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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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


                  For the quarterly period ended June 30, 2000

                                       OR

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

             For the transition period from __________ to __________

                        Commission File Number: 000-22433

                           Brigham Exploration Company

             (Exact name of registrant as specified in its charter)

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

            DELAWARE                                 1311                               75-2692967
  (State of other jurisdiction           (Primary Standard Industrial                (I.R.S. Employer
of incorporation or organization)         Classification Code Number)             Identification Number)
</TABLE>

                            6300 BRIDGEPOINT PARKWAY
                             BUILDING TWO, SUITE 500
                               AUSTIN, TEXAS 78730
                                 (512) 427-3300

               (Address, including zip code, and telephone number,
       including area code, of Registrant's principal executive offices)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

                              Yes X   No
                                 ---    ---

     As of August 11, 2000, 16,712,908 shares of Common Stock, $.01 per share,
were outstanding.

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


<PAGE>

                           BRIGHAM EXPLORATION COMPANY

                      SECOND QUARTER 2000 FORM 10-Q REPORT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           PAGE
                                                                                                           ----
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

<S>                                                                                                        <C>
         Condensed Consolidated Financial Statements of Brigham Exploration Company
              Balance Sheets - December 31, 1999 and June 30, 2000 ..........................................1
              Statements of Operations - Three and six months ended June 30, 1999 and 2000 ..................2
              Statements of Cash Flows - Six months ended June 30, 1999 and 2000 ............................3
              Statement of Changes in Stockholders' Equity - Six months ended June 30, 2000 .................4
              Notes to Condensed Consolidated Financial Statements ..........................................5

         Condensed Financial Statements of Certain Brigham Exploration Company Subsidiaries
              Balance Sheets - June 30, 2000.................................................................9
              Balance Sheets - December 31, 1999............................................................10
              Statements of Operations - Three months ended June 30, 2000...................................11
              Statements of Operations - Three months ended June 30, 1999...................................12
              Statements of Operations - Six months ended June 30, 2000.....................................13
              Statements of Operations - Six months ended June 30, 1999.....................................14
              Statements of Cash Flows - Six months ended June 30, 2000.....................................15
              Statements of Cash Flows - Six months ended June 30, 1999.....................................16
              Statements of Changes in Equity - Six months ended June 30, 2000..............................17
              Notes to Condensed Financial Statements.......................................................18


Item  2. Management's Discussion and Analysis of Results of
         Operations and Financial Condition.................................................................21

Item  3. Quantitative and Qualitative Disclosures

         About Market Risk..................................................................................31


                           PART II - OTHER INFORMATION

Item  6. Exhibits and Reports on Form 8-K...................................................................32

SIGNATURES..................................................................................................33
</TABLE>



<PAGE>


PART I .  FINANCIAL INFORMATION

Item 1.      Financial Statements

                        BRIGHAM EXPLORATION COMPANY

                   CONDENSED CONSOLIDATED BALANCE SHEETS
                               (in thousands)

<TABLE>
<CAPTION>
                                                                              December 31,            June 30,
                                                                                  1999                  2000
                                                                             ----------------      ----------------
                                                                                                     (unaudited)
                                   ASSETS

<S>                                                                                <C>                   <C>
Current assets:
     Cash and cash equivalents                                                     $   2,742             $      73
     Accounts receivable                                                               4,945                 6,808
     Other current assets                                                                577                   427
                                                                             ----------------      ----------------
        Total current assets                                                           8,264                 7,308
                                                                             ----------------      ----------------


Natural gas and oil properties, at cost, net                                         112,066               120,320
Other property and equipment, at cost, net                                             1,686                 1,487
Drilling advances paid                                                                    23                    39
Deferred loan fees                                                                     3,481                 3,241
Other noncurrent assets                                                                  163                   263
                                                                             ----------------      ----------------
                                                                                   $ 125,683             $ 132,658
                                                                             ================      ================

                    LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:

     Accounts payable                                                              $  14,851             $   7,035
     Accrued drilling costs                                                              541                   729
     Participant advances received                                                       850                   215
     Other current liabilities                                                         1,502                 2,727
                                                                             ----------------      ----------------
        Total current liabilities                                                     17,744                10,706
                                                                             ----------------      ----------------

Notes payable                                                                         56,000                65,000
Senior subordinated notes, net                                                        41,341                44,437
Other noncurrent liabilities                                                           1,600                 5,523

Commitments and contingencies

Stockholders' equity:
     Preferred stock, $.01 par value, 10 million shares
        authorized, none issued and outstanding                                            -                     -
     Common stock, $.01 par value, 50 million shares authorized,
        14,517,786 and 16,712,908 issued and outstanding at
        December 31, 1999 and June 30, 2000, respectively                                145                   167
     Additional paid-in capital                                                       64,171                68,721
     Unearned stock compensation                                                        (290)                 (342)
     Accumulated deficit                                                             (55,028)              (61,554)
                                                                             ----------------      ----------------
        Total stockholders' equity                                                     8,998                 6,992
                                                                             ----------------      ----------------
                                                                                   $ 125,683             $ 132,658
                                                                             ================      ================
</TABLE>

Natural gas and oil properties are accounted for using the full cost method.



        See accompanying notes to the consolidated financial statements.


                                       1
<PAGE>


          BRIGHAM EXPLORATION COMPANY

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                           Three Months                        Six Months
                                                          Ended June 30,                      Ended June 30,
                                                 -------------------------------     -------------------------------
                                                     1999             2000               1999             2000
                                                 --------------   --------------     --------------   --------------
<S>                                                  <C>               <C>               <C>               <C>
Revenues:
     Natural gas and oil sales                       $   3,553         $  4,635          $   6,744         $  9,140
     Workstation revenue                                    71               16                161               49
                                                 --------------   --------------     --------------   --------------
                                                         3,624            4,651              6,905            9,189
                                                 --------------   --------------     --------------   --------------
Costs and expenses:
     Lease operating                                       619              502              1,154              961
     Production taxes                                      216              395                385              699
     General and administrative                            891              708              1,809            1,448
     Depletion of natural gas and oil properties         1,514            1,820              2,875            3,584
     Depreciation and amortization                         139              124                266              247
     Amortization of stock compensation                     55               24                113               36
                                                 --------------   --------------     --------------   --------------
                                                         3,434            3,573              6,602            6,975
                                                 --------------   --------------     --------------   --------------
        Operating income                                   190            1,078                303            2,214
                                                 --------------   --------------     --------------   --------------

Other income (expense):
     Interest income                                        70               19                 94               56
     Interest expense, net                              (2,377)          (3,031)            (4,458)          (5,806)
     Loss on sale of natural gas and oil properties    (12,195)               -            (12,195)               -
     Other expense                                        (527)          (2,394)              (527)          (2,990)
                                                 --------------   --------------     --------------   --------------
                                                       (15,029)          (5,406)           (17,086)          (8,740)
                                                 --------------   --------------     --------------   --------------

Net loss before income taxes                           (14,839)          (4,328)           (16,783)          (6,526)
Income tax expense                                           -                -                  -                -
                                                 --------------   --------------     --------------   --------------
     Net loss                                        $ (14,839)        $ (4,328)         $ (16,783)        $ (6,526)
                                                 ==============   ==============     ==============   ==============

Net loss per share:
     Basic/Diluted                                   $   (1.04)        $  (0.26)         $   (1.21)        $  (0.41)

Weighted average common shares outstanding:
     Basic/Diluted                                      14,309           16,713             13,816           15,996
</TABLE>


   See accompanying notes to the condensed consolidated financial statements.


                                       2
<PAGE>



                           BRIGHAM EXPLORATION COMPANY

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                    Six Months
                                                                                                  Ended June 30,
                                                                                             ----------------------
                                                                                               1999        2000
                                                                                             ----------  ----------
<S>                                                                                          <C>          <C>
Cash flows from operating activities:
    Net loss                                                                                 $ (16,783)   $ (6,526)
    Adjustments to reconcile net loss to cash provided (used) by operating activities:
       Depletion of natural gas and oil properties                                               2,875       3,584
       Depreciation and amortization                                                               266         247
       Amortization of stock compensation                                                          113          36
       Interest paid through issuance of additional senior subordinated notes                    2,642       3,003
       Amortization of deferred loan fees and debt issuance costs                                  628         689
       Amortization of discount on senior subordinated notes                                       228         417
       Loss on sale of natural gas and oil properties                                           12,195           -
       Amortization of deferred loss on derivatives instruments                                      -         280
       Market value adjustment for derivatives instruments                                         527       2,367
       Changes in working capital and other items:
         (Increase) decrease in accounts receivable                                              4,879      (1,863)
         (Increase) decrease in prepaid expenses                                                   (90)       (130)
         Increase (decrease) in accounts payable                                                (2,001)     (7,816)
         Increase (decrease) in participant advances received                                     (305)       (635)
         Increase (decrease) in other current liabilities                                          (76)        292
         Other noncurrent assets                                                                  (111)       (100)
         Other noncurrent liabilities                                                           (4,655)      2,388
                                                                                             ----------  ----------
         Net cash provided (used) by operating activities                                          332      (3,767)
                                                                                             ----------  ----------

Cash flows from investing activities:
    Additions to natural gas and oil properties                                                (15,280)    (11,612)
    Proceeds from sale of natural gas and oil properties                                        26,700           -
    Additions to other property and equipment                                                      (89)        (48)
    Increase in drilling advances paid                                                            (122)        (16)
                                                                                             ----------  ----------
         Net cash provided (used) by investing activities                                       11,209     (11,676)
                                                                                             ----------  ----------

Cash flows from financing activities:
    Proceeds from issuance of common stock                                                           -       4,187
    Proceeds from issuance of warrants                                                               -         260
    Increase in notes payable                                                                    6,000       9,000
    Repayment of notes payable                                                                 (16,750)       (109)
    Principal payments on capital lease obligations                                               (130)       (114)
    Deferred loan fees paid                                                                       (478)       (450)
                                                                                             ----------  ----------
         Net cash provided (used) by financing activities                                      (11,358)     12,774
                                                                                             ----------  ----------

Net increase (decrease) in cash and cash equivalents                                               183      (2,669)
Cash and cash equivalents, beginning of period                                                   2,569       2,742
                                                                                             ----------  ----------
Cash and cash equivalents, end of period                                                     $   2,752     $    73
                                                                                             ==========  ==========

Supplemental disclosure of cash flow information:

    Cash paid during the period for interest                                                 $   2,457     $ 1,646
                                                                                             ==========  ==========
Supplemental disclosure of noncash investing and financing activities:

    Capital lease asset additions                                                            $      51    $      -
                                                                                             ==========  ==========
    Decrease in accounts payable and other noncurrent liabilities in
       exchange for issuance of common stock                                                 $   3,510    $      -
                                                                                             ==========  ==========
    Increase in accounts payable for deferred loan fees to be paid in future periods         $     300    $      -
                                                                                             ==========  ==========
</TABLE>


   See accompanying notes to the condensed consolidated financial statements.


                                       3
<PAGE>



                           BRIGHAM EXPLORATION COMPANY

                             CONDENSED CONSOLIDATED
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>

                                      Common Stock           Additional       Deferred
                               ----------------------------    Paid-in          Stock          Accumulated
                                  Shares         Amounts       Capital      Compensation         Deficit         Total
                               --------------   -----------  ------------  ----------------   ---------------  ----------

<S>                               <C>                <C>         <C>                <C>            <C>           <C>
Balance, December 31, 1999        14,517,786         $ 145       $64,171            $ (290)        $ (55,028)    $ 8,998

Net loss                                   -             -             -                 -            (6,526)     (6,526)
Issuance of  common stock          2,195,122            22         4,165                 -                 -       4,187
Issuance of stock options                  -             -           185              (185)                -           -
Forfeiture of stock options                -             -           (60)               10                 -         (50)
Issuance of warrants                       -             -           260                 -                 -         260
Amortization of unearned
     stock compensation                    -             -             -               123                 -         123
                               --------------   -----------  ------------  ----------------   ---------------  ----------

Balance, June 30, 2000            16,712,908         $ 167       $68,721            $ (342)        $ (61,554)    $ 6,992
                               ==============   ===========  ============  ================   ===============  ==========
</TABLE>



See accompanying notes to the condensed consolidated financial statements.

                                       4

<PAGE>

                           BRIGHAM EXPLORATION COMPANY

                             NOTES TO THE CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


1.   ORGANIZATION AND NATURE OF OPERATIONS

     Brigham Exploration Company (the "Company") is a Delaware corporation
     formed on February 25, 1997 for the purpose of exchanging its common stock
     for the common stock of Brigham, Inc. and the partnership interests of
     Brigham Oil & Gas, L.P. The Company explores and develops onshore domestic
     natural gas and oil properties using 3-D seismic imaging and other advanced
     technologies. The Company focuses its exploration and development of
     onshore natural gas and oil properties primarily in the Anadarko Basin, the
     Texas Gulf Coast and West Texas.

