FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 1995

                                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________.

Commission file number: 0-7261


                            CHAPARRAL RESOURCES, INC.
             (Exact name of registrant as specified in its charter)

          Colorado                                         84-0630863
 ------------------------------                  ------------------------------
(State or other jurisdiction of                 (I.R.S. Employer Identification
 incorporation or organization)                             Number)

                       621 Seventeenth Street, Suite 1301
                             Denver, Colorado 80293
                    (Address of principal executive offices)


Registrant's telephone number, including area code: (303) 293-2340

Securities registered pursuant to Section 12(g) of the Act:

                          $0.10 Par Value Common Stock
                                (Title of Class)

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 and,  (2) has been subject to such filing  requirements
for the past 90 days.

         YES  [X]                   NO  [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

          [X]

         As of March 8, 1996,  the  aggregate  market value of the  Registrant's
voting stock held by nonaffiliates was $23,783,000.

         As of March 8, 1996,  Registrant had 24,009,192 shares of its $0.10 par
value common stock issued and outstanding.

                                                       Total Pages ___
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                                     PART I

ITEM 1.  BUSINESS

         Chaparral Resources, Inc. ("Company"), which was incorporated under the
laws of the state of Colorado in 1972, is an independent oil and gas exploration
and production company based in Denver, Colorado.  Historically, the Company has
produced  and sold crude oil and  natural gas to oil and gas  purchasers  in the
immediate area where the oil and gas is produced. The Company owns, acquires and
sells oil and gas leases and other mineral interests and drills and participates
with others in drilling and operating oil and gas fields and wells.  The Company
attempts to obtain outside  development  capital on a joint venture basis and to
share the risk of its drilling  with others  engaged in the oil and gas business
by  arranging  farmouts  to and from  others.  Most of the wells  from which the
Company  currently  is  receiving  production  are owned only  partially  by the
Company.

         Until 1994,  the Company's  oil and gas  activities  were  concentrated
solely  in the  United  States  and the  Company's  remaining  working  interest
property  in the  United  States  is in the  South  Douglas  Creek  Field in the
Piceance  Creek  Basin of western  Colorado,  an area of  multi-pay  natural gas
production.  During early 1994,  the  management of the Company made a strategic
decision to pursue international oil and gas projects,  with initial emphasis on
the  Commonwealth  of Independent  States (the former Soviet Union).  Due to its
involvement in the Karakuduk Oil Field Project  ("Karakuduk Field" or "Karakuduk
Project")  described  below,  the Company divested its domestic working interest
oil and gas  properties  other than the South Douglas Creek Field located in the
Piceance Creek Basin of western Colorado.

          The Company will  continue to operate the South  Douglas  Creek Field,
incurring revenue and operating  expenses,  and will continue to receive revenue
from producing wells. The South Douglas Creek Field contains 26 producing wells.
During  1995 the  combined  flow rate of these wells has  averaged  2,232 MCF of
natural gas per day. The Company  operates the 11,000 acre South  Douglas  Creek
Field and has an average of fifteen percent (15%) working  interest in the field
area.  The  Company  expects the South  Douglas  Creek Field to continue to be a
major  area  for  development  for the  Company  with  more  than 60  additional
locations in 10 sections  (approximately  6,400 acres)  identified  for possible
drilling on 160-acre  spacing.  Drilling and gas gathering line construction are
limited to summer and fall months due to the rugged  topography  and high ground
elevations.  Major  natural gas  pipeline  systems are in place in the field and
multiple gas marketing  opportunities exist to sell new production.  The Company
also  holds  overriding  royalty  interests  ranging  from  0.03%  to  10% in 85
producing wells located in Colorado,  North Dakota and Wyoming,  from which some
revenue will be anticipated. See "Business--Markets."

Karakuduk Project

         The Company has assembled a team familiar  with  international  oil and
gas matters to assist in the review and acquisition of international oil and gas
projects.  In early  September  1994, the Company signed a letter of intent with
Central Asian Petroleum,  Inc., a Delaware corporation  ("CAP-D"),  and Overseas
Consulting  Services Company,  Inc.  ("OCSCO"),  both private companies based in
Houston,  Texas,  to jointly  pursue the  registration  and  development  of the
Karakuduk  Field,  a  shut-in  oil  field  in  the  central  Asian  Republic  of
Kazakstan, discovered in the early 1970s but never placed in production.

         In  mid-September  1994, the Company acquired a 25% interest in Central
Asian Petroleum Guernsey Limited ("CAP-G"), with headquarters in Ankara, Turkey.
CAP-G has a 50% interest in Karakuduk Munay, Inc.  ("KKM"),  which holds 100% of
the right to develop the Karakuduk  Field. As a result of the acquisition of the
25% interest in CAP-G,  the Company has a 12.5%  beneficial  interest in KKM and
the  Karakuduk  Field.  The Company paid  $150,000  and agreed to issue  200,000
shares of restricted common stock, of which 150,000 shares have been issued, for
this interest.  In April 1995,  the Company  acquired all of the stock of CAP-D,
which also owned an interest in CAP-G,  in exchange for 4,250,000  shares of the

                                      - 2 -

<PAGE>

Company's Common Stock,  which are held in an escrow account to be released from
time to time  through  June 30,  2000,  upon the  occurrence  of certain  events
related to development of the Karakuduk Field. As a result of the acquisition of
CAP-D, the Company's  beneficial  interest in CAP-G increased to 45%, giving the
Company a 22.5% beneficial interest in KKM and the Karakuduk Field.

         Under terms of the  acquisition of CAP-D,  the former  shareholders  of
CAP-D have certain rights to cause the Company to nominate  persons  selected by
the former shareholders to the Company's Board of Directors. The first director,
Jay W. McGee,  was elected at the 1995 annual meeting.  See "Item 10.  Directors
and Executive Officers of the Registrant." Additionally,  in connection with the
acquisition,  the Company may be required to pay a brokerage fee to Mr. McGee in
the amount of $175,000  of which  $50,000 has been paid and the balance of which
is  payable  as KKM meets  milestones  in  connection  with  development  of the
Karakuduk Field. See "Item 13. Certain Relationships and Related Transactions."

         In January and February  1996, the Company  entered into  agreements to
acquire,  for a total of $5,850,000  cash and 1,785,000  shares of the Company's
restricted  common  stock,  up  to an  additional  55%  interest  in  CAP-G.  If
consummated,  the acquisitions will increase the Company's ownership in CAP-G to
100%, thus increasing to 50% the Company's  beneficial  ownership in KKM and the
Karakuduk  Field.  The other 50% ownership in the  Karakuduk  Field is held by a
Kazakstan regional government group.

         The  additional  55% of  CAP-G  is to be  acquired  in  three  separate
transactions,  the first two of which  include the  purchase of all of the CAP-G
shares owned by a private Turkish company  ("Darka") and by an individual  CAP-G
shareholder ("Koksal"), each of which owns 25% of the CAP-G shares outstanding.

         The Company must pay  $2,000,000 in cash plus issue  685,000  shares of
the Company's Common Stock to Darka for all of Darka's CAP-G shares. The Company
paid $600,000 of the cash purchase price and delivered 625,000 shares of Company
stock on March 8, 1996, with the balance of cash and stock due on April 1, 1996.

         The Company must pay $1,975,000 in cash and issue 900,000 shares of the
Company's Common Stock to Koksal for 60% of Koksal's CAP-G shares (15% of CAP-G)
with an option,  after  completion  of the initial  purchase,  to  purchase  the
remaining  40% of his CAP-G  shares for an  additional  $1,625,000  and  200,000
shares of the  Company's  Common  Stock.  The initial  purchase  from Koksal was
consummated  on March 11,  1996 when  $750,000  cash and  900,000  shares of the
Company's  Common Stock were delivered to Koksal.  The remaining cash balance of
$1,225,000  for the  initial  purchase  will be  paid  in four  equal  quarterly
payments of $306,250  between June 11, 1996 and March 11, 1997.  The Company has
the option to purchase the remaining 40% of Koksal's CAP-G shares (10% of CAP-G)
at any time following  completion of the initial  purchase and prior to December
11, 1997.

          Under  the  third  agreement,  the  Company  intends  to  acquire  the
remaining 5% of the  outstanding  CAP-G shares  from a private U.S.  corporation
for $250,000 cash to be paid on or before April 14, 1996.

Uzbekistan Project

         The Company has been  negotiating  an  agreement  pursuant to which the
Company  would  acquire 100% of the issued and  outstanding  capital stock of MD
International   Petroleum,   Inc.  ("MDI"),  a  private  company  of  which  the
shareholders  include or will  include four  directors  of the Company  (Messrs.
Karren,  Dilling,  Jeffs and McGee).  At the time of the  acquisition,  the only
asset that MDI would have would be a 2% to 5% interest in a joint  venture  that
Enron Oil & Gas Uzbekistan  Inc. is attempting to negotiate for the  development
of natural gas fields in Uzbekistan.  It is currently  contemplated that, if the
agreement  is   consummated,   the  Company   would  issue  MDI's   shareholders
approximately  6,400,000  shares of the  Company's  restricted  common  stock in
exchange for their MDI shares.  Of these shares,  the Company  anticipates  that
approximately 1,000,000 shares would be issued at closing and the balance over a
four to five year period, depending upon the occurrence of certain events. There
are no assurances  that the Company will be able to consummate  the agreement to
acquire the shares of MDI or that Enron Oil & Gas  Uzbekistan  Inc. will be able
to consummate a joint venture or other arrangement for the natural gas fields in
Uzbekistan.

                                      - 3 -

<PAGE>


         Risks of Foreign  Operations.  Because of the Company's interest in KKM
and the Karakuduk  Field,  the Company will be subject to certain risks inherent
in the  ownership  and  development  of foreign  properties,  including  without
limitation,  cancellation or renegotiation of contracts,  royalty increases, tax
increases,  retroactive tax claims,  expropriation,  adverse changes in currency
values, foreign exchange controls, import and export regulations,  environmental
controls,  and  other  laws and  regulations  which  may  adversely  affect  the
Company's  interest  in  the  Karakuduk  Field.  The  Company's  operations  and
agreements will also be governed by foreign laws. In the event of a dispute, the
Company may be subject to the exclusive  jurisdiction  of foreign  courts or may
not be successful in subjecting foreign persons to the jurisdiction of courts in
the United States. In addition,  the Company might be hindered or prevented from
enforcing its rights with respect to a government instrumentality because of the
doctrine of sovereign immunity.

         The Company has no prior  experience  operating in any foreign country,
including the Republic of Kazakstan,  and may encounter unexpected  difficulties
in conducting foreign operations.  Although the recent and continuing political,
social and  economic  upheavals  in Kazakstan  have  created  opportunities  for
foreign  investment,  substantial  uncertainty exists about the stability of the
central  Kazakstan  government,  the status of Kazakstan law and the autonomy of
the parties involved with the Company in Kazakstan.

         The Company has  endeavored to protect itself against the political and
commercial  risks,  but there is no certainty  that the steps taken will provide
adequate  protection.  In this  regard,  the Company has applied  with  Overseas
Private  Investment  Corporation  ("OPIC") for political  risk  insurance.  OPIC
insurance can cover the following political risks:

        o   Currency  Inconvertibility--deterioration  of the investor's ability
            to convert  profits,  debt service and other  remittances from local
            currency unto U.S. dollars;

        o   Expropriation--loss   of  an   investment   due  to   expropriation,
            nationalization or confiscation by a foreign government;

        o   Political Violence--loss of assets or income due to war, revolution,
            insurrection or politically  motivated  civil strife,  terrorism and
            sabotage; and

        o   Interference  With  Operations--loss  of  assets  or  income  due to
            cessation  of  operations  lasting  six  months  or more  caused  by
            political violence.

         The coverage elections for each category of insurance are computed on a
ceiling  and an active  amount.  The  coverage  ceiling  represents  the maximum
insurance  available for the insured  investment  and future  earnings  under an
insurance  contract.  The  premiums  for each  category  are  based on a maximum
insured amount  ("MIA"),  a current insured amount ("CIA") and a standby amount.
The MIA represents the maximum  insurance  available for the insured  investment
under an insurance contract.  The CIA represents the insurance actually in force
during the contract  period.  The difference  between the CIA and the MIA is the
standby amount. There is a charge for standby coverage.

         The Company has applied with OPIC for all four political risk coverages
on the Company's  investment in the Karakuduk  Field in western  Kazakstan.  The
MIAs sought for each coverage range from $23.4 to $40.2  million.  The estimated
yearly premium  amounts for the CIAs for each coverage range up to $84,000.  The
estimated  yearly standby  premiums for each coverage  range up to $88,000.  The
actual premium values may be higher or lower  depending on the contract  offered
to the Company by OPIC.

         The  Investment  Committee  of OPIC  approved the  Company's  Karakuduk
operations for political  risk insurance  coverage by OPIC on December 19, 1995.
The Company expects to receive the actual  Contract of Insurance  issued by OPIC
to the Company in April 1996.

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<PAGE>

 
         Under  the  terms  of  OPIC's   Expropriation   and  Interference  With
Operations insurance coverage,  the Company must be able to transfer to OPIC the
shares of beneficial interests related to the insured investment, free and clear
of all  encumbrances.  There are certain  restrictions on the transfer of shares
and  assignment  of the  Company's  beneficial  interests in KKM. The Company is
seeking a waiver of the transfer  restrictions  from the shareholders of KKM and
does not anticipate problems in obtaining the waiver.

Markets

         Domestic Production.  The availability of ready markets for oil and gas
and the prices  obtained for  production  depend upon a number of factors beyond
the Company's  control.  Such factors include the extent of domestic  production
and imports of oil and natural gas,  weather  conditions,  the  availability  of
pipelines and other means of transportation and federal and state regulations of
the  production,  transport  and  sale of oil and gas.  The  Company  and  other
producers are experiencing pipeline curtailment of gas production due to natural
gas prices and demand for natural gas.

         In fiscal 1995, the only customer having  purchases which accounted for
10% or more of the Company's  revenues was Conoco Inc. which accounted for 16.5%
of the Company's revenue.

         The  Company's  business is not  seasonal,  except that severe  weather
conditions  could  limit the  Company's  exploration  and  drilling  activities.
However,  severe cold weather increases the demand for oil and natural gas which
are used for heating purposes.

