<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                (AMENDMENT NO. 1)

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
                                       OR

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

                   COMMISSION FILE NO. 0-19136 (COMMON STOCK)
                      AND 333-9045 (SERIES B SENIOR NOTES)
                      AND 333-38075 (SERIES D SENIOR NOTES)


                           NATIONAL ENERGY GROUP, INC.
             (Exact Name of Registrant as Specified in Its Charter)



            DELAWARE                                             58-1922764
(State or Other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)

 4925 GREENVILLE AVENUE, SUITE 1400
           DALLAS, TEXAS                                           75206
(Address of Principal Executive Offices)                         (Zip Code)


                                 (214) 692-9211
              (Registrant's telephone number, including area code)


           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                     COMMON STOCK, PAR VALUE $.01 PAR VALUE
                                (Title of Class)

            SECURITIES REGISTERED PURSUANT TO SECURITIES ACT OF 1933:
                     SERIES B SENIOR NOTES, 10 3/4% DUE 2006
                     SERIES D SENIOR NOTES, 10 3/4% DUE 2006


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. Yes [ ] No [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [ ] No [X]

The aggregate market value of the shares of common stock held by non-affiliates
of the Registrant, as of March 31, 2003 (based upon the last sales price of $.30
as reported by the OTC Bulletin Board, was $3,357,195. 11,190,650 shares of the
Registrant's common stock, $0.01 par value, were outstanding on March 31, 2003.

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [X] No [ ]

DOCUMENTS INCORPORATED BY REFERENCE:

     There are no documents incorporated by reference herein.



<PAGE>
                                EXPLANATORY NOTE

National Energy Group, Inc. (the "Company") is filing this Amendment No. 1 to
its Annual Report on Form 10-K filed with the Securities and Exchange Commission
on March 31, 2003 solely for the purpose of providing information required by
Part III of Form 10-K. Unless otherwise expressly stated, this Amendment No. 1
does not reflect events occurring after the filing of the original Form 10-K, or
modify or update in any way disclosures contained in the original Form 10-K.

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






                                TABLE OF CONTENTS


                                    PART III

<TABLE>
<CAPTION>
ITEM                                                                                                      PAGE

<C>     <S>                                                                                                 <C>
10.      Directors and Executive Officers of the Registrant                                                 3
11.      Executive Compensation                                                                             6
12.      Security Ownership of Certain Beneficial Owners and Management                                     10
13.      Certain Relationships and Related Transactions                                                     13

</TABLE>



<PAGE>



ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


     The following table lists the name, age as of April 30, 2003 and present
position for each of our Company's directors and executive officers:

<TABLE>
<CAPTION>
                 NAME                      AGE          PRESENT POSITION WITH THE COMPANY
         -------------------              ----        -----------------------------------
         <S>                              <C>         <C>
         Bob G. Alexander *                69         Chairman of the Board of Directors,
                                                          President and Chief Executive Officer
         Martin L. Hirsch  *               48         Director
         Robert H. Kite *                  49         Director
         Robert J. Mitchell *              56         Director
         Jack G. Wasserman *               66         Director
         F. Wayne Campbell                 51         Vice President, Exploration
         Randall D. Cooley                 49         Vice President and Chief Financial Officer
         Philip D. Devlin..                58         Vice President, General Counsel and Secretary
         Rick L. Kirby                     49         Vice President, Drilling and Production
         R. Kent Lueders...                46         Vice President, Corporate Development
         Lori K. Mauk                      42         Vice President, Product Marketing
         David V. Rigsby                   51         Vice President, Land
</TABLE>

*    Current Director.

     Bob G. Alexander. Mr. Alexander, a founder of Alexander Energy Corporation,
was appointed to the Board of Directors of the Company when Alexander Energy
Corporation merged into National Energy Group on August 29, 1996. He was
appointed President and Chief Executive Officer of the Company on November 23,
1998. From 1980 until the merger, he served as Chairman of the Board, President
and Chief Executive Officer of Alexander Energy Corporation. From 1976 to 1980,
he served as Vice President and General Manager of the Northern Division of
Reserve Oil, Inc. and President of Basin Drilling Corp., subsidiaries of Reserve
Oil and Gas Company. Mr. Alexander attended the University of Oklahoma and
graduated with a Bachelor of Science degree in Geological Engineering.

     Martin L. Hirsch. Mr. Hirsch was appointed to the Board of Directors of the
Company on December 1, 1998 and served until the Corporation's Annual Meeting on
October 5, 2001, at which time he did not stand for re-election. Mr. Hirsch is
currently Executive Vice President of American Property Investors, Inc., which
is owned by Carl C. Icahn, and has been employed there since March 18, 1991
where he is involved in investing, managing and disposing of real estate
properties and securities. From January 1986 to January 1991, he was at
Integrated Resources, Inc. as a Vice President and where he was involved in the
acquisition of commercial real estate properties and asset management. From 1985
to 1986, he was a Vice President of Hall Financial Group where he was involved
in acquiring and financing commercial and residential properties. Mr. Hirsch
received his Master of Business Administration from The Emory University
Graduate School of Business.

