<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                   FORM 10-K/A



|X|  AMENDED ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934



                     FOR FISCAL YEAR ENDED DECEMBER 31, 1998

                                       OR

x    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE OF 1934



            FOR THE TRANSITION PERIOD FROM ___________ TO ___________


                         COMMISSION FILE NUMBER 0-18842

                            FIRST SEISMIC CORPORATION
               (Exact name of registrant as specified in charter)

                DELAWARE                                    76-0062729
                --------                                    ----------

(State or other jurisdiction of Incorporation             (I.R.S. Employer
or organization)                                       Identification Number)



              2470 GRAY FALLS SUITE 190, HOUSTON, TEXAS 77077-6513
                    (Address of principal executive offices)


                                 (281) 556-5656
              (Registrant's telephone number, including area code)


        Securities registered pursuant to Section 12(b) of the Act: None



           Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock par value $0.01 per share



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES x NO |X|



Indicate by check mark if disclosure of delinquent files pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|



The Common Stock of the Registrant is not currently listed on any Exchange,
however the Registrant's Common Stock has traded from time to time on NASD "Pink
Sheets". On October 20, 1999, a stock transaction reported on the OTC bulletin
board indicated that 400 shares of the stock traded for $0.05 per share. This
activity may not represent market value; however, the aggregate market value
obtained by using this valuation on the 5,639,251 shares of the voting stock
held by non-affiliates of the Registrant in December 1999 would be approximately
$281,963. For these purposes, the term "affiliate" is deemed to mean officers
and directors of the Registrant.


<PAGE>

                            FIRST SEISMIC CORPORATION

                           ANNUAL REPORT ON FORM 10-K
                                TABLE OF CONTENTS

PART I


<TABLE>
<S>               <C>                                                                                              <C>
Item 1.           Business .................................................................................        3
Item 2.           Properties ...............................................................................       12
Item 3            Legal Proceedings ........................................................................       12
Item 4.           Submission of Matters to a Vote of Security Holders ......................................       12


PART II

Item 5.           Market for the Registrant's Common Equity and Related Stockholder Matters ................       13
Item 6.           Selected Consolidated Financial Data .....................................................       15
Item 7.           Management's Discussion and Analysis of Financial Condition and Results of Operations ....       16
Item 7A.          Quantitative and Qualitative Disclosures About Market Risk ...............................       19
Item 8.           Financial Statements and Supplementary Data ..............................................       19

Item 9.           Changes in and Disagreements With Accountants on Accounting and Financial Disclosure .....       19


PART III

Item 10.          Directors and Executive Officers of the Registrant ......................................        20
Item 11.          Executive Compensation ..................................................................        22

Item 12.          Security Ownership of Certain Beneficial Owners and Management ...........................       25
Item 13.          Certain Relationships and Related Transactions ...........................................       25


PART IV

Item 14.          Exhibits, Financial Statement Schedules, and Reports on Form 8-K .........................       27



                  SIGNATURES ...............................................................................       28
</TABLE>


                                       2
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PART I

ITEM 1.  BUSINESS

GENERAL


          FIRST SEISMIC Corporation provides to its customers seismic data and
other geoscientific information that is primarily used in oil and gas
exploration and production efforts. We sell licenses to use our proprietary
information as well as information owned by others under broker and agency
arrangements to oil and gas companies. We also invest in select upstream oil and
natural gas exploration through our recently acquired wholly owned subsidiary
FORTESA Corporation, a Texas Corporation. See Note 10 to our Consolidated
Financial Statements for financial information relating to our March 30, 1999
acquisition of FORTESA. We were originally incorporated in Delaware in July
1990. Our data information operations are primarily conducted through our three
wholly owned subsidiaries, which are FIRST EXCHANGE Corporation, a Delaware
corporation, First Exchange Limited, a United Kingdom corporation, and BLACKWELL
SUPPLY, Inc., d.b.a. BLACKWELL TRADING, Inc., a Delaware corporation.



          Since 1993, sales of licenses to use our seismic information have
substantially declined due to reduced demand for 2D seismic data. Prior to 1993,
license sales of 2D data had been the source of substantially all of our
business. In response, we have redefined our business. Our main source of
revenues since 1993 have been license sales, brokerage, packaging, publication,
and related services pertaining to diverse geo-scientific information which we
seek to acquire, package, own or represent in order to make it available for
licensing to oil and gas industry exploration customers. This geo-scientific
information is comprised of studies, research, measurements, interpretations,
information compilations, translations, special reports, well data,
correlations, graphical displays, databases of values, and maps. The scientific
disciplines covered by these geo-scientific information packages include
geophysics, geology, geochemistry, engineering, environmental, and regional
synthesis of such information in various combinations, all oriented towards
providing exploration visibility in specific geographic areas to our customers.
We have copyrighted the completed published materials in each geographic area of
our endeavor, and our customers license the use of this information from us for
their own internal use.



          We have made capital expenditures of over $1,000,000 in the
acquisition, processing and packaging of such geo-scientific information during
the four years ended December 31, 1998 and are actively pursuing the licensing
of this data, as well as related geo-scientific services which are required by
our customer base.



          As discussed in detail below under Oil and Gas Exploration and
Production Operations, we are also pursuing select opportunities in the oil and
gas exploration and production business where such endeavors complement
relationships with our suppliers, customers and co-venturers. We plan to devote
a greater percentage of our financial and other resources in the future to oil
and gas exploration and production and the promotion of investment opportunities
for the oil and gas industry at large. Management believes that our future
financial success depends largely on the success of these related oil and gas
ventures. See "Oil and Gas Exploration and Production Operations" below for a
discussion of these oil and gas ventures.



          SEISMIC OPERATIONS. Historically, we have engaged in the development
of a proprietary seismic data library. Our seismic data library consists
exclusively of two-dimensional or 2D data, and was developed over a period of
approximately ten years. As of 1991 our seismic data library consisted of over
11,000 miles of domestic 2D seismic line data. As of December 31, 1998, our
seismic data library consisted of approximately 8,500 miles of domestic, plus
small amounts of foreign 2D seismic line data. Our library is marketed to major
and independent oil and gas companies under use-license arrangements.
Additionally, we have been involved in the sale of licenses for seismic data
owned by others, under brokerage and agency agreements. Seismic surveys and the
analysis of seismic data for the identification and definition of underground
geological features and structures are principal techniques used in oil and gas
exploration and development to determine possible locations of subsurface
hydrocarbons.


          Beginning in 1992, technology that enabled geoscientists to obtain
seismic data in three dimensions ("3D") became much more cost effective and
universally available. 3D seismic data makes possible a graphic geophysical
depiction of the substrata geology from two (instead of just one, as in 2D
seismic) horizontal dimensions and one vertical dimension. This process provides
a substantially more accurate representation than 2D data and significantly
enhances the ability to evaluate the probable existence and location of
subsurface hydrocarbons.


                                       3
<PAGE>


          Accordingly, 3D seismic data became the information of choice among
our historical customers, and as a result, the demand for and the relative value
of our extensive 2D library decreased significantly. Both the volume of 2D
seismic licenses sold and the prices which customers were willing to pay for
such information located in the domestic USA suffered severe downturns beginning
in late 1991. While a market remains for this information and we continue to
engage in this business, management believes that future prospects for growth in
ownership and marketing of 2D information are below a critical mass necessary to
be of significant commercial interest to us. During 1998, sales of 2D seismic
information accounted for approximately 20% of our revenues. Approximately 30%
of our revenues come from associated services such as reproduction and services
involving handling data.



          GEO-TECHNICAL PUBLISHING AND SERVICES. Cash flow from our operations
since 1993 has increasingly come from license fee and service revenue generated
by our exploration and geo-scientific research, as well as geo-technical
services performed directly for our customers. In these areas, we compete on the
basis of expertise in packaging, marketing, and supplying interrelated data for
a particular area of geologic interest. We perform these functions exclusively
for oil companies, either by our preparation of direct information on an
exclusive basis for the customer, or as multi-client studies on which (i) we
attempt to retain an ownership interest in the resulting study for on-going
income, and (ii) our customer receives the right to use the compiled information
for internal use under a licensing agreement.



          We have developed and added geo-technical publications used for
multi-client sales into our data library. Typically we realize a better margin
in these products due to our partial or full ownership position in them, as
compared to information brokerage and commission revenue from data that we do
not own. Potential customers may inspect abstracts of information and data types
and determine their usefulness for a particular project via our website at
WWW.FIRST-EXCHANGE.COM. Our geo-technical publication products and services tend
to be more cost effective for customers than those which they develop at their
own expense as we provide the needed exploration information in a useful form
with pricing based on a percentage of our costs for originating the information.
Further licenses for these same reports are sold or resold for varying prices
based on market demand.



          In conjunction with these services, we generate commission and service
revenue related to the compilation, interpretation, imaging and marketing of
geo-scientific data. These services typically involve fees for performance
arrangements with customers who own or desire to obtain mineral rights and are
seeking to determine viability for drilling programs. We seek to compete in this
area by exploiting our upstream relationships, data sources, and experience in
emerging areas such as Africa, South America and Eurasia. Revenue from
geo-scientific information and services accounted for approximately 50% of our
revenue in 1998.



          OIL AND GAS EXPLORATION AND PRODUCTION OPERATIONS. We intend to
utilize our expertise in the application of geo-scientific technology, as well
as our relationships with suppliers and owners of information and our customers
to participate in oil and gas exploration and production in selected situations
which do not conflict with the business interests of our customers. Through our
subsidiary FORTESA, we are currently pursuing several oil and gas prospects in
the U.S. as well as in West Africa. The Company utilizes the full cost method
for accounting for oil and gas properties. These prospects are in various stages
of development, however none are actively drilling or producing as of December
1999. The majority of these investments were accounted for at cost as we held a
minority ownership interest in 1998 in the West African opportunity. At December
31, 1998, we wrote down a prospect in East Texas by $34,920 due to a decline in
fair market value. Our historic cost basis in all of these oil and gas positions
totaled approximately $171,000. During 1998, two wells in Kansas in which we
hold a 9% interest, began producing with cash distributions expected to begin
after the operator has recovered the drilling costs.


RECENT DEVELOPMENTS


          FORTESA ACQUISITION. Effective March 30, 1999, we purchased all of the
outstanding shares of stock of FORTESA Corporation, a Texas corporation, from
the Beall Living Trust, its sole shareholder, the trustee for which is Rogers E.
Beall who at the time was and continues to be, our Chairman and Chief Executive
officer, in exchange for 50,000 shares of our Series A Convertible Preferred
Stock plus 8,055 shares of Common Stock. At the time of the acquisition,
FORTESA's assets consisted of oil and gas interests located in East Texas and
the Republic of Senegal and were valued at approximately $171,000, a figure that
represents the historical cost basis of FORTESA assets.


                                       4
<PAGE>


          FORTESA ASSETS. Mr. Rogers E. Beall, who at the time was, and
continues to be our Chairman and Chief Executive Officer, formed FORTESA in May
1997 to pursue an opportunity to develop natural gas reserves in an onshore
block owned by Petrosen, the national oil company of the Republic of Senegal and
referred to as the THIES Block. The opportunity to participate in the acreage
could not be obtained by us at the time as we were in default of our senior debt
and insolvent. The THIES Block consists of approximately 998,000 onshore acres
adjacent to Dakar, the Capital of Senegal. In February 1997, Petrosen drilled an
exploratory well on the acreage that was tested successfully in two zones,
including a flow of 4.3 million cubic feet per day from one of the intervals, a
Campanian sand interval, at 4,200 feet. We are required to fund 90% of the
capital expenditures for the initial development of the THIES Block. We estimate
that the total expenditures will be $6.0 million, of which we must contribute
$5.4 million.



          To develop the THIES Block, FORTESA initially entered into a joint
venture in December 1997 with Benton Oil and Gas Company under which FORTESA
retained a 15% working interest in the project. The terms of the joint venture
required Benton to act as the operator of the venture and to commit the first
$5.4 million required to develop the interest. FORTESA was required to fund its
share of capital requirements after Benton's committed expenditures were made.
We estimated that the development of the THIES Block will require drilling two
to five additional wells and the construction of a pipeline to deliver the
natural gas produced to the local power generating facility approximately 42
kilometers from the field. In November 1999 we entered into a gas sales
agreement to sell our future production to this power plant. See "Recent
Developments Concerning Fortesa" below.



          FORTESA also holds a small position in exploration acreage in East
Texas that we believe is prospective for gas exploration. This acreage is
adjacent to known productive areas that have exhibited commercial production in
the 1990's.



          RECENT DEVELOPMENTS CONCERNING FORTESA. On October 23, 1999, our
subsidiary FORTESA entered into a new agreement with Benton Oil and Gas Company
(Senegal) Ltd. whereby FORTESA has assumed all obligations and rights of Benton
Oil and Gas Company under the joint venture in the THIES Block. In addition,
Benton Oil and Gas purchased 135,000 shares of the Company's Series B
Convertible Preferred Stock, liquidation value $10.00, for $750,000 in cash,
with the balance in consideration for Benton's prior development expenditures on
the THIES Block. In connection with the issuance of Series B Convertible
Preferred Stock, we also granted to Benton registration rights for Common Stock
underlying Benton's shares of Preferred Stock. We were not affiliated with, and
no substantial business activities existed between us and Benton Oil and Gas
prior to the promotion by FORTESA of Benton Oil and Gas into the THIES project
in 1997. Mr. Alexander E. Benton was Chairman of the Board of Benton Oil and Gas
from 1987 until August 1999, and has served as an outside Director of our
Company from September 1990 to the present time. Mr. Benton resigned as Chairman
and Chief Executive Officer of Benton Oil and Gas in late August 1999, but has
remained on both Boards since that time.



          A condition precedent to this agreement was the granting of a release
from Petrosen to Benton Oil and Gas of the latter's obligations under the prior
joint venture agreement. On November 16, 1999, we obtained that release for
Benton Oil and Gas from our other partner, Petrosen. Under this agreement, we
also released Benton Oil and Gas on our behalf from Benton's above obligation to
spend $5,400,000 of the funds required to initially develop the Gadiaga Field by
February 2001, of which we have spent approximately $2.0 million to date. As a
result, we are now obligated to develop the Gadiaga Field without Benton Oil and
Gas, and we have assumed the role of "operator" of this project from Benton,
with the consent of Petrosen. We must therefore raise an additional $3.4 million
to complete the first phase of the project. Petrosen previously committed to pay
for a 10% working interest ($600,000) for the development costs, which amount is
the difference between our estimated $6.0 million budget for the first phase of
the project and the $5.4 million that our group is committed to.



          Our agreement with Benton Oil and Gas requires FORTESA to obtain
additional equity financing of at least $500,000 on terms equivalent to those of
the Series B Convertible Preferred Stock. Upon obtaining a letter of intent to
fund the additional equity, FORTESA was required to issue a purchase order for
pipe to be used in our construction of the pipeline that will transport gas
produced from the Gadiaga Field in the THIES Block. FORTESA issued the required
purchase order for the pipe on November 24, 1999. FORTESA is also required to
promptly commence efforts to obtain additional financing in the form of a
construction loan of up to $1,000,000 to complete installation of the pipeline.
As of the date of this filing FORTESA is engaged in discussions to secure the
required additional equity financing from third-party investors and the required
construction financing from an international bank with offices in Senegal.




                                       5
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          On November 23, 1999 FORTESA executed a gas sales agreement to supply
natural gas produced from the THIES Block to the main Senegalese power plant at
Cap Des Biches, Senegal. This main power plant is owned by the now privatized,
former Senegalese national power company Senelec, that is partially owned (34%)
and controlled and operated by Hydro-Quebec (Canadian electricity generator, and
reportedly the #2 supplier of electricity to the USA after CONED). The Company's
fixed price gas sales agreement is for 100 CFA per cubic meter of gas. The
contract has a two-year term. The power plant that is the intended recipient of
our gas needs up to 17,000,000 cubic feet of gas per day. Under the terms of
this agreement we have agreed to dedicate to the main power plant all of the
natural gas to be produced from the Gadiaga Field for at least two years at a
fixed price of 100 CFA per cubic meter of gas. The CFA is directly convertible
to the French Franc with no restrictions. As of the date of execution of this
agreement, 100 CFA would have converted to a price of $4.53 under exchange rates
in effect at the time. Due to fluctuations in the exchange rate, as of April
2000, this equates to a price of approximately USD$4.00 mcf. The Company may
also sell any production from the THIES Block, outside of its Gadiaga Field, to
the same power plant or other local energy users and industries. In late 1999,
we hired an independent, outside, non-related engineering firm that had never
worked for us before. This consulting firm reviewed our production test data,
our geologic, geophysical and engineering calculations, and our bids for service
work in Senegal to develop the discovery well in which we hold a 60% working
interest. As a result, on January 1, 2000 this firm documented the evaluation of
our net hydrocarbon reserves and future net revenues expected therefrom for our
60% net working interest in our Gadiaga gas discovery and the immediate
surrounding structure. The estimated "proved reserves", both shut-in plus
undeveloped, are 3.530 BCF of natural gas valued using a PV10 factor at
$7,249,500.



          We plan to complete construction of the gas delivery pipeline in the
second quarter of 2000, and realize cash flow from gas sales within 90 days of
the first gas transmission. Concurrent with the commencement of this cash flow,
we plan the drilling of two to five additional wells in 2000 and 2001. In order
to satisfy our obligations under the contract with Benton Oil and Gas, we must
raise or otherwise promote from new co-venturers the additional funds to drill
at least two wells before February 2001. We plan to use a combination of cash
flow from the production of the first well discussed above, new capital from
private or other sources, project financing or capital from future co-venturers
to fund the additional required wells. We intend to fund further development of
the Gadiaga gas field, as well as other exploration on the THIES Block, in the
same manner. We have no assurance that we will be able to successfully obtain
this financing on terms acceptable to us, complete the project and realize
continuing revenues from the gas supply contracts. If we do not subsequently
obtain the financing, we may lose our investment in the project and still be
liable for our commitments.



