UNITED  STATES
SECURITIES  AND  EXCHANGE  COMMISSION
WASHINGTON,  D.C.  20549
FORM  10-KSB
<TABLE>
<CAPTION>

<S>                                                                      <C>
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT 
    OF 1934 [FEE REQUIRED]
    For the fiscal year ended December 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE 
    ACT OF 1934 [NO FEE REQUIRED]
    For the transition period from to.
Commission File Number 1-6336

PETROMINERALS CORPORATION
--------------------------------------------------------------------------------
(Name of small business issuer in its charter)

       Delaware
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)

       95-2573652
--------------------------------------------------------------------------------
(I.R.S. Employer Identification No.)

27241 BURBANK, FOOTHILL RANCH, CALIFORNIA 92610-2500
--------------------------------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number: (949) 598-7300
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 $.80
--------------------------------------------------------------------------------
(Title of Class)
</TABLE>


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

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Registration  S-B  is not contained in this form and no disclosure 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-KSB or any
amendment  to  this  Form  10-KSB.   [X]

The  issuer's  revenues  for  its  most  recent  fiscal  year were approximately
$468,000.

Check  whether  the  Issuer  has  filed all documents and reports required to be
filed  by  Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities  under  a  plan  confirmed  by  a  court.
[    ]  yes          [    ]    no

Transitional  small  business  disclosure  format.        [    ] yes      [X] no
The  number  of shares of Registrant's common stock outstanding was 1,059,417 as
of  March  20,  1999.
The  aggregate  market  value  of  the  Registrant's  voting  stock  held  by
non-affiliates of the Registrant was approximately $1,929,500 as of February 24,
1999.

The  total  number  of  pages  in  this  Form  10-KSB  are  55.
The  Index  of  Exhibits  included  in  this  Form 10-KSB is located at page 52.
                                       1
<PAGE>
                            PETROMINERALS CORPORATION
                                     PART I
ITEM  1  -  BUSINESS
            --------
A.    GENERAL  DESCRIPTION  OF  BUSINESS
      ----------------------------------
INTRODUCTION
Petrominerals  Corporation (Petrominerals or the Company) which was incorporated
under  the  laws of the State of Delaware in 1966, was engaged in the production
of  on-shore  domestic  crude  oil  and  natural  gas  in  Los  Angeles  County,
California,  and  oilfield  services  through  its  well  servicing  division,
Hydro-Test  International,  Inc.  (Hydro-Test).  Effective  April  1,  1998, the
Company disposed of substantially all of its oil and gas properties in a sale to
an  unrelated  entity.  The Company's wholly owned subsidiary, Hydro-Test, a New
Mexico  corporation    acquired  in  1993,  provides  tubular  testing  services
including  hydro-static testing of tubing, pipelines and valve assemblies in the
oil  and  gas  industry,  under  the  name  Texas  Tubing Testers. In July 1998,
Hydro-Test ceased commercial operations and has continued with only one employee
operating  the  Company's  office.  The  Company  plans  to divest itself of the
subsidiary  through  a  complete  liquidation  or  sale.

BUSINESS  STRATEGY

After  completing  a  two  year  program  of corporate downsizing and performing
remedial work, the Company engaged the services of an investment banking firm to
look  for another Company to become a partner to a merger or acquisition. During
this  process,  the  Company  received  an  offer for the purchase of all of the
Company's  oil  and  gas  operations.

Management signed an agreement on February 4, 1998, with an unrelated entity for
the  sale  of  all  of  the  oil  and  gas  producing  property  and  related
infrastructure,  including the 140 acres (see "Real Property Holdings") owned by
the  Company,  for  $3,739,000  in  cash and a production payment receivable for
$931,000.  The sale did not include the assets of Hydro-Test. The effective date
of  the  sale was April 1, 1998. The Company plans to use the proceeds to either
purchase other oil producing assets or merge with another company. Management is
currently  considering   various options. The Company will no longer operate the
oil  and  gas segment of the business, unless other oil producing properties are
acquired.

DISPOSITION  AND  BANKRUPTCY  OF  HYDRO-TEST  INTERNATIONAL,  INC.

In March 1995, the Company adopted a formal plan to liquidate and dispose of the
assets  of Hydro-Test, due to a downturn in the oilfield service industry in the
first  quarter  of  1995.   Through August 1995, the Company proceeded with this
liquidation  plan  by  selling  the equipment and inventory of several locations
operated  by  Hydro-Test.  On  September  1,  1995,  management  abandoned  the
liquidation plan and commenced its voluntary reorganization case with the filing
of  a  petition under Chapter 11 of the United States Bankruptcy Code. This case
was filed as a Chapter 11 case to protect the Hydro-Test assets from seizure and
to  pay  creditor  claims  in  a  greater  amount  than  could be obtained in an
immediate  Chapter  7  liquidation  case.

                                       2
<PAGE>
ITEM  1  -  BUSINESS  (Continued)
            --------
A.    GENERAL  DESCRIPTION  OF  BUSINESS  (Continued)
      ----------------------------------
DISPOSITION  AND  BANKRUPTCY  OF  HYDRO-TEST  INTERNATIONAL,  INC.  (Continued)
On  May  16,  1996, the plan of reorganization was accepted by the creditors and
confirmed  by  the  United States Bankruptcy Courts for the Southern District of
Texas,  Houston  Division.  On  August  14,  1996, a final hearing took place to
approve  the  payment  of  professional  fees  and order final payment. As such,
Hydro-Test  is  no  longer  in  bankruptcy.

All  of  the creditors that had the option elected to receive 50% of their claim
over  60 months rather than 25% over 90 days. Hydro-Test has not yet paid any of
these  claims.  Management  continues  to  review  the  financial  condition  of
Hydro-Test  on  an  ongoing  basis and will determine when payments to creditors
will  be  made.  Management  is  also considering a complete liquidation of this
subsidiary.

REAL  PROPERTY  HOLDINGS

Prior to the sale agreement effective April 1, 1998, the Company owned 140 acres
of unimproved land in the Hasley Canyon field, Santa Clarita Valley, Los Angeles
County,  California, which was the Company's primary location of oil production.

Following  this  sale,  the  Company no longer has any significant real property
holdings. The remaining interests of the Company were fully impaired at December
31,  1998, based on a current reserve report which valued the remaining reserves
at  $0.

B.    FINANCIAL  INFORMATION  CONCERNING  INDUSTRY  SEGMENTS
      ------------------------------------------------------

Prior  to  the  sale  of its oil and gas producing properties effective April 1,
1998,  Petrominerals  principally  operated  in  two  industry segments: (1) the
production  and  sale  of  crude  oil;  and  (2)  providing  tubular testing and
complimentary  services  through  its  oilfield services subsidiary, Hydro-Test.
During  the  past  three years, revenues were derived from the oilfield services
operations  and  the  production  and sale of produced crude oil and natural gas
until  April  1, 1998. The following table shows the Industry Segment Percentage
Revenues  derived  by  Petrominerals  for  the  past  three  years:

Industry  Segment  Percentage  Revenues  for  the years ended December 31 are as
follows:
<TABLE>
<CAPTION>


                   1998   1997   1996
                   -----  -----  -----
<S>                <C>    <C>    <C>
Oilfield services  14.5%   6.7%   1.0%
Oil and gas sales  54.5%  76.7%  94.0%
Other . . . . . .  31.0%  16.6%   5.0%
</TABLE>

                                       3
<PAGE>
ITEM  1  -  BUSINESS  (Continued)
            --------

B.    FINANCIAL  INFORMATION  CONCERNING  INDUSTRY  SEGMENTS
      ------------------------------------------------------

See  Note  10  to  the  Consolidated  Financial  Statements in Item 7 hereof for
information  regarding  amount  of  revenue,  operating profit, and identifiable
assets  attributable  to  Petrominerals'  industry segments for the fiscal years
indicated  above.

C.    DESCRIPTION  OF  BUSINESS
      -------------------------

OIL  AND  GAS  SALES

Until  April  1998,  the  Company  owned  and  operated oil wells in Los Angeles
County, California. Specifically, the Hasley Canyon and Castaic Hills fields are
located  in  the  Santa  Clarita  Valley,  Los  Angeles  County.

Development  of    Properties
-----------------------------
Prior to the disposition of its oil and gas segment, Petrominerals contracted to
sell the oil it produced to customers who either refined the oil or resold it to
refiners.  The  Company did not refine any of its oil production and used all of
the  gas produced to either generate electricity for pumping units or to operate
natural  gas  powered pumping units and tank heaters. Sales of produced oil were
generally  made  pursuant  to  contracts of 30 or 90 days duration and fluctuate
with  differences  in  posted  field  prices  based  on  the  quality of the oil
produced.  The  price obtained for oil depended upon numerous factors, including
the  extent  of  domestic  production  and foreign imports, world events, market
demand,  hostilities  in oil producing countries, and the effect of governmental
regulations.  As  a  result  of  a  combination of these factors, oil prices are
constantly  fluctuating.  Prices for California oil are significantly lower than
reported  benchmark  prices  for  similar  oil  in the United States, due to the
influx  of  Alaskan  North  Slope  (ANS) crude into West Coast markets, which is
directly  in  competition  with  California's  production.

The  average  price  the  Company  received  for  its  crude oil during 1998 was
approximately  $8.46  per  barrel, which is approximately $5.83 per barrel lower
than  the  average  price  which the Company received for its crude in 1997. The
Company  incurred  average  production costs of approximately $12.89 per barrel,
and  produced  approximately  46,615  barrels  of  crude.

The  Company  entered  into a joint venture agreement with Petrominerals 96-1, a
limited  partnership  formed on December 3, 1996 to drill a well on a designated
site.  The  Company has a 1% interest as general partner in the partnership, and
the  limited  partners consist of three directors and two unrelated parties. The
Company  contributed  the  drill  site  in  exchange  for  their interest in the
partnership  and  serves  as  the  well's  operator.  The Company bought out all
limited  partners' interests in April 1998 and sold the partnership assets to an
unrelated  third  party  thereafter.  See  Note  8 to the consolidated financial
statements  in  Item  7  herein  for  details.

                                       4
<PAGE>
ITEM  1  -  BUSINESS  (Continued)
            --------

C.    DESCRIPTION  OF  BUSINESS  (Continued)
      -------------------------

Development  of    Properties  (Continued)
-----------------------------

Operating  Hazards  and Uninsured Risks. The Company's operations are subject to
all  of  the  operating hazards and risks associated with producing oil, such as
environmental  pollution  and  personal  injury.  The  Company  carries  general
liability  insurance,  however,  it  has  not  obtained  insurance  against
environmental pollution over and above the minimum amounts required by the State
of  California.

Government  Regulations.  Federal,  state  and local governments impose numerous
laws  and  regulations  on  the production and sale of oil and gas. In addition,
state  and Federal regulations have been adopted which pertain to the spacing of
wells,  prevention  of  waste  of  oil  and  gas,  limiting rates of production,
proration  of productions, handling of waste water and similar matters. All such
laws  and  regulations are subject to change at any time, and there is no way to
ascertain  either  the  likelihood  or  potential effect of such future changes.

Environmental  Matters.  The Company has established procedures for the on-going
evaluation  of  its operations to identify potential environmental exposures and
assure  compliance  with regulatory policies and procedures. Management monitors
these  laws  and  regulations  and  periodically  assesses  the propriety of its
operational  and accounting policies related to environmental issues. The nature
of  the  Company's  business  requires  routine  day-to-day  compliance  with
environmental  laws  and  regulations.  Additionally,  the  Company  has  been
identified  as  a  potentially  responsible  party  (PRP)  by  the Environmental
Protection  Agency  (see Item 3). Management is unable to determine what effect,
if  any,  this  will  have  on  the  Company.

The  Company  is  unable  to  predict  whether  its  future  operations  will be
materially  affected  by  these  laws  and  regulations.  It  is  believed  that
legislation  and  regulations  relating  to  environmental  protection  will not
materially  affect  the  results  of  operations  of  the Company. Environmental
clean-up  costs  are incurred by the Company in the ordinary course of business.
In 1996, the Company incurred approximately $973 in environmental investigation,
compliance and remediation costs. The Company has not incurred any environmental
costs  since  1996.

Employees.  As  of  December  31,  1998,  the  Company  employed  a  total  of 4
individuals,  of  which  1  was  employed  by  Hydro-Test  International,  Inc.

                                       5
<PAGE>
ITEM  1  -  BUSINESS  (Continued)
            --------
C.    DESCRIPTION  OF  BUSINESS  (Continued)
      -------------------------
OILFIELD  SERVICES
Until  July  1998,  when Hydro-Test ceased commercial operations, the subsidiary
was  engaged  in  the  hydro-static testing of tubular pipe, pipelines and valve
assemblies  in  the  oil  and  gas industry at one facility near Houston, Texas.
Hydro-Test  previously  operated  two  offices  in  California, three offices in
Texas,  one  office  in  New  Mexico,  and  through its franchisees, licensed an
additional four offices in the United States and other countries. All operations
were consolidated into the remaining Texas operation during 1995 in anticipation
of  reorganization.


ITEM  2  -  PROPERTIES
            ----------

AGREEMENT  FOR  SALE  OF  PROPERTY

As  noted  in "Management's Discussion and Analysis" contained in Item 6 hereof,
the  Company  had  sold substantially  all of its oil and gas producing assets 
to an unrelated entity.  All  of  the  properties  noted  below have been 
included in this sale.

GENERAL

The  principal  properties  of  the  oil  and  gas  segment  consisted of proved
developed  oil  and  gas  properties;  equipment  and  wells  related  to proved
properties;  proved  undeveloped  oil  and  gas  properties;  maps, geologic and
geophysical  records related thereto; and real estate. The Company's interest in
oil  and  gas  properties  were  principally  in the form of direct and indirect
working  interests  in  leases,  located  in Los Angeles County, California. The
Company  did  not  sell  the natural gas produced in their remaining fields, but
instead  used  the  gas  to produce electricity for electric pumping units or to
operate  natural  gas  powered pumping units and tank heaters. Subsequent to the
sale  of  these  properties,  the  Company  retained  certain  working
interests  in several of the properties. However, the Company had fully impaired
the carrying values of these interests to reflect its most recent reserve report
which  valued  the  remaining  reserves  at  $0.

