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 March 31, 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  13,285,581  shares of $.02 par value common stock  outstanding as of
May 12, 2000.

<PAGE>

                            CROWN ENERGY CORPORATION

                                      INDEX

                                                                         PAGE(S)

PART I.           Financial Information

         ITEM 1.  Financial Statements

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

                  Condensed Consolidated Statement of Operations for
                     the Three Months ended March 31, 2000 and 1999
                     (unaudited)                                              5

                  Condensed Consolidated Statement of Cash Flows for the
                     Three Months ended March 31, 2000 and 1999 (unaudited)   6

                  Notes to Condensed Consolidated Financial Statements
                     (unaudited)                                              8


         ITEM 2.  Management's Discussion and Analysis of Financial
                     Condition and Results of Operations                     16

         ITEM 3.  Quantitative and Qualitative Disclosures about
                     Market Risk                                             19

PART II.          Other Information

         ITEM 1.  Legal Proceedings                                          19

         ITEM 2.  Changes in Securities                                      19

         ITEM 3.  Defaults upon Senior Securities                            20

         ITEM 4.  Submission of Matters to a Vote of Security Holders        20

         ITEM 5.  Other Information                                          20

         ITEM 6.  Exhibits and Reports on Form 8-K                           20


PART III.         Signatures                                                 21

                                       2
<PAGE>
<TABLE>

                          PART I-FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS

                            CROWN ENERGY CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<CAPTION>
                                                                                  March 31,
                                                                                    2000               December 31,
                                                                                 [unaudited]               1999
                                                                                -------------          -----------
CURRENT ASSETS:
<S>                                                                                <C>                  <C>
     Cash and cash equivalents                                                     $3,010,849           $4,978,977
     Accounts receivable, net of allowance for uncollectible
        accounts of $12,349 and $298,000 at March 31, 2000
        and December 31, 1999, respectively                                         3,077,001            5,186,325
     Inventory                                                                      5,145,585            2,133,866
     Prepaid and other current assets                                                  78,471               35,582
                                                                                -------------          -----------
          Total Current Assets                                                     11,311,906           12,334,750

PROPERTY PLANT, AND EQUIPMENT, Net                                                  9,248,894            9,237,735

MINORITY INTEREST IN CONSOLIDATED
     JOINT VENTURES                                                                   446,349                    0

INVESTMENT IN AND ADVANCES
     TO AN EQUITY AFFILIATE                                                         6,931,835            7,174,920

GOODWILL, Net                                                                       4,072,072            4,127,680

OTHER INTANGIBLE ASSETS, Net                                                          162,500              175,000
OTHER ASSETS                                                                          212,855               63,768
                                                                                -------------          -----------
TOTAL                                                                             $32,386,411          $33,113,853
                                                                                =============         ============

 The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                       3
<PAGE>
<TABLE>
                            CROWN ENERGY CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<CAPTION>
                                                                                    March 31,
                                                                                     2000            December 31,
                                                                                  [unaudited]            1999
                                                                                -------------       --------------
CURRENT LIABILITIES
<S>                                                                              <C>                  <C>
     Accounts payable                                                              $1,128,043           $1,132,251
     Preferred stock dividends payable                                                500,000              400,000
     Accrued expenses                                                               2,972,490            2,248,055
     Long-term debt - estimated current portion                                       169,593              166,204
     Line-of-credit to related party                                               14,935,222           14,935,222
     Other Current Liabilities                                                         26,630               33,937
                                                                                -------------       --------------
     Total current liabilities                                                     19,731,978           18,915,669
                                                                                -------------       --------------
MINORITY INTEREST IN CONSOLIDATED
     JOINT VENTURES                                                                         0              301,699

CAPITALIZATION:
     Long-term debt                                                                11,291,946           11,332,681
     Redeemable preferred stock                                                     4,853,774            4,839,623
     Common stockholders' equity                                                   (3,491,287)          (2,275,819)
                                                                                -------------       --------------
          Total capitalization                                                     12,654,433           13,896,485
                                                                                -------------       --------------
TOTAL                                                                             $32,386,411          $33,113,853
                                                                                =============      ===============