     Robert H. Kite. Mr. Kite was appointed to the Board of Directors of the
Company on December 17, 1991. Previously, he served on the Board of Directors of
VP Oil, Inc. from November 1987 until June 1991, at which time it was merged
with Big Piney Oil and Gas Company to form National Energy Group, Inc. Since
1980, he has served as President and Chief Operating Officer of KFC, Inc.,
managing general partner KFT LLP, a family-owned company with operations that
include real estate development, investments and medical MRI clinics. Since
1982, he has also served as Chief Executive Officer of Roamin' Korp, Inc., a
company engaged in construction, recording, mining and equity investments. Mr.
Kite graduated from Southern Methodist University with a Bachelor of Science
degree in Psychology and Political Science.




                                       3
<PAGE>





     Robert J. Mitchell. Mr. Mitchell was appointed to the Board of Directors of
the Company on August 29, 1996. He has been the Senior Vice President - Finance
of ACF Industries, Incorporated, a privately-held railcar leasing and
manufacturing company, since March 1995, and was Treasurer of ACF from December
1984 to March 1995. He has also served as President and Treasurer of ACF
Industries Holding Corp., a privately-held holding company for ACF, since August
1993. Mr. Mitchell also served as Treasurer of Trans World Airlines, Inc. from
1989 to 1992. Mr. Mitchell also serves as a Director of Stratosphere
Corporation, which operates the Stratosphere Hotel and Casino, since October 14,
1998, and Philip Services Corp. since 2001. Prior to joining Icahn Associates
Corp. in 1984, Mr. Mitchell served for 10 years as Regional Vice President of
Nat West USA. Mr. Mitchell received his Bachelor of Science Degree in Business
Administration from St. Francis College.

     Jack G. Wasserman. Mr. Wasserman was appointed to the Board of Directors of
the Company on December 1, 1998. He is an attorney, and from 1966 to September
2001 was a senior partner of Wasserman, Schneider, Babb and Reed, a New
York-based law firm and its predecessors. Since September 2001 he has been a
sole practitioner. Mr. Wasserman is admitted to practice before the Supreme
Court of the United States and in the states of New York, Florida and in the
District of Columbia. He serves as a Director of American Property Investors,
Inc., the general partner of American Real Estate Partners, L.P. which is an
affiliate of Carl C. Icahn and whose units are traded on the New York Stock
Exchange, and Cadus Pharmaceutical Corporation of which Carl C. Icahn is the
largest single shareholder and whose shares are traded on the NASDAQ National
Market. Mr. Wasserman earned a Bachelor of Arts degree from Adelphi University,
a Juris Doctorate degree from Georgetown University, and a Graduate Diploma from
the Johns Hopkins University School of Advanced International Studies in
Bologna, Italy.

     F. Wayne Campbell. Mr. Campbell was appointed Vice President, Exploration
for the Company in October 2001. Effective with the August 1996 merger with
Alexander Energy Corporation, he was Chief Geologist. Previously, from 1980
until the merger he was Chief Geologist for Alexander Energy Corporation. From
1976 until 1980 he served as Senior Geologist for the Northern Division of
Reserve Oil, Inc. Mr. Campbell received his Bachelor of Science degree in
Geology from Oklahoma State University. He is certified by both the American
Association of Petroleum Geologists and the State of Arkansas.

     Randall D. Cooley. Mr. Cooley joined the Company in April 2001 as Vice
President and Chief Accounting Officer. In March 2003, he was appointed Vice
President and Chief Financial Officer of the Company. From 1989 until 2001, Mr.
Cooley was Vice President, Controller and Chief Financial Officer for Shana
Petroleum Company. He began his career in 1978 with Pennzoil Oil Company in
Houston. From 1980 until 1984 he worked in public accounting and from 1984 until
1989 he was controller for Rebel Drilling Company and Wildcat Well Service. Mr.
Cooley earned a Bachelor of Science in Business Administration, with a Major in
Accounting from the University of Southern Mississippi and is a licensed
Certified Public Accountant in the State of Mississippi.

