SECURITIES EXCHANGE COMMISSION
                     Washington, D.C.  20549

                           FORM 10-KSB
          Annual Report Pursuant to Section 13 or 15(d) 
            of the Securities Exchange Act of 1934
             
             
               For the fiscal year ended 12-31-97
                 Commission file number 33-28188
                 
             THE OHIO & SOUTHWESTERN ENERGY COMPANY
     (Exact name of registrant as specified in its charter)

               Colorado                  84-1116458
        (State of incorporation)        (I.R.S. Employer
                                        Identification No.)

        10200 W. 44th Ave., #400, Wheat Ridge, CO  80033 
       (Address of principal executive offices) (Zip Code)

    Registrant's telephone number, including area code: None 
  
    Securities registered pursuant to Section 12(b) of the Act:

                   Title of each class:  None

        Name of each exchange on which registered:  N/A

   Securities registered pursuant to Section 12(g) of the Act: 
 
                   Title of each class: None

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 the  filing 
requirements for at least the past 90 days.

                      Yes  X       No
Check if disclosure of delinquent filers pursuant to Item 405  of 
Regulation  S-B is not contained in this form, and no  disclosure 
will  be contained, to the best  of Registrant's  knowledge,  in 
definitive  proxy  or information  statements incorporated by 
reference  in  Part III of this Form 10-KSB or any amendment  to 
this Form 10-KSB.      X

State issuer's revenues for its most recent fiscal year. $0 

Transitional Small Business Disclosure Format:

               ______ Yes     ___x____ No



<PAGE>

Aggregate market value of the voting stock held by
non-affiliates of the registrant as of December 31,
1997:  $0


Number  of  outstanding shares of the registrant's no
par  value common stock, as of December 31, 1997:
2,116,695.


<PAGE>

                       PART 1
                          
Item 1.   Business

     Jefferson  Capital Corporation (the Company), a
     development stage company, was organized under
     the laws of the State  of Colorado  on  February 
     28, 1989.  The  Company  is  in  the development  
     stage as defined in Financial  Standards  Board 
     Statement No. 7. 

     On  January 4, 1990, the Company sold 10,000,000 units of 
     no par  value  common stock in a "Blind Pool" public  
     offering. The  offering price for each unit  was  $.01.   
     Each  unit consisted of one share of the Company's no par 
     value  common stock  and 25  Class  A  Common Stock  
     Redeemable  Purchase Warrants  (Class  A  Warrants).  The 
     Class  A  Warrants  are exercisable  for 24 months from the 
     effective  date  of  the regitration  statement (October 30, 
     1989) and entitled  the holder  thereof to purchase 25 shares 
     of common stock  at  a price of $.014 per share.  The Company 
     received $72,730, net of  offering  costs, from the sale of 
     common  stock  in  the public offering.

     Effective June 13, 1990, the Company entered into  a  merger
     agreement  with  Ohio & Southwestern Energy Company  (OSEC).
     The Company issued 80,000,000 shares of its common stock  in
     exchange  for all of the outstanding shares of OSEC.   After
     the  exchange  of  shares, OSEC's sole shareholder,  Members
     Service Corporation (MSC), owned 80% of the Company's issued
     and  outstanding common stock.  The name of the  corporation
     was changed to Ohio & Southwestern Energy Company (OSEC).
     
     No  significant  business  activity  was  conducted  by  the
     Company  during the fiscal year. As a result, no income  was
     realized by the Company in its last fiscal year.

     While  the  company commenced 1990 with a successful  public
     offering,  the  subsequent  merger  agreement  with  Ohio  &
     Southwestern   Energy  Corp.  (OSEC)  became   an   abortive
     transaction.  The new management of OSEC never completed the
     merger  with  assets represented, and without  authorization
     distributed the corporate funds to unauthorized  parties  or
     uses  which resulted in a total write off of the capital  of
     the Company.

     The  majority  stockholder, MSC, failed to disclose  to  the
     minority  stockholders the distribution of  corporate  funds
     during  the  year  ended  1990.   The  Company  recorded  an
     extraordinary loss in the amount of $69,116 as a  result  of
     the unauthorized distribution of corporate funds in 1990.

     The  minority  shareholders filed a  complaint  in  Arapahoe
     County  Colorado  District  Court,  Civil  Division,  during
     April,  1991  alleging among other things that the  majority
     shareholder,  MSC,  failed to disclose the  distribution  of
     corporate funds, failed to account for the operations of the


<PAGE>

     corporation   and  transferred  assets  of  the  corporation
     without stockholder or board meetings.  The supposed  assets
     of OSEC did not exist and the Company (OSEC) was a sham.

     On  August 28, 1991, a Receiver was appointed and the  court
     ordered the 80,000,000 shares of common stock issued to  MSC
     to   be   canceled.   On  January  12,  1995,  the  minority
     shareholders   filed   a  motion  for  supplemental   orders
     requesting   that  the  merger  between  Jefferson   Capital
     Corporation  and  Ohio and Southwestern  Energy  Company  be
     declared null and void and a bar date of April 15, 1995,  be
     set within which any and all creditors must file a claim.