 The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                       4
<PAGE>
<TABLE>
                            CROWN ENERGY CORPORATION

                                   [Unaudited]

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

<CAPTION>
                                                                                  For the Three Months Ended
                                                                                            March 31,
                                                                              ------------------------------------
                                                                                    2000                  1999
                                                                             ----------------       --------------
<S>                                                                           <C>                  <C>
SALES, Net of demerits                                                             $1,316,409           $4,819,084

COST OF SALES                                                                       1,964,838            4,729,659
                                                                             ----------------       --------------

GROSS PROFIT                                                                         (648,429)              89,425

GENERAL AND ADMINISTRATIVE EXPENSES                                                   635,915              585,951
                                                                             ----------------       --------------

INCOME (LOSS) FROM OPERATIONS                                                      (1,284,345)            (496,526)
                                                                             ----------------       --------------
OTHER INCOME (EXPENSES):
   Interest income and other income                                                   303,366              112,251
   Interest and other expense                                                        (621,888)            (382,118)
   Equity in losses of unconsolidated equity affiliate                               (266,925)            (229,398)
                                                                             ----------------       --------------
        Total other expense, net                                                     (585,446)            (499,265)

LOSS BEFORE INCOME TAXES
   AND MINORITY INTERESTS                                                          (1,869,791)            (995,791)
                                                                             ----------------       --------------

DEFERRED INCOME TAX BENEFIT                                                                 0                    0

MINORITY INTEREST IN EARNINGS OF
   CONSOLIDATED JOINT VENTURE                                                         768,473              319,696
                                                                             ----------------       --------------

NET LOSS                                                                          ($1,101,318)           ($676,095)
                                                                             ----------------       --------------
NET LOSS PER COMMON SHARE-
   Basic                                                                               ($0.09)              ($0.06)
                                                                             ================       ==============

 The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                       5
<PAGE>
<TABLE>
                            CROWN ENERGY CORPORATION

                                   [Unaudited]

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>
                                                                                      For the Three Months Ended
                                                                                              March 31,
                                                                                    -------------------------------
                                                                                        2000             1999
                                                                                    -------------   ---------------
Cash Flows From Operating Activities:
<S>                                                                                  <C>                 <C>
       Net income (loss)                                                             ($1,101,318)        ($676,095)
                                                                                    -------------   ---------------
       Adjustments  to  reconcile  net  loss  to  net  cash  used  by  operating
           activities:
                Amortization, depreciation and depletion                                  218,426           144,371
                Equity in losses of unconsolidated affiliate                              266,925           244,559
                Minority interest                                                        (768,473)         (319,697)
                Change in assets and liabilities:
                    Accounts receivable                                                 2,109,324          (520,805)
                    Inventory                                                          (3,011,718)       (4,206,752)
                    Other assets                                                         (191,975)          486,214
                    Accounts payable                                                       (4,208)        1,840,910
                    Accrued expenses                                                      715,917            82,084
                                                                                    -------------   ---------------
                           Total adjustments                                            (665,782)       (2,249,116)
                                                                                    -------------   ---------------
                           Net Cash Used in Operating Activities                      (1,767,100)       (2,925,211)
                                                                                    -------------   ---------------

Cash Flows From Investing Activities:
       Investment in and advances to Crown Asphalt Ridge, LLC                            (39,000)         (936,626)
       Acquisition of Cowboy Asphalt Terminal                                                  0        (1,973,511)
       Purchase of property and equipment                                               (146,318)         (257,392)
                                                                                    -------------   ---------------
                           Net Cash Used by Investing Activities                        (185,318)       (3,167,529)
                                                                                    -------------   ---------------

Cash Flows From Financing Activities:
       Net change in line of credit from related party                                          0         2,000,000
       Sale of equity interest in subsidiary to a minority shareholder                          0           172,550
       Capital contributions from partners                                                 20,425                 0
       Net changes in long-term debt                                                      (36,135)        1,259,964
                                                                                    -------------   ---------------
                           Net Cash Used in Financing Activities                          (15,710)       $3,432,514
                                                                                    -------------   ---------------

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

                                       6
<PAGE>
<CAPTION>
                            CROWN ENERGY CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   [Continued]

