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

                                    FORM 10-Q

(Mark One)
[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 0-19365


                            CROWN ENERGY CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Utah                                           87-0368981
---------------------------------                     -------------------
(State or other jurisdiction                          (I.R.S. Employer
of incorporation or organization)                     Identification No.)

            215 South State, Suite 650, Salt Lake City, Utah, 84111
--------------------------------------------------------------------------------
               (Address of principal executive offices, zip code)

                                 (801) 537-5610
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not applicable
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes   [X]      No  [ ]

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

There were 13,285,581shares of $.02 par value common stock outstanding as of
August 14, 2000.

<PAGE>

                            CROWN ENERGY CORPORATION

                                      INDEX

                                                                        PAGE(S)

PART I.           Financial Information

         ITEM 1.  Financial Statements

                  Condensed Consolidated Balance Sheets at June 30,
                     2000 (unaudited) and December 31, 1999                  3

                  Condensed Consolidated Statements of Operations for
                     the Three Months ended June 30, 2000 and 1999
                     (unaudited)                                             5

                  Condensed Consolidated Statements of Operations for
                     the Six Months ended June 30, 2000 and 1999
                     (unaudited)                                             6

                  Condensed Consolidated Statements of Cash Flows for
                     the Six Months ended June 30, 2000 and 1999
                     (unaudited)                                             7

                  Notes to Condensed Consolidated Financial Statements
                     (unaudited)                                             9


         ITEM 2.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                     18

         ITEM 3.  Quantitative and Qualitative Disclosures about
                    Market Risks                                            22

PART II.          Other Information

         ITEM 1.  Legal Proceedings                                         23

         ITEM 2.  Changes in Securities                                     23

         ITEM 3.  Defaults upon Senior Securities                           24

         ITEM 4.  Submission of Matters to a Vote of Security Holders       24

         ITEM 5.  Other Information                                         24

         ITEM 6.  Exhibits and Reports on Form 8-K                          24


PART III.         Signatures                                                25

                                       2
<PAGE>

                          PART I-FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                            CROWN ENERGY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                                                  June 30,
                                                                                    2000            December 31,
                                                                                 [unaudited]             1999
                                                                             ----------------     ----------------
CURRENT ASSETS:
<S>                                                                          <C>                  <C>
     Cash and cash equivalents                                               $        937,545     $      4,978,977
     Accounts receivable, net of allowance for uncollectible
       accounts and demerits of $262,696 and $298,000 at June 30, 2000
       and December 31, 1999, respectively                                          5,657,135            5,186,325
     Inventory                                                                      4,789,251            2,133,866
     Prepaid and other current assets                                                  47,408               35,582
                                                                             ----------------     ----------------
          Total Current Assets                                                     11,431,339           12,334,750

PROPERTY, PLANT AND EQUIPMENT, Net                                                  9,617,925            9,237,735

INVESTMENT IN AND ADVANCES
  TO AN EQUITY AFFILIATE                                                            6,633,778            7,174,920

GOODWILL, Net                                                                       3,879,446            4,127,680

OTHER INTANGIBLE ASSETS, Net                                                          287,020              175,000
OTHER ASSETS                                                                          210,306               63,768
                                                                             ----------------     ----------------
TOTAL                                                                        $     32,059,814     $     33,113,853
                                                                             ================     ================
</TABLE>

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

                                       3
<PAGE>
<TABLE>
<CAPTION>
                           CROWN ENERGY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                                  June 30,
                                                                                    2000            December 31,
                                                                                 [unaudited]             1999
                                                                             ----------------     ----------------
CURRENT LIABILITIES
<S>                                                                          <C>                  <C>
     Accounts payable                                                        $      1,606,481     $      1,132,251
     Preferred stock dividends payable                                                599,996              400,000
     Accrued expenses                                                               3,814,237            2,281,992
     Long-term debt - estimated current portion                                       156,386              166,204
     Borrowings from related party                                                 14,935,222            4,935,222
                                                                             ----------------     ----------------
     Total current liabilities                                                     21,112,322            8,915,669
                                                                             ----------------     ----------------

MINORITY INTEREST IN CONSOLIDATED
  JOINT VENTURES                                                                     415,388              301,699

CAPITALIZATION:
     Long-term debt                                                                11,268,199           11,332,681
     Redeemable preferred stock                                                     4,867,925            4,839,623
     Common stockholders' deficit                                                  (5,604,020)          (2,275,819)
                                                                             ----------------     ----------------
          Total capitalization                                                     10,532,104           13,896,485
                                                                             ----------------     ----------------
TOTAL                                                                        $     32,059,814     $     33,113,853
                                                                             ================     ================
</TABLE>

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

                                       4
<PAGE>
<TABLE>
<CAPTION>
                            CROWN ENERGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                   [Unaudited]


                                                                                  For the Three Months Ended
                                                                                           June 30,
                                                                           ---------------------------------------
                                                                                  2000                  1999
                                                                           ------------------     ----------------
<S>                                                                        <C>                    <C>
SALES, Net of demerits                                                     $        6,872,696     $    10,057,495

EXPENSES:
  Cost of goods sold                                                                5,733,582            7,442,952
  Operating expenses                                                                1,102,730            1,803,323
  General and administrative                                                          457,942              648,802
  Depreciation, and amortization                                                      215,323              128,335
                                                                           ------------------     ----------------
TOTAL                                                                               7,509,577           10,023,412
                                                                           ------------------     ----------------
INCOME (LOSS) FROM OPERATIONS                                                        (636,881)              34,083

OTHER INCOME (EXPENSES):
   Interest and other income                                                          284,461              113,881
   Interest and other expense                                                        (644,565)            (530,734)
   Equity in losses of unconsolidated equity affiliate                               (167,088)            (196,875)
                                                                           ------------------     ----------------
        Total other (expense) net                                                    (527,192)            (613,728)

LOSS BEFORE INCOME TAXES
  AND MINORITY INTERESTS                                                           (1,164,073)            (579,645)
                                                                           ------------------     ----------------
DEFERRED INCOME TAX BENEFIT                                                                 0                    0

MINORITY INTEREST IN LOSSES OF
  CONSOLIDATED JOINT VENTURE                                                           10,039               85,266
                                                                           ------------------     ----------------
NET LOSS                                                                   $       (1,154,034)    $       (494,379)
                                                                           ------------------     ----------------
NET LOSS PER COMMON SHARE-
  Basic and diluted                                                        $            (0.09)    $          (0.04)
                                                                           ==================     ================
</TABLE>

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

                                       5
<PAGE>
<TABLE>
<CAPTION>
                            CROWN ENERGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                   [Unaudited]

                                                                                   For the Six Months Ended
                                                                                           June 30,
                                                                           ---------------------------------------
                                                                                   2000                 1999
                                                                           ------------------     ----------------
<S>                                                                        <C>                    <C>
SALES, Net of demerits                                                     $        8,189,105     $     14,876,581

EXPENSES:

  Cost of goods sold                                                                6,638,461           10,619,620
  Operating expenses                                                                1,944,263            3,145,360
  General and administrative                                                        1,093,857            1,234,060
  Depreciation, and amortization                                                      433,749              339,985
                                                                           ------------------     ----------------
TOTAL                                                                              10,110,330           15,339,025
                                                                           ------------------     ----------------
INCOME LOSS FROM OPERATIONS                                                        (1,921,225)            (462,444)

OTHER INCOME (EXPENSES):
   Interest and other income                                                          587,827              226,136
   Interest and other expense                                                      (1,266,453)            (912,853)
   Equity in losses of unconsolidated equity affiliate                               (434,013)            (426,273)
                                                                           ------------------     ----------------
        Total other (expense) net                                                  (1,112,639)          (1,112,990)

LOSS BEFORE INCOME TAXES
  AND MINORITY INTERESTS                                                           (3,033,864)          (1,575,434)
                                                                           ------------------     ----------------

DEFERRED INCOME TAX BENEFIT                                                                 0                    0

MINORITY INTEREST IN LOSSES OF
  CONSOLIDATED JOINT VENTURE                                                           17,214              404,962
                                                                           ------------------     ----------------
NET LOSS                                                                   $       (3,016,650)    $     (1,170,472)
                                                                           ------------------     ----------------
NET LOSS PER COMMON SHARE-
  Basic and diluted                                                        $            (0.24)    $          (0.10)
                                                                           ==================     ================
</TABLE>

