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

                                   FORM 10-KSB
                                      
           X     Annual report  under  Section  13 or  15(d)  of  the
                 Securities  Exchange  Act  of  1934
                 (No fee required, effective October 7, 1996.)

                  For the fiscal year ended December 31, 1996.

Transition  report under Section 13 or 15(d) of the  Securities  Exchange Act of
1934 (No fee required)

For the transition period from _________ to ____________.
Commission File Number: 0-9435

                            ENERGY PRODUCTION COMPANY
                 (Name of Small Business Issuer in Its Charter)
                    Colorado                              84-0811034
                    --------                              ----------
           (State or Other Jurisdiction of             (I.R.S. Employer
           Incorporation or Organization)              Identification No.)

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

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

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

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

                          Common Stock, $.01 Par Value
                                 Title of Class

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

Yes                        No       X

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ X ]

The issuer's revenues for its most recent fiscal year were $2,000.00.

As of June 1, 1997,  75,000,000  shares of the  Registrant's  common stock,  par
value $.01 per share, were outstanding. The aggregate market value of the voting
stock held by non-affiliates of the Registrant at June 1, 1997, was $1,423.38.

Documents Incorporated by Reference:  None.

<PAGE>


                                     PART I

ITEM 1 - BUSINESS

General

Energy  Production  Company,  a  Colorado  corporation  (the  "Company"),  is an
independent  oil and gas producer which was formed in March 1980 for the primary
purpose of identifying, acquiring, revitalizing, and enhancing the production of
mature oil and natural gas fields  located  primarily in the  mid-continent  and
Rocky Mountain  region.  Since  inception,  the Company has been a developmental
stage company with no material operations that has devoted  substantially all of
its efforts to  establishing  its business,  and beginning in December 1986, the
Company sold all of its oil and gas assets and operations.  Since December 1986,
the Company has not engaged in any oil and gas operations,  nor does the Company
presently have the requisite personnel, equipment, or finances to operate. Since
the 1986 fiscal  year,  as a primary  result of the  Company's  lack of business
operations,  the  Company  has  failed to file the  required  reports  and other
filings  required to be filed with the  Securities  and Exchange  Commission  in
accordance  with the Securities  Exchange Act of 1934, as amended (the "Exchange
Act").  The  Company  intends to become  current  with  regard to its  reporting
requirements  pursuant to the  applicable  provisions  of the Exchange  Act, and
through strategic acquisitions of identified oil and gas properties, the Company
believes  that it will be able to  commence  business  operations  although  its
planned operations have not yet commenced.

         The  principal  offices of the Company  are  located at 1703  Edelweiss
Drive, Cedar Park, Texas 78613, and its telephone number is (512) 250-8692.

Recent Developments

In May 1997, the Company issued 44,038,222 shares of the Company's common stock,
par value $0.01 per share ("Common  Stock"),  to Bass  Petroleum,  Inc., a Texas
corporation  ("BPI"), in consideration of the cash payment by BPI of $5,000, and
assignment  by BPI to the Company of certain oil and gas  properties  located in
Texas,  which the Company  believes  are valued at  $40,000.  In addition to the
issuance  of such  shares,  the  controlling  shareholder  of the  Company  sold
16,728,000  shares  of the  Common  Stock  to BPI in  consideration  of the cash
payment of $45,000 by BPI. To date,  BPI owns an aggregate of 60,766,222  shares
of the Company's  Common  Stock,  constituting  approximately  81% of all of the
issued and outstanding shares of Common Stock of the Company.

Business Strategy

The Company intends to merge with or acquire a company actively  involved in oil
and gas  exploration,  development  and  operations  with existing  revenues and
operating properties. Once such acquisition or merger is complete, the Company's

                                       2

<PAGE>

activities  will focus on the  acquisition of producing oil and gas  properties.
Such acquisitions  will be based on an analysis of the properties'  current cash
flow and the  Company's  ability to profit from the  acquisition.  The Company's
acquisitions  will include  leasehold and other working interests in exploration
areas.

