SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-KSB



ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended June 30, 2003



File No. 0-09482



COLORADO WYOMING RESERVE COMPANY



(Name of Small Business Issuer as Specified in its Charter)



|Wyoming                      | 83-0246080         
|---------------------------- | -------------------
|(State or other jurisdiction | (IRS Employer      
|of incorporation)            | Identification No.)





|751 Horizon Court, Suite 205, Grand Junction, Colorado |  | 81506     
|------------------------------------------------------ |  | ----------
|(Address of principal executive offices)               |  | (Zip Code)

Registrants telephone number, including area code: (970) 255-9995





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



YES   [X]              NO  [  ]



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained herein, 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. [ ]



State Issuer's revenues for its most recent fiscal year: None



As of June 27, 2005, 10,807,694 shares of common stock $.01 par value were outstanding. The aggregate market value of voting stock held by non-affiliates of the Registrant was $10,749,858 based on the closing price of the Company's Common Stock of $1.75, as reported by the NASD based on the Other OTC on June 8, 2005.



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PART I



ITEM 1. BUSINESS



GENERAL



Colorado Wyoming Reserve Company ("CWYR" or the "Company"), with its principal office located at 751 Horizon Court, Suite 205, Grand Junction, Colorado 81506, telephone number (970) 255-9995, was incorporated as a Wyoming corporation on November 7, 1979.



The Company is an oil and natural gas exploration company with a geographical focus in the Rocky Mountain region of the western United States. The Company's primary objective is the acquisition of interests in undeveloped oil and gas properties, and the location and development of economically attractive accumulations of hydrocarbons in such properties through the use of a highly-integrated, interpretive approach to the application of three-dimensional ("3-D") geophysical data (seismic data acquired and processed to yield a three-dimensional picture of the subsurface). The Company's acquisitions of undeveloped oil and gas properties are accomplished primarily by the acquisition of direct mineral leasehold interests from private, state and federal lands. None of the Company's properties are in production, and consequently, the Company has no operating income or cash flow.



STRATEGY



The Company is currently focusing its exploratory efforts on its mineral interests in approximately 64,000 gross leased acres (approximately 25,500 net leased acres) in the central Paradox Basin of southeastern Utah (the "Paradox Basin Project" or the "Project"). During fiscal 2001, the Company obtained a 3-D seismic survey (the "Seismic Survey") covering a 26 square mile portion of its Paradox Basin leasehold position. The survey results indicate that further exploratory work is warranted on the Paradox Basin Project. Together with its joint venture partners, CWYR has recently undertaken drilling and intends to raise additional capital in order to be able to participate in the next phase of development of the Paradox Basin Project.



FARMOUT AGREEMENT



The Company entered into a farmout agreement (the "Farmout Agreement") with ST Oil Company ("ST Oil"), FM Energy, LLC (whose rights and interest were subsequently assigned to Moore Energy LLC ("Moore Energy")) and The Shoreline Companies, LLC, ("Shoreline") (collectively, "the Farmees"), effective September 22, 2000, to finance exploration of the Paradox Basin Project. Certain directors and stockholders of the Company are directors, officers and controlling stockholders of ST Oil, Moore Energy and Shoreline. Under the Farmout Agreement, the Company assigned 50 percent of its mineral working interests in the Paradox Basin Project to the Farmees in exchange for the Seismic Survey. Prior to the commencement of the Seismic Survey, the Company sold an additional 7.5 percent of its mineral working interests to the Farmees in February 2001 for $150,000. The purchase price was determined using the same valuation of the Paradox Basin Project as was used in the Farmout Agreement. The cost of completing, processing and interpreting the Seismic Survey of approximately $1.1 million was borne by the Farmees.



The Farmout Agreement requires the Company to bear 42.5 percent of the cost of maintaining the Paradox Basin Project leasehold, which cost is estimated at approximately $33,000 per year. The Company currently has no funds available to meet this obligation, and its interest in the Project consequently could be reduced or eliminated.



The Farmout Agreement establishes an area of mutual interest (the "AMI") until September 22, 2010. If during the ten-year term of the AMI, any party to the Farmout Agreement acquires an oil or gas leasehold interest in the AMI, that party must give all the other parties the opportunity to participate. The acquiring party must notify all other parties of the acquisition, and each recipient of this notice has thirty (30) days to notify the acquiring party of its election to participate or not participate. If a party elects to participate, the acquiring party must promptly assign to the party an interest in the leasehold interest proportionate to the party's interest under the Farmout Agreement. While there can be no assurance that the Company will have the funds to participate in future AMI acquisitions, it did participate during fiscal 2001, spending $54,000 on additional leases.







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No decision can be made regarding the next phase of the Paradox Basin Project without the approval of the Farmees and CWYR holding an aggregate 80 percent interest in the Paradox Basin Project. In the event the Company and the Farmees decide not to accept any industry proposal to purchase or develop the Paradox Basin Project, or if no industry proposals are received, one or more of the parties may notify the other parties that it desires to drill one or more wells on the Project. If the Farmees and Company cannot reach agreement as to a drilling program, the party or parties wishing to drill ("the Consenting Parties") are required to provide written notice to the other parties ("the Nonconsenting Parties") of the their intention to drill. The Nonconsenting Parties then have 30 days to notify the Consenting Parties of their election to participate or not to participate in the drilling program. Nonconsenting Parties who elect not to participate in the drilling are required to farmout their interest(s) to the Consenting Parties under standard industry terms and conditions, thereby reducing their percentage interest in the Project.

On September 25, 2002, Colorado Wyoming Reserve Company (the "Company") entered into a Farmout Agreement (the "2002 Farmout Agreement") with ST Oil Company, a Nevada corporation, and The Shoreline Companies, LLC, a Colorado limited liability company (collectively, the "Farmees"). The Company owns a 42.5% working interest and the Farmees collectively own a 34.5% working interest in certain oil and gas leases covering approximately 64,000 acres of land located in the Paradox Basin in San Juan County, Utah. J. Samuel Butler, a director of the Company till September 22, 2005, and a stockholder of the Company, is also President and Chief Executive Officer and a stockholder of ST Oil Company. F. Robert Tiddens and John F. Greene, directorsof the Company till September 22, 2005, and stockholders of the Company, are also directors and 50% stockholders of The Shoreline Companies, LLC.

Under the 2002 Farmout Agreement, the Farmees have agreed to drill a test well in the Remington Prospect, which covers approximately 1,440 acres in the Paradox Basin. The well must be drilled to a certain depth on or after November 15, 2002. The Company, as Farmor, will have the option to either participate in the drilling of the first test well for its proportionate share or to farmout its interest to the Farmees. If the Company wants to participate in the first test well, the Company must submit its proportionate share of the estimated drilling costs within 10 days of receipt of a notice to commence drilling. The Company's failure to submit drilling costs within such time will be deemed the Company's election not to participate and to farmout its interests to the Farmees.

If the Company elects not to participate, all costs and expenses incurred or arising out of the drilling, testing, completing and equipping or the plugging and abandoning the first test well would be borne by the Farmees.

If Farmees commence and drill the first test well to contract depth, the Farmees will earn all of the Company's right, title and interest in the 160-acre drillsite tract in the Remington Prospect as to all depths, and the right to designate within 90 days after reaching contract depth in the first test well, a second 160-acre drillsite tract for a second test well to be located within the Remington Prospect, within which Farmees shall earn at Farmor's option either (i) 60% of the Company's 42.5% interest in the second drillsite tract if the Company elects to participate for its remaining 40% interest in the second test well or (ii) all of the Company's interest in and to the second drillsite tract and second test well subject to a back-in (described below). The Farmees must make their designation within 90 days by giving notice to the Company, and the Company will have 10 days within receipt of the Farmees' designation to give notice of its election to participate or not. Interests shall be assigned to and from the Farmees with 66.67% of the interest going to ST Oil Company and 33.33% going to The Shoreline Companies, LLC.

For 30 days following receipt of written notice of payout (defined below) from Farmees, Farmor will have the option to back-in for 30% of the interest previously assigned from the Company to the Farmees in the first drillsite tract for the first test well and the second drillsite tract for the second test well. Within 10 days of receiving the Company's election to back-in at payout for the first test well or the second test well, Farmees shall re-assign 30% of the interest in the corresponding drillsite tract previously assigned by the Company to the Farmees.

Payout for the first test well means the day the Farmees have recovered from proceeds of production attributable to the first test well, less royalties, overriding royalties and other lease burdens, and production taxes (ie. ad valorem, severance, conservation and similar taxes assessed on production), 100% of all costs and expenses, tangible and intangible, incurred by Farmees in the drilling, testing, completing and equipping the first test well, together with all of the operating costs and expenses incurred during payout. Payout for the second test well means the day when Farmees have recovered from proceeds of production attributable to the second test well, less royalties, overriding royalties and other lease burdens, and production taxes, 300% of all costs and expenses, tangible and intangible, incurred by Farmees in the drilling, testing, completing and equipping the second test well, together with all of the operating costs and expenses incurred during payout.

Costs and expenses associated with drilling, testing, completing and equipping wells drilled subsequent to the drilling of the first test well and/or the second test well in the Remington Prospect will be borne by the Company and the Farmees in accordance to their proportionate ownership.



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The leases in the Remington Prospect remain subject to the Tax Partnership Agreement, attached to the Farmout Agreement, dated effective September 22, 2000 (the "2000 Farmout Agreement"), among the Farmor, the Farmees and FM Energy LLC (whose rights and interests were subsequently transferred to Moore Energy LLC). Pursuant to the 2000 Farmout Agreement, the Company assigned 50% of its mineral working interests in and to certain oil and gas leases covering approximately 64,000 acres of land located in the Paradox Basin in San Juan County, Utah, to the Farmees and Moore Energy LLC upon completion by the Farmees and Moore Energy LLC of seismic testing. Prior to commencement of the seismic survey, the Company sold an additional 7.5% of its mineral working interests to the Farmees and Moore Energy LLC in February 2001 for $150,000.

The Company, the Farmees and Moore Energy executed an operating agreement, with ST Oil Company as the operator, to govern the rights and obligations of the parties to all lands covered by the leases in the Remington Prospect.



CREDIT AGREEMENT



In September 2000, the Company entered into a Credit Agreement with the Farmees. The Credit Agreement established an unsecured revolving line of credit for the Company in an aggregate principal amount of $110,000. Amounts borrowed under the Credit Agreement bear interest at the rate of 8 percent per annum. At June 30, 2002 and 2001, the Company had a balance owing the Farmees of $122,000 and $130,509 respectively. The note was due and payable in full on September 28, 2001, and remains unpaid as of June 27, 2005.



EQUIPMENT



The Company currently owns only leasehold interests in undeveloped acreage in the Paradox Basin. CWYR owns no drilling rigs, and drilling, if any, will be accomplished by independent contractors, typically on a footage or day rate basis, for which the Company may bear the risks of fire, blowout or other catastrophe to its property.



COMPETITION



There is significant competition for the acquisition of properties capable of producing oil and gas, as well as for the equipment and labor required to explore, develop and operate such properties. Most of the Company's competitors have financial resources and exploration and development budgets that are substantially greater than those of the Company, which may adversely affect the Company's ability to compete with those companies, especially in the acquisition of attractive oil and gas properties.



GOVERNMENTAL REGULATION



If the Company is successful in developing the Paradox Basin Project, the availability of a ready market for its oil and gas production will depend upon numerous factors beyond the Company's control. These factors include regulation of natural gas and oil transportation, federal and state regulations governing environmental quality and pollution control, the amount of natural gas and oil available for sale, the availability of adequate pipeline and other transportation and processing facilities and the marketing of competitive fuels. State and federal regulations generally are intended to prevent waste of natural gas and oil, protect rights to produce natural gas and oil between owners in a common reservoir, and control contamination of the environment.