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

                                       6
<PAGE>
<TABLE>
<CAPTION>
                            CROWN ENERGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   [Unaudited]

                                                                                   For the Six Months Ended
                                                                                           June 30,
                                                                           ---------------------------------------
                                                                                   2000                 1999
                                                                           ------------------     ----------------
Cash Flows From Operating Activities:
<S>                                                                        <C>                    <C>
       Net loss                                                            $       (3,016,650)    $     (1,170,472)
                                                                           ------------------     ----------------
       Adjustments to reconcile net loss to net cash used by operating
           activities:
                Amortization, depreciation and depletion                              433,749              339,983
                Equity in losses of unconsolidated affiliate                          434,013              426,273
                Minority interest                                                     (17,214)            (404,962)

                Changes in assets and liabilities:
                    Accounts receivable                                              (470,810)          (3,135,951)
                    Inventory                                                      (2,655,389)          (6,513,028)
                    Other assets                                                     (158,363)            (888,635)
                    Accounts payable                                                  474,230            5,133,285
                    Accrued expenses                                                1,531,030              (33,003)
                                                                           ------------------     ----------------
                           Total adjustments                                         (428,754)          (5,076,038)
                                                                           ------------------     ----------------
                           Net Cash Used in Operating Activities                   (3,445,404)          (6,246,510)
                                                                           ------------------     ----------------

Cash Flows From Investing Activities:
       Investment in and advances to Crown Asphalt Ridge, LLC                          76,808           (1,010,981)
       Acquisition of Asphalt Terminals                                                     0           (3,856,390)
       Purchase of property and equipment                                            (647,400)          (1,240,057)
                                                                           ------------------     ----------------
                           Net Cash Used by Investing Activities                     (570,592)          (6,107,428)
                                                                           ------------------     ----------------

Cash Flows From Financing Activities:
       Net change in borrowings from related party                                          0            6,000,000
       Sale of equity interest in subsidiary to a minority shareholder                      0              192,971
       Long-term debt payment                                                         (73,089)             (67,422)
       Proceeds from borrowings of long-term debt                                           0            3,307.070
                                                                           ------------------     ----------------
       Capital contribution from partners                                              47,653                    0

                           Net Cash Provided by Used in
                             Financing Activities                          $          (25,436)    $      9,432,619
                                                                           ------------------     ----------------

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

                                       7
<PAGE>
<CAPTION>
                            CROWN ENERGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   [Continued]

                                                                                   For the Six Months Ended
                                                                                           June 30,
                                                                           ---------------------------------------
                                                                                   2000                 1999
                                                                           ------------------     ----------------
<S>                                                                        <C>                    <C>
         Net Increase (Decrease) in Cash:                                  $       (4,041,432)    $     (2,921,319)
                                                                           ==================     ================

Cash at Beginning of Period                                                $        4,978,977     $      3,735,632
                                                                           ==================     ================
Cash at End of Period                                                      $          937,545     $        814,313
                                                                           ==================     ================
Supplemental Disclosure of Cash Flow Information
       Cash paid during the period:
           Interest                                                        $          285,229     $         69,942
                                                                           ==================     ================
           Income taxes                                                                   ---                  ---
                                                                           ==================     ================
</TABLE>

Supplemental Schedule of Non-cash Investing and Financing Activities:
       For the period ended June 30, 2000:
           None
       For the period ended June 30, 1999:
           On January 27, 1999, the Company issued 317,069 shares of common
           stock to its preferred stockholders as payment in full for preferred
           stock dividends payable totaling $467,433.


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

                                       8
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The accompanying  consolidated  financial statements have been prepared
         by the  Company  without  audit.  In the  opinion  of  management,  all
         adjustments (which include only normal recurring adjustments) necessary
         to present  fairly the financial  position,  results of operations  and
         changes in stockholders' equity and cash flows at June 30, 2000 and for
         all periods presented have been made.

         Certain  information  and  footnote  disclosures  normally  included in
         financial  statements  prepared in accordance  with generally  accepted
         accounting  principles have been condensed or omitted.  It is suggested
         that these condensed  financial  statements be read in conjunction with
         the financial  statements  and notes thereto  included in the Company's
         December 31, 1999 Annual Report on Form 10-K. The results of operations
         for the period ended June 30, 2000 are not  necessarily  indicative  of
         the operating results for the full year.

         Organization  - Crown  Energy  Corporation  (CEC) and its  wholly-owned
         subsidiaries,   Crown  Asphalt  Corporation  (CAC)  and  Crown  Asphalt
         Products Company (Capco)  (collectively  referred to as the "Company"),
         are engaged in the mining, production, and selling of asphalt products.
         Prior to 1998, the Company was engaged in the production and selling of
         oil and gas from leases it  operated  in the State of Utah  through its
         previously owned subsidiary, Gavilan Petroleum, Inc. (Gavilan).

         Majority  Owned  Subsidiaries  - Capco is the  majority-owner  of Crown
         Asphalt Distribution, LLC (Crown Distribution). Crown Distribution is a
         joint venture formed on July 2, 1998,  between Capco and MCNIC Pipeline
         and  Processing  Company  (MCNIC) for the purpose of acquiring  certain
         assets of Petro  Source  Asphalt  Company  (Petro  Source).  Capco owns
         50.01%  and  MCNIC  owns  49.99%  of Crown  Distribution.  Capco is the
         general  manager and  operating  agent of Crown  Distribution.  Because
         there is no agreement  requiring the minority  shareholder to guarantee
         the subsidiary's  debt or a commitment to provide  additional  capital,
         other than working  capital,  all losses related to Crown  Distribution
         (including MCNIC's 49% interest in the losses totaling  $1,205,640) are
         included  in the  Company's  Financial  Statements.  CAT LLC is a joint
         venture  formed on June 16, 1998  between  Capco and  Foreland  Asphalt
         Corporation  (Foreland).  Cowboy Asphalt Terminal,  LLC (CAT LLC) is an
         asphalt  terminal and storage  facility.  On December  21, 1998,  Capco
         assigned  its  interest  in  CAT  LLC  to  Crown  Distribution.   Crown
         Distribution owns 66.67% and Foreland owns 33.33% of CAT LLC. MCNIC has
         since filed suit on this matter and the Company and/or its subsidiaries
         have  answered   such  suit  and  filed   counter   claims  and  claims
         independently, as detailed in Part II Item 1.

         Principles of  Consolidation - The  consolidated  financial  statements
         include the accounts of the Company and its wholly-owned  subsidiaries.
         All  significant  intercompany  transactions  have been  eliminated  in
         consolidation.

         Investment  in  and  Advances  to  Equity  Affiliate  -  The  Company's
         investment in Crown Asphalt  Ridge,  LLC (Crown Ridge) is accounted for
         using the equity  method.  Accordingly,  the  Company's  investment  is
         recorded at cost and adjusted by the Company's  share of  undistributed
         earnings and losses.  The excess of the  Company's  investment in Crown
         Ridge  over  its   equity  in  the   related   underlying   net  assets
         (approximately $2,168,000) is being amortized over 40 years.

         Basis  of  Presentation  -  The  accompanying   consolidated  financial
         statements  have  been  prepared  on  a  going  concern  basis,   which
         contemplates  the realization of assets and satisfaction of liabilities
         in the normal course of business. The consolidated financial statements
         do not  include any  adjustments  relating  to the  recoverability  and
         classifications of recorded amounts of assets or the amounts and

                                       9
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

         Basis of Presentation (continued) - classifications of liabilities that
         might be necessary  should the Company be unable to continue as a going
         concern. The Company's  continuation as a going concern depend upon its
         ability to generate  sufficient cash flows to meet its obligations on a
         timely basis and to obtain  additional  financing or refinancing as may
         be required.

         At June 30, 2000, the company's  current  liabilities  exceeded current
         assets by $9,680,983 and the Company had a common stockholders' deficit
         of $5,604,020.  For the year ended December 31, 1999, the Company had a
         loss of  $3,053,516  and for the six month  period ended June 30, 2000,
         the Company had a loss of  $3,016,650.  On March 27, 2000,  the Company
         was  advised by MCNIC that it was in  default  of the  working  capital
         loan. MCNIC has also demanded  immediate payment of the working capital
         loan plus accrued interest.  References to the Company may also include
         references  to  Crown  Distribution  within  this  Report  where  it is
         appropriate.  Management believes that the Company is not in default of
         the working  capital  loan,  since only the initial loan had  specified
         terms and such loan was  extinguished  by the replacement  loan,  which
         management believes is a line of credit as interpreted by the Operating
         Agreement  between  MCNIC and Capco.  The Company does not believe that
         MCNIC will provide additional working capital in excess of the existing
         loan and  Management  has been  unable  to  secure  additional  working
         capital through other sources.