         Foreign Production.  There is substantial  uncertainty as to the prices
at which any oil reserves produced by the Company from the Karakuduk Field could
be sold.  It is possible  that,  under the market  conditions  prevailing in the
future,  the  production  and sale of oil from the  Karakuduk  Field  may not be
commercially  feasible. The availability of ready markets and the price obtained
for oil  produced  depends  upon  numerous  factors  beyond  the  control of the
Company.  The current market for oil is characterized  by instability  which has
caused dramatic declines in world oil prices in recent years and there can be no
assurance of any price stability.  See also "Item 2.  Properties--The  Karakuduk
Field."

Competition

         Both foreign and domestic oil and gas  exploration  and the acquisition
of producing and undeveloped  properties is a highly competitive and speculative
business. In seeking suitable  opportunities,  the Company competes in all areas
of the oil and gas industry with a number of other  companies,  including  large
multi-national  oil and gas  companies  and  other  independent  operators  with
greater  financial  resources and, in some cases,  with more experience than the
Company. The Company does not hold a significant  competitive position in either
the foreign or domestic oil and gas industry.

Regulation

         General.  All  aspects  of the  oil and gas  industry  are  extensively
regulated by federal,  state and local governments in areas in which the Company
has  operations,  and  the  Company's  foreign  operations  may  be  subject  to
regulation by foreign  governments or other regulatory bodies governing the area
in which the Company's overseas operations are located.  Regulations govern such
things as drilling permits,  production rates, and environmental  protection and
pollution  control,  royalty  rates  and  taxation  rates  among  others.  These
regulations may substantially increase the costs of doing business and sometimes
may prevent or delay the  starting or  continuing  of any given  exploration  or
development  project.  Moreover,  regulations  are subject to future  changes by
legislative  and  administrative  action  and by  judicial  decisions  which may
adversely  affect  the  petroleum   industry  in  general  and  the  Company  in
particular.  At the present  time,  it is  impossible  to predict the effect any


                                      - 5 -

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current or future proposals or changes in existing laws or regulations will have
on the  Company's  operations.  The Company  believes  that it complies with all
applicable legislation and regulations in all material respects.

         Environmental.   The  Company   does  not  believe  that  its  business
operations  presently impair  environmental  quality.  However,  compliance with
federal,  state  and  local  regulations  which  have been  enacted  or  adopted
regulating the discharge of materials into the environment could have an adverse
effect  upon the  Company,  the extent of which the Company is unable to assess.
Since inception the Company has not made any material  capital  expenditures for
environmental control facilities and has no plans to do so.

Employees

         The Company employs five persons on a full-time basis.

ITEM 2.  PROPERTIES

The Karakuduk Field

         The Karakuduk Field is located in the Mangistau  Region of the Republic
of Kazakstan.  KKM's  license to develop the  Karakuduk  Field covers an area of
approximately  16,922.5  acres  and has been  granted  to KKM for a period of 25
years.  The agreement  granting KKM the right to develop the Karakuduk Field was
approved by the Ministry of Oil and Gas  Industries of the Republic of Kazakstan
on August  30,  1995.  CAP-G's  share of the  initial  capitalization  of KKM is
$100,000, of which the Company's share has been paid.

         The Karakuduk Field is geographically located,  approximately 227 miles
northeast of the regional  capital city of Aqtau, on the Ust-Yurt  Plateau.  The
closest  settlement  is the  Say-Utes  Railway  Station  approximately  38 miles
southeast of the field.  The ground  elevation  varies  between 590 and 656 feet
above sea level. The region has a dry, continental  climate,  with fewer than 10
inches of rainfall per year. Mean temperatures range from -25 degrees Fahrenheit
in January to 100 degrees  Fahrenheit  in July.  The  operating  environment  is
similar to that found in northern Arizona and New Mexico in the United States.

         The Karakuduk  structure is an  asymmetrical  anticline  located on the
Aristan Uplift in the North Ustyurt  Basin.  Oil was discovered on the structure
in 1972, when Kazakstan was a republic of the former Soviet Union, from Jurassic
age  sediments  between  8,500  and  10,000  feet.  Twenty-two  exploratory  and
development  wells were drilled to  delineate  the field,  however,  none of the
wells was ever placed on production.  The productive area of the Karakuduk Field
is 11,300 acres, with a minimum of seven separate productive horizons present in
the Jurassic formation.  Oil has been recovered in tests from all seven horizons
within the Jurassic  formation with flow rates ranging from 3 to 966 barrels per
day. The Company  estimates that the drilling of approximately 90 additional oil
wells and 26 water  injection wells will be required to fully develop the field.
Peak oil production from the field is expected to occur within seven years after
start-up,  although time or amount of development or production cannot presently
be assured.

         Ryder  Scott  Company   Petroleum   Engineers   ("Ryder   Scott"),   an
internationally  recognized petroleum engineering group retained by the Company,
has stated that in its opinion,  after review, a reserve report  commissioned by
the Company which estimated that the Karakuduk Field has estimated  original oil
in place of 74 million barrels which could be considered proved undeveloped,  is
reasonable.  However,  neither  the Ryder Scott  opinion or the  reserve  report
considered  the potential  adverse impact of  marketability  on price of any oil
which might be  produced  due to the remote  location of the field or  potential
political  instability  and,  therefore,  none of the reserves can  presently be
considered  proven.  The  production  and  marketing of the oil reserves will be
subject to a number of  political,  economic  and other  risks.  See  "--Foreign
Operations, --Markets and --Competition."


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         The   Karakuduk   Field  is   approximately   19  miles  north  of  the
Mukat-Mangishlak   railroad,  the  Mangishlak-  Astraghan  water  pipeline,  the
Beyneu-Uzen  high voltage utility lines, and the  Uzen-Atrau-Samara  oil and gas
pipelines.  KKM has the  right  of  priority  to use  the  existing  oil and gas
pipeline  facilities to transport  produced oil from the Karakuduk  Field to the
Baltic  Sea  ports of  Kainingrad  and  Vendsplis  and/or  the Black Sea port of
Novorsiysk,  thus offering a potential  world market for the produced crude oil.
This priority use of existing  facilities is granted within the guarantee issued
by the  Ministry of Oil and Gas  Industry  of the  Republic  of  Kazakstan.  The
planned  development  program for the  Karakuduk  Field will include a secondary
recovery  operation  that  the  Company  believes  could  result  in  additional
recoverable reserves.

         Because of uncertainties  surrounding the prospect,  no proved reserves
have  been  attributed  to  the  field.  The  Karakuduk   Project  will  require
significant development costs for which the financing is not complete. There can
be no assurance  that the project will be adequately  financed or that the field
will be  successfully  developed.  The license  requires a minimum  work plan of
approximately  $10 million in 1996, $34 million in 1997 and $12 million in 1998.
The  agreement  provides  KKM with the right to defer the minimum  work  program
under  certain  conditions.  As part of the minimum work plan  requirement,  the
Company is committed to loan CAP-G  sufficient  funds up to a total amount of $4
million to enable CAP-G to loan KKM sufficient  funds to place existing wells in
the Karakuduk Field on production.

         The initial  operating  budget for KKM was approved in September  1995,
and the Company paid  $320,000 as its share for the  remainder of calendar  year
1995.

         In  January  1996,  the  Board of  Directors  of KKM  approved  the KKM
operating  budget for the first half of 1996,  of which the  Company's  share is
approximately  $864,650,  and of which the Company has paid  $150,000.  KKM will
notify the  Company of KKM's  additional  capital  requirements  on an as needed
basis.

         The Karakuduk  Field will be developed in phases.  Phase I, expected to
require at least one year,  is scheduled  to begin  during 1996.  Because of the
uncertainty of the conditions of the existing wells, Phase I expenditures are to
include the  recompletion  of seven existing wells or if, after  recompletion of
three  wells,  it  is  determined  that  well  conditions  are  unfavorable  for
additional  recompletions,  a new  development  well  will  be  drilled  in  the
Karakuduk Field. The estimated costs for Phase I are as follows:

         Option I:  Recomplete seven existing wells.
         Total costs, including engineering design, well recompletions,  storage
tanks  and  facilities,   oil  transport   trucks,   roads,   camp   facilities,
communications facilities,  field transportation,  office overhead and personnel
costs, are estimated to be $3.01 million.

         Option I:  Recomplete  three existing  wells and drill one  development
well.
         Total  costs  for  Option  II,  including   engineering   design,  well
recompletions,  drilling and completion costs, storage tanks and facilities, oil
transport  trucks,  roads,  camp  facilities,  communication  facilities,  field
transportation,  office overhead and personnel  costs, are estimated to be $3.60
million.

         The  Company  will be  responsible  for  providing  all of the  funding
necessary  for the  completion  of Option I or  Option  II under  Phase I of the
development of the Karakuduk  Field. If the estimated costs under Phase I exceed
$4,000,000,  any  additional  costs will be paid by the  Company,  assuming  the
Company  consummates  the  acquisitions  of the  additional  interests  in CAP-G
described above. If not, the Company's share of expenditures after Phase I would
be 45%.

         The  Company   anticipates   that  produced  crude  oil  from  Phase  I
development would be sold beginning within two to three months after start-up of
this phase.  The produced oil will be transported by tanker trucks over existing
roads to the  pumping  station  at  Beiman  approximately  85 miles  east of the

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Karakuduk Field. The oil would probably either be sold to private  international
companies at this station or transported via the Uzen-Atrau-  Samara pipeline to
world markets.

         Management of the Company  believes the  risk-to-reward  considerations
involved with the  development of the Karakuduk  Field are very positive and may
lead to substantial growth of the Company over the next several years.  However,
the Company can provide no assurances  that the Karakuduk Field will produce oil
in any amounts or that the Company will ever realize a profit as a result of the
Company's interest in the field.

         The  exploration  and development of the Karakuduk Field is governed by
the terms of the agreements with the other  shareholders in CAP-G and KKM. There
can be no assurance  that such  shareholders,  or any  successor  thereto,  will
contribute or will be in a position to  contribute  its  proportionate  share of
costs and expenses for either entity for which it is responsible without raising
additional  capital.  Thus, in the event a joint venture  partner cannot finance
its obligations, the Company may be required to assume its financing obligations
or risk the forfeiture of the property.  In addition,  the Company's  ability to
utilize any revenue  generated by the  successful  development  of the Karakuduk
Field held indirectly by the Company through CAP-G and KKM may be limited.  Such
limitations  may result  from  governmental  restrictions  which may  prevent or
inhibit  the  distribution  of funds  from  KKM to  CAP-G  or from  CAP-G to the
Company.

         All of the permits and  licenses  required to develop the field are not
yet in place and there is no assurance they will be obtained.  Also,  because of
uncertainties  surrounding the project,  no proved reserves have been attributed
to the field. The project will require  significant  development costs for which
the financing is not in place.  There can be no assurance  that the project will
be  financed  or that the field will be  successfully  developed.  Further,  the
Company will face all of the risks  inherent in attempting to develop an oil and
gas property in a foreign country.

         See also Item  7--Management's  Discussion  and  Analysis of  Financial
Condition and Results of Operations.

         Reserves.  As  detailed  in  "Disclosures  About Oil and Gas  Producing
Activities"  following the Notes to  Consolidated  Financial  Statements in this
report,  estimated  quantities  of the Company's  proved oil reserves  decreased
40.7% for the fiscal year ended  November 30, 1995,  as compared to the previous
fiscal year and natural gas reserves  decreased 7.1%.  Reserves decreased due to
production  during the year,  the sale of certain  producing  properties and the
abandonment  of certain  properties  which  produced at  uneconomic  rates.  The
present value of the Company's  proved  reserves  decreased  60.6% at the fiscal
year end November 30, 1995, as compared to the end of the previous  fiscal year,
due to lower  natural gas prices,  production,  the sale of proved  reserves and
abandonment of proved reserves.

         Production. The Company's production for the fiscal year ended November
30, 1995 was 8,224 barrels of oil and 132,924 MCF of natural gas. Oil production
decreased  27.1% from that  during the fiscal  year  ended  November  30,  1994.
Natural gas production decreased 16.4% from the previous fiscal year.

         Productive Wells and Acreage.  As of November 30, 1995, the Company had
interests  in 65 gross  productive  oil wells  (1.73 net oil wells) and 62 gross
productive  gas wells  (4.61 net gas wells).  There are no  multiple  completion
wells. Production was from 45,775 gross (2,793 net) developed acres.

         Undeveloped  Acreage.  The Company on November 30, 1995, held interests
in 2,500 gross (690 net) undeveloped oil and gas leases,  all located within the
State of Wyoming.

         Drilling  Activity.  All of the Company's drilling activity has been in
the United  States.  During the last three fiscal years ended November 30, 1995,
the Company participated in the drilling of the following productive exploratory
and  development  wells.  This  table  does not  include  any wells in which the
Company had a carried or overriding  royalty  interest,  nor any wells that were
recompleted.

                                      - 8 -

<PAGE>
<TABLE>
<CAPTION>


   Fiscal Year              Exploratory Wells                     Development Wells
      Ended         -------------------------------      ---------------------------------  
   November 30,      Productive            Dry             Productive             Dry
   ------------     -------------    --------------      --------------     --------------
                    Gross    Net     Gross      Net      Gross      Net     Gross      Net
                    -----    ----    -----      ---      -----      ---     -----      ---

<C>                   <C>      <C>     <C>       <C>       <C>       <C>      <C>        <C>

1995..............    0        0       0         0         0         0        0          0
1994..............    0        0       0         0         5        .81       1        .15
1993..............    1      .11       0         0         3        .34       0          0

</TABLE>

          Present  Activities.  As of  March  13,  1996,  the  Company  was  not
participating in the drilling of any oil or natural gas wells.

          Offices.  The  Company's  offices  comprise  3,906 square feet and are
rented for $2,767 per month, under a lease which expires in March of 1997.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is not involved in any material pending legal proceedings.

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

         No matter was  submitted to a vote of the  Company's  security  holders
during the Company's fiscal quarter ended November 30, 1995.

                                     PART II

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

          The  Company's  $0.10  par value  common  stock  trades on the  Nasdaq
Small-Cap Market under the symbol CHAR.

         At March 8, 1996, the Company had approximately  2,100  shareholders of
record of its $0.10 par value  common  stock.  No dividend  has been paid on the
Company's  common  stock,  and  there  are  no  plans  to pay  dividends  in the
foreseeable future.

         The following table shows the range of high and low  "real-time"  trade
prices  for each  quarter  during the  Company's  last two  fiscal  years  ended
November  30,  1995,  as  reported by the  National  Association  of  Securities
Dealers, Inc.

<TABLE>
<CAPTION>
                                                                Price Range
Trading Range                                               -------------------
Fiscal Quarter Ended                                        High          Low
--------------------                                        ----         ------

<S>                                                         <C>             <C>
February 28, 1994........................................   11/32           1/4
May 31, 1994.............................................    9/32           1/4
August 31, 1994..........................................   15/32          9/32
November 30, 1994........................................   29/32         11/32
February 28, 1995........................................   23/32           5/8
May 31, 1995.............................................     7/8         21/32
August 31, 1995..........................................   11/16         15/32
November 30, 1995........................................       1           1/2
</TABLE>

ITEM 6.        SELECTED FINANCIAL DATA

          The   following  is  selected   consolidated   financial   information
concerning the Company.  This information should be read in conjunction with the
Consolidated  Financial  Statements appearing elsewhere in this Annual Report on
Form 10-K.

<TABLE>
<CAPTION>

                                              1995          1994           1993           1992           1991
                                              ----          ----           ----           ----           ----

<S>                                        <C>          <C>           <C>            <C>            <C>       

Oil and gas sales.......................   $ 255,000    $  374,000    $  414,000     $  492,000     $  523,000
Total revenues*.........................     255,000       374,000       414,000        492,000        607,000
Noncash write-down of oil
  and gas properties....................     619,000       416,000       230,000           --             --
Net income (loss).......................    (704,000)     (474,000)     (123,000)      (121,000)      (154,000)
Net income (loss) per
  common share..........................      (0.04)         (0.02)        (0.01)        (0.01)         (0.01)
Working capital.........................     366,000       497,000       709,000        357,000        323,000
Total assets............................   5,595,000     2,388,000     2,597,000      2,292,000      2,537,000
Long-term obligations and
   deferred terms.......................     461,000         --          115,000        135,000        135,000
Shareholders' equity....................   4,920,000     2,035,000     2,167,000      1,880,000      2,001,000
Present value of proved reserves........     427,000     1,084,000     1,360,000      1,429,000      1,643,000
Proved oil reserves (bbls)..............      66,185       111,690       141,748        105,973        209,136
Proved gas reserves (mcf)...............   3,062,417     3,294,730     2,305,142      1,485,556      1,321,377

-------------------
</TABLE>

         *Certain  reclassifications  have been  made to  conform  prior  years'
information with the current year presentation.

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

Liquidity and Capital Resources

         The Company's  primary source of capital is from oil and gas sales. The
Company's  working  capital  position was  positive at November 30, 1995.  Total
current assets were $580,000 and total current  liabilities  were $214,000 for a
working capital ratio of 2.7 to 1.

         Net cash and cash  equivalents  increased  $183,000 during fiscal 1995.
The  increase  was due to  receipt of  proceeds  from a private  unsecured  loan
represented  by a note  payable in the amount of $750,000  (see Note E, Notes to
Consolidated  Financial Statements) and proceeds from the issuance of $93,000 in
capital Stock (see Note F, Notes to Consolidated Financial Statements).

         In  mid-September  1994, the Company  acquired a 25% interest in CAP-G.
CAP-G has a 50% interest in Karakuduk Munay,  Inc.  ("KKM"),  which owns 100% of
the right to develop the Karakuduk  Field.  In April 1995, the Company  acquired
all of the stock of Central Asian Petroleum, Inc. ("CAP-D"), which also owned an
interest  in CAP-G,  in exchange  for up to  4,250,000  shares of the  Company's
Common Stock which are held in escrow to be delivered  from time to time through
June 1, 2000,  upon the  occurrence  of certain  events in  connection  with the
development of the Karakuduk Field.

          In January and February 1996, the Company  entered into  agreements to
acquire,  for a total of $5,850,000  cash and 1,785,000  shares of the Company's

                                      - 9 -

<PAGE>



Common  Stock,  an  additional  55%  interest  in  CAP-G.  If  consummated,  the
acquisitions  would  increase the  Company's  ownership  in CAP-G to 100%,  thus
increasing  to 50% the Company's  beneficial  ownership in KKM and the Karakuduk
Field.  The other 50%  ownership in the  Karakuduk  Field is held by a Kazakstan
regional  government group. As of March 11, 1996,  $1,350,000 of such amount had
been paid and 625,000 of such shares had been  issued,  with  $1,680,000  of the
balance due in April 1996 and  $1,225,000  of the balance  payable in four equal
quarterly payments beginning June 11, 1996.

         The Company does not have significant  income-producing  properties and
the  Karakuduk  Field  is  substantially  undeveloped.  The  development  of the
Karakuduk  Field  through KKM will  require  substantial  amounts of  additional
capital, in addition to the significant cash portion of the purchase price which
remains to be paid for the CAP-G shares. The Company's share for the 1996 budget
for the Karakuduk Field development is anticipated to be at least $4,000,000, of
which  approximately  $150,000  has been paid and $760,000 is due by April 1996.
The terms of the KKM license from the Republic of Kazakstan requires a 1996 work
plan of  approximately  $10,000,000,  a portion of which can be  deferred by KKM
under  certain  conditions.  KKM will  notify the  Company  of KKM's  additional
capital requirements on an as needed basis.

         The Company has  incurred  operating  losses for each of its last three
fiscal  years.  The Company  will be required  to raise  substantial  additional
capital to finance its  obligations  in connection  with the  acquisition of its
interest in and the development of the Karakuduk  Field,  and to satisfy working
capital  needs.  The  Company  plans to seek to raise  this  additional  capital
through  debt or equity  offerings,  encumbering  properties  or  entering  into
arrangements whereby certain costs of exploration will be paid by others to earn
an interest  in the  properties.  The  present  environment  for  financing  the
acquisition of oil and gas  properties or the ongoing  obligations of an oil and
gas business is uncertain  due, in part, to the  substantial  instability in oil
and gas  prices in recent  years.  There  can be no  assurance  that the debt or
equity financing  expected to be necessary to fund the Company's  operations and
obligations will be available to the Company on economically  acceptable  terms.
If  sufficient  funds cannot be raised to meet the  Company's  obligations  with
respect to the Karakuduk Field, its interest in such property might be adversely
affected.  See Notes B, D and N, Notes to Consolidated  Financial Statements and
Report of Independent Certified Public Accountants.

         The  Company  has no other  material  commitments  for cash  outlay and
capital expenditures other then normal operations.

Results of Operations Fiscal 1995 Compared with Fiscal 1994

         The  Company's  operations  during  fiscal  1995  resulted in a loss of
$719,000  primarily  due to a noncash  write-down  of oil and gas  properties of
$619,000 for fiscal 1995. Due to the noncash write-down, the net loss for fiscal
1995 was $704,000  compared to a net loss of $474,000  during  fiscal 1994.  The
noncash  write-down was primarily the result of the decreased value of estimated
future net values of proved  reserves due to lower gas prices  during the fourth
quarter of fiscal 1995 (see Note M, Notes to Consolidated Financial Statements),
and the sale of proved reserves during 1995.

         Revenue  from  oil and gas  sales  decreased  $119,000  or  31.8%  from
$374,000 in fiscal 1994 due to lower production, lower crude oil and natural gas
prices and sale or abandonment of certain producing properties.

         Costs and expenses  increased  $91,000,  or 20.4%  during  fiscal 1995,
excluding the noncash  write-down of oil and gas  properties.  Production  costs
decreased  by 50.4%  to  $115,000  in  fiscal  1995  due to the sale of  certain
properties  and shut-in of certain  properties  due to lower natural gas prices.
Depreciation  and  depletion  also  decreased  by 38.3% to $74,000  for the same
reasons that production decreased. General and administrative expenses increased
$72,000, or 76.6% in fiscal 1995 due to the costs related to the acquisition and
operation of the Company's interest in the Karakuduk Field.


                                     - 10 -

<PAGE>


Results of Operations Fiscal 1994 Compared with Fiscal 1993

         The Company's  operations resulted in a loss of $488,000 in fiscal 1994
due to a noncash  write-down  of oil and gas  properties  of $416,000 for fiscal
1994. Due to the noncash  write-down,  the net loss for fiscal 1994 was $474,000
compared to a net loss of $123,000 for fiscal 1993.  The noncash  write-down was
primarily  the result of the decreased  value of estimated  future net values of
proved  reserves  due to lower gas prices  during  the fourth  quarter of fiscal
1994. The charge will reduce future depletion expenses.

         Revenues from oil and gas sales in fiscal 1994  decreased by $40,000 or
9.7% from $414,000 in fiscal 1993 due to lower crude oil and natural gas prices.

         In fiscal  1994  costs and  expenses  increased  by  $42,000,  or 10.4%
excluding the $416,000 noncash write-down of oil and gas properties.  Production
costs increased by 25.4% to $232,000 in fiscal 1994 due to additional production
taxes as a result  of a  federal  audit  and new  wells  placed  on  production.
Depreciation  and depletion  decreased by 4.0% to $120,000 in fiscal 1994 due to
the  abandonment of certain  producing oil and gas  properties,  sale of certain
producing  oil and gas  properties  and the  noncash  write-down  of oil and gas
properties. General and administrative expenses remained the same.,

          Inflation.  The Company cannot control prices in its oil and gas sales
and to the extent the Company is unable to pass on increases in operating costs,
it may be affected by inflation.

Management's Discussion of Changes in Standardized Measure

         Standardized  measure of  discounted  future  net cash flows  decreased
60.6% in fiscal 1995 as compared to fiscal 1994. This decrease was the result of
production in 1995, lower oil and gas prices,  the sale of proved reserves,  and
the abandonment of proved reserves during the year.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See  Item  14(a)  for a  list  of  the  Financial  Statements  and  the
supplementary  financial  information  included  in this  report  following  the
signature page.

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

         There were no changes in the Company's  independent  accountants during
the Company's last two fiscal years ended November 30, 1995.

                                    PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The name, position with the Company, age of each director and executive
officer and the period during which each  director and executive  officer of the
Company has served are as follows:

                                     - 11 -

<PAGE>
<TABLE>
<CAPTION>


Name of Director and Executive                  Director                   Principal Occupation
Officer and Position, in the Company             Since         Age         During the last Five Years
------------------------------------            -------        ---         --------------------------

<S>                                               <C>           <C>                                                       

Paul V. Hoovler.............................      1972          68         President, Chief Executive Officer and director
(President and Chief Executive                                             of the Company since 1972.
 Officer since 1972)

Matthew R. Hoovler..........................      1987          43          Vice President of the Company since 1980;
(Vice President since 1980 and                                              Treasurer since 1982.
 Treasurer since 1982)

Frank H. Gower, Jr..........................      1972          72          Director of the Company since 1972.  Mr.
                                                                            Gower and his wife are the sole owners of
                                                                            Gower Oil Company, Denver, Colorado.

Barry W. Spector............................      1995          44          Secretary of the Company since 1995.  Attorney
(Secretary since 1995)                                                      engaged in the practice of law as a sole practi-
                                                                            tioner emphasizing oil and gas and business law
                                                                            since 1979.

Peter G. Dilling............................      1995          46          President and a director of M-D International
                                                                            Petroleum, Inc., an oil and gas company, since
                                                                            September 1994.  A partner of M-D Interna-
                                                                            tional, an unincorporated oil and gas business,
                                                                            from March 1993 to the present.

James A. Jeffs..............................      1995          45          Chief Investment Officer for the Whittier Trust
                                                                            Company since 1994.  A director of M-D Inter-
                                                                            national Petroleum, Inc., an oil and gas compa-
                                                                            ny, since 1994.  Senior Vice President of Union
                                                                            Bank of Los Angeles from 1993 to 1994.  Chief
                                                                            Investment Officer for Northern Trust of Cali-
                                                                            fornia, N.A., from 1991 to 1992.  President and
                                                                            chief executive officer of TSA Capital Manage-
                                                                            ment, and Senior Vice President of Trust
                                                                            Services of America, Capital Managemeent Companies,
                                                                            from 1988 to 1991.

Howard Karren...............................      1995          65          A consultant to Enron Oil & Gas International
                                                                            Co., an oil and gas company, since 1994.
                                                                            President and Vice Chairman of Enron Oil &
                                                                            Gas International Co. from 1984 until 1994.

Jay W. McGee................................      1995          48          Director of M-D International Petroleum, Inc.,
                                                                            an oil and gas company, since September 1994.
                                                                            Manager of M-D International, an unincorporat-
                                                                            ed oil and gas entity, from March 1993 to the
                                                                            present.  Vice President of Anglo Suisse L.P.,
                                                                            an oil and gas company, from September 1990
                                                                            to February 1993.  Prior thereto, Director of
                                                                            Exploration of Anglo Suisse, Inc., an oil and
                                                                                                              gas company.
</TABLE>


                                     - 12 -

<PAGE>

         The  present  term of office of each  director  will expire at the next
annual meeting of shareholders.

         Each  executive  officer will hold office until his  successor  duly is
elected  and  qualified,  until his  resignation  or until he is  removed in the
manner provided by the Company's Bylaws.

         In  connection  with the Company's  acquisition  of all of the stock of
CAP-D,  the  former  shareholders  of CAP-D  have  certain  rights  to  nominate
directors of their  choosing for election to the  Company's  Board of Directors.
Pursuant to these rights, the former CAP-D shareholders caused the nomination of
Jay W.  McGee,  who was  elected  a  director  at the  1995  annual  meeting  of
shareholders.  The  Company  has also  agreed  in  principle  that  such  former
shareholders  will have the right to nominate  another director at the Company's
1996 annual meeting of  shareholders.  If by June 30, 2000, the Karakuduk  Field
obtains 5,000 barrels of oil production per day averaged over any sixty (60) day
period, or the Company's beneficial interest in the field is sold or the Company
and the former shareholders jointly participate in a new exploratory development
project, the former shareholders have the right to cause the Company to nominate
one additional director at the Company's 2000 annual meeting of shareholders.

         In  connection  with the  Company's  loan  from the  Brae  Group,  Inc.
("Brae"), in November 1995, the Company was required to appoint Messrs.  Karren,
Dilling and Jeffs as  directors  of the  Company  and to appoint  Mr.  Karren as
Chairman of the Board of Directors of the Company. The Company borrowed $750,000
represented by an unsecured promissory note which bears interest at 8% per annum
and is due and payable on April 30, 1997. The Company is required to continue to
nominate  such  persons as directors  until the note is paid in full.  If one or
more of such persons ceases to serve as a director,  then until such time as the
note is paid in  full,  Brae  may  designate  another  person  to  serve  on the
Company's Board of Directors in place of such person.

         There are no other arrangements or understandings between any executive
officer  and any  director  or other  person  pursuant  to which any  person was
selected as a director or an executive officer.

          Matthew R. Hoovler is the son of Paul V. Hoovler. With this exception,
there are no family relationships among the officers or directors.

         No  director  of the  Company is a director  of an entity  that has its
securities  registered  pursuant to Section 12 of the Securities Exchange Act of
1934.

         Paul V. Hoovler is the  President  and a  shareholder  of The Minnelusa
Company ("Minnelusa"),  a privately held Florida corporation,  the sole business
of which  is the    operation  of Deep  Lagoon  Marina  located  in Fort  Myers,
Florida.  Minnelusa  filed for bankruptcy  under Chapter 11 of the United States
Bankruptcy  Code on January  18,  1994.  The primary  reason for the  bankruptcy
petition  was the  filing  of a  lawsuit  by three of the  individual  Minnelusa
shareholders  who  demanded  payment on  promissory  notes made by  Minnelusa to
purchase their Minnelusa  stock.  Prior to the filing of the bankruptcy,  it was
determined  that the  acquisition  of their  stock,  which  placed  Minnelusa in
insolvency,  was an  illegal  transaction  under the laws of  Florida.  Frank H.
Gower,  Jr., a director of the Company and a director and officer of  Minnelusa,
also filed  personal  bankruptcy  in August 1994,  as Mr.  Gower had  personally
guaranteed  these same Minnelusa notes. A Plan of  Reorganization  for Minnelusa
was filed with the court in Florida and this plan was approved at a confirmation
hearing in February 1995, in the District Court in Fort Myers, Florida. In March
1995 Minnelusa emerged from bankruptcy.  As a part of the Plan of Reorganization
for  Minnelusa,  Minnelusa  agreed to pay the  claims  of the  three  individual
Minnelusa  shareholders  who originally  filed a lawsuit  ("claimants")  against
Minnelusa,  on or  before  March 13,  1998.  Mr.  Gower  also  settled  with the
claimants and agreed to pay any amount due to the  claimants  that is not timely
paid by Minnelusa.

         Based  solely  upon a review  of the  Forms 3 and 4 and any  amendments
thereto furnished to the Company during the Company's fiscal year ended November
30,  1995,  and Form 5 and  amendments  thereto  furnished  to the Company  with
respect to such fiscal year, during the Company's fiscal year ended November 30,

                                     - 13 -

<PAGE>



1995, no persons who were directors,  officers or beneficial owners of more than
10% of the Company's outstanding Common Stock during such fiscal year filed late
reports on Form 3, 4, or 5.

ITEM 11.          EXECUTIVE COMPENSATION

         The  following  table sets forth for the  Company's  last three  fiscal
years ended  November  30, 1995,  1994 and 1993,  the  compensation  paid by the
Company  for  services  rendered  in all  capacities  to the  Company to Paul V.
Hoovler, who was the chief executive officer of the Company during the Company's
three fiscal years ended November 30, 1995. No person who served as an executive
officer of the Company during the Company's  fiscal year ended November 30, 1995
received  total annual  salary and bonus in excess of $100,000  from the Company
during the Company's fiscal year ended November 30, 1995:

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE
                                                                                                 Long Term
                                                                                               Compensation
                                                   Annual Compensation                             Awards
                                         ---------------------------------------------------   -------------
                                                                                Other
                           Year                                                 Annual            Securities        All Other
Name and                   Ended                                               Compen-           Underlying         Compensa-
Principal Position      November 30,     Salary($)          Bonus($)           sation($)          Options(#)         tion($)
------------------      -----------     ---------          --------          ----------         -----------        ----------
<S>                       <C>            <C>                                 <C>                                   <C>       

Paul V. Hoovler........   1995.........  $60,000               --            $  4,413(1)              --            $40,000(3)
 President and            1994.........  $60,000               --            $  3,518(1)              --  (2)       $40,000(3)
 Chief Executive          1993.........  $60,000               --            $  5,620(1)            37,500(2)       $40,000(3)
 Officer

---------------------
</TABLE>

(1)      The  Company  has a Royalty  Participation  Plan which is  intended  to
         provide incentive for the Company's employees and to enable the Company
         to  attract,  motivate  and retain in its employ  key  employees.  Each
         employee  of  the  Company  becomes  a  participant  in the  plan  upon
         expiration  of  a  90-day   probationary   period  after  the  date  of
         employment.  The Company  contributes  to the plan certain oil, gas and
         other nonproducing  hydrocarbon royalty interests and the proceeds from
         production  received  by the  Company  which  are  attributable  to the
         royalty  interests.  On the last day of the plan year,  the  Committee,
         which  currently  consists  of  all of the  directors  of the  Company,
         allocated  the net  income  of the plan for the plan year  among  those
         participants  employed by the Company on the last day of the plan year,
         together with those  participants  whose interests are vested.  The net
         income of the plan is  allocated  by assigning  each  participant  to a
         group  and by  assigning  a  "multiplier"  factor to each  group.  Each
         participant is then assigned a percentage of division within the group.
         The  determination  of the  Committee as to placing  participants  in a
         particular  group and the  multiplier  to be  assigned to each group is
         solely within the discretion of the Committee.

         The amount  allocated  to  non-management  employees  vests  during the
         fiscal year after 60 months of employment  and the amount  allocated to
         management  employees  vests  during the fiscal year after 37 months of
         employment.  The plan has been  extended by the Board of  Directors  to
         December 31, 1997, and thereafter  will be evaluated for continuance on
         an annual basis.  Paul V. Hoovler was distributed  $4,413 from the plan
         for the plan year ended December 31, 1995.

(2)      Represents  warrants to purchase 37,500 shares of the Company's  common
         stock that were  acquired  by Mr.  Hoovler  from the  Company in March,
         1993.  The warrants were  exercisable  at a price of $.40 per share and
         were acquired in a private offering by the Company on the same terms as
         persons who were not affiliated with the Company acquired warrants.  On
         October 11, 1994, Mr. Hoovler exercised the warrants (37,500 shares) at
         $.40 per share for a total sum of $15,000.

                                     - 14 -

<PAGE>


(3)     The  Company has a  Deferred  Compensation  and Death  Benefit  Plan for
        Paul V. Hoovler.  The plan allows  for Mr. Hoovler to continue in active
        employment of the Company  until age 70.5.  The Company pays Mr. Hoovler
        $40,000 annually from this plan.  If  Mr. Hoovler voluntarily terminates
        his  employment  prior to  his retirement,  disability,  or death, he or
        his  estate will receive the  remaining  residual  funds to be disbursed
        from the  plan.   If  Mr.  Hoovler  dies  prior to  retirement  or other
        termination  of  employment,   Mr.  Hoovler's   estate will  receive the
        remaining  residual  funds to be disbursed  from  the plan.  The plan is
        funded by a life  insurance  policy on  the life of  Mr.  Hoovler  which
        provides for the  major  portion of any  costs to the Company.  The plan
        was fully funded  when the  Company paid,  during the  Company's  fiscal
        year  ended  November  30,  1991,  the  final  payment  of a  premium of
        $18,000  on  a  life  insurance  policy  insuring  the  life  of Paul V.
        Hoovler.

Option Grants in Fiscal Year Ended November 30, 1995

         No options were  granted by the Company to Paul V.  Hoovler  during the
Company's fiscal year ended November 30, 1995.

Fiscal Year-End Option Values

         The  following  table sets  forth  information  concerning  unexercised
options (warrants) held by Paul V. Hoovler at November 30, 1995:

<TABLE>
<CAPTION>

                                         Number of Securities
                                        Underlying Unexercised                    Value of Unexercised
                                             Options as of                       In-the-Money Options at
                                         November 30, 1995(#)                      November 30, 1995($)
                                   ---------------------------------           --------------------------
Name                               Exercisable/        Unexercisable           Exercisable/ Unexercisable

<S>                                  <C>                <C>                    <C>          <C>

Paul V. Hoovler............          500,000               - 0 -               $274,062.50       - 0 -
</TABLE>

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


(1)      The value was determined by multiplying the number of shares underlying
         the  warrants  by the  difference  between the  exercise  price and the
         average of the closing  bid and asked  prices of the  Company's  Common
         Stock on November 30, 1995.  No options  (warrants)  were  exercised by
         Paul V. Hoovler  during the  Company's  fiscal year ended  November 30,
         1995.

         There were no standard or other  arrangements  for the compensation of
the Company's  directors in effect for the Company's  fiscal year ended November
30, 1995.

         There are no employment contracts between the Company and any executive
officer.

ITEM 12.         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following  persons are the only persons known to the Company who on
March  8,  1996,  owned  beneficially  5% or  more of the  Company's  24,009,192
outstanding shares of $0.10 par value common stock:

<TABLE>
<CAPTION>
                                                       Amount and Nature of          Percent
Name and Address of Beneficial Owner                  Beneficial Ownership(1)        of Class
------------------------------------                  -----------------------        --------
<S>                                                   <C>                              <C> 

Paul V. Hoovler.........................              1,590,952(2)                     6.5%
621 17th St., Suite 1301
Denver, Colorado 80293

-------------------
</TABLE>


                                     - 15 -

<PAGE>



(1)      The beneficial  owner listed above has sole voting and investment power
         with respect to the shares shown unless otherwise indicated.
(2)      The 1,590,952  shares  include  500,000 shares  underlying  unexercised
         warrants and 365,466 shares held in the Company's  401(k) Plan & Trust.
         Paul V.  Hoovler is the trustee of the 401(k) Plan & Trust and has sole
         voting and  investment  power over the total  365,466  shares which are
         owned by the  employees of the Company,  including  Paul V. Hoovler who
         beneficially owns 95,582 of the shares.

         The  following  table  shows as of March 8,  1996,  the  shares  of the
Company's  $0.10 par value common stock  beneficially  owned by each director of
the  Company,  by Paul V.  Hoovler,  who is the  Company's  President  and Chief
Executive  Officer,  and by all of the directors  and executive  officers of the
Company as a group:
<TABLE>
<CAPTION>

                                            Amount and Nature of        Percent
Name and Address of Beneficial Owner       Beneficial Ownership(1)      of Class
------------------------------------       ----------------------       --------
<S>                                                <C>                     <C> 

Paul V. Hoovler...........................         1,590,952(2)            6.5%

Matthew R. Hoovler........................           536,049(3)            2.2%

Barry W. Spector..........................            56,250(4)           0.23%

Peter G. Dilling..........................              -0-                0.0%

Frank H. Gower, Jr........................           593,080(5)            2.5%

James A. Jeffs............................           925,500(6)            3.9%

Howard Karren.............................           350,000(7)            1.4%

Jay W. McGee..............................           930,678(6)            3.9%

All Directors and Executive Officers
 as a Group (eight persons)..................      4,982,509              19.8%

-------------------
</TABLE>

(1)      The beneficial owners listed have sole voting and investment power with
         respect to the shares shown unless otherwise indicated.
(2)      The  1,590,952   shares  include  725,485  shares  and  500,000  shares
         underlying  unexercised  warrants  owned by Paul V. Hoovler and 365,466
         shares  held in trust in the  Company's  401(k)  Plan & Trust.  Paul V.
         Hoovler,  trustee  of the  401(k)  Plan & Trust,  has sole  voting  and
         investment  power over the total 365,466  shares which are owned by the
         employees of the Company,  including Paul V. Hoovler,  who beneficially
         owns 95,582 of the shares.
(3)      The 536,049 shares include 52,000 shares and 250,000 shares  underlying
         unexercised warrants owned by Matthew R. Hoovler,  131,049 shares owned
         jointly  by Mr.  Hoovler  and his  wife,  97,000  shares  owned  by Mr.
         Hoovler's wife and 6,000 shares owned by his daughter over all of which
         shares Mr.  Hoovler may be deemed to have shared voting and  investment
         power. Not included are 105,607 shares beneficially owned by Matthew R.
         Hoovler but held in trust in the Company's 401(k) Plan & Trust. Paul V.
         Hoovler,  trustee  of the  401(k)  Plan & Trust,  has sole  voting  and
         investment power over these shares.
(4)      The 56,250 shares  include  37,500 shares owned by Barry W. Spector and
         18,750 shares owned by his minor  children over all of which shares Mr.
         Spector may be deemed to have sole voting and investment power.
(5)      The 593,000 shares include 224,608 shares and 100,000 shares underlying
         unexercised  warrants owned by Mr. Gower, 250,000 shares owned by Gower
         Oil Company and 18,472 shares owned by Mr.  Gower's  wife,  over all of
         which  shares  Mr.  Gower  may be  deemed  to have  shared  voting  and
         investment power.

                                     - 16 -

<PAGE>


(6)      Includes  925,500 of a  total of 4,250,000  shares being held in escrow
         in connection  with  the  acquisition of CAP-D as described in "Item 1.
         Business," above, and 5,178  shares owned jointly with his wife.

(7)      The 350,000  shares are  to be issued to Mr. Karren either  directly or
         in connection with the  acquisition by the Company of MD  International
         Petroleum,  Inc.  ("MDI").   See "Item 13.  Certain  Relationships  and
         Related Transactions."

         Except to the extent the agreement  relating to the  acquisition of the
outstanding shares of CAP-D as described in "Item 1--Business" could result in a
change in control,  there are presently no arrangements of any kind which may at
a subsequent date result in a change in control of the Company.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The  Company  has agreed to issue a minimum  of  350,000  shares of the
Company's  restricted  common stock to Howard Karren, a director of the Company.
Mr.  Karren  is or  will be a  shareholder  and  principal  of  MDI,  a  private
corporation  which holds certain rights in a joint venture that is attempting to
negotiate for the  development  of natural gas fields in  Uzbekistan  (see "Item
1--Business"   above).   The  Company  is  negotiating  to  acquire  MDI.  If  a
satisfactory acquisition of MDI is consummated by the Company, the Company would
issue up to 6,400,000 shares of its restricted  common stock to the shareholders
of MDI,  including the 350,000 shares to Mr. Karren.  If the  transaction is not
consummated,  the  Company  will  issue the  shares to Mr.  Karren or persons he
designates.

         Mr.  Karren was  appointed a director  and chairman of the board of the
Company's Board of Directors, along with James A. Jeffs and Peter G. Dilling, in
connection  with the Company's  loan of $750,000  received from Brae in November
1995.  The  Company is  required to keep  Messrs.  Karren,  Jeffs and Dilling as
directors until the loan is paid in full. If one or more of them ceases to serve
as a  director,  then  until  such  time as the loan is paid in  full,  Brae may
designate another person to serve on the Company's Board of Directors.

         In connection with the acquisition of CAP-D by the Company, the Company
may be required to pay a  brokerage  fee of up to $175,000 to Jay W. McGee,  who
became a  director  of the  Company in  connection  with that  acquisition.  The
Company  paid to Mr.  McGee  $50,000 in 1995 and the balance is payable upon the
occurrence of certain  milestones in development of the Karakuduk  Field.  Under
the terms  pursuant to which CAP-D was acquired,  the Company  issued  4,500,000
shares of  restricted  common stock which will be held in escrow and released to
the former shareholders of CAP-D, including Messrs. Jeffs, McGee and Dilling, or
affiliates of them,  from time to time in  connection  with  development  of the
Karakuduk Field.
                                     PART IV

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

         (a)(1)  Financial Statements.

         Table of Contents
         Report of Independent Certified Public Accountants
         Balance Sheets--As of November 30, 1995 and 1994
         Consolidated  Statements of Operations--Years  ended November 30, 1995,
         1994  and  1993  Consolidated  Statements  of Cash  Flows--Years  ended
         November 30, 1995, 1994, and 1993 Consolidated  Statement of Changes in
         Stockholders' Equity--Years ended November 30, 1995,
            1994 and 1993
         Notes to Consolidated Financial Statements
         Disclosure About Oil and Gas producing Activities (unaudited)


                                     - 17 -

<PAGE>

         (a)(2)  Financial Statement Schedules.

                  None.

         (b)  Current Reports on Form 8-K:

         The  Company  filed the  following  reports on Form 8-K during the last
fiscal quarter ended November 30, 1995:

         Current  Report on Form 8-K dated  November 1, 1995 (November 7, 1995).
         Current  Report on Form 8-K/A  dated  November  1, 1995  (November  13,
         1995).

         (c)  Exhibits.

         2.1      Stock Acquisition  Agreement and Plan of Reorganization  dated
                  April 12, 1995  between  Chaparral  Resources,  Inc.,  and the
                  Shareholders of Central Asian Petroleum, Inc., incorporated by
                  reference to Exhibit 2.1 to the Company's  Quarterly Report on
                  Form 10-Q for the quarter ended May 31, 1995.

         2.2      Escrow  Agreement  dated  April  12,  1995  between  Chaparral
                  Resources,  Inc., the Shareholders of Central Asian Petroleum,
                  Inc.  and  Barry W.  Spector,  incorporated  by  reference  to
                  Exhibit 2.2 to the Company's Quarterly Report on Form 10-Q for
                  the quarter ended May 31, 1995.

         3.1      Restated    Articles   of   Incorporation    and   Amendments,
                  incorporated  by  reference  to Exhibit  3.1 to the  Company's
                  Annual Report on Form 10-K for the fiscal year ended  November
                  30, 1993.

         3.2      Articles   of   Amendment   to  the   Restated   Articles   of
                  Incorporation dated April 20, 1988,  incorporated by reference
                  to Exhibit 3.2 to the Company's Annual Report on Form 10-K for
                  the fiscal year ended November 30, 1993.

         3.3      Bylaws, as amended through December 5, 1995.

         3.4      Articles   of   Amendment   to  the   Restated   Articles   of
                  Incorporation and Amendments dated June 21, 1995, incorporated
                  by reference to Exhibit B to the Company's Quarterly Report on
                  Form 10-Q for the quarter ended May 31, 1995.

         10.1     Royalty  Participation Plan dated June 15, 1982,  incorporated
                  by reference to Exhibit 10.1 to the Company's Annual Report on
                  Form 10-K for the fiscal year ended November 30, 1993.

         10.2     Chaparral  Resources,  Inc. 1989  Stock Warrant Plan effective
                  May 1, 1989,  incorporated  by  reference  to Exhibit  10.3 to
                  the Company's Annual Report on  Form 10-K for the fiscal  year
                  ended November 30, 1993.

         10.3     Target Benefit Plan effective December 1, 1990 incorporated by
                  reference to Exhibit 10.9 to the  Company's  Annual  Report on
                  Form 10-K for the fiscal year ended November 30, 1991.

         10.4     Deferred  Compensation  and  Death  Benefit  Plan  as  amended
                  November 15, 1991  incorporated  by reference to Exhibit 10.10
                  to the  Company's  Annual  Report on Form 10-K for the  fiscal
                  year ended November 30, 1991.


                                     - 18 -

<PAGE>

         10.5     Promissory   Note  dated   November  1,  1995  from  Chaparral
                  Resources,   Inc.,  to  Brae  Group,  Inc.,   incorporated  by
                  reference to Exhibit 10.1 to the Company's  Current  Report on
                  Form 8-K dated November 1, 1995.

         10.6     Purchase  Agreement,   dated   effective  January   12,  1996,
                  between  the Company  and Guntekin  Koksal  (purchase of CAP-G
                  shares).

         10.7     Letter  Agreement, dated  January 3, 1996, between the Company
                  and certain  stockholders  of Darka  Petrol Ticaret Ltd. Sti.,
                  together with Exhibits A--E.

         10.8     Amendment,  effective  March 4, 1996, to the Letter  Agreement
                  revising the terms pursuant to which the Company is to acquire
                  all shares of CAP(G) stock owned by Darka Petrol Ticaret Ltd.
                  Sti.

         21       Subsidiaries of the Registrant.

         23       Consent of Grant Thornton for S-8.

         24       Power of Attorney.

         27       Financial Data Schedule.


                                     - 19 -

<PAGE>

                                   SIGNATURES

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

                                    CHAPARRAL RESOURCES, INC.
                                    a Colorado corporation


                                    By /s/ Paul V. Hoovler
                                       -------------------------------
                                       Paul V. Hoovler,
                                       President, Principal Executive Officer


                                     By /s/ Matthew R. Hoovler
                                        -------------------------------
                                       Matthew R. Hoovler,
                                       Chief Financial Officer, and
                                       Principal Accounting Officer

                                     Dated  March 14, 1996

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


Date                       Name and Title               Signature



March 14, 1999             Paul V. Hoovler              /s/ Paul V. Hoovler
                           Director                     ------------------------

March 14, 1996             Matthew R. Hoovler
                           Director

March 14, 1996             Frank H. Gower, Jr.
                           Director

March 14, 1996             Peter G. Dilling
                           Director

March 14, 1996             James A. Jeffs
                           Director

March 14, 1996             Howard Karren
                           Director

March 14, 1996             Jay W. McGee
                           Director



March 14, 1996                                          By /s/ Paul V. Hoovler
                                                           ---------------------
                                                           Paul V. Hoovler
                                                           Attorney-in-Fact


                                     - 20 -

<PAGE>
















                       FINANCIAL STATEMENTS AND REPORT OF
                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                    CHAPARRAL RESOURCES, INC. AND SUBSIDIARY

                        November 30, 1995, 1994 and 1993


<PAGE>


                                 C O N T E N T S

                                                                          Page


REPORT OF INDEPENDENT CERTIFIED
  PUBLIC ACCOUNTANTS ...............................................        F- 2


FINANCIAL STATEMENTS

         CONSOLIDATED BALANCE SHEETS ...............................        F- 3

         CONSOLIDATED STATEMENTS OF OPERATIONS .....................        F- 5

         CONSOLIDATED STATEMENTS OF CASH FLOWS .....................        F- 6

         CONSOLIDATED STATEMENTS OF CHANGES IN
           STOCKHOLDERS' EQUITY ....................................        F- 8

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ................        F- 9


SUPPLEMENTARY INFORMATION

         DISCLOSURE ABOUT OIL AND GAS PRODUCING
           ACTIVITIES - UNAUDITED ..................................        F-24

<PAGE>



                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS


The Board of Directors and Stockholders
Chaparral Resources, Inc. and Subsidiary

We have  audited  the  accompanying  consolidated  balance  sheets of  Chaparral
Resources, Inc. and Subsidiary as of November 30, 1995 and 1994, and the related
consolidated  statements of operations,  cash flows and changes in stockholders'
equity for each of the three years in the period ended November 30, 1995.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated  financial  position  of  Chaparral
Resources,  Inc.  and  Subsidiary  as of  November  30,  1995 and 1994,  and the
consolidated  results of their operations and their  consolidated cash flows for
each of the three years in the period ended November 30, 1995 in conformity with
generally accepted accounting principles.

                                       F-2


<PAGE>



The accompanying  financial  statements have been prepared  assuming the Company
will  continue as a going  concern.  As shown in the financial  statements,  the
Company incurred a net loss of $704,000 during the year ended November 30, 1995.
As  discussed  in  note B to the  financial  statements,  the  Company  requires
significant  additional  financing to meet its  financial  requirements  through
fiscal 1996. These factors raise substantial doubt about the
Company's ability to continue as a going concern.  Management's  plans in regard
to these matters are also  described in note B. The financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.




GRANT THORNTON LLP




Denver, Colorado
January 19, 1996 (except for note N, as to
  which the date is March 8, 1996)






























                                       F-3


<PAGE>
<TABLE>
<CAPTION>

                    Chaparral Resources, Inc. and Subsidiary

                           CONSOLIDATED BALANCE SHEETS

                                  November 30,



                                                       1995             1994
                                                   ------------     ------------

                  ASSETS
<S>                                               <C>              <C>         

CURRENT ASSETS
  Cash and cash equivalents ..................    $    501,000     $    318,000
  Certificates of deposit ....................            --             20,000
  Investments in U.S. Treasury securities
    (at cost) ................................            --             199,000
  Accounts receivable
    Joint interest participants ..............          31,000          231,000
    Oil and gas purchasers ...................          46,000           64,000
  Prepaid expenses ...........................           2,000            2,000
                                                  ------------     ------------

                  Total current assets .......         580,000          834,000

PROPERTY AND EQUIPMENT - AT COST
  Oil and gas properties - full cost
    United States
      Subject to depletion ...................      16,149,000       16,115,000
      Not subject to depletion ...............          40,000           40,000
  Less accumulated depletion and
    depreciation and impairment ..............     (15,722,000)     (15,032,000)
                                                  ------------     ------------
                                                       467,000        1,123,000

  Furniture, fixtures and equipment ..........         197,000          337,000
  Less accumulated depreciation ..............        (177,000)        (324,000)
                                                  ------------     ------------
                                                        20,000           13,000
                                                  ------------     ------------
                                                       487,000        1,136,000

OTHER ASSETS
  Investment in and advances to affiliate ....       4,507,000          256,000
  Long-term investments in U.S. ..............
    Treasury securities (at cost) ............            --            100,000
  Cash value of insurance and
    annuities ................................           8,000           48,000
  Equipment inventory ........................          13,000           14,000
                                                  ------------     ------------
                                                     4,528,000          418,000
                                                  ------------     ------------

                                                  $  5,595,000     $  2,388,000
                                                  ============     ============



The accompanying notes are an integral part of these statements.

                                       F-4


<PAGE>
<CAPTION>

                    Chaparral Resources, Inc. and Subsidiary

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                  November 30,



                                                      1995            1994
                                                  ------------    ------------
<S>                                               <C>             <C>         

    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable
  Trade .......................................   $    102,000    $    151,000
  Joint interest participants - revenue .......         26,000          41,000
Accrued liabilities ...........................         86,000         145,000
                                                  ------------    ------------

     Total current liabilities ................        214,000         337,000

LONG-TERM OBLIGATIONS
  Note payable ................................        461,000             --

MINORITY INTEREST IN JOINT VENTURE ............           --            16,000

STOCKHOLDERS' EQUITY
Common stock - authorized, 50,000,000
  shares and 25,000,000 shares at November
  30, 1995 and 1994, respectively, of
  $.10 par value; issued and outstanding,
  20,484,192 and 15,782,317 and shares
  at November 30, 1995 and 1994,
  respectively ................................      2,048,000       1,572,000
Capital in excess of par value ................     12,577,000       9,464,000
Preferred stock - authorized, 1,000,000
  shares, no shares issued or outstanding .....           --              --
Retained earnings (deficit) ...................     (9,705,000)     (9,001,000)
                                                  ------------    ------------
                                                     4,920,000       2,035,000
                                                  ------------    ------------

                                                  $  5,595,000    $  2,388,000
                                                  ============    ============

</TABLE>







The accompanying notes are an integral part of these statements.

                                       F-5


<PAGE>
<TABLE>
<CAPTION>

                    Chaparral Resources, Inc. and Subsidiary

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                            Years ended November 30,



                                        1995            1994             1993
                                     ----------       ----------       ---------
<S>                                <C>             <C>             <C>         

Revenue
  Oil and gas sales ...........    $    255,000    $    374,000    $    414,000

Costs and expenses
  Production costs ............         115,000         232,000         185,000
  Write down of oil and gas
     properties ...............         619,000         416,000         230,000
  Depreciation and depletion . .         74,000         120,000         125,000
  General and administrative ...        166,000          94,000          94,000
                                   ------------    ------------    ------------
                                        974,000         862,000         634,000
                                   ------------    ------------    ------------

(Loss) from operations .........       (719,000)       (488,000)       (220,000)

Other income (expense)
  Interest income ..............         25,000          13,000          20,000
  Interest expense .............        (17,000)         (4,000)         (8,000)
  Other - net ..................          7,000           5,000          85,000
                                      ------------    ------------    ------------
                                         15,000          14,000          97,000
                                      ------------    ------------    ------------

NET (LOSS) .....................   $   (704,000)   $   (474,000)   $   (123,000)
                                   ============    ============    ============

Net (loss) per share ...........   $       (.04)   $       (.02)   $       (.01)

Weighted average number of
  shares outstanding ............     18,865,454      15,064,856      13,319,893

</TABLE>













The accompanying notes are an integral part of these statements.

                                       F-6


<PAGE>
<TABLE>
<CAPTION>



                    Chaparral Resources, Inc. and Subsidiary

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            Years ended November 30,



                                                    1995              1994        1993
                                                  ---------         ---------   ---------
<S>                                              <C>            <C>            <C>         

Increase (decrease) in cash
  and cash equivalents

Cash flows from operating activities
  Net (loss) .................................   $  (704,000)   $  (474,000)   $  (123,000)
  Adjustments to reconcile net
    (loss) to net cash provided by
    operating activities
      Depreciation and depletion .............        74,000        120,000        125,000
      (Decrease) in deferred
        compensation .........................          --          (40,000)       (20,000)
      Write down of oil and
        gas property .........................       619,000        416,000        230,000
      Stock issued for services
        and bonuses ..........................        27,000          8,000           --
      Amortization of note discount ..........        17,000           --             --
      Changes in assets and liabilities
        (Increase) decrease in
          Accounts receivable ................       218,000         22,000       (165,000)
          Prepaid expenses ...................          --             --           (1,000)
        Increase (decrease) in
          Accounts payable ...................       (64,000)        47,000         62,000
          Accrued liabilities ................       (59,000)        (9,000)       (27,000)
                                                  -----------    -----------    -----------

          Net cash provided by
            operating activities .............       128,000         90,000         81,000

Cash flows from investing activities
  Additions to property and equipment ........       (86,000)      (255,000)      (310,000)
  Investment in foreign oil and gas
    properties ...............................    (1,088,000)      (256,000)          --
  Proceeds from sale of interest
    in oil and gas properties ................        41,000         71,000          2,000
  Decrease in cash value of
    insurance and annuities ..................        40,000         40,000         39,000
  Increase (decrease) in minority
    interest .................................       (16,000)        (1,000)         1,000
  Decrease in equipment inventory ............         1,000           --             --
  Sale (purchase) of bonds ...................       299,000       (299,000)          --
  Redemption of certificates of deposit ......        20,000        146,000           --
  Purchase of certificates of deposit ........          --             --           (2,000)
                                                   -----------    -----------   -----------

          Net cash provided by (used in)
            investing activities .............      (789,000)      (554,000)      (270,000)

The accompanying notes are an integral part of these statements.

                                      F-7
<PAGE>
<CAPTION>



                    Chaparral Resources, Inc. and Subsidiary

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                            Years ended November 30,



                                                    1995              1994        1993
                                                  ---------         ---------   ---------
<S>                                              <C>            <C>            <C>         

Cash flows from financing
  activities
    Proceeds from note payable ...............   $   750,000    $      --      $      --
    Proceeds from issuance of
      capital stock ..........................        94,000        260,000        410,000
                                                 -----------    -----------     ----------

          Net cash provided by
            (used in) financing
            activities .......................       844,000        260,000        410,000
                                                 -----------    -----------     ----------

          NET (DECREASE) INCREASE
            IN CASH AND CASH
            EQUIVALENTS ......................       183,000       (204,000)       221,000


Cash and cash equivalents at
  beginning of year ..........................       318,000        522,000        301,000
                                                 -----------    -----------     ----------

Cash and cash equivalents at
  end of year ................................   $   501,000    $   318,000    $   522,000
                                                 ===========    ===========    ===========


Supplemental cash flow disclosures
  Cash paid during the year
    Interest .................................   $     5,000    $     4,000    $     8,000
    Income taxes .............................          --             --             --

Supplemental schedules of noncash investing and
  financing activities
    Common stock issued for
      investment in affiliate ................   $ 3,162,000    $      --      $      --
    Discount recognized for note
      issued with detachable stock
      warrants ...............................       306,000           --             --
    Common stock issued upon
      conversion of debentures ...............          --           75,000           --

</TABLE>







The accompanying notes are an integral part of these statements.

                                       F-8


<PAGE>
<TABLE>
<CAPTION>

                    Chaparral Resources, Inc. and Subsidiary

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                  Years ended November 30, 1995, 1994 and 1993



                                                                                     Capital
                                                    Common stock                    in excess          Retained
                                             ---------------------------              of par           earnings
                                                Shares         Amount                 value            (deficit)
                                             -----------     -----------           -----------       -------------
<S>                                         <C>              <C>                 <C>                <C>         

Balance at November 30,
  1992 ..................................   $  12,237,875    $ 1,223,000         $  9,061,000       $(8,404,000)

Issuance of capital
  stock ..................................      2,685,750        269,000              141,000              --
Net loss .................................            --             --                 --             (123,000)
                                               -----------    -----------         -----------         ----------

Balance at November 30,
 1993..................................        14,923,625      1,492,000            9,202,000        (8,527,000)

Warrants exercised for
  capital stock ..........................        650,625         65,000              195,000              --
Conversion of debentures
  for capital stock ......................        200,067         20,000               55,000              --
Capital stock issued for
 services ...............................           8,000          1,000                6,000              --
Net loss .................................           --             --                   --            (474,000)
                                              -----------    -----------          -----------       -----------

Balance at November 30,
 1994..................................        15,782,317      1,578,000            9,458,000        (9,001,000)

Warrants exercised for
  capital stock ..........................        265,375         27,000               67,000              --
Capital stock issued
  for investment in
  affiliate ..............................      4,400,000        440,000            2,722,000              --
Capital stock issued for
  services ...............................         12,500          1,000                9,000              --
Capital stock issued for
  employee and director
  bonuses ................................         24,000          2,000               15,000              --
Debt issuance costs -
  stock warrants
  issued ................................           --             --                306,000              --
Net loss .................................           --             --                   --            (704,000)
                                              -----------    -----------          -----------       -----------

Balance at November 30,
 1995..................................       20,484,192     $ 2,048,000         $ 12,577,000       $(9,705,000)
                                              ===========    ===========          ===========       ===========
</TABLE>





The accompanying notes are an integral part of these statements.

                                       F-9

<PAGE>

                    Chaparral Resources, Inc. and Subsidiary

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    The summary of significant  accounting policies  consistently applied in the
    preparation of the accompanying consolidated financial statements follows:

  1.  History and Business Activity

        Chaparral Resources, Inc. was incorporated in the State of
        Colorado on January 13, 1972, principally to engage in the
        exploration, development and production of oil and gas
        properties.

  2.  Principles of Consolidation

        The  November 30, 1994  consolidated  financial  statements  include the
        accounts of the Company and its 87% owned joint venture, Reservoir Creek
        Gathering System.  Hereinafter,  Chaparral Resources, Inc. and Reservoir
        Creek Gathering System are collectively  referred to as the Company. All
        significant intercompany transactions have been eliminated. On April 15,
        1995, the Company sold its 87% ownership interest in this joint venture.

  3.  Cash Equivalents

        For  purposes of the  statement  of cash  flows,  cash  equivalents  are
        defined as highly liquid investments purchased with an original maturity
        of three months or less.

  4.  Investments in Debt and Equity Securities

        The Company accounts for investments in debt and equity securities under
        the provision of Financial Accounting Standards No. 115, "Accounting for
        Certain  Investments  in Debt and  Equity  Securities."  This  statement
        requires  that,  at  acquisition,  the Company  classify debt and equity
        securities   into   one   of   three    categories:    held-to-maturity,
        available-for-sale,   or   trading.   At  each   reporting   date,   the
        appropriateness of the classification shall be reassessed.








                                      F-10


<PAGE>



                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

  5.  Oil and Gas Property and Equipment

        The Company uses the full cost method of accounting  for its oil and gas
        properties.  All costs  incurred  in the  acquisition,  exploration  and
        development of properties  (including costs of surrendered and abandoned
        leaseholds,   delay  lease  rentals,  dry  hole  costs,  geological  and
        geophysical  costs and overhead  related to exploration  and development
        activities)  are  capitalized  on  a  country  by  country  basis.   The
        limitation on such  capitalized  costs is determined in accordance  with
        rules specified by the Securities and Exchange  Commission.  Capitalized
        costs are  depleted  using the units of  production  method.  All of the
        Company's proved reserves are in the United States.

  6.  Sales of Proved Oil and Gas Property

        Sales  of  oil  and  gas  properties,  whether  or not  being  amortized
        currently,  are accounted for as adjustments of capitalized  costs, with
        no gain or loss recognized,  unless such adjustments significantly alter
        the relationship  between  capitalized  costs and proved reserves of oil
        and gas. A significant  alteration  would not  ordinarily be expected to
        occur for sales  involving less than 25% of the reserve  quantities of a
        given cost center.  If gain or loss is recognized on such a sale,  total
        capitalized  costs  within the cost  center are  allocated  between  the
        reserves  sold and  reserves  retained on the same basis used to compute
        amortization,  unless there are substantial economic differences between
        the properties sold and those retained,  in which case capitalized costs
        are  allocated  on  the  basis  of  the  relative  fair  values  of  the
        properties.

  7.  Costs Not Subject to Depletion

        Costs associated with acquisition and evaluation of unproved  properties
        are excluded from the amortization computation until it is determined if
        proved reserves can be attributed to the properties.  These  unevaluated
        properties are assessed annually for possible  impairment and the amount
        impaired,   if  any,  is  added  to  the  amortization  base.  Costs  of
        exploratory dry holes and geological and geophysical  costs not directly
        associated  with  specific  unevaluated  properties  are  added  to  the
        amortization base as incurred.






                                      F-11


<PAGE>



                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

  8.  Sales of Unproved Properties

        Proceeds  received  from  drilling  arrangements  are  credited  to  the
        appropriate cost center and recognized as a lower amortization provision
        as reserves are produced.

  9.  Other Property and Equipment

        Furniture,  fixtures and equipment are depreciated  using  straight-line
        and  accelerated  methods over  estimated  useful lives which range from
        three to ten years.

        Gains or losses on sales of property and  equipment,  other than oil and
        gas  exploration  and  development  costs,  are  recognized  as  part of
        operations.  Expenditures  for renewals and betterments are capitalized,
        while expenditures for maintenance and repairs are charged to operations
        as incurred.

 10.  Administrative Overhead Reimbursement

        The Company,  as operator of drilling and/or  producing  properties,  is
        reimbursed by the nonoperators for administration,  supervision,  office
        services and warehousing  costs on an annually adjusted fixed rate basis
        per well per month.  These charges are applied as a reduction of general
        and administrative expenses for purposes of the statement of operations.

 11.  Income Taxes

        The Company  accounts for income taxes under the  provisions of FAS 109,
        which require that taxes be provided on the liability  method based upon
        the tax rate at which  items of income and  expense  are  expected to be
        settled in the Company's tax return.

 12.  (Loss) Per Common Share

        Earnings (loss) per common and common  equivalent  share is based on the
        weighted average number of shares  outstanding.  The potential  dilution
        from the exercise of stock warrants is not material.





                                      F-12

<PAGE>


                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 13.  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.

 14.  Reclassifications

        Certain   reclassifications  have  been  made  to  conform  prior  years
        information with the current year presentation.


NOTE B - GOING CONCERN

    The Company's financial  statements have been presented on the basis that it
    is a going concern,  which  contemplates  the  realization of assets and the
    satisfaction  of liabilities  in the normal course of business.  The Company
    has over 80% of its  assets  invested  in  entities  that are  pursuing  the
    development of the Karakuduk Field, a shut in oil field in the central Asian
    Republic of Kazakstan,  which will require  significant  additional  funding
    (note D).

    The Company  has  commenced a private  placement  of common  stock (note N).
    However, the Company does not anticipate that the net proceeds from the sale
    of the shares offered, together with the Company's current cash reserves and
    cash flow from operations,  will be sufficient to meet the Company's capital
    requirements through fiscal 1996. While the Company believes that additional
    funds will be available from additional financing, there can be no assurance
    that such  will be the  case.  There is also no  assurance  that  additional
    financing, if available, can be obtained on terms favorable or affordable to
    the Company.

    The Company's  continued existence as a going concern in its present form is
    dependent upon the success of future operations, which is, in the near term,
    dependent on the  successful  financing  and  development  of the  Karakuduk
    Field, of which there is no assurance.



                                      F-13


<PAGE>



                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE C - INVESTMENTS IN DEBT AND EQUITY SECURITIES

    The Company  classifies  its  investments  in U.S.  Treasury  securities  as
    held-to-maturity  securities.  Held-to-maturity  securities  are  carried at
    amortized cost.

    As of November 30, 1995, the Company did not own any investments in debt and
    equity securities. The amortized cost, unrealized gains and losses, and fair
    values of the  Company's  held-to-maturity  securities  held at November 30,
    1994 are summarized as follows:

<TABLE>
<CAPTION>

                                               Gross        Gross
                               Amortized     unrealized  unrealized      Fair
                                  cost         gains       losses        value
                               ---------     ----------  ----------    --------- 
<S>                            <C>            <C>            <C>        <C>     

U.S. government
  securities ...........       $299,000       $  4,000       $--        $303,000
                               ========       ========       ====       ========
</TABLE>

    The following table lists the maturities of debt securities held at November
    30, 1994 classified as held-to-maturity.
<TABLE>
<CAPTION>

                                        Within   One to five  More than
                                       one year      years    five years   Total
                                       ---------   ----------  ---------  ---------
<S>                                     <C>        <C>       <C>        <C>     

Held-to-maturity
  securities .......................    $199,000   $100,000    $--     $299,000
                                        ========   ========    ====    ========
</TABLE>


NOTE D - INVESTMENT IN AND ADVANCES TO AFFILIATE

    In  September,  1994,  the Company  acquired a 25% interest in Central Asian
    Petroleum Guernsey Limited ("CAP-G"),  with headquarters in Ankara,  Turkey.
    CAP-G has a 50% interest in Karakuduk Munay, Inc.  ("KKM"),  which owns 100%
    of the right to develop  the  Karakuduk  Field,  a shut-in  oil field in the
    central Asian Republic of Kazakstan.  As a result of the  acquisition of the
    25% interest in CAP-G,  the Company had a 12.5%  beneficial  interest in KKM
    and the Karakuduk  Field.  In April,  1995, the Company  acquired all of the
    stock of Central Asian Petroleum,  Inc. ("CAP-D"), in exchange for shares of
    the Company's  common stock (note F - shares in escrow).  As a result of the
    acquisition,  the Company's  beneficial  interest in CAP-G increased to 45%,
    giving the  Company a 22.5%  beneficial  interest  in KKM and the  Karakuduk
    Field (see note N).





                                      F-14


<PAGE>

                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE D - INVESTMENT IN AND ADVANCES TO AFFILIATE (CONTINUED)

    Since the Company and its affiliates are in the  acquisition  and evaluation
    phase  related to the  Karakuduk  Field,  all costs  incurred by the Company
    related to the Field have been capitalized and are not subject to depletion.

    All of the permits and licenses required to develop the field are not yet in
    place and there is no assurance that they will be obtained.

    Because of uncertainties  surrounding the prospect,  no proved reserves have
    been  attributed  to  the  field.  The  project  will  require   significant
    development  costs for which the financing is not complete.  There can be no
    assurance  that the project  will be  adequately  financed or that the field
    will be successfully developed.  The license requires a minimum work plan of
    approximately  $10,000,000 in 1996,  $34,000,000 in 1997 and  $12,000,000 in
    1998.  The  agreement  provides KKM with the right to defer the minimum work
    program under certain conditions. As part of the minimum workplan, Chaparral
    is  committed  to  loan  CAP-G  sufficient  funds  up to a total  amount  of
    $4,000,000 to enable CAP-G to loan KKM  sufficient  funds to place  existing
    wells in the Karakuduk Field on production.

    In  addition  to the  normal  risks  associated  with  domestic  oil and gas
    exploration and development,  this project is subject to other risks such as
    political instability,  war,  expropriation,  language barriers,  government
    bureaucracy,  uncertain  markets,  fluctuation in currency  exchange  rates,
    limitations on currency  repatriation,  foreign  taxes,  duties and tariffs,
    renegotiation  or  modification  of contracts  and the  availability  of oil
    gathering systems and pipelines.






                                      F-15


<PAGE>


                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE E - LONG-TERM DEBT

    Long-term  obligations at November 30, 1995 consisted of a note payable to a
    private  corporation  in the  amount  of  $750,000.  The  note is due on the
    earlier of April 30, 1997 or the third business day following the receipt by
    Chaparral of any proceeds from one of the following sources:  1) the sale or
    issuance of its securities,  or 2) any debt financing provided or guaranteed
    by the Overseas Private Investment Corporation or other governmental entity.
    Interest is payable monthly at a rate of 8%.

    As additional  consideration  for this note,  Chaparral issued to the holder
    warrants to purchase  500,000 shares of Chaparral's  common stock,  and to a
    private corporation,  as a finders fee, warrants to purchase 200,000 shares,
    at $0.25 per share,  exercisable  at any time, but no later than October 30,
    1998.

    The note has been  discounted by the difference  between the market value of
    the Company's common stock on the date of issuance and the exercise price of
    the warrants.  The discount will be amortized  over the life of the note (18
    months).  The  following  is a summary of the note  payable at November  30,
    1995:
<TABLE>
<CAPTION>

         <S>                                                          <C>      
          Note payable ..................................             $ 750,000
          Less unamortized discount
            based on imputed interest
            rate of 24% .................................              (289,000)
                                                                      ---------

                                                                      $ 461,000
                                                                      =========
</TABLE>

    Under the terms of the note,  Chaparral  was  required to elect three people
    affiliated  with the  holder  to its Board of  Directors,  with one of these
    people being named the Chairman of the Board.

    The note is subject  to a  provision  whereby,  if the note is not repaid by
    specific  dates  (before April 30, 1997),  Chaparral  will issue  additional
    warrants to the holder.

    Aggregate  maturities  of  long-term  debt as of  November  30,  1995 are as
    follows:
<TABLE>
<CAPTION>

            <S>                                       <C>   
            1996 ...................                  $   --
            1997 ...................                  750,000

</TABLE>




                                      F-16


<PAGE>



                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE F - COMMON STOCK AND STOCK WARRANTS

    Stock Warrant Plan

    During 1989,  the Board of Directors  approved a stock  warrant plan for key
    employees and directors.  The Company has reserved  1,175,000  shares of its
    common  stock for  issuance  under the plan.  Warrants  must be granted  and
    exercised  within a 10 year period ending April 30, 1999. The exercise price
    must equal the fair market value of the  Company's  common stock on the date
    of grant.

    Immediately  following  approval  of the  plan by the  Board  of  Directors,
    warrants for  1,175,000  shares were granted with an exercise  price of $.28
    per share.  The plan was  approved  in 1990 by the  Company's  shareholders.
    During 1995,  100,000 of the  warrants  were  exercised  for the purchase of
    common stock. The exercise price was $.28 per share for a total of $28,000.

    Stock Offering

    During  1993,  the  Company  sold a total  of  1,790.5  units  in a  private
    placement  consisting  of  2,685,750  shares of common  stock and  1,342,875
    warrants to purchase  stock with an exercise  price of $.40.  An  additional
    105,540 warrants were paid as commission.

    During 1994,  650,625 of the warrants  issued in the private  placement were
    exercised for the purchase of shares of common stock. The exercise price was
    $.40 per share for a total of $260,000.

    During 1995,  165,375 of the warrants  issued in the private  placement were
    exercised for the purchase of shares of common stock. The exercise price was
    $.40 per share for a total of $66,000.

    Stock Warrants Related to Debt Issuance (note E)

    As  consideration  for the issuance of a $750,000  note,  the Company issued
    warrants for a total of 700,000  shares of the Company's  common  stock,  at
    $.25 per share, exercisable at any time, but no later than October 30, 1998.






                                      F-17


<PAGE>


                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE F - COMMON STOCK AND STOCK WARRANTS (CONTINUED)

     Shares in Escrow

     The  Company   issued   4,400,000   shares  of  common  stock to acquire an
     interest in CAP-G (see note D).  150,000 of these shares were issued during
     the year  ended  November  30,  1995 for the  first 25%  interest.  For the
     remaining 20% interest, 4,250,000 shares were held in escrow at the date of
     this  transaction  with delivery  authorized upon the occurrence of several
     events.  The first 1,000,000 shares were delivered in September,  1995 upon
     registration  of the  Karakuduk  Munay  Agreement by the  governmentof  the
     Republic  of  Kazakstan.  Additional  shares will be  delivered  based upon
     future events  including  completion of financing for the Karakuduk  field,
     minimum production quantities and project financing.


NOTE G - INCOME TAXES

    The following is a summary of the provision for income taxes:
<TABLE>
<CAPTION>

                                                    Year ended
                                                    November 30,
                                      -----------------------------------------
                                        1995            1994            1993
                                      ---------       ---------       ---------
<S>                                   <C>             <C>             <C>       

Income taxes (benefit)
  computed at Federal
  statutory rate ...............      $(241,000)      $(161,000)      $ (42,000)
Change in asset valuation
  allowance ....................        298,000         256,000          65,000
Other ..........................        (57,000)        (95,000)        (23,000)
                                      ---------       ---------       ---------

Income taxes ...................      $    --         $    --         $    --
                                      =========       =========       =========




















                                      F-18


<PAGE>

                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE G - INCOME TAXES (CONTINUED)

    The components of the Company's deferred tax assets and
    liabilities under SFAS No. 109 are as follows:

<CAPTION>
                                                  Year ended
                                                  November 30,
                                  ---------------------------------------------
                                      1995            1994             1993
                                  -----------      -----------      -----------
<S>                               <C>              <C>              <C>        

Deferred tax assets
  Net operating loss
    carryforwards ...........     $ 4,131,000      $ 3,934,000      $ 3,777,000
 Full cost pool
    capitalization ..........         246,000          145,000           46,000
Valuation allowance .........      (4,377,000)      (4,079,000)      (3,823,000)
                                  -----------      -----------      -----------

Deferred tax assets .........     $      --        $      --        $      --
                                  ===========      ===========      ===========
</TABLE>

    There were no  deferred  tax assets or income tax  benefits  recorded in the
    financial  statements  for  net  deductible  temporary  differences  or  net
    operating  loss  carryforwards  due to the fact that the  realization of the
    related tax benefits is not considered likely.

    At  November   30,  1995,   the  Company   has  tax  loss  carryforwards  of
    approximately  $12,149,000  available to offset future taxable income. These
    carryforwards  will  expire at  various  times  between  1996 and 2011.  The
    Company has issued a significant number of shares of common stock during the
    year ended  November 30, 1995 and has also issued  warrants.  The Company is
    also currently  negotiating for the infusion of additional capital which, if
    successful,  will  require  additional  shares  of stock to be  issued.  The
    changes in ownership  may  significantly  restrict the use of net  operating
    loss  carryforwards.  At  November  30,  1995,  unused  statutory  depletion
    carryforwards,  which have unlimited duration,  are approximately  $567,000.
    The unused  investment  tax credit  carryover was  approximately  $86,000 at
    November  30,  1995 and  expires  through  2000.  The loss  carryforward  at
    November  30,  1995  for  financial   reporting  purposes  is  approximately
    $11,264,000.  The  difference  between the loss  carryforward  for financial
    reporting and income tax purposes results principally from the difference in
    book and tax basis of oil and gas properties.





                                      F-19


<PAGE>



                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE H - RELATED PARTY TRANSACTIONS

    The Company paid a director  $24,000 during 1995 and 1994 and $20,000 during
    1993, for public relations consulting services.


NOTE I - MAJOR CUSTOMERS

    The Company is presently  engaged in exploration  for and development of oil
    and gas.  The Company  sells its  production  under  contracts  with various
    purchasers,  with certain domestic purchasers accounting for sales of 10% or
    more per year as follows:

               1995                                   16%
               1994                                   15%, 13% and 11%
               1993                                   13%, 11% and 11%


NOTE J - LEASE

    The Company  leases  office space under a  noncancellable  operating  lease,
    expiring in March,  1997.  The  following  is a schedule  of future  minimum
    rental payments:

                  Year ending November 30,
                     1996                            $ 33,000
                     1997                              11,000
                                                       ------
                                                     $ 44,000
                                                       ======

    Net rent  expense was $36,000  for 1995,  $37,000 for 1994,  and $34,000 for
    1993.  Related party sublease income included in rent expense was $6,000 for
    1994 and 1993, there was no sublease income in 1995.


NOTE K - DEFERRED COMPENSATION PLANS

    Royalty Participation Plan

    During  1982,  the  Company  adopted  a Royalty  Participation  Plan for the
    employees of the Company.  Under the plan,  the Company may  contribute to a
    trust fund,  royalty  interests  acquired by the Company  together  with any
    proceeds of  production  received by the Company which are  attributable  to
    such royalty interests. The net income of the trust fund will be distributed
    yearly to the  participants  based on years of service  and  position in the
    Company.  Distributions  were $12,000 for 1995, $10,000 for 1994 and $10,000
    for 1993.



                                      F-20


<PAGE>

                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE K - DEFERRED COMPENSATION PLANS (CONTINUED)

    Deferred Compensation Agreement

    In  1991,  the  Company  amended  its  deferred  compensation  plan  for its
    president to provide for payments of $20,000  annually for 5 years,  a total
    of $100,000,  beginning in 1991. Prior to the amendment, the plan called for
    payments of $18,000  annually,  a total of $180,000,  for 10 years beginning
    upon  termination.  At November  30,  1994,  the  Company  has no  remaining
    obligation under the Plan.


NOTE L - DEFINED CONTRIBUTION PLANS

    Effective December 31, 1990, the Company adopted a new defined  contribution
    plan which  covers  all  full-time  eligible  employees.  Contributions  are
    determined as a percent of each covered  employee's salary and are funded as
    accrued. Plan contributions for the Company were $27,000 in 1995, $26,000 in
    1994,  and $29,000 in 1993, of which $20,000 in 1995,  $20,000 in 1994,  and
    $23,000 in 1993 was attributable to the president of the Company.

    The Company  also adopted a 401(k) plan  covering  all full time  employees,
    effective January 1, 1991. Employee  contributions are in the form of salary
    reductions up to the maximum percentage allowable under IRS codes. There are
    no employer matching contributions.


NOTE M - FOURTH QUARTER ADJUSTMENTS

    During the fourth  quarter of the year ended  November 30, 1995, the Company
    recognized  a write down of its oil and gas  properties  of  $619,000,  as a
    result of a full cost ceiling limitation.













                                      F-21


<PAGE>


                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE N - SUBSEQUENT EVENTS

    In January and  February,  1996,  the Company  entered  into  agreements  to
    acquire,  for a  total  of  $5,850,000  cash  and  1,785,000  shares  of the
    Company's common stock, an additional 55% interest in CAP-G. If consummated,
    the  acquisitions  would increase the Company's  ownership in CAP-G to 100%,
    thus  increasing  to 50% the Company's  beneficial  ownership of KKM and the
    Karakuduk Field.

    The  additional  55%  of  CAP-G  is   to  be   acquired  in  three  separate
    transactions,  the first two of which  include  the  purchase  of all of the
    CAP-G  shares  owned  by a  private  Turkish  company  ("Darka")  and  by an
    individual CAP-G shareholder ("K`ksal"), each of which owns 25% of the CAP-G
    shares outstanding.

    The Company would pay  $2,000,000 in cash plus issue   685,000 shares of the
    Company's  common  stock  to Darka  for all of its  CAP-G  shares.  The cash
    payment  includes an initial  $300,000 paid by the Company on March 4, 1996,
    following the Company's review of Darka. An additional  $300,000 and 625,000
    shares of Company stock were  delivered  March 8, 1996,  with the balance of
    cash and stock due at closing on April 1, 1996.

    The Company would pay  $1,975,000  in cash and issue  900,000  shares of the
    Company's  common stock to K`ksal for 60% of K`ksal's CAP-G shares,  with an
    option, after completion of the initial purchase,  to purchase the remaining
    40% of his CAP-G shares for an additional  $1,625,000  and 200,000 shares of
    the Company's  common stock.  The cash payment on the initial  purchase from
    K`ksal  includes  $150,000 paid by the Company into an escrow account during
    the  Company's  60-day due  diligence  review.  If the  initial  purchase is
    consummated  from  K`ksal,  the  escrowed  funds  would be  released  and an
    additional  $600,000 cash and 900,000  shares of the Company's  common stock
    delivered to K`ksal on or before March 11, 1996.  The remaining cash balance
    of $1,225,000 for the initial  purchase will be paid in four equal quarterly
    payments of $306,250  between June 11, 1996 and March 11, 1997.  The Company
    has the option to acquire the remaining 40% of K`ksal's  CAP-G shares at any
    time following  completion of the initial purchase and prior to December 11,
    1997.

    Under a third  agreement,  the Company would acquire the remaining 5% of the
    outstanding CAP-G shares from a private  corporation  ("OCSCO") for $250,000
    to be paid at the earlier of April 14, 1996 or 15 days after completion of a
    private placement of common stock described below.




                                      F-22


<PAGE>

                    Chaparral Resources, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE N - SUBSEQUENT EVENTS

    In March,  1996, the Company  commenced a private  offering of common stock,
    whereby  the Company is offering  12,000,000  shares at $.50 per share.  The
    Company  reserved the right to increase the offering to  14,000,000  shares.
    There is no minimum  amount in the  offering,  and proceeds from the sale of
    the shares will be used by the Company as subscriptions are accepted without
    any escrow.

    If all shares  offered are sold,  the net  proceeds  from the  offering  are
    estimated to be  approximately  $5,500,000  after deducting  Placement Agent
    fees and estimated offering expenses of $500,000.

































                                      F-23


<PAGE>




            SUPPLEMENTAL INFORMATION - DISCLOSURES ABOUT OIL AND GAS
                        PRODUCING ACTIVITIES - UNAUDITED


The following  estimates of proved and unproved developed reserve quantities and
related standardized measure of discounted net cash flow are estimates only, and
do not  purport  to  reflect  realizable  values  or fair  market  values of the
Company's reserves. The Company emphasizes that reserve estimates are inherently
imprecise and that estimates of new discoveries are more imprecise than those of
producing oil and gas properties.  Additionally,  the price of oil has been very
volatile and downward changes in prices can significantly effect quantities that
are  economically  recoverable.  Accordingly,  these  estimates  are expected to
change  as  future  information   becomes  available  and  the  changes  may  be
significant. All of the Company's reserves are located in the United States.

Proved  reserves  are  estimated  reserves  of crude  oil and  natural  gas that
geological and engineering  data  demonstrate  with  reasonable  certainty to be
recoverable in future years from known  reservoirs  under existing  economic and
operating  conditions.  Proved  developed  reserves  are  those  expected  to be
recovered through existing wells, equipment and operating methods.

The  standardized  measure of  discounted  future net cash flows is  computed by
applying  year-end  prices of oil and gas (with  consideration  of price changes
only to the extent provided by contractual arrangements) to the estimated future
production of proved oil and gas reserves,  less estimated  future  expenditures
(based on year-end  costs) to be incurred in developing and producing the proved
reserves,  less estimated  future income tax expenses.  The estimated future net
cash  flows  are  then  discounted  using a rate of 10% a year  to  reflect  the
estimated timing of the future cash flows.
















                                      F-24


<PAGE>
<TABLE>
<CAPTION>

            SUPPLEMENTAL INFORMATION - DISCLOSURES ABOUT OIL AND GAS
                  PRODUCING ACTIVITIES - UNAUDITED (CONTINUED)

                      PROVED OIL AND GAS RESERVE QUANTITIES
                         (All within the United States)


                                                    Oil                 Gas
                                                  reserves            reserves
                                                  (bbls.)              (Mcf.)
                                                 --------             ---------
<S>                                              <C>                  <C>
      
Balance December 1, 1992 .................       105,973              1,485,556
    Revisions of previous estimates ......       (10,970)              (200,049)
    Extensions, discoveries and
      other additions ....................        59,193              1,175,421
    Production ...........................       (12,448)              (155,786)
                                                ---------             ----------
Balance November 30, 1993 ................       141,748              2,305,142
    Revisions of previous estimates ......          (125)              (455,946)
    Sales of reserves ....................       (20,392)               (95,714)
    Extensions, discoveries and
      other additions ....................         1,745              1,700,289
    Production ...........................       (11,286)              (159,041)
                                                 --------             ---------

Balance November 30, 1994 ................       111,690              3,294,730
    Revisions of previous estimates ......        (1,438)               (98,536)
    Sales of reserves ....................       (36,425)               (10,228)
    Extensions, discoveries and
      other additions ....................           582                  9,375
    Production ...........................        (8,224)              (132,924)
                                                 -------              ---------

Balance November 30, 1995 ................        66,185              3,062,417
                                               =========              =========

Proved developed reserves
    November 30, 1993 ....................        82,798              1,155,946
    November 30, 1994 ....................        52,740              1,103,203
    November 30, 1995 ....................         7,235                870,890

</TABLE>



                                      F-25


<PAGE>
<TABLE>
<CAPTION>



            SUPPLEMENTAL INFORMATION - DISCLOSURES ABOUT OIL AND GAS
                  PRODUCING ACTIVITIES - UNAUDITED (CONTINUED)

            STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
           AND CHANGES THEREIN RELATING TO PROVED OIL AND GAS RESERVES



                                                                               Year ended November 30,
                                                                       -----------------------------------------
                                                                          1995            1994           1993
                                                                       -----------     ------------    ---------

<S>                                                                     <C>            <C>            <C>        
Future cash inflows .................................................   $ 3,449,000    $ 5,041,000    $ 4,980,000
Future production and
  development costs .................................................    (2,478,000)    (3,051,000)    (2,661,000)
Future income tax expenses ..........................................          --           --                --
                                                                         -----------    -----------    -----------

Future net cash flows ...............................................       971,000      1,990,000      2,319,000
10% annual discount for
  estimated timing of cash
  flows .............................................................      (544,000)      (907,000)      (959,000)
                                                                         -----------    -----------    -----------

Standardized measure of
  discounted future net cash
  flows .............................................................   $   427,000    $ 1,083,000    $ 1,360,000
                                                                         ===========    ==========     ==========

The following are the principal  sources of changes in the standardized  measure
of discounted future net cash flows:
<CAPTION>

                                                                                 Year ended November 30,
                                                                        ----------------------------------------
                                                                            1995          1994           1993
                                                                        -----------    -----------    -----------

<S>                                                                     <C>            <C>            <C>        
Beginning balance ...................................................   $ 1,084,000    $ 1,360,000    $ 1,429,000
Expenditures which reduced
  future development costs .........................................        (3,000)       (146,000)       (67,000)
Acquisition of proved reserves .....................................          --             --                --
Sale of proved reserves ............................................       (81,000)       (102,000)            --
Sales and transfers of oil
  and gas produced, net of
  production costs ..................................................      (140,000)      (143,000)      (229,000)
Net increase (decrease) in
  price .............................................................      (593,000)      (568,000)      (485,000)
Net (increase) decrease in
  costs .............................................................       247,000          3,000         94,000
Extensions and discoveries ..........................................       165,000        526,000        631,000
Revisions of previous
  quantity estimates ................................................       (38,000)      (214,000)      (140,000)
Accretion of discount ...............................................       108,000        136,000        143,000
Effect of change in timing
  and other .........................................................      (322,000)       231,000       (16,000)
                                                                           ---------    ----------     ----------
Ending balance ......................................................   $   427,000    $ 1,083,000   $ 1,360,000
                                                                         ===========    ==========     ==========


                                      F-26


<PAGE>
<CAPTION>


            SUPPLEMENTAL INFORMATION - DISCLOSURES ABOUT OIL AND GAS
                  PRODUCING ACTIVITIES - UNAUDITED (CONTINUED)

                  STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET
                   CASH FLOWS AND CHANGES THEREIN RELATING TO
                     PROVED OIL AND GAS RESERVES (CONTINUED)


Costs Incurred

                                                                                        Year ended November 30,
                                                                                  --------------------------------------
                                                                                     1995            1994         1993
                                                                                  ----------      ----------   ----------
<S>                                                                              <C>           <C>           <C>        

Property acquisition costs -
  unproved leases ............................................................   $      --     $     7,000   $    12,000
Property acquisition costs -
  proved properties ..........................................................        30,000        37,000       228,000
Exploration costs ............................................................          --            --           2,000
Development costs ............................................................        30,000       146,000        67,000

(1)  Net of lease sale proceeds of $169,000.

Production Costs

<CAPTION>
                                                                                          Year ended November 30,
                                                                                  ----------------------------------------
                                                                                     1995          1994           1993
                                                                                  -----------    -----------    ----------

<S>                                                                              <C>           <C>           <C>        
Lease operating expense ......................................................   $    95,000   $   176,000   $   155,000
Production tax ...............................................................        20,000        56,000        30,000
                                                                                  -----------   -----------   -----------

                                                                                 $   115,000   $   232,000   $   185,000
                                                                                  ===========   ===========   ===========
<CAPTION>

Other Information

                                                                                         Year ended November 30,
                                                                                  --------------------------------------
                                                                                     1995          1994          1993
                                                                                  -----------    -----------   ---------
<S>                                                                              <C>           <C>           <C>        

Net revenue (revenue less production
  costs, ad valorem and severance
  taxes) .....................................................................   $   140,000   $   142,000   $   299,000

Amortization per equivalent barrel
  of production* .............................................................         2.33          3.18          3.14
Price per bbl. (oil) .........................................................        14.27         12.75         14.09
Production cost per bbl. (oil) ...............................................         6.34          8.21          7.91
Price per Mcf. (gas) .........................................................         1.02          1.44          1.52
Production cost per Mcf. (gas) ...............................................          .47           .86           .55
Price per net equivalent bbl.* ...............................................         8.33          9.86         10.74
Production cost per net equivalent bbl.* .....................................         3.78          6.06          4.81

*   Natural gas converted to equivalent barrels using conversion
    ratio of 6:1.





                                      F-27


<PAGE>

            SUPPLEMENTAL INFORMATION - DISCLOSURES ABOUT OIL AND GAS
                  PRODUCING ACTIVITIES - UNAUDITED (CONTINUED)

                  STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET
                   CASH FLOWS AND CHANGES THEREIN RELATING TO
                     PROVED OIL AND GAS RESERVES (CONTINUED)


                                                                                         Year ended November 30,
                                                                                  ------------------------------------
                                                                                    1995          1994         1993
                                                                                  ---------    ------------  ---------

Present value of proved
  reserves
    Proved developed .........................................................   $  266,000   $   650,000  $  785,000
    Proved undeveloped .......................................................      161,000       433,000     575,000
                                                                                 -----------   -----------  ----------

  Total ......................................................................   $  427,000   $ 1,083,000  $1,360,000
                                                                                 ==========   ===========   =========

Future net revenues of proved
  reserves
    Proved developed .........................................................   $  383,000   $   950,000  $1,129,000
    Proved undeveloped .......................................................      588,000     1,040,000   1,190,000
                                                                                 ----------    ----------   ---------

  Total ......................................................................   $  971,000   $ 1,990,000  $2,319,000
                                                                                 ==========    ==========  ==========

</TABLE>
























                                      F-28
<PAGE>

                                  EXHIBIT INDEX

Exhibit   Description                                                   Page No.
-------   ------------                                                  --------

2.1       Stock Acquisition Agreement and Plan of Reorganization dated      N/A
          April  12,  1995  between  Chaparral  Resources,  Inc.,  and
          the   Shareholders   of  Central  Asian   Petroleum,   Inc.,
          incorporated  by reference  to Exhibit 2.1 to the  Company's
          Quarterly  Report on Form 10-Q for the quarter ended May 31,
          1995.

2.2       Escrow  Agreement  dated  April 12, 1995  between  Chaparral     N/A
          Resources,   Inc.,   the   Shareholders   of  Central  Asian
          Petroleum,  Inc.  and  Barry  W.  Spector,  incorporated  by
          reference to Exhibit 2.2 to the Company's  Quarterly  Report
          on Form 10-Q for the quarter ended May 31, 1995.

3.1       Restated   Articles   of   Incorporation   and   Amendments,     N/A
          incorporated    by   reference   to    Exhibit  3.1  to  the
          Company's  Annual  Report on Form 10-K for the  fiscal  year
          ended November 30, 1993.

3.2       Articles  of   Amendment   to  the   Restated   Articles  of     N/A
          Incorporation  dated  April  20,  1988,    incorporated   by
          reference to Exhibit 3.2 to the  Company's  Annual Report on
          Form 10-K for the fiscal year ended November 30, 1993.

3.3       Bylaws, as amended through December 5, 1995.

3.4       Articles  of   Amendment   to  the   Restated   Articles  of     N/A
          Incorporation   and   Amendments   dated   June  21,   1995,
          incorporated  by  reference  to  Exhibit B to the  Company's
          Quarterly  Report  on  Form 10-Q for the  quarter  ended May
          31, 1995.

10.1      Royalty Participation Plan dated June 15, 1982, incorporated     N/A
          by  reference  to  Exhibit  10.1  to  the  Company's  Annual
          Report on Form 10-K for the fiscal year ended  November  30,
          1993.

10.2      Chaparral Resources,  Inc. 1989 Stock Warrant Plan effective     N/A
          May 1, 1989,  incorporated  by  reference to Exhibit 10.3 to
          the Company's Annual Report on Form 10-K for the fiscal year
          ended November 30, 1993.

10.3      Target Benefit Plan effective  December 1, 1990 incorporated     N/A
          by reference to Exhibit 10.9 to the Company's  Annual Report
          on Form 10-K for the fiscal year ended November 30, 1991.

10.4      Deferred  Compensation  and Death  Benefit  Plan as  amended     N/A
          November 15, 1991 incorporated by reference to Exhibit 10.10
          to the  Company's  Annual Report on Form 10-K for the fiscal
          year ended November 30, 1991.

10.5      Promissory  Note  dated  November  1,  1995  from  Chaparral     N/A
          Resources,  Inc.,  to  Brae  Group,  Inc.,  incorporated  by
          reference to Exhibit  10.1  to the Company's  Current Report
          on Form 8-K dated November 1, 1995.

10.6      Purchase  Agreement,   dated  effective  January  12,  1996,
          between the Company and Guntekin  Koksal  (purchase of CAP-G
          shares).

10.7      Letter Agreement, dated January 3, 1996, between the Company
          and certain  stockholders of Darka Petrol Ticaret Ltd. Sti.,
          together with Exhibits A--E.

10.8      Amendment,  effective March 4, 1996, to the Letter Agreement
          revising  the  terms  pursuant  to which the  Company  is to
          acquire  all shares of CAP(G)  stock  owned by Darka  Petrol
          Ticaret Ltd. Sti.

21        Subsidiaries of the Registrant.

23        Consent of Grant Thornton for S-8.

24        Power of Attorney.

27        Financial Data Schedule.