          TERMS OF THE SERIES A CONVERTIBLE PREFERRED STOCK. The terms of the
Series A Convertible Preferred Stock provide for dividends at a rate of 6% of
the $1.00 per share liquidation value per annum which will accrue and accumulate
beginning March 31, 2001. We may not pay dividends on our Common Stock unless
and until all accrued and unpaid dividends on the Series A Convertible Preferred
Stock are paid. Shares of the Series A Convertible Preferred Stock are
convertible into shares of Common Stock at the holders' option after March 31,
2001 at a conversion ratio that varies proportionally with an increase in value
of the assets of FORTESA. Initially the Series A Convertible Preferred Stock
will be convertible at a ratio of 10 shares of Common Stock for each share of
Series A Convertible Preferred Stock. On each of December 31, 2001, 2002 and
2003 the conversion ratio shall be adjusted in proportion to the increase in
value of the assets of FORTESA, if any, as determined by an annual PV10
valuation of the assets performed by an independent engineer. In any event, the
conversion ratio shall not exceed a maximum of 40 shares of Common Stock for
each share of Series A Convertible Preferred Stock. The maximum ratio would
correspond to an increase in value for the FORTESA assets acquired on March 30,
1999 to $2,925,000 as determined by the independent valuation.



          TERMS OF THE SERIES B CONVERTIBLE PREFERRED STOCK. The terms of the
Series B Convertible Preferred Stock entitle the holder(s) at any time to
convert each share into 10 shares of Common Stock at their option. In addition,
we have the right to redeem all or part of the outstanding shares of Series B
Convertible Preferred Stock at the $10.00 per share liquidation value. If the
shares are redeemed prior to three years from the date of issuance, we must also
pay a premium equal to 6% of the liquidation value per annum from the date of
issuance until the date of such redemption.



                                       6
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          EXCHANGE OF COMMON STOCK FOR 12% SENIOR NOTES. In October 1997, we
entered into agreements with the current holders of all of the Company's 12%
Senior Notes due December 31, 1996 which modified the terms of these Senior
Notes. Prior to entering into these individual loan modification agreements, we
had been in non-compliance with various provisions including payment of interest
on these Senior Notes since September 30, 1993. The provisions of the loan
modification agreements reduced the balance due on the Senior Notes to the
outstanding principal amount only and forgave unpaid interest and suspended
other remedies available to the Noteholders. These modification agreements
required us to retire these Senior Notes prior to September 30, 1999. In March
of 1999, we were able to satisfy the balance of our obligations that were not
already paid in cash under the terms of the modification agreement by issuing
1,363,111 shares of Common Stock, valued at two times the book value of the
Company, in exchange for most of the outstanding Senior Notes. We received debt
reduction of $0.72 per share plus forgiveness of interest expense of
approximately $0.68 per share for a total debt and interest trade of $1.40 per
share, and we received release of the 60% lien that the Senior Noteholders had
on our old domestic 2D seismic library. We paid the remaining outstanding
principal balance on the Senior Notes of as of September 1999.



          EXCHANGE OF COMMON STOCK FOR 6% NOTES, AND WARRANTS TRANSACTIONS.
In March 1999 we issued 1,073,734 shares of Common Stock, together with new
warrants to purchase an aggregate 475,000 additional shares of Common Stock at a
price of $0.30 per share, in exchange for all of our outstanding 6% Secured
Promissory Notes. These 6% Notes had an original principal amount of $500,000,
with an outstanding principal balance of $411,178 plus accrued interest as of
March 29 1999. In connection with this transaction, the Noteholders, who were
also the warrant holders, agreed to exercise at least 80% of the outstanding
$0.50 warrants, thereby purchasing shares of new Common Stock for cash. As an
inducement, we offered 150% of the number of shares of Common Stock called for
by the warrants as originally issued in 1993 for each warrant exercised. As of
October 1999 all of the Noteholders accepted the offer to exchange their Note
for Common Stock. Of these converting Noteholders, 92.5% also purchased an
aggregate 712,500 shares of Common Stock for $237,500 in cash. We received debt
reduction of $0.38 per share in return for the issuance of their Common Stock,
and the release of the lien these Noteholders had in 100% of the ownership of
the operating subsidiary, FIRST EXCHANGE Corporation. One holder of 25,000
warrants issued in 1993 at a strike price of $0.50 chose not to exercise his
warrants early. Those 25,000 warrants expire in June 2000.


CUSTOMERS


          We market our geo-scientific products and services to major and
independent oil and gas companies. During 1998, 47% of revenues were
attributable to four customers, each of which individually accounted for over
10% of our revenues. These customers were Anadarko Petroleum, BP Exploration,
Phillips Petroleum and Fina NeftGaz. Each of these Companies is independent and
has an arms-length relationship with us. During 1997 and 1996 no one customer
had accounted for as much as 10% of our revenues. Although, we believe that
revenues from our seismic and geo-scientific data library operations will
maintain a minimum level of activity sufficient to sustain that effort, we
believe any future revenue growth is limited to our oil and gas exploration and
promotion activities. We also believe that these activities will require more
co-venturing and partnering with our historical customers and others with whom
we have relationships, than do those of our geo-scientific information business


COMPETITION


          The sale of seismic data and geo-scientific analysis, information and
reports is highly competitive in the United States and Western Europe where we
earn most of our revenues. We rely on supplier and owner relationships to obtain
information, data, analysis, and previously compiled studies to market to our
customer base. Our relationships and supplier contracts are with major and
independent oil and gas companies, national oil companies in the U.S. and
Europe, independent geological and geophysical data compilers that own
proprietary equipment, processes, and technologies, and technical institutes and
agencies that employ scientists to advance such research. Due to our supplier
and owner relationships, we are able to leverage expertise from our suppliers
and realize significant efficiencies in data gathering, processing and analysis
activities. We have successfully built these relationships in key areas of
Western Europe, the Caspian Sea, West Africa and South America. In addition, we
use our proprietary data library of geotechnical reports and seismic data to
provide information cost-effectively to our customer base compared to similar
alternative products offered by our competitors.


          There are a number of other independent oil service companies and
numerous oil and gas companies that create and market seismic data, create
research studies and maintain their own seismic data libraries. Many of our
competitors have longer operating histories, greater financial resources and
larger sales volumes than we have. In 1998, there were approximately ten
companies with operations similar to our operations. Additionally, over one
hundred service companies create new information for sale to the upstream oil
industry in competition with us worldwide. We consider all of these entities to
be significant competitors.


                                       7
<PAGE>


          In the oil and gas exploration and production business there are many
companies competing for the acquisition of mineral properties. Many of these
competitors are better capitalized than we are. We seek to compete in the
exploration for and development of natural gas and crude oil reserves on the
basis of our contacts, relationships, understanding of the application and use
of geo-scientific technology and information in the location and extraction of
commercially producible hydrocarbons, and our expertise in geo-scientific
disciplines. No assurances can be made that we will have the resources necessary
to fully develop the properties that we currently own or to acquire new
properties for development.


SEASONALITY AND TIMING FACTORS

          Our results of operations can fluctuate from quarter to quarter. The
fluctuations are caused by a number of factors.


          Our seismic licensing, brokering, geotechnical publishing and service
activities are significantly influenced by oil and gas industry capital
expenditure budgets and spending patterns. The timing of oil and gas industry
capital expenditures can be irregular, since spending patterns are affected by
individual oil and gas company requirements as well as industry-wide conditions.
As a result, our geo-scientific data licensing revenue does not necessarily flow
evenly or progressively on a sequential quarterly basis during the year.



          No revenues have been realized from our oil and gas activities as of
December 31, 1998. We may bring wells on-line in the future that may cause
significant fluctuations in our financial results. Our future oil and gas
exploration and production operations may be impacted by certain weather-related
events as well as by mechanical and equipment problems or shortages and other
factors, which may delay the hookup of successfully completed wells and delay
the resultant production revenue. Also, due to the seasonal variations in oil
and gas prices, our results from future oil and gas operations may be subject to
significant fluctuations due to variations in commodity prices.


EMPLOYEES


          As of February 2000 in all of our operations we had 20 full-time
employees and several employees who devote part of their time to our business
who are also officers of other affiliated corporations. Of these full-time
employees, 7 work in geo-scientific information, 7 in corporate staff or
administrative operations, and 2 in oil and gas operations. None of our
employees are covered under collective bargaining agreements, and we believe we
have a favorable relationship with our employees. We have employment contracts
with our Chief Executive Officer who also acts as the President of our FIRST
EXCHANGE subsidiary, and also with the President of FORTESA, our oil and gas
subsidiary. See Item 11, Executive Compensation, for further details.


RISK FACTORS AND INFORMATION REGARDING FORWARD LOOKING STATEMENTS

         ANY INVESTMENT IN OUR SECURITIES INVOLVES RISK. INVESTORS SHOULD
CAREFULLY CONSIDER, IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS
REPORT, RISKS SUCH AS THOSE DESCRIBED BELOW BEFORE MAKING ANY INVESTMENT
DECISION.


          This Annual Report on Form 10-K includes forward-looking statements
and assumptions we have made. These statements relate to future events or our
future financial performance and involve known and unknown risks, uncertainties
and other factors that may cause our or our industry's actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
the forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," or other
comparable terminology. Although we believe that our expectations are based on
reasonable assumptions, we can give no assurance when or if our goals will be
achieved. Important factors that could cause actual results to differ materially
from those in the forward looking statements we have made in this report include
at a minimum changes in the exploration budgets of our customers for seismic
data, geo-scientific studies and related services. Some additional factors will
be actual customer demand for our seismic data, geo-scientific studies and
related services, the extent of our success in acquiring oil and gas properties
and in discovering, developing and producing reserves, the timing and extent of
changes in commodity prices for natural gas, crude oil and condensate and
natural gas liquids and conditions in the capital and equity markets during the
periods covered by the forward looking statements. These are all factors that
will be experienced in the future that we have based our estimates and plans on,
and they may vary significantly from the present and cause us not to realize our
plans in the future.


                                       8
<PAGE>


          DECREASES IN ENERGY INDUSTRY SPENDING COULD ADVERSELY AFFECT OUR
BUSINESS. Overall demand for 2D seismic data, geo-scientific information, and
the type of related services that we provide depends primarily upon the level of
spending by oil and gas companies for exploration, production and development
activities. Industry spending levels may follow increases and decreases in the
commodity prices for oil and gas, so that demand for our products and services
may be affected to some degree by market prices for natural gas and crude oil.
These prices have historically been very volatile due to the sensitivity of
product prices to market demand. As a result of the very significant weaknesses
in oil and gas commodity prices starting in mid-1998 and through mid-1999, the
level of overall oil and gas industry exploration activity had declined from
levels experienced in recent years. This has resulted in a significant
consolidation in the number of major customers for our geo-scientific products.
Our customers' capital spending decreased significantly in the period
immediately after the 1998 annual report contained herein, due to these recent
industry trends. This resulted in a significant adverse effect in 1999 upon the
demand for our services and our resulting level of operations and cash flow. In
addition, potential revenues to be generated in the future by our oil and gas
exploration and development business may fluctuate with increases and decreases
in the market prices of oil and gas. Many factors beyond our control may affect
such oil and gas operations. These factors include financing activities, the
level of worldwide supply of natural gas and oil, the availability of adequate
pipeline and other transportation and processing facilities and the marketing of
competitive fuels, and similar worldwide factors.



          DATA LIBRARY INVESTMENT AND FUTURE LICENSING. Our method of selling
use-licenses for our data library allows us to sell the same information to
multiple buyers. However, data that we have developed and invested in may not
continue to be of interest to customers in the future due to changes in areas of
interest, licensing of the underlying lands for hydrocarbon exploration by
companies, product pricing factors, political risk changes and perceptions, and
changes in financial and other conditions that can reduce the viability of
hydrocarbon extraction in areas for which we own data. In such cases, we may not
fully recover our costs in acquiring and developing geophysical and other
geo-scientific data through future licenses of that data. The Company utilizes
the full cost method for accounting. As a result, we would have to expense costs
of that data library asset without having corresponding revenues, thereby
causing a loss in those periods affected.


          AMORTIZATION OF OUR DATA LIBRARY. Our methods for accounting for
investment in our data library can have a significant effect on the results of
our operations for any given period of time. We amortize our data library based
in part on our estimates of future sales of licenses to our data or over a
regular minimum period, whichever is greater. Estimates are inherently imprecise
and may vary from period to period depending on market developments and our
expectations. If we see that the values in our data library are not being
recovered through revenues at any point in time, we may increase the
amortization rates. This may result in impairments of our data library assets in
periods of low exploration industry interest, and such impairments can have a
significant effect on our reported results of operations.


          INTERNATIONAL EXPOSURE AND RISKS. As we increase our investment in
countries outside of the U.S., we increase our exposure to risks that we cannot
always anticipate or control by the rule of law or compliance with standards
normal for our business. In the future, we believe that an increasing amount of
our revenue will come from sales of information and natural resources
originating in Senegal and other countries outside of the U.S., and these
revenues will be subject to risks that are inherent in doing business abroad.
These risks include the possibilities of expropriation of our assets and
investments, changes in tax and other laws, currency exchange rate fluctuations
and devaluation's, labor and political disturbances, insurrection or war,
disruptions or delays of licensing, permitting, or leasing activities, and the
requirements of partial local ownership of our operations.


          INSURANCE LIMITATIONS. We attempt to insure against normal
liabilities, and to protect our assets and investments against losses. However,
we cannot always obtain insurance for our operating risks. In addition,
sometimes insurance is not available at cost-effective rates. We will
periodically review the insurance coverage we have in effect, and try to insure
against possible losses when coverage is available at rates that do not make our
projects non-commercial.

          DRILLING HAZARDS AND DRY HOLES COULD AFFECT OUR OIL AND GAS
ACTIVITIES. Our oil and gas operations will be subject to hazards incident to
the drilling of oil and gas wells, such as cratering, explosions, uncontrollable
flows of oil, gas or well fluids, fires, pollution, or other environmental
risks, as well as to the risk that we may not encounter commercially productive
natural gas or oil reserves. Some of these hazards can cause personal injury and
loss of life, severe damage to and destruction of property and equipment,
environmental damage and suspension of operations. However, since we sometimes
may not act as operator in our oil and gas drilling business, these factors may
be dependent upon our petroleum company co-venturers to conduct operations in a
manner so as to minimize these operating risks. In accordance with industry
practice, we will maintain insurance against some, but not all, of these
operating risks. There can be no assurance that adequate insurance will be
available in the future, or that we will be able to maintain adequate insurance
on terms and conditions acceptable to management. As a result of the risks
inherent in oil and gas operations, the success of our oil and gas exploration,
development and production activities is uncertain.


                                       9
<PAGE>

          LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS. Our
operations are dependent upon a relatively small group of management and
technical personnel. The loss of one or more of these individuals could have a
material adverse effect on our operations and future results. Equity ownership
and other incentives are offered to attract and retain our key employees. In
addition, we have employment agreements with our chairman and chief executive
officer, Rogers E. Beall, who also acts as the President of our FIRST EXCHANGE
subsidiary, and also with FORTESA president, Hayne S. Blakely.


          OUR ABILITY TO OBTAIN ADDITIONAL FINANCING COULD IMPAIR OUR FUTURE OIL
AND GAS ACTIVITIES. The success of our oil and gas development activities
depends substantially on our ability to obtain additional financing. In
particular, our activities in Senegal require us to make significant capital
expenditures to continue the development of that project, which will depend upon
our ability to obtain additional financing. See "Oil and Gas Exploration and
Production Operations - "Recent Developments". Although discussions with
potential equity and debt investors and lenders are ongoing, we have no firm
commitments for such additional financing, and no assurances can be made that
additional financing will be obtained.



          REGIONAL EVENTS MAY AFFECT OUR GEOGRAPHICALLY CONCENTRATED OPERATIONS.
Most of the seismic data in our library is 2D data covering lands located in the
Rocky Mountains, Michigan Basin and other onshore areas of the U.S. The majority
of our compiled geo-scientific data and studies cover areas in the Caspian Sea,
South America and Western Africa. Our interests in oil and gas properties are
concentrated in East Texas and The Republic of Senegal in Western Africa. Any
regional events that increase costs, reduce availability of equipment or
supplies, reduce demand or limit production will impact us adversely in these
specific areas.



          GOVERNMENTAL REGULATIONS. When we conduct geotechnical field
operations, we are affected by a variety of laws and regulations, including laws
relating to the use of information, the environment, taxes, exports and imports,
safety, permitting operations, and investment in certain countries that may
become out of favor with the U.S. or other governments. We invest in financial
and management resources in order to comply with such regulations and laws, but
we cannot always anticipate changes in the laws and politics, and errors in
compliance by operatives of our company. Such modifications and non-compliance
can cause us to lose our investment or become liable for errors in judgment or
actions that will result in losses.



          Further, when we conduct oil and gas operations, we are subject to
extensive governmental regulation, which changes from time to time in response
to economic or political conditions. In particular, oil and gas exploration and
production are subject to international and U.S. Federal and State regulations
governing environmental quality and pollution control, state limits on allowable
rates of production by well or proration unit, and other similar regulations.
These 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 the amount of natural gas and oil produced in order to
avoid waste and reservoir damage, by assigning allowable rates of production and
control contamination of the environment. Environmental regulations will affect
our operations on a daily basis. Also, we believe that the trend toward more
expansive and stricter environmental laws and regulations will continue. At
present, we do not yet expend material amounts to comply with such regulations.
The implementation of new or changing of existing laws or regulations affecting
the oil and gas industry could have a material adverse impact on us in the
future.


                                       10
<PAGE>


     The following organization chart gives an overview of our structure,
     organization and operations as of February 2000.


        ---------------------------------
                  FIRST SEISMIC
                   CORPORATION
                  -------------

                 DELAWARE CORP.
               BOARD OF DIRECTORS
              3 OUTSIDE DIRECTORS
              1 DIRECTOR/OFFICER
                  0 EMPLOYEES
        ---------------------------------
                       |                 \
                       |                  \
                       |              WHOLLY-OWNED
                       |               SUBSIDIARY
                  WHOLLY-OWNED               \
                   SUBSIDIARY                 \
                       |                       \
                       |                        \
                       |                         \
         ------------------------------           ---------------------------
                 FIRST EXCHANGE                              FORTESA
                  CORPORATION                              CORPORATION
                 --------------                            -----------
                 DELAWARE CORP.                            TEXAS CORP.