         The Crown Ridge production  facility,  which is a joint venture between
         MCNIC and CAC, has not  completed  the pilot  operations  in the second
         quarter as  indicated  by  Management  in its  December 31, 1999 annual
         report on Form  10-K.  The  continued  delays of the pilot  operations,
         indicate that the $6,633,778  investment  that the Company holds on its
         balance  sheet in Crown Ridge has the  potential  to be impaired if the
         facility does not achieve an acceptable level of profitable operations.
         Management  believes that if viable and economic solution exists at the
         facility and the facility becomes operational, then Crown Ridge will be
         able to continue as a going concern.

         These factors, as well as continued operating losses raise some concern
         regarding the Company's ability to operate as a going concern.

         Revenue  Recognition - Revenues are recognized when the related product
         is shipped.

         Income Taxes - The Company utilizes an asset and liability approach for
         financial  accounting and reporting for income taxes.  Deferred  income
         taxes are provided for temporary differences in the bases of assets and
         liabilities  as  reported  for  financial   statement  and  income  tax
         purposes.  As of June 30, 2000, all net deferred tax assets were offset
         by a valuation allowance.

         Number  of  Shares   Outstanding  -  The  number  of  shares  shown  as
         outstanding do not reflect 350,000 shares committed to be issued to the
         law firm of  Berman,  Gaufin,  Tomsic & Savage in  connection  with the
         litigation against MCNIC described in Part II Item 1.

         Loss Per Share - Net loss per common share is computed  under the basic
         method using the weighted average number of the Company's common shares
         outstanding.  The effect of common shares from stock options, warrants,
         and  convertible  securities is not  considered in the diluted loss per
         share computations as such common stock equivalents are anti-dilutive.

                                       10
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

         Cash and Cash  Equivalents  - For  purposes of the  statements  of cash
         flows,  the  Company  considers  all  highly  liquid  debt  investments
         purchased  with  a  maturity  of  three  months  or  less  to  be  cash
         equivalents.

         Use of Estimates in Preparing Financial Statements - The preparation of
         financial statements in conformity with accounting principles generally
         accepted in the United States of America,  requires  management to make
         estimates and  assumptions  that affect the reported  amounts of assets
         and liabilities,  the disclosures of contingent  assets and liabilities
         at the date of the  financial  statements  and the  reported  amount of
         revenues and expenses during the reporting period. Actual results could
         differ from those estimated.

         Inventory - Inventories consist principally of asphalt hydrocarbons and
         chemical  supplies which are valued at the lower of cost (computed on a
         first-in, first-out basis) or market.

         Long-Lived  Assets  - The  Company  evaluates  the  carrying  value  of
         long-term assets including intangibles based on current and anticipated
         undiscounted cash flows and recognizes  impairment when such cash flows
         will be less than the  carrying  values.  Measurement  of the amount of
         impairments,  if any,  is based upon the  difference  between  carrying
         value and fair value. There were no impairments as of June 30, 2000 and
         December 31, 1999.

         Goodwill - The Company has recorded the amount paid for Petro Source in
         excess of the fair value of the net  tangible  assets  acquired  at the
         date of acquisition as goodwill.  Such goodwill is amortized  using the
         straight-line method over 20 years.

         Asphalt Demerits - Crown's  subsidiary,  Capco, blends asphalt for sale
         to contractors and state  agencies.  The asphalt sold must meet certain
         specifications for a particular  application.  If the asphalt sold does
         not meet these specifications for whatever reason, the asphalt supplier
         may be held liable for possible damages (asphalt  demerits)  therefrom.
         Management  believes that the  Company's  product  liability  insurance
         would cover any significant damages.

         Environmental  Expenditures -  Environmental  related  restoration  and
         remediation costs are recorded as liabilities when site restoration and
         environmental  remediation and clean-up obligations are either known or
         considered probable, and the related costs can be reasonably estimated.
         Other environmental  expenditures,  that are principally maintenance or
         preventative  in nature,  are  recorded  when  expended and expensed or
         capitalized as appropriate.

         Comprehensive  Income - In 1998,  the  Company  adopted  SFAS No.  130,
         "Reporting  Comprehensive Income". SFAS 130 requires that an enterprise
         (a) classify items of other  comprehensive  income by their nature in a
         financial  statement and (b) display the  accumulated  balance of other
         comprehensive   income  separately  from  additional  paid-in  capital,
         retained  earnings,  and  stockholders'  equity.  The Company  does not
         currently  have any components of  comprehensive  income other than net
         loss.

         Derivative Instruments and Hedging - In June 1998, the FASB issued SFAS
         No. 133, Accounting for Derivative  Instruments and Hedging Activities.
         SFAS  No.  133  establishes  accounting  and  reporting  standards  for
         derivative  instruments  and hedging  activities.  It requires  that an
         entity recognize all derivatives as either assets or liabilities in the
         balance sheet and measure those instruments at fair value. SFAS No. 133
         is effective for the Company's financial statements for the year ending
         December 31,  2001.  The Company does not expect the impact of SFAS No.
         133 to be material in relation to its financial statements.

                                       11
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

         Stock-Based Compensation - The Company has elected to continue to apply
         Accounting  Principles Board (APB) Opinion 25 (as permitted by SFAS No.
         123,   Accounting  for  Stock-Based   Compensation).   The  appropriate
         disclosures required by SFAS No. 123 are included in Note 8.

         Revenue  Recognition - In December  1999,  the  Securities and Exchange
         Commission (SEC) issued SEC Staff Accounting  Bulletin (SAB): No. 101 -
         Revenue  Recognition  in  Financial  Statements.  This  SAB  summarizes
         certain of the staff's views in applying generally accepted  accounting
         principals to revenue  recognition  in financials  statements.  The SAB
         will be  effective in the fourth  quarter of this year.  The company is
         still  evaluating  the impact  that the SAB will have on its  financial
         statements.

NOTE 2 - ACQUISITION OF ASSETS

         Acquisition of Cowboy Asphalt  Terminal  Property - On January 9, 1999,
         CAT LLC acquired the Cowboy Terminal  Property for $1,973,511.  CAT LLC
         paid deposits totaling $496,441 during 1998. In addition,  CAT LLC paid
         $195,000 in cash at closing and  executed  and  delivered a  promissory
         note in the amount of $1,282,070. This promissory note is payable in 84
         equal monthly installments of $20,627 beginning on February 1, 1999 and
         ending on January 1, 2006.  The note bears  interest  at the rate of 9%
         and is  secured  by a deed of trust  encumbering  the  Cowboy  Terminal
         Property.  The acquisition was accounted for as a purchase.  There were
         no significant operations during 1998.

         Acquisition of Rawlins Asphalt  Terminal - On May 12, 1999, the Company
         acquired the Rawlins Asphalt Terminal and inventory for $2,291,571 from
         S&L  Industrial  (S&L).  The  purchase  price  consists  of the Company
         assuming S&L's debt of approximately  $1,800,000,  entering into a note
         payable to S&L for  $225,000,  and a cash  payment of  $266,571.  Capco
         currently  processes  asphalt for Crown  Distribution for a fee through
         the Rawlins Asphalt Terminal by throughput  agreement.  The Company has
         been notified by MCNIC that it will participate in this acquisition and
         will fund one-half of all costs. To date, however,  MCNIC has not taken
         the actions required in order for it to participate.

NOTE 3 - PROCESSING AGREEMENT EXPIRATION

         The  Company,  through  its  subsidiary,   Crown  Distribution  had  an
         agreement with Santa Maria  Refining  Company (SMRC) and SABA Petroleum
         whereby Crown  Distribution  purchased  crude oil for processing at the
         Santa  Maria  Refinery,  and  Capco  marketed  the  slate  of  products
         produced,  primarily  asphalt.  This agreement was acquired through the
         acquisition of Petro Source Asphalt  Company in 1998. The agreement was
         terminated  effective  April  30,  1999.  Revenues  resulting  from the
         agreement  were  approximately  $4.8 million in the first six months of
         1999.

