SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

For the fiscal year ended December 31, 1999 Commission File No. 0-18774


                            Spindletop Oil & Gas Co.
             (Exact name of registrant as specified in its charter)


               Texas                                     75-2063001
  (State or other jurisdiction                       (IRS Employer or ID #)
    of incorporation or organization)

      9319 LBJ, Frwy., #205 Dallas, TX                      75243
(Address of principal executive offices)                  (Zip Code)


Company's telephone number, including area code:  (972) 644-2581

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
                                (Title of Class)

Indicate by check mark whether the Company (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  Company  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                  YES   X                      NO

As of March 31, 2000, 7,525,804 shares of the Company's common stock were issued
and  outstanding,  and the  aggregate  market  value of the voting stock held by
non-affiliates  of the  company  as of that  date is not  determinable  since no
significant  public trading market has been established for the Company's common
stock.



                                       1
<PAGE>





                                     PART I

Item 1. Description of Business.
(a) General Business Development.
Spindletop Oil & Gas Co. is engaged in the exploration, development and
production of oil and natural gas; the rental of oilfield equipment;and through
one of its  subsidiaries, the gathering and  marketing of natural gas. The term
"Company" is used herein to refer to Spindletop Oil & Gas Co. and its wholly
owned subsidiaries, Prairie Pipeline Co. ("PPL") and Spindletop Drilling Company
("SDC") .

The net crude oil and gas reserves of the Company as of December 31, 1999,  were
22,562 barrels of oil and condensate and 1,910,744 MCF (thousand  cubic feet) of
natural  gas.  The  Company  owns  rental   equipment,   including  natural  gas
compressors,  pumping units, natural gas dehydrators and other various pieces of
oilfield  production  equipment.  In addition,  the Company,  through PPL,  owns
approximately  26.1 miles of pipelines located in Texas,  which are used for the
gathering of natural gas. The Company's  principal executive offices are located
at 9319 LBJ  Freeway,  Suite  #205,  Dallas,  Texas.  The  telephone  number  is
(972)644-2581.

                                   BACKGROUND

The Company is a Texas  Corporation.  The  Company  was  previously  known as
Prairie  States  Energy Co.  ("PSE").  On July 13,  1990, Spindletop  Oil & Gas
Co., a Utah  Corporation, ("SOG UTAH") merged into PSE, and the name of PSE was
changed to Spindletop  Oil & Gas Co., the Company herein.

The Company was originally  incorporated  in Colorado as Mid-America  Drilling &
Exploration, Inc., on August 9, 1978 as a wholly-owned subsidiary of Mid-America
Petroleum,  Inc. ("MAP"). The principal business of the Company at that time was
contract  drilling  of oil and gas wells.  The  initial  public  offering of the
Company  occurred by prospectus  dated  December 13, 1979. In January 1981,  the
shares  of the  Company  owned  by MAP were  distributed  as a  dividend  to the
shareholders   of  MAP.  The  Company's  name  was  changed  to  Prairie  States
Exploration,  Inc. on March 15, 1983.  Prairie States  Exploration,  Inc. became
insolvent  in late  1983,  and  filed for  protection  under  Chapter  11 of the
Bankruptcy Code on December 14, 1983.

Prairie States Exploration, Inc. was successfully reorganized under Chapter 11
of the Bankruptcy  Code, and the Bankruptcy  Court approved the plan of
reorganization  on September 9, 1985.  Pursuant to the Plan, the Company merged
into a wholly-owned subsidiary, Prairie States Energy Co., a Texas Corporation.
The Plan of Reorganization was proposed and funded by Paul E. Cash.

Since the  reorganization,  the  Company  has engaged in the general oil and gas
business, including exploration, development, and production of oil and gas, the
rental of oilfield  production  equipment and the ownership and construction and
operation of pipelines  for the gathering and marketing of natural gas. SOG Utah
was  incorporated  on August 15,  1975 as Main  Street  Equities,  Inc.,  a Utah
corporation. SOG Utah sold 5,000,000 shares of common stock in a public offering
in 1976. Until 1981, the business of the company  consisted of minor real estate
operations.  In October  1981 the name was  changed to Aledo Oil and Gas Company
and in January 1983 the name was changed to Spindletop Oil & Gas Co.

The name  "Spindletop"  has been used by Paul E. Cash since 1975 in conjunction
with several  previous oil and gas businesses in which he was engaged.

On July 13, 1990,  SOG Utah was merged into PSE,  and the name of the  surviving
company was changed to  Spindletop  Oil & Gas Co., a Texas  corporation.  In the



                                       2
<PAGE>



merger,  each shareholder of PSE received  one-half share of the common stock of
the  surviving  company,  the Company,  for each share of PSE owned prior to the
merger.  Each  shareholder  of SOG Utah received one and one-half  shares of the
common stock of the surviving company, for each share of SOG Utah owned prior to
the merger.  After the merger, the Company had outstanding  44,922,564 shares of
common  stock,  32,255,195  of which were owned by the  shareholders  of PSE and
12,667,369 by shareholders of SOG Utah. Shares issued to the former shareholders
of SOG Utah have not been registered with the Securities and Exchange Commission
but according to Rule 144-K these shares would automatically become free trading
three years from date of issuance.  The Company's  management  believes that all
shares  issued to the former  shareholders  of SOG Utah are now free  trading in
accordance with Rule 144-K. On January 31, 1997, the Company  effected a one for
six reverse stock split.  The Company reduced the authorized  common shares from
150,000,000  to  100,000,000  and increased the par value from $.001 to $.01 per
share.

Pursuant to a Stock Purchase Agreement dated December 1, 1999 between
Paul E. Cash (Mr. Cash) and Giant Energy Corp., (Giant) a Texas Corporation, on
December 1, 1999, Giant purchased controlling interest in Spindletop Oil & Gas
Co.

Giant purchased 5,860,889 shares of the Registrant's outstanding Common
Stock from Mr. Cash. After the transaction, Giant Energy owns 77.88 percent of
the Registrant's 7,525,804 shares of outstanding Common Stock. Giant Energy
acquired the above shares for $490,000 cash.

Prior to the Stock Purchase Agreement, control of the Registrant was held by Mr.
Cash,  who owned 81.98  percent of the  Registrant's  outstanding  Common Stock.
Prior to the transaction Mr. Cash was President and Chairman of the Board of the
Registrant.  After the transaction,  Mr. Cash resigned as President and Chairman
of the Board of Registrant, but he will remain a director of Registrant.

On December 1, 1999, Registrant acquired oil and gas properties and equipment
from Mr. Cash and Double River Investment Co. (owned 100% by Mr. Cash)for a
total purchase price of $460,885.04.

                                PLAN OF OPERATION

In  1995  the  Company  successfully  concentrated  its  efforts  on oil and gas
property  acquisitions.  With  increased  competition  for oil and gas  property
acquisitions  and  with a  corresponding  increase  in oil and gas  prices,  the
Company,  in 1996,  returned  its focus to its  primary  business of oil and gas
exploration and production.  The Company's long-term strategy is to build an oil
and gas production  company through an exploration  program.  Additionally,  the
Company  will  continue  to rework  existing  wells in an  attempt  to  increase
production and reserves.

The Company  will  continue to generate  and  evaluate  prospects  using its own
geological and land staff. The Company intends to fund operations primarily from
cash flow generated by operations.  The Company's  primary area of operation has
been and  will  continue  to be in  Texas  with an  emphasis  in the  geological
provinces known as the Ft. Worth Basin in Texas.

The  Company  will  attempt to expand its  pipeline  system.  Expansion  will be
dependent upon success in its  exploration  programs,  since the majority of its
existing  pipelines are connected to wells which it operates.  In addition,  the
oilfield rental equipment  business will be expanded as needed, but this segment
also depends upon the success of the exploration and development program.



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<PAGE>



The  Company  in 1996  expanded  its  current  pipeline  system  by 6.7 miles by
acquiring, at no cost, a pipeline system in Hood County, Texas. The Company sold
this pipeline in 1998 for a price of $30,000.

(b) Financial information relating to Industry Segments
The Company has two identifiable business segments: exploration, development and
production  of oil and natural gas, and gas  gathering  and oil field  equipment
rental.  Footnote 15 to the Consolidated  Financial Statements filed herein sets
forth the relevant  information  regarding revenues,  income from operations and
identifiable assets for these segments.

(c) Narrative Description of Business
The Company and SDC are engaged in the  exploration,  development and production
of oil and natural gas, and the rental of oil and gas production equipment.  PPL
is engaged in the gathering and marketing of natural gas.

(i) Principal Products, Distribution and Availability.
The  principal  products  marketed  by the Company are crude oil and natural gas
which  are  sold  to  major  oil  and  gas  companies,  brokers,  pipelines  and
distributors,  and oil and gas properties which are acquired and sold to oil and
gas development entities.  Reserves of oil and gas are depleted upon extraction,
and the Company is in  competition  with other entities for the discovery of new
prospects.

The  Company is also  engaged in the  gathering  and  marketing  of natural  gas
through  its  subsidiary  PPL.  The  Company  owns 26.1 miles of  pipelines  and
currently  gathers  approximately  410 MCF of gas per day. Gas is gathered for a
fee.  Substantially  all of the gas gathered by the Company is gas produced from
wells which the Company operates and in which it owns a working interest.

The Company is also  engaged in the  business  of rental of oilfield  production
equipment.  The  equipment  is  comprised  of pumping  units,  compressors,  gas
dehydrators  and  related  production  equipment.   Substantially  all  of  such
equipment is located on wells which the Company  operates and in which it owns a
working interest.

(ii)  Patents,  Licenses and  Franchises.  Oil and gas leases of the Company are
obtained  from the owner of the mineral  estate.  The leases are generally for a
primary term of 1 to 5 years,  and in some  instances as long as 10 years,  with
the provision  that such leases shall be extended into a secondary term and will
continue  during  such  secondary  term as long as oil and gas are  produced  in
commercial  quantities  or other  operations  are  conducted  on such  leases as
provided  by the terms of the  leases.  It is  generally  required  that a delay
rental be paid on an annual  basis  during the primary  term of the lease unless
the  lease is  producing.  Delay  rentals  are  normally  $1.00 to $5.00 per net
mineral acre.