OIL  AND  GAS  RESERVES  AND  PRODUCTION  INFORMATION

The  tables  located  in  Note  15  of Item 7 located elsewhere herein set forth
information  with  respect  to  the  engineering estimates of proved oil and gas
reserves  owned by the Company. As of December 31, 1998, all remaining interests
of  the  property  have  been  impaired  and  the  remaining book value of these
interests  is  $0. The reserves are shown in barrels (Bbl) of oil. Except as set
forth  in  this  report,  Petrominerals  has  not  filed any estimates of proved
reserves  with  any federal authority or agency during the last fiscal year. The
Company's  net  interest in proved reserves and related valuations for the years
ended  December  31,  1998  and 1997 have been prepared by Babson & Sheppard, an
independent  petroleum  engineering  firm  in  Long  Beach,  California.

                                       6
<PAGE>
ITEM  2  -  PROPERTIES  (Continued)
            ----------
OIL  AND  GAS  RESERVES  AND  PRODUCTION  INFORMATION  (Continued)

Reserve  estimates  are  based upon detailed engineering and geological studies.
Where  an  adequate  production  trend  has  been  established, extrapolation of
production  performance  is  used.  If  insufficient  well data is available for
performance  calculations, the initial gas or oil in place volumes are estimated
from  geological interpretation of reservoirs, analysis of production from wells
in  similar surrounding areas, or other techniques. Petroleum engineering is not
an exact science, and it involves estimates based upon numerous factors, many of
which  are  inherently variable and uncertain. Such factors include the price of
oil  and  gas  and  estimates  of oil and gas production and costs. Estimates of
reserves  and  future  net  revenue  costs  involve projecting future results by
estimating  future  events.  Therefore,  there  are  no  assurances  that actual
productions,  revenues,  taxes,  development expenditures and operating expenses
will  occur  as  estimated.

Oil  and  Gas  Reserves  Information
------------------------------------

Information  regarding  the  Company's  estimated  net  oil  and  gas  reserves,
additions and revisions to estimated net reserves, estimated future cash inflows
and  related  costs  and  discounted  future  net cash flows for the years ended
December  31,  1998  and  1997,  are  contained  in  Note  15  to  the Company's
consolidated  financial  statements  in  Item  7  hereof.  The Company's reserve
report, from which the foregoing estimates were derived, is based upon prices in
effect  at  December  31,  1998.

The  Company periodically evaluates its oil and gas properties for impairment by
determining if the carrying value of the properties exceeds the present value of
their  estimated  future  net  revenues, calculated at current prices (i.e., the
ceiling).  Since  March 1986, the Company has established impairment reserves of
$10,963,000  against  its  oil  and  gas  properties.  The  entire  reserve  of
$10,963,000 was charged off in 1998 due to the sale of minerals in place and the
impairment  of  remaining  interests  due  to depressed oil prices and recurring
losses from operations. Current accounting standards do not allow the Company to
reinstate  value  for  subsequent  increases  in  the  ceiling.

PRODUCTION

Net  Annual  Production
-----------------------
The following table sets forth the Company's net production of oil interests for
the years ended December 31 (in thousands). Net production represents production
owned  by  Petrominerals  and  produced  to its interest, less royalty and other
similar  interests.
<TABLE>
<CAPTION>


                        1998  1997
                        ----  ----
<S>                     <C>   <C>
Net annual production
   Oil (Bbl) . . . . .    47   119
</TABLE>


                                       7
<PAGE>
ITEM  2  -  PROPERTIES  (Continued)
            ----------

PRODUCTION  (Continued)

Sales  Prices  and  Production  Costs
-------------------------------------

The  following  table  sets forth the average sales price and average production
(lifting)  cost  per  unit  of  oil  produced by the Company for the years ended
December  31,:
<TABLE>
<CAPTION>


                                        1998    1997
                                       ------  ------
<S>                                    <C>     <C>
Average sales price of oil per barrel  $ 8.44  $14.29
Average production cost per barrel. .   12.89    9.17
</TABLE>


PRODUCTIVE  WELLS  AND  DEVELOPED  ACREAGE

Proved  developed oil and gas properties are properties on which wells have been
drilled,  and  are  capable  of producing crude oil or natural gas in commercial
quantities.  The  Company  has sold substantially all of its proved acreage. See
Note  5  to  the  consolidated financial statements located in Item 7 herein for
details.

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

The  Company entered into a joint venture during 1996 with Petrominerals 96-1, a
newly  formed,  limited  partnership,  to drill a well on a designated site in a
proven  area. Under the terms of the agreement, the Company had a 1% interest as
general  partner  and  6  other  entities,  including  2 directors and a company
controlled  by  a  director, own the remaining 99% interest. The partnership was
formed  to enter into a joint venture agreement with the Company to drill a well
on  the  Company's  Mabel  Strawn  lease. The Company received $280,000 from the
partnership  under  a  turnkey  drilling  contract.  Proceeds  from  the working
interest  will  be  paid  90% to Petrominerals 96-1 and 10% to the Company until
payout,  and thereafter 30% to Petrominerals 96-1 and 70% to the Company. Payout
occurs  when  Petrominerals  96-1  has recouped the monies it contributed to the
joint  venture.  The  Company  completed the well on January 20, 1997, and began
production  shortly  thereafter.

In  April  1998, the Company bought out all limited partners' interests and sold
the Petrominerals 96-1 partnership assets to an unrelated third party. See Notes
5  and  8  to  the  consolidated  financial  statements  in  Item 7 for details.


                                       8
<PAGE>
ITEM  3  -  LEGAL  PROCEEDINGS
            ------------------

The  Company  is  not a party to nor is its property the subject of any material
legal  proceedings  other  than  ordinary  routine  litigation incidental to its
business,  or  which  is  covered  by  insurance,  except  as  set  forth below:

In  December  1989,  the Company was notified by the United States Environmental
Protection  Agency  (EPA)  that,  under  the  provisions  of  the  Comprehensive
Environmental  Response,  Compensation  and  Liability Act of 1980 (CERCLA), the
Company  was considered a potentially responsible party (PRP) in the clean-up of
the  Operating  Industries,  Inc.  (OII) waste disposal site located in Monterey
Park,  California.  Century  Oil  Corporation,  a  predecessor  of  the Company,
disposed  of  drilling  mud and water at the OII disposal site, at various times
from 1975 to 1977. The Company, along with several other similar PRP's,  contend
that  drilling mud and waste water do not constitute hazardous substances within
the  meaning  of  CERCLA. Although the ultimate impact of the resolution of this
contingency  is  unknown,  management now  believes that this matter could 
have potentially an adverse  affect  on  the  financial  position  of  the  
Company.

On  September  1, 1995, the Company's subsidiary, Hydro-Test International, Inc.
(Hydro-Test),  filed a petition under Chapter 11 of the United States Bankruptcy
Code.    This  case  was  filed  as a Chapter 11 case to protect the assets from
seizure  and  pay  creditor claims a greater amount than could be obtained in an
immediate  Chapter 7 liquidation case.  The case was presented before the United
States  Bankruptcy  Courts for the Southern District of Texas, Houston Division.
Under  the  plan,  creditors  had  the option of receiving a 25% cash payment of
allowed  claims  within  90  days of the effective date or 50% of allowed claims
over  a  period  of  60  months,  with the exception of unsecured creditors with
claims  in  excess  of  $5,001.  Creditors  with claims in excess of $5,001 were
to receive  payments  over 84 months. The parent Company also agreed to pay 
$50,000 in  cash  for  equipment  repair  and  convert $500,000 of its 
unsecured debt to equity  at  the rate of $100,000 per year for five years and 
defer participation in  cash  distribution  for  24  months.  The  new value of
the parent company's contribution  was  computed  at  $300,000.

On  May  16,  1996, the plan of reorganization was accepted by the creditors and
confirmed  by  the  United States Bankruptcy Courts for the Southern District of
Texas,  Houston  Division.  On  August  14,  1996, a final hearing took place to
approve  the  payment  of  professional  fees  and order final payment. As such,
Hydro-Test  is  no  longer  in  bankruptcy.

All  of  the creditors that had the option elected to receive 50% of their claim
over 60 months rather than 25% over 90 days. The Company has not yet paid any of
these  claims,  except  for  Federal  payroll  tax  liabilities in the amount of
approximately  $68,000.


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

During the fourth quarter of 1998, no matter was submitted to a vote of security
holders  through  the  solicitation  of  proxies  or  otherwise.


                                       9
<PAGE>
                                     PART II


ITEM  5  -  MARKET  FOR  THE  REGISTRANT'S  COMMON  STOCK  AND
            --------------------------------------------------
            RELATED  SECURITY  HOLDER  MATTERS
            ----------------------------------

The Company's common stock is currently traded in the Small Cap System under the
nasdaq  symbol  PTRO.  The  following table sets forth the range of high and low
sales  prices on the nasdaq Small Cap System for the Company's common stock, for
the  fiscal  years  ended  December  31,  by  fiscal  quarters  as  indicated:
<TABLE>
<CAPTION>


                      High    Low
                     ------  ------
<S>                  <C>     <C>
1997
     First quarter.  $    4  $2 1/2
     Second quarter   3 1/2       3
     Third quarter.   3 1/2   2 3/4
     Fourth quarter       6   3 1/4
1998
     First quarter.  $4 3/4  $3 1/4
     Second quarter   4 1/4   2 3/4
     Third quarter.   3 1/2   2 1/4
     Fourth quarter   3 1/8   2 1/4
</TABLE>


These stock prices have been retroactively adjusted to reflect the one for eight
reverse  stock  split  that  occurred  on  January 9, 1998 (see Item 7, Note 7 -
Common  Stock).

The Company has 842 shareholders of record of its common stock as of January 21,
1999.

No regular dividends for Petrominerals' stock have been declared since 1986. The
Board  of  Directors has no current intention to declare or pay dividends in the
foreseeable  future.  The  Board of Directors periodically reviews the financial
position  of the Company and evaluates whether or not it will declare dividends.


                                       10
<PAGE>
ITEM  6  -  MANAGEMENT  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
            ----------------------------------------------------
            CONDITION  AND  RESULTS  OF  OPERATIONS
            ---------------------------------------

The  following  discussion  should  assist  in an understanding of the Company's
financial  position  and  results of operations for each of the two years in the
period  ended  December 31, 1998. The Notes to Consolidated Financial Statements
as of December 31, 1998, included elsewhere herein, contain detailed information
that  should  be  referred  to  in  conjunction  with  this  discussion.

BUSINESS  REVIEW

General
-------

The  current  President  and CEO of the Company was appointed to his position on
December  30,  1998.  His  predecessor  had  served  his  third  full term since
returning  during  1995. During 1998 and up to his resignation, he continued his
original  goals  of cutting corporate overhead, disposing of unproductive assets
and  performing  previously deferred remedial work. He began considering various
merger  and acquisition scenarios that would assure future profitable growth and
maximize  shareholder  value.  His successor will continue his efforts to locate
suitable  opportunities  for  the  Company.

The  Company  engaged  the services of an investment banking firm during 1997 to
assist  in  locating  a  merger or acquisition partner. During this process, the
Company  received  an offer from an unrelated entity for the purchase of all its
oil  and gas producing assets. An agreement was signed on February 4, 1998, that
provides  for  $3,739,000  in  cash to be paid at the closing, and an additional
reserved production payment of $931,000, to be paid in installments in any month
in  which  certain postings for crude oil exceed $13.50 per barrel.  The monthly
payment will be equal to one-half of the difference between the weighted average
price  and  $13.50,  multiplied  by  the number of barrels produced. There is no
stated  interest  associated  with  the  note. The sale of substantially all the
Company's  oil and gas properties was effective April 1, 1998, and the Company's
oil  and  gas  operations  have  been  discontinued.

Oilfield  Services  Segment
---------------------------

The  Company's  wholly owned subsidiary, Hydro-Test International, Inc., emerged
from  Chapter  11  bankruptcy on May 16, 1996, after their plan was confirmed by
the  courts  and accepted by the creditors. Management has continued to sell off
its  remaining  assets  and  continued  to  operate  the remaining facility near
Houston,  Texas,  on  a limited basis up until July 1998 when operations ceased.
There are no current plans to expand the operations or obtain additional capital
from  the  parent company. Management is also considering a complete liquidation
as  one  of  their  options.


                                       11
<PAGE>
ITEM  6  -  MANAGEMENT  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
            ----------------------------------------------------
            CONDITION  AND  RESULTS  OF  OPERATIONS  (Continued)
            ---------------------------------------

BUSINESS  REVIEW  (Continued)

1998  COMPARED  WITH  1997

The  Company  had  negative cash flows from operations of approximately $631,000
for the year ended December 31, 1998, as compared with a negative cash flow from
operations  of  $133,000  in  the  prior  year.  The  decrease in cash flow from
operating  activities  was primarily the result of the net operating loss due to
the  drop  in  oil  prices,  as  well  as  increased general and  administrative
expenses  associated  with  professional  fees  incurred  during  merger/sale
negotiations.

The  Company had net income of approximately $595,000, compared to net income of
$0  in  the prior year. Current year net income was primarily due to the gain on
disposition of properties  (discontinued operations) of approximately $1,482,000
and  loss  from  continuing  operations of approximately $887,000. The loss from
continuing  operations is the net effect of continued net losses from Hydro-Test
of  approximately  $67,000  and  net  loss  of  approximately  $820,000 from the
Company's  oil  and  gas  operations,  including  the $242,000 impairment losses
recorded  in  1998.

The  Company  has  discontinued  Hydro-Test's  operation since July 1998 and has
discontinued  its  oil  and  gas operations after the disposition of oil and gas
producing  assets  to  an  unrelated  party in April 1998. As such, revenues and
expenses from discontinued operations in 1999 will be inconsistent with the 1998
amounts.

The  Company's  other income decreased by approximately $87,000 during 1998, due
primarily   to the prior year's one time payments for options to purchase assets
of  the  Company.  Other  income in 1998 in the amount of $145,000 was primarily
interest  income derived from cash and cash equivalents deposited with financial
institutions.  This  trend is expected to continue in 1999 until the majority of
cash  is  used  for the purchase of new businesses or producing assets, or other
purposes.

General  and  administrative  expenses  increased  by  approximately 10%, due to
additional  professional fees incurred during negotiations to sell the Company's
assets.


