SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, DC  20549

                                   FORM 10-K

           [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
               THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
                                       or
           [  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
               THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)

                  For the fiscal year ended December 31, 1996


                         Commission file number 0-5781

                     HAWKS INDUSTRIES, INC.
               -----------------------------------

                  (Exact Name of Registrant as specified in its charter)


      Delaware                                          83-0211955
---------------------                              -----------------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)

913 Foster Road, Casper, Wyoming                            82601
---------------------------------                      ---------------
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code:   (307) 234-1593
----------------------------------------------------------------------

Securities registered pursuant to Section 12 (b) of the Act:  None
Securities registered pursuant to Section 12 (g) of the Act:

                          Common Stock, $.01 Par Value

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes    X       No
                                        -----

The aggregate market value of the voting stock held by non-affiliates of the
Registrant computed by reference to the average bid and asked prices of the
Common Stock, $.01 Par Value, on March 26, 1997 was $2,411,152.

As of March 26, 1997, Registrant had 27,028,194 shares of Common Stock, $.01 Par
Value outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

Definitive Proxy Materials to be filed pursuant to Regulation 14 C into Part
III.

Annual Report Pursuant to Section 13 or 15 (d) of Securities Exchange Act of
1934 for the Fiscal Year Ended December 31, 1995, Form 10-K, dated March 26,
1996, filed March 26, 1996 into Part IV.


                                    PART I.

ITEM 1 - BUSINESS

History - General
-----------------

Except where the context otherwise requires, the term "the Company", as used in
this Report, refers to the Registrant and its subsidiaries.

The Company was incorporated on March 19, 1971 and through mid-1986 was solely
engaged in the business of oil and gas exploration, development and production,
and conducted its operations primarily in the Rocky Mountain region of the
United States.

In February, 1986, when the price of crude oil on the futures and spot markets
dropped below $12 per barrel, management determined that until such time as the
price of crude oil stabilized in the world markets and returned to higher
levels, exploration funds from industry and private investors would be further
curtailed and that economics, except in selected instances, would not justify
the drilling of further exploratory and development wells in the Rocky Mountain
area.

Consequently, the Company ceased the drilling of development wells on its
properties, the drilling of exploratory wells under which it would share in the
cost, and drastically reduced its exploration staff.  Since that time the
Company has participated in one exploratory well and four development wells.
The Company does not anticipate any significant development drilling on its
properties. In mid 1992, the Company further de-emphasized its oil and gas
activities and determined to restrict their oil and gas business to buying and
selling of producing properties. In conjunction with this decision, the Company
sold most of the oil and gas interests wherein it acted as operator and reduced
technical staff accordingly.

In 1986, due to the instability in the oil and gas industry a program of
diversification was commenced and the Company acquired a controlling interest in
International Aviation Publishers, Inc., ("IAP"), a publishing company, and in a
light manufacturing facility, SanTech, Inc., ("SanTech"), funded partially by
the State of Wyoming and by local government grants and assistance.  That
diversification was highly successful and International Aviation Publishers grew
to be a source of steady cash flow and profitability for the Company.

In 1992, in a continuing mode of diversification, the Company acquired 100% of
the outstanding shares of Western Environmental Services & Testing, Inc.
("W.E.S.T."), a privately held environmental testing and consulting firm.

In 1993, due to a downturn in the aviation industry and specifically to a nearly
45% decrease in student enrollment in aviation maintenance schools, IAP's sales
declined.  Accordingly, the Company's growth in 1993 was directed at the
environmental business.  Additional "air quality" staff were employed to meet
the increasing demand for the Company's services.

During late 1994, the Company received an unsolicited offer to buy its aviation
publishing assets (IAP).  Accordingly, as of December 31, 1994, substantially
all of the publishing assets were sold for approximately $1,800,000.  In this
report and in the accompanying financial statement, the results of operations of
IAP have been shown as `discontinued operations'' in accordance with generally
accepted accounting principles.

As a result of the sale of IAP, it became impractical to continue the
navigational supplies business (SanTech) and the printing business (Hawks Book
Company).  They are also included in discontinued operations.  During 1995, all
the assets of the printing company were sold and a significant amount of the
``navigational supplies'' assets were also sold.

In 1996, the Company made a significant investment in undeveloped real estate.
The Company plans on holding this real estate as a long term investment.

The industry segment information on the following page will give the reader a
financial overview of each of the Company's industry segments.  A detailed
description of each segment follows thereafter.

<TABLE>
<CAPTION>
                                           1996          1995          1994
                                           ----          ----          ----

      <S>                              <C>          <C>           <C>
      Sales to unaffiliated customers:
       Oil and gas industry            $   188,000  $    196,000  $    171,000
       Environmental testing and
         management industry             1,958,000     3,097,000     2,424,000
                                       -----------  ------------  ------------
                                       $ 2,146,000  $  3,293,000  $  2,595,000
                                       ===========  ============  ============
      Discontinued operations          $    44,000  $     28,000  $  1,841,000
                                       ===========  ============  ============
      Operating profit or (loss):
       Oil and gas industry            $   (43,000) $    (46,000) $     44,000
       Environmental testing and
         management industry              (433,000)      323,000       (23,000)
       Unallocated Corporate expenses     (247,000)     (192,000)     (213,000)
                                       -----------  ------------  ------------
                                       $  (723,000) $     85,000  $   (192,000)
                                       ===========  ============  ============
       Discontinued operations         $   (13,000) $   (330,000) $   (510,000)
                                       ===========  ============  ============
      Identifiable assets:
       Oil and gas industry            $   879,000  $    619,000  $    505,000
       Environmental testing and
         management industry             1,080,000     1,203,000       940,000
       Corporate assets                  1,806,000     2,107,000     1,170,000
       Discontinued operations                 -          86,000     2,268,000
                                       -----------  ------------  ------------
                                       $ 3,765,000  $  4,015,000  $  4,883,000
                                       ===========  ============  ============
      Capital expenditures:
       Oil and gas industry            $   358,000  $    189,000  $     33,000
       Environmental testing and
         management industry               207,000       214,000       299,000
       Other capital expenditures           49,000         7,000       160,000
       Discontinued operations                 -           1,000        19,000
                                       -----------  ------------  ------------
                                       $   614,000  $    411,000  $    511,000
                                       ===========  ============  ============
      Depreciation, depletion and
      amortization:
       Oil and gas industry            $    67,000  $     39,000  $     19,000
       Environmental testing and
         management industry               116,000        98,000        97,000
       Other depreciation, depletion
         and amortization                   56,000        57,000        60,000
                                       -----------  ------------  ------------
                                       $   239,000  $    194,000  $    176,000
                                       ===========  ============  ============
       Discontinued operations         $     2,000  $     61,000  $    156,000
                                       ===========  ============  ============

</TABLE>

OIL AND GAS
-----------

To the date of this report the Company had participated in the drilling of 315
gross (63.47 net) wells of which 219 gross (39.17 net) have been successful.  In
general terms, the Company has ceased its drilling and exploration activity.
The likelihood of the Company participating in additional wells in the near
future is remote.  The Company does, however, have several oil and gas
properties which it will attempt to have drilling completed on where the Company
will have a nonoperating interest.

The Company's oil and gas activity will be predominantly in the buying and
selling of existing producing properties.

Competition
-----------

The oil and gas industry is highly competitive.  Domestic producers of oil and
gas must not only compete with each other, but must compete with producers of
imported oil and gas and alternative energy sources such as coal, atomic power
and hydroelectric power.

Markets
-------

The availability of a ready market for oil and gas produced by the Company will
depend upon numerous factors beyond the control of the Company including the
extent of domestic production and importation of foreign oil and gas; the
proximity of the Company's properties to gas pipelines and other transportation
facilities; the availability, capacity and cost of such pipelines and other
transportation facilities; the marketing of other competitive fuels; fluctuation
in demand; state and federal governmental regulation of production, refining,
transportation and sales; general national and worldwide economic conditions,
pricing, and use; and allocation of oil and gas and their substitute fuels.

With the exception of brief periods when political and economic unrest in the
Mideast (such as the last half of 1990), or when short-term market
"interruptions" such as the Alaska oil spill caused prices to rise rapidly,
prices of crude oil and refined petroleum products generally have declined in
the last six years as a result of an oversupply of petroleum products,
particularly gasoline and fuel oils, relative to the demand for such products.
The prices received for oil production have become increasingly volatile.  This
has resulted in great uncertainty in the oil and gas industry and has led many
companies engaged in oil and gas exploration and production to substantially
curtail their activities.  This situation of substantial oversupply relative to
demand is due in part to increased production and lower rates of consumption
caused by voluntary conservation efforts as well as increased competition from
alternative fuels.

No certainty exists as to the length of time that this situation of
substantially reduced prices will exist.  However, as long as the supply of oil
available on a worldwide basis exceeds demand by a substantial margin, it is
likely that oil prices will remain subject to downward pressure.

In response to the current oversupply of natural gas, many purchasers have
unilaterally reduced the quantities of gas purchased under existing contracts,
and a number of purchasers have stated their intentions not to honor their
contractual commitments to purchase specified quantities of gas from producers
at the prices set out in their respective purchase contracts.  In many instances
buyers cannot readily be located for gas production resulting in gas wells being
shut-in or curtailed for various periods of time.  In addition, many gas
purchasers are refusing to honor obligations under so-called "take-or-pay" gas
contracts.  There can be no assurance that markets for gas and oil will not
continue to decline.

The Company's contracts with its gas purchasers generally provide that they are
not obligated to purchase all of the gas which the wells are capable of
producing, and the Company has experienced curtailment problems to date.  There
is also no assurance that the Company will not experience significant
curtailment problems in the future.

Regulation
----------

The Company's operations will be affected from time to time in varying degrees
by political developments and federal and state laws and regulations.  In
particular, oil and gas production operations and economics are affected by
price control, tax and other laws relating to the petroleum industry, by changes
in such laws and by constantly changing administrative regulations.