The Company currently holds interests in producing and non-producing oil and gas
leases. The existence of the oil and gas leases and the terms of the oil and gas
leases are important to the business of the Company because future  additions to
reserves will come from oil and gas leases  currently owned by the Company,  and
others that may be acquired, when they are proven to be productive.  The Company
is  continuing  to purchase oil and gas leases in areas where it  currently  has
production, and also in other areas.

(iii) Seasonality.
The  Company's  oil and gas  activities  generally are conducted on a year round
basis with only minor interruptions caused by weather.



                                       4
<PAGE>



(iv) Working Capital Items.
The Company  finances the majority of its operations,  including the purchase of
oil and gas leases,  the development of wells, the construction of pipelines and
acquisition of oil field rental  equipment from its internal  working capital as
well as some borrowings.

(v) Dependence on Customers.
The following is a summary of significant  purchasers of the oil and natural gas
produced by the Company for the three year period ended December 31, 1999:

<TABLE>
<CAPTION>


        Purchaser                              December 31, Percent (1)
        ---------                       -------------------------------------
                                             1999       1998        1997
                                            -----      -----       -----
<S>                                          <C>         <C>         <C>
TXU Processing                               15%         13%         13%
Mitchell Marketing Co.                       23%         22%         13%
Texas Utilities Fuel Co.                      -%         - %         10%
</TABLE>

(1) Percent of total oil and gas sales


In the past The Company  sold gas under long term  contracts  to TXU  Processing
(formerly  called Lone Star Gas Company) and its affiliates.  Such contracts are
no longer in effect.  Gas previously  marketed under those contracts is now sold
to other parties under market sensitive, short term contracts.

Sales of natural gas to Texas  Utilities Fuel Company  ("TUFCO") are pursuant to
contracts  expiring in 1994 through 1999.  Gas  previously  marketed under those
contracts  and from those  contracts  that will expire is sold to other  parties
under market sensitive, short-term contracts.

(vi) Competition.
Numerous  entities and individuals,  many of whom have far greater financial and
other  resources  than  the  Company,  are  active  in the  exploration  for and
production of oil and gas. Substantial competition exists for leases,  prospects
and equipment, all of which are necessary for successful operations. Competition
is focused  primarily on the discovery of new  prospects  which can be developed
and made productive.

The market  prices  received for the  Company's  products  depend on a number of
factors beyond the control of the Company,  including consumer demand, worldwide
availability,   transportation   facilities,   and  United  States  and  foreign
government  regulation  of  exports,  imports,  production  and  prices.  Widely
fluctuating  prices for oil and gas over recent years,  have had a direct effect
on the profitability of the Company's operations.

(vii) Development Activities.
The  Company's  primary oil and gas  prospect  acquisition  efforts have been in
known producing areas in the United States with emphasis devoted to Texas.

The Company  intends to use a portion of its available  funds to  participate in
drilling activities.  Any drilling activity is performed by independent drilling
contractors.  The Company does not refine or  otherwise  process its oil and gas
production.



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<PAGE>



Exploration  for oil and gas is normally  conducted  with the Company  acquiring
undeveloped oil and gas prospects,  and carrying out exploratory drilling on the
prospect  with the  Company  retaining  a  majority  interest  in the  prospect.
Interests in the property are sometimes  sold to key  employees  and  associated
companies at cost. Also, interests may be sold to third parties with the Company
retaining  an  overriding  royalty  interest,   carried  working  interest,   or
reversionary interest.

A prospect is a geographical  area  designated by the Company for the purpose of
searching for oil and gas reserves and  reasonably  expected by it to contain at
least one oil or gas  reservoir.  The Company  utilizes its own funds to acquire
oil and gas leases covering the lands comprising the prospects. These leases are
selected by the Company and are obtained  directly from the landowners,  as well
as from landmen, geologists, other oil companies, some of whom may be affiliated
with the Company, and by direct purchase,  farm-in, or option agreements.  After
an initial test well is drilled on a property,  any  subsequent  development  of
such  prospect  will  normally  require  the  Company's  participation  for  the
development of the discovery.

(viii) Environmental Regulation.
The Company's oil and gas exploration  and production  activities are subject to
Federal,  State  and  environmental  quality  and  pollution  control  laws  and
regulations.  Such  regulations  restrict  emission and discharge of wastes from
wells,  may require permits for the drilling of wells,  prescribe the spacing of
wells and rate of production, and require prevention and clean-up of pollution.

Although the Company has not in the past incurred substantial costs in complying
with  such  laws  and   regulations,   future   environmental   restrictions  or
requirements may materially increase the Company's capital expenditures,  reduce
earnings,  and delay or prohibit certain activities.  However, such restrictions
and  requirements  would  also  apply to the  Company's  competitors,  and it is
unlikely that  compliance by the Company  would  adversely  affect the Company's
competitive position.


(ix) Additional Government Regulation.
In addition to environmental regulations, the production and sale of oil and gas
is subject to regulation by Federal,  State and local  governmental  authorities
and  agencies.  Such  regulations  encompass  matters  such as the  location and
spacing of wells,  the  prevention of waste,  the rate of  production,  the sale
price of certain oil and gas, conservation, and safety.

Oil Price Regulation
Historically, regulatory policy affecting crude oil pricing was derived from the
Emergency  Petroleum  Allocation  Act of 1973,  as amended,  which  provided for
mandatory  crude  oil price  controls  until  June 1,  1979,  and  discretionary
controls through September 30,1981. On April 5, 1979,  President Carter directed
the Department of Energy to complete administrative procedures designed to phase
out, commencing June 1, 1979, price controls on all domestically  produced crude
oil by October 1, 1981. However,  on January 28, 1981,  President Reagan ordered
the  elimination  of  remaining  federal  controls on domestic  oil  production,
effective immediately.
Consequently, oil may currently be sold at unregulated prices.

Gas Price Regulation.
The Natural Gas Act of 1938 ("NGA") regulates the interstate  transportation and
certain  sales for resale of natural  gas.  The  Natural  Gas Policy Act of 1978
("NGPA")  regulates  the maximum  selling  prices of certain  categories of gas,
whether sold in so-called  "first sales" in  interstate or intrastate  commerce.
These  statutes are  administered  by the Federal Energy  Regulatory  Commission
("FERC").  The NGPA established  various  categories of natural gas and provided



                                       6
<PAGE>



for  graduated  deregulation  of price  controls  for  first  sales  of  several
categories  of natural gas.  With  certain  exceptions,  all price  deregulation
contemplated  under the NGPA as  originally  enacted in 1978 has  already  taken
place.  Under  current  market  conditions,  deregulated  gas  prices  under new
contracts  tend to be  substantially  lower than most  regulated  price ceilings
prescribed by the NGPA.

On July 26, 1989,  the Natural Gas Wellhead  Decontrol  Act of 1989  ("Decontrol
Act") was enacted.  The  Decontrol Act amended the NGPA to remove as of July 27,
1989 both price and  non-price  controls from natural gas not subject to a first
sale  contract in effect on July 26, 1989.  The  Decontrol Act also provided for
the phasing out of all price regulation under the NGPA by January 1, 1993.

(x)  Special Tax Provisions.
See footnote 7 to Consolidated Financial Statements

(xi) Employees.
The Company employs a total of 4 people. All are full-time employees.

(d)  Financial  information  about  foreign and domestic  operations  and export
sales.

All of the Company's business is conducted domestically, with no export sales.







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<PAGE>








Item 2. Properties
Oil and Gas Properties.
The following table sets forth pertinent data with respect to the  Company-owned
oil and gas  properties,  all located within the continental  United States,  as
estimated by the Company:

<TABLE>
<CAPTION>


                                                   Year Ended December 31,
                                             1999         1998           1997
                                           ----------   ----------    ----------
Gas and Oil Properties (net) (1):
<S>                                        <C>          <C>           <C>
Proved Developed Gas Reserves-MCF (2)      1,683,667    1,699,425     2,122,247
Proved Undeveloped Gas Reserves-MCF(3)       227,077      299,112       299,112
  Total Proved Gas Reserves-MCF            1,910,744    1,998,537     2,421,359

Proved Developed Crude Oil
 and Condensate Reserves-Bbls(2)             22,562       33,920        61,646
Proved Undeveloped Crude Oil and
Condensate Reserves-Bbls (3)                    -             -             -
  Total Proved Crude Oil and
  Condensate Reserves-Bbls                   22,562       33,920        61,646

</TABLE>

                       (See footnotes on Page 9 following)



                                       8
<PAGE>

<TABLE>
<CAPTION>


                                                   Year Ended December 31,
                                            1999           1998         1997
                                       ------------   ------------  -----------

Present Value of Estimated
    Future Net Revenues
    From Proved Reserves (4) (5):
<S>                                   <C>             <C>           <C>
    Developed                         $  1,394,000    $  1,405,000  $ 2,107,000
    Developed and Undeveloped            1,604,000       1,599,000    2,283,000
Productive Wells (6):
    Gas Wells
      Gross                                    231             228          236
       Net                                   29.96           27.59        29.34
    Oil Wells
       Gross                                   205             212          216
       Net                                   13.25           14.56        14.83
Acreage:
    Developed Acres (Producing)
       Gross                                81,073          81,073       82,042
       Net                                   7,685           7,685        7,864
    Undeveloped Acres
       Gross                                86,868          86,868       86,868
       Net                                  13,856          13,856       13,856
</TABLE>

                 (See footnotes below and on Page 10 following)

(1) The estimate of the net proved oil and gas  reserves,  future net  revenues,
and the present value of future net revenues.

(2) "Proved Developed Oil and Gas Reserves" are reserves that can be expected to
be recovered  through  existing  wells with  existing  equipment  and  operating
methods.