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

Market for Oil and Gas

The demand for oil and gas is dependent upon a number of factors,  including the
availability of other domestic production,  crude oil imports, the proximity and
size of oil and gas pipelines in general, other transportation  facilities,  the
marketing  of  competitive  fuels,  and general  fluctuations  in the supply and
demand for oil and gas. The Company has not generated any revenues from the sale
of oil and gas during its past three fiscal years.  The Company  intends to sell
of all of its production to traditional  industry  purchasers,  such as pipeline
and crude oil companies,  who have  facilities to transport the oil and gas from
the wellsite.

Competition

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

Environmental Matters and Government Regulations

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

                                       3

<PAGE>

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

Employees

At December 31, 1996, the Company had three employees, and the Company currently
has one employee.

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

The Company owns no significant  properties  other than oil and gas  properties.
The  Company  owned no oil and gas  properties  during  the 1994,  1995 and 1996
fiscal years. As of June 1, 1997, the Company owned interests in two oil and gas
properties  which are described  below.  As of June 1, 1997,  the Company had no
sales,  no drilling  activity,  no  operations,  no  production  and no delivery
commitments.

The office space for the Company's  executive  offices at 1703 Edelweiss  Drive,
Cedar Park, Texas 78613, is currently provided by the majority shareholder at no
cost to the Company.

Revenues Reported To Other Agencies

The Company  filed no  estimates  of total,  proved net oil or gas  reserves and
included no such  estimates  in any reports to any federal  authority  or agency
since the beginning of the last fiscal year.

Production

During the last  three  fiscal  years,  the  Company  had no  operations  and no
production.

                                       4
<PAGE>


Productive Wells And Acreage

All the Company's oil and gas properties,  reserves and activities,  are located
onshore in Texas.  As of December 31,  1996,  the Company had no interest in any
oil and gas leases or properties. As of June 1, 1997, the Company held interests
in oil and gas leases as follows:

                                                    Producing Wells
              Acres               Oil                    Gas
County     Gross   Net        Gross    Net          Gross    Net
------    -----    ---        -----    ---          -----    ---
Burleson   80      62.4       N/A      N/A          1        .78
Lee        40      28.4       1        .71          N/A      N/A

     (a) A gross well is a well in which the Company owns a working interest.  A
         net well is the fractional interest owned by the Company.

Underdeveloped Acreage

For the last three fiscal years, the Company had no underdeveloped acreage.

Drilling Activity

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

Present Activities

As of June 1,  1997,  the  Company  had no  drilling,  waterflood  installation,
pressure maintenance operations, or other related operations.

Delivery Commitments

As of June 1, 1997,  and for the last three  years,  the Company had no delivery
commitments.

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

The Company knows of no material litigation pending, threatening or contemplated
or  unsatisfied  judgments  against  it,  or any other  proceeding  in which the
Company is a party.  The Company knows of no material  legal actions  pending or
threatened or judgments  entered  against any officers or the Board of Directors
of the Company in their capacity as such.

                                       5
<PAGE>


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

No matters were  submitted to a vote of the security  holders during the quarter
ended December 31, 1996.

                                     PART II

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

The Company's  Common Stock was quoted in the NASDAQ  System until  February 22,
1984, when the Company's  Common Stock was deleted from the NASDAQ System due to
an insufficient  number of active market makers.  Since that date, the Company's
Common  Stock has  experienced  only  limited  trading and its prices are quoted
irregularly  in the  National  Quotation  Bureau's  "Pink  Sheets".  Information
regarding  bid prices  and  closing  bids has been  obtained  from the  National
Quotation Bureau. The following quotations, where quotes were available, reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions.

         FISCAL 1995                                    CLOSING BID
         -----------                                    -----------
                                                       HIGH           LOW
                                                       ----           ---
First Quarter1                                         .0001          .0001
Second Quarter                                         .0001          .0001
Third Quarter                                          .0001          .0001
Fourth Quarter                                         .0001          .0001

         FISCAL 1996
         -----------
                                                       HIGH           LOW
                                                       ----           ---
                                                        
First Quarter                                          .0001          .0001
Second Quarter                                         .0001          .0001
Third Quarter                                          .0001          .0001
Fourth Quarter                                         .0001          .0001

        FISCAL 1997
        -----------
                                                       HIGH           LOW
                                                       ----           ---
First Quarter                                         .0001          .0001
Second Quarter                                        .0001          .0001

--------------

1    Closing  Bid prices for the first  quarter  of 1995 were  unavailable.  The
     prices provided are Bid Prices.

At June 1, 1997,  the  approximate  number of holders of record of the Company's
Common Stock was 792. The Company has not paid any dividends on its Common Stock
and does not expect to do so in the foreseeable future.

