<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                  FORM 10-QSB

(Mark One)

   X      Quarterly report under Section 13 or 15(d) of the Securities
          Exchange Act of 1934

For the quarterly period ended             MARCH 31, 2002
                              -------------------------------------------------

         Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from                      to
                               --------------------    -----------------------

                              BLUE RIDGE ENERGY, INC.
--------------------------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


            NEVADA                                       61-1306702
--------------------------------                    -----------------------
(State or Other Jurisdiction of                          (IRS Employer
Incorporation or Organization)                         Identification No.)


              632 ADAMS STREET, SUITE 710, BOWLING GREEN, KY 42101
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (270) 842-2421
--------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

                                      N/A
--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

     Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 ____________


                APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 7,516,094 shares as of
May 10, 2002.


<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

      FINANCIAL STATEMENTS OF REGISTRANT

          INDEX                                                      NUMBER
         Balance Sheets as of March 31, 2002
                  and December 31, 2001.                               2-3
         Statements of Income for the three
                  months ended March 31, 2002 and 2001.                  4
         Statements of Cash Flows for the three
                  months ended March 31, 2002 and 2001.                  5
         Notes to Financial Statements                                6-12

The financial statements of the Registrant included herein have been prepared,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Although certain information normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States has been omitted, the Registrant believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Form 10-KSB of the
Registrant for its fiscal year ended December 31, 2001.

The financial statements included herein reflect all adjustments (consisting
only of normal recurring accruals) which, in the opinion of management, are
necessary to present a fair statement of the results for the interim periods.

The results for interim periods are not necessarily indicative of trends or of
results to be expected for a full year.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS             13-16



                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                                  17
ITEM 2.  CHANGES IN SECURITIES                                              17
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                    17
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                17
ITEM 5.  OTHER INFORMATION                                                  17
ITEM 6.  EXHIBITS AND REPORTS OF FORM 8-K                                   17
SIGNATURES                                                                  17



                                       2
<PAGE>


                             BLUE RIDGE ENERGY, INC.
                                 BALANCE SHEETS
                                   (UNAUDITED)

                                                    MARCH 31,    DECEMBER 31,
                                                      2002           2001
                                                   ---------     ------------

     ASSETS
     ------

     CURRENT ASSETS:
     Cash                                          $  232,650     $1,081,096
     Accounts Receivable:
        Managed Limited Partnerships                   56,969        426,420
        Trade and Other                                42,264         72,098
     Note Receivable                                  612,000           --
     Prepaid Expenses and Other Current Assets         95,053        190,053
                                                   ----------     ----------

              TOTAL CURRENT ASSETS                  1,038,936      1,769,667

     DEFERRED INCOME TAX ASSET                         15,899           --

     PROPERTY AND EQUIPMENT, NET                    3,669,666      3,667,656

     OTHER NONCURRENT ASSETS                              490            490
                                                   ----------     ----------
     TOTAL ASSETS                                  $4,724,991     $5,437,813
                                                   ==========     ==========







                   The accompanying notes are an integral part
                          of these financial statements



                                       3
<PAGE>


                             BLUE RIDGE ENERGY, INC.
                                 BALANCE SHEETS
                                   (UNAUDITED)
<CAPTION>
<TABLE>

                                                                MARCH 31,       DECEMBER 31,
                                                                  2002             2001
                                                               -----------      -----------
<S>                                                            <C>              <C>
     LIABILITIES AND
     STOCKHOLDERS' EQUITY

     CURRENT LIABILITIES:
     Accounts Payable and Accrued Liabilities                  $   334,626      $   265,238
     Drilling Advances                                             655,002        1,469,811
     Advances from Related Parties                                 361,246           83,469
     Current Portion Long Term Debt                                302,469          311,955
                                                               -----------      -----------
              TOTAL CURRENT LIABILITIES                          1,653,343        2,130,473

     LONG TERM DEBT                                                169,816          211,962
     DEFERRED INCOME TAXES                                            --             52,751
                                                               -----------      -----------
              TOTAL LIABILITIES                                  1,823,159        2,395,186

     COMMITMENTS AND CONTINGENCIES (NOTE 5)                           --               --

     STOCKHOLDERS' EQUITY:
     Preferred Stock, $0.001 par value; 5,000,000
         shares authorized; 0 and 60,750 shares
         issued and outstanding at March 31, 2002
         and December 31, 2001, respectively (liquidation
         preference of $0 at March 31, 2002 and
         $304,000 at December 31, 2001)                               --                 61
     Common Stock, $0.005 par value; 20,000,000
         shares authorized; 7,516,094 and 7,455,344 shares
         issued and outstanding at March 31, 2002
         and December 31, 2001, respectively                        37,581           37,277
     Additional Paid-In Capital                                  5,680,041        5,680,284
     Accumulated Deficit                                        (2,815,790)      (2,674,996)
                                                               -----------      -----------
              TOTAL STOCKHOLDERS' EQUITY                         2,901,832        3,042,626
                                                               -----------      -----------
     TOTAL LIABILITIES AND
     STOCKHOLDERS' EQUITY                                      $ 4,724,991      $ 5,437,812
                                                               ===========      ===========
</TABLE>






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



                                       4
<PAGE>

                             BLUE RIDGE ENERGY, INC.
                              STATEMENTS OF INCOME
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                               THREE MONTHS ENDED
                                                    MARCH 31,
     OPERATING REVENUES:                       2002            2001
                                           -----------      -----------
<S>                                        <C>              <C>
     Turnkey Contract Sales                $   835,000      $   468,000
     Contract Drilling Services                288,307          319,513
     Oil and Gas Sales                          45,825           75,617
                                           -----------      -----------
              Total Operating Revenues       1,169,132          863,130