(3) "Proved Undeveloped Reserves" are reserves that are expected to be recovered
from new wells on undrilled  acreage,  or from existing wells where a relatively
major expenditure is required for recompletion.

(4) "Estimated  Future Net Revenues" are computed by applying  current prices of
oil and gas, less the estimated future  expenditures (based on current costs) to
be incurred in developing and producing the proved reserves.

(5) "Present Value of Estimated  Future Net Revenues" is computed by discounting
the  Estimated  Future Net Revenues at the rate of ten percent (10%) per year in
accordance with the Securities and Exchange Commission Rules and Regulations.




                                       9
<PAGE>






(6)   Operated Wells having multiple completions are as follows:
                             1999               1998               1997
                      -----------------  -----------------  -------------
                      Gross      Net       Gross     Net     Gross   Net
          Gas           6        2.55        6       2.55      6     2.55
          Oil          -0-       -0-        -0-      -0-      -0-    -0-


The Company has  interests  in numerous  wells which are operated by third party
operators.  Information as to multiple  completions  with respect to third party
operated wells is not available to the Company.

The Company's  working  interests in exploration and development wells completed
during the years indicated were as follows:

<TABLE>
<CAPTION>

                                               Year Ended December 31,
                                          1999           1998           1997
                                      ------------    ------------   ----------
                                      Gross    Net    Gross    Net   Gross   Net
<S>                                   <C>     <C>     <C>     <C>   <C>    <C>
Exploratory wells:
      Productive                       -        -       -       -      -      -
      Non-Productive                   -        -       -       -      2    1.6
                                      ---     ----     ---     ----  ----   ----
               Total                   -        -       -        -     1    1.6
                                      ---     ----     ---     ----  ----   ----

Development wells:
      Productive                       -        -       -        -     -     -
      Non-Productive                   -        -       -        -     -     -
                                      ---     ----    ----      ----  ----  ----
               Total                   -        -       -        -    -      -
                                      ---     ----    ----      ----  ----  ----



Total Exploratory and Development
wells:
      Productive                       -        -       -        -     -     -
      Non-Productive                   -        -       -        -     2    1.6
                                      ---     ----    ----      ----  ----  ----
      Total                            -        -       -        -    1     1.6
                                      ---     ----    ----      ----  ----  ----

</TABLE>


                                       10
<PAGE>






The following  tables set forth  additional data with respect to production from
Company-owned oil and gas properties,  all located within the continental United
States:

<TABLE>
<CAPTION>

                                                 Year Ended December 31,
                                 ------------------------------------------
                                    1999      1998      1997     1996    1995
                                 ---------  --------- --------  ------- --------
Oil and Gas Production (net):
<S>                                <C>       <C>       <C>      <C>      <C>
   Gas-Mcf                         277,834   350,566   357,166  371,074  322,465
   Crude Oil and Condensate-
    Bbls                             6,986    13,304    14,998   17,276   17,873
Average Sales Price Per Unit
 Produced:
   Gas - per Mcf                    $ 2.20    $ 1.97    $ 2.66   $ 2.48   $ 2.28
   Crude Oil and Condensate -
   per Bbl.                         $16.70    $11.97    $20.29   $21.16   $16.61
Average Production Cost Per
Equivalent
Barrel (1) (2)                      $ 9.59    $ 7.37    $ 8.90   $ 8.90   $ 8.81
</TABLE>

(1) Includes severance taxes and ad valorem taxes.

(2) Gas production is converted to equivalent barrels at the rate of six MCF per
barrel,  representing  the estimated  relative  energy content of natural gas to
oil.

The Company owns producing  royalties and overriding  royalties under properties
located in Texas. The revenues from these properties is not significant.

Current Activities - March 15, 2000.
Gross Wells in Process of Drilling                     -0-
Net Wells in Process of Drilling                       -0-
Waterfloods in Process of Installation                 -0-
Pressure Maintenance Operations                        -0-

The Company is not aware of any major  discovery  or other  favorable or adverse
event that is  believed  to have caused a  significant  change in the  estimated
proved reserves since December 31, 1999.

Office Space.

The Company leases office space as follows:

Location                     Square Feet               Lease Expires
Dallas, Texas                   5,393                   Month to month



Pipelines.
The Company owns,  through its  subsidiary  Prairie  Pipeline Co., 26.1 miles of
natural gas  pipelines  in Parker, Palo Pinto and  Eastland  Counties, Texas.
These pipelines  are  steel and  polyethylene  and  range in size  from 2 inches
to 6  inches. These pipelines primarily gather natural gas from wells operated
by the Company and in which the Company  owns a working  interest, but also for
other parties.



                                       11
<PAGE>



The Company  normally does not purchase and resell  natural gas, but gathers gas
for a fee.  The fees  charged in some cases are  subject to  regulations  by the
State of Texas and the  Federal  Energy  Regulatory  Commission.  Average  daily
volumes of gas gathered by the  pipelines  owned by the Company was 410, 518 and
615 MCF per day for 1999, 1998, and 1997 respectively.

Oil Field Production Equipment.
The Company owns various natural gas compressors, pumping units, dehydrators and
various other pieces of oil field production equipment.

Substantially all of the equipment is located on oil and gas properties in which
the Company owns a working  interest and which are operated by the Company.  The
rental fees are charged as lease operating fees to each property and each owner.

Item 3.  Legal Proceedings
Neither the Registrant nor its  subsidiaries  nor any officers or directors is a
party to any material  pending legal  proceedings  for or against the Company or
its subsidiary nor are any of their properties subject to any proceedings.

Item 4.  Submission of Matters of Security Holders to a Vote
None

                                     PART II

Item 5.  Market for the Company's Common Stock and Related Stockholder Matters.
No  significant  public trading  market has been  established  for the Company's
common stock.  The common stock of the Company is traded on an occasional  basis
by dealers in the over the counter market,  the terms of which are not available
to the Company.  The Company  does not believe  that  listings of bid and asking
prices for its stock in the pink sheets are  indicative  of the actual trades of
its stock, since trades are made infrequently.

There is no amount of common  stock which is subject to  outstanding  options or
warrants to  purchase,  or  securities  convertible  into,  common  stock of the
Company.  On January 31, 1997, the Company  effected a one for six reverse stock
split.  At that time,  the Company  reduced the  authorized  common  shares from
150,000,000  to  100,000,000  and increased the par value from $.001 to $.01 per
share.

The approximate  number of record holders of the Company's Common Stock on March
20, 2000, was 634.

The Company has not paid any dividends  since its  reorganization  and it is not
contemplated  that  it  will  pay  any  dividends  on its  Common  Stock  in the
foreseeable  future.  There are no financing  agreements in place which restrict
payment of dividends.

The Registrant currently serves as its own stock transfer agent and registrar.



                                       12
<PAGE>



Item 6.  Selected Financial Data
The selected financial  information presented should be read in conjunction with
the consolidated financial statements and the related notes thereto.

<TABLE>
<CAPTION>

                                           Years Ended December 31,
                          1999      1998        1997       1996          1995
                     ----------- ----------  ---------   ----------  ----------
<S>                  <C>         <C>          <C>        <C>         <C>
Total Revenue        $1,072,000  $ 1,239,000  $1,685,000 $1,693,000  $ 1,448,000
Net Income(Los         (271,000)    (229,000)     83,000    141,000        7,000
Earnings Per Share(1)    (.04)        (.03)        .01        .02            -
At End of Periods
Total Assets          1,843,000    1,793,000   2,225,000  2,154,000    1,949,000
Long-Term Debt          241,000        -          -           -              -
</TABLE>

 (1) After 1 for 6 stock split  discussed  in Note 2 to  Consolidated  Financial
Statements.

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

Liquidity and Capital Resources
The Company's  operating  capital needs, as well as its capital spending program
are generally funded from cash flow generated by operations. Because future cash
flow is subject to a number of variables,  such as the level of  production  and
the sales price of oil and  natural  gas,  the Company can provide no  assurance
that its operations will provide cash  sufficient to maintain  current levels of
capital  spending.  Accordingly,  the Company may be required to seek additional
financing from third parties in order to fund its  exploration  and  development
programs.

Results of Operations:

1999 Compared to 1998

Oil and gas  revenues  decreased  in 1999 due to a decrease  in both oil and gas
production.

Lease operating expenses decreased in 1999. No major rework was done on existing
wells as compared to prior years.

During 1999 the company  invested in the stock market and  experienced a loss on
sale of securities.


1998 Compared to 1997

Oil and gas  revenues  decreased  primarily  because of decreases in oil and gas
prices. There was also a slight decrease in production.

Lease  operating  expenses  decreased  because  of a sale  of  some  oil and gas
properties  and an overall  decrease in the amount of repairs  and  maintencance
required on existing wells in 1998.

Gas pipeline sales and gas pipeline purchases decreased because of the sale the
pipeline in 1998 for $30,000.  This pipeline had been obtained at no cost. The
$30,000 gain is reflected in other income



                                       13
<PAGE>




1997 Compared to 1996

Gas pipeline  sales of $89,000 and related gas  pipeline  purchases  of $64,000
did not exist in 1996.  The pipeline was  purchased in December 1996.

Revenue from lease operations decreased  $28,000 in 1997. The Company decreased
its monthly  overhead fee on several wells that it operates.


Year 2000 Disclosure
The  Company  has not  experienced  any  problems  related to the year 2000 date
change, nor have its suppliers  experienced any difficulties with respect to the
products and services provided to the Company.

Certain Factors That Could Affect Future Operations
Certain  information  contained  in this  report,  as well as  written  and oral
statements  made or  incorporated  by reference from time to time by the Company
and its  representatives  in other  reports,  filings  with the  Securities  and
Exchange Commission, press releases, conferences,  teleconferences or otherwise,
may be deemed to be  'forward-looking  statements' within the meaning of Section
21E of the Securities  Exchange Act of 1934 and are subject to the 'Safe Harbor'
provisions of that section.

