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

|   | For                  the Fiscal Year ended December 31,                  2006 |
|--------|-------------------------------------------------------------------------------|

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

**ADAMS        RESOURCES & ENERGY, INC.**

| **Delaware**                                              | **74-1753147**                                        |
|-----------------------------------------------------------|-------------------------------------------------------|
| (State                  of Incorporation)                 | (I.R.S.                  Employer Identification No.) |
|                                                      |                                                  |
| **4400                  Post Oak Parkway Ste. 2700**      |                                                  |
| **Houston,                  Texas**                       | **77027**                                             |
| (Address                  of Principal executive offices) | (Zip                  Code)                           |

**        (713) 881-3600**

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

| Title                  of each class              | Name                  of each exchange on which registered |
|---------------------------------------------------|------------------------------------------------------------|
| **Common                  Stock, $.10 Par Value** | **American                  Stock Exchange**               |

**DOCUMENTS        INCORPORATED BY REFERENCE**

----

----

----

|      |   | Oil                  Wells |   | Gas                  Wells |   | Total                  Wells |   |
|-----------|--------|----------------------------|--------|----------------------------|--------|------------------------------|--------|
|      |   | Gross                      |   | Net                        |   | Gross                        |   | Net |   | Gross |   | Net |   |
| Texas     |   |                       | 57     |                       |   | 13.02                        |   |   | 65 |   |   | 4.59 |   |   | 122 |   |   | 17.61 |   |
| Louisiana |   |                       | 24     |                       |   | 1.36                         |   |   | 48 |   |   | 4.37 |   |   | 72 |   |   | 5.73 |   |
| Other     |   |                       | 73     |                       |   | 1.75                         |   |   | 49 |   |   | 6.64 |   |   | 122 |   |   | 8.39 |   |
|      |   |                       | 154    |                       |   | 16.13                        |   |   | 162 |   |   | 15.60 |   |   | 316 |   |   | 31.73 |   |

|      |   | Developed                  Acreage |   | Undeveloped                  Acreage |   |
|-----------|--------|------------------------------------|--------|--------------------------------------|--------|
|      |   | Gross                              |   | Net                                  |   | Gross |   | Net |   |
| Texas     |   |                               | 68,436 |                                 |   | 11,909 |   |   | 121,770 |   |   | 13,677 |   |
| Louisiana |   |                               | 7,550  |                                 |   | 622 |   |   | 3,228 |   |   | 216 |   |
| Other     |   |                               | 4,261  |                                 |   | 754 |   |   | 16,307 |   |   | 2,402 |   |
|      |   |                               | 80,247 |                                 |   | 13,285 |   |   | 141,305 |   |   | 16,295 |   |

|                                       |   | 2006   |   | 2005   |   | 2004   |   |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                       |   | Gross  |   | Net    |   | Gross  |   | Net |   | Gross |   | Net |   |
| Exploratory                  wells drilled |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| -                  Productive              |   |   | 6      |   |   | .52    |   |   | 4 |   |   | .33 |   |   | 12 |   |   | .59 |   |
| -                  Dry                     |   |   | 3      |   |   | .35    |   |   | 6 |   |   | .58 |   |   | 6 |   |   | .44 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Development                  wells drilled |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| -                  Productive              |   |   | 26     |   |   | 1.89   |   |   | 20 |   |   | 1.12 |   |   | 8 |   |   | .42 |   |
| -                  Dry                     |   |   | 2      |   |   | .08    |   |   | 5 |   |   | .44 |   |   | 1 |   |   | .01 |   |

----

|                                                       |   | December                  31, |   |
|------------------------------------------------------------|--------|-------------------------------|--------|
|                                                       |   | 2006                          |   | 2005 |   | 2004 |   |
| Crude                  oil (barrels)                       |   |                          | 396    |   |   | 396 |   |   | 436 |   |
| Natural                  gas (mcf)                         |   |                          | 8,300  |   |   | 9,643 |   |   | 10,950 |   |
| Standardized                  measure of discounted future |   |                          |   |   |   |   |   |   |   |   |
| net                  cash flows from oil and gas reserves  |   | $                             | 18,770 |   | $ | 29,960 |   | $ | 22,797 |   |

| Years                  Ended  |   | Crude                  Oil |   | Natural                    |   |
|-------------------------------|--------|----------------------------|--------|----------------------------|--------|
| December                  31, |   | (barrels)                  |   | Gas                  (mcf) |   |
| 2006                          |   |                       | 75,900 |                       |   | 1,604,000 |   |
| 2005                          |   |                       | 66,600 |                       |   | 1,388,000 |   |
| 2004                          |   |                       | 71,300 |                       |   | 1,309,000 |   |

|                                                     |   | Years                  Ended December 31, |   |
|----------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                     |   | 2006                                      |   | 2005 |   | 2004 |   |
| Average                  oil and condensate              |   |                                      |   |   |   |   |   |   |   |   |
| sales                  price per barrel                  |   | $                                         | 64.26  |   | $ | 54.76 |   | $ | 39.48 |   |
| Average                  natural gas                     |   |                                      |   |   |   |   |   |   |   |   |
| sales                  price per mcf                     |   | $                                         | 7.53   |   | $ | 8.43 |   | $ | 6.09 |   |
| Average                  production cost, per equivalent |   |                                      |   |   |   |   |   |   |   |   |
| barrel,                  charged to expense              |   | $                                         | 12.40  |   | $ | 9.48 |   | $ | 10.30 |   |

|                                                |   | Crude                  Oil |   | Natural                  Gas |   |
|-----------------------------------------------------|--------|----------------------------|--------|------------------------------|--------|
| Average                  Annual Price for 2006      |   | $                          | 64.26  |                         | $      | 7.53 |   |
| Average                  Price for December 2006    |   | $                          | 60.35  |                         | $      | 7.84 |   |
| Average                  Price on December 31, 2006 |   | $                          | 57.00  |                         | $      | 5.58 |   |

----

| -   | The                Solid Waste Disposal Act, as amended by the Resource Conservation                and                Recovery Act of 1976, as amended. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| -   | Comprehensive                Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"                or "Superfund"), as amended. |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| -   | The                Clean Water Act of 1972, as amended. |
|---------------|---------------------------------------------------------|
| -   | Federal                Oil Pollution Act of 1990, as amended. |
|---------------|---------------------------------------------------------------|
| -   | The                Clean Air Act of 1970, as amended. |
|---------------|-------------------------------------------------------|
| -   | The                Toxic Substances Control Act of 1976, as                amended. |
|---------------|-------------------------------------------------------------------------------------|
| -   | The                Emergency Planning and Community Right-to-Know                Act. |
|---------------|---------------------------------------------------------------------------------------|
| -   | The                Occupational Safety and Health Act of 1970, as                amended. |
|---------------|-------------------------------------------------------------------------------------------|
| -   | Texas                Clean Air Act. |
|---------------|-------------------------------------|
| -   | Texas                Solid Waste Disposal Act. |
|---------------|------------------------------------------------|
| -   | Texas                Water Code. |
|---------------|----------------------------------|
| -   | Texas                Oil Spill Prevention and Response Act of 1991, as amended. |
|---------------|---------------------------------------------------------------------------------|

----

----

----

*Fluctuations        in oil and gas prices could have an effect on the Company*

| ·   | supply                and demand for oil and gas and expectations regarding supply and                demand; |
|--------------------|---------------------------------------------------------------------------------------------------------------|
| ·   | political                conditions in other oil-producing countries, including the possibility                of                insurgency or war in such areas; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | economic                conditions in the United States and worldwide; |
|--------------------|------------------------------------------------------------------------|
| ·   | governmental                regulations; |
|--------------------|------------------------------------------|
| ·   | the                price and availability of alternative fuel                sources; |
|--------------------|---------------------------------------------------------------------------------------|
| ·   | weather                conditions; and |
|--------------------|----------------------------------------|
| ·   | market                uncertainty. |
|--------------------|------------------------------------|