NOTE 4 - BORROWINGS FROM RELATED PARTY

         Pursuant  to the Crown  Distribution  Operating  Agreement,  Management
         believes,  MCNIC elected to provide a working capital revolving line of
         credit to Crown  Distribution in lieu of the Company  completing a line
         with an outside financial  institution.  As of June 30, 2000, this line
         had a balance of approximately  $14,935,222 and accrues interest at 8%.
         Management  of the  Company  has  indicated  that  MCNIC  believes  the
         borrowing is a working capital loan.  Through the period ended June 30,
         2000,  $1,754,390  in interest  had been  accrued.  This line is repaid
         solely out of the cash flow from Crown Distribution. Crown Distribution
         has  received a notice of default of a working  capital loan from MCNIC
         made in conjunction with the Petro Source asset  acquisition.  Further,
         MCNIC has filed

                                       12
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 4 - BORROWINGS FROM RELATED PARTY (continued)

         a complaint  seeking,  among  other  things,  repayment  of the working
         capital  loan  plus all  interest  accrued  thereon.  The  Company  has
         answered MCNIC's suit and filed  counterclaims and an additional action
         of its own  relating to MCNIC's  actions with regard to the Company and
         its ventures with it. (See "Part II, Item 1 Legal  Proceedings and Item
         3. Defaults upon Senior Securities.")

NOTE 5 - LOSSES FROM EQUITY AFFILIATE

         Crown Ridge has recorded certain expenses, the majority of which relate
         to the  pilot  project  currently  being  conducted,  that the  Company
         believes were not approved by the Management  Committee of Crown Ridge.
         The Company has recorded  its share of such  expenses,  however  should
         these expenses be determined not to be valid Crown Ridge  expenditures,
         the Company  will reverse its share of such  expenses,  estimated to be
         $391,122, in the period upon such determination.

NOTE 6 - LONG TERM DEBT

         Long-term debt consists of the following at June 30, 2000:

         Debt with Hancock-Geisler R.I.C., interest at 9%, with
           monthly principal and interest payments of $20,627 for
           84 months                                                $ 1,083,205

         Debt with Community First National Bank, interest at
           prime plus 1%, with monthly payments of $13,600
           through May 12, 2001 with additional principal
           payments due in 2000 and 2001 of $60,000 and $66,000
           respectively, based on cash flow from Capco only.
           Balance as of May 12, 2001 to be amortized over 13
           year.                                                    $ 1,798,788

         Debt with S&L Industrial, interest at LIBOR with annual
           payments equal to the greater of 25% of the Rawlins
           Terminal cash flow after debt service or principal and
           interest payments annualized over 10 years. Such
           amount will be reduced because certain representations
           of S&L were not satisfied.                                 $ 225,000

         Preferential Capital Contribution in Crown Distribution
           with MCNIC, interest at 15%, with annual principal and
           interest installments equal to 50% of the net cash
           flows (as defined) of Crown Distribution. This debt is
           secured by all of the assets of Crown Distribution and
           is repayable solely from Crown Distribution's cash
           flow and is non-recourse to the Company.                 $ 5,325,723

         Debt with MCNIC, interest at prime plus 1%, with monthly
           payments of $20,757 through July 20, 2001 with
           additional payments due in 2000 and 2001 based upon
           the Company's cash flow. Balance as of July 20, 2001
           to be amortized over 13 years.                           $ 2,991,869

         Less estimated current portion                             $  (156,386)
                                                                    -----------

         Long-term portion                                          $11,268,199
                                                                    ===========
                                       13
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 7 - CONCENTRATION OF CREDIT RISK

         Financial  instruments  which subject the Company to  concentration  of
         credit risk consist  principally  of trade  receivables.  The Company's
         policy is to evaluate,  prior to shipment,  each  customer's  financial
         condition  and determine the amount of open line credit to be extended.
         It is also the Company's policy to obtain adequate letters of credit or
         other  acceptable  security as collateral  for amounts in excess of the
         open line.

NOTE 8 - COMMON STOCKHOLDERS' DEFICIT AND REDEEMABLE PREFERRED STOCK

         At June 30, 2000 and December 31, 1999, common stockholders' equity and
         redeemable preferred stock consists of the following:

                                                        June 30,    December 31,
                                                          2000         1999
                                                       -----------   ----------

         Redeemable preferred stock - $.005 par value;
         1,000,000 shares authorized; $10.00 stated
         value; 500,000 Series A cumulative convertible
         shares issued and outstanding; original
         estimated fair value of $4,716,981, accretion
         of $28,302 and $56,604 for the periods ended
         June 30, 2000 and December 31, 1999,
         respectively, toward the stated value of
         $5,000,000                                   $  4,867,925  $ 4,839,623
                                                      ============  ===========

         Common stockholders' equity:

         Common stock, $.02 par value; 50,000,000
         shares authorized; 13,285,581 and 13,285,581
         shares issued and outstanding at June 30, 2000
         and December 31, 1999, respectively          $    265,711  $   265,711

         Additional paid-in capital                      5,563,527    5,791,828

         Stock warrants outstanding; 683,750 at June
         30, 2000 and December 31, 1999, respectively      243,574      243,574

         Common stock subscription receivable from
         officers                                         (549,166)    (549,166)

         Retained deficit                              (11,127,666)  (8,027,766)
                                                       -----------   ----------
         Total                                        $ (5,604,020) $(2,275,819)
                                                      ============  ===========

NOTE 9 - CAPITAL TRANSACTIONS

         Preferred  Stock  -  The  Company  is  authorized  to  issue  1,000,000
         preferred  shares,  par value $.005 per share. On November 4, 1997, the
         Company completed the sale of 500,000 shares of its Series A Cumulative
         Convertible  Preferred Stock ("Series A Preferred") pursuant to a stock
         purchase  agreement  dated  September  25, 1997 for an aggregate  sales
         price of $5,000,000. Each share of Series

                                       14
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

         A Preferred is  convertible  at the option of its holder,  at any time,
         into 8.57  shares of common  stock of the  Company.  At the date of the
         issuance of the  preferred  stock,  the embedded  conversion  price was
         $1.17 and the  estimated  fair  value of the  common  stock was  $1.03.
         Dividends  accrue on the outstanding  Series A Preferred at the rate of
         8% per annum and may be  declared,  at the option of the  Company,  and
         paid through cash or common  shares of the Company at the option of the
         holder.  Subject  to  the  holder's  right  to  convert  the  Series  A
         Preferred,  the Company  may redeem the Series A Preferred  at any time
         from the date on which it is issued  at a  percentage  of the  Series A
         Preferred's  stated  value of $10 per  share;  130% of stated  value if
         redemption  occurs  within  thirty-six  months of the date of issuance,
         115% of  stated  value if  redemption  occurs  between  thirty-six  and
         forty-eight months after the date of issuance,  110% of stated value if
         redemption  occurs between  forty-eight and sixty months after the date
         of issuance,  and 100% if redemption occurs  thereafter.  The holder of
         the  Series A  Preferred  may also  require  the  Company to redeem the
         Series  A  Preferred  after  the  eighth  anniversary  of the  Series A
         Preferred's issuance.  The holders of the Series A Preferred shall have
         the right,  but shall not be obligated,  to appoint 20% ofthe Company's
         Board  of  Directors.   The  Company  may  not  alter  the  rights  and
         preferences  of the Series A Preferred,  authorize any security  having
         liquidation preference, redemption, voting or dividend rights senior to
         the Series A  Preferred,  increase  the  number of Series A  Preferred,
         reclassify its securities or enter into specified  extraordinary events
         without  obtaining  written consent or an affirmative  vote of at least
         75% of the holders of the outstanding  shares of the Series A Preferred
         stock.  All voting  rights of the Series A  Preferred  expire  upon the
         issuance by the Company of its notice to redeem such shares. The shares
         of common stock issuable upon  conversion of the Series A Preferred are
         subject to  adjustment  upon the issuance of  additional  shares of the
         Company's  common stock resulting from stock splits,  share  dividends,
         and other  similar  events as well as upon the  issuance of  additional
         shares or options  which are issued in  connection  with the  Company's
         equity  investment  or  as  compensation  to  any  employee,  director,
         consultant, or other service provider of the Company or any subsidiary,
         other than options to acquire up to 5% of the Company's common stock at
         or less than fair  market  value.  This  anti-dilution  provision  only
         applies upon the issuance of additional  equity in connection  with the
         Company's  interest in Crown Asphalt Ridge, LLC or equity issued to any
         employee, director, consultant or other service provider outside of the
         Company's Long Term Incentive Plan.