     OPERATING COSTS AND
         OTHER EXPENSES:
     Turnkey Contract Costs                    543,005          303,571
     Drilling Services Costs                   249,904          342,876
     Lease Operating Costs                       7,852           24,975
     Depreciation, Depletion
        and Amortization                        54,000           36,000
     Marketing Costs                           196,195           86,187
     General and Administrative Costs          310,414          281,553
                                           -----------      -----------
              Total Operating Costs          1,361,370        1,075,162
                                           -----------      -----------
     OPERATING LOSS                           (192,238)        (212,032)

     OTHER EXPENSE:
     Interest Expense                           (9,140)         (11,275)
                                           -----------      -----------
              Total Other Expense               (9,140)         (11,275)
                                           -----------      -----------
     LOSS BEFORE TAXES                        (201,378)        (223,307)
     Income Tax Provision                       68,650           75,924
                                           -----------      -----------
     NET LOSS                              $  (132,728)     $  (147,383)
                                           ===========      ===========
     LOSS PER COMMON SHARE:
          Basic                            $     (0.02)     $     (0.03)
                                           ===========      ===========
          Diluted                          $     (0.02)     $     (0.03)
                                           ===========      ===========
     Weighted Average Common
              Shares Outstanding             7,485,719        6,084,869
                                           ===========      ===========
</TABLE>



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



                                       5
<PAGE>

                             BLUE RIDGE ENERGY, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                                      MARCH 31,
                                                               2002             2001
                                                            -----------      -----------
<S>                                                         <C>              <C>
  CASH FLOWS FROM
  OPERATING ACTIVITIES:
      Net Loss                                          $  (132,728)     $  (147,383)
      Adjustments to Reconcile Net Loss to
      Net Cash Flows from Operating Activities:
        Depreciation, Depletion and Amortization             54,000           36,000
        Deferred Taxes                                      (68,650)         (75,924)
 Change in Operating Assets and Liabilities:
        Accounts Receivable                                 399,285          310,548
        Drilling Advances                                  (814,809)        (468,000)
     Prepaid Expenses                                        95,000           51,503
        Accounts Payable
             and Accrued Liabilities                         69,388            9,248
                                                        -----------      -----------
  NET CASH USED IN
  OPERATING ACTIVITIES                                     (398,514)        (284,008)

  CASH FLOWS FROM
  INVESTING ACTIVITIES:
  (Decrease) Increase in Advances from Affiliate            277,777          (94,582)

  Purchase of Oil and Gas Properties                       (668,012)        (154,829)
                                                        -----------      -----------
  NET CASH USED IN
   INVESTING ACTIVITIES                                    (390,235)        (249,411)

  CASH FLOWS FROM
  FINANCING ACTIVITIES:
  Payments of Long Term Debt                                (51,632)         (26,016)
  Dividends Paid                                             (8,065)         (64,500)
                                                        -----------      -----------
  NET CASH USED IN
   FINANCING ACTIVITIES                                     (59,697)         (90,516)
                                                        -----------      -----------
  NET DECREASE IN CASH                                     (848,446)        (623,935)
  CASH AT BEGINNING OF PERIOD                             1,081,096          918,963
                                                        -----------      -----------
  CASH AT END OF PERIOD                                 $   232,650      $   295,028
                                                        ===========      ===========
  SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash Paid for Interest                                $     9,140      $    11,275
                                                        ===========      ===========
  Cash Paid for Income Taxes                            $      --        $      --
                                                        ===========      ===========
</TABLE>


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



                                       6
<PAGE>


                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2002 AND 2001

    1.   OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    GENERAL

         Blue Ridge Energy, Inc., (the Company), a Nevada corporation, was
 organized in November, 1994, as Gem Source, Incorporated (Gem Source), and
 subsequently changed the name of the Company to Blue Ridge Energy, Inc. in May,
 1996. The Company has offices at 632 Adams Street, Suite 710, Bowling Green,
 Kentucky, 42101. The Company is engaged in the oil and gas business; primarily
 in Texas, Kentucky, New Mexico and West Virginia. The Company sponsors oil and
 gas drilling partnerships through which it raises money for the drilling of oil
 and gas wells and participates for a 1% partnership interest as the managing
 general partner of the oil and gas exploration partnerships. The Company also
 owns two drilling rigs. These rigs are used to drill oil and gas wells for the
 sponsored oil and gas drilling partnerships and also other non-affiliated oil
 and gas companies. The rigs are operated on behalf of the Company by an
 affiliate, Blue Ridge Group, Inc. The Company also acquires direct working
 interest participation in oil and gas properties. The participation includes
 both operated and non-operated working interest in exploratory and development
 wells. These acquisitions are funded by a combination of the profits earned
 from sponsoring oil and gas drilling programs, the profit earned from contract
 drilling services, revenues from oil and gas sales and from the proceeds of
 private offerings of preferred stock. The Company intends to maintain an active
 role in the oil and gas industry as an operator of oil and gas wells, a sponsor
 of oil and gas drilling programs, a participant in oil and gas programs, and as
 an independent producer of oil and gas.

