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|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                            
|UNITED STATES                                                                                                                                                                                                                                                                                               
|SECURITIES AND EXCHANGE COMMISSION                                                                                                                                                                                                                                                                          
|Washington, D.C. 20549                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                            
|FORM 10-QSB                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                            
|[X]                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                            
|[  ]                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                            
|COMMISSION FILE NUMBER: 0-5525                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                            
|CASTLEGUARD ENERGY, INC.                                                                                                                                                                                                                                                                                    
|(Exact name of Registrant as specified in its charter)                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                            
|Florida
(State or other jurisdiction of 
of incorporation or organization)                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                            
|4625 Greenville Avenue, Suite 203, Dallas, TX
(Address of principal executive offices)                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                            
|(214) 361-1755                                                                                                                                                                                                                                                                                              
|(Registrant's telephone number, including area code)                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                            
|Securities registered pursuant to Section 12(b) of the Act: NONE                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                            
|Securities registered pursuant to Section 12(g) of the Act:                                                                                                                                                                                                                                                 
|Common Stock Without Par Value                                                                                                                                                                                                                                                                              
|(Title of Class)                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                            
|Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
|                                                                                                                                                                                                                                                                                                            
|At June 30, 2000, there were 18,650,626 Common shares outstanding.                                                                                                                                                                                                                                          
|______________________________                                                                                                                                                                                                                                                                              
|Transitional Small Business Disclosure Format (check one): Yes [   ] No [X]                                                                                                                                                                                                                                 





|CASTLEGUARD ENERGY, INC.
|------------------------
|                        
|INDEX                   
|                        
|                        
|Part 1.                 
|                        
|Item 1.                 
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|Item 2.                 
|                        
|Part II.                
|                        
|Item 1.                 
|                        
|Item 2.                 
|                        
|Item 3.                 
|                        
|Item 4.                 
|                        
|Item 5.                 
|                        
|Item 6.                 
|                        
|Signatures              
|                        





|Item 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|CASTLEGUARD ENERGY, INC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Board of Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Castleguard Energy, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|We have reviewed the accompanying balance sheets of Castleguard Energy, Inc. as of June 30, 2000, and the related statements of income for the three and six month periods and cash flows and stockholders' equity for
the six month period then ended. These financial statements are the responsibility of the Company's management.                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of analytical procedures
applied to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles.                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Jackson & Rhodes P.C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Dallas, Texas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|August 9, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       





|CASTLEGUARD ENERGY INC.                 
|----------------------------------------
|                                        
|BALANCE SHEETS                          
|                                        
|June 30, 2000 and December 31, 1999     
|                                        
|                                        
|Assets                                  
|                                        
|Current assets:                         
|                                        
|                                        
|                                        
|                                        
|Petroleum and natural gas interests, net
|                                        
|Office equipment, net                   
|                                        
|TOTAL ASSETS                            
|                                        
|                                        
|Liabilities & Stockholders' Equity      
|                                        
|Current liabilities:                    
|                                        
|                                        
|                                        
|                                        
|Subscriptions received                  
|                                        
|Stockholders' equity:                   
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
|                                        



|CASTLEGUARD ENERGY INC.                                            
|-------------------------------------------------------------------
|                                                                   
|STATEMENTS OF OPERATIONS                                           
|(Unaudited)                                                        
|                                                                   
|                                                                   
|                                                                   
|Net Sales:                                                         
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Expenses:                                                          
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Income (Loss) before interest income                               
|                                                                   
|Interest income                                                    
|                                                                   
|Net income (loss)                                                  
|                                                                   
|Net Income (Loss) per weighted average
               share        
|                                                                   
|Weighted average number of common
               shares outstanding





|CASTLEGUARD ENERGY INC.                  
|-----------------------------------------
|                                         
|STATEMENTS OF CASH FLOWS                 
|(Unaudited)                              
|                                         
|                                         
|                                         
|                                         
|Cash Flows from Operating Activities:    
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|Net cash provided by (used in) operating 
|                                         
|                                         
|Cash Flows from Investing Activities:    
|                                         
|                                         
|Net cash (used in) investing activities  
|                                         
|Cash Flows from Financing Activities:    
|                                         
|                                         
|                                         
|                                         
|Net cash provided by financing activities
|                                         
|Net increase in cash and cash equivalents
|                                         
|Cash and cash equivalents,               
|                                         
|                                         
|                                         
|Cash and cash equivalents,               
|                                         
|                                         
|                                         





|CASTLEGUARD ENERGY INC.
STATEMENTS OF STOCKHOLDERS' EQUITY(Unaudited for the year 2000 first six months)
|--------------------------------------------------------------------------------------------------------
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Balance at December 31, 1998                                                                            
|                                                                                                        
|Issuance of common stock for:                                                                           
|Cash proceeds                                                                                           
|Interest in property                                                                                    
|                                                                                                        
|Net loss:                                                                                               
|January 1, 1999 to                                                                                      
|December 31, 1999                                                                                       
|                                                                                                        
|Balance at December 31, 1999                                                                            
|                                                                                                        
|Issuance of common stock for:                                                                           
|Cash proceeds                                                                                           
|                                                                                                        
|Net income:                                                                                             
|January 1, 2000 to                                                                                      
|June 30, 2000                                                                                           
|                                                                                                        
|Balance, June 30, 2000                                                                                  





|CASTLEGUARD ENERGY, INC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|NOTES TO FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Six months ended June 30, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Note 1 - Future Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. As at June 30, 2000, the Company had an accumulated deficit of $378,510 (1999- $398,965). The Company is in the process of growing through the acquisition of oil and gas interests (note 3). The
Company intends to finance this growth through the issuance of common stock and external debt. Future operations are dependent on the Company's ability to obtain financing from share issuances and external debt to finance acquisitions of property and on
its ability to achieve earnings from its acquired operations.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 2 - Summary of Significant Accounting Policies and Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