                                       6
<PAGE>


Recent Sales Of Unregistered Securities

On May 21, 1997, the Company issued  44,038,222 shares of Common Stock to BPI in
a transaction under Section 4(2) of the Securities Act of 1933, as amended,  for
$45,000,  consisting of $5,000 cash and two oil and gas  properties  valued at a
total of $40,000.  (For a more complete description of the properties,  see Item
2.)

ITEM 6 - PLAN OF OPERATION
         -----------------

General

Energy  Production  Company,  a  Colorado  corporation  (the  "Company"),  is an
independent  oil and gas producer which was formed in March 1980 for the primary
purpose of identifying, acquiring, revitalizing, and enhancing the production of
mature oil and natural gas fields  located  primarily in the  mid-continent  and
Rocky Mountain  region.  Since  inception,  the Company has been a developmental
stage company with no material operations that has devoted  substantially all of
its efforts to  establishing  its business,  and beginning in December 1986, the
Company sold all of its oil and gas assets and operations.  Since December 1986,
the Company has not engaged in any oil and gas operations,  nor does the Company
presently have the requisite personnel, equipment, or finances to operate. Since
the 1986 fiscal  year,  as a primary  result of the  Company's  lack of business
operations,  the  Company  has  failed to file the  required  reports  and other
filings  required to be filed with the  Securities  and Exchange  Commission  in
accordance  with the Securities  Exchange Act of 1934, as amended (the "Exchange
Act").  The  Company  intends to become  current  with  regard to its  reporting
requirements  pursuant to the  applicable  provisions  of the Exchange  Act, and
through strategic acquisitions of identified oil and gas properties, the Company
believes  that it will be able to  commence  business  operations  although  its
planned operations have not yet commenced.

Pre-Operating Activities

The Company's  historical financial statements are not indicative of anticipated
revenues  which may be  obtained  or  expenditures  which may be incurred by the
Company in future periods.  The Company's plan of operation entails  identifying
and  strategically  acquiring or merging with an existing  corporation  which is
actually involved in oil and gas exploration,  development and operations within
the next six (6) months. The Company does not expect  pre-operating  expenses to
be  significant.  However,  because  the  Company  will incur some  expenditures
without corresponding  revenues prior to commencement of oil and gas operations,
the Company  anticipates  a net loss for the 1997 fiscal year,  and possibly for
the 1998 fiscal  year.  Monthly  pre-operating  losses will  continue  until the
Company commences oil and gas operations.

Once the intended  acquisition  or merger is complete,  the  Company's  business
strategy  is to  acquire  and  develop  producing  crude  oil  and  natural  gas
properties in Texas, Wyoming, Oklahoma and other areas identified by management.

                                       7

<PAGE>

After the intended  acquisition  or merger,  the Company  intends to satisfy its
operating  costs  through  the cash flow  from the  operations  of the  acquired
company.  The Company does not intend to raise  additional funds within the next
twelve months to satisfy its cash requirements.

The  Company  intends  to  acquire  all of the  outstanding  shares of BPI,  the
majority  shareholder  of the  Company,  in a  share  exchange.  Ray D.  Reaves,
Director,  President,  Chairman,  and Chief Executive Officer of the Company, is
Chairman,  Chief Executive Officer, Chief Financial Officer, and Director of BPI
and owns sixty  percent (60%) of the common stock of Bass  Petroleum,  Inc. Such
acquisition is subject to any required  approvals for the shareholders and Board
of  Directors  of the  Company  and BPI.  There  can be no  assurance  that such
acquisition will be successful.

Oil and Gas Operations

The Company is a developmental stage company that has devoted  substantially all
of its efforts since inception to establishing its business plan, and operations
have not yet commenced.  Commercial oil and gas operations are expected to begin
early 1998,  although numerous factors may cause commencement of such operations
to be delayed.  Although the Company  believes that its markets will support oil
and gas  operations and will enable the Company to establish  sufficient  market
share  to  operate   profitably,   the  Company's  plan  to  achieve  profitable
operations,  if  any,  is  subject  to  various  uncertainties.  Because  of the
substantial number of variables applicable to an oil and gas operation,  and the
Company's  lack  of  operating  history,  there  can be no  assurance  that  the
Company's  business strategy will prove accurate,  or that the Company's plan of
operation will lead to profitability.