                                                                                      For the Three Months Ended
                                                                                              March 31,
                                                                                    -------------------------------
                                                                                        2000             1999
                                                                                    -------------   ---------------
         Net Increase (Decrease) in Cash:                                             ($1,968,128)       (2,660,226)
                                                                                    =============   ===============
Cash at Beginning of Period                                                            $4,978,977        $3,735,632
                                                                                    =============   ===============
Cash at End of Period                                                                  $3,010,849        $1,075,406
                                                                                    =============   ===============

Supplemental Disclosure of Cash Flow Information
       Cash paid during the period:
           Interest                                                                      $138,841           $19,148
                                                                                    =============   ===============
           Income taxes                                                                       ---               ---
                                                                                    =============   ===============

Supplemental Schedule of Non-cash Investing and Financing Activities:
       For the period ended March 31, 2000:
           None
       For the period ended March 31, 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.
       For the period ended March 31, 1998:
           None

 The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                       7
<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 March 31,  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 March 31, 2000 are not  necessarily  indicative of
         the operating results for the full year.

         Basis of  Presentation  - 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.  The Company  further
         believes that MCNIC is improperly attempting to demand repayment of the
         working capital loan.

         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.
         Although  there can be no  assurance  that the Company  will be able to
         resolve these issues with MCNIC on mutually  acceptable  terms, or that
         the Company will  ultimately  prevail in the event of  litigation  with
         MCNIC,  Company  management  intends to take all actions  necessary  or
         appropriate to assert the Company's rights and preserve its interest in
         Crown Distribution and all other aspects of its operations.  Management
         of the Company  believes  that MCNIC is  improperly  attempting to gain
         control  of Crown  Distribution  and  other  aspects  of the  Company's
         operations.

         There can be no  assurance  that the  Company  will be able to  resolve
         these issues with MCNIC on mutually  acceptable terms, that the Company
         will  ultimately  prevail in the event of litigation with MCNIC or that
         such litigation,  if any, will not be unduly costly.  Further,  Company
         management  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. In the event MCNIC is
         legally able to demand immediate repayment of the working capital loan,
         the Company could,  and likely would,  suffer a material adverse impact
         upon its financial  liquidity and working  capital.  For instance,  the
         Company may have to seek replacement  financing on terms and conditions
         which  are  less   favorable   than  it  might   obtain   under   other
         circumstances.  Otherwise,  it is  conceivable  that MCNIC might obtain
         possession  and legal control over  critical  Company  assets,  such as
         operating  assets of Crown  Distribution,  the  Company's  interests in
         Crown  Distribution,  etc.  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.
         However,  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 in its view of the recent actions taken by MCNIC.

         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)  and  Cowboy  Asphalt
         Terminal,  LLC (CAT LLC). 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.  CAT LLC is a joint venture  formed on June 16,
         1998 between Capco and Foreland Asphalt Corporation (Foreland). CAT LLC
         is an asphalt terminal and storage  facility.  Crown  Distribution owns
         66.67% and Foreland owns 33.33% of CAT LLC.

         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.

         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 March 31, 2000, all net deferred tax assets were offset
         by a valuation allowance.

                                       8
<PAGE>

                            CROWN ENERGY CORPORATION

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS

         Loss Per Share - Effective  for the year ended  December 31, 1997,  the
         Company adopted Statement of Financial  Accounting Standards (SFAS) No.
         128,  Earnings  Per  Share.  Accordingly,  net  loss per  common  share
         computed under the basic method uses 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 loss per share computations as such common stock equivalents are
         anti-dilutive.

         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 generally accepted  accounting
         principles  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 March 31, 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

                                       9
<PAGE>

                            CROWN ENERGY CORPORATION

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS

         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.

         Segment  Reporting  - In  1998,  the  Company  adopted  SFAS  No.  131,
         Disclosures  About Segments of an Enterprise  and Related  Information,
         which  redefined  how business  enterprises  report  information  about
         operating segments in annual financial  statements.  The statement also
         establishes  standards  for  related  disclosures  about  products  and
         services, geographical areas, and major customers. The Company operates
         primarily  in  the  production,   manufacturing,  and  distribution  of
         asphalt.  The Company's  operations and sales are dispersed  throughout
         Utah,  Arizona,  Nevada,  Wyoming,  Idaho  and  Colorado  and  could be
         adversely affected by economic downturns in these states and by federal
         or state funding policies related to road construction or improvements.