                                       12
<PAGE>
ITEM  6  -  MANAGEMENT  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
            ----------------------------------------------------
            CONDITION  AND  RESULTS  OF  OPERATIONS  (Continued)
            ---------------------------------------

BUSINESS  REVIEW  (Continued)

1997  COMPARED  WITH  1996

The  Company  had  negative cash flows from operations of approximately $133,000
for the year ended December 31, 1997, as compared with a positive cash flow from
operations  of  $316,000  in the prior year. This decrease in cash was primarily
the  result  of  the  Company  paying  off  their  accounts  payable and accrued
liability  balances  associated  with  the  96-1  drilling  project.  The  cost
associated  with the 96-1 drilling program was capitalized by the Company during
1997.

The  Company  had a net loss of approximately $15,000, compared to net income of
$376,000  in  the  prior year. The prior year net income was primarily due to an
extra  ordinary gain resulting from the Chapter 11 reorganization of Hydro-Test.
The  current year loss is the net effect of continued net losses from Hydro-Test
of  approximately  $107,000  and  net  income  of approximately $92,000 from the
Company's  oil  and  gas  operations.

The  losses  from  Hydro-Test will most likely continue through 1998, unless the
Company  is able to sell off the remaining assets. Any proceeds from the sale of
assets  will  be  set aside to pay creditors under the Chapter 11 plan. Revenues
and  expenses  associated  with  the  oilfield  services  segment  should remain
consistent  with  prior year amounts during the first quarter of 1998. Following
the  first quarter, the Company will report any revenues and expenses associated
with  the  oil  and  gas  segment  as  discontinued  operations.

The  Company's other income increased significantly during 1997, due to one time
payments  for  options  to  purchase  assets  of  the Company. This trend is not
expected  to  continue  in  1998.

General  and  administrative  expenses  increased  by  approximately 12%, due to
additional  professional fees incurred during negotiations to sell the Company's
assets.  This  trend  will  likely  continue  during  1998.

Year  2000  Issue
-----------------

Management  has  considered  the  impact  of  Year  2000 Issues on the Company's
computer  systems.  Conversion  activities are in process and management expects
conversion  and  testing  to  be  complete  by  the  middle  of  1999.


                                       13
<PAGE>
ITEM  7  -  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA
            -----------------------------------------------
<TABLE>
<CAPTION>


                                                           Page(s)
                                                           -------
<S>                                                        <C>
Report of Brown Armstrong Randall Reyes Paulden &McCown,
  Independent Auditor's Report. . . . . . . . . . . . . .    15-16

Consolidated Balance Sheets at December 31, 1998 and 1997    17-18

Consolidated Statements of Operations for the Years Ended
  December 31, 1998 and 1997. . . . . . . . . . . . . . .       19

Consolidated Statements of Shareholders' Equity for the
  Years Ended December 31, 1998 and 1997. . . . . . . . .       20

Consolidated Statements of Cash Flows for the Years Ended
  December 31, 1998 and 1997. . . . . . . . . . . . . . .       21

Notes to Consolidated Financial Statements. . . . . . . .    22-41
</TABLE>



                                       14
<PAGE>
                        REPORT OF BROWN ARMSTRONG RANDALL
                             REYES PAULDEN & MCCOWN
                          INDEPENDENT AUDITOR'S REPORT



Board  of  Directors  and  Shareholders
Petrominerals  Corporation


We  have  audited  the accompanying consolidated balance sheets of Petrominerals
Corporation  (a Delaware corporation) and Subsidiary as of December 31, 1998 and
1997,  and  the  related  consolidated  statements  of operations, shareholders'
equity, and cash flows for the two years then ended and the related December 31,
1998  and  1997  financial  statement  schedules  as listed in the index at Item
13(a).    These financial statements and schedules are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audits.

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

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects, the financial position of Petrominerals Corporation and
consolidated  subsidiary  as  of  December 31, 1998 and 1997, and the results of
their  operations  and  their cash flows for the years then ended, in conformity
with  generally  accepted  accounting  principles.
                                       15
<PAGE>
As  disclosed  in  Note  5 to the financial statements, on February 4, 1998, the
Company  entered  into  an agreement and sold a major segment of its operations.
The  segment  represents a significant portion of the Company's total assets and
operations.

BROWN  ARMSTRONG  RANDALL
REYES  PAULDEN  &  McCOWN
ACCOUNTANCY  CORPORATION














Bakersfield,  California
March  17,  1999


                                       16
<PAGE>
PETROMINERALS  CORPORATION
CONSOLIDATED  BALANCE  SHEETS
DECEMBER  31,  1998  AND  1997
(Dollars  in  thousands,  except  par  value  amounts)

ASSETS
<TABLE>
<CAPTION>


                                                   1998      1997
                                                  ------  -----------
                                                          (Restated)
<S>                                               <C>     <C>
Current Assets
  Cash and cash equivalents. . . . . . . . . . .  $2,928  $       235
  Accounts receivable. . . . . . . . . . . . . .       8          115
  Inventories. . . . . . . . . . . . . . . . . .       -           50
  Prepaid expenses . . . . . . . . . . . . . . .      52            7
  Other current assets . . . . . . . . . . . . .       -           22
                                                  ------  -----------
     Total Current Assets. . . . . . . . . . . .   2,988          429
Restricted Cash. . . . . . . . . . . . . . . . .      25           40
Property and Equipment, net (including oil and
 gas properties accounted for on the successful
 efforts method) . . . . . . . . . . . . . . . .     129        2,198
Notes Receivable and Other Assets. . . . . . . .     417          445
                                                  ------  -----------
     TOTAL ASSETS. . . . . . . . . . . . . . . .  $3,559  $     3,112
                                                  ======  ===========
</TABLE>


                                       17

   The accompanying notes are an integral part of these financial statements.
<PAGE>
LIABILITIES  AND  SHAREHOLDERS'  EQUITY
<TABLE>
<CAPTION>


                                                    1998      1997
                                                   ------  -----------
                                                           (Restated)
<S>                                                <C>     <C>
Current Liabilities
  Accounts payable. . . . . . . . . . . . . . . .  $  133  $       145
  Current portion of long-term debt . . . . . . .       -            8
  Accrued liabilities . . . . . . . . . . . . . .      44           83
  Royalties payable . . . . . . . . . . . . . . .      11           29
                                                   ------  -----------
     Total Current Liabilities. . . . . . . . . .     188          265
Long-Term Debt, net of current portion. . . . . .       -            3
Prepetition Liabilities . . . . . . . . . . . . .     448          516
                                                   ------  -----------
     Total Liabilities. . . . . . . . . . . . . .     636          784
                                                   ------  -----------
Shareholders' Equity
  Preferred stock:
    $.10 par value, 5,000,000 shares authorized;
      no shares issued and outstanding. . . . . .       -            -
  Common stock:
    $.80 par value, 20,000,000 shares authorized;
    1,059,417 shares issued and outstanding at
    December 31, 1998 and 1997. . . . . . . . . .     848          848
Capital in Excess of Par Value. . . . . . . . . .     563          563
Retained Earnings . . . . . . . . . . . . . . . .   1,512          917
                                                   ------  -----------
     Total Shareholders' Equity . . . . . . . . .   2,923        2,328
                                                   ------  -----------
     TOTAL LIABILITIES AND
       SHAREHOLDERS' EQUITY . . . . . . . . . . .  $3,559  $     3,112
                                                   ======  ===========
</TABLE>



                                       18

   The accompanying notes are an integral part of these financial statements.

<PAGE>
PETROMINERALS  CORPORATION
CONSOLIDATED  STATEMENTS  OF  OPERATIONS
FOR  THE  YEARS  ENDED  DECEMBER  31,  1998  AND  1997
(Dollars  in  thousands,  except  per  share  amounts)
<TABLE>
<CAPTION>


                                                          1998       1997
                                                         -------  -----------
                                                                  (Restated)
<S>                                                      <C>      <C>
Revenues
  Oilfield services . . . . . . . . . . . . . . . . . .  $   68   $        95
  Oil and gas . . . . . . . . . . . . . . . . . . . . .     255         1,080
  Other income. . . . . . . . . . . . . . . . . . . . .     145           232
                                                         -------  -----------
     Total Revenues . . . . . . . . . . . . . . . . . .     468         1,407
                                                         -------  -----------
Costs and Expenses
  Oilfield services . . . . . . . . . . . . . . . . . .     128           174
  Oil and gas . . . . . . . . . . . . . . . . . . . . .     402           601
  Depreciation, depletion and amortization. . . . . . .      32           123
  General and administrative. . . . . . . . . . . . . .     522           475
  Interest. . . . . . . . . . . . . . . . . . . . . . .       4             3
  Impairment loss . . . . . . . . . . . . . . . . . . .     242             -
  Other expense . . . . . . . . . . . . . . . . . . . .      25            31
                                                         -------  -----------
     Total Costs and Expenses . . . . . . . . . . . . .   1,355         1,407
Loss from continuing operations before income taxes . .    (887)            -
Income tax benefit (expense). . . . . . . . . . . . . .       -             -
                                                         -------  -----------

Loss from continuing operations . . . . . . . . . . . .    (887)            -
Discontinued operations, net of income taxes
  Income (loss) on disposition net of income tax of $0
    for 1998 and 1997 . . . . . . . . . . . . . . . . .   1,482             -
                                                         -------  -----------
Income (Loss) from discontinued operations. . . . . . .     595             -
                                                         -------  -----------

Net Income (Loss) . . . . . . . . . . . . . . . . . . .  $  595   $         -
                                                         =======  ===========

Per Share Amounts
  From continuing operations. . . . . . . . . . . . . .  $(0.84)  $         -
  From discontinued operations. . . . . . . . . . . . .    1.40             -
                                                         -------  -----------
Net income (loss) per share . . . . . . . . . . . . . .  $  .56   $         -
                                                         =======  ===========

Weighted average common shares outstanding. . . . . . .   1,059         1,059
                                                         =======  ===========
</TABLE>


(Per share amounts have been adjusted retroactively for the effects of a one for
eight  reverse stock  split  on  January  9,  1998).

                                       19

   The accompanying notes are an integral part of these financial statements.
<PAGE>
PETROMINERALS  CORPORATION
CONSOLIDATED  STATEMENTS  OF  SHAREHOLDERS'  EQUITY
FOR  THE  YEARS  ENDED  DECEMBER  31,  1998  AND  1997
(Dollars  in  thousands,  except  number  of  shares)


<TABLE>
<CAPTION>


                                    Number of           Capital in
                                     Common              Excess of    Retained
                                     Shares    Amount    Par Value    Earnings    Total
                                    ---------  -------  -----------  ----------  -------
<S>                                 <C>        <C>      <C>          <C>         <C>
Balance, December 31, 1995 . . . .  1,057,542  $   847  $       558  $     541   $1,946 
  Issuance of shares for Directors
    Compensation . . . . . . . . .      1,875        1            5          -        6 
  Net income . . . . . . . . . . .          -        -            -        376      376 
                                    ---------  -------  -----------  ----------  -------
Balance, December 31, 1996 . . . .  1,059,417      848          563        917    2,328 
  Net income . . . . . . . . . . .          -        -            -        (15)     (15)
                                    ---------  -------  -----------  ----------  -------
Balance, December 31, 1997 . . . .  1,059,417      848          563        902    2,313 
  Prior period adjustment. . . . .          -        -            -         15       15 
                                    ---------  -------  -----------  ----------  -------
Balance, December 31, 1997,
  As restated. . . . . . . . . . .  1,059,417      848          563        917    2,328 
  Net income . . . . . . . . . . .          -        -            -        595      595 
                                    ---------  -------  -----------  ----------  -------
Balance, December 31, 1998 . . . .  1,059,417  $   848  $       563  $   1,512   $2,923 
                                    =========  =======  ===========  ==========  =======
</TABLE>


(Per share amounts have been adjusted retroactively for the effects of a one for
eight  reverse  stock  split  on  January  9,  1998).


                                       20

   The accompanying notes are an integral part of these financial statements.
<PAGE>
PETROMINERALS  CORPORATION
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
FOR  THE  YEARS  ENDED  DECEMBER  31,  1998  AND  1997
(Dollars  in  thousands)
<TABLE>
<CAPTION>


                                                            1998       1997
                                                          --------  -----------
                                                                    (Restated)
<S>                                                       <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss). . . . . . . . . . . . . . . . . . .  $   595   $        - 
  Adjustment to reconcile net income (loss) to net cash
    provided (used) by operating activities:
      Depreciation, depletion and amortization . . . . .       32          123 
      Impairment loss. . . . . . . . . . . . . . . . . .      242            1 
      (Gain) on disposal of fixed assets . . . . . . . .   (1,482)           - 
      Accounts receivable. . . . . . . . . . . . . . . .      107           68 
      Other current assets . . . . . . . . . . . . . . .      (23)           7 
      Inventories. . . . . . . . . . . . . . . . . . . .       50           11 
      Restricted cash. . . . . . . . . . . . . . . . . .        -            - 
      Accounts payable and accrued liabilities . . . . .      (66)        (325)
      Royalties payable. . . . . . . . . . . . . . . . .      (18)         (13)
      Prepetition liabilities. . . . . . . . . . . . . .      (68)          (5)
                                                          --------  -----------
Net Cash Provided (Used) by Operating Activities . . . .     (631)        (133)
                                                          --------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment . . . . . . . . . .     (190)        (276)
  Purchase of partnership interest . . . . . . . . . . .     (215)           - 
  Proceeds from sale of assets . . . . . . . . . . . . .    3,685           18 
  Notes receivable . . . . . . . . . . . . . . . . . . .       40           16 
                                                          --------  -----------
Net Cash Provided (Used) by Investing Activities . . . .    3,320         (242)
                                                          --------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Payments of bank debt. . . . . . . . . . . . . . . . .      (11)          (4)
                                                          --------  -----------
Net increase (decrease) in cash and cash equivalents . .    2,678         (379)
Cash and cash equivalents at beginning of year . . . . .      235          614 
                                                          --------  -----------
Cash and cash equivalents at end of year . . . . . . . .  $ 2,913   $      235 
                                                          ========  ===========

SUPPLEMENTAL DISCLOSURES:
   Cash paid during the period for interest. . . . . . .  $     4   $        3 
                                                          ========  ===========
</TABLE>



                                       21

   The accompanying notes are an integral part of these financial statements.
<PAGE>
                            PETROMINERALS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
            ----------------------------------------------

Business
--------

Petrominerals  Corporation's  (the  Company's)  principal  business  activities
consist  of  the  production  and sale of crude oil within the United States and
hydro-static  well  testing  oilfield  services.