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

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

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

Report of Independent Public Accountants                            F-1
Balance Sheets                                                      F-2
Statement of Operations                                             F-3
Statement of Changes in Stockholders' Equity                        F-4
Statement of Cash Flows                                             F-5
Notes to Financial Statements                                       F-6

                                       8

<PAGE>



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

                                    PART III

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

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

Name                   Age   Position with Company            Period Served
----                   ---   ---------------------            -------------

Robert N. Watson, Jr.  54    Director, President, Chairman
                             and Chief Executive Officer      1986 - May 1997
William G. Watson      48    Director and Vice President      1986 - May 1997
Linda R. Watson        53    Director and Secretary           1986 - May 1997
Ray D. Reaves          35    Director, President, Chairman,
                             Chief Executive Officer and
                             Chief Financial Officer          May 1997 - present

Mr.  Robert N.  Watson,  Jr.  received  his B.A.  and  B.B.A.  degrees  from the
University  of Texas at Austin in 1966 and 1967.  He is a Director and President
of Robert Watson, Inc., an oil and gas and real estate development firm which he
founded in 1969.  He has been a Director of the Company and its Chief  Executive
Officer since 1986.

Mr.  William G. Watson  received his B.A.  degree from Texas Tech  University in
1970 and his M.S.  degree from the  University of Texas at Arlington in 1974. He
has been a Director of Robert  Watson,  Inc.  and a Director  and  President  of
William Watson, Inc., an independent petroleum geological firm, which he founded
in 1983,  for more  than the last five  years.  He is the  brother  of Robert N.
Watson,  Jr. He has been a Director of the Company and its Vice President  since
1986.

Ms. Linda R. Watson  received her B.A.  degree from the  University  of Texas at
Austin  in 1966.  She has been a  Director  and  Secretary-Treasurer  of  Robert
Watson,  Inc.  for more than the last five  years.  She is the wife of Robert N.
Watson, Jr. She has been a Director of the Company and its Secretary since 1986.

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

                                       9
<PAGE>


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

(b)  Identification  of Significant  Employees.  The Company does not employ any
persons,  other than its sole  director,  who make or are  expected  to make any
significant contributions to the business of Company.

(c) Family  Relationships.  There is no family relationship  between any present
director,  executive  officer or person  nominated  or chosen by the  Company to
become a director or executive officer.

(d) Involvement in Certain Legal  Proceedings.  No present director or executive
officer of the Company has been the subject of any civil or criminal  proceeding
during the past five years which is material to an  evaluation  of his integrity
or  ability  to serve as an  officer  or  director,  nor is any such  person the
subject of any order, judgment or decree of any federal or state authority which
is material to an evaluation of his abilities or integrity.

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

No  compensation  has been paid to any of the  Company's  directors or executive
officers for the year ended  December 31, 1996.

Name                         Position with Company                 Compensation
----                         ---------------------                 ------------

Robert N. Watson, Jr.        Director, President, Chairman and      $0
                             Chief Executive Officer

Ray D. Reaves                Director, President, Chairman,         $0
                             Chief Executive Officer and
                             Chief Financial Officer


                                       10

<PAGE>

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table  sets  forth  the  persons  known  to the  Company  to own
beneficially more than five percent of the outstanding shares of Common Stock as
of December 31, 1996 and  information  as of December 31, 1996,  with respect to
the  ownership of Common Stock by each  director  and  executive  officer of the
Company.  In all cases,  the owners have sole voting and investment  powers with
respect to the shares.

Name and Address of              Amount and Nature
Beneficial Owner                 of Beneficial Owner           Percent of Class
-------------------              -------------------           ----------------

Robert N. Watson, Jr.1           16,728,0003                        54%4
P.O. Box 202650
Austin, Texas  78720

William G. Watson1                      0                            0
P.O. Box 202650
Austin, Texas  78720

Linda R. Watson1                        0                            0
P.O. Box 202650
Austin, Texas  78720

Robert Watson, Inc.2             16,728,000                         54%4
P.O. Box 202650
Austin, Texas  78720
--------------------

1        Resigned as Directors and Officers effective May 22, 1997.
2        Sold to Bass Petroleum, Inc. on May 22, 1997.
3        Mr.  Watson is the  beneficial  owner of these  shares  based  upon his
         ownership of one hundred  percent  (100%) of the common stock of Robert
         Watson, Inc.
4        Prior to the May 21, 1997 issuance by the Company of 44,038,222 shares
         to Bass Petroleum, Inc.


