UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB

(Mark One)
[X]      Annual report under Section 13 or 15(d) of the Securities Exchange Act
         of 1934 for the fiscal year ended September 30, 2002

[ ]      Transition report under Section 13 or 15(d) of the Securities
         Exchange Act of 1934 (No fee required) for the transition period
         from __________________________ to_____________________________.


     Commission file number: 000-09419
                             ---------

                       MATRIX ENERGY SERVICES CORPORATION
                  ---------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

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      Nevada                                                84-0811647
-------------                                     --------------------------
State or Other Jurisdiction of           (I.R.S. Employer Identification No.)
Incorporation or Organization)

                  5416 Birchman Avenue, Fort Worth, Texas 76107
                -------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (817) 377-4464
                      -------------------------------------
                (Issuer's Telephone Number, Including Area Code)

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

          Title of Each Class   Name of each Exchange on Which Registered
          -------------------   -----------------------------------------
          Common Stock                   None
           ($0.02 Par Value)


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 there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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 total consolidated revenues for the year ended September 30, 2002,
were $108,580.

The aggregate market value of the registrant's Common Stock, $0.02 par value
(the only class of voting stock), held by non-affiliates was approximately
$8,821,235 based on the average closing bid and asked prices for the Common
Stock on January 10, 2003.

At January 10, 2003, the number of shares outstanding of the registrant's Common
Stock, $0.02 par value (the only class of voting stock), was 43,518,036.







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                                TABLE OF CONTENTS

                                                                         PAGE
                                    PART I


Item 1.       Description of Business.................................... 1

Item 2.       Description of Property.................................... 8

Item 3.       Legal Proceedings..........................................10

Item 4.       Submission of Matters to a Vote of Security-Holders........11


                                    PART II

Item 5.       Market for Common Equity and Related Stockholder Matters...10

Item 6.       Management's Discussion and Analysis or Plan of Operation..15

Item 7.       Financial Statements.......................................21

Item 8.       Changes in and Disagreements With Accountants
                on Accounting and Financial Disclosure...................49

                                    PART III

Item 9.       Directors and Executive Officers...........................49

Item 10.      Executive Compensation.....................................50

Item 11.      Security Ownership of Certain Beneficial
                Owners and Management....................................51

Item 12.      Certain Relationships and Related Transactions.............51

Item 13.      Exhibits and Reports on Form 8-K...........................52

















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FORWARD-LOOKING STATEMENTS

     THIS ANNUAL REPORT ON FORM 10-KSB INCLUDES "FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED
(THE"SECURITIES ACT"), AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED (THE "EXCHANGE ACT"), WHICH CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING TERMINOLOGY SUCH AS, "MAY," "BELIEVE," "EXPECT," "INTEND,"
"ANTICIPATE," "ESTIMATE" OR "CONTINUE" OR THE NEGATIVE THEREOF OR OTHER
VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. ALL STATEMENTS OTHER THAN
STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS FORM 10-KSB, INCLUDING WITHOUT
LIMITATION, THE STATEMENTS UNDER "BUSINESS," "PROPERTIES," "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EXPLORATION--LIQUIDITY AND CAPITAL RESOURCES" AND "MARKET FOR THE REGISTRANT'S
COMMON EQUITY AND RELATED SHAREHOLDER MATTERS" LOCATED ELSEWHERE HEREIN
REGARDING THE FINANCIAL POSITION AND LIQUIDITY OF POWER EXPLORATION INC. ("THE
COMPANY"), THE VOLUME OR DISCOUNTED PRESENT VALUE OF ITS OIL AND NATURAL GAS
RESERVES, ITS ABILITY TO SERVICE ITS INDEBTEDNESS, ITS STRATEGIC PLANS INCLUDING
ITS ABILITY TO LOCATE AND COMPLETE ACQUISITIONS OF OIL AND NATURAL GAS ASSETS,
ITS ABILITY TO LIST ITS STOCK ON THE OVER THE COUNTER ELECTRONIC BULLETIN BOARD
(OTC-EBB) AND OTHER MATTERS, ARE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE
COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING
STATEMENTS ARE REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL
PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS WITH RESPECT TO ANY SUCH
FORWARD-LOOKING STATEMENTS, INCLUDING CERTAIN RISKS AND UNCERTAINTIES THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S EXPECTATIONS
("CAUTIONARY STATEMENTS") ARE DISCLOSED IN THIS FORM 10-KSB, INCLUDING, WITHOUT
LIMITATION, IN CONJUNCTION WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS
FORM 10-KSB. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS HEREIN INCLUDE, BUT ARE
NOT LIMITED TO, THE TIMING AND EXTENT OF CHANGES IN COMMODITY PRICES FOR OIL AND
NATURAL GAS, THE NEED TO DEVELOP AND REPLACE RESERVES, ENVIRONMENTAL RISKS,
DRILLING AND OPERATING RISKS, RISKS RELATED TO EXPLORATION AND DEVELOPMENT,
UNCERTAINTIES ABOUT THE ESTIMATES OF RESERVES, COMPETITION, GOVERNMENT
REGULATION AND THE ABILITY OF THE COMPANY TO MEET ITS STATED BUSINESS GOALS. ALL
SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE
COMPANY OR PERSONS ACTING ON ITS BEHALF ARE EXPRESSLY QUALIFIED IN THEIR
ENTIRETY BY THE CAUTIONARY STATEMENTS.


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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Business Development

As used herein, the term "Company" refers to Matrix Energy Services Corporation
(formerly Power Exploration, Inc.), a Nevada corporation, and its subsidiaries
and predecessors, unless the context indicates otherwise. Originally
incorporated on October 31, 1979 in Colorado as Imperial Energy Corp., the
Company adopted its present name in May of 2002. During its history, the Company
has changed its name several times. At different times the Company has been
known as Imperial Energy Corp., Funscape Corp., Oil Retrieval Systems, Inc.,
Titan Energy Corp., Inc. and Power Exploration, Inc. Current management obtained
controlling ownership of the Company in October of 1999. The Company changed its
domicile to Nevada on May 31, 1998 through a merger of Titan Energy Corp., Inc.,
a Colorado Corporation, with a Nevada corporation bearing the name Power
Exploration, Inc.

The Company, along with its wholly owned subsidiaries, is a developmental
resource company engaged in oil and gas exploration. In addition to exploration
and development of new properties, the Company redevelops currently producing
oil and gas fields.

Business of the Issuer

Oil and natural gas are the principal products currently produced by the
Company. The Company does not refine or process the oil and natural gas that it
produces. The Company sells the oil it produces under short-term contracts at
market prices in the areas in which the producing properties are located,
generally at F.O.B. field prices posted by the principal purchaser of oil in
such areas.

The Company focuses its exploration efforts on its significant holdings in
Texas. The Company is redeveloping existing fields in and around Corsicana,
Texas and other areas of the region where fields have been partially depleted by
conventional production methods, but where significant, proven reserves of oil
and gas still remain. These fields can become commercially viable and provide
long-term revenue streams utilizing the latest technology.

Recovery methods employed by the Company have yielded positive results in recent
application tests. The first process involves the use of a controlled,
under-balanced horizontal drilling technique in retrieving secondary production
from fields whose depletion curves have flattened. This process has been used
extensively in the higher-pressure environments, like the Austin-Chalk, however
it has not been widely applied to shallow depth, pressure depleted reservoirs.

A supplemental process to the horizontal drilling methods described above is the
use of an alkaline-surfactant aided polymer flood. Water floods have been the
predominate method for retrieving oil from partially depleted fields. A polymer
flood builds a wall, which coupled with the alkaline-surfactant, helps "push"
oil from the reservoir into the well bore. The spacing and permeability
characteristics of the Company's Corsicana field are prime candidates for this
process. The presence of the horizontal well creates a larger well bore in which
fluid (oil) can enter and can increase production ten fold to that of a vertical
well.

On May 16, 1997 the Company acquired Oil Retrieval Systems, Inc. (now Power
Drilling Services, Inc.) and its portable swabbing technology, assets and
liabilities from Rife Oil Properties, Inc. In September of 2000, the Company
discontinued the operations of its ORS unit due to a lack of operational
funding.

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On June 17, 1997 the Company acquired 100% of the issued and outstanding shares
of Oil Seeps, Inc. (now Power Operating, Inc.), a Texas Corporation. Due to its
lack of capital for exploration and drilling, Oil Seeps ceased operations in
1999.

On June 21, 2002, the Company purchased 2747.95 acres of mineral leases from J.
Rags Properties, LLC for 2,000,000 shares of newly issued shares of the
Company's common stock, restricted pursuant to Rule 144 of the Securities Act of
1933, valued at $1.00 per share. The mineral leases were originally sold by the
US Bureau of Land Management on Oct. 17, 2001 at public auction. The mineral
leases acquired by the Company are divided into 11 parcels and are all located
in the LBJ National Grasslands in northern Wise County, Texas. All leases are
for a term of 10 years with an effective date of 12-1-01. All of the mineral
leases are within the known boundaries of the Barnett Shale gas play with no
depth restrictions.

On August 6, 2002, the Company signed a Letter of Intent with TBX Resources,
Inc. and JADA Mineral Trust to sell an undivided 83.3333% participation in the
Company's BLM mineral leases. TBX and JADA would provide drilling funds for the
development drilling of approximately 70 wells on the BLM mineral leases
commencing in the 1st quarter of 2003.

As of this filing, no drilling operations have commenced.

With respect to its drilling operations, the Company plans to concentrate on
lower risk development-type properties generally consisting of drilling in
reservoirs from which production is or formerly was being obtained while also
drilling some wildcat and developmental wells. The drilling of development wells
is subject to the normal risk of dry holes or a failure to produce oil and
natural gas in commercial quantities. The degree of risk varies depending, among
other things, on the distance between the well and the nearest producing well,
other available geological information and the geological features of the area.
All drilling activities are subject to the risk of encountering unusual or
unexpected formations and pressures and other conditions that may result in
financial losses or liabilities to third parties or governmental entities, many
of which may not be covered by insurance. The number and type of wells drilled
by the Company will vary depending on the amount of funds available for
drilling, the cost of each well, the size of the fractional working interests
acquired by the Company in each well and the estimated recoverable reserves
attributable to each well.

Because of the Company's focus on the acquisition and development of new and
currently producing oil and gas properties, the Company will continue to seek
acquisition possibilities.

As of September 30, 2002, the Company employed 5 persons all of whom are engaged
in office and administrative activities.

Exploration and Development Activities

Historically, the Company has financed its exploration and development
expenditures primarily through bank borrowing, equity capital from private sales
of stock, and promoted funds from industry partners. With respect to its
acquisition activities, the Company intends to shift its emphasis to smaller
scale acquisitions of producing properties with additional development and
exploration potential. Initially, the Company plans to use a combination of debt
and equity financing to fund these smaller acquisitions.

The Company made no exploration and development expenditures during the fiscal
years ended September 30, 2001, and 2002, respectively. The Company made net
lease acquisitions of $2,000,000 for proved and unproved properties during the
fiscal year-ended September 30, 2002. Total lease acquisition for both proved
and unproved properties was zero during the fiscal year ended September 30,

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2001. The Company's ability to continue to fund its exploration and development
activities depends upon cash flow and its ability to secure the necessary
financing for such activities.

Products, Markets and Revenues

Oil and natural gas are the principal products currently produced by the
Company. The Company does not refine or process the oil and natural gas that it
produces. The Company sells the oil it produces under short-term contracts at
market prices in the areas in which the producing properties are located,
generally at F.O.B. field prices posted by the principal purchaser of oil in
such areas.

The availability of a ready market for oil and natural gas and the prices of oil
and natural gas are dependent upon a number of factors that are beyond the
control of the Company. These factors include, among other things, the level of
domestic production and economic activity generally, the availability of
imported oil and natural gas, actions taken by foreign oil producing nations,
the availability of natural gas pipelines with adequate capacity and other
transportation facilities, the availability and marketing of other competitive
fuels, fluctuating and seasonal demand for oil, natural gas and refined products
and the extent of governmental regulation and taxation (under both present and
future legislation) of the production, refining, transportation, pricing, use
and allocation of oil, natural gas, refined products and substitute fuels.
Accordingly, in view of the many uncertainties affecting the supply and demand
for oil, natural gas and refined petroleum products, it is not possible to
predict accurately the prices or marketability of the oil and natural gas from
any producing well in which the Company has or may acquire an interest.

Oil prices have been subject to significant fluctuations over the past decade.
Levels of production maintained by the Organization of Petroleum Exporting
Countries ("OPEC") member nations and other major oil producing countries are
expected to continue to be a major determinant of oil price movements in the
future. As a result, future oil price movements cannot be predicted with any
certainty. Similarly, during the past several years, the market price for
natural gas has been subject to significant fluctuations on a monthly basis as
well as from year to year. These frequent changes in the market price make it
impossible for the Company to predict natural gas price movements with any
certainty.

The Company cannot provide assurance that it will be able to market all oil or
natural gas that the Company produces or, if such oil or natural gas can be
marketed, that favorable price and contractual terms can be negotiated. Changes
in oil and natural gas prices may significantly affect the revenues and cash
flow of the Company and the value of its oil and natural gas properties.
Further, significant declines in the prices of oil and natural gas may have a
material adverse effect on the business and financial condition of the Company.
(See "Management's Discussion and Analysis").

In certain areas in which the Company engages in oil and natural gas production
activities, the supply of oil and natural gas available for delivery from time
to time exceeds the demand. During such times, companies purchasing oil and
natural gas in such areas reduce the amount of oil and natural gas that they
will purchase or "take." If buyers cannot be readily located for newly
discovered oil and natural gas reserves, newly completed oil and natural gas
wells may be shut-in for various periods of time. As a result, the over-supply
of oil and natural gas in certain areas may cause the Company to experience
"take" problems or may adversely affect the Company's ability to obtain
contracts to market oil and natural gas discovered in wells in which the Company
owns an interest.


