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

                                FORM 10-KSB

[x]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934
          For the fiscal year ended       June 30, 2001
                                    -------------------------
[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
          SECURITIES EXCHANGE ACT OF 1934
          For the transition period from              to
                                         ------------    ------------
                       Commission File Number 0-27849

                             BASIC ENERGY, INC.
               ----------------------------------------------
               (Name of small business issuer in its chapter)

      Utah                                                  00001748413
-------------------------------                  --------------------------
(State or other jurisdiction of                  (I.R.S. Employer I.D. No.)
 incorporation or organization)

 3771 South State Street, Salt Lake City, Utah                     84115
-----------------------------------------------                  ----------
   (Address of principal executive offices)                      (Zip Code)

     Issuer's telephone number, including area code       (801) 262-8429
                                                          ---------------
          Securities registered pursuant to section 12(b) of the Exchange
          Act:
                                    None

          Securities registered under Section 12(g) of the Exchange Act:

                   $0.10 par value, common voting shares
                              (Title of class)

     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
report(s), and (2) has been subject to such filing requirements for the
past 90 days.  (1) Yes [X]  No [  ]
                      -----   -----
     Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is 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.  [   ]

       The issuer's revenue for its most recent fiscal year was $ 0.

     The aggregate market value of the issuer's voting stock held as of
September 21, 2001, by non-affiliates of the issuer was $295,187.  As of
September 21, 2001, issuer had 7,339,030 shares of its $0.10 par value
common stock outstanding.
                             BASIC ENERGY, INC.
    Annual Report on Form 10-KSB for the Fiscal Year ended June 30, 2001

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                            INDEX TO FORM 10-KSB

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     PART I

     ITEM 1    DESCRIPTION OF BUSINESS. . . . . . . . . . . . . . . . . . . . .

     ITEM 2    DESCRIPTION OF PROPERTY. . . . . . . . . . . . . . . . . . . . .

     ITEM 3    LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . .

     ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS. . . . . .

     PART II

     ITEM 5    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . .

     ITEM 6    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. . . .

     ITEM 7    FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . .

     ITEM 8    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING AND
FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . .

     PART III

     ITEM 9    DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT  . . . . . . . . . . . .

     ITEM 10   EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . .

     ITEM 11   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT .

     ITEM 12   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . .


PART IV

     ITEM 13   EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . .

     SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .




                                          2



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     PART I

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FORWARD LOOKING INFORMATION

--------------------------------------------------------------------------

     This Form 10-KSB contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.  For
this purpose any statements contained in this Form 10-KSB that are not
statements of historical fact may be deemed to be forward-looking
statements.  Without limited the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "estimate," "continue" or comparable
terminology are intended to identify forward-looking statements.  These
statements by their nature involve substantial risks and uncertainties, and
actual results may differ materially depending on a variety of factors,
many of which are not within the Company's control.  These factors include
but are not limited to economic conditions generally and in the industries
in which the Company, acquisition of a business opportunity, may
participate; competition within the industry in which the Company may
enter, including competition from much larger competitors; technological
advances which could render the Company's future products or services less
competitive or obsolete; failure by the Company, once it has acquired a
business, to successfully develop new products or to anticipate current or
prospective customers' product needs; price increase or supply limitations
for components purchased by the Company for use in future products; and
delays, reductions, or cancellations of orders placed with the Company if
and when it acquires a business opportunity.

--------------------------------------------------------------------------

                      ITEM 1.  DESCRIPTION OF BUSINESS

--------------------------------------------------------------------------

     Basic Energy, Inc was originally organized on June 4, 1926 in the
State of Utah under the name The M.M. Lead Company.  The Company was
established to pursue and develop mining operations.  On February 28, 1979,
the Company changed its name to M.M. Lead Company and again changed its
name to Basic Energy, Inc., on February 22, 1980.

     The Company was unsuccessful in its pursuit of mining ventures and has
been dormant.  The Company has focused its efforts on seeking,
investigating, and if warranted, acquiring an interest in a business
opportunity.  The Company does not propose to restrict its search for a
business opportunity to any particular industry or geographical area and
may, therefore, engage in essentially any business in any industry. The
Company has unrestricted discretion in seeking and participating in a
business opportunity; subject to the availability of such opportunities,
economic conditions and other factors.

     The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise
of its best judgment.  There is no assurance that the Company will be able
to identify and acquire any business opportunity which will ultimately
prove to be beneficial to the Company and its shareholders.


                                     3


     The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no
specific business and may acquire or participate in a business opportunity
based on the decision of management which will, in all probability, act
without the consent, vote or approval of the Company's shareholders. The
risks faced by the Company are further increased as a result of its lack of
resources and its inability to provide a prospective business opportunity
with capital.