     Philip D. Devlin. Mr. Devlin has served as Vice President, General Counsel
and Secretary of the Company since March 1997. From October 1994 through
February 1997, he served as President and Chief Executive Officer of Sunrise
Energy Services, Inc., a publicly-held natural gas marketing company. From
September 1984 through October 1994, he served as Executive Vice President,
General Counsel and Secretary of Sunrise Energy Services, Inc. In July 1995,
Sunrise Energy Services, Inc. filed to reorganize under Chapter 11 of the United
States Bankruptcy Code, and in February 1997 a Plan of Reorganization was
confirmed by the Bankruptcy Court. He is licensed by the State Bar of Texas,
admitted to practice before the Supreme Court of the United States and is a past
President and Director of the Natural Gas and Electric Power Association of
North Texas. Mr. Devlin earned a Bachelors of Arts




                                       4
<PAGE>

degree and a Master of Arts degree from the University of California, and a
Juris Doctor degree with honors from California Western School of Law, San
Diego, California.

     Rick L. Kirby. Mr. Kirby was appointed Vice President, Drilling and
Production in September 2000. Previously, since May 1998, he served as Director
of Operations for the Company. He joined the Company in November 1996 as Group
Manager of Offshore Operations. From 1991 to 1996, he served as a Senior
Offshore Engineer for Enserch Exploration, Inc. and PG&E Resources. From 1977 to
1991, he held various engineering and management positions with Louisiana Land
and Exploration, C&K Petroleum and Amoco Production Company. Mr. Kirby earned a
Bachelor of Science degree in Petroleum Engineering from the University of
Oklahoma in 1977.

     R. Kent Lueders. Mr. Lueders joined the Company as Director of Corporate
Development in April 1998 and was appointed to Vice President of the Company in
September 1998. Previously, he was Manager of Acquisitions for Merit Energy from
1996 until he joined the Company in April 1998. He also worked as a consulting
evaluation engineer for RK Engineering from 1994 through 1996. Prior to this he
was the Product Line Manager with Munro Garrett International from 1993 to 1994.
From 1982 to 1993, he was Manager of Engineering Services for Pacific
Enterprises Oil Company (USA) where he managed the reserves, budget and
engineering systems. He began his career with Amoco Production Company in 1979
as an engineer working East and West Texas. Mr. Lueders earned a Bachelor of
Science degree in Petroleum Engineering from the University of Missouri at Rolla
in 1979.

     Lori K. Mauk. Ms. Mauk was appointed Vice President, Marketing for the
Company in September 2000. From 1997 until her appointment to Vice President,
she served as Marketing Manager for the Company. Effective with the August 1996
merger of Alexander Energy Corporation into the Company, she became Coordinator
of Marketing. From 1992 to August 1996, she was Marketing Manager for Alexander
Energy Corporation. From 1980 to 1996, she served as Marketing Manager and
Assistant Supervisor of Revenue for Petroleum Investments, Ltd. and the parent
company Bradmar Petroleum Corporation. Ms. Mauk studied Mathematics and
Engineering at Rose State College.

     David V. Rigsby. Mr. Rigsby joined the Company in June 1998 as District
Landman and in September 2000 was appointed Vice President, Land. Mr. Rigsby has
26 years of experience working in the energy industry including the areas of
exploration, production, acquisitions and divestitures. From 1996 until he
joined the Company in 1998, he served as Senior Staff Landman for Lyco Energy
Corporation. Previously, he worked as an independent land consultant for Hunt
Oil Corporation from 1993 to 1996. He also held various landman and land manager
positions for Pacific Enterprises Oil Company (USA) from 1977 through 1993. He
began his career with Texaco, Inc. in 1974 as an associate landman. He earned a
Bachelor of Science degree in Business Administration from the University of
Tulsa in 1974.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     To the Company's knowledge, based solely on a review of the copies of such
reports furnished to us and written representations that no other reports were
required, during the year ended December 31, 2002, the Company's directors,
executive officers and beneficial owners of more than 10% of the Company's
common stock complied with all applicable Section 16(a) filing requirements. No
former executive officers who resigned during the year ended December 31, 2002
were required to file a Form 5 for that period.




