SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO _________


                           Commission File No. 1-12334

                      FORTUNE NATURAL RESOURCES CORPORATION

             (Exact Name of Registrant as specified in its charter)


          Delaware                                           95-4114732
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)

One Commerce Green, 515 W. Greens Rd.,
     Suite 720, Houston, Texas                                 77067
(Address of Principal Executive Offices)                     (Zip Code)


                                  281-872-1170
                               ------------------
                            Issuer's telephone number


                                       N/A
     ---------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.   Yes  X      No ___
                                                                ---


Applicable only to corporate issuers:

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

                         16,356,802 as of April 30, 2000

Transition small business disclosure format (check one)    Yes         No   X
                                                               -----      -----




<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                      FORTUNE NATURAL RESOURCES CORPORATION

                                 BALANCE SHEETS

                                     ASSETS
<TABLE>

                                                                                       March 31,           December 31,
                                                                                         2000                  1999
                                                                                    -------------         -------------
                                                                                     (Unaudited)            (Audited)
<S>                                                                                 <C>                   <C>
CURRENT ASSETS:
     Cash and cash equivalents..................................................    $     804,000         $     294,000
     Accounts receivable........................................................          341,000               314,000
     Prepaid expenses...........................................................            9,000                22,000
                                                                                    -------------         -------------
         Total Current Assets...................................................        1,154,000               630,000
                                                                                    -------------         -------------
PROPERTY AND EQUIPMENT:
     Oil and gas properties, accounted for
       using the full cost method...............................................       27,359,000            27,302,000
     Office and other...........................................................          384,000               384,000
                                                                                    -------------         -------------
                                                                                       27,743,000            27,686,000
     Less--accumulated depletion, depreciation and amortization.................      (21,712,000)          (21,562,000)
                                                                                    -------------         -------------
                                                                                        6,031,000             6,124,000
                                                                                    -------------         -------------
OTHER ASSETS:
     Deposits...................................................................           51,000                51,000
                                                                                    -------------         -------------

TOTAL ASSETS....................................................................    $   7,236,000         $   6,805,000
                                                                                    =============         =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                                       March 31,           December 31,
                                                                                         2000                  1999
                                                                                    -------------          -----------
                                                                                     (Unaudited)            (Audited)
CURRENT LIABILITIES:
     Current portion of long-term debt..........................................    $      10,000         $           -
     Accounts payable...........................................................           14,000                33,000
     Accrued expenses...........................................................          132,000               193,000
     Royalties and working interests payable....................................            2,000                 5,000
     Accrued interest...........................................................           69,000                97,000
                                                                                    -------------         -------------
         Total Current Liabilities..............................................          227,000               328,000
                                                                                    -------------         -------------

LONG-TERM DEBT..................................................................        2,295,000             3,235,000
                                                                                    -------------         -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
     Preferred stock, $1.00 par value:
         Authorized--2,000,000 shares
         Issued and outstanding--None...........................................                -                     -
     Common stock, $.01 par value:
         Authorized--40,000,000 shares
         Issued and outstanding 16,349,531 and 12,259,846 at
         March 31, 2000 and December 31, 1999, respectively.....................          163,000               123,000
     Capital in excess of par value.............................................       32,089,000            30,295,000
     Accumulated deficit........................................................      (27,538,000)          (27,176,000)
                                                                                    -------------         -------------
NET STOCKHOLDERS' EQUITY........................................................        4,714,000             3,242,000
                                                                                    -------------         -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......................................    $   7,236,000         $   6,805,000
                                                                                    =============         =============
</TABLE>

                 See accompanying notes to financial statements.


                                       2
<PAGE>


                      FORTUNE NATURAL RESOURCES CORPORATION

                            STATEMENTS OF OPERATIONS

<TABLE>
                                                                                        For the Three Months Ended
                                                                                    ------------------------------
                                                                                       March 31,             March 31,
                                                                                         2000                  1999
                                                                                    -------------         -------------
                                                                                                 (Unaudited)
<S>                                                                                 <C>                   <C>
REVENUES
     Sales of oil and gas, net of royalties.....................................    $     359,000         $     255,000
     Other income...............................................................            6,000                15,000
                                                                                    -------------         -------------
                                                                                          365,000               270,000
                                                                                    -------------         -------------

COSTS AND EXPENSES
     Production and operating...................................................          123,000                90,000
     Provision for depletion, depreciation and amortization.....................          150,000               210,000
     General and administrative.................................................          267,000               291,000
     Note restructuring cost....................................................                -                61,000
     Interest payable in cash...................................................           69,000                97,000
     Interest - amortization of deferred financing cost.........................                -                74,000
                                                                                    -------------         -------------
                                                                                          609,000               823,000
                                                                                    -------------         -------------

LOSS BEFORE INCOME TAXES AND EXTRAORDINARY ITEM.................................         (244,000)             (553,000)
PROVISION FOR INCOME TAXES......................................................                -                     -
                                                                                    -------------         -------------
LOSS BEFORE EXTRAORDINARY ITEM..................................................         (244,000)             (553,000)

EXTRAORDINARY LOSS ON EARLY EXTINGUISHMENT
   OF DEBT......................................................................         (118,000)                    -
                                                                                    -------------         -------------

NET LOSS .......................................................................    $    (362,000)        $    (553,000)
                                                                                    =============         =============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING......................................       14,299,000            12,138,000
                                                                                    =============         =============

NET LOSS PER COMMON SHARE (BASIC AND DILUTED)
     Net loss before extraordinary item.........................................    $       (0.02)        $       (0.05)
     Extraordinary item.........................................................            (0.01)                    -
                                                                                    -------------         -------------
         Net loss per common share..............................................    $       (0.03)        $       (0.05)
                                                                                    =============         =============
</TABLE>



                 See accompanying notes to financial statements.