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Competition

The oil and natural gas industry is highly competitive. The Company encounters
strong competition from other independent operators and from major oil companies
in acquiring properties, in contracting for drilling equipment and in securing
trained personnel. Many of these competitors have financial resources and staffs
substantially larger than those available to the Company. Therefore, competitors
may be able to pay more for desirable leases and to evaluate, bid for and
purchase a greater number of properties or prospects than the financial or
personnel resources of the Company will permit.

Exploration and production of oil and natural gas is also affected by
competition for drilling rigs and the availability of tubular goods and certain
other equipment. While the oil and natural gas industry has experienced
shortages of drilling rigs and equipment, pipe and personnel in the past, the
Company is not presently experiencing any shortages and does not foresee any
such shortages in the near future. the Company is unable to predict how long
current market conditions will continue.

Competition for attractive oil and natural gas producing properties, undeveloped
leases and drilling rights is also strong, and the Company cannot provide
assurance that it will be able to compete satisfactorily in the acquisition of
such properties. Many major oil companies have publicly indicated their
decisions to concentrate on overseas activities and have been actively marketing
certain of their existing producing properties for sale to independent
producers. There can be no assurance that the Company will be successful in
acquiring any such properties.

Regulation

The Company's operations are affected from time to time in varying degrees by
political developments and federal and state laws and regulations. In
particular, oil and natural gas production, operations and economics are or have
been affected by price controls, taxes and other laws relating to the oil and
natural gas industry, by changes in such laws and by changes in administrative
regulations. The Company cannot predict how existing laws and regulations may be
interpreted by enforcement agencies or court rulings, whether additional laws
and regulations will be adopted, or the effect such changes may have on its
business or financial condition. Matters subject to regulation include discharge
permits for drilling operations, drilling and abandonment bonds or other
financial responsibility requirements, reports concerning operations, the
spacing of wells, unitization and pooling of properties, and taxation. There can
be no assurance that new laws or regulations, or modifications of or new
interpretations of existing laws and regulations, will not increase
substantially the cost of compliance or otherwise adversely affect the Company's
oil and natural gas operations and financial condition or that material
indemnity claims will not arise against the Company with respect to properties
acquired by or from the Company.

The Company's operations are subject to numerous laws and regulations governing
the discharge of materials into the environment or otherwise relating to
environmental protection. These laws and regulations require the acquisition of
a permit before drilling commences, restrict the types, quantities and
concentration of various substances that can be released into the environment in
connection with drilling and production activities, limit or prohibit drilling
activities on certain lands lying within wilderness, wetlands and other
protected areas, and impose substantial liabilities for pollution which might
result from the Company's operations. Moreover, the recent trend toward stricter
standards in environmental legislation and regulation is likely to continue.

For instance, legislation has been proposed in Congress from time to time that
would reclassify certain crude oil and natural gas exploration and production
wastes as "hazardous wastes" which would make the reclassified wastes subject to
much more stringent handling, disposal and clean-up requirements. If such

7

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legislation were to be enacted, it could have a significant impact on the
operating costs of the Company, as well as the oil and natural gas industry in
general. Initiatives to further regulate the disposal of crude oil and natural
gas wastes are also pending in certain states, and these various initiatives
could have a similar impact on the Company. The Company could incur substantial
costs to comply with environmental laws and regulations. In addition to
compliance costs, government entities and other third parties may assert
substantial liabilities against owners and operators of oil and natural gas
properties for oil spills, discharge of hazardous materials, remediation and
clean-up costs and other environmental damages, including damages caused by
previous property owners. As a result, substantial liabilities to third parties
or governmental entities may be incurred, the payment of which could reduce or
eliminate the funds available for project investment or result in loss of the
Company's properties.

Although the Company maintains insurance coverage it considers to be customary
in the industry, it is not fully insured against certain of these risks, either
because such insurance is not available or because of high premium costs.
Accordingly, the Company may be subject to liability or may lose substantial
portions of properties due to hazards that cannot be insured against or have not
been insured against due to prohibitive premium costs or for other reasons. The
imposition of any such liabilities on the Company could have a material adverse
effect on the Company's financial condition and results of operations.

The Oil Pollution Act of 1990 ("OPA") imposes a variety of regulations on
"responsible parties" related to the prevention of oil spills. The
implementation of new, or the modification of existing, environmental laws or
regulations, including regulations promulgated pursuant to the Oil Pollution Act
of 1990, could have a material adverse impact on the Company. While the Company
does not anticipate incurring material costs in connection with environmental
compliance and remediation, it cannot guarantee that material costs will not be
incurred.

Legislation affecting the oil and natural gas industry is under constant review
for amendment or expansion, frequently increasing the regulatory burden. Also,
numerous departments and agencies, both federal and state, are authorized by
statute to issue and have issued rules and regulations binding on the oil and
natural gas industry and its individual members, compliance with which is often
difficult and costly and certain of which carry substantial penalties for the
failure to comply. The Company cannot predict how existing regulations may be
interpreted by enforcement agencies or the courts, nor whether amendments or
additional regulations will be adopted, nor what effect such interpretations and
changes may have on the Company's business or financial condition.

Historically, interstate pipeline companies generally acted as wholesale
merchants by purchasing natural gas from producers and reselling the natural gas
to local distribution companies and large end users. Commencing in late 1985,
the Federal Energy Regulatory Commission (the "FERC") issued a series of orders
that have had a major impact on interstate natural gas pipeline operations,
services, and rates, and thus have significantly altered the marketing and price
of natural gas. The FERC's key rule making action, Order No. 636 ("Order 636"),
issued in April 1992, required each interstate pipeline to, among other things,
"unbundle" its traditional bundled sales services and create and make available
on an open and nondiscriminatory basis numerous constituent services (such as
gathering services, storage services, firm and interruptible transportation
services, and standby sales and natural gas balancing services), and to adopt a
new rate making methodology to determine appropriate rates for those services.

To the extent the pipeline company or its sales affiliate makes natural gas
sales as a merchant in the future, it does so pursuant to private contracts in
direct competition with all other sellers, such as the Company; however,
pipeline companies and their affiliates were not required to remain "merchants"
of natural gas, and most of the interstate pipeline companies have become
"transporters only." In subsequent orders, the FERC largely affirmed the major
features of Order 636 and denied a stay of the implementation of the new rules

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pending judicial review. By the end of 1994, the FERC had concluded the Order
636 restructuring proceedings, and, in general, accepted rate filings
implementing Order 636 on every major interstate pipeline. However, even through
the implementation of Order 636 on individual interstate pipelines is
essentially complete, many of the individual pipeline restructuring proceedings,
as well as Order 636 itself and the regulations promulgated thereunder, are
subject to pending appellate review and could possibly be changed as a result of
future court orders.

The Company cannot predict whether the FERC's orders will be affirmed on appeal
or what the effects will be on its business. In recent years the FERC also has
pursued a number of other important policy initiatives which could significantly
affect the marketing of natural gas. Some of the more notable of these
regulatory initiatives include (i) a series of orders in individual pipeline
proceedings articulating a policy of generally approving the voluntary
divestiture of interstate pipeline owned gathering facilities by interstate
pipelines to their affiliates (the so-called "spin down" of previously regulated
gathering facilities to the pipeline's nonregulated affiliate), (ii) the
completion of a rule making involving the regulation of pipelines with marketing
affiliates under Order No. 497, (iii) the FERC's ongoing efforts to promulgate
standards for pipeline electronic bulletin boards and electronic data exchange,
(iv) a generic inquiry into the pricing of interstate pipeline capacity, (v)
efforts to refine the FERC's regulations controlling operation of the secondary
market for released pipeline capacity, and (vi) a policy statement regarding
market based rates and other non-cost-based rates for interstate pipeline
transmission and storage capacity.

Several of these initiatives are intended to enhance competition in natural gas
markets, although some, such as "spin downs," may have the adverse effect of
increasing the cost of doing business on some in the industry as a result of the
monopolization of those facilities by their new, unregulated owners. The FERC
has attempted to address some of these concerns in its orders authorizing such
"spin downs," but it remains to be seen what effect these activities will have
on access to markets and the cost to do business. As to all of these recent FERC
initiatives, the ongoing, or in some instances, preliminary evolving nature of
these regulatory initiatives makes it impossible at this time to predict their
ultimate impact on the Company's business.

The federal government may propose tax initiatives that affect the oil and
natural gas industry, including the Company. Due to the preliminary nature of
these proposals, the Company is unable to determine what effect, if any, the
proposals would have on product demand or the Company's results of operations.

The various states in which the Company conducts or may conduct activities
regulate the drilling, operation and production of oil and natural gas wells,
such as the method of developing new fields, spacing of wells, the prevention
and clean-up of pollution, and maximum daily production allowables based on
market demand and conservation considerations.

The Company's exploration, development and production of oil and gas, including
its operation of saltwater injection and disposal wells, are subject to various
federal, state and local environmental laws and regulations. Such laws and
regulations can increase the costs of planning, designing, installing and
operating oil and gas wells. The Company's domestic activities are subject to a
variety of environmental laws and regulations, including, but not limited to,
the Oil Pollution Act of 1990 ("OPA"), the Clean Water Act ("CWA"), the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
the Resource Conservation and Recovery Act ("RCRA"), the Clean Air Act ("CAA")
and the Safe Drinking Water Act ("SDWA"), as well as state regulations
promulgated under comparable state statutes.

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The Company also is subject to regulations governing the handling,
transportation, storage and disposal of naturally occurring radioactive
materials that are found in its oil and gas operations. Civil and criminal fines
and penalties may be imposed for non-compliance with these environmental laws
and regulations. Additionally, these laws and regulations require the
acquisition of permits or other governmental authorizations before undertaking
certain activities, limit or prohibit other activities because of protected
areas or species and impose substantial liabilities for cleanup of pollution.

Under the OPA, a release of oil into water or other areas designated by the
statue could result in the Company being held responsible for the costs of
re-mediating such a release, certain OPA specified damages and natural resource
damages. The extent of that liability could be extensive, as set forth in the
statute, depending on the nature of the release. A release of oil in harmful
quantities or other materials into water or other specified areas could also
result in the Company being held responsible under the CWA for the cost of
remediation, and civil and criminal fines and penalties.

CERCLA and comparable state statutes, also known as "Superfund" laws, can impose
joint and several and retroactive liability, without regard to fault or the
legality of the original conduct, on certain classes of persons for the release
of a "hazardous substance" into the environment. In practice, cleanup costs are
usually allocated among various responsible parties. Potentially liable parties
include site owners or operators, past owners or operators under certain
conditions and entities that arrange for the disposal or treatment of, or
transport hazardous substances found at the site. Although CERCLA, as amended,
currently exempts petroleum, including, but not limited to, crude oil, gas and
natural gas liquids from the definition of hazardous substance, the Company's
operations may involve the use or handling of other materials that may be
classified as hazardous substances under CERCLA. Furthermore, there can be no
assurance that the exemption will be preserved in future amendments of the act,
if any.

RCRA and comparable state and local requirements impose standards for the
management, including treatment, storage and disposal of both hazardous and
nonhazardous solid wastes. The Company generates hazardous and nonhazardous
solid waste in connection with its routine operations. From time to time,
proposals have been made that would reclassify certain oil and gas wastes,
including wastes generated during pipeline, drilling and production operations,
as "hazardous wastes" under RCRA which would make such solid wastes subject to
must more stringent handling, transportation, storage, disposal and clean-up
requirements. This development could have a significant impact on the Company's
operating costs. While state laws vary on this issue, state initiatives to
further regulate oil and gas wastes could have a similar impact.

Because previous owners and operators have conducted oil and gas exploration and
production, and possibly other activities, at some of the Company's properties,
materials from these operations remain on some of the properties and in some
instances require remediation. In addition, the Company has agreed to indemnify
Sellers of producing properties from whom the Company has acquired reserves
against certain liabilities for environmental claims associated with such
properties. While the Company does not believe the costs to be incurred by the
Company for compliance and re-mediating previously or currently owned or
operated properties will be material, there can be no guarantee that such costs
will not result in material expenditures.

Additionally, in the course of the Company's routine oil and gas operations,
surface spills and leaks, including casing leaks, of oil or other materials
occur, and the Company incurs costs for waste handling and environmental
compliance. Moreover, the Company is able to control directly the operations of
only those wells for which it acts as the operator. Notwithstanding the
Company's lack of control over wells owned by the Company but operated by
others, the failure of the operator to comply with applicable environmental
regulations may, in certain circumstances, be attributable to the Company.

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It is not anticipated that the Company will be required in the near future to
expend amounts that are material in relation to its total capital expenditures
program by reason of environmental laws and regulations, but inasmuch as such
laws and regulations are frequently changed, the Company is unable to predict
the ultimate cost of compliance. There can be no assurance that more stringent
laws and regulations protecting the environment will not be adopted or that the
Company will not otherwise incur material expenses in connection with
environmental laws and regulations in the future.

Proposed Legislation

In the past, Congress has been very active in the area of natural gas
regulation. Legislative proposals are pending in various states which, if
enacted, could significantly affect the petroleum industry. The company cannot
predict which proposals, if any, may actually be enacted by Congress or any of
the state legislatures, and what impact, if any, such proposals may have on the
Company's operations.

ITEM 2.  DESCRIPTION OF PROPERTIES

Facilities

The Company leases approximately 2,500 square feet of office space in Fort
Worth, Texas, for its corporate offices. The month-to month lease requires a
monthly rental payment of $3,325.00. The Company considers this space adequate
for its present needs.

General Description of Oil and Gas Properties

The Company has leasehold interests in the Corsicana Field, located in South
Central Texas. The Corsicana Field is comprised of 875 existing wells on 67
leases of which the Company has a leasehold interest of approximately 8,000
acres in the underground minerals. Of these wells, there were only 215 active
wells as of September 30, 2002. Of the 215 active wells, not all are regularly
producing wells.