                                       5
<PAGE>




ITEM 11.  EXECUTIVE COMPENSATION

     The following table sets forth the cash compensation received by the
Company's Chief Executive Officer and each of the next five most highly
compensated executive officers of the Company whose cash compensation exceeded
$100,000 for the fiscal year ended December 31, 2002, and whose base salary plus
bonus equaled or exceeded $100,000. Pursuant to the Joint Plan of Reorganization
effective August 2000, all stock options and warrants of the Company were
cancelled, and no new such options or warrants have been authorized or issued.
No SAR's have ever been authorized or issued by the Company.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                     LONG TERM
                                                                                COMPENSATION AWARDS
                                                        ANNUAL              RESTRICTED
                                                    COMPENSATION(1)            STOCK      SECURITIES          ALL
                                              -------------------------
                                                                              AWARDS      UNDERLYING         OTHER
 NAME AND PRINCIPAL POSITION           YEAR     SALARY($)  BONUS($)(2)          ($)       OPTIONS(#)    COMPENSATION($)
----------------------------          -----   ------------ -----------    ------------- -------------  ----------------
<S>                                   <C>     <C>          <C>            <C>
Bob G. Alexander...............       2002    $  300,000         $--            --              --         $  6,000(3)
  President and Chief                 2001       262,500     150,000            --              --            3,646(3)
  Executive Officer                   2000       250,000          --            --              --          128,125(4)
Randall D. Cooley(5)                  2002       120,000      10,000            --              --            5,500(6)
  Vice President, Chief               2001        85,657          --            --              --            3,896(6)
   Financial Officer                  2000            --          --            --              --               --
Philip D. Devlin...............       2002       184,000      15,000            --              --            6,000(7)
  Vice President, General             2001       181,000     100,000            --              --            5,250(7)
  Counsel and Secretary               2000       180,000          --                            --           90,000(8)
Rick L. Kirby..................       2002       123,000       8,000            --              --            5,500(9)
  Vice President, Drilling            2001       117,000          --            --              --            5,250(9)
  and Production                      2000       105,133          --            --              --          51,537(10)
R. Kent Lueders................       2002       134,000       8,000            --              --           5,500(11)
  Vice President, Corporate           2001       128,000          --            --              --           5,120(12)
  Development                         2000       122,000          --            --              --          60,000(13)
David V. Rigsby ...............       2002       110,500      10,000            --              --           5,500(13)
  Vice President, Corporate           2001       107,500          --            --              --           5,250(13)
  Development                         2000        93,167          --            --              --          44,581(14)

</TABLE>

----------

(1)  Excludes the aggregate, incremental cost to the Company of perquisites and
     other personal benefits, securities or property, the aggregate amount of
     which, with respect to the named individual, does not equal or exceed the
     lesser of $50,000 or 10% of reported annual salary and bonus for such
     person.

(2)  Authorized by the Company's Board of Directors.

(3)  Mr. Alexander received $3,646 and $6,000 in matching funds contributed by
     the Company to the 401(k) plan during 2001 and 2002, respectively.

(4)  Mr. Alexander received $125,000 pursuant to the Bankruptcy Court ordered
     Severance Program which provided certain benefits to all employees who
     remained with the Company during the course of the bankruptcy proceeding.
     In addition, Mr. Alexander received $3,125 in matching funds contributed by
     the Company to the 401(k) Plan during 2000.

(5)  Mr. Cooley joined the Company in April 2001.

(6)  Mr. Cooley received $3,896 and $5,500 in matching funds contributed by the
     Company to the 401(k) Plan during 2001 and 20092, respectively.



                                       6
<PAGE>




(7)  Mr. Devlin received $5,250 and $6,000 in matching funds contributed by the
     Company to the 401(k) Plan during 2001 and 2002, respectively.

(8)  Mr. Devlin received $90,000 pursuant to the Bankruptcy Court ordered
     Severance Program which provided certain benefits to all employees who
     remained with the Company during the course of the bankruptcy proceeding.

(9)  Mr. Kirby received $5,250 and $5,500 in matching funds contributed by the
     Company to the 401(k) Plan during 2001 and 2002, respectively.

(10) Mr. Kirby received $50,100 pursuant to the Bankruptcy Court ordered
     Severance Program which provided certain benefits to all employees who
     remained with the Company during the course of the bankruptcy proceeding.
     In addition, Mr. Kirby received $1,437 in matching funds contributed by the
     Company to the 401(k) Plan.

(11) Mr. Lueders received $5,120 and $5,500 in matching funds contributed by the
     Company to the 401(k) Plan during 2001 and 2002, respectively.

(12) Mr. Lueders received $60,000 pursuant to the Bankruptcy Court ordered
     Severance Program which provided certain benefits to all employees who
     remained with the Company during the course of the bankruptcy proceeding.

(13) Mr. Rigsby received $5,250 and $5,500 in matching funds contributed by the
     Company to the 401(k) Plan during 200l and 2002, respectively.

(14) Mr. Rigsby received $43,250 pursuant to the Bankruptcy Court ordered
     Severance Program which provided certain benefits to all employees who
     remained with the Company during the course of the bankruptcy proceeding.
     In addition, Mr. Rigsby received $1,331 in matching funds contributed by
     the Company to the 401(k) Plan.

REPORT OF THE COMPENSATION COMMITTEE

     The Compensation Committee advises the Board of Directors and management
concerning compensation for its executive officers. The Compensation Committee
assumes responsibility for all matters relating to compensation of the Company's
executive officers; provided that directors who are executive officers or
employees of the Company are required to abstain from all matters in which they
have a vested interest. Compensation for executive officers is based on the
principle that compensation must be competitive to enable our Company to
motivate, attract and retain highly qualified and talented employees to lead and
grow our business and, at the same time, provide rewards which are closely
linked to our Company's and the individual's performance.