                                       3
<PAGE>


                      FORTUNE NATURAL RESOURCES CORPORATION
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                      FOR THE YEAR ENDED DECEMBER 31, 1999
                    AND THE THREE MONTHS ENDED MARCH 31, 2000

<TABLE>

                                                   Common Stock              Capital in                              Stock-
                                           ----------------------------      Excess of           Accumulated        holders'
                                              Shares          Amount         Par Value             Deficit           Equity
                                           -----------     ------------    --------------      --------------    -------------
<S>                                        <C>             <C>             <C>                 <C>               <C>
BALANCE, December 31, 1998...............   12,134,675     $    121,000    $   30,171,000      $  (25,588,000)   $   4,704,000
                                           ===========     ============    ==============      ==============    =============

Common stock contributed to
    401(k) Plan..........................       22,137                -            29,000                   -           29,000
Warrants issued for
    note restructuring...................            -                -            61,000                   -           61,000
Common stock issued for
    directors' fees......................      103,035            2,000            34,000                   -           36,000
Common stock returned to treasury........           (1)               -                 -                   -                -
Net loss.................................            -                -                 -          (1,588,000)      (1,588,000)
                                           -----------     ------------    --------------      --------------    -------------

BALANCE, December 31, 1999...............   12,259,846     $    123,000    $   30,295,000      $  (27,176,000)   $   3,242,000

Common stock contributed to
    401(k) Plan..........................       55,405                -            19,000                   -           19,000
Common stock issued for
    directors' fees......................       12,655                -             8,000                   -            8,000
Common stock issued for
    conversion of notes..................    2,821,162           28,000           902,000                   -          930,000
Common stock issued for premium on early
    extinguishment of debt...............      158,132            2,000           116,000                   -          118,000
Common stock issued for
    exercise of warrants.................      218,331            2,000           162,000                   -          164,000
Common stock issued for
    stock offering.......................      824,000            8,000           610,000                   -          618,000
Common stock offering expenses...........            -                -           (23,000)                  -          (23,000)
Net loss.................................            -                -                 -            (362,000)        (362,000)
                                           -----------     ------------    --------------      --------------    -------------

BALANCE, March 31, 2000
    (Unaudited)..........................   16,349,531     $    163,000    $   32,089,000      $  (27,538,000)   $   4,714,000
                                           ===========     ============    ==============      ==============    =============
</TABLE>


                 See accompanying notes to financial statements.


                                       4
<PAGE>


                      FORTUNE NATURAL RESOURCES CORPORATION
                            STATEMENTS OF CASH FLOWS
<TABLE>

                                                                                        For the Three Months Ended
                                                                                    ------------------------------
                                                                                       March 31,             March 31,
                                                                                         2000                  1999
                                                                                    -------------         --------------
                                                                                                (Unaudited)
<S>                                                                                 <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss....................................................................   $    (362,000)        $    (553,000)
     Adjustments to reconcile net loss to net
       cash used in operating activities:
         Depletion, depreciation and amortization................................         150,000               210,000
         Non-cash compensation expense...........................................               -                20,000
         Common stock issued for directors' fees.................................           8,000                     -
         Common stock issued for premium on early
           extinguishment of debt................................................         118,000                     -
         Amortization of deferred financing cost.................................               -                74,000
         Note restructuring cost.................................................               -                61,000
                                                                                    -------------         -------------
              Cash flow before working capital adjustments.......................         (86,000)             (188,000)
     Changes in assets and liabilities:
         Accounts receivable.....................................................         (27,000)               83,000
         Prepaids................................................................          13,000                14,000
         Accounts payable and accrued expenses...................................         (80,000)             (177,000)
         Royalties and working interest payable..................................          (3,000)               33,000
         Accrued interest........................................................         (28,000)                    -
         Other...................................................................          19,000                 9,000
                                                                                    -------------         -------------
     Net cash used in operating activities.......................................        (192,000)             (226,000)
                                                                                    -------------         -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Expenditures for oil and gas properties.....................................         (57,000)             (197,000)
                                                                                    -------------         -------------
     Net cash used in investing activities.......................................         (57,000)             (197,000)
                                                                                    -------------         -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of common stock......................................         782,000                     -
     Expenditures for offering costs.............................................         (23,000)                    -
                                                                                    -------------         -------------
     Net cash provided by financing activities...................................         759,000                     -
                                                                                    -------------         -------------
NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS...........................................................         510,000              (423,000)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...................................         294,000             1,452,000
                                                                                    -------------         -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD.........................................   $     804,000         $   1,029,000
                                                                                    =============         =============

Supplemental information:
     Interest paid in cash.......................................................   $      69,000         $      97,000
Non-cash transactions

     Common stock issued for 401(k) Plan contribution............................          19,000                30,000
     Common stock issued for directors' fees.....................................           8,000                     -
     Common stock issued for conversion of notes.................................         930,000                     -
     Common stock issued for premium on early extinguishment of debt.............         118,000                     -
</TABLE>

                       See accompanying notes to financial statements.