     On  May  23,  1995,  the Receiver issued  his  final  report
     stating  that no claims of creditors had been filed  by  the
     bar  date.   The Receiver incurred $36,395 in  costs  during
     receivership.  Certain of the costs had been advanced by the
     Receiver in the anticipation of issuance of shares of common
     stock  by the Board of Directors after the dismissal of  the
     Receivership.

     On  June  21,  1995, the Court ordered the merger  null  and
     void,  approved  the Receiver's final report and  authorized
     the  restoration  of  the name of the Company  to  Jefferson
     Capital  Corporation.  The Board has elected to  retain  the
     existing  name  for consistency. The Company engaged  in  no
     foreign  operations or export sales to date, has no  product
     and has no full-time employees at year end.

     On  August 30, 1995 the shareholders of the company voted to
     approve  a  reverse  split of up to one new  share  for  300
     shares  outstanding.  On September 25, 1995,  the  directors
     effectuated a reverse split on a one for 300 shares basis.

     The Company was inactive in 1997 and presently does not
     participate in any industry segment. The Company had no
     revenues,  or operating profits or identifiable  assets
     in 1997 other than nominal cash.

     The  Company  is  currently seeking  acquisition  or  merger
     candidates  with which it would seek to enter into  a  share
     exchange reorganization.

Item 2.   Property

     The  Company does not have any formal offices  at  year
     end.  Records are maintained and mail received at 10200
     W.  44th  Ave.,  #400,  Wheat Ridge,  CO   80033.   The
     company owns no property.
     
     
<PAGE>

Item 3.   Legal Proceedings

     The Company is a party to no pending legal proceedings,
     nor  is  its  property subject to such proceedings,  at
     year end 1997.
     
Item 4.   Submission  of Matters to a Vote of  Security
          Holders

     No  matters were submitted during the fiscal year covered by
     this  report  to a vote of security holders of the  Company,
     through the solicitation of proxies or otherwise.
     
                              PART II
                                 
Item 5.   Market  for  Registrant's  Common  Equity  and  Related
          Stockholder Matters

     As  of the date of this report, management knows of  no
     trading or quotation of the Company's common stock. The range
     of  high and low bid quotations for each  fiscal quarter
     since  the  last report, as  reported  by  the National
     Quotation Bureau Incorporated, was as follows:
     
                  1997             High      Low

               First quarter       *         *
               Second quarter      *         *
               Third quarter       *         *
               Fourth quarter      *         *

                  1996             High      Low
               First quarter       *         *
               Second quarter      *         *
               Third quarter       *         *
               Fourth quarter      *         *
               
               
             * No quotations reported
                         
     The   above  quotations  reflect  inter-dealer  prices,
     without  retail  mark-up, mark-down, or commission  and
     may not necessarily represent actual transactions.
     
     As of December 31, 1997 there were 46 record holders of
     the Company's common Stock.
     
     The Company has not declared or paid any cash dividends
     on  its  common  stock and does not  anticipate  paying
     dividends for the foreseeable future.
     

<PAGE>

Item 6.   Management's  Discussion  and   Analysis   of
          Financial Condition and Results of Operations

          Financial  Condition  and  Changes  in Financial 
          Condition
          
     No  operations were conducted and no revenues were generated
     in  the fiscal year.  The Company at year end had no capital
     and  only minimal cash, and no other assets whatsoever.  The
     Company  at  year end was totally illiquid  and  would  have
     needed cash infusions from shareholders to provide capital.
     
          Liquidity

     The  Company had cash in the amount of $212 at December  31,
     1997.
     
     The  Company  ceased active operations in 1991  and  has  no
     business  at  the  present  time.   It  anticipates  seeking
     acquisition or merger candidates in the future.
     
     During  the  course  of the fiscal year ended  December  31,
     1997,  the  Company's outstanding debt  level  increased  to
     $11,069 from $10,496 in fiscal year ended December 31, 1996.
     This  increase was due to costs relating to company's public
     status, and legal and accounting.
     
     Stockholders deficit decreased to ($10,857) at December  31,
     1997 compared to ($10,496) at December 31, 1996.
     
          Capital Resources

     None.  The Company currently has no capital resources.
                                 
     The  Company  has  no other known material  commitments  for
     capital expenditures.  The Company has no additional  plans,
     agreements, or commitments concerning any transaction  which
     would  require  the Company to use a significant  amount  of
     capital.
     
          Results of Operations

     During  the  fiscal year ended December 31,  1997,  the
     Company  incurred  general and administrative  expenses
     and  consulting fees.  At present, the Company  has  no
     business   income   or  operations.  Accordingly,   the
     reported  financial  information  herein  may  not   be
     indicative of future operating results.

     Comparison  of  year Ended December 31, 1997 to  year  Ended
     December  31, 1996.  The Company ceased operations  in  June
     1991,  and  has had no revenues or sales of any  type  since
     then.
     

<PAGE>

     General  and  administrative expenses for  the  years  ended
     December   31,  1997  and  1996  were  $22,261  and   $9,068
     respectively.
     
     The  operating losses for years ended December 31, 1997  and
     1996  were  ($22,261) and ($9,068), respectively.   The  net
     loss  for  year ended December 31, 1997 was ($22,261).   For
     year ended December 31, 1996, the net loss was ($9,068).
     
     Loss  per share for year ended December 31, 1997 was  ($.01)
     per  share, compared to approximately ($.08) per  share  for
     year ended December 31, 1996.
     