Forward-looking  statements  include  statements  concerning  the  Company's and
management's  plans,  objectives,  goals,  strategies and future  operations and
performance and the assumptions underlying such forward-looking statements. When
used  in  this  document,  the  words  "anticipates,"   "estimates,"  "expects,"
"believes,"  "intends," "plans" and similar expressions are intended to identify
such  forward-looking  statements.  Actual results and developments could differ
materially  from those  expressed in or implied by such  statements due to these
and other factors.


Item 8. Consolidated Financial Statements and Schedules, index at page 20.



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

The  accountants  for the  Company  are Farmer,  Fuqua,  Hunt &  Munselle,  P.C.
Certified  Public  Accountants,  who have  prepared  audit reports for the years
ended December 31, 1997, 1998, and 1999.

There have been no disagreements  between the Company and Farmer,  Fuqua, Hunt &
Munselle,  P.C. on any matter of accounting  principles or practices,  financial
statement disclosure, or auditing scope or procedure.




                                       14
<PAGE>





                                    PART III


Item 10.  Directors and Executive Officers of the Registrant
(a) and (b)The  Directors  and  Executive  Officers  of the  Company and certain
information concerning them is set forth below:


           Name                         Age             Position
     ----------------                 ------ ------------------------
     Chris Mazzini                      42    Director, President and Chairman
                                              of the Board
     Michelle Mazzini                   38    Director and Secretary
     Paul E. Cash                       67    Director
     Gary Goodnight                     45    Controller

All directors hold office until the next annual meeting of the  shareholders  or
until their  successors are duly elected and qualified.  Officers of the Company
serve at the discretion of the board of directors.

(c) Significant employees
        Not applicable

(d) Family relationships
        Michelle Mazzini is the wife of Chris Mazzini

(e) Business experience
Chris Mazzini,  President graduated from the University of Texas at Arlington in
1979 with a Bachelor of Science  degree in geology.  Mr.  Mazzini  founded Giant
Energy Corp (Giant) in 1985 and has served as President of Giant since then.  He
has worked in the oil and gas  industry  since  1978.  He joined the  Company in
December 1999 when he purchased controlling interest from Mr. Cash.

Michelle Mazzini, received her Bachelor of Science Degree in Business
Administration (major: Accounting) in accounting from the University of
Southwestern  Louisiana  where she  graduated  magna cum laude in 1985. Ms.
Mazzini earned her law degree from Louisana State  University where she
graduated  Order of the Coif in 1988. Ms. Mazzini serves as Vice  President and
legal counsel of Giant Energy Corp.

Paul E. Cash is a graduate of The University of Texas (B.B.A.-Accounting) and is
a Certified  Public  Accountant.  He has been active in the oil and gas industry
for over 25 years,  during which time he has served as financial  officer of two
publicly-owned  companies,  Texas Gas  Producing Co. and Landa Oil Co., and also
served  as  president  of  publicly-owned   Continental  American  Royalty  Co.,
Bloomfield  Royalty Co., Southern Bankers  Investment Co.,  Spindletop Oil & Gas
Co. (a Utah Corporation),  Double River Oil & Gas Co., and Loch Exploration Inc.
Mr. Cash has also been an officer and part owner of several  private oil and gas
companies and  partnerships.  Mr. Cash also formerly served as Mayor of the City
of Sunnyvale, Texas.

Gary Goodnight, CPA, is the Controller and Principal Accounting Officer.
Mr. Goodnight joined the Company in November 1986. Mr. Goodnight was employed by
KPMG Peat Marwick LLP from 1977 to 1979.  From 1979 until joining the Company,
Mr. Goodnight was employed by various independent oil and gas exploration
companies. He received a B.B.A. from the University of Texas at Austin in 1977.


(f) Involvement in certain legal proceedings.
None of the directors or executive  officers of the Registrant,  during the past
five  years,  has been  involved  in any civil or  criminal  legal  proceedings,
bankruptcy  filings or has been the  subject of an order,  judgment or decree of
any Federal or State authority involving Federal or State securities laws.




                                       15
<PAGE>



Item 11.  Executive Compensation

(a) Cash Compensation
For the year ended  December  31,  1999,  neither of the CEO's,  Mr. Cash or Mr.
Mazzini,  took any salary  from the  Company.  None of the  Company's  executive
officers were paid cash compensation at the annual rate in excess of $100,000.

(b) Compensation Pursuant to Plan.  None

(c) Other Compensation
Key  employees of the Company,  may  sometimes  be assigned  overriding  royalty
interests and/or carried working interest in prospects  acquired by or generated
by the Company.  These interests  normally vary from one-half to one percent for
each  employee.  There is no set  formula  or policy for such  program,  and the
frequency and amounts are largely controlled by the economics of each particular
prospect.

(d) Compensation of Directors
Directors are not currently  compensated  nor are there plans to compensate them
for their services on the board.

(e) Termination of Employment and Change of Control Arrangement
There are no plans or  arrangements  for payment to officers or  directors  upon
resignation or a change in control of the Registrant.





                                       16
<PAGE>







Item 12.  Security Ownership of Certain Beneficial Owners and Management.
(a) & (b) Security ownership of certain beneficial owners and managers
The table below sets forth the information  indicated regarding the ownership of
the  Registrant's  common stock,  $.01 par value,  the only  outstanding  voting
securities,  as of December 31, 1999 with respect to: (i)any person who is known
to the  Registrant  to be the  owner  of  more  than  five  percent  (5%) of the
Registrant's  common stock;(ii) the common stock of the Registrant  beneficially
owned by each of the directors of the Registrant  and, (iii) by all officers and
directors  as a group.  Each person has sole  investment  and voting  power with
respect to the shares indicated,  except as otherwise set forth in the footnotes
to the table.
<TABLE>
<CAPTION>

                                                     NATURE OF       %BASED ON
 NAME AND ADDRESS OF                 NUMBER OF       BENEFICIAL     OUTSTANDING
  BENEFICIAL OWNER                    SHARES          OWNERSHIP      PERCENT OF
                                                                       CLASS
-------------------------          ------------     ------------      ---------
<S>                                  <C>           <C>                  <C>
Chris Mazzini                        5,898,543          Direct            78%
9319 LBJ Frwy, Suite 205
Dallas, TX  75243

Paul E. Cash                           308,468          Direct             4%
9319 LBJ Frwy, Suite 205
Dallas, TX  75243

All officers and directors
as a group                           6,207,011                            82%

</TABLE>

(c) Changes in control
The  Company is not aware of any  arrangements  or pledges  with  respect to its
securities which may result in a change in control of the Company.



Item 13. Certain  Relationships  and Related  Transactions (a) Transactions with
management and others.
       none

(b) Certain Business Relationships

Key  employees of the Company,  may  sometimes  be assigned  overriding  royalty
interests and/or carried working interests in prospects acquired by or generated
by the Company.  These interests  normally vary from one-half to one percent for
each  employee.  There is no set  formula  or policy for such  program,  and the
frequency and amounts are largely controlled by the economics of each particular
prospect.



                                       17
<PAGE>






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

                                     PART IV

 (a) The following documents filed as part of this Report
     1. Independent Auditors' Report
        Consolidated  Balance  Sheets  at  December  31,  1999  and 1998
        Consolidated  Statements  of  Income  (Loss)  for the years
         ended December 31, 1999, 1998, and 1997
        Consolidated Statements of Changes in Shareholders' Equity for the years
         ended December 31, 1999, 1998, and 1997
        Consolidated Statements of Cash Flows for the years ended
        December 31, 1999, 1998, and 1997
        Notes to Consolidated Financial Statements
     2. Financial Statement Schedules required to be filed by Item 8 and
        Paragraph (d) of this Item 14
        Schedule II  Valuation  and  Qualifying  Accounts All other
        schedules have been omitted because they are not applicable or required
        under the rules of Regulation S-X or the  information has been supplied
        in the consolidated financial statements or notes thereto.
        Such schedules and reports are at page 40 of this Report.
     3. The Exhibits are listed in the index of Exhibits Required by Item 601 of
        Regulation S-K at Item (c) below and included at page 41.

 (b)    A Form 8-K was filed filed  during the last  quarter of the period
        covered by this Report.  The 8-K reported the change in control of
        the Registrant

 (c)   The Index of Exhibits is included following the Financial Statement
       Schedules  beginning  at  page 41 of this Report.

 (d)   The  Index to  Consolidated  Financial  Statements  and  Supplemental
       Schedules is included  following  the  signatures,  beginning at page 20
       of this Report.




                                       18
<PAGE>




                                   SIGNATURES


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


                            SPINDLETOP OIL & GAS CO.



Dated April 13, 2000

                                           By  /s/ Chris Mazzini
                                             ---------------------
                                             Chris Mazzini
                                             President, Director


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




      Signatures                       Capacity                  Date
Principal Executive Officers:


/s/Chris Mazzini                     President, Director      April 13, 2000
------------------
Chris Mazzini

/s/ Michelle Mazzini                 Secretary, Director      April 13, 2000
--------------------
Michelle Mazzini

/s/ Paul E. Cash                     Director                 April 13, 2000
--------------
Paul E. Cash

/s/ Gary D. Goodnight                Controller               April 13, 2000
------------------
Gary D. Goodnight






                                       19
<PAGE>







                    SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
            Index to Consolidated Financial Statements and Schedules


                                                                   Page

Independent Auditors' Report.........................................21

Consolidated Balance Sheets - December 31, 1999
and 1998..............................................  .............22-23

Consolidated Statements of Income (Loss) for the years
ended December 31, 1999, 1998 and 1997...............................24

Consolidated Statements of Changes in Shareholders'
Equity for the years ended December 31, 1999,
1998, and 1997.......................................................25

Consolidated Statements of Cash Flows for the
years ended December 31, 1999, 1998
and 1997.............................................................26

Notes to Consolidated Financial Statements...........................27

Schedules for the years ended December 31, 1999,
1998 and 1997
         II - Valuation and Qualifying Accounts......................40


All other  schedules  have been  omitted  because they are not  applicable,  not
required,  or the  information has been supplied in the  consolidated  financial
statements or notes thereto.