Corsicana Field

On June 11, 1997, the Company acquired 650 oil wells, each approximately 800' to
1000' deep, situated on 4,500 acres of leases in the Corsicana Field, located in
Corsicana, Texas from Rife Oil Properties for 20,000 shares of restricted common
stock and a promissory note for $1,300,000, bearing 6% interest per annum and
due on November 11, 1997. The note was secured by 10,000 shares of newly-issued
common stock and held by an attorney as Trustee. The note for $1,300,000 plus
$43,381 in accrued interest was satisfied on December 15, 1997, by agreement of
the parties, with the shares of restricted common stock, which were held in
escrow. All of the wells are approximately 800 ft. to 1,000 ft. deep with 84.5
million gross barrels of oil in place. The Company has split the field into
small AMI's (Area of Mutual Interest) in order to facilitate fund raising for
the development of the field. All of these leases are production leases that
will continue in perpetuity so long as oil or gas is being produced on the
property subject to the lease. So long as the Company continues to produce oil
or gas from the leases in the Corsicana field, the leases will not expire.

Then on December 9, 1999, the Company issued 240,000 shares of its common stock
to acquire an additional 3,500 acres of leases in the Corsicana Fiele consisting
of 32 leases including 240 producing oil wells and 39 injection wells.

A reserve study was performed by Ultra Engineering & Consulting of Houston,
Texas. The study, which was performed as of September 30, 2001, estimated net
reserves of 16,381,058 recoverable barrels of oil. The value of future cash
flows, discounted at 10% to present value, was estimated to be $57,944,349. At
current commodity prices, the estimated future cash flow (not discounted) is
$206 million.


11
<PAGE>

Production from the Corsicana Field has a virtually flat decline curve, thereby
holding the leases for the foreseeable future. The leases carry an average net
revenue interest of 80%.

Due to the Company's inability to raise capital sufficient to develop its proved
oil and gas reserves in the Corsicana Field, no reserve report was prepared for
the year ending September 30, 2002. For the year ending September 30, 2002 and
2001, less than an average of 6,400 barrels of oil were produced annually. This
lack of production or potential production led to the Company suffering an
impairment loss in its proved oil and gas properties in the amount of $7,856,890
in 2001. This impairment loss lowers the carrying value of the leases to
management's estimation of the value of the leases if a sale was made to an
unrelated third party in an arms length transaction. No additional impairment
was made as of September 30, 2002.

On June 21, 2002, the Company purchased 2747.95 acres of mineral leases from J.
Rags Properties, LLC for 2,000,000 shares of newly issued shares of the
Company's common stock, restricted pursuant to Rule 144 of the Securities Act of
1933, valued at $1.00 per share. The mineral leases were originally sold by the
US Bureau of Land Management on Oct. 17, 2001 at public auction. The mineral
leases acquired by the Company are divided into 11 parcels and are all located
in the LBJ National Grasslands in northern Wise County, Texas. All leases are
for a term of 10 years with an effective date of 12-1-01. All of the mineral
leases are within the known boundaries of the Barnett Shale gas play with no
depth restrictions.

On August 6, 2002, the Company signed a Letter of Intent with TBX Resources,
Inc. and JADA Mineral Trust to sell an undivided 83.3333% participation in the
Company's BLM mineral leases. TBX and JADA would provide drilling funds for the
development drilling of approximately 70 wells on the BLM mineral leases
commencing in the 1st quarter of 2003.

As of this filing, no drilling operations have commenced.

Oil and Gas Reserves

As of September 30, 2002, the Company's oil and natural gas interests were
located in the State of Texas. The Company has no reserves offshore.

The following table summarizes the Company's reserves on September 30, 2000, and
September 30, 2001 and was prepared in accordance with the rules and regulations
of the Commission. As noted above, no reserve study was done in 2002.



                                                         Oil (mbbls)
                                                         -----
                                                         2000           2001
                                                         ----           ----
           Proved Developed and Undeveloped Reserves

          Beginning of Year                              18,473.3      16,384.6
          Purchases of Minerals in Place
          Revisions of previous estimates                (2,078.7)          3.7
          Production                                        (10)           (7.2)
          End of Year                                    16,384.6      16,381.1
          Proved Developed Reserves:End of Year             324           320

12
<PAGE>

Operating Activities

Where possible, the Company prefers to have Rife Oil Properties, Inc. act as
operator of the oil and natural gas properties and prospects in which it owns an
interest. M. O. Rife III, a Director of the Company, is the President of Rife
Oil Properties, Inc. Mr. Rife, through ownership in MOROIL, owns 15,740,000
shares or 36% of the Company. The operator of an oil and natural gas property
supervises production, maintains production records, employs field personnel and
performs other functions required in the production and administration of such
property. The fees for such services customarily vary from well to well,
depending on the nature, depth and location of the well being operated.
Generally, the operator of an oil and natural gas prospect is determined by such
factors as the size of the working interest held by a participant in the
prospect, a participant's knowledge and experience in the geological area in
which the prospect is located and geographical considerations. Independent
drilling contractors drill the Company's wells.

Title to Properties

As is common industry practice, little or no investigation of title is made at
the time of acquisition of undeveloped properties, other than a preliminary
review of local mineral records. Title investigations are made, and in most
cases, a title opinion of local counsel is obtained before commencement of
drilling operations. The Company believes that the methods it utilizes for
investigating title prior to the acquisition of any properties are consistent
with practices customary in the oil and gas industry and that such practices are
adequately designed to enable the Company to acquire good title to such
properties. Some title risks, however, cannot be avoided, despite the use of
customary industry practices.

The Company's leased properties are generally subject to customary royalty and
overriding royalty interests, liens incident to operating agreements, liens for
current taxes and other burdens and minor encumbrances, easements and
restrictions, and may be mortgaged to secure indebtedness of the Company. The
Company believes that none of these burdens either materially detract from the
value of such properties or materially interfere with their use in the operation
of the Company's business.

Sales of producing properties and underdeveloped Acreage

The Company evaluates properties on an ongoing basis to determine the economic
viability of the property and whether such property enhances the objectives of
the Company. During the course of normal business, the Company may dispose of
producing properties and undeveloped acreage if the Company believes that such
disposition is in its best interests.

ITEM 3.  LEGAL PROCEEDINGS

There are no material pending cases involving the Company:

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

During the fiscal year ended September 30, 2002, no matters were submitted by
the Company to a vote of its shareholders.

13
<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
        MATTERS


Market Information

The Company's Common Stock is currently quoted on the Electronic Bulletin Board
under the symbol "MXES," but there is limited trading in the Common Stock. The
following table sets forth the high and low bid prices from October 1, 2000
through September 30, 2002, based upon quotations periodically published on the
OTC. All price quotations represent prices between dealers, without retail
mark-ups, mark-downs or commissions and may not represent actual transactions.

                                                        HIGH          LOW

Fiscal Year ended September 30, 2001
     October, November, & December, 2000                $ 0.50        $ 0.14
     January, February, & March, 2001                   $ 0.187       $ 0.08
     April, May, & June, 2001                           $ 0.25        $ 0.10
     July, August, & September, 2001                    $ 0.09        $ 0.029

Fiscal Year ended September 30, 2002
     October, November, & December, 2001                $ 0.75        $ 0.0
     January, February, & March, 2002                   $10.50        $ 2.625
     April, May, & June, 2002                           $ 6.75        $ 1.00
     July, August, & September, 2002                    $ 2.625       $ 0.3125


The bid price for the Common Stock was $0.43 on January 10, 2003. The above
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commissions and may not necessarily represent actual transactions.


14
<PAGE>


Shareholders

According to the records of the Company's transfer agent, there were 2,238
holders of record who held 43,518,036 shares of the Company's Common Stock on
September 30, 2002 (including nominee holders such as banks and brokerage firms
who hold shares for beneficial holders).1

Dividends

The Company has not paid any cash dividends on its Common Stock, and does not
anticipate paying cash dividends on its Common Stock in the next year. The
Company anticipates that any income generated in the foreseeable future will be
retained for the development and expansion of its business. Future dividend
policy is subject to the discretion of the Board of Directors and will depend
upon a number of factors, including future earnings, debt service, capital
requirements, business conditions, the financial condition of the Company and
other factors that the Board of Directors deems relevant.

Recent Sales of Unregistered Securities

The following is a list of all securities sold by the Company within the period
covered by this report, including, where applicable, the identity of the person
who purchased the securities, title of the securities, and the date sold.

On March 31, 2002, the Company issued 9,000,000 shares of its common stock for
consulting services valued at $450,000 to Benchmark Equity Group, Inc.

On March 31, 2002, the Company issued 25,500,000 shares of its common stock for
the settlement of related party debts at a value of $1,275,000.

On March 31, 2002, the Company issued 1,250,000 shares of its common stock for
consulting services valued at $62,500 to Nepal Consulting, Inc.

On June 7, 2002, the Company issued 1,800,000 shares of its common stock for
consulting services valued at $1,122,300 to Allen Wolfson.

On June 12, 2002, the Company issued 1,500,000 shares of its common stock for
consulting services valued at $1,623,650 to Howard A. Pence.

On June 21, 2002, the Company issued 2,000,000 shares of its common stock for
the acquisition of oil and gas propertiew for a value of $2,000,000.

15
<PAGE>

In July 2002, the Company acquired 10,000,000 shares of its common stock through
the issuance of a note payable to MOROIL, Inc., a company owned by M.O. Rife,
III, Director and Chairman of the Board of the Company, in the amount of
$286,366. These shares are being held in escrow pursuant to an offshore stock
purchase agreement with First Chartered Capital Corporation, Inc., a British
Virgin Islands Corporation. As of September 30, 2002, 642,032 shares of the
10,000,000 treasury shares had been sold for $210,635. From October 1, 2002
through January 10, 2003, the balance of the treasury shares (9,357,968 shares)
plus an additional 2,924,716 shares of the Company's common shares had been sold
for $505,172 for a total of 12,924,716 shares.

On August 19, 2002 the Company issued 2,000,000 shares of its common stock as an
investment in Career Worth, Inc. for a value of $5,020,000.

On September 5, 2002, the Company issued 45,000 shares of its common stock for
fees relating to a bridge financing valued at $9,000.

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

The Company's operations consist primarily of exploration and development of oil
and gas properties, and redevelopment of currently producing oil and gas fields.
While oil and natural gas are the principal products currently produced by the
Company, the Company does not refine or process the oil and natural gas that it
produces. The Company sells the oil it produces under short-term contracts at
market prices in the areas in which the producing properties are located,
generally at F.O.B. field prices posted by the principal purchaser of oil in
such areas.

Results of Operations

Revenues

The Company's oil and gas sales decreased $66,007 or 38%, to $108,580 for the
fiscal year ended September 30, 2002 from $174,587 for the fiscal year ended
September 30, 2001. Revenues from the sales of oil and gas decreased primarily
because of the decrease in production generated from the Corsicana Field.

Costs and Expenses
<TABLE>
<CAPTION>

The Company's general and                     2002              %                2001            %
<S>                                       <C>                 <C>            <C>              <C>
                                          ----------          -------        ------------     -------
administrative expenses increased
$833,079, or 123%, to $1,509,110 for
the fiscal year ended September 30,
2002 from $676,031 for the fiscal year
ended September 30, 2001. The change in
the dollar amount of general and
administrative expenses was due
primarily to increased consulting fees,
which accounted for 73% of all general
and administrative expenses in 2002.
The following summarizes the general
and administrative expenses:

     Consulting Fees                      $1,106,413           73.3          $  80,557          11.9
     Corporate Directors Expense                  -              -                  -             -
     Legal Fees and Settlements                4,010             -               3,042            -
     Salaries and Payroll Taxes              233,120           15.4            386,596          57.2
     Other                                   165,567           11.3            205,836          30.9
                                          ---------           --------        ---------         -----

                                          $1,509,110          100.0%         $ 676,031         100.0%
                                          ==========          ======         =========         =======
</TABLE>

16
<PAGE>

The Company used its common shares as payment to consultants, the fair values of
these shares resulted in extremely large charges to operations in 2002. In 2002,
the Company issued shares of its common stock as payment for $1,106,413 in
services.

The lease operating expenses increased by $7,051, or 3%, to $246,162 in 2002,
compared to $239,111 in 2001. The increase was primarily due to a small increase
in repairs and maintenance costs.

In 2002, the interest expense increased by $554,398, or 1791% to $585,352,
compared to $30,954 in 2001. The increase is primarily the result of issuing
8,500,000 shares of the Company's common stock valued at $.15 in payment of
accounts payable, accrued liabilities, and notes payable to related parties. The
debt settlements were liquidated by issuance of the Company's common stock.

Net Income (Loss)

Net loss for the fiscal year ended September 30, 2002 was $2,330,758, or $.11
per share, compared to a loss of $8,629,157, or $20.49 per share, for the fiscal
year ended September 30, 2001. This $6,298,399 decrease in loss was primarily
the result of the decrease in the write down of the impairment of oil and gas
assets in 2001. Net cash used in operating activities was $0 for the fiscal year
ended September 30, 2001, and $186,337 for the fiscal year ended September 30,
2002.

Liquidity and Capital Resources

The Company's working capital surplus on September 30, 2002 was $1,338,025
compared to a deficit of $1,395,453 on September 30, 2001. This $2,733,478
increase in working capital surplus resulted primarily from the current portion
of prepaid consulting fees (see note 6 of the financial statements), for
services to be rendered through March 2004.

Non Cash Transactions

During the year ended September 30, 2002, the Company issued the following
shares of its common stock:
                                            Shares                Value
                                            ------------          -------------
  Compensation for Consulting Services      13,550,000           $   3,258,450
  Settlement of Related Party Debts         25,500,000               1,275,000
  Acquisition of Oil and Gas Properties      2,000,000               2,000,000
  Investment in Career Worth, Inc.           2,000,000               5,020,000
  Bridge Financing Fee                          45,000                   9,000
                                            ------------          --------------

                                            43,095,000           $  11,562,450
                                            ==========            ============
Long-Term Debt

On September 30, 2002, the Company had no long-term debt. Although 55% of the
Company's assets are comprised of oil and gas properties that are not a current
asset, all of the Company's borrowings have been short term in nature. This has
aggravated the Company's cash position and produced lower measures of financial
performance than would otherwise be possible.