                                       5
<PAGE>

                      FORTUNE NATURAL RESOURCES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 2000

(1)  LINE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     AND PROCEDURES

     The condensed financial statements at March 31, 2000, and for the periods
then ended included herein have been prepared by Fortune Natural Resources
Corporation, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. However, Fortune believes that the disclosures are
adequate to make the information presented not misleading. These condensed
financial statements should be read in conjunction with the financial statements
and the notes thereto included in Fortune's latest annual report on Form
10-KSB/A. Certain reclassifications have been made to prior period amounts to
conform to presentation in the current period. In Fortune's opinion, the
financial statements reflect all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly its financial position and
the results of its operations and its cash flows for the dates and periods
presented. The results of the operations for these interim periods are not
necessarily indicative of the results for the full year.

 (2)  LONG-TERM DEBT

     At March 31, 2000, a summary of long-term debt is as follows:
<TABLE>

                                                                                  March 31,           December 31,
                                                                                    2000                  1999
                                                                                -------------        --------------
         <S>                                                                    <C>                  <C>
         Convertible Subordinated Notes due December 31, 2007..............     $   2,295,000        $    3,225,000

         Credit Lyonnais credit facility due January 11, 2001..............            10,000                10,000
                                                                                -------------        --------------

         Total long-term debt..............................................         2,305,000             3,235,000
         Less current installments.........................................           (10,000)                    -
                                                                                -------------        --------------

         Long-term debt, excluding current installments....................     $   2,295,000        $    3,235,000
                                                                                =============        ==============
</TABLE>

     At March 31, 2000, Fortune had $2,295,000 of 12% subordinated convertible
notes outstanding that are due December 31, 2007. Fortune has realized net
losses for many years, resulting in an accumulated deficit of $28 million at
March 31, 2000. As a result of depleting reserves and the sale of Fortune's
interest in East Bayou Sorrel in March 1998, Fortune has realized negative
operating cash flows of $656,000 and $616,000 in calendar years 1999 and 1998,
respectively, and $192,000 in the first quarter of 2000. In February and March
2000, Fortune took steps to improve its short term liquidity by raising $782,000
through the sale of common stock and the exercise of common stock warrants. See
note 6 for information regarding these stock offerings. Also during February and
March 2000, $930,000 of Fortune's 12% convertible notes were converted to common
stock. The remaining notes are convertible into common stock at $0.75 per share.
As a result of these transactions, management believes that Fortune has the
capital resources to maintain its operations over the next year. However, based
on historical operating results and the uncertainties of projecting long term
production and cash flows from current oil and gas reserves, Fortune may not be
able to repay the remaining $2,295,000 of

                                       6
<PAGE>

convertible subordinated notes when they become due on December 31, 2007.
Management believes that operating cash flow will increase if Fortune is
successful exploiting its inventory of projects or acquiring producing
properties. However, there is no assurances that cash flow will increase or that
it will be sufficient to enable Fortune to repay the convertible subordinated
notes at December 31, 2007.

     In the event that Fortune's operating cash flow decreases unexpectedly,
drilling is unsuccessful or management determines to accelerate the growth plans
for Fortune, the Company will require additional equity and debt financing for
our continuing operations. Fortune's projections of production, cash flow and
capital requirements are based upon numerous assumptions about the future,
including: oil and gas prices, production decline rates, costs, absence of major
operating disruptions and catastrophes, timing of projects and markets for our
production. There is no assurance that management's assumptions will be
accurate. If Fortune experiences significant unexpected decreases in cash flow
or increases in capital requirements, and is unable to raise capital, management
will need to take other steps to maintain Fortune's viability over the next
year. Those steps might include reducing overhead further, foregoing our
participation in projects or selling assets.

     As discussed above, in February and March 2000, holders of the $930,000 of
Fortune's 12% notes that were convertible at approximately $0.33 per share,
converted those notes into 2,821,162 shares of common stock. As an inducement to
encourage conversion, Fortune paid the noteholders who converted a premium equal
to one year's prepaid interest plus certain accrued interest. This premium was
paid in Fortune common stock valued at $0.75 per share, resulting in the
issuance of an additional 158,132 shares to the noteholders who converted. This
premium was expensed during the first quarter of 2000 as an extraordinary loss
on early extinguishment of debt. Two Renaissance funds, who are each beneficial
owners of more than five percent of Fortune's common stock, converted all of
their combined $700,000 principal amount of notes to stock in this transaction.
Each Renaissance fund received 1,122,394 shares in connection with this
conversion. As a result of this note conversion, Fortune's annual cash interest
expense has been reduced by $111,600.