|CASTLEGUARD ENERGY, INC                                                                                                                                                                                                                                                                                                                                            
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                   
|NOTES TO FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                   
|Six months ended June 30, 2000                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                   
|Note 3 - Subscriptions Received                                                                                                                                                                                                                                                                                                                                    
|At June 30, 2000, the Company had received $75,900 (1999 - $100,900) in subscriptions for the issuance of 203,000 shares (1999 - 1,003,000 shares), through private placement.                                                                                                                                                                                     
|At the date of filing these financial statements, the outstanding subscriptions had not been exchanged for common stock.                                                                                                                                                                                                                                           
|Note 4 - Related Party Transactions                                                                                                                                                                                                                                                                                                                                
|The Company received oil and gas revenue and incurred lease operating expenses from properties owned by H & S Production, a company owned by the Chairman of the Board, totaling $17,155 (1999 - $30,824). At
December 31, 1999, the Company owed H & S Production $14,387, relating to operating activities.                                                      
|In February 1999, the Company acquired an 8% working interest in oil and gas leases covering approximately 10,000 acres in Navarro County, Texas as well as 40 sq. miles of 3D seismic on this property from H
& S Production in exchange for 1,500,000 shares of common stock at a fair value of $750,000 and $50,000, respectively, for a total cost of $800,000.
|The loans payable of $56,000 at December 31, 1999, include $28,000 due to H & S Production and $28,000 due to the president of the Company. The loans were interest free and were repaid prior to March 31, 2000
 .                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                   





|Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|CASTLEGUARD ENERGY, INC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|CONDITION AND RESULTS OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|This Quarterly Report on Form 10-QSB includes "forward-looking" statements within the meaning of Section 27a of the Securities Act of 1933, as amended (the "Securities Act"), and section 21e of the
Securities Exchange Act of 1934, as amended (the "exchange act"). Specifically, all statements other than statements of historical facts included in this report regarding the Company's financial position, business strategy and plans and objectives of
management of the Company for future operations are forward- looking statements. These forward-looking statements are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's
management. When used in this report, the words "anticipate," "believe," "estimate," "expect" and "intend" and words or phrases of similar import, as they relate to the Company or Company management, are intended to identify forward-looking statements.
Such statements reflect the current view of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions related to certain factors including, without limitation, price levels for oil and natural gas,
concentration of oil and natural gas reserves and production, drilling risks, uncertainty of oil and gas reserves, risks associated with the development of additional revenues and with the acquisition of oil and gas properties and other energy assets,
operating hazards and uninsured risks, general economic conditions, governmental regulation, changes in industry practices, marketing risks, one time events and other factors described herein ("cautionary statements"). Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Based upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not intend to update these forward- looking
statements. All subsequent written and oral forward- looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the applicable cautionary statements. Reference is made to "Management's
Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Information - Cautionary Statements" included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999, which is incorporated herein by
reference.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The Company is an independent oil and gas exploration company whose strategic focus is the application of advanced seismic imaging and computer-aided exploration technologies in the systematic search for
commercial hydrocarbon reserves, primarily in the states of Texas and Louisiana. The Company attempts to leverage its technical experience and expertise with seismic to identify exploration and exploitation projects with significant potential economic
return. The company intends to participate in selected exploration projects as a non-operating, working interest owner, sharing both risk and rewards with its partners. The Company has and will continue to pursue exploration opportunities in regions where
the Company believes significant opportunity for discovery of oil and gas exists. By reducing drilling risk through seismic technology, the Company seeks to improve the expected return on investment in its oil and gas exploration projects. The Company
attempts to limit capital requirements by forming industry alliances and exchanges a portion of its interest for cash and/or a carried interest in its exploration projects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



|Results of Operations - Comparison of Three Month Periods Ended June 30, 2000 and 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Results of operations continued to improve in the second quarter of 2000 which, combined with the small loss in the first quarter, resulted in a slight net income ($20,455) for
the first six months of this year compared to a loss of ($146,243). The improvement was driven by higher revenues from oil and natural gas attributable to increased production from the Company's interest in the Minden Dome in Louisiana and higher prices
for such production. Revenues increased 488% in the quarter compared to 1999 and 348% for the six months over 1999. Operating results were also positively impacted by lower general and administrative costs in the year 2000 with 1999 experiencing one time
costs of reorganizing and altering the Company's business. Excluding working capital changes, both quarters of 2000 were cash flow positive.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Although operating at a slight positive cash flow in the first half of 2000, ability to execute the Company's business plan will depend upon success in obtaining additional cash
resources from sales of capital stock, sales of existing properties, or industry alliances to limit the Company's need to fund projects. Management believes future cash flows from existing properties will be adequate to fund current operating requirements.                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Inflation and Changing Prices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The impact of inflation, as always, is difficult to assess. During 1997 and 1998, the oil and gas industry remained depressed; however as of December 31, 1999, oil prices had made a rebound
and were consistently improving. This improvement has continued to increase in the second quarter of 2000. The general softening of the market prior to and into 1999 had reduced the cost of labor, materials, contract services, and other operating costs;
therefore, the increase in oil prices could cause an increase in operating costs. The Company cannot anticipate where cost and revenue trends will head; however, a sudden increase in inflation and/or an increase in operating costs coupled with a cessation
of the current improved trend of oil prices could have an adverse effect on the operations of the Company.                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Part II. Other Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Item 1. Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Item 2. Changes in Securities and Use of Proceeds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Item 3. Defaults Upon Senior Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Item 4. Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Item 5. Other Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Item 6. Exhibits and Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       





|SIGNATURES                                                                                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|August 14, 2000                                                                                                                                                                         
|