         Common  Stock  Warrant  - In  conjunction  with  the  issuance  of  the
         preferred  stock described  above,  the Company issued a warrant to the
         holders of the  preferred  stock.  The fair value of the warrant at the
         date of  issuance  was  estimated  to be $283,019  and was  recorded to
         additional  paid-in  capital and as a reduction  to the stated value of
         the preferred stock. The reduction in preferred stock is being accreted
         over the  five-year  period from the date of  issuance to the  earliest
         exercise  date  of the  warrant.  Upon  the  fifth  anniversary  of the
         issuance of the preferred  stock, the warrant becomes  exercisable,  at
         $.002 per share,  into the number of common shares of the Company equal
         to (a) [$5,000,000  plus the product of (i)  ($5,000,000  multiplied by
         (ii)  39%  (internal  rate of  return)  multiplied  by  (iii) 5  years]
         (14,750,000),  minus  (b)  the  sum  of (i)  all  dividends  and  other
         distributions  paid by the  Company  on the  preferred  stock or on the
         common stock received upon  conversion of the preferred stock plus (ii)
         the greater of the proceeds from the sale of any common stock  received
         by the holder upon the  conversion of the preferred  stock prior to the
         fifth anniversary date or the terminal value (as defined below) of such
         common stock sold before the fifth  anniversary plus (iii) the terminal
         value of the preferred  stock and common stock received upon conversion
         of the preferred stock then held,  divided by (c) the fair market value
         of the  Company's  common stock on a weighted  average basis for the 90
         days immediately  preceding the fifth  anniversary date of the issuance
         of the preferred stock. Terminal value is defined as the sum of (i) the
         shares of common  stock  into  which the  preferred  stock then held is
         convertible,  plus (ii) shares of common stock received upon conversion
         of preferred

                                       15
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

         Common Stock Warrant (continued) - stock, multiplied by the fair market
         value of the Company's common stock on a weighted average basis for the
         90  days  immediately  preceding  the  fifth  anniversary  date  of the
         issuance of the preferred  stock.  The warrants will expire in 2007 and
         is subject to a cap of up to an additional  8% of the  Company's  fully
         diluted  outstanding  shares as of September 25, 1997 and other certain
         adjustments.

NOTE 10 - LOSS PER SHARE

         The following  table is a  reconciliation  of the net loss numerator of
         basic and  diluted net loss per common  share for the six months  ended
         June 30, 2000 and 1999:
<TABLE>
<CAPTION>
                                                  2000                           1999
                                          ----------------------          --------------------
                                                       Loss                            Loss
                                          Loss         Per Share          Loss       Per Share
                                          ----         ---------          ----       ---------
         <S>                         <C>             <C>           <C>               <C>
         Net Loss                    $ (3,016,650)                  $ (1,170,472)

         Redeemable preferred
           stock dividends               (200,000)                      (200,000)
                                         --------                       --------
         Net loss attributable to
           common stockholders       $ (3,216,650)    $ (0.24)      $ (1,370,472)      $ (0.10)
                                     ============     =======       ============       =======
         Weighted average common
           shares outstanding -
           basic and diluted           13,285,581                     13,285,581
                                       ----------                     ----------
</TABLE>

         The Company had at June 30, 2000 and  December  31,  1999,  incremental
         options and warrants to  purchase,  computed  under the treasury  stock
         method,  668,256  shares of common  stock that were not included in the
         computation  of diluted  earnings  per share  because  their effect was
         anti-dilutive. The Company also has preferred stock outstanding at June
         30, 2000 and December 31, 1999 which is convertible into  approximately
         4,300,000  shares  of  common  stock  that  was  not  included  in  the
         computation   of  diluted   earnings   per  share  as  its  effect  was
         anti-dilutive.  Accordingly, diluted earnings per share does not differ
         from basic earnings.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

         On June  20,  2000,  MCNIC  filed a  Complaint  in the  Third  Judicial
         District Court, Salt Lake County, Utah, against Crown Distribution. The
         action seeks to foreclose on alleged mortgage and security  interest in
         and to certain real and personal property of Crown Distribution,  which
         property  constitutes  a substantial  part of the  operating  assets of
         Crown  Distribution.  In  summary,  in its  Complaint  MCNIC  does  not
         acknowledge  its prior  commitment  to "roll"  the Loan into the Credit
         Line  and  alleges  that  Crown  Distribution  is  in  default  on  the
         promissory note evidencing the Loan to Crown Distribution in the amount
         of  $7,141,930.00.  MCNIC further alleges that the total amount owed by
         Crown  Distribution  to MCNIC is in excess of  $15,000,000,  as well as
         interest  at the rate of 18% from  January  1, 2000 until paid in full.
         The Complaint  also seeks the  appointment  of a receiver to ensure and
         protect the  interests of MCNIC in the property of Crown  Distribution,
         pending a  determination  by the Court of the merits of the  Complaint.
         Crown Distribution intends to vigorously defend against this litigation
         and  believes  that  it has  certain  available  defenses,  claims  and
         counterclaims. Crown Distribution's

                                       16
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 11 - COMMITMENTS AND CONTINGENCIES (continued)

         managements  further  believe that certain of MCNIC's  allegations  are
         lacking  in either  legal or  factual  basis.  However,  litigation  is
         inherently  uncertain  and Crown  Distribution  is therefore  unable to
         predict the outcome of the litigation.

NOTE 12 - SUBSEQUENT EVENT

         On July 25, 2000,  the Company  brought  suit  against  MCN,  MCNIC and
         certain  officers of MCN and MCNIC in the United States  District Court
         for the District of Utah, Central Division.  The Company alleges claims
         against  defendants for breach of fiduciary  duties,  economic  duress,
         breach of implied  covenants of good faith and fair dealing,  breach of
         contracts,  estoppel,  intentional  interference,  and trade  libel and
         slander  of title as a result  of  defendants'  wrongful  and bad faith
         conduct  in the  joint  venture  relationships.  Damages  of an  amount
         exceeding $100 million are being sought with the full amount of damages
         on all  claims to be proven  at trial.  (See  "Part II - Item 1 - Legal
         Proceedings")

         On  August  1,   2000,   Crown   Distribution   filed  its  Answer  and
         Counterclaims to the MCNIC Complaint and named additional  counterclaim
         defendants,  MCN and certain  officers of MCN and MCNIC. The Answer and
         Counterclaims  substantially denied all of the allegations set forth in
         the MCNIC Complaint and alleged numerous counterclaims. (See "Part II -
         Item 1 - Legal Proceedings")

                                       17
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULT
        OF OPERATIONS

         The  following  discussion  and  analysis  of the  Company's  financial
condition,  results  of  operations  and  related  matters  includes a number of
forward-looking  statements  within the meaning of Section 27A of the Securities
Act  of  1933  and  Section  21E  of  the  Securities   Exchange  Act  of  1934.
Forward-looking  statements  include, by way of illustration and not limitation,
statements containing the words "anticipates", "believes", "expects", "intends",
"future"  and words of similar  import  which  express,  either  directly  or by
implication,  management's  beliefs,  expectations  or intentions  regarding the
Company's  future  performance  or future  events or trends which may affect the
Company or its results of operations.

         Forward-looking  statements  are  subject to known and  unknown  risks,
uncertainties  and other  factors,  including  but not  limited  to  changes  in
economic conditions  generally or with respect to the Company's asphalt products
market  in  particular,  new or  increased  governmental  regulation,  increased
competition,  shortages in labor or materials,  delays or other  difficulties in
shipping or  transporting  the  Company's  products,  technical  or  operational
difficulties  at the facility of Crown Ridge,  difficulties  in integrating  the
Company's  recent joint venture and  acquisition  related  businesses  and other
similar  risks  inherent in the Company's  operations or in business  operations
generally. Any such risks or uncertainties,  either alone or in combination with
other factors, may cause the actual results,  performance or achievements of the
Company to differ materially from its anticipated future results, performance or
achievements  (which  may be  expressed  or  implied  by  such  forward  looking
statements).  Consequently,  the following management's discussion and analysis,
including all  forward-looking  statements  contained therein,  is qualified and
limited by the foregoing  cautionary factors.  Interested persons are advised to
consider all  forward-looking  statements  within the context of such cautionary
factors.

