SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                               FORM 10-K

(Mark One)
 [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 

For the fiscal year ended     September 30, 1998

 [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934  [FEE REQUIRED]

For the transition period from:

Commission File No.  0-9392

                           CLX ENERGY, INC.
         (Exact name of registrant as specified in its charter)

 COLORADO                                        84-0749623
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                  Identification No.)

1776 Lincoln Street, Suite 806, Denver, CO                     80203
(Address of principal executive offices)                       (Zip code)

Registrant's telephone number, including area code:  (303) 894-0763

     Securities Registered Pursuant to Section 12(b) of the Act:

                               None

     Securities Registered Pursuant to Section 12(g) of the Act:

                      Common Stock, $.01 par value

     Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act during the preceding 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 [ ]

     The number of shares outstanding of each class of the Registrant's common
stock as of the end of the period covered by this report was:  Common Stock -
$0.01 par value, 4,054,154 shares.

     The aggregate market value of the voting stock held by non-affiliates of 
the Registrant at December 1, 1998 was $309,630.

                      Documents Incorporated By Reference

                                     None

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any 
amendment to this Form 10-K    [ ] 

<PAGE>


CLX ENERGY, INC.

FORM 10-K

Table of Contents

September 30, 1998

 

PART I

Item 1.     Business

Item 2.     Properties

Item 3.     Legal Proceedings

Item 4.     Submission of Matters to a vote of Security Holders

PART II

Item 5.     Market for Registrant's Common Stock and Related
              Stockholder Matters

Item 6.     Selected Financial Data

Item 7.     Management's Discussion and Analysis of Financial Condition
              and Results of Operations

Item 8.     Financial Statements and Supplementary Data

Item 9.     Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure

PART III

Item 10.    Director's and Executive Officers of the Registrant

Item 11.    Executive Compensation

Item 12.    Security Ownership of Certain Beneficial Owners and
              Management

Item 13.    Certain Relationships and Related Transactions

Item 14.    Exhibits, Financial Statement Schedules and Reports
              on Form 8-K

Signatures

<PAGE>


                                     PART I

                                    ITEM 1.

                                   BUSINESS


General Development of Business
-------------------------------

     CLX Energy, Inc., the registrant (the "Company") is an independent oil and
gas company which was incorporated in the State of Colorado on December 12, 
1977.  The Company engages in on-shore oil and gas exploration, development
and production in the continental United States.  The Company's oil and gas
activities are concentrated primarily in Kansas, Oklahoma and Wyoming.


Financial Information About Industry Segments
---------------------------------------------

     The Company has engaged in only one industry segment and line of business,
namely the acquisition, exploration, development and operation of oil and
gas properties for its own account.  See the Company's Financial Statements
included herein.


Forward-Looking Statements
--------------------------

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


Description of Business
-----------------------

     CLX Energy, Inc., the Company, is engaged in the operation of producing 
oil and gas wells, the acquisition of producing properties, the acquisition of 
oil and gas leases, and the development of oil and gas drilling prospects.  
Drilling prospects, both development and wildcat, are sold to others on a 
promoted basis with the Company recovering its land, legal and geological costs
and retaining a cost free interest in the prospect.

     As of September 30, 1998 the Company's significant oil and gas operations 
were located in the following areas.

               STATE               COUNTY
               -----               ------

               Wyoming             Campbell and Crook
               Kansas              Meade
               Oklahoma            Alfalfa and Beaver


<PAGE>


Principal Products Produced and Services Rendered
-------------------------------------------------

     The Company's principal products are crude oil and natural gas.  Crude oil
and natural gas are sold to various purchasers, including pipeline companies,
which generally service the area in which the Company's wells are located.  The
Company's oil and gas production is sold to several purchasers, three of which
purchased more than 10% of oil and gas revenues.  Prices received for the 
Company's oil and gas production is based upon the "spot" market of the 
National Commodity Futures Exchange subject to reductions for transportation
and product quality.  These prices vary from month to month subject to supply
and demand.  See the Company's Financial Statements included herein.


Status of New Products or Industry Segments
-------------------------------------------

     There has been no public announcement of, and no information otherwise has
been made public about a new product or industry segment, which would require 
the investment of a material amount of the Company's assets, or which otherwise
is material.


Sources and Availability of Raw Materials
-----------------------------------------

     The existence of commercial oil and gas reserves is essential to the 
ultimate realization of value from the Company's properties and thus may be 
considered a raw material essential to the Company's business.  However, the 
acquisition, exploration, development, production, and sale of oil and gas is 
subject to many factors which are outside of the Company's control.  These 
factors include national and international economic conditions, availability of
drilling rigs, casing, pipe and other equipment and supplies, proximity to 
pipelines, the supply and price of other fuels.  The Company acquires oil and
gas properties from landowners, other owners of interests in such properties,
or governmental entities.  For information relating to specific properties of
the Company see Item 2 below.  The Company currently is not experiencing any 
difficulty in acquiring necessary supplies, including drilling rigs.


Patents, Trademarks, Licenses, Franchises and Concessions
---------------------------------------------------------

     The Company does not own any patents, trademarks, licenses, franchises, or
concessions, except oil and gas interests granted by governmental authorities
and private land owners.


Seasonal Nature of Business
---------------------------

     The Company's business is not seasonal in nature.


Working Capital Items
---------------------

     Working capital is not required to carry inventories to meet rapid 
delivery requirements, or to assure continuous allotments of goods from 
suppliers.  Access to sufficient cash is essential to take advantage of 
opportunities to acquire, develop, and operate oil and gas properties.



<PAGE>


Major Customers
---------------

     The Company's business does not depend upon a single customer or a very 
few customers.  Oil and gas purchasers have been readily available in this 
Company's market areas (See Note 8 to Financial Statements).


Backlog
-------

     Backlog is not relevant to an understanding of the Company's business.


Renegotiation or Termination of Government Contracts
----------------------------------------------------

     No portion of the Company's business is subject to renegotiation of 
profits or termination of contracts or subcontracts at the election of the 
Government.


Competitive Conditions
----------------------

     The exploration for and development and production of oil and gas are 
subject to intense competition.  The principal methods of competition in the 
industry for the acquisition of oil and gas leases are the payment of bonus 
payments at the time of acquisition of leases, delay rentals, location damage 
supplement payments, the use of differential royalty rates, the amount of 
annual rental payments and stipulations requiring exploration and production 
commitments by the lessee.  Companies with greater financial resources, 
existing staff and labor forces, equipment for exploration, and vast experience
will be in a better position than the Company to compete for such leases.  In
addition, the availability of a ready market for oil and gas will depend upon 
numerous factors beyond the Company's control, including the extent of domestic
production and imports of oil, proximity and capacity of pipelines, and the
affect of federal and state regulation of oil and gas sales.  The Company has
an insignificant competitive position in the oil and gas industry.


Research and Development
------------------------

     The Company has not engaged and does not currently engage in any research 
and development activities.


<PAGE>


Environment Protection
----------------------

     The Company is subject to various federal, state and local provisions 
regarding environmental matters, the existence of which has not hindered nor 
adversely affected the Company's business.  Although the Company does not 
believe its business operations presently impair environmental quality, 
compliance with federal, state and local regulations which have been enacted or
adopted regulating the discharge of materials into the environment could have 
an adverse effect upon the capital expenditures, earnings and competitive 
position of the Company.  Since inception, the Company has not made any 
material capital expenditures for environmental control facilities and is not
aware of any such expenditures that will be required in the current or 
following fiscal years.


Employees
---------

     As of September 30, 1998, the Company employed one person, the President
and Chief Executive Officer, on a full-time basis.


Financial Information About Foreign and Domestic Operations and Export Sales
----------------------------------------------------------------------------

     The Company has no operations in foreign countries and no portion of its 
sales or revenues is derived from customers in foreign countries.



<PAGE>


                                ITEM 2.

                              PROPERTIES


Office Facilities
-----------------

     The Company's offices are located at 1776 Lincoln Street, Suite 806, 
Denver, Colorado  80203, in space which the Company leases from an unaffiliated
entity.  The Company currently occupies approximately 1,440 square feet for 
which it pays a monthly rental of $1,137.  The lease agreement on this space 
is on a month to month basis.  The Company has entered into a three year lease 
for new office space effective January 1, 1999.  Monthly rent will approximate 
$1,138 for 1999.

Oil and Gas Properties
----------------------

     The Company is in only one line of business, that of acquiring, developing
and producing oil and gas properties.  The Company's estimated discounted 
future net revenue attributable to proved producing reserves of $242,500 is 
attributed 85.6% to natural gas reserves and 14.4% to oil reserves.