History of Losses

The Company had net losses of $2,330,758 and $8,629,157, for the years ended
September 30, 2002 and September 30, 2001, respectively. The Company may
continue to incur net losses and, to the extent that it remains without
operational funding, such losses may continue.

17
<PAGE>

Need for Additional Financing for Growth

The growth of the Company's business will require substantial capital on a
continuing basis, and there is no assurance that any such required additional
capital will be available on satisfactory terms and conditions, if at all. There
is also no assurance that the Company will not pursue, from time to time,
opportunities to acquire oil and natural gas properties and businesses that may
utilize the capital currently expected to be available for its present
operations. The amount and timing of the Company's future capital requirements,
if any, will depend upon a number of factors, including drilling costs,
transportation costs, equipment costs, marketing expenses, staffing levels and
competitive conditions, and any purchases or dispositions of assets, many of
which are not within the Company's control. Failure to obtain any required
additional financing could materially adversely affect the growth, cash flow and
earnings of the Company. In addition, the Company's pursuit of additional
capital could result in the incurrence of additional debt or potentially
dilutive issuances of additional equity securities.

The Company's ability to meet any future debt service obligations will be
dependent upon the Company's future performance, which will be subject to oil
and natural gas prices, the Company's level of production, general economic
conditions and financial, business and other factors affecting the operations of
the Company, many of which are beyond its control. There can be no assurance
that the Company's future performance will not be adversely affected by such
changes in oil and natural gas prices and/or production nor by such economic
conditions and/or financial, business and other factors. In addition, there can
be no assurance that the Company's business will generate sufficient cash flow
from operations or that future bank credit will be available in an amount to
enable the Company to service its indebtedness or make necessary expenditures.
In such event, the Company would be required to obtain such financing from the
sale of equity securities or other debt financing. There can be no assurance
that any such financing will be available on terms acceptable to the Company.
Should sufficient capital not be available, the Company may not be able to
continue to implement its business strategy.

There is also no assurance that the Company will not pursue, from time to time,
opportunities to acquire oil and natural gas properties and businesses that may
utilize the capital currently expected to be available for its present
operations. The amount and timing of the Company's future capital requirements,
if any, will depend upon a number of factors, including drilling costs,
transportation costs, equipment costs, marketing expenses, staffing levels and
competitive conditions, and any purchases or dispositions of assets, many of
which are not within the Company's control. Failure to obtain any required
additional financing could materially adversely affect the growth, cash flow and
earnings of the Company. In addition, the Company's pursuit of additional
capital could result in the incurrence of additional indebtedness or potentially
dilutive issuances of additional equity securities.

Acquisition Risks

The Company's business strategy includes focused acquisitions of producing oil
and natural gas properties. Any such future acquisitions will require an
assessment of the recoverable reserves, future oil and natural gas prices,
operating costs, potential environmental and other liabilities and other similar
factors. It generally is not feasible to review in detail every individual
property involved in an acquisition. Ordinarily, review efforts are focused on
the higher-valued properties. However, even a detailed review of all properties
and records may not reveal existing or potential problems; nor will it permit
the Company to become sufficiently familiar with the properties to assess fully
their deficiencies and capabilities. Inspections are not always performed on
every well, and potential problems, such as mechanical integrity of equipment
and environmental conditions that may require significant remedial expenditures,
are not necessarily observable even when an inspection is undertaken. Even if

18

<PAGE>
problems are identified, the seller may be unwilling or unable to provide
effective contractual protection against all or part of such problems. There can
be no assurance that oil and natural gas properties acquired by the Company will
be successfully integrated into the Company's operations or will achieve desired
profitability objectives.

Drilling Risks

The Company's drilling involves numerous risks, including the risk that no
commercially productive natural gas or oil reservoirs will be encountered. The
Company must incur significant expenditures for the identification and
acquisition of properties and for the drilling and completion of wells. The cost
of drilling, completing and operating wells is often uncertain, and drilling
operations may be curtailed, delayed or canceled as a result of a variety of
factors, including unexpected drilling conditions, pressure or irregularities in
formations, equipment failures or accidents, weather conditions and shortages or
delays in the delivery of equipment. In addition, any use by the Company of
3-dimensional seismic and other advanced technology requires greater
pre-drilling expenditures than traditional drilling strategies. There can be no
assurance as to the success of the Company's future drilling activities.

Uncertainty of Estimates of Oil and Natural Gas Reserves

Numerous uncertainties are inherent in estimating quantities of proved oil and
natural gas reserves, including many factors beyond the control of the Company.
This Form 10-KSB contains an estimate of the Company's proved oil and natural
gas reserves and the estimated future net cash flows and revenue based upon
reports of the Company's independent petroleum engineers (Ultra Engineering).
Such reports rely upon various assumptions, including assumptions required by
the Securities and Exchange Commission (the "Commission"), as to constant oil
and natural gas prices, drilling and operating expenses, capital expenditures,
taxes and availability of funds and such reports should not be construed as the
current market value of the estimated proved reserves. The process of estimating
oil and natural gas reserves is complex, requiring significant decisions and
assumptions in the evaluation of available geological, engineering and economic
data for each reservoir. As a result, such estimates are inherently an imprecise
evaluation of reserve quantities and future net revenue. Actual future
production, revenue, taxes, development expenditures, operating expenses and
quantities of recoverable oil and natural gas reserves may vary substantially
from those assumed in the estimate. Any significant variance in these
assumptions could materially affect the estimated quantity and value of reserves
set forth in this Form 10-KSB. In addition, the Company's reserves may be
subject to downward or upward revision, based upon production history, results
of future exploration and development, prevailing oil and natural gas prices and
other factors.

Geographic Concentration of Operations

Virtually all of the Company's current operations are located in Texas. Because
of this concentration, any regional events that increase costs or competition,
reduce availability of equipment or supplies, reduce demand or limit production
will impact the Company more adversely than if the Company were geographically
diversified.

Concentration of Production

The Company's existing proved producing oil and natural gas reserves and its
production is located in a single field, which consists of 8,000 acres and
contains 875 wells. Accordingly, to the extent that the Company experiences any
operating difficulties in connection with such wells or that the estimated

19
<PAGE>

proved reserves attributable thereto are less than those that are currently
estimated to exist, the Company could be adversely affected.

Inability to Develop Additional Reserves

The Company's future success as an oil and natural gas producer, as is generally
the case in the industry, depends upon its ability to find, develop and acquire
additional oil and natural gas reserves that are economically recoverable.
Except to the extent that the Company conducts successful development activities
or acquires properties containing proved reserves, the Company's proved reserves
will generally decline as reserves are produced. There can be no assurance that
the Company will be able to locate additional reserves or that the Company will
drill economically productive wells or acquire properties containing proved
reserves.

Certain Industry and Marketing Risks

The Company's operations are subject to the risks and uncertainties associated
with drilling for, producing and transporting of oil and natural gas. The
Company's future ability to market its natural gas and oil production will
depend upon the availability and capacity of natural gas gathering systems and
pipelines and other transportation facilities. Federal and state regulation of
oil and natural gas production and transportation, general economic conditions,
changes in supply and in demand all could materially adversely affect the
Company's ability to market its oil and natural gas production.

Effects of Changing Prices

The future financial condition and results of operations of the Company depend
upon the prices it receives for its oil and natural gas and the costs of
acquiring, developing and producing oil and natural gas. Oil and natural gas
prices have historically been volatile and are subject to fluctuations in
response to changes in supply, market uncertainty and a variety of additional
factors that are also beyond the Company's control. These factors include,
without limitation, the level of domestic production, the availability of
imported oil and natural gas, actions taken by foreign oil and natural gas
producing nations, the availability of transportation systems with adequate
capacity, the availability of competitive fuels, fluctuating and seasonal demand
for natural gas, conservation and the extent of governmental regulation of
production, weather, foreign and domestic government relations, the price of
domestic and imported oil and natural gas, and the overall economic environment.
A substantial or extended decline in oil and/or natural gas prices could have a
material adverse effect on the Company's estimated value of its natural gas and
oil reserves, and on its financial position, results of operations and access to
capital. The Company's ability to maintain or increase its borrowing capacity,
to repay current or future indebtedness and to obtain additional capital on
attractive terms is substantially dependent upon oil and natural gas prices.

The Company uses the full cost method of accounting for its investment in oil
and gas properties. Under the full cost method of accounting, all costs of
acquisition, exploration and development of oil and gas reserves are capitalized
into a "full cost pool" as incurred, and properties in the pool are depleted and
charged to operations using the unit-of-production method based on the ratio of
current production to total proved oil and gas reserves. To the extent that such
capitalized costs (net of accumulated depreciation, depletion and amortization)
less deferred taxes exceed the SEC PV-10 (present value discounted at 10% as
dictated by the SEC) of estimated future net cash flow from proved reserves of
oil and gas, and the lower of cost or fair value of unproved properties after
income tax effects, such excess costs are charged against earnings. Once
incurred, a write-down of oil and gas properties is not reversible at a later
date even if oil or gas prices increase.

20
<PAGE>

Operating Hazards and Uninsured Risks

The Company's operations are subject to the risks inherent in the oil and
natural gas industry, including the risks of fire, explosions, blow-outs, pipe
failure, abnormally pressured formations and environmental accidents such as oil
spills, gas leaks, ruptures or discharges of toxic gases, brine or well fluids
into the environment (including groundwater contamination). The occurrence of
any of these risks could result in substantial losses to the Company due to
injury or loss of life, severe damage to or destruction of property, natural
resources and, equipment, pollution or other environmental damage, clean-up
responsibilities, regulatory investigation and penalties and suspension of
operations. In accordance with customary industry practice, the Company
maintains insurance against some, but not all, of the risks described above.
There can be no assurance that any insurance maintained by the Company will be
adequate to cover any such losses or liabilities. Further, the Company cannot
predict the continued availability of insurance, or availability at commercially
acceptable premium levels. The Company does not carry business interruption
insurance. Losses and liabilities arising from uninsured or under-insured events
could have a material adverse effect on the financial condition and operations
of the Company. From time to time, due primarily to contract terms, pipeline
interruptions or weather conditions, the producing wells in which the Company
owns an interest have been subject to production curtailments. The curtailments
range from production being partially restricted to wells being completely
shut-in. The duration of curtailments varies from a few days to several months.
In most cases the Company is provided only limited notice as to when production
will be curtailed and the duration of such curtailments. The Company is not
currently experiencing any material curtailment on its production.


Inflation and Changing Prices

The impact of inflation, as always, is difficult to assess. In 1997 and through
the first quarter of 1998, the Company has experienced a weakness in prices
received for its oil and natural gas production. In the year 2000, the Company
experienced a significant increase in the prices received for its oil and
natural gas production. The Company cannot anticipate whether the present level
of inflation will remain, however, a sudden increase in inflation and/or an
increase in operating costs or drilling costs coupled with a reversal of current
pricing could have an adverse effect on the operations of the Company.



21
<PAGE>


ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following pages contain the audited financial statements and accompanying
notes as prepared by the Company's independent auditors.



               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                                TABLE OF CONTENTS



                                                                       Page

Report of Independent Certified Public Accountants
   Killman, Murrell & Co., P.C.                                        F-2

Financial Statements

   Consolidated Balance Sheets as of September 30, 2002 and 2001       F-3

   Consolidated Statements of Operations for the
        Years Ended September 30, 2002 and 2001                        F-5

   Consolidated Statements of Stockholders' Equity (Deficit)
        and Comprehensive Loss for the Years Ended
        September 30, 2002 and 2001                                    F-7

   Consolidated Statements of Cash Flows for the Years Ended
        September 30, 2002 and 2001                                    F-8

   Notes to Consolidated Financial Statements                          F-10



















                                       F-1
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders
Matrix Energy Services Corporation and Subsidiaries
(Formerly Power Exploration, Inc. and Subsidiaries)
Fort Worth, Texas

We have audited the accompanying consolidated balance sheets of Matrix Energy
Services Corporation (formerly Power Exploration, Inc.) and Subsidiaries as of
September 30, 2002 and 2001, and the related consolidated statements of
operations, stockholders' equity (deficit) and comprehensive loss, 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Matrix
Energy Services Corporation (formerly Power Exploration, Inc.) and Subsidiaries
as of September 30, 2002 and 2001, and the consolidated results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 9 to the
consolidated financial statements, the Company has suffered recurring losses
from operations and its limited capital resources raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 9. The consolidated financial
statements do not include any adjustments that might result form the outcome of
this uncertainty.