2.   BASIS OF PRESENTATION

     The accompanying financial statements include the accounts of the Company
     and its wholly-owned subsidiaries, and its proportionate share of assets,
     liabilities and income and expenses of the limited partnerships in which
     the Company, or any of its subsidiaries, has a participating interest. All
     significant intercompany accounts and transactions have been eliminated.

     The accompanying condensed consolidated financial statements are unaudited,
     and in the opinion of management, reflect all adjustments that are
     necessary for a fair presentation of the financial position and results of
     operations for the periods presented. All such adjustments are of a normal
     and recurring nature. The results of operations for the periods presented
     are not necessarily indicative of the results to be expected for the entire
     year. The unaudited condensed consolidated financial statements should be
     read in conjunction with the Company's 1999 Annual Report on Form 10-K
     pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

3.   AMENDMENT TO REVOLVING CREDIT FACILITY AND SENIOR SUBORDINATED NOTES

     In February 2000, the Company entered into an amended and restated Credit
     Facility with its existing lenders and a new lender. This amended and
     restated Credit Facility provides the Company with $70 million in borrowing
     availability for a three-year term. If the Company exceeds certain asset
     value and interest coverage tests in the third quarter of 2000, the total
     borrowing availability under the Credit Facility will increase to $75
     million. The Company expects to meet these tests. The Credit Facility
     includes a provision whereby certain amounts held by one of the lenders,
     not to exceed $30 million of the outstanding borrowings, are convertible
     into shares of the Company's common stock ("Convertible Notes") to the
     extent total borrowings exceed $45 million. As of June 30 and August 11,
     2000, the Convertible Notes approximate $20 million and $25 million,
     respectively.

     The Credit Facility provides that the Convertible Notes will be convertible
     as follows: (i) the first $10 million of borrowings is convertible at $3.90
     per share, (ii) the second $10 million is convertible at $6.00 per share,
     and (iii) the final $10 million is convertible at $8.00 per share. The
     Convertible Notes could result in a beneficial conversion feature based on
     the relationship between the Company's stock price at the time of a
     borrowing and the strike price of the relative portion of the convertible
     debt. The value assigned to the beneficial conversion feature would be
     recorded as a component of interest expense to the extent the Convertible
     Notes are immediately convertible. Due to the fact that the strike prices
     of the Convertible Notes at February 17, 2000 and at each subsequent draw
     date were in excess of the market prices of the Company's common stock at
     those respective dates, no beneficial conversion feature was recorded. If
     the Credit Facility is repaid at maturity or is prepaid prior to maturity
     without payments of cash premiums, the warrants issued to the new
     participant in the Credit Facility to purchase Brigham common stock become
     exercisable. Further, to the extent the Company prepays any of the
     Convertible Notes, it will be required to pay a premium above the face
     value of the Convertible Notes to the lender. Such premium amounts range
     from 150% to 110%, depending on the timing of the prepayment. Such
     prepayment, however, would require the prior approval of the original
     lenders to the Credit Facility. In addition, certain financial covenants of
     the Credit Facility were amended or added. In


                                       5
<PAGE>


                           BRIGHAM EXPLORATION COMPANY

                             NOTES TO THE CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


     connection with this most recent amendment, the Company reset the price of
     the warrants previously issued to its existing senior lenders to purchase
     one million shares of the Company's common stock from an exercise price of
     $2.25 per share to $2.02 per share.

     In February 2000, the indenture governing the Subordinated Notes was
     amended. In this amendment, the holders of the Subordinated Notes waived
     the minimum consolidated interest coverage ratio covenant through June 30,
     2000, and adjusted subsequent levels under this test. In addition, the
     amendment provides the Company with an extension of its right to pay
     interest through the issuance of additional Subordinated Notes in lieu of
     cash (or "in kind") through the third quarter of 2000 and potentially
     through the fourth quarter of 2000 if certain conditions are met. In
     exchange for granting these amendments, the Company (i) reset the price of
     the warrants previously issued to the holders of the Subordinated Notes to
     purchase one million shares of the Company's common stock from an exercise
     price of $3.50 per share to $2.43 per share, and (ii) granted to the
     holders of the Subordinated Notes a term overriding royalty interest that
     provides for the limited right to receive 4%, or 3% if certain conditions
     are met, of the Company's net production revenue to reduce any outstanding
     Subordinated Notes issued as interest paid in kind. As payments are made
     pursuant to the term overriding royalty interest, they will be recorded by
     the Company as a reduction of the balance payable pursuant to the
     Subordinated Notes.

     The modification of these agreements did not result in any material
     adjustment to debt issuance costs.

4.   NET INCOME (LOSS) PER SHARE

     Net loss per share is presented in the consolidated financial statements
     based on a basic loss per share calculation as well as a diluted loss per
     share calculation. Basic loss per share is computed by dividing net loss
     applicable to common shareholders by the weighted average number of common
     shares outstanding during each period. Diluted loss per share is computed
     by dividing net loss applicable to common shareholders by the weighted
     average number of common shares and common share equivalents outstanding
     (if dilutive) during each period. The number of common share equivalents
     outstanding is computed using the treasury stock method.

     At June 30, 2000 and December 31, 1999, options and warrants to purchase
     8,767,624 and 3,519,726 shares of common stock, respectively, were
     outstanding but were not included in the computation of diluted loss per
     share because they were anti-dilutive.

5.   ISSUANCE OF COMMON STOCK

     In February 2000, the Company issued 2,195,122 shares of common stock and
     731,707 warrants to purchase the Company's common stock for total net
     proceeds of $4.2 million in a private placement to a group of institutional
     investors led by affiliates of two members of the Company's board of
     directors. The equity sale consisted of units that included one share of
     common stock and one-third of a warrant to purchase the Company's common
     stock at an exercise price of $2.5625 per share.

6.   HEDGING ACTIVITIES

     The Company utilizes various commodity swap and option contracts to (i)
     reduce the effects of volatility in price changes on the oil and natural
     gas commodities it produces and sells, (ii) support its capital budgeting
     plans, and (iii) lock-in prices to protect the economics related to certain
     capital projects.

     In the first six months of 2000 the Company recognized losses of $2.3
     million ($0.72 per Mcfe) from hedging contracts as a component of oil and
     gas sales. Derivative instruments that do not qualify as hedging contracts
     are recorded at fair market value and recorded on the balance sheet as
     deferred gain or loss. Each balance sheet



                                       6
<PAGE>


                           BRIGHAM EXPLORATION COMPANY

                             NOTES TO THE CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


     date the market value of these derivative instruments is adjusted to
     current value and any deferred gains or losses are recognized as a
     component of other income or expense. In the first six months of 2000 the
     Company recognized other losses of $3.0 million related to derivative
     instruments not qualifying as hedging contracts, including $2.4 million in
     non-cash losses related to the changes in fair market values of certain
     hedging contracts.

     The following tables summarize the Company's outstanding natural gas and
     oil hedging arrangements as of July 1, 2000:

<TABLE>
<CAPTION>
 NATURAL GAS HEDGES                                        2000                  2001                    2002
                                                   -------------------  ---------------------   -----------------------
                                                             Average                  Average                  Average
                                                   Volumes   Contract   Volumes      Contract    Volumes      Contract
                                     Monthly       Hedged    Price       Hedged        Price     Hedged         Price
                   Pricing Basis  Contract Term    (MMBtu)   ($/MMBtu)  (MMBtu)      ($/MMBtu)   (MMBtu)      ($/MMBtu)
                   -------------  -------------    -------   ---------  -------      ---------   -------      ---------

 Fixed Price Swaps:

<S>                <C>             <C>               <C>        <C>        <C>         <C>       <C>            <C>
    Contract #1         ANR        July 2000 -       920,000    $2.0650    600,000     $2.0650         --            --
                     Oklahoma      April 2001

    Contract #2       Houston      July 2000 -       920,000    $2.1500    600,000     $2.1500         --            --
                   Ship Channel    April 2001

    Contract #3        TETCO       July 2000 -       920,000    $2.0575    600,000     $2.0575         --            --
                    South Texas    April 2001

 Fixed Price Cap        ANR        May 2001 -             --         --  2,450,000     $2.5498  1,810,000       $2.6326
                     Oklahoma       June 2002

 Fixed Price Floor      ANR        May 2001 -             --         --    765,000     $1.8000         --            --
                     Oklahoma     December 2001

<CAPTION>

CRUDE OIL HEDGES                                          2000                   2001                  2002
                                                   --------------------     --------------------   ------------------
                                                                Average                  Average             Average
                                                  Volumes      Contract    Volumes      Contract  Volumes    Contract
                                     Monthly       Hedged        Price      Hedged        Price   Hedged      Price
                   Pricing Basis  Contract Term    (Bbls)       ($/Bbl)     (Bbls)       ($/Bbl)   (Bbls)     ($/Bbl)
                   -------------  -------------    ------       -------     ------       -------   ------     -------

<S>                    <C>        <C>               <C>          <C>       <C>          <C>            <C>        <C>
Fixed Price Cap        NYMEX       July 2000 -      110,400      $31.75    109,200      $26.15         --         --
                                  December 2001
Fixed Price Floor      NYMEX       July 2000 -      110,400      $18.00    109,200      $17.36         --         --
                                  December 2001
</TABLE>


7.   RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
     for Derivative Instruments and Hedging Activities." This Statement, as
     amended in June 2000 by SFAS No. 138, "Accounting for Certain Derivative
     Instruments and Certain Hedging Activities - an Amendment of SFAS No. 133"
     establishes accounting and reporting standards for derivative instruments
     and for hedging activities. It requires enterprises to recognize all
     derivatives as either assets or liabilities in the balance sheet and
     measure those instruments at fair value. The requisite accounting for
     changes in the fair value of a derivative will depend on the intended use
     of the derivative and the resulting designation. The Company must adopt
     SFAS No. 133 and No. 138, as amended by SFAS No. 137, "Accounting for
     Derivative Instruments and Hedging Activities - Deferral of the Effective
     Date of FASB


                                       7
<PAGE>


                           BRIGHAM EXPLORATION COMPANY

                             NOTES TO THE CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


     Statement No. 133", effective January 1, 2001. The Company is currently
     assessing the impact adoption of this standard will have on its financial
     statement presentation.

     In March 2000, the Financial Accounting Standards Board issued
     Interpretation No. 44 ("FIN 44") ACCOUNTING FOR CERTAIN TRANSACTIONS
     INVOLVING STOCK COMPENSATION, AN INTERPRETATION OF APB OPINION NO. 25. FIN
     44 clarifies the application of opinion No. 25 for (a) the definition of
     employee for purposes of applying Opinion No. 25, (b) the criteria for
     determining whether a plan qualifies as a noncompensatory plan, (c) the
     accounting consequences of various modifications to the terms of a
     previously fixed stock option or award, and (d) the accounting for an
     exchange of stock compensation awards in a business combination. FIN 44 is
     effective July 1, 2000, but certain conclusions cover specific events that
     occur after either December 15, 1998, or January 12, 2000. The Company
     believes that the impact of FIN 44 will not have a material effect on its
     financial position or results of operations.



                                       8
<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES
                            CONDENSED BALANCE SHEETS
                               AS OF JUNE 30, 2000
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                           BRIGHAM                           BRIGHAM        BRIGHAM
                                                            OIL &           BRIGHAM,        HOLDINGS        HOLDINGS
                                                          GAS, L.P.           INC.           I, LLC         II, LLC

                                     ASSETS

Current assets:
<S>                                                         <C>              <C>              <C>             <C>
     Cash and cash equivalents                              $      67        $      73        $      1        $      1
     Accounts receivable                                        6,808            6,808               -               -
     Other current assets                                         427              427               -               -
                                                         -------------    -------------    ------------   -------------
         Total current assets                                   7,302            7,308               1               1
                                                         -------------    -------------    ------------   -------------

Natural gas and oil properties, at cost, net                  120,320          120,320               -               -
Other property and equipment, at cost, net                      1,487            1,487               -               -
Investment in subsidiaries
     and intercompany advances                                    141               27             305          50,296
Drilling advances paid                                             39               39               -               -
Deferred loan fees                                              1,979            1,979               -               -
Other noncurrent assets                                           263              263               -               -
                                                         -------------    -------------    ------------   -------------
                                                            $ 131,531        $ 131,423         $   306        $ 50,297
                                                         =============    =============    ============   =============

                             LIABILITIES AND EQUITY

Current liabilities:
     Accounts payable                                       $   7,035        $   7,035         $     -        $      -
     Accrued drilling costs                                       729              729               -               -
     Participant advances received                                215              215               -               -
     Other current liabilities                                  2,400            2,400               -               -
                                                         -------------    -------------    ------------   -------------
         Total current liabilities                             10,379           10,379               -               -
                                                         -------------    -------------    ------------   -------------

Notes payable                                                  65,000           65,000               -               -
Other noncurrent liabilities                                    5,523            5,523               -               -
Intercompany accounts payable                                   2,007            1,923               -           2,034
Intercompany notes payable                                     48,138           48,138               -          48,138

Commitments and contingencies

Minority interest                                                   -              332               -               -

Equity

     Partners' capital                                            484                -             306             125
     Common stock, $1.00 par value, 1,000
         shares authorized, issued and
         outstanding                                                -                1               -               -
     Additional paid-in capital                                     -           19,233               -               -
     Accumulated deficit                                            -          (19,106)              -               -
                                                         -------------    -------------    ------------   -------------
         Total equity                                             484              128             306             125
                                                         -------------    -------------    ------------   -------------
                                                            $ 131,531        $ 131,423         $   306        $ 50,297
                                                         =============    =============    ============   =============
</TABLE>


  Natural gas and oil properties are accounted for using the full cost method.