Basis  of  Presentation  and  Going  Concern
--------------------------------------------

PRINCIPLES  OF  CONSOLIDATION

The  consolidated  financial  statements include the accounts of the Company and
its  wholly-owned  subsidiary,  Hydro-Test International, Inc. (Hydro-Test). All
material  intercompany  accounts  and  transactions  have  been  eliminated.

GOING  CONCERN

The  consolidated  financial  statements are presented on a going concern basis.
This basis of accounting contemplates the realization of assets and satisfaction
of liabilities in the normal course of business operations. The Company incurred
net  losses  from  continuing  operations of $887,000 and $0 for the years ended
December  31,  1998  and  1997,  respectively.

On  February 2, 1998, the Company entered into an agreement with American Energy
Operations,  Inc.  (AEO) and sold substantially all of its oil and gas operating
assets  to  AEO  effective  April  1,  1998. Remaining oil and gas assets, which
included  primarily  indirect  working  interests  in  a  few  of  the  disposed
properties, have been impaired at December 31, 1998 as a result of the Company's
latest  geological reserve report which valued the Company's remaining interests
at  $0.

With respect to the Company's subsidiary Hydro-Test International, Inc.,
industry  conditions  caused  a  significant  downturn  in  the oilfield service
business  in  the first quarter of 1995. Because of this downturn, combined with
Hydro-Test's inability to refinance its debt and obtain a working capital line,
the  Company  adopted  a  formal  plan  to  liquidate this subsidiary. This plan
was abandoned, and on  September  1,  1995,  Hydro-Test International, Inc. 
commenced its voluntary reorganization case with the filing of a petition under
Chapter 11 of the United States  Bankruptcy Code. This case was filed as a 
Chapter 11 case to protect the Hydro-Test  assets  from  seizure  and pay 
creditor claims a greater amount than could  be  obtained in an immediate 
Chapter 7 liquidation case. On May 16, 1996, the  plan  of  reorganization was 
accepted by the creditors and confirmed by the United  States  Bankruptcy
Courts  for  the Southern District of Texas, Houston Division.  On August 14,
1996, a final hearing took place to approve the payment of  professional  
fees and order final payment. However,  it is uncertain if 
Hydro-Test will be able to satisfy the  remaining  debt. In July 1998, 
Hydro-Test ceased commercial  operations and currently employs one person
at its  office  in  Texas.

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.

Cash  and  Cash  Equivalents
----------------------------

The  Company  considers all highly liquid investments purchased with an original
maturity  of  less  than  three  months  to  be  cash  equivalents.

Restricted  Cash
----------------

The  Company  has  Certificates  of  Deposit (CD's) with values of approximately
$25,000  and $40,000 at December 31, 1998 and 1997, respectively, that have been
recorded as restricted cash. Of the two CD's remaining at December 31, 1997, one
has  been  pledged to the Bureau of Land Management to cover environmental costs
and the other was pledged as a deposit to a utility company. The utility deposit
of $15,000 has been reclassified to unrestricted cash and  cash  equivalents  
at  December  31,  1998.

Revenue  Recognition
--------------------

Revenues  from the sale of petroleum produced are recognized upon the passage of
title,  net  of  royalties  and  net  profits  interests.

Inventories
-----------

The Company determines the cost of inventories on the first-in, first-out (FIFO)
method.  Inventories  of  crude  oil  held  under sales contracts are carried at
market  value.
                                       22
<PAGE>

                                       23
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

Property  and  Equipment
------------------------

The  carrying  value  of  oilfield  service operations property and equipment is
stated  at  net  estimated  realizable  value.

Oil  and gas properties are accounted for using the successful efforts method of
accounting.  Costs  of  drilling  and  equipping  successful  exploratory  and
developmental  wells are capitalized. All other exploratory expenses are charged
to  operations  as  incurred.  The  carrying  value of oil and gas properties is
evaluated in relation to the estimated present value of the future net revenues.
Depletion,  depreciation  and  amortization  are  calculated  using  the
units-of-production  method  based  on recoverable reserves. The Company did not
incur  any  exploratory costs during the years ended December 31, 1997 and 1998.

In  March 1995, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment
of Long-Lived Assets and/or Long-Lived Assets to be Disposed of." This statement
requires the review of long-lived assets for possible impairment whenever events
or  changes  in  circumstances indicate that the carrying amount of an asset may
not  be  recoverable.  It  establishes guidelines for determining recoverability
based on future net cash flows from the use of the asset and for the measurement
of  the  impairment  loss.

Impairment  loss  under SFAS No. 121 is calculated as the difference between the
carrying amount of the asset and its fair value. Any impairment loss is recorded
in  the  current  period in which the recognition criteria are first applied and
met.  Under  the  successful  efforts  method  of  accounting  for  oil  and gas
operations,  the  Company  periodically  assesses  its  proved  properties  for
impairments  by  comparing  the aggregate net book carrying amount of all proved
properties  with  their  aggregate  future  net  cash  flows.  The new statement
requires  the  impairment  review  to  be performed on the lowest level of asset
groupings  for  which  there  are  identifiable  cash  flows. In the case of the
Company,  this results in an impairment review of the Santa Clarita, California,
properties.

The  Company adopted SFAS No. 121 in 1996. The future impairment loss on the oil
and  gas properties has been calculated as the difference between the asset book
carrying  amounts  and  future  undiscounted  net  cash flow projections, giving
consideration to recent prices, pricing trends and estimated reserve quantities.
These  projections  represent the Company's best estimate of fair value based on
the  information  available.  All remaining oil and gas interests of the Company
were  fully impaired at December 31, 1998, based on the Company's reserve report
at  December  31,  1998  which  valued  the  remaining  reserves  at  $0.


                                       24
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

Property  and  Equipment  (Continued)
------------------------

In  addition  to  recognition  of impairment under SFAS No. 121, management also
periodically  assesses  the  value of significant proved and unproved properties
and  charges  estimated  impairments  of value to expense. A valuation allowance
expense  of  $1,390,000  was  recorded  in  1993,  bringing  the total valuation
provision for oil and gas properties to $10,963,000. The valuation allowance has
not  increased  since.  The  carrying  value  of  fixed  assets of the Company's
remaining  subsidiary,  Hydro-Test  International,  Inc.,  approximates  net
realizable  value  following  the  disposal  and  abandonment  losses  that were
recorded  in  1995.

Upon  the  sale  of  oil  and  gas  reserves  in  place,  costs less accumulated
amortization  of  such property are removed from the accounts and resulting gain
or loss on sale is reflected in operations.  Upon abandonment of properties, the
reserves are deemed fully depleted and any unamortized costs are recorded in the
statement  of  operations  under  loss  on  leases. Management sold or abandoned
substantially  all  oil  and  gas properties during the years ended December 31,
1998.

Disclosures  about  Fair  Value  of  Financial  Instruments
-----------------------------------------------------------

The  carrying  amount  of  cash  and cash equivalents, restricted cash, accounts
receivable,  other  current  assets,  accounts  payable  and  accrued  expenses
approximates fair value because of the short-term maturity of these instruments.
It  is  impractical  to  estimate  the  fair  value  of  the  production payment
receivable  included in other assets because there is no stated interest rate or
maturity,  and because the realization of the receivable is subject to price and
market  factors  uncontrollable  by  the  Company.

Income  Taxes
-------------

The  provision  for income taxes is based on pretax financial accounting income.
Deferred  tax  assets  and  liabilities  are  recognized  for  the  expected tax
consequences  of  temporary  differences  between  the  tax  basis of assets and
liabilities  and  the  reported  net  amounts.

Per  Share  Computations
------------------------

Per  share  computations  contained  in the financial statements included herein
reflect  the  retroactive  effect  of  a one for eight reverse stock split which
occurred  on  January  9,  1998.

Reclassifications
-----------------

Certain  prior year amounts have been reclassified to conform to classifications
followed  for  1998.  These  reclassifications  had  no effect upon reported net
income.


                                       25
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

New  Accounting  Pronouncements
-------------------------------

Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards  No.  130  (SFAS  130), Reporting Comprehensive Income. This statement
requires  that  all  items  that  are required to be recognized under accounting
standards  as  components  of  comprehensive  income  be reported in a financial
statement  that  is  displayed  with  the  same  prominence  as  other financial
statements.  Comprehensive  income  is  the  same  as  net  income for all years
presented.

Effective January 1, 1998, the Company adopted Statement of Accounting Standards
No.  131  (SFAS  131),  Disclosures  about Segments of an Enterprise and Related
Information. This statement requires the Company to report income/loss, revenue,
expense  and  assets  by  business  segment  including information regarding the
revenues  derived from specific products and services and about the countries in
which  the  Company  is  operating. The Statement also requires that the Company
report  descriptive  information  about  the  way  that  operating segments were
determined,  the  products  and  services  provided  by  the operating segments,
differences  between  the measurements used in reporting segment information and
those  used in the Company's general-purpose financial statements and changes in
the  measurement  of  segment amounts from period to period. As noted above this
statement  establishes  standards  for reporting and display and has no material
effect  on  the  Company's  financial  condition  or  results  of  operations.

In  February  1998,  the FASB issued Statement of Financial Accounting Standards
No.  132  (SFAS  132),  Employers'Disclosures  about  Pensions  and  other
Postretirement Benefits. This statement standardizes the disclosure requirements
for  pension  and other post retirement benefits. The Company typically does not
offer  the  types  of  benefit  programs  that fall under the guidelines of this
statement.

In  June  1998,  the FASB issued Statement of Financial Accounting Standards No.
133  (SFAS  133),  Accounting for Derivative Instruments and Hedging Activities.
This  statement  establishes  accounting  and reporting standards for derivative
instruments and requires recognition of all derivatives as assets or liabilities
in  the  statement of financial position and measurement of those instruments at
fair value. The statement is effective for fiscal years beginning after June 15,
1999.  Management  has  not  determined what impact this standard, when adopted,
will  have  on  the  Company's  financial  statements.


                                       26
<PAGE>
NOTE  2  -  PROPERTY  AND  EQUIPMENT
            ------------------------

Property  and equipment, all of which is located in the United States, is stated
at  cost  or  net realizable value and consists of the following at December 31,
(in  thousands):
<TABLE>
<CAPTION>


                                               1998     1997
                                              ------  ---------
<S>                                           <C>     <C>
At Cost
  Oil and gas properties, all proved, net of
    valuation allowance of $10,963 . . . . .  $   -   $ 21,882 
  Accumulated depletion and amortization . .      -    (20,974)
                                              ------  ---------
Net oil and gas properties . . . . . . . . .      -        908 
                                              ------  ---------
Other Property and Equipment
  Land and building. . . . . . . . . . . . .      -      1,265 
  Furniture, fixtures and equipment. . . . .    451        345 
  Accumulated depreciation related to other
    property and equipment . . . . . . . . .   (444)      (443)
                                              ------  ---------
Net Other Property and Equipment . . . . . .      7      1,167 
                                              ------  ---------
Net Property and Equipment, at cost. . . . .      7      2,075 
At Net Realizable Value:
  Oilfield service equipment . . . . . . . .    122        123 
                                              ------  ---------
Property and Equipment, net. . . . . . . . .  $ 129   $  2,198 
                                              ======  =========
</TABLE>


Depreciation,  depletion  and amortization for the years ended December 31, 1998
and  1997  was  $32,000  and  $123,000,  respectively.

Financial  Accounting  Standards  Board  Statements No. 121, "Accounting for the
Impairment  of  Long-Lived  Assets  and  for Long-Lived Assets to be Disposed of
(SFAS  121)." This statement requires that long-lived assets be held and used by
an entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Management
believes that the remaining carrying amount of plant assets is recoverable based
on  current cash flows projections. Such projections are predicated on currently
supported  estimates  and  assumptions.  The  cash  flows  that the Company will
ultimately  realize  could  differ  materially  from  the  projected  amounts.

During  1998,  the  Company determined that the decline in estimated oil and gas
reserves  due to the sale of substantially all oil and gas operating assets (see
Note  5),  depressed  oil  prices, and the Company's continuing operating losses
indicated  impairment  of  the  Company's  remaining oil and gas properties. The
estimated  undiscounted  cash  flows anticipated from  operating the oil and gas
properties  indicated  that a write-down to fair market value was required under
SFAS  121.  This  write-down  results in a charge to income of $242,000 which is
included  in  the Statement of Operations as impairment loss. The estimated fair
value  of  these  assets  was  determined  based  on  an  independent appraisal.


                                       27
<PAGE>
NOTE  3  -  PREPETITION  LIABILITIES
            ------------------------

Liabilities subject to compromise were stated in the December 31, 1995 financial
statements  at the amount of the original claim and not at the amounts for which
the  claims  were  settled.  Certain  claims were settled outside of bankruptcy,
however,  most  of  the  claims  were settled at 50% of the original prepetition
liability.  The  Company  has  not  accrued interest on the claims since seeking
Chapter  11  protection  on  September  1,  1995.

The remaining prepetition liability of Hydro-Test of $448,000 has been 
recorded as a long-term liability  as  management  does not intend to repay 
these liabilities within the next  operating  cycle.  Under  the  approved plan,
Hydro-Test will repay these liabilities  with  funds  generated  from  the  
sale  of  assets  or  continuing operations,  within  60  months  of  the  
plan's  approval  on  May  16,  1996.

During  fiscal  year  1998,  the  Company  repaid  $68,000  on  the  prepetition
liabilities  according  to  the  approved  plan.


NOTE  4  -  LONG-TERM  DEBT
            ---------------

Long-term  debt  at  December  31,  is  summarized  as  follows  (in  thousands)
(excluding  prepetition  liabilities):
<TABLE>
<CAPTION>


                                                 1998   1997
                                                 -----  -----
<S>                                              <C>    <C>
Bank term notes payable (secured by various
vehicles), due in monthly installments of $812,
including interest of 8.9% to 9.9%. . . . . . .  $   -  $  11
Less: current portion . . . . . . . . . . . . .      -      8
                                                 -----  -----
                                                 $   -  $   3
                                                 =====  =====
</TABLE>



NOTE  5  -  DISPOSITION  OF  ASSETS
            -----------------------

Liquidation  and  Reorganization
--------------------------------

On  February 12, 1997, Hydro-Test sold a testing truck for $16,000 cash, plus an
additional  $2,000  which  is  to  be  paid  over  a  12 month period in monthly
installments.