         Derivative Instruments and Hedging - In June 1998, the FASB issued SFAS
         No. 133, Accounting for Derivative  Instruments and Hedging Activities,
         which supersedes SFAS No. 80,  Accounting for Futures  Contracts,  SFAS
         No. 105,  Disclosure of Information  About Financial  instruments  with
         Off-Balance-Sheet  Risk and Financial instruments with Concentration of
         Credit Risk, and SFAS No. 119,  Disclosure about  Derivative  Financial
         Instruments  and Fair Value of Financial  Instruments,  and also amends
         certain  aspects  of other  SFAS's  previously  issued.  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.

         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.

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.

         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.The Company
         has been notified by MCNIC that it will participate in this acquisition
         and will fund one-half of all costs.

                                       10
<PAGE>

                            CROWN ENERGY CORPORATION

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS

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  marketed  the slate of products  produced,
         primarily  asphalt.  This agreement was acquired through the acquistion
         of Petro Source Asphalt  Company in 1998.  Revenues  resulting from the
         agreement  were   approximately  $4.8  million  in  1999.  This  amount
         represents  substantially  all of the Company's  revenue for the period
         due the seasonal  nature of the Company's  other  asphalt  distribution
         operations.  The Company  expects to offset  this loss of revenue  with
         revenue from its recent acquisitions and its future acquisitions.  SMRC
         extended the  agreement,  which  expired on December 31, 1998, to April
         30, 1999. As anticipated,  the agreement was not extended subsequent to
         April 30, 1999.

NOTE 4 - WORKING CAPITAL LINE OF CREDIT

         MCNIC elected to extend 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 March 31, 2000, this line had a
         balance  of  approximately  $14,935,222  and  accrues  interest  at 8%.
         Through the period  ended March 31,  2000,  $1,456,507  in interest had
         been  accrued.  This  line is repaid  solely  out of the cash flow from
         Crown  Distribution.  The Company has received a notice of default of a
         working  capital  loan from  MCNIC made in  conjucntion  with the Petro
         Source asset  acquisition.  (see "Part II, Item 3. Defaults upon Senior
         Securities").

NOTE 5 - LONG TERM DEBT

         Long-term debt consists of the following at March 31, 2000:

         Debt with Hancock-Geisler R.I.C., interest at 9%, with
         monthly principal and interest payments of $20,627 for
         82 months                                                  $ 1,120,159

         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 years.                             $ 1,798,778

         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 principle 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
         in non-recourse to the Company.                           $ 5,325,723

                                       11
<PAGE>

                            CROWN ENERGY CORPORATION

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS

NOTE 5 - LONG TERM DEBT- (continued)

         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                             $  (169,593)
                                                                    -----------
         Long-term portion                                          $11,291,946
                                                                    ===========

NOTE 6 - 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 7 - 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 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 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% of the 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

                                       12
<PAGE>

                            CROWN ENERGY CORPORATION

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS

NOTE 7 - CAPITAL TRANSACTIONS - (continued)

         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.

         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)  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  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.

                                       13
<PAGE>

                            CROWN ENERGY CORPORATION

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS

NOTE 8 - COMMON STOCKHOLDERS' EQUITY AND REDEEMABLE PREFERRED STOCK

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

                                                            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 $14,151 and
            $56,604 for the periods ended March 31,
            2000 and December 31, 1999, respectively,
            toward the stated value of $5,000,000      $ 4,853,774  $ 4,839,623
                                                       ===========  ===========

         Common stockholders' equity: Common stock,
            $.02 par value; 50,000,000 shares
            authorized; 13,285,581 and 12,968,512
            shares issued and outstanding at March 31,
            2000 and December 31, 1999, respectively   $   265,711  $   265,711
         Additional paid-in capital                      5,777,677    5,791,828
         Stock warrants outstanding; 683,750 at March
            31, 2000 and December 31, 1999,
            respectively                                   243,574      243,574
         Common stock subscription receivable from
            officers                                      (549,166)    (549,166)
         Retained deficit                               (9,229,083)  (8,027,766)
                                                       -----------  -----------