          See accompanying notes to the condensed financial statements.


                                       9
<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES
                            CONDENSED BALANCE SHEETS
                             AS OF DECEMBER 31, 1999
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                           BRIGHAM                           BRIGHAM        BRIGHAM
                                                            OIL &           BRIGHAM,        HOLDINGS        HOLDINGS
                                                          GAS, L.P.           INC            I, LLC         II, LLC

                                     ASSETS

Current assets:
<S>                                                         <C>              <C>              <C>             <C>
     Cash and cash equivalents                              $   2,718        $   2,736        $      6        $      6
     Accounts receivable                                        4,945            4,945               -               -
     Other current assets                                         577              577               -               -
                                                         -------------    -------------    ------------   -------------
         Total current assets                                   8,240            8,258               6               6
                                                         -------------    -------------    ------------   -------------

Natural gas and oil properties, at cost, net                  112,066          112,066               -               -
Other property and equipment, at cost, net                      1,686            1,686               -               -
Investment in subsidiaries

     and intercompany advances                                    130               26           1,299          47,802
Drilling advances paid                                             23               23               -               -
Deferred loan fees                                              2,108            2,108               -               -
Other noncurrent assets                                           164              164               -               -
                                                         -------------    -------------    ------------   -------------
                                                            $ 124,417        $ 124,331        $  1,305        $ 47,808
                                                         =============    =============    ============   =============

                             LIABILITIES AND EQUITY

Current liabilities:
     Accounts payable                                       $  14,851        $  14,851        $      -        $      -
     Accrued drilling costs                                       541              541               -               -
     Participant advances received                                850              850               -               -
     Other current liabilities                                  1,429            1,429               -               -
                                                         -------------    -------------    ------------   -------------
         Total current liabilities                             17,671           17,671               -               -
                                                         -------------    -------------    ------------   -------------

Notes payable                                                  56,000           56,000               -               -
Other noncurrent liabilities                                    1,600            1,600               -               -
Intercompany accounts payable                                   1,752            1,687               -           1,779
Intercompany notes payable                                     45,459           45,459               -          45,459

Commitments and contingencies

Minority interest                                                   -            1,325               -               -

Equity

     Partners' capital                                          1,935                -           1,305             570
     Common stock, $1.00 par value, 1,000
         shares authorized, issued and
         outstanding                                                -                1               -               -
     Additional paid-in capital                                     -           17,832               -               -
     Accumulated deficit                                            -          (17,244)              -               -
                                                         -------------    -------------    ------------   -------------
         Total equity                                           1,935              589           1,305             570
                                                         -------------    -------------    ------------   -------------
                                                            $ 124,417        $ 124,331        $  1,305        $ 47,808
                                                         =============    =============    ============   =============
</TABLE>


  Natural gas and oil properties are accounted for using the full cost method.


         See accompanying notes to the condensed financial statements.

                                       10
<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES
                       CONDENSED STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30, 2000
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                BRIGHAM                           BRIGHAM          BRIGHAM
                                                 OIL &           BRIGHAM,         HOLDINGS         HOLDINGS
                                               GAS, L.P.           INC.            I, LLC          II, LLC

<S>                                                <C>               <C>            <C>               <C>
Revenues:
     Natural gas and oil sales                    $  4,635          $  4,635        $      -          $      -
     Workstation revenue                                16                16               -                 -
                                             -------------   ---------------   -------------   ---------------
                                                     4,651             4,651               -                 -
                                             -------------   ---------------   -------------   ---------------
Costs and expenses:
     Lease operating                                   502               502               -                 -
     Production taxes                                  395               395               -                 -
     General and administrative                        704               706               3                 2
     Depletion of natural gas and oil properties     1,820             1,820               -                 -
     Depreciation and amortization                     124               124               -                 -
     Amortization of stock compensation                 24                24               -                 -
                                             -------------   ---------------   -------------   ---------------
                                                     3,569             3,571               3                 2
                                             -------------   ---------------   -------------   ---------------
        Operating income (loss)                      1,082             1,080              (3)               (2)
                                             -------------   ---------------   -------------   ---------------

Other income (expense):
     Interest income                                    19                19               -                 -
     Interest expense, net                          (1,145)           (1,145)              -                 -
     Interest expense - intercompany                (1,545)           (1,545)              -            (1,545)
     Other expense                                  (2,394)           (2,394)              -                 -
                                             -------------   ---------------   -------------   ---------------
                                                    (5,065)           (5,065)              -            (1,545)
                                             -------------   ---------------   -------------   ---------------

Minority interest in net loss                            -            (2,728)              -                 -

                                             -------------   ---------------   -------------   ---------------
Net loss before income taxes                        (3,983)           (1,257)             (3)           (1,547)

Income tax benefit                                       -                 -               -                 -
Equity in net income (loss) of investee                  -                 -          (2,728)              330
                                             -------------   ---------------   -------------   ---------------
     Net loss                                     $ (3,983)         $ (1,257)       $ (2,731)         $ (1,217)
                                             =============   ===============   =============   ===============
</TABLE>

         See accompanying notes to the condensed financial statements.


                                       11
<PAGE>



                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES
                       CONDENSED STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30, 1999
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                BRIGHAM                           BRIGHAM          BRIGHAM
                                                                 OIL &           BRIGHAM,         HOLDINGS         HOLDINGS
                                                               GAS, L.P.           INC.            I, LLC          II, LLC

<S>                                                              <C>               <C>           <C>                <C>
Revenues:
     Natural gas and oil sales                                 $   3,553          $  3,553       $       -          $      -
     Workstation revenue                                              71                71               -                 -
                                                            -------------   ---------------   -------------   ---------------
                                                                   3,624             3,624               -                 -
                                                            -------------   ---------------   -------------   ---------------
Costs and expenses:
     Lease operating                                                 619               619               -                 -
     Production taxes                                                216               216               -                 -
     General and administrative                                      881               886               5                 5
     Depletion of natural gas and oil properties                   1,514             1,514               -                 -
     Depreciation and amortization                                   139               139               -                 -
     Amortization of stock compensation                               55                55               -                 -
                                                           -------------   ---------------   -------------   ---------------
                                                                   3,424             3,429               5                 5
                                                           -------------   ---------------   -------------   ---------------
        Operating income (loss)                                      200               195              (5)               (5)
                                                           -------------   ---------------   -------------   ---------------

Other income (expense):
     Interest income                                                  70                70               -                 -
     Interest expense, net                                        (1,563)             (786)              -                 -
     Interest expense - intercompany                                (584)           (1,361)              -            (1,361)
     Loss on sale of natural gas and oil properties              (12,195)          (12,195)              -                 -
     Other expense                                                  (527)             (527)              -                 -
                                                           -------------   ---------------   -------------   ---------------
                                                                 (14,799)          (14,799)              -            (1,361)
                                                           -------------   ---------------   -------------   ---------------

Minority interest in net loss                                          -           (10,000)              -                 -

                                                           -------------   ---------------   -------------   ---------------
Net loss before income taxes                                     (14,599)           (4,604)             (5)           (1,366)

Income tax benefit                                                     -                 -               -                 -
Equity in net income (loss) of investee                                -                 -         (10,000)           (3,091)
                                                           -------------   ---------------   -------------   ---------------
     Net loss                                                  $ (14,599)         $ (4,604)      $ (10,005)         $ (4,457)
                                                           =============   ===============   =============   ===============
</TABLE>



          See accompanying notes to the condensed financial statements.


                                       12

<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES
                       CONDENSED STATEMENTS OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2000
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                        BRIGHAM                          BRIGHAM         BRIGHAM
                                                          OIL &          BRIGHAM,        HOLDINGS        HOLDINGS
                                                        GAS, L.P.          INC.           I, LLC          II, LLC

<S>                                                      <C>             <C>             <C>             <C>
Revenues:
     Natural gas and oil sales                           $  9,140        $  9,140        $      -        $      -
     Workstation revenue                                       49              49               -               -
                                                     -------------   -------------   -------------    ------------
                                                            9,189           9,189               -               -
                                                     -------------   -------------   -------------    ------------
Costs and expenses:
     Lease operating                                          961             961               -               -
     Production taxes                                         699             699               -               -
     General and administrative                             1,439           1,443               5               4
     Depletion of natural gas and oil properties            3,584           3,584               -               -
     Depreciation and amortization                            247             247               -               -
     Amortization of stock compensation                        36              36               -               -
                                                     -------------   -------------   -------------    ------------
                                                            6,966           6,970               5               4
                                                     -------------   -------------   -------------    ------------
         Operating income (loss)                            2,223           2,219              (5)             (4)
                                                     -------------   -------------   -------------    ------------

Other income (expense):
     Interest income                                           56              56               -               -
     Interest expense, net                                 (2,145)         (2,145)              -               -
     Interest expense - intercompany                       (3,042)         (3,042)              -          (3,042)
     Other expense                                         (2,990)         (2,990)              -               -
                                                     -------------   -------------   -------------    ------------
                                                           (8,121)         (8,121)              -          (3,042)
                                                     -------------   -------------   -------------    ------------

Minority interest in net loss                                   -          (4,040)              -               -

                                                     -------------   -------------   -------------    ------------
Net loss before income taxes                               (5,898)         (1,862)             (5)         (3,046)

Income tax benefit                                              -               -               -               -
Equity in net income (loss) of investee                         -               -          (4,040)          1,243
                                                     -------------   -------------   -------------    ------------
     Net loss                                            $ (5,898)       $ (1,862)       $ (4,045)       $ (1,803)
                                                     =============   =============   =============    ============
</TABLE>


         See accompanying notes to the condensed financial statements.


                                       13

<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES
                       CONDENSED STATEMENTS OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1999
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                       BRIGHAM                         BRIGHAM          BRIGHAM
                                                        OIL &          BRIGHAM,        HOLDINGS        HOLDINGS
                                                      GAS, L.P.          INC.           I, LLC          II, LLC
Revenues:
<S>                                                     <C>            <C>              <C>             <C>
     Natural gas and oil sales                          $   6,744        $  6,744         $       -        $      -
     Workstation revenue                                      161             161               -               -
                                                     -------------   -------------   -------------    ------------
                                                            6,905           6,905               -               -
                                                     -------------   -------------   -------------    ------------
Costs and expenses:
     Lease operating                                        1,154           1,154               -               -
     Production taxes                                         385             385               -               -
     General and administrative                             1,799           1,804               5               5
     Depletion of natural gas and oil properties            2,875           2,875               -               -
     Depreciation and amortization                            266             266               -               -
     Amortization of stock compensation                       113             113               -               -
                                                     -------------   -------------   -------------    ------------
                                                            6,592           6,597               5               5
                                                     -------------   -------------   -------------    ------------
         Operating income                                     313             308              (5)             (5)
                                                     -------------   -------------   -------------    ------------

Other income (expense):
     Interest income                                           94              94               -               -
     Interest expense, net                                 (2,878)         (2,101)              -               -
     Interest expense - intercompany                       (1,165)         (1,942)              -          (2,678)
     Loss on sale of natural gas and oil properties       (12,195)        (12,195)              -               -
     Other expense                                           (527)           (527)              -               -
                                                     -------------   -------------   -------------    ------------
                                                          (16,671)        (16,671)              -          (2,678)
                                                     -------------   -------------   -------------    ------------

Minority interest in net loss                                   -         (11,205)              -               -
                                                     -------------   -------------   -------------    ------------
Net loss before income taxes                              (16,358)         (5,158)             (5)         (2,683)

Income tax benefit                                              -               -               -               -
Equity in net income (loss) of investee                         -               -         (11,205)         (2,311)
                                                     -------------   -------------   -------------    ------------
     Net loss                                           $ (16,358)       $ (5,158)      $ (11,210)       $ (4,994)
                                                     =============   =============   =============    ============
</TABLE>



See accompanying notes to the condensed financial statements.