     The Company holds interests in producing and non-producing leaseholds as 
set forth below.

               Producing Properties                    Non-Prod. Properties
               --------------------                    --------------------
               Gross          Net                      Gross          Net
               Acres          Acres                    Acres          Acres
               -----          -----                    -----          -----

State
-----

Kansas         1,920           294                       -               -
Oklahoma       1,120           212                       -               -
Wyoming          716            58                     5,471           1,407
               -----           ---                     -----           -----

               3,756           564                     5,471           1,407


     Net acres represent the gross acres in a lease or leases multiplied by the
Company's working interest in such lease or leases.

     The Company's undeveloped acreage is all held pursuant to leases from the
landowner or a governmental entity.  Such leases have varying dates of 
execution and generally expire one to five years after the date of the lease.
The Company is obligated to pay varying delay rentals to the lessors of such
properties to prevent the leases from expiring.



<PAGE>


Proved and Proved Developed Reserves
------------------------------------

     The following table shows, for the years indicated, the proved and proved
developed oil and gas reserves attributable to the Company's interests.
Proved oil and gas reserves are the estimated quantities of crude oil, natural
gas, and natural gas liquids which geological and engineering data demonstrate
with reasonable certainty to be recoverable in future years from known 
reservoirs under existing economic and operating conditions, i.e., prices and
costs as of the date the estimate is made.  Prices include consideration of
changes in existing prices provided only by contractual arrangements, but not
on escalations based upon future conditions.  Proved developed oil and gas 
reserves are reserves that can be expected to be recovered through existing
wells with equipment and operating methods.

                                                September 30
                                  --------------------------------------
                                      1998          1997        1996
                                  ------------   ----------  -----------

     Barrels of oil
     --------------
       Proved                        23,100        30,500      38,200 
       Proved developed               8,900        16,300      24,100 

     MCF of gas
     ----------
       Proved                       214,400       242,600     183,400
       Proved developed             214,400       242,600     183,400 


     No oil and gas of the Company is applicable to long term supply or similar
agreements with foreign governments or authorities in which the Company is
a producer.


Estimated Future Net Revenues
-----------------------------

     The following table shows, for the years indicated, the present value of
estimated future net revenues to be generated by the sales of the estimated
reserves utilizing a discount factor of 10% per year and holding the sales
price of oil and gas constant at the respective year end levels.


                                               September 30
                                  --------------------------------------
                                     1998         1997          1996  
                                  ----------    --------     -----------

       Proved                     $310,200      417,200       448,900 
       Proved developed           $242,500      288,600       335,400 


     See Supplementary Information - Oil and Gas Producing Activities for an
explanation of change in the estimated future net revenue of the Company.

     The above reserves are located entirely within the United States.


<PAGE>


Oil and Gas Reserve Estimates Filed
-----------------------------------

     Since September 30, 1998 the Company has filed no estimates of total 
proved net oil or gas reserves with or included such information in reports to
any federal authority or agency other than the Securities and Exchange 
Commission.


Net Oil and Gas Production
--------------------------

     The following table shows, for the periods indicated, the approximate
production attributable to the Company's oil and gas interests.


                                 YEAR ENDED SEPTEMBER 30
                         ---------------------------------------
                            1998           1997          1996
                            ----           ----          ----

     Crude Oil (Bbls)       2,200          1,800         1,900 
     Natural Gas (MCF)     25,600         31,400        35,200 


     The following table shows, for the periods indicated, the approximate 
average sales price per barrel of oil and MCF of gas and approximate average 
productive cost of oil and gas produced on a relative unit basis.


                                      YEAR ENDED SEPTEMBER 30
                              ---------------------------------------
                                 1998           1997          1996
                                 ----           ----          ----
     Average Sales Price
       Per Barrel of Oil        $ 9.42         16.84         16.13
       Per MCF of Gas           $ 2.36          2.55          2.03

     Average Lifting Cost
       Per Equivalent MCF       $  .23           .36          0.24 
       Per Equivalent BBL       $ 3.61          6.28          4.57



<PAGE>

Total Gross and Net Productive Wells and Developed Acres
--------------------------------------------------------

     The following table sets forth the Company's total gross and net 
productive wells as of September 30, 1998, which are located on 3,756 gross 
(564 net) acres:

               Gross Wells               Net Wells
               -----------               ---------
               Oil     Gas               Oil   Gas
               ---     ---               ---   ---

                2       11               .15   .91



Net Productive and Dry Exploratory and Development Wells
--------------------------------------------------------

     The following table sets forth the number of net productive and dry 
exploratory and development wells drilled by the Company during fiscal 1998,
1997 and 1996.

          Exploratory Wells          Development Wells
          -----------------          -----------------
         Net Prod.   Net Dry        Net Prod.   Net Dry
         ---------   -------        ---------   -------
                              1998
                              ----
              0       .00              0          0
                              1997
                              ----
              0       .21              0          0
                              1996
                              ----
              0       .20              0          0



Present Activities
------------------

     As of December 22, 1998, the Company was not involved in the drilling of 
any wells.


Future Oil and Gas Delivery Contracts
-------------------------------------

     The Company is not obligated to provide a fixed and determinable quantity
of oil or gas in the future pursuant to existing contracts or agreements.



<PAGE>


                                ITEM 3.

                           LEGAL PROCEEDINGS

     The Company is not party to any pending legal proceedings, nor have any 
such proceedings been threatened and none are contemplated, except for the 
demand for reimbursement of certain taxes as described in Note 9.  The Company
knows of no legal proceedings, pending or threatened, or judgements against any
Director or Officer of the Company in their capacity as such, nor are any such 
persons involved in "Certain Legal Proceedings" as defined in Section 401(f) of
Regulation SK.


                                   ITEM 4.

             SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


     No matters were submitted to the vote of security holders during the 
fourth quarter of the fiscal year.


                                   PART II

                                   ITEM 5.
  MARKET PRICE OF THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS


     The Company's Common Stock is traded in the over-the-counter market and 
listed on the Bulletin Board under the symbol "CLXE."  Prior to 
February 20, 1998, no quotations on the Company's stock was readily available
since the Company's stock was not quoted on either the NASDAQ Small 
Capitalization level or the Bulletin Board.  Information regarding
closing bid prices has been obtained from the National Quotation Bureau.  The
following quotations, where quotes were available, reflect inter-dealer prices,
without retail mark-up, markdown or commission and may not necessarily 
represent actual transactions.

          FISCAL 1998
          -----------                
                                     HIGH          LOW
         Quarter ended               ----          ---
 
         March 31, 1998             $ .15           .125
         June 30, 1998                .18           .15
         September 30, 1998           .18           .15

     The Company has paid no dividends on its common stock and does not expect
to pay dividends in the foreseeable future.

     The following table sets forth the approximate number of security holders 
of record of the Company's $0.01 par value common stock and $0.01 par value
preferred stock as of September 30, 1998.


     TITLE OF CLASS     SHARES OUTSTANDING     NUMBER OF SHAREHOLDERS
     --------------     ------------------     ----------------------

     $0.01 Par Value         4,054,154                1,059
      Common Stock

     $0.01 Par Value           134,000                   18
      Series A
      Preferred Stock


     The Series A Preferred Stock was issued as a cumulative convertible 
preferred stock paying a dividend of $0.06 per share per year.  See Note (3) of
the Notes to Financial Statements for details of the preferred stock.



<PAGE>


                                  ITEM 6.

                          SELECTED FINANCIAL DATA
                          -----------------------


<TABLE>
                                                                    
                                              YEAR ENDED                
                                             SEPTEMBER 30           
                             --------------------------------------------
                           1998       1997       1996       1995       1994
                           ----       ----       ----       ----       ----

<S>                    <C>         <C>        <C>        <C>       <C>      

Oil and gas sales      $  82,019    111,309    108,845     95,648   127,240 
Total revenues            83,551    143,092    172,507    120,782   227,529
Costs and expenses       142,987    259,589    184,126    241,676   259,674
                         -------    -------    -------    -------   -------

Net loss               $( 59,436)  (116,497)  ( 11,619)  (120,894) ( 32,145)
                         =======    =======    =======    =======   =======

Net loss per 
 common share - basic
 and diluted           $(    .02)  (    .03)  (    .01)  (    .04) (    .01)
                         =======    =======    =======    =======   =======

Weighted average
 number of common
 shares outstanding -
 basic and diluted     4,054,154  3,905,752  3,220,821  3,220,821 3,220,821
                       =========  =========  =========  ========= =========

At year end:
 Current assets        $  37,417    106,244     30,040     16,951    36,617 
 Current liabilities      89,962    124,748     75,522     90,400    62,666 
 Working capital
  (deficit)             ( 52,545)  ( 18,504)  ( 45,482)  ( 73,449) ( 26,049)
 Total assets            172,297    266,519    208,789    239,420   349,260 
 Long-term debt              -          -          -        4,134    20,814 
 Stockholders equity      82,335    141,771    133,267    144,886   265,780

Cash dividends per  
 common share          $     -          -          -          -         -
                         =======    =======    =======    =======   =======






</TABLE>
<PAGE>


                                   ITEM 7.

          MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS


Liquidity, Capital Resources and Commitments
--------------------------------------------

     Under current prices for oil and gas, net cash flow from oil and gas sales
does not cover fixed costs of the Company.  Net cash flow from oil and gas 
sales at the end of fiscal 1998 were down approximately 50% from net cash flow
amounts at the beginning of fiscal 1998 on essentially the same quantity of 
production.  This has resulted in net cash flow failing to cover fixed costs by
approximately $2,000 per month at the current time.  If oil and gas prices 
remain at the current depressed levels, the Company may be required to sell 
some of its assets.  The Company is currently seeking capital infusion through
the sale of equity or merger with a stronger entity.

     The Company currently has a negative current ratio with current 
liabilities exceeding current assets by approximately $53,000.  Of this amount,
$45,000 is booked as a payable to Panhandle Eastern Pipeline as a result of an
FERC ruling concerning reimbursement of ad valorem taxes collected by a 
predecessor of CLX on gas production in Meade County, Kansas during the period
October 1983 through June 1988.  This issue is discussed in more detail in 
note 9 to the financial statements.  It is anticipated that some or all of this
reimbursement will be due in May, 1999.

     Internally, the Company does not expect to be adversely affected by the 
year 2000 (y2k) problem.  The Company's use of computers is minimal and any 
work performed by computer programs can be done manually.  The Company does not
know the extent to which purchasers of its oil and gas production will be 
affected by the y2k problem.

     The Company currently has drilling prospects which it is actively 
marketing to industry participants.  If these prospects are successfully sold,
the Company will receive a front-end payment and an interest carried free of
costs in these prospects which would improve the Company's liquidity.
 

<PAGE>


Results of Operations
---------------------
Year Ended September 30, 1998 Compared With Year Ended September 30, 1997:
--------------------------------------------------------------------------

Operating Revenue
-----------------

     Revenue from oil and gas sales for the year ended September 30, 1998 was
$82,019 compared to $111,309 for the year ended September 30, 1997.  This
decrease is primarily attributable to decreases in average unit prices for oil
and gas.  The decrease in gas sales volume was primarily the result of normal
declines.  Management fees decreased due to the termination of the drilling
program that the Company managed.

     A comparison of approximate volumes sold and average unit prices is
summarized as follows:

                                    YEAR ENDED SEPT. 30
                                    -------------------
     Quantities Sold                 1998         1997
     ---------------                 ----         ----

        Oil (Bbls.)                  2,200        1,800
        Gas (MCF)                   25,600       31,400

     Average Unit Price
     ------------------

        Oil (Bbls.)                 $ 9.42        16.84
        Gas (MCF)                     2.36         2.55


Operating Costs and Expenses
----------------------------

     Lease operating expense, was $15,505 for the year ended September 30, 1998
compared to $21,804 for the year ended September 30, 1997, a decrease of 29%.
This decrease is attributable primarily to normal fluctuations in operating 
costs caused by mild weather conditions.

     Depreciation and depletion declined as a result of decling production on 
higher cost basis producing properties.

     Dry hole expense and abandoned leases decreased as a result of reduced
drilling activity.

     The unusual expenses for the year ended September 30, 1997 represents
estimated costs of settlement of a claim relating to gas prices during the
years 1983 through 1985.

     General and administrative expense for the year ended September 30, 1998
was $88,690 compared to $133,836 for the year ended September 30, 1997.  The
decrease was primarily the result of decreases in salary expense and contract
wages.


<PAGE>


Year Ended September 30, 1997 Compared With Year Ended September 30, 1996:
--------------------------------------------------------------------------

Operating Revenue
-----------------

     Revenue from oil and gas sales for the year ended September 30, 1997 was
$111,309 compared to $108,845 for the year ended September 30, 1996.  This
increase is attributable to increases in average unit prices for oil and gas
offset by a decrease in revenue due to quantities sold in 1997 compared to 
1996.  The decrease in sales volume was primarily the result of normal 
declines.  Management fees increased due to an increase in activity in a 
drilling program that the Company manages.

     A comparison of approximate volumes sold and average unit prices is 
summarized as follows:

                                    YEAR ENDED SEPT. 30
                                    -------------------
     Quantities Sold                 1997         1996
     ---------------                 ----         ----

       Oil (Bbls.)                   1,800        1,900
       Gas (MCF)                    31,400       35,200

     Average Unit Price
     ------------------

       Oil (Bbls.)                  $16.84        16.13 
       Gas (MCF)                    $ 2.55         2.03


Operating Costs and Expenses
----------------------------

     Lease operating expense, was $21,804 for the year ended September 30, 1997
compared to $24,292 for the year ended September 30, 1996, a decrease of 10%.  
This decrease is attributable primarily to normal fluctuations in operating 
costs.

     The unusual expenses for the year ended September 30, 1997 represents
estimated costs of settlement of a claim relating to gas prices during the 
years 1983 through 1985.

     General and administrative expense for the year ended September 30, 1997
was $133,836 compared to $110,195 for the year ended September 30, 1996.  The
increase was primarily the result of an increase in salary expense.

     Dry hole expense increased as a result of additional participation in 
exploratory wells.


<PAGE>


Results of Operations
---------------------
Year Ended September 30, 1996 Compared With Year Ended September 30, 1995:
--------------------------------------------------------------------------

Operating Revenue:
------------------

     Revenue from oil and gas sales for the year ended September 30, 1996 was
$108,845 compared to $95,648 for the year ended September 30, 1995.  This
increase is attributable to increase in average unit prices for oil and gas 
offset by a decrease in revenue due to quantities sold in 1996 compared to 
1995.  The decrease in sales volumes was primarily the result of normal 
declines.

     A comparison of approximate volumes sold and average unit prices is
summarized as follows:

                                   YEAR ENDED SEPT. 30
                                   -------------------
     Quantities Sold                1996         1995
     ---------------                ----         ----

       Oil (Bbls.)                  1,900        2,500
       Gas (MCF)                   35,200       44,300

     Average Unit Price
     ------------------

       Oil (Bbls.)                 $16.13        13.06
       Gas (MCF)                   $ 2.03         1.44


Operating Costs and Expenses
----------------------------

     Lease operating expense, including production taxes, was $34,068 for the
year ended September 30, 1996 compared to $28,326 for the year ended September
30, 1995, an increase of 20%.  This increase is attributable to a general 
increase in operating costs during 1996.

     General and administrative expense for the year ended September 30, 1996
was $110,195 compared to $122,146 for the year ended September 30, 1995.
Approximately $9,000 of this $12,000 decrease in general and administrative 
expense was from reduced salary expense and the balance of the decrease 
resulted from a decrease activity level of oil and gas leasing and prospect 
generation.

     Depreciation and depletion expense for the year ended September 30, 1996
was $30,592 compared to $47,129 for the year ended September 30, 1995, a 
decrease of 35%.  This decrease is the result of a decrease in oil and gas 
production quantities sold and reduced capitalized costs due to an impairment
provision recorded for the year ended September 30, 1995.




<PAGE>




                              ITEM 8

            FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
            -------------------------------------------

                          CLX ENERGY, INC.

       INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                            
Independent Auditor's Report
Balance Sheets - September 30, 1998 and 1997
Statements of Operations - years ended
  September 30, 1998, 1997 and 1996 
Statements of Stockholders' Equity - 
  years ended September 30, 1998, 1997 and 1996
Statements of Cash Flows - year ended
  September 30, 1998, 1997 and 1996
Notes to financial statements - years
  ended September 30, 1998, 1997 and 1996
Schedule V. Property and equipment - years
  ended September 30, 1998, 1997 and 1996 
Schedule VI. Accumulated depreciation and
  depletion of property and equipment - 
  years ended September 30, 1998, 1997 and 1996



     The remaining schedules for which provision is made in Regulation S-X
     are not required under the instructions contained therein, are
     inapplicable, or the information required in included in the financial
     statements or footnotes.