                                       28
<PAGE>
NOTE  5  -  DISPOSITION  OF  ASSETS  (Continued)
            -----------------------

Sale  of  Oil  and  Gas  Operating  Assets
------------------------------------------

On  February  4,  1998,  the  Company  entered  into  a contract for the sale of
substantially  all of the Company's oil and gas operating assets to an unrelated
entity.    These  operating  assets include the Company's 140 acre real property
holding  in  Hasley  Canyon,  together  with the oil and gas wells and leasehold
interests  and  related  equipment.    The  sale  was  effective  April 1, 1998.

The  purchase  price  was  $4,670,000  which  included  $3,739,000 in cash and a
production  payment  of  $931,000, payable in installments in any month in which
certain  postings  for crude oil exceeds $13.50 per barrel.  The monthly payment
will be equal to one-half of the difference between the posted price and $13.50,
multiplied  by  the  barrels produced.  There is no stated interest on the note.
Presently, the Company has received no production payments under this provision.

In  the third quarter of 1998, persistent declines in the price of oil triggered
management to reevaluate both the recorded value and net realizable value of the
$931,000  production  payment given in the exchange.  Management feels that only
approximately 40% of the stated value of the production payment will be realized
by  the  Company.    Accordingly,  the  proceeds  from  the sale and the gain as
previously  reported  at  June 30, 1998 have been reduced by $559,000 to reflect
management's  revised  valuation  of  the  production  payment  receivable.  The
previously  reported  gain  has  also  been  recalculated  from June 30, 1998 to
re-capitalize certain assets previously expensed. The Company retained interests
in  some  of the properties. However, the Company's December 31, 1998 geological
reserve  report  placed  no value on these interests. Accordingly, an impairment
loss  was recorded to report the remaining assets at $0, as discussed in Note 2.


NOTE  6  -  INCOME  TAXES
            -------------

A  reconciliation  of  the provision (benefit) for income taxes to the statutory
Federal income tax rate before extraordinary items is as follows (in thousands):
<TABLE>
<CAPTION>


                                              1998    1997
                                             ------  ------
<S>                                          <C>     <C>
Statutory Federal income tax (benefit). . .  $ 207   $  14 
Increase (decrease) in provision resulting
  from losses without tax benefit . . . . .   (207)    (14)
                                             ------  ------
                                             $   -   $   - 
                                             ======  ======
</TABLE>




                                       29
<PAGE>
NOTE  6  -  INCOME  TAXES  (Continued)
            -------------

Deferred  income  taxes  reflect  the  net  tax effects of temporary differences
between  the  carrying  amount of assets and liabilities for financial reporting
purposes  and  the  amount  used  for  income tax purposes.  The following table
summarizes  the  significant components of the Company's deferred tax assets and
liabilities  as  of  December  31,:
<TABLE>
<CAPTION>


                                                  1998      1997
                                                --------  --------
<S>                                             <C>       <C>
Deferred Tax Assets:
  Net operating loss carryforwards . . . . . .  $ 2,150   $ 1,903 
Valuation reserve for deferred tax assets. . .   (2,145)   (1,883)
                                                --------  --------
     Net Deferred Tax Assets . . . . . . . . .  $     5   $    20 
                                                ========  ========
Deferred Tax Liabilities:
  Tax over book depreciation, amortization
    and depletion. . . . . . . . . . . . . . .  $     5   $    20 
                                                --------  --------
     Deferred Tax Liabilities, net of deferred
       tax assets. . . . . . . . . . . . . . .  $     -   $     - 
                                                ========  ========
</TABLE>

At  December  31,  1998,  the  Company  had  net operating loss carryforwards of
approximately  $6,324,000  for  Federal  income  tax  purposes  that will expire
beginning  in  the  year  2002.  For  financial  reporting purposes, a valuation
allowance  of  $2,145,000  has  been  recorded  to offset the deferred tax asset
related  primarily  to  these  carryforwards.


NOTE  7  -  COMMON  STOCK
            -------------

On  February  8,  1993,  the Board of Directors adopted the 1993 Incentive Stock
Option Plan and the 1993 Non-Statutory Stock Option Plan (the Plans).  The Plans
provide  for  the  granting  of  options  to purchase up to a maximum of 150,000
shares  of  the  Company's common stock to officers, key employees and directors
who are not otherwise employed by the Company.  Under the Plans, options granted
to  non-employee  directors  are  limited  to  a  maximum of 7,500 shares of the
Company's  common  stock.    The  Plans  expire  on  February  8,  2003.

On  February  8,  1993, the Board of Directors adopted the 1993 Stock Bonus Plan
(the Bonus Plan). The Bonus Plan provides for the award of up to 6,250 shares of
the  Company's  common  stock  to officers and key employees of the Company. The
Bonus  Plan  was approved by the shareholders at the Company's Annual Meeting on
May  23,  1993.  The  Bonus  Plan  expired  on  February  8,  1998.


                                       30
<PAGE>
NOTE  7  -  COMMON  STOCK  (Continued)
            -------------

On  April  16,  1992,  the  Board  of  Directors  adopted  the  Directors  Stock
Compensation  Plan  (the  Stock Compensation Plan).  The Stock Compensation Plan
was  adopted  as  part  of  the  Company's  cost containment program.  The Stock
Compensation  Plan  provides  for  the  granting  of  up to 18,750 shares of the
Company's  common  stock to non-employee directors. Under the Stock Compensation
Plan  for the period May 1992 through September 1993, 12,450 shares were granted
to directors. On February 10, 1995, the balance of 6,300 shares of the Company's
common  stock  were  granted  to  six  non-employee  directors  under  the Stock
Compensation  Plan  for  the  period  October 1993 through June 1994.  The Stock
Compensation  Plan  terminated  on  February  10, 1995, at which time all of the
shares  issued  under  the Directors Stock Compensation Plan were distributed to
the  six  non-employee  directors.

On  March  6,  1997,  the  Board  adopted a resolution granting stock options to
purchase  up  to  5,000  shares of common stock to the then CEO, and up to 2,500
shares  of  common  stock to each of the three non-employee directors. Under the
terms  of  the resolution, the former CEO and each of the directors can purchase
shares  of  common  stock  for  the  average  price that the Company's stock was
trading  before  and  after  March 6, 1997. This average is $3.00 per share. The
Company  has  not  yet  issued  these  options.

No  stock  options  were  exercised during the years ended December 31, 1998 and
1997.

On  January 9, 1998, the Company's shareholders approved a one for eight reverse
split  of the Company's common stock.  Under the terms of the reverse split, one
share  of  $0.80 par value common stock will be issued for eight shares of $0.10
par  value  common  stock, effective as of January 25, 1998, for shareholders of
record  on  December  8, 1997. All fractional interest will be rounded up to the
next  whole  share. This stock split has been shown retroactively in the audited
financial  statements  as  of  December  31,  1998  and  1997.


                                       31
<PAGE>
NOTE  7  -  COMMON  STOCK  (Continued)
            -------------

In  February  1997,  the  Financial  Accounting  Standards  Board  (FASB) issued
Statement  of  Financial  Accounting  Standards  (SFAS)  No.  128, "Earnings per
Share," which is effective for the Company beginning December 31, 1998. SFAS 128
replaced  the  presentation of primary earnings per share with a presentation of
basic earnings per share based upon the weighted average number of common shares
for the period. It also requires dual presentation of basic and diluted earnings
per  share  for  companies  with  complex  capital structures. Basic and diluted
earnings per share for the twelve months ended December 31, 1998 and 1997 are as
follows:
<TABLE>
<CAPTION>


                        1998                            1997
                   ---------------                 ---------------        
                                                     (Restated)
                      Weighted                        Weighted
                   Average Shares   Income (Loss)  Average Shares   Income (Loss)
                   (in thousands)     Per Share    (in thousands)     Per Share
                   ---------------  -------------  ---------------  -------------
<S>                <C>              <C>            <C>              <C>
Basic
  Loss from
   continuing
   operations . .          (1,059)         (0.84)          (1,059)              -
                   ===============                 ===============               
  Income from
   discontinued
   operations                               1.40                                -
                                    -------------                   -------------

Net Income (Loss)                           0.56                                -
                                    =============                   =============
Diluted
  Loss from
   continuing
   operations . .          (1,059)         (0.84)          (1,059)              -
                   ===============                 ===============               
  Income from
   discontinued
   operations                               1.40                                -
                                    -------------                   -------------

Net Income (Loss)                           0.56                                -
                                    =============                   =============
</TABLE>


(All share amounts have been adjusted retroactively for the effects of a one for
eight  reverse  stock  split  on  January  9,  1998).

Basic  and  diluted  earnings  per  share  are  the same, as any impact from the
exercise  of  stock  options  would  be  anti-dilutive.


                                       32
<PAGE>
NOTE  8  -  RELATED  PARTIES  AND  RELATED  PARTY  TRANSACTIONS
            ---------------------------------------------------
During the periods covered by the financial statements, the Company was involved
in  various  transactions  with  related  parties. These related parties consist
primarily  of  corporations and joint ventures in which officers, directors, and
shareholders  of  the Company, directly and/or indirectly, own varying ownership
interest  and/or  are officers and directors thereof. Related party transactions
involving  the purchase of property and equipment by the Company and payments to
the  Company  for  services were approximately $18,000 and $134,000 for 1998 and
1997,  respectively.

On  December  3,  1996,  the Company became the general partner of Petrominerals
96-1,  a  newly formed limited partnership. Under the terms of the joint venture
agreement,  the  Company  assigned  the  drillsite  to the joint venture and all
casing  required  for the well, and leased to the joint venture the rods, tubing
and  downhole  and  surface  pumps and all other tangible equipment necessary to
produce  the  well.

The Company has a 1% interest as general partner and 6 other entities, including
2  directors  and  a  company  controlled  by  a director, own the remaining 99%
interest.  The  partnership  was  formed to enter into a joint venture agreement
with  the  Company  to  drill  a  well  on the Company's Mabel Strawn lease. The
Company  received  $280,000  from  the  partnership  under  a  turnkey  drilling
contract.  Proceeds  from the working interest will be paid 90% to Petrominerals
96-1  and  10%  to the Company until payout, and thereafter 30% to Petrominerals
96-1  and 70% to the Company. Payout occurs when Petrominerals 96-1 has recouped
the  monies  it contributed to the joint venture. The Company completed the well
on  January  20,  1997,  and  began  production  shortly  thereafter.

Three  directors  of the Company are limited partners in Petrominerals 96-1. The
respective  percentage  interests  of  the  partners in Petrominerals 96-1 as of
December  31,  1997  are  as  follows:

<TABLE>
<CAPTION>


                                                 Capital
                                 % Interest   Contribution
                                 -----------  -------------
<S>                              <C>          <C>
General Partner:
  Petrominerals Corporation . .        1.00%  $       2,800
Limited Partners:
  Paul L. Howard (director) . .       23.21%  $      65,000
  Morris V.  Hodges (director)*       17.86%  $      50,000
  David G.  Davidson (director)       17.86%  $      50,000
  Unrelated parties . . . . . .       40.07%  $     112,200
</TABLE>




                                       33
<PAGE>

NOTE  8  -  RELATED  PARTIES  AND  RELATED  PARTY  TRANSACTIONS
            ---------------------------------------------------
                  (Continued)
<TABLE>
<CAPTION>


                                                  Percentage
                      Name     Beneficial Owner      Owned
-----------------------------  -----------------  -----------
<S>                            <C>                <C>
Petrominerals 96-1, a Limited  General Partner:
  Partnership . . . . . . . .  Petrominerals            1.00%
                               Limited Partners:
                               Paul L. Howard          23.21%
                               Morris V. Hodges*       17.86%
                               David G. Davidson       17.86%
                               Unrelated parties       40.07%
                                                  -----------
   Total                                              100.00%
                                                  ===========
</TABLE>


*  Represents indirect ownership through his wholly-owned corporation, Kaymor
   Petroleum  Products,  Inc.

The  Company receives a $350 monthly management fee and a monthly rental fee for
the tangible equipment. The rental fee is $2,400 per month until payout and $400
per  month  thereafter.  These  payments  began  in  1997.

The  Company  bought  out  all  outside  interests from the limited partners for
$214,755  in  April  1998.  The  partnership assets were sold to American Energy
Operations,  Inc.  (AEO)  pursuant  to  the  sale  of  the Company's oil and gas
holdings  effective  April  1,  1998  (see  Note  5).

NOTE  9  -  UNAUDITED  QUARTERLY  FINANCIAL  DATA
            -------------------------------------
(In  thousands,  except  per  share  amounts)
<TABLE>
<CAPTION>


                               First     Second      Third     Fourth
                              Quarter    Quarter    Quarter    Quarter    Year
                             ---------  ---------  ---------  ---------  -------
<S>                          <C>        <C>        <C>        <C>        <C>
1998
---------------------------                                                     
  Revenues. . . . . . . . .  $    188   $    110   $    102   $     68   $  468 
  Costs and expenses. . . .       346        238        263        508    1,355 
  Income (loss) from
    continuing operations .      (158)      (128)      (161)      (440)    (887)

  Discontinued operations,
    net of taxes. . . . . .         -      2,161       (476)      (203)   1,482 
  Net income (loss) . . . .      (158)     2,033       (637)      (643)     595 
  Net income (loss)
    per share . . . . . . .     (0.15)      1.92      (0.60)     (0.61)    0.56 
</TABLE>



                                       34
<PAGE>
NOTE  9  -  UNAUDITED  QUARTERLY  FINANCIAL  DATA  (Continued)
            -------------------------------------
<TABLE>
<CAPTION>


                              First     Second     Third     Fourth
                             Quarter    Quarter   Quarter    Quarter    Year
                             --------  ---------  --------  ---------  ------
<S>                          <C>       <C>        <C>       <C>        <C>
1997 (Restated)
---------------------------                                                  
  Revenues. . . . . . . . .  $    368  $    337   $    399  $    303   $1,407
  Costs and expenses. . . .       312       346        330       419    1,407
  Income (loss) from
    continuing operations .        56        (9)        69      (116)       -

  Discontinued operations,
    net of taxes. . . . . .         -         -          -         -        -
  Net income (loss) . . . .        56        (9)        69      (116)       -
  Net income (loss)
    per share . . . . . . .      0.05     (0.01)      0.07     (0.11)       -
</TABLE>


(Per share amounts have been adjusted retroactively for the effects of a one for
eight  reverse  stock  split  on  January  9,  1998).