Sales of crude oil, condensate and gas liquids are currently not subject to federal regulation and are made at market prices. The state of Utah, in which the Company's Paradox Basin Project is located, regulates the production of natural gas and oil, including requirements for obtaining drilling permits, the method of developing new fields, the spacing and operation of wells and the prevention of waste of natural gas and other resources. Such provisions may restrict the number of wells that may be drilled on a particular lease or in a particular field. Recent trends indicate increased state and local regulation of oil and gas activities and pipeline operations which could impact operations on the Paradox Basin Project if an oil and gas prospect is discovered and developed; however, these impacts are not expected to be significant.





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ENVIRONMENTAL REGULATION



The Company's exploration activities are, and any development or production activities could be, subject to numerous laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental or cultural resource protection. These laws and regulations may (a) require the acquisition of a permit prior to constructing a drill site, commencing drilling or constructing pipelines; (b) restrict the types, quantities and concentration of various substances that can be released into the environment in connection with drilling and production activities; (c) limit or prohibit drilling activities on certain lands lying within wilderness, wetlands, culturally sensitive and other protected areas; and (d) impose substantial liabilities for pollution resulting from the Company's operations. Moreover, the recent trend toward stricter standards in environmental legislation and regulations is likely to continue. Existing, as well as future legislation and regulations, could cause additional expense, capital expenditures, restrictions and delays in the development of properties, the extent of which cannot be predicted. Management believes that the Company is in substantial compliance with current applicable environmental laws and regulations and that continued compliance with existing requirements will not have a material adverse impact on the Company. Since inception, the Company has not been required to make any material expenditures with respect to compliance with environmental laws and does not expect to make any material expenditures during the current and following fiscal year.



EMPLOYEES



As of June 27, 2005, the Company had one full-time employee. The Company employs consultants as needed.





RISK FACTORS



THE COMPANY HAS NO CASH, NO OPERATIONS AND NO REVENUES AND COULD BE FORCED TO LIQUIDATE; AS A RESULT, STOCKHOLDERS MAY SUFFER A COMPLETE LOSS OF THEIR INVESTMENT.



CWYR has a history of operating losses, and it is anticipated that those losses will continue for the foreseeable future. The Company continues to incur costs related to maintaining its interests in its properties as well as general and administrative costs. In addition, CWYR will require substantial additional capital to further explore and develop its properties and to acquire additional properties. The Company currently has no cash. The Company does not currently have any producing properties, and therefore has no prospects for a positive revenue stream in the near future. The Company is in default for nonpayment of its $110,000 loan under the Credit Agreement. The Company will need to raise additional capital through a debt or equity financing in the immediate future in order to fund its share of maintaining and marketing the Paradox Basin Project, to acquire additional properties pursuant to the AMI provision of the Farmout Agreement or otherwise, to cover its general and administrative expenses and to repay outstanding indebtedness. If the Company is successful in raising additional equity capital, a substantial discount to prevailing market prices may be required, resulting in significant dilution to existing stockholders. There can be no assurance that the Company will be successful in obtaining additional financing on terms acceptable to it, if at all. The Company's failure to obtain additional financing would have a material adverse effect on the Company's business and financial position, and, as a result, CWYR may have to liquidate and stockholders may suffer a complete loss of their investment.



THE COMPANY IS DEPENDENT ON A SINGLE PROJECT; IF THE PARADOX BASIN PROJECT IS NOT SUCCESSFUL, THE COMPANY WOULD BE MATERIALLY ADVERSELY AFFECTED.



CWYR's only properties are its mineral interests in the Paradox Basin. The Company, together with the Farmees, have recently begun drilling in the Paradox Basin Project. The results of the Seismic Survey indicate that additional exploratory work is warranted. The Company may not be able to fund its share of developing the Project and its interest in the Project could consequently be reduced or forfeited. The Company may expend significant funds only to determine that the properties do not contain reserves. If the Company's exploration efforts on the Paradox Basin Project fail, the Company could be forced to liquidate and stockholders may suffer a complete loss of their investment.





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THE COMPANY'S EXPLORATION ACTIVITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.



CWYR currently is spending its entire capital budget on exploration of one project. Exploration activities are speculative and involve substantially more risk than development or exploitation activities. Even when fully utilized and properly interpreted, 3-D seismic data and visualization techniques only assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not conclusively allow the interpreter to know if hydrocarbons will in fact be present in such structures. In addition, the use of 3-D seismic data and such technologies requires greater predrilling expenditures than traditional drilling strategies. Additionally, market forces could increase the costs of further exploration to make it prohibitive. Because the Company has only one exploration project, any exploration failure could force the Company to liquidate.



ONE OF THE COMPANY'S MANY CREDITORS COULD FORCE IT INTO BANKRUPTCY.



The Company has significant liabilities and numerous creditors, some of whom are parties to the Farmout Agreement. A creditor or group of creditors could force the Company into bankruptcy. The Company may be forced to liquidate and stockholders may suffer a complete loss of their investment.



THE UNCERTAINTY OF OIL AND NATURAL GAS PRICES MAY ADVERSELY EFFECT CWYR'S ABILITY TO RAISE ADDITIONAL CAPITAL.



For much of the past decade, the prices for oil and natural gas have been extremely volatile. It is anticipated that such prices will continue to be volatile in the foreseeable future. In general, prices of oil, gas and natural gas liquids are dependent upon numerous external factors such as weather, various economic, political and regulatory developments and competition from other sources of energy. The unsettled nature of the energy market and the unpredictability of worldwide political developments, including, for example, actions of OPEC members, make it particularly difficult to estimate future prices. Any substantial price erosion for an extended period of time would have a material adverse effect on CWYR's ability to raise additional capital in the future to fund the Company's exploration activities and could harm the Company's business and financial condition.



CWYR COMPETES AGAINST LARGER, BETTER FINANCED AND MORE EXPERIENCED COMPANIES.



Competition in the oil and gas industry is intense. Major and independent oil and gas companies, as well as individuals and drilling programs, actively bid for desirable oil and gas properties, as well as for the equipment and labor required to operate and develop such properties. A number of CWYR's competitors have financial resources and exploration and development budgets that are substantially greater than those of CWYR, which may adversely affect CWYR's ability to compete successfully, especially in the acquisition of attractive oil and gas properties on terms the Company considers acceptable. The effects of this highly competitive environment could harm the Company's business, financial condition and results of operations.



THE ABSENCE OF A LIQUID MARKET FOR CWYR COMMON STOCK COULD HARM THE ABILITY OF STOCKHOLDERS TO SELL SHARES OF CWYR COMMON STOCK.



Due to the Company's extended delay in filing its Annual Reports on Form 10-KSB for the year ended June 30, 2001, the National Association of Securities Dealers (the "NASD") has removed the Company from the OTC Bulletin Board System ("OTCBBS"). Because the Company's Common Stock, par value $0.01 per share ("Common Stock"), is not able to trade on the OTCBBS, stockholders may be unable to sell their shares of Common Stock.



The Company is delinquent in filing its Quarterly Reports on Form 10-QSB for the quarters ended September 30, 2003, December 31, 2003, March 31, 2004, September 30, 2004, December 31, 2004, and March 31, 2005 and its Annual Reports on Form 10-KSB for the fiscal year ended June 30, 2004, and as a result, the Company is able to trade only on the "pink sheets" maintained by Pink Sheets LLC.  This market is thinly traded and lacks the liquidity of other public markets with which some investors have more experience. There is no assurance that a more liquid trading market will develop or, if developed, would be sustained. Stockholders may be unable to sell their shares of Common Stock. Furthermore, it is unlikely that a lending institution would accept Common Stock as pledged collateral for loans unless a regular trading market develops.





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THE COMPANY'S DELINQUENCY IN FILING EXCHANGE ACT REPORTS COULD LIMIT THE ABILITY OF STOCKHOLDERS TO SELL RESTRICTED SHARES OF CWYR COMMON STOCK.



The Company is delinquent in filing its Quarterly Reports on Form 10-QSB for the quarters ended September 30, 2003, December 31, 2003, March 31, 2004, September 30, 2004, December 31, 2004, and March 31, 2005. The Company was delinquent in filing its Annual Reports on Form 10-KSB for the fiscal years ended June 30, 1999, 2001, 2002 and 2003 and is delinquent in filing its Annual Reports on Form 10-KSB for the fiscal year ended June 30, 2004. The Company's delinquency in filing such reports could have an impact on the ability of its stockholders to sell restricted shares of Common Stock pursuant to the exemption from registration provided by Rule 144 of the Securities Act of 1933, as amended.



LIMITED SHARE TRADING, STOCK PRICE VOLATILITY AND FUTURE ISSUANCES COULD ADVERSELY AFFECT THE PRICE OF CWYR COMMON STOCK.



Historically, trading in the Company's stock has been sporadic and the stock price has been volatile. Sales of substantial amounts of Common Stock by CWYR's principal stockholders in the public market could adversely affect the prevailing market price of the Common Stock. In addition, CWYR has granted options and issued warrants to purchase 6,424,666 shares of Common Stock, all of which are presently exercisable. Future issuances upon exercise of options or warrants could cause substantial dilution to stockholders.



THE COMPANY'S EXPLORATION ACTIVITIES ARE CONTROLLED BY THIRD PARTIES.



The Company's current exploration activities are being conducted and controlled by third parties. The Company has a minority interest in the Paradox Basin Project, so its ability to control the future exploration activities under the Farmout Agreement is limited.



CONFLICTS OF INTEREST MAY HARM THE INTERESTS OF STOCKHOLDERS.



J. Samuel Butler, F. Robert Tiddens and John F. Greene, who were all directors and stockholders of the Company until September 22, 2004, are officers, directors and/or stockholders of the Farmees under the Farmout Agreement. The Company is in default on payment of the $110,000 loan from the Farmees pursuant to the terms of the Credit Agreement. In addition Mr. Butler is the President of Trinity Petroleum Management, LLC ("Trinity"), a privately-held company providing accounting and other administrative services to CWYR. See Item 12, "Certain Relationships and Related Transactions." The continuation of certain related party transactions and the interests that the Company's directors and stockholders have in other enterprises, including the Farmees, may result in conflicts of interest between the Company and such individuals. For example, the ownership interests of the Farmees in the Paradox Basin Project would increase if the Company fails to fund it share of maintaining the project. Conflicts of interest may not be resolved in a manner favorable to the Company.



CONTROL BY INSIDERS MAY PREVENT A CHANGE IN CONTROL OR ASSET SALE THAT WOULD BE IN THE BEST INTERESTS OF STOCKHOLDERS.



Of the Company's shares of Common Stock currently outstanding, approximately 20 percent is held by the Company's directors, officer and affiliates. In addition, options or warrants for 2,400,000 shares of Common Stock have been granted to the Company's directors, officer and affiliates, all of which are currently outstanding and presently exercisable. If all such currently exercisable options were exercised, the Company's directors, officers and affiliates would beneficially own approximately 42 percent of the total outstanding shares of Common Stock of CWYR. Consequently, they are able to exercise significant control over all matters requiring stockholder approval. Such voting concentration may have the effect of discouraging, delaying or preventing a change in control of CWYR or a sale of CWYR's assets.



TITLE TO CWYR'S PROPERTY MAY BE DEFECTIVE AND MAY BE CHALLENGED.



Title matters relating to oil and gas properties can be subject to some doubt. In most states, it is not possible or customary in the oil and gas industry to purchase title insurance. The decision of whether or not to expend funds for additional title work is made by management on a case-by-case basis. In some cases, title may be found to be defective and the cost to cure title may be prohibitive. The validity of the Company's title to its property may be challenged, which could result in expensive and time consuming litigation.







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COST OF COMPLIANCE WITH GOVERNMENTAL REGULATIONS COULD BE MATERIAL.



CWYR's business is subject to federal, state and local laws and regulations relating to the exploration for and the production, transportation and sale of natural gas and oil. Although CWYR believes it is in substantial compliance with all applicable laws and regulations, legal requirements are frequently changed and subject to interpretation, and the Company is unable to predict the ultimate cost of compliance with these requirements or their effect on its operations.



LEGISLATIVE CHANGES TO ENVIRONMENTAL REGULATIONS COULD ADVERSELY AFFECT CWYR'S BUSINESS.