                  Total                                $(3,491,287) $(2,275,819)
                                                       ===========  ===========

NOTE 9 - 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 years ended March
         31, 2000 and March 31, 1999:

                                                2000                1999
                                                ----                ----
                                                      Loss               Loss
                                          Loss     Per Share    Loss   Per Share

  Net Loss                            ($1,101,318)           ($676,095)

  Redeemable preferred stock dividends   (100,000)            (100,000)
                                       ----------             --------
  Net loss attributable to
    common stockholders               ($1,201,318)  ($0.09)  ($776,095)  ($0.06)
                                       ==========    =====    ========    =====

  Weighted average common shares
    outstanding - basic and diluted    13,285,581           13,193,983
                                       ==========           ==========

                                       14
<PAGE>

                            CROWN ENERGY CORPORATION

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS

NOTE 9 - LOSS PER SHARE - (continued)

         The Company had at March 31, 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
         March  31,  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.

                                       15
<PAGE>

                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS 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, continued or additional 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 March 31,  2000,  the Company had cash and other  current  assets of
         $11,311,906 as compared to cash and other current assets of $12,334,750
         at December 31, 1999.  The decrease of $1,022,844  was primarily due to
         the Company's asphalt inventory  winterfill program whereby the Company
         purchases asphalt during the winter months,  when prices are lower, for
         storage and subsequent sale during the asphalt season, typically during
         the months from April through  October.  The Company's  majority  owned
         subsidiary,  Crown Asphalt Distribution,  L.L.C. ("Crown Distribution")
         accounted  for  almost  all of the  Company's  cash and  other  current
         assets.  As of March 31, 2000,  Crown  Distribution  had cash and other
         current assets of approximately $10.9 million,  consisting of roughly $
         2.8 million of cash,  $5.1  million in  inventory  and $3.0  million in
         accounts   receivable,   excluding   related  party   balances.   Crown
         Distribution's  business  requires  a working  capital  line of credit.
         MCNIC Pipeline & Processing Company  ("MCNINC"),  the minority interest
         owner,  elected to  provide  such line under the same terms as had been
         offered  to the  Company  by a third  party bank and to replace a prior
         loan with this working  capital line. The Company has accrued  interest
         on the line at an interest rate of 8%. At March 31, 2000,  the line had
         an outstanding principal balance of $14,935,222.

         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.  The Company  further  believes  that MCNIC is
         improperly attempting to demand repayment of the working capital loan.

         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.
         Although  there can be no  assurance  that the Company  will be able to
         resolve these issues with MCNIC on mutually  acceptable  terms, or that
         the Company will  ultimately  prevail in the event of  litigation  with
         MCNIC,  Company  management  intends to take all actions  necessary  or
         appropriate  to assert the

                                       16
<PAGE>

         Company's  rights and preserve its interests in Crown  Distribution and
         all other aspects of its operations. Management of the Company believes
         that  MCNIC  is   improperly   attempting  to  gain  control  of  Crown
         Distribution and other aspects of the Company's operations.

         There can be no  assurance  that the  Company  will be able to  resolve
         these issues with MCNIC on mutually  acceptable terms, that the Company
         will  ultimately  prevail in the event of litigation with MCNIC or that
         such litigation,  if any, will not be unduly costly.  Further,  Company
         management  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. In the event MCNIC is
         legally able to demand immediate repayment of the working capital loan,
         the Company could,  and likely would,  suffer a material adverse impact
         upon its financial  liquidity and working  capital.  For instance,  the
         Company may have to seek replacement  financing on terms and conditions
         which  are  less   favorable   than  it  might   obtain   under   other
         circumstances.  Otherwise,  it is  conceivable  that MCNIC might obtain
         possession  and legal control over  critical  Company  assets,  such as
         operating  assets of Crown  Distribution,  the  Company's  interests in
         Crown  Distribution,  etc.  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.
         However,  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 in its view of the recent actions taken by MCNIC.

         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.