                                       20
<PAGE>







                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
Spindletop Oil & Gas Co.

We have audited the accompanying consolidated balance sheets of Spindletop Oil &
Gas Co. (a Texas Corporation) and subsidiaries as of December 31, 1999 and 1998,
and  the  related   consolidated   statements  of  income  (loss),   changes  in
shareholders'  equity and cash  flows for each of the three  years in the period
ended  December  31,  1999.  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  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Spindletop Oil & Gas Co. and  subsidiaries as of December 31, 1999 and 1998, and
the  consolidated  results of their  operations and their cash flows for each of
the three years in the period  ended  December  31,  1999,  in  conformity  with
generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
consolidated  financial statements taken as a whole. The schedules listed in the
index of  consolidated  financial  statements  are  presented  for  purposes  of
complying with the Securities and Exchange  Commission's  rules and are not part
of the  basic  consolidated  financial  statements.  These  schedules  have been
subjected  to the  auditing  procedures  applied  in  the  audits  of the  basic
consolidated  financial  statements  and, in our opinion,  fairly state,  in all
material  respects,  the  financial  data  required  to be set forth  therein in
relation to the basic consolidated financial statements taken as a whole.

FARMER, FUQUA, HUNT & MUNSELLE, P.C.



Dallas, Texas
April 12, 2000




                                       21
<PAGE>

<TABLE>
<CAPTION>


                    SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                                           December 31,
                                                  ------------------------------
                                                       1999            1998
                                                  ------------     ------------
              ASSETS
Current Assets
<S>                                               <C>              <C>
 Cash                                             $   284,000      $   288,000
 Accounts receivable                                  267,000          284,000
 Accounts receivable, related parties                  59,000           33,000
 Shareholder Loans                                        -              8,000
 Inventory                                                -               -
                                                  ------------      ------------
     Total Current Assets                             610,000          613,000
                                                  ------------      ------------

Property and Equipment - at cost
 Oil and gas properties (full cost method)          3,205,000        3,008,000
 Rental equipment                                     405,000          338,000
 Gas gathering systems                                145,000          151,000
 Other property and equipment                         180,000          191,000
                                                   -----------       -----------
                                                    3,935,000        3,688,000
Accumulated depreciation and amortization          (2,714,000)      (2,548,000)
                                                   -----------      ------------
                                                    1,221,000        1,140,000
                                                   -----------      ------------


Other Assets, net of accumulated
amortization of $101,000 and
$89,000 at December 31,1999 and 1998
respectively                                          12,000            40,000
                                                  -----------       ----------
Total Assets                                     $ 1,843,000      $  1,793,000
                                                  ===========       ===========

</TABLE>

The accompanying notes are an integral part of these statements.




                                       22
<PAGE>



<TABLE>
<CAPTION>




                    SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS - (Continued)


                                                             December 31,
                                                  ------------------------------
                                                    1999                 1998
                                                  ------------      ------------
     LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                              <C>               <C>
Current liabilities
   Accounts payable and accrued
    liabilities                                   $   439,000       $   426,000
   Tax savings benefit payable                         97,000            97,000
                                                   -----------       -----------
            Total Current Liabilities                 536,000           523,000
                                                   -----------       -----------

Notes payable-related party                           308,000              -

Shareholders' Equity
  Common stock, $.01 par value;100,000,000
   shares authorized;7,525,804 shares issued and
   outstanding (7,525,804 at December 31, 1998)         75,000           75,000
   Additional paid-in capital                          733,000          733,000
   Retained earnings                                   191,000          462,000
                                                    ----------        ----------
                                                       999,000        1,270,000
                                                    ----------        ----------

Total Liabilities And Shareholders' Equity       $   1,843,000      $  1,793,000
                                                    ==========        ==========
</TABLE>

The accompanying notes are an integral part of these statements.





                                       23
<PAGE>



<TABLE>
<CAPTION>



                    SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)


                                               Years ended December 31,
                                      ------------------------------------------
                                          1999            1998          1997
                                      ------------     -----------   -----------
Revenues
<S>                                   <C>             <C>           <C>
 Oil and gas revenues                 $ 729,000       $  850,000    $ 1,255,000
 Revenue from lease operations          158,000          176,000        187,000
 Gas pipeline sales                         -             35,000         89,000
 Gas gathering fees                      18,000           17,000         19,000
 Equipment rental                       110,000          121,000        114,000
 Interest income                          2,000            5,000          9,000
 Other                                   55,000           35,000         12,000
                                       ----------      -----------   -----------
                                       1,072,000       1,239,000      1,685,000
                                       -----------     -----------   -----------
Expenses
 Pipeline and rental operations          50,000           86,000         70,000
 Gas pipeline purchases                     -             19,000         64,000
 Lease operations                       457,000          529,000        663,000
 Depreciation and amortization          207,000          260,000        257,000
 General and administrative             551,000          574,000        547,000
 Loss on sale of securities              78,000              -               -
 Interest expense                           -                -            1,000
                                      ----------        ----------    ----------
                                      1,343,000         1,468,000     1,602,000
                                      ----------        ----------    ----------

Net Income (Loss)                 $    (271,000)      $  (229,000)   $   83,000
                                      ==========        ===========    =========

Earnings (Loss)Per Share Of
Common Stock                          $  (0.04)         $  (0.03)        $  .01
                                         ======           =======       =======
Weighted average shares
outstanding                            7,525,804        7,525,804      7,492,992
                                      ==========        ==========    ==========

</TABLE>


      The accompanying notes are an integral part of these statements.




                                       24
<PAGE>





<TABLE>
<CAPTION>


                    SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 1999, 1998, and 1997



                                                          Additional
                                      Common Stock         Paid-in     Retained
                                 Shares         Amount      Capital    Earnings
                              ------------  -----------  ----------   ----------

<S>                            <C>           <C>          <C>         <C>
Balance January 1, 1997        7,488,304     $ 75,000     $  727,000  $ 608,000
Stock issued in exchange
for pipeline                      37,500            -          6,000        -
Net income                           -              -             -      83,000
                               ----------   ---------      ---------   ---------
Balance December 31, 1997      7,525,804       75,000        733,000    691,000
Net loss                            -            -              -      (229,000)
                               ----------  ---------        --------- ----------
Balance December 31, 1998      7,525,804       75,000        733,000    462,000
Net loss                            -             -              -     (271,000)
                               ----------   ---------      ---------  ----------
Balance December 31, 1999      7,525,804     $ 75,000    $   733,000  $ 191,000
                               ==========   =========      ==========  =========


</TABLE>


The accompanying notes are an integral part of these statements.




                                       25
<PAGE>



<TABLE>
<CAPTION>


                    SPINDLETOP OIL & GAS CO AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                 Years ended December 31,
                                        ----------------------------------------
                                          1999            1998           1997
                                        ------------  -----------   ------------
Cash Flows from Operating Activities
<S>                                     <C>           <C>            <C>
 Net Income (Loss)                      $ (271,000)   $ (229,000)    $  83,000
 Reconciliation of net income (loss)
 to net cash provided by (used for)
 operating activities
  Depreciation and amortization           207,000        260,000        257,000
  Other                                   (4,000)          -              -
  (Increase) decrease in accounts
   receivable                             (1,000)        137,000        (21,000)
  (Increase) decrease in inventory          -              8,000         23,000
  Increase (decrease) in accounts
  payable                                 13,000        (202,000)       (10,000)
                                        -----------    ----------   -----------
Net cash provided by (used for)
operating activities                     (56,000)       (26,000)        332,000
                                         ---------     ----------   ------------

Cash Flows from Investing Activities
 Capitalized acquisition, exploration
  and development costs                        -        (188,000)      (429,000)
 Proceeds from sale of properties           44,000           -             -
 Proceeds from sale of other assets         16,000           -             -
 Proceeds from sale of property equipment      -          69,000         70,000
 Purchase of property and equipment         (8,000)       (9,000)       (21,000)
                                          ----------    ----------     ---------
Net cash provided by (used for)
investing activities                        52,000      (128,000)      (380,000)
                                          ----------    ----------     ---------

Cash Flows from Financing Activities
     Repayment of notes payable                -          (1,000 )      (19,000)
     Proceeds from borrowings                  -              -           8,000
     Repayment of shareholder loans            -              -         245,000
     Advances to shareholder                   -          (5,000)      (214,000)
                                         ------------    ----------    ---------
Net cash provided by (used for)
 financing activities                          -          (6,000)        20,000
                                          -----------    ----------    ---------

Decrease in cash                            (4,000)      (160,000)      (28,000)
Cash at beginning of period                288,000        448,000       476,000
                                         -----------     ----------    --------
Cash at end of period                  $   284,000     $  288,000      $448,000
                                         ===========     ==========    =========

</TABLE>

The accompanying notes are an integral part of these statements.




                                       26
<PAGE>









                    SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  BASIS OF PRESENTATION AND ORGANIZATION
Merger and Basis of Presentation
On July 13,  1990,  Prairie  States  Energy Co., a Texas  corporation,  (the
Company) merged with Spindletop Oil & Gas Co., a Utah corporation (the Acquired
Company). The name of Prairie States Energy Co. was changed to Spindletop Oil &
Gas Co. at the time of the merger.

Organization and Nature of Operations
The  Company  was  organized  as a  Texas  Corporation  in  September  1985,  in
connection with the Plan of Reorganization  (the Plan),  effective  September 9,
1985,  of  Prairie  States   Exploration,   Inc.,   (Exploration),   a  Colorado
Corporation, which had previously filed for Chapter 11 bankruptcy. In connection
with the Plan,  Exploration was merged into the Company,  with the Company being
the surviving  corporation.  After giving effect to the stock split discussed in
Note 2, up to a total of 166,667 of the Company's common shares may be issued to
Exploration's  former  shareholders.  As of December 31, 1999,  1998,  and 1997,
122,436, 122,436, and 122,436 shares,  respectively,  have been issued to former
shareholders in connection with the Plan.