     In March 1999, noteholders representing the still outstanding $2,295,000
principle amount of the convertible subordinated notes agreed to amend the
conversion price of their notes to $0.75 per share, subject to adjustment for
certain future recapitalizations or dividends of Fortune. All notes are
convertible by the holders and/or redeemable by Fortune. The notes are
redeemable at a premium that reduces monthly from 10% to zero from May 1999 to
November 2000. As of May 1, 2000, the premium on redemption was 3.28% of par.
The premium is waived if Fortune's common stock price averages at least $4.50
per share for 30 consecutive trading days. The notes are subordinate to all of
Fortune's secured debt, including the credit facility with Credit Lyonnais. The
notes bear interest at a rate of 12% per year, payable quarterly. The cost
incurred to issue the original notes has been amortized as additional interest
expense over the 18-month period ended May 1, 1999, the first date that the
notes were convertible. As a result of this amortization of issuance costs, the
effective interest rate of the notes over this 18-month period was 21.2%. If any
notes are held to maturity, the effective interest rate to maturity on those
notes will be 13.4%.

     For agreeing to amend their conversion price, the amending noteholders
received, for each share into which each of their notes is now convertible, one
three-year warrant, exercisable at $1 per warrant. Fortune valued this warrant
at $0.02 per warrant and expensed the value of all such warrants during the
first quarter of 1999 as note restructuring cost.

                                       7
<PAGE>

     Fortune's $20 million credit facility with Credit Lyonnais New York Branch
was to expire January 11, 2000; however, in March 2000, Credit Lyonnais extended
the facility to January 11, 2001. The borrowing base is currently set at
$10,000, subject to redetermination upon the bank's approval. The interest rate
on the facility is, at Fortune's option, either 1.25% above Credit Lyonnais'
base rate or 4% above LIBOR. The credit facility is secured by a mortgage on
substantially all of Fortune's existing proved oil and gas properties. Fortune
is also required to pay a commitment fee of 0.5% on the unused portion, if any,
of the borrowing base.

     Fortune is required by the credit facility to meet a 3 to 1 coverage ratio
of cash flow to fixed-charges for the twelve-months period ended March 31, 2000.
Fortune failed to meet this covenant at March 31, 2000. Fortune has requested a
waiver of this covenant from the bank for the period ended March 31, 2000. If a
waiver is not received, Fortune will repay the $10,000 balance outstanding on
the facility.

(3)  INCOME TAX EXPENSE

     No provision for income taxes was required for the three months ended March
31, 2000.

     At March 31, 2000, Fortune estimates it had cumulative net operating loss
carryforwards for federal income tax purposes of approximately $22 million, of
which approximately $7 million is subject to restrictions under I.R.C. 382.
These loss carryforwards are available to offset future federal taxable income,
if any. The net operating losses expire from 2002 through 2020. Fortune is
uncertain as to the recoverability of the above deferred tax assets and has
therefore applied a 100% valuation allowance.

(4) LEGAL PROCEEDINGS

     There are no material pending legal proceedings involving any of Fortune's
properties or which involve a claim for damages which exceed 10% of Fortune's
current assets.

(5)  COMPUTATION OF LOSS PER SHARE

     Basic net loss per common share is computed by dividing net loss by the
weighted average number of common shares outstanding. Diluted earnings per
common share are not presented because the issuance or conversion of additional
securities would have an antidilutive effect.

(6)  STOCK ISSUANCE

     In January 2000, Fortune commenced both a private placement offering of
common stock and an incentive warrant exercise program. The private placement
closed March 10, 2000. The incentive warrant exercise program has been extended
through June 1, 2000, unless terminated earlier at Fortune's sole discretion.
Fortune raised $618,000 in the private placement (824,000 shares sold at $0.75
per share) and has raised $164,000 through March 10, 2000 in the incentive
warrant exercise (218,331 shares issued at $0.75 per share). The warrants
subject to this program would have been exercisable otherwise at prices from
$2.61 to $3.625 per share. Fortune determined that the value, if any, associated
with reducing the warrant exercise price in this offering is not material;
accordingly, no charge has been recorded on this transaction.

     Barry W. Blank, a beneficial owner of more than five percent of Fortune's
common stock, acquired 51,750 shares of stock in the warrant exercise program.
Also, Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US
Growth and Income Trust PLC, which each beneficially own more than five percent
of Fortune's common stock, each purchased 200,000 shares of stock in the private
placement. Warrants convertible into approximately 1.5 million shares of common
stock, including 1,080,705 shares owned by Mr. Blank, remain eligible to
participate in the incentive warrant exercise program through the termination
date.

                                       8
<PAGE>

     In addition to the shares acquired in these offerings, all participants
received one three-year stock-purchase warrant for each share acquired. The
exercise price of one-half of these warrants was set at $1.50 per share; the
exercise price for the remainder is $2.25. Accordingly, Fortune has issued
1,042,331 such new warrants in connection with these transactions.

     Fortune estimates that its out-of-pocket costs in these transactions were
$23,000. The proceeds from these offerings will be used for anticipated
exploration expenditures and general corporate purposes.