State statutory provisions relating to oil and gas generally require permits for
the drilling of wells and also cover the spacing of wells, the prevention of
waste, the rate of production, the prevention and clean-up of pollution and
other matters.

The wellhead sale of natural gas in the United States is subject, with certain
significant exceptions, to a regulatory scheme implemented pursuant to the
Natural Gas Policy Act of 1978 (the  "NGPA") and overseen by the Federal Energy
Regulatory Commission (the "FERC").  The NGPA classified gas into various
categories in maximum permissible prices.  However, none of the NGPA prices can
be collected unless purchasers willing to pay such prices can be located.  As a
result of the general decline in prices for oil and gas, many of the contracts
for purchases of gas at NGPA maximum prices have been renegotiated.  Contract
provisions allowing price reductions have been exercised or purchasers have
refused to accept production at such prices claiming, among other defenses,
force majeure and commercial impracticability.  As a result, a larger and
increasing percentage of gas is sold at prices below NGPA maximum lawful rates.
Sales of gas at prices lower than such NGPA rates are common throughout the
natural gas industry.


Environmental Regulation
------------------------

Various federal, state and local laws and regulations covering the discharge of
materials into the environment, or otherwise relating to the protection of the
environment, may affect the Company's operations and costs as a result of their
effect on oil and gas exploration, development and production activities.

Environmental protection laws to date have not required the Company to make any
significant additional capital outlays.  It is not anticipated that the Company
will be required in the near future to expend amounts that are material in
relation to its total capital expenditure program by reason of environmental
laws and regulations.  The Company believes that its operations comply with
environmental laws and regulations, but inasmuch as such laws and regulations
are constantly being revised and changed, the Company is unable to predict the
ultimate cost of complying with present and future environmental laws and
regulations.


Taxation
--------

The Company's oil and gas operations are affected by certain provisions of the
federal income tax laws applicable to the petroleum industry.  Current law
permits the Company to deduct currently, rather than capitalize, "intangible"
drilling and development costs incurred or borne by it.  The Company, as an
independent producer, is also entitled to deduction for percentage depletion
with respect to the first 1,000 barrels per day of domestic crude oil (and/or
equivalent units of domestic natural gas) produced by it if such percentage
depletion exceeds cost depletion.

Generally, this deduction is a specified percentage (currently 15%) of gross
income from oil and gas property.  Percentage depletion may not exceed 100% of
the net income, and is limited in the aggregate to 65% of the Company's taxable
income.  Any depletion exceeding the 65% limitation, however, may be carried
over indefinitely.  At December 31, 1996 this carryover was $2,131,000.

The Company's oil and gas activities are also subject to state and local income,
severance, property and other taxes.  It is anticipated that the aggregate
burden of these taxes will increase in the future.

It is possible that subsequent legislation, court decisions and governmental
agency actions could further limit tax benefits and impose further tax burdens
on the oil and gas activities of the Company.

The Company at December 31, 1996 had a net operating loss ("NOL") carryforward
of approximately $10,907,000.

The Tax Reform Act of 1986 made substantial changes with regard to NOL
carryforwards.  After an "ownership change" the taxable income of a loss
corporation available for offset by pre-change NOL carryforwards is limited
annually to a prescribed rate times the value of the loss corporation's stock
immediately before the ownership change.  In general, an ownership change occurs
if ownership of more than 50% in value of the stock of the loss corporation
changes during the three year period preceding the test date.  Under federal tax
law, the amount and availability of loss carryforwards are subject to a variety
of interpretations and restrictive tests applicable to the Company.  Under the
Code, the utilization of such loss carryforward could be limited or effectively
lost upon certain changes in ownership.  The net operating loss carryforwards
expire between 1997 and 2010.


DISCONTINUED OPERATIONS
-----------------------

As of December 31, 1994 the Company sold substantially all of the assets of its
aviation publishing business for approximately $1,800,000.  The Company had
purchased this business on July 1, 1986 for less than $300,000.  During 1995,
the Company sold its printing assets for $221,000.  Also the Company has
realized $36,000 from the sale of navigational supply assets and from furniture
and fixtures.

Additional sales proceeds will be realized as excess assets which were not
included in the sale are sold.  It is expected that this total will be less than
$100,000 and will approximate the book value of those remaining assets yielding
little or no gain.

In conjunction with the sale of its aviation publishing business, the Company
has chosen to discontinue its navigational products business in order to
maximize sales of existing inventory.  This discontinuance has involved the
gradual liquidation of inventory and sale of equipment.  At December 31, 1996
this discontinuance was completed.


ENVIRONMENTAL ENGINEERING
-------------------------

Competition
-----------

The Environmental Engineering industry is also highly competitive.  Many of the
company's competitors both in its primary market areas and throughout the United
States are substantially larger and have significantly greater financial and
human resources.

Markets
-------

The company concentrates its activities primarily in the Rocky Mountains, the
mid-continent area and in Texas.  However, during 1994, 1995 and 1996, the
company provided services for customers in 25, 14, and 13 different states
respectively.  In the area of air quality and air emissions the company provides
to its customers compliance testing for air emissions in accordance with certain
federal and state environmental standards.  In addition, they perform
evaluations of process operations for the users of emissions equipment.  And to
a lesser degree, the company performs "performance guarantees" for newly
purchased abatement equipment for some of its customers.  The company also
provides ambient air surveys for new or renewable air emission permits.

In the area of water waste, the company performs analysis for virtually all
kinds of discharge of water waste.  The company also evaluates all public and
private drinking water supplies for compliance with existing environmental
standards.  The company performs environmental analysis of real property for
customers involved in the transfer of real property.  This includes the analysis
for lending institutions prior to funding the purchase of real property.
Lastly, the company provides soil analysis primarily for the mining industry.


Regulation
----------

The Clean Drinking Water Act mandates certification requirements for
laboratories who are engaged in the analysis of public drinking water.  In
addition, the company is subject to certain regulations of the Nuclear
Regulatory Commission governing testing standards for environmental
laboratories.

The Environmental Protection Agency and Nuclear Regulatory Commission perform
periodic audits in the form of on-site walk throughs at testing facilities.  In
addition, the Environmental Protection Agency submits "blind samples" for which
the company analyzes and submits its test results.  These results are measured
against standardized testing performed by the EPA on the same sample to
determine a lab's ability to analyze samples.

In addition, most state environmental agencies conduct on-site evaluations for
compliance with established professional testing standards and techniques.

Taxation
--------

The company's environmental contracts are generally not individually
significant.  However, to the degree that a contract is in process at year end,
the company employs the completed contract method of accounting for income
taxes.  Generally this method provides that no income or expense will be
recognized on a contract until such time as the contract is completed.

EMPLOYEES
---------

As of the date of this report, the Company has 28 full-time employees.
(Administration and Accounting 5, Environmental 20 and Corporate Management 3).
All employees are provided with the opportunity to participate in a
comprehensive health and benefits package.  All eligible employees participate
in the Company's Employee Stock Ownership Plan.

None of the employees are represented by a union and the Company believes that
its relationship with its employees is good.

ITEM 2 - PROPERTIES

PROPERTIES - REAL ESTATE
------------------------

The company owns facilities consisting of five separate buildings located on
approximately ten acres.

One building, an office building, has 10,600 square feet and housed the oil and
gas and publishing operations.  The adjacent building has 6,000 square feet and
housed the SanTech shop and offices.  Next to it is an 11,500 square foot
warehouse where all finished goods were held until shipped.  These buildings
have been listed for sale and as of the date of this report an offer of $225,000
has been received on the shop and warehouse.  The offer is contingent on the
buyer obtaining satisfactory financing.  The Company's debt on the buildings
subject to the offer is $147,000 at the date of this report. The existing
Corporate offices have been relocated to W.E.S.T's offices at the Foster Road
location in Casper.  That building is described below.

In September, 1993 the Company acquired a 5,000 sq. ft. building in San Marcos,
Texas which houses all environmental personnel and equipment for the Company's
Texas operations.

On March 22, 1994, the Company purchased a 10,600 square foot building on 4
acres in an industrial park in Casper.  The lease arrangement on the former
building terminated in 1994.  This new facility will accommodate the expected
growth of the Company's environmental business and now houses the Corporate and
accounting offices.

In addition, W.E.S.T. rents office space in Evanston, Wyoming on a month-to-
month basis from a third party.  In 1994 and 1995 the Company also rented office
space in Cheyenne, Wyoming on a month-to-month basis.

Management believes that the existing facilities are now adequate for current
needs.

In late 1996 the Company purchased 33.7 acres of undeveloped commercial real
estate in Casper,  Wyoming.  The land is adjacent to and fronts Interstate 25
and is dissected by East Second Street (the main business thoroughfare in
Casper).  The land was purchased for less than 18 cents per square foot.  There
is no announced time table for development of the land.


Disclosures of Oil and Gas Producing Activities
-----------------------------------------------

The Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 69, Disclosures about Oil and Gas Producing Activities, requires
certain disclosures about an entity's oil and gas producing operations.  Those
disclosures are applicable if any one of revenues, results of operations, or
assets, generated or attributable to the oil and gas activities, are more than
10% of total revenues, operations, or total assets.  The Company in recent years
has acquired significant non oil and gas operating assets.  These are primarily
assets in the environmental testing and analysis industries.

Consequently, the Company's oil and gas revenues are not 10% of total revenues.
The Company's oil and gas operations are not 10% of total operations.  The
Company's oil and gas assets are less than 23% of total assets.  It is expected
that with normal depreciation and depletion, and with the potential of selling
additional oil and gas assets in the coming months, that the Company will not
meet this test either.

Although technically required to do so, the Company has not presented the
required disclosure.  Management feels that with the sale of its major oil and
gas producing property in 1992 and with the continually decreased emphasis on
oil and gas producing activities, the information is relatively meaningless.  In
addition, based on costs of prior years, the estimated costs to obtain all of
such information would be at least $10,000.  For these reasons the disclosure
has not been presented.