         Liquidity and Capital Resources

         At June 30,  2000,  the  Company had cash and other  current  assets of
$11,431,339  as  compared to cash and other  current  assets of  $12,334,750  at
December 31, 1999.  The  decrease of $903,411  was  primarily  the result of the
Company's  operating  loss for the six month  period  ended June 30,  2000.  The
operating  loss resulted from  insufficient  funds  available  under its working
capital line of credit to complete its asphalt inventory winterfill program. The
winterfill  program involves the purchase of asphalt during the winter months to
fill the available storage capacity,  when prices are lower, for subsequent sale
during the  asphalt  season,  typically  during the  months  from April  through
October.  Management believes, MCNIC, the minority interest owner, having agreed
to  provide  such line of  credit  in lieu of third  party  bank  financing  has
declined to make available to the Company additional borrowings. The Company has
accrued  interest on the line at an interest  rate of 8%. At June 30, 2000,  the
line had an outstanding principal balance of $14,935,222. (See "Part II - Item 1
- Legal Proceedings")

         On March 27, 2000,  MCNIC  delivered to the Company a notice of default
with  respect  to  the  working  capital  loan,  and  demanded  payment  of  the
outstanding  principal  balance  plus  all  interest  accrued  thereon.   MCNIC,
immediately  following  its notice of  default,  proposed  an  extension  on the
working capital loan, provided the Company also relinquishes operational control
of Crown  Distribution  to MCNIC.  The Company has  endeavored  to resolve these
issues with MCNIC on mutually acceptable terms. However, on June 20, 2000, MCNIC
filed a Complaint in the Third Judicial District Court, Salt Lake County,  Utah,
against Crown  Distribution.  The action seeks to foreclose on alleged  mortgage
and  security  interest in and to certain  real and  personal  property of Crown
Distribution,  which  property  constitutes a substantial  part of the operating
assets of Crown  Distribution.  In  summary,  in its  Complaint  MCNIC  does not
acknowledge  its prior  agreement  to  extinguish  the working  capital loan and
"roll" such loan into the working capital line of credit.  The Complaint alleges
that Crown  Distribution  is in default on the  promissory  note  evidencing the
working capital loan to Crown Distribution in the amount of $7,141,930.00. MCNIC
further alleges that the total amount owed by Crown  Distribution to MCNIC is in
excess of  $15,000,000,  as well as interest at the rate of 18% from  January 1,
2000 until paid in full. The Complaint also seeks the  appointment of a receiver
to  ensure  and  protect  the  interests  of  MCNIC  in the  property  of  Crown
Distribution,  pending  a  determination  by  the  Court  of the  merits  of the
Complaint.

         Management of the Company  believes  that the working  capital loan was
fully  satisfied  and  replaced  by the  working  capital  line of credit and no
default has occurred under the working  capital loan or working  capital line of
credit.  The Company  further  believes that MCNIC is  improperly  attempting to
demand repayment of the working capital loan. Additionally,  Management believes
that MCNIC is improperly attempting to gain control of Crown Distribution and

                                       18
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULT
        OF OPERATIONS (continued)

other aspects of the Company's  operations.  The Company and Crown  Distribution
intend to vigorously defend against this litigation. An Answer and Counterclaims
to the  MCNIC  Complaint  were  filed on August 1, 2000 with the court and named
additional counterclaim  defendants,  MCN Energy Group, Inc. ("MCN") and certain
officers of MCN and MCNIC. The Answer and Counterclaims substantially denied all
of the allegations  set forth in the MCNIC Complaint and made certain  defensive
arguments, claims and counterclaims. The Answer and Counterclaims further argued
that  certain  of MCNIC's  allegations  are  lacking in either  legal or factual
basis.

         Interested persons should note that litigation is inherently  uncertain
and the  Company  and Crown  Distribution  are  therefore  unable to predict the
outcome of the  litigation.  Should MCNIC  prevails in the action  against Crown
Distribution,  and depending upon the extent and nature of any relief granted by
the Court,  Crown  Distribution  may be severely and adversely  impacted and may
lose  possession  of some or all of its primary  assets and sources of revenues.
Further,  since Crown  Distribution  provides a very significant  portion of the
Company's  revenues from operations,  the Company is likely to be materially and
adversely  impacted by any adverse outcome of MCNIC's  litigation.  On the other
hand,  interested  persons  should  note that,  subject  of course to  available
equitable and other creditor remedies, neither the MCNIC working capital loan or
working  capital line to Crown  Distribution  contain  cross-default  provisions
giving  MCNIC any right to  declare a default or to seek  control or  possession
over the assets or operations of Crown Ridge or the Company's  interest in Crown
Ridge or any other assets of the Company.

         Management  of the  Company  intends to take all actions  necessary  or
appropriate to assert the Company's rights and preserve its rights and assets in
Crown Distribution and other aspects of its operations. As a result, the Company
on July 25, 2000 filed suit in United States  District Court for the District of
Utah,  Central Division against MCN, MCNIC and certain officers of MCN and MCNIC
in which the Company  alleges claims against  defendants for breach of fiduciary
duties,  economic  duress,  breach of implied  covenants  of good faith and fair
dealing,  breach of contracts,  estoppel,  intentional  interference,  and trade
libel and  slander of title as a result of  defendants'  wrongful  and bad faith
conduct in the joint venture relationships.  Damages of an amount exceeding $100
million  are being  sought  with the full  amount of damages on all claims to be
proven at trial.  While there is no way of  predicting or knowing the outcome of
the  litigation  which is now in process,  the Company is  confident  that it is
asserting its claims in good faith, has a reasonable basis for pursuing them and
will  continue  to pursue  them with  vigor.  Given the wide range of  potential
actions  which  MCNIC  might  take,  and the  equally  wide  range of  defenses,
counterclaims  and other  actions which the Company might assert and/or take, it
is  difficult  to predict  possible  outcomes  at this time.  Again,  interested
persons should note the  significant  and material risks facing the Company,  as
well as the related  material,  negative impacts the Company would experience in
the event the Company does not prevail.

         The Company also owed MCNIC an  additional  $5,325,723 at June 30, 2000
with  respect  to the  Preferential  Capital  Contribution  which  funded  Crown
Distribution's  acquisition of the assets of Petro Source Asphalt  Company.  The
Preferential  Capital  Contribution  yields a 15% rate of return  and is payable
solely from 50% of the cash flow from Crown Distribution's operations. .

         The  Company  believes  its  asphalt  distribution  business,  which is
operated  through  Capco,  is a business  whose  success is not dependent on the
Company's   interest  in  the  Crown  Ridge  facility.   However,   the  asphalt
distribution business is capital intensive and requires substantial  investments
to acquire terminal storage,  blending,  and raw material assets.  For instance,
the Rawlins,  Wyoming asphalt  terminal,  acquired by Capco in 1999, has not yet
generated  positive cash flow and requires  working  capital to fund its ongoing
operations.  Under the Company's contractual  relationship with MCNIC, MCNIC has
certain  rights to  participate in additional  business  opportunities,  if any,
which may be pursued by the Company. MCNIC has agreed to jointly own the Rawlins
asphalt  terminal in a new,  separate  joint  venture,  Crown  Distribution  II.
Assuming that both the Company and MCNIC satisfy their respective obligations to
contribute assets to and otherwise fund Crown Distribution II, it is anticipated
that Crown  Distribution  II will be owned  50.01% by the  Company and 49.99% by
MCNIC. The final operating agreement for Crown Distribution II was not completed
as of the date of this  Report,  and no assets  have been  contributed  to Crown
Distribution  II,  but has not taken  the  steps  necessary  to  consummate  the
transaction. The Company expects that MCNIC will fund its proportionate share of
all  costs and  losses  retroactive  to the  acquisition  date of May 12,  1999.
Additionally,  the Rawlins  asphalt  terminal  will  require a separate  working
capital line of credit to operate the business, which line of credit the Company
expects will be

                                       19
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULT
        OF OPERATIONS (continued)

jointly  funded  by MCNIC and the  Company.  Therefore,  until  such time as the
Rawlins asphalt terminal  generates positive cash flow, the Company expects that
the  operations at the Rawlins  asphalt  terminal will require  working  capital
provided by the Company.