Reports to Security Holders

     Prior to filing of the registration statement on Form 10-SB, the
Company was not subject to the reporting requirements of Section 13(a) or
15(d) of the Exchange Act.  Upon effectiveness of this registration
statement, the Company will file annual and quarterly reports with the
Securities and Exchange Commission ("SEC").  The public may read and copy
materials filed by the Company with the SEC at the SEC's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549.  The public may
obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330.  The Company is an electronic filer and the SEC
maintains an Internet site that contains reports and other information
regarding the Company which may be viewed at http://www.sec.gov.

Sources of Opportunities

     It is anticipated that business opportunities may be available to the
Company from various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited
proposals.

     The Company will seek a potential business opportunity from all known
sources, but will rely principally on personal contacts of its officers and
directors as well as indirect associations between them and other
businesses and professional people.  Although the Company does not
anticipate engaging  professional firms specializing in business
acquisitions or reorganizations, if management deems it in the best
interest of the Company, such firms may be retained.  In some instances,
the Company may publish notices or advertisements seeking a potential
business opportunity in financial or trade publications.

Criteria

     The Company will not restrict its search to any particular business,
industry or geographical location. The Company may acquire a business
opportunity or enter into a business in any industry and in any stage of
development. The Company may enter into a business or opportunity involving
a "start up" or new company.  The Company may acquire a business
opportunity in various stages of its operation.

     In seeking a business venture, the decision of management of the
Company will not be controlled by an attempt to take advantage of an
anticipated or perceived appeal of a specific industry, management group,
or product or industry, but will be based upon the business objective of
seeking long-term capital appreciation in the real value of the Company.


                                     4


     In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; the history of
operations; prospects for the future; the nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of the management; the potential for further
research, development or exploration; the potential for growth and
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services, trade or service marks, name
identification; and other relevant factors.

     To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the
other firm's management and personnel, the ability to market products, and
numerous other factors which are difficult if not impossible to analyze
through the application of any objective criteria.  In many instances, it
is anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future because of the
requirement to substantially augment management, or other factors.

     Generally, the Company will analyze all factors in the circumstances
and make a determination based upon a composite of available facts, without
reliance upon any single fact as controlling.

Methods of Participation of Acquisition

     Specific business opportunities will be reviewed and, on the basis of
that review, the legal structure or method of participation deemed by
management to be suitable will be selected. The Company may consider
structures and methods such as leases, purchase and sale agreements,
licenses, joint ventures, or other contractual arrangements and may involve
a reorganization, merger or consolidation transaction.  The Company may act
directly or indirectly through an interest in a partnership, corporation,
or other form of organization.

Procedures

     As part of the Company's investigation of business opportunities,
officers and directors may meet personally with management and key
personnel of the firm sponsoring the business opportunity, visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key
personnel, and conduct other reasonable measures.

     The Company will generally request that it be provided with written
materials regarding the business opportunity containing such items as: a
description of products, services and company history;  management resumes;
financial information; available projections with related assumptions upon
which they are based; an explanation of proprietary products and services;
present and proposed forms of compensation to management; a description of
transactions between the prospective entity and its affiliates; relevant
analysis of risks and competitive conditions; a financial plan of operation
and estimated capital requirements; and other information deemed relevant.


                                     5


Competition

     The Company expects to encounter substantial competition in its
efforts to acquire a business opportunity.  The primary competition is from
other companies, organized and funded for similar purposes, small venture
capital partnerships and corporations, small business investment companies
and wealthy individuals who are interested in a business opportunity.  Many
of these companies and groups have substantial financial and personal
resources which give such companies considerable advantage over the
Company.

Employees

     The Company does not currently have any employees but relies upon the
efforts of its officers and directors to conduct the business of the
Company.

--------------------------------------------------------------------------

                      ITEM 2.  DESCRIPTION OF PROPERTY

--------------------------------------------------------------------------

     The Company leases 600 square feet of office space at 3771 South State
Street, Salt Lake City, Utah.  The lease terms are $50.00 per month,
renewable at the same rate every twelve months.

--------------------------------------------------------------------------

                         ITEM 3.  LEGAL PROCEEDINGS

--------------------------------------------------------------------------

     No legal proceedings are threatened or pending against the Company or
any of its officers or directors.  Further, none of the Company's officers
or directors or affiliates of the Company are parties against the Company
or have any material interests in actions that are adverse to the Company's
interests.

--------------------------------------------------------------------------

        ITEM 4.  SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

--------------------------------------------------------------------------

     No matters were submitted to a vote of the security holders during the
fourth quarter of the fiscal year ended June 30, 2001.

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                                  PART II

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               ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY
                      AND RELATED STOCKHOLDER MATTERS

--------------------------------------------------------------------------


                                     6


     On September 24, 2001 the NASD approved the Company for listing on the
NASD OTC Bulletin Board.  The Company's shares will be listed under the
symbol "BEGI."  There is no assurance that a widely traded market will
develop for the Company's shares, or if developed, that it can be
sustained.