Net Quantities of Oil and Gas Produced
--------------------------------------

The net quantities of oil and gas produced by the Company during each of the
last three fiscal years are as follows:
<TABLE>
<CAPTION>
          Oil (bbls)Gas (Mcf)
          -------------------
<S>       <C>       <C>
   1994     3,800    41,000
   1995     6,500    52,000
   1996     4,500    57,000
</TABLE>

Average Sales Price and Production Costs
----------------------------------------

The following table reflects information concerning each of the last three
fiscal years:
<TABLE>
<CAPTION>
                                 1996       1995        1994
                                 ----       ----        ----
<S>                           <C>        <C>        <C>
Average sales price per bbl    $20.84      $17.50     $16.66
Average sales price per Mcf      1.47        1.30       1.57
Average production cost per
 net equivalent bbl*             4.34        5.38       6.45
</TABLE>

* Natural gas has been converted into equivalent bbls using a conversion ratio
of 6:1.

Wells and Productive Acreage
----------------------------

The following table reflects the total gross and net wells, expressed separately
for oil and gas, and the total gross and net developed acres as of December 31,
1996:
<TABLE>
<CAPTION>
   Productive Working Interest Wells                 Developed Acres
   ---------------------------------                 ---------------
          Gross         Net                           Gross     Net
          -----         ---                           -----     ---
         <C>  <C>    <C>  <C>                          <C>     <C>
         Oil  Gas    Oil  Gas
         19    5    1.663.6404                       10,605    906
</TABLE>

In addition, the Company holds overriding royalty interests ranging from
 .000494% to 5.58215% in 11 oil and 40 gas wells.  The Company's interests in
undeveloped acreage at December 31, 1996 are summarized in the following table.
Except as otherwise indicated, the interests reflected in the table are working
interests.
<TABLE>
<CAPTION>
                                               Overriding
State           Gross Acres   Net Acres      Royalty Interest
-----           -----------   ---------      ----------------
<S>               <C>          <C>           <C>
Colorado           1,600           88                -
New Mexico         8,047        8,047                -
New Mexico        21,254           -               6%-1%
Utah                 605          182                -
Wyoming            9,808        3,220                -
Wyoming            1,640           -             3.5%-1.5%
                  ------       ------
                  42,954       11,537
                  ======       ======
</TABLE>

Drilling Activity
-----------------

The Company has not participated in the drilling of exploratory wells in 1996,
1995 nor 1994.  The Company did not participate in the drilling of development
wells in 1994.  In late 1995, the Company participated in the drilling one
development well which was a productive well.  In 1996 the Company participated
in the drilling of 3 developmental wells which were productive.

Title to Properties
-------------------

As is customary in the oil and gas industry, a preliminary title check is
conducted at the time properties believed to be suitable for drilling operations
are acquired by the Company.  Prior to the commencement of drilling operations,
curative work determined to be appropriate as a result of a title examination is
customarily performed with respect to significant defects before the Company
commences such operations.  The Company believes that the title to its
properties is marketable in accordance with standards generally acceptable in
the oil and gas industry.


ITEM 3 - LEGAL PROCEEDINGS

The Company is not involved in any, or aware of any, pending or threatened
material legal proceedings, to which the Company is a party or which any of its
property is the subject.

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

Not applicable.  No matters were submitted during the Fourth Quarter of the
fiscal year covered by this report to a vote of security holders.


                                    PART II


ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED MATTERS

The Company's Common Stock is traded in the over-the-counter market and is
quoted by NASDAQ under the symbol "HAWK".  The high and low closing bid
quotations for the calendar period indicated, as reported by NASDAQ, are shown
in the following table:
<TABLE>
<CAPTION>
                                      Bid Price
                                      ---------

                               HIGH              LOW
                               ----              ---
<S>  <C>                 <C>              <C>
1994:
     First Quarter              1/8               3/32
     Second Quarter             1/8               1/16
     Third Quarter              3/32              1/16
     Fourth Quarter             1/16              1/16
1995:
     First Quarter              1/16              1/16
     Second Quarter             1/16              1/32
     Third Quarter              9/32              1/16
     Fourth Quarter             7/32              5/32
1996:
     First Quarter              7/32              3/32
     Second Quarter             7/32              3/32
     Third Quarter              9/32              5/32
     Fourth Quarter             1/4               5/32
1997:
     First Quarter              3/16              5/32
</TABLE>

Bid quotations represent prices between dealers, do not include retail markup,
markdown, or commissions and do not necessarily represent actual transactions.


Number of Shareholders
----------------------

As of March 26, 1997 there were 954 holders of record of the Company's Common
Stock.

Dividends
---------

The Company has never paid any dividends on its common stock and does not have
any current plans to pay any dividends in the foreseeable future.  Should the
Company determine at some future date that the payment of dividends would be
desirable, any such dividends would be dependent upon the earnings and financial
condition of the Company.


ITEM 6 - FINANCIAL DATA
<TABLE>
<CAPTION>
                                                          Year Ended December 31,
                                                          -----------------------
                              1996               1995              1994              1993               1992
                              ----               ----              ----              ----               ----
<S>                      <C>               <C>                <C>               <C>               <C>
Operating revenues from
 continuing operations   $     2,146,000   $     3,293,000    $    2,595,000    $     2,602,000   $     2,709,000
Net income (loss) from
 continuing operations          (742,000)          117,000          (250,000)          (275,000)         (102,000)
Net income (loss)               (755,000)         (213,000)          268,000           (410,000)         (150,000)
Income (loss) from
 continuing operations
 per share                          (.03)              .00              (.01)              (.01)             (.00)
Net income (loss) per
 share                              (.03)             (.01)              .01               (.01)             (.01)
Total assets                   3,765,000         4,015,000         4,883,000          4,461,000         5,046,000
Long-term debt                   445,000           493,000           677,000            554,000           569,000
Shareholder's equity           2,237,000         2,992,000         3,175,000          2,912,000         3,371,000
Dividends declared
 per share                           -                  -                 -                 -                 -
</TABLE>

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS

Liquidity and Capital Resources:
--------------------------------

In 1996, the Company had a loss of $755,000.  In the later part of 1994, the
Company made a decision to expand its environmental operations by opening an
office in San Marcos, Texas and then in early 1996 another office in Salt Lake
City, Utah.  In hindsight, those decisions proved to be unproductive and poorly
timed.  The Company's Texas operation has lost money and the Company has made
the decision to reduce the size of that office.  (A few technical people remain
to monitor existing clients ongoing needs.)

In addition, the Salt Lake City office has been reorganized and streamlined.  It
is anticipated that the $250,000 in losses annually from the Texas operation
will cease immediately and that the cost of the Salt Lake City office will be
decreased by nearly 50% netting an additional $100,000 in savings.  In addition,
there has been an industry wide reduction in demand for environmental
engineering services.  The Company has been forced to make the decision to
retain highly trained technical staff through this slowdown time in order to
provide services for our ongoing clients and to be competitive in this technical
market.

It is our belief that this decrease in demand for services was based on industry
wide `wait and see'' attitude about the 1996 national election.  Many clients
of both ours and our competitors delayed or postponed environmental service work
throughout 1996.  Consequently, revenues for the year are down $1,165,000.  In
1995 the volume of revenue seemed sufficient to continue our experiments with
the branch offices.  In 1996, a very quick decline in revenues has generated
substantial losses.  The Company purchased approximately $614,000 of property
and equipment in 1996 as compared to $410,00 in 1995.  It is not anticipated
that these purchases will be repeated in 1997 or 1998 and the utilization of
cash proceeds will not be depleted with future purchases.

The Company continues to attempt to sell its facilities on 6WN Road in Casper
and has leased one-half of those facilities that amounts approximately equal to
the debt service on the building.  As of the writing of this report an offer has
been received on the shop and warehouse for $225,000.  The offer is contingent
upon the buyer obtaining a satisfactory financing.  Property values have
escalated substantially in the San Marcos/Austin area and it is anticipated that
the Texas property will continue to increase in value.  Parts of the building
have been leased to tenants to minimize the carrying costs of that building.
The sale of either of the Casper properties or the San Marcos property would
have a significant positive impact on the Company's liquidity and capital
resources.

The following information is provided for the years ending December 31, 1996 and
1995:
<TABLE>
<CAPTION>
                                          1996            1995
                                          ----            ----
<S>                                    <C>             <C>
Working capital                        $  (41,000)     $ 1,289,000
Long-term debt to equity                     1:5.0           1:6.0
Cash provided (utilized) by operations $   160,000     $  (250,000)
Cash and short-term investments
available                              $   619,000     $ 1,004,000
</TABLE>

In addition, in late 1996 the Company purchased 33.7 acres of undeveloped
commercial real estate in Casper,  Wyoming.  The land is adjacent to and fronts
Interstate 25 and is dissected by East Second Street (the main business
thoroughfare in Casper).  The land was purchased for less than 18 cents per
square foot.  There is no announced time table for development of the land.

Management believes that the carrying value of producing oil and gas properties
is not in excess of the future revenues which will be recovered.  Carrying value
of producing properties, net of depletion is $854,000.  Oil and gas revenues,
net of expenses were $108,000 for the year.  As many of the Company's producing
properties are natural gas properties with lives in excess of twenty-five years,
we believe the carrying value of the assets is fully recoverable.

In addition, the Company has participated in drilling 3 development wells in the
Brundage Canyon area.  We have experienced significant success for our Company,
and expect oil and gas revenues to increase to nearly $300,000 in 1997.

In addition, the Company has carrying value of $26,000 on nonproducing
properties which is net of an allowance for impairment of $2,000.  Management
believes the allowance is adequate and the remaining costs in the assets will be
recovered.

Management knows of no environmental assessment problems nor of the potential of
any such environmental assessment.  All purchased real estate has had
environmental studies done prior to purchase and both our printing operation and
our environmental lab have been instructed on the appropriate procedures for
disposals of various kinds of waste.  Such wastes (although relatively
insignificant in amount) are tested prior to disposal as part of an
environmental assurance program.

Results of Operations:
---------------------

This summarization of the Results of Operations will not include the activities
of the discontinued operations.  The reader is referred to the section above
entitled Liquidity and Capital Resources and to Footnote No. 9 of the
Consolidated Financial Statements.