CWYR's business is subject to complex environmental laws and regulations adopted by federal, state and local governmental authorities. Environmental laws and regulations are frequently changed. The implementation of new, or the modification of existing, laws or regulations could have a material adverse effect on the Company. The discharge of natural gas, oil or other pollutants into the air, soil or water may give rise to significant liabilities on the part of CWYR to the government and third parties and may require CWYR to incur substantial costs of remediation. No assurance can be given that existing environmental laws or regulations, as currently interpreted or reinterpreted in the future, or future laws or regulations will not substantially harm CWYR's financial condition and results of operations.



THE ABILITY OF CWYR AND STOCKHOLDERS TO OBTAIN DAMAGES FROM DIRECTORS IS LIMITED.



The liability of a director to CWYR or any stockholder for monetary damages for breach of his fiduciary duties as a director is limited by CWYR's Articles of Incorporation, with certain exceptions. In addition, CWYR will provide officers and directors the maximum indemnification allowable from time to time under Wyoming law. These provisions limit CWYR's and its stockholders' ability to obtain damages or other relief from its officers and directors in the event of a claimed wrongdoing.



THE ADDED DISCLOSURE REQUIREMENTS UNDER THE PENNY STOCK RULES COULD ADVERSELY AFFECT THE ABILITY OF STOCKHOLDERS TO SELL CWYR COMMON STOCK.



Shares of CWYR Common Stock are subject to rules adopted by the Securities and Exchange Commission regulating broker-dealer practices in connection with transactions in "penny stocks." Such rules require that prior to effecting any transaction in a penny stock, a broker or dealer must give the customer a risk disclosure document that describes various risks associated with an investment in penny stocks, as well as various costs and fees associated with such an investment. It is possible that some brokers may be unwilling to engage in transactions of shares of CWYR Common Stock because of these added disclosure requirements, which would make it more difficult for a stockholder to sell his shares.



ITEM 2. PROPERTIES



The Company's Paradox Basin Project consists of mineral interests in approximately 64,000 gross leased acres (approximately 25,500 net leased acres) in San Juan County in southeastern Utah. During fiscal 2001, the Company obtained the Seismic Survey covering a 26 square mile portion of its Paradox Basin leasehold position. Analysis of the data confirmed the existence of drillable prospects previously identified by two dimensional ("2-D") seismic as well as the identification of prospects not previously defined. Additionally, the Seismic Survey confirmed that 3-D Vibroseis, a technique that is considerably less expensive than the traditional dynamite energy source, can be used effectively in many areas of the Paradox Basin Project.



The Seismic Survey was located and conducted in an area where Pennsylvanian aged prospects were previously identified by 2-D seismic. Many analog Pennsylvanian fields produce in the Paradox Basin south of the Company's project area. Due to the lack of sub-surface well control and complex geology, drilling these prospects based on 2-D seismic entails significant risk. The Company obtained the Seismic Survey to delineate prospects and to identify other potential hydrocarbon formations. As a result of the Seismic Survey, several Pennsylvanian prospects were delineated and two separate Pennsylvanian zones were identified as being potentially productive. Additionally, two deeper Mississippian zone locations were found to be prospective. Analysis of the seismic led to the inference of closed carbonate structures and faulting in the Mississippian. The Lisbon Field, a Mississippian carbonate unit less than 10 miles from the Company's project area, has produced over 50 million barrels of oil and 580 billion cubic feet of gas. There can be no assurance that reserves will be found at the Paradox Basin Project.



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The Company is still evaluating its options with respect to the next phase of Project development. See Management's Discussion and Analysis or Plan of Operation.



ACREAGE



The following table sets forth the Company's approximate working interest in undeveloped acreage, all of which is located in the central Paradox Basin, San Juan County, Utah, at June 30, 2003:



|Undeveloped  Acreage
Gross       Net
----------  ---------
Utah                   64,000     25,500
|---------------------------------------------------------------------------------------------------



CWYR's oil and gas properties are in the form of mineral leases. As is customary in the oil and gas industry, a preliminary investigation of title is made at the time of acquisition of undeveloped properties. Title investigations are generally completed, however, before commencement of drilling operations. CWYR believes that its methods of investigating are consistent with practices customary in the industry and that it has generally satisfactory title to its leases.



PRODUCING WELLS



CWYR owned no productive oil and gas wells or developed acreage at June 30, 2003.



OTHER



During fiscal 2003 and 2002:



o There have been no reserve estimates filed with any other United States federal authority or agency.



o The Company was not a party to any long-term supply or similar agreements with foreign governments or authorities in which CWYR acted as a producer.



o In the fall of 2002 the Company participated in the drilling of one exploratory well that proved to be dry.  The Company drilled no other productive or dry, exploratory or development wells.



o The Company was not (nor is it currently) obligated to provide a fixed and determinable quantity of oil and gas pursuant to any contracts or agreements.



o The Company sold no oil or gas.



ITEM 3. LEGAL PROCEEDINGS



None.



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



During the fiscal year covered by this Annual Report on Form 10-KSB, no matter was submitted to a vote of CWYR's security holders through the solicitation of proxies or otherwise.







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PART II



ITEM 5. MARKET FOR COMPANY'S COMMON STOCK AND RELATED SECURITY HOLDER

MATTERS



PRICE RANGE OF COMMON STOCK



The Common Stock was traded on the NASD's Over-the-Counter Bulletin Board System (the "OTCBB") until November 20, 2001. Since that date the stock has traded under the symbol CWYR on the Other OTC or otherwise known as the Grey Market. Grey Market is the trading of a security that is not listed on any stock exchange or quoted on the Pink Sheets or the OTCBB. Other OTC trades are reported to the NASD so investors can track price and volume; however bids and offers are not collected in a central spot so Best Execution of orders is difficult.



Once the Company has filed all past due Annual and Quarterly Reports, management intends to seek the resumption of quotation of its Common Stock on the OTC Bulletin Board.



The following table sets forth the high and low bid prices of the Common Stock as reported by the NASD in the Other OTC for the periods indicated. The bid prices represent prices between dealers, without retail markups, markdowns or commissions, and may not represent actual transactions. Public trading in the Common Stock of CWYR has been minimal.



|For the Quarter Ended        Low        High
---------------------------  ---------  --------
September 30, 2001           $ .21      $    .57
December 31, 2001            $ .05      $   .625
March 31, 2002               $ .05      $   1.25
June 30, 2002                $ .25      $    .55
September 30, 2002           $ .55      $    .20
December 31, 2002            $ .35      $    .05
March 31, 2003               $ .05      $  .0001
June 30, 2003                $ .01      $    .01
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The number of record holders of Common Stock of CWYR as of June 27, 2005 is estimated to be 2,756. The closing price as of that date, as quoted on the Other OTC under the symbol CWYR was $1.75.



No dividends have been declared to date by CWYR, nor does CWYR anticipate declaring and paying cash dividends in the foreseeable future.



RECENT SALES OF UNREGISTERED SECURITIES



There were no sales of unregistered securities during fiscal 2003.

On November 14, 2002, the Company closed a private placement of convertible notes to accredited investors for $280,000. The Convertible Notes are convertible into Common Stock at a conversion rate equal to the principal amount of each Convertible Note (plus accrued and unpaid interest) divided by the conversion price of $.30 per share of Common Stock. Repayment of the Convertible Notes is due on November 14, 2007, or on a sale of substantially all the assets of the Company, bankruptcy or liquidation of the Company occurring prior to November 14, 2007. The Convertible Notes are redeemable at the option of the Company for the principal amount of such Convertible Notes, plus accrued and unpaid interest any time after November 14, 2004. The use of proceeds from the private placement was as follows:

- $75,000 to repay indebtedness owed to Kim Fuerst, President and Chief Executive Officer and a stockholder of the Company, for expenses that Mr. Fuerst paid on behalf of the Company (including lease payments, rent payments, telephone bills, etc.), for four months of the 33 months of unpaid but accrued salary that the Company owes Mr. Fuerst and for a loan that Mr. Fuerst made to the Company so that the Company could make lease rental payments;

- an aggregate of approximately $68,000 to repay amounts due Trinity Petroleum Management, Butler Resources and ST Oil Company, each of which is an affiliate of J. Samuel Butler, a director and stockholder of the Company, for accounting services, reimbursement for payment of escrow fees for the private placement and reimbursement for payment of delay rentals and lease acquisitions;



10



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- approximately $24,000 to the farmees under the Farmout Agreement, dated September 28, 2000, between the Company as farmor and the Shoreline Companies LLC, Moore Energy LLC and ST Oil Company as farmees (certain directors and stockholders of the Company are directors, officers and controlling stockholders of ST Oil Company, the Shoreline Companies LLC and Moore Energy LLC) for reimbursement for payment of delay rentals and lease acquisitions; and

- approximately $60,000 to repay existing indebtedness to the Company's accountants, auditors, legal counsel and other trade accounts.

The remaining $38,000 of the proceeds from the private placement will be used for general corporate purposes.

Effective September 22, 2004, J. Samuel Butler, F. Robert Tiddens, and John Green resigned from the board of directors of the Colorado Wyoming Reserve Company (the "Company"). None of Messrs. Butler's, Tiddens', or Green's resignations were a result of any disagreement with the Company or any matter relating to the Company's operations, policies, or procedures.



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



UNCERTAINTY OF FORWARD-LOOKING INFORMATION



This annual report on Form 10-KSB includes statements that are not purely historical and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements involve risks and uncertainties that could cause actual results to differ from projected results. Such statements address activities, events or developments that the Company expects, believes, projects, intends or anticipates will or may occur, particularly its ability to raise capital sufficient enough to repay outstanding indebtedness, to fund its share of maintaining and marketing the Project and to participate in future Paradox Basin activities, the Company's use of proceeds from any financing or sale of its interest, the Company's beliefs regarding the results of the Seismic Survey and the next phase of development, volatility of Common Stock prices, anticipated lack of revenues, anticipated losses, plans to market the Project to third parties and the effect of the application of certain accounting rules. Factors that could cause actual results to differ materially ("Cautionary Disclosures") include, among others: general economic conditions, the market price of oil and natural gas, concentration of the Company's properties in a small area in the Paradox Basin, the strength and financial resources of the Company's competitors, climatic conditions, environmental risks, the results of financing efforts, regulatory developments and the factors identified in ITEM 1 - BUSINESS - RISK FACTORS. Many of such factors are beyond the Company's ability to control or predict. All forward-looking statements included or incorporated by reference in this Form 10-KSB are based on information available to the Company on the date hereof. Although the Company believes that the assumptions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct or that the Company will take any actions that may presently be planned. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Disclosures.



PLAN OF OPERATIONS



At June 27, 2005, the Company had no cash, no operations and no revenues. These factors raise substantial doubts about the Company's ability to continue as a going concern without raising significant additional capital.



At June 27, 2005, the following major events have taken place:



In accordance with the terms of the Farmout Agreement, the Farmees have provided interpreted seismic data to the Company, and the Company has, in turn, made assignments of the respective leasehold ownership interests to the Farmees. Based on the results of the Seismic Survey, the Company believes that exploratory test wells are warranted on at least three prospects. As the Seismic Survey covered less than one-third of CWYR's acreage position, the Company also believes additional acreage should be surveyed. The Company and the Farmees plan to present the Paradox Basin Project to qualified industry companies for the purpose of determining the market value of the project and the terms on which an industry partner might be brought into the Project. The Company believes that the next phase of Project development is the drilling of an exploratory well on the Project and conducting a seismic shoot on prospects not included in the first shoot. No decision can be made regarding the next phase of development of the Paradox Basin Project without the approval of CWYR and the Farmees holding an aggregate 80 percent interest in the Paradox Basin Project. In addition to the implications of the Farmout Agreement on the decision, the Company's current lack of capital limits the options available to it.





11



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The Company and the Farmees may elect to sell the Paradox Basin Project for cash and to retain an overriding royalty interest in the Project. This option would require the Company to raise capital sufficient to fund its share of the costs of maintaining and marketing the Project, to pay its existing creditors and to run day-to-day operations until the Project is sold. Alternatively, the Company and the Farmees could enter into a farmout agreement with an industry partner whereby the industry partner pays all the cost of one or more exploratory wells and possibly a second seismic shoot. The Company would need to raise additional capital sufficient to fund its share of the drilling of future exploratory and development wells. Finally, the Company and the Farmees could decide to participate in the drilling of the initial exploratory well and all future drilling and seismic shoots. This third option would require extensive capital.