                                       11

<PAGE>

The  following  table  sets  forth  the  persons  known  to the  Company  to own
beneficially more than five percent of the outstanding shares of Common Stock as
of  June 1,  1997  and  information  as of June 1,  1997,  with  respect  to the
ownership of Common Stock by each director and executive officer of the Company.
Unless otherwise  indicated,  the owners have sole voting and investment  powers
with respect to the shares.

Bass Petroleum, Inc.                       60,766,222                       81%
1703 Edelweiss
Cedar Park, Texas  78613

Ray D. Reaves                              60,766,2221                      81%
1703 Edelweiss
Cedar Park, Texas  78613

All Officers, Directors and                60,766,222                       81%
Five Percent Shareholders
as a group
-----------------------
1        Mr.  Reaves is the  beneficial  owner of these  shares  based  upon his
         position as Chairman, Chief Executive Officer, Chief Financial Officer,
         Director and owner of sixty  percent  (60%) of the common stock of BPI;
         Mr. Reaves' voting and investment  powers with respect to the Company's
         Common Stock are limited by his position as Director and shareholder of
         BPI.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
          ----------------------------------------------
         The  Company  entered  into an  annual  management  agreement  with its
controlling shareholder,  Robert Watson, Inc., in 1987 and renewed the agreement
each year until  December  1996.  The agreement  called for an amount reached by
mutual  agreement of the Company and the  shareholder  to be paid each year. The
Company paid management fees of $0 in 1996, $0 in 1995, and $1,500 in 1994.

         As of December  31, 1996,  1995 and 1994,  the Company had a receivable
from  Robert  Watson,  Inc.  in  the  amount  of  $20,000  ("Receivable").  This
Receivable  bore interest at 10% and was due on demand.  In connection  with the
successful  completion of the sale of 44,038,222  shares of the Company's Common
Stock to BPI,  the Company  paid a $20,000  management/finder  fee  ("Management
Fee") to Robert Watson, Inc. The Receivable was repaid in May 1997 by offsetting
the Management Fee.

         The Company  intends to acquire all of the  outstanding  shares of BPI,
the majority  shareholder of the Company,  in a share  exchange.  Ray D. Reaves,
Director,  President,  Chairman,  Chief  Executive  Officer and Chief  Financial
Officer of the Company,  is Chairman,  Chief Executive Officer,  Chief Financial
Officer, and Director of BPI and owns sixty percent (60%) of the common stock of
Bass Petroleum,  Inc. Such acquisition is subject to any required  approvals for
the  shareholders and Board of Directors of the Company and BPI. There can be no
assurance that such acquisition will be successful.

                                       12
<PAGE>


ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

(a)           Exhibits

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

              3.1          Articles of Incorporation1

              3.2          Bylaws2

              27           Financial Data Schedule
----------------------
1        Previously  filed as Exhibit  (2)(a) of the  Company's  registration 
         statement on Form S-2 (file number 2-6770).
2        Previously  filed as Exhibit  (2)(b) of the  Company's  registration 
         statement of Form S-2 (file number 2-6770).
         

(b)      Reports on Form 8-K

         There were no reports on Form 8-K filed by the Company  during the last
         quarter  of its fiscal  year.  The  Company  filed a report on Form 8-K
         dated May 22, 1997  describing  a change in control of the  Company,  a
         disposition  of  the  assets,  the  resignation  of  the  officers  and
         directors and the appointment of a new officer and director.