     As of September 21, 2001 the Company had 188 shareholders holding
7,339,030 common shares.  Of the issued and outstanding common stock,
1,069,360 are free trading, the balance are "restricted securities" shares
as that term is defined in Rule 144 promulgated by the Securities and
Exchange Commission .  The Company has never paid, nor declared a dividend
on its common shares since its inception and does not intend to declare any
such dividend in the foreseeable future.  The Company's ability to pay
dividends is subject to limitations imposed by Utah law.

     The Company issued no shares during the quarter ended June 30, 2001.

--------------------------------------------------------------------------

               ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                           OR PLAN OF OPERATIONS

--------------------------------------------------------------------------

     The Company has little cash and has experienced losses.  As of June
30, 2001 the Company  has -0- cash on hand.  As of that date the Company
had no outstanding liabilities.  The Company has no material commitments
for capital expenditures for the next twelve months.

     As of the date of this Form 10-KSB, the Company has yet to generate
positive cash flow.  The Company has financed its operations primarily
through the sale of common stock.

     The Company believes that its current cash needs can be met either
through the sale of additional stock or through loans.  However, should the
Company obtain a business opportunity, it may be necessary to raise
additional capital.  This may be accomplished by selling common stock of
the Company.

     Management of the Company intends to actively seek business
opportunities for the Company during the next twelve months.


--------------------------------------------------------------------------

                       ITEM 7.  FINANCIAL STATEMENTS

--------------------------------------------------------------------------




                                     7



















                             Basic Energy, Inc.
                       (A Development Stage Company)

                            Financial Statements

                           June 30, 2001 and 2000


/Letterhead/
--------------------------------------------------------------------------
                        BIERWOLF NILSON & ASSOCIATES
 A PARTNERSHIP          CERTIFIED PUBLIC ACCOUNTANTS
 OF PROFESSIONAL          1453 SOUTH MAJOR STREET    NEPHI J. BIERWOLF, CPA
 CORPORATIONS            SALT LAKE CITY, UTAH 84115      TROY NILSON, CPA
--------------------------------------------------------------------------


                        Independent Auditor's Report
                        ---------------------------

To the Board of Directors & Stockholders
of Basic Energy, Inc.


We have audited the accompanying balance sheets of Basic Energy, Inc., (a
development stage company) as of June 30, 2001,  and the related statements
of operations, stockholders' equity, and cash flows for the year then
ended.  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 audit.

We conducted our audit 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 misstatements.  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 the significant estimates made by management, as well as
evaluating the overall financial statements presentation.  We believe that
our audit provides a reasonable basis for our opinion.

In our opinion, the June 30, 2001 financial statements referred to above
present fairly, in all material respects, the financial position of Basic
Energy, Inc., as of June 30, 2001, and the results of its operations and
its cash flows for the year then ended, in conformity with generally
accepted accounting principles.

The accompanying financial statements have been prepared assuming the
Company will continue as a going concern.  As discussed in Note #4 to the
financial statements, the Company has an accumulated deficit and a negative
net worth at June 30, 2001.  Those conditions raise substantial doubt about
it's ability to continue as a going concern.  Management's plans regarding
those  matters are also discussed in Note #4.  The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


/s/ Bierwolf Nilson & Associates
Salt Lake City, Utah
September 24, 2001


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        MEMBERS OF AMERICAN INSTITUTE OF CPAS, SEC PRACTICE SECTION
                        AND UTAH ASSOCIATES OF CPAS



                             Basic Energy, Inc.
                       (A Development Stage Company)
                               Balance Sheets
                                  June 30
<Table>

                                                        2001        2000
                                                    ----------- -----------
<S>                                                <C>         <C>
                                   Assets

Current Assets
--------------
  Cash                                              $    1,694  $    -
                                                    ----------- -----------
     Total Assets                                   $    1,694  $     -
                                                    =========== ===========

                     Liabilities & Stockholders' Equity

Current Liabilities
-------------------

  Accounts Payable                                  $   14,324  $   31,077
  Due to Officers                                       22,452       7,385
                                                    ----------- -----------
     Total Current Liabilities                          36,776      38,462
                                                    ----------- -----------
Stockholders' Equity
--------------------

  Common Stock, 20,000,000 Shares
   Authorized at $0.10 Par Value;
   7,339,030 and 6,444,693 Shares Issued
   and Outstanding Respectively                        733,903     644,469
  Paid In Capital                                       42,741      42,741
  Deficit Accumulated During the Development Stage    (811,726)   (725,672)
                                                    ----------- -----------
     Total Stockholders' Equity                        (35,082)    (38,462)
                                                    ----------- -----------
     Total Liabilities & Stockholders' Equity       $    1,694  $     -
                                                    =========== ===========


</Table>



 The accompanying notes are an integral part of these financial statements
                                     10

                             Basic Energy, Inc.
                       (A Development Stage Company)
                          Statement of Operations
                      For the Years Ended June 30 and
   Accumulated from the Period June 4, 1926 (Inception) to June 30, 2001