     The   management  of  the  Company  does  not  believe  that
     inflation has had any material effect on the Company  during
     the year ended December 31, 1997.
     
     
Item 7.   Financial Statements and Supplementary Data

          Please refer to pages F-1 through F-10.

Item 8.   Changes  in  and Disagreements on  Accounting and 
          Financial Disclosure

          NONE


                             PART III
                                 
Item 9.   Directors  and  Executive  Officers  of   the
          Registrant and Compliance with Section 16(a)
                                 
      The directors and executive officers of the Company  as
      of December 31, 1997 are as follows:

          Name             Age          Position

Robert Kropf             37        President, Director

Paul Adams               36        Secretary, Treasurer, Director

Kevin D. Geiss           35        Director

      The  term of office of each director and executive  officer
ends  at,  or  immediately  after, the  next  annual  meeting  of
shareholders  of the Company.  Except as otherwise indicated,  no
organization by which any director or officer has been previously
employed is an affiliate, parent or subsidiary of the Company.


       Robert  Kropf,  President  and  Director  of  The  Ohio  &
Southwestern Energy Company since 1996.  Mr. Kropf was owner  and
operator  of  the Dinner and Bingo Club in Salt Lake  City,  Utah
from 1995 until 1998.


<PAGE>

     Paul Adams, is Secretary, Treasurer and Director of The Ohio
&  Southwestern  Energy Company and was appointed  in  summer  of
1997.   He  has served as President of Big Water Tackle  of  Salt
Lake  City, Utah since 1993.  Currently he is President of  Tubes
and Tails and has been since fall 1997.

     Kevin  D. Geiss, received his BA in Business Administration
from  the  University of Northern Colorado in December  of  1985.
Upon  graduation,  Mr.  Geiss  spent  two  years  as  a  regional
marketing  director with Dynavex, Inc. a manufacturer  of  oxygen
related  equipment.   Currently Mr. Geiss owns  and  operates  an
insurance agency affiliated with the Farmers Insurance  Group  of
Companies  in Denver.  Mr. Geiss also served as a Vice President,
Treasurer  and  Director of ANCR, Inc.,  a public  "Blank  Check"
company formed in Colorado in 1985.  Mr. Geiss resigned from that
company  as part of a reverse acquisition transaction in  October
of  1987.   Mr. Geiss was a founding Director of Registrant,  who
resigned in 1990, but was re-elected by shareholders in 1995.

     Section  16(a) of the Securities Exchange Act of  1934,  as
amended (the "Exchange Act"), requires the Company's officers and
directors,  and  persons who own more than 10%  of  a  registered
class  of  the  Company's equity securities, to file  reports  of
ownership  and changes in ownership of equity securities  of  the
Company  with the Securities and Exchange Commission and  NASDAQ.
Officers,   directors  and  greater-than  10%  shareholders   are
required by the Securities and Exchange Commission regulation  to
furnish  the Company with copies of all Section 16(a)  that  they
file.  No officers, directors or 10% shareholders have filed  any
Reports pursuant to Section 16(a) at year end.

Item 10.  Executive Compensation

      The  Company accrued a total of $0 in compensation  to  the
executive  officers  as  a  group for services  rendered  to  the
Company  in  all capacities during the 1997 fiscal year.  No  one
executive  officer received, or has accrued for his  benefit,  in
excess of $60,000. No cash bonuses were or are to be paid to such
persons. No compensation was deferred.

      The  Company  does  not have any employee  incentive  stock
option plans.

      There  are  no  plans pursuant to which  cash  or  non-cash
compensation was paid or distributed during the last fiscal year,
or  is  proposed to be paid or distributed in the future, to  the
executive  officers  of  the Company. No other  compensation  not
described  above was paid or distributed during the  last  fiscal
year  to  the  executive officers of the Company.  There  are  no
compensatory plans or arrangements, with respect to any executive
office  of  the  Company, which result or will  result  from  the
resignation,  retire-ment  or  any  other  termination  of   such
individual's  employment with the Company or  from  a  change  in
control   of   the  Company  or  a  change  in  the  individual's
responsibilities following a change in control.


<PAGE>

Item 11.  Security   Ownership  of  Certain  Beneficial
          Owners and Management

      The  following table sets forth information, as of December
31,  1997,  with  respect  to  the beneficial  ownership  of  the
Company's no par value common stock by each person known  by  the
Company  to be the beneficial owner of more than five percent  of
the outstanding common stock, and by the Company's management.

      Stock        Names and Address       Beneficial     Percent
  Title of Class   of Beneficial Owner     Ownership      of Class

Common           Robert Kropf                   0              0%
                 President & Director
                 c/o 4505 S. Wasatch Blvd.
                 Suite #330
                 Salt Lake City, UT 84124

Common           Paul Adams                      200,000        9.4%
                 Secretary, Treasurer & Dir.
                 (through beneficial
                 ownership of Big Water Tackle)
                 124 W. Burton Ave.
                 Salt Lake City, UT                                

Common           Kevin D. Geiss                  5,833          .2%
                 Director
                 999 18th, #212
                 Denver, CO  80202

Common           GeoTech Management Services     1,300,000      61.4%
                 c/o 4505 S. Wasatch Blvd.
                 Suite #330
                 Salt Lake City, UT  84124
                 (Beneficially owned by Ken Carol 
                 10 Donald Street
                 Winnipeg, MB  R3C 1L5)