Spindletop  Oil & Gas Co. is engaged in the  exploration,  development  and
production  of oil and natural gas; the rental of oilfield equipment; and
through one of its subsidiaries, the gathering and marketing of natural gas.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant  accounting  policies  consistently  applied in the
preparation of the accompanying financial statements follows:

Consolidation
The  consolidated  financial  statements include the accounts of Spindletop Oil
& Gas Co. and its wholly-owned subsidiaries, Prairie Pipeline Co. and Spindletop
Drilling Company. All significant intercompany transactions and accounts have
been eliminated.

Oil and Gas Properties
The  Company  follows  the full cost  method of  accounting  for its oil and gas
properties. Accordingly, all costs associated with acquisition,  exploration and
development  of oil and gas reserves are  capitalized  and accounted for in cost
centers,  on a  country-by-country  basis.  If  unamortized  costs within a cost
center  exceed the cost center  ceiling (as  defined),  the excess is charged to
expense during the year in which the excess occurs.

Depreciation  and  amortization for each cost center are computed on a composite
unit-of-production  method,  based on estimated proved reserves  attributable to
the respective cost center. All costs associated with oil and gas properties are
currently  included in the base for  computation  and  amortization.  Such costs
include all acquisition, exploration and development costs. All of the Company's
oil and gas properties are located within the continental United States.

Gains and losses on sales of oil and gas  properties  are treated as adjustments
of capitalized costs. Gains or losses on sales of property and equipment,  other
than oil and gas properties, are recognized as part of operations.  Expenditures
for  renewals  and  improvements  are   capitalized,   while   expenditures  for
maintenance and repairs are charged to operations as incurred.




                                       27
<PAGE>



Property and Equipment
The Company, as operator,  leases equipment to owners of oil and gas wells, on a
month-to-month basis.

The Company,  as operator,  transports gas through its gas gathering systems, in
exchange for a fee.

Depreciation is provided in amounts sufficient to relate the cost of depreciable
assets to  operations  over  their  estimated  service  lives (5 to 10 years for
rental equipment and gas gathering  systems, 4 to 5 years for other property and
equipment).  The  straight-line  method of  depreciation  is used for  financial
reporting purposes, while accelerated methods are used for tax purposes.

Inventory
Inventory  consists of oil field materials and supplies,  stated at the lower of
average cost or market.

Goodwill
The goodwill resulting from the contingent  consideration,  as discussed in Note
7, is being amortized over the remaining life of the net operating loss existing
at the time of the Plan discussed in Note 1, which expires in 2000.

Income Taxes
The Company  accounts  for income  taxes  pursuant  to  Statement  of  Financial
Accounting  Standards No. 109  "Accounting  for Income Taxes" (SFAS 109),  which
requires the recognition of deferred tax liabilities and assets for the expected
future tax  consequences  of events that have been  recognized  in the Company's
financial statements or tax returns. Under this method, deferred tax liabilities
and  assets  are  determined  based  on the  difference  between  the  financial
statement  carrying  amounts  and tax bases of  assets  and  liabilities,  using
enacted tax rates in effect in the years in which the  differences  are expected
to  reverse.  These  temporary  differences  primarily  relate to  depreciation,
depletion and  intangible  drilling  costs.  The Company has  established a full
valuation allowance against these carryforward  benefits,  due to uncertainty as
to the Company's ability to utilize the loss carryforwards.

Investment Tax Credits
Investment  tax credits are  accounted  for by the  "flow-through"  method which
recognizes  the  credits as a  reduction  of income tax  expense in the year the
credit is utilized.

Use of Estimates
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  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.

Stock Split
In December 1996 the Board of Directors  declared a 1-for-6  reverse stock split
on the Company's  common stock.  The record date was January 31, 1997. All share
and per share data as appropriate, reflect this split.



                                       28
<PAGE>



3.  ACCOUNTS RECEIVABLE
<TABLE>
<CAPTION>
                                                     December 31,
                                                 1999              1998
                                             -------------   --------------
<S>                                          <C>            <C>
         Trade                               $  378,000     $     387,000
         Accrued revenue                        187,000           146,000
         Other                                    2,000             1,000
                                              -----------      -----------
                                                567,000           534,000
         Less allowance for losses             (300,000)         (250,000)
                                             ------------      -----------
                                             $ 267,000      $     284,000
                                             ============      ===========
</TABLE>

4.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
<TABLE>
<CAPTION>

                                                         December 31,
                                                  1999                1998
                                             ---------------   ---------------
<S>                                            <C>              <C>
     Trade payables                            $   56,000       $     69,000
     Production proceeds payable                  253,000            451,000
     Accrued production taxes                       4,000             10,000
     Other                                        126,000             98,000
                                                ----------         ---------
                                               $  439,000       $    628,000
                                                ==========         =========
</TABLE>



5.  NOTES PAYABLE-RELATED PARTY
                                                                December 31,
                                                             1999        1998
                                                         ------------  -------
Non-interest  bearing note to Paul Cash, due in monthly
installments of $3,000  beginning  January,  2001, with
unpaid  principal due  November,  2008  ($384,000  face
value less  amortized  discount of $143,000 based on an
effective   interest  rate  of  8.50%).   The  note  is
uncollateralized.                                          241,000          -

Non-interest  bearing note to Paul Cash, due June, 2000
($77,000 face value less amortized  discount of $10,000
based on an  effective  interest  rate of  8.50%).  The
note is uncollateralized.                                  67,000          -
                                                          ----------  ---------
                                                          308,000          -
Less current maturities                                       -            -
                                                         ----------   ---------
                                                         $ 308,000   $    -
                                                         =========    =========


                                       29
<PAGE>




     Principal maturities of notes payable as of December 31, 1999 are
     as follows:
               Year Ended
               December 31,                   Amount
           -----------------               -----------
               2000                         $  -
               2001                            85,000
               2002                            20,000
               2003                            22,000
               2004                            23,000
              Thereafter                      158,000
                                           -----------
                                            $ 308,000
                                           ============


6.  RELATED PARTY TRANSACTIONS

From March 1994 until  1998,  the Company  provided  various  personnel,  office
space, supplies and other administrative  services to a related company,  Double
River Oil & Gas Co. (Double River) for a fee of $575 per month.

At December 31, 1999, and 1998,  approximately  $2,000 and $2,000  respectively,
are due from Double River.

Included in the accompanying balance sheets are the following amounts related
to Mr. Cash:

                                                               December 31,
                                                        1999           1998
                                                    -----------   -------------
Shareholder loans, non-interest bearing               $  -         $   8,000
Notes payable, non-interest bearing                     308,000           -


7.  INCOME TAXES

The Company  accounts  for income  taxes  pursuant  to  Statement  of  Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS 109
utilizes the liability method of computing deferred income taxes.

For  Federal  income  tax  purposes,  the  Company  has net  operating  loss and
investment credit carryovers of approximately $838,000 and $1,000, respectively,
which expire at various dates through 2014.
<TABLE>
<CAPTION>

               Expires            Net Operating Loss          Investment Tax
             December 31,           Carryforward                 Credit
        ---------------------   ---------------------   -----------------------
        <S>                      <C>                    <C>
                2000                $   -                      $ 1,000
                2005                  55,000                       -
                2007                 146,000                       -
                2010                  28,000                       -
                2012                  27,000                       -
                2013                 323,000                       -
                2014                 259,000                       -
                                    ---------                  ----------
                                   $ 838,000                   $ 1,000
                                    =========                  ==========

</TABLE>

In connection  with the Plan  discussed in Note 1, the Company agreed to pay, in
cash, to Exploration's unsecured creditors,  as defined,  one-half of the future



                                       30
<PAGE>



reductions of Federal  income taxes which were  directly  related to any allowed
carryovers of  Exploration's  net operating  losses and  investment tax credits.
Such payments are to be made on a pro-rata  basis.  Amounts  incurred under this
agreement,  which are  considered  contingent  consideration  under APB No.  16,
totaled $ -0-, $ -0-, and $3,000 in 1999, 1998 and 1997, respectively,  and have
been recorded as goodwill.  As of December 31, 1999 the Company has not received
a ruling from the Internal Revenue Service concerning the net operating loss and
investment  credit  carryovers.  Until the tax  savings  which  result  from the
utilization  of these  carryforwards  is assured,  the  Company  will not pay to
Exploration's unsecured creditors any of the tax savings benefit. As of December
31,  1999 and 1998,  the  Company  owes  $97,000  and  $97,000  respectively  to
Exploration's unsecured creditors.

In calculating tax savings benefits described above,  consideration was given to
the alternative minimum tax, where applicable,  and the tax effects of temporary
differences, as shown below:

                                               1999          1998        1997
                                          -------------  -----------  ----------
Intangible drilling costs                   $  (4,000)   $ (175,000) $ (183,000)
Differences between book and tax
depreciation, depletion and amortization        4,000        36,000      49,000

Deferred income taxes reflect the effects of temporary  differences  between the
tax bases of assets and liabilities and the reported amounts of those assets and
liabilities for financial reporting purposes. Deferred income taxes also reflect
the value of net  operating  losses,  investment  tax credits and an  offsetting
valuation  allowance.  The Company's total deferred tax assets and corresponding
valuation allowance at December 31, 1999 and 1998 consisted of the following:
<TABLE>
<CAPTION>

                                                           December 31,
                                                      1999               1998
                                                  --------------   ------------
Deferred tax assets
<S>                                             <C>                 <C>
  Net operating loss carryforwards              $       209,000     $   145,000
  Investment tax credit carryforwards                     1,000           1,000
  Depreciation, depletion and amortization              140,000         139,000
  Other, net                                              7,000           7,000
                                                   -------------    ------------
      Total                                             357,000         292,000
Deferred tax liabilities
  Intangible drilling costs                            (229,000)       (227,000)
                                                   -------------    ------------

Net deferred tax assets                                 128,000          65,000
  Less valuation allowance                             (128,000)        (65,000)
                                                   -------------    ------------
Net deferred tax asset                          $            -     $        -
                                                   =============    ============
</TABLE>

SFAS 109  requires  that a valuation  allowance  be recorded  against tax assets
which are not  likely to be  realized.  The  Company's  carryforwards  expire at
specific  future dates and  utilization of certain  carryforwards  is limited to
specific  amounts  each  year.  However,  due to the  uncertain  nature of their
ultimate  realization  based upon past  performance  and expiration  dates,  the
Company has established a full valuation  allowance  against these  carryforward
benefits and is recognizing the benefits only as reassessment  demonstrates they


                                       31
<PAGE>


are  realizable.  Realization  is entirely  dependent  upon  future  earnings in
specific  tax  jurisdictions.  While the need for this  valuation  allowance  is
subject to periodic review, if the allowance is reduced, the tax benefits of the
carryforwards  arising  prior to  reorganization  will be credited to additional
paid-in capital, because they bear no relationship to current operations,  while
the tax benefits of carryforwards  arising after reorganization will be recorded
in future operations as a reduction of the Company's income tax expense.