<Table>
                                          2001        2000     Accumulated
                                      ------------------------ ------------
<S>                                  <C>                      <C>            <C>

Revenues                              $     -     $     -             $     -     --------

Expenses
--------

  General & Administrative Expenses        86,054      38,462      751,726
  Loss on Mining Claims                     -           -           60,000
                                      ------------------------ ------------
     Total Expenses                        86,054      38,462      811,726
                                      ------------------------ ------------
     Net Loss                         $   (86,054)$   (38,462) $  (811,726)
                                      ======================== ============
     Loss Per Share                   $     (0.01)$     (0.01)

     Weighted Average Shares
     Outstanding                        6,769,686   6,444,693
                                      ========================




</Table>

 The accompanying notes are an integral part of these financial statements

                                     11


                             Basic Energy, Inc.
                       (A Development Stage Company)
                     Statement of Stockholders' Equity
                       June 30, 1998 to June 30, 2001
<Table>
<Caption>

                                                   Common Stock         Paid In    Accumulated
                                   Shares       Amount     Capital      Deficit
                                ------------------------------------------------
                              <C>          <C>         <C>          <C>
Balance, June 30, 1998          5,545,203   $  554,520  $   42,741   $ (597,261)

Shares Issued for
Cost & Services                   899,490       89,949

Net Loss for Year
Ended June 30, 1999                                                     (89,949)
                                ------------------------------------------------
Balance, June 30, 1999          6,444,693      644,469      42,741     (687,210)

Net Loss for Year
Ended June 30, 2000                                                     (38,462)
                                ------------------------------------------------
Balance, June 30, 2000          6,444,693      644,469      42,741     (725,672)

Shares Issued for Services        894,337       89,434

Net Loss for Year
Ended June 30, 2001                                                     (86,054)
                                ------------------------------------------------
Balance, June 30, 2001          7,339,030   $  733,903  $   42,741    $(811,726)
                                ================================================



</Table>


    The accompanying notes are an integral part of these financial statements

                                       12




                               Basic Energy, Inc.
                          (A Development Stage Company)
                            Statements of Cash Flows
                        For the Years Ended June 30, and
           Accumulated from June 4, 1926 (Inception) to June 30, 2001

<Table>
                                               2001        2000     Accumulated
                                           ------------------------ ------------
<S>                                       <C>                      <C>            <C>

Cash Flows from Operating Activities
------------------------------------
  Net Loss                                 $   (86,054)$   (38,462) $  (811,726)
  Adjustments to Reconcile Net Loss to
   Cash Used by Operating Activities;
     Non Cash                                   89,434       -          729,280
     Loss on Mining Claim                        -           -           60,000
     Increase (Decrease) in
      Accounts Payable                           7,746       6,578        7,746
     Increase (Decrease) Due to Officers        (9,432)     31,884       (9,432)
                                           ------------------------ ------------
     Cash Used from Operating Activities        (1,694)      -          (24,132)

Cash Flows from Investing Activities             -           -            -
------------------------------------       ------------------------ ------------

Cash Flows from Financial Activities
------------------------------------
  Proceeds from Sale of Common Stock             -           -           25,826
                                           ------------------------ ------------
     Cash Provided from Financing
     Activities                                  -           -           25,826
                                           ------------------------ ------------
     Increase (Decrease) in Cash                 1,694       -            1,694

     Cash at Beginning of Period                 -           -            -
                                           ------------------------ ------------
     Cash at End of Period                 $     1,694 $     -      $     1,694
                                           ======================== ============
Disclosures for Operating Activities
------------------------------------

  Interest                                 $     -     $     -      $     -
  Taxes                                          -           -            -


</Table>



 The accompanying notes are an integral part of these financial statements
                                     13


                             Basic Energy, Inc.
                       (A Development Stage Company)
                       Notes to Financial Statements
                               June 30, 2001

NOTE #1 - Organization
----------------------

The Company was organized on June 4, 1926 under the laws of the state of
Utah using the name of M.M. Lead Company.  On February 22, 1980 a
Certificate of Amendment was filed with the state of Utah changing the name
to Basic Energy, Inc.  The Company has been dormant for many years and is
considered to be a development stage company.

NOTE #2 - Significant Accounting Policies
-----------------------------------------

A.   The Company uses the accrual method of accounting.
B.   Revenues and directly related expenses are recognized in the period
     when the goods are shipped to the customer.
C.   The Company considers all short term, highly liquid investments that
     are readily convertible, within three months, to known amounts as cash
     equivalents.  The Company currently has no cash equivalents.
D.   Primary Earnings Per Share amounts are based on the weighted average
     number of shares outstanding at the dates of the financial statements.
     Fully Diluted Earnings Per Shares shall be shown on stock options and
     other convertible issues that may be exercised within ten years of the
     financial statement dates.
E.   Estimates:   The preparation of the financial statements in conformity
     with generally accepted accounting principles requires management to
     make estimates and assumptions that affect the amounts reported in the
     financial statements and accompanying notes.  Actual results could
     differ from those estimates.