                                       35
<PAGE>

NOTE  10  -  SEGMENT  INFORMATION
             --------------------

The Company adopted SFAS No. 131, Disclosure About Segments of an Enterprise and
Related Information  SFAS 131" in 1998 which changes the way the Company reports
information  about  its  operating  segments.

The  Company identifies reportable segments by product and country, although the
Company  currently  does not have foreign country segments. The Company includes
revenues  from both external customers and revenues from transactions with other
operating  segments  in  its measure of segment profit or loss. The Company also
includes interest revenue and expense, DD&A, and other operating expenses in its
measure  of  segment  profit  or  loss.

The  accounting  policies  of  the  reportable  segments  are  the same as those
described  in  the  Summary  of  Significant Accounting Principles (see Note 1).

The  Company's  operations  are classified into two principal industry segments.
Following  is  a  summary  of  segmented  information  for  1998  and  1997:
<TABLE>
<CAPTION>


                                                           Oil
                                            Oilfield    Production
                                            Services    and Sales     Total
                                           ----------  ------------  -------
<S>                                        <C>         <C>           <C>
Year Ended December 31, 1998
Revenue from external customers . . . . .  $      68   $       400   $  468 
                                           ==========  ============  =======
Interest revenue. . . . . . . . . . . . .  $       -   $       122   $  122 
                                           ==========  ============  =======
Interest expense. . . . . . . . . . . . .  $       1   $         3   $    4 
                                           ==========  ============  =======
Expenditures for segment assets . . . . .  $       -   $       405   $  405 
                                           ==========  ============  =======
Depreciation, depletion and amortization.  $       1   $        31   $   32 
                                           ==========  ============  =======
Lease impairment. . . . . . . . . . . . .  $       -   $       242   $  242 
                                           ==========  ============  =======
Total Assets (net of intercompany items).  $     125   $     3,434   $3,559 
                                           ==========  ============  =======
(Loss) from continuing operations . . . .  $     (67)  $      (820)  $ (887)
                                           ==========  ============  =======
Income from discontinued operations . . .  $       -   $     1,482   $1,482 
                                           ==========  ============  =======
Net Income (Loss) . . . . . . . . . . . .  $     (67)  $       662   $  595 
                                           ==========  ============  =======

Year Ended December 31, 1997(Restated)
Revenue from external customers . . . . .  $      95   $     1,312   $1,407 
                                           ==========  ============  =======
Interest revenue. . . . . . . . . . . . .  $       -   $        41   $   41 
                                           ==========  ============  =======
Interest expense. . . . . . . . . . . . .  $       1   $         2   $    3 
                                           ==========  ============  =======
Expenditures for segment assets . . . . .  $       -   $       276   $  276 
                                           ==========  ============  =======
Depreciation, depletion and amortization.  $      10   $       113   $  123 
                                           ==========  ============  =======
Lease impairment. . . . . . . . . . . . .  $       -   $         -   $    - 
                                           ==========  ============  =======
Total Assets (net of intercompany items).  $     196   $     2,916   $3,112 
                                           ==========  ============  =======
(Loss) from continuing operations . . . .  $    (108)  $        93   $    - 
                                           ==========  ============  =======
Income from discontinued operations . . .  $       -   $         -   $    - 
                                           ==========  ============  =======
Net Income (Loss) . . . . . . . . . . . .  $    (108)  $        93   $    - 
                                           ==========  ============  =======
</TABLE>


Effective  April  1, 1998, the Company disposed of its oil production segment by
sale  to  an  unaffiliated  third  party.

                                       36
<PAGE>
NOTE  11  -  ENVIRONMENTAL  MATTERS
             ----------------------

On December 6, 1989, the Company was notified by the United States Environmental
Protection  Agency  (EPA)  that,  under  provisions  of  the  Comprehensive
Environmental  Response,  Compensation  and  Liability Act of 1980 (CERCLA), the
Company  was considered a potentially responsible party (PRP) in the clean-up of
the  Operating  Industries,  Inc. (OII) waste disposal site, located in Monterey
Park,  California.  The  EPA has also contacted approximately 270 other PRPs who
disposed of liquid waste at this site. The Company is in the fourth tier of PRPs
notified  by  the  EPA,  regarding  this  site.

Management  continues  to  gather information related to this matter. Based upon
information  available  to it at this time, management believes that the Company
(through its predecessors, Century Oil Corporation) disposed of drilling mud and
water  at  the  OII  waste disposal site at various times from 1975 to 1977. The
Company  contends  that  any  drilling  mud  and  waste water disposed of by the
Company (or its predecessor) does not contribute to the problem at the OII site.
Although  the  ultimate impact of the resolution of this contingency is unknown,
management  believes that this matter will not have a material adverse effect on
the  financial  position  of  the  Company.


NOTE  12  -  CONTINGENCIES
             -------------

The  Company  has  certain  contingent  liabilities  with respect to litigation,
claims,  taxes,  government  regulations and contractual agreements arising from
the  ordinary  course  of  business.  While  there  are always risks inherent in
resolution  of  any  contingency,  it  is  the  opinion  of management that such
contingent  liabilities  will not result in any loss which would have an adverse
material  effect  on  the  Company's  financial  position.

The Company is subject to other possible loss contingencies pursuant to federal,
state  and  local environmental laws and regulations. These include existing and
potential  obligations  to  investigate  the  effects  of the release of certain
hydro-carbons  or  other  substances  at  various sites; to remediate or restore
these  sites; and to compensate others for damages and to make other payments as
required  by  law  or regulation. These obligations relate to sites owned by the
Company  or  others,  and  are  associated  with  past  and  present oil and gas
operations.  The  amount of such obligations is indeterminate and will depend on
such  factors  as  the  unknown  nature and extent of contamination, the unknown
timing,  extent  and  method  of  remedial  actions  which  may be required, the
determination  of  the  Company's  liability  in proportion to other responsible
parties,  and  the  state  of  the  law.


                                       37
<PAGE>
NOTE  13  -  PRIOR  PERIOD  ADJUSTMENTS
             --------------------------

An  error,  resulting  in the understatement of the Company's beginning retained
earnings, in the Company's previously issued 1997 financial statements, has been
corrected  in  the  current  year.  This  resulted  in  the following changes to
retained  earnings  as  of  December 31, 1997, and the related 1997 statement of
operations.
<TABLE>
<CAPTION>


                                           Retained
                                           Earnings    Net Loss
                                           ---------  ----------
<S>                                        <C>        <C>
December 31, 1997, as previously reported  $     902  $     (15)
  Adjustment: overstated accounts payable         15         15 
                                           ---------  ----------
December 31, 1997, as restated. . . . . .  $     917  $       - 
                                           =========  ==========
</TABLE>


NOTE  14  -  CONCENTRATION  OF  BUSINESS  AND  CREDIT  RISK
             ----------------------------------------------

The  Company  sold  substantially  all  of its oil and gas to Texaco Trading and
Transportation,  Inc.  (Texaco).  In fiscal year 1998 and 1997, revenue from the
sale  to  Texaco  was  more than 50% and 80% of the Company's gross revenue from
continuing  operations,  respectively.

The Company maintains most cash and cash equivalents in short-term (less than 30
days)  commercial  paper managed by Union Bank of California which does not have
Federal Insurance or collaterals to secure the balance. At December 31, 1998 and
1997,  unsecured cash and cash equivalents were $2,775,000 and $0, respectively.

NOTE  15  -  SUPPLEMENTAL  OIL  AND  GAS  PROPERTIES  AND  RELATED
             -----------------------------------------------------
             RESERVES  (UNAUDITED)
             ---------------------

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

Selected  financial  information  for oil and gas operations accounted for under
the  successful  efforts  methods for the years ended December 31, is summarized
below  (in  thousands):
<TABLE>
<CAPTION>


                                             1998    1997
                                            ------  ------
<S>                                         <C>     <C>
Produced oil and gas sales . . . . . . . .  $ 255   $1,171
Less:
  Operating expenses . . . . . . . . . . .    402      648
  Depreciation, depletion and amortization     31      113
                                            ------  ------
Results of operations from oil and gas
 producing activities, excluding corporate
 overhead and interest costs . . . . . . .  $(178)  $  410
                                            ======  ======
</TABLE>


No  development  or  property  acquisition  costs were incurred in 1998 or 1997.

                                       38
<PAGE>
NOTE  15  -  SUPPLEMENTAL  OIL  AND  GAS  PROPERTIES  AND  RELATED
             -----------------------------------------------------
             RESERVES  (UNAUDITED)  (Continued)
             ---------------------

Estimated  Quantities  of  Oil  and  Gas  Reserves
--------------------------------------------------

The  following  table  presents  the  Company's  estimates of its proved oil (in
thousands  of barrels) reserves, which are all located in the United States. All
reserve  estimates  have  been  prepared by independent petroleum engineers. The
Company  emphasizes  that  reserve  estimates  are  inherently imprecise and are
expected  to  change  as  future information becomes available. Estimates of its
proved  oil  reserves  for  the  years  ended  December  31,  are  as  follows:
<TABLE>
<CAPTION>


                                            1998    1997
                                            -----  ------
<S>                                         <C>    <C>
Proved developed and undeveloped reserves:
  Beginning of period. . . . . . . . . . .   871   1,999 
  Revision of previous estimates . . . . .     -      12 
  Production . . . . . . . . . . . . . . .   (47)   (119)
  Sale of minerals in place. . . . . . . .  (824)      - 
                                            -----  ------
End of period. . . . . . . . . . . . . . .     -   1,892 
Proved developed reserves:
  Beginning of period. . . . . . . . . . .   871     952 
  End of period. . . . . . . . . . . . . .     -     871 
</TABLE>


Discounted  Future  Net  Cash  Flows  Relating  to  Proved  Oil and Gas Reserves
--------------------------------------------------------------------------------
A  standardized  measure  of discounted future net cash flows is presented below
for  each of the years ended December 31, 1998 and 1997. Future cash inflows are
computed  by  applying  year-end prices of oil and gas relating to the Company's
proved  reserves  to  year-end  quantities  of  those  reserves.

Future  development  and  production  costs  are  computed  by  estimating  the
expenditures  to  be  incurred  for  developing and producing proved oil and gas
reserves, based on year-end costs and assuming continuation of existing economic
conditions.

Future  income  tax  expense  is  computed  by applying year-end statutory rates
(adjusted  for  permanent  differences)  to  the  future  pretax  net cash flows
relating  to  the  Company's  proved oil and gas reserves, less the tax basis at
each  year-end  of  the  properties  involved.

A  10%  annual  discount  rate  is used to reflect the timing of future net cash
flows  relating  to  proved  oil  and  gas  reserves.

                                       39
<PAGE>
NOTE  15  -  SUPPLEMENTAL  OIL  AND  GAS  PROPERTIES  AND  RELATED
             -----------------------------------------------------
             RESERVES  (UNAUDITED)  (Continued)
             ---------------------

Discounted  Future  Net  Cash  Flows  Relating  to  Proved  Oil and Gas Reserves
--------------------------------------------------------------------------------
(Continued)
-------

The  projections  should  not  be  viewed  as realistic estimates of future cash
flows,  nor  should  the  "standardized  measure" be interpreted as representing
current value to the Company. Material revisions to estimates of proved reserves
may  occur  in  the  future;  development and production of the reserves may not
occur  in  the  periods  assumed;  and  actual  prices realized and actual costs
incurred  may  vary  significantly  from  those  used.

The  following  reserve  estimates  and  resulting  future  net  cash flows were
developed  in  accordance  with  Securities and Exchange Commission rules, using
selling  prices  in  effect at the end of the years indicated. Both the quantity
estimates and "cash flow" of reserves are sensitive to sales prices in effect at
the  year  end  quantification  date. During periods of rapidly changing prices,
reserve  information must be examined with this understanding. Reserve estimates
and  resulting  future  net  cash  flows for the years ended December 31, are as
follows  (in  thousands):
<TABLE>
<CAPTION>


                                           1998     1997
                                           -----  ---------
<S>                                        <C>    <C>
Future cash inflows . . . . . . . . . . .  $   -  $ 27,591 
Future production and development costs .      -   (16,522)
Future income tax expense . . . . . . . .      -    (3,763)
                                           -----  ---------
Future net cash flows . . . . . . . . . .      -     7,306 
10% annual discount for estimated timing
  of cash flows . . . . . . . . . . . . .      -    (2,469)
                                           -----  ---------
Standardized measure of discounted future
  net cash flows. . . . . . . . . . . . .  $   -  $  4,837 
                                           =====  =========
</TABLE>




                                       40
<PAGE>
NOTE  15  -  SUPPLEMENTAL  OIL  AND  GAS  PROPERTIES  AND  RELATED
             -----------------------------------------------------
             RESERVES  (UNAUDITED)  (Continued)
             ---------------------

Discounted  Future  Net  Cash  Flows  Relating  to  Proved  Oil and Gas Reserves
--------------------------------------------------------------------------------
(Continued)
-------

Following  are  the  principal  sources of change in the standardized measure of
discounted  future  cash  flows for the years ended December 31, (in thousands):
<TABLE>
<CAPTION>


                                                 1998     1997
                                               --------  ------
<S>                                            <C>       <C>
Sales and transfers of oil and gas produced,
  net of production cost. . . . . . . . . . .  $   131   $(455)
Net changes in prices and production costs,
  based on beginning of year barrels. . . . .        -       - 
Net changes in previous estimate of future
  development costs . . . . . . . . . . . . .        -     410 
Revisions to previous estimates . . . . . . .        -     104 
Accretion of discount . . . . . . . . . . . .        -     330 
Net change in income taxes. . . . . . . . . .        -    (719)
Sale of minerals in place . . . . . . . . . .    4,968       - 
Other . . . . . . . . . . . . . . . . . . . .        -    (477)
                                               --------  ------
Net Increase (Decrease) . . . . . . . . . . .  $(4,837)  $(807)
                                               ========  ======
</TABLE>




                                       41
<PAGE>
ITEM  8  -  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
            ------------------------------------------------------
                ACCOUNTING  ANDFINANCIAL  DISCLOSURE
                ------------------------------------

None.