                                       9
<PAGE>

                      FORTUNE NATURAL RESOURCES CORPORATION

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS


FINANCIAL CONDITION

     At March 31, 2000, Fortune had $2,295,000 of 12% subordinated convertible
notes outstanding. Such convertible subordinated notes are due December 31,
2007. Fortune has realized net losses for many years, resulting in an
accumulated deficit of $28 million at March 31, 2000. As a result of depleting
reserves and the sale of Fortune's interest in East Bayou Sorrel in March 1998,
Fortune has realized negative operating cash flows of $656,000 and $616,000 in
calendar years 1999 and 1998, respectively, and $192,000 in the first quarter of
2000. In February and March 2000, Fortune took steps to improve its short term
liquidity by raising $782,000 through the sale of common stock and the exercise
of common stock warrants. Also during February and March 2000, $930,000 of
Fortune's 12% convertible notes were converted to common stock. The remaining
notes are convertible into common stock at $0.75 per share. As a result of these
transactions, we believe that Fortune has the capital resources to maintain its
operations over the next year. However, based on historical operating results
and the uncertainties of projecting long term production and cash flows from
current oil and gas reserves, Fortune may not be able to repay the remaining
$2,295,000 of convertible subordinated notes when they become due on December
31, 2007. We believe that Fortune's operating cash flow will increase if we are
successful exploiting our inventory of projects or acquiring producing
properties. However, no assurances can be given that cash flow will increase or
that it will be sufficient to enable Fortune to repay the convertible
subordinated notes at December 31, 2007.

     In the event that Fortune's operating cash flow decreases unexpectedly,
drilling is unsuccessful or management determines to accelerate the growth plans
for Fortune, we will require additional equity and debt financing to fund our
continuing operations. Fortune's projections of production, cash flow and
capital requirements are based upon numerous assumptions about the future,
including: oil and gas prices, production decline rates, costs, absence of major
operating disruptions and catastrophes, timing of projects and markets for our
production. See "Forward Looking Statements" below for a discussion of risks
associated with Fortune and future projections made by us. There is no assurance
that our assumptions will be accurate. If we experience significant unexpected
decreases in cash flow or increases in capital requirements, and we are unable
to raise capital, we will need to take other steps to maintain our viability
over the next year. Those steps might include reducing overhead further,
foregoing our participation in projects or selling assets. Fortune has been
successful in the past raising capital to fund its operations and/or repay debt
balances substantially greater than that currently outstanding. For example,
from 1995 through March 31, 2000, Fortune raised over $15 million through the
issuance of common stock (most of which was raised in 1995), reduced its total
debt by $4.8 million and virtually eliminated its current maturities of
long-term debt. Furthermore, Fortune's debt balance at March 31, 2000 is the
lowest it has been since 1991. Although there is no assurance Fortune will be
successful in raising capital in the future to fund its activities, management
will continue to look for opportunities to improve Fortune's financial
condition.


                                       10
<PAGE>


RESULTS OF OPERATIONS

COMPARISON OF 2000 OPERATING RESULTS TO 1999

QUARTER ENDED MARCH 31, 2000 AND 1999

     Successful drilling results from 1999 are partially offsetting production
declines from depletion. New production from two successful year-end 1998
drilling projects, at South Timbalier Block 86 and Espiritu Santo Bay, began
contributing revenues during the quarter ended June 30, 1999. Revenues from Bay
Marchand Block 5 and the Bacon prospect began contributing revenues during the
third quarter of 1999. Increases in oil and gas prices offset lower oil and gas
production. Consequently, Fortune's oil and gas revenues for the quarter ended
March 31, 2000 increased 41% to $359,000 compared to $255,000 reported during
the first quarter of 1999. Fortune's net loss also improved to $362,000 during
the first quarter of 2000 compared to a net loss of $553,000 for the same 1999
period. The lower 2000 loss is due to a combination of the higher oil and gas
prices and lower costs.

     Analysis  of  change in oil and gas  revenues  -

<TABLE>
                                                    Quarter Ended March 31,
                                                   -------------------------       Percent
                                                     2000             1999          Change
                                                   --------         --------       --------
     <S>                                           <C>             <C>            <C>
     Production
         Oil     -  Bbl                               3,300           3,300            0 %
         Gas     -  Mcf                              99,100         122,800          (19)%
     Prices
         Oil     -  $/Bbl                         $   27.44       $    9.99          175 %
         Gas     -  $/Mcf                              2.70            1.80           50 %
     Revenues
         Oil                                      $  91,000      $   33,000          176 %
         Gas                                        268,000         222,000           21 %

</TABLE>

     Depletion was the primary contributor to the decrease in gas production.
The $104,000 increase in oil and gas revenue from 1999 to 2000 is attributable
to the 175% increase in oil prices and the 50% increase in gas prices.

     Analysis of change in selected expenses -

<TABLE>
                                                          Quarter Ended March 31,
                                                        ---------------------------       Percent
                                                           2000             1999          Change
                                                        ----------       ----------      ---------
     <S>                                                <C>              <C>              <C>
     Production and operating expense                   $  123,000       $   90,000         37 %
         -  per MCFE                                          1.03             0.63         63 %
     Depreciation, depletion and amortization              150,000          210,000        (29)%
         -  per MCFE                                          1.26             1.47        (14)%

</TABLE>

     Production and operating expense increased by $33,000 for the first quarter
of 2000 versus 1999 because of higher production taxes and more producing
properties in 2000.