NOTE #3 - Stockholders' Equity
------------------------------

Common Stock

Upon Incorporation the Company had 1,000,000 shares of common stock
authorized with a par value of $0.10 per share.  On February 28, 1979 the
Articles of Incorporation were changed authorizing 20,000,000 shares with a
par value of $0.10 per share.

The Company issued 600,000 shares of its common stock to acquire mining
claims in 1926.  In 1937, the Company wrote the claims off as having no
value.

The Company has issued 6,013,837 shares at $0.10 per share for services and
out of pocket expense to its officers and directors from time to time.

The shares issued in 1926 were assessable, and in 1937 the 600,000 shares
were assessed at $.001 per share, 423,780 shares did not pay the assessment
and were canceled.



                                -Continued-
                                     14


                             Basic Energy, Inc.
                       (A Development Stage Company)
                       Notes to Financial Statements
                               June 30, 2001

NOTE #4 - Going Concern
-----------------------

The Company has no assets and no operations from which it can obtain
working capital.  The Company recognizes that it must find a source of
working capital or the Company may not be able to continue its existence.

NOTE #5 - Income Taxes
----------------------

The Company has adopted FASB 109 to account for income taxes.  The Company
currently has no issues that create timing differences that would mandate
deferred tax expense.  Net operating losses would create possible tax
assets in future years.  Due to the uncertainty as to the utilization of
net operating loss carryforwards an evaluation allowance has been made to
the extent of any tax benefit that net operating losses may generate.
Changes in majority control of the Company will have negative impact upon
the Company's ability to utilize net operations loss carryforwards.

The Company has incurred losses that can be carried forward to offset
future earnings if conditions of the Internal revenue Codes are met.  These
losses are as follows:

<Table>
                        Year of Loss         Amount   Expiration Date
                                                    -----------------------------------------------
                      <S>               <C>          <C>
                        1985 to 2001      $ 642,786      2000 to 2021
</Table>
     Current Tax Asset Value of Net Operating Loss Carryforwards
      at Current Prevailing Federal Tax Rate                     $ 218,547
     Evaluation Allowance                                         (218,547)
                                                                 ----------
          Net Tax Asset                                          $    -
          Current Income Tax Expense                                  -
          Deferred Income Tax Benefit                                 -

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          ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH  ACCOUNTANTS
                   ON ACCOUNTING AND FINANCIAL DISCLOSURE

--------------------------------------------------------------------------

     Due to the unexpected death of the Company's independent accountant,
Darrell Schvaneveldt, the Company was forced to retain new independent
accountants in 2000.  Schvaneveldt & Company was acquired by Crouch,
Bierwolf & Associates.  The  board of directors elected to retain Crouch
Bierwolf & Associates as its independent accountants. The Company had no
disagreements with Schvaneveldt & Company as to any matter regarding
accounting or financial disclosure.

     Crouch, Bierwolf & Associates recently changed its name to Bierwolf,
Nilson & Associates.



                                     15

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                                  PART III

--------------------------------------------------------------------------

           ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS,
                    AND CONTROL PERSONS; COMPLIANCE WITH
                     SECTION 16(a) OF THE EXCHANGE ACT
--------------------------------------------------------------------------

     The following table sets forth as of June 30, 2001 the name, age, and
position of each executive officer and director and the term of office of
each director of the Corporation.

<Table>
<Caption>

NAME                 AGE    POSITION           DIRECTOR OR OFFICER SINCE
-------------------------------------------------------------------------
<S>                  <C>    <C>                <C>
Jay W. Gibson        76     President &
                     June 25, 1980
                            Chairman of the
                            Board of Directors

Ronald D. Burnett    64     Vice-President     September 15, 1990
                            & Director

Karl Seljaas         56     Assistant          March 7, 1999
                            Vice President
                            & Director

Joyce Sigler         56     Secretary          March 7, 1999
                            & Director

Joseph M. Graubard   78     Treasurer          February 5, 1997
                            & Director
</Table>
     Each Director serves for a period of one year or until his successor
is duly elected and qualified. Officers serve at the will of the Board of
Directors.

     Jay W. Gibson, President and Chairman of the Board of Directors.  Mr.
Gibson attended Occidental College in Los Angeles, California.  While
serving in the United States Marine Corps Reserve, he attended Officer's
Candidate School and Officer's School.  In 1961, he accepted a general
management position with Continental Laboratories, Inc., in Denver,
Colorado.  After leaving Continental, he worked for the Adolf Coors
Corporation in Golden, Colorado, where he spent his tenure on the
development and marketing of the Golden Choice line of pet foods.  Mr.
Gibson left the Adolf Coors Corporation in 1968.  For the next three years
he served as President and Chairman of the Board of Southwestern
Diversified Investors, Inc., of Salt Lake City, Utah.  He then accepted a
position as the General Manager of Industrial Design for Polaris Battery
Company, Industrial Commercial Batteries, in Garden Grove, California.  He
held this position until 1977.  Mr. Gibson served as Vice President and
General Manager of United Energy for twelve years, he continued his tenure
when the company changed its name to Basic Energy, Inc., of California. In
1984, Mr. Gibson accepted the Presidency of Basic Energy, Inc., of Utah, he
also serves as Chairman of the Board of Directors.