                 16 EMPLOYEES                         - EAST TEXAS ACREAGE
         ------------------------------               - SENEGAL WORKING
                       /\                               INTEREST
                     /    \                           - PROSPECT GENERATION
                   /        \                           2 EMPLOYEES
           WHOLLY-OWNED    WHOLLY-OWNED           ---------------------------
           SUBSIDIARY       SUBSIDIARY
               /               \
              /                 \
   -------------------  -------------------
     FIRST EXCHANGE          BLACKWELL
        LIMITED             TRADING INC.
        -------             ------------
        UK CORP.           DELAWARE CORP.

   - LONDON OFFICE       USA DATA BROKERAGE
   - BAKU OFFICE         USA AIRBORNE SPEC
     2 EMPLOYEES
   -------------------  -------------------



                                       11
<PAGE>


ITEM 2.  PROPERTIES

          We lease office space under non-cancelable operating leases. Our lease
for our corporate and operating offices in Houston, Texas amounts to 7,650
square feet and expires in January 2001. Our lease for our U.K. operations
amounts to 1,565 square feet for our facilities just south of London, England,
and expires in June 2000. Our offices in Baku, Azerbaijan are in the facilities
of one of our publication co-venturers and the space is made available to us at
no charge.

          We hold rights to a natural gas discovery known as the Gadiaga Field
that is located in the THIES Block in the Republic of Senegal through our wholly
owned FORTESA subsidiary.


          In late 1999, we hired an independent outside, non-related engineering
firm. This consulting firm reviewed our production test data, our geologic,
geophysical and engineering calculations, and our bids for service work in
Senegal to develop the discovery well that we hold a 60% working interest in. As
a result, on January 1, 2000 this firm documented the evaluation of our net
hydrocarbon reserves and future net revenues expected there-from for our 60% net
working interest in our Gadiaga gas discovery and the immediate surrounding
structure. Our net share of the estimated "proved reserves", both shut-in and
undeveloped of 3.530 BCF of natural gas, valued using a PV10 factor at
$7,249,500.


          In order to exploit our rights under the agreement with Petrosen, we
are obligated to make expenditures in the amount of $5,400,000 to fund the
construction of a delivery pipeline and the drilling of two development wells in
the Gadiaga gas field. See "Liquidity and Capital Resources" and "Oil and Gas
Exploration and Production Operations - Recent Developments".


          We also hold various mineral lease rights on certain speculative oil
and gas acreage located in East Texas. Expenditures made to secure these rights
are recorded at historical cost in the accompanying financial statements. We
periodically evaluate the expected future value of these rights in order to
determine if they have become impaired or reduced in value. As of December 1998
the value of these rights was approximately $171,000. (See Note 1 - Summary of
Accounting Policies, Oil and Gas Properties in the accompanying financial
statements).


ITEM 3.  LEGAL PROCEEDINGS


          We are a defendant in a lawsuit filed on October 28, 1997 in the U.S.
District Court for the Northern District of Oklahoma, brought by two parties
claiming to be the successors-in-interest to McKenzie Management Inc., a
minority owner of 1,200 miles of 2D seismic data acquired by us in September
1990 from McMoRan Oil and Gas Company and Adobe Resources Corporation. A portion
of this data was originally owned by a joint venture comprised of McMoRan, Adobe
and McKenzie Management Inc. At the time of our original purchase of this data,
McMoRan and Adobe could not locate McKenzie and indemnified us "against any and
all future claims, costs, expenses or causes of action that may be asserted by
the referenced minority owner....". In June 1994, we sold our interest in this
data to Seitel Corporation and indemnified Seitel against claims relating to the
seismic data being sold. The plaintiffs seek approximately $600,000 to
$1,500,000, plus punitive damages and attorney's fees. We believe we are
indemnified against loss based on our purchase contract with McMoRan and Adobe.
This lawsuit is still in the early stages of discovery and we cannot predict the
extent of our liability, if any


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

          NONE



                                       12
<PAGE>

PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS


          Our Common Stock was formerly traded on the NASDAQ NMS system. In
March of 1993 our Common Stock was de-listed from the NASDAQ and any trading
activity since that time has taken place through the OTC Bulletin Board System
(Pink Sheets). The following table sets forth the high and low bid information
for the Common Stock for 1998 and 1997 as reported by the OTC Bulletin Board
System.



<TABLE>
<CAPTION>
                                              1998                              1997
                                ---------------- ---------------- ---------------- -----------------
                                      LOW             HIGH              LOW              HIGH

                                ---------------- ---------------- ---------------- -----------------
            <S>                      <C>              <C>              <C>              <C>
            First Quarter            $0.02            $0.20            $0.02            $0.20
            Second Quarter           $0.02            $0.20            $0.02            $0.20
            Third Quarter            $0.02            $0.20            $0.02            $0.20
            Fourth Quarter           $0.02            $0.20            $0.02            $0.20
</TABLE>



          This Annual Report on Form 10-K represents the first filing we have
submitted to the Securities and Exchange Commission since our filing on Form
10-Q for the period ended September 30, 1992. See "FORTESA Acquisition" above
for description of the Company's Convertible Preferred Stock Series A and B that
was issued during 1999.



          To our knowledge as of March 2000 there are approximately 600 holders
of record of our Common Stock.


DIVIDEND POLICY

          We have not paid cash dividends since 1990, and we intend to retain
future earnings from the next several years to provide funds for use in the
expansion of our business. We do not intend to pay dividends in the foreseeable
future.

RECENT SALES OF UNREGISTERED SECURITIES


          In December 1996 our Chairman purchased 253,790 shares of Common Stock
at $0.02 per share as part of an agreement whereby he also waived $253,790 of
his salary. The issuance of such shares was exempt from registration under
Section 4(2) of the Securities and Exchange Act of 1933. We benefited by a total
of $1.02 per share in debt reduction and cash savings from this transaction.



          On January 1, 1997, we issued 150,000 shares of our Common Stock to
our Executive Vice President in exchange for all of the shares of BLACKWELL
SUPPLY, Inc. in which we already had a 75% net profits interest. This
transaction benefited us by bringing the geophysical data owned by BLACKWELL
under our full ownership. We valued the shares we received of BLACKWELL at
$31,500. Through BLACKWELL, we conduct its domestic geophysical information
activity, including the marketing and sale of airborne remote sensing surveys.
The issuance of such shares was exempt from registration under Section 4(2) of
the Securities and Exchange Act of 1933.



          Effective March 30, 1999, we issued 50,000 shares of our Series A
Preferred Stock and 8,055 shares of our Common Stock in exchange for all of the
Common Stock of FORTESA. We valued internally the West African natural gas
reserves and carried development historical costs and East Texas acreage and its
geotechnical data at $1,350,000, but booked these assets internally and in our
statements at FORTESA's historical cost of $171,000.



          Shares of our Series A Preferred Stock are convertible to shares of
Common Stock at an initial ratio of 10 shares of Common Stock for each share of
Series A Preferred Stock. The conversion ratio is adjustable in proportion to an
increase in value for the FORTESA assets acquired on March 30, 1999. In any
event the conversion ratio shall not exceed a maximum of 40 shares of Common
Stock for each share of Series A Convertible Preferred Stock. The issuance of
such shares was exempt from registration under Section 4(2) of the Securities
and Exchange Act of 1933.


                                       13
<PAGE>


          In March 1999 we issued 1,073,734 shares of Common Stock, together
with new warrants to purchase an aggregate 475,000 additional shares of Common
Stock at a price of $0.30 per share, in exchange for all of our outstanding 6%
Secured Promissory Notes. We received debt reduction of $448,785 in return for
the issuance of this Common Stock, and the Company received release of the lien
these Noteholders had in 100% of the ownership of the operating subsidiary,
FIRST EXCHANGE Corporation. In addition, holders of 92.5% of these 6% Notes
exercised their existing Warrants to purchase an aggregate of 475,000 shares of
our Common Stock at $0.50 per share. As an inducement, we offered 150% of the
number of shares of Common Stock called for by the Warrants as originally issued
in 1993 for each Warrant exercised. These converting Noteholders purchased an
aggregate of 712,500 shares of Common Stock for $237,500 cash. The issuance of
such shares and warrants was exempt from registration under Section 3(a)(9) of
the Securities and Exchange Act of 1933.



          In March 1999, we issued 1,363,111 shares of our Common Stock valued
at $0.72 per share, which was two times per share book value in exchange for the
12% Senior Notes. This transaction benefited us by principle debt reduction of
$981,496, plus agreement by each of these Noteholders to waive all unpaid
interest which would have been in the additional amount of $926,912. This
interest had not been accrued, as the agreements entered into as of October 1997
with each Noteholder provided that the interest would be waived if we exchanged
our Common Stock for these notes. We also received a release of the 60% lien
that the Senior Noteholders had on our old domestic 2D seismic library. The
issuance of such shares and warrants was exempt from registration under Section
3(a)(9) of the Securities and Exchange Act of 1933.



          As part of our November 1999 transaction with Benton Oil and Gas, we
issued 135,000 shares of the Company's Series B Convertible Preferred Stock,
liquidation value $10.00, for $750,000 in cash and in consideration for the
$910,000 of Benton Oil and Gas's prior development on the Senegal THIES block.
Each share of Series B Convertible Preferred Stock is convertible into 10 shares
of Common Stock. The issuance of such shares was exempt from registration under
Section 4(2) of the Securities and Exchange Act of 1933. See "Recent
Developments -- RECENT DEVELOPMENTS CONCERNING FORTESA" in Item 1 for a
discussion of this transaction.



                                       14
<PAGE>

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

SELECTED FINANCIAL STATEMENT INFORMATION

    The following table sets forth selected historical consolidated financial
    data for the periods indicated. All intangible and tangible assets are
    recorded at cost.

    STATEMENT OF OPERATIONS:


<TABLE>
<CAPTION>

                                                                               YEAR ENDED DECEMBER 31,

                                                                 1998              1997            1996              1995
                                                                 ----              ----            ----              ----
<S>                                                      <C>               <C>             <C>               <C>
    REVENUE (Note 2)
    Company owned Geophysical                            $    149,750      $    236,244    $    188,569      $    556,395
    Company owned Geological                                 1,294,646          699,732         412,856           245,333
    Net revenue interest                                       89,889           216,870         159,486           148,938
    Brokerage of third party Geophysical                      694,474           378,009         672,853         1,301,124
    Brokerage of third party Geological                       406,981           449,882         649,343           287,028
    Commissions                                                54,002           270,063          35,734            55,330
    Reproduction and other                                    274,688           119,572         112,353           150.819
                                                         ------------      ------------    ------------      ------------

    TOTAL REVENUE                                       $   2,964,430         2,370,372        2,231,194     $  2,744,967
                                                         ------------      ------------    ------------      ------------

    COST OF SALES                                           1,454,145         1,120,119       1,018,708        1,456,953
                                                          ------------     ------------     ------------     -----------

    GROSS MARGIN                                            1,510,285        1,250,253        1,212,486        1,288,014
                                                        -------------     ------------    -------------     ------------

    OPERATING EXPENSES

    Selling, general and administrative expenses           1,056,397          949,968          953,411        1,247,285
    Depreciation and amortization (Note 1)                   447,294           295,240         753,877        1,018,044
                                                        ------------      ------------     ------------     -----------

    TOTAL OPERATING EXPENSES                                1,503,691        1,245,208        1,707,288        2,265,329
                                                        -------------     ------------    -------------     ------------

    Net operating income                                        6,594            5,045        (494,802)        (977,315)
                                                        -------------     ------------    -------------     ------------

    OTHER INCOME AND EXPENSES

    Interest expense (Note 3)                                 42,293           25,458           12,247           14,213
    Interest income                                           (3,857)          (2,121)          (2,388)            (928)
    Other income                                              (1,006)              -0-              -0-              -0-
    Settlements/Liability extinguishments (Note 1)          (305,489)        (177,324)        (925,178)      (1,755,554)
    Other expense                                             34,920               -0-          32,896               824
                                                        ------------      ------------      ----------      ------------

    TOTAL OTHER INCOME AND EXPENSES                        (233,139)        (153,987)         (882,423)     (1,741,445)
                                                        -------------     ------------      -----------     ------------

    NET INCOME                                                239,733          159,032          387,621          764,130
                                                        -------------     ------------      -----------     ------------

    COMPREHENSIVE INCOME
    FOREIGN CURRENCY TRANSLATION

    ADJUSTMENTS                                               (6,509)          (5,420)      $       -0-     $        -0-

    COMPREHENSIVE INCOME                                 $    233,224      $    153,612     $   387,621      $   764,130
                                                         ============      ============     ===========      ===========

    NET INCOME PER SHARE  (Note 12)                     $        0.04     $       0.03      $      0.08     $       0.16
                                                        -------------     ------------      -----------     ------------


    WEIGHTED NUMBER OF SHARES USED IN

    COMPUTING NET INCOME (LOSS) PER SHARE                   5,552,869        5,251,647        5,071,510        4,817,720
</TABLE>



                                       15
<PAGE>



<TABLE>
<CAPTION>
    BALANCE SHEET DATA:                                           YEAR ENDED DECEMBER 31,

                                                       1998          1997          1996             1995
                                                       ----          ----          ----             ----
<S>                                               <C>            <C>            <C>            <C>
ASSETS
Total Current Assets                              $  580,359     $  706,760     $  660,034     $ 1,335,389
Data library, net                                  2,462,964      2,117,109      2,257,401       2,513,319
Data and Agency use positions, net                    23,185         26,435         41,232         155,144
Property and equipment, net                           52,983         45,705         47,620          43,209
Investment in oil and gas properties, at cost        170,710        178,630        102,025         102,025
Other assets                                          40,384         42,670         37,232          31,655
                                                  ----------     ----------     ----------     -----------

TOTAL ASSETS                                       3,330,585      3,117,309      3,145,544       4,180,741
                                                  ----------     ----------     ----------     -----------

LIABILITIES AND STOCKHOLDERS' EQUITY

(DEFICIT)

Long Term Debt                                    $1,442,674      1,613,919      1,375,607       1,715,607

Total Stockholders' Equity (Deficit)                 564,681        266,957         11,845        (634,642)
                                                  ----------     ----------     ----------     -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)                    $3,330,585     $3,117,309     $3,145,544     $ 4,180,741
                                                  ==========     ==========     ==========     ===========
</TABLE>



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS

          SALES OF SEISMIC AND GEO-SCIENTIFIC DATA. Total revenue for the year
ended December 31, 1998 increased approximately $594,000 or 25% compared to the
same period in 1997. Revenues by category fluctuated but the primary net
increase was due to increased licensing and brokerage of geo-scientific products
related to the Caspian Sea region. Declines in revenue from our commission
income are primarily attributable to a decrease in oil and gas exploration
activity in East Texas and a resultant decrease in demand for our domestic sales
of geophysical information. We expect that revenues from future licensing of our
domestic USA geophysical database will continue to not be a significant source
of future revenues, due to its technological inferiority to 3D seismic, age and
increased costs of exploration in the onshore domestic USA.

          Revenues for the year ended December 31, 1997 were up over 1996 by
approximately $139,000 or 6%, as a result of the cash payment from Benton Oil
and Gas of a prospect promotions fee for Senegal THIES Block representing costs
that FORTESA had expended to develop the farm-in opportunity with Petrosen, plus
increases realized in our Caspian Sea geologic products.

          OIL AND GAS. Our investments in oil and gas properties have produced
no operational revenue as of this filing. The natural gas reserves held by our
subsidiary FORTESA are not yet producing. Revenue associated with these reserves
is subject to certain capital expenditures for which we are obligated and which
have yet to be made. See "Liquidity and Capital Resources" for a discussion of
these capital expenditure requirements.

          COST OF SALES. Cost of sales is composed of employee and
administrative costs directly associated with specific projects or sales, and of
partner and data owner payments for licensed and brokered data. These costs do
not include the amortization of the associated data library that is included in
Expenses after Gross Margin. Costs of sales have regularly averaged
approximately 50% of revenues during the period covered herein, in spite of
product mix fluctuations. Due to the recent change in our business strategy, and
fluctuations in the price of oil, which effects our customer need for our
products, we cannot predict the percentage of sales of our cost of sales will be
in the near future.


          CORPORATE AND OTHER. Selling and General and Administrative expenses
increased approximately 12% or $110,000 for the year ended December 31, 1998 as
compared to year ended December 31, 1997 primarily as the result of increased
accounting costs associated with our efforts to comply with public company
reporting requirements and increased bad debt expense. Such expenses did not
materially change during fiscal years 1996 and 1997. The increased accounting
expenses are expected to continue in the future as we develop more complete
accounting system for public reporting requirements.


                                       16
<PAGE>


          Depreciation and amortization expense, which consists primarily of
amortization of our data libraries, increased approximately 50% or $152,000 for
the year ended December 31, 1998 as compared to the year ended December 31,
1997. This was due to the increased level of capital expenditures for new
geo-scientific reports in the Caspian Sea region that were completed and placed
on the market during 1998. These reports are normally amortized over
approximately three years. Depreciation and amortization expense for the year
ended December 31, 1997 decreased approximately 60% compared to the 1996 period
such decrease was due to a final regular amortization of our 2D seismic library
to its residual carrying value made in 1996. Subsequent to December 31, 1996,
amortization charges to the 2D library were made on only the residual value of
the seismic library, which represents a 10% residual on the original full cost,
over a 15 year period which resulted in significantly lower amortization charges
than were previously made.



          During the three years ended December 31, 1998, we recognized gains
totaling approximately $1.4 million in connection with settlements and statutory
extinguishments of debt with certain trade creditors. These non-cash gains
occurred in connection with the decline of our 2D seismic brokerage activities
and were substantially offset by the associated product-line final regular
amortization costs of the 2D data library. These costs were shown as operating
costs. The final settlements and extinguishments are shown as extraordinary
items in the accompanying financial statements. We do not believe significant
gains or compromised amounts of this nature are likely to be realized in the
future, as these amounts resulted from the substantial elimination of our
operations in the domestic seismic brokerage business by the end of 1993.



          Interest expense increased in each of the last three years in
connection with the 6% Notes until they were converted into Common Stock and
warrants in March 1999. After 1993, due to the uncertainty of our ability to pay
amounts due for interest on our outstanding debt, interest was not accrued
ratably on any of our debt obligations, except for interest that was actually
paid. See Note 10 - Subsequent Events in the accompanying financial statements.