<PAGE>


                               EASTON AND BARSCH
                         Certified Public Accountants
                      8790 West Colfax Avenue, Suite 106
                              Lakewood, CO  80215


                         INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
CLX Energy, Inc.
Denver, CO


We have audited the accompanying balance sheets of CLX Energy, Inc. as of 
September 30, 1998 and 1997 and the related statements of operations, 
stockholders' equity and cash flows for the years ended September 30, 1998, 
1997 and 1996.  Our audits also included the financial statement schedules 
listed in the index at Item 8.  These financial statements and financial 
statement schedules are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the 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 financial statements referred to above present fairly, in
all material respects, the financial position of CLX Energy, Inc. as of 
September 30, 1998 and 1997 and the results of its operations and its cash 
flows for the years ended September 30, 1998, 1997 and 1996 in conformity with 
generally accepted accounting principles.  Also, in our opinion, such financial
statement schedules V and VI, when considered in relation to the basic 
financial statements taken as a whole, present fairly in all material respects 
the information set forth therein.


/s/ EASTON AND BARSCH
EASTON AND BARSCH
Certified Public Accountants
Lakewood, Colorado


December 16, 1998


<PAGE>
<TABLE>


                           CLX ENERGY, INC.
                            Balance Sheets
                      September 30, 1998 and 1997


<CAPTION>
ASSETS:                                        1998           1997
<S>                                        <C>            <C>
Current assets:
   Cash                                    $  30,024         34,763 
   Accounts receivable:
     Trade                                       294         59,471
     Oil and gas sales                         7,099         12,010
                                             -------        -------
          Total current assets                37,417        106,244
                                             -------        -------
Property and equipment, at cost:
   Oil and gas properties
     (successful effort method):
       Proved                                327,213        329,732 
       Unproved                               18,314         20,060
   Office equipment                            3,618          3,618
                                             -------        -------
                                             349,145        353,410
       Less accumulated depreciation
         and depletion                      (214,265)      (193,135)
                                             -------        -------
                                             134,880        160,275
                                             -------        -------
          Total assets                     $ 172,297        266,519
                                             =======        =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                        $  81,607        116,393 
   Due joint interest owners                   8,355          8,355
                                             -------        -------
          Total current liabilities           89,962        124,748
                                             -------        -------
Stockholders' equity:
   Preferred stock, $.01 par value,
     2,000,000 shares authorized,
     600,000 shares designated Series A
     $.06 cumulative convertible:
     134,000 shares issued and outstanding
     (aggregate involuntary liquidation
     preference of $134,000 plus unpaid
     dividends)                                1,340          1,340
   Common stock, $.01 par value,
     50,000,000 shares authorized,
     4,054,154 shares issued and 
     outstanding                              40,542         40,542
   Additional paid-in capital                541,417        541,417
   Accumulative deficit                     (500,964)      (441,528)
                                             -------        -------
          Net stockholders' equity            82,335        141,771 
                                             -------        -------
          Total Liabilities and Equities   $ 172,297        266,519
                                             =======        =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>

                             CLX ENERGY, INC.
                         Statements of Operations
              Years Ended September 30, 1998, 1997 and 1996

<CAPTION>
                                            1998          1997          1996  
<S>                                     <C>           <C>           <C>     
Revenues:
   Oil and gas sales                    $  82,019       111,309       108,845
   Management fees                            900        26,783        19,075
                                          -------       -------       ------- 
     Total revenue                         82,919       138,092       127,920
                                          -------       -------       -------

Operating expenses:
   Lease operating                         15,505        21,804        24,292
   Production taxes                         9,696         9,748         9,776
   Lease rentals                            1,358         2,324           645
   Dry holes and abandoned leases             428        14,580           520
   Depreciation and depletion              21,130        31,096        30,592
   Unusual expenses                           -          45,000           -
   Impairment of oil and gas properties     2,519           -             -
   General and administrative              88,690       133,836       110,195
                                          -------       -------       ------- 
     Total operating expenses             139,326       258,388       176,020
                                          -------       -------       ------- 
     Operating loss                      ( 56,407)     (120,296)     ( 48,100)
                                          -------       -------       ------- 

Other income (expenses):
   Gain on sale of assets                     632         5,000        44,587
   Interest expense                      (  3,661)     (  1,201)     (  8,106)
                                          -------       -------       ------- 
     Total other income (expenses)       (  3,029)        3,799        36,481
                                          -------       -------       -------

          Net loss                      $( 59,436)     (116,497)     ( 11,619)
                                          =======       =======       ======= 

Weighted average number of common
  shares outstanding - basic and 
  diluted                               4,054,154     3,905,752     3,220,821
                                        =========     =========     =========

Net loss per common share - basic
  and diluted                           $(    .02)     (    .03)     (    .01)
                                          =======       =======       =======

<FN>
The accompanying notes are an integral part of these financial statements.

</TABLE>

<PAGE>
<TABLE>

                              CLX ENERGY, INC.
                     Statements of Stockholders' Equity
                Years Ended September 30, 1998, 1997 and 1996

<CAPTION>
                                                         Additional
                        Preferred Stock     Common Stock   Paid-in  Accumulated
                         Shares  Amount    Shares  Amount  Capital    Deficit

<S>                     <C>     <C>     <C>        <C>      <C>      <C>

Balances,
  September 30, 1995    134,000 $1,340  3,220,821  $32,208  424,750  (313,412)

Net loss                    -      -          -        -        -    ( 11,619)
                        -------  -----  ---------   ------  -------   -------

Balances,
  September 30, 1996    134,000  1,340  3,220,821   32,208  424,750  (325,031)

Issuance of common 
  stock                     -      -      833,333    8,334  116,667       -

Net loss                    -      -          -        -        -    (116,497)
                        -------  -----  ---------   ------  -------   -------
Balances,
  September 30, 1997    134,000  1,340  4,054,154   40,542  541,417  (441,528)

Net loss                    -      -          -        -        -    ( 59,436)
                        -------  -----  ---------   ------  -------   -------
Balances, 
  September 30, 1998    134,000 $1,340  4,054,154  $40,542  541,417  (500,964) 
                        =======  =====  =========   ======  =======   =======


<FN>

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


</TABLE>
<PAGE>
<TABLE>
                            CLX ENERGY, INC.
                        Statements of Cash Flows
              Years Ended September 30, 1998, 1997 and 1996


<CAPTION>
                                                  1998       1997       1996
<S>                                           <C>         <C>        <C>
Cash flows from operating activities:
   Net loss                                   $( 59,436)  (116,497)  ( 11,619)
   Adjustments to reconcile net loss
     to net cash used in operating 
     activities:
       Depreciation and depletion                21,130     31,096     30,592
       Impairment of oil and gas
        properties                                2,519        -          -
       Abandoned properties                         -          -          623
       Gain on sale of assets                  (    632)  (  5,000)  ( 44,587)
       (Increase) decrease in
         accounts receivable                     64,088   ( 56,734)  (  5,234)
       (Increase) decrease in
         deposits and prepaid expenses              -           49        671
       Increase (decrease) in 
         accounts payable                      ( 34,786)   110,716   (  5,921)
       Increase (decrease) in 
         accrued expenses                           -     (    356)  (     36)
                                                -------    -------    -------
           Net cash provided by (used in)
             operating activities              (  7,117)  ( 36,726)  ( 35,511)
                                                -------    -------    -------

Cash flows from investing activities:
   Proceeds from sale of property and 
     equipment                                    7,130      5,000     58,141
   Purchase of property and equipment          (  4,752)  ( 12,622)  (  1,049)
                                                -------    -------    -------
           Net cash provided by (used in)
             investing activities                 2,378   (  7,622)    57,092
                                                -------    -------    -------

Cash flows from financing activities:
   New short-term borrowings                        -          -       14,000 
   Payments on short-term borrowings                -     (  4,134)  ( 10,375)
   Payments on long-term borrowings                 -     ( 57,000)  ( 16,680)
   Proceeds from issuance of common stock           -      125,000        -   
                                                -------    -------    -------
           Net cash provided by (used in)
             financing activities                   -       63,866   ( 13,055)
                                                -------    -------    -------

           Net increase (decrease) in cash     (  4,739)    19,518      8,526

Cash, beginning of year                          34,763     15,245      6,719
                                                -------    -------    -------

Cash, end of year                             $  30,024     34,763     15,245
                                                =======    =======    =======

Supplemental disclosures of cash 
  flow information - cash paid                               
  during period for interest                  $     -        1,557      8,142
                                                =======    =======    =======

<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
                              CLX ENERGY, INC.
                       NOTES TO FINANCIAL STATEMENTS
               Years Ended September 30, 1998, 1997 and 1996


(1)  Summary of Significant Accounting Policies
     ------------------------------------------
     (a)  Nature of operations
          --------------------
          The Company is engaged in the oil and gas business which consists of
          acquiring, exploring, developing, selling and operating oil and gas
          properties.  The Company's oil and gas activities are subject to 
          existing Federal, state and local environmental laws, rules and
          regulations.  All of the Company's activities are in the United 
          States, primarily Kansas, Oklahoma and Wyoming.  The Company's oil
          and gas production is sold to several purchasers, three of which
          purchase more than 10 percent of oil and gas revenues.