     The Compensation Committee considers management skills, long-term
performance, operating results, unusual accomplishments as well as economic
conditions and other external events that affect our Company's operations.

     Salaries, bonuses, stock options or other incentives are considered
annually based on performance, length of service or other noted contribution in
increasing the value, reserves and/or cash flows of our Company. Options were
previously granted under the National Energy Group, Inc. 1996 Incentive
Compensation Plan, which has been terminated as a result of the Plan of
Reorganization. Presently, there are no stock options authorized or issued, nor
any stock option plan in effect.

     With respect to Mr. Alexander's base compensation, the Board of Directors
recognized that the growth and performance of our Company is dependent on the
efforts and results of its executive officers and in particular its Chief
Executive Officer. Mr. Alexander's current base salary of $300,000 per year was
determined to reflect his increased responsibilities to the Company during both
the period of financial



                                       7
<PAGE>

instability which eventually culminated in the bankruptcy proceeding and the
successful reorganization of our Company once it emerged from the bankruptcy
proceeding.

     Base Salary. The base salary for each executive officer is determined in
consideration of the following factors: experience, personal performance, the
median salary levels in effect for comparable positions within and outside the
industry, geographical location and internal comparability considerations. The
weight given to each of these factors may differ from individual to individual
as the Compensation Committee deems appropriate. In selecting comparable
companies for the purposes of maintaining competitive compensation, the
Compensation Committee considers many factors, including geographic location,
growth rate, annual revenue, profitability and market capitalization. The
Compensation Committee also considers companies outside the industry which may
compete with us in recruiting executive talent.

     Employee Stock Purchase Plan. Contributions to our Employee Stock Purchase
Plan implemented pursuant to Section 423(b) of the United States Internal
Revenue Code of 1986, as amended, were suspended during the pendancy of the
Company's bankruptcy proceeding. Additionally, there was no employee
participation through April 2001 when the plan was dissolved and distributions
made to the employees in accordance with the plan's provisions.

     Compensation of Directors. Non-employee Board of Directors members are
compensated in the amount of $1,000 for each official Board of Directors'
meeting and $500 for each Board of Directors' committee meeting, unless such
committee meeting is held at the time of, or in conjunction with, an official
Board of Directors' meeting. Members of the Audit Committee also receive $15,000
annually for serving on this committee. In addition, members of the Board of
Directors have been granted stock options in past years. As a result of the
confirmation of the Plan of Reorganization in August 2000, all stock options,
warrants and other equity interests were cancelled, and no new such options or
warrants have been authorized or issued since that date.

     In addition, other incidental compensation is paid to directors from time
to time, consisting primarily of reimbursement for travel and necessary
entertainment expenses incurred on behalf of our Company.

     Employment Agreements. All employment and/or change of control agreements
were cancelled pursuant to confirmation of the Plan of Reorganization in August
2000. Currently, no employees have employment or change of control agreements.

     Severance Program. Pursuant to an order of the Bankruptcy Court dated
September 7, 1999, a Severance Program was put into effect for all employees of
our Company. The Severance Program provided for contingent payments as follows:
(a) a "stay-pay" component payable on the earlier of an employee's termination
without cause, the closing of a sale of substantially all our Company's assets,
or the confirmation of a plan of reorganization; and (b) a "severance"
component, whereby upon termination of any employee who did not obtain new
employment, or was not offered a permanent job in Dallas, Texas for a period of
at least one year at the same pay and benefits, such employee would be entitled
to certain severance benefits. No severance payments were made or were required
to be made under the Severance Program pursuant to confirmation of the Plan of
Reorganization. The order also provided that any employee who participated in
the Severance Program waived and released any and all claims arising from any
pre-bankruptcy employment agreement with the Company. There are no remaining
obligations under the pre-bankruptcy employment agreements or Severance Program,
and no new employment agreements have been authorized or are in effect.



                                       8
<PAGE>



     Compensation Committee Interlocks and Insider Participation. The
Compensation Committee consists of Mr. Alexander and Mr. Mitchell. Mr. Alexander
is the Company's current Chief Executive Officer and President and has no
interlocking relationship with any other director of the Company. Mr. Mitchell
is neither an officer nor former officer of the Company, nor does he receive any
compensation from the Company for his services other than the fees and expenses
paid to him in conjunction with his services on behalf of the Company as a
director. Mr. Mitchell is employed by an affiliate of Arnos Corp and High River
Limited Partnership (which owns or controls 49.9% of the Company's common stock)
and disclaims beneficial ownership of any shares attributable to such affiliated
entities.

     Long-Term Incentive Plan Awards Table. The Company does not have any
long-term incentive plans or defined benefit or actuarial plans, nor has the
Company authorized or issued any SAR's. Therefore, the table on long-term
incentive plans awards and pension plans is omitted. Similarly, the Equity
Compensation Plan Information Table has been omitted.