         The Company also owed MCNIC an additional  $5,325,723 at March 31, 2000
         with respect to the preferential capital contribution that funded Crown
         Distribution's acquisition of the assets of Petro  Source  Asphalt
         Company. The preferential capital contribution requires payment of 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 its wholly owned  subsidiary,  Crown Asphalt Products
         Company ("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. 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 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.

                                       17
<PAGE>

         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 March  31,  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

2000 vs. 1999

         Total revenue  decreased from $4,819,084 for the period ended March 31,
         1999 to  $1,316,409  for the period ended March 31, 2000, a decrease of
         $3,502,675. Cost of sales also decreased from $4,729,659 for the period
         ended March 31,1999 to $1,964,838  for the period ended March 31, 2000,
         a decrease of $2,764,821.  The decreases in both sales and revenues and
         costs of sales were  primarily due to the  termination of the Company's
         processing  agreement  with the Santa Maria Refinery on April 30, 1999.
         However,  favorable weather  conditions,  allowed the Company's asphalt
         terminal distribution  operations to generate revenue of $1,316,409 for
         the period ended March 31, 2000.  Generally,  the asphalt  distribution
         operations  are  seasonal  and the Company  did not expect  significant
         revenues  during  this  period.  Company  management  expects  that the
         asphalt terminal distribution  operations will be the Company's primary
         means of future growth.

         General and  administrative  expenses  increased  from $585,981 for the
         period  ended March 31, 1999 to $635,915 for the period ended March 31,
         2000, an increase of $49,934.  The Company's  overhead  increased as it
         increased  its  asphalt   distribution   business   subsequent  to  the
         acquisition of the Rawlins asphalt terminal.

         Interest and other income/expenses  increased from net other expense of
         $499,265 for the period  ended March 31, 1999 to net other  expenses of
         $585,446 for the period  ended March 31, 2000,  an increase of $86,181.
         The 2000 total was comprised of interest costs related to the Company's
         working capital line and preferential loan for its asphalt distribution
         business of $621,888 and expenses of $266,925  related to equity in the
         losses of Crown Ridge.  These amounts were partially offset by interest
         income and other income of $303,366.

         Minority  interest  of  $768,473  represents  MCNIC's  approximate  49%
         interest in the losses of Crown Distribution and Foreland's approximate
         33% interest in the loss of CAT, LLC.

                                       18
<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.


                          PART II. - OTHER INFORMATION

ITEM 1.  Legal Proceedings

         On May 21,  1998,  Road Runner Oil,  Inc.  ("Road  Runner") and Gavilan
Petroleum,  Inc.  ("Gavilan")  filed an action in the  Third  Judicial  District
Court,  Salt Lake  County,  State of Utah,  as Civil #  98-0905064  against  the
Company and its President.  The action relates to the purchase by Road Runner of
100% of the  stock  of  Gavilan  in 1997,  and  generally  seeks  to (i)  obtain
corporate records of Gavilan in the Company's  possession relating to the amount
of oil  and gas  royalties  potentially  owed  to  third  parties  prior  to the
aforementioned  stock  sale,  and (ii) to  determine  the  amount  of  royalties
allegedly  owed. The action  further  alleges,  on behalf of Gavilan,  claims of
breach of fiduciary duty,  professional negligence and mismanagement against the
Company's  President  for  alleged   mismanagement  of  Gavilan's  affairs.  The
Plaintiffs seek injunctive  relief requiring the tendering by the Company of the
referenced  records  and such  damages  as may be proven at trial.  The  Company
believes that the  Plaintiff's  claims are groundless and that it is entitled to
payment of the $75,000  still owed by Road Runner as part of the purchase  price
for Gavilan.  In addition,  since the action was filed, the Company has tendered
the corporate records to the Plaintiffs.  On March 8, 2000, the Company filed an
answer  denying  liability  and filed a  counterclaim  against  Road  Runner and
Gavilan  for  breach of  contract  and  declaratory  judgment.  The  Company  is
uncertain as to whether or not the outstanding balance under the promissory note
is collectible by the Company.