                                       11
<PAGE>


     Fortune's provision for depletion, depreciation and amortization (DD&A)
decreased by $60,000 in the first quarter of 2000 as compared to 1999 primarily
because of lower production and proved reserve additions during the fourth
quarter of 1999.

<TABLE>
                                                            Quarter Ended March 31,
                                                           -------------------------        Percent
                                                              2000            1999          Change
                                                           ----------      ----------      ---------
     <S>                                                   <C>             <C>              <C>
     General and administrative expense                    $  267,000      $  291,000         (8)%
     Interest - cash                                           69,000          97,000        (29)%
              - non-cash                                            -          74,000         N/A

</TABLE>

     Interest expense payable in cash decreased by $28,000 in 2000 compared to
1999 because of the note conversion discussed above. This note conversion
resulted in the $118,000 non-cash extraordinary loss on early extinguishment of
debt in 2000 which represents a premium equal to one year's interest paid in
common stock to the converting noteholders. Non-cash interest expense in 1999
was for amortization of debt financing costs, which were fully amortized by the
end of April 1999.

LIQUIDITY AND CAPITAL RESOURCES

     CASH BALANCE, WORKING CAPITAL AND CASH FLOWS FROM OPERATING ACTIVITIES

     Fortune used $192,000 of cash in its operating activities during the first
quarter of 2000 compared to $226,000 during the same 1999 period. Before
considering the effect of changes in non-cash working capital accounts,
operating cash flow used was $(86,000) during 2000 compared to $(188,000) during
1999. As discussed above, higher oil and gas prices and lower expenses accounts
for this increase in cash flow. Cash and working capital at March 31, 2000
increased significantly from December 31,1999 because of the capital raised
during 2000 discussed above.

     Analysis of changes in selected liquidity measures -

<TABLE>

                                                                          As of
                                                              ----------------------------
                                                                March 31,     December 31,      Percent
                                                                  2000            1999          Change
                                                              ------------    ------------    ---------
         <S>                                                  <C>             <C>               <C>
         Cash balance                                         $    804,000    $    294,000       173 %
         Net working capital                                       927,000         302,000       207 %
         Long-term debt                                          2,295,000       3,235,000       (29)%

</TABLE>

<TABLE>
                                                                 Quarter ended March 31,        Percent
                                                                  2000            1999          Change
                                                              ------------    ------------    ---------
         <S>                                                    <C>             <C>             <C>
         Cash flow from operations before
            working capital adjustments                         $  (86,000)     $ (188,000)       54%
         Cash flow from operating activities                      (192,000)       (226,000)       15%

</TABLE>


                                       12
<PAGE>

     CASH USED IN INVESTING ACTIVITIES - CAPITAL EXPENDITURES

     Expenditures for oil and gas properties for the first quarter of 2000 were
$57,000 compared to $197,000 for the first quarter of 1999.

     The 1999 expenditures include primarily:

     - additional leases at Espiritu Santo Bay;
     - seismic interpretation at Espiritu Santo Bay and La Rosa;
     - completion expenditures for two wells at Espiritu Santo Bay, ST 216 #16
       and ST 210 #5; and
     - completion  expenditures for the Bacon prospect Anderson 24-7 well
       drilled in Mississippi.

     The 2000 expenditures include primarily:

     - drilling and completion expenditures for the Bacon prospect Ivy 24-11 in
       Mississippi;
     - expenditures for a La Rosa Rooke C-6 well that is being completed; and
     - expenditures for the attempted recompletion at Estherwood prospect in
       Louisiana that was abandoned in January 2000.

     The 2000 activities are discussed below.

     As a result of McMoRan's previously announced decision not to test the
Espiritu Santo Bay 210#6 well, it has returned all rights in the well to Fortune
and its partners so that we may test the well. McMoRan has reconveyed to Fortune
its original 7.4% working interest in the well. McMoRan retained its approximate
49% working interest in the 3,200-acre farmout area (except for the 210-#6
well). Petro-Guard Company, Inc. will operate the testing and production of the
well. The participating partners will pay for all future operations on the well,
including additional facilities, if necessary, and will receive all future
revenues from the well, if any. All participants have agreed to share
information from this test with McMoRan, since it has the right to participate
in future wells on the balance of this acreage.

     Fortune has also been advised that permitting activities have commenced for
additional well locations, including a 16,000' test that the partners hope to
spud later this year. These well locations have been generated from Fortune's
and its partners' proprietary 3-D seismic survey of the bay.

     The La Rosa C-6 well was spud on March 29, 2000 and logged on April 5, 2000
as new discovery. Completion activities are underway. Fortune owns an 18.75%
working interest in the well and its share of the drilling and completion costs
are estimated to be $44,000. This well is expected to begin contributing
revenues during the second quarter of 2000. The next exploration well at La Rosa
is the C-7 well. The C-7 is anticipated to spud in May. Fortune owns an 18.75%
working interest in this well and expects the drilling cost to be approximately
$24,000.