/s/ Killman, Murrell & Co., P.C.
KILLMAN, MURRELL & COMPANY, P.C.
Dallas, Texas
November 21, 2002

                                       F-2


<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                           CONSOLIDATED BALANCE SHEETS

                           SEPTEMBER 30, 2002 AND 2001

                                     ASSETS
<TABLE>
<CAPTION>

                                                                                  2002                   2001
                                                                              -------------          --------
CURRENT ASSETS
<S>                                                                           <C>                    <C>
    Cash                                                                      $     11,077           $          -
    Receivable-Related Parties                                                      16,749                 10,911
    Current Portion of Prepaid Consulting - Note 6                               2,128,044                      -
                                                                              ------------           ------------

            TOTAL CURRENT ASSETS                                                 2,155,870                 10,911
                                                                              ------------           ------------

OIL AND GAS PROPERTIES,
    FULL COST METHOD - Note 13                                                   3,000,000              1,000,000
        Less: Accumulated Depreciation, Depletion and
        Amortization                                                               (53,785)               (42,058)
                                                                              ------------           ------------

            NET OIL AND GAS PROPERTIES                                           2,946,215                957,942
                                                                              ------------           ------------

OFFICE  EQUIPMENT, Net of Accumulated
    Depreciation of $1,269 and $893                                                  3,758                    481
                                                                              ------------           ------------

OTHER ASSETS
    Investments Available-For-Sale - Note 11                                       100,000                      -
    Prepaid Consulting - Net of Current Portion - Note 6                            93,750                      -
    Net Assets of Discontinued Operations - Note 14                                      -                 66,143
    Other                                                                            6,037                  6,037
                                                                              ------------           ------------

            TOTAL OTHER ASSETS                                                     199,787                 72,180
                                                                              ------------           ------------

            TOTAL ASSETS                                                      $  5,305,630           $  1,041,514
                                                                              ============           ============
</TABLE>











                          The accompanying notes are an
            integral part of these consolidated financial statements.
                                   (Continued)

                                       F-3


<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                           CONSOLIDATED BALANCE SHEETS
                                   (Continued)

                           SEPTEMBER 30, 2002 AND 2001

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>

                                                                                  2002                   2001
                                                                              -------------          --------

CURRENT LIABILITIES
<S>                                                                           <C>                    <C>
    Cash Overdraft                                                            $           -          $       5,426
    Accounts Payable and Accrued Expenses                                           169,207                598,697
    Accounts Payable - Related Party                                                121,840                522,241
    Note Payable - Note 2                                                           250,000                250,000
    Notes Payable - Related Party - Note 2                                          276,798                 30,000
                                                                              -------------          -------------

            TOTAL CURRENT LIABILITIES                                               817,845              1,406,364
                                                                              -------------          -------------

COMMITMENTS AND CONTENGENCIES - Note 7                                                    -                      -

STOCKHOLDERS' (DEFICIT) EQUITY - Note 8 Common Stock, $.02 par value,
    50,000,000 Shares Authorized, 43,518,036 and 423,036 Shares Issued
            and Outstanding, respectively                                           870,361                  8,461
    Additional Paid-In Capital                                                   45,262,982             33,753,508
    Retained Deficit                                                            (36,457,577)           (34,126,819)
    Unrealized Loss on Securities
        Available for Sale - Note 11                                             (4,920,000)                     -
    Treasury Stock - 9,357,968 Shares, at Cost - Note 12                           (267,981)                     -
                                                                              -------------          -------------

            TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                  4,487,785               (364,850)
                                                                              -------------          -------------

            TOTAL LIABILITIES AND
                STOCKHOLDERS' EQUITY (DEFICIT)                                $   5,305,630          $   1,041,514
                                                                              =============          =============
</TABLE>











                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                       F-4

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001
<TABLE>
<CAPTION>

                                                                                    2002                   2001
                                                                               ------------           ---------

<S>                                                                            <C>                    <C>
REVENUE - Oil and Gas Sales                                                    $    108,580           $    174,587
                                                                               ------------           ------------

COST OF REVENUE
     Lease Operating                                                                246,162                239,111
     Production Taxes                                                                 5,039                  8,687
     Depreciation, Depletion and Amortization                                        11,727                 14,491
                                                                               ------------           ------------

         TOTAL COST OF REVENUES                                                     262,928                262,289
                                                                               ------------           ------------

            GROSS LOSS                                                             (154,348)               (87,702)
                                                                               ------------           ------------

EXPENSES
     General and Administrative                                                   1,509,110                676,031
     Interest Expense                                                               585,352                 30,954
                                                                               ------------           ------------

         TOTAL EXPENSES                                                           2,094,462                706,985
                                                                               ------------           ------------

           LOSS BEFORE OTHER INCOME
(EXPENSES),INCOME TAXES AND
                 DISCONTINUED OPERATIONS                                         (2,248,810)              (794,687)

OTHER INCOME (EXPENSES)
     Loss on Impairment of Long-Lived Assets - Note 10                                    -             (7,856,890)
     Liability Settlement                                                            39,252                 12,238
                                                                               ------------           ------------

           LOSS BEFORE INCOME TAXES
                 AND DISCONTINUED OPERATIONS                                     (2,209,558)            (8,639,339)

INCOME TAXES                                                                              -                      -
                                                                               ------------           ------------

           NET LOSS FROM CONTINUING
                 OPERATIONS                                                      (2,209,558)            (8,639,339)
                                                                               ------------           ------------
DISCONTINUED OPERATIONS - Note 14
     Operating Income from Discontinued Operations                                        -                 10,182
     Loss on Disposal of Discontinued Operations                                   (121,200)                     -
                                                                               --------------         ------------

         TOTAL DISCONTINUED OPERATIONS                                             (121,200)                10,182
                                                                               -------------          -------------

           NET LOSS                                                            $ (2,330,758)          $ (8,629,157)
                                                                               ==============         =============
</TABLE>

                                   (Continued)

                                       F-5

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Continued)

                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001
<TABLE>
<CAPTION>
<S>                                                                            <C>                    <C>
                                                                                   2002                    2001
                                                                               -------------          ------------

WEIGHTED AVERAGE NUMBER OF
     SHARES OUTSTANDING  (Adjusted for
         2002 Stock Split)                                                       21,730,344                421,131
                                                                                ===========            ===========

NET (LOSS) INCOME PER SHARE:
     Continuing Operations                                                     $       (.10)          $    (20.51)
     Discontinued Operations                                                           (.01)                  .02
                                                                               -------------           -----------

         TOTAL LOSS PER SHARE                                                  $       (.11)          $    (20.49)
                                                                               =============           ==========
</TABLE>





























                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                       F-6


<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   STATEMENT OF STOCKHOLDERS' (DEFICIT) EQUITY
                             AND COMPREHENSIVE LOSS

                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001
<TABLE>
<CAPTION>

                                           Common Stock        Additional                Unrealized
                                   ------------------------
                                     Number of                  Paid-In        Treasury  Loss on       Retained

                                      Shares        Amount        Capital       Shares  Securities     (Deficit)      Total
                                     ---------     -------     -----------  ----------  ---------      -------------   -----------

BALANCE, SEPTEMBER 30,
<S>                                <C>             <C>         <C>          <C>          <C>            <C>            <C>
   2000-As Previously Reported        139,012      $  2,780    $33,671,533  $        -   $      -       $(25,497,662)  $ 8,176,651

   Stock Split, Three Shares
for One Share - June 17, 2002         278,024         5,561         (5,561)          -          -               -             -
                                   ----------      --------    -----------  ----------   ---------      ------------   ---------


BALANCE, SEPTEMBER 30, 2000
     As Restated                      417,036         8,341     33,665,972           -          -        (25,497,662)    8,176,651

   Issuance of Shares for               8,100          162          87,494           -          -               -           87,656
     Services
   Cancellation of Shares
   Previously Issued for               (2,100)         (42)            42            -          -               -             -
     Services
   Net Loss                                 -            -              -            -          -         (8,629,157)   (8,629,157)
                                   ----------      -------     ----------   ----------   ---------      ------------   -----------


BALANCE, SEPTEMBER 30, 2001           423,036         8,461     33,753,508           -          -        (34,126,819)     (364,850)


   Issuance of Shares for          13,595,000       271,900      2,995,550           -          -               -        3,267,450
     Services
   Issuance of Shares for
     Settlement                    25,500,000       510,000        765,000           -          -               -        1,275,000
     Of Debt
  Issuance of Shares for
  Acquisition of                    2,000,000        40,000      1,960,000           -          -               -        2,000,000
  Oil & Gas Property
  Investment in Career Worth,Inc.   2,000,000        40,000      4,980,000           -          -               -        5,020,000
  Purchase of 10,000,000
  Treasury Shares                          -             -              -     (286,366)         -               -         (286,366)

  Sale of 642,032 Treasury Shares          -             -         192,250      18,385          -               -          210,635

   Contribution of Employee
    Compensation                           -             -         616,674          -           -               -          616,674

COMPREHENSIVE LOSS, Net of
     Tax
   Net Loss                                -             -             -            -           -         (2,330,758)   (2,330,758)

   Unrealized Loss on Securities
    Available-for-Sale                     -             -             -            -     (4,920,000)           -       (4,920,000)
   Total Comprehensive Loss                -             -             -            -           -               -       (7,250,758)
                                  ---------       -------      ---------   ----------   ------------    -----------    ------------


BALANCE, SEPTEMBER 30, 2002        43,518,036      $870,361    $45,262,982  $ (267,981)  $(4,920,000)   $(36,457,577)  $ 4,487,785
                                   ==========      ========    ===========  ==========   ============   ============   ============
</TABLE>



                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                       F-7

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                             STATEMENT OF CASH FLOWS

                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001
<TABLE>
<CAPTION>

                                                                                  2002                   2001
                                                                              --------------         --------
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                           <C>                    <C>
     Net (Loss)                                                               $  (2,330,758)         $  (8,629,157)
     Adjustments to Reconcile Net (Loss) to Net Cash
         From Operating Activities
             Interest Expense                                                       553,474                      -
             Depreciation, Depletion and Amortization                                12,103                 14,766
             Issuance of Shares for Services and
                Liability Settlements                                             1,036,656                 87,656
             Loss on Impairment of Long-Lived Assets                                      -              7,856,890
     Changes in Operating Assets and Liabilities
             Related Party Receivable/Payable                                       288,867                369,023
             Accounts Payable and Accrued Expenses                                  192,604                331,509
             Cash Overdraft                                                          (5,426)                (2,534)
                                                                              -------------          -------------

                  NET CASH (USED) PROVIDED IN
                     CONTINUING OPERATIONS                                         (252,480)                28,153
                                                                              -------------          -------------

                  NET CASH PROVIDED (USED) BY
                     DISCONTINUED OPERATIONS                                         66,143                (28,153)
                                                                              -------------          -------------

                  NET CASH (USED) IN
                     OPERATING ACTIVITIES                                          (186,337)                     -
                                                                              -------------          -------------

CASH FLOW FROM INVESTING ACTIVITIES
             Purchase of Equipment                                                   (3,653)                     -
                                                                              -------------          -------------

                  NET CASH (USED) BY
                     INVESTING ACTIVITIES                                            (3,653)                     -
                                                                              -------------          -------------
</TABLE>











                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                   (Continued)
                                       F-8

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                             STATEMENT OF CASH FLOWS
                                   (Continued)

                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001
<TABLE>
<CAPTION>

                                                                                   2002                   2001
                                                                                -----------            -----------

CASH FLOW FROM FINANCING ACTIVITIES
<S>                                                                           <C>                      <C>
             Repayments of Borrowings                                         $      (9,568)           $         -
             Proceeds from Sale of Treasury Shares                                  210,635                      -
                                                                              -------------            -----------
                  NET CASH PROVIDED BY
                     FINANCING ACTIVITIES                                           201,067                      -
                                                                              -------------            -----------

NET INCREASE IN CASH                                                                 11,077                      -

CASH AT BEGINNING OF PERIOD                                                               -                      -
                                                                              -------------            -----------

CASH AT END OF YEAR                                                           $      11,077            $         -
                                                                              =============            ===========

SUPPLEMENTAL SCHEDULE OF CASH FLOW
     INFORMATION
             Cash Paid During the Period For:
                Interest                                                      $       5,125            $     2,958
                                                                              =============            ===========
                Income Taxes                                                  $           -            $         -
                                                                              =============            ===========

SUPPLEMENTAL SCHEDULE OF NONCASH
     INVESTING AND FINANCING ACTIVITIES:
             Purchase of Oil and Gas Properties                               $  (2,000,000)           $         -
             Investment in Securities Available-For-Sale                           (100,000)                     -
             Reduction in Accounts Payable and
                Accrued Expenses                                                   (419,594)                     -
             Issuance of Common Stock                                             9,972,320                      -
             Cancellation of Shares Previously Issued for
Services                                                                                  -                    (14)
             Contribution of Wages to Capital                                       414,174                     14
             Unrealized Loss on Securities Available-For-Sale                    (4,920,000)                     -
             Acquisition of Treasury Shares                                        (286,366)                     -
             Increase in Related Party Note Payable                                 286,366                      -
             Decrease in Accounts Payable - Related Party                          (695,106)                     -
             Decrease in Related Party Note Payable                                 (30,000)                     -
             Increase in Prepaid Consulting                                      (2,221,794)                     -
                                                                                 ----------            -------------

                                                                              $           -            $         -
                                                                              =============            ============
</TABLE>




                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                       F-9

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

The Company is engaged primarily in the acquisition, development and exploration
for and sale of oil and gas in the state of Texas.

Basis of Consolidation

The consolidated financial statements include the accounts of Matrix Energy
Services Corporation (formerly Power Exploration, Inc.) and its 100% owned
subsidiaries, Power Drilling Services, Inc., ("PDS", formerly Oil Retrieval
Systems, Inc.) and Power Operating, Inc. ("POI", formerly Oil Seeps, Inc.)
Accordingly, all references herein to the "Company" include the consolidated
results of its subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents.

Oil and Gas Properties

The Company follows the full cost method of accounting for oil and gas
properties. Accordingly, all costs associated with acquisition, exploration, and
development of oil and gas reserves, including directly related overhead costs,
are capitalized.

All capitalized costs of oil and gas properties, including the estimated future
costs to develop proved reserves, are amortized on the units-of-production
method using estimates of proved reserves. Investments in unproved properties
and major development projects are not amortized until proved reserves
associated with the projects can be determined or until impairment occurs. If
the results of an assessment indicate that the properties are impaired, the
amount of the impairment is added to the capitalized costs to be amortized.

In addition, the capitalized costs are subject to a "ceiling test", which
basically limits such costs to the aggregate of the "estimated present value,"
discounted at 10-percent interest rate of future net revenues from proved
reserves, based on current economic and operating conditions, plus the lower
cost or fair market value of unproved properties.