    PRINCIPALS OF CONSOLIDATION

          The accompanying financial statements include the accounts of Blue
 Ridge Energy, Inc. and its investment in limited partnerships for which it acts
 as managing general partner. As such, the company has the sole and exclusive
 right and power to manage and control the partnership. The Company accounts for
 its investment in limited partnerships under the proportionate consolidation
 method. Under this method, the Company's financial statements include its
 pro-rata share of assets and liabilities and revenues and expenses,
 respectively, of the limited partnership in which it participates. All material
 inter-company accounts and transactions have been eliminated in consolidation.

    USE OF ESTIMATES

          The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates and
 assumptions that affect the reported amounts of assets and liabilities and
 disclosure of contingent assets and liabilities at the date of the financial
 statements and the reported amounts of revenues and expenses during the
 reporting periods. Actual results could differ from those estimates.

    RECENTLY ISSUED ACCOUNTING STANDARDS

                      Goodwill and Other Intangible Assets

         In June 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) 141, BUSINESS COMBINATIONS,
and SFAS 142, GOODWILL AND OTHER INTANGIBLE ASSETS. SFAS 141 requires business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method of accounting and broadens the criteria for recording intangible
assets separate from goodwill. Under the provisions of SFAS 142, goodwill and
certain other intangible assets, which do not possess finite useful lives, will
no longer be amortized into net income over an estimated life but rather will be
tested at least annually for impairment based on specific guidance provided in
the new standard. Intangible assets determined to have finite lives will
continue to be amortized over their estimated useful lives and also continue to
be subject to impairment testing.

         The adoption of SFAS 141 had no impact on the financial position or
results of operations for the Company. The Company adopted the provisions of
SFAS 142, as required, effective January 1, 2002. SFAS 142, as part of its
adoption provisions, requires a transitional impairment test be applied to all
goodwill and other indefinite-lived intangible assets prior to June 30, 2002 and
any resulting impairment loss be reported as a change in accounting principle.
The Company did not have an impairment loss in 2002 as a result of adoption
because the Company does not have any goodwill or other indefinite-lived
intangible assets.

         In general, application of the new provisions may result in more income
statement volatility due to potential periodic recognition of impairment losses,
which are likely to vary in amount and regularity, for goodwill and other
indefinite-lived intangible assets, versus reducing those assets through the
recognition of recurring, consistent amortization amounts.



                                       7
<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2002 AND 2001


         Accounting for Long-Lived Assets

         SFAS 144, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF, was issued in October 2001 and addresses
how and when to measure impairment on long-lived assets and how to account for
long-lived assets that an entity plans to dispose of either through sale,
abandonment, exchange, or distribution to owners. The new provisions supersede
SFAS 121, which addressed asset impairment, and certain provisions of APB
Opinion 30 related to reporting the effects of the disposal of a business
segment and requires expected future operating losses from discontinued
operations to be recorded in the period in which the losses are incurred rather
than the measurement date. Under SFAS 144, more dispositions may qualify for
discontinued operations treatment in the income statement. The provisions of
SFAS 144 became effective for the Company January 1, 2002 and have not had a
material impact on the Company's results of operations, financial position, or
liquidity.

         Accounting for Asset Retirement Obligations

         In June 2001, the Financial Accounting Standards Board issued SFAS No.
143, ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS, which is effective for fiscal
years beginning after June 15, 2002. The Statement requires legal obligations
associated with the retirement of long-lived assets to be recognized at their
fair value at the time that the obligations are incurred. Upon initial
recognition of a liability, that cost should be capitalized as part of the
related long-lived asset and allocated to expense over the useful life of the
asset. The Company will adopt Statement 143 on January 1, 2003. Due to the
number of operating facilities that the Company maintains and the extensive
number of documents that must be reviewed and estimates that must be made to
assess the effects of the Statement, the expected impact of adoption of
Statement 143 on the Company's financial position or results of operations has
not yet been determined.

    OPERATION OF DRILLING RIGS

          The Company follows the percentage of completion method of accounting
 for its drilling operations. This accounting method allows for the periodic
 recognition of income as it is earned. Under this method, income under drilling
 contracts, expenses under drilling contracts, all direct costs, and appropriate
 portions of indirect costs related to contracts in progress are recognized as
 revenues and expenses based upon estimates of the percentage of work completed
 at the end of each reporting period.

    WORKING INTERESTS

          Oil and gas revenue from working interests the Company owns are
recognized at the point of sale.

    MANAGED LIMITED PARTNERSHIPS

          The Company sponsors limited partnerships for which it serves as the
 Managing General Partner. The purpose of these partnerships is to acquire and
 develop oil and gas leases. The partnerships enter into turnkey drilling
 contracts with the Company to drill, complete and equip, if warranted, the oil
 and gas wells of the partnerships. The Company receives direct compensation,
 reimbursement of costs and expenses, and revenues related to turnkey drilling
 contracts. The Company normally participates for 1% of the Limited Partnerships
 as the Managing General Partner. The Company follows the industry practice of
 pro rata consolidation of its investments in these partnerships. Accordingly,
 the Company records on its financial statements its pro rata share of the
 assets, liabilities, revenues and expenses of each partnership.



                                       8
<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2002 AND 2001

    PROPERTY AND EQUIPMENT

          Property and equipment (other than oil and gas) are stated at cost.
 Depreciation is recognized on the straight line method, after considering
 salvage value, over the estimated useful lives of the assets as follows:

                                                                Lives (Years)
                                                                -------------

          Machinery and Equipment.........................          10

          The Company follows the successful efforts method of accounting for
 oil and gas producing activities. Under the successful efforts method of
 accounting, costs which relate directly to the discovery of oil and gas
 reserves are capitalized. These capitalized costs include;

          (1)       the costs of acquiring mineral interest in properties,

          (2)       costs to drill and equip exploratory wells that find proved
                    reserves,

          (3)       costs to drill and equip development wells and

          (4)       costs for support equipment and facilities used in oil and
                    gas producing activities.