                                       14
<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES
                       CONDENSED STATEMENTS OF CASH FLOWS
                     For the Six Months Ended June 30, 2000
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                           BRIGHAM                     BRIGHAM        BRIGHAM
                                                                            OIL &       BRIGHAM,       HOLDINGS      HOLDINGS
                                                                          GAS, L.P.       INC.          I, LLC        II, LLC

<S>                                                                          <C>           <C>           <C>            <C>
Cash flows from operating activities:
    Net loss                                                                 $(5,898)      $(1,862)      $(4,045)       $(1,803)
    Adjustments to reconcile net loss to cash
     provided (used) by operating activities:
      Depletion of natural gas and oil properties                              3,584         3,584             -              -
      Depreciation and amortization                                              247           247             -              -
      Amortization of stock compensation                                          36            36             -              -
      Amortization of deferred loan fees and debt issuance costs                 488           488             -              -
      Amortization of deferred loss on derivatives instruments                   280           280             -              -
      Market value adjustment for derivatives instruments                      2,367         2,367             -              -
      Minority interest in net loss                                                -        (4,040)            -              -
      Equity in net (income) loss of investee                                      -             -         4,040         (1,243)
      Changes in working capital and other items:
        (Increase) decrease in accounts receivable                            (1,863)       (1,863)            -              -
        (Increase) decrease in prepaid expenses                                 (130)         (130)            -              -
        Increase (decrease) in accounts payable                               (7,816)       (7,816)            -              -
        Increase (decrease) in participant advances received                    (635)         (635)            -              -
        Increase (decrease) in other current liabilities                          77            77             -              -
        Increase (decrease) in intercompany accounts payable                     107            88             -             38
        Other noncurrent assets                                                 (100)         (100)            -              -
        Other noncurrent liabilities                                           2,388         2,388             -              -
                                                                         ------------  ------------   -----------   ------------
        Net cash provided (used) by operating activities                      (6,868)       (6,891)           (5)        (3,008)
                                                                         ------------  ------------   -----------   ------------

Cash flows from investing activities:
    Additions to natural gas and oil properties                              (11,612)      (11,612)            -              -
    Additions to other property and equipment                                    (48)          (48)            -              -
    Investment in subsidiaries and intercompany advances                       4,454         4,465             -              -
    Increase in drilling advances paid                                           (16)          (16)            -              -
                                                                         ------------  ------------   -----------   ------------
        Net cash provided (used) by investing activities                      (7,222)       (7,211)            -              -
                                                                         ------------  ------------   -----------   ------------

Cash flows from financing activities:
    Increase in notes payable                                                  9,000         9,000             -              -
    Increase in intercompany notes payable                                     3,003         3,003             -          3,003
    Principal payments on capital lease obligations                             (114)         (114)            -              -
    Deferred loan fees paid                                                     (450)         (450)            -              -
                                                                         ------------  ------------   -----------   ------------
        Net cash provided (used) by financing activities                      11,439        11,439             -          3,003
                                                                         ------------  ------------   -----------   ------------

Net decrease in cash and cash equivalents                                     (2,651)       (2,663)           (5)            (5)
Cash and cash equivalents, beginning of year                                   2,718         2,736             6              6
                                                                         ------------  ------------   -----------   ------------
Cash and cash equivalents, end of period                                     $    67       $    73       $     1        $     1
                                                                         ============  ============   ===========   ============

Supplemental disclosure of cash flow information:
    Cash paid during the year for interest                                   $ 1,646       $ 1,646       $     -        $     -
Supplemental disclosure of cash flow information:
    Intercompany capital contributions                                       $     -       $ 1,406       $ 3,058        $ 1,364
</TABLE>


See accompanying notes to the condensed financial statements.


                                       15
<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES
                       CONDENSED STATEMENTS OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1999
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                           BRIGHAM                     BRIGHAM        BRIGHAM
                                                                            OIL &       BRIGHAM,       HOLDINGS      HOLDINGS
                                                                          GAS, L.P.       INC.          I, LLC        II, LLC

<S>                                                                        <C>            <C>          <C>             <C>
Cash flows from operating activities:
    Net loss                                                               $ (16,358)     $ (5,158)    $ (11,210)      $ (4,994)
    Adjustments to reconcile net loss to cash
     provided (used) by operating activities:
      Depletion of natural gas and oil properties                              2,875         2,875             -              -
      Depreciation and amortization                                              266           266             -              -
      Amortization of stock compensation                                         113           113             -              -
      Amortization of deferred loan fees and debt issuance costs                 440           440             -              -
      Loss on sale of natural gas and oil properties                          12,195        12,195
      Market value adjustment for derivative instruments                         527           527
      Minority interest in net loss                                                -       (11,205)            -              -
      Equity in net (income) loss of investee                                      -             -        11,205          2,311
      Changes in working capital and other items:
        (Increase) decrease in accounts receivable                             4,879         4,879             -              -
        (Increase) decrease in prepaid expenses                                  (90)          (90)            -              -
        Increase (decrease) in accounts payable                               (2,001)       (2,001)            -              -
        Increase (decrease) in participant advances received                    (305)         (305)            -              -
        Increase (decrease) in other current liabilities                        (111)         (111)            -              -
        Increase (decrease) in intercompany accounts payable                      29           125             -             35
        Other noncurrent assets                                                 (109)         (109)            -              -
        Other noncurrent liabilities                                          (4,655)       (4,655)            -              -
                                                                         ------------  ------------   -----------   ------------
        Net cash provided (used) by operating activities                      (2,305)       (2,214)           (5)        (2,648)
                                                                         ------------  ------------   -----------   ------------

Cash flows from investing activities:

    Additions to natural gas and oil properties                              (15,280)      (15,280)            -              -
    Proceeds from sale of natural gas and oil properties                      26,700        26,700             -              -
    Additions to other property and equipment                                    (89)          (89)            -              -
    Change in investment insubsidiaries and intercompany advances                 (4)          (95)            5              6
    Increase in drilling advances paid                                          (122)         (122)            -              -
                                                                         ------------  ------------   -----------   ------------
        Net cash provided (used) by investing activities                      11,205        11,114             5              6
                                                                         ------------  ------------   -----------   ------------

Cash flows from financing activities:

    Increase in notes payable                                                  6,000         6,000             -              -
    Repayment of notes payable                                               (16,750)      (16,750)            -              -
    Increase in intercompany notes payable                                     2,642         2,642             -          2,642
    Principal payments on capital lease obligations                             (130)         (130)            -              -
    Deferred loan fees paid                                                     (478)         (478)            -              -
                                                                         ------------  ------------   -----------   ------------
        Net cash provided (used) by financing activities                      (8,716)       (8,716)            -          2,642
                                                                         ------------  ------------   -----------   ------------

Net increase in cash and cash equivalents                                        184           184             -              -
Cash and cash equivalents, beginning of year                                   2,549         2,563             5              6
                                                                         ------------  ------------   -----------   ------------
Cash and cash equivalents, end of year                                     $   2,733      $  2,747      $      5        $     6
                                                                         ============  ============   ===========   ============

Supplemental disclosure of cash flow information:

    Cash paid during the year for interest                                 $   2,897      $  2,897      $      -        $     -
Supplemental disclosure of noncash investing and financing activities:
    Capital lease asset additions                                          $      51      $     51      $      -        $     -
    Increase in accounts payable for deferred loan fees to be
      paid in future periods                                               $     300      $    300      $      -        $     -
    Capital contributions received in exchange for accounts
      payable and other noncurrent liabilities                             $   3,510      $      -      $      -        $     -
    Intercompany capital contributions                                     $       -      $  1,106      $  2,404        $ 1,071
</TABLE>


         See accompanying notes to the condensed financial statements.


                                       16
<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES
                    CONDENSED STATEMENTS OF CHANGES IN EQUITY
                          (in thousands, except shares)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                          Retained
                                                          Additional     Earnings/
                                      Common Stock          Paid-In     Accumulated     Partners'
                                 -----------------------
                                  Shares      Amounts       Capital       Deficit        Capital       Total
                                 ---------  ------------  ------------  -------------   ----------   ----------

<S>                               <C>               <C>      <C>           <C>            <C>          <C>
BRIGHAM OIL & GAS, L.P.
     Balance,
       December 31, 1999          $     -           $ -      $      -      $       -      $ 1,935      $ 1,935
     Capital contribution               -             -             -              -       14,907       14,907
     Net loss                           -             -             -              -      (16,358)     (16,358)
                                 ---------  ------------  ------------  -------------   ----------   ----------
     Balance,
       June 30, 2000                    -           $ -      $      -      $       -      $   484      $   484
                                 =========  ============  ============  =============   ==========   ==========

BRIGHAM INC.
     Balance,
       December 31, 1999            1,000           $ 1      $ 17,832      $ (17,244)     $     -        $ 589
     Capital contribution               -             -         4,697              -            -        4,697
     Net loss                           -             -             -         (5,158)           -       (5,158)
                                 ---------  ------------  ------------  -------------   ----------   ----------
     Balance,
       June 30, 2000                1,000           $ 1      $ 22,529      $ (22,402)     $     -      $   128
                                 =========  ============  ============  =============   ==========   ==========

BRIGHAM HOLDING I, LLC
     Balance,
       December 31, 1999                -           $ -           $ -            $ -      $ 1,305      $ 1,305
     Capital contribution               -             -             -              -       10,211       10,211
     Net loss                           -             -             -              -      (11,210)     (11,210)
                                 ---------  ------------  ------------  -------------   ----------   ----------
     Balance,
       June 30, 2000                    -           $ -           $ -            $ -        $ 306      $   306
                                 =========  ============  ============  =============   ==========   ==========

BRIGHAM HOLDINGS II, LLC
     Balance,
       December 31, 1999                -           $ -           $ -            $ -        $ 570        $ 570
     Capital contribution               -             -             -              -        4,549        4,549
     Net loss                           -             -             -              -       (4,994)      (4,994)
                                 ---------  ------------  ------------  -------------   ----------   ----------
     Balance,
       June 30, 2000                    -           $ -           $ -            $ -        $ 125      $   125
                                 =========  ============  ============  =============   ==========   ==========
</TABLE>



          See accompanying notes to the condensed financial statements.

                                       17
<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES

                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                   (unaudited)


1.   ORGANIZATION AND BACKGROUND

     In August 1998, upon the filing of a registration statement with the SEC,
     Brigham Exploration Company, a Delaware corporation, (the "Company") issued
     $50 million of debt and equity securities to two affiliated institutional
     investors. The financing transaction consisted of the issuance of $40
     million of senior subordinated secured notes (the "Notes"). The Notes are
     fully and unconditionally guaranteed, on a joint and several basis, by each
     of the Company's directly or indirectly wholly-owned subsidiaries which are
     Brigham Oil & Gas, L.P. (the "Partnership"), Brigham Inc., Brigham Holdings
     I LLC ("Holdings I"), and Brigham Holdings II LLC ("Holdings II").
     Furthermore, these subsidiaries have pledged their respective stock and
     partnership interests as collateral for the Notes. These financial
     statements include the financial statements for the wholly owned
     subsidiaries whose securities and partnership interests comprise
     substantially all of the collateral pledged for the Notes.

     The Partnership explores and develops onshore domestic natural gas and oil
     properties using 3-D seismic imaging and other advanced technologies. The
     Company focuses its exploration and development of onshore natural gas and
     oil properties primarily in the Anadarko Basin, the Texas Gulf Coast and
     West Texas. Brigham, Inc. is a Nevada corporation whose only asset prior to
     the Exchange was it's less than 1% ownership interest in the Partnership.
     Brigham, Inc. is the managing general partner of the Partnership.

     The Company is a Delaware corporation formed on February 25, 1997 for the
     purpose of exchanging its common stock for the common stock of Brigham,
     Inc. and the partnership interests of Brigham Oil & Gas, L.P. Subsequent to
     this exchange, the Company owned a 68.5% interest in the Partnership and
     Brigham, Inc. owned a 31.50% interest in the Partnership. Effective January
     1, 1998, Brigham, Inc. contributed 30.5% of its 31.5% interest in the
     Partnership to Holdings II, a newly formed Nevada LLC and wholly owned
     subsidiary of Brigham, Inc., whose only asset is its investment in the
     Partnership. Also effective January 1, 1998 the Company contributed its
     68.5% interest in the Partnership to Brigham Holdings I, a newly formed
     Nevada LLC and wholly owned subsidiary of the Company whose only asset is
     its investment in the Partnership.