Common           Big Water Tackle                200,000        9.4%
                 (Beneficially Paul Adams,
                 an officer and director) 
                 124 W. Burton Avenue
                 Salt Lake City, UT
               
Common           Dora Mower                      200,000        9.4%
                 1883 S. 900 East
                 Salt Lake City, UT

Common           Wayne Mower                     150,000        7%
                 2700 W. 7461 S.
                 Salt Lake City, UT

Common           Edward B. Wilson                150,000        7%
                 8th S. 350 Palamino
                 Naperville, IL

Officers and Directors as a group                205,833        9.6%



<PAGE>

Item 12.  Certain Relationships and Related Transactions
          
          During March 1989, the Company sold 10,000,000 units of
no  par value common stock to its officers, directors and private
investors.   The  offering price for each unit was  $.001.   Each
unit  consisted of one share of the Company's no par value common
stock  and  25  common  stock purchase  warrants.   Each  warrant
enables  its  holder to purchase one share of  restricted  common
stock  at  $.014  per share for a period of 24 months  commencing
with  the  effective date of the prospectus (October  30,  1989).
The  Company received $10,000 in proceeds from the sale of common
stock to its officers, directors and private investors.

           On  January 4, 1990, the Company sold 10,000,000 units
of  no  par value common stock in a "Blind Pool" public offering.
The  offering price for each unit was $.01.  Each unit  consisted
of  one sharer of the Company's no par value common stock and  25
Class  A  Common  Stock  Redeemable Purchase  Warrants  (Class  A
Warrants).  The Company received $72,730, net of offering  costs,
from  the  sale  of  common stock in the  public  offering.   All
Warrants expired in October 1991.

      Effective June 13, 1990, the Company entered into a  merger
agreement  with Ohio & Southwestern Energy Company  (OSEC).   The
Company  issued 80,000,000 shares of its common stock in exchange
for all of the outstanding shares of OSEC.  After the exchange of
shares,  OSEC's  sole  shareholder, Members  Service  Corporation
(MSC),  owned 80% of the Company's issued and outstanding  common
stock.   The  name  of  the corporation was  changed  to  Ohio  &
Southwestern Energy Company (OSEC).

      The  minority  shareholders filed a complaint  in  Arapahoe
County  District Court, Colorado, Civil Division,  during  April,
1991  alleging among other things that the majority  shareholder,
MSC,  failed  to  disclose the distribution of  corporate  funds,
failed  to  account  for the operations of  the  corporation  and
transferred  assets  of  the corporation without  stockholder  or
board meetings.

      On  August 28, 1991, a Receiver was appointed and the court
ordered the 80,000,000 shares of common stock issued to MSC to be
canceled.  On January 12, 1995, the minority shareholders filed a
motion for supplemental orders requesting that the merger between
Jefferson  Capital  Corporation and Ohio and Southwestern  Energy
Company  be  declared null and void and a bar date of  April  15,
1995,  be  set  within which any and all creditors  must  file  a
claim.

      On  May  23,  1995, the Receiver issued  his  final  report
stating  that no claims of creditors had been filed  by  the  bar
date.    The   Receiver   incurred  $36,395   in   costs   during
receivership.   Certain of the costs had  been  advanced  by  the
Receiver  in the exception of issuance of shares of common  stock
by   the   Board  of  Directors  after  the  dismissal   of   the
Receivership.


<PAGE>

      On  June  21, 1995, the Court ordered the merger  null  and
void,  approved  the Receiver's final report and  authorized  the
restoration  of  the  name of the Company  to  Jefferson  Capital
Corporation.  The Board elected not to do so for consistency.

      On July 25, 1995, the Company issued 50,000 shares (adjusted
for  a  one for 300 reverse split of common stock) for  $.03  per
share  to  seven  unrelated  parties  for  legal  and  consulting
services rendered.

       In   April  1997,  the  Company  paid  Robert  Beaton,   a
shareholder, $10,000 for consulting services rendered,  and  paid
M.A. Littman, a shareholder, $5,000 for legal services rendered.

       In  1997,  the  Company issued 2 million common  shares  to
certain  persons and entities for cash consideration of  $21,900.
Such  shares constitute 94.4% of the total outstanding  stock  of
the Company.  Big Water Tackle (Beneficially Paul Adams) received
200,000  shares.  GeoTech Management Services received  1,300,000
shares (61.4% of the company).

Item 13.  Disagreements   with  Accountants  on  Accounting   and
          Financial Disclosure

      There  has  been no change of Accountants  since  the  1989 Audit.

      In  connection with audits of two most recent fiscal  years
and  any  interim period preceding resignation, no  disagreements
exist  with  any  former accountant on any matter  of  accounting
principles  or  practices,  financial  statement  disclosure,  or
auditing  scope of procedure, which disagreements if not resolved
to  the  satisfaction of the former accountant would have  caused
him  to  make  reference in connection with  his  report  to  the
subject matter of the disagreement(s).

       The   principal  accountant's  report  on  the   financial
statements  for  any of the past two years contained  no  adverse
opinion  or  a  disclaimer of opinion nor  was  qualified  as  to
uncertainty, audit scope, or accounting principles except for the
"going concern" qualification.