          These costs are depreciated, depleted or amortized on the unit of
 productions method, based on estimates of recoverable proved developed oil and
 gas reserves. Costs to drill exploratory wells that do not find proved
 reserves, geological and geophysical costs, and costs of carrying and retaining
 unproved properties are expensed.

          The costs of acquiring unproved properties are capitalized as incurred
 and carried until the property is reclassified as a producing oil and gas
 property, or considered impaired. The Company annually assesses its unimproved
 properties to determine whether they have been impaired. If the results of this
 assessment indicate impairment, a loss is recognized by providing a valuation
 allowance. When an unproved property is surrendered, the costs related thereto
 are charged to the application valuation allowance, if adequate, or charged as
 a loss to current operations.

          The costs of drilling exploration wells are capitalized as wells in
 progress pending determination of whether the well has found proved reserves.
 Once a determination is made, the capitalized costs are either charged to
 expense or reclassified as part of the costs of the Company's wells and related
 equipment. In the absence of a determination as to whether the reserves that
 have been found can be classified as proved, the costs of drilling such an
 exploratory well are not carried as an asset for more than one year following
 completion of drilling. If after a year has passed, the Company is unable to
 determine that proved reserves have been found, the well is assumed to be
 impaired, and its costs are charged to expense.

    SURRENDER OR ABANDONMENT OF DEVELOPED PROPERTIES

          Normally, no gain or loss is recognized if only an individual well or
 individual item of equipment is abandoned or retired or if only a single lease
 or other part of a group of proved properties constituting the amortization
 base is abandoned or retired as long as the remainder of the property or group
 of properties continues to produce oil or gas. The asset being abandoned or
 retired is deemed to be fully amortized, and its cost is charged to accumulated
 depreciation, depletion, or amortization. When the last well on an individual
 property or group of properties with common geological structures ceases to
 produce and the entire property or property group is abandoned, gain or loss is
 recognized.

    OTHER DISPOSITIONS

          Upon disposition or retirement of property and equipment other than
 oil and gas properties, the cost and related accumulated depreciation are
 removed from the accounts and the gain or loss thereon, if any, is credited or
 charged to income. The Company recognizes the gain or loss on the sale of
 either a part of a proved oil and gas property or of an entire proved oil and
 gas property constituting a part of a field upon the sale or other disposition
 of such. The unamortized cost of the property or group of properties, a part of
 which was sold or otherwise disposed of, is apportioned to the interest sold
 and interest retained on the basis of the fair value of those interests.

    IMPAIRMENT OF LONG-LIVED ASSETS

          The Company follows the provisions of SFAS 144-ACCOUNTING FOR THE
IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS. Consequently, the Company reviews
its long-lived assets to be held and used, including oil and gas properties
accounted for under the successful efforts method of accounting. Whenever events
or circumstances indicate the carrying value of those assets may not be
recoverable, an impairment loss for proved properties and capitalized


                                       9
<PAGE>
                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2002 AND 2001

exploration and development costs is recognized. The Company assesses impairment
of capitalized costs of proved oil and gas properties by comparing net
capitalized costs to undiscounted future net cash flows on a field-by-field
basis using expected prices. If an impairment is indicated based on undiscounted
expected future cash flows, then an impairment is recognizable to the extent
that net capitalized costs exceed the estimated fair value of the property.

    EARNINGS PER COMMON SHARE

         The Company's basic earnings per common share ("Basic EPS") is based on
the weighted average number of common shares outstanding during the respective
periods. The income available to common shareholders is computed after deducting
dividends on the preferred stock. The convertible preferred stock and
outstanding stock warrants are considered anti-dilutive and therefore, excluded
from the earnings per share calculations. The following is a reconciliation of
the numerators and denominators used in the calculation of Basic EPS for the
three months ended March 31, 2002 and 2001:

<TABLE>
<CAPTION>

    BASIC EPS COMPUTATION                                                                                  2002
                                                                                                           ----
<S>                                                                                                  <C>
    Net Loss....................................................................................     $     (132,728)
    Less: Preferred Stock Dividends.............................................................             (8,065)
                                                                                                     --------------
    Loss Available to Common Stockholders.......................................................     $     (140,793)
                                                                                                     ==============
</TABLE>
<TABLE>
<CAPTION>

    DATES                                                                        SHARES         FRACTION       WEIGHTED
    OUTSTANDING                                                                OUTSTANDING      OF PERIOD   AVERAGE SHARES
    -----------                                                                -----------      ---------   --------------
<S>                                                                               <C>          <C>           <C>
    January 1-March  31...................................................        7,455,344    100.0%        7,455,344
    Conversion of Preferred Stock.........................................           60,750     50.0%           30,375
                                                                                -----------                 ----------
                                                                                   7,516,094
    Weighted Average Shares...............................................                                   7,485,719
                                                                                                            ==========
    Basic EPS (Loss)......................................................                                  $     (0.02)
                                                                                                            ===========
</TABLE>
<TABLE>
<CAPTION>
    BASIC EPS COMPUTATION                                                                                  2001
                                                                                                           ----
<S>                                                                                                  <C>
    Net Loss....................................................................................     $     (147,383)
    Less: Preferred Stock Dividends.............................................................            (64,500)
                                                                                                     --------------
    Loss Available to Common Stockholders.......................................................     $     (211,883)
                                                                                                     ==============
</TABLE>
<TABLE>
<CAPTION>