          LIQUIDITY AND CAPITAL RESOURCES. Our cash flow from operations was
$1,106,439, $540,742 and $347,181 for each of the three years ended 1998, 1997
and 1996 respectively. Cash flow from investing and financing was increased by
the exercising by our Chairman/Chief Executive Officer of his employee Stock
Options for 300,000 Common Shares at $0.20 per share in August 1998. Most of the
outgoing cash flow represented payments on our long-term debt. For the three
years 1998, 1997 and 1996, we had generated a total of $1,994,362 from operating
activities, of which we reinvested $1,477,943 in our business, netting available
cash flows of $516,419. We paid $825,143 on debt reduction during these three
years, which was $308,724 more than our net generated cash flow. Our line of
credit with our bank for $100,000 is secured by our Accounts Receivable, and has
an available amount of $100,000 as of December 31, 1999. Our Chairman/Chief
Executive Officer has personally guaranteed this line of credit, pending
completion of our restructuring.


          We had a working capital deficit at December 31, 1998 of approximately
$670,000. Of this, we expect to be able to settle liabilities included in the
current section of the accompanying balance sheet in the amount of approximately
$200,000 from non-cash transactions in the form of services or trades of
information.


          Expenditures on acquisition of data for resale were approximately
$765,000 and $81,000 in 1998 and 1997 respectively. We expect to fund capital
expenditures in the next 12 months through customer pre-commitments to any
approved new projects, prior to capital expenditures exceeding $25,000 on any
single project. Customer pre-commitments are pre-sale agreements that are made
by customers who have expressed an interest in the development of a specific
project that has not been yet developed. The pre-commitment allows us to
minimize our financial risk in developing projects.



         FORTESA's capital expenditures required by our contract for the THIES
   Block in the Republic of Senegal in phase one of the Petrosen farm-out are
   $5.4 million (90% of $6.0 million) for installation of a pipeline and
   drilling in the Gadiagas Field. The timing for FORTESA'S expenditures for the
   first three-quarters of 2000. As operator of this project, we are expending
   all of these funds into the Gadiaga Field.



         FORTESA and Petrosen are currently negotiating with the Ministry of
   Senegal to extend the time period for the second phase of the farm-out.


                                       17
<PAGE>


         We plan to complete construction of the gas delivery pipeline in the
second quarter of 2000, and realize cash flow from gas sales within 90 days of
the first gas transmission. Concurrent with the commencement of this cash flow,
we plan the drilling of two to five additional wells in 2000 and 2001. In order
to satisfy our obligations under the contract with Benton Oil and Gas, we must
raise or otherwise promote from new co-venturers the remaining $3.4 million of
the $5.4 million required to drill at least two wells before February 2001. We
plan to use a combination of cash flow from the production of the first well
discussed above, new capital from private or other sources, project financing or
capital from future co-venturers to fund the additional required wells. We
intend to fund further development of the Gadiaga gas field, as well as other
exploration on the THIES Block, in the same manner. We have no assurance that we
will be able to successfully obtain this financing on terms acceptable to us,
complete the project and realize continuing revenues from the gas supply
contracts. If we do not subsequently obtain the financing, we may lose our
investment in the project and still be liable for our commitments.



          We believe that cash flows from operations will be sufficient to fund
our working capital needs for the next 12 months, except for required
expenditures in conjunction with Oil and Gas development in the Republic of
Senegal, which will require additional financing. We are required to make these
expenditures in the second quarter of 2000 to stay on the schedule agreed to
with the government of Senegal. At the present time, we do not have the funding
secured to complete the pipeline installation project in Senegal. We are
negotiating with banks, guarantors, potential co-venturing partners and new
investors to secure funds necessary to install the pipe and start the cash flow
from the Gadiaga gas discovery well. Thereafter, we will seek funding for
drilling confirmation wells in the Gadiaga Field.


          See "FORTESA Acquisition" and "Recent Developments" in ITEM 1 for
possible future impacts to Liquidity and Capital Resources.

RECENT ACCOUNTING PRONOUNCEMENTS


          In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". The
Statement establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. The Statement requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate, and assess the effectiveness of transactions that receive
hedge accounting. Statement 133 is effective for fiscal years beginning after
June 15, 1999 and cannot be applied retroactively. Statement 133 must be applied
to (a) derivative instruments and (b) certain derivative instruments embedded in
hybrid contracts that were issued, acquired, or substantively modified after
December 31, 1997 (and, at our election, before January 1 1998). We have not,
and, are not engaging in hedging activities, and we do not buy or sell
derivative instruments. Therefore we do not believe that application of this
recent statement will have any effect on our consolidated financial statements.


YEAR 2000


We had no adverse consequences occur and no special expenses involved with the
transition of our computer systems and business into the year 2000.


IMPACT OF INFLATION AND CHANGING PRICES


          The general levels of exploration activity in the oil and gas industry
directly affect the cost of acquiring, processing and reselling geo-scientific
data and exploration and development costs of advancing our gas projects. The
pricing of our products and services and of the costs we must pay for
hydrocarbon development are primarily a function of these factors. For these
reasons, we do not believe inflationary trends have had any significant impact
on its financial operating results during the three years ended December 31,
1998. But management believes the large fluctuations in the worldwide
hydrocarbon product pricing during this period, and oil field services excesses
and shortages resulted in cost fluctuations that presented significant
challenges to us for planning the development of the Senegalese project, and our
cash flow management.



                                       18
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          Our exposure to market risk, including adverse changes in commodity
prices, interest rates and foreign currency exchange rates is discussed below.


          COMMODITY PRICE RISK. We have not produced revenues as of March 2000
related to sales of natural gas, crude oil, condensate and natural gas liquids.
We have no program in place to undertake to hedge our position with respect to
these commodities and does not originate or buy derivative type instruments.
However, to initially minimize price fluctuation risk factors of our gas
development project in Senegal, we agreed to a fixed price per MCF in our gas
supply agreement over the next two years with the power plant that is party to
such agreement.


          Fluctuations in hydrocarbon commodity prices could have a material
impact on the level of revenues in future periods.

INTEREST RATE RISK


          We have no variable rate debt, and therefore we have no open interest
"rate swap" or interest rate "lock agreements".


CURRENCY EXCHANGE RATES


          We conduct some of our business in British "pounds sterling", and in
"CFA" in the Republic of Senegal (the CFA is directly tied monetarily to the
French Franc which will be replaced by the "Euro" in the next year). Therefore
we are subject to foreign currency exchange rate risk on cash flows related to
sales, expenses, financing and investing transactions. Exposure from market rate
fluctuations related to activities in the Republic of Senegal, where the
Company's functional currency is the CFA, and in the United Kingdom, where the
Company's functional currency is British Pound Sterling, is not material at this
time, but future increases in the strength of the USA "dollar" could have a
negative effect on our revenues from international information license sales and
gas sales transactions.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          The financial statements and financial statement schedules required by
this Item are set forth on pages F1 through F28 hereof and incorporated herein
by reference.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

          NONE


                                       19
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

BOARD OF DIRECTORS


ROGERS E. BEALL, CHAIRMAN -- 52 years old. FIRST SEISMIC and its predecessors
have employed Mr. Rogers Beall continuously since February 1974 (26 years) Mr.
Rogers E. Beall has been on the Board of Directors continuously since April 1983
with terms of three years, or serving until replaced. Previously Mr. Beall was
employed for 3 years as the Comptroller of the NATIONAL AERONAUTICAL AND SPACE
ADMINISTRATION'S Slidell Louisiana Computer Center during the Skylab program.
Prior to that time, Arthur Andersen & Co employed him in their audit and tax
divisions in Cleveland Ohio for approximately 4 years. Mr. Beall received his
CPA certification in Ohio and Louisiana, and a Bachelor of Arts degree in
Business Administration, with a concentration in Accounting and a minor in
Economics from Baldwin-Wallace College in Berea, Ohio in 1969.



ALEXANDER E. BENTON, DIRECTOR -- 57 years old. Mr. Alexander E. Benton has
served on the Board of Directors since September 1990 for a period of three
years or serving until replaced. In 1988, he was a founder, and is a former
member of the Board of Directors. Mr. Benton is a former Executive Officer of an
affiliate of Benton Oil and Company, of Carpinteria, California, a NYSE listed,
international oil and gas operator. Previously he served as the President of
Benton Petroleum Company from 1985 to 1988. He began his career at Amoco
Production Company and ultimately became a `Director of Applied Geophysical
Research' at Amoco's research center in Tulsa Oklahoma. Mr. Benton also was
employed in senior positions with TransOcean Oil Co., May Petroleum and also
with MOBIL Oil Company. Mr. Benton has a Bachelor of Science degree in
Geophysics from California State University, and served the American Association
of Geologists as one of their AAPG Distinguished Lecturers in 1998.



EDWARD M. TRAPP, DIRECTOR -- 70 years old. Mr. Edward Trapp is a shareholder in
FIRST SEISMIC, owning 110,000 shares of Common Stock. Mr. Trapp serves on the
Audit and Compensation Committees of the Company and served on the Board of
Directors since October 1997 for a term of three years. Mr. Trapp worked as a
geophysical consultant from 1989 to present, and assists the Company in this
regard, as requested. From 1953 to 1989, Mr. Trapp was employed by AMOCO
Production in Europe and the USA, in varying responsible positions in
Geophysical Operations, ending his career at Amoco as the Regional Geophysicist
for the Europe, Latin America, and Far East Region. Mr. Trapp has a Bachelor of
Science degree in geophysics from St. Louis University, and is a veteran of the
U.S. Army from the Korean era.



ARTHUR O. BEALL, PH.D., DIRECTOR -- 63 years old. Dr. Arthur O. Beall (no
relation to Mr. Rogers E. Beall) was appointed to the Board of Directors in
October 1997 for a term of three years, and serves on the Audit and Compensation
Committees. Since 1994, Dr. Beall has worked as an international Oil and Gas
Consultant, and advisor to J. Ray McDermott Co., and to others. Since 1997, ELF
Exploration, Inc., of France has retained Dr. Beall as International Business
Development Advisor, in Houston. From 1989 to 1994, Dr. Beall was the
President/General Manager of British Gas (Americas) (formerly Tenneco
International) running an international exploration program with 450 employees
and working in Africa, Latin America, and the USA. Prior to 1989, Dr. Beall ran
international exploration programs for Tenneco Int'l, Hamilton Int'l Oil Co.
(VP) and CONOCO. Dr. Beall received his Ph.D in Geology from Stanford University
(1964), Master of Science degree in Management from M.I.T. (1976), and his
Master of Science degree and Bachelor of Science degree in Geology from Baylor
University where he completed his studies in 1961.



All directors of the board serve a three-year term.


EXECUTIVE OFFICERS

The current executive officers of the Company are:


ROGERS E. BEALL, CEO and Acting Chief Accounting Officer of FIRST SEISMIC and
President of FIRST EXCHANGE Corporation. Biographical information regarding
Rogers E. Beall is set forth above, under the Directors' section.



                                       20
<PAGE>

The following biographies describe the business experience of the remaining
executive officers:


HAYNE S. BLAKELY, PRESIDENT OF FORTESA -- 49 years old. Mr. Blakely joined
FORTESA on January 1, 1998. Previously he was the President of Quintana Minerals
(Peru), and served as Vice President of Operations and as a consultant for
Quintana Minerals Corporation in Houston for a total of eleven years. He began
his career in oil and gas industry in 1974 with Schlumberger, and then worked in
various engineering positions for AMOCO and Terra Resources. Later he served as
Vice President and partner of Pure Energy Production Company, and President and
owner of Blakely Engineering and Associates providing consulting services. Mr.
Blakely has a Bachelor of Science degree in Industrial Engineering from the
University of Tennessee and is a registered engineer in the state of Texas and
Kansas.



NICHOLAS E. ROCKECHARLIE, VICE PRESIDENT OF FINANCE --- 53 years old. Mr.
Rockecharlie is the Managing Director of Rockecharlie and Company, a merchant
banking firm he founded in 1979. Rockecharlie and Company has sponsored and/or
arranged a variety of transactions including leveraged buyouts,
recapitalizations, mergers, acquisitions and private equity placements. From
1984 - 1993 Mr. Rockecharlie organized and served as managing general partner of
Elisa Research Ltd., a Texas limited partnership engaged in medical diagnostic
research performed by leading virologists from the Baylor College of Medicine.
From 1977 - 1979, he was Vice President of Charter New York Leasing Corporation
(a unit of Irving Trust Company). Mr. Rockecharlie was Vice President of
Commercial Credit Capital Corporation responsible for institutional placement of
equity interests in leveraged leases arranged by the firm. In 1968 - 1971, Mr.
Rockecharlie served in the U.S. Army, graduated from the Infantry Officer
Candidate School at Ft. Benning, GA, and served in the Republic of Viet Nam. He
holds a Bachelor of Science Degree in Mathematics from Loyola College in
Baltimore and a Master of Administrative Science degree from Johns Hopkins
University.



WALTER H. WALNE, III, SECRETARY -- 52 years old. Mr. Walne is an attorney in
private practice. From 1980 to 1986, Mr. Walne was an officer and founding
director of Blackstone Oil Company, an exploration company. Mr. Walne's practice
is focused on energy industry related matters, including reserve based loan
document preparation for commercial banks; providing counsel to various
independent oil and gas producers engaged in domestic onshore and offshore
exploration and production operations regarding issues arising out of
acquisitions, operations, financing, administrative compliance, and operating
agreements. Mr. Walne holds a Bachelor of Arts degree in English from Princeton
University (1969), and a law degree from the University of Texas (1973). He
served in the United States Marine Corps Reserve from 1969 to 1975, obtaining
the rank of captain.


                                       21
<PAGE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE


          Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the directors, executive officers and persons who own
more than ten percent of the outstanding shares of Common Stock of the Company
to file initial reports of ownership and reports of changes in ownership (Forms
3, 4, and 5) of Common Stock with the Securities and Exchange Commission
Directors, executive officers and greater than ten percent stockholders are
required by the Securities and Exchange Commission regulation to furnish the
Company with copies of all such forms that they file.



          To the Company's, knowledge based solely on its review of the copies
of such reports received by it and on written representations by certain
reporting persons that no reports on Forms 3,4 and 5 were required, the Company
believes that during the fiscal year ending December 31, 1998, all Section 16(a)
filing requirements applicable to its directors, executive officers and ten
percent stockholders were complied with.


ITEM 11. EXECUTIVE COMPENSATION


          The following table summarizes, with respect to the cash compensation
paid by our subsidiary FIRST EXCHANGE Corporation to the chief executive
officer. No other executive officer received cash compensation in excess of
$100,000 in years 1996 through 1998.


SUMMARY COMPENSATION TABLE


<TABLE>
<CAPTION>
                                                   ANNUAL COMPENSATION             LONG-TERM                 ALL OTHER
                                                             (1)                  COMPENSATION            COMPENSATION (2)
                                             -------------------------------      ------------            ----------------
NAME AND PRINCIPAL POSITION                 FISCAL       SALARY       BONUS        SECURITIES
                                             YEAR                                  UNDERLYING
                                                                                OPTIONS (NUMBER)

<S>                                          <C>      <C>               <C>          <C>                     <C>
ROGERS E. BEALL, CEO OF FIRST SEISMIC        1998     $  105,000       -0-           300,000                 $   167
CORP, PRESIDENT OF FIRST EXCHANGE
CORPORATION

                                             1997     $   93,500       -0-            50,000                 $   951
                                             1996     $   71,500       -0-            50,000                 $ 3,782

HAYNE S. BLAKELY                             1998     $   90,000       -0-           105,000                  -0-
PRESIDENT OF FORTESA CORP
</TABLE>


(1)      During the years ending December 31, 1996, 1997 and 1998, perquisites
         for the individual named in the Summary Compensation Table aggregated
         less than 10% of the total annual salary and bonus reported for such
         individual in the Summary Compensation Table. Accordingly, no such
         amounts are included in the Summary Compensation Table.

(2)      Consists of matching contributions and Company contributions through
         its retirement plans, amounts paid under certain insurance plans and a
         transportation allowance.


(3)      Our Chief Executive/Chairman has an annually renewable employment
         contract that was executed in June 1990, calling for a base salary of
         $125,000 per year, plus discretionary bonuses. The Company has not paid
         the full amounts due to Mr. Beall in any year since 1992, and no
         bonuses have been paid. In December 1996 our Chairman purchased 253,790
         shares of Common Stock at $0.02 per share as part of an agreement
         whereby he also waived $253,790 of his salary. We benefited by $1.02
         per share in debt reduction plus cash saved from this transaction, for
         a total benefit to us of $258,866.


(4)      Our President of FORTESA has a contract which provides for an annual
         compensation of a minimum base salary of $90,000 plus an additional
         amount of up to $78,000 per year based on our net cash flow from
         petroleum operations, and his professional services for which we are
         able to invoice third parties. Mr. Blakely's contract is for three
         years until December 31, 2001. There are provisions for discretionary
         bonuses, plus earning 205,000 shares of the Company stock over the
         first two years of the contract.



                                       22
<PAGE>

STOCK OPTION GRANTS

          The following table sets forth certain information with respect to
stock option grants made to the Named Executive Officers during 1998 under the
Company's Stock Option Plan, (the "Stock Option Plan").

<TABLE>
<CAPTION>
                                         OPTION GRANTS IN LAST FISCAL YEAR
                                                      INDIVIDUAL GRANTS
                                                      -----------------
          NAME              NUMBER OF            % OF TOTAL          EXERCISE OF      EXPIRATION     POTENTIAL REALIZABLE VALUE
                           SECURITIES             OPTIONS            BASE PRICE          DATE          AT ASSUMED ANNUAL RATE
                           UNDERLYING       GRANTED TO EMPLOYEES       ($/SH)                              OF-STOCK-PRICE
                         OPTIONS GRANTED          IN 1998                                             APPRECIATION-FOR OPTION
                                                                                                              TERM (1)
<S>                          <C>                    <C>                 <C>              <C>             <C>            <C>

                                                                                                        5%             10%

Rogers E. Beall             300,000                60%                 $0.20            6/00           -0-            -0-
CEO and Chairman
</TABLE>


(1)       The dollar amounts under these columns represent the potential
          realizable value of each grant of options assuming that the market
          price of Common Shares appreciate in value from the date of grant at
          the 5% and 10% annual rates prescribed by the Securities and Exchange
          Commission and therefore is not intended to forecast possible future
          appreciation, if any, of the price of Common Shares.


1998 OPTION EXERCISES AND YEAR-END VALUE TABLE

          The following table sets forth for the Named Executive Officers in the
Summary Compensation Table above information regarding options held by them at
December 31, 1998.