                                       13
<PAGE>

     Fortune and its partners farmed out a portion of the working interest in
the Cadiz prospect Brooks #1 exploratory well to Prime Energy Management
Corporation at the end of March 2000. Fortune farmed-out three-quarters of its
15% working interest in the drilling expense and received a cash payment of
approximately $10,000 and the right to receive back, at casing point, 25% of the
interest farmed out. Consequently, if the well is completed and Fortune elects
to participate, Fortune will have a 6.5625% working interest in the well. The
well was spud on April 22, 2000 and is designed to test a 3-D seismic anomaly at
a depth of approximately 10,000 feet generated from seismic licensed by Fortune.
The farmout also provides Prime with an option to drill a second well on
adjacent acreage on the same terms as the first well. Fortune's share of the
drilling costs of the Brooks #1 is estimated to be $12,000.

     The Bacon prospect Ivy #24-11 was spud in February 2000 and is being
completed as a new discovery. Fortune owns an approximate 10% working interest
in the well. The operator anticipates the well should produce approximately half
a million cubic feet of natural gas per day. Fortune's share of the drilling and
completion costs is estimated to be $24,000. This well is expected to begin
contributing revenues during the second quarter of 2000.

OIL AND GAS PRICES

     Conditions outside of our control influence the prices we receive for oil
and gas. As of April 28, 2000, Fortune was receiving an average of approximately
$22.50 per barrel for its oil production and $3.00 per Mcf for its gas
production.

RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

     In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
133 establishes accounting and reporting standards for derivative instruments,
including derivative instruments embedded in other contracts and for hedging
activities. SFAS 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000. Fortune does not use derivative instruments;
accordingly, SFAS 133 is not expected to have a material effect on the reporting
of Fortune's future operating results.

FORWARD LOOKING STATEMENTS

     This Form 10-Q contains forward-looking statements. Forward-looking
statements include statements regarding future oil and gas production and
prices, future cash flow and cash requirements, future exploration and
development spending, future drilling and operating plans and results, reserve
and production potential of Fortune's properties and prospects, Fortune's
business strategy, and management's plans and expectations. Actual events or
results could differ materially from those discussed in the forward-looking
statements as a result of various risk factors including the factors described
below.

     FORTUNE'S RELIANCE ON EXPLORATORY PROJECTS INCREASES THE RISKS INHERENT IN
THE OIL AND GAS INDUSTRY. Our current investments are primarily in exploration
projects, where the risks are substantially greater than projects involving
already producing formations. We anticipate that one or more of our next wells
will be designed to test formations that are deeper than known production in
Espiritu Santo Bay. These formations have not been extensively tested to date.
The exploration risks, therefore, are higher on this project than they might be
where a greater number of underground references exist. Fortune has realized
less success than originally anticipated in drilling some of its recent
prospects and we expect that a substantial number of our future projects could
experience similar results.

                                       14
<PAGE>

     FORTUNE HAS INCURRED NET LOSSES FOR EACH OF THE LAST SEVERAL YEARS. Fortune
has incurred substantial net losses for several years. Although we made
significant budget cuts in 1999 and are making additional budget cuts in 2000,
oil and gas prices continue to fluctuate significantly. This makes it likely
that losses will continue. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

     FORTUNE IS NOT CURRENTLY REPLACING ALL OF ITS EXISTING RESERVES. We are not
adding reserves at present at the same pace at which they are being produced.
Therefore, without adding additional reserves in the future, our oil and gas
reserves and production will decline.

     OUR REVENUE IS DEPENDENT UPON A LIMITED NUMBER OF PRODUCING WELLS. Over 30%
of our oil and gas revenues, cash flow, and proved oil and gas reserves are
currently accounted for by a single well at South Timbalier Block 76. This well
was shut-in for repairs for one month in 1997 and for over two months during
1996 as the result of mechanical failures. A significant curtailment or loss of
production for a prolonged period before we could replace the reserves would
have a material adverse effect on our projected operating results and financial
condition.

     OUR NEED FOR WORKING CAPITAL MAY AFFECT OUR LEVEL OF PARTICIPATION IN
VARIOUS PROJECTS. Investment in oil and gas exploration requires the commitment
of substantial amounts of capital over significant periods of time. We may not
have sufficient liquid capital resources to participate at our existing working
interest level if the operators of any of our properties accelerate the drilling
and development schedule or if we incur unexpected significant expenditures or
reduced production. If we do not participate in the capital expenditures for any
project, our interest in that project will be substantially reduced or lost
entirely.

     FORTUNE IS DEPENDENT ON OPERATORS, CONSULTANTS AND PARTNERS OVER WHOM IT
HAS LITTLE CONTROL. Since we do not operate our projects, we are dependent on
other oil and gas companies to conduct operations in a prudent, competent, and
timely manner.

     ACCOUNTING METHOD MAY RESULT IN ADDITIONAL WRITE-DOWNS OF OIL AND GAS
PROPERTY COSTS. We report our operations using the full-cost method of
accounting for oil and gas properties. Under these rules, the net capitalized
costs of properties may not exceed a "ceiling" limit of the tax-effected,
discounted present value of estimated future net revenues from proved reserves,
plus the lower of cost or fair market value of unproved properties. The risk
that we will be required to write down the carrying value of our properties
increases when oil and gas prices are depressed or unusually volatile or when
previously unevaluated properties are determined to be worth less than their
cost. Fortune has recognized significant impairments in past periods. As a
result of continued fluctuating oil and gas prices, it is likely that we will
incur further impairments in future periods.