                                     16

     Ronald D. Burnett, Vice President and Director.  Mr. Burnett began his
career in 1958 as a sales associate with Wood Motor Oldsmobile/Cadillac of
Ogden, Utah. In 1964, he accepted a management position with Burnett's
Furniture and Appliance located in Murray, Utah.  He left Burnett's and
became the owner and operator of Burnett's Furniture & Appliance.  In 1970,
he joined the management team of the Bountiful, Utah, location Menlove
Dodge Toyota as the used car manager.  Just two years later he accepted the
same position with Bountiful Lincoln Mercury, where he was employed until
1978.  Since that time Mr. Burnett has been the owner/operator of Carriage
Motors & Trailer Sales.

     Joseph M. Graubard, Secretary/Treasurer and Director.  Mr. Graubard is
a graduate of the University of Pittsburgh and is a Registered Professional
Engineer in the State of Florida and the Commonwealth of Pennsylvania.  His
40 year career in management, engineering, product management and
construction management has included comprehensive experience in industry
and management consulting in the United States and internationally.  During
his extensive consulting career Mr. Graubard has maintained a high
professional perspective, having prepared and presented seminars throughout
the world on the subject of project management and control, construction
management, claims avoidance and contract administration.  He has published
various articles on the subject and presented papers at international
professional conferences.

     Mr. Graubard's corporate line management and consulting experience has
included the development of long range planning functions, corporate
organizations, maintenance and production management systems as well as
senior in line  management of a major steel corporation's engineering
function and vice president of a major United States consulting firm. In
addition to project and construction management and control experience, he
has carried out successful consulting assignments in strategic planning,
organization, production planning and control, material management,
manpower planning, inventory control, maintenance and work force reduction.
He has participated in over 100 assignments as a consultant, managing a
majority of them.  Mr. Graubard's experience covers both private and public
sectors and a variety of industries, including: utility, steel, mining,
paper, glass, petroleum, transportation, medical, educational, health
products, pharmaceutical and commercial building.  He has worked
domestically throughout the United States and has been a resident and
managed assignments in Italy, Zimbabwe, Venezuela and Brazil.  Other
assignments have been performed in Mexico, Argentina, Sweden, England,
Portugal, Switzerland, United Arab Emirates, France and Thailand.
Employers have included U.S. Steel Corporation, Booz Allen & Hamilton,
International Reliance Financial Group and O'Brien Kreitzberg & Associates,
Inc.

     Joyce Sigler.  Secretary & Director.  Ms. Sigler has worked for Basic
Energy, Inc. of California since 1992 as the office secretary. Ms. Sigler
acts as receptionist, secretary, record keeper, and does both  payroll and
accounts payable and receivable for the Company. Previous to working at
Basic Energy Ms. Sigler worked as General Office manager and in data
processing for two companies.



                                     17

     Karl Seljaas.  Assistant Vice President & Director.  Mr. Seljaas
brings vast experience in mining operations.  He served as a smelter worker
for Kennecott Copper and as Mine Superintendent for South Hecla Mining for
twelve years.  He was office manager for Shogun Oil for four years and most
recently was owner and operator of Quality Emission in Salt Lake City.

     There are no family relationships between any of the Company's
officers and directors.  In addition, none of the officers and directors
have been involved in legal proceeding which require isclosure in this
annual report of the Company.

Compliance with Section 16(a) of the Exchange Act

     Directors and executive officers are required to comply with Section
16(a) of the Securities Exchange Act of 1934, which requires generally that
such persons file reports regarding ownership of and transactions in
securities of the Company on Forms 3, 4, and 5.  A Form 3 is an initial
statement of ownership of securities, which is to be filed by the officers
and directors owning shares in the Company within 10 days after the
effective date of the Company's filing on Form 10-SB.    Form 4 is to
report changes in beneficial ownership and is due on or before the tenth
day of the month following any month in which they engage in any
transaction in the Company's common stock.  Form  5 covers annual statement
of changes in beneficial ownership which is due 90 days after the fiscal
year end of the Company.

     Based solely on a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5
and amendments thereto furnished to the Company with respect to the most
recent fiscal year, it appears that each of the officers and directors
inadvertently forgot to file Form 4s and 5s for the year ended June 2001 in
a timely manner.

--------------------------------------------------------------------------

                      ITEM 10.  EXECUTIVE COMPENSATION

--------------------------------------------------------------------------

     The following table sets forth certain summary information concerning
the compensation paid or accrued over each of the Registrant's last three
completed fiscal years to the Company's, or its principal subsidiaries,
chief executive officers during such period (as determined at June 30, 2001
the end of the Registrant's last completed fiscal year).