<TABLE>
<CAPTION>
                                                            SECURITIES UNDERLYING           VALUE OF SECURITIES UNDERLYING
                                                         UNEXERCISED OPTIONS HELD AT         UNEXERCISED OPTIONS HELD AT
                                                              DECEMBER 31, 1998                 DECEMBER 31, 1998 (1)
                                                       --------------------------------- -------------------------------------
           NAME                SHARES     VALUE        EXERCISABLE     UNEXERCISABLE       EXERCISABLE         UNEXERCISABLE
                              ACQUIRED     REALIZED
                                 ON
                              EXERCISE
                              OF OPTION

<S>             <C>            <C>            <C>           <C>              <C>                <C>                  <C>
Rogers E. Beall (2)            300,000       -0-           -0-              -0-                -0-                  -0-
</TABLE>

(1)  (1) Computed based on the difference between aggregate fair market value
     and aggregate exercise price. The fair market value of the Common Stock on
     December 31, 1998 was based on the average of the high and low sales prices
     on the OTB Bulletin Board on the most recent date preceding December 31,
     1998 on which a sale of Common Stock occurred.

(2)  The value of the acquired shares was less than the exercise price.


                                       23
<PAGE>

COMMITTEES OF THE BOARD


          The Board has two standing committees the identities, memberships and
functions of which are described below.



          AUDIT COMMITTEE. The members of the Audit Committee of the Board are
Edward M. Trapp and Arthur O. Beall. The Audit Committee's functions include
making recommendations concerning the engagement of independent auditors,
reviewing with the independent auditors the plan and results of the auditing
engagement, approving professional services provided by the independent
auditors, and reviewing the adequacy of the Company's internal accounting
controls and reviewing our refinancing plans and strategies.



          COMPENSATION COMMITTEE. All of the outside directors are members of
the Compensation Committee. They are Edward M. Trapp, Alexander E. Benton and
Arthur O. Beall. The Compensation Committee's functions include a general review
of the Company's compensation and benefit plans to ensure that they meet
corporate objectives. The Compensation Committee reviews the Chief Executive
Officer's recommendations on (a) compensation of the senior executive officers
of the Company, (b) granting of awards under the Company's Stock Option and
other benefit plans and (c) adopting and changing major Company compensation
policies and practices. In addition to reviewing the compensation for the Chief
Executive Officer, the Compensation Committee reports its recommendations to the
whole Board for approval.


INFORMATION REGARDING MEETINGS


          The Board and the Audit Committee each held two meetings in 1998.
Compensation Committee issues were also discussed at each Board meeting and all
outside directors are members of the Compensation Committee. Each director
attended all of the meetings of the Board and of the committees (if any) on
which such person served.


EMPLOYEE STOCK OPTION PLAN


          In July 1990, the Company reserved 500,000 shares of Common Stock for
issuance under its Employee Stock Option Plan. All Incentive Stock Options
("ISO's") will be granted to employees at an exercise price of not less than the
fair market value of the stock on the date of grant. All Non-incentive Stock
Options ("NSO's") will be granted at an exercise price of not less than 85% of
the fair market value of the stock on the date of grant. The Company and the
Board's Compensation Committee, on February 3, 1998, re-assigned the entire
500,000 options from terminated employees to current employees of the Company.
The strike price was set at $0.20 per share. Of the 500,000 Options reassigned,
the Company's Chairman/Chief Executive Officer was granted Options for 300,000
or 60% of the total available. Due to the Company's liquidity requirements in
August 1998, the Chairman/Chief Executive Officer agreed to exercise all of his
options, thereby infusing $60,000 of cash into the Company. The remaining
200,000 Options are outstanding at December 31, 1998 and are issued to our
regular employees that have been employed by us for more than two years.


DIRECTOR STOCK OPTIONS


          In July 1990, we also reserved 150,000 shares of Common Stock for
issuance under its Directors' Stock Option Plan. All options will be granted to
non-employee directors at an exercise price of not less than the fair market
value on the date of grant. Each year, the directors are granted options to
purchase10,000 shares of Common Stock as compensation for their services.


DIRECTOR COMPENSATION


          In addition to the stock options discussed above, the directors were
paid 10,000 shares of Common Stock as compensation for their services. The
directors are reimbursed for all out of pocket expenses incurred in attending
any meeting of the Board or any committee thereof.


                                       24
<PAGE>

ITEM 12.  SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          The table below sets forth certain information, as of March 2000, with
respect to the Common Shares beneficially owned by (a) each person known by the
Company to own beneficially five percent or more of the outstanding shares of
Common Stock, (b) each director and nominee for director, (c) each of the
executive officers and (d) all directors, nominees for director and executive
officers as a group.

<TABLE>
<CAPTION>
                                                                SHARES OF COMMON STOCK OF            PERCENTAGE OF OUTSTANDING
NAME OF BENEFICIAL OWNER (1)                                FIRST SEISMIC BENEFICIALLY OWNED           SHARES OF COMMON STOCK
----------------------------                                --------------------------------           ----------------------

<S>                                                                 <C>                                         <C>
Rogers E. Beall,                                                    2,967,026 (2)(5)                            32.11%
Chairman and Chief Executive Officer

Edward M. Trapp, Director                                             152,500 (3)                                1.65%

Alexander E. Benton, Director                                          67,500 (4)                                 *

Arthur O. Beall, Ph.D.                                                 42,500 (3)                                 *

All directors and executive officers as a group
(7 persons)                                                         3,599,526                                   38.96%
</TABLE>

* Represents less than 1%.

(1)      Unless otherwise indicated, each person has sole voting power and
         investment power with respect to the shares of Common Stock listed.

(2)      Includes 100,000 shares underlying warrants exercisable at $.30 per
         share. The Beall Living Trust owns the remaining shares, the trustees
         of which are Rogers E. Beall and his spouse.

(3)      Includes 7,500 shares underlying Stock Options exercisable within 60
         days after December 31, 1998 at a strike price of $0.20 per share.
(4)      Includes 22,500 shares underlying Stock Options exercisable within 60
         days after December 31, 1998 at a strike price of $0.20 per share.
(5)      In addition Mr. Rogers E. Beall is the beneficial owner of 50,000
         shares of our Series A Preferred Stock which has future convertibility
         provisions into Common Stock as of March 31st, 200l. See ITEM 1,
         "Recent Developments for Terms of the Series A Convertible Preferred
         Stock."

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          Set forth below is a description of certain transactions entered into
between the Company and certain of its directors, nominees for director and
stockholders. We believe each of these below listed transactions were at least
as favorable to us as others that might have been secured in similar arms-length
transactions.

          During the period 1993 until 1996, the Chairman/Chief Executive
Officer of the Company had not received his contracted salary amount in cash
compensation due to cash liquidity problems. The unpaid salary was accrued. In
December 1996, the Chairman/Chief Executive Officer entered into an agreement to
purchase 253,790 shares of Common Stock at $0.02 cash per share and to forego
the $253, 790 compensation due him, for a total value increase to the Company of
$258,866. The accompanying financial statements reflect this agreement to forego
cash compensation, and to reflect the issuance of stock.

          In 1992, the Chairman/Chief Executive Officer of the Company agreed to
act as the general partner of a limited partnership formed to make investments
in oil and gas exploration, development, reserves, and to make financing
investments to facilitate portions of our business plan that were outside of our
financing capabilities. The 15 owners of this limited partnership consist of
certain our Shareholders and former Noteholders. FIRST SEISMIC also owns a
minority interest in the limited partnership which was granted in exchange for
data use positions extended by us to the limited partnership. The limited
partnership is engaged in leasing interests in East Texas with natural gas
prospects.


                                       25
<PAGE>


          In 1993, we sold one license for our East Texas data-set to the
limited partnership, prior to posting that data-set for sale for the benefit of
the Senior Noteholders, for consideration of $16,000 in cash and $84,000 upon
our successful promotion of the East Texas prospect(s) and receiving
reimbursement for seismic data costs from the promoted incoming partners. We
successfully leased the prospect but elected not to promote it until a 3D
seismic survey could be arranged over the prospect. In 1997, we arranged for a
3D seismic survey over this acreage that was interpreted in 1998 and indicated
only moderate commercial viability. Therefore, the $84,000 contingent receivable
is not reflected in the financial statements, and will be reported as a gain in
the year received from the Limited Partnership if we promote this first, or one
of the other prospects successfully with seismic costs reimbursed.



          On January 1, 1997, we issued 150,000 shares of our Common Stock at
par value to its Executive Vice President in exchange for all of the shares of
BLACKWELL SUPPPLY, Inc. BLACKWELL is used to conduct the domestic geophysical
activity of the Company, including its airborne remote sensing surveys. See Item
5 in PART II "Recent Sales of Unregistered Securities" for more details.


          We entered into a series of transactions in March 1999 with the
holders of our 6% Notes and our 12% Notes. Please refer to the section of this
report entitled "Recent Transactions" for a detailed discussion of these
transactions.


          In March of 1999, we acquired all of the shares of stock of F0RTESA
Corporation, a Texas Corporation ("FORTESA"), from its sole shareholder, Rogers
E. Beall who is our Chairman/Chief Executive Officer. Mr. Beall formed FORTESA
in May of 1997 for the purpose of acquiring certain oil and gas interests in the
country of Senegal. Prior to forming FORTESA, Mr. Beall presented this
development opportunity to our Board of Directors. After considering the
opportunity, we asked for a right of first refusal but were unable to invest in
the opportunity due to our deficit financial position at the time. Subsequent to
its formation, FORTESA entered into a joint venture with Benton Oil and Gas, a
Delaware corporation, ("BENTON") to develop these interests after having spent
considerable time and effort presenting the opportunity to over sixty (60) other
potential co-venturers. In February 1999, Mr. Beall again presented our Board
the opportunity to participate in the Senegal joint venture through the purchase
of FORTESA stock. Upon consideration of the prospects of the venture and the
potential return of the investment, the members of the Board, other than Mr.
Beall who did not take part in the meeting, voted to acquire all of the
outstanding shares of FORTESA in exchange for 50,000 shares of the Company's
Series A Preferred Stock and 8,055 shares of our Common Stock. We valued the
shares of the Company's Series A Preferred Stock at its liquidation value of
$1.00 per share and the shares of the Company's Common Stock at $0.02 per share,
the latest trade value on the OTC pink sheets of the bid price of our stock. The
value of the consideration at the time of the transaction was therefore equal to
$51,161. At the time, based on a market value of our Common Stock of $0.02 per
share and the initial conversion ratio of the Series A Preferred Stock of 10
shares of Common Stock to one share of Preferred Stock, the market value of the
transaction was $10,161. The members of the Board of Directors negotiated the
terms of this transaction directly with Mr. Beall and debated the individual
terms of the transaction outside of the presence of Mr. Beall.



         We believe each of these above listed transactions were at least as
favorable to us as others that might have been secured in similar arms-length
transactions.


                                       26
<PAGE>

ITEM 14. EXHIBITS. FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


<TABLE>
<CAPTION>
(A) EXHIBITS

         <S>      <C>
         2.1      Stock Purchase Agreement amongst FIRST SEISMIC Corporation and
                  The Beall Living Trust, dated as of March 29, 1999

         3.1      Certificate of Incorporation of FIRST SEISMIC Corporation, as
                  amended

         3.2      Bylaws of FIRST SEISMIC Corporation, as amended

         4.1      Form of Common Stock Certificate

         4.2      Series A Convertible Preferred Stock, Certificate of
                  Designation

         4.3      Series B Convertible Preferred Stock, Certificate of
                  Designation

         4.4      Form of Warrant - 1993 - $0.50 per share

         4.5      Form of Warrant - 1999 - $0.30 per share

         4.6      6% Notes purchase Agreement

         4.7      Loan Modification Agreement

         10.1     Senegal pre - 1999 Contract with Benton Oil and Gas (Senegal)
                  Ltd

         10.2     Revolving Credit Agreement

         10.3     Management Contract with Hayne Blakely

         10.6     Management Contract with Rogers Beall 10.6 Directors' Stock
                  Option Plan

         10.7     October 1999 Agreement with Benton Oil and Gas (Senegal) Ltd

         10.8     Assignment and Release with Benton Oil and Gas (Senegal) Ltd

         10.9     Registration Rights Agreement for Benton Oil and Gas (Senegal)
                  Ltd 11.0 Statement Regarding Computation of Earnings Per Share

         21.0     List of Subsidiaries of the Company

         27.1     Financial Data Schedule
</TABLE>



                                       27
<PAGE>



                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report on Form 10-K to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Houston, State of Texas, on the 14th of April, 2000.


                                            FIRST SEISMIC CORPORATION

                                       By:
                                          ------------------------------------
                                            ROGERS E BEALL

                                            President, Chief Executive Officer
                                            Principal Accounting Officer


Pursuant to the requirements of the Securities Act of 1934, the following
persons in their official capacities and on the date indicated have signed this
Report on Form 10-K below.


<TABLE>
<CAPTION>
          SIGNATURE                                  TITLE                         DATE
          ---------                                  -----                         ----

<S>                                                <C>                       <C>
                                                   Chairman                  April 4, 2000
---------------------------------
ROGERS E. BEALL

                                                   Director                  April 4, 2000
---------------------------------
ALEXANDER E. BENTON

                                                   Director                  April 4, 2000
---------------------------------
EDWARD M. TRAPP

                                                   Director                  April 4, 2000
---------------------------------
ARTHUR O. BEALL
</TABLE>

                                       28

<PAGE>


                   FIRST SEISMIC Corporation and Subsidiaries

                                    INDEX TO

                        CONSOLIDATED FINANCIAL STATEMENTS

                      DECEMBER 31, 1998, 1997, 1996 & 1995
<TABLE>

<S>                                                                             <C>
Independent Auditors Report ..................................................   F-2

Consolidated Balance Sheets as of
     December 31, 1998, 1997, 1996, 1995 .....................................   F-3

Consolidated Statements of Income and Comprehensive Income for the years ended
     December 31, 1998, 1997, 1996, 1995 .....................................   F-4

Consolidated Statements of Stockholders' Equity as of
     December 31, 1998, 1997, 1996, 1995 .....................................   F-5

Consolidated Statements of Cash Flows for the years ended
     December 31, 1998, 1997, 1996, 1995 .....................................   F-6

Notes to Consolidated Financial Statements
     December 31, 1998, 1997, 1996, 1995 .....................................   F-7
</TABLE>


<PAGE>


                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
FIRST SEISMIC Corporation and Subsidiaries
Houston, Texas

We have audited the accompanying consolidated balance sheets of FIRST SEISMIC
Corporation and Subsidiaries as of December 31, 1998, 1997, 1996 and 1995, and
the related consolidated statements of operations, changes in stockholders'
equity (deficit) and cash flows for the years then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of FIRST SEISMIC
Corporation and Subsidiaries at December 31, 1998, 1997, 1996 and 1995, and the
results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

As discussed in Note 1, the Company has a substantial working capital deficit.

/s/ Harper & Pearson Company

Houston, Texas
October 22, 1999

                                      F-2

<PAGE>




                                      FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                                     CONSOLIDATED BALANCE SHEETS
                                      AS OF DECEMBER 31, 1998, 1997, 1996 & 1995
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

<S>                                                         <C>          <C>          <C>          <C>
ASSETS ..............................................       1998         1997         1996         1995
                                                        ----------   ----------   ----------   ----------

CURRENT ASSETS

Cash ................................................   $  169,487   $  184,186   $  209,999   $  439,818
Accounts receivables, trade, net ....................      385,568      491,768      450,035      895,571
Due from FORTESA ....................................       25,304       30,806           -0-          -0-
                                                         ----------   ----------   ----------   ----------

TOTAL CURRENT ASSETS ................................      580,359      706,760      660,034    1,335,389

Data library, net (Notes 1 and 2) ...................    2,462,964    2,117,109    2,257,401    2,513,319
Data and agency use position, net (Notes 1 and 2) ...       23,185       26,435       41,232      155,144
Property and equipment, net (Notes 1 and 2) .........       52,983       45,705       47,620       43,209
Investment in oil and gas prospects, at cost (Note 1)      170,710      178,630      102,025      102,025
Other assets ........................................       40,384       42,670       37,232       31,655
                                                         ----------   ----------   ----------   ----------

TOTAL ASSETS ........................................   $3,330,585   $3,117,309   $3,145,544   $4,180,741
                                                        ==========   ==========   ==========   ==========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

Current portion of long-term debt (Note 3) ..........  $       -0-   $  175,321   $  751,178   $  679,490
Accounts payable, trade .............................    1,083,581      671,286      470,951    1,719,196
Accrued expenses ....................................      148,431       60,199       39,217       35,901
Accrued compensation ................................       17,408       10,000       10,000      263,790
Unearned Income .....................................          -0-       56,888          -0-          -0-
                                                         ----------   ----------   ----------   ----------

TOTAL CURRENT LIABILITIES ...........................    1,249,420      973,694    1,271,346    2,698,377

Long-term debt (Note 3) .............................    1,442,674    1,613,919    1,375,607    1,715,607
Data use payables, net ..............................       73,810      112,739      186,746      101,399
Reserve for potential liabilities (Note 1) ..........         --        150,000      300,000      300,000
                                                         ----------   ----------   ----------   ----------

TOTAL LIABILITIES ...................................    2,765,904    2,850,352    3,133,699    4,815,383
                                                         ----------   ----------   ----------   ----------

COMMITMENTS (NOTE 6)

STOCKHOLDERS' EQUITY (DEFICIT) (NOTE 4)
Preferred stock, $1.00 par value,1,000,000 shares
authorized; no shares issued or outstanding
Common stock, voting, $.01 par value, 10,000,000
shares authorized; 5,776,865, 5,365,365, 5,115,365
and 4,861,575 shares issued and 5,733,010, 5,321,510,
5,071,510 and 4,817,720 shares outstanding at
December 31, 1998, 1997, 1996 and 1995, respectively        57,769         53,654         51,154         48,616
Additional paid-in capital .........................     9,531,278      9,470,893      9,371,893      9,115,565
Retained earnings (deficit) ........................    (8,947,083)    (9,186,816)    (9,345,848)    (9,733,469)
Foreign currency translation adjustments ...........       (11,929)        (5,420)           -0-            -0-
Less treasury stock, 43,855 shares at cost .........       (65,354)       (65,354)       (65,354)       (65,354)
                                                       -----------    -----------    -----------    -----------

TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ...............       564,681        266,957         11,845       (634,642)
                                                       -----------    -----------    -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                       $ 3,330,585    $ 3,117,309    $ 3,145,544    $ 4,180,741
                                                       ===========    ===========    ===========    ===========
</TABLE>


                                      F-3


<PAGE>



                                      FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                       FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, 1996 & 1995

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

<TABLE>
<CAPTION>

                                                                       YEAR ENDED DECEMBER 31,
                                                          1998           1997           1996           1995
                                                      -----------    -----------    -----------    -----------
<S>                                                <C>            <C>            <C>            <C>
REVENUE (Note 2)
Company owned Geophysical .......................   $   149,750    $   236,244    $   188,569    $   556,395
Company owned Geological ........................     1,294,646        699,732        412,856        245,333
Net revenue interest ............................        89,889        216,870        159,486        148,938
Brokerage of third party Geophysical ............       694,474        378,009        672,853      1,301,124
Brokerage of third party Geological .............       406,981        449,882        649,343        287,028
Commissions .....................................        54,002        270,063         35,734         55,330
Reproduction and other ..........................       274,688        119,572        112,353        150.819
                                                    -----------    -----------    -----------    -----------

TOTAL REVENUE ...................................  $  2,964,430      2,370,372    $ 2,231,194   $  2,744,967
                                                    -----------    -----------    -----------    -----------

COST OF SALES ...................................     1,454,145      1,120,119      1,018,708      1,456,953
                                                    -----------    -----------    -----------    -----------

GROSS MARGIN ....................................     1,510,285      1,250,253      1,212,486      1,288,014
                                                    -----------    -----------    -----------    -----------

OPERATING EXPENSES

Selling, general and administrative expenses ....     1,056,397        949,968        953,411      1,247,285
Depreciation and amortization (Note 1) ..........       447,294        295,240        753,877      1,018,044
                                                    -----------    -----------    -----------    -----------

TOTAL OPERATING EXPENSES ........................     1,503,691      1,245,208      1,707,288      2,265,329
                                                    -----------    -----------    -----------    -----------

Net operating income ............................         6,594          5,045       (494,802)      (977,315)
                                                    -----------    -----------    -----------    -----------

OTHER (INCOME) AND EXPENSES

Interest expense (Note 3) .......................        42,293         25,458         12,247         14,213
Interest income .................................        (3,857)        (2,121)        (2,388)          (928)
Other income ....................................        (1,006)           -0-            -0-            -0-
Settlements/Liability extinguishments (Note 1) ..      (305,489)      (177,324)      (925,178)    (1,755,554)
Other expense ...................................        34,920            -0-         32,896            824
                                                    -----------    -----------    -----------    -----------

TOTAL OTHER (INCOME) AND EXPENSES ...............      (233,139)      (153,987)      (882,423)    (1,741,445)
                                                    -----------    -----------    -----------    -----------

NET INCOME ......................................   $   239,733    $   159,032    $   387,621    $   764,130
                                                    ===========    ===========    ===========    ===========

COMPREHENSIVE INCOME
FOREIGN CURRENCY TRANSLATION

ADJUSTMENTS .....................................        (6,509)        (5,420)           -0-            -0-

COMPREHENSIVE INCOME ............................   $   233,224    $   153,612    $   387,621    $   764,130
                                                    ===========    ===========    ===========    ===========

NET INCOME PER SHARE  (Note 12) .................   $      0.04    $      0.03    $      0.08    $      0.16
                                                    ===========    ===========    ===========    ===========


  WEIGHTED NUMBER OF SHARES USED IN

COMPUTING NET INCOME (LOSS) PER SHARE ...........     5,552,869      5,251,647      5,071,510      4,817,720
                                                      ===========    ===========    ===========    ===========
</TABLE>


                                      F-4

<PAGE>





                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                        FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, 1996 & 1995
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                            FOREIGN
                                                   ADDITIONAL       RETAINED      CURRENCY                                 TOTAL
                                COMMON STOCK        PAID-IN         EARNINGS     TRANSLATION     TREASURY STOCK            EQUITY
                             SHARES    PAR VALUE     CAPITAL       (DEFICIT)     ADJUSTMENTS    SHARES        COST        (DEFICIT)
                             ------    ---------     -------       ---------     -----------    -----         ----       ---------

<S>                     <C>         <C>           <C>           <C>            <C>            <C>         <C>           <C>
BALANCE,
DECEMBER 31, 1994 ..     4,861,575   $    48,616   $ 9,115,565   $(10,497,599)   $   --         43,855      $ 65,354)   $(1,398,772)
NET INCOME                    --            --            --         764,130         --             --          --          764,130
                       -----------   -----------   -----------   -----------    -----------    -----------  ---------    -----------

BALANCE,
DECEMBER 31, 1995 ..     4,861,575        48,616     9,115,565    (9,733,469)        --         43,855       (65,354)      (634,642)

STOCK ISSUE TO
OFFICER FOR
SERVICES                   253,790         2,538       256,328          --           --             --          --          258,866

NET INCOME                    --            --         387,621          --           --             --       387,621
                       -----------   -----------   -----------   -----------    -----------    -----------   ---------     ---------

BALANCE,
DECEMBER 31, 1996 ..     5,115,365        51,154     9,371,893    (9,345,848)        --           43,855     (65,354)        11,845

STOCK ISSUE IN
SETTLEMENT OF
DEBT                       100,000         1,000        99,000          --           --             --          --          100,000

STOCK ISSUE TO
PURCHASE
BLACKWELL                  150,000         1,500          --            --           --             --          --            1,500

TRANSLATION
ADJUSTMENT                    --            --            --            --       (5,420)            --          --           (5,420)

NET INCOME                    --            --            --         159,032         --             --          --          159,032
                       -----------   -----------   -----------   -----------   -----------    -----------    ---------    ---------

BALANCE,
DECEMBER 31, 1997 ..     5,365,365        53,654     9,470,893    (9,186,816)    (5,420)        43,855       (65,354)       266,957

EXERCISE OF EMPLOYEE
STOCK OPTIONS BY
OFFICER                    300,000         3,000        57,000          --           --             --          --           60,000

STOCK ISSUED
FOR SERVICES               111,500         1,115         3,385          --           --             --          --            4,500

TRANSLATION
ADJUSTMENT                    --            --            --            --       (6,509)            --          --           (6,509)

NET INCOME                    --            --            --         239,733         --             --          --          239,733
                       -----------   -----------   -----------   -----------     --------      ----------   ----------    ----------

BALANCE,
DECEMBER 31, 1998 ..     5,776,865   $    57,769   $ 9,531,278   $(8,947,083)  $(11,929)        43,855   $   (65,354)   $   564,681
                       ===========   ===========   ===========   ===========   ==========    ===========   ===========   ==========
</TABLE>


                                      F-5
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            DECEMBER 31, 1998, 1997, 1996 & 1995
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                           1998           1997           1996           1995
                                                        -----------    -----------    -----------    -----------
<S>                                                     <C>            <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income                                              $   239,733    $   159,032    $   387,621    $   764,130
                                                        -----------    -----------    -----------    -----------
Adjustments to reconcile net income to net cash
Provided by operating activities:
Depreciation and amortization (Note 1)                      447,294        295,240        753,877      1,018,044
Net change in allowance for doubtful accounts               124,481            -0-            -0-            -0-
Settlements/liability extinguishments (Note 1)             (155,489)       (27,324)      (925,178)    (1,755,554)
Reserve for potential liabilities (Note 1)                 (150,000)      (150,000)           -0-        300,000
Reduction in carrying value of oil and gas investment        34,920            -0-            -0-            -0-
Stock issued as compensation                                  4,500            -0-          5,075            -0-
Changes in operating assets and liabilities:
   Accounts receivable, trade                               (18,281)       (41,733)       445,536       (272,663)
   Other current assets                                         -0-            -0-            -0-            700
   Accounts payable, trade                                  540,529        227,657       (323,066)       529,318
   Accrued expenses                                          88,232         20,982          3,316         (2,968)
   Accrued compensation, officer (Note 5)                     7,408            -0-            -0-         65,190
   Unearned Income                                          (56,888)        56,888            -0-            -0-
                                                        -----------    -----------    -----------    -----------

TOTAL ADJUSTMENTS                                           866,706        381,710        (40,440)      (117,933)
                                                        -----------    -----------    -----------    -----------

NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES           1,106,439        540,742        347,181        646,197
                                                        -----------    -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of other assets                                     -0-        (34,744)       (10,075)       (10,000)
Disposition of other assets                                  15,786            -0-          4,500            -0-
Acquisition of property and equipment                       (19,444)       (18,146)       (17,980)       (20,990)
Acquisition of data library                                (765,793)        81,006)      (378,000)        60,000
Investment in oil and gas prospects                             -0-        (76,605)           -0-       (102,017)
Acquisition of data and agency use positions                    -0-            -0-            -0-        (25,000)
Dispositions of data library                                    -0-            -0-          7,522            -0-
Increase/(Decrease) in data use payables                    (70,794)      (118,510)        85,346         13,247
                                                        -----------    -----------    -----------    -----------

NET CASH USED BY INVESTING ACTIVITIES                      (840,245)      (329,011)      (308,687)       (84,760)
                                                        -----------    -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES

Restricted stock issued                                      60,000            -0-            -0-            -0-
Payments to FORTESA                                         (21,607)           -0-            -0-            -0-
Borrowings on line of credit                                693,000            -0-            -0-            -0-
Payments on line of credit                                 (693,000)           -0-            -0-            -0-
Principal payments on long-term debt                       (319,286)      (237,544)      (268,313)      (233,966)
                                                         -----------    -----------    -----------    -----------

NET CASH USED BY FINANCING ACTIVITIES                      (280,893)      (237,544)      (268,313)      (233,966)
                                                        -----------    -----------    -----------    -----------

NET INCREASE (DECREASE) IN CASH                             (14,699)       (25,813)      (229,819)       327,471

CASH AT BEGINNING OF YEAR                                   184,186        209,999        439,818        112,347
                                                        -----------    -----------    -----------    -----------

CASH AT END OF YEAR                                     $   169,487    $   184,186    $   209,999    $   439,818
                                                        ===========    ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOWINFORMATION:

CASH PAID FOR INTEREST                                  $    42,293    $    25,488    $    12,247    $    14,213
                                                        ===========    ===========    ===========    ===========

</TABLE>



                                      F-6
<PAGE>



                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------


NOTE 1        SUMMARY OF ACCOUNTING POLICIES

              The reporting entity in these financial statements consists of
              FIRST SEISMIC Corporation ("FIRST"), its three wholly-owned
              subsidiaries: FIRST EXCHANGE Corporation ("FEC"), First Exchange
              Limited ("FEL") and BLACKWELL SUPPLY, Inc., d.b.a. BLACKWELL
              TRADING, Inc. ("BTI") collectively referred to as the Company.
              FIRST, FEC and BTI are incorporated in the State of Delaware. FEL
              is a United Kingdom Corporation. The Company originates, markets,
              and owns domestic geophysical and international geological
              information for licensing to oil and gas exploration companies.
              The Company's customers are primarily located in the United States
              and Western Europe, and its suppliers are primarily major oil
              companies, national government oil companies, or independent
              geo-scientific consulting firms and oil service providers.

              The Company acquired 100% of the stock of its former 75% net
              revenue interest affiliate, BLACKWELL SUPPLY, Inc., effective
              January 1, 1997 for issuance of stock (See Note 5).

              The Company went public in September 1990, however the last 10-K
              filed with the Securities and Exchange Commission ("SEC") was for
              the period ending December 31, 1991. Currently, the Company is not
              in compliance with SEC requirements for filing and reporting.
              However, the Company intends to become current with all SEC
              requirements as soon as practicable.

              PRINCIPLES OF CONSOLIDATION

              The consolidated financial statements include the accounts of
              FIRST, FEC, BTI and FEL. All material intercompany accounts and
              transactions have been eliminated in consolidation.

              ESTIMATES

              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.

                                      F-7

<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------


NOTE 1        SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

              CONCENTRATIONS OF CREDIT RISK


              Financial instruments, which potentially subject the Company to
              concentrations of credit risk, consist principally of trade
              receivables and cash. The Company places its cash with high credit
              quality financial institutions. Generally, no collateral or other
              security is required to support customer receivables. To reduce
              credit risk, a customer's credit history is reviewed before
              extending credit. In addition, an allowance for doubtful accounts
              is established as needed based upon factors surrounding the credit
              risk of specific customers, historical trends, and other
              information. Management has established an allowance for doubtful
              accounts at December 31, 1998 in the amount of $124,481. There was
              no allowance as of December 31, 1997, 1996 and 1995. During 1998,
              47% of revenues were attributable to four customers.


              CASH

              The Company has an interest bearing account primarily dedicated
              for payments to the 12% Senior Noteholders. In addition to other
              uses, the Company has used this account to deposit funds earned by
              the Company from the sale of certain licenses of Company owned
              data or revenue interest payments, pending disbursements to the
              Senior Noteholders. Payments to these Noteholders have been
              periodically made when sufficient levels of cash have accumulated
              to justify disbursement. Cash pledged for payment to the Senior
              Noteholders held in this account at December 31, 1998, 1997, 1996
              and 1995 was $11,786, $93,357, $27,024 and $50,143, respectively.
              The amounts were subsequently disbursed by the Company pro rata to
              each of the 12% Senior Noteholders.

              Cash and cash equivalents consist of demand deposits and money
              market funds and other unrestricted liquid investments held at
              depository institutions with maturity of three months or less.

              DATA LIBRARY

              The costs included in Data Library represent company owned seismic
              data, net revenue interests in seismic data previously owned and
              sold to third parties, and geo-scientific reports. The Company
              capitalizes third party costs plus internal direct costs loaded
              with overhead relating to the acquisition of the Data Library.
              Amortization of these costs commences as soon as a new project is
              completed.

                                      F-8

<PAGE>

                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------


NOTE 1        SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

              Seismic costs are amortized over the greater of the estimated
              volume of anticipated revenues that the Company expects to realize
              from the licensing of its Company owned seismic data or a five
              year period with a (10%) ten percent residual value using the 150%
              declining balance method. In 1992, the Company's investment in its
              Data Library had a residual value of $2,653,290. Beginning in
              1992, the Company elected to amortize the residual balances on a
              straight-line basis over a fifteen-year period. The residual value
              amortization amounted to $176,886 for each of the years ending
              December 31, 1998, 1997, 1996, and 1995.

              Net revenue interest in seismic data previously owned and sold to
              third parties is amortized over a five-year period with no
              residual value using the 150% declining balance method.

              The Company's ownership interest in geo-scientific reports is
              amortized over three years to a ten-percent residual value. The
              amortization during the three-year period is the greater of 4.5%
              per sale up to 20 licenses or 2.5% per month cumulative minimum.
              The residual value is then amortized over 15 years on a
              straight-line basis.

              DATA AND AGENCY POSITIONS

              Data and agency positions include Seismic Data Rights and agency
              agreements with certain foreign governments. The Company
              capitalizes third party costs plus an allocation of internal
              overhead costs relating to the acquisition of data and agency
              positions.

              Data Use Rights represent the value of data that the Company has
              to use or has to give to others regarding the license of seismic
              data relative to third parties. Such rights were obtained or are
              owned primarily by trade of the use of seismic data or of services
              provided by the Company.

              Agency agreements represent the Company's costs of organizing
              third parties' data and opportunities into marketable products or
              promotion for fees to energy companies on a multi client basis.
              Such costs are amortized over five years, or written off if the
              Company concludes the relationship has no future earning value.

              PROPERTY AND EQUIPMENT

              Property and equipment are recorded at cost. Depreciation of
              property and equipment is provided using accelerated methods over
              the estimated useful lives of three to five years.



                                      F-9
<PAGE>

                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 1        SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

              INVESTMENT IN OIL AND GAS PROSPECTS

              In 1993, the Company initiated efforts and agreements to earn
              interests in oil and gas reserves in both the domestic and the
              international arena by organizing and promoting acreage and
              opportunities, and by using its information to obtain rights for
              hydrocarbon reserve ownership. As of 1997, the Company has
              positions in East Texas (See Note 5), Kansas and Guinea-Bissau,
              West Africa. The necessary investment to advance these positions
              had either been raised from third parties, thus carrying the
              Company on a portion of the exploration results, or the acreage
              has been analyzed and leased for exploration rights which include
              the Company. The Company owns the "right of first refusal' to
              acquire a similar and more presently significant interest in
              Senegal, West Africa (See Note 10).

              These investments are accounted for at cost as the Company holds a
              minor ownership interest. At December 31, 1998, the Company wrote
              down one prospect by $34,920 due to a decline in fair value. The
              Company's cost basis in these investments totaled approximately
              $170,710. During 1998, two wells in Kansas began producing with
              cash distributions expected to begin after drilling costs are
              paid.

              STANDARD MEASURE

              Standardized measure of discounted future net cash flows relating
              to proven oil and gas reserves. The accompanying table presents a
              standardized measure of discounted future net cash flows relating
              to the production of the Company's estimated proved oil and gas
              reserves at the end of 1998. The method of calculating the
              standardized measure of discounted future net cash flows is as
              follows:

              (1)     Future cash inflows are computed by applying year-end
                      prices of oil and gas to the Company's year-end quantities
                      of proven oil and gas reserves. Future price changes are
                      considered only to the extent provided by contractual
                      arrangements in existence at year-end.

              (2)     Future development and production costs are estimates of
                      expenditures to be incurred in developing and producing
                      the proven oil and gas reserves at year-end, based on
                      year-end costs and summing continuation of existing
                      economic conditions.

              (3)     Future income tax expenses are calculated by applying the
                      applicable statutory Federal income tax rate to future
                      pretax net cash flows. The Company anticipates no expense
                      due to a substantial NOL carry forward.

              (4)     The discount, calculated at ten percent per year, reflects
                      an estimate of the timing of future net cash flows to give
                      effect to the time value of money.