    DATES                                                                       SHARES         FRACTION       WEIGHTED
    OUTSTANDING                                                               OUTSTANDING      OF PERIOD   AVERAGE SHARES
    -----------                                                               -----------      ---------   --------------
<S>                                                                               <C>          <C>           <C>
    January 1-March  31...................................................        6,084,494    100.0%        6,084,494
    Conversion of Preferred Stock.........................................              750     50.0%              375
                                                                             --------------                  ----------
                                                                                  6,085,244
    Weighted Average Shares...............................................                                   6,084,869
                                                                                                            ==========
    Basic EPS (Loss)......................................................                                  $      (0.03)
                                                                                                            ============
</TABLE>


         There also exists various warrants for the purchase of common stock. As
of March 31, 2002, there are warrants outstanding, convertible into 3,865,731
shares of common stock that are exercisable at prices ranging from $1.00 to
$6.00 per share.


                                       10
<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2002 AND 2001

      INCOME TAXES

         Income taxes in the three months ended March 31, 2002 and 2001 have
been provided for at an estimated effective tax rate of 34% which is the
statutory federal tax rate.

    CASH AND CASH EQUIVALENTS

         For purposes of reporting cash flows, cash and cash equivalents
includes cash on hand and cash on deposit. The Company defines cash equivalents
as short-term and highly liquid investments that are both readily convertible to
known amounts of cash and have an original maturity of less than 90 days.

    RECLASSIFICATIONS

     Certain 2001 amounts have been reclassified in the financial statements to
conform with the 2002 presentation.

    2.  AFFILIATED OIL AND GAS PARTNERSHIPS

     The Company provides turnkey drilling services for the various oil and gas
partnerships which it sponsors. Fees earned for these drilling services,
including the sale of leases to the partnerships, amounted to $835,000 and
$468,000 during the three months ended March 31, 2002 and 2001, respectively.

     Included in the Company's financial statements are contributions made to
the various Company sponsored oil and gas partnerships, less the applicable loss
generated by these partnerships relative to the Company's percentage ownership.
The Company has allocated, on a pro-rata basis the amounts associated with these
investments to the appropriate asset, liability, income and expense accounts.

     3.  RELATED PARTY TRANSACTIONS

     STOCK TRANSACTIONS

     As of March 31, 2002, there are 7,516,094 shares of common stock issued and
outstanding. A total of 3,126,893 shares are held by Blue Ridge Group, Inc (BRG)
and the remainder of 4,389,201 shares are held by approximately 600
shareholders, 40 of which are original stockholders of the Company.

     ADVANCES TO/FROM RELATED PARTIES

     BRG provides various management, administrative, accounting and geological
services for the Company at a rate of $20,750 per month. BR Energy also
reimburses BRG for direct costs paid on its behalf and the costs of various
drilling services. As of March 31, 2002 and 2001, approximately $58,754 and
$111,737 had been advanced to BRG under these arrangements. Additionally, in
March, 2002, BRG loaned $420,000 on a short term basis to BR Energy to
facilitate the purchase of an interest in 48,000 miles of seismic data in the
Texas Gulf Coast area.

     BR Energy receives advances from its sponsored limited partnerships for
turnkey drilling and completion services prior to completing such activities.
These amounts are recorded as drilling advances and reflected as current
liabilities until such drilling and completion activities have been completed
and such amounts have been earned as income. As of March 31, 2002 and December
31, 2001, drilling advances received related to future obligations to be
completed were $655,002 and $1,469,811, respectively.



                                       11
<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2002 AND 2001

 4.  PROPERTY AND EQUIPMENT

      Property and equipment, stated at cost, consisted of the following at
 March 31, 2002 and December 31, 2001:

                                               March 31,      December 31,
                                                 2002           2001
                                             ----------     ----------
           Oil and Gas Properties            $2,704,863     $1,776,425
           Drilling Rigs and Equipment        1,472,514      2,212,861
           Furniture and Fixtures                 2,173           --
                                             ----------     ----------
                                              4,179,550      3,989,286
           Less Accumulated Depreciation       (509,884)      (313,683)
                                             ----------     ----------
                                             $3,669,666     $3,675,603
                                             ==========     ==========

 Depletion, Depreciation and Amortization expense was $54,000 and $36,000 for
 the three months ended March 31, 2002 and 2001, respectively.

 During the first quarter of 2002, Rig #2 was sold for its book value of
 $612,000 to Double D Drilling in exchange for a short-term note receivable to
 be satisfied out of future drilling by Double D Drilling.

 5.  COMMITMENTS AND CONTINGENCIES

     COMMITMENTS

     During March, 2002 in conjunction with the Company's purchase of an
interest in 48,000 miles of seismic data in the Texas Gulf Coast area, the
Company committed to reprocessing this data. It is estimated that the
reprocessing will be completed by September 30, 2003 at a cost to the Company
of approximately $2.2 million which will be funded by short term advances from
BR Group and the sale of Preferred Stock.

     CONTINGENCIES

     The Company's drilling and oil and gas exploration and production
 operations are subject to inherent risks, including blowouts, fire and
 explosions which could result in personal injury or death, suspended drilling
 operations, damage to or destruction of equipment, damage to producing
 formations and pollution or other environmental hazards. As a protection
 against these hazards, the Company maintains general liability insurance
 coverage of approximately $10 million per occurrence and in the aggregate. The
 Company believes it is adequately insured for public liability and property
 damage to others with respect to its operations. However, such insurance may
 not be sufficient to protect the Company against liability for all consequences
 of well disasters, extensive fire damage, or damage to the environment. The
 Company has never been fined or incurred liability for pollution or other
 environmental damage in connection with its operations.