*Revenues        are generated under contracts that must be periodically        renegotiated.*

*Anticipated        or scheduled volumes will differ from actual or delivered        volumes.*

*Environmental        liabilities and environmental regulations may have an adverse effect on the        Company.*

----

*Counterparty        credit default could have an adverse effect on the Company.*

*The        Company’s business is dependent on the ability to obtain credit*

*Operations        could result in liabilities that may not be fully covered by        insurance*

*Changes        in tax laws or regulations could adversely affect the Company*

----

*The        Company’s business is subject to changing government        regulations*

*Estimating        reserves, production and future net cash flow is difficult*

*The        Company’s business is dependent on the ability to replace        reserves*

*Fluctuations        in commodity prices could have an adverse effect on the        Company.*

| ·   | regional,                domestic and international supply and                demand; |
|--------------------|---------------------------------------------------------------------------------------|
| ·   | availability                and adequacy of transportation                facilities; |
|--------------------|---------------------------------------------------------------------------------------|
| ·   | energy                legislation; |
|--------------------|------------------------------------|
| ·   | federal                and state taxes, if any, on the sale or transportation of natural                gas; |
|--------------------|--------------------------------------------------------------------------------------------------------------|
| ·   | abundance                of supplies of alternative energy sources; |
|--------------------|---------------------------------------------------------------------|
| ·   | political                unrest among oil producing countries; and |
|--------------------|--------------------------------------------------------------------|
| ·   | opposition                to energy development in environmentally sensitive                areas. |
|--------------------|----------------------------------------------------------------------------------------------------|

----

*Revenues        are dependent on the ability to successfully complete drilling        activity*

| ·   | lack                of acceptable prospective acreage; |
|--------------------|--------------------------------------------------------|
| ·   | inadequate                capital resources; |
|--------------------|----------------------------------------------|
| ·   | weather; |
|--------------------|----------|
| ·   | title                problems; |
|--------------------|--------------------------------|
| ·   | compliance                with governmental regulations; and |
|--------------------|--------------------------------------------------------------|
| ·   | mechanical                difficulties. |
|--------------------|-----------------------------------------|

*Current        and future litigation could have an adverse effect on the        Company.*

*Le        Petit Chateau De Luxe, et. al. vs Great Southern Oil & Gas Co., et.        al.*

----

|                            |   | American                  Stock Exchange |   |
|---------------------------------|--------|------------------------------------------|--------|
|                            |   | High                                     |   | Low |   |
| 2005                            |   |                                     |   |   |   |   |   |
| First                  Quarter  |   | $                                        | 25.55  |   | $ | 17.10 |   |
| Second                  Quarter |   |                                     | 22.90  |   |   | 15.00 |   |
| Third                  Quarter  |   |                                     | 23.99  |   |   | 18.20 |   |
| Fourth                  Quarter |   |                                     | 23.45  |   |   | 18.60 |   |
|                            |   |                                     |   |   |   |   |   |
| 2006                            |   |                                     |   |   |   |   |   |
| First                  Quarter  |   | $                                        | 29.00  |   | $ | 22.70 |   |
| Second                  Quarter |   |                                     | 44.60  |   |   | 25.30 |   |
| Third                  Quarter  |   |                                     | 44.33  |   |   | 33.00 |   |
| Fourth                  Quarter |   |                                     | 39.30  |   |   | 28.73 |   |

----

*Performance        Graph*

| 1.   | $100.00                was invested on December 31, 2001 in the Company’s common stock, the                S&P 500 Index, and the S&P 500 Integrated Oil and Gas                Index. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.   | Dividends                are reinvested on the ex-dividend dates. |
|----------------|-------------------------------------------------------------------|

|                                                      |       | **INDEXED                  RETURNS** |
|-----------------------------------------------------------|------------|--------------------------------------|
|                                                      | **Base**   | **Years                  Ending**    |
|                                                      | **Period** |                                 |   |   |   |   |
| **Company                  / Index**                      | **Dec01**  | **Dec02**                            | **Dec03** | **Dec04** | **Dec05** | **Dec06** |
| **ADAMS                  RESOURCES & ENERGY INC**     | **100**    | 68.96                                | 181.00 | 239.62 | 315.42 | 421.59 |
| **S&P                  500 INDEX**                    | **100**    | 77.90                                | 100.25 | 111.15 | 116.61 | 135.03 |
| **S&P                  500 INTEGRATED OIL & GAS** | **100**    | 87.80                                | 111.25 | 143.32 | 168.59 | 227.32 |