2.   BASIS OF PRESENTATION

     The accompanying financial condensed financial statements are unaudited,
     and in the opinion of management, reflect all adjustments that are
     necessary for a fair presentation of the financial position and results of
     operations for the periods presented. All such adjustments are of a normal
     and recurring nature. The results of operations for the periods presented
     are not necessarily indicative of the results to be expected for the entire
     year. The unaudited condensed financial statements should be read in
     conjunction with the Company's 1999 Annual Report on Form 10-K pursuant to
     Section 13 or 15(d) of the Securities and Exchange Act of 1934.

3.   AMENDMENT TO REVOLVING CREDIT FACILITY

     In February 2000, the Partnership entered into an amended and restated
     Credit Facility with its existing lenders and a new lender. This amended
     and restated Credit Facility provides the Partnership with $70 million in
     borrowing availability for a three-year term. If the Company exceeds
     certain asset value and interest coverage tests in the third quarter of
     2000, the total borrowing availability under the Credit Facility will
     increase to $75 million. The Company expects to meet these tests. The
     Credit Facility includes a provision whereby certain amounts held by one of
     the lenders, not to exceed $30 million of the outstanding borrowings, are
     convertible into shares of the Company's common stock ("Convertible Notes")
     to the extent total borrowings exceed $45



                                       18
<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES

                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                   (unaudited)


     million. As of June 30 and August 11, 2000, the Convertible Notes
     approximate $20 million and $25 million, respectively.

     The Credit Facility provides that the Convertible Notes will be convertible
     as follows: (i) the first $10 million of borrowings is convertible at $3.90
     per share, (ii) the second $10 million is convertible at $6.00 per share,
     and (iii) the final $10 million is convertible at $8.00 per share. The
     Convertible Notes could result in a beneficial conversion feature based on
     the relationship between the Company's stock price at the time of a
     borrowing and the strike price of the relative portion of the convertible
     debt. The value assigned to the beneficial conversion feature would be
     recorded as a component of interest expense to the extent the Convertible
     Notes are immediately convertible. Due to the fact that the strike prices
     of the Convertible Notes at February 17, 2000 and at each subsequent draw
     date were in excess of the market prices of the Company's common stock at
     those respective dates, no beneficial conversion feature was recorded. If
     the Credit Facility is repaid at maturity or is prepaid prior to maturity
     without payments of cash premiums, the warrants issued to the new
     participant in the Credit Facility to purchase Brigham common stock become
     exercisable. Further, to the extent the Partnership prepays any of the
     Convertible Notes, it will be required to pay a premium above the face
     value of the Convertible Notes to the lender. Such premium amounts range
     from 150% to 110%, depending on the timing of the prepayment. Such
     prepayment, however, would require the prior approval of the original
     lenders to the Credit Facility. In addition, certain financial covenants of
     the Credit Facility were amended or added. In connection with this most
     recent amendment, the Partnership reset the price of the warrants
     previously issued to its existing senior lenders to purchase one million
     shares of the Company's common stock from an exercise price of $2.25 per
     share to $2.02 per share.

     The modification of this agreement did not result in any material
     adjustment to debt issuance costs.

4.   HEDGING ACTIVITIES

     The Company utilizes various commodity swap and option contracts to (i)
     reduce the effects of volatility in price changes on the oil and natural
     gas commodities it produces and sells, (ii) support its capital budgeting
     plans, and (iii) lock-in prices to protect the economics related to certain
     capital projects.

     In the first six months of 2000 the Company recognized losses of $2.3
     million ($0.72 per Mcfe) from hedging contracts as a component of oil and
     gas sales. Derivative instruments that do not qualify as hedging contracts
     are recorded at fair market value and recorded on the balance sheet as
     deferred gain or loss. Each balance sheet date the market value of these
     derivative instruments is adjusted to current and any deferred gains or
     losses are recognized as a component of other income or expense. In the
     first six months of 2000 the Company recognized other losses of $3.0
     million related to derivative instruments not qualifying as hedging
     contracts, including $2.4 million in non-cash losses related to the changes
     in fair market values of certain hedging contracts.


                                       19
<PAGE>


                    BRIGHAM EXPLORATION COMPANY SUBSIDIARIES

                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                   (unaudited)


     The following tables summarize the Company's outstanding natural gas and
     oil hedging arrangements as of July 1, 2000:

<TABLE>
<CAPTION>
NATURAL GAS HEDGES                                        2000                   2001                  2002
                                                    -------------------    ------------------     ------------------
                                                                Average                Average              Average
                                                    Volumes    Contract   Volumes     Contract    Volumes  Contract
                                     Monthly         Hedged      Price     Hedged       Price     Hedged     Price
                   Pricing Basis  Contract Term     (MMBtu)    ($/MMBtu)   (MMBtu)    ($/MMBtu)   (MMBtu)   ($/MMBtu)
                   -------------  -------------     -------    ---------   -------    ---------   -------   ---------

<S>                <C>            <C>               <C>         <C>        <C>         <C>      <C>          <C>
Fixed Price Swaps:
   Contract #1          ANR        July 2000 -      920,000     $2.0650    600,000     $2.0650         --         --
                     Oklahoma      April 2001

   Contract #2        Houston      July 2000 -      920,000     $2.1500    600,000     $2.1500         --         --
                   Ship Channel    April 2001

   Contract #3         TETCO       July 2000 -      920,000     $2.0575    600,000     $2.0575         --         --
                    South Texas    April 2001

Fixed Price Cap         ANR        May 2001 -            --          --  2,450,000     $2.5498  1,810,000    $2.6326
                     Oklahoma       June 2002

Fixed Price Floor       ANR        May 2001 -            --          --    765,000     $1.8000         --         --
                     Oklahoma     December 2001

<CAPTION>

CRUDE OIL HEDGES                                          2000                   2001                  2002
                                                   --------------------   --------------------   --------------------
                                                                Average                 Average               Average
                                                   Volumes     Contract   Volumes      Contract   Volumes    Contract
                                     Monthly       Hedged        Price     Hedged       Price     Hedged      Price
                   Pricing Basis  Contract Term    (Bbls)       ($/Bbl)     (Bbls)      ($/Bbl)   (Bbls)      ($/Bbl)
                   -------------  -------------    ------       -------     ------      -------   ------      -------
<S>                <C>            <C>               <C>         <C>        <C>         <C>            <C>         <C>
Fixed Price Cap        NYMEX       July 2000 -      110,400      $31.75    109,200      $26.15         --         --
                                  December 2001

Fixed Price Floor      NYMEX       July 2000 -      110,400      $18.00    109,200      $17.36         --         --
                                  December 2001
</TABLE>


5.   RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
     for Derivative Instruments and Hedging Activities." This Statement, as
     amended in June 2000 by SFAS No. 138, "Accounting for Certain Derivative
     Instruments and Certain Hedging Activities - an Amendment of SFAS No. 133"
     establishes accounting and reporting standards for derivative instruments
     and for hedging activities. It requires enterprises to recognize all
     derivatives as either assets or liabilities in the balance sheet and
     measure those instruments at fair value. The requisite accounting for
     changes in the fair value of a derivative will depend on the intended use
     of the derivative and the resulting designation. The Company must adopt
     SFAS No. 133 and No. 138, as amended by SFAS No. 137, "Accounting for
     Derivative Instruments and Hedging Activities - Deferral of the Effective
     Date of FASB Statement No. 133", effective January 1, 2001. The Company is
     currently assessing the impact adoption of this standard will have on its
     financial statement presentation.



                                       20
<PAGE>

     Item 2.  Management's Discussion and Analysis of Results of Operations and
              Financial Condition

     RESULTS OF OPERATIONS

     COMPARISON OF THREE MONTH PERIODS ENDED JUNE 30, 1999 AND 2000

         NATURAL GAS AND OIL SALES. Natural gas and oil sales increased 30% from
     $3.6 million in the second quarter of 1999 to $4.6 million in the second
     quarter of 2000. Of this net increase, $1.0 million was attributable to a
     28% increase in the average realized equivalent oil and natural gas sales
     price and $78,000 was attributable to a 2% increase in net equivalent
     production volumes. Net natural gas production volumes increased 4% from
     1,005 MMcf in the second quarter of 1999 to 1,047 MMcf in the second
     quarter of 2000. Net natural gas volumes for the second quarter of 1999
     included approximately 213 MMcf attributable to properties sold by Brigham
     in June 1999. Excluding production attributable to these divested
     properties, net natural gas volumes increased 32% in the second quarter of
     2000, compared to adjusted volumes produced during the same period in 1999.
     This increase was principally due to the completion of wells drilled over
     the past twelve months and recompletion and workover projects performed on
     certain producing wells. The average price received for natural gas
     decreased 5% from $2.07 per Mcf in the second quarter of 1999 to $1.98 per
     Mcf in the second quarter of 2000. Included in these realized prices were
     natural gas hedging gains of $7,000 ($0.01 per Mcf) in the second quarter
     of 1999, and natural gas hedging losses of $1.7 million ($1.66 per Mcf) in
     the second quarter of 2000. Net oil production volumes decreased 1% from 90
     MBbls in the second quarter of 1999 to 89 MBbls in the second quarter of
     2000. Excluding 11 MBbls of net oil production attributable to properties
     divested in June 1999, net oil volumes increased 12% in the second quarter
     of 2000 as compared to the adjusted volumes produced during the same period
     in 1999. This increase was principally due to the completion of wells
     drilled over the past twelve months and recompletion and workover projects
     performed on certain producing wells. The average price received for oil
     increased 77% from $16.24 per Bbl in the second quarter of 1999 to $28.71
     per Bbl in the second quarter of 2000.

         WORKSTATION REVENUE. Workstation revenue decreased 77% from $71,000 in
     the second quarter of 1999 to $16,000 in the second quarter of 2000.
     Brigham recognizes workstation revenue as industry participants in the
     Company's seismic programs are charged an hourly rate for the work
     performed by Brigham on its 3-D seismic interpretation workstations. The
     decrease in the second quarter 2000 is primarily attributable to a
     reduction in the volume of 3-D seismic interpretation activity billable to
     industry participants as compared with the prior year period.

         LEASE OPERATING EXPENSES. Lease operating expenses decreased 19% from
     $619,000 for the second quarter of 1999 to $502,000 for the second quarter
     of 2000 and, on a per unit of production basis, lease operating expenses
     for the same periods decreased 21% from $0.40 per Mcfe to $0.32 per Mcfe.
     The decrease in lease operating expenses was primarily due to a decrease in
     the number of producing wells in the second quarter of 2000, as compared
     with the same period in 1999, as a result of Brigham's June 1999 property
     divestitures and the plugging and abandonment of certain uneconomic wells.

         PRODUCTION TAXES. Production taxes increased 83% from $216,000 ($0.14
     per Mcfe) for the second quarter of 1999 to $395,000 ($0.25 per Mcfe) for
     the second quarter of 2000, primarily as a result of a 76% increase in the
     average equivalent price received for natural gas and oil sales before the
     effects of hedging gains and losses.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
     expenses decreased 21% from $891,000 for the second quarter of 1999 to
     $708,000 for the second quarter of 2000 primarily due to the reduction of
     various administrative costs, including reduced employee payroll and
     benefits expenses and lower office rent. On a per unit of production basis,
     general and administrative expenses decreased from $0.58 per Mcfe for the
     second quarter of 1999 to $0.45 per Mcfe for the second quarter of 2000.

         DEPLETION OF NATURAL GAS AND OIL PROPERTIES. Depletion of natural gas
     and oil properties increased 20% from $1.5 million ($0.98 per Mcfe) in the
     second quarter of 1999 to $1.8 million ($1.15 per Mcfe) in the second
     quarter of 2000. Of this net increase, $273,000 was due to an increase in
     the depletion rate per unit of production and $33,000 was due to an
     increase in production volumes. The increased depletion rate was



                                       21
<PAGE>


     principally the result of estimated additions of proved natural gas and oil
     reserves at higher average capital costs during the second quarter of 2000
     as compared with estimated amounts for the second quarter of 1999.

         NET INTEREST EXPENSE. Net interest expense increased 28% from $2.4
     million in the second quarter of 1999 to $3.0 million in the second quarter
     of 2000. This increase was due to a higher average debt balance with a
     higher average interest rate in the second quarter of 2000 compared with
     the second quarter of 1999. The weighted average outstanding debt balance
     increased from $104.1 million in the second quarter of 1999 to $112.5
     million in the second quarter of 2000. The average effective annual
     interest rate on borrowings outstanding during the second quarter of 1999
     was 12.0% compared to 12.6% for the second quarter of 2000. Interest
     expense in the second quarter of 2000 included $2 million of non-cash
     charges, including (i) $1.5 million of interest expense related to the
     Subordinated Notes that was paid through the issuance of additional
     Subordinated Notes (or "paid-in-kind"), (ii) $298,000 for amortization of
     deferred financing fees, and (iii) $237,000 for amortization of debt
     discounts related to the issuance of the Subordinated Notes. See "Liquidity
     and Capital Resources - Credit Facility; - Subordinated Notes".