                                       42
<PAGE>
                                    PART III


ITEM  9  -  DIRECTORS,  EXECUTIVE  OFFICERS,  COMPLIANCE  WITH  SECTION
            -----------------------------------------------------------
            16(A)  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934
            ---------------------------------------------------

The  Executive  Officers of Petrominerals, together with the years in which such
Officers  were  named  to  their  present  offices  are  as  follows:
<TABLE>
<CAPTION>

<S>                                                                         <C>                       <C>
                                                                            Position with             Year Named to
Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  Company                   Present Position
--------------------------------------------------------------------------  ------------------------  ----------------
Morris V. Hodges*. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  President, Chief
                                                                            Executive Officer, Chief
                                                                            Financial Officer and
                                                                            Director                         1998
Everett L. Hodges**. . . . . . . . . . . . . . . . . . . . . . . . . . . .  Secretary and Treasurer          1998
</TABLE>


Each of the Executive Officers serves at the pleasure of the Board of Directors.

                                       43
<PAGE>

*   Mr. Morris Hodges was appointed President and Chief Executive Officer on
    December 30, 1998. Mr. Hodges has held the position of Assistant Secretary 
    since March  1995.

**  Mr. Everett Hodges was appointed Secretary and Treasurer on December 30,
    1998.


Biographical  Information
-------------------------

The  following table sets forth the name, principal occupation, age and the year
in  which the individual first became a director, and business experience during
the  last  five  years:
<TABLE>
<CAPTION>


<S>               <C>  <C>       <C>
MORRIS V. HODGES  64  Director  1979
----------------                    
</TABLE>


Mr.  Morris  V.  Hodges  was  appointed President and Chief Executive Officer on
December 30, 1998.  Mr. Morris Hodges has held a controlling interest in and has
served  as  a  director and officer of the following companies for more than the
past  ten  years:  Hillcrest Beverly Oil Corporation; Kaymor Petroleum Products,
Inc.;  Sunset Pipeline and Terminalling, Inc.; Coastal Petroleum Refiners, Inc.;
and  Hydraulic Rod Pumps, International. Certain of the foregoing companies have
been  affiliated  with  the  Company  in  various  transactions.   See Item 12 -
"Certain  Relationships  and Related Transactions." Morris V. Hodges and Everett
L.  Hodges,  as  a  group,  may  be  deemed  to  be  controlling  persons.


                                       44
<PAGE>
ITEM  9  -  DIRECTORS,  EXECUTIVE  OFFICERS,  COMPLIANCE  WITH  SECTION
            -----------------------------------------------------------
            16(A)  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934  (Continued)
            ---------------------------------------------------
<TABLE>
<CAPTION>


<S>                <C>  <C>       <C>
EVERETT L. HODGES  66  Director  1979
-----------------                    
</TABLE>


Mr.  Everett  L.  Hodges  served as President of the Company from September 1987
through  February 1992.  For more than the past ten years, Mr. Hodges has held a
controlling  interest  in  and  has  served  as a director and officer of Energy
Production  &  Sales  Co.;  California Oil Independents, Inc.; Coastal Petroleum
Refiners,  Inc.;  and  has  served  as  a  director and officer of St. James Oil
Corporation  since  1988.    Mr.  Hodges has also served as the President of the
Violence  Research  Foundation,  a non-profit foundation, since its inception in
1991.   Certain of the foregoing companies have been affiliated with the Company
in  various  transactions.    See  Item  12 - "Certain Relationships and Related
Transactions."    Everett  L.  Hodges  and  Morris V. Hodges, as a group, may be
deemed  to  be  controlling  persons.
<TABLE>
<CAPTION>


<S>                <C>  <C>       <C>
DAVID G. DAVIDSON  74  Director  1979
-----------------                    
</TABLE>


Mr.  Davidson  has  been  principally  employed  as  President and Owner of OP&E
Company  since 1984.  Mr. Davidson serves as a director of Mieco, Inc., a public
company  engaged  in  domestic  and  foreign  petroleum  trading.  Mr.  Davidson
currently  sits  on  the  audit  committee.
<TABLE>
<CAPTION>


<S>                <C>  <C>       <C>
WILLIAM N. HAGLER  66  Director  1998
-----------------                    
</TABLE>


Mr William N. Hagler is Chairman of the Board of Directors, CEO and President of
Intermountain  Refining  Co.,  Inc., a company he founded in 1984. Intermountain
Refining  is  or  has  been  engaged  in  petroleum  refining  and  marketing,
co-generation  of  electric  power  and  natural gas production. Since 1955, Mr.
Hagler  has  been  continuously  employed  in  various  phases  of the petroleum
industry  with  Exxon,  Cities  Service  Oil  Company,  Riffe Petroleum Company,
Plateau,  Inc.,  and  Unico,  Inc.,  a company he founded in 1979. Mr. Hagler is
Chairman  of  the Board of Directors of SABA Petroleum Company and is a director
of  Consolidated  Oil and Transportation Company. In addition, he is a President
of  Red  Hills  Manufacturing Company and Hagler Oil and Gas Company. Mr. Hagler
serves  on the Public Utility Commission for the City of Farmington, New Mexico.
Mr.  Hagler  currently  sits  on  the  audit  committee.


                                       45
<PAGE>
ITEM  9  -  DIRECTORS,  EXECUTIVE  OFFICERS,  COMPLIANCE  WITH  SECTION
            -----------------------------------------------------------
            16(A)  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934  (Continued)
            ---------------------------------------------------
<TABLE>
<CAPTION>


<S>              <C>  <C>       <C>
JOHN C. MCMAHON  52  Director  1999
---------------                    
</TABLE>


Mr. John C. McMahon has been employed as Vice President of Koch Oil's West Coast
crude  oil  operations  from  January 1978 - December 1998. This was a privately
held  company engaging in the crude oil marketing, gathering and trading of both
domestic  and  foreign  crude oil. Mr. McMahon retired from Koch in January 1999
after  Koch  Oil's  assets  were  sold  to  E.O.T.T.

Standing  Committees  and  Meetings  of  the  Board  of  Directors
------------------------------------------------------------------

STANDING  COMMITTEES

The  Company  has certain standing committees, each of which is described below:

Ad-Hoc  Committee  -  This  committee consists of Messrs. Morris Hodges, William
Hagler  and  David  Davidson.    This committee evaluates proposed acquisitions,
mergers  or  other pertinent negotiations which may come before the Board.  This
committee  held  no  meetings during the last fiscal year, as all discussions
and decisions were made  by  the  full  Board  of  Directors,  which  includes 
the Ad-Hoc Committee membership.

Audit  Committee  -  This committee consists of Messrs. William Hagler and David
Davidson.    The  Audit  Committee  is  responsible  for reviewing the scope and
procedures  of  internal  auditing  work, the results of independent audits, the
accounting  policies  of management, and recommends to the Board the appointment
of  the  Company's  outside  auditors.  This committee did not hold any meetings
during  the  last  fiscal  year, as all discussions and decisions were made by 
the full Board of Directors,  which  includes  the  Audit  Committee  
membership.

ATTENDANCE  AT  BOARD  MEETINGS

During  the  last  fiscal year, the Board of Directors of the Company held three
regular  meetings  and  one special meeting.  Attendance at such meetings of the
Board  was  100%.


                                       46
<PAGE>
ITEM  10  -  EXECUTIVE  COMPENSATION
             -----------------------

The following Summary Annual Compensation Table sets forth all cash compensation
paid,  distributed  or  accrued for services, including salary and bonus amounts
rendered in all capacities for the Company during the fiscal year ended December
31,  1998,  whose  annual cash compensation exceeded $100,000 or served as Chief
Executive Officer. All other tables required to be reported have been omitted as
there  has  been  no  compensation  awarded  to, earned by or paid to any of the
Company's  executives  in  any  fiscal  year  covered  by  the  table.

SUMMARY  ANNUAL  COMPENSATION  TABLE
<TABLE>
<CAPTION>


                                                 Year  Salary
                                                 ----  -------
<S>                                              <C>   <C>
Paul L.  Howard, former President, Chief
 Executive Officer and Chief Financial Officer,  1998  $90,000
 resigned December 30, 1998
</TABLE>


Mr  Howard was appointed Chairman, President, Chief Executive Officer, and Chief
Financial  Officer  of  Petrominerals  Corporation  on  March  24,  1995.

OTHER  COMPENSATION  OF  EXECUTIVE  OFFICERS

The Company provided travel and entertainment expenses to its executive officers
and  key  employees.    The  aggregate  amount  of  such compensation, as to any
executive  officer  or key employee, did not exceed the lesser of $25,000 or 10%
of the cash compensation paid to such executive officer or key employee, nor did
the  aggregate  amount  of  such  other  compensation  exceed  10%  of  the cash
compensation  paid  to  all  executive  officers  or  key  employees as a group.

TERMINATION  AND  CHANGE  IN  CONTROL  ARRANGEMENTS

In  July  1993,  the  Board  of Directors adopted a severance plan for executive
officers  providing  that, in the event of termination of employment as a result
of  a  change  in  control of the corporation, that such executive officer would
receive  severance  in  the amount of one year's base salary.  The Plan does not
provide  for  any  severance  in  the  event  of  the resignation, retirement or
termination  of  any Executive Officer's employment with the Company for reasons
other  than  a  change  in  control  of  the  Company.


                                       47
<PAGE>
ITEM  10  -  EXECUTIVE  COMPENSATION  (Continued)
             -----------------------

COMPENSATION  OF  DIRECTORS

During  the  year  ended  December  31,  1998,  each  of  the three non-employee
directors  who  held office the entire year were paid $350 per month for a total
of $4,200 each.  In addition, the  non-employee  directors  are reimbursed for 
reasonable expenses incurred in connection  with  any  meetings attended.

The  Company did not pay any additional fees to directors for serving as members
of  the  Audit or Ad-Hoc Committees during the last fiscal year.


ITEM  11  -  SECURITY  OWNERSHIP  OF  BENEFICIAL  OWNERS  AND
             ------------------------------------------------
             MANAGEMENT
             ----------

The  following table lists the beneficial ownership, as of February 24, 1999, of
the  Company's  common  stock  with  respect  to all directors and officers as a
group,  to the extent that it is known to the Company, either through Securities
Exchange  Act  filings,  Company  records or information supplied by the persons
named  in  the  table.
<TABLE>
<CAPTION>


Name and Address          Amount and Nature of
     of Beneficial Owner  Beneficial Ownership   Percent of Class
------------------------  ---------------------  -----------------
<S>                       <C>                    <C>
John C. McMahon. . . . .                 1,875               0.18%
David G. Davidson. . . .                 3,750               0.35%
Everett L. Hodges. . . .         88,060     (2)              8.31%
Morris V. Hodges . . . .        108,187     (3)             10.21%
                          ---------------------  -----------------
                                201,872     (1)             19.05%
                          =====================  =================
</TABLE>


(1)       All directors and officers, as a group, including persons named above.

(2)      The 88,060 shares beneficially held by Everett L. Hodges include 73,487
shares  held  of  record  jointly  in  the Everett L. Hodges  and Mary M. Hodges
Trust.    This  amount  also  includes  4,175 shares held directly by Everett L.
Hodges,  and 10,398 shares held of record by Energy Production & Sales Co., Inc.
(EPS).  The  88,060  shares  do  not include 10,052 shares held in trust for the
children  and  grandchild  of Everett L. and Mary M. Hodges, as to which Mr. and
Mrs. Everett L. Hodges disclaim any beneficial ownership.  Everett L. Hodges and
Morris  V.  Hodges,  as  a  group,  may  be deemed to be a controlling person of
Petrominerals  by  virtue  of  their  share  ownership.


                                       48
<PAGE>
ITEM  11  -  SECURITY  OWNERSHIP  OF  BENEFICIAL  OWNERS  AND
             ------------------------------------------------
             MANAGEMENT  (Continued)
             ----------
(3)         The 108,187 shares beneficially held by Morris V. Hodges include 714
shares  held  of  record  jointly  in the Morris V. Hodges and Kathryn M. Hodges
Trust,  and  1,050  shares  held directly by Morris V. Hodges.  This amount also
includes 10,398 shares held of record by Sunset Pipeline and Terminalling, Inc.,
a company controlled by Mr. Hodges, and 96,025 shares held by the adult children
of  Morris V. Hodges and Kathryn M. Hodges for the benefit of the  children
and their grandchildren. Everett L. Hodges and Morris V. Hodges, as a group, 
may be deemed  to  be  a  controlling  person of Petrominerals by virtue of 
their share ownership.

1993  INCENTIVE  STOCK  OPTION  PLAN  AND  1993  NON-STATUTORY STOCK OPTION PLAN
The  Company  has  in  effect  two stock option plans - the 1993 Incentive Stock
Option  Plan  (the  Incentive Plan) and the 1993 Non-Statutory Stock Option Plan
(the  Non-Statutory  Plan)  (the  Incentive  Plan and the Non-Statutory Plan are
sometimes  collectively  referred to herein as the Plans), which were adopted by
the  Board of Directors and approved by the shareholders of the Company in 1993.
The  Plans  in  the  aggregate provide for the granting of options to purchase a
maximum  of  150,000  shares  of  the  Company's  common  stock to employees and
directors  of  the  Company  and  its  affiliates  (as defined herein); however,
options  which may be granted to non-employee directors are limited to a maximum
of  7,500  shares.    The  Plans  expire  on  February  8,  2003.

Any  of  the Company's current or future employees who render, in the opinion of
the Board of Directors, the type of services which tend to contribute materially
to  the  success  of  the Company or an affiliate of the Company are eligible to
participate  in  the  Incentive  Plan.  Any  of  the Company's current or future
employees  or  directors  (whether or not otherwise employed by the Company) who
render,  in  the  opinion  of the Board of Directors, the type of services which
tend  to  contribute materially to the success of the Company or an affiliate of
the  Company  are  eligible  to  participate  in  the  Non-Statutory  Plan.