                                     18



<Table>
                              SUMMARY COMPENSATION TABLE

                                               Long Term Compensation
                                               Awards               Payouts
                                      Other    Restr                        All
Name and                              Annual   icted                        Other
Principal                       Bonus Compen   Stock        Options LTIP    Compen
Position          Year   Salary $     sation   Awards(1)    /SARs   Payout  sation
-----------------------------------------------------------------------------------
<S>               <C>    <C>    <C>   <C>      <C>          <C>     <C>     <C>
Jay W. Gibson     2001     -      -     -      $20,997(2)     -       -       --
President         2000     -      -     -      $37,932(2)     -       -       --
& Chairman        1999     -      -     -      $24,108(2)     -       -       --
of the Board

Ronald D. Burnett 2001     -      -     -         $931(3)     -       -       --
Vice President &  2000     -      -     -       $1,244(3)     -       -       --
Director          1999     -      -     -         $471(3)     -       -       --

Karl Seljaas      2001     -      -     -         $811(4)     -       -       --
Assistant Vice
President         2000     -      -     -         $454(4)     -       -       --
& Director        1999     -      -     -         $114(4)     -       -       --

Joseph M.
Graubard          2001     -      -     -       $1,295(5)     -       -       --
Treasurer &
Director          2000     -      -     -       $2,138(5)     -       -       --
                  1999     -      -     -         $694(5)     -       -       --

Joyce Sigler      2001     -      -     -         $329(6)     -       -       --
Secretary &
Director          2000     -      -     -         $165(6)     -       -       --
                  1999     -      -     -          $42(6)     -       -       --

</Table>
     (1) From June 30, 1999 to June 30, 2001 the stock of the Company was
not publicly traded because there was no market.  Therefore, an arbitrary
value at par $.10 per share was used to determine compensation.

      (2) In January 2001, Mr. Gibson was awarded 115,130 restricted common
shares for the period of October 2000 through December 2000.  In October
2000, Mr. Gibson was awarded 569,065 for the period of March 1999 to
September 2000.  In March 1999 Mr. Gibson was awarded 146,290 restricted
common shares for the period of July 1998 through March 1999.  2001, 2000,
and 1999 compensation figures are based on a monthly average of these
amounts.  All shares awarded were issued as compensation for services
rendered and to cover out of pocket expenses incurred on behalf of the
Company.

     (3)  In January 2001, Mr. Burnett was awarded 6,200 restricted common
shares for the period of October 2000 through December 2000.  In October
2000, Mr. Burnett was awarded 18,653 restricted common shares for the
period of March 1999 to September 2000.  In March 1999 Mr. Burnett was
awarded 1,600 restricted common shares for the period of July 1998 through
March 1999.  2001, 2000, and 1999 compensation figures are based on a
monthly average of these amounts.  All shares awarded were issued as
compensation for services rendered and to cover out of pocket expenses
incurred on behalf of the Company.


                                     19
     (4)  In January 2001, Mr. Seljass was awarded 6,970 restricted common
shares for the period of October 2000 through December 2000.  In October
2000, Mr. Seljass was awarded 6,813 restricted common shares for the period
of March 1999 to September 2000.  2001, 2000, and 1999 compensation figures
are based on a monthly average of these amounts.  All shares awarded were
issued as compensation for services rendered and to cover out of pocket
expenses incurred on behalf of the Company.

     (5)  In January 2001, Mr. Graubard was awarded 7,600 restricted common
shares for the period of October 2000 through December 2000.  In October
2000, Mr. Graubard was awarded 32,074 restricted common shares for the
period of March 1999 to September 2000.  In March 1999 Mr. Graubard was
awarded 1,600 restricted common shares for the period of July 1998 through
March 1999.  2001, 2000, and 1999 compensation figures are based on a
monthly average of these amounts.  All shares awarded were issued as
compensation for services rendered and to cover out of pocket expenses
incurred on behalf of the Company.

     (6)  In January 2001, Ms. Sigler was awarded 2,880 restricted common
shares for the period of October 2000 through December 2000.  In October
2000, Ms. Sigler was awarded 2,472 restricted common shares for the period
of March 1999 to September 2000.  2001, 2000, and 1999 compensation figures
are based on a monthly average of these amounts.  All shares awarded were
issued as compensation for services rendered and to cover out of pocket
expenses incurred on behalf of the Company.

Compensation of Officers and Directors

     Compensation of Directors, Officers, and other agents has been awarded
by the issuance of shares  of restricted common stock of the Company,
having a par value of ten cents per share.  Stock  issued is fully paid and
non-assessable.  The rate of compensation is $40.00 per hour for labor,
thirty cents per mile for miles traveled while working for the Company, and
any out of pocket expenses are also compensated at the rate of ten cents
per share.  All stock issued for compensation is issued by the Board of
Directors.