Environmental revenues increased from $2,423,000 to $3,124,000 between 1994 and
1995 primarily due to the Company's ability to acquire several large clients in
1995.  With the completion of those jobs and with a general turn down in the
demand for environmental services as described in the preceding section,
environmental revenues decreased from $3,124,000 to $1,959,000 in 1996.
Environmental expenses showed a proportional increase from 1994 to 1995, but in
1996 the expense did not decrease proportionally with the dramatic decrease in
revenues.  The reason for this is the Company's inability to decrease its
trained staff without jeopardizing its ability to compete in the market.
Consequently, anytime when there is a short term rapid decline in demand for
services, the Company's carrying costs of technical staff will generate losses
for that period.  As described above, the size of the Company's staff has been
decreased in its Texas and Salt Lake City offices to partially compensate for
these declines.  For the first three months in 1997, revenues and expenses are
approximately equal in the Company's environmental business.

Oil and gas sales increased from $166,000 in 1994 to $186,000 in 1995 and showed
a slight decline to $181,000 in 1996.  However, oil and gas expense, although
increasing from $107,000 to $123,000 in 1995, decreased by $50,000 to $73,000
for the year 1996.  This decline reflects the Company's acquisition of certain
producing overriding royalties as compared to the bulk of the sales being from
more expensive properties in prior years.

Depreciation, depletion and amortization were $239,000 in 1996 as compared to
$194,000 in 1995 and $176,000 in 1994.  The increase in depreciation reflects
the depreciation on the increased assets purchased during 1996.

General and administrative costs were $153,000 in 1994 and increased to $217,000
in 1995 and again to $281,000 in 1996.  This increase in overhead costs reflects
an increased number of staff in 1995 and early 1996.

Interest expense was $70,000 in 1994 slightly increased to  $76,000 in 1995,
reflecting an increased borrowing base and declining to $65,000 in 1996,
reflecting the repayment of long term debt.  Interest income increased from
$15,000 in 1994 to $67,000 in 1995, indicative of an increased amount of
investment funds from the sale of the publishing businesses and has declined to
$43,000 in 1996, reflecting the utilization of some of those funds.  Provisions
for income tax in 1994 reflect the amount of current income taxes payable.  No
provision has been made for deferred taxes in 1994, 1995, or 1996.

Management believes that although disclosures mandated by SFAS No. 109 are
generally informative, that in the Company's case the application of SFAS No.
109 leads to disclosures which are confusing.  To comply with SFAS No. 109 is to
record deferred income tax expense on the books of the Company, when in fact,
the Company has over $10,000,000 of net operating loss carryforwards, over
$2,000,000 of depletion carryforwards and over $180,000 of various income tax
credits.  This issue is derived from the application of the provisions of SFAS
No. 109 to companies who have had quasi reorganizations in the past.  (Hawks
Industries applied the quasi reorganization provisions ARB #43, effective in
1988.)  Specifically, paragraphs 39 and 49 of SFAS No. 109 require that in cases
where there has been a quasi reorganization, that the tax benefits of loss
carryforwards and credits, earned prior to the date of the quasi reorganization,
be ignored when calculating deferred income tax benefits.  Although management
believes that such obscure provisions may give rise to great fodder in the world
of academia, we believe that to apply the principles of SFAS No. 109, paragraphs
39 and 49, is at variance with the economic realities of the present case.
Accordingly, we have not applied the provisions of SFAS No. 109, paragraphs 39
and 49.

It is management's intent to attempt to reflect the economic reality of our
present tax situation.  Given all of the future tax benefits which will be
available to the Company to offset future net income, management believes that
the financial statements presented have accomplished our goal.


ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Hawks Industries, Inc. and Subsidiaries


Index to Consolidated Financial Statements and Supplementary
Schedules

Report of Certified Public Accountants on
    the Financial Statements                                   19
Consolidated Balance Sheets                                    20
Consolidated Statements of Operations                          21
Consolidated Statements of Shareholders' Equity                22
Consolidated Statements of Cash Flows                          23
Notes to Consolidated Financial Statements                     24
Report of Certified Public Accountants on the Schedule         36
Schedule VIII - Valuation and Qualifying Accounts and Reserves 37


                    HOCKER, LOVELETT, HARGENS & YENNIE, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS
                          INDEPENDENT AUDITORS' REPORT

To the Shareholders and Board of Directors
Hawks Industries, Inc.
Casper, Wyoming

We have audited the accompanying consolidated balance sheets of Hawks
Industries, Inc. and subsidiaries as of December 31, 1996 and 1995 and the
related consolidated statements of operations, shareholders' equity, and cash
flows for the years ended December 31, 1996, 1995 and 1994. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

As described in Note 4, Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" requires that deferred taxes be reflected for
temporary differences resulting from differences between the financial statement
and tax basis of assets and liabilities.  SFAS  No. 109 also precludes the use
of tax benefits resulting from the carryforward of net operating losses which
originated prior to the Company's quasi-reorganization to increase net income
and specifically requires that they be treated as direct additions to paid-in-
capital.  The Company has not provided for recognition of deferred taxes in
accordance with generally accepted accounting principles.  If such a provision
were made, net income for 1996, 1995 and 1994 would be increased/(decreased) by
approximately $11,000, $(61,000) and $(89,000), respectively.

In our report dated March 15, 1995, we expressed an opinion that the 1994
consolidated financial statements presented fairly, in all material
respects, the financial position, results of operations and cash flows in
conformity with generally accepted accounting principles.  As discussed in the
preceding paragraph, the Company has changed its method of accounting for
deferred taxes to a method that is not in conformity with generally accepted
accounting principles.  Accordingly, our present opinion on the 1994
financial statements, as presented herein, is different from that expressed in
our previous report.

In our opinion, except for the effects of omitting deferred income taxes, as
discussed in the third paragraph, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Hawks Industries, Inc. and subsidiaries as of December 31, 1996 and 1995 and the
results of their operations and their cash flows for the years ended December
31, 1996, 1995 and 1994, in conformity with generally accepted accounting
principles.

The Company has not presented the disclosures about oil and gas producing
activities that the Financial Accounting Standards Board has determined is
necessary to supplement, although not required to be part of, the basic
financial statements.

                             /s/ Hocker, Lovelett, Hargens & Yennie, P.C.
Casper, Wyoming
March 6, 1997


<TABLE>
                    HAWKS INDUSTRIES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                           December 31, 1996 and 1995
<CAPTION>
                   ASSETS                              1996           1995
                   ------                              ----           ----
<S>                                                <C>            <C>
CURRENT ASSETS
 Cash (including certificates of deposit 1996      $     48,000   $    197,000
   $2,000; 1995 $3,000)
 Accounts receivable                                    320,000        719,000
 Short-term investments                                 571,000        807,000
 Inventory                                                   -          37,000
 Costs in excess of billings                             51,000          7,000
 Other current assets                                    52,000         52,000
                                                   ------------   ------------
   Total current assets                               1,042,000      1,819,000
                                                   ------------   ------------
PROPERTY AND EQUIPMENT, net (successful efforts
 method)                                              2,266,000      1,915,000
                                                   ------------   ------------
NOTE RECEIVABLE                                          42,000         46,000
                                                   ------------   ------------
LAND INVESTMENT                                         202,000            -
                                                   ------------   ------------
OTHER ASSETS                                            213,000        235,000
                                                   ------------   ------------
                                                   $  3,765,000   $  4,015,000
                                                   ============   ============

    LIABILITIES AND SHAREHOLDERS' EQUITY
    ------------------------------------

CURRENT LIABILITIES
 Notes payable                                     $    485,000   $    230,000
 Current maturities of long-term debt                   101,000         87,000
 Accounts payable                                       402,000        148,000
 Accrued liabilities                                     95,000         65,000
                                                   ------------   ------------
   Total current liabilities                          1,083,000        530,000
                                                   ------------   ------------
LONG TERM DEBT                                          445,000        493,000
                                                   ------------   ------------
SHAREHOLDERS' EQUITY
 Capital stock:
   Preferred stock, $.01 par value; authorized
     19,940,000 shares; no shares issued                     -             -
   Common stock, $.01 par value; authorized
     100,000,000 shares; outstanding 1996 -
     26,788,858 shares; 1995 - 26,788,858               268,000        268,000
 Capital in excess of par value of common stock       2,586,000      2,586,000
 Retained earnings (deficit) (since elimination of
   deficit at December 31, 1988)                       (617,000)       138,000
                                                   ------------   ------------
                                                      2,237,000      2,992,000
                                                   ------------   ------------
                                                   $  3,765,000   $  4,015,000
                                                   ============   ============
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>

<TABLE>
                    HAWKS INDUSTRIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  Years ended December 31, 1996, 1995 and 1994
<CAPTION>
                                                            1996                 1995                 1994
                                                            ----                 ----                 ----
<S>                                                   <C>                  <C>                  <C>
Operating revenue:
  Oil and gas                                         $         181,000    $         186,000    $         166,000
  Environmental                                               1,959,000            3,124,000            2,423,000
  Gain (loss) on sale of assets                                   6,000              (17,000)               6,000
                                                      -----------------    -----------------    -----------------
                                                              2,146,000            3,293,000            2,595,000
                                                      -----------------    -----------------    -----------------
Operating expenses:
  Oil and gas                                                    73,000              123,000              107,000
  Environmental                                               2,276,000            2,674,000            2,351,000
  Depreciation, depletion and amortization                      239,000              194,000              176,000
  General and administrative                                    281,000              217,000              153,000
                                                      -----------------    -----------------    -----------------
                                                              2,869,000            3,208,000            2,787,000
                                                      -----------------    -----------------    -----------------
Operating income (loss) from continuing operations             (723,000)              85,000             (192,000)
Other income (expense):
  Other income                                                    3,000                   -                    -
  Interest income                                                43,000               67,000               15,000
  Interest expense                                              (65,000)             (76,000)             (70,000)
  Sale of Marketable Securities                                      -                41,000                   -
                                                      -----------------    -----------------    -----------------
Gain (loss) from continuing operations before taxes            (742,000)             117,000             (247,000)
Provision for taxes:
  Current                                                            -                    -                 3,000
                                                      -----------------    -----------------    -----------------
Gain (loss) from continuing operations                         (742,000)             117,000             (250,000)
Discontinued operations                                         (13,000)            (330,000)            (510,000)
Gain (loss) on sale of discontinued operations
 (includes $128,000 deferred costs on discontinued
 operations)                                                         -                    -             1,028,000
                                                      -----------------    -----------------    -----------------
Net income (loss)                                     $        (755,000)   $        (213,000)   $         268,000
                                                      =================    =================    =================
Weighted average number of common shares outstanding         26,788,858           26,578,295           26,203,330
                                                      =================    =================    =================
Earnings (loss) per common share:
  Gain (loss) from continuing operations              $            (.03)   $             .00    $            (.01)
  Discontinued operations (net)                                    (.00)                (.01)                (.02)
  Gain (loss) on sale of discontinued operations                     -                    -                   .04
                                                      -----------------    -----------------    -----------------
                                                      $            (.03)   $            (.01)   $             .01
                                                      =================    =================    =================
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>

