  believes the fair values of these
     instruments,  with the exception of the  long-term  debt,  approximate  the
     carrying  values,   due  to  the  short-term  nature  of  the  instruments.
     Management  believes  the fair  value of  long-term  debt  also  reasonably
     approximates its carrying value,  based on expected cash flows and interest
     rates.

     Financial  instruments  that  subject the  Company to credit  risk  consist
     principally of receivables. The receivables are primarily from companies in
     the oil and gas business or from  individual oil and gas  investors.  These
     parties  are  primarily  located in the  Southwestern  region of the United
     States. The Company does not ordinarily require collateral, but in the case
     of receivables for joint  operations,  the Company often has the ability to
     offset amounts due against the  participant's  share of production from the
     related property.  The Company believes the allowance for doubtful accounts
     at December 31, 1998 and 1997 is adequate.

     The Company had the following concentrations in volume of oil and gas sales
     revenue:
                                                     
                                Customer              1998          1997 
                                                     ------        ------ 
                                   A                   45%           52%
                                   B                   17%           16%
                                   C                   21%           16%
                                   D                   13%           13%
                   

     Additionally, the four customers above accounted for a total of 88% and 97%
     of  accrued  oil  and  gas  sales  as  of  December   31,  1998  and  1997,
     respectively.

11.  SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED)
     ------------------------------------------------------------------------

     The following table sets forth certain  information with respect to the oil
     and gas producing activities of the Company:

<TABLE>

                                                                    YEAR ENDED DECEMBER 31,
                                                                  ---------------------------
                                                                     1998              1997
                                                                     -----             ----
<S>                                                               <C>                <C>

      Costs incurred in oil and gas producing activities:
           Acquisition of unproved properties                     $ 180,000          $    -
           Acquisition of proved properties                         237,537           176,517
                                                                  ---------          --------

                               
                               



                                      F-14

<PAGE>

                        FIELDPOINT PETROLEUM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                    YEAR ENDED DECEMBER 31,
                                                                  ---------------------------

                                         Total costs incurred     $ 417,537          $176,517    
                                                                  =========          ========         
                                        

      Net capitalized costs related to oil and gas producing activities:
           Unproved leasehold costs                               $ 180,000          $    -
                                         
           Proved leasehold costs                                   1,288,036          1,050,499
           Less accumulated depletion and depreciation              (460,268)           (308,175)
                                                                  ----------         -----------
                                Net oil and gas property costs    $1,007,768         $   742,324
                                                                  ==========         ===========

     The following table, based on information prepared by independent petroleum
     engineers,  summarizes  changes  in  the  estimates  of the  Company's  net
     interest in total proved  reserves of crude oil and  condensate and natural
     gas, all of which are domestic reserves:

                                                                       Oil              Gas
                                                                     (Barrels)         (MCF)
                                                                     ---------       ---------
      Balance, January 1, 1997                                       152,514          453,873
      Purchase of minerals in place                                   48,258          151,594
      Revisions of previous estimates                                 17,121         (101,067)
      Production                                                     (25,846)         (67,683)
                                                                   ---------         --------
      Balance, December 31, 1997                                     192,047          436,717

      Purchase of minerals in place                                   40,559          238,020
      Revisions of previous estimates                                (50,742)         (96,663)
      Production                                                     (28,788)         (89,127)
                                                                  ----------         --------
      Balance, December 31, 1998                                     153,076          488,947
                                                                  ==========         ========

</TABLE>

     The foregoing  reserves are all classified as proved  developed at December
     31, 1998 and 1997. Proved oil and gas reserves are the estimated quantities
     of crude oil,  condensate and natural gas which  geological and engineering
     data  demonstrate  with  reasonable  certainty to be  recoverable in future
     years  from  known  reservoirs   under  existing   economic  and  operating
     conditions.  Proved developed oil and gas reserves are reserves that can be
     expected to be recovered through existing wells with existing equipment and
     operating methods. The above estimated net interests in proved reserves are
     based upon  subjective  engineering  judgments  and may be  affected by the
     limitations inherent in such estimation. The process of estimating reserves
     is  subject  to  continual  revision  as  additional   information  becomes
     available  as  a  result  of  drilling,   testing,  reservoir  studies  and
     production history.  There can be no assurance that such estimates will not
     be materially revised in subsequent periods.

12.  STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS (UNAUDITED)
     --------------------------------------------------------------------

     The  standardized  measure of discounted  future net cash flows at December
     31,  1998 and 1997,  relating  to proved oil and gas  reserves is set forth
     below. The assumptions  used to compute the standardized  measure are those
     prescribed by the Financial Accounting Standards Board and, as such, do not
     necessarily  reflect the Company's  expectations  of actual  revenues to be
     derived  from those  reserves  nor their  present  worth.  The  limitations
     inherent in the reserve quantity  estimation process are equally applicable
     to the  standardized  measure  computations  since these  estimates are the
     basis for the valuation process.


                                      F-15


<PAGE>

<TABLE>

<CAPTION>

                        FIELDPOINT PETROLEUM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                        YEAR ENDED DECEMBER 31,
                                                                      ----------------------------
                                                                        1998              1997
                                                                      -----------     ------------
<S>                                                                   <C>             <C>


      Future cash inflows                                             $ 2,386,000     $  4,426,000
      Future development and production costs                          (1,660,000)      (2,447,000)
                                                                      -----------     ------------
      Future net cash flows, before income tax                            726,000        1,979,000
      Future income taxes                                                  (8,000)        (420,000)
                                                                      -----------     ------------  
      Future net cash flows                                               718,000        1,559,000
      10% annual discount                                                (195,000)        (565,000)
                                                                      -----------     ------------
      Standardized measure of discounted future net cash flows        $   523,000     $    994,000
                                                                      ==========      ============



     Future net cash flows were computed  using year-end  prices and costs,  and
     year-end  statutory tax rates  (adjusted for  permanent  differences)  that
     relate to existing  proved oil and gas reserves at year end. The  following
     are  the  principal  sources  of  change  in the  standardized  measure  of
     discounted net cash flows:

                                                                        YEAR ENDED DECEMBER 31,
                                                                     ----------------------------
                                                                        1998              1997
                                                                     -----------     ------------

      Sales of oil and gas produced, net of production costs          $ (168,000)     $ (367,000)
      Purchase of minerals in place                                      192,000         356,000
      Net changes in prices and production costs                        (742,000)        (88,000)
      Revisions and other                                               (153,000)         44,000
      Accretion of discount                                              100,000          97,000
      Net change in income taxes                                         300,000         (20,000)
                                                                     -----------     -----------
           Net change                                                   (471,000)         22,000
      Balance, beginning of year                                         994,000         972,000
                                                                     -----------     -----------
      Balance, end of year                                           $   523,000     $   994,000
                                                                     ===========     ===========
</TABLE>

4.       SUBSEQUENT EVENTS

     Management  is  attempting a private  placement  of 1,466,667  equity units
     during  February  to April  1999.  Each unit  consists  of one share of the
     Company's common stock and one Class A warrant which entitles the holder to
     purchase one share of the Company's  common stock at $1.25 until expiration
     three years from the effective  date of the offering.  Each unit is offered
     for $.75 with a minimum  investment  of 30,000  units.  For the offering to
     break  escrow,  the Company must raise a minimum of  $400,000.  The maximum
     offering is $1,100,000.









    
                                  F-16