----

**FIVE        YEAR REVIEW OF SELECTED FINANCIAL DATA**

|                                                  |   | Years                  Ended December 31,              |      |
|-------------------------------------------------------|--------|--------------------------------------------------------|-----------|
|                                                  |   | 2006                                                   |      | 2005 |   | 2004 |   | 2003 |   | 2002 |   |
| Revenues:                                             |   | (In                  thousands, except per share data) |
| Marketing                                             |   | $                                                      | 2,167,502 |   | $ | 2,292,029 |   | $ | 2,010,968 |   | $ | 1,676,727 |   | $ | 1,725,042 |   |
| Transportation                                        |   |                                                   | 62,151    |   |   | 57,458 |   |   | 47,323 |   |   | 35,806 |   |   | 36,406 |   |
| Oil                  and gas                          |   |                                                   | 16,950    |   |   | 15,346 |   |   | 10,796 |   |   | 8,395 |   |   | 4,750 |   |
|                                                  |   | $                                                      | 2,246,603 |   | $ | 2,364,833 |   | $ | 2,069,087 |   | $ | 1,720,928 |   | $ | 1,766,198 |   |
| Operating                  Earnings:                  |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Marketing                                             |   | $                                                      | 12,975    |   | $ | 22,481 |   | $ | 13,597 |   | $ | 12,117 |   | $ | 10,471 |   |
| Transportation                                        |   |                                                   | 5,173     |   |   | 5,714 |   |   | 5,687 |   |   | 973 |   |   | 2,142 |   |
| Oil                  and gas                          |   |                                                   | 5,355     |   |   | 6,765 |   |   | 2,362 |   |   | 2,310 |   |   | (633 | ) |
| General                  and administrative           |   |                                                   | (8,536    | ) |   | (9,668 | ) |   | (7,867 | ) |   | (6,299 | ) |   | (7,259 | ) |
|                                                  |   |                                                   | 14,967    |   |   | 25,292 |   |   | 13,779 |   |   | 9,101 |   |   | 4,721 |   |
| Other                  income (expense):              |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  income                      |   |                                                   | 965       |   |   | 188 |   |   | 62 |   |   | 362 |   |   | 115 |   |
| Interest                  expense                     |   |                                                   | (159      | ) |   | (128 | ) |   | (107 | ) |   | (108 | ) |   | (117 | ) |
| Earnings                  from continuing operations  |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| before                  income taxes and cumulative   |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| effect                  of accounting change          |   |                                                   | 15,773    |   |   | 25,352 |   |   | 13,734 |   |   | 9,355 |   |   | 4,719 |   |
|                                                  |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax provision                 |   |                                                   | 5,290     |   |   | 8,583 |   |   | 4,996 |   |   | 3,013 |   |   | 1,615 |   |
|                                                  |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                  from continuing operations  |   |                                                   | 10,483    |   |   | 16,769 |   |   | 8,738 |   |   | 6,342 |   |   | 3,104 |   |
| Earnings                  (loss) from discontinued    |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| operations,                  net of taxes             |   |                                                   | -         |   |   | 872 |   |   | (130 | ) |   | (3,148 | ) |   | (1,652 | ) |
| Earnings                  before cumulative effect    |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                  accounting change                 |   |                                                   | 10,483    |   |   | 17,641 |   |   | 8,608 |   |   | 3,194 |   |   | 1,452 |   |
| Cumulative                  effect of accounting      |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| change,                  net of taxes                 |   |                                                   | -         |   |   | - |   |   | - |   |   | (92 | ) |   | - |   |
| Net                  earnings                         |   | $                                                      | 10,483    |   | $ | 17,641 |   | $ | 8,608 |   | $ | 3,102 |   | $ | 1,452 |   |
|                                                  |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Earnings                  (Loss) Per Share**        |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| From                  continuing operations           |   | $                                                      | 2.49      |   | $ | 3.97 |   | $ | 2.07 |   | $ | 1.50 |   | $ | .73 |   |
| From                  discontinued operations         |   |                                                   | -         |   |   | .21 |   |   | (.03 | ) |   | (.74 | ) |   | (.39 | ) |
| Cumulative                  effect of                 |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| accounting                  change                    |   |                                                   | -         |   |   | - |   |   | - |   |   | (.02 | ) |   | - |   |
| Basic                  earnings per share             |   | $                                                      | 2.49      |   | $ | 4.18 |   | $ | 2.04 |   | $ | .74 |   | $ | .34 |   |
|                                                  |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                  per common share           |   | $                                                      | .42       |   | $ | .37 |   | $ | .30 |   | $ | .23 |   | $ | .13 |   |
|                                                  |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Financial                  Position**               |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Working                  capital                      |   | $                                                      | 35,208    |   | $ | 39,321 |   | $ | 35,789 |   | $ | 32,758 |   | $ | 30,628 |   |
| Total                  assets                         |   |                                                   | 289,287   |   |   | 312,662 |   |   | 238,854 |   |   | 210,607 |   |   | 202,120 |   |
| Long-term                  debt, net of               |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| current                  maturities    |   |                                                   | 3,000     |   |   | 11,475 |   |   | 11,475 |   |   | 11,475 |   |   | 11,475 |   |
| Shareholders’                  equity           |   |                                                   | 74,368    |   |   | 65,656 |   |   | 49,575 |   |   | 42,232 |   |   | 40,100 |   |
| Dividends                  on common shares           |   |                                                   | 1,771     |   |   | 1,560 |   |   | 1,265 |   |   | 970 |   |   | 548 |   |

| -   | In                2002, oil and gas operating earnings sustained a loss of $633,000.                This                loss includes $1.7 million in dry hole costs and property valuation                write-down. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Results        of Operations**

*Marketing*

|                                |   | 2006   |      | 2005   |   | 2004      |   |
|-------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
|                                |   |   |      |   |   |      |   |
| Revenues                            |   | $      | 2,167,502 |   | $      | 2,292,029 |   | $ | 2,010,968 |   |
|                                |   |   |      |   |   |      |   |   |   |   |
| Operating                  earnings |   | $      | 12,975    |   | $      | 22,481    |   | $ | 13,597 |   |
|                                |   |   |      |   |   |      |   |   |   |   |
| Depreciation                        |   | $      | 1,344     |   | $      | 1,252     |   | $ | 1,211 |   |

**(in        thousands):**

|                                                                             |   | 2006   |      | 2005   |   | 2004      |   |
|----------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
|                                                                             |   |   |      |   |   |      |   |
| Crude                    oil sales, net of proceeds from buy/sell                |   |   |      |   |   |      |   |   |   |   |
| arrangements                                                                     |   | $      | 1,975,972 |   | $      | 1,427,388 |   | $ | 1,149,745 |   |
| Crude                    oil sales proceeds from buy/sell ** **arrangements |   |   | -         |   |   | 690,190   |   |   | 735,476 |   |
| Natural                    gas sales                                             |   |   | 13,621    |   |   | 13,063    |   |   | 8,675 |   |
| Refined                    product sales                                         |   |   | 177,909   |   |   | 161,388   |   |   | 117,072 |   |
|                                                                             |   |   |      |   |   |      |   |   |   |   |
| Total                    marketing revenues                                      |   | $      | 2,167,502 |   | $      | 2,292,029 |   | $ | 2,010,968 |   |

----

|                                               |   | 2006   |                           | 2005   |   | 2004                           |   |
|----------------------------------------------------|--------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|                                               |   |   |                           |   |   |                           |   |
| Field                  Level Purchases per day (1) |   |   |                           |   |   |                           |   |   |   |   |
| -                  Crude Oil                       |   |   | 61,800                  bbls   |   |   | 66,900                  bbls   |   |   | 76,000                  bbls |   |
| -                  Natural Gas                     |   |   | 354,000                  mmbtu |   |   | 289,000                  mmbtu |   |   | 294,000                  mmbtu |   |
|                                               |   |   |                           |   |   |                           |   |   |   |   |
| Average                  Purchase Price            |   |   |                           |   |   |                           |   |   |   |   |
| -                  Crude Oil                       |   | $      | 62.40/bbl                      |   | $      | 53.51/bbl                      |   | $ | 39.88/bbl |   |
| -                  Natural Gas                     |   | $      | 6.62/mmbtu                     |   | $      | 7.98/mmbtu                     |   | $ | 5.75/mmbtu |   |

**(in        thousands):**

|                              |   | 2006   |   | 2005   |   | 2004   |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                              |   |   |   |   |   |   |   |
| Crude                  oil        |   | $      | 5,088  |   | $      | 13,489 |   | $ | 10,684 |   |
| Natural                  gas      |   |   | 6,558  |   |   | 8,436  |   |   | 3,810 |   |
| Refined                  products |   |   | 1,329  |   |   | 556    |   |   | (897 | ) |
|                              |   | $      | 12,975 |   | $      | 22,481 |   | $ | 13,597 |   |

----

*Transportation*

**(in        thousands):**

|                                |   | 2006   |   | 2005            |   | 2004   |   |
|-------------------------------------|--------|--------|--------|-----------------|--------|--------|--------|
|                                |   | Amount |   | Change(1)  |   | Amount |   | Change(1) |   | Amount |   | Change(1) |   |
|                                |   |   |   |            |   |   |   |   |   |   |   |   |   |
| Revenues                            |   | $      | 62,151 |            |   | 8      | %      | $ | 57,458 |   |   | 21 | % | $ | 47,323 |   |   | 32 | % |
|                                |   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  earnings |   | $      | 5,173  |            |   | (9     | )%     | $ | 5,714 |   |   | - |   | $ | 5,687 |   |   | 484 | % |
|                                |   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                        |   | $      | 4,538  |            |   | 45     | %      | $ | 3,130 |   |   | 47 | % | $ | 2,125 |   |   | 2 | % |

*Oil        and Gas*

**(in        thousands):**

|                                        |   | 2006   |   | 2005      |   | 2004   |   |
|---------------------------------------------|--------|--------|--------|-----------|--------|--------|--------|
|                                        |   | Amount |   | Change(1) |   | Amount |   | Change(1) |   | Amount |   | Change(1) |   |
|                                        |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Revenues                                    |   | $      | 16,950 |      |   | 10     | %      | $ | 15,346 |   |   | 42 | % | $ | 10,796 |   |   | 29 | % |
|                                        |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  earnings         |   |   | 5,355  |      |   | (21    | )%     |   | 6,765 |   |   | 186 | % |   | 2,362 |   |   | 2 | % |
|                                        |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                  and depletion |   |   | 3,603  |      |   | 35     | %      |   | 2,678 |   |   | (9 | )% |   | 2,949 |   |   | 36 | % |