         OTHER EXPENSE. Other expense increased from $527,000 in the second
     quarter of 1999 to $2.4 million in the second quarter of 2000. The Company
     recognizes other income or expense primarily related to the changes in the
     fair market values and the related cash flows of certain oil and natural
     gas hedging contracts that do not qualify for hedge accounting treatment.
     Other expense in the second quarter 2000 included (i) $1.9 million of
     non-cash expenses related to the changes in the fair market values of these
     hedging contracts during the period, and (ii) $471,000 of expenses related
     to cash settlements incurred during the period pursuant to these hedging
     contracts.

         LOSS ON SALE OF NATURAL GAS AND OIL PROPERTIES. In June 1999, the
     Company sold all of its interests in certain producing and non-producing
     natural gas and oil properties for a total sales price of $17.1 million.
     Due to the magnitude of the reserve volumes that were attributable to these
     properties relative to the Company's remaining net reserve volumes, the
     Company recognized a $12.2 million non-cash loss in the second quarter of
     1999 to reflect the difference between the sales price received (after
     adjustment for transaction costs) and the $28.9 million basis allocated to
     the divested properties in accordance with the full-cost method of
     accounting for oil and gas properties.

     COMPARISON OF SIX MONTH PERIODS ENDED JUNE 30, 1999 AND 2000

         NATURAL GAS AND OIL SALES. Natural gas and oil sales increased 36% from
     $6.7 million in the first six months of 1999 to $9.1 million in the first
     six months of 2000. This increase was attributable to a 36% increase in the
     average realized equivalent oil and natural gas sales price. Net natural
     gas production volumes decreased 3% from 2,053 MMcf for the first six
     months of 1999 to 1,987 MMcf for the first six months of 2000. Net natural
     gas volumes for the first six months of 1999 included approximately 442
     MMcf attributable to properties sold by Brigham in June 1999. Excluding
     production attributable to these divested properties, net natural gas
     volumes increased 23% in the first six months of 2000, compared to adjusted
     volumes produced during the same period in 1999. This increase was
     principally due to the completion of wells drilled over the past twelve
     months and recompletion and workover projects performed on certain
     producing wells. The average price received for natural gas decreased 6%
     from $2.08 per Mcf in the first six months of 1999 to $1.96 per Mcf in the
     first six months of 2000. Included in these realized prices were natural
     gas hedging gains of $566,000 ($0.28 per Mcf) in the first six months of
     1999, and natural gas hedging losses of $2.3 million ($1.13 per Mcf) in the
     first six months of 2000. Net oil production volumes increased 5% from 178
     MBbls in the first six months of 1999 to 188 MBbls in the first quarter of
     2000. Excluding 22 MBbls of net oil production attributable to properties
     divested in June 1999, net oil volumes increased 20% in the first six of
     2000 as compared to the adjusted volumes produced during the same period in
     1999. This increase was principally due to the completion of wells drilled
     over the past twelve months and recompletion and workover projects
     performed on certain producing wells. The average price received for oil
     increased from $13.85 per Bbl in the first six months of 1999 to $27.89 per
     Bbl in the first six months of 2000. Oil hedging losses reduced realized
     average oil prices received in the first six months of 2000 by $2,000 ($.01
     per Bbl). Brigham did not have any oil hedges in place during the first six
     months of 1999.

         WORKSTATION REVENUE. Workstation revenue decreased 70% from $161,000 in
     the first six months of 1999 to $49,000 in the first six months of 2000.
     Brigham recognizes workstation revenue as industry participants in the



                                       22
<PAGE>

     Company's seismic programs are charged an hourly rate for the work
     performed by Brigham on its 3-D seismic interpretation workstations. The
     decrease in the first six months of 2000 is primarily attributable to a
     reduction in the volume of 3-D seismic interpretation activity billable to
     industry participants as compared with the prior year period.

         LEASE OPERATING EXPENSES. Lease operating expenses decreased 17% from
     $1.2 million for the first six months of 1999 to $961,000 for the first six
     months of 2000 and, on a per unit of production basis, lease operating
     expenses for the same periods decreased 17% from $0.37 per Mcfe to $0.31
     per Mcfe. The decrease in lease operating expenses was primarily due to a
     decrease in the number of producing wells in the first six months of 2000,
     as compared with the same period in 1999, as a result of Brigham's June
     1999 property divestitures and the plugging and abandonment of certain
     uneconomic wells.

         PRODUCTION TAXES. Production taxes increased 82% from $385,000 ($0.12
     per Mcfe) for the first six months of 1999 to $699,000 ($0.22 per Mcfe) for
     the first six months of 2000, as a result of a 85% increase in the average
     equivalent price received for natural gas and oil sales before the effects
     of hedging gains and losses.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
     expenses decreased 20% from $1.8 million for the first six months of 1999
     to $1.5 million for the first six months of 2000 primarily due to the
     reduction of various administrative costs, including reduced employee
     payroll and benefits expenses, lower office rent and reduced equipment
     rental and maintenance expenses. On a per unit of production basis, general
     and administrative expenses decreased from $0.58 per Mcfe for the first six
     months of 1999 to $0.47 per Mcfe for the first six months of 2000.

         DEPLETION OF NATURAL GAS AND OIL PROPERTIES. Depletion of natural gas
     and oil properties increased 25% from $2.9 million ($0.92 per Mcfe) in the
     first six of 1999 to $3.6 million ($1.15 per Mcfe) in the first six months
     of 2000. The increase was due to an increase in the depletion rate per unit
     of production. The increased depletion rate was principally the result of
     estimated additions of proved natural gas and oil reserves at higher
     average capital costs during the first six months of 2000 as compared with
     estimated amounts for the first six months of 1999.

         NET INTEREST EXPENSE. Net interest expense increased 30% from $4.5
     million in the first six months of 1999 to $5.8 million in the first six
     months of 2000. This increase was due to a higher average debt balance with
     a higher average interest rate in the first six months of 2000 compared
     with the first six months of 1999. The weighted average outstanding debt
     balance increased from $101.8 million in the first six months of 1999 to
     $108.8 million in the first six months of 2000. The average effective
     annual interest rate on borrowings outstanding during the first six months
     of 1999 was 11.7% compared to 12.8% for the first six months of 2000.
     Interest expense in the first six months of 2000 included $4.1 million of
     non-cash charges, including (i) $3.0 million of interest expense related to
     the Subordinated Notes that was paid through the issuance of additional
     Subordinated Notes (or "paid-in-kind"), (ii) $689,000 for amortization of
     deferred financing fees, and (iii) $417,000 for amortization of debt
     discounts related to the issuance of the Subordinated Notes. See "Liquidity
     and Capital Resources - Credit Facility; - Subordinated Notes".

         OTHER EXPENSE. Other expense increased from $527,000 in the first six
     months of 1999 to $3.0 million in the first six months of 2000. The Company
     recognizes other income or expense primarily related to the changes in the
     fair market values and the related cash flows of certain oil and natural
     gas hedging contracts that do not qualify for hedge accounting treatment.
     Other expense in the first six months of 2000 included (i) $2.4 million of
     non-cash expenses related to the changes in the fair market values of these
     hedging contracts during the period, and (ii) $620,000 of expenses related
     to cash settlements incurred during the period pursuant to these hedging
     contracts.

         LOSS ON SALE OF NATURAL GAS AND OIL PROPERTIES. In June 1999, the
     Company sold all of its interests in certain producing and non-producing
     natural gas and oil properties for a total sales price of $17.1 million.
     Due to the magnitude of the reserve volumes that were attributable to these
     properties relative to the Company's remaining net reserve volumes, the
     Company recognized a $12.2 million non-cash loss in the second quarter of
     1999 to reflect the difference between the sales price received (after
     adjustment for transaction costs) and the $28.9 million basis allocated to
     the divested properties in accordance with the full-cost method of
     accounting for oil and gas properties.



                                       23
<PAGE>

     LIQUIDITY AND CAPITAL RESOURCES

         The Company's primary sources of capital have been credit facility and
     other debt borrowings, public and private equity financings, the sale of
     interests in projects and properties and funds generated by operations. The
     Company's primary capital requirements are 3-D seismic acquisition,
     processing and interpretation costs, land acquisition costs and drilling
     expenditures.

     CREDIT FACILITY

         In January 1998, the Company entered into a revolving credit agreement
     (the "Credit Facility"), which provided for an initial borrowing
     availability of $75 million. The Credit Facility was amended in March 1999
     to reduce the borrowing availability, extend the date of borrowing base
     redetermination, modify certain financial covenants, include certain
     additional covenants that place significant restrictions on the Company's
     ability to incur certain capital expenditures, and to increase the interest
     rate on outstanding borrowings.

         As a result of the completion of the majority of the Company's
     strategic initiatives to improve its capital resources, including its June
     1999 property divestitures and the application of the net sales proceeds to
     reduce borrowings outstanding under the Credit Facility, the Company and
     its senior lenders entered into an amendment to the Credit Facility in July
     1999. This amendment provided the Company with borrowing availability of
     $56 million principally to fund its planned drilling activities and
     anticipated working capital requirements through the end of 1999. As
     consideration for this amendment to the Credit Facility, in July 1999 the
     Company issued to its senior lenders one million warrants to purchase the
     Company's common stock at an exercise price of $2.25 per share. The
     warrants have a seven-year term from the date of issuance and are
     exercisable at the holders' option at any time. An estimated value of $1.2
     million was attributed to these warrants by the Company and was recognized
     as additional deferred loan fees that will be amortized and included in
     interest expense over the remaining period to maturity of the Credit
     Facility.

         In February 2000, Brigham entered into an amended and restated Credit
     Facility with its existing lenders and a new lender. This amended and
     restated Credit Facility provides the Company with $70 million in borrowing
     availability for a three-year term, an increase from the $56 million
     previously available. If the Company exceeds certain asset value and
     interest coverage tests in the third quarter of 2000, the total borrowing
     availability under the Credit Facility will increase to $75 million. The
     Company expects to meet these tests. In this amendment, the Company's
     lenders indicated that the borrowing availability provided under the
     amended Credit Facility exceeded that which would otherwise have been made
     available under a more traditional conforming borrowing base calculation
     based on the estimated value of the Company's then current net proved
     reserves and cash flow.

         The Credit Facility includes a provision whereby certain amounts held
     by one lender, not to exceed $30 million, are convertible into shares of
     Brigham common stock (the "Convertible Notes") to the extent total
     borrowings under the Credit Facility exceed $45 million. The Credit
     Facility provides that any outstanding Convertible Notes will be
     convertible into shares of Brigham common stock in the following amounts:
     (i) the first $10 million of borrowings is convertible at $3.90 per share,
     (ii) the second $10 million is convertible at $6.00 per share and (iii) the
     final $10 million is convertible at $8.00 per share. As of June 30, 2000,
     the Company had $65 million in borrowings outstanding under the Credit
     Facility, of which the Convertible Notes approximate $20 million.

         The Convertible Notes could result in a beneficial conversion feature
     based on the relationship between Brigham's stock price at the time of a
     borrowing and the strike price of the relative portion of the Convertible
     Notes. The value assigned to the beneficial conversion feature would be
     recorded as a component of interest expense to the extent the applicable
     Convertible Notes are immediately convertible. Due to the fact that the
     strike price of the Convertible Notes at June 30, 2000 was in excess of the
     market price of Brigham's common stock at each draw date since the
     amendment of the Credit Facility, no beneficial conversion feature was
     recorded.

         If the Credit Facility is repaid at maturity or is prepaid prior to
     maturity without payment of cash premiums, the warrants issued to the new
     participant in the Credit Facility to purchase Brigham common stock become



                                       24
<PAGE>

     exercisable. Further, to the extent Brigham chooses to prepay any of the
     Convertible Notes without the warrants becoming exercisable, and also
     assuming the lender chooses not to convert to equity upon notice of such
     prepayment, the Company will be required to a pay a premium above the face
     value of the Convertible Notes to the lender. Such premium amounts would
     range from 150% to 110%, depending upon the timing of the prepayment. Such
     prepayment, however, would require prior approval of the original lenders
     to the Credit Facility. In addition, certain financial covenants of the
     Credit Facility were amended or added. In connection with this most recent
     amendment, the Company reset the price of the warrants previously issued to
     its existing senior lenders to purchase one million shares of Brigham
     common stock from the then current exercise price of $2.25 per share to
     $2.02 per share.