 6.  STOCKHOLDERS' EQUITY

     The Company is authorized to issue two classes of stock that are
 designated, respectively, common and preferred stock. As of March 31, 2002, the
 Company was authorized to issue 25,000,000 shares of stock, 20,000,000 being
 designated as common stock and 5,000,000 shares designated as preferred stock.

     SERIES D PREFERRED STOCK

     During 1998, the Company authorized the issuance and sale of 1,000,000
 shares of Series D Preferred Stock ("Series D Stock") which has a par value of
 $0.001 per share at $5.00 per share. The Series D Stock bears a 12% per annum
 dividend payable monthly. Each share of the Series D Stock shall be converted
 automatically into one (1) share of Common Stock effective when a Securities
 Act Registration Statement for the Common Stock is filed with the SEC or two
 years from issuance, whichever occurs first.

     In the event of any liquidation, dissolution or winding up of the Company,
 either voluntary or involuntary, the existing holders of Series D Stock shall
 be entitled to receive, prior and in preference to any distribution of any
 assets or surplus funds of the Company to the holders of Common Stock the
 amount of $5.00 per share plus all unpaid dividends on such share of each share
 of Series D Stock then held by the shareholder.

     During the first quarter of 2002, the remaining 60,750 shares of Series D
 Preferred Stock were converted to common stock.

     COMMON STOCK WARRANTS

     As of March 31, 2002, the Company had warrants outstanding to purchase
 3,865,731 shares of Common Stock at prices ranging from $1.00 to $6.00 per
 share. These warrants expire from October 31, 2002 until March 27, 2005. See
 the Company's Form 10-KSB for December 31, 2001 for additional details.


                                       12
<PAGE>


               MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

 FINANCIAL OVERVIEW:

     Blue Ridge Energy, Inc. ("BR Energy"), a Nevada corporation, was organized
 in November, 1994, as Gem Source, Incorporated ("Gem Source"), and subsequently
 changed the name of the company to Blue Ridge Energy, Inc. in May 1996. BR
 Energy has offices at 632 Adams Street, Suite 710, Bowling Green, KY 42101.

     BR Energy is engaged in the oil and gas business primarily in Texas,
 Kentucky, New Mexico and West Virginia. BR Energy sponsors oil & gas drilling
 partnerships through which it raises funds for the drilling of oil and gas
 wells and normally participates for a 1% partnership interest as the managing
 general partner of the partnerships. BR Energy also owns one drilling rig.
 This rig is used to drill oil and gas wells for the sponsored oil and gas
 drilling partnerships and also other non-affiliated oil and gas companies. The
 rig is operated on behalf of BR Energy by an affiliate, Blue Ridge Group,
 Inc.

     BR Energy also acquires direct working interest participation in oil and
 gas properties. The working interest participation includes exploratory and
 development wells and both operated and non-operated working interest
 participation. BR Energy intends to maintain an active role in the oil and gas
 industry as an operator of oil and gas wells, a sponsor of oil and gas drilling
 programs, a participant in oil and gas programs and as an independent producer
 of oil and gas.

     Mr. Edward L. Stillie resigned as President and CEO on March 1, 2002 and BR
 Energy appointed Mr. Patrick A. Kelleher as its new President and CEO on March
 1, 2002. Mr. Kelleher brings over 23 years of industry experience, as a
 disciplined Geologist and major company trained Geophysicist. Starting out his
 career with Exxon, Mr. Kelleher has found Oil and Gas reserves for Edge
 Petroleum, Cockrell Oil, and most recently as co-owner of Pecos Petroleum
 Company, a privately held oil and gas exploration company. Mr. Kelleher will
 replace Mr. Ed Stillie, who has resigned to pursue other business interests.

     At March 31, 2002, BR Energy had total assets of $4.8 million, total
 liabilities of $1.9 million and shareholders' equity of $2.9 million. BR
 Energy's net loss decreased to $133,000 during the first three months of 2002
 as compared to $147,000 for the same period in 2001. The loss per common share,
 which takes into account cash dividends paid on preferred stock decreased to
 $(0.02) per share during the first three months of 2002 as compared to $(0.03)
 during the same period in 2001. All per share data in this report has been
 adjusted to give effect to applicable stock issues and conversions.

     As of March 31, 2002, BR Energy has participated, either directly or
indirectly through its sponsored limited partnerships, in eighty-six (86) wells,
of which sixty-one (61) are presently productive and five (5) are in the
completion process, located in Kentucky, Texas, West Virginia and New Mexico.

         The following tables summarize by geographic area BR Energy's developed
and undeveloped acreage, oil and gas reserves and gross and net interests in
producing oil and gas wells as of March 31, 2002. Productive wells are producing
wells and wells capable of production, including gas wells awaiting pipeline
connections and oil wells awaiting connection to production facilities. Wells
that are completed in more than one producing horizon are counted as one well.