     (b)  Use of estimates
          ----------------
          The preparation of financial statements in conformity with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect certain reported amounts and
          disclosures.  Oil and gas reserve estimates are inherently imprecise
          and are continually subject to revisions based on production
          history, results of additional exploration and development, price of
          oil and gas and other factors.  Accordingly it is least reasonably
          possible those estimates could be revised in the near term and those
          revisions could be material.

     (c)  Property and equipment
          ----------------------
          The Company follows the successful efforts method of accounting.
          Lease acquisition and development costs (tangible and intangible)
          for expenditures relating to proved oil and gas properties are
          capitalized.  Delay and surface rentals are charged to expense in
          the year incurred.  Dry hole costs incurred on exploratory
          operations are expensed.  Dry hole costs associated with developing
          proved fields are capitalized.  Expenditures for additions,
          betterments, and renewals are capitalized.  Geological and
          geophysical costs are expensed when incurred.

          Upon sale or retirement of proved properties, the cost thereof and
          the accumulated depreciation or depletion are removed from the
          accounts and any gain or loss is credited or charged to income.
          Maintenance and repairs are charged to operating expenses.

          Provisions for depreciation and depletion of capitalized exploration
          and development costs are computed on the unit-of-production method
          based on estimated proved developed reserves of oil and gas on a 
          property by property basis.  An additional impairment provision is
          recorded if the estimated fair market value is less than the carrying
          amount of the assets on a property by property basis.

          Unproved properties are assessed periodically to determine whether
          they are impaired.  When impairment occurs, an impairment loss is
          recognized.  When leases for unproved properties expire, any
          remaining cost is expensed.

          Depreciation on office equipment is provided using accelerated
          methods with estimated useful lives of five to seven years.

<PAGE>


                               CLX ENERGY, INC.
                   NOTES TO FINANCIAL STATEMENTS (continued)
  

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

     (e)  Fair value of financial instruments
          -----------------------------------
          The Company's financial investments consist of cash, trade 
          receivables and trade payables.  The carrying value of cash and cash
          equivalents, trade receivables and trade payables are considered to
          be representative of their fair market value, due to the short 
          maturity of these instruments.

     (f)  Net loss per common share
          -------------------------

          Net loss per common share is computed on the basis of the weighted
          average number of common shares outstanding during the year as
          illustrated below:

                                  1998               1997               1996
                                  ----               ----               ----
Net loss                      $( 59,436)          (116,497)          ( 11,619)
Preferred stock dividends      (  8,040)          (  8,040)          (  8,040)
                                -------            -------            -------
Net loss, basic and diluted,
  applicable to common
  stockholders                $( 67,476)          (124,537)          ( 19,659)
                                =======            =======            =======

Weighted average number of
  shares outstanding - basic
  and diluted                 4,054,154          3,905,752          3,220,821
                              =========          =========          =========

Net loss per share, basic and
  diluted, applicable to
  common shareholders         $(    .02)          (    .03)          (    .01)
                                =======            =======            =======


Options to purchase 475,000 shares of common stock were outstanding at 
September 30, 1998 and September 30, 1997 but were not included in the 
computation of diluted net loss per share because the result would be 
antidilutive.


<PAGE>


                              CLX ENERGY, INC.
                  NOTES TO FINANCIAL STATMENTS (continued)

(2)  Notes Payable
     -------------
          In December, 1996 the Company paid principal & interest in full on a 
          revolving line of credit with a bank in the amount of $57,000 and a
          note due to a bank in the amount of $4,134.

          The weighted average balance outstanding and the weighted average
          interest rate for 1997 and 1996 were as follows:

                                                  1997        1996      
                                                  ----        ----      
               Weighted average balance
                 outstanding                    $11,428      73,157 
               Weighted average interest rate     10.5%       10.2% 

(3)  Stockholders' Equity
     --------------------
          On December 4, 1996 the Company sold, in a private placement, 833,333
          shares of common stock for $ .15 per share.  

          Each share of the Company's outstanding Series A preferred stock was 
          convertible into one share of common stock until the conversion 
          privilege expired on April 30, 1983.  Except in certain specified 
          circumstances, the Series A preferred stock is nonvoting.  The 
          Series A shares are redeemable at the option of the Company at $1.50 
          per share, plus any accrued and unpaid dividends.  The Series A 
          preferred stock has an involuntary liquidation preference of $1 per 
          share plus accrued and unpaid dividends.  Dividends on preferred 
          stock of $.06 per share, $8,040, were not declared in 1984 through 
          1998 for a total of $120,600 and are in arrears at September 30, 
          1998.

(4)  Stock Options
     -------------
          During the 1994 fiscal year the Company adopted an employee incentive
          stock option plan which provides for the issuance to employees,
          including officers, of up to 10 percent of the issued and outstanding
          shares of common stock in accordance with the plan.  Under this plan,
          options are exercisable at market price of the Company's common stock
          on the date of grant, have a term of ten years and are earned over a
          five year period.  The Company issued options on 200,000 shares under
          this plan during the 1994 fiscal year.  Options on 100,000 shares 
          were canceled during the 1997 fiscal year and options on 100,000 
          shares remain outstanding at September 30, 1998.

          During the 1994 fiscal year the Company adopted a director stock 
          option plan which provides for the issuance to members of the board, 
          who are not full time employees of the Company, options to purchase 
          up to 125,000 shares of the Company's common stock in accordance with
          the plan.  Under this plan, options are exercisable at market price 
          of the Company's common stock on the date of grant, have a term of 
          ten years and are earned over a five year period.  The Company issued
          options on 93,750 shares under this plan during the 1994 fiscal year 
          and issued options on 31,250 during the 1997 fiscal year.


<PAGE>


                              CLX ENERGY, INC.
                  NOTES TO FINANCIAL STATEMENTS (continued)


          The Company granted non-qualified options to two officers of the 
          Company for 400,000 common shares at $ .25 per share during the 1994 
          fiscal year.  The options are exercisable for up to ten years after 
          the date of grant.  Options on 200,000 common shares were canceled 
          during the 1997 fiscal year and options on 200,000 shares remain 
          outstanding at September 30, 1998.

          In connection with the acquisition of an oil and gas property in 
          September, 1994, the Company issued non-qualified options for 50,000
          shares of common stock at $ .12.  The options are exercisable until
          September, 1999.

          A summary of certain stock options information follows:

                                       Outstanding options  Exercisable options
                                                  Weighted             Weighted
                                       Number of   average  Number of   average
                                         shares     price     shares     price
                                       ---------  --------  ---------  --------
          September 30, 1996:
          -------------------
           Incentive stock options      293,750    $  .12    117,500    $  .12
           Non-qualified options        450,000      .236    450,000      .236

          September 30, 1997:
          -------------------
           Incentive stock options      225,000    $  .12    116,250    $  .12
           Non-qualified options        250,000      .224    250,000      .224

          September 30, 1998:
          -------------------
           Incentive stock options      225,000    $  .12    161,250    $  .12
           Non-qualified options        250,000      .224    250,000      .224


          No options were exercised during the 1998, 1997 or 1996 fiscal years.

          The Company has elected to account for grants of stock options under 
          APB Opinion No. 25.  No compensation cost has been recognized on the
          statements of operations through September 30, 1998 for stock options
          granted.  Statement of Financial Accounting Standards No. 123, 
          "Accounting for Stock-Based Compensation", (SFAS No.123) requires
          compensation expense to be determined based on the fair value, as 
          defined, of options at the grant date.  Pro forma net earnings and 
          pro forma earnings per share must be disclosed based on the 
          additional compensation expense.  The provisions of SFAS No. 123 are
          effective for the Company's 1996, 1997 and 1998 fiscal years.  No 
          options were granted during the 1996 fiscal year.  For the 1997 
          fiscal year, additional compensation expense under SFAS No. 123 would
          have increased the net loss from $116,497 to a pro forma net loss of 
          $118,278.  The additional compensation expense for 1997 did not 
          change the net loss per share of $.03.  No options were granted 
          during the 1998 fiscal year.  The pro forma adjustment is calculated 
          using an estimated fair market value of each option on the date of 
          grant based upon an expected life of 10 years, risk-free interest 
          rate of 6.3%, expected dividend yield and volatility of 0%.