<TABLE>
                    HAWKS INDUSTRIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                  Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                                                                   Capital in        Accumulated 
                                                      Common Stock Issued           Excess of         Earnings
                                                      -------------------
                                                     Shares          Amount         Par Value         (Deficit)
                                                     ------          ------         ---------         ---------
<S>                                              <C>              <C>            <C>               <C>
Balance January 1, 1994                             25,282,782    $   253,000    $     2,576,000   $     83,000
Additional shares issued- WEST merger                1,000,000         10,000            (10,000)            -
Stock bonus granted employee                            40,000             -               1,000             -
Recapture of paid in capital from sale of assets
 involved in Quasi reorganization                           -              -              (6,000)            -
Net Income                                                  -              -                 -          268,000
                                                 -------------    -----------    ---------------   ------------
Balance December 31, 1994                           26,322,782        263,000          2,561,000        351,000
Stock issued to Employee Stock Ownership Plan
 Trust                                                 461,076          5,000             24,000             -
Stock bonus granted employee                             5,000             -               1,000             -
Net loss                                                    -              -                 -         (213,000)
                                                 -------------    -----------    ---------------   ------------
Balance December 31, 1995                           26,788,858        268,000          2,586,000        138,000
Net loss                                                    -              -                 -         (755,000)
                                                 -------------    -----------    ---------------   ------------
Balance December 31, 1996                           26,788,858    $   268,000    $     2,586,000   $   (617,000)
                                                 =============    ===========    ===============   ============

<FN>
See Notes to Consolidated Financial Statements.
</TABLE>

<TABLE>
                    HAWKS INDUSTRIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                                    1996             1995            1994
                                                    ----             ----            ----
<S>                                           <C>              <C>             <C>
Cash flows from operating Activities:
  Gain (loss) from continuing operations      $     (742,000)  $     117,000   $     (250,000)
  Adjustments to reconcile net earnings/loss
   to net cash provided:
    Depreciation, depletion and amortization         237,000         194,000          176,000
    Gain on sale of assets                            (6,000)        (24,000)          (6,000)
    Impairment of nonproducing oil and gas
     property                                          6,000          37,000           34,000
    Changes in operating assets and
     liabilities:
      Decrease (increase) in accounts
      receivable                                     384,000        (269,000)         (47,000)
      Decrease (increase) in inventory, costs
       in excess of  billings and other
       current assets                                (45,000)         24,000           81,000
      Increase (decrease) in accounts payable,
       accrued expenses and billings in
       excess of costs                               292,000        (202,000)         100,000
                                              --------------   -------------   --------------
                                                     126,000        (123,000)          88,000
  Operating cash flow from discontinued
   operations.                                        34,000        (127,000)         277,000
                                              --------------   -------------   --------------
Net cash flows provided by (used in) oper.
 activities                                          160,000        (250,000)         365,000
                                              --------------   -------------   --------------
Cash flow from investing activities:
  Purchases of property and equipment               (614,000)       (410,000)        (342,000)
  Proceeds from sale of properties                    42,000         216,000            9,000
  Decrease in other assets                             3,000          13,000           10,000
  Increase in land investment                       (202,000)             -               -
  Decrease (increase) in note receivable               4,000         (46,000)          91,000
  Decrease (increase) in short-term
   investments                                       236,000        (807,000)             -
                                              --------------   -------------   --------------
                                                    (531,000)     (1,034,000)        (232,000)
  Investing cash flow from discontinued
   operations                                          1,000         285,000        1,256,000
                                              --------------   -------------   --------------
Net cash provided by (used in) investing
activities                                          (530,000)       (749,000)       1,024,000
                                              --------------   -------------   --------------
Cash flows from financing activities:
  Proceeds from sale of stock                            -            30,000            1,000
  Proceeds from debt obligations incurred            331,000         182,000          210,000
  Reduction of debt obligations                      (95,000)       (307,000)        (175,000)
                                              --------------   -------------   --------------
                                                     236,000         (95,000)          36,000
  Financing cash flow from discontinued
   operations                                        (15,000)        (49,000)        (192,000)
                                              --------------   -------------   --------------
Net cash provided by (used in) financing
activities                                           221,000        (144,000)        (156,000)
                                              --------------   -------------   --------------
Increase (decrease) in cash and cash
equivalents                                         (149,000)     (1,143,000)       1,233,000
Cash and cash equivalents at beginning of year       197,000       1,340,000          107,000
                                              --------------   -------------   --------------
Cash and cash equivalents at end of year      $       48,000   $     197,000   $    1,340,000
                                              ==============   =============   ===============
Supplemental disclosure of non cash investing
 and financing activities:
 Purchase of property by issuance of debt
   obligation                                 $          -     $          -    $      150,000
                                              ==============   =============   ==============

<FN>
See Notes to Consolidated Financial Statements.
</TABLE>

                    HAWKS INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.   Nature of Business and Significant Accounting Policies

     Nature of business:

     The Company is engaged in the environmental testing business through its
     subsidiary, Western Environmental Services & Testing, Inc. (WEST), acquired
     in 1992.  During 1993, WEST formed a new subsidiary, Western Environmental
     Services, Inc. which manages environmental clean ups.  The environmental
     service and testing company's emphasis is on air quality testing, but
     soils, water and asbestos testing are also performed.  The Company provides
     services to the general public although, most clients are industrial
     entities.  Fees for services are due upon receipt of invoice.

     The Company is also presently engaged in investing in oil and gas producing
     properties with an emphasis on nonoperating interests.  Previously the
     Company had been involved in exploration and production activity but has
     de-emphasized this part of the oil and gas business in the last five years.
     Sales of oil and gas are made to domestic petroleum purchasing and refining
     companies with payment normally received within thirty to sixty days of
     date of sale.

     The Company formed Central Wyoming Properties, Inc. (a wholly owned
     subsidiary) in 1996 to acquire real estate investments.  The Company to
     date has acquired one property.

     The Company had also been engaged in the business of aviation publishing
     and navigational products assembly and sales through its subsidiary
     International Aviation Publishers, Inc., acquired in 1986.  During 1990 IAP
     formed a new subsidiary, Hawks Books Company, which acquired printing
     equipment to print IAP books and also to provide outside printing services.
     Substantially all of the assets of IAP were sold as of December 31, 1994
     and operations of IAP, Hawks Book Company and SanTech, Inc. are shown as
     "Discontinued Operations".

     On December 31, 1988 the Company effected a quasi-reorganization whereby
     all of its assets (primarily those in the oil and gas industry segment)
     were revalued to their estimated fair market value and the retained
     earnings deficit was eliminated.

     This summary of significant accounting policies of Hawks Industries, Inc.
     and subsidiaries (the Company) is presented to assist in understanding the
     Company's financial statements. The financial statements and notes are
     representations of the Company's management. These accounting policies,
     with the exception of the adoption of SFAS No. 109, conform to generally
     accepted accounting principles and have been consistently applied in the
     preparation of the financial statements.

     Principles of consolidation:

     The Consolidated Financial Statements include the accounts of the Company
     and its subsidiaries. The Company's proportionate share of partnership and
     joint venture assets, liabilities, revenue and expenses is consolidated in
     the financial statements. In consolidation, all significant intercompany
     accounts and transactions have been eliminated.

     The Company has one wholly-owned oil and gas subsidiary, Burton/Hawks
     Exploration Co., Ltd.  The Company had one wholly-owned subsidiary, Hawks
     Environmental Instrumentation, Inc. which manufactured environmental
     testing instruments, this portion of the Company was also discontinued at
     December 31, 1994 and all assets were either sold or transferred to
     W.E.S.T.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The Company also owned 100% of IAP.  (All assets have been sold or
     transferred to Hawks Industries, Inc. at December 31, 1995 and operations
     have been discontinued).  IAP had two wholly-owned subsidiaries, SanTech,
     Inc., which assembled and sold navigational products, and Hawks Book
     Company, formed to own and operate printing equipment.  All of Hawks Book
     Company's assets have been sold at December 31, 1995 and operations have
     been discontinued.  All of SanTech, Inc. assets and liabilities have been
     sold or transferred to Hawks Industries, Inc. and operations have been
     discontinued at December 31, 1996.

     The Company also owns 100% of W.E.S.T. which does environmental services
     and testing.  W.E.S.T. has one wholly owned subsidiary, Western
     Environmental Services, Inc. which manages environmental clean-up projects
     and performs site evaluations.

     The Company also owns 100% of Central Wyoming Properties, Inc. which has
     real estate investments.

     Cash equivalents:

     For purposes of the Statement of Cash Flows, the Company considers highly
     liquid debt instruments purchased with a maturity of three months or less
     to be cash equivalents.

     Concentration of credit risk for cash held at banks:

     The Federal Deposit Insurance insures up to $100,000 of deposits maintained
     at any one financial institution.  On December 31, 1996, the Company had
     approximately $496,000 in excess of insured levels, based upon bank
     records, at one bank.