                                       13

<PAGE>


                                   SIGNATURES


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

                            ENERGY PRODUCTION COMPANY
                                  (Registrant)

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

         Date:  July 18, 1997

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

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

         Date:  July 18, 1997

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

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

                                       14


<PAGE>


                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------


The Board of Directors
Energy Production Company

We have audited the accompanying  balance sheets of Energy Production Company as
of December 31, 1996,  1995 and 1994 and the related  statements of  operations,
changes in stockholders' equity and cash flows for each of the years then ended.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on the financial statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Energy Production Company as of
December 31, 1996,  1995 and 1994 and the results of its operations and its cash
flows for each of the years then ended,  in conformity  with generally  accepted
accounting principles






HEIN + ASSOCIATES LLP

Dallas, Texas
July 1, 1997

                                       F1

<PAGE>


                            ENERGY PRODUCTION COMPANY

                                 BALANCE SHEETS

                                     ASSETS
                                     ------


                                                        DECEMBER 31,
                                                       -------------
                                                1996         1995         1994
                                              ------       ------        -----
CURRENT ASSETS:
  Cash                                    $      874    $   1,272    $    1,041
  Receivable from related party - current     20,000         -              -
                                           ---------    ---------       --------
           Total current assets               20,874        1,272         1,041

RECEIVABLE FROM RELATED PARTY                   -          20,000        20,000
                                           ---------    ---------       --------

           Total assets                   $   20,874    $  21,272    $   21,041
                                           =========      =======       ========

                   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES-
    Accounts payable                      $       65   $       65    $       65
STOCKHOLDERS' EQUITY:
 Common stock, $.01 par value; 75,000,000 
   shares authorized, 30,961,778 shares 
   issued and outstanding                    309,618       309,618      309,618
   Additional paid-in capital              1,794,373     1,794,373    1,794,373
   Accumulated deficit                    (2,083,182)   (2,082,784)  (2,083,015)
                                         ------------   -----------  -----------
       Total stockholders' equity             20,809        21,207       20,976
                                         ------------   -----------  -----------
       Total liabilities and
       stockholders' equity              $   20,874    $    21,272   $   21,041

                                         ============  ============  ===========
















              See accompanying notes to these financial statements.


                                       F-2

<PAGE>


                                               ENERGY PRODUCTION COMPANY

                                                STATEMENTS OF OPERATIONS

                                    YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


                                             1996           1995          1994
                                            ------         ------        -----
INTEREST INCOME                       $      2,000      $   2,000   $     2,000
GENERAL AND ADMINISTRATIVE EXPENSES          2,398          1,771         3,184
                                      ------------      ---------   ------------
NET INCOME (LOSS)                            (398)            231        (1,184)
                                      ============     ==========   ============
NET LOSS PER SHARE                            *              *           *
                                      ============     ==========   ============
WEIGHTED AVERAGE NUMBER OF COMMON
   SHARES OUTSTANDING                   30,961,778     30,961,778    30,961,778
                                      ============     ==========    ===========


       * Less than $.01 per share





              See accompanying notes to these financial statements.


                                       F-3

<PAGE>


                            ENERGY PRODUCTION COMPANY

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

          FOR THE PERIOD FROM JANUARY 1, 1994 THROUGH DECEMBER 31, 1996

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


                                                                        Additional
                                           Common Stock                  Paid-in                   Accumulated
                                           -------------                
                                      Shares        Amount               Capital                     Deficit               Total
                                      ------       -------              ---------                  -----------             -----
Balance, January 1, 1994            30,961,778    $  309,618           $ 1,794,373                 $ (2,081,831)          $ 22,160

Net loss                                  -             -                     -                          (1,184)            (1,184)
                                    ----------    ----------           -----------                 -------------         ----------

Balance, December 31, 1994          30,961,778      309,618              1,794,373                   (2,083,015)            20,976

Net income                                -             -                     -                             231             231
                                    ----------   ------------         ------------                 -------------         ----------

Balance, December 31, 1995          30,961,778      309,618              1,794,373                   (2,082,784)            21,207

Net loss                                  -            -                      -                            (398)              (398)
                                   -----------   ------------         ------------                --------------        -----------

Balance, December 31, 1996          30,961,778   $  309,618            $ 1,794,373                  $ (2,083,182)         $ 20,809
                                   ===========   ============          ===========                  =============        ==========


</TABLE>























              See accompanying notes to these financial statements.