The Company plans to raise funds to meet its obligation to fund its 42.5 percent share of the costs of maintaining the Paradox Basin Project leasehold (estimated at $33,000 per year) and the costs of marketing the Project, to repay the $110,000 borrowed under the Credit Agreement and due and payable in full on September 28, 2001, and to pay existing accounts payable. If the Company is not successful in raising additional capital to fund its short term needs, the Company may have to liquidate and stockholders may suffer a complete loss of their investment.



If the Company and the Farmees elect to sell the property, the Company intends to use its share of the proceeds to pay outstanding obligations, including the $110,000 due under the Credit Agreement and existing accounts payable. Remaining proceeds, if any, may be used to purchase new oil and gas leases. If the joint venture elects to enter into a farmout agreement with an industry partner or to drill an exploratory well or wells, the Company would need significant additional financing. If an industry partner is brought in to drill or if the Company is not successful in raising additional capital, its interests in the Project would be further reduced. The failure to raise additional capital could also lead to forfeiture of the Company's interest in the Project.



On December 9, 2002 results of the first test well on the Remington Prospect, which well covers approximately 160 acres of the 26 square mile (16,640 acres) portion of the Company's Paradox Basin leasehold position encompassed by the 3-D seismic survey acquired by the Company during fiscal 2001 (the "3-D Seismic Area"), were unsuccessful. The Company plans to review the 3-D seismic data and the sub surface data obtained by drilling the test well to determine whether future shallow zone exploration in the Remington Prospect and in the 3-D Seismic Area is warranted. In addition, the Company intends to study ways of developing the deeper horizon potential identified by the 3-D seismic survey.



On December 17, 2003, pursuant to the terms of a farmout agreement, Colorado Wyoming Reserve Company (the Company) elected to participate in the extension of an assignment of a lease regarding land located in San Juan County, Utah. The Company has a 42.5% working interest in the lease, and the lessor is the Department of the Interior.



On January 5, 2004, pursuant to the terms of a farmout agreement, the Company elected to participate in the acquisition of an oil and gas lease with respect to two wells located in San Juan County, Utah. The lessor is the Bureau of Land Management, and the Company and the other participants intend to recomplete the two wells upon resolution of certain contractual obligations and other issues.



On March 3, 2005, the Company confirmed its proprietary 3-D Seismic Science with two exploratory successes at its Paradox Basin Exploration Project in Southeast Utah.  The science, four years under development, has been confirmed by the completion of the Federal 1-31 and the Evelyn Chambers wells on the West Lisbon structure, 3 1⁄2 miles southwest of the 155 million barrel oil equivalent Lisbon Field in the same Mississippian formation. Both wells tested in the range of 2 MMCFD in the formation analogous to the productive formation at Lisbon. The wells are awaiting pipeline contract and hook-up.



The Company owns 10.6% APO of this 700-acre structure and 10.6% of the surrounding 8,960 acres.  Further additional seismic work in light of this successful discovery is anticipated on the structure.



The Company owns 42 1⁄2 % of two other, 3-D delineated, structures in the Paradox Basin Project.  Additionally, the Company will have 42 1⁄2 % of two other, tentatively identified, structures in the area.



In the fall of 2005 the Company plans additional 3-D Seismic science work in the whole of the Paradox Basin Project area as well as a development drilling program in the West Lisbon structure.  Also in the summer of 2005 the two delineated structures are anticipated to be explored.



12



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EFFECTS OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS



In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS No. 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, and establishes that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The Company does not expect to be affected by either SFAS Nos. 141 or 142.



In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the asset.



SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. The liability is accreted at the end of each period through charges to operating expense. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement.



While the Company presently has no assets that would be affected by SFAS No. 143, should producing wells be drilled on the Paradox Basin acreage, the estimated abandonment cost of such wells could be subject to SFAS No. 143. However, the financial statement impact cannot be estimated at present.



In August 2001, the FASB also approved SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS 144 replaces SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The new accounting model for long-lived assets to be disposed of by sale applies to all long-lived assets, including discontinued operations, and replaces the provisions of APB Opinion No. 30, Reporting Results of Operations Reporting the Effects of Disposal of a Segment of a Business, for the disposal of segments of a business. SFAS 144 requires that those long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. Therefore, discontinued operations will no longer be measured at net realizable value or include amounts for operating losses that have not yet occurred. SFAS 144 also broadens the reporting of discontinued operations to include all components of an entity with operations that can be distinguished from the rest of the entity and that will be eliminated from the ongoing operations of the entity in a disposal transaction. The provisions of SFAS 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001 and, generally, are to be applied prospectively. At this time, the Company cannot estimate the effect of this statement on its financial position, results of operations, or cash flows.



In March 2000 the FASB adopted FASB Interpretation No. 44, Accounting for Certain Transactions including Stock Compensation. Accordingly, beginning with the first quarter of fiscal 2001, the Company was required to value any options repriced subsequent to December 15, 1998 as if the options were granted pursuant to a variable stock plan.





13



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ITEM 7. FINANCIAL STATEMENTS

PAGE





Independent Auditor's Report

15



Balance Sheet as of June 30, 2003

16



Statements of Operations for the Years Ended June 30, 2003 and June 30, 2002

and the Period from January 1, 1999 through June 30, 2003

17



Statements of Stockholders' Equity for the Years Ended June 30, 2003

and June 30, 2002

18



Cash Flow Statements for the Years Ended June 30, 2003 and June 30, 2002

and the Period from January 1, 1999 through June 30, 2003

19



Notes to the Financial Statements

20



























































14



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INDEPENDENT AUDITOR'S REPORT



Board of Directors

Colorado Wyoming Reserve Company

Grand Junction, Colorado



I have audited the accompanying balance sheet of Colorado Wyoming Reserve Company as of June 30, 2003, the related statements of operations, stockholders' equity and cash flows for year then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.



I conducted my audit in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.



In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Colorado Wyoming Reserve Company as of June 30, 2003, and the results of its operations and cash flows for the year ended June 30, 2003 in conformity with U.S. generally accepted accounting principles.



The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring negative cash flows from operations and has limited available funds. These items raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ Arshad Farooq

ARSHAD FAROOQ CPA



Ontario, California

June 28, 2005



15



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COLORADO WYOMING RESERVE COMPANY

(A DEVELOPMENT STAGE ENTERPRISE)

BALANCE SHEET

JUNE 30, 2003



CURRENT ASSETS:

|Cash and cash equivalents                         $   9,736
Accounts receivable                                      --
-----------
Total current assets                                     9,736

PROPERTY AND EQUIPMENT:
Unproved oil and gas properties                      71,223
Other property and equipment                         14,914


Less accumulated depreciation, other property
and equipment                                      (14,841)
-----------
Net property and equipment                        71,296

Other                                                 3,460
-----------
Total assets                                         $  84,492
===========
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



CURRENT LIABILITIES:

|Trade accounts payable                            $ 199,065
Other accrued liabilities                            28,696
Related party payables:
On account                                       196,336
Advances from Lightening Draw                    122,000
Note payable to joint venture                    305,000
-----------
Total current liabilities                              851,097

EQUITY
Common Stock, $.01 par value: authorized--
75,000,000 shares; issued and
outstanding--10,607,694                        106,077
Additional paid-in capital                        5,336,976
Warrants                                            148,100
Accumulated deficit:
Before entering the development stage       (4,441,242)
After entering the development stage        (1,916,516)
-----------
Total Equity                                          (766,605)
-----------

Total liabilities and equity                        $   84,492
===========
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



16



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COLORADO WYOMING RESERVE COMPANY

(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENTS OF OPERATIONS



|Years Ended           Period From
June 30,             January 1,
-------------------------     1999 to
2003         2002      June 30, 2003
------------------------- ---------------

REVENUES:                          $    -        $       -    $         -

EXPENSES:
Exploration cost                   42,346        79,390        643,224
Depreciation, depletion and
amortization                                           420          6,320
General and administrative        150,352       226,440      1,215,461
------------  -----------  ------------
Total expenses                       192,698       306,250      1,865,005
------------  -----------  ------------

Operating loss                      (192,698)     (306,250)    (1,672,307)

OTHER INCOME (EXPENSE)
Interest income (expense)          (9,993)      (13,131)       (50,280)
Loss on sale of assets                  -             -         (1,231)
------------  -----------  ------------
Income (Loss) before income taxes   (202,691)     (319,381)    (1,916,516)

Provision for income taxes                 -             -              -
Net loss                       $ (202,691)   $ (319,381)  $ (1,916,516)
============  ===========  ============

Basic and diluted loss per
share                              $   (0.02)    $   (0.03)
============  ===========

Weighted average common
shares outstanding                10,607,694   10,607,694
============  ===========
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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





17



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COLORADO WYOMING RESERVE COMPANY

(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENTS OF STOCKHOLDERS' EQUITY

JUNE 30, 2003



|Common Stock                                 Additional
---------------------              Subscription     Paid-In     Accumulated
Shares    Par Value    Warrants   Receivable      Capital       Deficit        Total
----------  ---------  ---------   ---------    -----------     ------------   ---------
BALANCE, JUNE 30, 2002   10,607,694  $106,077     $148,100    $            $5,336,976    $(6,155,067)   $(563,914)

Stock option exercise                                    -           -              -              -
Sale of common stock             -         -            -           -              -              -
Net (loss) for the year
ended June 30, 2003              -         -            -           -              -       (202,691)    (202,691)
----------  --------     --------   ---------     ----------     ------------  ----------
BALANCE, JUNE 30, 2003               $106,077     $148,100   $       -      5,336,976     (6,357,758)    (766,605)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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





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COLORADO WYOMING RESERVE COMPANY

(A DEVELOPMENT STAGE ENTERPRISE)

CASH FLOW STATEMENTS



|Years Ended         Period From
June 30,           January 1,
-------------------------     1999 to
2003         2002      June 30, 2003
------------------------- ---------------
Cash flows from operating activities:
Net loss                                               $(202,691)    $(319,381)   $(1,916,516)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depletion, depreciation and amortization                    -             -          6,320
Loss on asset sale                                          -             -          1,231
Amortization  of note payable discount                      -             -         35,000
Loss from joint venture investment                          -             -        361,767
Equity issued as compensation                               -                       95,600

Changes in current assets and liabilities:
Receivables                                          19,094       (16,572)       (15,968)
Payables                                            206,151       234,521        504,341
Other                                                              (2,500)          (436)
------------   -----------   ------------
Net cash (used in) operating activities                   22,554      (103,932)      (909,567)

Cash flows from investing activities:
Additions to unproved properties                      (13,613)      (31,396)       (55,197)
Unproved property cost recovery                           200             -        189,967
Asset purchases                                             -             -         (1,269)
Proceeds from asset sale                                    -             -         (2,354)
------------   -----------   ------------
Net cash provided by investing activities                (13,413)       31,396        131,147


Cash flows from financing activities:
Sale of common stock                                        -             -        784,456
Borrowings under credit agreement                           -                      130,509
Repayment of note payable                                   -             -       (130,000)
------------   -----------   ------------
Net cash provided by financing activities                      -             -        784,965
------------   -----------   ------------

Net increase (decrease) in cash and equivalents             9,141      (72,116)         6,545
Cash and equivalents at beginning of period                   595       72,711          3,191
------------   -----------   ------------

Cash and equivalents at end of period                  $    9,736    $     595    $     9,736
============   ===========   ============
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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







19



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NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2003 AND 2002



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



ORGANIZATION AND NATURE OF OPERATIONS:



Colorado Wyoming Reserve Company (the "Company" or "CWYR") is an oil and natural gas exploration company with a geographical focus in the Rocky Mountain region of the western United States. The Company's primary objective is the acquisition of interests in undeveloped oil and gas properties, and the location and development of economically attractive accumulations of hydrocarbons in such properties through the use of a highly-integrated, interpretive approach to the application of 3-D geophysical data (seismic data acquired and processed to yield a three-dimensional picture of the subsurface). The Company's acquisitions of undeveloped oil and gas properties are accomplished primarily by the acquisition of direct mineral leasehold interests from private, state and federal lands.