----

|                                |   | 2006   |                           | 2005   |   | 2004                           |   |
|-------------------------------------|--------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|                                |   |   |                           |   |   |                           |   |
| Production                  Volumes |   |   |                           |   |   |                           |   |   |   |   |
| -                  Crude Oil        |   |   | 75,900                  bbls   |   |   | 66,600                  bbls   |   |   | 71,300                  bbls |   |
| -                  Natural Gas      |   |   | 1,604,000                  mcf |   |   | 1,388,000                  mcf |   |   | 1,309,000                  mcf |   |
|                                |   |   |                           |   |   |                           |   |   |   |   |
| Average                  Price      |   |   |                           |   |   |                           |   |   |   |   |
| -                  Crude Oil        |   | $      | 64.26/bbl                      |   | $      | 54.76/bbl                      |   | $ | 39.48/bbl |   |
| -                  Natural Gas      |   | $      | 7.53/mcf                       |   | $      | 8.43/mcf                       |   | $ | 6.09/mcf |   |

|                                             |   | 2006                         |      | 2005                         |   | 2004                         |   |
|--------------------------------------------------|--------|------------------------------|-----------|------------------------------|--------|------------------------------|--------|
|                                             |   | (Eq.                  Bbls.) |      | (Eq.                  Bbls.) |   | (Eq.                  Bbls.) |   |
|                                             |   |                         |      |                         |   |                         |   |
| Beginning                  of year               |   |                         | 2,003,000 |                         |   | 2,261,000                    |   |   | 1,933,000 |   |
| Estimated                  reserve additions     |   |                         | 577,000   |                         |   | 320,000                      |   |   | 649,000 |   |
| Production                                       |   |                         | (343,000  | )                            |   | (298,000                     | )      |   | (289,000 | ) |
| Reserves                  sold                   |   |                         | -         |                         |   | (135,000                     | )      |   | - |   |
| Revisions                  of previous estimates |   |                         | (458,000  | )                            |   | (145,000                     | )      |   | (32,000 | ) |
|                                             |   |                         |      |                         |   |                         |   |   |   |   |
| End                  of year                     |   |                         | 1,779,000 |                         |   | 2,003,000                    |   |   | 2,261,000 |   |

----

**Eaglewood        Project**

**Calcasieu        Parish**

**Southern        Alabama**

**Elm        Grove**

**James        Lime Project**

**Seismic        Surveys**

----

**United        Kingdom North Sea**

| *-  * | *General                and administrative, interest income and income                tax* |
|-----------------|--------------------------------------------------------------------------------------------|
| -   | *Discontinued                operations* |
|---------------|------------------------------------------|

----

*Outlook*

| -   | Maintain                marketing operating earnings at the $13 million                level. |
|---------------|-----------------------------------------------------------------------------------------------|
| -   | Maintain                transportation operating earnings at the $5 million                level. |
|---------------|---------------------------------------------------------------------------------------------------|
| -   | Increase                oil and gas operating earnings to the $6 million level and replace                110                percent of 2006 production with current reserve additions. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Liquidity        and Capital Resources**

**(in        thousands):**

|                                                            |   | Years                  Ended December 31, |    |
|-----------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                            |   | 2006                                      |    | 2005 |   | 2004 |   | Total |   |
|                                                            |   |                                      |    |   |   |   |   |   |   |
| Earnings                  from continuing operations       |   | $                                         | 10,483  |   | $ | 16,769 |   | $ | 8,738 |   | $ | 35,990 |   |
|                                                            |   |                                      |    |   |   |   |   |   |   |   |   |   |   |
| Depreciation,                  depletion and amortization  |   |                                      | 9,485   |   |   | 7,060 |   |   | 6,285 |   |   | 22,830 |   |
|                                                            |   |                                      |    |   |   |   |   |   |   |   |   |   |   |
| Property                  and equipment additions          |   |                                      | (14,602 | ) |   | (19,128 | ) |   | (12,161 | ) |   | (45,891 | ) |
|                                                            |   |                                      |    |   |   |   |   |   |   |   |   |   |   |
| Debt                  repayment                                 |   |                                      | (8,475  | ) |   | - |   |   | - |   |   | (8,475 | ) |
|                                                            |   |                                      |    |   |   |   |   |   |   |   |   |   |   |
| Cash                  available (used) for other uses      |   | $                                         | (3,109  | ) | $ | 4,701 |   | $ | 2,862 |   | $ | 4,454 |   |

*Banking        Relationships*

----

*Off-balance        Sheet Arrangements*

*Contractual        Cash Obligations*

----

|                                        |   | 2007   |   | 2008   |   | 2009  |   | 2010   |   | 2011   |   | Thereafter |   | Total  |   |
|---------------------------------------------|--------|--------|--------|--------|--------|-------|--------|--------|--------|--------|--------|------------|--------|--------|--------|
| Long-term                  debt             |   | $      | -      |   | $      | 375   |   | $      | 1,500  |   | $      | 1,125      |   | $      | -      |   | $ | - |   | $ | 3,000 |   |
| Interest                  Rate Payments (1) |   |   | 1      |   |   | -     |   |   | -      |   |   | -          |   |   | -      |   |   | - |   |   | 1 |   |
| Operating                  leases           |   |   | 4,060  |   |   | 3,861 |   |   | 1,538  |   |   | 548        |   |   | 186    |   |   | 104 |   |   | 10,297 |   |
| Total                                       |   | $      | 4,061  |   | $      | 4,236 |   | $      | 3,038  |   | $      | 1,673      |   | $      | 186    |   | $ | 104 |   | $ | 13,298 |   |

**(in        thousands):**

|                         |   | January |    | Remaining |   |   |   |   |   |       |   |   |   |
|------------------------------|--------|---------|---------|-----------|--------|--------|--------|--------|--------|------------|--------|--------|--------|
|                         |   | 2007    |    | 2007      |   | 2008   |   | 2009   |   | Thereafter |   | Total  |   |
| Crude                  Oil   |   | $       | 191,752 |      | $      | 56,037 |   | $      | -      |       | $      | -      |   | $ | - |   | $ | 247,789 |   |
| Natural                  Gas |   |    | 70,000  |      |   | 39,824 |   |   | 24,265 |       |   | -      |   |   | - |   |   | 134,089 |   |
|                         |   | $       | 261,752 |      | $      | 95,861 |   | $      | 24,265 |       | $      | -      |   | $ | - |   | $ | 381,878 |   |

*Investment        Activities*

*Insurance*

*Competition*

----

*Fair        Value Accounting*

| 1.   | Gross                margins, derived from certain aspects of the Company’s ongoing business,                are front-ended into the period in which contracts are executed.                Meanwhile, personnel and other costs associated with servicing accounts                as                well as substantially all risks associated with the execution of                contracts                are incurred during the period of physical product flow and title                passage. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.   | Mark-to-market                earnings are calculated based on stated contract volumes. A significant                risk associated with the Company’s business is the conversion of stated                contract or planned volumes into actual physical commodity movement                volumes without a loss of margin. Again, any planned profit from                such                commodity contracts is bunched and front-ended into one period while                the                risk of loss associated with the difference between actual versus                planned                production or usage volumes falls in a subsequent                period. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.   | Cash                flows, by their nature, match physical movements and passage of title.                Mark-to-market accounting, on the other hand, creates a mismatch                between                reported earnings and cash flows. This complicates and confuses the                picture of stated financial conditions and                liquidity. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Trade        Accounts*