                              PART IV

Item 14.  Exhibits and Reports on Form 8-K

          The  following documents are  filed  as
          part of this report:

          1.   Reports on Form 8-K: None
          2.   Exhibits:


<PAGE>

                                             Form 10-K
Regulation                                   Consecutive
S-K Number               Exhibit             Page Number

3.1       Articles of Incorporation               *
3.3       Bylaws                                  *
24.2      Court Order dated August 23, 1991       **
24.3      Court Order dated June 21, 1995         **

 *Incorporated by reference to SEC filing #33-28188.
**Incorporated by reference to 10-KS B Report for 12/31/94 period.



                            SIGNATURES
                                 
Pursuant  to  the  requirements of Section 13  or  15(d)  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.

                         THE OHIO & SOUTHWESTERN ENERGY CO.
                         (Registrant)
                         
Date: June 1, 1998

                          /s/Robert Kropf
                         Robert Kropf, President

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

                         THE OHIO & SOUTHWESTERN ENERGY COMPANY
                                   (Registrant)
Date: June 1, 1998

                                   /s/Robert Kropf
                                   Robert Kropf, Director

                                   /s/Paul Adams
                                   Paul Adams, Director

                                   /s/Kevin D. Geiss
                                   Kevin D. Geiss, Director


<PAGE>


                  INDEX TO FINANCIAL STATEMENTS

     
                                                                    Page 

Independent Auditors' Report                                        F-2

Financial Statements:

  Balance Sheet                                                     F-3

  Statements of Operations                                          F-4

  Statements of Changes in Stockholders' Equity (Deficit)           F-5

  Statements of Cash Flows                                          F-6

Notes to Financial Statements                                       F-7

                                F-1    

<PAGE>

                     INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
of The Ohio & Southwestern Energy Company
Denver, Colorado


We  have  audited the accompanying balance sheet of
The  Ohio  & Southwestern Energy Company (a development
stage company)  as  of December 31,  1997,  and the related
statements  of  operations, changes  in  stockholders'
equity (deficit), and cash flows  for each  of the two
years in the period ended December 31, 1997  and
cumulative  from February 28, 1989 (inception).  These
financial statements  are  the responsibility of the Company's
management. Our  responsibility is to express an opinion on
these  financial statements based on our audits.

We  conducted  our  audits in accordance with generally
accepted auditing  standards. Those standards require that
we  plan  and perform  the audit to obtain reasonable
assurance about  whether the financial  statements are free
of material misstatement.  An audit includes examining on a
test basis, evidence supporting the amounts  and disclosures in
the financial statements.  An audit also includes assessing the
accounting  principles  used and significant  estimates made
by management, as well as evaluating the  overall financial 
statement presentation.  We believe  that our audits provide a 
reasonable basis for our opinion.

In  our  opinion,  the financial statements  referred to  above 
present  fairly, in all material respects, the financial position 
of  The Ohio  & Southwestern Energy Company as of  December  31,
1997,  and  the results of its operations and its cash flows for 
each  of the two years in the period ended December 31, 1997  and 
cumulative from February 28, 1989 (inception), in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming 
that  the Company will continue as a going concern.  As discussed 
in  Note  1  to the financial statements, the Company is  in  the 
development stage and has not earned  any revenues from operations.   
Its ability to continue  as  a  going concern  is dependent  upon  its
ability to develop  additional sources  of capital,  locate  a merger  
candidate  and ultimately   achieve profitable operations. These 
conditions raise substantial  doubt about its ability to continue as a
going concern.  The financial statements do not include any adjustments 
that might result from the outcome of this uncertainty.


Denver, Colorado
April 16, 1998
                                 F-2

<PAGE>

                  THE OHIO & SOUTHWESTERN ENERGY COMPANY
                     (A Development Stage Company)
                            BALANCE SHEET
                          DECEMBER 31, 1997




                                ASSETS

CURRENT ASSETS, Cash                                     $      212

                                                         $      212

            LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                
                
CURRENT LIABILITIES, Accounts payable, shareholder       $   11,069


COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS' EQUITY (DEFICIT):

  Preferred stock, $.01 par value, 100,000 shares
    authorized, none issued and outstanding
  Common stock, no par value, 10,000,000 shares              
    authorized, 2,116,695 shares  issued and
        outstanding                                         105,530
  Contributed capital                                        25,442
  (Deficit accumulated during the development stage        (141,829)

          Total Stockholders' Equity (Deficit)              (10,857)

                                                          $     212


              SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
                      
                                 F-3 


<PAGE>
[CAPTION]
<TABLE>
                 THE OHIO & SOUTHWESTERN ENERGY COMPANY
                     (A Development Stage Company)
                       STATEMENTS OF OPERATIONS         


                                                                 Cumulative
                                                                    from
                                                                February 28,
                                                                    1989
                                                                (Inception)
                                     For the Years Ended             to   
                                         December 31,           December 31,
                                       1997           1996          1997
<S>                                 <C>           <C>             <C>

REVENUE                             $       -     $       -       $       -


COSTS AND EXPENSES:
  Amortization                              -             -             750
  General and administrative           22,261         9,068          71,963

          Total Costs and Expenses     22,261         9,068          72,713


(LOSS) BEFORE EXTRAORDINARY ITEM      (22,261)       (9,068)        (72,713)