The Company is currently focusing its exploratory efforts in the central Paradox Basin areas of southeastern Utah (the "Paradox Basin Project"). The Company has no revenues and continues to incur certain general and administrative expenses and obligations related to the Paradox Basin Project.



As more fully discussed in Note 3, on September 28, 2000, the Company entered into a Farmout Agreement with ST Oil Company ("ST Oil"), FM Energy, LLC, (whose rights and interests were subsequently assigned to Moore Energy LLC ("Moore Energy") and The Shoreline Companies ("Shoreline") (collectively, "the Farmees"). The Farmout Agreement was entered into for the purpose of having a 3-D seismic survey (the "Seismic Survey") conducted on the Paradox Basin Project. The Seismic Survey was completed in August 2001. On September 25, 2002, the Company entered into another Farmout Agreement with ST Oil and Shoreline.  This Farmout Agreement was entered into for the purpose of having a test well drilled on a certain portion of the Paradox Basin Project.



GOING CONCERN:



The Company currently has no revenue source and continues to incur obligations with respect to certain general and administrative items and maintenance cost of its Paradox Basin Project acreage. Accordingly, there is substantial doubt about the Company's ability to continue as a going concern. There is no assurance that the Company will be successful in raising additional capital and failure to do so could result in the liquidation of the Company.



The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



CASH AND CASH EQUIVALENTS:



The Company considers all highly liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value because the instruments have maturity dates of three months or less.



CONCENTRATION OF CREDIT RISK:



The Company currently has no material trade receivables. Historically, however, substantially all of the Company's trade receivables were within the oil and gas industry, primarily from purchasers of oil and gas and joint venture participants, and collectibility has been dependent upon the general economic conditions of the industry. The receivables were not collateralized.



The Company generally invests its excess cash in money market funds having minimal credit risk.







20



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NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2003 AND 2002





1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued



OIL AND GAS ACTIVITIES:



The Company follows the successful efforts method of accounting for its oil and gas properties. Under this method of accounting, all property acquisition costs and costs of exploratory and development wells are capitalized when incurred, pending determination of whether the well has found proved reserves. If an exploratory well has not found proved reserves, the costs of drilling the well are charged to expense. The costs of development wells are capitalized whether productive or nonproductive.



Geological and geophysical costs on exploratory prospects and the costs of carrying and retaining unproved properties are expensed as incurred. An impairment allowance is provided to the extent that capitalized costs of unproved properties, on a property-by-property basis, are considered to be not realizable.



Should the Company own producing properties in the future, it will test for impairment of those producing properties by comparing expected undiscounted future net revenues on a property-by-property basis with the related net capitalized costs at the end of each period. When the net capitalized costs exceed the undiscounted future net revenues, the cost of the property is written down to "fair value," which is estimated using discounted future net revenues from the producing property. Gains and losses are recognized on sales of entire interests in proved and unproved properties. Sales of partial interests are generally treated as recoveries of costs. With regard to properties held for sale, the Company uses the estimated net sales proceeds as its estimate of fair value. Depletion, depreciation and amortization ("DD&A") of capitalized costs of proved oil and gas properties will be provided on a property-by-property basis using the units of production method based upon proved reserves. The computation of DD&A takes into consideration restoration, dismantlement and abandonment costs and the anticipated proceeds from equipment salvage.



For financial reporting purposes, during fiscal 2001 the Company recognized its pro rata share of the expenses (primarily exploration costs) incurred by the Farmees pursuant to the Farmout Agreement. Undeveloped acreage cost was reduced by the amount of such expenses.



Exploration costs are comprised of delay lease rentals and the Seismic Survey costs. Delay rentals were paid at 100 percent by the Company during fiscal 2000 and the first quarter of fiscal 2001. From the date of the Farmout Agreement (September 2000) through June 30, 2001, CWYR recognized its pro rata share (50 percent until February 2000 and thereafter 42.5 percent) of delay rentals. Additionally, during fiscal 2001, the Company recognized as exploration costs its pro rata share of Seismic Survey costs incurred by the Farmees.



OTHER PROPERTY AND EQUIPMENT:



Other property and equipment is depreciated using the straight line method over the estimated useful life of the property.



INCOME TAXES:



Deferred income taxes are provided on the difference between the tax basis of an asset or liability and its reported amount in the financial statements. This difference will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively.







21



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NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2003 AND 2002



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued



STOCK OPTIONS:



As permitted under the Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based Compensation, the Company accounts for its stock-based compensation for options issued to employees and directors in accordance with the provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. As such, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. Certain pro forma net income and EPS disclosures for employee stock option grants are also included in the notes to the financial statements as if the fair value methods as defined in SFAS No. 123 had been applied. Transactions in equity instruments with non-employees for goods or services are accounted for by the fair value method.



In March 2000 the Financial Accounting Standards Board ("FASB") adopted FASB Interpretation No. 44, Accounting for Certain Transactions including Stock Compensation. Accordingly, beginning with the first quarter of fiscal 2001, the Company has been required to value any options repriced subsequent to December 15, 1998 as if the options were granted pursuant to a variable stock plan.



COMPREHENSIVE INCOME:



The Company has adopted SFAS No. 130, Reporting Comprehensive Income. SFAS No. 130 establishes new rules for the reporting and display of comprehensive income and its components; however, it has no impact on the Company's net loss or stockholders' equity.



NET LOSS ATTRIBUTABLE TO COMMON SHARES:



The Company has adopted SFAS 128, Earnings per Share. SFAS 128 requires the presentation of basic and diluted earnings per share. Basic earnings per share are calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by taking into account all potentially dilutive securities. The Company has not included potentially dilutive securities consisting of options and warrants to purchase 3.09 million shares in each of 2003 and 2002 because they would be anti-dilutive.



USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:



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



Significant estimates made by CWYR include the ultimate realization of the cost of the Company's unproved oil and gas properties. Depending on the results of its Paradox Basin Project, the Company's estimate as to the realization of the unproved property cost could materially change.



RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS:



In July 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS No. 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, and establishes that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. At present, The Company does not have any mergers or acquisitions under consideration so it is anticipated that neither SFAS Nos. 141 or 142 will affect the Company.





22



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NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2003 AND 2002



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued



RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS, continued



In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the asset.



SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. The liability is accreted at the end of each period through charges to operating expense. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement.



While the Company presently has no assets that would be affected by SFAS No. 143, should producing wells be drilled on the Paradox Basin Project acreage, the estimated abandonment cost of such wells could be subject to SFAS No. 143. However, the financial statement impact cannot be estimated at present.



In August 2001, the FASB also approved SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets SFAS 144 replaces SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The new accounting model for long-lived assets to be disposed of by sale applies to all long-lived assets, including discontinued operations, and replaces the provisions of APB Opinion No. 30, "Reporting Results of Operations Reporting the Effects of Disposal of a Segment of a Business," for the disposal of segments of a business. SFAS 144 requires that those long-lived assets be measure at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. Therefore, discontinued operations will no longer be measured at net realizable value or include amounts for operating losses that have not yet occurred. SFAS 144 also broadens the reporting of discontinued operations to include all components of an entity with operations that can be distinguished from the rest of the entity and that will be eliminated from the ongoing operations of the entity in a disposal transaction. The provisions of SFAS 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001 and, generally, are to be applied prospectively. At this time, the Company cannot estimate the effect of this statement on its financial position, results of operations, or cash flows.



2. INCOME TAXES



No tax benefits from the losses incurred during fiscal 2003 and 2002 were recognized due to the substantial uncertainty as to their eventual utilization.



At June 30, 2001, the Company had tax basis net operating loss carry forwards available to offset future taxable income of $2.8 million, which expire from 2001 to 2015. Of that amount, approximately $1.8 million can never be used by the Company and the usage of approximately $200,000 is limited to certain maximum yearly amounts over a 14-year period, as a result of the changes in control occurring during fiscal 1999 and 1998.



3. COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS



Effective January 1, 1998, the Company entered into an Agreement for Administrative Services (the "Trinity Agreement") with Trinity Petroleum Management LLC, a Colorado limited liability company ("Trinity"). Pursuant to the terms of the Trinity Agreement, Trinity performs certain management functions for the Company. Trinity bills for its services on an hourly basis, receives a flat fee of $1,100 per month (formerly $3,000 per month) and is reimbursed for third party expenses. The Trinity Agreement continues on a month-to-month basis, terminable upon 60 days written notice by either party. J. Samuel Butler, a member of the Board of Directors of the Company until September 22, 2004, currently serves as President of Trinity and owns approximately 24 percent of Trinity through his ownership of Butler Resources, LLC. In connection with certain additional services provided to the Company by Trinity as part of the merger with Shoreline Resource Company, Inc. on January 22, 1998 the Company issued to Trinity 25,000 restricted shares of Common Stock as well as a warrant to purchase up to 100,000 shares of the Company's Common Stock at an exercise price of $1.50 per share, subsequently repriced to $.10 per share in May 1999.





23



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NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2003 AND 2002





3. COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS, Continued



The Company entered into an employment contract with its president, Mr. Kim M. Fuerst on October 1, 1996 pursuant to which Mr. Fuerst received a salary of $10,000 per month and was granted incentive stock options to purchase up to 500,000 shares of the Company's Common Stock at an exercise price of $1.00 per share (repriced to $.25 per share in May 1999). The contract is renewed automatically for succeeding periods of one year unless terminated. The contract may be terminated by Mr. Fuerst upon 90 days prior written notice to the Company, and by the Company without prior notice to Mr. Fuerst, if for Cause (as defined in the contract). The Company's salary obligation to Mr. Fuerst of $10,000 per month for the months of June through October 1998 was extinguished in connection with the purchase by FM Energy (of which Mr. Fuerst owns 50 percent) of the Company's properties located in North Dakota. The satisfaction of the Company's salary obligation for such months served as partial consideration for the purchase. Mr. Fuerst determined to forego his salary during the months of November and December 1998, and January through April 1999. In May 1999, Mr. Fuerst's salary was reduced to $5,000 per month pursuant to an amendment to his employment agreement. During July 1999, the Company granted Mr. Fuerst an incentive stock option pursuant to the Equity Incentive Plan, to purchase 500,000 shares of Common Stock at an exercise price of $.75 per share (determined to be at least 110 percent of the fair market value at the date of grant). The option has a five year life and is exercisable as of the date of grant.



On April 29, 1999, the Company entered into a Letter Agreement with F. Robert Tiddens, a director and stockholder of the Company. Pursuant to the terms of this agreement, the retainer fee due Mr. Tiddens under the Merger Agreement, dated February 6, 1998, was reduced to $27,000, payable within five (5) days of the effective date of the agreement. Mr. Tiddens agreed to solicit industry partners for the Company for the sum of $40 per hour plus reasonable expenses. In addition, the agreement stated that if Mr. Tiddens or others successfully consummated for the Company a sharing arrangement, defined as any arrangement that will significantly enhance the value of the Paradox Project such as a seismic survey and/or a drilling commitment, the Company would assign to Mr. Tiddens an overriding royalty interest of one percent of 8/8ths on all acreage subject to the resulting agreement. The Board agreed to transfer a one percent overriding royalty interest as a result of the Company's entering into the Farmout Agreement (discussed below and in Note 1) in satisfaction of the agreement. Effective September 22, 2000, the consulting agreement with Mr. Tiddens was terminated.



Mr. Fuerst made advances on behalf of the Company in the form of interest-free loans of $0 and $14,000 in fiscal 2003 and 2002, respectively.



On September 28, 2000, the Company entered into a Farmout Agreement, effective September 22, 2000, with the Farmees. Certain directors and stockholders of the Company are directors, officers and controlling stockholders of the Farmees.