----

*Oil        and Gas Reserve Estimate*

*Contingencies*

*Revenue        Recognition*

*Recent        Accounting Pronouncements*

----

*Interest        Rate Risk*

*Commodity        Price Risk*

----

|                                                                   |   | 2006   |   |
|------------------------------------------------------------------------|--------|--------|--------|
| Net                  fair value on January 1,                          |   | $      | 1,781  |   |
| Activity                  during 2006                                  |   |   |   |   |
| -                  Cash received from settled contracts                |   |   | (2,121 | ) |
| -                  Net realized gain from prior years’ contracts |   |   | 472    |   |
| -                  Net unrealized gain from current year contracts     |   |   | 1,332  |   |
| Net                  fair value on December 31,                        |   | $      | 1,464  |   |

----

**ADAMS        RESOURCES & ENERGY, INC. AND SUBSIDIARIES**

**INDEX        TO FINANCIAL STATEMENTS**

|                                                                                       |   | Page   |   |
|--------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                       |   |   |   |
| REPORT                  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                   |   |   | 30     |   |
|                                                                                       |   |   |   |   |
| FINANCIAL                  STATEMENTS:                                                     |   |   |   |   |
|                                                                                       |   |   |   |   |
| Consolidated                  Balance Sheets as of December 31, 2006 and 2005              |   |   | 31     |   |
|                                                                                       |   |   |   |   |
| Consolidated                  Statements of Operations for the Years Ended                 |   |   |   |   |
| December                  31, 2006, 2005 and 2004                                          |   |   | 32     |   |
|                                                                                       |   |   |   |   |
| Consolidated                  Statements of Shareholders’ Equity for the Years Ended |   |   |   |   |
| December                  31, 2006, 2005 and 2004                                          |   |   | 33     |   |
|                                                                                       |   |   |   |   |
| Consolidated                  Statements of Cash Flows for the Years Ended                 |   |   |   |   |
| December                  31, 2006, 2005 and 2004                                          |   |   | 34     |   |
|                                                                                       |   |   |   |   |
| Notes                  to Consolidated Financial Statements                                |   |   | 35     |   |

----

**REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

----

**ADAMS        RESOURCES & ENERGY, INC. AND SUBSIDIARIES**

**CONSOLIDATED        BALANCE SHEETS**

**(In        thousands)**

|                                                                               |   | December                  31, |    |
|------------------------------------------------------------------------------------|--------|-------------------------------|---------|
| ASSETS                                                                             |   | 2006                          |    | 2005 |   |
|                                                                               |   |                          |    |   |   |
| CURRENT                  ASSETS:                                                   |   |                          |    |   |   |   |   |
| Cash                  and cash equivalents                                    |   | $                             | 20,668  |   | $ | 18,817 |   |
| Accounts                  receivable, net of allowance for doubtful accounts of    |   |                          |    |   |   |   |   |
| $225                  and $608, respectively                                  |   |                          | 194,097 |   |   | 217,727 |   |
| Inventories                                                                   |   |                          | 7,950   |   |   | 11,692 |   |
| Risk                  management receivables                                  |   |                          | 13,140  |   |   | 13,324 |   |
| Income                  tax receivable                                        |   |                          | 1,396   |   |   | 1,304 |   |
| Prepayments                                                                   |   |                          | 4,539   |   |   | 7,586 |   |
|                                                                               |   |                          |    |   |   |   |   |
| Total                  current assets                                         |   |                          | 241,790 |   |   | 270,450 |   |
|                                                                               |   |                          |    |   |   |   |   |
| PROPERTY                  AND EQUIPMENT:                                           |   |                          |    |   |   |   |   |
| Marketing                                                                     |   |                          | 14,051  |   |   | 14,332 |   |
| Transportation                                                                |   |                          | 32,068  |   |   | 32,319 |   |
| Oil                  and gas (successful efforts method)                      |   |                          | 61,003  |   |   | 52,111 |   |
| Other                                                                         |   |                          | 99      |   |   | 99 |   |
|                                                                               |   |                          | 107,221 |   |   | 98,861 |   |
|                                                                               |   |                          |    |   |   |   |   |
| Less                  - Accumulated depreciation, depletion and amortization  |   |                          | (63,905 | ) |   | (58,965 | ) |
|                                                                               |   |                          | 43,316  |   |   | 39,896 |   |
| OTHER                  ASSETS:                                                     |   |                          |    |   |   |   |   |
| Risk                  management assets                                       |   |                          | 644     |   |   | 47 |   |
| Other                  assets                                                 |   |                          | 3,537   |   |   | 2,269 |   |
|                                                                               |   | $                             | 289,287 |   | $ | 312,662 |   |
| LIABILITIES                  AND SHAREHOLDERS’ EQUITY                        |   |                          |    |   |   |   |   |
|                                                                               |   |                          |    |   |   |   |   |
| CURRENT                  LIABILITIES:                                              |   |                          |    |   |   |   |   |
| Accounts                  payable                                             |   | $                             | 185,735 |   | $ | 213,668 |   |
| Risk                  management payables                                     |   |                          | 11,897  |   |   | 11,542 |   |
| Accrued                  and other liabilities                                |   |                          | 7,897   |   |   | 4,790 |   |
| Current                  deferred income taxes                                |   |                          | 1,053   |   |   | 1,129 |   |
| Total                  current liabilities                                    |   |                          | 206,582 |   |   | 231,129 |   |
|                                                                               |   |                          |    |   |   |   |   |
| LONG-TERM                  DEBT                                                    |   |                          | 3,000   |   |   | 11,475 |   |
|                                                                               |   |                          |    |   |   |   |   |
| OTHER                  LIABILITIES:                                                |   |                          |    |   |   |   |   |
| Asset                  retirement obligations                                 |   |                          | 1,152   |   |   | 1,058 |   |
| Deferred                  income taxes and other                              |   |                          | 3,762   |   |   | 3,296 |   |
| Risk                  management liabilities                                  |   |                          | 423     |   |   | 48 |   |
|                                                                               |   |                          | 214,919 |   |   | 247,006 |   |
| COMMITMENTS                  AND CONTINGENCIES (NOTE 8)                            |   |                          |    |   |   |   |   |
|                                                                               |   |                          |    |   |   |   |   |
| SHAREHOLDERS’                  EQUITY:                                       |   |                          |    |   |   |   |   |
| Preferred                  stock, $1.00 par value, 960,000 shares authorized,      |   |                          |    |   |   |   |   |
| none                  outstanding                                             |   |                          | -       |   |   | - |   |
| Common                  stock, $.10 par value, 7,500,000 shares authorized,        |   |                          |    |   |   |   |   |
| 4,217,596                  issued and outstanding                             |   |                          | 422     |   |   | 422 |   |
| Contributed                  capital                                          |   |                          | 11,693  |   |   | 11,693 |   |
| Retained                  earnings                                            |   |                          | 62,253  |   |   | 53,541 |   |
| Total                  shareholders’ equity                             |   |                          | 74,368  |   |   | 65,656 |   |
|                                                                               |   | $                             | 289,287 |   | $ | 312,662 |   |