         The  Company   remains   open  to  other   asphalt   related   business
opportunities  to complement  its existing  asphalt  distribution  capabilities.
There  can be no  assurance  that the  Company  can  obtain  additional  capital
financing  required  to  finance  such  transactions  on  acceptable  terms  and
conditions.

         The Company  has a portion of its  accounts  receivable  subject to the
risks and uncertainties of litigation (See "Part II, Item 1. Legal Proceedings")
and subject to related collection risks. In the event that the Company is unable
to collect  these  amounts,  or the  Company  is unable to secure the  necessary
working  capital line from third party  sources  (such as MCNIC) for the Rawlins
asphalt  terminal,  or if the  Company's  operating  losses and working  capital
deficits  continue,  the  Company  may not have  sufficient  capital  to operate
through 2000. Thus, the risk exists that the Company may not be able to continue
as a going concern.  Furthermore,  if Crown Ridge approves an additional capital
contribution  for the  modification to the facility and the Company is unable to
finance its approximate 25% of such capital  contribution,  its sharing ratio in
Crown Ridge may be diluted.

         As of June 30,  2000,  the  Company  has  made  cash  contributions  of
approximately  $5.7  million to Crown  Ridge.  During the  start-up of the Crown
Ridge  facility,  mechanical  and process  difficulties  were  experienced  that
affected production economics. Crown Ridge is currently conducting a pilot study
to develop a solution to these problems.  Should such delays continue, or should
the facility be unable to operate economically,  the Company believes this would
significantly  impact Crown  Ridge's  ability to continue as a going concern and
would adversely impact the Company's operations and financial condition.

         Results of Operations

         For the three month period  ended June 30, 2000,  compared to the three
months ended June 30, 1999

         Total revenue  decreased  from  $10,057,495  for the three month period
ended June 30, 1999 to  $6,872,696  for the same  period in 2000,  a decrease of
$3,184,799.  The decrease was due to the termination of the processing agreement
with the Santa Maria  Refinery that expired April 30, 1999.  Revenues  generated
from  the  Santa  Maria  agreement  during  the  same  prior  year  period  were
$3,547,938.  The Company is presently  engaged in litigation  with the owners of
the Santa Maria Refinery (See "Part II - Item 1 - Legal Proceedings).

         Cost of sales  decreased  from  $7,442,952  for the three month  period
ended June 30, 1999 to  $5,733,582  for the same  period in 2000,  a decrease of
$1,709,370.   This  decrease  was  due  to  reduced  costs  resulting  from  the
termination of the Santa Maria Refining agreement.

         Operating expenses decreased from $1,803,323 for the three month period
ended June 30, 1999 to  $1,102,730  for the same  period in 2000,  a decrease of
$700,593.  This decrease was due to lower  through put for the period,  improved
operating  efficiencies,  and the  termination  of the  Santa  Maria  Processing
Agreement. Estimated through put for the three month period ended March 31, 1999
was 24,100 tons as compared to 6,050 tons for the same period in 2000.

         General and  administrative  expenses  decreased  from $648,802 for the
three month  period ended June 30, 1999 to $457,942 for the same period in 2000,
a decrease of $190,860.  This change was  primarily  due to the  collection of a
receivable of $320,000 from the  Zimmerman  litigation,  which was expensed as a
bad debt in the prior year. This was partially offset by the additional overhead
attributed to the acquisition of the Rawlins Asphalt Terminal.

                                       20
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULT
        OF OPERATIONS (continued)

         Interest and other income/expenses decreased from net other expenses of
$613,728 for the three month period ended June 30, 1999 to net other expenses of
$527,192 for the same period  ended June 30,  2000,  a decrease of $86,536.  The
2000 total was  comprised of interest  costs  related to the  Company's  working
capital  line,  preferential  loan and other debt for its  asphalt  distribution
business of $644,565  and losses of $167,088  related to equity in the losses of
Crown Ridge. These amounts were partially offset by interest and other income of
$284,461. (See "Part I - Note 5. Equity Affiliate")

         Minority  interest of $10,039  Foreland's  approximate  33% interest in
CAT, LLC.

         For the six month  period  ended  June 30,  2000,  compared  to the six
months ended June 30, 1999

         Total revenue decreased from $14,876,581 for the six month period ended
June  30,  1999 to  $8,189,105  for the  same  period  in 2000,  a  decrease  of
$6,687,476.  The decrease was due to the termination of the processing agreement
with the Santa Maria  Refinery that expired April 30, 1999.  Revenues  generated
from  the  Santa  Maria  agreement  during  the  same  prior  year  period  were
$7,769,632.  The Company is presently  engaged in litigation  with the owners of
the Santa  Maria  Refinery  (See  "Part II - Item 1 - Legal  Proceedings")  that
refused to deliver the Company's inventory at that facility.

         Cost of sales decreased from $10,619,620 for the six month period ended
June  30,  1999 to  $6,638,461  for the same  period  in 2000,  an  increase  of
$3,981,159.   This  decrease  was  due  to  reduced  costs  resulting  from  the
termination of the Santa Maria Refining agreement.

         Operating  expenses  decreased from $3,145,360 for the six month period
ended June 30, 1999 to  $1,944,263  for the same  period in 2000,  a decrease of
$1,201,097.  This decrease was due to lower through put for the period, improved
operating  efficiencies,  and the  termination  of the  Santa  Maria  Processing
Agreement.  Estimated  through put for the six month  period ended June 30, 1999
was 81,500 tons as compared to 41,500 tons for the same period in 2000.

         General and  administrative  expenses decreased from $1,234,060 for the
six month period ended June 30, 1999 to $1,093,857  for the same period in 2000,
a decrease of $140,203.  This change was due to the  collection  of a receivable
which was expensed as a bad debt in the prior year and cost  efficiencies.  This
was partially offset by the additional overhead attributed to the acquisition of
the Rawlins Asphalt Terminal.

         Interest and other income/expenses decreased from net other expenses of
$1,112,990 for the six month period ended June 30, 1999 to net other expenses of
$1,112,639  for the same period in 2000, a decrease of $351.  The 2000 total was
comprised of interest  costs  related to the  Company's  working  capital  line,
preferential  loan and  other  debt for its  asphalt  distribution  business  of
$1,266,453  and  losses of  $434,013  related  to equity in the  losses of Crown
Ridge.  These  amounts  were  partially  offset by interest  and other income of
$587,827. (See "Part I - Note 5. Equity Affiliate")

         Minority  interest of $17,214  represents  Foreland's  approximate  33%
interest in CAT, LLC.

                                       21
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The  Company  does not believe it is subject to the  material  risks of
loss  related to certain  market  risks,  such as interest  rate risks,  foreign
currency  exchange rate risks or similar  risks,  and therefore the Company does
not  engage  in  transactions,  such  as  hedging  or  similar  transactions  in
derivative financial instruments, intended to reduce its exposure to such risks.
However,  the Company is subject to general market  fluctuations  related to the
purchase of its basestock  asphalt and may suffer reduced  operating  margins to
the extent its increased  costs are not passed  through to its  customers.  Such
prices generally fluctuate with the price of crude oil. The Company is prevented
in certain  contracts  with MCNIC  from  utilizing  any  hedging  strategies  to
minimize any market price changes. The Company believes the inability to protect
itself from market fluctuations may negatively impact its profit margins.

         The  Company  is  also  subject  to  certain   price   escalation   and
de-escalation  clauses in its asphalt distribution sales contracts.  The Company
supplies  asphalt to projects in certain  states where  regulations  provide for
escalation and de-escalation of the price for such asphalt relative to the price
difference  from the time the  project  is  awarded  to the  successful  bidding
company  and the time the  project  is  completed.  The  Company  includes  such
de-escalation  risk into its bid process  and does not  believe it has  material
exposure to risk resulting from these regulations.

                                       22
<PAGE>

                          PART II. - OTHER INFORMATION

ITEM 1.  Legal Proceedings

         On April 17, 2000,  pursuant to a February 2000  settlement  agreement,
Robert  Ryan  Zimmerman,  d/b/a  Asphalt  Supply  &  Service,  Inc.,  Robert  A.
Zimmerman,  d/b/a Inoco, Inc., and Connie R. Zimmerman, d/b/a Interstate Asphalt
Company,  delivered the sum of $320,000 to the Company in exchange for a release
of all  claims  and  rescission  of the  Company's  acquisition  of the  asphalt
terminals.