Pursuant to the terms of the Farmout Agreement, the Company assigned 50 percent of its mineral working interests in and to certain oil and gas leases and seismic options covering approximately 64,000 gross leased acres (approximately 25,500 net leased acres) of land located in the Paradox Basin Project in San Juan County, Utah, to the Farmees. Prior to commencement of the Seismic Survey, the Company sold an additional 7.5 percent of its mineral working interests to the Farmees in February 2001 for $150,000. The purchase price was determined using the same valuation of the Paradox Basin Project as was used in the Farmout Agreement. The cost of completing, processing and interpreting the Seismic Survey of approximately $1.1 million was borne by the Farmees. The Farmout Agreement requires the Company to bear its 42.5 percent share of the costs of maintaining the Paradox Basin Project leasehold.



The Farmout Agreement also establishes an area of mutual interest (the "AMI") for a term of ten years from the effective date of the Farmout Agreement. If during the ten-year term, any party to the Farmout Agreement acquires an oil or gas leasehold interest in the AMI, that party must give all other parties the opportunity to participate.



In September 2000, the Company entered into a Credit Agreement with the Farmees. The Credit Agreement established an unsecured revolving line of credit for the Company in an aggregate principal amount of $110,000. Amounts borrowed under the Credit Agreement bear interest at the rate of 8 percent per annum. At June 30, 2002 and 2001, the Company had a balance owing the Farmees of $122,000 and $130,509 respectively. The note was due and payable in full on September 28, 2001, and remains unpaid as of June 27, 2005.



24



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NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2003 AND 2002



3. COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS, Continued



Prior to the Farmout Agreement described above, in April 2000 the Company had entered into an Option Agreement with ST Oil and Edwards Energy Corporation, a Letter of Intent with FM Energy and a Letter of Intent with Shoreline, which agreements contemplated a joint venture arrangement to be established by all the parties similar to the arrangement set forth in the Farmout Agreement and the Credit Agreement described herein. Pursuant to the terms of the Option Agreement, the Company was paid $24,000 during the last quarter of fiscal 2000 for the option. The option and the letters of intent expired according to their terms on August 30, 2000.



The Farmout Agreement and the Credit Agreement reflect the final agreement of the parties regarding the acquisition by ST Oil, FM Energy, and Shoreline of an aggregate 50.0 percent of the Company's working interests in certain leases and seismic options in exchange for providing the Company with a seismic survey of certain acreage covered by such leases and options.



4. OPTIONS, WARRANTS AND RESERVED SHARES



On October 18, 1996 the Board of Directors of the Company adopted the Incentive Stock Option Plan ("the ISO Plan"). On April 5, 1997 the Board adopted the Equity Incentive Plan ("the Equity Plan"). Both plans were approved by stockholders at the Company's 1997 annual meeting. On February 11, 1998, the Equity Plan was amended to delete the automatic six-month vesting requirement for options granted thereunder to allow the Board of Directors or committee broad discretion in determining such requirements.



The ISO Plan was established for the purpose of providing an option to purchase the Company's common stock to one key employee of the Company, while the Equity Plan allows option grants to various employees, non-employees, directors, consultants and advisors.



Options under both the plans may have a term of up to five years or ten years; the actual term and any vesting requirements are set at the discretion of the Board of Directors or a Committee thereof. The maximum number of shares authorized for issuance under the ISO Plan is 500,000 shares. Under the Equity Plan the maximum is 2.5 million shares.



There was no option and warrant activity for the years ended June 30, 2003 and June 30, 2002.







25



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NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2003 AND 2002



4. OPTIONS, WARRANTS AND RESERVED SHARES, Continued



Information on options and warrants outstanding at June 30, 2003:



|Options and         Weighted         Options and
Warrants          Average            Warrants
Exercise       Outstanding      Contractual         Exercisable
Price         June 30, 2003           Life       June 30, 2003
-------------    ------------   --------------   -----------------
$0.10             500,000             5                500,000
$0.25           1,890,000             3.81           1,890,000
$0.34             200,000             2.59             200,000
$0.75             500,000             1.04             500,000
------------                    -----------------
3,090,000             3.48           3,090,000
============                    =================
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





In October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based Compensation. This Statement establishes a fair value method of accounting for stock-based compensation plans either through recognition or disclosure. The Company has elected to continue following Accounting Principles Board Opinion No. 25 ("APB No. 25"), Accounting for Stock Issued to Employees, and has elected to adopt SFAS No. 123 through compliance with the disclosure requirements set forth in the Statement and for shares issued to nonemployees. Pro forma information regarding net income and earnings per share is required by SFAS No. 123 and has been determined as if the Company had accounted for its employee stock options under the fair value method of that Statement. There were no options issued in fiscal 2003 or 2002.







26



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NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2003 AND 2002



4. OPTIONS, WARRANTS AND RESERVED SHARES



Had compensation cost been determined based on the fair value at grant dates for all stock option awards consistent with SFAS No. 123, the Company's net loss and net loss per share would have been increased to the pro forma amounts indicated below:



|For the Years Ended June 30,
------------------------------------
2003                 2002
----------------       -------------
Net loss as reported                  $ (202,691)           $ (319,381)
Pro forma                             $ (202,691)           $ (319,381)

Basic  loss per share as reported     $    (0.02)           $    (0.03)
Pro forma                             $    (0.02)           $    (0.03)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





In February 2001, the company issued 200,000 options to two nonemployee directors exercisable at $0.343 per share, the market price on the date of grant. For financial reporting purposes, these shares were fair valued under the Black Scholes Option Valuation Model, and the Company recorded an expense of $74,000 related to the issuance of the options.



5. SUPPLEMENTAL OIL AND GAS INFORMATION



Capitalized costs relating to oil and gas activities at June 30, 2003 and 2002 are as follows:



|2003          2002
----------    ----------
Unproved oil and gas properties      $  71,223     $  57,610
|--------------------------------------------------------------------------------------------------------





Costs incurred in oil and gas property acquisition, exploration, and development activities for the years ended June 30, 2003 and 2002 are as follows:



|2003          2002
----------    ----------
Acquisition of unproved properties   $ 24,163      $  24,078
|--------------------------------------------------------------------------------------------------------





The Company had no oil and gas sales during the years ended June 30, 2003 and 2002. As such, it had no results of operations for oil and gas producing activities during each of those periods.



RESERVES (UNAUDITED)



The Company had no proved oil and gas reserves at June 30, 2003 and 2002.









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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURES



On December 20, 2004 Hein & Associates LLP (Hein & Associates) was dismissed as independent auditor of Colorado Wyoming Reserve Company  (the "Company") in connection with the engagement of Arshad Farooq, CPA (Farooq) as the independent registered public accounting firm for the Company. Hein & Associates' reports in the Company's 10-KSB for each of the years ended June 30, 2001 and 2000, respectively, and all subsequent interim periods through March 31, 2002, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, other than reflecting an uncertainty as to the Company's ability to continue as a going concern.



During each of the two (2) years ended June 30, 2001 and 2000, and all subsequent interim periods through March 31, 2002, there were no disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to Hein & Associates satisfaction would have caused them to make reference in connection with their opinion to the subject matter of the disagreement.



On December 20, 2004, the Company engaged Farooq as its independent registered public accounting firm to audit the Company's financial statements for the fiscal years 2002, 2003 and 2004. During each of the two (2) years ended June 30, 2001 and 2000, and all subsequent interim periods through March 31, 2002, the Company did not consult Farooq on any matters described in Item 304(a)(2)(i) of Regulation S-B. During each of the two (2) years ended June 30, 2001 and 2000, and all subsequent interim periods through March 31, 2002, the Company did not consult Farooq on any matters described in Item 304(a)(2)(ii) of Regulation S-B.



The decision to change accountants was approved by the Board of Directors of the Company on December 20, 2004.



ITEM 8A   CONTROLS AND PROCEDURES



As of the end of the period covered by this report, the Company conducted an evaluation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation, the Company concluded that, subject to the limitations described below, the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in annual reports that it files under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms. There was no change in the Company's internal controls over financial reporting during the Company's most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting period.



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PART III



ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT; COMPLIANCE

WITH SECTION 16(A) OF THE EXCHANGE ACT



DIRECTORS AND EXECUTIVE OFFICERS



The following table sets forth the names, ages and titles of the Company's sole executive officer and the members of the Board of Directors of the Company as of June 30, 2003.



|Name                 Age                     Position
-------------------------  ------------  --------------------------------------

Kim M. Fuerst                  52        President, Chief Executive Officer,
Treasurer, Secretary and Director

J. Samuel Butler               58        Director*

John F. Greene                 63        Director*

F. Robert Tiddens              49        Director*

Rafiq A. Sayed                 49        Director

Dr. Syed A. Daud               39        Director
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





KIM M. FUERST has been President, Chief Executive Officer and Director since September 1996, and Treasurer and Chief Financial and Accounting Officer since October 17, 1997. From 1994 to 1996 he was a Vice President and head of the energy group of Van Kasper and Company, an investment banking firm. From 1989 to 1994 he served in various capacities at Great Northern Gas Company including Vice President of Finance and as a Director. From 1982 to 1990 he was President and Chief Operating Officer of Karen Oil Company which, during this period, drilled over 100 wells and operated those wells that were producing wells. Over the past 25 years he has worked in a variety of energy related positions, both as an independent producer and as an investment banker.



J. SAMUEL BUTLER has been a Director of the Company since September 1996. Mr. Butler formed Trinity Petroleum Management, LLC and ST Oil Company in 1996 and serves as President and Chief Executive Officer of both companies. During 1998, Mr. Butler was instrumental in organizing Professional Energy Advisors, LLC, and serves on the Board of Managers thereof. In addition, he was a member of the Board of Directors of Greystone Energy, Inc., a Colorado corporation, from 1998 until 2000. From 1989 to 1994, he served as a director, President and Chief Executive Officer of Sterling Energy Corp. and the Chief Executive Officer of Sheffield Exploration Company, Inc. from September 1990 to May 1996. Also during the period of September, 1989 to December, 1994, Mr. Butler was a founding principal in Petrie Parkman & Co., an investment banking firm specializing in upstream energy financing. Previously, he was President and Chief Operating Officer of Columbus Energy Corp. (Denver, Colorado) from 1985 to 1989, and to served as a director at Columbus until its sale in 2000. Mr. Butler joined the predecessor of Columbus, Consolidated Oil and Gas, Inc., in 1974 and held the position of Vice President of Exploration, Senior Vice President of Oil and Gas Operations and Executive Vice President and Chief Operating Officer. After receiving a degree in Petroleum Engineering from the Colorado School of Mines, Mr. Butler pursued graduate studies in the field of Mineral Economics at that institution. He is a past director of the Independent Petroleum Association of America and past director of the Independent Petroleum Association of the Mountain States.



DR. SYED ASLAM DAUD has been a Director of the Company since December 1998. Dr. Daud is currently working as analyst and project manager with First Health Canada, Inc. in Toronto, Ontario, Canada, a position he has held since April 1999.  Before that he was Vice President, Investor Relations & Communications of Sayed Consulting Inc. in Toronto, Ontario, Canada, a position he had held since January 1996. During a nine-month period from December 1997 to September of 1998, Dr. Daud was also an Investor Relations and Communications officer of Trivalence Mining



29



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Corporation. Prior to joining Sayed Consulting, Inc., he worked from September 1990 to October 1995 in various capacities at Shoppers Drug Mart and Shoppers Home Health Care (a division of Iamsco, Inc.), including Pharmacy System Trainer and Corporate Manager. Since 1994, Dr. Daud has served as national President of a non-profit youth organization. Dr. Daud is also the secretary and member of the board of directors for a non-profit housing organization.  He is also currently serving as the National General Secretary of a non-profit charitable organization.  Dr. Daud received his M.B.B.S. degree in Medicine and Surgery from Dow Medical College, University of Karachi, Pakistan.



JOHN F. GREENE has been a Director of the Company since February 1998. Mr. Greene has over 25 years experience in the oil and gas exploration and production industry. Since 2000, Mr. Greene has been a director and a member of The Shoreline Companies LLC, a Company he co-founded in September 2000. From 1985 until his retirement in 1995, Mr. Greene served as executive vice president of worldwide exploration and production for the Louisiana Land and Exploration Company, where he served on the board of directors from 1989 until his retirement. From 1981 to 1985, Mr. Greene was president and chief executive officer for Milestone Petroleum and then executive vice president of exploration for Meridian Oil and Gas Company via its merger with Milestone. He began his career at Continental Oil Company holding various positions including director of exploratory projects for onshore and offshore offices and a division exploration manager for the western United States.