<PAGE>

                              CLX ENERGY, INC.
                  NOTES TO FINANCIAL STATEMENTS (continued)


(5)  Income Taxes
     ------------
          For tax reporting purposes, after giving effect to ownership changes
          that occured in the 1993 fiscal year, the Company has a net operating
          loss carryforward of approximately $340,000 at September 30, 1998,
          which expires in varying amounts from September 30, 2003 through 
          2013.  Of the $340,000 carryforward, $57,000 is subject to an annual
          limitation of approximately $6,400.  Differences between income tax 
          and financial statement basis of assets consists of basis difference
          of oil and gas properties ($45,000) as a result of a purchase 
          acquisition in the 1993 fiscal year and intangible drilling costs 
          ($7,800) which are expensed for tax purposes.

          Benefit relating to the net operating loss carryforward has not been
          reflected as a net deferred tax asset because the limited carryover
          period combined with the history of losses of the Company make it 
          more likely than not that the net operating losses will not be 
          utilized by the Company prior to their expiration.

          Components of deferred tax liabilities and deferred tax assets of the
          Company are comprised of the following at September 30, 1998:

               Gross deferred tax liabilities:
                    Proved properties
                      basis differences                             $( 15,300)
               Gross deferred tax assets:
                    Net operating loss carryforward                   115,600
                    Valuation allowance for deferred
                      tax assets                                     (100,300)
                                                                      -------
               Net deferred amount                                  $     -
                                                                      =======

          CLX Exploration, a predecessor Company, has not filed state income 
          tax returns for the years ended September 30, 1983 through 1992.  The
          Company has filed its federal and state income tax returns for the 
          fiscal years ended September 30, 1993 through 1997.

(6)  Related Party Transactions
     --------------------------
          The Company paid $12,800 in consulting fees to a Director during the
          eight months ended September 30, 1997.  Prior to that time, the 
          Director was also an Officer of the Company and received a salary 
          from the Company.

(7)  Lease
     -----
          The Company leases its office space on a month to month basis.  
          Monthly rent is $1,137.  The Company has entered into a three year 
          lease for new office space effective January 1, 1999.  Monthly rent 
          will be $1,138 per month.  Rent expense for all operating leases 
          totaled $ 13,292, $13,614 and $15,172 during 1998, 1997 and 1996, 
          respectively.  Minimum lease payments under the leases are $13,653 in
          1999.


<PAGE>


                              CLX ENERGY, INC.
                  NOTES TO FINANCIAL STATEMENTS (continued)


(8)  Major Customers
     ---------------
          During the years ended September 30, 1998, 1997 and 1996 the 
          Company had three major customers, each of which acquired 10% or more
          of total oil and gas revenues:

                                         1998          1997          1996
                                         ----          ----          ----
               Credo Petroleum Corp       58%           47%           44%
               Texaco - Equiva            19%           18%           17% 
               Dolphin - Lariat           10%           12%           - % 
               Nomeco Oil & Gas           - %           - %           19%


(9)  Contingency and Unusual Expenses
     --------------------------------
          The Company has been advised by Panhandle Eastern Pipe Line Company
          that on September 10, 1997 the Federal Energy Regulatory Commission
          (FERC) issued an order that requires first sellers of gas to make 
          refunds for all Kansas Ad Valorem tax reimbursements collected for
          the period from October 3, 1983 through June 28, 1988, with interest.

          This claim resulted from a Federal Energy Regulatory Commission 
          (FERC) order issued September 10, 1997 which stated that ad valorem
          tax levied by the State of Kansas could not be considered as an 
          add-on the Maximum Lawful Price (MLP) of gas sold under the NGPA of 
          1978 covering the period from October 3, 1983 through June 28, 1988.
          This order reversed the FERC rules in effect during that time period 
          that ad valorem taxes paid to the State of Kansas by producers could 
          recover from the pipeline company by the producers over and above the
          MLP of gas sold under the guidelines set forth in the NGPA of 1978.

          The predecessor of the Company, Calvin Exploration Inc. was operator
          of certain Kansas gas wells during the period covered by the order.
          Panhandle Eastern Pipe Line Company has advised the Company that
          Calvin Exploration Inc., as first seller, was paid $57,732 in Kansas
          Ad Valorem taxes.  The Company was also advised that as successor in 
          interest to the first seller, the amount of the refund that must be 
          repaid with interest will approximate $196,000 on the due date of 
          March 9, 1998 (approximately $186,000 at September 30, 1997.)

          On February 6, 1998 the Company filed a request for Staff Review with
          the FERC relative to their order.  In our request we asked for the 
          following:

               * That the Company be responsible only for reimbursement of ad 
                 valorem taxes attributable to its working interest in the 
                 properties subject to the FERC order.

               * That the Company not be required to reimburse taxes on behalf
                 of royalty owners since such taxes are not recoverable from 
                 the royalty owners.

               * That the Company be allowed to service it's reimbursement
                 obligation over a five year period due to the financial 
                 hardship which would result from one lump sum payment.


          The Company has received various correspondence from the FERC 
          concerning its request for Staff Review, the latest dated December 4,
          1998.  In this letter the Company was advised that it was responsible
          only for reimbursement of it's working interest share of the total 
          refund.  Additional information was requested prior to the Commission
          making a decision to relieve the Company of the obligation to 
          reimburse taxes on behalf of the royalty owners.  The request for 
          installment payments was not addressed.  The Company was further 
          advised that the FERC staff expected to make a decision on the 
          Company's request by May 4, 1999.

          The $45,000 which has been booked as a current liability covers the 
          Company's working interest share of the total reimbursement claim.  
          If the FERC staff rules that the Company is responsible for 
          reimbursement of tax refunds received by royalty owners, this amount
          would be increased by approximately $5,200.


<PAGE>



                              CLX ENERGY, INC.
                  NOTES TO FINANCIAL STATEMENTS (continued)


(10) Oil and Gas Expenditures
     ------------------------
          The Company's results of operations from oil and gas exploration and
          production activities (all within the United States) for fiscal 1998,
          1997 and 1996 were as follows:

                                             1998          1997          1996
                                             ----          ----          ----

             Revenues from oil and gas
               producing activities       $ 82,019       111,309       108,845
             Producing costs              ( 25,201)     ( 31,552)     ( 34,068)
             Depreciation, depletion and
               impairment provision       ( 23,394)     ( 30,715)     ( 30,057)
                                            ------        ------        ------
             Results of operations from
               oil and gas producing
               activities (excluding
               general and administrative
               and interest costs)        $ 33,424        49,042        44,720
                                           =======        ======       =======

          The following table sets forth the costs incurred in oil and gas
          producing activities during 1998, 1997 and 1996:

                                             1998          1997          1996
                                             ----          ----          ----
             Property acquisition costs:
               Unproved                   $  1,171        12,622         1,049
               Proved                        3,581           -             -
             Exploration costs                 -          14,580           -
             Development costs                 -             -             -

          Depreciation and depletion of oil and gas properties per $1.00 of
          gross revenue was $0.25, $0.28 and $0.28 in 1998, 1997 and 1996,
          respectively.  The 1998 fiscal year impairment provision of oil and
          gas properties was $.03 per $1.00 of gross revenue.