     401(k) Savings Plan. We have an employee savings plan qualified under
Section 401 of the United States Internal Revenue Code of 1986, as amended (the
"401(k) Plan"). In October 2000, our 401(k) Plan was amended to provide for our
Company to make annual matching contributions equal to a maximum of 50% of the
first 10% of each eligible employee's contribution, not to exceed the legal
maximum permitted under the rules and regulations promulgated by the Internal
Revenue Service of the United States.

                                      Submitted by the Compensation Committee of
                                      the Board of Directors
                                        Robert J. Mitchell, Chairman
                                        Bob G. Alexander

CORPORATE PERFORMANCE

     Although the Company no longer directly owns any oil and gas properties,
its major asset is a 50% membership interest in NEG Holding LLC. NEG Holding
LLC's primary business is the ownership, development and production of oil and
gas properties which are operated and managed by the Company. Accordingly, the
following graph shows a five year comparison of cumulative total shareholder
returns for our Company, the NASDAQ Market Index (the "Broad Market") and an
index of peer companies in the oil and gas industry selected by us (the "Peer
Group").



                                       9
<PAGE>




              [Comparison of 5 Year Cumulative Total Return Chart]

<TABLE>
<CAPTION>
                                1997           1998            1999           2000            2001           2002
                                ----           ----            ----           ----            ----           ----
<S>                            <C>            <C>            <C>            <C>              <C>            <C>
National Energy Group, Inc.    $100.00         $5.66          $0.86          $5.71            $0.81         $ 1.13
         S & P 500             $100.00        $128.58        $155.64        $141.47          $124.66        $97.11
         NASDAQ US             $100.00        $140.99        $262.00        $157.59          $125.05        $85.83
        Peer Group             $100.00        $40.54          $37.42        $120.03          $60.67         $64.73
</TABLE>


                    Assumes $100 Invested On January 1, 1997
                           Assumes Dividend Reinvested
                      Fiscal Year Ending December 31, 2002

     The total cumulative return in investment (change in the year end stock
price plus reinvested dividends) for each of the years for our Company, the
NASDAQ Market Index and the Peer Group is based on the stock price or composite
index beginning at the end of the calendar year 1997. Our Company has never paid
dividends on its common stock.

     The Peer Group Index is a diversified group of independent oil and gas
companies comprised of the following companies: Abraxas Petroleum Corporation
(ABP); Clayton Williams Energy Inc (CWEI); Comstock Resources Inc. (CRK); Edge
Petroleum Corporation (EPEX); and Petrocorp Inc. (PEX).

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Security Ownership of Certain Beneficial Owners. The following tables set
forth, to the best of our knowledge, information as to the ownership of the
Company's common stock held by (i) each person or entity who owns of record as
of April 7, 2003 or who is known by us to own beneficially 5% or more of the
outstanding shares of the Company's common stock; (ii) directors; and (iii) all
directors and executive officers as a group, as of April 7, 2003. Except as
otherwise indicated, ownership of shares by the persons named below includes
sole voting and investment power held by such persons.



                                       10
<PAGE>





<TABLE>
<CAPTION>
         NAME AND ADDRESS                                           NUMBER               PERCENT
        OF BENEFICIAL OWNER                TITLE OF CLASS          OF SHARES            OF CLASS1
      ---------------------                --------------        -----------           ----------
      <S>                                  <C>                   <C>                      <C>
      Carl C. Icahn.........               common stock          5,584,0442               49.9%
        767 Fifth Avenue
        47th Floor
        New York, NY 10153
</TABLE>
-------------------------

1    Based upon the 11,190,650 shares of common stock that were outstanding on
     April 7, 2003.

2    Arnos Corp. is the record and beneficial owner of 4,656,889 of these
     shares; Icahn & Co., Inc. is the record owner of 509,900 of these shares,
     which are beneficially owned by High River Limited Partnership; and High
     River Limited Partnership is the record and beneficial owner of 417,255 of
     these shares. Mr. Icahn, by virtue of his relationships to Arnos Corp. and
     High River Limited Partnership, may be deemed to beneficially own (as that
     term is defined in Rule 13d-3 under the Exchange Act) these shares. Mr.
     Icahn disclaims beneficial ownership of such shares for all other purposes.
     Mr. Robert J. Mitchell and Mr. Martin L. Hirsch, present directors of our
     Company and employees of affiliates of Arnos Corp. and High River Limited
     Partnership, disclaim any beneficial ownership of these shares.

     Security Ownership of Directors and Management. The following table sets
forth information concerning the beneficial ownership of the Company's capital
stock as of April 7, 2003, by each of the Company's directors and executive
officers, and our directors and executive officers as a group.