                                       15
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

DISCLOSURE ABOUT MARKET RISK

     Fortune is exposed to market risk, including adverse changes in oil and gas
prices and interest rates as discussed below. Fortune does not currently use
derivative financial instruments to mitigate fluctuations in oil and gas prices
or interest rates.

     OIL AND GAS PRICE RISK. Fortune's oil and gas revenues can be significantly
affected as oil and gas prices fluctuate widely in response to changing market
forces. These fluctuations can be reduced through the proper use of oil and gas
price hedging tools. We currently do not use oil and gas price hedges because we
do not believe that Fortune has sufficient production volumes to offset the
risks inherent in their use. Consequently, our oil and gas revenues will
continue to fluctuate as prices fluctuate.

     INTEREST RATE RISK. Fortune's exposure to changes in interest rates
primarily results from its short-term and long-term debt with both fixed and
floating interest rates.

     Fortune's debt structure is comprised of:

                  Stated                  Balance
               Interest Rate           March 31, 2000            Matures
            ------------------        ----------------          ---------
                 12% Fixed               $2,295,000                2007

             Variable at banks
            Base rate + 1 1/4% or
                LIBOR + 4%                $10,000                  2001

     Changes in interest rates will not currently have a significant impact on
Fortune's interest expense.

                                       16
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     See note 4 of the footnotes to the financial statements in Part I herein
for a description of legal proceedings.

ITEM 2.  CHANGES IN SECURITIES

     In January 2000, Fortune commenced both a private placement offering of
common stock and an incentive warrant exercise program. These offers were made
to certain accredited investors, as that term is defined in SEC regulations, in
transactions that qualified for an exemption from registration requirements of
the Securities Act of 1933 under Regulation D. The private placement closed
March 10, 2000. The incentive warrant exercise program has been extended through
June 1, 2000, unless terminated earlier at Fortune's sole discretion. Fortune
raised $618,000 in the private placement (824,000 shares sold at $0.75 per
share) and has raised $164,000 through April 28, 2000 in the incentive warrant
exercise (218,331 shares issued at $0.75 per share). The warrants subject to
this program would have been exercisable otherwise at prices from $2.61 to
$3.625 per share.

     Barry W. Blank, a beneficial owner of more than five percent of Fortune's
common stock, acquired 51,750 shares of stock in the warrant exercise program.
Also, Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US
Growth and Income Trust PLC, which each beneficially own more than five percent
of Fortune's common stock, each purchased 200,000 shares of stock in the private
placement. Warrants convertible into approximately 1.5 million shares of common
stock, including 1,080,705 shares owned by Mr. Blank, remain eligible to
participate in the incentive warrant exercise program through the termination
date.

     In addition to the shares acquired in these offerings, all participants
received one three-year stock-purchase warrant for each share acquired. The
exercise price of one-half of these warrants was set at $1.50 per share; the
exercise price for the remainder is $2.25. Accordingly, Fortune has issued
1,042,331 such new warrants in connection with these transactions.

     Also in February and March 2000, holders of the $930,000 of Fortune's 12%
notes that were convertible at approximately $0.33 per share, including $700,000
of total notes held by the two Renaissance funds, converted those notes into
2,821,162 shares of common stock. As an inducement to encourage conversion,
Fortune paid the noteholders who converted a premium equal to one year's prepaid
interest and certain accrued interest. This premium was paid in Fortune common
stock valued at $0.75 per share, resulting in the issuance of an additional
158,132 shares to the noteholders who converted. Each Renaissance fund received
1,122,394 shares in connection with this transaction.

     Fortune estimates that its out-of-pocket costs in these transactions
approximated $23,000. The proceeds from these offerings are being used for
anticipated exploration expenditures and general corporate purposes. Fortune did
not use the services of an underwriter in any of these transactions.

                                       17
<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

     Exhibit No.       Description
     -----------       -----------
        27.1*          Financial Data Schedule.


(b)  REPORTS ON FORM 8-K / 8K-A

     A report on Form 8-K was filed with the Securities and Exchange Commission
on April 12, 2000 to report Fortune's press release updating its drilling
activities.

     A report on Form 8-K was filed with the Securities and Exchange Commission
on May 8, 2000 to report Fortune's press release of its first quarter 2000
financial results.

*Filed herewith.

                                       18
<PAGE>


                                   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.

                                    FORTUNE NATURAL RESOURCES CORPORATION



                                    By:   /s/ TYRONE J. FAIRBANKS
                                          -------------------------------------
                                          Tyrone J. Fairbanks
                                          President and Chief Executive Officer



                                    By:   /s/ J. MICHAEL URBAN
                                          -------------------------------------
                                          J. Michael Urban
                                          Vice President and Chief Financial
                                            and Accounting Officer

Date:  May 11, 2000


                                       19
<PAGE>