         Principal outstanding under the Credit Facility is due at maturity on
     December 31, 2002, with interest due monthly for base rate tranches or
     periodically as LIBOR tranches mature. The annual interest rate for
     borrowings under the Credit Facility is either the lender's base rate or
     LIBOR plus 3.00%, at the Company's option. The Company's obligations under
     the Credit Facility are secured by substantially all of the natural gas and
     oil properties and other tangible assets of the Company. At August 11,
     2000, the Company had $69 million in borrowings outstanding under the
     Credit Facility, which currently bear interest at an annual rate of
     approximately 9.6%.

         The Credit Facility has certain financial covenants, including current
     and interest coverage ratios, as defined. The Company and its lenders
     effected the amendments to the Credit Facility in March 1999, July 1999 and
     February 2000, in part to enable the Company to comply with certain
     financial covenants of the Credit Facility, including the minimum current
     ratio (as defined), minimum interest coverage ratio (as defined) and the
     limitation on capital expenditures related to seismic and land activities.
     Should the Company be unable to comply with certain of the financial or
     other covenants, its senior lenders may be unwilling to waive compliance or
     amend the covenants in the future. In such instance, the Company's
     liquidity may be adversely affected, which could in turn have an adverse
     impact on the Company's future financial position and results of
     operations.

     SUBORDINATED NOTES

         In August 1998, the Company issued $50 million of debt and equity
     securities to affiliates of Enron Corp. Securities issued by the Company in
     connection with this financing transaction included: (i) $40 million of
     Subordinated Notes, (ii) warrants to purchase one million shares of the
     Company's common stock at a price of $10.45 per share (the "Subordinated
     Note Warrants"), and (iii) 1,052,632 shares of the Company's common stock
     at a price of $9.50 per share. The approximate $47.5 million in net
     proceeds received by the Company from this financing transaction were used
     to repay a portion of outstanding borrowings under its senior credit
     facility, which at the time increased the Company's borrowing availability
     under its credit facility to fund capital expenditures.

         In March 1999, the Company and Chase Bank of Texas, National
     Association, as trustee (the "Trustee") for the holders of the Subordinated
     Notes, entered into an amendment to the indenture governing the
     Subordinated Notes. This amendment provided the Company with the option to
     pay interest due on the Subordinated Notes in kind, for any reason, through
     the second quarter of 2000. In addition, certain financial and other
     covenants were amended. The amendment also provided for a reduction in the
     exercise price per share of the Subordinated Note Warrants from $10.45 per
     share to $3.50 per share and extended the term of the Subordinated Note
     Warrants from seven to ten years.

         In February 2000, Brigham entered into another amendment to the terms
     of the indenture governing the Subordinated Notes. In this amendment, the
     holders of the Subordinated Notes waived the minimum consolidated interest
     coverage ratio covenant through June 30, 2000 and adjusted subsequent
     levels under this test. In addition, the amendment provides the Company
     with an extension of its right to pay interest in kind through the issuance
     of additional Subordinated Notes in lieu of cash through the third quarter
     of 2000 and potentially through the fourth quarter of 2000 if certain
     conditions are met. The Company currently does not expect to meet these
     conditions and therefore will be obligated to make quarterly interest
     payments on outstanding subordinated notes beginning in the fourth quarter
     2000 (approximately $1.5 million due November 20, 2000) in cash.



                                       25
<PAGE>

         In exchange for granting the February 2000 amendments, the Company (i)
     reset the price of the Subordinated Note Warrants from a then current
     exercise price of $3.50 per share to $2.43 per share, and (ii) granted to
     the holders of the Subordinated Notes a term overriding royalty interest
     that provides for the limited right to receive 4%, or 3% if certain
     conditions are met, of the Company's net production revenue to reduce any
     outstanding Subordinated Notes issued as interest paid in-kind. Payments
     made pursuant to the term overriding royalty interest will be recorded as a
     reduction of the balance payable pursuant to the Subordinated Notes.

         Principal outstanding under the Subordinated Notes is due at maturity
     on August 20, 2003. Interest on the Subordinated Notes is payable quarterly
     at rates that vary depending upon whether accrued interest is paid in cash
     or "in kind" through the issuance of additional Subordinated Notes.
     Interest is payable in cash at interest rates of 12%, 13% and 14% per annum
     during years one through three, year four and year five, respectively, of
     the term of the Subordinated Notes; provided, however, that the Company may
     pay interest in kind for a cumulative total of seven quarterly interest
     payments (potentially increasing to eight if certain conditions are met) at
     interest rates of 13%, 14% and 15% per annum during years one through
     three, year four and year five, respectively, of the term of the
     Subordinated Notes. As of August 11, 2000, the Company had made a
     cumulative total of six quarterly interest payments in kind and expects to
     make the next quarterly interest payment (due August 20, 2000) in kind and
     cash payments thereafter.

         The Subordinated Notes (other than amounts payable pursuant to the term
     overriding royalty interest) rank subordinate in right of payment to Senior
     Indebtedness (as defined) and senior to all other financings (other than
     any allowed capital leases and purchase money financings) of the Company.
     The Subordinated Notes are secured by a second lien against substantially
     all of the natural gas and oil properties and other tangible assets of the
     Company. The Subordinated Notes may be prepaid at any time, in whole or in
     part, without premium or penalty, provided that all partial prepayments
     must be pro rata to the various holders of the Subordinated Notes. The
     Subordinated Notes were issued pursuant to an indenture that contains
     certain covenants that, among other things, limit the ability of the
     Company and its subsidiaries to incur additional indebtedness, pay
     dividends, make distributions, enter into certain sale and leaseback
     transactions, enter into certain transactions with affiliates, dispose of
     certain assets, incur liens, reborrow funds utilized to prepay the Senior
     Indebtedness and engage in most types of mergers and consolidations.

         The indenture governing the Subordinated Notes has certain financial
     covenants, including current and interest coverage ratios, as defined. The
     Company and the holders of the Subordinated Notes effected the March 1999
     and February 2000 amendments to the indenture to enable the Company to
     comply with certain financial covenants of the indenture, including the
     minimum current ratio and the minimum interest coverage ratio, as defined.
     Should the Company be unable to comply with certain of the financial
     covenants, the holders of the Subordinated Notes may be unwilling to waive
     compliance or amend the covenants in the future. In such instance, the
     Company's liquidity may be adversely affected, which could in turn have an
     adverse impact on the Company's future financial position and results of
     operations.

         At June 30, 2000 and August 11, 2000, the Company had $48.4 million,
     respectively, principal amount of Subordinated Notes outstanding.

     SALES OF INTERESTS IN PROJECTS AND NATURAL GAS AND OIL PROPERTIES

         DUKE PROJECT FINANCING. In February 1999, the Company entered into a
     project financing arrangement with Duke Energy Financial Services, Inc.
     ("Duke") to fund the continued exploration of five Anadarko Basin projects
     covered by approximately 200 square miles of 3-D seismic data acquired in
     1998. In this transaction, the Company conveyed 100% of its working
     interest (land and seismic) in these project areas to a newly formed
     limited liability company (the "Duke LLC") for total consideration of $10
     million. The Company is the managing member of the Duke LLC with a 1%
     interest, and Duke is the sole remaining member with a 99% interest.
     Pursuant to the terms of the Duke LLC agreement, Brigham pays 100% of the
     drilling and completion costs for all wells drilled by the Duke LLC within
     the designated project areas in exchange for a 70% working interest in the
     wells (and their allocable drilling and spacing units), with the remaining
     30% working interest remaining in the Duke LLC, subject in each instance to
     proportionate reduction by any ownership rights held by third parties. Upon
     100% project payout, the Company has the right to back-in for 80% of the
     Duke LLC's working interest in all of the then producing wells (and their
     allocable drilling and spacing units) and a 94% working interest in any
     wells (and their allocable drilling and spacing units) drilled after payout
     within the



                                       26
<PAGE>

     designated project areas governed by the Duke LLC agreement, thereby
     increasing the Company's effective working interest in the Duke LLC wells
     from 70% to 94%. The Company believes this project financing arrangement to
     be beneficial as it enabled Brigham to recoup substantially all of its
     pre-seismic land and seismic data acquisition costs incurred in these
     project areas and provided capital to fund the drilling of the first six
     wells within these projects.

         MID-1999 PROPERTY SALES. In June 1999, Brigham sold certain producing
     and non-producing natural gas and oil properties located in its Anadarko
     Basin province to two separate parties for a total of $17.1 million. The
     divested properties were located in two fields operated by third parties -
     the Chitwood Field in Grady County, Oklahoma (originally acquired by the
     Company for $13.4 million in the Chitwood Acquisition in November 1997),
     and the Red Deer Creek Field in Roberts County, Texas. Brigham's
     independent reservoir engineers estimated net proved reserve volumes
     attributable to the properties as of June 1, 1999 of approximately 36 Bcfe,
     of which 33% were classified as proved developed producing reserves and 59%
     were natural gas. The Company estimated that net production volumes from
     the divested properties were 2.8 MMcfe per day at the time of the sales.
     The Company used the proceeds from these transactions to reduce borrowings
     under its credit facility, which contributed to provide the Company with $8
     million in borrowing availability under its then existing credit facility
     that was used to fund working capital needs and capital expenditures during
     the second half of 1999. The effective date of each transaction was June
     30, 1999.

     EQUITY PLACEMENTS

         Veritas Equity Issuances. On March 30, 1999, the Company entered into
     an agreement with Veritas DGC Land, Inc. to exchange 1,002,865 shares of
     newly issued Brigham common stock valued at $3.50 per share for
     approximately $3.5 million of payment obligations due to Veritas in 1999
     for certain seismic acquisition and processing services previously
     performed. In addition, this agreement provided for the payment by Brigham
     of up to $1 million in future seismic processing services to be performed
     by Veritas in newly issued shares of Brigham common stock valued at $3.50
     per share, in the event that the Company did not elect to pay for such
     services in cash. The settlement of these future seismic processing
     services was determined on a quarterly basis through September 30, 1999.
     Pursuant to this agreement, Brigham issued a total of 1,211,580 shares of
     common stock to Veritas to satisfy $4.2 million in aggregate payment
     obligations due to Veritas for seismic acquisition and processing services
     performed prior to 1999 and certain seismic processing services performed
     during 1999.

         PRIVATE EQUITY PLACEMENT. On February 22, 2000, Brigham entered into an
     agreement to issue 2,195,122 shares of common stock and 731,707 warrants to
     purchase common stock for total consideration of $4.5 million in a private
     placement to a group of institutional investors led by affiliates of two
     members of the Company's board of directors. The equity sale consisted of
     units that included one share of common stock priced at $2.0525 per share
     and one-third of a warrant to purchase Brigham common stock at an exercise
     price of $2.5625 per share with a three-year term. Pricing of this private
     equity placement was based on the average market price of Brigham common
     stock during a twenty trading day period prior to issuance. Net proceeds
     from this equity placement will be used to fund a portion of the Company's
     planned 2000 capital expenditures and working capital obligations.

     CASH FLOW ANALYSIS

         CASH FLOWS FROM OPERATING ACTIVITIES. Cash flows used by operating
     activities were $3.8 million in the first six months of 2000, which
     consisted of $4.1 million in net operating cash flow (net cash used by
     operating activities before changes in operating assets and liabilities)
     and $7.9 million in cash flow used for working capital items. This compares
     to cash flows provided by operating activities of $332,000 in the first six
     months of 1999, which consisted of $2.7 million in net operating cash flow
     and $2.4 million in cash flow used for working capital items.

         CASH FLOWS FROM INVESTING ACTIVITIES. Cash flows used by investing
     activities were $11.7 million in the first six months of 2000 as compared
     with $11.2 million provided by investing activities in the first six months
     of 1999. Capital expenditures declined $3.8 million to $11.7 million in the
     first six months of 2000 compared to $15.5 million for the comparable
     period in 1999. However, the Company realized net proceeds of $26.7 million



                                       27
<PAGE>

     in the first six months of 1999 from the sale of producing and
     non-producing properties. No oil and gas properties were sold during the
     first six months of 2000.

         CASH FLOWS FROM FINANCING ACTIVITIES. Cash flows provided by financing
     activities were $12.8 million in the first six months of 2000 as compared
     with cash flows used by financing activities of $11.4 million in first six
     months of 1999. This increase in cash flows provided by financing
     activities resulted primarily from a $9 million increase in borrowings
     under the Credit Facility and the February 2000 placement of common stock
     and warrants that generated proceeds of $4.5 million before transaction
     expenses. During the first six months of 1999, net borrowings under the
     Credit Facility decreased by $10.8 million as a portion of outstanding
     borrowings were repaid with proceeds received from the mid-1999 property
     sales.