     Inventory:

     At December 31, 1996, the Company had no inventories.  At December 31,
     1995, finished products inventories consisted of printed materials and
     navigational products. The printed materials and finished navigational
     products were carried at the lower of cost (moving average method) or
     market.

     Accounts receivable:

     Accounts receivable consists of regular receivables from customers and a
     receivable from a loan to an officer of the Company.  At December 31, 1996
     and 1995, receivables consisted of the following:

<TABLE>
<CAPTION>
                                              Regular
                                             Accounts       Loan to
                                 Total      Receivable      Officer
                                 -----      ----------      -------
     <S>                      <C>          <C>           <C>
     1996                     $    320,000 $    305,000  $     15,000
                              ============ ============  ============
     1995                     $    719,000 $    711,000  $      8,000
                              ============ ============  ============

</TABLE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Property and equipment:

     The Company uses the successful efforts method of accounting for oil and
     gas producing activities as prescribed by FASB Statement No. 19, "Financial
     Accounting and Reporting by Oil and Gas Producing Companies".  Under this
     method, the costs of unsuccessful exploratory wells and delay rentals are
     expensed as incurred.  Lease acquisition costs and costs of drilling and
     equipping productive exploratory and all development wells are capitalized.
     Depreciation and depletion of producing properties and equipment is
     computed by the unit-of-production method using Company estimates of
     unrecovered proved producing oil and gas reserves.  Total capitalized costs
     for individual proved oil and gas properties are limited to the estimated
     future net revenues from production of proved reserves.  An allowance for
     impairment has been established and expense charged for the estimated
     impairment of non-producing leasehold interests.

     Buildings and leasehold improvements, furniture and fixtures,
     transportation equipment, engineering and lab equipment, and machinery and
     equipment are stated at cost and depreciated over their estimated useful
     lives ranging from three to forty-one years principally by the straight-
     line method.

     The costs of maintenance and repairs are charged to operating expenses as
     incurred.  The costs of significant additions, renewals and betterment of
     properties are capitalized and depreciated over the remaining or extended
     useful lives of the properties.

     Environmental testing revenue and cost recognition:

     Income from environmental testing contracts is reflected in the financial
     statements by the completed contract method whereby income and costs are
     recognized when the testing has been completed and a report has been
     issued.  The Company is in the environmental testing business.  Due to the
     process involved, there is no way feasible to accurately determine the
     percentage of completion at any time during the process.

     Income taxes:

     By restatement of 1994, the Company has elected to omit deferred taxes as
     required by Statement of Financial Accounting Standards Number 109,
     ``Accounting for Income Taxes'' (SFAS No. 109).

     Investment tax credits will be reflected in the Statement of Operations as
     a reduction of income taxes in the year in which they become available for
     use.

     Earnings per share:

     Earnings per common share were computed by dividing net earnings (loss) by
     the weighted average number of shares outstanding during the year.
     Computation of the weighted average number of outstanding shares excludes
     common stock equivalents because their effect would be antidilutive.


                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Bad debt:

     Uncollectible accounts receivable are charged directly against earnings
     when they are determined to be uncollectible.  Use of this method does not
     result in a material  difference from the valuation method required by
     generally accepted accounting principles.

     Environmental costs:

     Environmental expenditures that relate to current operations are expensed
     or capitalized in accordance with generally accepted accounting principles.
     Liabilities for these expenditures are recorded when it is probable that
     obligations have been incurred and the amounts can be reasonably estimated.
     At December 31, 1996 and 1995, no material liabilities have been recorded
     as a range of loss cannot be reasonably estimated.

     Use of estimates:

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period.  Actual results could differ from those
     estimates.  The Company uses estimates to compute depreciation and
     depletion on oil and gas properties and on other depreciable assets.

     Fair value of financial instruments:

     The carrying value of cash, receivables and accounts payable approximates
     fair value due to the short maturity of these instruments.  The carrying
     value of short and long-term debt approximates fair value based on
     discounting the projected cash flows using market rates available for
     similar maturities.  None of the financial instruments are held for trading
     purposes.


Note 2.   Property and Equipment
<TABLE>
     Property and equipment at December 31, 1996 and 1995 consists of the
following:
<CAPTION>
                                                        1996         1995
                                                        ----         ----
      <S>                                           <C>           <C>
      Nonproducing oil and gas properties, net of
       valuation allowance of $2,000 in 1996 and
       $43,000 in 1995                              $    26,000   $    31,000
      Producing oil and gas properties                1,622,000     1,369,000
      Furniture and fixtures                            394,000       316,000
      Transportation equipment                          265,000       276,000
      Buildings and leasehold improvements              816,000       818,000
      Machinery and equipment                                -          3,000
      Engineering and lab equipment                   1,084,000       976,000
      Other                                             118,000       124,000
                                                    -----------   -----------
                                                      4,325,000     3,913,000
      Less accumulated depreciation and depletion     2,059,000     1,998,000
                                                    -----------   -----------
                                                    $ 2,266,000   $ 1,915,000
                                                    ===========   ===========
</TABLE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3.  Notes Payable, Long-Term Debt and Pledged Assets
<TABLE>
     Notes payable were as follows at December 31, 1996 and 1995
<CAPTION>
                                                           1996         1995
                                                           ----         ----
      <S>                                           <C>           <C>
      Short-term notes payable due bank, interest at
       8.0% $50,000 maturing January 1, 1997 and
       $150,000 maturing June 23, 1997
       collateralized by certificate of deposit     $    200,000  $        -
      Revolving line of credit $300,000, interest at
       6.25% maturing June 23, 1997 collateralized
       by certificate of deposit                         285,000       230,000
                                                    ------------  ------------
                                                    $    485,000  $    230,000
                                                    ============  ============

</TABLE>
<TABLE>
     Long-term debt at December 31, 1996 and 1995 is as follows:
<CAPTION>
                                                           1996         1995
                                                           ----         ----
      <S>                                           <C>           <C>
      Mortgage note payable to bank, interest set at
       3.125% above U.S.Treasury Bill index for one
       year each June 1st, (9.325% at December 31,
       1996), payable $1,471 per month including
       interest until April 1, 2003, collateralized
       by office building                           $     84,000  $     93,000
      Mortgage note payable to City of Casper,
       interest at 4%, payable $859 per month
       including interest until June 8, 1998 then
       balance due in lump sum, collateralized by
       office building and warehouse                     149,000       153,000
      Mortgage notes payable to W.D. Hodges and Jim
       Ferris Properties, interest at 9% payable
       $971 per month until September 17, 2013,
       collateralized by building                        101,000       103,000
      Mortgage note payable to bank, interest set at
       4% above U.S. Treasury Bill index for one
       year each April 1st, (9.5% at December 31,
       1996) payable $1,222 per month including
       interest until March 22, 2009, collateralized
       by office building                                106,000       112,000
      Lease payable, Eaton Financial Corporation,
       payable $1,227 per month including interest,
       collateralized by computer equipment with
       original cost of $49,000, accumulated
       depreciation of $17,000 and $13,000 at 1996
       and 1995                                           11,000        22,000
      Note payable, State of Wyoming, interest at
       4%, due in quarterly installments of
       approximately $4,000 including interest until
       May 14, 1998, unsecured                            23,000        38,000
      Installment loans payable, due at various
       times from March 1994 to August, 1999,
       interest rates from 7.0% to 10%, secured by
       equipment                                          72,000        59,000
                                                    ------------  ------------
                                                         546,000       580,000
      Less current maturities                            101,000        87,000
                                                    ------------  ------------
                                                    $    445,000  $    493,000
                                                    ============  ============

</TABLE>
<TABLE>
     Aggregate maturities of long-term debt are as follows:
<CAPTION>
     <S>                   <C>
     1997                    101,000
     1998                    188,000
     1999                     25,000
     2000                     23,000
     2001                     26,000
     Thereafter              183,000
                           ---------
                           $ 546,000
                           =========

</TABLE>

     Actual cash payments for interest during the years ended December 31, 1996,
     1995 and 1994 were $66,000, $78,000 and $114,000 respectively.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4.   Income Taxes, Accounting Change, Prior Period Restatement

     Under SFAS 109 deferred income taxes arise from temporary differences
     resulting from differences between the financial statement and tax basis of
     assets and liabilities.  In financial reporting for oil and gas properties,
     the Company uses differing methods to compute depreciation on certain
     equipment for financial statement purposes and tax purposes; the tax
     depreciation deductions are larger than those for financial statement
     purposes primarily due to accelerated depreciation methods and shorter
     lives for tax purposes; for financial statement purposes, an allowance for
     impairment is established for estimated impairment of non-producing leases;
     however, no deduction is taken for taxes until the lease has expired or is
     dropped; intangible drilling costs are capitalized for financial statement
     purposes and may be expensed for tax purposes as the expenses are incurred;
     and, the carrying value of certain equipment has been reduced to
     approximate market value, but the loss will be recognized for tax purposes
     upon disposition.  The Company recognizes income and expense from some
     investments on the accrual basis, but uses the cash basis for tax purposes.
     Deferred taxes are classified as current and noncurrent depending on the
     classification of the assets and liabilities to which they relate.
     Deferred taxes arising from timing differences that are not related to an
     asset or liability are classified as current or noncurrent depending on the
     periods in which the timing differences are expected to reverse.

     Management believes that although disclosures mandated by SFAS No. 109 are
     generally informative, that in the Company's case the application of SFAS
     No. 109 leads to disclosures which are confusing.  To comply with SFAS No.
     109 is to record deferred income tax expense (credit) on the books of the
     Company, when in fact, the Company has over $10,000,000 of net operating
     loss carryforwards, over $2,000,000 of depletion carryforwards and over
     $126,000 of various income tax credits.  This issue is derived from the
     application of the provisions of SFAS No. 109 to companies who have had
     quasi reorganizations in the past.  (Hawks Industries applied the quasi
     reorganization provisions ARB #43, effective in 1988.)  Specifically,
     paragraphs 39 and 49 of SFAS No. 109 require that in cases where there has
     been a quasi reorganization, that the tax benefits of loss carryforwards
     and credits, earned prior to the date of the quasi reorganization, be
     ignored when calculating deferred income tax benefits.  Although management
     believes that such obscure provisions may give rise to great fodder in the
     world of academia, we believe that to apply the principles of SFAS No. 109,
     paragraphs 39 and 49, is at variance with the economic realities of the
     present case.  Accordingly, we have not applied the provisions of SFAS No.
     109, paragraphs 39 and 49.