EXTRAORDINARY ITEM, UNAUTHORIZED                             
DISTRIBUTION                                -             -          69,116


NET (LOSS)                          $ (22,261)    $  (9,068)      $(141,829)


NET (LOSS) PER COMMON SHARE - BASIC $    (.01)    $    (.08)


WEIGHTED AVERAGE NUMBER OF COMMON 
SHARES OUTSTANDING                  1,683,818       116,695
</TABLE>
                SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
        
                                   F-4


<PAGE>
[CAPTION]
<TABLE>                           
                 THE OHIO & SOUTHWESTERN ENERGY COMPANY
                     (A Development Stage Company)
         STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
           FOR THE PERIOD FROM FEBRUARY 28, 1989 (INCEPTION)
                         TO DECEMBER 31, 1997


                                                          (Deficit)
                                                          Accumulated
                                                          During the  
                          Common Stock       Contributed  Development
                        Shares      Amount   Capital      Stage        Total
<S>                    <C>        <C>       <C>       <C>            <C>

Balances, February             -  $      -  $     -   $        -     $       -
28, 1989
 Issuance of stock                  
 to insiders on                                      
   March 7, 1989 at
   $.30 per share         33,347    10,000        -            -       10,000     
 Net (loss)                    -         -        -            -             -
                       
Balances, December       
31, 1989                  33,347    10,000        -            -       10,000
 Issuance of stock
 during public    
 offering for $3.00
 per share, net of 
 offering costs of
 $27,270                  33,348    72,730        -            -       72,730
 Net (loss)                    -         -        -     (84,159)      (84,159)

Balances, December        
31, 1990                  66,695    82,730        -     (84,159)       (1,429)
 Net (loss)                    -         -        -      (3,416)       (3,416)

Balances, December       
31, 1991                  66,695    82,730        -     (87,575)       (4,845)
 Net (loss)                    -         -        -      (2,713)       (2,713)

Balances, December       
31, 1992                  66,695    82,730        -     (90,288)       (7,558)
 Net (loss)                    -         -        -      (1,614)       (1,614)

Balances, December       
31, 1993                  66,695    82,730        -     (91,902)       (9,172)
 Net (loss)                    -         -        -      (1,863)       (1,863)

Balances, December   
31, 1994                  66,695    82,730        -     (93,765)      (11,035)
 Issuance of stock     
 for services
  rendered at $.03 
  per share               50,000     1,500        -            -        1,500    
 Contributed capital           -         -   24,842            -       24,842             
 Net (loss)                    -         -        -     (16,735)      (16,735)

Balances, December       
31, 1995                 116,695    84,230   24,842    (110,500)       (1,428)
 Net (loss)                    -         -        -      (9,068)       (9,068)

Balances, December      
31, 1996                 116,695    84,230   24,842    (119,568)      (10,496)
 Issuance of shares          
 for cash              2,000,000    21,300        -            -       21,300
 Contributed capital           -         -      600            -          600
 Net (loss)                    -         -        -     (22,261)      (22,261)

Balances, December     
31, 1997               2,116,695  $105,530  $25,442   $(141,829)     $(10,857)
</TABLE>

                  SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
         
                                   F-5


<PAGE>
[CAPTION]
<TABLE>

                   THE OHIO & SOUTHWESTERN ENERGY COMPANY
                       (A Development Stage Company)
                         STATEMENTS OF CASH FLOWS

                                                                  Cumulative
                                                                      from
                                                                  February 28,
                                                                      1989                                                         
                                        For the Years Ended      (Inception to)
                                            December 31,           December 31,
                                         1997          1996           1997
  <S>                                  <C>            <C>            <C>

CASH FLOWS FROM (TO) OPERATING
ACTIVITIES:
  Net (loss) from operations           $(22,261)      $(9,068)       $(141,829)
  Adjustments to reconcile net (loss) 
  to net cash used by operating
  activities:
     Amortization                              -             -             750
     Changes in:
       Accounts payable                     573         9,068           12,569
          Net Cash (Used) by Operating 
          Activities                    (21,688)             -        (128,510)


CASH FLOWS FROM (TO) INVESTING
ACTIVITIES:
  (Increase) in organization costs             -             -            (750)

          Net Cash (Used) by Investing       
          Activities                           -             -            (750)

CASH FLOWS FROM (TO) FINANCING
ACTIVITIES:
  Proceeds from issuance of common 
  stock to insiders                      21,300              -          31,300
  Proceeds from issuance of common 
  stock to the public                          -             -         100,000
  Payment of offering costs from     
  issuance of common stock to        
  the public                                   -             -         (27,270)  
  Contributed capital                       600              -          25,442

         Net Cash Provided by Financing             
         Activities                      21,900              -         129,472

NET INCREASE IN CASH                        212              -             212

CASH, beginning of period                      -             -                -

CASH, end of period                    $    212       $      -       $     212
</TABLE>

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
 
                                      F-6


<PAGE>

                    THE OHIO & SOUTHWESTERN ENERGY COMPANY
                        (A Development Stage Company)
                        NOTES TO FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

History
The   Ohio   &   Southwestern   Energy Company (OSEC) (the Company)
(formerly   known   as  Jefferson  Capital Corporation or JEFFCO), a
development   stage  company,  was  organized under  the   laws of the
State   of  Colorado  on  February  28, 1989.  The  Company is in the
development stage as defined in Financial Accounting  Standards Board
Statement No. 7.