         On July 12, 1999, Morrison Knudsen Corporation ("MK") filed a Complaint
in the Eighth Judicial District Court,  Uintah County,  State of Utah,  alleging
that Crown Asphalt Corporation ("CAC")had breached an agreement whereby MK would
provide  certain  mining  services for CAC at Crown  Ridge's  Facility in Uintah
County, Utah (the "Project"). MK seeks damages in the amount of $303,873.42 plus
interest.  MK also seeks  foreclosure  of a  mechanics'  and mining  lien on the
Project. Crown has denied MK's allegations and will vigorously oppose the claims
of MK. Although Crown believes that it has substantial and material  defenses to
the claims of MK,  there can be no assurance  that the Company  will  ultimately
prevail or that judgment will not be entered against it.

         On July 14, 1999,  Crown  Distribution and Capco filed an action in the
United States  District Court for the Central  District of California,  Southern
Division,  against Santa Maria Refining Company ("SMRC"), SABA Petroleum Company
("SABA") and Greka Energy  Corporation  ("Greka").  The claims include causes of
action for breach of  contract,  breach of the  covenant  of good faith and fair
dealing,   conversion,   fraud,  claim  and  delivery,   unjust  enrichment  and
constructive  trust,   unfair  competition,   declaratory  relief  and  specific
performance.  These claims arise out of the Defendant's  alleged  termination of
the  Processing  Agreement and  subsequent  refusal to deliver  asphalt to Crown
Distribution.  Discovery of facts and testimony related to issues arising in the
lawsuit has  commenced.  Trial has been  scheduled  for November of 2000.  It is
anticipated  that  the  damages  caused  by the  Defendant's  actions  could  be
substantial.  Although Crown  Distribution  will attempt to recoup those damages
from SMRC, SABA and Greka, due to the  uncertainties  inherent in any litigation
proceeding,  there can be no  assurance  that Crown  Distribution  or Capco will
ultimately prevail.

         On July 28, 1999 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, (collectively, the "Zimmerman") filed an application
for  preliminary  injunction,   temporary  restraining  order,  and  declaratory
judgment in the First Judicial  District Court,  Lewis & Clark County,  State of
Montana,  against the Company,  Capco and the  Company's  President.  The action
relates to Capco's agreement to purchase from the Zimmerman two separate asphalt
terminals located, respectively, in Laurel, Montana and Williston, North Dakota,
as well as their asphalt  products  related  inventory  and certain  contractual
agreements.  The action generally seeks a declaration that the Zimmerman remains
the  owners and  operators  of the  purchased  asphalt  terminals,  as well as a
preliminary injunction and temporary restraining order.

         On  December 8, 1999,  the  Company and Capco filed a complaint  in the
Federal District Court in Montana alleging that the Zimmerman breached the asset
purchase  agreement  by failing to comply  with  certain  terms and  conditions,
whereby the Company has been damaged.  In February  2000,  the Company and Capco
entered a  settlement  agreement  with the  Zimmerman  to resolve the  foregoing
disputes. On April 17, 2000, pursuant to the settlement agreement, the Zimmerman
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 January 25, 2000, Oriental New Investments,  Ltd. ("Oriental") filed
a Complaint  against the Company in the Third Judicial District Court, Salt Lake
County, Utah. The action relates to a 1997 convertible debenture and replacement
convertible  debenture  issued by the Company to  Oriental.  The action seeks to
recover  from  the  Company  $50,000  liquidated  damages,  plus  interest,  and
attorneys fees and costs,  for alleged  breaches of the convertible  debentures.
The  Company  answered  the  Complaint  on March 1,  2000,  denying  any and all
liability,  and believes that Oriental's claims are meritless.  The Company will
vigorously  defend its position that Oriental's  claims are meritless.  However,
due to the uncertainties inherent in any litigation proceeding,  there can be no
assurance that the Company will ultimately prevail.

ITEM 2.  Changes in Securities

                  None.

                                       19
<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 March 31, 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  has  decided  to  postpone  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

                                       20
<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: May 15, 2000                       By: /s/ JAY MEALEY
                                             -------------------------------
                                             Jay Mealey, Chief Executive Officer

Date: May 15, 2000                       By: /s/ ALEXANDER L. SEARL
                                             -------------------------------
                                             Alexander L. Searl, Chief Operating
                                             and Financial Officer

                                       21