<TABLE>
<CAPTION>
         NAME AND ADDRESS OF                                                            NUMBER             % OF
          BENEFICIAL OWNER                               TITLE OF CLASS                OF SHARES          CLASS(1)
-----------------------------------                      --------------               ----------         ---------
<S>                                                      <C>                            <C>               <C>
Bob G. Alexander.........................................common stock                   57,000(2)         (14)
  4925 Greenville Avenue
  Suite 1400
  Dallas, TX 75206
Robert H. Kite ..........................................common stock                   84,262(3)         (14)
  6910 East Fifth Street
  Scottsdale, AZ 85251
R. Kent Lueders..........................................common stock                   43,572(4)         (14)
  4925 Greenville Avenue
  Suite 1400
  Dallas, Texas 75206
Philip D. Devlin.........................................common stock                   15,209(5)         (14)
  4925 Greenville Avenue
  Suite 1400
  Dallas, TX 75206
Rick L. Kirby............................................common stock                   14,864(6)         (14)
  4925 Greenville Avenue
  Suite 1400
  Dallas, TX 75206
F. Wayne Campbell........................................common stock                      496(7)         (14)
  4925 Greenville Avenue
  Suite 1400
  Dallas, TX 75206
Lori K. Mauk.............................................common stock                      276(8)         (14)
  4925 Greenville Avenue
  Suite 1400
  Dallas, TX 75206
Robert J. Mitchell.......................................common stock                      -- (9)         (14)
  767 Fifth Avenue
  New York, NY 10153

</TABLE>



                                       11
<PAGE>




<TABLE>
<CAPTION>
<S>                                                      <C>                              <C>              <C>

Jack G. Wasserman                                        common stock                     -- (10)          (14)
  111 Broadway
  New York, NY 10006
Martin L. Hirsch.........................................common stock                     -- (11)
  767 Fifth Avenue                                                                                         (14)
  New York, NY 10153
David V. Rigsby..........................................common stock                     -- (12)          (14)
  4925 Greenville Avenue
  Suite 1400
  Dallas, TX 75206
Randall D. Cooley........................................common stock                     -- (13)          (14)
  4925 Greenville Avenue
  Suite 1400
  Dallas, TX 75206
All officers and directors as a group (12 people)........common stock                     215,679         1.92%

</TABLE>

----------

(1)  As of April 7, 2003 there were 11,190,650 shares of the Company's common
     stock outstanding. All stock options and warrants were cancelled pursuant
     to the Plan of Reorganization, and no new options or warrants have been
     authorized or issued.

(2)  Shares held directly by Mr. Alexander.

(3)  Robert H. Kite is Chief Operating Officer and a 33.0% beneficial owner of
     KFT, Ltd. and may be deemed to be the beneficial owner of shares held by
     KFT, Ltd. KFT, Ltd. holds 59,285 shares and Mr. Kite holds 24,977 shares
     directly.

(4)  Shares held directly by Mr. Lueders.

(5)  Shares held directly by Mr. Devlin.

(6)  Shares held directly by Mr. Kirby.

(7)  Shares held directly by Mr. Campbell.

(8)  Shares held directly by Ms. Mauk.

(9)  Mr. Mitchell holds no shares of common stock of the Company and disclaims
     beneficial ownership of any shares attributable to Arnos Corp. or High
     River Limited Partnership.

(10) Mr. Wasserman holds no shares of common stock of the Company.

(11) Mr. Hirsch holds no shares of common stock of the Company and disclaims
     beneficial ownership of any shares attributable to Arnos Corp. or High
     River Limited Partnership.

(12) Mr. Rigsby holds no shares of common stock of the Company.

(13) Mr. Cooley holds no shares of common stock of the Company.

(14) Less than one percent.




                                       12
<PAGE>




ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Effective December 22, 1998, our Company's credit facility and related $25
million outstanding balance was assigned jointly by Bank One Texas, N.A. and
Credit Lyonnais New York Branch Bank to Arnos Corp. In January 2001, we paid the
$25 million outstanding balance owing under the credit facility, but in August
2001 borrowed $10.9 million which was used to redeem certain of the Company's
10-3/4% Senior Notes and related interest in the amount of $21.2 million. On
March 26, 2003, NEG Holding LLC distributed the $10.9 million note outstanding
under the existing credit facility to the Company as a priority distribution.
Also, on March 26, 2003 the Company, Arnos Corp. and NEG Operating LLC (whose
membership interest is wholly owned by NEG Holding LLC) entered into an
agreement to assign the existing credit facility to NEG Operating LLC, thereby
canceling all outstanding balances due under the credit facility. Effective with
this assignment, Arnos Corp. amended the credit facility to increase the
revolving commitment to $150 million, increase the borrowing base to $75 million
and extend the revolving due date until June 30, 2004. Concurrently, Arnos Corp.
extended a $40.5 million loan to NEG Operating LLC under the amended credit
facility; NEG Operating LLC then distributed $40.5 million to NEG Holding LLC
which, thereafter, made a $51.4 million priority distribution to the Company
(inclusive of the $10.9 million note). The Company utilized these funds to pay
the entire amount of the interest on the 10-3/4% Senior Notes reinstated
pursuant to the Plan of Reorganization and interest accrued thereon outstanding
on March 27, 2003.