                                       F-4

<PAGE>


                            ENERGY PRODUCTION COMPANY

                            STATEMENTS OF CASH FLOWS

                  YEARS ENDED DECEMBER 31, 1996, 1995 and 1994


                                          1996             1995           1994
                                         ------           ------         ------
CASH FLOWS FROM OPERATING ACTIVITIES-
   Net income (loss)                 $   (398)         $    231        $ (1,184)
                                     ----------        ---------       ---------

NET CHANGE IN CASH                       (398)              231          (1,184)
CASH AT BEGINNING OF YEAR                1,272            1,041           2,225
                                     ----------        ---------       ---------
CASH AT END OF YEAR                  $     874         $  1,272        $  1,041
                                     ==========        =========       ========




              See accompanying notes to these financial statements.


                                       F-5

<PAGE>


                                               ENERGY PRODUCTION COMPANY


                                             NOTES TO FINANCIAL STATEMENTS

1.     NATURE OF OPERATIONS
       --------------------
       Energy Production  Company (the "Company") was incorporated
       under the laws of the State of Colorado  on March 11, 1980 and  completed
       an initial  public  offering in  November  1980.  From 1980 to 1987,  the
       company was engaged in the acquisition,  operation and development of oil
       and gas  properties.  In December  1986,  the Company began to divest its
       remaining  oil and gas  assets  and  operations  and has been  relatively
       inactive since 1988.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
       ------------------------------------------
         (a)  Income Taxes
              ------------
              Income  taxes are  provided  for the tax  effects of  transactions
              reported  in  the  financial   statements  and  consist  of  taxes
              currently due plus deferred taxes related primarily to differences
              between the financial and income tax reporting bases of assets and
              liabilities.  Deferred tax assets and  liabilities  represent  the
              future tax return  consequences of those  differences,  which will
              either be taxable or  deductible  when the assets and  liabilities
              are  recovered or settled.  The Company has no deferred tax assets
              or  liabilities  at December  31,  1996,  1995 or 1994,  except as
              described below.

              The Company had substantial  Federal income tax net operating loss
              carryforwards (NOL) available at December 31, 1996, 1995 and 1994.
              However,  following a change in control of the Company in December
              1986 and again in May 1997,  use of the NOL is  severely  limited.
              The deferred tax asset resulting from the NOL is fully reserved.

         (b)  Statements of Cash Flows
              ------------------------
              For purposes of the statement of cash flows, the Company considers
              cash on deposit and all highly  liquid  investments  with original
              maturities of three months or less to be cash equivalents.

         (c)  Net loss Per Common Share
              -------------------------
              Net  loss  per  common  share  has been  computed  based  upon the
              weighted average number of common shares  outstanding  during each
              year.

         (d)  Use of Estimates
              ----------------
              The  preparation  of the Company's financial  statements in
              conformity with generally accepted accounting  principles requires
              the Company's  management to make estimates and assumptions
              that affect the amounts reported in these financial statements and
              accompanying   notes.  Actual  results  could  differ  from  those
              estimates.

3.     RELATED PARTY TRANSACTIONS
       --------------------------
       As of December 31, 1996, 1995 and 1994, the Company had a receivable from
       the  controlling  shareholder  in the amount of $20,000.  This  unsecured
       receivable bore interest at 10% and was due on demand. The receivable was
       repaid in May 1997 by offsetting a management fee as described in Note 4.




                                       F-6

<PAGE>


                            ENERGY PRODUCTION COMPANY


                          NOTES TO FINANCIAL STATEMENTS

       The  Company  entered  into  an  annual  management  agreement  with  its
       controlling shareholder in 1987 and renewed the agreement each year until
       December  1996.  The  agreement  called  for an amount  reached by mutual
       agreement of the Company and the  shareholder  to be paid each year.  The
       Company  paid  management  fees of $0, $0 and $1,500 for the years  ended
       December 31, 1996, 1995 and 1994, respectively.

4.     SUBSEQUENT EVENTS

       In May 1997, the Company's controlling  shareholder sold his shares
       to Bass Petroleum,  Inc. (Bass) and the Company issued  44,038,222 shares
       of its common  stock to Bass in exchange  for two oil and gas  properties
       valued  at a total  of  $40,000,  and  $5,000  in  cash.  The oil and gas
       properties  were valued by management  based upon an independent  reserve
       report. In connection with the successful completion of this transaction,
       the  Company  paid a  $20,000  management/finder's  fee to the old
       controlling shareholder.












                                       F-7