Sales of proved and unproved properties are accounted for as adjustments of
capitalized costs with no gain or loss recognized, unless such adjustments would
significantly alter the relationship between capitalized costs and proved
reserves of oil and gas, in which case the gain or loss is recognized in income.
Abandonments of properties are accounted for as adjustments of capitalized costs
with no loss recognized.
                                   (Continued)
                                      F-10

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Revenue Recognition

Revenues from the sale of oil and gas production are recognized when title
passes, net of royalties.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting date. Actual
results could differ from those estimates.

Depreciation and Amortization

Office equipment is stated at cost and is depreciated using the straight-line
method over their estimated useful lives of five (5) years.

The costs of maintenance and repairs are charged to expense when incurred; costs
of renewals and betterments are capitalized. Upon the sales or retirement of
property and equipment, the cost and related accumulated depreciation are
eliminated from the respective accounts and the resulting gain or loss is
included in operations.

Fair Value of Financial Instruments

The Company's financial instruments consist of cash, accounts receivable,
accounts payable and short-term debt. The carrying amounts of cash, accounts
receivable, accounts payable and short-term debt approximate fair value due to
the relatively short maturity of these instruments.

Long - Lived Assets

Long - lived assets to be held and used are reviewed for impairment whenever
events or changes in circumstances indicate that the related carrying amount may
not be recoverable. When required, impairment losses on assets to be held and
used are recognized based on the fair value of the assets and long - lived
assets to be disposed of are reported at the lower of carrying amount or fair
value less cost to sell.

Financial Statement Presentation

Certain amounts in the 2001 consolidated financial statements have been
reclassified to conform to the 2002 presentation.


                                   (Continued)
                                      F-11

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

Provisions for income taxes are based on taxes payable or refundable for the
current year and deferred taxes on temporary differences between the amount of
taxable income and pretax financial income and between the tax bases of assets
and liabilities and their reported amounts in the financial statements. Deferred
tax assets and liabilities are included in the financial statements at currently
enacted income tax rates applicable to the period in which the deferred tax
assets and liabilities are expected to be realized or settled as prescribed in
FASB Statement No. 109, Accounting for Income Taxes. As changes in tax laws or
rates are enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes.

Concentration of Credit Risk

The Company places its cash in what it believes to be credit-worthy financial
institutions. However, cash balances may exceed FDIC insured levels at various
times during the year.

Stock-Based Compensation

In October 1999, the Company adopted its 1999 Stock Benefit Plan ("Plan") under
which officers, employees, and individuals who management perceives to have
contributed to the success of the Company may be granted shares of common stock
or options to purchase common stock at a price determined by the administrators
of the Plan. The maximum number of shares of the Company's common stock
available for issuance under the Plan is 4,000,000. As of September 30, 2002,
the number of shares available for future grants under the Plan was 1,780,000.
The Company accounts for the issuance of these stocks and options pursuant to
the guidance set forth in Financial Accounting Standards Board Statement No. 123
(Accounting for Stock-Based Compensation) using the fair value method. The
Company recorded $87,656 in expenses related to the issuance of shares in this
Plan for the year ended September 30, 2001. There were no shares issued from
this Plan for the year ending September 30, 2002. As of September 30, 2002,
there were no stock options outstanding.

In June 2002, the Company adopted its 2002 Stock Benefit Plan ("2002 Plan")
under which officers, employees, and individuals who management perceives to
have contributed to the success of the Company may be granted shares of common
stock or options to purchase common stock at a price determined by the
administrators of the 2002 Plan. The maximum number of shares of the Company's
common stock available for issuance under the Plan was 3,000,000. As of
September 30, 2002, the number of shares available for future grants under the
plan was 254,050. The Company accounts for the issuance of these stocks and
options pursuant to the guidelines set forth in Financial Accounting Standards
Board Statement No. 123 (Accounting for Stock-Based Compensation) using the fair
value method. The Company recorded $2,745,950 in expenses related to the
issuance of shares in the 2002 Plan for the year ended September 30, 2002. As of
September 30, 2002, there were 1,900,000 stock options outstanding.

Stock Options

The Company has authorized the granting of options covering a total of 1,900,000
shares of the Company's common stock to certain consultants of the Company.
Options are granted fully exercisable until June 7, 2003.

                                   (Continued)
                                      F-12

<PAGE>



               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

       Stock Options (Continued)
       ------------------------

       A summary of the Company's outstanding stock option transactions is as
follows:
<TABLE>
<CAPTION>

                                                                              Year Ended September 30,
                                                                  --------------------------------------------------------
                                                                           2002                          2001
                                                                  ---------------------------   --------------------------
                                                                                   Weighted                     Weighted
                                                                                   Average                      Average
                                                                                   Exercise                     Exercise
                                                                      Shares         Price         Shares         Price
                                                                    ----------     -----------   ----------     -------
<S>                                                                 <C>            <C>           <C>            <C>
     Outstanding at Beginning of Year                                       -      $      -              -      $      -
       Granted                                                       1,900,000          .50              -             -
       Forfeited                                                             -            -              -             -
                                                                    ----------     --------      ----------      --------

     Outstanding at December 16, 2001                                1,900,000          .50              -             -

     Effect of 3 for 1 Stock Split on
       June 17, 2002                                                        x3           /3              -             -
                                                                    ----------     --------      ----------      --------

     Outstanding at End of Year After Giving
       Effect to 3 for 1 Stock Split                                 5,700,000     $    .16              -      $      -
                                                                    ==========     ========      ==========      ========

     Options Exercisable at End of Year                              5,700,000     $    .16              -      $      -
                                                                    ==========     ========      ==========      ========

     Weighted Average Fair Value of Options
       Granted During the Year                                        $.50                              N/A
                                                                    ======                       ==========
</TABLE>



   The weighted average remaining contractual life of these options is .75 years
   in 2002. The exercise price of outstanding options is $.16 as of September
   30, 2002.

   The fair value of each grant is estimated on the date of grant using the
   Black-Scholes option-pricing model with the following weighed average
   assumptions used for grants: dividend yield of zero percent (0%); expected
   volatility of two hundred and forty four percent (244%); risk free interest
   rates of five percent (5.0%) and expected lives nine months.



                                   (Continued)
                                     F - 13

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income

In June 1997, SFAS No. 130, "Reporting Comprehensive Income", was issued. This
statement establishes standards for the reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses) in the
financial statements. Statement No. 130 requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. It does not require a
specific format for that financial statement but requires that an entity display
an amount representing total comprehensive income for the period in that
financial statement. Statement No. 130 had no impact on the financial condition
or results of operations of the Company, but required changes in the Company's
disclosure and presentation requirements. The principal change was the
disclosure of the components of and total comprehensive income within the
Consolidated Statements of Stockholders' equity.

Per Share of Common Stock

Per share amounts have been computed based on the average number of common
shares outstanding during the period. Potential common stock has been excluded
from the computation of earnings per share since the inclusion of options and
warrants would be antidilutive.

On June 17, 2002, the Company's Board of Directors authorized a 3-for-1 stock
split of its $.02 par value common stock effective on that day. Accordingly, all
references to the number of common shares and per share data in the accompanying
financial statements have been adjusted to reflect the stock split on a
retroactive basis.

Stockholders' equity reflects the stock split by reclassifying from "Common
Stock" to "Additional Paid - In Capital" an amount equal to the par value of the
shares split. All fractional shares are being rounded up. The effect on the
weighted average common shares outstanding are as follows:


                                                 September 30,
                                               ----------------------
                                                  2002                  2001
                                               ------------           -------

Weighted Average Number of Common Shares
Outstanding Prior to Stock Split               7,243,448                140,377

3-For-1 Stock Split                           14,486,896                280,754
                                              ----------             ----------

Weighted Average Number of Common Shares
 Outstanding Subsequent to Stock Split        21,730,344                421,131
                                              ==========             ==========

                                      F-14

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001

NOTE 2:  NOTES PAYABLE

Notes payable at September 30, 2002 and 2001 consist of the following:
<TABLE>
<CAPTION>


                                                                                  2002                   2001
                                                                               -----------            -------

<S>                                                                            <C>                    <C>
     a) Note Payable - Business Exchange Investments, Inc.                     $  250,000             $  250,000
     b) Note Payable - Related Party                                              276,798                 30,000
                                                                               ----------             ----------

                                                                               $  526,798             $  280,000
                                                                               ===========            ==========
</TABLE>


         a)   The Company is indebted to Business Exchange Investment, Inc.
              under terms of a promissory note dated September 15, 1998. Terms
              of the note provide for interest at a rate of 10% per annum with
              an extended maturity date of September 15, 2003. The note is
              collateralized by 100% of the shares of POI.

         b)   The Company is indebted to MOROIL, Incorporated under the terms of
              a promissory note dated July 16, 2002, in the amount of $276,798.
              Terms of the note provide for an interest rate of 5% per annum,
              with a maturity date of September 1, 2003.


NOTE 3:  WARRANTS

At September 30, 2001, the Company had the following common stock purchase
warrants outstanding:

a)            800 warrants, each of which entitles the registered holder thereof
              to purchase one share of common stock, exercisable at any time on
              or before August 31, 2003 at an exercise price of $1.00 per share
              (subject to customary anti-dilution adjustments). The warrants
              were issued in connection with the debt issued in 1999.

b)            750 warrants, each of which entitles the registered holder thereof
              to purchase one share of common stock, exercisable at any time on
              or before August 20, 2003 at an exercise price of $2.50 per share
              (subject to customary anti-dilution adjustments). The warrants
              were issued as a fee in connection with the debt issued in 1999.

c)            200 warrants, each of which entitles the registered holder thereof
              to purchase one share of common stock, exercisable at any time on
              or before June 1, 2003 at an exercise price of $2.50 per share
              (subject to customary anti-dilution adjustments).

              The warrants issued do not confer upon the holders thereof any
              voting or other rights of a stockholder of the Company.

              The warrants described in items (b) through (d) above are subject
              to a "cashless exercise" provision (the "warrant exchange").

No warrants were exercised during the years ended September 30, 2002 or 2001.



                                   (Continued)
                                      F-15

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001

NOTE 4:  INCOME TAXES

The components of the provision for income taxes is as follows:
<TABLE>
<CAPTION>

                                                                                            September 30,
                                                                                 ------------------------
                                                                                     2002                   2001
                                                                                 ----------             --------
     Current Tax Expense
<S>                                                                              <C>                    <C>
         U.S. Federal                                                            $       -              $       -
         State and Local                                                                 -                      -
                                                                                 ---------              ---------

             Total Current                                                       $       -              $       -
                                                                                 ---------              ---------

     Deferred Tax Expense
         U.S. Federal                                                            $       -              $       -
         State and Local                                                                 -                      -
                                                                                 ---------              ---------

             Total Deferred                                                      $       -              $       -
                                                                                 ---------              ---------

             Total Tax Provision from
                Continuing Operations                                            $       -              $       -
                                                                                 =========              =========

The reconciliation of the effective income tax rate to the Federal statutory
rate is as follows:

                                                                                    2001                   2000
                                                                                 ----------             ---------

     Federal Income Tax Rate                                                        (34.0)%                (34.0)%
     Deferred Tax Charge (Credit)                                                        -                      -
     Effect of Valuation Allowance                                                   34.0 %                 34.0 %
     State Income Tax, Net of Federal Benefit                                            -                      -
                                                                                 ----------             ----------

     Effective Income Tax Rate                                                        0.0 %                  0.0 %
                                                                                 ==========             ==========
</TABLE>













                                      F-16

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001

NOTE 4:  INCOME TAXES (Continued)

At September 30, 2002, the Company had net carryforward losses of approximately
$27,382,000. A valuation allowance equal to the tax benefit for deferred taxes
has been established due to the uncertainty of realizing the benefit of the tax
carryforward.

Deferred tax assets and liabilities reflect the net tax effect of temporary
differences between the carrying amount of assets and liabilities for financial
reporting purposes and amounts used for income tax purposes. Significant
components of the Company's deferred tax assets and liabilities at September 30
are as follows:
<TABLE>
<CAPTION>

                                                                                          September 30,
                                                                              ------------------------------------
                                                                                 2002                    2001
                                                                              -------------          --------
     Deferred Tax Assets (Liabilities):
<S>                                                                           <C>                    <C>
         Loss Carryforwards                                                   $   8,790,000          $   8,428,000
         Exploration Costs                                                          (23,000)               (23,000)
         Depreciation                                                               (29,000)               (29,000)
         Impairment Loss                                                          2,671,000              2,671,000
             Less: Valuation Allowance                                          (11,409,000)           (11,047,000)
                                                                               ------------           ------------

                Net Deferred Tax Assets (Liabilities)                         $           -          $           -
                                                                               =============          =============
</TABLE>


Net tax operating loss carryforwards expire in 2003 through 2022 as follows:


                         September 30,
                             2003               $      18,000
                             2005                       5,000
                             2007                      65,000
                             2009                      16,000
                             2010                       3,000
                             2011                      28,000
                             2012                     303,000
                             2018                   2,329,000
                             2019                   3,901,000
                             2020                  17,612,000
                             2021                     772,000
                             2022                   2,330,000
                                                   ------------

                                                $  27,382,000






                                      F-17

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001


NOTE 5:  RELATED PARTY TRANSACTIONS

During the year ended September 30, 2001:

a)       Rife Oil Properties, Inc. (Rife), a company owned by a director is the
         operator of all oil and gas leases owned by the Company. For the year
         ended September 30, 2001, Rife charged the Company $239,111 for
         operating the Company's oil and gas wells.

b)       The Company combined and renewed its promissory notes to M.O. Rife III,
         Trust A, aggregating $30,000 into one note with an interest rate of 11%
         maturing on September 30, 2002.