          The capitalized costs related to oil and gas properties were as
          follows at September 30, 1998, 1997 and 1996:

                                              1998         1997         1996
                                              ----         ----         ----
               Proved properties           $327,213      329,732      329,732
               Unproved properties           18,314       20,060        7,438
                                            -------      -------      -------
                 Total capitalized costs    345,527      349,792      337,170
               Less accumulated depreciation
                 and depletion             (210,746)    (189,871)    (159,156)
                                            -------      -------      -------
                 Net capitalized costs     $134,781      159,921      178,014
                                            =======      =======      =======

<PAGE>

                             CLX ENERGY, INC.
                 NOTES TO FINANCIAL STATEMENTS (continued)


(11) Supplemental Schedules of Reserve Information (Unaudited)
     ---------------------------------------------------------
          The following reserve related information for 1998, 1997 and 1996 is
          based on estimates prepared by management of the Company.  Reserve
          estimates are inherently imprecise and are continually subject to
          revisions based on production history, results of additional
          exploration and development, price of oil and gas and other factors.
          All of the Company's oil and gas reserves are located in the United 
          States.
                                                     Oil (Bbl)     Gas (MCF)
                                                     ---------     ---------
          Proved reserves at September 30, 1995         46,100       212,500
            Revisions in previous estimates           (  6,000)        6,100
            Production                                (  1,900)     ( 35,200)
                                                       -------       -------
          Proved reserves at September 30, 1996         38,200       183,400
            Revisions in previous estimates           (  5,900)       90,600
            Production                                (  1,800)     ( 31,400)
                                                       -------       -------
          Proved reserves at September 30, 1997         30,500       242,600
            Revisions in previous estimates           (  5,200)     (  2,600)
            Production                                (  2,200)     ( 25,600)
                                                       -------       -------
          Proved reserves at September 30, 1998         23,100       214,400
                                                       =======       =======

          Proved developed reserves:
               September 30, 1996                       24,100       183,400
               September 30, 1997                       16,300       242,600
               September 30, 1998                        8,900       214,400


          The following is the standardized measure of discounted future net
          cash flows and changes therein relating to proved oil and gas 
          reserves.  Future net cash flows were computed using year-end prices
          and costs related to existing proved oil and gas reserves in which
          the Company has mineral interests.  No future income tax expense was
          provided due to the Federal income tax carryover.  All of the 
          reserves are located in the United States.


                                                      September 30
                                                ----------------------
                                               1998       1997       1996
                                               ----       ----       ----

          Future cash infows              $  759,600  1,081,200  1,098,800
          Future production costs            260,000    421,300    393,100
                                           ---------    -------    -------
          Future cash flows                  499,600    659,900    705,700
          10% annual discount for estimated
            timing of cash flows             189,400    242,700    256,800
                                           ---------    -------    -------
          Standardized measure of
            discounted cash flows         $  310,200    417,200    448,900
                                           =========    =======    =======


<PAGE>

                              CLX ENERGY, INC.
                  NOTES TO FINANCIAL STATEMENTS (continued)


          The following are the principal sources of change in the 
          standardized measure of discounted future net cash flows:

                                                      September 30
                                                -----------------------
                                               1998       1997       1996
                                               ----       ----       ----

          Standardized measure,
            beginning of year               $417,200    448,900    412,600
          Sales of oil and gas,
            net of production costs         ( 56,800)  ( 79,800)  ( 74,800)
          Net changes in prices and 
            future production costs         (  4,500)  ( 48,800)   204,400
          Revisions of previous
            quantity estimates              ( 66,600)    70,600   (114,900)
          Accretion of discount               20,900     26,300     21,600
                                             -------    -------    -------
          Standardized measure,
            end of year                     $310,200    417,200    448,900
                                             =======    =======    =======

          Future net cash flows were computed using year-end prices for oil of
          $9.44 in 1998, $17.49 in 1997 and $19.04 in 1996 and for gas of 
          $2.31 in 1998, $2.26 in 1997 and $2.02 in 1996.


<PAGE>

                              CLX ENERGY, INC.
                              ----------------

                    SCHEDULE V - PROPERTY AND EQUIPMENT
                    -----------------------------------

                         Balance at                    Changes
                         beginning  Additions  Retire-   add      Balance at
                         of period   at cost   ments   (deduct)  end of period
                         ---------- --------- -------  --------  -------------


     Description
     -----------


Year ended September 30, 1996
-----------------------------

  Oil and gas properties:
     Proved              $330,049       -         -    (    317)*   329,732
     Unproved              20,463     1,049       520  ( 13,554)*     7,438
  Office equipment          4,763       -       1,145       -         3,618
                          -------   -------   -------   -------     -------
                         $355,275     1,049     1,665  ( 13,871)    340,788
                          =======   =======   =======   =======     =======


Year ended September 30, 1997
-----------------------------

  Oil and gas properties:
     Proved              $329,732       -         -         -       329,732
     Unproved               7,438    12,622       -         -        20,060
  Office equipment          3,618       -         -         -         3,618
                          -------   -------   -------   -------     -------
                         $340,788    12,622       -         -       353,410
                          =======   =======   =======   =======     =======


Year ended September 30, 1998
-----------------------------

  Oil and gas properties:
     Proved              $329,732     3,581       -    (  4,867)*
                                                          1,286 **
                                                       (  2,519)*** 327,213
     Unproved              20,060     1,171       -    (  1,631)*
                                                       (  1,286)**   18,314
  Office equipment          3,618       -         -         -         3,618
                          -------   -------   -------   -------     -------
                         $353,410     4,752       -    (  9,017)    349,145
                          =======   =======   =======   =======     =======

*    Sales of properties.
**   Transfer.
***  Impairment provision.


<PAGE>

                               CLX ENERGY, INC.
                               ----------------

                    SCHEDULE VI - ACCUMULATED DEPRECIATION
                    --------------------------------------

                   AND DEPLETION OF PROPERTY AND EQUIPMENT
                   ---------------------------------------


                                       Additions
                         Balance at    charged to   
                         beginning     costs and    Retire-     Balance at
                         of period      expenses     ments    end of period
                         ----------    ----------   -------   -------------


     Description
     -----------


Year ended September 30, 1996
-----------------------------

  Oil and gas properties:
     Proved              $129,416       30,057          317      159,156
     Unproved                 -            -            -            -
  Office equipment          3,390          535        1,042        2,883
                          -------      -------      -------      -------
                         $132,806       30,592        1,359      162,039
                          =======      =======      =======      =======


Year ended September 30, 1997
-----------------------------


  Oil and gas properties:
     Proved              $159,156       30,715          -        189,871
     Unproved                 -            -            -            -
  Office equipment          2,883          381          -          3,264
                          -------      -------      -------      -------
                         $162,039       31,096          -        193,135
                          =======      =======      =======      =======


Year ended September 30, 1998
-----------------------------


  Oil and gas properties:
     Proved              $189,871       20,875          -        210,746
     Unproved                 -            -            -            -
  Office equipment          3,264          255          -          3,519
                          -------      -------      -------      -------
                         $193,135       21,130          -        214,265
                          =======      =======      =======      =======


<PAGE>

                                    ITEM 9.
             
          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                           AND FINANCIAL DISCLOSURE

     There has been no disagreements between the Company and its auditors on
accounting and financial disclosure.


                                   PART III

                                   ITEM 10.

              DIRECTORS AND EXECUTIVE OFFICERS ON THE REGISTRANT

     Information concerning the Company's Directors and Executive Officers is
set forth below:


                                                                   PERIOD OF
          NAME AND AGE                   POSITION                   SERVICE
          ------------                   --------                  ---------

     S. W. Houghton               Chairman of the board,       March 26, 1993
          58                      Secretary & Director         to Present


     E. J. Henderson              President, Chief             March 26, 1993
          64                      Executive Officer,           to Present
                                  Treasurer & Director


     Donald B. Lamont             Director                     December 1, 1996
          79                                                   to present


     Kerry L. Phelps              Director                     May 1, 1993
          55                                                   to Present


     Gary C. Wilkins              Director                     December 1977
          66                                                   to Present


     George H.C. Lawrence         Director                     December 2, 1993
          61                                                   to Present


<PAGE>

S. W. Houghton (58) Chairman of the Board
--------------

Mr. Houghton is a graduate of the Wharton School of Finance and Commerce with
a B.S. in Economics.  Mr. Houghton has an extensive background in investment
banking in the financial and natural resources industries serving in corporate
management, an investor in, and a Director in several public and private oil,
gas and mining companies.  Some of the companies with which Mr. Houghton has
been associated are Cotton Petroleum Corporation, Henderson Petroleum 
Corporation, Siskon Mining Corporation and Hadson Corporation.  Since
resigning as President and Chief Executive Officer of Hadson Corporation in
February 1990, Mr. Houghton has been active as a private investor and in the 
management of Houghton & Company, Inc.


E. J. Henderson (64) President, Chief Executive Officer, Treasurer
---------------      and Director

Mr. Henderson is a graduate of Texas A & M University with a B.S. in Petroleum
Engineering.  Mr. Henderson served in Engineering/Operations positions with
Pan American Petroleum and Hunt Oil Company and in Engineering/Management 
positions with Consolidated Oil & Gas, Inc., and K.R.M. Petroleum Corporation.
Mr. Henderson founded Henderson Petroleum Corporation in September 1978.
Henderson Petroleum Corporation, a public corporation, was acquired by
Burkhart Petroleum Corporation in December 1985.  Mr. Henderson has served as
President of E & S Investments, Inc., since its formation in April 1981 until
the merger with CLX Energy, Inc. in March 1993.