                                      F-10

<PAGE>
                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 1        SUMMARY OF ACCOUNTING POLICIES (CONTINUED)


<TABLE>
<CAPTION>
              STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET
              CASH FLOWS RELATING TO PROVED OIL AND GAS RESERVES          DECEMBER 31, 1998           DECEMBER 31, 1997
              --------------------------------------------------          -----------------           -----------------
                                                                            (In Thousands)             (In Thousands)

<S>                                                                         <C>                    <C>
              Future cash inflows proved shut-in reserves                   $-0-                   $    -0-
              Future cash inflows proved undeveloped reserves                         -0-                         -0-
                                                                            -------------               -------------
              TOTAL FUTURE CASH FLOWS                                       $         -0-               $         -0-

              Future production costs                                       $         -0-               $         -0-
              Future development costs                                                -0-                         -0-
              Future income tax expenses [see (3) above]                              -0-                         -0-
                                                                            -------------               -------------
              FUTURE NET CASH FLOWS                                         $         -0-               $         -0-

              10% annual discount for estimated timing of cash flows                  -0-                         -0-
                                                                            -------------               -------------
              STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH

              FLOWS RELATING TO PROVEN OIL AND GAS RESERVES                 $         -0-               $         -0-
                                                                            =============               =============
</TABLE>


              INCOME TAXES

              The Company uses the balance sheet approach for recording deferred
              taxes. The balance sheet approach accounts for deferred income
              taxes by applying statutory tax rates in effect at the balance
              sheet date to differences between the book basis and the tax basis
              of assets and liabilities. The resulting deferred tax assets and
              liabilities are adjusted to reflect changes in tax law or rates.

              The Company and its wholly owned U.S. subsidiaries file a
              consolidated federal income tax return.

              OPERATIONS


              The Company would have experienced losses in all of the periods
              covered by these statements, had it not successfully obtained
              settlements and liability extinguishments from amounts originating
              from its former USA domestic seismic brokerage operations. As of
              December 31, 1998, current liabilities exceeded current assets by
              $669,061.


                                      F-11

<PAGE>
                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------



NOTE 1        SUMMARY OF ACCOUNTING POLICIES (CONTINUED)


              The Company's trade payables are reviewed periodically to
              determine the requirement for payment. Due to the Company's
              liquidity crisis since 1992 resulting from the loss of commercial
              viability of the domestic 2D seismic licensing business, the
              Company ended many related contracts and operations. Payables from
              discontinued contracts over four years in age with no
              correspondence, negotiations or payments involving the vendor
              during the four year period for the particular payable in question
              exceed the Statute of Limitations whereby such accounts payable
              may be enforceable and have been written down by the Company.
              Formal settlements of liabilities resulting in reduced payment
              requirements were also recorded in this settlements/gain account
              and not against regular operations. At December 31, 1998, the
              Company anticipates no further settlement gains resulting in trade
              payables for which the Statute of Limitations will expire.


              During 1995 the Company established a $300,000 reserve for
              liabilities which had been written off in prior periods but which
              could possibly have been subject to future collection efforts by
              the creditors involved. Management subsequently determined that
              this reserve was no longer required as no such liabilities became
              known, nor were any asserted over the passage of time. Accordingly
              the reserve was decreased to $150,000 at December 31, 1997, and
              eliminated at December 31, 1998.

              REVENUE RECOGNITION


              Gross revenues for Company owned information (Data Library) is
              recognized when the information is transmitted to clients. Any
              related expenses incurred as results of data licensing, such as
              commissions or revenue sharing arrangements, are expensed at the
              time revenues are recognized. In instances where the Company owns
              only a revenue interest in seismic data, then only the Company's
              net proceeds are recorded as revenue. The Company changed its
              accounting procedures effective January 1, 1998 to align itself
              with SEC policy. The effect was to allow the recognition of
              revenues when the materials licensed were completed products and
              available for delivery by the Company, but held temporarily at the
              request of the customer. This new policy would have had no impact
              on the 1995, 1996, or 1997 financial statements. In 1998, $36,000
              of revenues were recognized for data available for delivery but
              not picked up by the customer at year-end.


              Third Party Data revenues are recognized when the information is
              transmitted to the clients. The Company assists certain of its
              clients in qualifying their seismic data licensing and trading
              transactions as "like kind exchange" transactions qualifying for
              non-recognition of gain under Section 1031 of the Internal Revenue
              Code.

                                      F-12

<PAGE>
                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------



NOTE 1        SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

              Commission revenues are generated when the Company serves only as
              an agent for licensing geo-scientific information owned by another
              company. Commission revenues are recognized on a pro rata basis as
              the completion of such firm orders progress.

              Reproduction and other revenue are recognized as the service is
completed.

              NET INCOME (LOSS) PER SHARE

              Net income (loss) per share is computed by dividing net income
              (loss) by the common and common equivalent shares considered
              outstanding during each period. Equivalent shares issuable under
              Stock Options are determined using the treasury stock method.
              There is no difference between basic and fully diluted earnings
              per share for all periods presented.

NOTE 2        SELECTED FINANCIAL STATEMENT INFORMATION


<TABLE>
<CAPTION>

All intangible and tangible assets are
recorded at cost                             1998               1997            1996                1995
                                             ----               ----            ----                ----

<S>                                      <C>               <C>               <C>               <C>
DATA LIBRARY:
Company owned seismic data               $ 26,659,117      $ 26,585,533      $ 26,545,505      $ 26,545,505
Net revenue interest                       12,296,044        12,296,044        12,296,044        12,296,044
Geoscientific reports                       1,312,847           576,978           536,000           166,282
Less accumulated amortization             (37,805,044)      (37,341,446)      (37,120,148)      (36,494,512)
                                          -----------       -----------       -----------       -----------

DATA LIBRARY, NET                           2,462,964      $  2,117,109         2,257,401         2,513,319
                                            ---------      ------------         ---------         ---------

AGENCY USE POSITIONS:
Agency agreements                        $    255,983           255,983           255,983           255,983
Less accumulated amortization agency
agreements                                   (232,798)         (229,548)         (214,751)         (100,839)
                                             --------          --------          --------          --------

AGENCY USE POSITIONS, NET                      23,185            26,435            41,232           155,144

PROPERTY AND EQUIPMENT:
Office furniture and equipment           $    126,138            94,564            76,418            58,438
Less accumulated depreciation                 (73,155)          (48,859)          (28,798)          (15,229)
                                              -------           -------           -------           -------

PROPERTY AND EQUIPMENT, NET              $     52,983      $     45,705      $     47,620      $     43,209
                                         ============      ============      ============      ============
</TABLE>



                                      F-13
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------


NOTE 2        SELECTED FINANCIAL STATEMENT INFORMATION (CONTINUED)


<TABLE>
<CAPTION>

                                               1998              1997            1996              1995
                                               ----              ----            ----              ----
<S>                                      <C>              <C>              <C>              <C>
DATA USE PAYABLES/(RECEIVABLES), NET:
Data use payables                        $   233,854      $   282,112      $   360,118      $   274,771
Seismic data rights                         (776,317)        (798,715)        (798,715)        (798,715)
Less valuation allowance,                    616,273          629,342          625,343          625,343
                                             -------          -------          -------          -------
seismic data rights

DATA USE PAYABLES/(RECEIVABLES), NET          73,810          112,739          186,746          101,399
                                              ------          -------          -------          -------


REVENUES:
Company owned Geophysical                    149,750          236,244          188,569          556,395
Company owned Geological                   1,294,646          699,732          412,856          245,333
Net revenue interest                          89,889          216,870          159,486          148,938
Brokerage of third party Geophysical         694,474          378,009          672,853        1,301,124
Brokerage of third party Geological          406,981          449,882          649,343          287,028
Commissions                                   54,002          270,063           35,734           55,330
Reproduction and other                       274,688          119,572          112,353          150,819
                                             -------          -------          -------          -------

REVENUES                                 $ 2,964,430      $ 2,370,372      $ 2,231,194      $ 2,744,967
                                         ===========      ===========      ===========      ===========
</TABLE>



NOTE 3        DEBT


<TABLE>
<CAPTION>

                                                              1998               1997           1996             1995
                                                              ----               ----            ----            ----

<S>                                                       <C>              <C>             <C>              <C>
              LONG TERM DEBT:
              Senior Noteholders                          $  1,031,496     $   1,303,062   $   1,410,607    $  1,668,919
              Six percent Noteholders                          411,178           411,178         411,178         421,178
              Convertible debenture                                -0-               -0-         100,000          100,000
              Vendor note payable                                  -0-           75,000         205,000          205,000
                                                          ------------     -------------   -------------    ------------

              TOTAL DEBT                                     1,442,674         1,789,240       2,126,785       2,395,097

              Less current portion                                 -0-           175,321        751,178          679,490
                                                         -------------     -------------   -------------    ------------

              LONG-TERM DEBT                              $  1,442,674     $  1,613,919    $   1,375,607    $   1,715,607
                                                          ============     =============   =============    =============
</TABLE>


Scheduled principal payments or demand balances due for the years subsequent to
December 31, 1998 are as follows:

            1999                                              $ 1,442,674



                                      F-14
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------


NOTE 3        DEBT (CONTINUED)


              The Company was granted a line of credit by its principal bank in
              the amount of $100,000 on August 13, 1997. This line of credit,
              which expires October 29, 1999 is secured by the accounts
              receivable of the Company and was obtained through a personal
              guaranty from the President of the Company. Interest at prime plus
              1.5% is payable monthly. No balance was payable on this line as of
              December 31, 1998.


              During 1991, FIRST issued $2,240,000 of 12% Senior Notes. These
              notes required 10% principal payments annually for four years
              beginning December 31, 1992 along with a final 60% principal
              payment on December 31, 1996. Interest was payable quarterly.
              These notes are secured by FIRST's seismic Data Library. Only one
              scheduled 10% principal payment was paid to the Noteholders.
              Subsequent to 1993, all payments made by FIRST were applied to the
              reduction of principal, due to the uncertainty of complete
              satisfaction of the debt. The outstanding principal balances at
              December 31, 1998, 1997, 1996 and 1995 were $1,031,496,
              $1,303,062, $1,410,607 and $1,668,919, respectively. The
              outstanding principal balance is past due. on October 7, 1997.
              FIRST offered a loan modification agreement to the holders of the
              notes.

              The loan modification agreement extends the maturity date of the
              notes to September 30, 1999, waives any and all unpaid interest,
              and at the option of FIRST can be converted into FIRST's Common
              Stock in one of three ways: FIRST may convert the outstanding
              principal balance to shares of the Company's Common Stock by
              dividing the average five day ask price of the public market
              trading price five days prior to the proposed exchange; FIRST may
              convert the outstanding principal balance valued at a stock price
              per share within forty-five days of a significant private
              placement; or FIRST may convert the outstanding principal balance
              at two times the actual net book value of FIRST's equity per share
              per the most recent quarterly financial statements immediately
              prior to such exchange.

              In addition to the loan modification agreement in 1998, FORTESA
              signed agreements with certain Noteholders whereby their notes
              would be satisfied for a discounted amount. The substance of the
              transaction was for FORTESA to transfer funds to the Company to
              facilitate a payoff to the Noteholders. The gain from the
              extinguishments of debt was $48,687 and is included in the
              $305,489 settlements/liability extinguishments on the Company's
              1998 statement of income and comprehensive income. With the
              intercession of FORTESA (See Note 10), all present holders of the
              12% Senior Notes accepted the loan modification agreement as of
              June 1998. Consequently, these amounts are classified as
              non-current in the accompanying balance sheets.


              During 1993, FIRST issued $500,000 of 6% Notes. The 6% Notes
              required interest only quarterly payments with the principal due
              in full, May 31, 1996. The 6% Notes are secured by 100% of the
              stock of the Company's subsidiary for international information
              licensing, FEC.



                                      F-15
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 3        DEBT (CONTINUED)

              In addition, the 6% Noteholders received 500,000 warrants to
              purchase the Company's Common Stock at $0.50 per share expiring
              June 1, 2000. Total assets and equity of FEC at December 31, 1998
              were $1,117,300 and 474,069, respectively. The outstanding
              principal balance of these 6% Notes amounted to $411,178 at
              December 31, 1998, 1997 and 1996 and $421,178 at December 31,
              1995. On December 28, 1998, the Company offered to exchange the
              principal and interest balances owed on the 6% Notes for equity in
              the Company contingent upon at least 80% of the Warrants held by
              these 6% Noteholders being exercised early. As of October 1999,
              all of the 6% Noteholders had accepted this offer.

              The $100,000 convertible debenture, which matured on June 30,
              1991, was reissued with interest at the rate of 10% payable
              semi-annually, maturing June 30, 1992. On September 12, 1997,
              interest was waived and the debenture was converted into 100,000
              shares of the Company's Common Stock. Consequently, this amount is
              classified as non-current in the accompanying 1996 and 1995
              balance sheets.


              On May 17, 1993, FIRST entered into a settlement agreement with a
              vendor for $300,000. The terms of the agreement have been modified
              several times due to the Company's liquidity crisis. In September
              1997, FIRST renegotiated the terms of the vendor settlement
              agreement, which then had a $205,000 balance. A payment of $30,000
              was paid on September 30, 1997, $100,000 was paid on December 15,
              1997 and the $75,000 balance was paid by December 15, 1998.
              Therefore, the outstanding principal balance at December 31, 1998,
              1997, and 1996 was $0.00, $75,000 and $205,000, respectively.


NOTE 4        STOCKHOLDERS' EQUITY


              The Company is authorized to issue up to 10,000,000 shares of
              Common Stock with a par value of $0.01 per share and up to
              1,000,000 shares of Preferred Stock with a par value of $1.00 per
              share. At a meeting held on January 7, 1999 the Board of Directors
              recommended re-establishing the original 1990 authorized
              capitalization, which were 20,000,000 Common Shares and 10,000,000
              Preferred Shares. A majority of the shareholders is required to
              approve this transaction.



                                      F-16
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------


NOTE 4        STOCKHOLDERS' EQUITY (CONTINUED)

              STOCK RIGHTS OUTSTANDING

              EMPLOYEE STOCK OPTION PLAN - In July 1990, the Company reserved
              500,000 shares of Common Stock for issuance under its Employee
              Stock Option Plan. All Incentive Stock Options ("ISO's") will be
              granted to employees at an exercise price of not less than the
              fair market value of the stock on the date of grant. All
              Non-incentive Stock Options ("NSO's") will be granted at an
              exercise price of not less than 85% of the fair market value of
              the stock on the date of grant. The Company and the Board's
              Compensation Committee, on February 3, 1998, re-assigned the
              entire 500,000 options from terminated employees to current
              employees of the Company.


              The strike price was set at $0.20 per share. The fair market value
              was difficult to access due to the fact that the Company's Common
              Stock is traded on the pink sheets, which is not a clear indicator
              of fair market value. Of the 500,000 shares granted, the Company's
              President was granted 300,000 shares or 60% of the total
              available. Due to the Company's liquidity requirements in August
              1998, the President agreed to exercise all of his options, thereby
              infusing $60,000 of cash into the Company. As a further inducement
              for the early exercise of these options, the Company granted the
              President a security interest in its tangible personal property.
              The remaining 200,000 options are outstanding at December 31,
              1998.


              DIRECTOR STOCK OPTIONS - In July 1990, the Company also reserved
              150,000 shares of Common Stock for issuance under its Directors'
              Stock Option Plan. All options will be granted to non-employee
              directors at an exercise price of not less than the fair market
              value on the date of grant.


              NOTEHOLDERS WARRANTS - Warrants are outstanding to the 6%
              Noteholders Group for 500,000 shares at $0.50 per share, which
              expire June 1, 2000. The Company's offer of December 28, 1998 to
              the 6% Noteholders would call for early exercise of most of these
              warrants (see Note 3) and cause the issuance of the same number of
              new warrants to these warrant holders (see Note 10).


NOTE 5        TRANSACTIONS WITH RELATED PARTIES


              During the period 1993 until 1996, the President of the Company
              had not received his contracted salary amount in cash compensation
              due to the Company's cash liquidity problems. The unpaid salary
              was accrued. In December 1996, the President entered into an
              agreement to purchase 253,790 shares of Common Stock at $0.02 cash
              per share and to forego the $253,790 compensation due him, for a
              total value increase to the Company of $258,860. The accompanying
              financial statements reflect this agreement to forego cash
              compensation, and to reflect the issuance of stock.



                                      F-17
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 5 TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

              In 1993, a limited partnership ("LTD") was established and the
              Company's President agreed to act as the general partner of this
              enterprise. LTD was founded to make investments in oil and gas
              exploration, development, reserves, and to make financing
              investments to facilitate portions of the Company's business plan
              that were outside of the financing capabilities of the Company.


              The 15 owners of LTD are all Shareholders or Noteholders of the
              Company. The Company itself also owns a minority percentage of
              LTD, granted for data use positions extended by the Company to LTD
              for the benefit of LTD leasing land in East Texas over one of the
              Company's prospects for natural gas.


              LTD funded all of the cash to acquire those leases, resulting in
              the Company having a 33% interest in the prospect and LTD having a
              12% interest for its lease money and reimbursable data use rights
              expended thereon. However, it was LTD's cash extended to lease
              acreage that enabled the Company to complete the cycle to obtain
              the exclusive drilling rights to the first of the five prospects
              in East Texas generated in which the Company has an interest.

              In 1993, the Company sold one license for its East Texas data-set
              to LTD, prior to posting that data-set for sale for the benefit of
              the Senior Noteholders, LTD agreed to pay a total of $100,000 on
              terms of $16,000 cash advanced to the Company and the $84,000
              balance to be paid if the Company successfully promotes the East
              Texas prospect(s) and receives reimbursement for seismic data
              costs from the promoted incoming partners. The Company
              successfully leased the prospect but elected not to promote it
              until a 3D seismic survey could be arranged over the prospect. The
              Company was successful in arranging for a 3D seismic survey over
              this acreage in 1997. The 3D seismic data was interpreted in 1998
              and indicated only moderate commercial viability. The Company's
              $84,000 contingent receivable is not reflected in the financial
              statements, and will be reported as a gain in the year received
              from LTD, if the Company promotes this first, or one of the other
              prospects successfully with seismic costs reimbursed.

              On January 1, 1997, the Company issued 150,000 shares of its
              Common Stock at par value to its Executive Vice President in
              exchange for all of the shares of BLACKWELL SUPPLY, Inc. BLACKWELL
              is used to conduct the domestic geophysical activity of the
              Company, including its airborne remote sensing surveys. (See Note
              1).

              During 1998 and 1997, the Company provided office space and
              administrative services to FORTESA at no charge.