Effective  June 13, 1990, JEFFCO entered  into a merger agreement with
OSEC.    JEFFCO  issued  80,000,000  (pre-split)  shares of its common   
stock   in  exchange  for  all of  the  outstanding   shares   of OSEC.
After   the   exchange   of  shares, OSEC's   sole shareholder,Members   
Service   Corporation  (MSC), owned   80%   of   the   Company's issued   
and   outstanding  common stock.   The  name  of  the   surviving
corporation became The Ohio & Southwestern Energy Company.

The   minority   shareholders  filed  a complaint   during   April,   1991
alleging   among   other  things  that  the  majority   shareholder,   MSC,
failed  to  disclose  the  distribution of  corporate  funds,  failed  to
account   for   the   operations   of the  corporation   and   transferred
assets of the corporation without stockholder or board meetings.

On   August   28,   1991,   a  Receiver was  appointed   and   the   court
ordered   that   the  80,000,000  (pre- split)  shares   of   common   stock
issued   to   MSC  be  cancelled.   On January  12,  1995,  the   minority
shareholders   filed   a   motion   for supplemental   orders   requesting
that  the  merger  between  JEFFCO  and OSEC  be  declared  null  and  void and
a  bar  date  of  April    15, 1995 be set  within  which  any  and  all
creditors must file a claim.

On   May   23,   1995,  the  Receiver issued  his  final  report   stating
that  no  claims  of  creditors  had been filed  by  the  bar  date. The
Receiver   incurred   $36,395  in  costs during   receivership.    Certain
of  the  costs  had  been  advanced  by the  Receiver  in  the  expectation of
issuance  of  shares  of    common  stock by  the  Board  of  Directors
after   the  dismissal  of  the Receivership.    On  June  21,  1995, the
court  ordered  the  merger  agreement null  and  void  and  approved  the
Receiver's final report.

Going Concern
The   Company's   financial  statements have   been   presented   on the
basis   that   it   is   a   going concern,   which   contemplates  the
realization  of  assets  and  the satisfaction  of  liabilities   in   the
normal   course   of   business.   The Company  is  in   the   development
stage and has not earned any revenues from operations.

                                 F-7

<PAGE>


               THE OHIO & SOUTHWESTERN ENERGY COMPANY
                   (A Development Stage Company)
                   NOTES TO FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The   Company  is  currently  devoting its  efforts  to  locating   merger
candidates.   The  Company's  ability  to continue  as  a  going   concern
is   dependent   upon  its  ability  to develop  additional   sources  of
capital, locate   a   merger candidate, and   ultimately, achieve profitable
operations.   The accompanying  financial  statements do not  include  any  
adjustments  that might  result  from  the  outcome  of these uncertainties.

Income Taxes
The   Company   uses  the  liability method  of  accounting   for   income
taxes   pursuant  to  Statement  of Financial  Accounting  Standards No. 109.   
Under   this  method,  deferred income  taxes  are  recorded  to reflect 
the tax consequences in future  years  of temporary differences between  the  
tax  basis of  the  assets  and liabilities and their financial amounts at 
year end.

For   federal   income  tax  purposes, substantially  all  expenses   must 
be   deferred   until  the  Company commences  business  and   then   they
may  be  written  off  over  a 60-month period.  The  Company  is  not  in
business    at   this   date.  Therefore, $141,829  of net losses incurred   
to   date   have  not  been deducted  for  tax  purposes and represent   a   
deferred   tax  asset.  The   Company  is  providing  a valuation  allowance  
in  the  full amount  of  the  deferred  tax   asset since there is no 
assurance of future taxable income.

Earnings (Loss) Per Common Share
During   1997  the  Financial  Accounting Standard  Board  (FASB)   issued
Statement   of   Financial   Accounting Standards  No.   128,   "Earnings
per   Share"   (SFAS   128).   SFAS  128 replaced the   calculation  of
primary   and   fully   diluted  earnings per   share   with   basic and
diluted   earnings   per   share.  Basic earnings   (loss)   per   common
share   is   computed   based   upon  the weighted   average   number  of
common   shares   outstanding   during the  period.     Diluted   earnings
per   share   consists   of   the weighted  average   number   of   common
shares   outstanding   plus   the dilutive   effects   of    options   and
warrants   calculated   using  the treasury   stock   method.    In   loss
periods,   dilutive   common  equivalent shares  are   excluded   as the
effect   would  be  anti-dilutive.   All prior  period  per   share   data
has been restated to reflect the requirements of SFAS    128.

Use of Estimates in the Preparation of 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 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   and
assumptions.

Cash Equivalents
For   purposes   of  reporting  cash flows,  the  Company  considers  all
funds  with  original  maturities  of three  months or  less  to  be  cash
equivalents.