Donald B. Lamont (79) Director
----------------

Mr. Lamont is a graduate of the Harvard Graduate School of Business (MBA) and
Yale University (BA) and has extensive experience in the oil and gas industry.
Mr. Lamont is President of Interocean Oil & Gas Company (USA), Interocean Oil
Company of Canada, Interocean Oil Company of Abu Dhabi, Interocean Oilfields
Ltd. and Interocean Oil Exploration Ltd.  He serves as a Director for American
Independent Oil Company and South American Gold & Copper Company.  Mr. Lamont
has also served as an officer and director of several other international oil
and gas companies.


Kerry L. Phelps (55) Director
---------------

Mr. Phelps is a graduate of Bowling Green State University with a B.S. in
Geology.  Mr. Phelps has a broad background in petroleum exploration including
the management of large geographically diverse exploration and drilling
programs.  Mr. Phelps served in various positions with Amerada Hess
Corporation in Canada for seven years, then in Denver worked for several
independent producers including Duncan Oil Properties and Resources Investment
Corporation.  Mr. Phelps was Senior Vice President/Exploration for General
Atlantic Energy from 1982 to 1989, then formed Cavalier Petroleum where he
served as President until joining CLX Energy, Inc. in May 1993 as Executive
Vice President, Secretary and Director.  Mr. Phelps resigned as Executive Vice
President and Secretary on February 1, 1997, but remains as a Director.


<PAGE>


Gary C. Wilkins (66) Director
---------------

Mr. Wilkins is a graduate of the University of Iowa with both a B.A. and M.S.
in geology.  Mr. Wilkins served in exploration geology positions with Mobil
Oil Corporation and Mesa Petroleum Company and exploration and senior
management positions with Lear Petroleum Corporation.  Mr. Wilkins is
currently an independent Geological Consultant, operating as Hawkeye
Exploration.  Mr. Wilkins has been associated with CLX since its inception as
a Director and has served for various periods as President, Senior Vice 
President, Chief Operating Officer and Vice President of Exploration.


George H.C. Lawrence (61) Director
--------------------

Mr. Lawrence is a graduate of Columbia College (NYC) and Pace University.  Mr.
Lawrence has extensive experience in investment banking, having served with 
W. E. Hutton & Co., R. W. R/Pressrich & Co., and G. H. Walker & Co. from 1960 
to 1970.  Since 1970, Mr. Lawrence has been President and CEO of Lawrence 
Investing Co., a 100 year old family owned real estate development company.
Mr. Lawrence has served on the Board of Directors of several companies,
including Cotton Petroleum Corporation from 1971 to 1986.  He has served as a
Trustee of Sarah Lawrence College and as a member of the Board of Governors of
Lawrence Hospital.

     No Family relationship exists between any director, executive officer,
significant employee or person nominated or chosen by the Company to become a
director of executive officer.

     There was no arrangement or understanding between any officer or director 
and any other person pursuant to which any director or officer was elected as 
such.

     The Company has not established an executive committee of the Board of
Directors or any committee that would serve similar functions.  The Company
has discontinued its audit, incentive compensation and nominating committees.



                                  ITEM 11.

                           EXECUTIVE COMPENSATION

     The following table sets information regarding compensation of certain
Executive Officers of the Company, none of whom received compensation in
excess of $30,000 during 1994.

     Name            Principal Position          Year          Annual
     ----            ------------------          ----       Compensation
                                                            ------------

E. J. Henderson   President, Chief Executive     1998         $33,500
                  Officer and Chief Financial    1997          48,000
                  Officer                        1996          24,000

     The officers receive no benefits other than cash compensation.


<PAGE>

     The company does not have any plans for its Executive Officers involving
stock appreciation rights, long term incentive, employment contracts,
termination of employment and change in control agreements.  An officer of the 
Company has stock options totaling 300,000 shares which were granted in 1994.
These options are detailed in Item 12, footnote (6).

     Directors are not compensated for their services; however, Mr. Phelps
received $12,800 as a consultant to the Company for the year ended September
30, 1997.  Directors are currently reimbursed travel expenses and the cost of 
overnight accomodations incurred in connection with attendance of Directors 
meetings.


                                 ITEM 12.

      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


     The following table sets forth the beneficial ownership of the Company's
equity securities by the directors and executive officers of the Company, and
certain individuals who own 5% or more of the Company's outstanding common
stock.


                                               Common Stock
  Name                   Position            Par Value $0.001        % of Class
--------               ------------          ----------------        ----------

Beneficial Owners:
-----------------

None


Officers & Directors:
--------------------

S. W. Houghton           Chairman of             412,390 (5)           10.17
369 Lexington Ave.       the Board
New York, New York  10017

E. J. Henderson          President               335,000 (1), (6)       8.26
1776 Lincoln St., Suite 806
Denver, Colorado  80203

Donald B. Lamont         Director                566,667               13.98
680 Fifth Ave., Suite 1100
New York, NY  10019

Kerry Phelps             Director                485,000 (2)           11.96
1776 Lincoln St., Suite 806
Denver, Colorado  80203

Gary C. Wilkins          Director                148,894 (3), (5)       3.67
518 17th St., Suite 660
Denver, Colorado  80202

George H.C. Lawrence     Director                 42,000 (4), (5)       1.04
P.O. Box 3445
Vero Beach, Florida  32964


Officers and Directors                         1,989,951               49.08
as a group (6 Persons)



<PAGE>


(1)  Includes 50,000 shares owned by Mr. Henderson's two adult children.  
     Mr. Henderson disclaims beneficial ownership of these 50,000 shares.

(2)  These shares are held in the name of Cavalier Petroleum Corporation, a 
     company of which Mr. Phelps is the sole stockholder.

(3)  Includes 23,194 shares held in the name of Hawkeye Exploration Inc., a
     company 100% owned by Mr. Wilkins.

(4)  Includes 42,000 shares held in the name of Lawrence Properties, Inc., a
     company 100% owned by Mr. Lawrence.

(5)  Does not include an option to acquire 31,250 shares of the Company's
     restricted common stock granted May 24, 1994 under the Company's
     Qualified Directors Stock Option Plan.  The options may be exercised in
     five cumulative annual installments beginning January 1, 1995 and will
     expire March 1, 2004.  The exercise price is $0.12 per share.

(6)  Does not include:

     (a)  An option to acquire 100,000 shares of the Company's restricted
          common stock granted May 24, 1994 under the Company's Qualified
          Employee Stock Option Plan.  The option may be exercised as to 20%
          of the total option each successive anniversary date of the grant of
          the option at an exercise price of $0.12 per share.  The option will
          expire May 24, 2004.

     (b)  A non-qualified option granted May 24, 1994 to acqire 200,000 shares
          of the Company's restricted common stock at an exercise price of
          $0.25 per share.  This option is exercisable at any time, in whole 
          or in part, and will expire on May 24, 2004.


                                 ITEM 13.

              CERTAIN RELATIONSHIPS AND RELATED TRANSCATIONS

For information on these matters refer to Notes 4 and 6 of "Notes to
Financial Statements".


                                 ITEM 14.

     EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

     (a)  (1) and (2) Financial Statements and Schedules

     See "Index to Financial Statements and Supplemental Schedules" in Part
     II, Item 8.

     (3)  Exhibits - Exhibit 27.  Financial Data Schedule.

     (b)  No reports on Forms 8-K were filed during the Company's fiscal
          quarter ended September 30, 1998.



<PAGE>


                                     SIGNATURES


     Pursuant to the requirements of Section 13 and 15(d) of the Securities 
Exchange Act of 1934, the Company has duly caused this report to be signed on 
its behalf by the undersigned, thereunto duly authorized.

                                              CLX ENERGY, INC.



                                             By /s/ E. J. Henderson
Dated:  December 22, 1998                        E. J. Henderson
                                                  President



     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on dates indicated:




                                             By /s/ S. W. Houghton
Dated:  December 22, 1998                        S. W. Houghton
                                                  Chairman of the Board
                                                  and Director


                                             By /s/ E. J. Henderson
Dated:  December 22, 1998                        E. J. Henderson
                                                  Chief Executive 
                                                  Officer, President,
                                                  Treasurer, Director


                                             By /s/ Donald B. Lamont
Dated:  December 22, 1998                        Donald B. Lamont
                                                  Director


                                              By /s/ Kerry L. Phelps
Dated:  December 22, 1998                         Kerry L. Phelps
                                                   Director


                                              By /s/ Gary C. Wilkins
Dated:  December 22, 1998                         Gary C. Wilkins
                                                   Director


                                              By /s/ George H.C. Lawrence
Dated:  December 22, 1998                         George H.C. Lawrence
                                                   Director