         Interest expense on these notes was $3,296 for the year ended September
         30, 2001.

c)       The Company leases its office space from the Rife Trust. Rental expense
         for the year ended September 30, 2001 was $39,900.

d)       The following amounts were either due to or due from various related
         parties at September 30, 2001:
<TABLE>
<CAPTION>

                                                                               Accounts                 Accounts
                                                                              Receivable                Payable

<S>                                                                           <C>                      <C>
                Rife Oil Properties                                           $   10,911               $   455,648
                M.O. Rife III Trust A                                                   -                   51,430
                Chief Financial Officer                                                 -                   15,163
                                                                              -----------              -----------

                                                                              $   10,911               $   522,241
                                                                              ==========               ===========
</TABLE>


During the year ended September 30, 2002:

a)       The Company issued 1,250,000 shares of its common stock to consulting
         firm for consulting services. The value of the shares was $62,500.

b)       The Company issued 25,500,000 shares of its common stock to MOROIL,
         Inc., a company owned by a director, in settlement of various notes and
         accounts payable aggregating $730,526, including $5,420 of interest
         expense. These shares were valued at $1,275,000 on the date of
         issuance. The difference between the value of the stock and the
         liability was recorded as a charge to interest in the amount of
         $544,474.

c)       The Company, through issuance of a note payable in the amount of
         $286,366, purchased 10,000,000 shares of its treasury stock from
         MOROIL, Inc., a company owned by a director. Interest expense on this
         note was paid in the amount of $2,932. The balance of the note was
         $276,798 at September 30, 2002.

                                      F-18


<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001


NOTE 5:  RELATED PARTY TRANSACTIONS (Continued)


d)       Rife Oil Properties, Inc., a company owned by a director, is the
         operator of all oil and gas leases owned by the Company. For the year
         ended September 30, 2002, Rife charged the Company $246,796 for
         operating the Company's oil and gas wells.

e)       The Company leases its office space from the Rife Trust. Rental expense
         for the year ended September 30, 2002 was $37,300.

f)       The following amounts were either due to or due from various related
         parties at September 30, 2002:
<TABLE>
<CAPTION>

                                                                               Accounts                 Accounts
                                                                              Receivable                Payable

<S>                                                                           <C>                      <C>
                Rife Oil Properties                                           $   16,113               $    88,087
                M.O. Rife III Trust A                                                636                    16,000
                Napal Consulting, Inc.                                                 -                    11,428
                Matrix Drilling                                                        -                     6,325
                                                                              -----------              -------------

                                                                              $   16,749               $   121,840
                                                                              ==========               =============
</TABLE>



NOTE 6:  CONSULTING AGREEMENTS

During the years ended September 30, 2002 and 2001, the Company issued
13,550,000 and 8,100 shares of its common stock with aggregate values of
$3,258,450 and $87,656, respectively, in payment of various consulting services.
Included in the $3,258,450 of consulting fees are $2,221,794 recorded as prepaid
consulting fees for services through March 1, 2004. There were no prepaid
consulting fees at September 30, 2001.












                                      F-19

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001


NOTE 7:  COMMITMENTS AND CONTINGENCIES

The Company has entered into various non-cancelable operating lease agreements
for office equipment.

         Future minimum lease payments under these lease agreements for each of
         the years ended September 30 are as follows:


                             2003               $  9,509
                             2004                  1,453
                                                --------

      Total minimum lease payments              $ 10,962
                                                ========

         Equipment rental expense included in the financial statements for the
         years ended September 30, 2002 and 2001, totaled $15,964 and $27,145,
         respectively.

The Company has pledged 100% of the shares of Power Operating, Inc. (formerly,
Oil Seeps, Inc.), a wholly owned subsidiary, as collateral for a $250,000
promissory note due on September 15, 2002.


NOTE 8:  SUPPLEMENTAL DISCLOSURE OF COMMON STOCK ACTIVITIES

During the year ended September 30, 2001, the Company issued the following
shares of its common stock:
<TABLE>
<CAPTION>

                                                                                   Number of
                            Reason For Issuance                                      Shares               Value

<S>                                                                              <C>                   <C>
                Compensation for Consulting Services                                  6,750            $     76,558
                Legal Services                                                        1,350                  11,098
                                                                                     ------            ------------

                                                                                      8,100            $     87,656
                                                                                     ======            ============


During the year ended September 30, 2002, the Company issued the following
shares of its common stock:

                                                                                   Number of
                            Reason For Issuance                                      Shares               Value

                Acquisition of Oil and Gas Properties                             2,000,000            $  2,000,000
                Investment in Career Worth , Inc.                                 2,000,000               5,020,000
                Compensation for Consulting Services                             13,550,000               3,258,450
                Settlement of Related Party Debts                                25,500,000               1,275,000
                Bridge Financing Fee                                                 45,000                   9,000
                                                                                 ----------            ------------

                                                                                 43,095,000            $ 11,562,450
                                                                                 ==========            ============
</TABLE>


The fair value of the shares issued was determined by using the reported trading
value on the date of issue.


                                      F-20

<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001


NOTE 9:  GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming
the company will continue as a going concern. As of September 30, 2002, the
Company has a working capital deficit, net of prepaid charges, of $791,019 and
an accumulated deficit of $36,457,577. Based upon the Company's plan of
operation, the Company estimates that existing resources, together with funds
generated from operations will not be sufficient to fund the Company's working
capital deficit or any type of drilling program. The Company is actively seeking
additional equity financing. There can be no assurances that sufficient
financing will be available on terms acceptable to the Company or at all. If the
Company is unable to obtain such financing, the Company will be forced to scale
back operations, which would have an adverse effect on the Company's financial
condition and results of operation.

NOTE 10: LOSS ON IMPAIRMENT OF LONG-LIVED ASSETS

The Company's lack of investment capital has raised substantial doubt as to the
Company's ability to develop its proved oil and gas reserves held for future
development. This lack of available funds has called into question the
recoverability of the carrying amounts of these assets. As a result, pursuant to
FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed of", an impairment loss of $7,856,890 for the
year ended September 30, 2001, has been recognized for these oil and gas
properties and included as a component of income before income taxes. No
impairment was recorded for the year ended September 30, 2002. In calculating
the impairment loss, the carrying value was determined by management's
estimation of the value of the leases if a sale was made to an unrelated third
party in an arms length transaction.

NOTE 11: INVESTMENT IN MARKETABLE SECURITIES

At September 30, 2002, marketable securities were comprised of 2,000,000 shares
of Career Worth, Inc.'s equity securities classified as available-for-sale.
Marketable securities considered available-for-sale are recorded in the
financial statements at fair market value, in accordance with SFAS No. 115,
Accounting for Certain Investments in Debt and Equity Securities. The
corresponding unrealized gain or loss in the fair market value in relation to
cost is accounted for as a separate item in the stockholders' equity section of
the balance sheet.

Following are the market value, original cost, and unrealized loss on marketable
securities available for sale as of September 30, 2002.

                                                                   Unrealized
                            Market
                            Value                  Cost             (Loss)
                            ----------         -----------       ------------

  Career Worth, Inc.        $ 100,000          $ 5,020,000       $(4,920,000)





                                      F-21


<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001

NOTE 12:  TREASURY STOCK

In July 2002, the Company acquired 10,000,000 of its shares of common stock
through the issuance of a note payable to a related party in the amount of
$286,366. These shares are being held in escrow, pursuant to an offshore stock
purchase agreement with First Chartered Capital Corporation, Inc., a British
Virgin Islands Corporation. As of September 30, 2002, 642,032 shares of the
10,000,000 treasury shares had been sold, leaving a balance of 9,357,968 shares
in the treasury.

NOTE 13:  SUPPLEMENTAL INFORMATION ON OIL AND GAS OPERATIONS (UNAUDITED)

The following supplemental unaudited information regarding the Company's oil and
gas activities is presented pursuant to the disclosure requirements of Statement
of Financial Accounting Standards No. 69. The proved oil and gas properties have
been reduced to their estimated realizable value of the leases if a sale was
made to an unrelated third party in an arms length transaction; therefore, no
reserve information is being reported.
<TABLE>
<CAPTION>

                                                                                          September 30,
                                                                               -----------------------------------
                                                                                  2002                   2001
                                                                               ------------           -------
     Capitalized Costs Relating to Oil and Gas
       Producing Activities at September 30:
<S>                                                                            <C>                    <C>
         Proved Oil and Gas Properties                                         $  1,000,000           $  1,000,000
         Unproved Oil and Gas Properties                                          2,000,000                      -
         Less: Accumulated Amortization and Impairment                              (53,785)               (42,058)
                                                                               ------------           ------------

             Net Capitalized Costs                                             $  2,946,215           $    957,942
                                                                               ============           ============

     Costs Incurred in Oil and Gas Producing Activities for
       the Year Ended September 30,
         Property Acquisition Costs:
             Proved                                                            $          -           $          -
                                                                               ------------           ------------


     Results of Operations for Oil and Gas Producing
Activities for the Years Ended September 30,
         Oil and Gas Sales                                                     $    108,580           $    174,587
         Production (Lifting) Costs and Production Taxes                           (251,201)              (247,798)
         Amortization Expenses                                                      (11,727)               (14,491)
                                                                               ------------           ------------

                  Net Loss                                                         (154,348)               (87,702)

     Income Taxes                                                                         -                      -
                                                                               ------------           ------------

     Results of Operations for Oil and Gas Producing
       Activities (excluding corporate overhead and
       financing costs)                                                        $   (154,348)          $    (87,702)
                                                                               ============           ============
</TABLE>


                                   (Continued)
                                      F-22


<PAGE>


               MATRIX ENERGY SERVICES CORPORATION AND SUBSIDIARIES

               (FORMERLY POWER EXPLORATION, INC. AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002 AND 2001

NOTE 14:  DISCONTINUED OPERATIONS

In 2000, the Company's management determined that the operations of Power
Drilling Services, Inc. (formerly Oil Retrieval Systems, Inc.) were no longer
viable; therefore, the manufacturer of oil and gas construction equipment
ceased. The Company disposed of all of the net assets of PDS during the year
ended September 30, 2002 at a loss of $122,200. The net assets of the
discontinued operations were as follows:
<TABLE>
<CAPTION>


                                                                                   2002                  2001
                                                                                 ----------            ------

<S>                                                                              <C>                   <C>
    Net Current Assets                                                           $       -             $   10,588
    Net Property and Equipment                                                           -                200,987
    Other Assets                                                                         -                    490
    Net Liabilities                                                                      -                145,922
                                                                                 ---------             ----------

    Net Asset of Discontinued Operations                                         $       -             $   66,143
                                                                                 =========             ==========



The results of discontinued operations for the years ended September 30, 2002
and 2001, were as follows:

                                                                                     2002                 2001
                                                                                  ---------             -------

    Pre Tax Income                                                               $       -             $   10,182
    Provisions for Income Tax                                                            -                      -
                                                                                 ----------            -----------

    Income of Operations of Discontinued
        Operations - Net of Tax                                                          -                 10,182
    Loss on Disposal of Discontinued
        Operations - Net of Tax                                                    122,200                      -
                                                                                 ---------             -----------

    Total Discontinued Operations                                                $ 122,200             $   10,182
                                                                                 ==========            ===========
</TABLE>












                                   (Continued)
                                      F-23

<PAGE>




                       CONSENT OF INDEPENDENT ACCOUNTANTS




         We hereby consent to the incorporation of our report dated November 21,
2002, which is incorporated in this Annual Report on Form 10-K.



/s/ Killman, Murrell & Co., P.C.
Killman, Murrell & Co., P.C.

January 13, 2003





























<PAGE>


                                    PART III

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

The Issuer has a 2-person board of directors, all of which positions are
currently filled. The Directors and Executive Officers of the Issuer, their ages
and present positions held with the Issuer are:

NAME                               AGE      POSITION HELD

M. O. Trey Rife III                63       Chairman of the Board & Director
Joe Bill Bennett                   56       Chief Executive Officer & Director

The Issuer's Directors were elected October 5, 1999 and will serve in such
capacity until the next annual meeting of the Issuer's shareholders or until
their successors have been elected and qualified. There are no familial
relationships among the Issuer's officers and directors, nor are there any
arrangements or understandings between any of the officers or directors of the
Issuer or any other person pursuant to which any officer or director was or is
to be selected as an officer or director.

M.O. Rife III, Chairman/Director. Mr. Rife was born in Fort Worth, Texas in
1939. He is 63 years old. He was elected to the Company's Board of Directors in
May of 1997. Mr. Rife will serve as a Director until the next regularly held
shareholder's meeting, or until his successor is elected and qualified. He
currently serves as the Chairman of the Board. His family has been in the oil
industry for three generations. His grandfather retired from Gulf Oil as a
production superintendent and his father was an independent oil and gas operator
for over forty years. Mr. Rife attended Texas Christian University and began
working in the oil field when he was eighteen. He worked with his father for 15
years, then started his own company, Rife Oil Properties, Inc. For the past
twenty-five years, he has served as President and Chief Executive Officer of
Rife Oil Properties, Inc. He has been involved in the drilling, completion and
operating of over 500 wells throughout the mid-continent Region. Currently Rife
Oil Properties, Inc. operates over 800 wells in Texas.



<PAGE>


Joe Bennett, Director, Chief Executive Officer. Mr. Bennett was born in Graham,
Texas in 1946. He is 56 years old. He was elected to the Company's Board of
Directors in May of 1997. Mr. Bennett will serve as a Director until the next
regularly scheduled shareholder's meeting, or until his successor is elected and
qualified. He currently serves as Chief Executive Officer of the Company after
stepping down as CEO for a short period from March 1, 2002 to September 20,
2002. He has worked for the Company since September of 1994. Prior to being
appointed Chief Executive Officer in September 1999, he served as a
Vice-President of the Company. His family has been involved in the oil industry
as independent oil and gas operators in North Texas for three generations. Mr.
Bennett attended the University of Texas at Austin studying petroleum
engineering. At the age of sixteen he began working summers in the oil field for
the family business. He has over 30 years of experience in developing
exploration projects, drilling and completing wells, and all phases of
operations. From 1976 to 1980 Mr. Bennett helped organize and start up an
aircraft overhaul business that employed over 100 people. As C.O.O., he was
responsible for all operations and marketing. In 1981 Mr. Bennett became
President and CEO of Bennett Resources, Inc. As head of the family business, he
directed the development of exploration projects in Texas, Oklahoma, Kansas,
Illinois, Kentucky and Tennessee. In 1994 Mr. Bennett joined Rife Oil
Properties, Inc. as VP Operations. His primary responsibilities were to oversee
the company's stripper well acquisition program and to manage all operations of
these properties using new production technology.