Employment Contracts and Termination of Employment and Change in Control
Arrangements

     There are no employment contracts between the Company and any of its
Officers or Directors.

     There are no compensatory plans or arrangements, including payments to
be received from the Company, with respect to any person named in Cash
Compensation set out above which would in any way result in payments to any
such person because of his resignation, retirement, or other termination of
such person's employment with the Company or its subsidiaries, or any
change in control of the Company, or a change in the person's
responsibilities following a change in control of
the Company.

--------------------------------------------------------------------------

  ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

--------------------------------------------------------------------------
     The term "beneficial owner" refers to both the power of investment
(the right to buy and sell) and rights of ownership (the right to received
distributions from the company and proceeds from sales of the shares).
Inasmuch as these rights or shares may be held by more than one person,
each person who has a beneficial ownership interest in shares is deemed the
beneficial owners of the same shares because there is shared power of
investment or share rights of ownership.
                                     20
     The following table sets forth as of September 21, 2001, the name and
the number of shares of the Registrant's Common Stock, par value $0.10 per
share, held of record or beneficially by each person who held of record, or
was known by the Registrant to own beneficially, more than 5% of the
7,339,030 outstanding shares of the Registrant's Common Stock, and the name
and shareholdings of each director and of all officers and directors as a
group.

<Table>
<Caption>
Title of   Name and Address of     Amount and Nature of
Class      Beneficial Owner        Beneficial Ownership Percentage of Class
---------- ----------------------  -------------------- -------------------
<S>        <C>                     <C>                  <C>
Common     Ron Burnett (1),(2)         176,313                 .02%
           155 W. American Avenue
           Murray, Utah  84108

Common     Joseph M. Graubard (1)       56,274                 .01%
           23886 Corte Cajon
           Murrieta, CA 92562

Common     Jay W. Gibson (1),(3)     3,239,163                  44%
           23871 Corte Cajon
           Murrieta, CA 92565

Common     Karl Seljass (1)             39,783                 .01%
           2179 Blaine Avenue
           Salt Lake City, UT 84108

Common     Joyce Seigler (1)            31,632                  00%
           1305 So. Shelly St.
           Santa Ana, CA 92704

Common     Fred Rhyme & Winifred       865,600                 .12%
           B. Rhyme(4)
           P.O. Box 4907
           Compton, CA 90224

--------------------------------------------------------------------------

Common     Officers, Directors and    3,543,165                48.3%
           Nominees as a Group:
           5 persons
--------------------------------------------------------------------------

</Table>
(1) Officer and/or director of the Company

(2) Includes 115,093 shares held of record by Ron Burnett and 61,220 shares
held of record by Carriage Motor Company.  Mr. Burnett is the owner of
Carriage Motor Company and may be deemed to be the beneficial owner of
those shares.



                                     21

(3) Includes 601,654 shares held by Janet Gibson, his wife and 750,000
shares held by Jay and Janet Gibson as joint tenants.

(4)  Includes 801,600 shares held by Fred Rhyme and Winifred B. Rhyme as
joint tenants, 24,000 shares held of record by Fred Rhyme individually, and
40,000 shares held of record by Rainbow Meal Worm Company.  Mr. Rhyme is an
officer of Rainbow Meal Worm Company and therefore may be deemed to be a
beneficial owner of those shares.

There are no contracts or other arrangements that could result in a change
of control of the Company.

--------------------------------------------------------------------------

                    ITEM 12.  CERTAIN RELATIONSHIPS AND
                            RELATED TRANSACTIONS

--------------------------------------------------------------------------

     None.

--------------------------------------------------------------------------

                                  PART IV

--------------------------------------------------------------------------

                 ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

--------------------------------------------------------------------------

(a)  Reports on Form 8-K.

     None.

(b)  Exhibits.  The following exhibits are included as part of this report:

<Table>
SEC     Exhibit
Exhibit Reference
Number  Number      Title of Document               Location
<S>     <C>         <C>                             <C>
3.01    3           Articles of Amendment to the    Incorporated by
                    Articles of Incorporation       reference*

3.02    3           Articles of Incorporation       Incorporated by
                                                    reference*

3.03    3           Bylaws                          Incorporated by
                                                    reference*

23.01   23          Consent of Accountant           Attached

</Table>
* Incorporated by reference from the Registrant's registration statement on
Form 10-SB, as amended, filed with the Commission, SEC File No. 0-27849.

--------------------------------------------------------------------------

                                 SIGNATURES

--------------------------------------------------------------------------

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

                                     Basic Energy, Inc.



September 27, 2001                   /s/ Jay W. Gibson
                                     ------------------------------------
                                     Jay W. Gibson
                                     Chairman of the Board and President


September 27, 2001                   /s/ Joseph M. Graubard
                                     ------------------------------------
                                     Joseph M. Graubard
                                     Treasurer and Director













                                     23