                                      13
<PAGE>

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS


Developed and Undeveloped Acreage
<TABLE>
<CAPTION>

Geographic Area                        Developed Acreage                        Undeveloped Acreage
---------------                        -----------------                        -------------------
                                 Gross Acres           Net Acres         Gross Acres            Net Acres
                                 -----------           ---------         -----------            ---------
<S>                                <C>                    <C>                 <C>                     <C>
New Mexico................         80.00                  53.60               0.00                    0.00
Texas.....................        863.78                  33.03             332.00                  133.00
Kentucky..................        700.00                  99.40          50,387.00               32,142.00
West Virginia.............        120.00                   8.24           2,520.00                2,142.00
                               ---------                -------        -----------             -----------
      Totals..............      1,763.78                 194.27          53,239.00               34,417.00
                                ========                 ======          =========               =========
</TABLE>

Productive Wells
<TABLE>
<CAPTION>
                                     Gross Wells              Net Wells                    Reserves
                                     -----------              ---------                    --------
Geographic Area                   Oil          Gas         Oil          Gas          Oil            Gas
---------------                   ---          ---         ---          ---          ---            ---
                                (BBLS)        (MCF)      (BBLS)        (MCF)       (BBLS)          (MCF)
<S>                              <C>          <C>         <C>          <C>          <C>            <C>
New Mexico                       1.00         0.00        0.67         0.00         7,361          19,000
Texas                            2.00         0.00        0.83         0.00         2,440          21,000
Kentucky                         0.00        54.00        0.00         7.33             0         152,054
West Virginia                    0.00         9.00        0.00         1.89             0          63,597
                                 ----         ----        ----         ----         -----         -------
Totals                           3.00        65.00        1.50         9.22         9,801         255,651
                                 ====        =====        ====         ====         =====         =======
</TABLE>

Key Properties

         The working interest owned by BR Energy, either directly or indirectly
through the oil and gas partnerships, is owned jointly with other working
interest partners. Management does not believe any of these burdens materially
detract from the value of the properties or will materially detract from the
value of properties or materially interfere with their use.

         The following are the primary properties held by BR Energy as of March
31, 2002:

Developed Properties

         Boon's Camp Prospect: As of March 31, 2002, nine (9) wells are
producing a total of approximately 550 - 650 MCF per day, five (5) wells are
still in the completion phase and one (1) well has been determined to be a dry
hole in the lower zone it tested and is being evaluated for completion in other
zones.

         Homestake #1: The Homestake #1 oil well is a development well located
in Lea County, New Mexico. BR Energy owns 66.9% of the Working Interest in the
Homestake #1 which is a 50.2% Net Revenue Interest.

         Big Sandy Prospect: As of March 31, 2002 ten (10) wells in the
Big Sandy Prospect are currently in production and selling gas on a curtailed
basis. BR Energy owns varying working interests in these wells ranging from 25%
to 30.25% of the working interest with net revenue interests ranging from 18.75%
to 22.69% in each well.

         Contrary Creek Prospect: Drilling in this prospect located in Lawrence
County, Kentucky began during the fourth quarter of 2000 with all 11 wells
having been drilled and determined as commercially productive as of March 31,
2002.

         McDonald Prospect: Drilling in this prospect located in Logan County,
West Virginia began during the fourth quarter of 2000 with 5 wells having been
drilled and determined as commercially productive as of March 31, 2002.


                                       14
<PAGE>

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

         Keegan Gibson #1: BR Energy owns 74% of the working interest which is
a 63% net revenue interest in this well located in Smith County, Texas.

         Shelby County, Texas: BR Energy owns a 0.5% Net Revenue Interest in the
Hailey Bridges #1 in Shelby County, Texas, which began producing in September,
2000 and continues to produce approximately 3.3 MMCF per day.

         Mingo And Wyoming Counties, West Virginia: BR Energy owns an 8.0%
Working Interest in five (5) development wells in Mingo and Wyoming Counties,
West Virginia. These wells are presently producing a total of 200-250 MCF
per day.

Undeveloped Properties

         Redwine Prospect: In September 2001, BR Energy entered into a joint
venture agreement with Hay Exploration, Inc. of Ashland, Kentucky to evaluate,
explore and develop an 18,000 acre leasehold area of mutual interest ("AMI") in
eastern Kentucky. The purchase price for BR Energy's 50% share was $850,000 and
the AMI will be developed on a 50/50 basis and the two companies will equally
share future lease acquisition, drilling and operating costs as well as the
proceeds from sale of production. As of March 31, 2002, BR Energy had paid
$581,104 of the $850,000 due for the purchase of the Redwine Prospect.

         West Pebble Island Prospect: During the second quarter of 2000, BR
Energy committed to the acquisition and development of undeveloped and
non-producing oil and gas leases consisting of a 40% Working Interest in 2 wells
to be drilled in the West Pebble Island Prospect in Tyler County, Texas. During
the fourth quarter of 2000, BR Energy sold this Working Interest to a limited
partnership sponsored by BR Energy, thereby retaining varying Working Interests.
Drilling in this prospect began during the first quarter of 2001 and mechanical
difficulties were encountered. The drilling contractor has refunded the funds
paid for the drilling of this well and BR Energy has sold its interest in this
property thereby recouping its investment.

         Licking River Prospect: During the fourth quarter of 2000, BR Energy
committed to the acquisition and development of undeveloped and non-producing
oil and gas leases consisting of a 50% Working Interest in approximately 18,000
acres in the Licking River Prospect in Morgan County, Kentucky. Drilling in this
prospect is now scheduled to begin during 2002.

         During March of 2002, Blue Ridge Energy also acquired a 17.5% working
 interest in a large ongoing Texas onshore exploration program that could have a
 significant impact on Blue Ridge Energy. The centerpiece of this program will
 utilize a large onshore Texas seismic database comprising approximately 48,000
 miles and covering 100+ counties of the Texas Gulf Coast, East Texas, and South
 Texas. The great majority of this data has never been put into the "public
 domain" and was acquired by a major oil company thought to be primarily
 exploring for large deep targets.