     The following disclosures are provided to show a condensed version of the
     financial statements had SFAS No. 109 been implemented.  The 1994 statement
     of income reflect the presentation before the restatement to remove the
     effect of deferred taxes.
     <TABLE>
     <CAPTION>

          Balance Sheet                              1996            1995
          -------------                              ----            ----
     <S>                                        <C>            <C>
     Current assets                             $   1,053,000  $   1,819,000
     Other assets                                   2,723,000      2,196,000
                                                -------------  -------------
      Total assets                              $   3,776,000  $   4,015,000
                                                =============  =============
     Current liabilities                        $   1,083,000  $     530,000
     Other liabilities                                445,000        493,000
                                                -------------  -------------
      Total liabilities                             1,528,000      1,023,000
                                                -------------  -------------
     Capital stock                                    268,000        268,000
     Capital in excess of par value                 2,752,000      2,752,000
     Retained earnings (deficit)                     (772,000)       (28,000)
                                                -------------  -------------
      Total equity                                  2,248,000      2,992,000
                                                -------------  -------------
      Total liabilities and equity              $   3,776,000  $   4,015,000
                                                =============  =============

</TABLE>
<TABLE>
<CAPTION>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          Income Statement               1996          1995           1994
          ----------------               ----          ----           ----
     <S>                            <C>           <C>           <C>
     Gain (loss) from continuing
      operations before taxes       $   (742,000) $    117,000  $   (247,000)
                                    ------------  ------------  ------------
     Provision for taxes:
      Current                                -             -          (3,000)
      Deferred                            11,000       (17,000)       87,000
                                    ------------  ------------  ------------
                                          11,000       (17,000)       84,000
                                    ------------  ------------  ------------
     Gain (loss) from continuing
     operations                         (731,000)      100,000      (163,000)
     Discontinued operations (net of
     taxes)                              (13,000)     (374,000)     (337,000)
     Gain (loss) on sale of
      discontinued operations (net
      of taxes)                              -             -         679,000
                                    ------------  ------------  ------------
     Net income (loss)              $   (744,000) $   (274,000) $    179,000
                                    ============  ============  ============

     </TABLE>

     If SFAS No. 109 was implemented, deferred tax (assets) liabilities would be
     comprised of the following at December 31:
     <TABLE>
     <CAPTION>
     Tax effects of temporary differences for:               1996                 1995                 1994
                                                             ----                 ----                 ----
     <S>                                            <C>                  <C>                  <C>
     Accounting for oil & gas properties            $           75,000   $           75,000   $           85,000
                                                    ------------------   ------------------   ------------------
      Total deferred tax liabilities                            75,000               75,000               85,000
                                                    ------------------   ------------------   ------------------
     Other liabilities                                         (11,000)                 -                (17,000)
     Tax loss carryforwards                                 (3,432,000)          (3,452,000)          (3,333,000)
     Allowance for loss on discontinued operations                 -                    -                (44,000)
     Tax credit carryforwards                                 (126,000)            (181,000)            (206,000)
                                                    ------------------   ------------------   ------------------
      Total deferred tax assets                             (3,569,000)          (3,633,000)          (3,600,000)
                                                    ------------------   ------------------   ------------------
     Net deferred asset                                     (3,494,000)          (3,558,000)          (3,515,000)
     Asset valuation allowances                              3,483,000            3,558,000            3,454,000
                                                    ------------------   ------------------   ------------------
        Net deferred tax asset                      $          (11,000)  $              -     $          (61,000)
                                                    ==================   ==================   ==================

     </TABLE>

     When subsequently recognized, approximately $3,000,000 of the 1996 deferred
     tax assets' tax benefits will be allocated directly to contributed capital
     as a result of the Company's quasi reorganization in 1988.

     At December 31, 1996, the Company's net operating loss and tax credits
     available for carryforward to offset future taxable income and tax
     liabilities for income tax reporting purposes expire as follows:
     <TABLE>
     <CAPTION>
                                            Net Operating         Investment
       Year Ending December 31,:               Losses             Tax Credits
       -------------------------               ------             -----------
<S>                                     <C>                  <C>
                  1997                          1,653,000               40,000
                  1998                          2,209,000               24,000
                  1999                          1,713,000                7,000
                  2000                          3,767,000               12,000
                  2002                            101,000                   -
                  2006                             96,000                   -
                  2008                            265,000                   -
                  2009                            359,000                   -
                  2010                            744,000                   -
                                        -----------------    -----------------
                                        $      10,907,000    $          83,000
                                        =================    =================
     </TABLE>

     The Company also has approximately $43,000 in unused jobs tax credits and
     $2,131,000 in percentage depletion carryforwards available to offset future
     income tax liabilities.  These items do not expire.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 5.   Stockholders' Equity

     The Company had an Incentive Stock Option Plan for key employees and had
     reserved 1,000,000 shares of unissued common stock to be issued thereunder.
     The plan expired on November 19, 1991.  The option price was the market
     value of the shares on the date the option ($.14) is granted except for
     beneficial holders of more than ten percent of the total outstanding shares
     of the Company, whose option price was one hundred ten percent of said
     market price.  No option may be exercised by any employee until all
     previously granted options still outstanding to the same employee are
     exercised.  There were 50,000 options outstanding and exercisable at
     December 31, 1996 and 1995.

     The Company has an Employee Stock Ownership Plan-Trust.  To be eligible to
     participate, employees must be 21 years of age and have had at least one
     year of continuous employment with the Company. The Company, at the
     discretion of the board of directors, may contribute to the plan an amount
     not to exceed 25 percent of total qualified compensation in any given year
     for any individual to a maximum of $30,000.  On occasion, when the Company
     has contributed less than the amount allowed, the Company has made
     additional contributions under the carryover provisions of the plan in
     subsequent years.  The total cost to the Company and its subsidiaries was
     $58,000, $63,000 and $88,000 in 1996, 1995 and 1994, respectively.  The
     ESOP compensation expense was $1,145,000, $1,140,000 and $1,173,000 in
     1996, 1995 and 1994 respectively.

Note 6.   Related Parties

     During the years ended December 31, 1995 and 1994 the Company's printing
     segment had $81,000 and $226,000 in sales of which $0 and $98,000 were
     intercompany and were eliminated during consolidation.

     The Company, through its subsidiary W.E.S.T., rented an office and
     laboratory in Casper, Wyoming from a company affiliated with two directors
     of the Company.  Rents paid were $12,000 and $15,000 in 1995 and 1994,
     respectively.


Note 7.   Lease Commitments and Total Rental Expense

     The Company rents equipment under various operating lease agreements.  The
     total minimum rental commitments at December 31, 1996 under the agreements
     are $18,000 which is due as follows:
<TABLE>
<CAPTION>
      During the year ending
      December 31:
      <S>                       <C>
      1997                      $    15,000
      1998                            3,000
                                -----------
                                $    18,000
                                ===========

</TABLE>
     The total equipment rental expense included in the Statements of Operations
     for the years ended December 31, 1996, 1995 and 1994 is $28,000, $198,000
     and $78,000 respectively.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8.    Financial Information Relating to Industry Segments
<TABLE>
<CAPTION>
                                           1996          1995          1994
                                           ----          ----          ----
      <S>                              <C>          <C>           <C>
      Sales to unaffiliated customers:
       Oil and gas industry            $   188,000  $    196,000  $    171,000
       Environmental testing and
         management industry             1,958,000     3,097,000     2,424,000
                                       -----------  ------------  ------------
                                       $ 2,146,000  $  3,293,000  $  2,595,000
                                       ===========  ============  ============
      Discontinued operations          $    44,000  $     28,000  $  1,841,000
                                       ===========  ============  ============
      Operating profit or (loss):
       Oil and gas industry            $   (43,000) $    (46,000) $     44,000
       Environmental testing and
         management industry              (433,000)      323,000       (23,000)
       Unallocated Corporate expenses     (247,000)     (192,000)     (213,000)
                                       -----------  ------------  ------------
                                       $  (723,000) $     85,000  $   (192,000)
                                       ===========  ============  ============
       Discontinued operations         $   (13,000) $   (330,000) $   (510,000)
                                       ===========  ============  ============
      Identifiable assets:
       Oil and gas industry            $   879,000  $    619,000  $    505,000
       Environmental testing and
         management industry             1,080,000     1,203,000       940,000
       Corporate assets                  1,806,000     2,107,000     1,170,000
       Discontinued operations                 -          86,000     2,268,000
                                       -----------  ------------  ------------
                                       $ 3,765,000  $  4,015,000  $  4,883,000
                                       ===========  ============  ============
      Capital expenditures:
       Oil and gas industry            $   358,000  $    189,000  $     33,000
       Environmental testing and
         management industry               207,000       214,000       299,000
       Other capital expenditures           49,000         7,000       160,000
       Discontinued operations                 -           1,000        19,000
                                       -----------  ------------  ------------
                                       $   614,000  $    411,000  $    511,000
                                       ===========  ============  ============
      Depreciation, depletion and
      amortization:
       Oil and gas industry            $    67,000  $     39,000  $     19,000
       Environmental testing and
         management industry               116,000        98,000        97,000
       Other depreciation, depletion
         and amortization                   56,000        57,000        60,000
                                       -----------  ------------  ------------
                                       $   239,000  $    194,000  $    176,000
                                       ===========  ============  ============
       Discontinued operations         $     2,000  $     61,000  $    156,000
                                       ===========  ============  ============
</TABLE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9  Discontinued Operations

     On December 23, 1994, the Company adopted a formal plan to sell its
     publishing segment for $1,800,000.  The disposal date for a substantial
     portion of the operations was December 23, 1994.  Assets of the publishing
     segment sold consisted of the following.
<TABLE>
<CAPTION>
     <S>                                  <C>
     Accounts receivable                  $    130,000
     Inventory                                 293,000
     Other current assets                      205,000
     Property and equipment                     20,000
     Book masters and copyright                 50,000
                                          ------------
     Total assets                         $    698,000
                                          ============
</TABLE>

     In 1994, the Company had a net gain on the sale of the publishing segment
     in the amount of $683,000.  The gain was netted against a provision for
     estimated losses of $44,000 on the disposal of the remaining assets and a
     provision of $129,000 for expected operating losses during the phase-out
     period from December 23, 1994 through March 31, 1995.  In 1995 the
     publishing company had a $142,000 loss which was $100,000 operating loss
     and $42,000 loss on the sale of the remaining equipment.