9.  CASH FLOW INFORMATION
The Company does not consider any of its assets to meet the definition of a cash
equivalent.

Net cash  provided by operating  activities  includes cash  payments for
interest of $ -0-, $ -0- and $1,000 in 1999,  1998,  and 1997, respectively.

Excluded  from the  Consolidated  Statements  of Cash Flows were the  effects of
certain non-cash investing and financing activities, as follows:
<TABLE>
<CAPTION>

                                             1999           1998          1997
                                         -------------  -----------  -----------
Purchase of equipment for note
<S>                                      <C>            <C>          <C>
 payable                                 $  67,000      $    -       $     -
Purchase of oil and gas properties
 for note payable                           240,000           -             -

Goodwill capitalized as additional
 cost of acquired company                      -              -           3,000

Tax savings benefit payable                    -              -           3,000

Issuance of common stock to acquire
 gas gathering system                          -              -           6,000

Acquisition of oil and gas properties
 in exchange for forgiveness of
 accounts receivable                           -              -          10,000

</TABLE>

10.  EARNINGS PER SHARE
Earnings per share EPS) are calculated in accordance with Statement of Financial
Accounting  Standards No. 128,  Earnings per Share (SFAS 128), which was adopted
in 1997 for all  years  presented.  Basic EPS is  computed  by  dividing  income
available to common shareholders by the weighted average number of common shares
outstanding during the period.  Diluted EPS does not apply to the Company due to
the absence of dilutive  potential  common shares.  All  calculations  have been
adjusted for the effects of the stock split discussed in Note 2. The adoption of
SFAS 128 had no effect on previously reported EPS.

11.  CONCENTRATIONS OF CREDIT RISK
As of December 31, 1999,  one of the Company's  subsidiaries  had  approximately
$283,000 in checking accounts at one bank.

Most of the Company's business activity is in Texas.  Accounts  receivable as of
December 31, 1999 and 1998 are primarily  from a wide variety of individual  and
institutional  owners of joint  interests in oil and gas wells. A portion of the
Company's  ability to collect  these  receivables  is  dependent  upon  revenues
generated from sales of oil and gas produced by the related wells.



                                       32
<PAGE>



12. FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial instruments at
 December 31, 1999 and 1998 follow:

<TABLE>
<CAPTION>
                                      1999                       1998
                                Carrying      Fair         Carrying      Fair
                                 Amount       Value         Amount       Value
                               ---------   ---------     -----------  ---------
<S>                            <C>         <C>           <C>          <C>
Cash                           $ 284,000   $ 284,000     $  288,000   $ 288,000
Accounts receivable              267,000     267,000        284,000     284,000
Accounts receivable, related
parties                          59,000       59,000         33,000      33,000
Shareholder loans                   -            -            8,000       8,000
Notes payable                   308,000      308,000            -           -
</TABLE>

The fair  value  amounts  for each of the  financial  instruments  listed  above
approximate carrying amounts due to the short maturities of these instruments.

13.  COMMITMENTS AND CONTINGENCIES
In connection with the Plan of  Reorganization  discussed in Note 1, the Company
agreed to pay,  in cash,  to  Exploration's  unsecured  creditors,  as  defined,
one-half of the future  reduction of Federal  income  taxes which were  directly
related to any allowed  carryovers of  Exploration's  net  operating  losses and
investment  tax credits  existing at the time of the  reorganization.  These net
operating losses expired in 1998 and the investment tax credits expired in 1997.

In June 1993,  Spindletop  Drilling  Company entered into an agreement with Loch
Exploration,  Inc.,  whereby the  parties  agreed to combine  their  talents and
resources  to  evaluate  and acquire  producing  and  non-producing  oil and gas
properties at various auctions.  Any such properties acquired under the terms of
this  agreement  are to be acquired by initial  assignment  to the Company.  The
Company has agreed to provide Loch with a recordable assignment of its interest,
such interest to be determined by the proportionate share of monies expended for
the acquisition of said properties. All costs are to be borne by the Company and
Loch in the  same  proportions  as their  respective  ownership  interests.  The
Company will serve as administrator  for properties  acquired in connection with
this agreement, and will be entitled to an overhead reimbursement for properties
for which the Company serves as operator.  This agreement had an initial term of
six months,  and continues month to month  thereafter,  until canceled by either
party.

In March 1994, the Company  entered into an agreement  with PGC Gas Company,  an
unaffiliated  entity,  under terms similar to those of the  agreement  with Loch
Exploration,  Inc.,  described above.  This agreement has an initial term of six
months,  and will continue month to month  thereafter,  until canceled by either
party.

The Company's oil and gas exploration  and production  activities are subject to
Federal,  State  and  environmental  quality  and  pollution  control  laws  and
regulations.  Such  regulations  restrict  emission and discharge of wastes from
wells,  may require permits for the drilling of wells,  prescribe the spacing of
wells and rate of production, and require prevention and clean-up pollution.

Although the Company has not in the past incurred substantial costs in complying
with  such  laws  and   regulations,   future   environmental   restrictions  or
requirements may materially increase the Company's capital expenditures,  reduce
earnings, and delay or prohibit certain activities.



                                       33
<PAGE>




14.  ADDITIONAL OPERATIONS AND BALANCE SHEET INFORMATION
Certain information about the Company's  operations for the years ended December
31, 1999, 1998, and 1997 follows.

Significant Oil and Gas Purchasers
The  Company's  oil sales are made on a day to day  basis at  approximately  the
current  area  posted  price.  The loss of any oil  purchaser  would not have an
adverse  effect upon  operations.  The Company  generally  contracts to sell its
natural gas to purchasers  pursuant to both short-term and long-term  contracts.
Additionally,  some of the Company's  natural gas not under  contract is sold at
the then current prevailing "spot" price on a month to month basis. Following is
a summary of  significant  oil and gas  purchasers  during the three year period
ended December 31, 1999.

<TABLE>
<CAPTION>

                                                             Year Ended
                                                            December 31,
                                              ---------------------------------
                                                1999       1998          1997
                                              ---------- ---------    --------
<S>                                             <C>         <C>           <C>
Lone Star Gas Company and Affiliates            15%         13%           13%
Mitchell Marketing Co.                          23          22            13
Texas Utilities Fuel Company                     -          -             10

</TABLE>

There are no other  customers of the Company  which  individually  accounted for
more than 10% of the Company's oil and gas revenues during the three years ended
December 31, 1999.
<TABLE>
<CAPTION>

                                                    Year Ended December 31,
                                             1999         1998            1997
                                           ----------- ------------  -----------
Capitalized costs relating to oil and gas
producing activities:
<S>                                        <C>           <C>          <C>
      Unproved properties                  $  93,000     $  89,000    $ 139,000
      Proved properties                    3,112,000     2,919,000    2,742,000
                                           ----------   -----------  -----------

      Total Capitalized Costs              3,205,000    3,008,000     2,881,000
      Accumulated amortization            (2,128,000)  (1,965,000)   (1,758,000)
                                          -----------  -----------   -----------
                                        $  1,077,000  $  1,043,000  $ 1,123,000
                                          ===========  ============  ===========

</TABLE>


                                       34
<PAGE>

<TABLE>
<CAPTION>


                                                   Year ended December 31,
                                             1999           1998          1997
                                         -------------  -----------   ---------
Costs incurred  in oil and gas property
 acquisition, exploration and
 development:
<S>                                      <C>            <C>          <C>
   Acquisition of Properties             $  241,000     $    -       $  81,000
   Exploration Costs                            -         122,000       327,000
   Development Costs                            -          66,000        21,000
                                          ----------     ----------   ----------
                                         $  241,000     $ 188,000    $  429,000
                                           =========     ==========   ==========

Results of operations from
producing activities:                             Year ended December 31,
                                          --------------------------------------
                                             1999          1998           1997
                                          -----------   -----------   ----------
Sales of oil and gas                      $ 729,000    $  850,000   $ 1,255,000
                                          ----------    -----------  -----------

Production costs                            457,000       529,000       663,000
Amortization of oil and gas properties      163,000       207,000       198,000
                                           ---------   -----------   -----------
                                            620,000       736,000       861,000
                                           ---------   -----------   -----------
                                          $  109,000   $  114,000   $   394,000
                                           =========    ==========    ==========

                                                 Year ended December 31,
                                              1999          1998          1997
                                         -------------   ----------   ----------
Sales price per equivalent Mcf            $   2.20         $ 1.97      $  2.81
                                             ======        =======      ========
Production cost per equivalent Mcf        $   1.59         $ 1.23      $  1.48
                                            =======        =======       =======
Amortization per equivalent Mcf           $    .51         $  .48      $   .44
                                            =======         ======       =======

Costs incurred in gas gathering
and equipment rental

Acquisition of property and equipment     $     -         $     -      $    -
                                            ========        ========    ========