                                      F-18
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 5 TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

              In March 1998, a company controlled by the President leased a
              laser copier to the Company for a period of 24 months at $424 per
              month on terms substantially identical to those paid by the
              President's company. The Company required use of the machine in
              connection with its new geologic report publishing business. At
              the end of the lease term, the Company will own the copier.


              See Note 10 for additional disclosures of related party
              transactions, which occurred after 1998.


                                      F-19
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 6        COMMITMENTS

              The Company entered into an agreement with a major oil company to
              use certain geo-scientific information to create a synthesized
              study of current interest to the industry. Among other things, the
              agreement requires the Company to make five annual payments,
              depending on the level of sales, starting December 31, 1996
              through December 31, 2000. The minimum payments required are
              $75,000, $75,000, $75,000, $25,000 and $25,000, respectively. In
              1997, the agreement was amended satisfying the December 31, 1997
              payment of $75,000 through performance of consulting services by
              the Company and $60,000 of the $75,000 due in 1998 were paid as of
              December 31, 1998. In 1999, the agreement was further amended
              satisfying the final $75,000, $25,000, and $25,000 minimum
              payments through successful 1998 performance of consulting
              services by the Company for this major oil company.

              LEASES

              The Company leases office space under non-cancelable operating
              lease agreements. Rent expense for the years ended December 31,
              1998, 1997, 1996 and 1995 was $118,602, $67,136, $71,835 and
              $62,442, respectively. The Company leases office space until June
              2000 for FEL and January 2001 for FEC.

              The minimum rental commitment under these leases, as currently
              modified to reflect the subsequent amendment/extension of lease
              agreements, at December 31, 1998 is as follows:


<TABLE>
<CAPTION>

             <S>                                                 <C>
                  1999                                            $89,416
                  2000                                             75,427
                  2001                                              6,116
                                                                -------------

                  TOTAL                                           $170,959
</TABLE>


NOTE 7        INCOME TAXES

              Income tax expense is comprised of the following:


<TABLE>
<CAPTION>

                                        1998             1997           1996           1995
                                        ----             ----           ----           ----

<S>                                <C>              <C>             <C>            <C>
              Current               $       -0-      $       -0-     $       -0-    $       -0-
              Deferred                      -0-              -0-             -0-            -0-
                                    ------------     ------------    -----------    -----------

                                    $       -0-      $        -0-    $      -0-     $       -0-
                                    ============      ===========    ===========    ===========
</TABLE>


                                      F-20
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 7        INCOME TAXES (CONTINUED)

              No income tax is expensed as the Company is in an NOL Carryforward
              position and has been charging income against prior losses on its
              income tax return. The difference between the effective rate of
              income tax expense and the amount which would be determined by
              applying the statutory U.S. income tax rates to income before
              income tax expense is explained below according to the tax
              implications of the various items of income or expense:


<TABLE>
<CAPTION>

                                                              1998             1997           1996             1995
                                                              ----             ----           ----             ----

<S>                                                     <C>              <C>             <C>             <C>
              Federal income tax expense at statutory    $   (81,509)     $    (60,290)   $  (131,791)    $  (259,804)
              rate
              Change in deferred tax valuation                81,509            60,290        131,791         259,804
                                                         -------------    -------------   ------------    ------------
              allowance

                                                         $         -0-    $         -0-   $       -0-     $       -0-
                                                         =============    =============   ============    ===========
</TABLE>


              The components of deferred income taxes are as follows:


<TABLE>
<CAPTION>

                                                                  1998             1997          1996             1995
                                                                  ----             ----          ----             ----
          <S>                                           <C>              <C>            <C>             <C>
              Deferred Tax Asset:
              Net operating loss carryover        (as
              amended, at 34%)                          $   5,018,830     $  5,100,339   $  5,232,310    $   5,492,114

              Deferred Tax Liability:
              Valuation allowance for net
              deferred tax assets                          (5,018,830)      (5,100,339)    (5,232,310)      (5,492,114)
                                                         -------------     ------------   ------------    -------------
              Deferred Taxes, Net                        $        -0-      $        -0-   $       -0-     $         -0-
                                                         =============      ===========   ============    =============
</TABLE>


              Although the Company has reported taxable income in each of the
              past four years, management believes there is a greater than 50%
              possibility that the deferred tax assets may not be realized with
              the next fiscal year; therefore, a valuation allowance has been
              established to offset these assets. If the proposed restructuring
              succeeds, including the merger of FORTESA into the Company, and
              successful development of its Senegal, West Africa gas field, the
              Company believes the future tax benefit resulting from its net
              operating losses will be more substantially realizable.
              Consequently, the valuation account may be substantially reduced
              depending upon the effects of the restructuring and acquisition of
              FORTESA. A significant increase in equity would result at that
              time.



                                      F-21
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 7        INCOME TAXES (CONTINUED)

              Tax basis net operating loss carryforwards at December 31, 1998
              and their respective expiration dates are as follows:


<TABLE>

                            <S>                                                <C>
                                    2006                                        $      1,269,471
                                    2007                                               5,256,991
                                    2008                                                 355,091
                                    2009                                               7,879,712
                                                                                ----------------
                                    TOTAL                                       $     14,761,265
                                                                                ================
</TABLE>


              The amount of the net operating loss carryovers has been revised
              for recent amendments to the Company's federal income tax returns.
              These carryovers could be revised upon IRS audit or restricted as
              to the Company's ability to utilize them to offset future taxable
              income.

NOTE 8        FAIR VALUES

              The estimated fair values of the Company's financial instruments
at December 31 are as follows:


<TABLE>
<CAPTION>

                       1998       1998       1997       1997       1996       1996       1995       1995
                       ----       ----       ----       ----       ----       ----       ----       ----
                     CARRYING     FAIR     CARRYING     FAIR     CARRYING     FAIR     CARRYING     FAIR
                      VALUE      VALUE      VALUE      VALUE      VALUE      VALUE      VALUE      VALUE


<S>                   <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>
ASSETS
Cash and cash
equivalents           $  169,487   $  169,487   $  184,186   $  184,186   $  209,999   $  209,999   $  439,818   $  439,818
                      ==========   ==========   ==========   ==========   ==========   ==========   ==========   ==========

LIABILITIES
Senior Noteholders    $1,031,496   $  933,504   $1,303,062   $1,117,496   $1,410,607   $1,136,337   $1,668,919   $1,305,161
Convertible                    0            0            0            0      100,000      100,000      100,000      100,000
debenture
Six percent              411,178      397,273      411,178      397,273      411,178      384,279      421,178      381,879
Noteholders
Vendor note payable            0            0       75,000       68,738      205,000      182,357      205,000      168,128
                               -            -       ------       ------      -------      -------      -------      -------


                      $1,442,674   $1,330,777   $1,789,240   $1,583,507    $2,126,78   $1,802,973   $2,395,097   $1,955,168
                      ==========   ==========   ==========   ==========    =========   ==========   ==========   ==========
</TABLE>



              The following methods and assumptions were used to estimate the
              fair value of each class of financial instruments for which it is
              practical to estimate fair value.


              CASH AND CASH EQUIVALENTS - the carrying amount approximates fair
              value because of the short maturity of those instruments.

              LONG-TERM DEBT - the fair value is based upon discounting the debt
              such that the effective interest rate is prime plus 1% (9.5%)
              utilizing actual and intended repayments. No discount was applied
              to the convertible debenture.


                                      F-22
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 9        GEOGRAPHIC AREAS

              The Company's geographic data for the years ended December 31, are
as follows:


<TABLE>
<CAPTION>

                                                                    1998           1997           1996            1995
                                                                    ----           ----           ----            ----
<S>                                                        <C>            <C>            <C>             <C>
              REVENUE:
              United States                                 $ 1,996,715    $  1,685,112   $  1,865,999    $  1,781,553
              Foreign Subsidiary                                 967,715        685,260        365,195         963,414
                                                            ------------   ------------   ------------    ------------

              REVENUE                                       $  2,964,430   $  2,370,372     $2,231,194     $2,744,967
                                                            =============   ============    ===========    ==========

              NET INCOME/(LOSS) FROM OPERATIONS:

              United States                                 $     28,363          9,537      (375,665)       (956,869)
              Foreign Subsidiary                                (24,769)        (4,492)      (119,137)        (20,446)
                                                            ------------   ------------   ------------    ------------

              NET INCOME/(LOSS) FROM OPERATIONS:                   6,599          5,045      (494,802)       (977,315)
                                                            ------------   ------------   ------------    ------------

              TOTAL ASSETS:
              United States                                    3,281,524      3,044,413      3,001,927      3,400,736
              Foreign Subsidiary                                  49,061         72,896        143,617        780,005
                                                            ------------   ------------   ------------    -----------

              TOTAL ASSETS                                  $  3,330,585   $  3,117,309   $  3,145,544    $  4,180,741
                                                            ============   ============   ============    ============
</TABLE>


                                      F-23
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 10       SUBSEQUENT EVENTS

              On December 28, 1998 the Company made a proposal to its 6%
              Noteholders to participate in a restructuring program, the major
              components of which are as follows:

              -      Conversion of the entire outstanding 6% Note balance
                     ($448,285 including accrued interest as of December 31,
                     1998) into 1,073,734 FIRST Common Shares.

              -      Early exercise of a minimum of 400,000 of the 6%
                     Noteholders' 500,000 $0.50/share warrants (at an effective
                     price of $0.33 per share) and issuance of a new $0.30 per
                     share warrant in exchange for each $0.50/share warrant
                     exercised early.

              -      Issuance of an additional number of shares of Common Stock
                     equal to 50% of the number of shares issued in connection
                     with the $.50 warrants.

              -      Merger of FORTESA into FIRST, and the changing of FIRST's
                     name to FORTESA.

              -      Conversion of 100% of the outstanding (55) FIRST 12 %
                     Senior Notes into 1,363,111 FIRST Common Shares, as
                     provided for in the existing October 7, 1997 Loan
                     Modification Agreements with each of said 12% Noteholders.


              All of the 6% Noteholders agreed to the offer to convert, and the
              key elements of this restructuring program were completed on the
              30th of March 1999. To date, 475,000 of the $0.50 and $0.33
              warrants have been exercised. Common Stock was issued to both the
              12% and the 6% Noteholders. Concurrently with this extinguishing
              of all of the Company's long-term debt, the Company acquired
              FORTESA Corporation from the President of the Company. This
              included a working interest in a commercially viable gas discovery
              in Senegal, West Africa with a carried interest to allow the
              pipeline to be connected to the local market, and most existing
              Warrant Holders exercised causing a cash infusion of $237,000 of
              new working capital.


              The President's, Beall Living Trust sold FORTESA to the Company
              for 50,000 shares of a special convertible Preferred Stock in the
              Company and 8,055 shares of Common Stock. These Preferred Shares
              are convertible into not less than 500,000 Common Shares and not
              more than 2 million Common Shares, based on 40% of the net value
              actually realized by the Company from FORTESA assets over the
              ensuing five-year period. The Company will have to either 1)
              purchase additional shares in the open market as Treasury Stock,
              or 2) increase its authorized number of Common Shares in the
              future to honor an ultimate conversion by the President of the
              Preferred Stock to Common, should the FORTESA assets cause the
              subsequent issuance of the additional 1,500,000 shares of Common
              Stock to the President as a result of successful value increase of
              FORTESA assets. Regarding the West African working interest,
              FORTESA had paid for all the technical costs of defining and
              presenting the geoscientific basis for the gas development
              project, and the Company had paid for communication thereof to
              potential partners in return for the right to acquire the results.



                                      F-24
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 10       SUBSEQUENT EVENTS (CONTINUED)

              A firm commitment for $5,400,000 in development expenditures was
              obtained from a third party co-venturer in January 1998. This
              partner commenced expenditures in the first quarter of 1998 to
              advance the commercial exploitation of the 1997 Senegalese Gas
              Discovery, including the position of FORTESA and its co-venturers
              in this development project. FORTESA is not required to expend any
              development funds until the $5,400,000 has been expended. FORTESA
              owns a 15% working interest in the entire development project,
              after project payout, and benefits from 7.5% (50% of 15%) of the
              project's cash flow after production costs prior to payout of the
              $5,400,000 of carried development expenditures. The discovery well
              made in January 1997 on the block indicated a minimum of 2 BCF of
              reserves in just this first well (See Note 5).


              The FORTESA acquisition will be accounted for similarly to a
              pooling of interests using the historical cost basis of the assets
              acquired.



              The 1998 oil price fell dramatically, and bottoming at the
              year-end. As a result, our database of exploration materials and
              opportunities experienced reduced revenues for licensing to the
              exploration industry, as many of our customers suffered
              significantly reduced capital expenditure budgets in 1999. The
              Company has adjusted during the subsequent period by suspending
              most all new projects, and seeking to deliver contract services
              using our experienced staff directly to certain of its oil
              industry customers. Revenues in the first half of 1999 were at
              very low levels, below that necessary to sustain us. Prices have
              subsequently recovered. We believe that revenues for the balance
              of 1999 will be adequate to recover the momentum enjoyed by our
              Company in 1998.


NOTE 11       LEGAL PROCEEDINGS


              The Company is a defendant in a lawsuit brought by two parties
              claiming to be the successors-in-interest to McKenzie Management
              Inc., a minority owner of certain seismic data acquired by us in
              September 1990 from McMoRan Oil and Gas Company and Adobe
              Resources Corporation. The data was originally owned by a joint
              venture comprised of McMoRan, Adobe and McKenzie Management Inc.
              At the time of its assignment to us, McMoRan and Adobe could not
              locate McKenzie and indemnified our Company "against any and all
              future claims, costs, expenses or causes of action that may be
              asserted by the referenced minority owner....". In June 1994, we
              resold the data to Seitel Corporation and indemnified Seitel
              against claims relating to the seismic data being sold. The
              plaintiffs seek approximately $600,000 to $1,500,000, plus
              punitive damages and attorney's fees.



                                      F-25
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 11       LEGAL PROCEEDINGS (CONTINUED)


              Our Company believes it is indemnified against loss based on its
              purchase contract with McMoran and Adobe. We hired a defense
              counsel and have made demands on IMC Global (as successor to
              McMoRan) and Santa Fe Resources (as successor to Adobe) to honor
              the indemnity running to FIRST SEISMIC Corporation, but so far
              they have refused. Merits discovery is just commencing and it
              cannot be predicted what, if any, liability we may ultimately have
              in the case. We intend to offer a vigorous defense based on
              several theories including Statute of Limitations, and a claim
              that McKenzie did not even own an interest in all the subject
              seismic data. No provision has been recorded in the accompanying
              financial statements.


NOTE 12       EARNINGS PER SHARE

              The following sets forth the computation of basic earnings per
              share at December 31, 1998, 1997, 1996 and 1995.


<TABLE>
<CAPTION>

              NUMERATOR                  1998            1997           1996         1995
              ---------                  ----            ----           ----         ----


<S>                                 <C>                 <C>          <C>           <C>
              NET INCOME            $    239,733        $159,032     $ 387,621     $ 764,130
                                    ============        ========     ==========     =========
</TABLE>



<TABLE>


              DENOMINATOR FOR BASIC EARNINGS PER SHARE

<S>                                                              <C>              <C>             <C>           <C>
              WEIGHTED NUMBER OF SHARES USED
              IN COMPUTING NET INCOME (LOSS)
              PER SHARE                                          5,552,860        5,251,647       5,071,510     4,817,720


               NET INCOME PER SHARE                            $      0.04     $       0.03      $      0.08   $      0.16
                                                               ============    =============     ===========   ===========
</TABLE>


              Based on estimated fair market values, outstanding Options and
              Warrants are considered antidilutive for all years presented.
              After year end, 50,000 shares of convertible Preferred Stock and
              8,055 shares of Common Stock were issued in connection with the
              FORTESA merger, as well as Common Shares issued in connection with
              the conversion of long-term debt.


                                      F-26
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 13       PRO FORMA MERGER

              Following is selected pro forma data of the company for the year
              ended December 31, 1998 had the merger with FORTESA Corporation
              taken place as of that date. FORTESA had no significant operations
              prior to 1998.


<TABLE>

                     <S>                                                               <C>
                                REVENUE                                                   $    3,131,360
                                                                                          ==============

                                NET INCOME                                                $      357,171
                                                                                          ==============

                                EARNINGS PER SHARE                                        $         0.06
                                                                                          ==============
</TABLE>


              There are no anticipated changes in accounting methods in
conjunction with the merger.

NOTE 14       NONCASH INVESTING AND FINANCING ACTIVITIES

               During 1998 the Company received consulting services from FORTESA
               totaling $40,500, which were capitalized. This amount is included
               in investment in oil and gas prospects on the balance sheet and
               is a reduction in the amount due from FORTESA.

               During 1998 the Company financed the purchase of an automobile
               with an $11,940 note payable.



                                      F-27
<PAGE>


                                     FIRST SEISMIC CORPORATION AND SUBSIDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           DECEMBER 31, 1998, 1997, 1996 & 1995
-------------------------------------------------------------------------------

NOTE 15    STOCK OPTIONS AND WARRANTS

               The Company has elected to follow Accounting Principles Board
               Opinion No. 25, "Accounting for Stock Issued to Employees (APB
               25) and related interpretations in accounting for its employee
               Stock Options". Under APB 25, because the exercise price of
               employee Stock Options is equal to the estimated market price of
               the underlying stock on the date of grant, no compensation
               expense is recorded. The Company has adopted the disclosure-only
               provisions of Statement of Financial Accounting Standards No.
               123, Accounting for Stock-Based Compensation. The value of
               Options and Warrants granted during 1998 as computed under SFAS
               123, is deemed insignificant.

               The following summarizes the option and warrant activity and
               balances for the year ended December 31, 1998:

               At December 31, 1998, outstanding options and warrants consisted
of the following:


<TABLE>
<CAPTION>

                                                               NUMBER OF           EXERCISE          EXPIRATION
                                                                 SHARES             PRICE                DATE

    <S>                                                        <C>               <C>                <C>
               Outstanding Options                              200,000           $   0.20            Feb. 4, 2008

               Outstanding Warrants                             500,000           $   0.50            June 1, 2000
</TABLE>


               All Warrants are currently exercisable.

               All outstanding options were nonqualified options. No
               compensation expense related to Stock Option grants was recorded,
               as the option exercise prices were equal to the estimated fair
               market value on the date of the grant.


                                      F-28