----

**ADAMS        RESOURCES & ENERGY, INC. AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF OPERATIONS**

**(In        thousands, except per share data)**

|                                                                       |   | Years                  Ended December 31, |      |
|----------------------------------------------------------------------------|--------|-------------------------------------------|-----------|
|                                                                       |   | 2006                                      |      | 2005 |   | 2004 |   |
| REVENUES:                                                                  |   |                                      |      |   |   |   |   |   |   |   |
| Marketing                                                                  |   | $                                         | 2,167,502 |   | $ | 2,292,029 |   | $ | 2,010,968 |   |
| Transportation                                                             |   |                                      | 62,151    |   |   | 57,458 |   |   | 47,323 |   |
| Oil                  and gas                                               |   |                                      | 16,950    |   |   | 15,346 |   |   | 10,796 |   |
|                                                                       |   |                                      | 2,246,603 |   |   | 2,364,833 |   |   | 2,069,087 |   |
| COSTS                  AND EXPENSES:                                       |   |                                      |      |   |   |   |   |   |   |   |
| Marketing                                                                  |   |                                      | 2,153,183 |   |   | 2,268,296 |   |   | 1,996,160 |   |
| Transportation                                                             |   |                                      | 52,440    |   |   | 48,614 |   |   | 39,511 |   |
| Oil                  and gas                                               |   |                                      | 7,992     |   |   | 5,903 |   |   | 5,485 |   |
| General                  and administrative                                |   |                                      | 8,536     |   |   | 9,668 |   |   | 7,867 |   |
| Depreciation,                  depletion and amortization                  |   |                                      | 9,485     |   |   | 7,060 |   |   | 6,285 |   |
|                                                                       |   |                                      | 2,231,636 |   |   | 2,339,541 |   |   | 2,055,308 |   |
|                                                                       |   |                                      |      |   |   |   |   |   |   |   |
| Operating                  Earnings                                        |   |                                      | 14,967    |   |   | 25,292 |   |   | 13,779 |   |
|                                                                       |   |                                      |      |   |   |   |   |   |   |   |
| Other                  Income (Expense):                                   |   |                                      |      |   |   |   |   |   |   |   |
| Interest                  income                                           |   |                                      | 965       |   |   | 188 |   |   | 62 |   |
| Interest                  expense                                          |   |                                      | (159      | ) |   | (128 | ) |   | (107 | ) |
|                                                                       |   |                                      |      |   |   |   |   |   |   |   |
| Earnings                  from continuing operations before income tax     |   |                                      |      |   |   |   |   |   |   |   |
| and                  cumulative effect of accounting change                |   |                                      | 15,773    |   |   | 25,352 |   |   | 13,734 |   |
|                                                                       |   |                                      |      |   |   |   |   |   |   |   |
| Income                  Tax Provision:                                     |   |                                      |      |   |   |   |   |   |   |   |
| Current                                                                    |   |                                      | 4,878     |   |   | 7,765 |   |   | 4,603 |   |
| Deferred                                                                   |   |                                      | 412       |   |   | 818 |   |   | 393 |   |
|                                                                       |   |                                      | 5,290     |   |   | 8,583 |   |   | 4,996 |   |
| Earnings                  from continuing operations                       |   |                                      | 10,483    |   |   | 16,769 |   |   | 8,738 |   |
| Earnings                  (loss) from discontinued operations, net of tax  |   |                                      |      |   |   |   |   |   |   |   |
| (provision)                  benefit of zero, $(443) and $67, respectively |   |                                      | -         |   |   | 872 |   |   | (130 | ) |
|                                                                       |   |                                      |      |   |   |   |   |   |   |   |
| Net                  Earnings                                              |   | $                                         | 10,483    |   | $ | 17,641 |   | $ | 8,608 |   |
|                                                                       |   |                                      |      |   |   |   |   |   |   |   |
| EARNINGS                  (LOSS) PER SHARE:                                |   |                                      |      |   |   |   |   |   |   |   |
| From                  continuing operations                                |   | $                                         | 2.49      |   | $ | 3.97 |   | $ | 2.07 |   |
| From                  discontinued operations                              |   |                                      | -         |   |   | .21 |   |   | (.03 | ) |
|                                                                       |   |                                      |      |   |   |   |   |   |   |   |
| Basic                  and diluted net earnings per share                  |   | $                                         | 2.49      |   | $ | 4.18 |   | $ | 2.04 |   |
|                                                                       |   |                                      |      |   |   |   |   |   |   |   |
| DIVIDENDS                  PER COMMON SHARE                                |   | $                                         | .42       |   | $ | .37 |   | $ | .30 |   |

----

**ADAMS        RESOURCES & ENERGY, INC. AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF SHAREHOLDERS' EQUITY**

**(In        thousands)**

|                                            |   |       |   |            |   |         |   | **Total**               |   |
|-------------------------------------------------|--------|------------|--------|-----------------|--------|--------------|--------|-------------------------|--------|
|                                            |   | **Common** |   | **Contributed** |   | **Retained** |   | **Shareholders’** |   |
|                                            |   | **Stock**  |   | **Capital**     |   | **Earnings** |   | **Equity**              |   |
|                                            |   |       |   |            |   |         |   |                    |   |
| BALANCE,                  January 1, 2004       |   | $          | 422    |            | $      | 11,693       |   | $                       | 30,117 |   | $ | 42,232 |   |
| Net                  earnings                   |   |       | -      |            |   | -            |   |                    | 8,608  |   |   | 8,608 |   |
| Dividends                  paid on common stock |   |       | -      |            |   | -            |   |                    | (1,265 | ) |   | (1,265 | ) |
| BALANCE,                  December 31, 2004     |   | $          | 422    |            | $      | 11,693       |   | $                       | 37,460 |   | $ | 49,575 |   |
| Net                  earnings                   |   |       | -      |            |   | -            |   |                    | 17,641 |   |   | 17,641 |   |
| Dividends                  paid on common stock |   |       | -      |            |   | -            |   |                    | (1,560 | ) |   | (1,560 | ) |
| BALANCE,                  December 31, 2005     |   | $          | 422    |            | $      | 11,693       |   | $                       | 53,541 |   | $ | 65,656 |   |
| Net                  earnings                   |   |       | -      |            |   | -            |   |                    | 10,483 |   |   | 10,483 |   |
| Dividends                  paid on common stock |   |       | -      |            |   | -            |   |                    | (1,771 | ) |   | (1,771 | ) |
| BALANCE,                  December 31, 2006     |   | $          | 422    |            | $      | 11,693       |   | $                       | 62,253 |   | $ | 74,368 |   |