DRILLING RIGS

    During 1999, the Company acquired two drilling rigs and ancillary equipment.
Rig #4 is a 1999 Ingersoll Rand RD-20 which is capable of drilling to 5,000 feet
and Rig #2 which is an Ingersoll Rand TR-4 acquired from BR Group which is
capable of drilling to 3,000 feet. The drilling rigs are managed by BR Group on
behalf of BR Energy and are used to drill wells for oil and gas partnerships
sponsored by BR Energy as well as on a contract basis for other third parties.
During the first quarter of 2002, Rig #2 was sold for its book value of $612,000
to Double D Drilling in exchange for a short-term note receivable to be
satisfied out of future drilling by Double D Drilling.

INCOME STATEMENT REVIEW:

THREE MONTHS ENDED MARCH 31, 2002 AND 2001:

    BR Energy's net loss decreased to $133,000 during the first quarter of 2002
 as compared to $147,000 for the same period in 2001, The loss per common share,
 which takes into account cash dividends paid on preferred stock decreased to
 $(0.02) per share during the first quarter of 2002 as compared to $(0.03)
 during the same period in 2001.


                                       15
<PAGE>

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

    OPERATING REVENUES:

    Operating revenues totaled $1,169,000 during the three months ended March
 31, 2002 as compared to the $863,000 recorded during the three months ended
 March 31, 2001, This increase was primarily related to an increased activity
 level in BR Energy's sponsorship of Limited Partnerships for the drilling and
 development of oil and gas properties during 2002.

    DIRECT OPERATING COSTS:

    Direct operating costs totaled $855,000 during the three months ended March
 31, 2002, as compared to the $707,000 experienced during the same period in
 2001. The changes in direct operating costs are directly and proportionally
 related to the changes in operating revenues previously discussed.

    OTHER OPERATING EXPENSES:

    Marketing expenses increased 128% to $196,000 during the first quarter of
 2002 from the $86,000 experienced during this period in 2001 due to increased
 levels in sponsoring Limited Partnerships as previously discussed. General and
 Administrative expenses increased 10% to $310,000 during the first quarter of
 2002 as compared to $281,000 during the same period in 2001, primarily as a
 result of increased costs associated with changes in management personnel.

    OTHER EXPENSE:

     Other Expense remained essentially the same during the first quarter of
 2002 as compared to the first quarter of 2001.

BALANCE SHEET REVIEW:

ASSETS:

    BR Energy's current assets decrease of 41% to $1.0 million at March 31, 2002
as compared to $1.8 million at December 31, 2001 was primarily due to the use of
cash and advances in fulfillment of drilling commitments that existed at
December 31, 2001. A large portion of such decreases was offset by a current
note receivable in the amount of $612,000 resulting from the sale of Drilling
Rig #2. Due to the investment of approximately $670,000 in oil and gas
properties offsetting the sale of this drilling rig, property and equipment at
March 31, 2002 remained essentially the same as at December 31, 2001.

LIABILITIES:

     BR Energy's current liabilities decreased 22% to $1,653,000 at March 31,
2002 from $2,130,000 at December 31, 2001 primarily due to decreases in drilling
advances received for work in progress.

     At March 31, 2002 and December 31, 2001 BR Energy had recognized deferred
income tax assets (liabilities) of $16,000 and $(53,000), respectively.

 STOCKHOLDERS' EQUITY:

     Total capital invested in BR Energy for Common and Preferred Stock
 decreased 5% to $2.9 million at March 31, 2002 from $3.0 million at December
 31, 2001, primarily as a result of the loss for the quarter and the payment of
 dividends on Preferred Stock.

 CAPITAL RESOURCES AND LIQUIDITY:

     As a result of BR Energy's equity transactions and net loss from
 operations, the current ratio at March 31, 2002 was 0.65 to 1, a decrease of
 22% from 0.83 to 1 at December 31, 2001.

     During the two periods ended March 31, 2002 and December 31, 2001, BR
 Energy has relied upon net inflows of cash from equity and debt transactions,
 supplemented by net inflows of cash generated by its operating activities to
 fund the purchase of assets and its expansion. Generally speaking, management
 expects to finance further growth with similar equity transactions and improved
 cash flow from operations. It is anticipated that the Company will raise funds
 from the issuance of Preferred Stock in


                                       16
<PAGE>

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

 order to fund its commitment resulting from the acquisition of seismic
 information in the Texas Gulf Coast region. It is also possible that further
 expansion will be aided through the use of long-term debt transactions, both
 secured and unsecured.

                                     PART II
                                OTHER INFORMATION

 ITEM 1.  LEGAL PROCEEDINGS
           There are no legal proceedings pending against BR Energy, Inc.

 ITEM 2.  CHANGES IN SECURITIES
           None

 ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
            Not Applicable

 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
           None

 ITEM 5.  OTHER INFORMATION
            None

 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
            No reports on Form 8-K were filed during the quarter ended March 31,
2002.

                                   SIGNATURES

 In accordance with the requirements of the Exchange Act, the registrant caused
 this report to be signed on its behalf by the undersigned, thereunto duly
 authorized.

                                 BLUE RIDGE ENERGY, INC.



 Date May 14, 2002               By   /s/ James T. Cook, Jr.
      ------------                    --------------------------------
                                      James T. Cook, Jr.
                                      Sr. Vice President-Finance & CFO


                                       17