The  Plans  are  administered by the Board of Directors of the Company which has
the authority to determine the employees and directors to whom options are to be
granted,  the  number  of  shares  subject  to  each option price of outstanding
options  (but not below the fair market value of the shares subject thereto), to
enter  into agreements relating to the value of the option at the date of grant,
and  to  make  all  other  determinations  necessary  or  advisable  to  the
administration  of  the  Plan.  With  the  consent of the optionee, the Board of
Directors  will  also  have the power to substitute options with different terms
for  previously  granted  options,  or  to  amend  the  terms  of  any  option.

The  Board  of  Directors may delegate administration of the Plan to a committee
composed  of  not  less  than  three  members  of  the  Board  of  Directors.
Administration  of  the  Plan  with  respect to committee members, however, just
remain  vested  in the Board. With respect to options granted to a director, the
Board  of  Directors shall take action by a vote sufficient without counting the
vote  of  the  interested  director.  Interested  directors  may  be  counted in
determining  the presence of quorum at a meeting of the Board of Directors which
authorized  the  granting  of  options  to  such  directors.

                                       49
<PAGE>
ITEM  11  -  SECURITY  OWNERSHIP  OF  BENEFICIAL  OWNERS  AND
             ------------------------------------------------
             MANAGEMENT  (Continued)
             ----------

1993  STOCK  BONUS  PLAN

In  February 1993, the Board of Directors adopted the Company's 1993 Stock Bonus
Plan (Bonus Plan). The Bonus Plan provides the awarding of up to 6,250 shares of
the  Company's  common  stock  to officers and key employees of the Company. The
Plan  is  administered  by  the  Board  of  Directors which has the authority to
determine  the  officers  and  key  employees  to  whom  stock bonuses are to be
awarded,  the time or times at which stock bonuses will be awarded, and, subject
to  the  limits  discussed  below, the number of shares to be granted under each
award.  The  Board  of Directors has the power to delegate the administration of
the  Bonus  Plan  to  a  committee of the Board appointed in accordance with the
Company's  Bylaws. The aggregate fair market value (determined as of the date of
grant)  of  the  shares  of  common stock awarded to any officer or key employee
under  the  Bonus  Plan  in any one calendar year cannot exceed one-sixth of the
officer's  or  key  employee's  salary (excluding bonuses and awards under other
incentive  plans  maintained  by  the Company) for such calendar year. The Bonus
Plan  terminated  on  February  8,  1998.

DIRECTORS  STOCK  COMPENSATION  PLAN
On  April  16,  1992,  as  part  of  its  cost containment program, the Board of
Directors  of  the  Company  adopted  the Directors Stock Compensation Plan (the
Stock  Compensation Plan). The Stock Compensation Plan provides for the granting
of  stock  to non-employee directors of the Company in lieu of paying director's
fees  in  cash.  The  purpose of the Stock Compensation Plan is to minimize cash
outflow  from  the  Company  by  compensating  non-employee  directors for their
services  to  the  Company  in  stock rather than in cash. The maximum number of
shares  provides  for  the  Stock Compensation Plan is 18,750. Only non-employee
directors  of  the Company are eligible to participate in the Stock Compensation
Plan.  In  February  1994  and February 1993, a distribution of 2,075 shares and
1,050  shares  was  made  to each of the non-employee directors under this Plan,
respectively.  This  Plan  terminated on February 10, 1995, at which time all of
the  shares  issued  under this Plan were distributed to non-employee directors.

The  Stock Compensation Plan is administered by the disinterested members of the
Board,  or,  in the event there are none such, the President and Chief Executive
Officer  and the Secretary of the Company. The granting of stock under the Stock
Compensation  Plan  is according to a pre-set formula. Directors fees payable to
non-employee  directors  of the Company under this plan were set by the Board at
$700  per  month.  Under  the  Stock  Compensation  Plan, the eligible directors
received  stock  at a value of $700 per month, determined by the average trading
price  as  quoted  on  the  nasdaq  Small  Cap  System  for  the  calendar month
immediately preceding the month in which the directors fees is earned; provided,
however,  that  the  valuation  of the stock shall not be less than the net book
value  of  the  Company  expressed on a per share basis. Any shares issued under
this  plan  shall  be  restricted  shares, subject to a two year holding period.


                                       50
<PAGE>
ITEM  11  -  SECURITY  OWNERSHIP  OF  BENEFICIAL  OWNERS  AND
             ------------------------------------------------
             MANAGEMENT  (Continued)
             ----------

REPORTABLE  TRANSACTIONS
To  the knowledge of the Company, as of March 20, 1999, all reporting persons
have properly filed the appropriate forms on all reportable transactions and all
forms  were  timely  filed in compliance with Section 16(a) of the Exchange Act.

OPTION/SAR  GRANTS  IN  LAST  FISCAL  YEAR
On  March  6,  1997,  the  Board  adopted a resolution granting stock options to
purchase  up  to 5,000 shares of common stock to the CEO, and up to 2,500 shares
of  common stock to each of the three non-employee directors. Under the terms of
the  resolution, the CEO and each of the directors can purchase shares of common
stock  for  the  average  price  that the Company's stock was trading before and
after  March  6,  1997. This average is $3.00 per share. The Company has not yet
issued  these  options.

No  stock  options  were  exercised during the years ended December 31, 1998 and
1997.


ITEM  12  -  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
             --------------------------------------------------
TRANSACTIONS  WITH  MANAGEMENT  AND  OTHERS
During  the  last  fiscal year, the Company has been involved in various related
party transactions with certain Directors of the Company, or entities controlled
or  affiliated  with  such  individuals.  The  following  table  sets  forth the
relationship,  through  ownership  of  securities, between Petrominerals and the
following  individuals  and  entities  as  of  December  31,  1997:
<TABLE>
<CAPTION>


                                                  Percentage
                      Name     Beneficial Owner      Owned
-----------------------------  -----------------  -----------
<S>                            <C>                <C>
Petrominerals 96-1, a Limited  General Partner:
  Partnership . . . . . . . .  Petrominerals            1.00%
                               Limited Partners:
                               Paul L. Howard          23.21%
                               Morris V. Hodges*       17.86%
                               David G. Davidson       17.86%
                               Unrelated parties       40.07%
                                                  -----------
   Total                                              100.00%
                                                  ===========
</TABLE>


*  Represents indirect ownership through his wholly-owned corporation, Kaymor
   Petroleum  Products,  Inc.

                                       51
<PAGE>
ITEM  12  -  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
             --------------------------------------------------
             (Continued)

Petrominerals  96-1  Limited  Partnership
-----------------------------------------

The  Petrominerals 96-1 Limited Partnership was formed in December 1996, for the
purpose  of drilling a well on the Company's Mabel Strawn oil lease. The Company
entered  into  a  joint  venture agreement with the partnership and assigned the
drill  site  to  the  joint  venture.

The  partnership  contributed $280,000 to cover the intangible costs of drilling
the well and the Company provided the drill site and well casing under a turnkey
drilling contract. The Company also provided all of the other tangible equipment
needed  to  produce  the well under a lease agreement. Proceeds from the working
interest  will  be  paid  90% to Petrominerals 96-1 and 10% to the Company until
payout,  and  thereafter  30%  to Petrominerals 96-1 and 70% to the Company. The
Company  receives  $2,400  per  month for leased equipment until payout and $400
thereafter. The Company also receives a $350 per month management fee as general
partner.

The  Company  bought  out  all  limited  partners'  interests  for the amount of
$214,755  in  April  1998,  and  sold  all partnership assets to American Energy
Operations,  Inc.  thereafter.

INDEBTEDNESS  OF  MANAGEMENT

During  the  Company's  last  fiscal  year,  no executive officer, director, any
member  of  the  immediate  family  or  any of those persons, any corporation or
organization  for  which  any  of those persons serve as an executive officer or
partner  or  which  they  own  directly  or indirectly 10% or more of its equity
securities, or any trust or other estate in which any of the Company's executive
officers  or  directors have a substantial beneficial interest or for which they
serve  as  a  trustee or in a similar capacity, has owed the Company at any time
since  the  beginning  of  its  last  fiscal  year  more  than  $60,000.


                                       52
<PAGE>
                                     PART IV
                                     -------

ITEM  13  -  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS
             --------------------------------------------------------
             ON  FORM  8-K
            -------------

<TABLE>
<CAPTION>


                                                                              Page(s)
                                                                              -------
<S>                                                                           <C>
A.  LIST OF DOCUMENTS
----------------------------------------------------------------------------         

      1.  Report of Brown Armstrong Randall Reyes Paulden & McCown
             Independent Auditor's Report. . . . . . . . . . . . . . . . . .    15-16
           Consolidated Balance Sheets at December 31, 1998 and 1997 . . . .    17-18
           Consolidated Statements of Operations for the Years Ended
             December 31, 1998 and 1997. . . . . . . . . . . . . . . . . . .       19
           Consolidated Statements of Shareholders' Equity for the
             Years Ended December 31, 1998 and 1997. . . . . . . . . . . . .       20
           Consolidated Statements of Cash Flows for the Years Ended
             December 31, 1998 and 1997. . . . . . . . . . . . . . . . . . .       21
           Notes to Consolidated Financial Statements. . . . . . . . . . . .    22-41
      2.  Financial Statement Schedules
----------------------------------------------------------------------------         

           The financial statement schedules of the Company filed herewith
           are listed below.  Schedules not included have been omitted
           because they are not applicable or the required information as
           shown in the consolidated financial statements and notes thereto.
           Schedules for the Years Ended December 31, 1998 and 1997:

           Schedule II - Valuation, Qualifying Accounts and Reserves . . . .       54
</TABLE>




                                       53
<PAGE>
ITEM  13  -  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS
             --------------------------------------------------------
             ON  FORM  8-K  (Continued)
            -------------
    3.    Reports  on  Form  8-K
          ----------------------
          A  statement on the eight-for-one reverse split of the Company's 
          common stock  was iled  on  January  22,  1998,  on  Form  8-K.
          A  statement  on the proposed sale of the oilfield properties was 
          filed on  February  4, 1998,  on  Form  8-K.
          A statement on the sale of the oilfield properties was filed on 
          May 21, 1998,  on  Form 8-K.
    4.    Exhibits
          --------
         (2)(a)         Order Approving Disclosure Statement and Fixing Time for
                        Filing
                        Acceptances  and  Rejections of Plan and Fixing Date for
                        Confirmation
                        Hearing  for  Hydro-Test  International,  Inc.*
          (2)(b)        Supplemental  Hydro-Test  International, Inc. Chapter 11
                        Disclosure Statement*
        (2)(c)          Supplemental Hydro-Test International, Inc. Chapter 11 
                        Plan*
        (3)(a)          Certificate  of  Incorporation**
        (3)(a)(I)       Amendment  of  Certificate  of  Incorporation***
        (3)(b)          Bylaws,  as  Amended***
        (10)(a)         Petrominerals Corporation 1993 Incentive Stock Option 
                        Plan and  1993
                        Non-Statutory  Stock  Option  Plan  Incorporation****
         (10)(b)        Form  of Petrominerals Corporation Employee Stock Option
                        Agreement****
         (10)(c)        Petrominerals  Corporation  1993  Employee  Stock  Bonus
                        Plan*****
         (10)(d)        Petrominerals  Corporation  Directors Stock Compensation
                        Plan******
         (21)           Subsidiaries  of  the  Registrant

*             Incorporated herein by reference to Exhibit of same number in
              Registrant's  Annual
              Report  on  Form  10-K  for  the  year  ended  December  31, 1995.

**            Incorporated herein by reference to Exhibit of same number in
              Registrant's  Annual
              Report  on  Form  10-K  for  the  year  ended  December  31, 1981.

***           Incorporated herein by reference to Exhibit of same number in
              Registrant's  Annual
              Report  on  Form  10-K  for  the  year  ended  December  31, 1987.

****          Incorporated  herein  by  reference to Form S-8 Registration No.
              33-70690,  as  filed
              with  the  Securities and Exchange Commission on October 22, 1993.

*****         Incorporated herein by reference to Form S-8 Registration No. 
              33-70688, as  filed
              with  the  Securities and Exchange Commission on October 22, 1993.
******        Incorporated herein by reference to Form S-8 Registration No. 
              33-70692, as  filed
              with  the  Securities and Exchange Commission on October 22, 1993.

                                       54
<PAGE>
PETROMINERALS  CORPORATION
SCHEDULE  II  -  VALUATION,  QUALIFYING  ACCOUNTS  AND  RESERVES
YEARS  ENDED  DECEMBER  31,  1998  AND  1997
(In  Thousands)




<TABLE>
<CAPTION>


                                   Balance at   (Recoveries)   Balance at
                                    Beginning    Charged to      End of
                                    of Period      Income        Period
                                   -----------  -------------  -----------
<S>                                <C>          <C>            <C>
Valuation allowance on oil and
  gas properties
        1998. . . . . . . . . . .  $    10,963  $      10,963  $        -
                                   ===========  =============  ===========
        1997. . . . . . . . . . .  $    10,963  $           -  $    10,963
                                   ===========  =============  ===========

                                   Balance at     (Additions)  Balance at
                                   Beginning    Posted to      End of
                                   of Period    Income         Period
                                   -----------  -------------  -----------
Allowance for doubtful receivable
        1998. . . . . . . . . . .  $        29  $          29  $         -
                                   ===========  =============  ===========
        1997. . . . . . . . . . .  $        29  $          29  $         -
                                   ===========  =============  ===========
</TABLE>



                                       55
<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.

PETROMINERALS  CORPORATION
(Registrant)


By:  /s/  Morris  V.  Hodges
     -----------------------
     Morris  V.  Hodges,  President  and  Chief  Executive  Officer

Dated:


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  included:
<TABLE>
<CAPTION>


<S>     <C>
Dated:  By: /s/Morris V. Hodges
        -------------------------------------
        Morris V. Hodges
        President, Chief Executive Officer
        Chief Financial Officer, and Director

Dated:  By: /s/ William N. Hagler
        -------------------------------------
        William N. Hagler, Director

Dated:  By: /s/ David G. Davidson
        -------------------------------------
        David G. Davidson, Director
</TABLE>



                                       56
<PAGE>
                                    EXHIBITS


                                       57
<PAGE>
                                   EXHIBIT 21


                         SUBSIDIARIES OF THE REGISTRANT


                                       58
<PAGE>
1.          Hydro-Test  International,  Inc.


                                       59