     The management and operation of NEG Operating LLC's oil and gas assets is
being undertaken by the Company pursuant to a management agreement between the
Company and NEG Operating LLC. During the year ended December 31, 2002, the
Company received $7.6 million in management fees attributable to the management
agreement.

     Pursuant to the Plan of Reorganization, Arnos Corp. and its affiliates are
presently the only holders of our Company's 10-3/4% Senior Notes. The 10-3/4%
Senior Notes shall remain outstanding and be paid either under the existing
terms or under terms agreed upon between the Company and Arnos Corp. and its
affiliates.

     By virtue of Gascon Partners' interest in NEG Holding LLC, NEG Operating
LLC and the entities controlled by such LLC's, Gascon Partners and its
affiliates, including Astral Gas Corp., Shana Petroleum Company and Mr. Carl C.
Icahn, may be deemed affiliates of such LLC's and its controlled entities.

                                   SIGNATURES

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


                                                     NATIONAL ENERGY GROUP, INC.

                                         By: /s/  Bob G. Alexander
                                             -----------------------------------
                                                      Bob G. Alexander
April 30, 2003                             President and Chief Executive Officer


                                        By: /s/  Randall D. Cooley
                                            ------------------------------------
                                                     Randall D. Cooley
April 30, 2003                        Vice President and Chief Financial Officer



                                       13
<PAGE>



                                  CERTIFICATION

                     PURSUANT TO AND IN CONNECTION WITH THE
                          ANNUAL REPORTS ON FORM 10-K
                 TO BE FILED UNDER SECTIONS 13 AND 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Bob G. Alexander, certify that:

1. I have reviewed this annual report on Form 10-K/A of National Energy Group,
Inc.

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

          (a) designed such disclosure controls and procedures to ensure that
          material information relating to the Registrant, is made known to us
          by others within those entities, particularly during the period in
          which this annual report is being prepared;

          (b) evaluating the effectiveness of the Registrant's disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this annual report (the "Evaluation Date") and

          (c) presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5. The Registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent function):

          (a) all significant deficiencies in the design or operation of
          internal controls which could adversely affect the Registrant's
          ability to record, process, summarize and report financial data and
          have identified for the Registrant's auditors any material weaknesses
          in internal controls; and

          (b) any fraud, whether or not material, that involves management or
          other employees who have a significant role in the Registrant's
          internal controls; and

6. The Registrant's other certifying officer and I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.



                                       By: /s/ BOB G. ALEXANDER
                                           -------------------------------------
                                           Bob G. Alexander
                                           President and Chief Executive Officer


April 30, 2003



                                       14
<PAGE>



                                  CERTIFICATION

                     PURSUANT TO AND IN CONNECTION WITH THE
                          ANNUAL REPORTS ON FORM 10-K
                 TO BE FILED UNDER SECTIONS 13 AND 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Randall D. Cooley, certify that:

1. I have reviewed this annual report on Form 10-K/A of National Energy Group,
Inc.

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

          (a) designed such disclosure controls and procedures to ensure that
          material information relating to the Registrant, is made known to us
          by others within those entities, particularly during the period in
          which this annual report is being prepared;

          (b) evaluating the effectiveness of the Registrant's disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this annual report (the "Evaluation Date") and

          (c) presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5. The Registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

          (a) all significant deficiencies in the design or operation of
          internal controls which could adversely affect the Registrant's
          ability to record, process, summarize and report financial data and
          have identified for the Registrant's auditors any material weaknesses
          in internal controls; and

          (b) any fraud, whether or not material, that involves management or
          other employees who have a significant role in the Registrant's
          internal controls; and

6. The registrant's other certifying officer and I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


                                   By: /s/ RANDALL D. COOLEY
                                      ------------------------------------------
                                      Randall D. Cooley
                                      Vice President and Chief Financial Officer
April 30, 2003



                                       15
<PAGE>


                                 Exhibit Index
<TABLE>

<C>     <S>
99.1    Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350(18).
        Pursuant to SEC Release 34-47551 this Exhibit is furnished to the Securities and Exchange Commission and shall not be deemed
        to be "filed".

99.2    Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350(18).
        Pursuant to SEC Release 34-47551 this Exhibit is furnished to the Securities and Exchange Commission and shall not be deemed
        to be "filed".

</TABLE>