                                F-8

<PAGE>


             THE OHIO & SOUTHWESTERN ENERGY COMPANY
                 (A Development Stage Company)
                 NOTES TO FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued Accounting Pronouncements
In   June   1997,  the  FASB  issued Statement  of Financial Accounting
Standards  No. 130,  "Reporting Comprehensive  Income"   (SFAS   130),
which  establishes  standards   for reporting and display  of comprehensive 
income, its components  and   accumulated balances. Comprehensive  income  
is  defined  to include  all  changes in equity except those resulting    
from investments by owners  and distributions   to   owners.  Among
other   disclosures,   SFAS 130 requires  that  all items that are required  
to    be  recognized   under current  accounting  standards  as components  
of  comprehensive income   be   reported  in  a  financial statement  that 
is displayed with the same prominence as other financial statements.

Also, in  June  1997,  the FASB issued Statement of  Financial
Accounting   Standards  No.  131, "Disclosures  about Segments  of  an
Enterprise   and   Related  Information" (SFAS  131), which supersedes
Statement  of  Financial Accounts Standards  No. 14, "Financial Reporting   
for Segments  of  a Business  Enterprise."  SFAS 131 establishes standards
for  the  way that   public   companies report information about  operating
segments in  annual financial statements   and   requires   reporting
of  selected   information   about operating   segments  in  interim
financial  statements  issued   to  the public.   It   also   establishes
standards  for disclosures regarding products and   services,  geographic
areas   and major  customers.  SFAS   131   defines  operating  segments
as  components  of   a   company about   which  separate  financial
information  is  available,  that is evaluated   regularly  by the chief
operating  decision  maker  in deciding how to allocate resources and in
assessing performance.

SFAS 130 and 131  are  effective for  financial   statements for periods    
beginning  after December  15,  1997 and requires comparative information   
for earlier years  to  be   restated.  Management   believes the adoption
of  these    statements will  not have a material impact on the Company's
financial statements.

In  February  1998, the  FASB issued Statement of Financial Accounting    
Standards  No. 132, "Employer's  Disclosures about Pensions and Other   
Postretirements Benefits"  (SFAS 132) which standardizes the  disclosure
requirements for  pensions  and postretirement   benefits   and requires    
additional   information on changes  in  the  benefit  obligations
and  fair  values  of  plan  assets that  will   facilitate financial  
analysis.  SFAS  132   is    effective for  years   beginning   after
December   15,  1997  and requires comparative   information  for  earlier
years  to  be   restated,   unless such   information   is   not  readily
available.   Management   believes the   adoption  of  this  statement  will
have  no   material  impact  on the Company's financial statements.

Reclassifications
Certain   balances   in   the  December 31,  1996  financial   statements
have been   reclassified to  conform to the December 31, 1997 presentation.   
The   reclassifications had  no effect on  the financial  condition, results   
of operations   or   cash   flows for December 31, 1996.

                                F-9

<PAGE>

               THE OHIO & SOUTHWESTERN ENERGY COMPANY
                   (A Development Stage Company)
                   NOTES TO FINANCIAL STATEMENTS



NOTE 2 - STOCKHOLDERS' EQUITY (DEFICIT)

During  March  1989,  the  Company  sold 33,347  units  of  no  par  value 
common stock   to   its  officers,  directors and   private investors. 
The   offering  price  for  each  unit was  $.30.   Each  unit  consisted
of   one  share  of  the  Company's  no par  value  common  stock  and  25
common   stock   purchase  warrants. Each  warrant  enabled its holder to  
purchase   one share  of  restricted  common  stock  at $4.20  per share   
for   a   period  of  24  months commencing  with  the effective date   of  
the  prospectus  (October  30, 1989).  The  Company  received $10,000   in   
proceeds   from   the sale   of  common   stock to its officers, directors 
and private investors.

On  January  4,  1990,  the  Company sold 33,348  units  of  no  par  value 
common stock  in  a  public  offering.   The offering  price  for   each unit 
was $3.00.  Each   unit  consisted  of one   share   of the Company's  no  
par  value  common  stock and  25  Class A  Common   Stock Redeemable   
Purchase Warrants (Class A Warrants).  The Class A Warrants were exercisable  
for  24 months  from  the  effective   date of the  registration  statement 
(October  30,  1989)  and  entitled  the holder  thereof  to  purchase  25  
shares of  common  stock  at  a   price of $4.20   per   share.  The   Company 
received   $72,730, net of offering  costs, from  the sale of common  stock   
in   the   public offering.  All warrants have expired unexercised.

On   July   25,   1995,  the  Company issued  50,000  shares   of   common
stock  for  $.03  per  share  to  seven unrelated  parties  for  legal  and
consulting services rendered.

On  September  26,  1995,  the  Board  of Directors  approved  a  one  for
300   share  reverse  split.   All financial  information  and  per  share
data have been restated to reflect this event.

On   March   20,   1997,  the  Company received  $21,300  for 2,000,000
subscribed   shares  of  common  stock.  The  proceeds   were designated
to pay  outstanding  transfer agent, legal, accounting  and miscellaneous 
bills.

NOTE 3 - RELATED PARTY TRANSACTIONS

The   Company  paid  $10,000  to  a shareholder  for  consultin  services
and $5,000 to a shareholder for legal fees during 1997.

NOTE 4 - EXTRAORDINARY ITEM

The   former  majority  stockholder, MSC,  failed  to  disclose  to   the
minority   stockholders   the distribution  of  corporate   funds during
the   year   ended  1990.  The  Company recorded  an  extraordinary  loss 
in  the amount   of $69,116   as  a   result   of  the  unauthorized
distribution of corporate funds (see Note 1).

                                 F-10