----

**ADAMS        RESOURCES & ENERGY, INC. AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

**(In        thousands)**

|                                                                  |   | Years                  Ended December 31, |    |
|-----------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                  |   | 2006                                      |    | 2005 |   | 2004 |   |
|                                                                  |   |                                      |    |   |   |   |   |
| CASH                  PROVIDED BY OPERATIONS:                         |   |                                      |    |   |   |   |   |
| Earnings                  from continuing operations                  |   | $                                         | 10,483  |   | $ | 16,769 |   | $ | 8,738 |   |
| Adjustments                  to reconcile net earnings to net cash    |   |                                      |    |   |   |   |   |   |   |   |
| provided                  by (used in) operating activities-          |   |                                      |    |   |   |   |   |   |   |   |
| Depreciation,                  depletion and amortization             |   |                                      | 9,485   |   |   | 7,060 |   |   | 6,285 |   |
| Gains                  on property sales                              |   |                                      | (101    | ) |   | (1,159 | ) |   | (1,438 | ) |
| Impairment                  of oil and gas properties                 |   |                                      | 1,405   |   |   | 391 |   |   | 616 |   |
| Other,                  net                                           |   |                                      | 262     |   |   | (157 | ) |   | (188 | ) |
| Decrease                  (increase) in accounts receivable           |   |                                      | 23,630  |   |   | (55,842 | ) |   | (26,579 | ) |
| Decrease                  (increase) in inventories                   |   |                                      | 3,742   |   |   | (320 | ) |   | (5,072 | ) |
| Risk                  management activities                           |   |                                      | 317     |   |   | (1,151 | ) |   | 62 |   |
| Decrease                  (increase) in tax receivable                |   |                                      | (92     | ) |   | (1,304 | ) |   | 1,310 |   |
| Decrease                  (increase) in prepayments                   |   |                                      | 3,047   |   |   | 759 |   |   | (3,475 | ) |
| Increase                  (decrease) in accounts payable              |   |                                      | (27,682 | ) |   | 53,200 |   |   | 15,138 |   |
| Increase                  (decrease) in accrued liabilities           |   |                                      | 3,107   |   |   | (1,114 | ) |   | 2,540 |   |
| Deferred                  income taxes                                |   |                                      | 412     |   |   | 818 |   |   | 393 |   |
| Net                  cash provided by (used in) continuing operations |   |                                      | 28,015  |   |   | 17,950 |   |   | (1,670 | ) |
| Net                  cash provided by discontinued operations         |   |                                      | -       |   |   | 332 |   |   | 4,160 |   |
| Net                  cash provided by operating activities            |   |                                      | 28,015  |   |   | 18,282 |   |   | 2,490 |   |
|                                                                  |   |                                      |    |   |   |   |   |   |   |   |
| INVESTING                  ACTIVITIES:                                |   |                                      |    |   |   |   |   |   |   |   |
| Property                  and equipment additions                     |   |                                      | (14,602 | ) |   | (19,128 | ) |   | (12,161 | ) |
| Insurance                  and tax deposits                           |   |                                      | (1,458  | ) |   | (1,787 | ) |   | - |   |
| Proceeds                  from property sales                         |   |                                      | 142     |   |   | 2,078 |   |   | 2,536 |   |
|                                                                  |   |                                      |    |   |   |   |   |   |   |   |
| Net                  cash used in continuing operations               |   |                                      | (15,918 | ) |   | (18,837 | ) |   | (9,625 | ) |
| Proceeds                  from sale of discontinued operations        |   |                                      | -       |   |   | 990 |   |   | - |   |
| Net                  cash used in investing activities                |   |                                      | (15,918 | ) |   | (17,847 | ) |   | (9,625 | ) |
|                                                                  |   |                                      |    |   |   |   |   |   |   |   |
| FINANCING                  ACTIVITIES:                                |   |                                      |    |   |   |   |   |   |   |   |
| Net                  repayments under credit agreements               |   |                                      | (8,475  | ) |   | - |   |   | - |   |
| Dividend                  payments                                    |   |                                      | (1,771  | ) |   | (1,560 | ) |   | (1,265 | ) |
| Net                  cash used in financing activities                |   |                                      | (10,246 | ) |   | (1,560 | ) |   | (1,265 | ) |
|                                                                  |   |                                      |    |   |   |   |   |   |   |   |
| Increase                  (decrease) in cash and cash equivalents     |   |                                      | 1,851   |   |   | (1,125 | ) |   | (8,400 | ) |
|                                                                  |   |                                      |    |   |   |   |   |   |   |   |
| Cash                  and cash equivalents at beginning of year       |   |                                      | 18,817  |   |   | 19,942 |   |   | 28,342 |   |
|                                                                  |   |                                      |    |   |   |   |   |   |   |   |
| Cash                  and cash equivalents at end of year             |   | $                                         | 20,668  |   | $ | 18,817 |   | $ | 19,942 |   |

----

**(1)        Summary of Significant Accounting Policies**

*Principles        of Consolidation *

*Nature        of Operations*

*Cash        and Cash Equivalents*

*Inventories*

|                                |   | DDecember                  31, |   |
|-------------------------------------|--------|--------------------------------|--------|
|                                |   | 2006                           |   | 2005 |   |
|                                |   |                           |   |   |   |
| Crude                  oil          |   | $                              | 5,983  |   | $ | 9,924 |   |
| Petroleum                  products |   |                           | 1,967  |   |   | 1,768 |   |
|                                |   | $                              | 7,950  |   | $ | 11,692 |   |

*Property        and Equipment*

----

*Other        Assets*

*Revenue        Recognition*

----

*Statement        of Cash Flows*

*Earnings        Per Share*

*Use        of Estimates*

*Price        Risk Management Activities*

----

|                                                                       |   | 2006   |   | 2005   |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|--------|
| Net                  fair value on January 1,                              |   | $      | 1,781  |   | $      | 630 |   |
| Activity                  during 2006                                      |   |   |   |   |   |   |   |
| -                  Cash received from settled contracts                    |   |   | (2,121 | )      |   | (913 | ) |
| -                  Net realized gain from prior years’ contracts     |   |   | 472    |   |   | 283 |   |
| -                  Net unrealized gain from current years’ contracts |   |   | 1,332  |   |   | 1,781 |   |
| Net                  fair value on December 31,                            |   | $      | 1,464  |   | $      | 1,781 |   |

*Asset        Retirement Obligations*

|                                     |   | 2006   |   | 2005   |   |
|------------------------------------------|--------|--------|--------|--------|--------|
| Balance                  on January 1,   |   | $      | 1,058  |   | $      | 723 |   |
| Liabilities                  incurred    |   |   | 46     |   |   | 50 |   |
| Accretion                  of discount   |   |   | 62     |   |   | 63 |   |
| Liabilities                  settled     |   |   | (14    | )      |   | (103 | ) |
| Revisions                  to estimates  |   |   | -      |   |   | 325 |   |
| Balance                  on December 31, |   | $      | 1,152  |   | $      | 1,058 |   |

----

*Recent        Accounting Pronouncements*

**(2)        Long-Term Debt**

----

|                                                                                       |   |  December                  31, |   |
|--------------------------------------------------------------------------------------------|--------|-------------------------------------|--------|
|                                                                                       |   | 2006                                |   | 2005 |   |
| Bank                  lines of credit, secured by substantially all of the Company’s |   |                                |   |   |   |   |   |
| assets                  (excluding Gulfmark and ARM), due in eight quarterly               |   |                                |   |   |   |   |   |
| installments                  commencing on October 31, 2008                               |   |                                | 3,000  |   |   | 11,475 |   |
| Less                  - current maturities                                                 |   |                                | -      |   |   | - |   |
|                                                                                       |   |                                |   |   |   |   |   |
| Long-term                  debt                                                            |   | $                                   | 3,000  |   | $ | 11,475 |   |