RAFIQ A. SAYED has been a Director of the Company since September 1998. Since May 2000, Mr. Sayed has worked for EMC Corporation as a Vice President. From October 1999 through April 2000, Mr. Sayed was a consultant for the utility industry. From 1997 to October 1999, Mr. Sayed served as Vice President of Engineering for ADC Telecom. From 1981 to 1997, Mr. Sayed was with Nortel Technology in various positions, most recently as Senior Director. He served on the Board of Directors of Meteor Industries, Inc., a position he held from April 1996 until September 1998. Mr. Sayed graduated from Southbank College in London, England in 1975 with an H.N.D. in Electrical/Electronic Engineering. He also attended Essex University in London, England where he was enrolled in an advanced computer science program.



F. ROBERT TIDDENS has been a Director of the Company since February 1998. Mr. Tiddens has over 25 years experience in oil and gas exploration, production and acquisition activities in all producing states in the continental United States. Since 2000, Mr. Tiddens has been president and managing member of The Shoreline Companies LLC, a Company he co-founded in September 2000. From 1995 to 2000, he was President and Chief Executive Officer of Shoreline Resource Company, Inc., a Denver based private oil and gas exploration concern he founded and subsequently merged into a subsidiary of the Company in February 1998, at which time he became a director of the Company. From 1990 to 1995, Mr. Tiddens was a consultant advising client companies in all facets relating to the oil and gas industry. Prior thereto, Mr. Tiddens was Vice President of Land & Acquisitions for Presidio Oil Company, a rapidly-growing American Stock Exchange Company based in Denver and New York. Mr. Tiddens is a graduate of the University of Wisconsin with a finance/economics degree.



All directors of the Company serve one year terms and hold office until the next annual meeting of stockholders and until their respective successors are duly elected and qualified. Mr. Sayed and Dr. Daud were selected to serve on the Board of Directors pursuant to certain agreements between the Company and The James E. Moore Revocable Trust, u/d/t dated July 28, 1994 (the "Trust") in connection with a loan from the Trust to the Company, and an extension of the repayment due date of such loan. Officers of the Company serve at the discretion of the Board of Directors and until the next annual meeting of directors of the Company.



*Effective September 22, 2004, J. Samuel Butler, F. Robert Tiddens, and John Green resigned from the board of directors of the Company. None of Messrs. Butler's, Tiddens', or Green's resignations were a result of any disagreement with the Company or any matter relating to the Company's operations, policies or procedures.



COMMITTEES AND MEETINGS



During the fiscal year ended June 30, 2003, the Board of Directors held one meeting. The Board of Directors of the Company has no established committees to which it has delegated any authority.



SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE



The Company's directors, executive officers and persons who are beneficial owners of more than ten percent of the Company's Common Stock are required to file reports of their holdings and transactions in Common Stock with the Commission and to furnish the Company with such reports. Based solely upon written representations it has obtained from certain of these persons, the Company believes that in the fiscal year ended June 30, 2001, Dr. Daud and Mr. Sayed had each failed to file a Form 5 to report the grant of an option.





30



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ITEM 10. EXECUTIVE COMPENSATION



EXECUTIVE COMPENSATION



The following table sets forth the aggregate compensation paid for each of the Company's last three fiscal years by the Company to its chief executive officer.



SUMMARY COMPENSATION TABLE



|Annual Compensation     Long Term Compensation Awards
-------------------   --------------------------------
Awards
--------------------------------
Name and Position(1)          Year        Salary ($)       Securities Underlying Options(#)
-----------------------        ------  ------------------    --------------------------------

Kim M. Fuerst                   2003            60,000                    --
Chief Executive Officer,        2002            60,000                    --
President, Treasurer            2001            60,000                    --
and Secretary
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





(1) The Company had no other executive officer during the fiscal year ended June 30, 2003.



There were no stock option grants to the Company's executive officer during fiscal 2003. The Company does not grant stock appreciation rights.



STOCK OPTION AND INCENTIVE PLAN



On October 18, 1996 the Board of Directors of the Company adopted the Incentive Stock Option Plan ("the ISO Plan"). On April 5, 1997 the Board adopted the Equity Incentive Plan ("the Equity Plan"). Both plans were approved by stockholders at the Company's 1997 annual meeting. On February 11, 1998, the Equity Plan was amended to delete the automatic six-month vesting requirement for options granted thereunder to allow the Board of Directors or committee broad discretion in determining such requirements.



The ISO Plan was established for the purpose of providing an option to purchase the Company's common stock to one key employee of the Company, while the Equity Plan allows option grants to various employees, non-employees, directors, consultants and advisors. Options under both the plans may have a term of up to five years or ten years; the actual term and any vesting requirements are set at the discretion of the Board of Directors or a Committee thereof.



A total of 2,500,000 shares of Common Stock have been reserved for issuance under the Equity Plan, subject to adjustments to reflect changes in the Company's capitalization resulting from stock splits, stock dividends and similar events. To date, options to purchase 2,310,000 shares have been granted under the Equity Plan. A total of 500,000 shares have been reserved for issuance under the ISO Plan. Both plans are currently administered by the Board of Directors, but may be administered by a committee appointed by the Board.



The following table shows the number of shares covered by all exercisable and unexercisable stock options held by the named executive officer as of June 30, 2003, as well as the value of unexercised "in the money" options at such date. No stock options were exercised by the named executive officer during the last fiscal year.





31



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AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR

AND FISCAL YEAR-END OPTION/SAR VALUES



|Number of Securities      Value of Unexercised In the
Underlying Unexercised        Money Options/SARs at
Name                  Options/SARs At FY-End              FY-End
(#)               Exercisable/Unexercisable
Exercisable/Unexercisable
----------------------    -------------------------  ---------------------------

Kim M. Fuerst                 1,000,000/0                    $0/0 (1)

------------------------
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





(1)  The closing price on June 30, 2003, was $0.01 per share.  Consequently none of the options were in the money.



EMPLOYMENT CONTRACTS



The Company entered into an employment contract with Mr. Fuerst on October 1, 1996 pursuant to which Mr. Fuerst received a salary of $10,000 per month and was granted incentive stock options to purchase up to 500,000 shares of Common Stock at an exercise price of $1.00 per share (repriced to $.25 per share in May 1999). The contract is renewed automatically for succeeding periods of one year unless terminated. The contract may be terminated by Mr. Fuerst upon 90 days prior written notice to the Company, and by the Company without prior notice to Mr. Fuerst, if for Cause (as defined in the contract). In May 1999, Mr. Fuerst's employment agreement was amended to reduce his salary to $5,000 per month. See Item 12 - "Certain Relationships and Related Transactions."



COMPENSATION OF DIRECTORS



On February 2, 2001, Rafiq Sayed and Dr. Daud, directors of the Company, were granted options to purchase 150,000 shares and 50,000 shares, respectively, at $.343 per share, exercisable immediately and expiring on February 2, 2006.



On September 22, 2004, Rafiq Sayed and Dr. Daud, directors of the Company, were granted options to purchase 800,000 shares and 50,000 shares, respectively, at $.25 per share, exercisable immediately and expiring on September 22, 2014.  A consultant was also granted options to purchase up to 1,250,000 shares at a price of $.25 per share, exercisable immediately and expiring on September 22, 2014.



Effective September 22, 2004 Rafiq Sayed was also appointed CFO of the Company at a salary of $10,000 per month.



The Directors of CWYR do not receive annual salaries or retainers from CWYR but do receive reimbursement for travel expenses.



On April 29, 1999, the Company entered into a Letter Agreement with F. Robert Tiddens, a director and stockholder of the Company. Pursuant to the terms of this agreement, the retainer fee due Mr. Tiddens under the Merger Agreement, dated February 6, 1998, was reduced to $27,000, payable within five (5) days of the effective date of the agreement. Mr. Tiddens agreed to solicit industry partners for the Company for the sum of $40 per hour plus reasonable expenses. In addition, the agreement stated that if Mr. Tiddens or others successfully consummated for the Company a sharing arrangement, defined as any arrangement that will significantly enhance the value of the Paradox Basin Project, such as a seismic survey and/or a drilling commitment, the Company would assign to Mr. Tiddens an overriding royalty interest of 1 percent of 8/8ths on all acreage subject to the resulting agreement. The Board agreed to transfer a 1 percent overriding royalty interest as a result of the Company's entering into the Farmout Agreement in satisfaction of the agreement. Effective September 22, 2000, the consulting agreement with Mr. Tiddens was terminated.





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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The following table sets forth certain information as to the number of shares of Common Stock of the Company beneficially owned as of June 27, 2005, by (i) each person who is known to the Company to be the beneficial owner of more than five percent of the Common Stock of the Company; (ii) each of the Company's directors; (iii) the Company's sole executive officer; and (iv) all of the executive officers and directors of the Company as a group. Except as otherwise indicated, the Company believes that the beneficial owners of the Common Stock listed below, based on information furnished by such holders, have sole investment and voting power with respect to such shares, subject to community property laws, where applicable.



|Number of         Percentage
Name and Address                Shares(a)     Beneficially Owned (b)
------------------------------------------   -----------  ----------------------

Kim M. Fuerst.............................    3,112,500(c)           28.8%
751 Horizon Court, Ste. 205
Grand Junction, Colorado  81506

J. Samuel Butler*.........................      325,000(d)            3.0%
1801 Broadway, Suite 600
Denver, Colorado  80202

Syed A. Daud..............................      200,000(e)            1.9%
64 Hainsworth Ct.
Markham, Ontario  L3S1T5
Canada

John F. Greene*...........................      453,303(f)            4.2%
1569 Royal Buffalo Drive
Silverthorne, Colorado  80498

Rafiq A. Sayed............................      1,208,600(g)         11.2%
102 Avenue of the Estates
Cary, North Carolina  27511

F. Robert Tiddens*........................      545,030(f)            5.0%
8360 East Hinsdale Avenue
Englewood, Colorado  80112

The James E. Moore Revocable Trust,.......    3,050,000(h)           28.2%
u/d/t dated July 28, 1994
7827 Berger Avenue
Playa del Rey, California  90293

All executive officers and directors as a
group (three persons)......................   4,521,100(i)           41.8%
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



­­­­­­­­­­­­­­­­­­

(a) All shares are owned both of record and beneficially unless otherwise specified by footnote to this table.

(b) Based on 10,807,694 shares of Common Stock outstanding at June 8, 2005.

(c) Includes 500,000 shares issuable upon exercise of currently exercisable stock options granted under the Incentive Stock Option Plan in 1996, and 500,000 shares issuable upon exercise of currently exercisable stock options granted under the Equity Plan.

(d) Includes 200,000 shares issuable upon exercise of currently exercisable stock options granted under the Equity Plan in 1996; 100,000 shares issuable upon exercise of a currently exercisable warrant issued to Trinity Petroleum Management



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LLC, of which Mr. Butler owns approximately 24 percent and serves as the President and CEO; and 25,000 restricted shares owned by ST Oil Company, of which Mr. Butler owns approximately 28 percent and serves as the President and CEO.

(e) Includes 150,000 shares issuable upon exercise of currently exercisable director stock options granted under the Equity Incentive Plan, and 50,000 shares issuable upon exercise of currently exercisable stock options granted September 22, 2004.

(f) Includes 100,000 shares issuable upon exercise of currently exercisable director stock options granted under the Equity Incentive Plan.

(g) Includes 400,000 shares issuable upon exercise of currently exercisable director stock options granted under the Equity Incentive Plan and 800,000 shares issuable upon exercise of currently exercisable stock options granted September 22, 2004.

(h) Includes 180,000 shares issuable upon exercise of currently exercisable warrants granted in connection with Bridge Loan and extensions thereof.

(i) Includes 2,400,000 shares issuable upon exercise of options and warrants.