     On December 23, 1994, the Company adopted a formal plan to sell its
     navigational products segment.  A portion of the product line was sold in
     conjunction with the disposal of the publishing segment on December 23,
     1994.  The final disposal date was extended to December 31, 1996.  The
     assets of the navigational products segment were sold piece meal and
     consisted primarily of inventory and property and equipment.

     On December 23, 1994, the Company adopted a formal plan to sell its
     printing segment.  The disposal date was August 15, 1995.  The assets of
     the printing products segment to be sold as an operating unit, consisted
     primarily of inventory and property and equipment.  The printing company
     assets were sold during 1995 resulting in a loss of $113,000 in addition
     the company had a loss from operations of $80,000 prior to the sale.

     On December 31, 1994, the Company adopted a formal plan to dispose of its
     environmental assembly segment.  The disposal was completed on December 31,
     1994 with disposition of equipment at a net loss of $4,000 and by
     transferring remaining miscellaneous equipment to the environmental testing
     segment.

     In 1994, the Company estimated an additional loss on the disposal of all
     discontinued operations of $128,000 to be incurred during the phase-out
     period of January 1, 1995 through December 31, 1995.  Due to the additional
     operating losses incurred during the phase-out period and unanticipated
     losses on the disposition of certain equipment sales, actual losses of
     $458,000 were incurred during 1995 and $13,000 in 1996, exceeding the
     original estimates by $340,000.  Accordingly, the accompanying consolidated
     statements of operations for 1996 and 1995 includes the additional loss.

     Net assets to be disposed of for the discontinued segments on the balance
     sheets at December 31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
                                                        1996           1995
                                                        ----           ----
     <S>                                           <C>            <C>
     Accounts receivable                           $         -    $     15,000
     Inventory                                               -          37,000
     Other current assets                                    -           1,000
     Property and equipment                                  -           2,000
                                                   -----------    ------------
      Total assets                                 $         -    $     55,000
                                                   ===========    ============
</TABLE>

     Assets are shown at their expected net realizable values.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Operating results of the publishing, navigational products, printing, and
     environmental assembly segments for the period prior to disposal are shown
     separately in the accompanying consolidated income statements.

     Net sales of the discontinued segments for 1996, 1995, and 1994 were as
     follows:
<TABLE>
<CAPTION>
                                          1996          1995           1994
                                          ----          ----           ----
     <S>                             <C>           <C>            <C>
     Publishing                      $        -    $     14,000   $  1,533,000
     Navigational products                 44,000        92,000        176,000
     Printing                                 -          81,000        128,000
     Environmental assembly                   -              -           4,000
                                     ------------  -------------  ------------
                                     $     44,000  $    187,000   $  1,841,000
                                     ============  ============   ============
</TABLE>

     These amounts are not included in net sales in the accompanying
     consolidated statements of operations.

Note 13. Short-term Investments

     Short-term investments consisted of treasury bills and certificates of
     deposits which are intended to be held until maturity.  The following
     schedule summarizes investment activity for the years ended December 31,
     1996 and 1995.
<TABLE>
<CAPTION>
                                                       1996           1995
                                                       ----           ----
     <S>                                          <C>           <C>
     Beginning balance, at cost                   $    807,000  $         -
     Purchase of investments                           253,000     1,550,000
     Redemption of investments                        (518,000)     (750,000)
     Earnings on investments                            29,000         7,000
                                                  ------------  ------------
     Ending balance, at cost                      $    571,000  $    807,000
                                                  ============  ============
     Approximate market value                     $    571,000  $    807,000
                                                  ============  ============
     At December 31, 1996 the investments are
      scheduled to mature as follows:
       Year ended December 31, 1997               $    507,000
                                                  ============  
</TABLE>

Note 14. Major Customers

     The following companies are considered major customers which accounted for
     ten percent or more of total revenues in 1996, 1995 and 1994.
<TABLE>
<CAPTION>
                                 Percentage     Service
                                 ----------     -------
                              1996  1995  1994
                              ----  ----  ----
     <S>                      <C>   <C>   <C>   <C>
     Newmont Gold             22%   23%    -    Environmental
                                                testing
     Dames and Moore          15%   10%    -    Environmental
                                                testing
</TABLE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15.  Note Receivable

      The note receivable on December 31, 1996, consisted of $45,000 due from
      the sale of printing equipment, building and other assets, part of which
      is shown in current assets.  The note receivable is secured by above
      assets.  The note has an interest rate of 9%.
<TABLE>
          Maturities on this note are as follows:
<CAPTION>
          <S>                 <C>
          1997               $     4,000
          1998                     4,000
          1999                     4,000
          2000                     5,000
          2001                     5,000
          Thereafter              23,000
                             -----------
                             $    45,000
                             ===========
</TABLE>

                    HOCKER, LOVELETT, HARGENS & YENNIE, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS




                          INDEPENDENT AUDITORS' REPORT





To the Shareholders and Board of Directors
Hawks Industries, Inc.
Casper, Wyoming


In connection with our audits of the consolidated financial statements of Hawks
Industries, Inc. as of December 31, 1996 and 1995 and for the years ended
December 31, 1996, 1995 and 1994, which report thereon dated March 6, 1997
is incorporated by reference in this annual report on Form 10-K, we also audited
the financial statement schedules listed in the accompanying index at Item
14(a)(2) as of and for the years ended December 31, 1996, 1995 and 1994. In our
opinion these financial statement schedules present fairly, when read in
conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.


                             /s/   Hocker, Lovelett, Hargens & Yennie, P.C.



Casper, Wyoming
March 6, 1997



                    HAWKS INDUSTRIES, INC. AND SUBSIDIARIES
         SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
                                Balance                               Balance
                                  At     Charged  Charged               At
                               Beginning   To     To Other            End Of
Classification                 Of Period Expense  Accounts  Deduction Period
--------------                 --------- -------- --------  -------- ---------
<S>                            <C>      <C>       <C>       <C>      <C>
Year ended December 31, 1996:
 Allowance for impairments,
   nonproducing oil and gas
   properties                  $ 43,000 $   6,000 $ 47,000  $    -   $   2,000
 Allowance for doubtful
   accounts receivable               -        -         -        -         -
Year ended December 31, 1995
 Allowance for impairments,
   nonproducing oil and gas
   properties                  $ 21,000 $  37,000 $ 15,000  $    -   $  43,000
 Allowance for doubtful
   accounts receivable               -        -         -        -         -
Year ended December 31, 1994
 Allowance for impairments,
   nonproducing oil and gas
   properties                  $  4,000 $  34,000 $ 17,000  $    -   $  21,000
 Allowance for doubtful
   accounts receivable               -        -         -        -         -
</TABLE>


ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL DISCLOSURE

                                     -NONE-


                                    PART III

The information called for by Items 10, 11, 12, and 13 is incorporated by
reference from the Company's Definitive Proxy Materials to be filed pursuant to
Regulation 14 A.

                                    PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8K

(a)  The following documents are filed as part of this Report:

     1. Financial Statements:
        Report of Certified Public Accountants
        Consolidated Balance Sheets
        Consolidated Statements of Operations
        Consolidated Statements of Shareholders' Equity
        Consolidated Statements of Cash Flows
        Notes to Consolidated Financial Statements


     2. Financial Statement Schedules and Exhibits
        required to be filed by Item 8 of this form and by paragraph (d) of this
        Item:

        Report of Certified Public Accountants on Schedule
        Schedule VIII - Valuation and Qualifying Accounts and Reserves

(b)  Reports on Form 8-K

     The Company filed no reports on form 8K for the fourth quarter.



                                   SIGNATURES


Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange
Act of 1934,  the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.

                                   HAWKS INDUSTRIES, INC.

                                   Joseph J. McQuade, President
                                   ----------------------------
                                   Joseph J. McQuade, President


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


Signatures                                        Date
----------                                        ----

Joseph J. McQuade, President                      April 25, 1997
----------------------------------------------
Joseph J. McQuade, President,
Principal Executive Officer
and Director


Bill Ukele                                        April 25, 1997
----------------------------------------------
Bill Ukele
Chief Financial Officer


Dwight B. Despain                                 April 25, 1997
----------------------------------------------
Dwight B. Despain
Director


James E. Meador, Jr.                              April 25, 1997
----------------------------------------------
James E. Meador, Jr.
Director


Bruce A. Hinchey                                  April 25, 1997
----------------------------------------------
Bruce A. Hinchey
Director


Gerald E. Moyle                                   April 25, 1997
----------------------------------------------
Gerald E. Moyle
Director


                                  EXHIBIT 21.0
                       LIST OF SUBSIDIARIES OF REGISTRANT

           HAWKS INDUSTRIES, INC. SUBSIDIARIES-STATE OF INCORPORATION
                               DECEMBER 31, 1996

     Company                                       Parent         State
Burton-Hawks Exploration Co., Ltd.              (Hawks Ind.)    Colorado
SanTech, Inc.                                   (IAP, Inc.)      Wyoming
Western Environmental Services Inc.             (WEST, Inc.)    Colorado
Western Environmental Services and Testing,
Inc.                                            (Hawks Ind.)     Wyoming
Central Wyoming Properties, Inc.                (Hawks Ind.)     Wyoming