Results of operations from gas gathering
and equipment rental:
Revenues                                  $  128,000      $  173,000   $ 222,000
                                            ---------       ---------  ---------
Gas pipeline purchases                           -            19,000      64,000
Operating Expenses                            50,000          86,000      70,000
Depreciation                                  14,000          21,000      20,000
                                             --------        -------    --------
                                              64,000         126,000     154,000
                                             --------        --------   --------
                                          $   64,000      $   47,000   $  68,000
                                             ========         =======   ========

</TABLE>





                                       35
<PAGE>





15.  BUSINESS SEGMENTS
The Company's two business segments are (1) oil and gas exploration,  production
and  operations  and  (2)  transportation  of  natural  gas,  including  related
equipment  rental.  Management  has chosen to organize  the Company into the two
segments based on the products or services  provided.The  following is a summary
of selected  information  for these  segments  for the  three-year  period ended
December 31, 1999:
<TABLE>
<CAPTION>


                                        1999              1998             1997
                                  --------------  ---------------  -------------
Revenues:(3)
Oil and gas exploration,
<S>                                   <C>            <C>             <C>
 production and operations            $   887,000    $  1,026,000    $ 1,442,000
Gas gathering and equipment
 rental                                   128,000         173,000        222,000
                                        ----------      ----------    ----------
                                      $ 1,015,000    $  1,199,000    $ 1,664,000
                                        =========       ==========    ==========
Depreciation, depletion and
amortization expense:
 Oil and gas exploration,
 production and operations             $  163,000    $    207,000    $   198,000

Gas gathering and equipment rental         14,000          21,000         20,000
                                          --------       ---------    ----------
                                        $ 177,000    $    228,000    $   218,000
                                          ========       =========    ==========
Income from operations:
Oil and gas exploration,
production and operations               $ 267,000    $    290,000    $  581,000
Gas gathering and equipment rental         64,000          47,000        68,000
                                          --------       --------     ----------
                                          331,000         337,000       649,000
Corporate and other (1)                  (602,000)       (566,000)     (566,000)
                                         ----------     ----------    ----------
Consolidated net income                $ (271,000)    $  (229,000)   $    83,000
                                         ===========    ==========     =========

Identifiable assets:
Oil and gas exploration,
production and operations              $ 1,077,000    $ 1,043,000   $ 1,124,000
Gas gathering & rental equipment           118,000         71,000        83,000
                                         ---------     ----------    ----------
                                         1,195,000     1,114,000      1,207,000
Corporate and other (2)                    648,000       679,000      1,018,000
                                         ---------     ----------    ----------
                                       $  1,843,000   $1,793,000    $ 2,225,000
                                         ==========    =========      ==========
</TABLE>

(1) Corporate and other  includes  general and  administrative  expenses,  other
non-operating income and expense and income taxes.

(2) Corporate and other includes cash, accounts and notes receivable, inventory,
other property and equipment and intangible assets.

(3) All reported revenues are from external customers.




                                       36
<PAGE>



16.  SUPPLEMENTARY INCOME STATEMENT INFORMATION

<TABLE>
<CAPTION>
                                                              Charged
                                                        Directly to Expense
                                          -------------------------------------
                                             1999         1998           1997
                                          ---------   -----------     ----------
<S>                                       <C>         <C>            <C>
Maintenance and Repairs                   $ 50,000    $  86,000      $   49,000
Production taxes                            41,000       45,000          68,000
Taxes, other than payroll and income taxes  12,000       23,000          21,000
</TABLE>


17.  SUPPLEMENTAL RESERVE INFORMATION (UNAUDITED)
The Company's net proved oil and gas reserves as of December 31, 1999,  1998 and
1997 have been  estimated by Company  personnel in  accordance  with  guidelines
established  by  the  Securities  and  Exchange  Commission.   Accordingly,  the
following  reserve  estimates  were based on  existing  economic  and  operating
conditions.  Oil and gas prices in effect at December 31 of each year were used.
Operating costs,  production and ad valorem taxes and future  development  costs
were based on current costs with no escalation.

There are numerous  uncertainties  inherent in  estimating  quantities of proved
reserves  and in  projecting  the  future  rates of  production  and  timing  of
development  expenditures.  The following reserve data represents estimates only
and should not be construed as being exact.  Moreover, the present values should
not be  construed  as the  current  market  value of the  Company's  oil and gas
reserves or the costs that would be incurred to obtain equivalent reserves.

Changes in Estimated Quantities of Proved Oil and Gas Reserves

<TABLE>
<CAPTION>

                                       Oil                Gas
                                       Bbls               Mcf
                                     ------------    --------------
Proved reserves:
<S>                                     <C>              <C>
Balance December 31, 1996               72,091           2,471,174
Sales of reserves in place                   -              (4,554)
Acquired properties                          -             176,266
Revisions of previous estimates          4,553             135,639
Production                             (14,998)           (357,166)
                                       --------          ----------
Balance December 31, 1997               61,646           2,421,359
Sales of reserves in place                   -             (50,843)
Revisions of previous estimates        (14,422)            (21,413)
Production                             (13,304)           (350,566)
                                       --------          ----------
Balance December 31, 1998               33,920           1,998,537
Sales of reserves in place              (7,856)            -
Acquired properties                          -             354,133
Revisions of previous estimates          3,484            (164,092)
Production                              (6,986)           (277,834)
                                       --------          ----------
Balance December 31, 1999               22,562           1,910,744
                                       =======           =========

Proved Developed Reserves:
Balance December 31, 1997               61,646           2,122,247
Balance December 31, 1998               33,920           1,699,425
Balance December 31, 1999               22,562           1,683,667

</TABLE>



                                       37
<PAGE>




16.  SUPPLEMENTAL RESERVE INFORMATION (UNAUDITED) - Continued

          Standardized Measure of Discounted Future Net Cash Flows and
             Changes Therein Relating to Proved Oil and Gas Reserves
                                   (Unaudited)

The Standardized Measure of Discounted Future Net Cash Flows and Changes Therein
Relating  to Proved  Oil and Gas  Reserves  ("Standardized  Measures")  does not
purport to present the fair market value of a company's oil and gas  properties.
An estimate of such value  should  consider,  among other  factors,  anticipated
future  prices  of oil and gas,  the  probability  of  recoveries  in  excess of
existing proved reserves,  the value of probable reserves and acreage prospects,
and perhaps  different  discount  rates.  It should be noted that  estimates  of
reserve quantities,  especially from new discoveries,  are inherently  imprecise
and subject to substantial revision.

Future net cash flows  were  computed  using the  contract  price  which was not
escalated.  Future production  includes  operating costs and taxes. No deduction
has  been  made  for  interest,  general  corporate  overhead,  depreciation  or
amortization.  Future  income tax  payable was not  computed  because of the net
operating  loss  carryforward  (See Note 7). The annual  discount  of  estimated
future  net cash  flows  is  defined,  for use  herein,  as  future  cash  flows
discounted at 10% per year, over the expected period of realization

<TABLE>
<CAPTION>


                                                          December 31,
                                           1999             1998         1997
                                        ------------ --------------  ----------
Standardized Measures of Discounted
Future Net Cash Flows:

<S>                                     <C>           <C>           <C>
Future production revenue               $ 4,643,000   $ 4,487,000   $ 6,302,000
Future development costs                   (110,000)     (110,000)     (110,000)
Future production costs                  (2,523,000)   (2,238,000)   (3,167,000)
                                        ----------     -----------    ----------

Future net cash flows before Federal
income tax                                2,010,000     2,139,000     3,025,000
Future Federal income tax                      -             -              -
                                        ----------    -----------    ----------
Future net cash flows                     2,010,000     2,139,000     3,025,000
Effect of discounting 10%
per year                                   (406,000)    (540,000)      (741,000)
                                        -----------   -----------     ----------
                                        $ 1,604,000   $1,599,000    $ 2,284,000
                                        ===========   ============    ==========


</TABLE>


                                       38
<PAGE>



<TABLE>
<CAPTION>



                                             1999         1998           1997
                                          -----------   ----------    ---------
Change Relating to the Standardized
Measures of Discounted Future Net Cash
Flows:
<S>                                      <C>           <C>          <C>
Beginning balance                        $ 1,599,000   $ 2,284,000  $ 2,381,000
Oil and gas sales, net of
production costs                            (272,000)     (321,000)    (592,000)
Net change in prices, net of production
costs                                       (317,000)     (211,000)      99,000
Extensions and discoveries                      -                           -
Purchase of reserves in place                825,000            -       124,000
Sales of reserves in place                  (113,000       (73,000)      (4,000)
Revisions of quantity estimates             (171,000)     (124,000)     204,000
Accretion of discount                        160,000       228,000      238,000
Other                                       (107,000)      (184,000)   (166,000)
                                           -----------  -----------   ----------
                                         $ 1,604,000   $  1,599,000  $ 2,284,000
                                           ===========  ============  ==========

</TABLE>




                                       39
<PAGE>




                                 SCHEDULE II

<TABLE>
<CAPTION>


                   SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS
                  YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997



                               Charged To
                         Beginning       Costs and                      Ending
   Description            Balance        Expenses     Deductions        Balance
--------------------   -------------   ------------  -------------  -----------
Allowance for
Doubtful Accounts
----------------
<S>                   <C>                <C>         <C>            <C>
December 31, 1997      $   230,000            -           -         $   230,000
                          =======        ========      =======       ==========
December 31, 1998      $   230,000         20,000         -         $   250,000
                          ========       ========      =======       ==========
December 31, 1999      $   250,000        50,000          -         $   300,000
                          ========       ========       =======      ==========



</TABLE>






                                       40
<PAGE>











                    SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES

                                Index to Exhibits


                                                             PAGE

22.  Subsidiaries of the Registrant                            42












                                       41
<PAGE>













                    SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES




                           Subsidiaries the Registrant


Prairie Pipeline Co. incorporated June 22, 1983, under the laws of the State of
Texas, is a wholly-owned subsidiary of Registrant.


Spindletop Drilling Company,  incorporated  September 5, 1975, under the laws of
the State of Texas, is a wholly-owned subsidiary of the Registrant.





                                       42
<PAGE>