*  Effective September 22, 2004, Messrs. Butler, Green and Tiddens resigned from the Board of Directors.





ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



Set forth below is a description of transactions entered into between the Company and its executive officer and certain directors during the last two fiscal years.



CONSULTING AGREEMENTS



Effective January 1, 1998, the Company entered into an Agreement for Administrative Services (the "Trinity Agreement") with Trinity Petroleum Management LLC, a Colorado limited liability company ("Trinity"). Pursuant to the terms of the Trinity Agreement, Trinity performs certain management functions for the Company. Trinity bills for its services on an hourly basis, receives a flat fee of $1,100 per month (formerly $3,000 per month) and is reimbursed for third party expenses. The Trinity Agreement continues on a month-to-month basis, terminable upon 60 days written notice by either party. J. Samuel Butler, a member on the Board of Directors of the Company, currently serves as President of Trinity and owns approximately 24 percent of Trinity through his ownership of Butler Resources, LLC. During the fiscal years ended June 30, 2001, and June 30, 2000, the Company incurred fees to Trinity of $53,279 and $44,803, respectively, pursuant to the Trinity Agreement.



In January 1998, as partial consideration for certain additional services provided to the Company by Trinity in connection with the Company's merger with Shoreline Resource Company, Inc., the Company issued to Trinity 25,000 restricted shares of Common Stock as well as a warrant to purchase up to 100,000 shares of Common Stock at an exercise price of $1.50 per share, subsequently repriced to $.10 per share in May 1999.



FINANCINGS



Kim Fuerst, a director, executive officer and principal stockholder of the Company, made advances on behalf of the Company in the form of interest-free loans of $-0- and $14,000 during fiscal 2003 and 2002, respectively.



On September 28, 2000, the Company entered into a Farmout Agreement, effective September 22, 2000, with the Farmees: ST Oil, FM Energy (whose rights and interest were subsequently assigned to Moore Energy) and Shoreline. Sam Butler, a director and stockholder of the Company, is the Chairman, Chief Executive Officer and principal stockholder of ST Oil. FM Energy is jointly owned by Kim Fuerst, the Company's Chief Executive Officer and President, and The James E. Moore Revocable Trust, a principal stockholder of the Company, and Mr. Moore, the trustee and sole beneficiary under the Trust, and Mr. Fuerst serve as Co-Chairman of FM Energy. The Trust is the sole member of Moore Energy, and Mr. Moore serves as the manager of Moore Energy. F. Robert Tiddens, a director and stockholder of the Company, is the President and Chief Executive Officer and holder of a 49 percent interest in Shoreline. John Greene, who is also a director and stockholder of the Company, is a director and holder of a 51 percent interest in Shoreline.



Pursuant to the terms of the Farmout Agreement, the Company assigned 50 percent of its mineral working interests in and to certain oil and gas leases and seismic options covering approximately 61,000 acres of land located in the Paradox Basin Project in San Juan County, Utah, to the Farmees. Prior to commencement of the Seismic Survey, the Company sold an additional 7.5 percent to the Farmees in February 2001 for $150,000. The purchase price was determined using the same valuation of the Paradox Basin Project as was used in the Farmout Agreement. The cost of completing, processing and



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interpreting the Seismic Survey of approximately $1.1 million was borne by the Farmees. The Farmout Agreement requires the Company to bear 42.5 percent of the cost of maintaining the Paradox Basin Project leasehold.



The Farmout Agreement also establishes an area of mutual interest (the "AMI") for a term of ten years from the effective date of the Farmout Agreement. If during the ten-year term, any party to the Farmout Agreement acquires an oil or gas leasehold interest in the AMI, that party must give all other parties the opportunity to participate.



In September 2000, the Company entered into a Credit Agreement with the Farmees. The Credit Agreement established an unsecured revolving line of credit for the Company in an aggregate principal amount of $110,000. Amounts borrowed under the Credit Agreement bear interest at the rate of 8 percent per annum. At June 30, 2002 and 2001, the Company had a balance owing the Farmees of $122,000 and $130,509 respectively. The note was due and payable in full on September 28, 2001, and remains unpaid as of June 27, 2005.



In April 2000, the Company had entered into an Option Agreement with ST Oil and Edwards Energy Corporation, a Letter of Intent with FM Energy and a Letter of Intent with The Shoreline Companies, which agreements contemplated a joint venture arrangement to be established by all the parties similar to the arrangement set forth in the Farmout Agreement and the Credit Agreement described above. Pursuant to the terms of the Option Agreement, the Company was paid $24,000 during the last quarter of fiscal 2000 for the option. The option and the letters of intent expired according to their terms on August 30, 2000. The Farmout Agreement and the Credit Agreement reflect the final agreement of the parties regarding the acquisition by ST Oil, FM Energy and The Shoreline Companies of an aggregate 50 percent of the Company's working interests in certain leases and seismic options in exchange for providing the Company with a seismic survey of certain acreage covered by such leases and options.





ITEM 13. EXHIBITS



(a) Exhibits



A list of the Exhibits filed as part of this report or incorporated by reference is set forth in the Index to Exhibits.





ITEM 14.  AUDIT FEES



The aggregate fees billed by Hein + Associates LLC for its audit of the Companys annual financial statements and review of interim financial statements, including the Companys Form 10-QSB reports for the fiscal year ended June 30, 2003 was $-0-.



The aggregate fees billed by Arshad Farooq CPA for its audit of the Companys annual financial statements and review of interim financial statements, including the Companys Form 10-QSB reports for the fiscal year ended June 30, 2003, was $10,000.



Audit-Related Fees



$-0- and $16,500 in 2003 and 2002, respectively, by Hein & Asociates LLC.



$10,000 and $10,000 in 2003 and 2002, respectively, by Arshad Farooq CPA.



Tax  Fees



None in 2003 and 2002.



All Other Fees



There were no other aggregate fees billed in either of the last two fiscal years for products and services provided by Hein + Associates or Arshad Farooq, CPA, other than the services reported above.





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SIGNATURES



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



COLORADO WYOMING RESERVE COMPANY



|Dated:  June 29, 2005                By:  /S/ KIM M. FUERST
--------------------------------------
Kim M. Fuerst, President and Chief
Executive Officer
|-------------------------------------------------------------------------------------------------------------------------------------------------------





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 Registrant and in the capacities and on the date indicated.



|Dated:  June 29, 2005                By:  /s/ KIM M. FUERST
--------------------------------------
Kim M. Fuerst, President, Chief
Executive Officer, Treasurer and
Secretary (Principal Executive
Officer, Chief Financial and
Accounting Officer)


Dated:  June 29, 2005                By:  /s/ RAFIQ A. SAYED
--------------------------------------
Rafiq A. Sayed, Director and
Chief Financial Officer


By:  /s/ SYED A. DAUD
--------------------------------------
Dated:  June 29, 2005                    Syed A. Daud, Director
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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INDEX TO EXHIBITS



EXHIBIT NO.       DESCRIPTION





3.1         Articles of Incorporation, incorporated by reference to the

Company's Annual Report on Form 10-K for the fiscal year ended May

31, 1983.



3.2         Bylaws, incorporated by reference to the Company's Annual Report on

Form 10-K for the fiscal year ended May 31, 1983.



10.1        Employment Agreement between the Company and Kim M. Fuerst, dated

October 1, 1996, incorporated by reference to the Company's

Quarterly Report on Form 10-QSB for the quarter ended March 31,

1997, and as amended by Amendment, dated May 17, 1999, incorporated

by reference to the Company's Annual Report on Form 10-KSB for the

year ended June 30, 1999.



10.2        Incentive Stock Option Plan, dated October 18, 1996, incorporated by

reference to the Company's Quarterly Report on Form 10-QSB for the

quarter ended March 31, 1997.



10.3        Incentive Stock Option Agreement between the Company and Kim M.

Fuerst, dated October 18, 1996, incorporated by reference to the

Company's Quarterly Report on Form 10-QSB for the quarter ended

March 31, 1997.



10.4        The Company's Equity Incentive Plan, incorporated by reference to

the Company's Quarterly Report on Form 10-QSB for the quarter ended

March 31, 1997.



10.5        Warrant, dated March 31, 1997, from the Company to Trinity Petroleum

Management, LLC, incorporated by reference from the Company's

Quarterly Report on Form 10-QSB for the quarter ended March 31,

1997.



10.6        Agreement for Administrative Services between the Company and

Trinity Petroleum Management, LLC, dated as of January 1, 1998,

incorporated by reference to the Company's Annual Report on Form

10-KSB for the fiscal year ended June 30, 1998.



10.12       Warrant Agreement, dated as of August 25, 1998, between the Company

and the Trust, incorporated by reference to the Company's Annual

Report on Form 10-KSB for the fiscal year ended June 30, 1998.



10.13       Registration Rights Agreement, dated as of August 25, 1998, between

the Company and the Trust, incorporated by reference to the

Company's Annual Report on Form 10-KSB for the fiscal year ended

June 30, 1998.



10.15       Amendment No. 1 to  Registration  Rights  Agreement and Promissory

Note,  dated as of December 4,  1998,  between the Company and the

Trust,  incorporated  by reference to the Company's  Annual Report

on Form 10-KSB for the fiscal year ended June 30, 1998.



10.16       Warrant Agreement, dated as of December 4, 1998, between the Company

and the Trust, incorporated by reference to the Company's Annual

Report on Form 10-KSB for the fiscal year ended June 30, 1998.





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10.18       Warrant Agreement, dated December 30, 1998, between the Company and

the Trust, incorporated by reference to the Company's Quarterly

Report on Form 10-QSB for the quarter ended December 31, 1998.





10.19       Amendment No. 2 to  Registration  Rights  Agreement and Promissory

Note,  dated as of December 30, 1998,  between the Company and the

Trust,  incorporated  by  reference  to  the  Company's  Quarterly

Report on Form 10-QSB for the quarter ended December 31, 1998.



10.26       Letter  Agreement,  dated  April  29,  1999,  by and  between  the

Company and F. Robert Tiddens.



10.27       Option Agreement, dated May 10, 2000, by and between the Company and

ST Oil Company, incorporated by reference to the Company's Quarterly

Report on Form 10-QSB for the quarter ended March 31, 2000.



10.28       Letter of Intent, dated May 15, 2000, by and between the Company and

FM Energy, LLC, incorporated by reference to the Company's Quarterly

Report on Form 10-QSB for the quarter ended March 31, 2000.



10.29       Letter of Intent, dated May 10, 2000, by and between the Company and

The Shoreline Companies, LLC, incorporated by reference to the

Company's Quarterly Report on Form 10-QSB for the quarter ended

March 31, 2000.



10.30       Farmout Agreement, dated September 22, 2000, by and among the

Company, ST Oil Company, FM Energy, LLC and The Shoreline Companies,

LLC, incorporated by reference to the Company's Current Report on

Form 8-K dated September 22, 2000.



10.31       Credit Agreement, dated September 22, 2000, by and among the

Company, ST Oil Company, FM Energy LLC and The Shoreline Companies,

LLC, incorporated by reference to the Company's Current Report on

Form 8-K dated September 22, 2000.



10.32       Farmout Agreement, dated September 25, 2002, by and among the

Company, ST Oil Company, and The Shoreline Companies,

LLC, incorporated by reference to the Company's Current Report on

Form 8-K dated September 25, 2002



14          Code of Business Conduct and Ethics of Colorado Wyoming Reserve Company

(Incorporated by reference to Exhibit 14 in the Companys Annual Report

on Form 10-KSB for the year ended June 30, 2002.)



21          Subsidiaries of the Company:



Shoreline Resource Company, Inc., a Colorado corporation



23          Consent of Arshad Farooq CPA



31.1        Certification of Chief Executive Officer pursuant to Section 302 of

the Sarbanes-Oxley Act of 2002



31.2        Certification of Chief Financial Officer pursuant to Section 302 of

the Sarbanes-Oxley Act of 2002



32.1        Certification of Chief Executive Officer pursuant to U.S.C. 18,

Section 1350



32.2        Certification of Chief Financial Officer pursuant to U.S.C. 18,

Section 1350





38