**(3)        Discontinued Operations**

----

**(4)        Income Taxes **

|      |   | Years                  ended December 31, |   |
|-----------|--------|-------------------------------------------|--------|
|      |   | 2006                                      |   | 2005 |   | 2004 |   |
| Current:  |   |                                      |   |   |   |   |   |   |   |   |
| Federal   |   | $                                         | 4,506  |   | $ | 7,244 |   | $ | 4,076 |   |
| State     |   |                                      | 372    |   |   | 964 |   |   | 460 |   |
|      |   |                                      | 4,878  |   |   | 8,208 |   |   | 4,536 |   |
| Deferred: |   |                                      |   |   |   |   |   |   |   |   |
| Federal   |   |                                      | 504    |   |   | 704 |   |   | 214 |   |
| State     |   |                                      | (92    | ) |   | 114 |   |   | 179 |   |
|      |   | $                                         | 5,290  |   | $ | 9,026 |   | $ | 4,929 |   |

|                                          |   | Years                  ended December 31, |   |
|-----------------------------------------------|--------|-------------------------------------------|--------|
|                                          |   | 2006                                      |   | 2005 |   | 2004 |   |
| From                  continuing operations   |   | $                                         | 5,290  |   | $ | 8,583 |   | $ | 4,996 |   |
| From                  discontinued operations |   |                                      | -      |   |   | 443 |   |   | (67 | ) |
|                                          |   | $                                         | 5,290  |   | $ | 9,026 |   | $ | 4,929 |   |

|                                                                  |   | Years                  ended December 31, |   |
|-----------------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                                  |   | 2006                                      |   | 2005 |   | 2004 |   |
| Statutory                  federal income tax provision               |   | $                                         | 5,521  |   | $ | 9,333 |   | $ | 4,603 |   |
| State                  income tax provision (net of federal benefit), |   |                                      | 266    |   |   | 751 |   |   | 321 |   |
| Federal                  statutory depletion                          |   |                                      | (537   | ) |   | (630 | ) |   | (306 | ) |
| Foreign                  tax rate change                              |   |                                      | (108   | ) |   | - |   |   | - |   |
| Valuation                  Allowance - Foreign                        |   |                                      | 475    |   |   | - |   |   | - |   |
| Book/tax                  basis adjustment                            |   |                                      | (208   | ) |   | (291 | ) |   | 120 |   |
| State                  net operating loss valuation allowance         |   |                                      | -      |   |   | (147 | ) |   | 152 |   |
| Texas                  rate change adjustment                         |   |                                      | (108   | ) |   | - |   |   | - |   |
| Other                                                                 |   |                                      | (11    | ) |   | 10 |   |   | 39 |   |
|                                                                  |   | $                                         | 5,290  |   | $ | 9,026 |   | $ | 4,929 |   |

----

|                                                        |   | Years                  Ended December 31, |   |
|-------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                        |   | 2006                                      |   | 2005 |   |
| Current                  deferred taxes                     |   |                                      |   |   |   |   |   |
| Bad                  debts                                  |   | $                                         | 84     |   | $ | 231 |   |
| Prepaid                  insurance                          |   |                                      | (590   | ) |   | (684 | ) |
| Mark-to-market                  contracts                   |   |                                      | (547   | ) |   | (676 | ) |
|                                                        |   |                                      |   |   |   |   |   |
| Net                  current deferred tax asset (liability) |   |                                      | (1,053 | ) |   | (1,129 | ) |
|                                                        |   |                                      |   |   |   |   |   |
| Long-term                  deferred taxes                   |   |                                      |   |   |   |   |   |
| State                  net operating losses                 |   |                                      | 44     |   |   | 56 |   |
| --Less                  valuation allowance                 |   |                                      | -      |   |   | (5 | ) |
| Basis                  difference in foreign investments    |   |                                      | 475    |   |   | 281 |   |
| --Less                  valuation allowance                 |   |                                      | (475   | ) |   | - |   |
| Property                                                    |   |                                      | (3,876 | ) |   | (3,649 | ) |
| Other                                                       |   |                                      | 201    |   |   | 174 |   |
|                                                        |   |                                      |   |   |   |   |   |
| Net                  long-term deferred tax (liability)     |   |                                      | (3,631 | ) |   | (3,143 | ) |
|                                                        |   |                                      |   |   |   |   |   |
| Net                  deferred tax (liability)               |   | $                                         | (4,684 | ) | $ | (4,272 | ) |

**(5)        Fair Value of Financial Instruments and Concentration of Credit        Risk**

*Fair        Value of Financial Instruments*

*Concentration        of Credit Risk*

----

|                                             |   | 2006   |   | 2005   |   | 2004   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                             |   |   |   |   |   |   |   |
| Balance,                  beginning of year      |   | $      | 608    |   | $      | 384    |   | $ | 1,935 |   |
| Provisions                  for bad debts        |   |   | 346    |   |   | 390    |   |   | 90 |   |
| Less:                  Write-offs and recoveries |   |   | (729   | )      |   | (166   | )      |   | (1,641 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |
| Balance,                  end of year            |   | $      | 225    |   | $      | 608    |   | $ | 384 |   |

**(6)        Employee Benefits**

**(7)        Transactions with Related Parties**

----

**(8)        Commitments and Contingencies **

*Le        Petit Chateau Le Luxe, et. al. vs Great Southern Oil & Gas Co., et.        al.*

**(9)        Guarantees**

|                                   |   | 2007 |   | 2008   |   | 2009 |   | 2010 |   | Thereafter |   | Total |   |
|----------------------------------------|--------|------|--------|--------|--------|------|--------|------|--------|------------|--------|-------|--------|
| Lease                  residual values |   | $    | -      |   | $      | 304  |   | $    | 1,475  |       | $      | 217   |   | $ | 469 |   | $ | 2,465 |   |

----

|                                   |   | 2007   |   | 2008   |   | 2009  |   | 2010   |   | Thereafter |   | Total |   |
|----------------------------------------|--------|--------|--------|--------|--------|-------|--------|--------|--------|------------|--------|-------|--------|
| Bank                  Debt             |   | $      | -      |   | $      | 375   |   | $      | 1,500  |       | $      | 1,125 |   | $ | - |   | $ | 3,000 |   |
| Operating                  leases      |   |   | 4,060  |   |   | 3,861 |   |   | 1,538  |       |   | 548   |   |   | 290 |   |   | 10,297 |   |
| Lease                  residual values |   |   | -      |   |   | 304   |   |   | 1,475  |       |   | 217   |   |   | 469 |   |   | 2,465 |   |
| Commodity                  purchases   |   |   | 22,477 |   |   | -     |   |   | -      |       |   | -     |   |   | - |   |   | 22,477 |   |
| Letters                  of credit     |   |   | 31,732 |   |   | -     |   |   | -      |       |   | -     |   |   | - |   |   | 31,732 |   |
|                                   |   | $      | 58,269 |   | $      | 4,540 |   | $      | 4,513  |       | $      | 1,890 |   | $ | 759 |   | $ | 69,971 |   |

**(10)        Segment Reporting**

----

|                                           |   |     |      | Segment                  Operating |   | Depreciation                  Depletion and |   | Property                  and Equipment |   |
|------------------------------------------------|--------|----------|-----------|------------------------------------|--------|---------------------------------------------|--------|-----------------------------------------|--------|
|                                           |   | Revenues |      | Earnings                           |   | Amortization                                |   | Additions                               |   |
| Year                  ended December 31, 2006- |   |     |      |                               |   |                                        |   |                                    |   |   |   |   |   |
| Marketing                                      |   |     |      |                               |   |                                        |   |                                    |   |   |   |   |   |
| -                  Crude oil                   |   | $        | 1,975,972 |                               | $      | 5,088                                       |   | $                                       | 857    |   | $ | 1,395 |   |
| -                  Natural gas                 |   |     | 13,621    |                               |   | 6,558                                       |   |                                    | 59     |   |   | 432 |   |
| -                  Refined products            |   |     | 177,909   |                               |   | 1,329                                       |   |                                    | 428    |   |   | 1,085 |   |
| Marketing                  Total               |   |     | 2,167,502 |                               |   | 12,975                                      |   |                                    | 1,344  |   |   | 2,912 |   |
| Transportation                                 |   |     | 62,151    |                               |   | 5,173                                       |   |                                    | 4,538  |   |   | 1,342 |   |
| Oil                  and gas                   |   |     | 16,950    |                               |   | 5,355                                       |   |                                    | 3,603  |   |   | 10,348 |   |
|                                           |   | $        | 2,246,603 |                               | $      | 23,503                                      |   | $                                       | 9,485  |   | $ | 14,602 |   |
| