<PAGE>

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

                                   FORM 10-K

[ X ]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                 For the fiscal year ended   DECEMBER 31, 2000
                                            -------------------

                                      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  0-22258

                             AVIVA PETROLEUM INC.
            (Exact name of registrant as specified in its charter)

                Texas                                        75-1432205
    (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                      Identification No.)

         8235 Douglas Avenue,                                   75225
       Suite 400, Dallas, Texas                              (Zip Code)
(Address of principal executive offices)

                                (214) 691-3464
             (Registrant's telephone number, including area code)

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

                                                       Names of each exchange
                                                       ----------------------
     Title of each class                                on which registered
     -------------------                                -------------------
     Depositary Receipts, each representing five                None*
     shares of Common Stock, without par value

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

                        Common Stock, without par value

*The Company's Depositary Shares were delisted by the American Stock Exchange
effective as of April 9, 1999.

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

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 .
           ---

The aggregate market value of voting and non-voting securities held by non-
affiliates of the Registrant on February 28, 2001 was approximately $1,904,000.
As of such date, the last sale price of a Depositary Share representing five
shares of Common Stock, without par value ("Common Stock"), was U.S. $0.22, as
quoted on the OTC Bulletin Board.

As of February 28, 2001, 46,900,132 shares of Registrant's Common Stock were
outstanding, of which 27,614,445 shares of Common Stock were represented by
Depositary Shares.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                     None.
<PAGE>

                        TABLE OF CONTENTS TO FORM 10-K

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Part I
  Item 1.     Business
                 General................................................................     1
                 Garnet Merger..........................................................     1
                 Debt Restructuring.....................................................     1
                 Current Operations.....................................................     1
                 Risks Associated with the Company's Business...........................     2
                 Products, Markets and Methods of Distributions.........................     3
                 Regulation.............................................................     4
                 Competition............................................................     7
                 Employees..............................................................     7
  Item 2.     Properties
                 Productive Wells and Drilling Activity.................................     7
                 Undeveloped Acreage....................................................     7
                 Title to Properties....................................................     8
                 Reserves and Future Net Cash Flows.....................................     8
                 Production, Sales Prices and Costs.....................................     8
                 Significant Properties
                    Colombia............................................................     9
                    United States.......................................................    10
                    Papua New Guinea....................................................    11
  Item 3.     Legal Proceedings.........................................................    11
  Item 4.     Submission of Matters to a Vote of Security Holders.......................    11

Part II

  Item 5.     Market for Registrant's Common Equity and Related Stockholder Matters
                 Price Range of Depositary Shares and Common Stock......................    12
                 Dividend History and Restrictions......................................    13
  Item 6.     Selected Financial Data...................................................    14
  Item 7.     Management's Discussion and Analysis of Financial Condition and Results
                 of Operations
                 Results of Operations..................................................    15
                 New Accounting Pronouncements..........................................    17
                 Liquidity and Capital Resources........................................    17
  Item 7A.    Quantitative and Qualitative Disclosure about Market Risk.................    18
  Item 8.     Financial Statements and Supplementary Data...............................    18
  Item 9.     Changes in and Disagreements with Accountants on Accounting
                 and Financial Disclosure...............................................    18
Part III

  Item 10.    Directors and Executive Officers of the Registrant
                 Directors of the Company...............................................    19
                 Executive Officers of the Company......................................    19
                 Meetings and Committees of the Board of Directors......................    19
                 Compliance with Section 16(a) of the Securities Exchange Act of 1934...    20
  Item 11.    Executive Compensation
                 Summary Compensation Table.............................................    21
                 Directors' Fees........................................................    21
                 Option Grants During 2000..............................................    21
                 Option Exercises During 2000 and Year End Option Values................    21
</TABLE>

                                      (i)
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                  TABLE OF CONTENTS TO FORM 10-K (Continued)

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                 Compensation Committee Interlocks and Insider Participation
                    in Compensation Decisions...................................     22
                 Employment Contracts...........................................     22
                 Compensation Committee Report on Executive Compensation........     22
                 Performance Graph..............................................     23
  Item 12.    Security Ownership of Certain Beneficial Owners and Management
                 Security Ownership of Certain Beneficial Owners................     24
                 Security Ownership of Management...............................     25
  Item 13.    Certain Relationships and Related Transactions....................     25

Part IV

  Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K...     26

Signatures......................................................................     29
</TABLE>

                                     (ii)
<PAGE>

                                    PART I

ITEM 1. BUSINESS

General

  Aviva Petroleum Inc. (referred to collectively with its consolidated
subsidiaries as the "Company"), a Texas corporation, through its subsidiaries,
is engaged in the exploration for and production and development of oil and gas
in Colombia, offshore in the United States, and in Papua New Guinea. The Company
was incorporated in 1973 and the common stock, without par value ("Common
Stock"), of the Company was traded on the London Stock Exchange Limited (the
"London Stock Exchange") from 1982 to 1999. On May 6, 1999, trading of the
Common Stock was suspended on the London Stock Exchange. In order to reduce
costs, the Company formally dropped its London Stock Exchange listing on
September 13, 2000. Depositary shares ("Depositary Shares"), each representing
the beneficial ownership of five shares of Common Stock, trade on the OTC
Bulletin Board under the symbol "AVVPP.OB." The Company's principal executive
offices are located in Dallas, Texas.

Garnet Merger

  On October 28, 1998, the Company acquired Garnet Resources Corporation
("Garnet") in exchange for the issuance, in the aggregate, of approximately 14
million shares of the Company's Common Stock. Pursuant to the Agreement and Plan
of Merger dated as of June 24, 1998, an indirect, wholly owned subsidiary of the
Company was merged with and into Garnet. Garnet's $15 million of 9 1/2%
Convertible Subordinated Debentures were acquired and canceled, and the
outstanding bank debt of Garnet and the Company was refinanced under a $15
million credit facility which was fully retired in 2000. See "--Debt
Restructuring". As a result of the merger, the Company was able to effect cost
savings, particularly in Colombia where each company had an interest in the same
properties.

Debt Restructuring

  On June 8, 2000, the Company entered into agreements with the Company's senior
secured lender, Crosby Capital L.L.C. ("Crosby"), in order to restructure the
Company's senior debt which, including unpaid interest, aggregated $16,103,064
as of May 31, 2000. Pursuant to the agreements, Crosby canceled $13,353,064 of
such debt and transferred to the Company warrants on 1,500,000 shares of the
Company's common stock in exchange for the general partner rights and an initial
77.5% partnership interest in Argosy Energy International ("Argosy"), a Utah
limited partnership which holds the Company's Colombian properties. Following
the transaction, Aviva Overseas, Inc. ("Aviva Overseas"), a wholly owned
subsidiary of the Company, owns a 22.1196% limited partnership interest in
Argosy. An additional 7.5% limited partnership interest will be transferred from
Crosby to Aviva Overseas when Crosby has received in distributions from Argosy
an amount equal to $3,500,000 plus interest at the prime rate plus 1% on the
outstanding balance thereof.

  The Company's remaining debt of $2,750,000 was reacquired from Crosby on
December 21, 2000, in exchange for a 15% net profits interest in any new
production at Breton Sound Block 31 field.  This transaction substantially
completed the restructuring of the Company and the reorganization of the
Company's wholly owned subsidiary Aviva America, Inc. ("AAI").

  AAI had filed a voluntary petition for reorganization under Chapter 11 of the
U.S. Bankruptcy Code on July 21, 2000. The filing, in the Northern District of
Texas, was initiated in order to achieve a comprehensive restructuring of AAI's
debts. Following approval by the court and creditors, the voluntary petition for
reorganization became effective on November 17, 2000.

  As a result of the aforementioned transactions, all of the Company's
outstanding senior secured debt has been eliminated.

Current Operations

  Colombia.  The Company is the owner of interests in, and is engaged in
  --------
exploration for, and development and production of oil from, two contracts
granted by Empresa Colombiana de Petroleos, the Colombian national oil company
("Ecopetrol") .

                                       1
<PAGE>

  The Company's Colombian activities are carried out by Argosy which operates
the Colombian properties.  Argosy is currently party to two contracts with
Ecopetrol called Santana and Aporte Putumayo.  Both contract areas are located
in the Putumayo Basin of southwestern Colombia.  The Company's production,
exploration and development activities are currently limited to the Santana
contract area.

  Twenty-one wells have been drilled on the Santana contract area.  Of 13
exploratory wells, seven have been productive and six were dry holes. Of eight
development wells, seven have been productive.  Four fields have been discovered
and have been declared commercial by Ecopetrol.  Gross production from the
Santana block has totaled approximately 16.5 million barrels during the period
from April 1992, when production commenced, through December 2000.

  The Aporte Putumayo block produced from 1976 until March 1995, when declining
production caused the block to be unprofitable under the terms of the contract.
The block has been relinquished, however Argosy remains obligated for
abandonment and restoration operations on the old wells in the block.

  Each concession is governed by a separate contract with Ecopetrol.  Generally,
the contracts cover a 28-year period and require certain exploration
expenditures in the early years of the contract and, in the later years of the
contract, permit exploitation of reserves that have been found.  Both of the
contracts provide that Ecopetrol shall receive, on behalf of the Colombian
Ministry of Mines, royalty payments in the amount of 20% of the gross proceeds
of the oil produced pursuant to the respective contract, less certain costs of
transporting the oil to the point of sale.  Under each of the contracts,
application must be made to Ecopetrol for a declaration of commerciality for
each discovery. If Ecopetrol declares the discovery commercial, it has the right
to a 50% reversionary interest in the field and is required to pay 50% of all
future costs.  If, alternatively, Ecopetrol declines to declare the discovery
commercial, Argosy has the right to proceed with development and production at
its own expense until such time as it has recovered 200% of the costs incurred,
at which time Ecopetrol is entitled to back in for a 50% working interest in the
field without payment or reimbursement of any historical costs. Exploration
costs (as defined in the contracts) incurred by Argosy prior to the declaration
of commerciality are recovered by means of retention by Argosy of all of the
non-royalty proceeds of production from each well until costs relating to that
well are recovered.

  United States.  In the United States the Company, through its wholly owned
  -------------
subsidiary, Aviva America, Inc. ("AAI"), has been engaged in the production of
oil and gas attributable to its working interests in various wells located in
the Gulf of Mexico offshore Louisiana, at Main Pass 41 and Breton Sound 31
fields.  Effective November 7, 2000, the Company assigned all of its interest in
the Main Pass 41 field to the field operator.  AAI continues to produce from,
and is the operator of, the Breton Sound 31 field. The Company acquired its
interests in these fields through the acquisition of Charterhall Oil North
America PLC in 1990.

  Papua New Guinea.  In Papua New Guinea the Company, through its wholly owned
  ----------------
subsidiary, Garnet PNG Corporation ("Garnet PNG"), is engaged in the exploration
for oil and gas attributable to its 2% carried working interest in Petroleum
Prospecting License No. 206 ("PPL-206"). The Company acquired Garnet PNG as part
of the merger with Garnet. See "-- Garnet Merger."

Risks Associated with the Company's Business

  General.  The Company's operations are subject to oil field operating hazards
  -------
such as fires, explosions, blowouts, cratering and oil spills, any of which can
cause loss of hydrocarbons, personal injury and loss of life, and can severely
damage or destroy equipment, suspend drilling operations and cause substantial
damage to subsurface structures, surrounding areas or property of others. As
protection against operating hazards, the Company maintains broad insurance
coverage, including indemnity insurance covering well control, redrilling and
cleanup and containment expenses, Outer Continental Shelf Lands Act coverage,
physical damage on certain risks, employers' liability, comprehensive general
liability, appropriate auto and marine liability and workers' compensation
insurance. The Company believes that such insurance coverage is customary for
companies engaged in similar operations, but the Company may not be fully
insured against various of the foregoing risks, because such risks are either
not fully insurable or the cost of insurance is prohibitive. The Company does
not carry business interruption insurance because of the prohibitively high
cost. The occurrence of an uninsured hazardous event could have a material
adverse effect on the financial condition of the Company.

                                       2
<PAGE>

  Colombia.  The Company has expended significant amounts of capital for the
  --------
acquisition, exploration and development of its Colombian properties and may
expend additional capital for further exploration and development of such
properties. Even if the results of such activities are favorable, further
drilling at significant cost may be required to determine the extent of and to
produce the recoverable reserves.  Failure to fund certain capital expenditures
could result in forfeiture of all or part of the Company's interests in the
applicable property.  For additional information on the Company's concession
obligations, see "-- Current Operations," and regarding its cash requirements,
see "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."

  The Company is subject to the other risks inherent in the ownership and
development of foreign properties including, without limitation, cancellation or
renegotiation of contracts, royalty and tax increases, retroactive tax claims,
expropriation, adverse changes in currency values, foreign exchange controls,
import and export regulations, environmental controls and other laws,
regulations or international developments that may adversely affect the
Company's properties.   The Company does not maintain political risk insurance.

  Exploration and development of the Company's Colombian properties are
dependent upon obtaining appropriate governmental approvals and permits.  See "-
- Regulation."    The Company's Colombian operations are also subject to price
risk.  See "-- Products, Markets and Methods of Distribution."

  There are logistical problems, costs and risks in conducting oil and gas
activities in remote, rugged and primitive regions in Colombia.  The Company's
operations are also exposed to potentially detrimental activities by the leftist
guerrillas who have operated within Colombia for many years.  The guerrillas in
the Putumayo area, where the Company's property is located, have as recently as
August 3, 1998, significantly damaged the Company's assets.  Since that time the
Company has been subject to lessor attacks on its pipelines and equipment
resulting in only minor interruptions of oil sales.  The Colombian army guards
the Company's operations, however, there can be no assurance that the Company's
operations will not be the target of significant guerrilla attacks in the
future.  Although the Company's losses were recovered through insurance, there
can be no assurance that such coverage will remain available or affordable.

  United States.  The Company's activities in the United States are subject to
  -------------
a variety of risks.  The U.S. properties could, in certain circumstances,
require expenditure of significant amounts of capital.  Failure to fund its
share of such costs could result in a diminution of value of, or under
applicable operating agreements forfeiture of, the Company's interest.  The
Company's ability to fund such expenditures is also dependent upon the ability
of the other working interest owners to fund their share of the costs.  If such
working interest owners fail to do so, the Company could be required to pay its
proportionate share or forego further development of such properties.  The
Company's activities in the United States are subject to various environmental
regulations and to price risk.  See "-- Regulation" and "-- Products, Markets
and Methods of Distribution."

  Information concerning the amounts of revenue, operating loss and identifiable
assets attributable to each of the Company's geographic areas is set forth in
Note 12 of the Notes to Consolidated Financial Statements contained elsewhere
herein.

Products, Markets and Methods of Distribution

  Colombia.  The Company's oil is sold pursuant to a sales contract with
  --------
Ecopetrol.  The contract provides for cancellation by either party with notice.
In the event of cancellation by Ecopetrol, the Company may export its oil
production.    Ecopetrol has historically purchased the Company's production,
but there can be no assurance that it will continue to do so, nor can there be
any assurance of ready markets for the Colombian production if Ecopetrol does
not elect to purchase the production.  The Company currently produces no natural
gas in Colombia.  See "Item 2.  Properties."

  During each of the three years ended December 31, 2000, the Company received
the majority of its revenue from Ecopetrol.  Sales to Ecopetrol accounted for
$4,267,000, or 74% of oil and gas revenue for 2000,  $5,683,000, or 84% of oil
and gas revenue for 1999 and $2,632,000, or 79% of oil and gas revenue for 1998.
The foregoing amounts represent the Company's entire Colombian oil revenue.  If
Ecopetrol were to elect not to purchase the Company's Colombian oil production,
the Company believes that other purchasers could be found for such production.

                                       3
<PAGE>

  United States.  The Company does not refine or otherwise process domestic
  -------------
crude oil and condensate production.  The domestic oil and condensate it
produces are sold to oil transmission companies at posted field prices in the
area where production occurs.  The Company does not have long term contracts
with purchasers of its domestic oil and condensate production.  The Company's
domestic gas production at Breton Sound 31 is used for field operations and is
recorded at spot prices.  The Company has not historically hedged any of its
domestic production.

  During 2000 and 1998, the Company received more than 10% of its revenue from
one domestic purchaser.  Such revenue accounted for $968,000, or 16.7% of oil
and gas revenue for 2000 and $479,000, or 14.4% of oil and gas revenue for 1998.
During 1999, the Company did not receive more than 10% of its revenue from any
one domestic purchaser.

  General.  Oil and gas are the Company's only products. There is substantial
  -------
uncertainty as to the prices that the Company may receive for production from
its existing oil and gas reserves or from oil and gas reserves, if any, which
the Company may discover or purchase. It is possible that under market
conditions prevailing in the future, the production and sale of oil or gas, if
any, from the Company's properties in Papua New Guinea may not be commercially
feasible. The availability of a ready market and the prices received for oil and
gas produced depend upon numerous factors beyond the control of the Company
including, without limitation, adequate transportation facilities (such as
pipelines), marketing of competitive fuels, fluctuating market demand,
governmental regulation and world political and economic developments. World oil
and gas markets are highly volatile and shortage or surplus conditions
substantially affect prices. As a result, there have been dramatic swings in
both oil and gas prices in recent years. From time to time there may exist a
surplus of oil or natural gas supplies, the effect of which may be to reduce the
amount or price of hydrocarbons that the Company may produce and sell while such
surplus exists.

Regulation

  Environmental Regulation.  The Company's operations are subject to foreign,
  ------------------------
federal, state, and local laws and regulations governing the discharge of
materials into the environment or otherwise relating to environmental
protection.  These laws and regulations may require the acquisition of a permit
by operators before drilling commences; restrict the types, quantities, and
concentration of various substances that can be released into the environment in
connection with drilling and production activities; limit or prohibit drilling
activities on certain lands lying within wilderness areas, wetlands, and other
protected areas; require remedial measures to mitigate pollution from former
operations, such as plugging and abandoning wells; and impose substantial
liabilities for pollution resulting from the Company's operations.  The
regulatory burden on the oil and gas industry increases the cost of doing
business and consequently affects its profitability.  Changes in environmental
laws and regulations occur frequently, and any revision or reinterpretation of
existing laws and regulations or adoption of new laws and regulations that
result in more stringent and costly waste handling, disposal, remedial,
drilling, permitting, or operational requirements could have a material adverse
impact on the operating costs of the Company, as well as significantly impair
the Company's ability to compete with larger, more highly capitalized companies.
Management believes that the Company is in substantial compliance with current
applicable environmental laws and regulations and that continued compliance with
existing requirements will not have a material adverse impact on the Company's
operations, capital expenditures, and earnings.  Management further believes,
however, that risks of substantial costs and liabilities are inherent in oil and
gas operations, and there can be no assurance that significant costs and
liabilities, including administrative, civil and criminal penalties for
violations of environmental laws and regulations, will not be incurred.

       Colombia.  Any significant exploration or development of the Company's
       --------
Colombian properties, such as conducting a seismic program, the drilling of an
exploratory or developmental well or the construction of a pipeline, requires
environmental review and the issuance of environmental permits by the Ministry
of the Environment.  In recent years the Company has received environmental
permits without substantial delay.  There can be, however, no assurance that the
Company will not experience future delays in obtaining necessary environmental
licenses.  See also "Item 2. Properties -- Significant Properties -- Colombia."

       United States.   The Company believes that its domestic operations are
       -------------
currently in substantial compliance with U.S. federal, state, and local
environmental laws and regulations.  Over the past few years, the Company has
incurred significant costs to make capital improvements, including the drilling
and completion of a salt water injection well at Breton Sound 31 field, in order
to maintain compliance with these U.S. environmental laws or regulations.  There
can be no assurance that the Company will not expend additional significant
amounts in the future to maintain such compliance.

                                       4
<PAGE>

  The Oil Pollution Act of 1990, as amended ("OPA '90"), and regulations
thereunder impose a variety of requirements on "responsible parties" related to
the prevention of oil spills and liability for damages resulting from such
spills in waters of the United States. A "responsible party" includes the owner
or operator of a vessel, pipeline, or onshore facility, or the lessee or
permittee of the area in which an offshore facility is located. OPA '90 assigns
liability to each responsible party for oil spill removal costs and a variety of
public and private damages from oil spills. While liability limits apply in some
circumstances, a party cannot take advantage of liability limits if the spill is
caused by gross negligence or willful misconduct, the spill resulted from
violation of a federal safety, construction, or operating regulation, or a party
fails to report a spill or to cooperate fully in the cleanup. Few defenses exist
to the liability imposed under OPA '90 for oil spills. The failure to comply
with these requirements or inadequate cooperation in a spill event may subject a
responsible party to civil or criminal enforcement actions. Management of the
Company is currently unaware of any oil spills for which the Company has been
designated as a responsible party under OPA '90 and that will have a material
adverse impact on the Company or its operations. OPA '90 also imposes ongoing
requirements on facility operators, such as the preparation of an oil spill
contingency plan. The Company has such plans in place.

  The Company's U.S. property at Breton Sound Block 31 field, on state leases
offshore Louisiana, is subject to OPA '90.  Under OPA '90 and a final rule
adopted by the U.S. Minerals Management Service ("MMS") in August 1998, owners
and operators of covered offshore facilities that have a worst case oil spill of
more than 1,000 barrels must demonstrate financial responsibility in amounts
ranging from $10 million in specified state waters to $35 million in federal
outer continental shelf ("OCS") waters, with higher amounts of up to $150
million in certain limited circumstances where the MMS believes such a level is
justified by the risks posed by operations at such covered offshore facilities
or if the worst case oil-spill discharge volumes possible at such facilities may
exceed the applicable threshold volumes specified under the MMS final rule.  The
Company believes that it currently has established adequate proof of financial
responsibility for its covered offshore facilities in Louisiana State waters.
However, the Company cannot predict whether these financial responsibility
requirements under the OPA '90 amendments or the MMS final rule will result in
the imposition of significant additional annual costs to the Company in the
future or otherwise have a material adverse effect on the Company.  The impact
of financial responsibility requirements is not expected to be any more
burdensome to the Company than it will be to other similarly or less capitalized
owners or operators in the Gulf of Mexico.

  With respect to the Federal Water Pollution Control Act, the United States
Environmental Protection Agency ("EPA") issued regulations prohibiting the
discharge of produced water and produced sand derived from oil and gas
operations in certain coastal areas (primarily state waters) of Louisiana and
Texas, effective February 8, 1995. However, the EPA also issued an
administrative order that effectively delayed compliance with the no discharge
requirement for produced water until January 1, 1997.  Effective August 27,
1996, the Louisiana Department of Environmental Quality ("LDEQ") officially
assumed responsibility for compliance and enforcement issues for produced water
as they relate to the Company's Breton Sound Block 31 facilities with the EPA
operating in an oversight capacity.  In connection with the issuance of these
regulations by the EPA, and following various extensions granted by the LDEQ,
the Company drilled and completed a saltwater injection well at the Breton Sound
Block 31 facilities in October 1998.  The Company presently operates this
injection well.

  The Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), also known as the "Superfund" law, and analogous state laws impose
liability, without regard to fault or the legality of the original conduct, on
certain classes of persons that are considered responsible for the release of a
"hazardous substance" into the environment.  These persons include the owner or
operator of the disposal site or sites where the release occurred and companies
that disposed or arranged for the disposal of hazardous substances found at the
site.  Persons who are or were responsible for releases of hazardous substances
under CERCLA may be subject to joint and several liability for the costs of
cleaning up the hazardous substances that have been released into the
environment and for damages to natural resources, and it is not uncommon for
neighboring landowners and other third parties to file claims for personal
injury, property damage and recovery of response costs allegedly caused by the
hazardous substances released into the environment.  The Company has not
received any notification nor is it otherwise aware of circumstances indicating
that it may be potentially responsible for cleanup costs under CERCLA.

  The federal Resource Conservation and Recovery Act ("RCRA") and comparable
state statutes regulate the storage, treatment and disposal of wastes, including
hazardous wastes.  The EPA and various state agencies have limited the approved
methods of disposal for certain hazardous and nonhazardous wastes, thereby
making such disposal more costly.  Furthermore, certain wastes generated by the
Company's oil and natural gas operations that

                                       5
<PAGE>

are currently exempt from treatment as hazardous wastes may in the future be
designated as hazardous wastes and therefore be subject to more rigorous and
costly operating and disposal requirements.

  Other Regulation - Colombia.  The Company's Colombian operations are regulated
  ---------------------------
by Ecopetrol, the Ministry of Mines and Energy, and the Ministry of the
Environment, among others.  The review of current environmental laws,
regulations and the administration and enforcement thereof, or the passage of
new environmental laws or regulations in Colombia, could result in substantial
costs and liabilities in the future or in delays in obtaining the necessary
permits to conduct the Company's operations in that country.  These operations
may also be affected from time to time in varying degrees by political
developments in Colombia.  Such political developments could result in
cancellation or significant modification of the Company's contract rights with
respect to such properties, or could result in tax increases and/or retroactive
tax claims being assessed against the Company.

  Other Regulation - United States.   Domestic exploration for and production
  --------------------------------
and sale of oil and gas are extensively regulated at both the national and local
levels.  Legislation affecting the oil and gas industry is under constant review
for amendment or expansion, frequently increasing the regulatory burden.  Also,
numerous departments and agencies, both federal and state, are authorized by
statute to issue, and have issued, rules and regulations applicable to the oil
and gas industry that are often difficult and costly to comply with and that may
carry substantial penalties for failure to comply.  The regulations also
generally specify, among other things, the extent to which acreage may be
acquired or relinquished, permits necessary for drilling of wells, spacing of
wells, measures required for preventing waste of oil and gas resources and, in
some cases, rates of production.  The heavy and increasing regulatory burdens on
the oil and gas industry increase the costs of doing business and, consequently,
affect profitability.

  Sales of crude oil, condensate and gas liquids by the Company are not
currently regulated and are made at market prices.  In a number of instances,
however, the ability to transport and sell such products is dependent on
pipelines whose rates, terms and conditions of service are subject to the
Federal Energy Regulatory Commission ("FERC") jurisdiction under the Interstate
Commerce Act. Certain regulations implemented by the FERC in recent years could
result in an increase in the cost of transportation service on certain
pipelines. However, the Company does not believe that these regulations affect
it any differently than others.

  The Company cannot accurately predict the effect that any of the
aforementioned orders or the challenges to the orders will have on the Company's
operations.  Additional proposals and proceedings that might affect the oil
industry are pending before Congress, the FERC and the courts.  The Company
cannot accurately predict when or whether any such proposals or proceedings may
become effective.

  State Regulation.  Production of any domestic oil and gas by the Company is
  ----------------
affected by state regulations.  Many states in which the Company has operated
have statutory provisions regulating the production and sale of oil and gas,
including provisions regarding deliverability.  Such statutes, and the
regulations promulgated in connection therewith, are generally intended to
prevent waste of oil and gas and to protect correlative rights to produce oil
and gas between owners of a common reservoir.  Such regulations include
requiring permits for the drilling of wells, maintaining bonding requirements in
order to drill or operate wells, and regulating the location of wells, the
method of drilling and casing wells, the surface use and restoration of
properties upon which wells are drilled, the plugging and abandoning of wells,
and the disposal of fluids used in connection with operations.

  The Company's operations are also subject to various conservation laws and
regulations including the regulation of the size of drilling and spacing units
or proration units, the density of wells that may be drilled, and the
unitization or pooling of oil and gas properties.  In addition, state
conservation laws establish maximum rates of production from oil and natural gas
wells, generally prohibit the venting or flaring of natural gas, and impose
certain requirements regarding the ratability of production.  The effect of
these regulations may limit the amount of oil and natural gas that the Company
can produce from its wells and may limit the number of wells or the locations at
which the Company can drill.  Inasmuch as such laws and regulations are
periodically expanded, amended and reinterpreted, the Company is unable to
predict the future cost or impact of complying with such regulations; however,
the Company does not believe it will be affected by these laws and regulations
materially differently than the other oil and natural gas producers with which
it competes.

  Other Regulations - Papua New Guinea.  The Company's operations in Papua
  ------------------------------------
New Guinea are currently governed by the Department of Petroleum and Energy,
which has jurisdiction over all petroleum exploration in that country.  In the
event the Company develops and operates a petroleum business in Papua New
Guinea, the Company will be subject to regulation by the Investment Promotion
Authority, which regulates almost all business operations with significant
foreign equity or with foreign management control.

                                       6
<PAGE>

Competition

  The Company encounters strong competition from other independent operators and
from major oil companies in acquiring properties suitable for exploration, in
contracting for drilling equipment and in securing trained personnel.  Many of
these competitors have financial and other resources substantially greater than
those available to the Company.

  The Company's ability to discover reserves in the future depends on its
ability to select, generate and acquire suitable prospects for future
exploration.  The Company does not currently generate its own prospects and
depends exclusively upon external sources for the generation of oil and gas
prospects.

Employees

  As of December 31, 2000, Aviva had 7 full-time employees.

ITEM 2. PROPERTIES

Productive Wells and Drilling Activity

  The following table summarizes the Company's developed acreage and productive
wells at December 31, 2000.  "Gross" refers to the total acres or wells in which
the Company has a working interest, and "net" refers to gross acres or wells
multiplied by the percentage working interest owned by the Company.

Developed Acreage /(1)/

                                                       Gross      Net
                                                       -----     -----
          United States                                1,646     1,110
          Colombia/(2)/                                3,706       288
                                                       -----     -----
                                                       5,352     1,398
                                                       =====     =====

Productive Wells /(3)/

                                          Oil                 Gas
                                   ---------------     ----------------
                                   Gross      Net      Gross       Net
                                   -----     -----     -----      -----

          United States                7      4.58         3       2.16
          Colombia                    14      1.08         -          -
                                    ----     -----     -----      -----
                                      21      5.66         3       2.16
                                    ====     =====     =====      =====

/(1)/  Developed acreage is acreage assignable to productive wells.
/(2)/  Excludes Aporte Putumayo acreage pending relinquishment.
/(3)/  Productive wells represent producing wells and wells capable of
       producing.

  During the period from January 1, 1998 through December 31, 2000, the Company
did not drill nor participate in the drilling of any development or exploratory
wells.

Undeveloped Acreage

  The Company's undeveloped acreage in Colombia is held pursuant to the Santana
contract with the Colombian government.  No further relinquishments are required
for the Santana contract until the expiration of the contract in 2015.  See "--
Significant Properties."

  The Company's undeveloped acreage in Papua New Guinea is held pursuant to PPL-
206.  See "-- Significant Properties."

  The Company does not have an undeveloped acreage position in the United States
because of the costs of maintaining such a position.  Oil and gas leases in the
United States generally can be acquired by the Company for specific prospects on
reasonable terms either directly or through farmout arrangements.

                                       7
<PAGE>

  The following table shows the undeveloped acreage held by the Company at
December 31, 2000.  Undeveloped acreage is acreage on which wells have not been
drilled or completed to a point that would permit the production of commercial
quantities of oil and gas, regardless of whether such acreage contains proved
reserves.

                                               Undeveloped Acres
                                             ---------------------
                                                Gross         Net
                                             ---------      ------

                    Colombia                    48,636      10,758
                    Papua New Guinea         1,228,187      24,564
                                             ---------      ------
                                             1,276,823      35,322
                                             =========      ======

Title to Properties

  The Company has not performed a title examination for offshore U.S. leases in
federal waters because title emanates from the United States government.  Title
examinations also are not performed in Colombia, where mineral title emanates
from the national government.  The Company believes that it generally has
satisfactory title to all of its oil and gas properties.  The Company's working
interests are subject to customary royalty and overriding royalty interests
generally created in connection with their acquisition, liens incident to
operating agreements, liens for current taxes and other burdens and minor liens,
encumbrances, easements and restrictions.  The Company believes that none of
such burdens materially detracts from the value of such properties or its
interest therein or will materially interfere with the use of the properties in
the operation of the Company's business.

Reserves and Future Net Cash Flows

  See Supplementary Information Related to Oil and Gas Producing Activities in
"Item 8.  Financial Statements and Supplementary Data" for information with
respect to the Company's reserves and future net cash flows.

  The Company will file with the Department of Energy (the "DOE") a statement
with respect to the Company's estimate of proved oil and gas reserves as of
December 31, 2000, that is not the same as that included in the estimate of
proved oil and gas reserves as of December 31, 2000, as set forth in "Item 8.
Financial Statements and Supplementary Data" elsewhere herein.  The information
filed with the DOE includes the estimated proved reserves of the properties of
which the Company is the operator, whereas the estimated proved reserves
contained in Item 8 hereof include only the Company's percentage share of the
estimated proved reserves of all properties in which the Company has an
interest.

Production, Sales Prices and Costs

  The following table summarizes the Company's oil production in thousands of
barrels and natural gas production in millions of cubic feet for the years
indicated:

                                               Year ended December 31,
                                             --------------------------

                                              2000      1999      1998
                                             ------    ------    ------

Oil /(1)/      United States                    49        57        44
               Colombia                        157       365       255

Gas            United States                    25        53        68
               Colombia                          -         -         -

/(1)/ Includes crude oil and condensate.

                                       8
<PAGE>

  The average sales price per barrel of oil and per thousand cubic feet ("MCF")
of gas produced by the Company and the average production (lifting) cost per
dollar of oil and gas revenue and per barrel of oil equivalent (6 MCF: 1 barrel)
were as follows for the years indicated:

<TABLE>
<CAPTION>
                                                                       Year ended December 31,/(1)/
                                                                      ------------------------------

                                                                       2000        1999        1998
                                                                      ------      ------      ------
<S>                                            <C>                    <C>         <C>         <C>
Average sales price per barrel of oil/(2)/     United States          $28.94      $17.13      $12.03
                                               Colombia               $27.18      $15.57      $10.31

Average sales price per MCF of gas             United States          $ 4.11      $ 2.42      $ 2.42
                                               Colombia               $    -      $    -      $    -

Average production cost per dollar of
  oil and gas revenue                          United States          $ 0.72      $ 1.05      $ 1.80
                                               Colombia               $ 0.31      $ 0.42      $ 0.86

Average production cost per barrel of
  oil equivalent                               United States          $20.59      $17.69      $22.54
                                               Colombia               $ 8.33      $ 6.58      $ 8.88
</TABLE>

/(1)/  All amounts are stated in United States dollars.
/(2)/  Includes crude oil and condensate.

Significant Properties

  Colombia.
  --------

  The Company's Colombian properties currently consist of two contracts, both of
which are located in the Putumayo Basin in southwestern Colombia along the
eastern front of the eastern cordillera of the Andes Mountains.  The Company's
interest in each of the contracts is subject to certain reversionary interests
in favor of Ecopetrol as described below.  Argosy, as operator of the
properties, carries out the program of operations for the two concessions.  The
program is determined by Argosy and approved by Ecopetrol.  The Santana
contract, which now consists of approximately 52,000 acres and contains 14
productive wells, has been in effect since 1987 and is the focus of the
Company's exploration and development activities.

  The Aporte Putumayo block, which consisted of approximately 77,000 acres and
contains three shut-in wells, produced from 1976 to 1995.  The block has been
relinquished, however Argosy remains obligated for abandonment and restoration
operations on the old wells in the block.

  Production from the Santana concession is sold pursuant to a sales contract
with Ecopetrol.  The contract provides that at least 25% of the sales proceeds
will be paid in Colombian pesos.  As a result of certain currency restrictions,
pesos resulting from these payments must generally remain in Colombia and are
used by the Company to pay local expenses.

  The Company's pretax income from Colombian sources, as defined under Colombian
law, is subject to Colombian income taxes at a statutory rate of 35%, although a
"presumptive" minimum income tax based on net assets, as defined under Colombian
law, may apply in years of little or no net income.  The Company's income after
Colombian income taxes is subject to a Colombian remittance tax that accrues at
a rate of 7%.  Payment of the remittance tax may be deferred under certain
circumstances if the Company reinvests such income in Colombia.

     Santana Contract.  The Santana block is held pursuant to a "risk-sharing"
     ----------------
contract for which Ecopetrol has the option to participate on the basis of a 30%
working interest in exploration activities in the contract area.  If a
commercial field is discovered, Ecopetrol's working interest increases to 50%
and the costs theretofore incurred and attributable to the 20% working interest
differential will be recouped by Argosy from Ecopetrol's share of production on
a well by well basis.  The risk-sharing contract provides that, when 7 million
barrels of cumulative production from the concession have been attained,
Ecopetrol's revenue interest and share of operating costs increases to 65% but
it remains obligated for only 50% of capital expenditures.  In June 1996, the 7
million barrel threshold was reached.  At that time, Argosy's revenue interest
in the contract declined from 40% to 28% and its share of operating expenses
declined from 50% to 35%.

                                       9
<PAGE>

  The Santana block is divided by the Caqueta River.  Two fields located south
of the river, the Toroyaco and Linda fields, were declared commercial by
Ecopetrol and commenced production in 1992.  There are currently four producing
wells in the Toroyaco field and four producing wells in the Linda field. During
1995, a 3-D seismic survey covering the Toroyaco and Linda fields was completed.
Based on this survey, one development well was drilled in each field during 1996
and one additional development well was drilled in the Linda field in 1997.   No
further drilling is anticipated for these fields.

  The Company constructed a 42-kilometer pipeline (the "Uchupayaco Pipeline")
which was completed and commenced operations during 1994 to transport oil
production from the Toroyaco and Linda fields to the Trans-Andean Pipeline owned
by Ecopetrol, through which the Company's production is transported to the port
of Tumaco on the Pacific coast of Colombia.

  Two additional fields, the Mary and Miraflor fields, were discovered north of
the Caqueta River and were declared commercial by Ecopetrol during 1993.  Except
for oil produced during production tests of wells located in these fields, the
production was shut-in until the first quarter of 1995 when construction of a
pipeline was completed and commercial production began.  Completion of this
pipeline provided the Company with direct pipeline access from all of its fields
to the Pacific coast port of Tumaco.  There are currently four producing wells
in the Mary field and one producing well in the Miraflor field.  A 3-D seismic
survey was completed over the Mary and Miraflor fields during early 1997. This
survey confirms the presence of several prospects and leads previously
identified from two-dimensional seismic data.  The most promising prospect, Mary
West, appears to be an extension of the Mary field.  The drilling of an
exploratory well on this prospect has been deferred pending contract changes
requested by Argosy and appropriate financing.  The survey also confirmed that
additional development drilling is not required for the Miraflor field.

  Argosy has fulfilled all the exploration obligations required by the Santana
risk-sharing contract.  The current work program contemplates the recompletion
of certain existing wells to increase production therefrom.

  The Santana contract has a term of 28 years and expires in 2015.  In 1993, the
Company relinquished 50% of the original Santana area in accordance with the
terms of the contract.  In July 1995, an additional 25% of the original contract
area was relinquished.  A final relinquishment was made in 1997 such that all
remaining contract areas except for those areas within five kilometers of a
commercial field were relinquished.

  Under the terms of a contract with Ecopetrol, all oil produced from the
Santana contract area is sold to Ecopetrol.  If Ecopetrol exports the oil, the
price paid is the export price received by Ecopetrol, adjusted for quality
differences, less a marketing fee of $0.165 per barrel.  If Ecopetrol does not
export the oil, the price paid is based on the price received from Ecopetrol's
Cartagena refinery, adjusted for quality differences, less Ecopetrol's cost to
transport the crude to Cartagena and a marketing fee of $0.165 per barrel.  In
2000, Ecopetrol exported the crude each month and the sales price averaged
$27.18 per barrel.

  United States.
  -------------

  The Company's remaining oil and gas properties in the United States are
located in the Gulf of Mexico offshore Louisiana at Breton Sound 31 field.  The
Breton Sound 31 field is operated by the Company.

  Breton Sound Block 31 is located 20 miles offshore Louisiana in 16 feet of
water.  The field is approximately 55 miles southeast of New Orleans on state
leases.  During 2000, five wells averaged 92 barrels of oil per day and 62 MCF
of gas per day, net to the Company's interest, from three sands completed
between 3,850 feet and 6,500 feet. The Company's interests in the leases
comprising the field vary from 59% to 87%.

  The interpretation of 3-D seismic data in 1996 identified two deep and several
shallow prospects in the Breton Sound Block 31 field.   The Company has signed a
farmout agreement covering the deep prospects.  Under the terms of the
agreement, as amended, the farmee, a privately held oil and gas company in New
Orleans, Louisiana, has the right to drill a well to test the Hollywood
formation at 16,000 feet on or before June 30, 2001.  The Company will retain
its proportionate share of a 3% overriding royalty interest during "payout".  At
payout the 3% overriding royalty interest is convertible, at the Company's
option, into either a 5% overriding royalty or a 25% working interest.  All
costs of the well will be borne by the farmee.  As for the shallow prospects,
the Company anticipates that it will drill at least one exploratory well upon
obtaining appropriate financing.

                                       10
<PAGE>

  Papua New Guinea.
  ----------------

  The area covered by PPL-206 is located in the Western, Gulf and Southern
Highland Provinces of Papua New Guinea.  The northern section of the area is in
a mountainous tropical rain forest while the southern section of the area is
predominantly lowlands, jungle and coastal swamps.  In 1986 oil was discovered
approximately 20 kilometers from the northern border of PPL-206 in an adjoining
license area and in 1999 gas was discovered approximately 20 kilometers
southwest of the western border.

  In accordance with the terms of the agreement governing PPL-206, the parties
have performed surface geological work and completed seismic programs during
1998 and 2000.  The 2000 program (the "Okoni Program") will be followed by
strike line acquisition in the first quarter of 2001 to determine the drilling
location for the Bosavi exploratory well that is scheduled for 2001.

  During 2000, a farmout agreement was entered into whereby Chevron Niugini
Limited ("Chevron") has an option to acquire a 40% interest in the license if it
elects to participate in the Bosavi well.  Pursuant to the Company's 2% carried
working interest, the Company is not obligated to pay any of the costs relative
to the work presently underway nor is it obligated to pay any of the costs of
drilling, testing or completing the exploratory well.  The Company's 2% carried
working interest will not be reduced by the Chevron farmout option.

  Under the provisions of PPL-206 the terms of any oil and gas development are
set forth in a Petroleum Agreement with the Government of Papua New Guinea.  The
Petroleum Agreement provides that the operator must carry out an appraisal
program after a discovery to determine whether the discovery is of commercial
interest.  If the appraisal is not carried out or the discovery is not of
commercial interest, the license may be forfeited.  If the discovery is of
commercial interest, the operator must apply for a Petroleum Development
License.  The Government retains a royalty on production equal to 1.25% of the
wellhead value of the petroleum and, at its election, may acquire up to a 22.5%
interest in the petroleum development after recoupment by the operator of the
project costs attributable thereto out of production.  In addition, income from
petroleum operations is subject to a Petroleum Income Tax at the rate of 50% of
net income, which is defined as gross revenue less royalties, allowances for
depreciation, interest deductions, operating costs and previous tax losses
carried forward.  An Additional Profits Tax of 50% of cash flow (after deducting
ordinary income tax payments) is also payable when the accumulated value of net
cash flows becomes positive.  For annual periods in which net cash flows are
negative, the cumulative amount is carried forward and increased at an annual
accumulation of 27%.  The Additional Profits Tax is calculated separately for
each Petroleum Development License.  In calculating the applicable tax, interest
expenses paid by Garnet PNG prior to the issuance of a Petroleum Development
License and, thereafter, to the extent that Garnet PNG's debt to equity ratio
exceeds two-to-one, are not deductible.

  The Company leases corporate office space in Dallas, Texas containing
approximately 5,100 square feet pursuant to a lease which expires in January
2002.  The annual lease payments for these offices are approximately $102,000.

ITEM 3. LEGAL PROCEEDINGS

  There are no legal proceedings to which the Company is a party or to which its
properties are subject which are, in the opinion of management, likely to have a
material adverse effect on the Company's results of operations or financial
condition.

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

  There were no matters submitted to a vote of security holders during the
fourth quarter of the Company's fiscal year ended December 31, 2000.


                                       11
<PAGE>

                                    PART II

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

Price Range of Depositary Shares and Common Stock

  The Company's Depositary Shares, each representing the beneficial ownership of
five shares of Common Stock, traded on the American Stock Exchange (the "ASE")
from November 14, 1994 through April 8, 1999.  On April 9, 1999, the Depositary
Shares were delisted from the ASE due to the Company's then existing financial
difficulties.  On May 13, 1999, the Depositary Shares began trading on the OTC
Bulletin Board (the "OTCBB") under the symbol "AVVPP.OB".  During 2000, an
aggregate of 1,909,000 Depositary Shares were traded on the OTCBB.

  The Company's Common Stock has been quoted in the National Quotation Bureau's
Daily Quotation Sheets (known as the "pink sheets") since December 1993.
Additionally, the Common Stock traded on the London Stock Exchange from 1982
until May 6, 1999, when trading of the Common Stock on the LSE was suspended. On
September 13, 2000, the company formally dropped its LSE listing in order to
reduce costs.

  The following table sets forth, for the periods indicated and subject to the
following qualifications, the high and low prices for the Depositary Shares on
the ASE and the OTCBB and the high and low prices for the Common Stock on the
London Stock Exchange.  The London Stock Exchange prices indicated in the table
are the middle market prices for the Common Stock as published in the Daily
Official List and do not represent actual transactions.  Prices on the London
Stock Exchange are expressed in British pounds sterling, and, accordingly, the
prices for the Common Stock traded on the London Stock Exchange included in the
following table are similarly expressed.  For ease of reference, these prices
are also expressed in U.S. dollars, having been converted using the exchange
rate in effect on the first day on which the stock price attained the high or
low price indicated.

                                       12
<PAGE>

<TABLE>
<CAPTION>
                                         2000                           1999                             1998
                              --------------------------    -----------------------------    ------------------------------

                                  High           Low            High             Low             High             Low
                              -----------   ------------    -------------   -------------    -------------    -------------
<S>                           <C>           <C>             <C>             <C>              <C>              <C>
Depositary Shares/(1)/:
----------------------

  ASE
  ---
  First Quarter               $        n/a  $        n/a    $        0.41   $        0.09    $        1.75    $        1.00
  Second Quarter              $        n/a  $        n/a    $        0.22   $        0.09    $        1.19    $        0.69
  Third Quarter               $        n/a  $        n/a    $         n/a   $         n/a    $        1.00    $        0.13
  Fourth Quarter              $        n/a  $        n/a    $         n/a   $         n/a    $        0.31    $        0.06

  OTC Bulletin Board
  ------------------
  First Quarter               $       0.25  $       0.06    $         n/a   $         n/a    $         n/a    $         n/a
  Second Quarter              $       0.38  $       0.06    $        0.31   $        0.06    $         n/a    $         n/a
  Third Quarter               $       0.38  $       0.13    $        0.22   $        0.06    $         n/a    $         n/a
  Fourth Quarter              $       0.38  $       0.06    $        0.22   $        0.03    $         n/a    $         n/a

Common Stock:
------------

  London Stock Exchange
  ---------------------
  First Quarter
    (Pounds)                  (Pounds) n/a  (Pounds) n/a    (Pounds) 0.06   (Pounds) 0.03    (Pounds) 0.28    (Pounds) 0.12
    US$                       $        n/a  $        n/a    $        0.10   $        0.05    $        0.45    $        0.20

  Second Quarter
    (Pounds)                  (Pounds) n/a  (Pounds) n/a    (Pounds) 0.06   (Pounds) 0.05    (Pounds) 0.14    (Pounds) 0.10
    US$                       $        n/a  $        n/a    $        0.10   $        0.08    $        0.22    $        0.16

  Third Quarter
    (Pounds)                  (Pounds) n/a  (Pounds) n/a    (Pounds)  n/a   (Pounds)  n/a    (Pounds) 0.10    (Pounds) 0.05
    US$                       $        n/a  $        n/a    $         n/a   $         n/a    $        0.17    $        0.08

  Fourth Quarter
    (Pounds)                  (Pounds) n/a  (Pounds) n/a    (Pounds)  n/a   (Pounds)  n/a    (Pounds) 0.06    (Pounds) 0.04
    US$                       $        n/a  $        n/a    $         n/a   $         n/a    $        0.10    $        0.07
</TABLE>

/(1)/ Representing five shares of Common Stock.

  As of February 28, 2001, the Company had approximately 5,000 shareholders of
record, including nominees for an undetermined number of beneficial holders.

Dividend History and Restrictions

  No dividends have been paid since June 1983, nor is there any current
intention on the part of the directors of the Company to pay dividends in the
future.


                                       13
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

  The following table summarizes certain selected financial data with respect to
the Company for, and as of the end of, each of the five years ended December 31,
2000, which should be read in conjunction with the Consolidated Financial
Statements included elsewhere herein.

<TABLE>
<CAPTION>
                                                         For the Years Ended
                                                             December 31,
                                     -----------------------------------------------------------
                                       2000        1999         1998          1997        1996
                                     -------     --------     --------      --------     -------
                                     (in thousands, except per share, per barrel and per MCF data)
<S>                                  <C>         <C>          <C>           <C>          <C>
For the period
 Revenues                            $ 6,183     $  6,797     $  3,332      $  9,726     $13,750
 Earnings (loss) before
  extraordinary item                 $ 4,961     $   (403)    $(16,881)     $(22,482)    $  (937)
 Extraordinary item -
  debt extinguishment                $ 5,543     $      -     $   (197)     $      -     $     -
 Net earnings (loss)                 $10,504     $   (403)    $(17,078)     $(22,482)    $  (937)
 Earnings (loss) before
  extraordinary item
  per common share                   $  0.10     $  (0.01)    $  (0.49)     $  (0.71)    $ (0.03)
 Basic and diluted net
  earnings (loss)
  per common share                   $  0.22     $  (0.01)    $  (0.50)     $  (0.71)    $ (0.03)
 Weighted average
  shares outstanding                  46,900       46,813       34,279        31,483      31,483
 Cash dividends per
  common share                       $     -     $      -     $      -      $      -     $     -
 Total annual net oil
  production (barrels)
   Colombia                              157          365          255           426         476
   United States                          49           57           44            76          94
                                     -------     --------     --------      --------     -------
    Total                                206          422          299           502         570
                                     -------     --------     --------      --------     -------
 Total annual net gas
  production (MCF)
   United States                          25           53           68           316       1,146

 Average price per barrel
  of oil
   Colombia                          $ 27.18     $  15.57     $  10.31      $  17.39     $ 19.82
   United States                     $ 28.94     $  17.13     $  12.03      $  19.17     $ 20.68
 Average price per MCF of
  Gas - United States                $  4.11     $   2.42     $   2.42      $   2.73     $  2.07

At period end
 Total assets                        $ 3,311     $  8,986     $ 11,422      $ 16,445     $42,944
 Long term debt, including
  current portion                    $     -     $ 14,495     $ 14,805      $  7,690     $ 7,990
 Stockholders' equity
  (deficit)                          $ 1,876     $(11,483)    $(11,083)     $  3,748     $26,230
</TABLE>

In connection with the application of the full cost method, the Company recorded
ceiling test write-downs of oil and gas properties of $12,343,000 in 1998 and
$19,953,000 in 1997 (see Note 1 of Notes to Consolidated Financial Statements).

                                       14
<PAGE>

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

  The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements included elsewhere herein.

Results of Operations

2000 versus 1999
----------------

                                        United States      Colombia
                                        Oil       Gas         Oil      Total
                                      -------   -------    --------   -------
       (Thousands)

       Oil and gas sales - 1999       $   987   $   127    $ 5,683   $ 6,797

       Volume variance                   (141)      (90)    (3,671)   (3,902)

       Price variance                     582        66      2,256     2,904

       Other                                -        (3)         -        (3)
                                      -------   -------    -------   -------

       Oil and gas sales - 2000       $ 1,428   $   100    $ 4,268   $ 5,796
                                      =======   =======    =======   =======

  Colombian oil volumes were 157,000 barrels in 2000, a decrease of 208,000
barrels from 1999.  Such decrease is due to a 108,000 barrel decrease resulting
from the transfer of partnership interests to Crosby and a 100,000 barrel
decrease resulting from production declines.

  U.S. oil volumes were 49,000 barrels in 2000, down approximately 8,000 barrels
from 1999, primarily due to normal production declines.  U.S. gas volumes before
gas balancing adjustments were 24,000 MCF in 2000, down 26,000 MCF from 1999.
Such decrease is due to a significant decline in production from the Main Pass
41 field.  Effective November 7, 2000, the Company assigned all of its interest
in the Main Pass 41 field to the field operator.

  Colombian oil prices averaged $27.18 per barrel during 2000.  The average
price for the same period of 1999 was $15.57 per barrel.  The Company's average
U.S. oil price increased to $28.94 per barrel in 2000, up from $17.13 per barrel
in 1999.  In 2000 prices were higher than in 1999 due to an increase in world
oil prices.  U.S. gas prices averaged $4.11 per MCF in 2000 compared to $2.42
per MCF in 1999.

  Service fees of $387,000 for administering the Colombian assets were received
pursuant to a Service Agreement with Crosby (see note 2 of the consolidated
financial statements included elsewhere herein).  This amount is net of Aviva
Overseas' 22.1196% share of the fee.

  Operating costs decreased approximately 33%, or $1,168,000, primarily as a
result of the transfer of partnership interests to Crosby.

  Depreciation, depletion and amortization ("DD&A") decreased by 49%, or
$485,000, primarily as a result of the transfer of partnership interests to
Crosby and lower volumes of oil produced.

  General and administrative ("G&A") expenses declined $88,000 mainly as a
result of lower public ownership costs and lower fees paid to consultants,
partially offset by higher employee related costs.

  In connection with the Company's restructuring, the Company realized a
$3,452,000 gain on the transfer of partnership interests in Argosy Energy
International and a $5,543,000 extraordinary gain on the extinguishment of
debt, net of income taxes of $2,855,000.

  Interest and other income decreased $52,000 from 1999 primarily due to a
foreign exchange gain of $193,000 in 1999.  During 2000, the foreign currency
exchange gain was only $44,000.  The decrease in foreign exchange gain was
partially offset by higher miscellaneous income.

                                       15
<PAGE>

  Interest expense decreased $591,000 during 2000, primarily as a result of the
extinguishment of the Company's long-term debt.

1999 versus 1998
----------------

                                        United States      Colombia
                                        Oil       Gas         Oil      Total
                                      -------   -------    --------   -------
       (Thousands)

       Revenue - 1998                 $   535   $   165    $  2,632   $ 3,332

       Volume variance                    158       (29)      1,130     1,259

       Price variance                     294        10       1,921     2,225

       Other                                -       (19)          -       (19)
                                      -------   -------    --------   -------

       Revenue - 1999                 $   987   $   127    $  5,683   $ 6,797
                                      =======   =======    ========   =======

  Colombian oil volumes were 365,000 barrels in 1999, an increase of 110,000
barrels from 1998.  Such increase was due to a 148,000 barrel increase resulting
from the acquisition of Garnet effective October 28, 1998, and an increase of
23,000 barrels due to continuous production in 1999 (1998 production was
interrupted by guerrilla attacks that damaged oil processing and storage
facilities), partially offset by a 61,000 barrel decrease resulting from
production declines.

  U.S. oil volumes were 57,000 barrels in 1999, an increase of 13,000 barrels as
compared to 1998.  An increase of approximately 15,000 barrels was due to
continuous production from the Company's Main Pass 41 field (shut in for
approximately 187 days during 1998 due to upgrading and modification of
production and water treatment facilities and adverse weather), and an increase
of approximately 9,000 barrels was due to continuous production from the
Company's Breton Sound 31 field (shut-in during the months of September and
October and a portion of November 1998 due to the drilling and completion of a
saltwater disposal well and adverse weather), partially offset by a 11,000
barrel decrease resulting from normal production declines.  U.S. gas volumes
before gas balancing adjustments were 51,000 MCF in 1999, down 3,000 MCF from
1998.  Of such decrease, approximately 122,000 MCF was due to production
declines, partially offset by 119,000 MCF due to the aforementioned continuous
production of the Main Pass 41 field.

  Colombian oil prices averaged $15.57 per barrel during 1999.  The average
price for the same period of 1998 was $10.31 per barrel.  The Company's average
U.S. oil price increased to $17.13 per barrel in 1999, up from $12.03 per barrel
in 1998.  In 1999 prices were higher than in 1998 due to a dramatic increase in
world oil prices.  U.S. gas prices averaged $2.42 per MCF in 1999 and 1998.

  In addition to the above-mentioned variances, U.S. gas revenue decreased
approximately $19,000 as a result of gas balancing adjustments.

  Operating costs increased approximately 1.5%, or $50,000, primarily due to the
increase in ownership of the Colombian properties following the Garnet Merger,
almost entirely offset by cost reductions in Colombia achieved after the Company
merged with Garnet and took over operatorship of the Colombian properties.

  DD&A decreased by 68%, or $2,152,000, primarily due to a decrease in costs
subject to amortization resulting from property write-downs during 1998.

  The Company recorded write-downs of $10,556,000 and $1,787,000 to the carrying
amounts of its Colombian and U.S. oil and gas properties, respectively, as a
result of ceiling test limitations on capitalized costs during 1998.  No such
write-downs were required during 1999.

  G&A expenses increased $171,000 mainly due to a $193,000 decrease in
administrative overhead fees recovered from joint interest partners in
properties where the Company serves as the operator.  This decrease in
administrative overhead fees resulted primarily because the Company relinquished
operatorship of the Main Pass 41 field effective January 1, 1999.

                                       16
<PAGE>

  The Company incurred severance expense of $62,000 during 1999 related to
Colombian operations.  The Company has taken significant cost cutting measures
in Colombia since it merged with Garnet and took over operatorship of the
Colombian properties.

  Interest and other income decreased $786,000 from 1998.  During 1998 the
Company realized a $720,000 gain on the settlement of litigation involving the
administration of a take or pay contract settlement.  No such gain was recorded
in 1999.

  Interest expense increased $648,000 from 1998 as a result of higher
outstanding balances of long-term debt and higher interest rates.

  Income taxes were $286,000 higher in 1999 principally due to higher Colombian
presumptive income taxes resulting from the increased ownership of the Colombian
properties for a full year in 1999 compared to only two months of full ownership
in 1998.

New Accounting Pronouncements

  The Company is assessing the reporting and disclosure requirements of SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities.  This
statement establishes accounting and reporting standards for derivative
instruments and hedging activities and will require the Company to recognize all
derivatives on its balance sheet at fair value.  If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of the
derivatives will either be offset against the change in fair value of the hedged
item through earnings, or recognized in other comprehensive income until the
hedged item is recognized in earnings.  The Company will adopt SFAS No. 133, as
amended, in the first quarter of fiscal 2001. The adoption will not have a
material effect on the Company's results of operations or financial position.

Liquidity and Capital Resources

  Cash and cash equivalents totaled $820,000 and $846,000 at December 31, 2000
and 1999, respectively.  The decrease in cash and cash equivalents resulted from
the costs of, and cash balances surrendered, aggregating $1,414,000 in
connection with the transfer of partnership interests in Argosy to Crosby (as
more fully described in note 2 of the consolidated financial statements included
elsewhere herein) and property additions of $382,000.   Such decreases were
almost entirely offset by net cash provided by operating activities.

  Net cash provided by operating activities was $1,722,000 in 2000, compared to
$(481,000) net cash used in operating activities for 1999.  This improvement
resulted primarily from significantly higher oil prices during 2000 and a
$1,703,000 reduction in accounts payable and accrued liabilities during 1999.
Excluding the effects of the transfer of partnership interests to Crosby, there
was no similar reduction in accounts payable and accrued liabilities during
2000.

  The Company surrendered a major partnership interest in Argosy in connection
with the aforementioned transaction with Crosby, and was thus able to eliminate
100% of its long term debt and accrued interest, which prior to the transaction
aggregated $16,103,064 as of May 31, 2000.

  The Company's financial condition has significantly improved as a result of
the transaction with Crosby and the reorganization of Aviva America, Inc.
("AAI"), a wholly owned subsidiary which holds the Company's interests in oil
and gas properties located offshore Louisiana (see notes 2 and 11 of the
consolidated financial statements included elsewhere herein).  Based on this
improvement in financial condition, management believes that the Company can
meet its existing commitments as set forth below.

  The Company plans to recomplete certain existing wells and engage in various
other projects in Colombia.  The Company's current share of the estimated future
costs of these development activities is approximately $0.3 million at December
31, 2000.  The Company expects to fund these activities using cash provided from
operations.  Risks that could adversely affect funding of such activities
include, among others, delays in obtaining any required environmental permits,
failure to produce the reserves as projected or a decline in the sales price of
oil.  Any substantial increases in the amounts of these required expenditures
could adversely affect the Company's ability to fund these activities. Any
substantial delays could, through the impact of inflation, increase the required

                                       17
<PAGE>

expenditures.  Cost overruns resulting from factors other than inflation could
also increase the required expenditures.  Historically, the inflation rate of
the Colombian peso has been in the range of 15-30% per year.  Devaluation of the
peso against the U.S. dollar has historically been slightly less than the
inflation rate in Colombia.  The Company has historically funded capital
expenditures in Colombia by converting U.S. dollars to pesos at such time as the
expenditures have been made.  As a result of the interaction between peso
inflation and devaluation of the peso against the U.S. dollar, inflation, from
the Company's perspective, had not been a significant factor.  During 1994, the
first half of 1995 and 1996, however, devaluation of the peso was substantially
lower than the rate of inflation of the peso, resulting in an effective
inflation rate in excess of that of the U.S. dollar.  There can be no assurance
that this condition will not occur again or that, in such event, there will not
be substantial increases in future capital expenditures as a result.  Due to
Colombian exchange controls and restrictions and the lack of an effective
market, it is not feasible to hedge against the risk of net peso inflation
against the U.S. dollar and the Company has not done so.  Depending on the
results of future exploration and development activities, substantial
expenditures which have not been included in the Company's cash flow projections
may be required. The outcome of these matters cannot be projected with
certainty.

  With the exception of historical information, the matters discussed in this
annual report to shareholders contain forward-looking statements that involve
risks and uncertainties.  Although the Company believes that its expectations
are based on reasonable assumptions, it can give no assurance that its goals
will be achieved.  Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include, among
other things, general economic conditions, volatility of oil and gas prices, the
impact of possible geopolitical occurrences world-wide and in Colombia,
imprecision of reserve estimates, the assessment of geological and geophysical
data, changes in laws and regulations, unforeseen engineering and mechanical or
technological difficulties in drilling, working-over and operating wells during
the periods covered by the forward-looking statements, as well as other factors
described in "Item 1. Business - Risks Associated with the Company's Business."

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

  The Company is exposed to market risk from changes in commodity prices.  The
Company produces and sells crude oil and natural gas.  These commodities are
sold based on market prices established with the buyers.  The Company does not
use financial instruments to hedge commodity prices.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

  See the Financial Statements of Aviva Petroleum Inc. attached hereto and
listed in Item 14 herein.


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

  None.

                                       18
<PAGE>

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors of the Company

  The by-laws of the Company provide that the number of directors may be fixed
by the Board of Directors at a number between one and seven, except that a
decrease in the number of directors shall not have the effect of reducing the
term of any incumbent director.  Effective October 28, 1998, the Board of
Directors, by resolution, decreased the number of directors from five to three.
Effective April 6, 2000, Eugene C. Fiedorek resigned from the Board of Directors
decreasing the number of directors from three to two.

  The information set forth below, furnished to the Company by the respective
individuals, shows as to each individual his name, age and principal positions
with the Company.

     Name           Age              Positions                   Director Since
     ----           ---              ---------                   --------------

Ronald Suttill       69    President, Chief Executive Officer          1985
                           and Director

Robert J. Cresci     57    Director                                    1998

  The following sets forth the periods during which directors have served as
such and a brief account of the business experience of such persons during at
least the past five years.

  Ronald Suttill has been a director of the Company since August 1985 and has
been President and Chief Executive Officer of the Company since January 1992.

  Robert J. Cresci has been a director of the Company since October 1998.  Mr.
Cresci has been a Managing Director of Pecks Management Partners, Ltd., an
investment management firm, since September 1990.  Mr. Cresci currently serves
on the boards of Sepracor, Inc., Film Roman, Inc., Castle Dental Centers, Inc.,
j2 Global Communications, Inc., Candlewood Hotel Co., Inc., SeraCare, Inc., E-
Stamp Corporation and several private companies.

Executive Officers of the Company

  The following table lists the names and ages of each of the executive officers
of the Company and their principal occupations for the past five years.

Name and Age                  Positions
------------                  ---------

Ronald Suttill, 69            President and Chief Executive Officer since
                              January 1992.

James L. Busby, 40            Chief Financial Officer since February 2000,
                              Treasurer since May 1994, Secretary since June
                              1996, Controller since November 1993.

Meetings and Committees of the Board of Directors

  The Board of Directors of the Company held three formal meetings during 2000.
Each director attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors held during the period in which he was a
director and (ii) the total number of meetings held by all committees on which
he served.

  The Audit Committee and the Compensation Committee are the only standing
committees of the Board of Directors, and the members of such committees are
appointed at the initial meeting of the Board of Directors each year.  The
Company does not have a formal nominating committee; the Board of Directors
performs this function.

                                       19
<PAGE>

  The Audit Committee, of which Mr. Cresci is the sole member, consults with the
independent accountants of the Company and such other persons as the committee
deems appropriate, reviews the preparations for and scope of the audit of the
Company's annual financial statements, makes recommendations as to the
engagement and fees of the independent accountants and performs such other
duties relating to the financial statements of the Company as the Board of
Directors may assign from time to time.  The Audit Committee held no formal
meetings during 2000, however, business was conducted via telephone conferences.

  The Compensation Committee, of which Mr. Cresci is the sole member, makes
recommendations to the Board of Directors regarding the compensation of
executive officers of the Company, including salary, bonuses, stock options and
other compensation.   The Compensation Committee held no formal meetings during
2000.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

  Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires officers, directors and holders of more than 10% of
the Common Stock (collectively, "Reporting Persons") to file reports of
ownership and changes in ownership of the Common Stock with the SEC within
certain time periods and to furnish the Company with copies of all such reports.
Based solely on its review of the copies of such reports furnished to the
Company by such Reporting Persons or on the written representations of such
Reporting Persons, the Company believes that, during the year ended December 31,
2000, all of the Reporting Persons complied with their Section 16(a) filing
requirements.

                                       20
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

  The following table sets forth certain information regarding compensation
earned in each of the last three fiscal years by the President and Chief
Executive Officer of the Company (the "Named Executive Officer").

                          Summary Compensation Table
                          --------------------------

<TABLE>
<CAPTION>
                                                                             Long Term
                                                                            Compensation
                                                                  ---------------------------------
                                   Annual Compensation                   Awards             Payouts
                         --------------------------------------   ---------------------------------
                                                         Other
                                                        Annual    Restricted   Securities
Name and                                                Compen-      Stock     Underlying    LTIP     All Other
Principal                                               sation     Award(s)     Options/    Payouts   Compensa-
Position                 Year   Salary ($)  Bonus ($)     ($)        ($)        SARs (#)      ($)      tion ($)
---------                ----   ----------  ---------   -------   ----------   ----------   -------   ---------
<S>                      <C>    <C>         <C>         <C>       <C>          <C>          <C>       <C>
Ronald Suttill/(1)/
 President and CEO       2000     150,000     7,500         -          -            -           -       9,000
 President and CEO       1999     150,000         -         -          -            -           -       4,500
 President and CEO       1998     157,500         -         -          -            -           -       4,750
</TABLE>

/(1)/  The amount recorded under bonus represents the market value of 300,000
       shares of the Company's common stock transferred to Mr. Suttill in
       connection with the debt restructuring and transfer of partnership
       interests to Crosby, effective June 8, 2000. The amounts reported for all
       other compensation for Mr. Suttill represent matching contributions made
       under the Aviva Petroleum Inc. 401(k) Retirement Plan (the "401(k)
       Plan").

Directors' Fees

  The directors of the Company are not paid a cash fee.  Directors are, however,
reimbursed for travel and lodging expenses.  Mr. Suttill receives no
compensation as a director but is reimbursed for travel and lodging expenses
incurred to attend meetings.

  On July 1 each year, non-employee directors who have served in such capacity
for at least the entire proceeding calendar year each receive an option to
purchase 5,000 shares of the Company's Common Stock pursuant to the Aviva
Petroleum Inc. 1995 Stock Option Plan, as amended.

  Effective June 8, 2000, in connection with the debt restructuring and transfer
of partnership interests to Crosby, 200,000 shares of the Company's common stock
with a market value of $5,000 were transferred to Mr. Robert J. Cresci.

Option Grants During 2000

  There were no options granted to the Named Executive Officer during 2000.  No
stock appreciation rights have been issued by the Company.

Option Exercises During 2000 and Year End Option Values

  The following table provides information related to options exercised by the
Named Executive Officer during 2000 and the number and value of options held at
year-end.  No stock appreciation rights have been issued by the Company.

<TABLE>
<CAPTION>
                                                          Number of Securities           Value of Unexercised
                                                         Underlying Unexercised          In-the-Money Options
                    Shares Acquired       Value           Options at FY-End (#)           at FY-End ($)/(1)/
                                                      ----------------------------   ----------------------------
Name                 on Exercise (#)   Realized ($)   Exercisable    Unexercisable   Exercisable    Unexercisable
----                 ---------------   ------------   -----------    -------------   -----------    -------------
<S>                 <C>                <C>            <C>            <C>             <C>            <C>
Ronald Suttill             none            none         250,000             -              -              -
</TABLE>

/(1)/  No values are ascribed to unexercised options of the Named Executive
       Officer at December 31, 2000 because the fair market value of a share of
       the Company's Common Stock at December 31, 2000 ($0.06) did not exceed
       the exercise price of any such options.

                                       21
<PAGE>

Compensation Committee Interlocks and Insider Participation in Compensation
Decisions

  As indicated above, the Compensation Committee, none of the members of which
is an employee of the Company, makes recommendations to the Board of Directors
regarding the compensation of the executive officers of the Company, including
salary, bonuses, stock options and other compensation.  There are no
Compensation Committee interlocks.

Employment Contracts

  The Named Executive Officer serves at the discretion of the Board of
Directors, except that, effective February 1, 2000, the Company entered into an
employment contract with Mr. Suttill.  Mr. Suttill's contract provides for
annual compensation of not less than $200,000 and a severance amount of $300,000
if his employment is terminated for any reason other than death, disability or
cause, as defined in the contract.

Compensation Committee Report on Executive Compensation

  The Company currently employs only two executive officers, the names of whom
are set forth above under "Item 10. Directors and Executive Officers of the
Registrant--Executive Officers of the Company." Decisions regarding compensation
of the executive officers are made by the Board of Directors, after giving
consideration to recommendations made by the Compensation Committee.

  The Company's compensation policies are designed to provide a reasonably
competitive level of compensation within the industry in order to attract,
motivate, reward and retain experienced, qualified personnel with the talent
necessary to achieve the Company's performance objectives.  These objectives are
to increase oil and gas reserves and to control costs, both objectives selected
to increase shareholder value.  These policies were implemented originally by
the entire Board of Directors, and, following its establishment, were endorsed
by the Compensation Committee.  It is the intention of the Compensation
Committee and the Board of Directors to balance compensation levels of the
Company's executive officers, including the Chief Executive Officer, with
shareholder interests.  The incentive provided by stock options and bonuses, in
particular, is intended to promote congruency of interests between the executive
officers and the shareholders.  Neither the Compensation Committee nor the Board
of Directors, however, believes that it is appropriate to rely on a formulaic
approach, such as profitability, revenue growth or return on equity, in
determining executive officer compensation because of the nature of the
Company's business.  The Company's business objectives include debt
restructuring and reorganization, overseeing a significant exploration and
development effort in Colombia and the maintenance of oil and gas production
levels and offshore operations in the United States.  Success in one such area
is not measurable by the same factors as those used in the other.  Accordingly,
the Compensation Committee and the Board of Directors rely primarily on their
assessment of the success of the executive officers, including the Chief
Executive Officer, in fulfilling the Company's performance objectives.  The
Board of Directors also considers the fact that the Company competes with other
oil and gas companies for qualified executives and therefore it considers
available information regarding compensation levels for executives of companies
similar in size to the Company.

  Compensation for the Company's executive officers during 2000 was comprised of
salary, stock bonus and matching employer contributions made pursuant to the
Company's 401(k) Plan.  The Company's 401(k) Plan is generally available to all
employees after one year of service.  The Company makes matching contributions
of 100% of the amount deferred by the employee, up to 6% of an employee's annual
salary.

                                             Compensation Committee

                                             R. J. Cresci

                                       22
<PAGE>

Performance Graph

  The following line-graph presentation compares five-year cumulative
shareholder returns on an indexed basis with a broad equity market index and a
published industry index.  The Company has selected the American Stock Exchange
Market Value Index as a broad equity market index, and the SIC Index "Crude
Petroleum and Natural Gas" as a published industry index.


              Comparison of 5 Year Cumulative Total Return of the
                   Company, Industry Index and Broad Market

                                        FISCAL YEAR ENDING
                          ----------------------------------------------
COMPANY/INDEX/MARKET        1995    1996    1997    1998    1999    2000

AVIVA PETROLEUM INC.      100.00   88.64   37.50    2.27    1.14    6.82
INDUSTRY INDEX            100.00  132.97  134.78  107.96  131.87  167.53
BROAD MARKET              100.00  105.52  126.97  125.25  156.15  154.23

                                       23
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

     The following table sets forth certain information as to each person who,
to the knowledge of the Company, is the beneficial owner of more than five
percent of the outstanding Common Stock of the Company.  Unless otherwise noted,
the information is furnished as of February 28, 2001.

<TABLE>
<CAPTION>
Name and Address of                      Amount and Nature of
Beneficial Owner or Group             Beneficial Ownership /(1)/    Percent of Class/(2)/
-------------------------             --------------------------    ---------------------
<S>                                   <C>                           <C>
Wexford Management LLC/(3)/                    5,438,639                   11.60%
411 West Putnam Avenue
Greenwich, Connecticut 06830

Pecks Management Partners Ltd./(4)/            5,155,108                   10.99%
One Rockefeller Plaza
New York, New York 10020

Lehman Brothers Inc./(5)/                      2,966,876                    6.33%
3 World Financial Center
11/th/ Floor
New York, New York 10285

Yale University/(6)/                           2,551,886                    5.44%
230 Prospect Street
New Haven, Connecticut 06511

Ronald Suttill/(7)//(8)/                       2,429,939                    5.07%/(9)/
8235 Douglas Avenue, Suite 400
Dallas, Texas 75225
</TABLE>

/(1)/  Except as set forth below, to the knowledge of the Company, each
       beneficial owner has sole voting and sole investment power.
/(2)/  Based on 46,900,132 shares of the Common Stock issued and outstanding on
       February 28, 2001.
/(3)/  Information regarding Wexford Management LLC ("Wexford Management") is
       based on a Schedule 13D dated November 12, 1998 filed by Wexford
       Management with the SEC. The shares are held by four investment funds.
       Wexford Management serves as investment advisor to three of the funds and
       as sub-investment advisor to the fourth fund which is organized as a
       corporation. Wexford Advisors, LLC ("Wexford Advisors") serves as the
       investment advisor to the corporate fund and as general partner to the
       remaining funds which are organized as limited partnerships. One of the
       limited partnerships, Wexford Special Situations 1996 L.P., holds more
       than 5% of Aviva Common Stock. Wexford Management shares voting and
       dispositive power with respect to these shares with each of the funds,
       with Wexford Advisors, and with Charles E. Davidson and Joseph M. Jacob,
       each of whom is a controlling person of Wexford Management and Wexford
       Advisors.
/(4)/  Based on the number of shares issued on October 28, 1998, in connection
       with the acquisition of Garnet Resources Corporation. The shares are held
       by three investment advisory clients of Pecks Management Partners Ltd.
       ("Pecks"). One such client, Delaware State Employees' Retirement Fund,
       holds more than 5% of Aviva's Common Stock. Pecks has sole investment and
       dispositive power with respect to these shares.
/(5)/  Information regarding Lehman Brothers Inc. is based on information
       received from Lehman Brothers Inc. on March 16, 1998.
/(6)/  Information regarding Yale University is based on a Schedule 13G dated
       March 11, 1994 filed by Yale University with the SEC.
/(7)/  Included are options for 250,000 shares exercisable on or within 60 days
       of February 28, 2001.
/(8)/  Includes the entire ownership of AMG Limited, a limited liability company
       of which Mr. Suttill is a member, as of February 28, 2001, of 935,550
       shares of Common Stock.
/(9)/  Treated as outstanding for purposes of computing the percentage ownership
       of Mr. Suttill are 1,006,500 shares issuable upon exercise of vested
       stock options granted pursuant to the Company's stock option plans.

                                       24
<PAGE>

Security Ownership of Management

  The following table sets forth certain information as of February 28, 2001,
concerning the Common Stock of the Company owned beneficially by each director,
by the Named Executive Officer listed in the Summary Compensation Table above,
and by directors and executive officers of the Company as a group:

<TABLE>
<CAPTION>
Name and Address of                          Amount and Nature
Beneficial Owner                        of Beneficial Ownership/(1)/       Percent of Class/(2)/
----------------                        ----------------------------       ---------------------
<S>                                     <C>                                <C>
Ronald Suttill                                 2,429,939/(3)(4)/                   5.07%
8235 Douglas Avenue, Suite 400
Dallas, TX 75225

Robert J. Cresci                                 220,000/(5)/                       *
Pecks Management Partners Ltd.
One Rockefeller Plaza
New York, NY 10020

All directors and executive officers
as a group (3 persons)                         3,842,691/(6)/                      8.02%
</TABLE>

/(1)/  Except as noted below, each beneficial owner has sole voting power and
       sole investment power.
/(2)/  Based on 46,900,132 shares of Common Stock issued and outstanding on
       February 28, 2001. Treated as outstanding for purposes of computing the
       percentage ownership of each director, the Named Executive Officer and
       all directors and executive officers as a group are 1,006,500 shares
       issuable upon exercise of vested stock options granted pursuant to the
       Company's stock option plans.
/(3)/  Included are options for 250,000 shares exercisable on or within 60 days
       of February 28, 2001.
/(4)/  Includes the entire ownership of AMG Limited, a limited liability company
       of which Mr. Suttill is a member, as of February 28, 2001, of 935,550
       shares of Common Stock.
/(5)/  Does not include shares owned by Pecks, of which Mr. Cresci is a managing
       director. For information with respect to such shares, see note (4) under
       "Security Ownership of Certain Beneficial Owners. "
/(6)/  Included are 935,550 shares beneficially owned through AMG Limited and
       options for 450,000 shares exercisable on or within 60 days of February
       28, 2001.
*      Less than 1% of the outstanding Aviva Common Stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  None.

                                       25
<PAGE>

                                    PART IV

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

a.   The following documents are filed as part of this report:

     (1)  Financial Statements: The Financial Statements of Aviva Petroleum Inc.
          filed as part of this report are listed in the "Index to Financial
          Statements" included elsewhere herein.

     (2)  Financial Statement Schedules: All schedules called for under
          Regulation S-X have been omitted because they are not applicable, the
          required information is not material or the required information is
          included in the consolidated financial statements or notes thereto.

     (3)  Exhibits:

            *2.1         Agreement and Plan of Merger dated as of June 24, 1998,
                         by and among Aviva Petroleum Inc., Aviva Merger Inc.
                         and Garnet Resources Corporation (filed as exhibit 2.1
                         to the Registration Statement on Form S-4, File No.
                         333-58061, and incorporated herein by reference).
            *2.2         Debenture Purchase Agreement dated as of June 24, 1998,
                         between Aviva Petroleum Inc. and the Holders of the
                         Debentures named therein (filed as exhibit 2.2 to the
                         Registration Statement on Form S-4, file No. 333-58061,
                         and incorporated herein by reference).
            *2.3         Loan, Settlement and Acquisition Agreement dated
                         effective May 31, 2000, by and among Crosby Capital,
                         LLC, Aviva Petroleum Inc., Aviva America, Inc., Aviva
                         Operating Company, Aviva Overseas, Inc., Neo Energy,
                         Inc., Garnet Resources Corporation, Argosy Energy,
                         Inc., and Argosy Energy International (filed as exhibit
                         2.1 to the Company's Form 8-K dated June 8, 2000, File
                         No. 0-22258, and incorporated herein by reference).
           **2.4         Confirmed Plan of Reorganization of Aviva America, Inc.
            *3.1         Restated Articles of Incorporation of the Company dated
                         July 25, 1995 (filed as exhibit 3.1 to the Company's
                         annual report on Form 10-K for the year ended December
                         31, 1995, File No. 0-22258, and incorporated herein by
                         reference).
            *3.2         Amended and Restated Bylaws of the Company, as amended
                         as of January 23, 1995 (filed as exhibit 3.2 to the
                         Company's annual report on Form 10-K for the year ended
                         December 31, 1994, File No. 0-22258, and incorporated
                         herein by reference).
           *10.1         Risk Sharing Contract between Empresa Colombiana de
                         Petroleos ("Ecopetrol"), Argosy Energy International
                         ("Argosy") and Neo Energy, Inc. ("Neo") (filed as
                         exhibit 10.1 to the Company's Registration Statement on
                         Form10, File No. 0-22258, and incorporated herein by
                         reference).
           *10.2         Contract for Exploration and Exploitation of Sector
                         Number 1 of the Aporte Putumayo Area ("Putumayo")
                         between Ecopetrol and Cayman Corporation of Colombia
                         dated July 24, 1972 (filed as exhibit 10.2 to the
                         Company's Registration Statement on Form10, File No. 0-
                         22258, and incorporated herein by reference).
           *10.3         Operating Agreement for Putumayo between Argosy and Neo
                         dated September 16, 1987 and amended on January 4, 1989
                         and February 23, 1990 (filed as exhibit 10.3 to the
                         Company's Registration Statement on Form10, File No. 0-
                         22258, and incorporated herein by reference).
           *10.4         Operating Agreement for the Santana Area ("Santana")
                         between Argosy and Neo dated September 16, 1987 and
                         amended on January 4, 1989, February 23, 1990 and
                         September 28, 1992 (filed as exhibit 10.4 to the
                         Company's Registration Statement on Form10, File No. 0-
                         22258, and incorporated herein by reference).
           *10.5         Santana Block A Relinquishment dated March 6, 1990
                         between Ecopetrol, Argosy and Neo (filed as exhibit
                         10.8 to the Company's Registration Statement on Form10,
                         File No. 0-22258, and incorporated herein by
                         reference).
           *10.6         Employee Stock Option Plan of the Company (filed as
                         exhibit 10.13 to the Company's Registration Statement
                         on Form10, File No. 0-22258, and incorporated herein by
                         reference).
           *10.7         Santana Block B 50% relinquishment dated September 13,
                         1993 between Ecopetrol, Argosy and Neo (filed as
                         exhibit 10.26 to the Company's annual report on Form
                         10-K for the year ended December 31, 1993, File No. 0-
                         22258, and incorporated herein by reference).

                                       26
<PAGE>

            *10.8        Aviva Petroleum Inc. 401(k) Retirement Plan effective
                         March 1, 1992 (filed as exhibit 10.29 to the Company's
                         annual report on Form 10-K for the year ended December
                         31, 1993, File No. 0-22258, and incorporated herein by
                         reference).
            *10.9        Relinquishment of Putumayo dated December 1, 1993
                         (filed as exhibit 10.30 to the Company's annual report
                         on Form 10-K for the year ended December 31, 1993, File
                         No. 0-22258, and incorporated herein by reference).
            *10.10       Deposit Agreement dated September 15, 1994 between the
                         Company and Chemical Shareholder Services Group, Inc.
                         (filed as exhibit 10.29 to the Company's Registration
                         Statement on Form S-1, File No. 33-82072, and
                         incorporated herein by reference).
            *10.11       Letter from Ecopetrol dated December 28, 1994,
                         accepting relinquishment of Putumayo (filed as exhibit
                         10.38 to the Company's annual report on Form 10-K for
                         the year ended December 31, 1994, File No. 0-22258, and
                         incorporated herein by reference).
            *10.12       Amendment to the Incentive and Nonstatutory Stock
                         Option Plan of the Company (filed as exhibit 10.4 to
                         the Company's quarterly report on Form 10-Q for the
                         quarter ended September 30, 1995, File No. 0-22258, and
                         incorporated herein by reference).
            *10.13       Santana Block B 25% relinquishment dated October 2,
                         1995 (filed as exhibit 10.51 to the Company's annual
                         report on Form 10-K for the year ended December 31,
                         1995, File No. 0-22258, and incorporated herein by
                         reference).
            *10.14       Aviva Petroleum Inc. 1995 Stock Option Plan, as amended
                         (filed as Appendix A to the Company's definitive Proxy
                         Statement for the Annual Meeting of Shareholders dated
                         June 10, 1997, and incorporated herein by reference).
            *10.15       Restated Credit Agreement dated as of October 28, 1998,
                         between Neo Energy, Inc., Aviva Petroleum Inc. and ING
                         (U.S.) Capital Corporation (filed as exhibit 99.1 to
                         the Company's Form 8-K dated October 28, 1998, File No.
                         0-22258, and incorporated herein by reference).
            *10.16       Joint Finance and Intercreditor Agreement dated as of
                         October 28, 1998, between Neo Energy, Inc., Aviva
                         Petroleum Inc., ING (U.S.) Capital Corporation, Aviva
                         America, Inc., Aviva Operating Company, Aviva Delaware
                         Inc., Garnet Resources Corporation, Argosy Energy
                         Incorporated, Argosy Energy International, Garnet PNG
                         Corporation, the Overseas Private Investment
                         Corporation, Chase Bank of Texas, N.A. and ING (U.S.)
                         Capital Corporation as collateral agent for the
                         creditors (filed as exhibit 99.2 to the Company's Form
                         8-K dated October 28, 1998, File No. 0-22258, and
                         incorporated herein by reference).
            *10.17       Amended and Restated Aviva Petroleum Inc. Severance
                         Benefit Plan dated December 31, 1999 (filed as exhibit
                         10.18 to the Company's annual report on Form 10-K for
                         the year ended December 31, 1999, File No. 0-22258, and
                         incorporated herein by reference).
            *10.18       Santana Crude Sale and Purchase Agreement dated January
                         3, 2000 (filed as exhibit 10.19 to the Company's annual
                         report on Form 10-K for the year ended December 31,
                         1999, File No. 0-22258, and incorporated herein by
                         reference).
            *10.19       Employment Agreement between the Company and Ronald
                         Suttill dated February 1, 2000 (filed as exhibit 10.20
                         to the Company's annual report on Form 10-K for the
                         year ended December 31, 1999, File No. 0-22258, and
                         incorporated herein by reference).
            *10.20       Employment Agreement between the Company and James L.
                         Busby dated February 1, 2000 (filed as exhibit 10.21 to
                         the Company's annual report on Form 10-K for the year
                         ended December 31, 1999, File No. 0-22258, and
                         incorporated herein by reference).
            *10.21       Service Agreement between Argosy Energy International
                         and Aviva Overseas, Inc. dated as of June 1, 2000
                         (filed as exhibit 10.1 to the Company's quarterly
                         report on Form 10-Q for the quarter ended June 30,
                         2000, File No. 0-22258, and incorporated herein by
                         reference).
            *10.22       Letter Agreement dated June 8, 2000 between Crosby
                         Capital, LLC and Aviva America, Inc. (filed as exhibit
                         10.2 to the Company's quarterly report on Form 10-Q for
                         the quarter ended June 30, 2000, File No. 0-22258, and
                         incorporated herein by reference).
            *10.23       Guaranty dated May 31, 2000 made by Aviva Overseas,
                         Inc. in favor of Crosby Capital, LLC (filed as exhibit
                         10.3 to the Company's quarterly report on Form 10-Q for
                         the quarter ended June 30, 2000, File No. 0-22258, and
                         incorporated herein by reference).
            *10.24       Assignment and Assumption Agreement dated June 1, 2000,
                         between Crosby Capital, LLC and Neo Energy, Inc. (filed
                         as exhibit 10.4 to the Company's quarterly report on
                         Form 10-Q for the quarter ended June 30, 2000, File No.
                         0-22258, and incorporated herein by reference).

                                       27
<PAGE>

            *10.25       Assignment and Assumption Agreement dated June 1, 2000
                         between Crosby Acquisition LLC and Argosy Energy, Inc.
                         (filed as exhibit 10.5 to the Company's quarterly
                         report on Form 10-Q for the quarter ended June 30,
                         2000, File No. 0-22258, and incorporated herein by
                         reference).
            *10.26       Assignment and Assumption Agreement dated June 1, 2000
                         between Crosby Capital, LLC and Garnet Resources Corp.
                         (filed as exhibit 10.6 to the Company's quarterly
                         report on Form 10-Q for the quarter ended June 30,
                         2000, File No. 0-22258, and incorporated herein by
                         reference).
            *10.27       Assignment and Assumption Agreement dated June 1, 2000
                         between Crosby Capital, LLC and Aviva Overseas, Inc.
                         (filed as exhibit 10.7 to the Company's quarterly
                         report on Form 10-Q for the quarter ended June 30,
                         2000, File No. 0-22258, and incorporated herein by
                         reference).
            *10.28       Assignment and Assumption Agreement dated June 1, 2000
                         between Argosy Energy, Incorporated and Crosby
                         Acquisition, LLC (filed as exhibit 10.8 to the
                         Company's quarterly report on Form 10-Q for the quarter
                         ended June 30, 2000, File No. 0-22258, and incorporated
                         herein by reference).
            *10.29       Assignment and Assumption Agreement dated June 1, 2000
                         between Crosby Capital, LLC and Aviva Overseas, Inc.
                         (filed as exhibit 10.9 to the Company's quarterly
                         report on Form 10-Q for the quarter ended June 30,
                         2000, File No. 0-22258, and incorporated herein by
                         reference).
            *10.30       Pledge Agreement dated May 31, 2000 executed by Aviva
                         Overseas, Inc. (Debtor) in favor of Crosby Capital, LLC
                         (Secured Party) (filed as exhibit 10.10 to the
                         Company's quarterly report on Form 10-Q for the quarter
                         ended June 30, 2000, File No. 0-22258, and incorporated
                         herein by reference).
            *10.31       Third Amendment to Second Amended and Restated Limited
                         Partnership Agreement of Argosy Energy International
                         dated May 31, 2000 (filed as exhibit 10.11 to the
                         Company's quarterly report on Form 10-Q for the quarter
                         ended June 30, 2000, File No. 0-22258, and incorporated
                         herein by reference).
            *10.32       Fourth Amendment to Second Amended and Restated Limited
                         Partnership Agreement of Argosy Energy International
                         dated June 1, 2000 (filed as exhibit 10.12 to the
                         Company's quarterly report on Form 10-Q for the quarter
                         ended June 30, 2000, File No. 0-22258, and incorporated
                         herein by reference).
            *10.33       Assignment of Stock Warrant Rights dated May 31, 2000
                         executed by Crosby Capital, LLC in favor of Aviva
                         Petroleum Inc. (filed as exhibit 10.13 to the Company's
                         quarterly report on Form 10-Q for the quarter ended
                         June 30, 2000, File No. 0-22258, and incorporated
                         herein by reference).
           **10.34       Assignment of Neo Debt and Collateral, dated December
                         21, 2000 from Crosby Capital, LLC to Aviva Operating
                         Company.
           **10.35       Conveyance of Net Profits Interest, dated December 21,
                         2000 from Aviva America, Inc. to Crosby Capital, LLC.
           **21.1        List of subsidiaries of Aviva Petroleum Inc.

           __________________________
           *             Previously Filed
           **            Filed Herewith

b.   Reports on Form 8-K
     -------------------

     The Company did not file any Current Reports on Form 8-K during and
     subsequent to the end of the fourth quarter.

                                       28
<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.

                                      AVIVA PETROLEUM INC.


                                      By:  /s/ Ronald Suttill
                                           -------------------------------------
                                           Ronald Suttill
                                           Chief Executive Officer and Director

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.

<TABLE>
<CAPTION>
Signature                                     Title                             Date
<S>                           <C>                                          <C>
/s/ Ronald Suttill            President, Chief Executive Officer           March 27, 2001
-----------------------                                                    --------------
Ronald Suttill                and Director (principal executive officer)


/s/ James L. Busby            Secretary, Treasurer and                     March 27, 2001
-----------------------                                                    --------------
James L. Busby                Chief Financial Officer (principal
                              financial and accounting officer)


/s/ Robert J. Cresci          Director                                     March 27, 2001
-----------------------                                                    --------------
Robert J. Cresci
</TABLE>

                                       29
<PAGE>

        INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES


                                                                           Page
                                                                           ----

Independent Auditors' Report............................................     31

Consolidated Balance Sheet as of December 31, 2000 and 1999.............     32

Consolidated Statement of Operations for the years
   ended December 31, 2000, 1999 and 1998...............................     33

Consolidated Statement of Cash Flows for the years
   ended December 31, 2000, 1999 and 1998...............................     34

Consolidated Statement of Stockholders' Equity (Deficit) for the years
   ended December 31, 2000, 1999 and 1998...............................     35

Notes to Consolidated Financial Statements..............................     36

Supplementary Information Related to Oil and Gas Producing
   Activities (Unaudited)...............................................     47

All schedules called for under Regulation S-X have been omitted because they are
not applicable, the required information is not material or the required
information is included in the consolidated financial statements or notes
thereto.

                                       30
<PAGE>

                         INDEPENDENT AUDITORS' REPORT
                         ----------------------------


The Board of Directors
Aviva Petroleum Inc.:

We have audited the accompanying consolidated financial statements of Aviva
Petroleum Inc. and subsidiaries as listed in the accompanying index. These
consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America.  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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Aviva Petroleum Inc.
and subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States of America.

                                                  /s/ KPMG LLP

Dallas, Texas
March 9, 2001

                                       31
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
                          Consolidated Balance Sheet
                          December 31, 2000 and 1999
                    (in thousands, except number of shares)

<TABLE>
<CAPTION>
                                                                 2000       1999
                                                               --------   --------
<S>                                                            <C>        <C>
ASSETS

Current assets:
 Cash and cash equivalents                                     $    820   $    846
 Restricted cash                                                      -          4
 Accounts receivable (note 9):
   Oil and gas revenue                                              132        716
   Trade                                                             65        633
   Other                                                             40        301
 Inventories                                                        161        724
 Prepaid expenses and other                                         187        236
                                                               --------   --------

   Total current assets                                           1,405      3,460
                                                               --------   --------
Property and equipment, at cost (note 5):
 Oil and gas properties and equipment (full cost method)         16,414     68,462
 Other                                                              333        584
                                                               --------   --------
                                                                 16,747     69,046
 Less accumulated depreciation, depletion
   and amortization                                             (15,791)   (65,081)
                                                               --------   --------
                                                                    956      3,965
Other assets (note 4)                                               950      1,561
                                                               --------   --------

                                                               $  3,311   $  8,986
                                                               ========   ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
 Current portion of long term debt (note 5)                    $      -   $ 14,495
 Accounts payable                                                   945      3,081
 Accrued liabilities                                                115      1,024
                                                               --------   --------
   Total current liabilities                                      1,060     18,600
                                                               --------   --------

Gas balancing obligations and other                                 375      1,869

Stockholders' equity (deficit) (notes 2, 5 and 7):
 Common stock, no par value, authorized 348,500,000 shares;
   issued 46,900,132 shares                                       2,345      2,345
 Additional paid-in capital                                      37,710     34,855
 Accumulated deficit*                                           (38,179)   (48,683)
                                                               --------   --------

   Total stockholders' equity (deficit)                           1,876    (11,483)

Commitments and contingencies (note 10)
                                                               --------   --------

                                                               $  3,311   $  8,986
                                                               ========   ========
</TABLE>

*Accumulated deficit of $70,057 was eliminated at December 31, 1992 in
connection with a quasi-reorganization. See note 7.

See accompanying notes to consolidated financial statements.

                                       32
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
                     Consolidated Statement of Operations
                 Years Ended December 31, 2000, 1999 and 1998
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                   2000      1999       1998
                                                                 -------   -------   --------
<S>                                                              <C>       <C>       <C>
Revenue:
 Oil and gas sales (note 9)                                      $ 5,796   $ 6,797   $  3,332
 Service fees (note 2)                                               387         -          -
                                                                 -------   -------   --------
   Total revenue                                                   6,183     6,797      3,332
                                                                 -------   -------   --------

Expense:
 Production                                                        2,407     3,575      3,525
 Depreciation, depletion and amortization                            515     1,000      3,152
 Write-down of oil and gas properties (note 1)                         -         -     12,343
 General and administrative                                        1,157     1,245      1,074
 Provision for (recovery of) losses on accounts
   receivable                                                       (256)     (101)       420
 Severance                                                             -        62          -
                                                                 -------   -------   --------

   Total expense                                                   3,823     5,781     20,514
                                                                 -------   -------   --------
Other income (expense):
 Gain on transfer of partnership interests (note 2)                3,452         -          -
 Interest and other income (expense), net (note 6)                   207       259      1,045
 Interest expense                                                   (805)   (1,396)      (748)
                                                                 -------   -------   --------

   Total other income (expense)                                    2,854    (1,137)       297
                                                                 -------   -------   --------
   Earnings (loss) before income taxes and
     extraordinary item                                            5,214      (121)   (16,885)

Income (taxes) benefits (note 8)                                    (253)     (282)         4
                                                                 -------   -------   --------

   Earnings (loss) before extraordinary item                       4,961      (403)   (16,881)

Extraordinary item - debt extinguishment, net of income
 taxes of $2,855 (notes 2 and 11)                                  5,543         -       (197)
                                                                 -------   -------   --------

   Net earnings (loss)                                           $10,504   $  (403)  $(17,078)
                                                                 =======   =======   ========
Weighted average common shares outstanding -
 basic and diluted                                                46,900    46,813     34,279
                                                                 =======   =======   ========
Basic and diluted net earnings (loss) per common share:
 Before extraordinary item                                       $  0.10   $ (0.01)  $  (0.49)
 Extraordinary item                                                 0.12         -      (0.01)
                                                                 -------   -------   --------
 Net earnings (loss)                                             $  0.22   $ (0.01)  $  (0.50)
                                                                 =======   =======   ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       33
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
                     Consolidated Statement of Cash Flows
                 Years Ended December 31, 2000, 1999 and 1998
                                (in thousands)

<TABLE>
<CAPTION>
                                                               2000      1999       1998
                                                             -------   -------   --------
<S>                                                          <C>       <C>       <C>
Net earnings (loss)                                          $10,504   $  (403)  $(17,078)
Adjustments to reconcile net earnings (loss) to
   net cash provided by (used in) operating activities:
  Depreciation, depletion and amortization                       515     1,000      3,152
  Write-down of oil and gas properties                             -         -     12,343
  Provision for (recovery of) losses on accounts
    receivable                                                  (256)     (101)       420
  Gain on transfer of partnership interests                   (3,452)        -          -
  Gain on debt extinguishment                                 (5,543)        -          -
  Loss (gain) on sale of assets, net                               4       (11)         -
  Foreign currency exchange gain, net                            (44)     (193)        (1)
  Other                                                         (357)      247       (275)
  Changes in assets and liabilities, net of effects
    of transfer of partnership interests:
     Escrow account                                                4       413       (417)
     Accounts receivable                                         204       120        825
     Inventories                                                  10       112        195
     Prepaid expenses and other                                   27        38       (196)
     Accounts payable and accrued liabilities                    106    (1,703)       983
                                                             -------   -------   --------
       Net cash provided by (used in) operating
        activities                                             1,722      (481)       (49)
                                                             -------   -------   --------
Cash flows from investing activities:
  Costs of and cash balances surrendered in
    connection with the transfer of partnership
    interests to Crosby                                       (1,414)        -          -
  Property and equipment expenditures                           (382)     (285)    (1,405)
  Proceeds from sale of assets                                     -        37          -
  Other                                                            -         -      1,421
                                                             -------   -------   --------
       Net cash provided by (used in) investing
        activities                                            (1,796)     (248)        16
                                                             -------   -------   --------
Cash flows from financing activities:
  Proceeds from long term debt                                     -         -      1,560
  Principal payments on long term debt                             -      (300)      (400)
  Other                                                            -         -        (97)
                                                             -------   -------   --------
       Net cash provided by (used in) financing
        activities                                                 -      (300)     1,063
                                                             -------   -------   --------
Effect of exchange rate changes on cash and
   cash equivalents                                               48       163         (8)
                                                             -------   -------   --------

Net increase (decrease) in cash and cash equivalents             (26)     (866)     1,022
Cash and cash equivalents at beginning of year                   846     1,712        690
                                                             -------   -------   --------

Cash and cash equivalents at end of year                     $   820   $   846   $  1,712
                                                             =======   =======   ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       34
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
           Consolidated Statement of Stockholders' Equity (Deficit)
                 Years Ended December 31, 2000, 1999 and 1998
                    (in thousands, except number of shares)

<TABLE>
<CAPTION>
                                       Common Stock         Additional                    Total
                                   ---------------------
                                   Number of                  Paid-in    Accumulated    Stockholders'
                                     Shares       Amount      Capital      Deficit     Equity (Deficit)
                                   ----------    -------    ----------   -----------   ----------------
<S>                                <C>           <C>        <C>          <C>           <C>
Balances at
 December 31, 1997                 31,482,716    $ 1,574     $ 33,376     $ (31,202)       $   3,748

Issuance of common stock
 pursuant to amendments
 of credit agreement
 (note 5)                           1,200,000         60           49             -              109

Issuance of common stock
 pursuant to the acquisition of
 Garnet Resources Corporation
 (note 3)                          14,017,416        701        1,437             -            2,138

Net loss                                    -          -            -       (17,078)         (17,078)
                                   ----------    -------     --------     ---------        ---------
Balances at
 December 31, 1998                 46,700,132      2,335       34,862       (48,280)         (11,083)

Issuance of common stock
 pursuant to investment
 banking agreement                    200,000         10           (7)            -                3

Net loss                                    -          -            -          (403)            (403)
                                   ----------    -------     --------     ---------        ---------
Balances at
 December 31, 1999                 46,900,132      2,345       34,855       (48,683)         (11,483)

Tax benefits relating to
 January 1, 1993 valuation
 allowance (note 8)                         -          -        2,855             -            2,855
Net earnings                                -          -            -        10,504           10,504
                                   ----------    -------     --------     ---------        ---------
Balances at
 December 31, 2000                 46,900,132    $ 2,345     $ 37,710     $ (38,179)       $   1,876
                                   ==========    =======     ========     =========        =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       35
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements

(1)  Summary of Significant Accounting Policies

     General

     Aviva Petroleum Inc. and its subsidiaries (the "Company") are engaged in
     the business of exploring for, developing and producing oil and gas in
     Colombia and in the United States.  The Company's Colombian oil production
     is sold to Empresa Colombiana de Petroleos, the Colombian national oil
     company ("Ecopetrol"), while the Company's U.S. oil and gas production is
     sold to principally one U.S. purchaser (See notes 9 and 12).

     Oil and gas are the Company's only products, and there is substantial
     uncertainty as to the prices that the Company may receive for its
     production.  A decrease in these prices would affect operating results
     adversely.

     Principles of Consolidation

     The consolidated financial statements include the accounts of Aviva
     Petroleum Inc. and its subsidiaries. The Company proportionately
     consolidates less than 100% owned oil and gas partnerships in accordance
     with industry practice. All significant intercompany accounts and
     transactions have been eliminated in consolidation.

     Inventories

     Inventories consist primarily of tubular goods, oilfield equipment and
     spares and are stated at the lower of average cost or market.

     Property and Equipment

     Under the full cost method of accounting for oil and gas properties, all
     productive and nonproductive property acquisition, exploration and
     development costs are capitalized in separate cost centers for each
     country. Such capitalized costs include lease acquisition costs, delay
     rentals, geophysical, geological and other costs, drilling, completion and
     other related costs and direct general and administrative expenses
     associated with property acquisition, exploration and development
     activities. Capitalized general and administrative costs include internal
     costs such as salaries and related benefits paid to employees to the extent
     that they are directly engaged in such activities, as well as all other
     directly identifiable general and administrative costs associated with such
     activities, including rent, utilities and insurance and do not include any
     costs related to production, general corporate overhead, or similar
     activities. Capitalized internal general and administrative costs were
     $57,000 in 2000, $46,000 in 1999 and $60,000 in 1998.

     Evaluated capitalized costs of oil and gas properties and the estimated
     future development, site restoration, dismantlement and abandonment costs
     are amortized by cost center, using the units-of-production method.  Total
     net future site restoration, dismantlement and abandonment costs are
     estimated to be $745,000.

     Depreciation, depletion and amortization expense per equivalent barrel of
     production was as follows:

                                      2000       1999        1998
                                     ------     ------      ------
                    United States    $ 2.62     $ 1.10      $27.00
                    Colombia         $ 2.29     $ 2.40      $ 5.98

       In accordance with the full cost method of accounting, the net
       capitalized costs of oil and gas properties less related deferred income
       taxes for each cost center are limited to the sum of the estimated future
       net revenues from the properties at current prices less estimated future
       expenditures, discounted at 10%, and unevaluated costs not being
       amortized, less income tax effects related to differences between the
       financial and tax bases of the properties, computed on a quarterly basis.
       The Company recorded write-downs of  $10,556,000 and $1,787,000 to the
       carrying amounts of its Colombian and U.S. oil and gas properties,
       respectively, as a result of ceiling limitations on capitalized costs
       during 1998.  No such write-downs were required during 1999 or 2000.

       Depletion expense and limits on capitalized costs are based on estimates
       of oil and gas reserves which are inherently imprecise and assume current
       prices for future net revenues. Accordingly, it is reasonably possible
       that the estimates of reserves quantities and future net revenues could
       differ materially in the near term from

                                       36
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (Continued)

     amounts currently estimated.  Moreover, a future decrease in the prices the
     Company receives for its oil and gas production or downward reserve
     adjustments could, for the Colombian cost center, result in a ceiling test
     write-down that is significant to the Company's operating results.

     Gains and losses on sales of oil and gas properties are not recognized in
     income unless the sale involves a significant portion of the reserves
     associated with a particular cost center.  Capitalized costs associated
     with unevaluated properties are excluded from amortization until it is
     determined whether proved reserves can be assigned to such properties or
     until the value of the properties is impaired.  Unevaluated costs of
     $272,000 and $553,000 were excluded from amortization at December 31, 2000
     and 1999, respectively.  Unevaluated properties are assessed quarterly to
     determine whether any impairment has occurred.  The unevaluated costs at
     December 31, 2000 represent exploration costs and were incurred primarily
     during the five-year period ended December 31, 2000. Such costs are
     expected to be evaluated and included in the amortization computation
     within the next three years.

     Other property and equipment is depreciated using the straight-line method
     over the estimated useful lives of the assets.

     Gas Balancing

     The Company uses the entitlements method of accounting for gas sales.  Gas
     production taken by the Company in excess of amounts entitled is recorded
     as a liability to the other joint owners.  Excess gas production taken by
     others is recognized as income to the extent of the Company's proportionate
     share of the gas sold and a related receivable is recorded from the other
     joint owners.

     Interest Expense

     The Company capitalizes interest costs on qualifying assets, principally
     unevaluated oil and gas properties.  During 2000, 1999 and 1998, the
     Company capitalized $43,000, $59,000 and $29,000 of interest, respectively.

     Earnings Per Common Share

     Basic earnings per share ("EPS") is computed by dividing income available
     to common shareholders by the weighted-average number of common shares
     outstanding for the period.  Diluted EPS reflects the potential dilution
     that could occur if securities or other contracts to issue common stock
     were exercised or converted into common stock or resulted in the issuance
     of common stock that then shared in the earnings of the entity.  For the
     years presented herein, basic and diluted EPS are the same since the
     effects of potential common shares (notes 5 and 7) are antidilutive.  For
     fiscal year 2000, options for 1,024,000 common shares were not included in
     the computation of diluted earnings per share because their exercise price
     was greater than the average market price of the common shares and,
     therefore, the effect would be antidilutive.

     Income Taxes

     The Company accounts for income taxes in accordance with Statement of
     Financial Accounting Standards No. 109 ("Statement 109") which requires
     recognition of deferred tax assets in certain circumstances and deferred
     tax liabilities for the future tax consequences of temporary differences
     between the financial statement carrying amounts and the tax bases of
     assets and liabilities.

     Statement of Cash Flows

     The Company considers all highly liquid debt instruments with original
     maturities of three months or less to be cash equivalents.  The Company
     paid interest, net of amounts capitalized, of $(37,000) in 2000, $547,000
     in 1999 and $860,000 in 1998 and paid income taxes of $267,000 in 2000,
     $201,000 in 1999 and $117,000 in 1998.

     Fair Value of Financial Instruments

     The reported values of cash, cash equivalents, accounts receivable and
     accounts payable approximate fair value due to their short maturities.



                                       37
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (Continued)


     Foreign Currency Translation

     The accounts of the Company's foreign operations are translated into United
     States dollars in accordance with Statement of Financial Accounting
     Standards No. 52.  The United States dollar is used as the functional
     currency.  Exchange adjustments resulting from foreign currency
     transactions are recognized in expense or income in the current period.

     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.

     Comprehensive Income

     Comprehensive income includes net income and other comprehensive income
     which is generally comprised of changes in the fair value of available-for-
     sale marketable securities, foreign currency translation adjustments and
     adjustments to recognize additional minimum pension liabilities. For each
     period presented in the accompanying consolidated statement of operations,
     comprehensive income and net income are the same amount.

(2)  Debt Restructuring and Transfer of Partnership Interests

     On June 8, 2000, the Company entered into agreements with the Company's
     senior secured lender, Crosby Capital, LLC ("Crosby"), in order to
     restructure the Company's senior debt which, including unpaid interest,
     aggregated $16,103,064 as of May 31, 2000.    Crosby acquired the debt from
     ING Capital and OPIC on May 1, 2000 (see note 5).  Pursuant to the
     agreements, Crosby canceled $13,353,064 of such debt and transferred to the
     Company warrants for 1,500,000 shares of the Company's common stock in
     exchange for the general partner rights and an initial 77.5% partnership
     interest in Argosy Energy International ("Argosy"), a Utah limited
     partnership, which holds the Company's Colombian properties.  Following the
     transaction, Aviva Overseas Inc. ("Aviva Overseas"), a wholly owned
     subsidiary of the Company, owns a 22.1196% limited partnership interest in
     Argosy.  An additional 7.5% limited partnership interest will be
     transferred from Crosby to Aviva Overseas when Crosby has received in
     distributions from Argosy an amount equal to $3,500,000 plus interest at
     the prime rate plus 1% on the outstanding balance thereof.  As of December
     31, 2000, Crosby had received approximately $2.2 million in distributions
     from Argosy.

     The Company's remaining debt of $2,750,000 was reacquired from Crosby on
     December 21, 2000, in exchange for a 15% net profits interest in any new
     production at Breton Sound Block 31 field.  This transaction substantially
     completed the restructuring of the Company and the reorganization of the
     Company's wholly owned subsidiary Aviva America, Inc. ("AAI") (see note
     11).

     In order to assist Crosby in maximizing the value of its interest in
     Argosy, Crosby entered into a Service Agreement with Aviva Overseas
     pursuant to which Aviva Overseas will provide certain services in
     administering the Colombian assets in exchange for a monthly fee.  The fee
     is $71,000 per month for the period June 1, 2000 through March 31, 2001,
     $46,000 per month for the period April 1, 2001  through  March 31, 2002,
     and $21,000 per month thereafter as long as the contract is in effect.
     The Service Agreement provides for a term of 22 months and will continue
     thereafter from month to month unless terminated by 30-day written notice
     by either party.

     The Company recognized a gain of $3,452,000 on the transfer of the
     partnership interests to Crosby, representing the excess of the fair value
     over the book value of the interests transferred.  The Company recognized
     an extraordinary gain of $4,888,000 on the extinguishment of the debt due
     to Crosby, net of income taxes of $2,517,000.

     In connection with the above-referenced transaction, 1,000,000 shares of
     the Company's common stock which were held by Crosby prior to the
     transaction, were transferred to members of management and the Board of
     Directors  of  the Company,  effective June 8, 2000.  As of such date, the
     aggregate market value of the common

                                       38
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (Continued)


     stock transferred to members of management and the Board of Directors was
     approximately $25,000 based on the last sale price on the OTC Bulletin
     Board of a depositary share representing five shares of the Company's
     common stock.  Additionally, 200,000 shares of the Company's common stock
     which were held by Crosby prior to the transaction were transferred to a
     consultant of the Company effective as of the same date.

(3)  Garnet Merger

     On October 28, 1998, the Company completed the merger of Garnet Resources
     Corporation ("Garnet") with one of the Company's subsidiaries.  As a result
     of the merger, the Company owned over 99% of the Colombian joint
     operations.  Additionally, the Company now holds a 2% carried working
     interest in an oil and gas Petroleum Prospecting License in Papua New
     Guinea.

     The merger arrangements included Aviva refinancing Garnet's 99.24% owned
     subsidiary's net outstanding debt to Chase Bank of Texas, N.A. ("Chase")
     which was guaranteed by the U.S. Overseas Private Investment Corporation
     ("OPIC"), issuing approximately 1.1 million and 12.9 million new Aviva
     common shares to Garnet shareholders and Garnet debenture holders,
     respectively, and canceling Garnet's $15 million of 9.5% subordinated
     debentures due December 21, 1998.

     The merger was accounted for as a "purchase" of Garnet for financial
     accounting purposes with Aviva's subsidiary as the surviving entity.  The
     purchase price of Garnet, approximately $9.9 million, consists of $2.4
     million related to the issuance of 14 million shares of Aviva's common
     stock at $0.167 per share plus merger costs and the assumption of
     approximately $6.0 million of net debt and $1.5 million of current and
     other liabilities.

     A summary of the assets acquired and liabilities assumed as of October 28,
     1998 follows (in thousands):

                 Current assets                             $ 1,659
                 Oil and gas properties                       8,250
                 Current liabilities                         (1,169)
                 Long term debt                              (5,954)
                 Other liabilities                             (346)
                                                            -------
                    Fair value of net assets acquired       $ 2,440
                                                            =======

(4)  Other Assets

     A summary of other assets follows:

                                                           December 31
                                                         ---------------
                                                           (thousands)
                                                          2000     1999
                                                         ------   ------
     Abandonment funds for U.S. offshore properties      $  948   $1,502
     Deferred financing charges                               -       55
     Other                                                    2        4
                                                         ------   ------

                                                         $  950   $1,561
                                                         ======   ======

(5)  Long Term Debt

     On October 28, 1998, concurrently with the consummation of the Garnet
     merger, Neo Energy, Inc., an indirect subsidiary of the Company, and the
     Company entered into a Restated Credit Agreement with ING (U.S.) Capital
     Corporation ("ING Capital").  ING Capital, Chase and OPIC also entered into
     a Joint Finance and Intercreditor Agreement (the "Intercreditor Agreement")
     with the Company.  ING Capital agreed to loan Neo Energy, Inc. an
     additional $800,000, bringing the total outstanding balance due ING Capital
     to $9,000,000.  The outstanding balance due to Chase was paid down to
     $6,000,000 from the $6,350,000 balance owed by Garnet prior to the merger.

                                       39
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (Continued)


     The Chase loan was unconditionally guaranteed by OPIC.  On September 1,
     1999, the Chase loan was assigned and transferred to OPIC pursuant to this
     guarantee.

     The ING Capital loan and the OPIC loan (the "Bank Credit Facilities") were
     guaranteed by the Company and its material domestic subsidiaries.  Both
     loans were also secured by the Company's consolidated interest in the
     Santana contract and related assets in Colombia, a first mortgage on the
     United States oil and gas properties of the Company and its subsidiaries, a
     lien on accounts receivable of the Company and its subsidiaries, and a
     pledge of the capital stock of the Company's subsidiaries.

     Borrowings under the ING Capital loan were subject to interest at the prime
     rate (as defined in the Restated Credit Agreement) plus 3% per annum.
     Borrowings under the OPIC loan were subject to interest at 10.27% per
     annum.

     On May 1, 2000, ING Capital and OPIC sold their entire interests in the
     Bank Credit Facilities to Crosby Capital, LLC.  As more fully described in
     note 2, this debt was restructured on June 8, 2000, and reacquired from
     Crosby on December 21, 2000.

     During 1998, following the Garnet merger, Aviva issued to ING Capital
     800,000 shares of Aviva common stock and warrants to purchase 1,500,000
     shares of Aviva common stock at an exercise price of $0.50 per share in
     payment of financial advisory fees.  The 800,000 shares were valued at
     their quoted market value on October 28, 1998, the date on which the Bank
     Credit Facilities were consummated.  The warrants were valued using the
     Black-Scholes option-pricing model.  Both amounts are included in debt
     extinguishment costs in the 1998 consolidated statement of operations.

(6)  Interest and Other Income (Expense)

     A summary of interest and other income (expense) follows:

                                                          (thousands)
                                                     2000     1999     1998
                                                    ------   ------   ------
          Gain on settlement of litigation          $    -   $    -   $  720
          Interest income                               97       94       70
          Foreign currency exchange gain (loss)         44      193        1
          Gain (loss) on sale of assets, net            (4)      11        -
          Other, net                                    70      (39)     254
                                                    ------   ------   ------
                                                    $  207   $  259   $1,045
                                                    ======   ======   ======

     In January 1998, the Company realized a $720,000 gain on the settlement of
     litigation involving the administration of a take or pay contract
     settlement.

(7)  Stockholders' Equity

     Quasi-Reorganization

     Effective December 31, 1992, the Board of Directors of the Company approved
     a quasi-reorganization which resulted in a reclassification of the
     accumulated deficit of $70,057,000 at that date to paid-in capital.  No
     adjustments were made to the Company's assets and liabilities since the
     historical carrying values approximated or did not exceed the estimated
     fair values.

     Stock Option Plans

     At December 31, 2000, the Company has two stock option plans, which are
     described below.  The Company applies APB Opinion No. 25 and related
     Interpretations in accounting for its plans.  Accordingly, no compensation
     cost has been recognized for its stock option plans.  Had compensation cost
     for the Company's stock option plans been determined consistent with FASB
     Statement No. 123, the Company's net earnings (loss) and earnings (loss)
     per share would have been changed to the pro forma amounts indicated below
     (in thousands, except per share data):

                                       40
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (Continued)


                                                      2000    1999      1998
                                                      ----    ----      ----

        Net earnings (loss)          As reported    $10,504  $ (403)  $(17,078)

                                     Pro forma      $10,496  $ (413)  $(17,095)

        Earnings (loss) per share    As reported    $  0.22  $(0.01)  $  (0.50)

                                     Pro forma      $  0.22  $(0.01)  $  (0.50)

     The Aviva Petroleum Inc. 1995 Stock Option Plan, as amended (the "Current
     Plan") is administered by a committee (the "Committee") composed of two or
     more outside directors of the Company.  Except as indicated below and
     except for non-discretionary grants to non-employee directors, the
     Committee has authority to determine all terms and provisions under which
     options are granted pursuant to the Current Plan.  An aggregate of up to
     1,000,000 shares of the Company's common stock may be issued upon exercise
     of stock options or in connection with restricted stock awards that may be
     granted under the Current Plan.  The Current Plan also provides for the
     grant, on July 1, each year, to each non-employee director who has served
     in such capacity for at least the entire preceding calendar year of an
     option to purchase 5,000 shares of the Company's common stock (the "Annual
     Option Awards"), exercisable as to 2,500 shares on the first anniversary of
     the date of grant and as to the remaining shares on the second anniversary
     thereof.

     The aggregate fair market value (determined at the time of grant) of shares
     issuable pursuant to incentive stock options which first become exercisable
     in any calendar year by a participant in the Current Plan may not exceed
     $100,000.  The maximum number of shares of common stock which may be
     subject to an option or restricted stock grant awarded to a participant in
     a calendar year cannot exceed 100,000.  Incentive stock options granted
     under the Current Plan may not be granted at a price less than 100% of the
     fair market value of the common stock on the date of grant (or 110% of the
     fair market value in the case of incentive stock options granted to
     participants in the Current Plan holding 10% or more of the voting stock of
     the Company).  Non-qualified stock options may not be granted at a price
     less than 50% of the fair market value of the common stock on the date of
     grant.

     As a result of the adoption of the Current Plan, during 1995 the Company's
     former Incentive and Non-Statutory Stock Option Plan was terminated as to
     the grant of new options, but options then outstanding for 250,000 shares
     of the Company's common stock remain in effect as of December 31, 2000.

     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes option-pricing model with the following weighted-average
     assumptions:

                                              2000      1999      1998
                                             ------    ------    ------
               Expected life (years)          10.0      10.0      10.0
               Risk-free interest rate        6.03%      5.8%      4.8%
               Volatility                    124.0%     87.0%     77.0%
               Dividend yield                  0.0%      0.0%      0.0%

                                       41
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (Continued)

     A summary of the status of the Company's two fixed stock option plans as of
     December 31, 2000, 1999 and 1998, and changes during the years ended on
     those dates is presented below:

<TABLE>
<CAPTION>
                                           2000                       1999                            1998
                                     --------------------    -------------------------         -----------------------
                                                Weighted-                    Weighted-                       Weighted-
                                                 Average                      Average                          Average
                                       Shares    Exercise     Shares         Exercise           Shares       Exercise
     Fixed Options                      (000)     Price        (000)           Price             (000)         Price
     -------------                   -------    ---------    ---------       ---------         --------      --------
     <S>                             <C>        <C>          <C>             <C>               <C>           <C>
     Outstanding at
        beginning of year              1,072      $ .51          1,148         $ .53               550       $   1.53
     Granted                               5        .08              5           .01               675            .06
     Forfeited                           (53)       .17            (81)          .74               (77)          3.60
                                     -------                 ---------                          ------
     Outstanding at
       end of year                     1,024        .51          1,072           .51             1,148            .53
                                     =======                 =========                          ======
     Options exercisable
       at year-end                     1,007                       825                             655
     Weighted-average fair
       value of options
       granted during
       the year                      $.   07                 $     .01                          $  .05
</TABLE>

     The following table summarizes information about fixed stock options
 outstanding at December 31, 2000:

<TABLE>
<CAPTION>
                                    Options Outstanding                                  Options Exercisable
                         ----------------------------------------------------     ---------------------------------
           Range              Number        Weighted-Avg.                             Number
            of            Outstanding        Remaining        Weighted-Avg.        Exercisable       Weighted-Avg.
      Exercise Prices      at 12/31/00    Contractual Life    Exercise Price       at 12/31/00       Exercise Price
      ---------------     -------------   ----------------    --------------      -------------      --------------
    <S>                    <C>            <C>                 <C>                 <C>                <C>
    $  .01   to    .17        619,000         7.85 years          $  .06              601,500             $ .06
       .51   to    .98        155,000         4.38                   .81              155,000               .81
      1.08   to   2.51        250,000         2.24                  1.42              250,000              1.42
    ------------------     ----------                                             -------------
    $  .01   to   2.51      1,024,000         5.96                   .51            1,006,500               .52
    ==================     ==========                                             =============
</TABLE>

(8)  Income Taxes

     Income tax expense includes current Colombian income taxes (benefit) of
     $241,000 in 2000, $282,000 in 1999,  $(4,000) in 1998.  Income tax expense
     also includes state income taxes of $12,000 in 2000 and $-0- in 1999 and
     1998.

     Income tax expense for the year ended December 31, 2000, differed from the
     amount computed by applying the statutory U.S. federal income tax rate
     (34%) to income before income taxes as a result of the following (in
     thousands):

         Computed expected tax expense                           $  1,773
         Decrease in valuation allowance                          (17,856)
         Expiration of net operating loss carryforwards            15,467
         Foreign income taxes and other                               869
                                                                 --------
                                                                 $    253
                                                                 ========

     During the years ended December 31, 1999 and 1998, the Company's effective
     tax rate differs from the U.S. statutory rate principally due to losses
     without tax benefit.



                                       42
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (Continued)

     The Company has deferred tax assets of $23,621,000 and $44,332,000 at
     December 31, 2000 and 1999, respectively, consisting principally of net
     operating loss carryforwards. The valuation allowance for deferred tax
     assets at January 1, 1998 was $42,053,000. The net change in the valuation
     allowance was a $20,711,000 decrease in 2000, a $1,696,000 decrease in
     1999, and a $3,975,000 increase in 1998. Subsequently recognized tax
     benefits relating to the valuation allowance of $9,327,000 for deferred
     tax assets at January 1, 1993 will be credited to additional paid in
     capital. Such benefits were $2,855,000 during the year ended December 31,
     2000.

     At December 31, 2000, the Company and its subsidiaries have aggregate net
     operating loss carryforwards for U.S. federal income tax purposes of
     approximately $63,000,000, expiring from 2001 through 2020, which are
     available to offset future federal taxable income.  The utilization of a
     portion of these net operating losses is subject to an annual limitation of
     approximately $2,400,000 and a portion may only be utilized by certain
     subsidiaries of the Company.

(9)  Financial Instruments and Credit Risk Concentrations

     Financial instruments which are subject to risks due to concentrations of
     credit consist principally of cash and cash equivalents and receivables.
     Cash and cash equivalents are placed with high credit quality financial
     institutions to minimize risk. Receivables are typically unsecured.
     Historically, the Company has not experienced any material collection
     difficulties from its customers.

     The carrying values of cash equivalents, accounts receivable and accounts
     payable approximate fair value due to the current maturities of these
     financial instruments.

     Ecopetrol has an option to purchase all of the Company's production in
     Colombia. For the years ended December 31, 2000, 1999 and 1998, Ecopetrol
     exercised that option and sales to Ecopetrol accounted for $4,267,000
     (73.6%), $5,683,000 (83.6%) and $2,632,000 (79.0%), respectively, of the
     Company's aggregate oil and gas sales.

     For the years ended December 31, 2000 and 1998, sales to one U.S. purchaser
     accounted for $968,000 (16.7%) and $479,000 (14.4%), respectively, of oil
     and gas sales. During 1999, the Company did not receive more than 10% of
     its revenue from any one domestic purchaser.

(10) Commitments and Contingencies

     The Company is engaged in ongoing operations on the Santana contract in
     Colombia. The contract obligations have been met; however, the Company
     plans to recomplete certain existing wells and engage in various other
     projects. The Company's current share of the estimated future costs of
     these activities is approximately $0.3 million at December 31, 2000. Any
     substantial increase in the amount of the above referenced expenditures
     could adversely affect the Company's ability to meet these obligations.

     The Company expects to fund these activities using cash provided from
     operations. Risks that could adversely affect funding of such activities
     include, among others, delays in obtaining any required environmental
     permits, cost overruns, failure to produce the reserves as projected or a
     decline in the sales price of oil. Depending on the results of future
     exploration and development activities, substantial expenditures which have
     not been included in the Company's cash flow projections may be required.
     Failure to fund certain expenditures could result in a decrease in the
     Company's ownership interest in Argosy.

     On August 3, 1998, leftist Colombian guerrillas inflicted significant
     damage on the Company's oil processing and storage facilities at the Mary
     field, and to a lesser extent, at the Linda facilities. Since that time the
     Company has been subject to lesser attacks on its pipelines and equipment
     resulting in only minor interruptions of oil sales. The Colombian army
     guards the Company's operations; however, there can be no assurance that
     the Company's operations will not be the target of additional guerrilla
     attacks in the future. The damages resulting from the above referenced
     attacks were covered by insurance. There can be no assurance that such
     coverage will remain available or affordable.

                                       43
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (Continued)

     Under the terms of the contracts with Ecopetrol, a minimum of 25% of all
     revenues from oil sold to Ecopetrol is paid in Colombian pesos which may
     only be utilized in Colombia. To date, the Company has experienced no
     difficulty in repatriating the remaining 75% of such payments, which are
     payable in U.S. dollars.

     Activities of the Company with respect to the exploration, development and
     production of oil and natural gas are subject to stringent foreign,
     federal, state and local environmental laws and regulations, including but
     not limited to the Oil Pollution Act of 1990, the Outer Continental Shelf
     Lands Act, the Federal Water Pollution Control Act, the Resource
     Conservation and Recovery Act and the Comprehensive Environmental Response,
     Compensation, and Liability Act. Such laws and regulations have increased
     the cost of planning, designing, drilling, operating and abandoning wells.
     In most instances, the statutory and regulatory requirements relate to air
     and water pollution control procedures and the handling and disposal of
     drilling and production wastes. Although the Company believes that
     compliance with environmental laws and regulations will not have a material
     adverse effect on the Company's future operations or earnings, risks of
     substantial costs and liabilities are inherent in oil and gas operations
     and there can be no assurance that significant costs and liabilities,
     including civil or criminal penalties for violations of environmental laws
     and regulations, will not be incurred. Moreover, it is possible that other
     developments, such as stricter environmental laws and regulations or claims
     for damages to property or persons resulting from the Company's operations,
     could result in substantial costs and liabilities. The Company's policy is
     to accrue environmental and restoration related costs once it is probable
     that a liability has been incurred and the amount can be reasonably
     estimated.

     The Company is involved in certain litigation involving its oil and gas
     activities.  Management of the Company believes that these litigation
     matters will not have any material adverse effect on the Company's
     financial condition or results of operations.

     The Company has one lease for office space in Dallas, Texas, which expires
     in January 2002.  Rent expense relating to the lease was $88,000, $94,000
     and $90,000 for 2000, 1999 and 1998, respectively. Future minimum payments
     under the lease are: 2001 - $102,000 and 2002 - $9,000.

(11) Subsidiary's Reorganization under Chapter 11

     On July 21, 2000, AAI, a wholly-owned subsidiary of the Company, filed a
     voluntary petition for reorganization under Chapter 11 of the U.S.
     Bankruptcy code.  AAI is a Delaware corporation which holds the Company's
     interests in oil and gas properties located offshore Louisiana.  The
     filing, in the Northern District of Texas, was initiated in order to
     achieve a comprehensive restructuring of AAI's debts.

     Following approval by the court and creditors, the voluntary petition for
     reorganization became effective on November 17, 2000.  In connection with
     the reorganization, the Company recognized an extraordinary gain of
     $655,000 on the extinguishment of certain AAI debts, net of income taxes of
     $338,000.

                                       44
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (Continued)

(12) Geographic Area Information

     The Company is engaged in the business of exploring for, developing and
     producing oil and gas in the United States and Colombia. Information about
     the Company's operations in different geographic areas as of and for the
     years ended December 31, 2000, 1999 and 1998 follows:

<TABLE>
<CAPTION>
     (Thousands)
                                                    United
                                                    States   Colombia     Total
                                                   -------   --------    -------
     <S>                                           <C>       <C>        <C>
     2000
     ----
     Revenue:
      Oil and gas sales                             $1,528    $ 4,268   $ 5,796
      Service fees                                     387          -       387
                                                   -------    -------   -------
                                                     1,915      4,268     6,183
                                                   -------    -------   -------

     Expense:
      Production                                     1,099      1,308     2,407
      Depreciation, depletion and
       amortization                                    131        384       515
      General and administrative                     1,077         80     1,157
      Recovery of losses on accounts receivable       (256)         -      (256)
                                                   -------    -------   -------
                                                     2,051      1,772     3,823
                                                   -------    -------   -------

     Gain on transfer of partnership
      interests                                          -      3,452     3,452
     Interest and other income
      (expense), net                                    39        168       207
     Interest expense                                 (183)      (622)     (805)
                                                   -------    -------   -------


     Earnings (loss) before income taxes and
      extraordinary item                              (280)     5,494     5,214
     Income taxes                                      (12)      (241)     (253)
                                                   -------    -------   -------

     Earnings (loss) before extraordinary item        (292)     5,253     4,961
     Extraordinary item - debt
      extinguishment                                   655      4,888     5,543
                                                   -------    -------   -------
     Net earnings                                   $  363    $10,141   $10,504
                                                   =======    =======   =======

     Total assets                                   $1,662    $ 1,649   $ 3,311
                                                   =======    =======   =======

     1999
     ----
     Oil and gas sales                              $1,114    $ 5,683   $ 6,797
                                                   -------    -------   -------

     Expense:
      Production                                     1,173      2,402     3,575
      Depreciation, depletion and amortization          59        941     1,000
      General and administrative                     1,148         97     1,245
      Recovery of losses on accounts receivable       (101)         -      (101)
      Severance                                          -         62        62
                                                   -------    -------   -------
                                                     2,279      3,502     5,781
                                                   -------    -------   -------

     Interest and other income (expense), net          154        105       259
     Interest expense                                 (397)      (999)   (1,396)
                                                   -------    -------   -------

     Earnings (loss) before income taxes            (1,408)     1,287      (121)
     Income taxes                                        -       (282)     (282)
                                                   -------    -------   -------

     Net earnings (loss)                           $(1,408)   $ 1,005   $  (403)
                                                   =======    =======   =======

     Total assets                                  $ 1,908    $ 7,078   $ 8,986
                                                   =======    =======   =======


</TABLE>

                                       45
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements (Continued)

<TABLE>
<CAPTION>
                                                               United
     (Thousands)                                               States         Colombia         Total
                                                             ---------        ---------      ---------
<S>                                                          <C>              <C>            <C>
     1998
     ----
     Oil and gas sales                                       $     700        $   2,632      $   3,332
                                                             ---------        ---------      ---------
     Expense:
       Production                                                1,259            2,266          3,525
       Depreciation, depletion and amortization                  1,556            1,596          3,152
       Write-down of oil and gas properties                      1,787           10,556         12,343
       General and administrative                                1,042               32          1,074
       Provision for losses on accounts receivable                 420                -            420
                                                             ---------        ---------      ---------
                                                                 6,064           14,450         20,514
                                                             ---------        ---------      ---------

     Interest and other income (expense), net                      768              277          1,045
     Interest expense                                             (346)            (402)          (748)
                                                             ---------        ---------      ---------

     Loss before income taxes and extraordinary item            (4,942)         (11,943)       (16,885)
     Income tax benefit                                              -                4              4
                                                             ---------        ---------      ---------

     Loss before extraordinary item                             (4,942)         (11,939)       (16,881)
     Extraordinary item - debt extinguishment                        -             (197)          (197)
                                                             ---------        ---------      ---------
     Net loss                                                $  (4,942)       $ (12,136)     $ (17,078)
                                                             =========        =========      =========
     Total assets                                            $   3,002        $   8,420      $  11,422
                                                             =========        =========      =========
</TABLE>

(13) Quarterly Financial Data (Unaudited)

     Quarterly operating results for 2000 and 1999 are summarized as follows (in
     thousands, except per share data):

<TABLE>
<CAPTION>

     Quarter Ended                                      March 31        June 30        September 30     December 31
                                                        --------        --------       ------------     -----------
     <S>                                                <C>             <C>            <C>              <C>
     2000
     ----
     Revenues                                           $  2,541        $  1,827        $    907        $    908
                                                        ========        ========        ========        ========
     Operating earnings                                    1,247             696             208             209
                                                        ========        ========        ========        ========
     Net earnings before extraordinary item                  733           3,887             134             207
                                                        ========        ========        ========        ========
     Extraordinary item - debt extinguishment                  -           3,089              (5)          2,459
                                                        ========        ========        ========        ========
     Net earnings                                            733           6,976             129           2,666
                                                        ========        ========        ========        ========

     Basic and diluted earnings (loss) per
      common share:
        Before extraordinary item                           0.02            0.08            0.00            0.00
                                                        ========        ========        ========        ========
        Extraordinary item                                     -            0.07           (0.00)           0.05
                                                        ========        ========        ========        ========
        Net earnings                                    $   0.02        $   0.15        $   0.00        $   0.05
                                                        ========        ========        ========        ========

     1999
     ----
     Revenues                                           $  1,184        $  1,575        $  1,955        $  2,083
                                                        ========        ========        ========        ========
     Operating earnings (loss)                              (411)             17             561             849
                                                        ========        ========        ========        ========
     Net earnings (loss)                                    (731)            (82)            303             107
                                                        ========        ========        ========        ========
     Basic and diluted earnings (loss) per
      common share                                      $  (0.02)       $  (0.00)       $   0.01        $   0.00
                                                        ========        ========        ========        ========
</TABLE>

     The amounts set forth above for fiscal year 2000 reflect the credit of tax
     benefits aggregating $2.9 million directly to additional paid in capital
     rather than earnings. To that extent, the results for the first three
     quarters of fiscal year 2000 differ from the results previously reported.
     This treatment is required by accounting rules relating to the Company's
     1992 quasi-reorganization.


                                       46
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
     Supplementary Information Related to Oil and Gas Producing Activities
                                  (Unaudited)

The following information relating to the Company's oil and gas activities is
presented in accordance with Statement of Financial Accounting Standards No. 69.
The Financial Accounting Standards Board has determined the information is
necessary to supplement, although not required to be a part of, the basic
financial statements.

Capitalized costs and accumulated depreciation, depletion and amortization
relating to oil and gas producing activities were as follows:

(Thousands)

<TABLE>
<CAPTION>
                                        United
                                        States     Colombia   Total
                                      -----------  --------  -------
<S>                                   <C>          <C>       <C>
December 31, 2000
-----------------

Unevaluated oil and gas properties        $  184    $    88  $   272
Proved oil and gas properties              3,936     12,206   16,142
                                          ------    -------  -------

 Total capitalized costs                   4,120     12,294   16,414

Less accumulated depreciation,
 depletion and amortization                4,177     11,360   15,537
                                          ------    -------  -------

 Capitalized costs, net                   $  (57)   $   934  $   877
                                          ======    =======  =======

December 31, 1999
-----------------

Unevaluated oil and gas properties        $   175   $   379  $   554
Proved oil and gas properties              13,199    54,709   67,908
                                          -------   -------  -------

 Total capitalized costs                   13,374    55,088   68,462

Less accumulated depreciation
 depletion and amortization                13,992    50,600   64,592
                                          -------   -------  -------

 Capitalized costs, net                   $  (618)  $ 4,488  $ 3,870
                                          =======   =======  =======
</TABLE>

                                       47
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
     Supplementary Information Related to Oil and Gas Producing Activities
                            (Unaudited) (Continued)

Costs incurred in oil and gas property acquisition, exploration and development
activities were as follows:

(Thousands)

<TABLE>
<CAPTION>
                                      United
                                      States     Colombia  Total
                                    -----------  --------  ------
<S>                                 <C>          <C>       <C>
2000
----

Exploration                             $   10     $    4  $   14
Development                                238        110     348
                                        ------     ------  ------
  Total costs incurred                  $  248     $  114  $  362
                                        ======     ======  ======


1999
----

Exploration                             $   17     $   41  $   58
Development                                 85         81     166
                                        ------     ------  ------
  Total costs incurred                  $  102     $  122  $  224
                                        ======     ======  ======



1998
----

Exploration                             $   15     $  136  $  151
Development                              1,039        209   1,248
Acquisition of Garnet properties             -      8,250   8,250
                                        ------     ------  ------
  Total costs incurred                  $1,054     $8,595  $9,649
                                        ======     ======  ======
</TABLE>

                                       48
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
     Supplementary Information Related to Oil and Gas Producing Activities
                            (Unaudited) (Continued)

The following schedule presents the Company's estimate of its proved oil and gas
reserves.  The proved oil and gas reserves in Colombia and the United States
were determined by independent petroleum engineers, Huddleston & Co., Inc. and
Netherland, Sewell & Associates, Inc., respectively.  The figures presented are
estimates of reserves which may be expected to be recovered commercially at
current prices and costs.  Estimates of proved developed reserves include only
those reserves which can be expected to be recovered through existing wells with
existing equipment and operating methods.  Estimates of proved undeveloped
reserves include only those reserves which are expected to be recovered on
undrilled acreage from new wells which are reasonably certain of production when
drilled or from presently existing wells which could require relatively major
expenditures to effect recompletion.

<TABLE>
<CAPTION>
                                            Changes in the Estimated Quantities of Reserves
                                            ------------------------------------------------
                                                United
                                                States            Colombia             Total
                                            ------------------------------------------------
<S>                                         <C>                  <C>                 <C>
Year ended December 31, 2000
----------------------------

Oil (Thousands of barrels)
Proved reserves:
 Beginning of period                               144              2,208             2,352
 Revisions of previous estimates                    79                259               338
 Sales of reserves                                   -             (1,614)           (1,614)
 Production                                        (49)              (157)             (206)
                                            ----------           --------            ------

 End of period                                     174                696               870
                                            ==========           ========            ======

Proved developed reserves, end of period           174                696               870
                                            ==========           ========            ======


Gas (Millions of cubic feet)
Proved reserves:
 Beginning of period                               101                  -               101
 Revisions of previous estimates                    38                  -                38
 Production                                        (25)                 -               (25)
                                            ----------           --------            ------

 End of period                                     114                  -               114
                                            ==========           ========            ======

Proved developed reserves, end of period           114                  -               114
                                            ==========           ========            ======
</TABLE>

                                       49
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
     Supplementary Information Related to Oil and Gas Producing Activities
                            (Unaudited) (Continued)

<TABLE>
<CAPTION>
                                             Changes in the Estimated Quantities of Reserves
                                            --------------------------------------------------
                                                United
                                                States           Colombia           Total
                                            ---------------  -----------------  --------------
<S>                                         <C>              <C>                <C>
Year ended December 31, 1999
----------------------------

Oil (Thousands of barrels)
Proved reserves:
 Beginning of period                                     8              2,352           2,360
 Revisions of previous estimates                       193                221             414
 Discoveries and extensions                              -                  -               -
 Sales of reserves                                       -                  -               -
 Production                                            (57)              (365)           (422)
                                               -----------   ----------------     -----------

 End of period                                         144              2,208           2,352
                                               ===========   ================     ===========

Proved developed reserves, end of period               144              2,208           2,352
                                               ===========   ================     ===========



Gas (Millions of cubic feet)
Proved reserves:
 Beginning of period                                     4                  -               4
 Revisions of previous estimates                       150                  -             150
 Discoveries and extensions                              -                  -               -
 Sales of reserves                                       -                  -               -
 Production                                            (53)                 -             (53)
                                               -----------   ----------------     -----------

 End of period                                         101                  -             101
                                               ===========   ================     ===========

Proved developed reserves, end of period               101                  -             101
                                               ===========   ================     ===========
</TABLE>

                                       50
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
     Supplementary Information Related to Oil and Gas Producing Activities
                            (Unaudited) (Continued)

<TABLE>
<CAPTION>
                                             Changes in the Estimated Quantities of Reserves
                                            --------------------------------------------------
                                                United
                                                States           Colombia           Total
                                            ---------------  -----------------  --------------
<S>                                         <C>              <C>                <C>
Year ended December 31, 1998
----------------------------

Oil (Thousands of barrels)
Proved reserves:
 Beginning of period                                   195              1,476           1,671
 Revisions of previous estimates                      (143)              (200)           (343)
 Acquisition of Garnet                                   -              1,331           1,331
 Production                                            (44)              (255)           (299)
                                                    ------              -----          ------

 End of period                                           8              2,352           2,360
                                                    ======              =====          ======

Proved developed reserves, end of period                 8              2,352           2,360
                                                    ======              =====          ======



Gas (Millions of cubic feet)
Proved reserves:
 Beginning of period                                 1,119                  -           1,119
 Revisions of previous estimates                    (1,047)                 -          (1,047)
 Production                                            (68)                 -             (68)
                                                    ------              -----          ------

 End of period                                           4                  -               4
                                                    ======              =====          ======

Proved developed reserves, end of period                 4                  -               4
                                                    ======              =====          ======
</TABLE>

                                       51
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
     Supplementary Information Related to Oil and Gas Producing Activities
                            (Unaudited) (Continued)

The following schedule is a standardized measure of the discounted net future
cash flows applicable to proved oil and gas reserves.  The future cash flows are
based on estimated oil and gas reserves utilizing prices and costs in effect as
of the applicable year end, discounted at ten percent per year and assuming
continuation of existing economic conditions.  The standardized measure of
discounted future net cash flows, in the Company's opinion, should be examined
with caution.  The schedule is based on estimates of the Company's proved oil
and gas reserves prepared by independent petroleum engineers.  Reserve estimates
are, however, inherently imprecise and estimates of new discoveries are more
imprecise than those of producing oil and gas properties.  Accordingly, the
estimates are expected to change as future information becomes available.
Therefore, the standardized measure of discounted future net cash flows does not
necessarily reflect the fair value of the Company's proved oil and gas
properties.

<TABLE>
<CAPTION>
 (Thousands)                                  United
                                              States     Colombia     Total
                                            -----------  ---------  ---------
<S>                                         <C>          <C>        <C>
At December 31, 2000:
---------------------

Future gross revenues                          $ 5,520   $ 12,501   $ 18,021
Future production costs                         (3,887)    (5,994)    (9,881)
Future development costs, including
  abandonment of U.S. offshore platforms          (745)      (390)    (1,135)
                                               -------   --------   --------
Future net cash flows before
  income taxes                                     888      6,117      7,005
Future income taxes                                  -          -          -
                                               -------   --------   --------
Future net cash flows after
  income taxes                                     888      6,117      7,005

Discount at 10% per annum                          120     (1,942)    (1,822)
                                               -------   --------   --------
Standardized measure of discounted
  future net cash flows                        $ 1,008   $  4,175   $  5,183
                                               =======   ========   ========


At December 31, 1999:
---------------------

Future gross revenues                          $ 3,708   $ 53,112   $ 56,820
Future production costs                         (2,792)   (15,195)   (17,987)
Future development costs, including
  abandonment of U.S. offshore platforms          (970)    (1,075)    (2,045)
                                               -------   --------   --------
Future net cash flows before
  income taxes                                     (54)    36,842     36,788
Future income taxes                                  -          -          -
                                               -------   --------   --------
Future net cash flows after
  income taxes                                     (54)    36,842     36,788

Discount at 10% per annum                          171     (8,699)    (8,528)
                                               -------   --------   --------
Standardized measure of discounted
  future net cash flows                        $   117   $ 28,143   $ 28,260
                                               =======   ========   ========
 </TABLE>

                                       52
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
     Supplementary Information Related to Oil and Gas Producing Activities
                            (Unaudited) (Continued)

<TABLE>
<CAPTION>
 (Thousands)                                  United
                                              States     Colombia     Total
                                            -----------  ---------  ---------
<S>                                         <C>          <C>        <C>
At December 31, 1998:
---------------------

Future gross revenues                            $  78   $ 17,645   $ 17,723
Future production costs                            (77)   (10,242)   (10,319)
Future development costs, including
  abandonment of U.S. offshore platforms          (969)      (570)    (1,539)
                                                 -----   --------   --------
Future net cash flows before
  income taxes                                    (968)     6,833      5,865
Future income taxes                                  -          -          -
                                                 -----   --------   --------
Future net cash flows after
  income taxes                                    (968)     6,833      5,865

Discount at 10% per annum                          136     (1,382)    (1,246)
                                                 -----   --------   --------
Standardized measure of discounted
  future net cash flows                          $(832)  $  5,451   $  4,619
                                                 =====   ========   ========
 </TABLE>

                                       53
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
     Supplementary Information Related to Oil and Gas Producing Activities
                            (Unaudited) (Continued)


The following schedule summarizes the changes in the standardized measure of
discounted future net cash flows.

<TABLE>
<CAPTION>
(Thousands)

                                                     2000      1999      1998
                                                 --------   -------   -------
<S>                                              <C>        <C>       <C>
Sales of oil and gas, net of production costs    $ (3,389)  $(3,222)  $   192
Sales of reserves in place                        (20,094)        -         -
Development costs incurred that reduced
 future development costs                              36         -         -
Accretion of discount                               2,826       462     1,142
Discoveries and extensions                              -         -         -
Purchase of reserves in place                           -         -     2,998
Revisions of previous estimates:
 Changes in price                                  (1,921)   24,161    (9,585)
 Changes in quantities                              1,422     4,103      (539)
 Changes in future development costs                 (236)      297      (448)
 Changes in timing and other changes               (1,721)   (2,160)     (561)
 Changes in estimated income taxes                      -         -         -
                                                 --------   -------   -------

 Net increase (decrease)                          (23,077)   23,641    (6,801)

Balances at beginning of year                      28,260     4,619    11,420
                                                 --------   -------   -------

Balances at end of year                          $  5,183   $28,260   $ 4,619
                                                 ========   =======   =======
</TABLE>

The foregoing information on the standardized measure of the discounted net
future cash flows applicable to the Company's Colombian proved oil reserves at
December 31, 2000, utilizes a year end oil price of $17.97 per barrel resulting
in a standardized measure of $4,175,000.  In February 2001 the oil price
received for the Company's Colombian oil production was $21.95 per barrel.  If
the Company had used an oil price of $21.95 per barrel at December 31, 2000, the
standardized measure of the Company's Colombian proved oil reserves would have
been $6,202,000 and the standardized measure of the Company's total proved
reserves would have been $7,210,000.

                                       54
<PAGE>

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                                   Sequentially
                                                                                     Numbered
Number                        Description of Exhibit                                   Page
------                        ----------------------                                -----------
<S>       <C>                                                                      <C>
  *2.1    Agreement and Plan of Merger dated as of June 24, 1998, by and among
          Aviva Petroleum Inc., Aviva Merger Inc. and Garnet Resources
          Corporation (filed as exhibit 2.1 to the Registration Statement on
          Form S-4, File No. 333-58061, and incorporated herein by reference).

  *2.2    Debenture Purchase Agreement dated as of June 24, 1998, between Aviva
          Petroleum Inc. and the Holders of the Debentures named therein (filed
          as exhibit 2.2 to the Registration Statement on Form S-4, file No.
          333-58061, and incorporated herein by reference).

  *2.3    Loan, Settlement and Acquisition Agreement dated effective May 31,
          2000, by and among Crosby Capital, LLC, Aviva Petroleum Inc., Aviva
          America, Inc., Aviva Operating Company, Aviva Overseas, Inc., Neo
          Energy, Inc., Garnet Resources Corporation, Argosy Energy, Inc., and
          Argosy Energy International (filed as exhibit 2.1 to the Company's
          Form 8-K dated June 8, 2000, File No. 0-22258, and incorporated herein
          by reference).

 **2.4    Confirmed Plan of Reorganization of Aviva America, Inc.

  *3.1    Restated Articles of Incorporation of the Company dated July 25, 1995
          (filed as exhibit 3.1 to the Company's annual report on Form 10-K for
          the year ended December 31, 1995, File No. 0-22258, and incorporated
          herein by reference).

  *3.2    Amended and Restated Bylaws of the Company, as amended as of January
          23, 1995 (filed as exhibit 3.2 to the Company's annual report on Form
          10-K for the year ended December 31, 1994, File No. 0-22258, and
          incorporated herein by reference).

 *10.1    Risk Sharing Contract between Empresa Colombiana de Petroleos
          ("Ecopetrol"), Argosy Energy International ("Argosy") and Neo Energy,
          Inc. ("Neo") (filed as exhibit 10.1 to the Company's Registration
          Statement on Form10, File No. 0-22258, and incorporated herein by
          reference).

 *10.2    Contract for Exploration and Exploitation of Sector Number 1 of the
          Aporte Putumayo Area ("Putumayo") between Ecopetrol and Cayman
          Corporation of Colombia dated July 24, 1972 (filed as exhibit 10.2 to
          the Company's Registration Statement on Form10, File No. 0-22258, and
          incorporated herein by reference).

 *10.3    Operating Agreement for Putumayo between Argosy and Neo dated
          September 16, 1987 and amended on January 4, 1989 and February 23,
          1990 (filed as exhibit 10.3 to the Company's Registration Statement on
          Form10, File No. 0-22258, and incorporated herein by reference).

 *10.4    Operating Agreement for the Santana Area ("Santana") between Argosy
          and Neo dated September 16, 1987 and amended on January 4, 1989,
          February 23, 1990 and September 28, 1992 (filed as exhibit 10.4 to the
          Company's Registration Statement on Form10, File No. 0-22258, and
          incorporated herein by reference).

 *10.5    Santana Block A Relinquishment dated March 6, 1990 between Ecopetrol,
          Argosy and Neo (filed as exhibit 10.8 to the Company's Registration
          Statement on Form10, File No. 0-22258, and incorporated herein by
          reference).

 *10.6    Employee Stock Option Plan of the Company (filed as exhibit 10.13 to
          the Company's Registration Statement on Form10, File No. 0-22258, and
          incorporated herein by reference).

 *10.7    Santana Block B 50% relinquishment dated September 13, 1993 between
          Ecopetrol, Argosy and Neo (filed as exhibit 10.26 to the Company's
          annual report on Form 10-K for the year ended December 31, 1993, File
          No. 0-22258, and incorporated herein by reference).

 *10.8    Aviva Petroleum Inc. 401(k) Retirement Plan effective March 1, 1992
          (filed as exhibit 10.29 to the Company's annual report on Form 10-K
          for the year ended December 31, 1993, File No. 0-22258, and
          incorporated herein by reference).

 *10.9    Relinquishment of Putumayo dated December 1, 1993 (filed as exhibit
          10.30 to the Company's annual report on Form 10-K for the year ended
          December 31, 1993, File No. 0-22258, and incorporated herein by
          reference).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                   Sequentially
                                                                                     Numbered
Number                        Description of Exhibit                                   Page
------                        ----------------------                               -----------
<S>       <C>                                                                      <C>
 *10.10   Deposit Agreement dated September 15, 1994 between the Company and
          Chemical Shareholder Services Group, Inc. (filed as exhibit 10.29 to
          the Company's Registration Statement on Form S-1, File No. 33-82072,
          and incorporated herein by reference).

 *10.11   Letter from Ecopetrol dated December 28, 1994, accepting
          relinquishment of Putumayo (filed as exhibit 10.38 to the Company's
          annual report on Form 10-K for the year ended December 31, 1994, File
          No. 0-22258, and incorporated herein by reference).

 *10.12   Amendment to the Incentive and Nonstatutory Stock Option Plan of the
          Company (filed as exhibit 10.4 to the Company's quarterly report on
          Form 10-Q for the quarter ended September 30, 1995, File No. 0-22258,
          and incorporated herein by reference).

 *10.13   Santana Block B 25% relinquishment dated October 2, 1995 (filed as
          exhibit 10.51 to the Company's annual report on Form 10-K for the year
          ended December 31, 1995, File No. 0-22258, and incorporated herein by
          reference).

 *10.14   Aviva Petroleum Inc. 1995 Stock Option Plan, as amended (filed as
          Appendix A to the Company's definitive Proxy Statement for the Annual
          Meeting of Shareholders dated June 10, 1997, and incorporated herein
          by reference).

 *10.15   Restated Credit Agreement dated as of October 28, 1998, between Neo
          Energy, Inc., Aviva Petroleum Inc. and ING (U.S.) Capital Corporation
          (filed as exhibit 99.1 to the Company's Form 8-K dated October 28,
          1998, File No. 0-22258, and incorporated herein by reference).

 *10.16   Joint Finance and Intercreditor Agreement dated as of October 28,
          1998, between Neo Energy, Inc., Aviva Petroleum Inc., ING (U.S.)
          Capital Corporation, Aviva America, Inc., Aviva Operating Company,
          Aviva Delaware Inc., Garnet Resources Corporation, Argosy Energy
          Incorporated, Argosy Energy International, Garnet PNG Corporation, the
          Overseas Private Investment Corporation, Chase Bank of Texas, N.A. and
          ING (U.S.) Capital Corporation as collateral agent for the creditors
          (filed as exhibit 99.2 to the Company's Form 8-K dated October 28,
          1998, File No. 0-22258, and incorporated herein by reference).

 *10.17   Amended and Restated Aviva Petroleum Inc. Severance Benefit Plan dated
          December 31, 1999 (filed as exhibit 10.18 to the Company's annual
          report on Form 10-K for the year ended December 31, 1999, File No. 0-
          22258, and incorporated herein by reference).

 *10.18   Santana Crude Sale and Purchase Agreement dated January 3, 2000 (filed
          as exhibit 10.19 to the Company's annual report on Form 10-K for the
          year ended December 31, 1999, File No. 0-22258, and incorporated
          herein by reference).

 *10.19   Employment Agreement between the Company and Ronald Suttill dated
          February 1, 2000 (filed as exhibit 10.20 to the Company's annual
          report on Form 10-K for the year ended December 31, 1999, File No. 0-
          22258, and incorporated herein by reference).

 *10.20   Employment Agreement between the Company and James L. Busby dated
          February 1, 2000 (filed as exhibit 10.21 to the Company's annual
          report on Form 10-K for the year ended December 31, 1999, File No. 0-
          22258, and incorporated herein by reference).

 *10.21   Service Agreement between Argosy Energy International and Aviva
          Overseas, Inc. dated as of June 1, 2000 (filed as exhibit 10.1 to the
          Company's quarterly report on Form 10-Q for the quarter ended June 30,
          2000, File No. 0-22258, and incorporated herein by reference).

 *10.22   Letter Agreement dated June 8, 2000 between Crosby Capital, LLC and
          Aviva America, Inc. (filed as exhibit 10.2 to the Company's quarterly
          report on Form 10-Q for the quarter ended June 30, 2000, File No. 0-
          22258, and incorporated herein by reference).

 *10.23   Guaranty dated May 31, 2000 made by Aviva Overseas, Inc. in favor of
          Crosby Capital, LLC (filed as exhibit 10.3 to the Company's quarterly
          report on Form 10-Q for the quarter ended June 30, 2000, File No. 0-
          22258, and incorporated herein by reference).

 *10.24   Assignment and Assumption Agreement dated June 1, 2000, between Crosby
          Capital, LLC and Neo Energy, Inc. (filed as exhibit 10.4 to the
          Company's quarterly report on Form 10-Q for the quarter ended June 30,
          2000, File No. 0-22258, and incorporated herein by reference).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                   Sequentially
                                                                                     Numbered
Number                        Description of Exhibit                                   Page
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<S>       <C>                                                                      <C>
 *10.25   Assignment and Assumption Agreement dated June 1, 2000 between Crosby
          Acquisition LLC and Argosy Energy, Inc. (filed as exhibit 10.5 to the
          Company's quarterly report on Form 10-Q for the quarter ended June 30,
          2000, File No. 0-22258, and incorporated herein by reference).

 *10.26   Assignment and Assumption Agreement dated June 1, 2000 between Crosby
          Capital, LLC and Garnet Resources Corp. (filed as exhibit 10.6 to the
          Company's quarterly report on Form 10-Q for the quarter ended June 30,
          2000, File No. 0-22258, and incorporated herein by reference).

 *10.27   Assignment and Assumption Agreement dated June 1, 2000 between Crosby
          Capital, LLC and Aviva Overseas, Inc. (filed as exhibit 10.7 to the
          Company's quarterly report on Form 10-Q for the quarter ended June 30,
          2000, File No. 0-22258, and incorporated herein by reference).

 *10.28   Assignment and Assumption Agreement dated June 1, 2000 between Argosy
          Energy, Incorporated and Crosby Acquisition, LLC (filed as exhibit
          10.8 to the Company's quarterly report on Form 10-Q for the quarter
          ended June 30, 2000, File No. 0-22258, and incorporated herein by
          reference).

 *10.29   Assignment and Assumption Agreement dated June 1, 2000 between Crosby
          Capital, LLC and Aviva Overseas, Inc. (filed as exhibit 10.9 to the
          Company's quarterly report on Form 10-Q for the quarter ended June 30,
          2000, File No. 0-22258, and incorporated herein by reference).

 *10.30   Pledge Agreement dated May 31, 2000 executed by Aviva Overseas, Inc.
          (Debtor) in favor of Crosby Capital, LLC (Secured Party) (filed as
          exhibit 10.10 to the Company's quarterly report on Form 10-Q for the
          quarter ended June 30, 2000, File No. 0-22258, and incorporated herein
          by reference).

 *10.31   Third Amendment to Second Amended and Restated Limited Partnership
          Agreement of Argosy Energy International dated May 31, 2000 (filed as
          exhibit 10.11 to the Company's quarterly report on Form 10-Q for the
          quarter ended June 30, 2000, File No. 0-22258, and incorporated herein
          by reference).

 *10.32   Fourth Amendment to Second Amended and Restated Limited Partnership
          Agreement of Argosy Energy International dated June 1, 2000 (filed as
          exhibit 10.12 to the Company's quarterly report on Form 10-Q for the
          quarter ended June 30, 2000, File No. 0-22258, and incorporated herein
          by reference).

 *10.33   Assignment of Stock Warrant Rights dated May 31, 2000 executed by
          Crosby Capital, LLC in favor of Aviva Petroleum Inc. (filed as exhibit
          10.13 to the Company's quarterly report on Form 10-Q for the quarter
          ended June 30, 2000, File No. 0-22258, and incorporated herein by
          reference).

**10.34   Assignment of Neo Debt and Collateral, dated December 21, 2000 from
          Crosby Capital, LLC to Aviva Operating Company.

**10.35   Conveyance of Net Profits Interest, dated December 21, 2000 from Aviva
          America, Inc. to Crosby Capital, LLC.

 **21.1   List of subsidiaries of Aviva Petroleum Inc.

</TABLE>


____________________________
*Previously Filed
**Filed Herewith