     CAPITAL EXPENDITURES

         Continuing its strategy implemented during 1999, Brigham intends to
     focus substantially all of its efforts and available capital resources in
     2000 to the drilling and monetization of its highest grade prospects within
     its over 5,000 square mile inventory of 3-D seismic data. The Company's
     2000 capital expenditure budget is $25 million, which includes
     approximately $20 million for drilling projects and $5 million for
     non-drilling activities (primarily acreage acquisition and capitalized
     overhead costs). Brigham's 2000 drilling program consists of a balanced
     blend of exploration and development drilling projects with approximately
     54% of budgeted drilling expenditures targeted for exploratory prospects,
     28% for development locations and the remaining 18% for development
     locations that are contingent upon drilling success during the year. In
     addition, the Company's 2000 budgeted drilling expenditures have been
     allocated approximately 75% to its Gulf Coast province and 25% to its
     Anadarko Basin province, concentrated within trends where the Company has
     experienced exploration success to date. The Company intends to fund the
     majority of its budgeted capital expenditures through a combination of cash
     flow from operations, available borrowings under its senior credit facility
     and the proceeds from its February 2000 private equity placement.
     Additionally, the Company may supplement its available capital resources
     through corporate debt and/or equity financings and selective sales of
     interests in non-producing assets, including interests in its 3-D seismic
     projects and promoted interests in future drilling prospects or locations.

         Due to the Company's active exploration and development activities,
     Brigham has experienced and expects to continue to experience substantial
     working capital requirements. Based on current conditions and expectations,
     the Company believes that cash flow from operations and borrowings under
     its senior credit facility are sufficient to finance approximately $20
     million of its planned capital expenditures for 2000. Additional financing
     is expected to be required to fund the estimated remaining $5 million of
     the Company's 2000 capital expenditure budget and negative working capital
     requirements. In the event additional financing is not available, the
     Company will be required to curtail or delay a portion of its planned
     activities.

     OTHER MATTERS

     HEDGING ACTIVITIES

         The Company believes that hedging, although not free of risk, allows
     the Company to reduce its exposure to natural gas and oil sales price
     fluctuations and thereby to achieve more predictable cash flows. However,
     hedging arrangements, when utilized, limit the benefit to the Company of
     increases in the prices of the hedged commodity. Moreover, the Company's
     hedging arrangements apply only to a portion of its production and provide
     only partial price protection against declines in commodity prices. The
     Company expects that the amount of its hedges will vary from time to time.

         In 1998, Brigham began using natural gas swap arrangements in an
     attempt to reduce its sensitivity to volatile commodity prices as its
     production base became increasingly weighted toward natural gas. Pursuant
     to these arrangements the Company exchanges a floating market price for a
     fixed contract price. The Company makes payments when the floating price
     exceeds the fixed price for a contract month and the Company receives
     payments when the fixed price exceeds the floating price. Settlements of
     these swaps are based on the difference between regional market index
     prices for a contract month and the fixed contract price for the same
     month. The Company accounts for substantially all of these transactions as
     hedging activities and, accordingly, adjusts the price received for natural
     gas and oil production during the period the hedged transactions occurred.



                                       28
<PAGE>


         In September 1999, Brigham sold call options on a portion of its future
     oil and natural gas production. The Company applied the proceeds from the
     sale of these call options to increase the effective fixed swap price on
     its then existing natural gas hedging contracts during the months of
     October 1999 through January 2000 by an average of $0.57 per MMBtu. For
     accounting purposes, the improvement in the Company's fixed natural gas
     swap price attributable to these transactions is not reflected in reported
     revenues. Rather, it is reflected in (i) other income (expense) on the
     income statement, and (ii) amortization of deferred loss on derivatives
     instruments and market value adjustment for derivatives instruments on the
     cash flow statement.

         In March 2000, Brigham purchased put options on a portion of its future
     oil and natural gas production. These transactions effectively converted a
     portion of its existing call options into collars, thus providing a hedge
     to future changes in oil and natural gas prices. Brigham also entered into
     costless collars on additional future oil and natural gas production thus
     providing further protection to the Company's exposure to potential oil and
     natural gas price declines.

     The following tables summarize the Company's outstanding natural gas and
     oil hedging arrangements as of July 1, 2000:

<TABLE>
<CAPTION>
NATURAL GAS HEDGES                                        2000                      2001                       2002
                                                  -----------------------    ----------------------    -----------------------
                                                                  Average                   Average                   Average
                                   Monthly         Volumes       Contract     Volumes      Contract     Volumes      Contract
                     Pricing       Contract        Hedged          Price      Hedged        Price       Hedged        Price
                      Basis         Term          (MMBtu)        ($/MMBtu)    (MMBtu)      ($/MMBtu)    (MMBtu)      ($/MMBtu)
                      -----         ----          -------        ---------    -------      ---------    -------      ---------
<S>                 <C>          <C>               <C>            <C>         <C>           <C>       <C>           <C>
Fixed Price Swaps:

   Contract #1         ANR       July 2000 -       920,000        $2.0650     600,000       $2.0650          --           --
                    Oklahoma     April 2001

   Contract #2       Houston     July 2000 -       920,000        $2.1500     600,000       $2.1500          --           --
                      Ship       April 2001
                     Channel


   Contract #3        TETCO      July 2000 -       920,000        $2.0575     600,000       $2.0575          --           --
                   South Texas   April 2001

Fixed Price Cap        ANR       May 2001 -             --             --   2,450,000       $2.5498   1,810,000      $2.6326
                    Oklahoma      June 2002

Fixed Price Floor      ANR       May 2001 -             --             --     765,000       $1.8000          --           --
                    Oklahoma    December 2001

<CAPTION>

CRUDE OIL HEDGES                                                  2000                   2001                  2002
                                                           ---------------------   -------------------    --------------------
                                                                         Average                Average                 Average
                                            Monthly        Volumes      Contract   Volumes     Contract    Volumes     Contract
                              Pricing      Contract         Hedged        Price    Hedged        Price      Hedged      Price
                               Basis         Term           (Bbls)       ($/Bbl)   (Bbls)       ($/Bbl)     (Bbls)      ($/Bbl)
                               -----         ----           ------       -------   ------       -------     ------      -------

<S>                            <C>        <C>               <C>          <C>       <C>          <C>            <C>       <C>
Fixed Price Cap                NYMEX       July 2000 -      110,400      $31.75    109,200      $26.15         --         --
                                          December 2001

Fixed Price Floor              NYMEX       July 2000 -      110,400      $18.00    109,200      $17.36         --         --
                                          December 2001
</TABLE>



                                       29
<PAGE>


     EFFECTS OF INFLATION AND CHANGES IN PRICES

         The Company's results of operations and cash flows are affected by
     changing oil and gas prices. If the price of oil and gas increases
     (decreases), there could be a corresponding increase (decrease) in revenues
     as well as the operating costs that the Company is required to bear for
     operations. Inflation has had a minimal effect on the Company.

     ENVIRONMENTAL AND OTHER REGULATORY MATTERS

         The Company's business is subject to certain federal, state and local
     laws and regulations relating to the exploration for and the development,
     production and marketing of natural gas and oil, as well as environmental
     and safety matters. Many of these laws and regulations have become more
     stringent in recent years, often imposing greater liability on a larger
     number of potentially responsible parties. Although the Company believes it
     is in substantial compliance with all applicable laws and regulations, the
     requirements imposed by laws and regulations are frequently changed and
     subject to interpretation, and the Company is unable to predict the
     ultimate cost of compliance with these requirements or their effect on its
     operations. Any suspensions, terminations or inability to meet applicable
     bonding requirements could materially adversely affect the Company's
     financial condition and operations. Although significant expenditures may
     be required to comply with governmental laws and regulations applicable to
     the Company, compliance has not had a material adverse effect on the
     earnings or competitive position of the Company. Future regulations may add
     to the cost of, or significantly limit, drilling activity.

     RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
     for Derivative Instruments and Hedging Activities." This Statement, as
     amended in June 2000 by SFAS No. 138, "Accounting for Certain Derivative
     Instruments and Certain Hedging Activities - an Amendment of SFAS No. 133"
     establishes accounting and reporting standards for derivative instruments
     and for hedging activities. It requires enterprises to recognize all
     derivatives as either assets or liabilities in the balance sheet and
     measure those instruments at fair value. The requisite accounting for
     changes in fair value of a derivative will depend on the intended use of
     the derivative and the resulting designation. The Company must adopt SFAS
     No. 133 and No 138, as amended by SFAS No. 137, "Accounting for Derivative
     Instruments and Hedging Activities - Deferral of the Effective Date of FASB
     Statement No. 133", effective January 1, 2001. The Company is currently
     assessing the impact adoption of this standard will have on its financial
     statement presentation.

     In March 2000, the Financial Accounting Standards Board issued
     Interpretation No. 44 ("FIN 44") ACCOUNTING FOR CERTAIN TRANSACTIONS
     INVOLVING STOCK COMPENSATION, AN INTERPRETATION OF APB OPINION NO. 25. FIN
     44 clarifies the application of opinion No. 25 for (a) the definition of
     employee for purposes of applying Opinion No. 25, (b) the criteria for
     determining whether a plan qualifies as a noncompensatory plan, (c) the
     accounting consequences of various modifications to the terms of a
     previously fixed stock option or award, and (d) the accounting for an
     exchange of stock compensation awards in a business combination. FIN 44 is
     effective July 1, 2000, but certain conclusions cover specific events that
     occur after either December 15, 1998, or January 12, 2000. The Company
     believes that the impact of FIN 44 will not have a material effect on its
     financial position or results of operations.

     FORWARD LOOKING INFORMATION

         Brigham or its representatives may make forward looking statements,
     oral or written, including statements in this report, press releases and
     filings with the SEC, regarding estimated future net revenues from oil and
     natural gas reserves and the present value thereof, planned capital
     expenditures (including the amount and nature thereof), increases in oil
     and gas production, the number of wells the Company anticipates drilling
     through 2000 and the Company's financial position, business strategy and
     other plans and objectives for future operations. Although the Company
     believes that the expectations reflected in these forward looking
     statements are reasonable, there can be no assurance that the actual
     results or developments anticipated by the Company will be realized or,
     even if substantially realized, that they will have the expected effects on
     its business or operations. Among the factors that could cause actual
     results to differ materially from the Company's expectations are general
     economic conditions, inherent uncertainties in interpreting engineering
     data, operating hazards, delays or cancellations of drilling operations for
     a variety of reasons, competition, fluctuations in oil and gas prices,
     availability of sufficient capital resources to the Company and its project
     participants, government regulations and other factors detailed herein and
     in the Company's 1999 Form 10-K report and other SEC filings. All
     subsequent oral and written forward looking statements attributable to the
     Company or persons acting on its behalf are expressly qualified in their
     entirety by these factors. The Company assumes no obligation to update any
     of these statements.


                                       30
<PAGE>


     ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         In Part II, Item 7A of Brigham's Form 10-K report for the year ended
     December 31, 1999 (see page 41 of Brigham's 1999 Form 10-K), Brigham
     provided a discussion of its market risk. There were no material changes
     during the second quarter of 2000 in Brigham's exposures to loss from
     possible future changes in the prices of oil and natural gas or in interest
     rates, other than those described in Brigham's 1999 Form 10-K report.



                                       31
<PAGE>

                           PART II - OTHER INFORMATION

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits:

                 27       Financial Data Schedule

          (b)  Reports on Form 8-K:

         The Company filed a report on Form 8-K on April 24, 2000, to report the
     announcements on April 17, 2000, that (i) it had drilled, tested and was
     completing a Springer channel discovery well in its Anadarko Basin core
     province and (ii) it provided an update on its development drilling
     activity at the Home Run Field in its Gulf Coast core province. The Form
     8-K included copies of the Company's press release that provided these
     announcements.

         The Company filed a report on Form 8-K on May 26, 2000, to report the
     announcements (i) on May 11, 2000, of its quarterly overview of operational
     activity for the three months ended March 31, 2000, and (ii) on May 15,
     2000, of its financial results for the quarter ended March 31, 2000. The
     Form 8-K included copies of the Company's press releases that provided
     these announcements.

         The Company filed a report on Form 8-K on July 5, 2000, to report the
     announcements on June 19, 2000, that (i) it had completed and brought on
     production a Lower Frio bright spot discovery well in its Southwest Danbury
     Project in Brazoria, County, Texas, and (ii) it provided an update
     regarding its 2000 drilling program and its daily production volumes. The
     Form 8-K included copies of the Company's press release that provided these
     announcements.



                                       32
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on August 11, 2000.

                               BRIGHAM EXPLORATION COMPANY


                               By:       /s/  BEN M. BRIGHAM
                                      -----------------------------
                                      Ben M. Brigham
                                      Chief Executive Officer, President and
                                         Chairman of the Board

                               By:       /s/  CURTIS F. HARRELL
                                      -----------------------------
                                      Curtis F. Harrell
                                      Chief Financial Officer



                                       33
<PAGE>


                                INDEX TO EXHIBITS


EXHIBIT
  NO.                                 DESCRIPTION
  --

  27         Financial Data Schedule