Edward A. Levy, Chief Executive Officer, Director. Mr. Levy served as director
and CEO from March 1, 2002 to September 20, 2002. Mr. Levy is the managing
partner of Nepal Consulting, Incorporated, a professional services firm that
specializes in assisting senior management of major corporations relaize
significant improvements in operating results. His firm focuses on corporate and
business unit strategy, process reengineering, corporated diversification, and
company valuation. Past clients include Avianca airlines, Accenture LDT, First
USA, and Wal-Mart.

Charles Boyd, Chief Financial Officer. Mr. Boyd served as CFO from March 1,
2002, to September 20, 2002. Mr. Boyd is a partner in Nepal Consulting, Inc.
with over 15 years of product development experience in several different
industries. He is a diversified business manager with a unique combination of
expertise that includes product development and management, strategic planning
and execution, alliance building, financial analysis, market research and
analysis, and business development. A graduate of The Wharton School of Business
MBA program (Marketing with a concentration in Finance), Mr. Boyd has held
senior management positions in a variety of companies. Mr. Boyd also holds a BA
in Physics from Hampton Univeersity in Virginia.

Kerry Smith, Chief Operating Officer. Mr. Smith served as COO from March 1, 2002
through September 20, 2002. Mr. Smith served as President of Kana Resources,
Inc. an oil and gas exploration company from 1992-2001 and for the past 20 years
has been involved in all phases of buisness, including capital formation, land
acquisition, drilling and completion and the operation of over 250 wells in the
West Texas fields. Recently, Mr. Smith reignited the interest in Barnett Shale
Play in Wise and Denton Counties in Northeast Central Texas with strategic
acquisition of 3,000 acres from the Bureau of Land Management for $450,000. This
leased acreage referred to as the Grassland Project produced a surprising
engineering report identifying oil and gas reserves in excess of $100M,
encouraging major producers such as Devon Energy to venture outside what was
condiered the rich gas window in the Dallas Ft. Worth Basin.

Compliance with Section 16(a) of the Exchange Act

Based solely upon a review of Forms 3, 4 and 5 furnished to the Company, the
Company is not aware of any person who at any time during the fiscal year ended
September 30, 2002 was a director, officer, or beneficial owner of more than ten
percent of the Common Stock of the Company, and who failed to file, on a timely
basis, reports required by Section 16(a) of the Securities Exchange Act of 1934
during such fiscal year.

ITEM 10. EXECUTIVE COMPENSATION

Joe Bill Bennett has served as Chief Executive Officer since 1999. He received
no compensation during the fiscal years ending September 30, 2002 and 2001. In
fiscal year September 2000, he received $48,758 in compensation paid in the form
of Company common stock.

Mr. Edward A. Levy, CEO/Director, from March 1, 2002 to September 20, 2002, was
paid 1,250,000 shares of the Company's common stock valued at $62,500.
Additional compensation in the amount of $15,000 was paid Nepal Consulting for
consulting services.

Compensation of Directors

M. O. Rife III, Chairman of the Board/Director since 1999 was not compensated
for his services during the fiscal year ending September 30, 2002 and 2001. For
the year ending September 30, 2000, he was paid Company common stock valued at
$88,146 as compensations for his services on the board of directors.

Joe Bill Bennett, CEO/Director since 1999, was also paid $88,146 in shares of
Company common stock for his services as a board member. He received no
additional compensation for his services as a director for the years ending
September 30, 2002 and 2001.

Mr. Edward Levy received no compensation for his services as a director for the
period from March 1, 2002 to September 20, 2002.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information concerning the ownership of
the Company's Common Stock as of January 10, 2003, with respect to: (i) each
person known to the Company to be the beneficial owner of more than five percent
of the Company's Common Stock; (ii) all directors; and (iii) directors and
executive officers of the Company as a group. The notes accompanying the
information in the table below are necessary for a complete understanding of the
figures provided below. As of January 10, 2003, there were 43,518,036 shares of
Common Stock issued and outstanding.
<TABLE>
<CAPTION>

                                                                   Amount and Nature of
      Title of Class         Name and Address of Beneficial        Beneficial Ownership         Percent of class
      --------------         -------------------------------       --------------------         ----------------
                                          Owner
<S>                         <C>                                <C>                            <C>
--------------------------- ---------------------------------- ------------------------------ ----------------------
--------------------------- ---------------------------------- ------------------------------ ----------------------

       Common Stock                 Joe Bill Bennett                       2,664                     0.006%
    ($0.02) par value                 5416 Birchman
                                  Fort Worth, TX 76107
--------------------------- ---------------------------------- ------------------------------ ----------------------
--------------------------- ---------------------------------- ------------------------------ ----------------------

       Common Stock                  M. O. Rife, III                       1,860                     0.004%
    ($0.02) par value                 5601 El Campo
                                 Fort Worth, Texas 76107
--------------------------- ---------------------------------- ------------------------------ ----------------------
--------------------------- ---------------------------------- ------------------------------ ----------------------

       Common Stock         Directors and Executive Officers               4,524                      0.01%
    ($0.02) par value          as a Group (3 individuals)
--------------------------- ---------------------------------- ------------------------------ ----------------------
--------------------------- ---------------------------------- ------------------------------ ----------------------

       Common Stock                   MOROIL, Inc.                      15,740,000                     36%
    ($0.02) par value             5416 Birchman Avenue
                                  Fort Worth, TX 76107

       Common Stock              Benchmark Equity Group                  4,777,500                    10.9%
    ($0.02) par value                  700 Gemini
                                  Houston, Texas 70058

--------------------------- ---------------------------------- ------------------------------ ----------------------
</TABLE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the year ended September 30, 2002:

(a)   Rife Oil Properties, Inc. ("Rife") is owned by the M. O. Rife III Trust A,
      which is controlled by M. O. Rife III, a Director of the Company. Rife is
      the operator of all oil and gas leases owned by the Company. For the year
      ended September 30, 2002, Rife charged the Company $246,796 for operating
      the Company's oil and gas wells.
(b)   The Company borrowed $30,000 from M. O. Rife III, Trust A during the
      fiscal year ending September 30, 2000, at an interest rate of 11%. The
      term of the notes were for one year due at various dated in the next
      fiscal year. The notes were combined and renewed October 1, 2001.

      The Company issued 25,500,000 shares of its common stock to MOROIL, Inc.,
      a company owned by M.O. Rife III, a director of the Company, in settlement
      of various notes and accounts payable aggregating $730,526. These shares
      were valued at $1,275,000 on the date of issuance. The difference between
      the value of the stock and the liability was recorded as a charge to
      interest expense in the amount of $544,474.

(c)   The Company, through issuance of a note payable in the amount of $286,366,
      purchased 10,000,000 shares of its treasury stock from MOROIL, Inc., a
      company owned by M.O. Rife III.

(d)   The Company issued 1,250,000 of its common stock to a consulting firm for
      consulting services.  The value of the shares was $62,500.

None of the other directors, executive officers or senior officers of the Issuer
or any subsidiary, or any associates or affiliates of any of them, is or has
been, indebted to the Issuer at any time since the beginning of the last
completed financial year of the Issuer.

<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits. Exhibits required to be attached by Item 601 of Regulation
         S-B are listed in the Index to Exhibits beginning on page 26 of this
         Form 10-KSB, which is incorporated herein by reference.

(2)      Reports on Form 8-K. The Company filed two reports on Form 8-K during
         the last quarter of the fiscal year ending September 30, 2002.

                                   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, this 13th day of January 2003.

                        Matrix Energy Services Corporation


                        Joe Bennett, President and Chief Executive Officer




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.


Signature                 Title                                 Date
/s/Joe Bill Bennett
--------------------
Joe Bill Bennett          Chief Executive Officer and Director  January 13, 2003


/s/M.O. Rife III
--------------------
M. O. Rife III            Chairman/Director                     January 13, 2003


                                INDEX TO EXHIBITS

-------------- -------- -------------------------------------------------------
Exhibit No.    Page     Description
               No.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
2.1            *        Plan of Reorganization  and Change of Situs by which
                        Titan Energy Corp., and Power Exploration,
                        Inc. Changes Its Place of Incorporation
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
2.2            *        Agreement and Plan of Merger Between Power  Exploration,
                        Inc. (Nevada) and Power  Exploration, Inc. (Colorado).
                        August 1, 1998
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
2.3            *        Articles of  Incorporator.  Election of  Officers  and
                        Directors  of Power  Exploration,  Inc.(Nevada).
                        May 31, 1998
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
2.4            *        Action  by  Incorporator.  Election  of  Officers  and
                        Directors of Power Exploration, Inc.(Nevada). May 1998

<PAGE>

-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
2.5            *        Special  Action by the Executive  Committee of Power
                        Exploration,  Inc. dated January 11, 1999(Incorporated
                        herein by reference from Exhibits to theCompany's Form
                        8-K field January 19, 1999).
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
3.1            *        Articles of Incorporation of Imperial Energy dated
                        October 31, 1979.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
3.2            *        Amendment to Articles of Incorporation dated June 26,
                        1984.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
3.3            *        Amendment to Articles of Incorporation dated September
                        25, 1996.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
3.4            *        Minutes of Special Shareholders Meeting Changing Name to
                        Oil Retrieval Systems,  Inc. dated May 14, 1997
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
3.5            *        Amendment to Articles of  Incorporation  dated June 15,
                        1997,  Changing  Name to Oil  Retrieval Systems, Inc.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
3.6            *        By Laws of the Corporation
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
3.7            *        Articles of Incorporation of Power Exploration, Inc.
                        (Nevada) dated May 14, 1998
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
3.8            *        By Laws of Power Exploration, Inc. (Nevada dated
                        June 1, 1998
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.1           *        Acquisition  Agreement  dated  December 8, 1999 between
                        Power  Exploration,  Inc. and Rife Oil Properties,  Inc.
                        (Incorporated  herein by reference  from Exhibits to the
                        Company's  Form 8-K filed December 13, 1999).
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.2           *        Agreement to Extend Repayment  Obligation Between Power
                        Exploration,  Inc. and Trident III LLC
                        dated May 1, 1999.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.3           *        Advisory  Agreement  entered into between  Power
                        Exploration,  Inc. and Ronald  Welborn  dated
                        October 21, 1999.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.4           **       Compromise  Settlement  Agreement  and Mutual  Release
                        dated  December 20, 1999 between  Power Exploration,
                        Inc. and Benchmark Equity Group,  Inc., Rife Oil
                        Properties,  Inc. and Jeffery W.Tomz.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.5           **       Compromise  Settlement  Agreement  and Mutual  Release
                        dated  December 20, 1999 between  Power Exploration,
                        Inc. and Trident III, LLC.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.6           **       Compromise  Settlement  Agreement  and Mutual  Release
                        dated  December 20, 1999 between  Power Exploration,
                        Inc. and Benchmark Equity Group, Inc.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.7           **       Purchase  Agreement  dated  December 20, 1999 between
                        Power Exploration, Inc. and Benchmark Equity Group, Inc.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.8           **       Purchase  Agreement  dated December 20, 1999 between
                        Power  Exploration,  Inc. and Trident III, LLC.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.9           *        Fee  Agreement for Legal  Services  between Power
                        Exploration,  Inc. and Richard  Surber dated
                        March 24, 2000.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.10          *        Contract for Financial Public Relations Services between
                        Power Exploration,  Inc. and Interwest Associates dated
                        September 15, 2000.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.11          *        Advisory  Agreement  dated  September  21, 2000 between
                        Power  Exploration,  Inc and Howard A.Pence.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.12          *        Agreement  between Power  Exploration,  Inc. and Genesis
                        Capital Corp.  dated February 9, 2000, or the
                        acquisition of Lincoln Health Fund, Inc.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.13          *        Agreement for Sale of Property  owned by Lincoln Health
                        Fund, Inc.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.14          *        Advisory  Agreement  entered into between  Power
                        Exploration,  Inc. and Ronald  Welborn  dated
                        December 8, 1999.
-------------- -------- -------------------------------------------------------
<PAGE>

-------------- -------- -------------------------------------------------------
10.15          *        Advisory  Agreement  entered into between  Power
                        Exploration,  Inc. and Allen Z. Wolfson dated
                        December 8, 1999.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
10.16          *        Merger and Acquisition Agreement dated March 20, 2000
                        (Pepin Oil Company, Inc. Acquisition.
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
21.1           *        Subsidiaries of the Issuer
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
23             *        Consent of Auditor
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
27             *        Financial Data Schedule ACE
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
9.1           *         Oil Lease Information Per Industry Guide for Corsicana
                        Field Near Dallas, Texas
-------------- -------- -------------------------------------------------------
-------------- -------- -------------------------------------------------------
99.2           *        Oil Lease Information Per Industry Guide for Polk
                        County, Texas Leases
-------------- -------- -------------------------------------------------------

*  Previously filed and incorporated herein by reference from the Form 10-KSB
        field January 14, 2000 by the Company.

** Previously filed and incorporated herein by reference from the Form 10-QSB
        field February 22, 2000 by the Company.



<PAGE>


I, Joe Bill Bennett, certify that:

   1. I have reviewed this annual report on Form 10-KSB of Matrix Energy
Services Corporation;

   2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

   3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

   4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
     and procedures as of a date within 90 days prior to the filing date of this
     annual report (the "Evaluation Date"); and

         c) presented in this annual report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

   5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):

         a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

         b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and

   6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: January 13, 2003

/s/ Joe Bill Bennett

Chief Executive Officer and Acting Chief Financial Officer




--------