         On June  20,  2000,  MCNIC  filed a  Complaint  in the  Third  Judicial
District Court, Salt Lake County,  Utah, against Crown Distribution.  The action
seeks to foreclose on alleged  mortgage and security  interest in and to certain
real and personal property of Crown Distribution,  which property  constitutes a
substantial part of the operating assets of Crown  Distribution.  In summary, in
its Complaint MCNIC does not acknowledge its prior commitment to "roll" the Loan
into the Credit Line and alleges  that Crown  Distribution  is in default on the
promissory  note  evidencing  the Loan to Crown  Distribution  in the  amount of
$7,141,930.00.  MCNIC  further  alleges  that  the  total  amount  owed by Crown
Distribution  to MCNIC is in excess of  $15,000,000,  as well as interest at the
rate of 18% from January 1, 2000 until paid in full.  The  Complaint  also seeks
the  appointment  of a receiver to ensure and protect the  interests of MCNIC in
the property of Crown Distribution,  pending a determination by the Court of the
merits of the Complaint. Crown Distribution intends to vigorously defend against
this litigation and believes that it has certain available defenses,  claims and
counterclaims.  Crown Distribution's managements further believe that certain of
MCNIC's  allegations  are  lacking in either  legal or factual  basis.  However,
litigation is inherently uncertain and Crown Distribution is therefore unable to
predict the outcome of the litigation.

         On July 25, 2000,  the Company  brought  suit  against  MCN,  MCNIC and
certain  officers of MCN and MCNIC.  The suit was  brought in the United  States
District Court for the District of Utah,  Central Division,  and is styled Crown
Energy  Corporation,  Crown  Asphalt  Corporation,  and Crown  Asphalt  Products
Company v. MCN Energy Group, Inc., MCNIC Pipeline & Processing  Company,  Howard
L.  ("Lee")  Dow III,  and William E.  Kraemer,  Civil No.  2:00CV-05873ST.  The
Company's  action  arises  from the joint  ventures  between  affiliates  of the
Company  and MCNIC with regard to the  asphalt  business  in the Western  United
States involving the mining, processing,  storage, manufacture, and marketing of
asphalt the Company  alleges claims  against  defendants for breach of fiduciary
duties,  economic  duress,  breach of implied  covenants  of good faith and fair
dealing,  breach of contracts,  estoppel,  intentional  interference,  and trade
libel and  slander of title as a result of  defendants'  wrongful  and bad faith
conduct in the joint venture relationships.  Damages of an amount exceeding $100
million  are sought on the  Company's  claims for  breach of  fiduciary  duties,
economic duress, and breach of implied covenants of good faith and fair dealing,
with the full amount of damages on all claims to be proven at trial. While there
is no way of predicting or knowing the outcome of the litigation which is now in
process, the Company is confident in its claims and will continue to pursue them
with vigor.

         On  August  1,   2000,   Crown   Distribution   filed  its  Answer  and
Counterclaims  to  the  MCNIC  Complaint  and  named   additional   counterclaim
defendants,  MCN Energy Group,  Inc.,  Howard L. ("Lee") Dow III, and William E.
Kraemer. Crown Distribution's Answer and Counterclaims  substantially denied all
of the  allegations  set  forth in the  MCNIC  Complaint  and  alleged  numerous
counterclaims,  including breach of fiduciary duty,  economic duress,  breach of
implied covenants of good faith and fair dealing, breach of contracts, estoppel,
intentional  interference,  trade  libel  and  slander  of  title,  and abuse of
process. Crown Distribution, pursuant to its counterclaims, has requested a jury
trial and is  seeking  relief in the way of  damages  in amounts to be proven at
trial, punitive damages,  attorney's fees, interest,  costs and any other relief
to which they may be entitled.  While there is no way of  predicting  or knowing
the outcome of the litigation  which is now in process,  Crown  Distribution  is
confident  in its defenses and  counterclaims  and will  continue to pursue them
with vigor.

ITEM 2.  Changes in Securities

         None.
                                       23
<PAGE>

ITEM 3.  Defaults upon Senior Securities

         On March 27, 2000,  MCNIC  delivered to the Company a notice of default
with  respect  to  the  working  capital  loan,  and  demanded  payment  of  the
outstanding  principal balance plus all interest accrued thereon.  Management of
the Company  believes  that the working  capital  loan was fully  satisfied  and
replaced by the working capital line of credit and no default has occurred under
the working  capital loan or working  capital line of credit.  At June 30, 2000,
the line had an  outstanding  principal  balance  of  $14,935,222.  The  Company
further believes that MCNIC is improperly  attempting to demand repayment of the
working  capital  loan.  (See  "Part I - Item 2 -  Management's  Discussion  and
Analysis of Financial Condition and Results of Operations.")

ITEM 4.  Submission of Matters to a Vote of Security Holders

         None.

ITEM 5.  Other Information

         The Company  postponed its 2000 Annual Meeting of Shareholders  until a
future date to be determined.  The Annual Meeting was tentatively  scheduled for
June 21, 2000.  The Company is presently  evaluating  its options and  strategic
alternatives  and  believes  postponing  its Annual  Meeting  will  enable it to
further explore and evaluate such matters and to present any related matters, if
required under applicable corporate laws, to shareholders at the Annual Meeting.

ITEM 6.  Exhibits and Reports on Form 8-K

         The Company  filed a Form 8-K on June 6, 2000 to report that on May 26,
2000, the Company  received notice that MCNIC had elected to exercise its option
to assume  operations as Operator of the Crown Ridge  facility in Vernal,  Utah,
effective June 26, 2000, from the Company's wholly owned subsidiary,  CAC. MCNIC
had the right to replace CAC as Operator by the Crown Ridge Operating  Agreement
and a January 20, 2000 letter agreement.  MCNIC will become Operator under a new
Operating and Management Agreement similar to that currently in effect.  MCNIC's
assumption of Crown Ridge's  operations will not affect CAC's (i) right to serve
as Operator for any  additional  plants built on Crown Ridge's tar sands leases,
or (ii) rights as a Member under Crown Ridge's Operating Agreement. To date, the
Company  does not believe  that MCNIC has  performed  all steps  entitling it to
assume its status as operator of Crown Ridge.

         The  Company  filed a Form 8-K on June 28,  2000 to report that on June
20, 2000,  MCNIC filed a Complaint in the Third Judicial  District  Court,  Salt
Lake County, Utah, against Crown Distribution.  The action seeks to foreclose on
alleged  mortgage  and  security  interest in and to certain  real and  personal
property of Crown  Distribution.  The Complaint  results from MCNIC's  assertion
that Crown  Distribution  is in default  with  respect to a MCNIC loan,  and the
payment of the outstanding  principal balance plus all interest accrued thereon.
The property  constitutes  a substantial  part of the operating  assets of Crown
Distribution. (See "Part 1- Item 2 - Liquidity and Capital Resources.")

         The  Company  filed a Form 8-K on August 4, 2000 to report that on July
25, 2000, the Company  brought suit against MCN,  MCNIC and certain  officers of
MCN and MCNIC in the United  States  District  Court for the  District  of Utah,
Central  Division.  The Company alleges claims against  defendants for breach of
fiduciary duties, economic duress, breach of implied covenants of good faith and
fair dealing, breach of contracts, estoppel, intentional interference, and trade
libel and  slander of title as a result of  defendants'  wrongful  and bad faith
conduct in the joint venture relationships.  Damages of an amount exceeding $100
million  are being  sought  with the full  amount of damages on all claims to be
proven at trial.  On August 1,  2000,  Crown  Distribution  filed its Answer and
Counterclaims  to  the  MCNIC  Complaint  and  named   additional   counterclaim
defendants,  MCN  and  certain  officers  of  MCN  and  MCNIC.  The  Answer  and
Counterclaims substantially denied all of the allegations set forth in the MCNIC
Complaint and alleged numerous counterclaims.  (See "Part 1 - Item 2 - Liquidity
and Capital Resources.")

                                       24
<PAGE>

                             PART III. - 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.

                                              CROWN ENERGY CORPORATION
                                              (Registrant)


Date: August 14, 2000                         By: /s/ JAY MEALEY
                                                  ---------------
                                                  Jay Mealey, Chief Executive
                                                  Officer

Date: August 14, 2000                         By: /s/ ALEXANDER L. SEARL
                                                  --------------------------
                                                  Alexander L. Searl,  Chief
                                                  Operating and Financial
                                                  Officer

                                       25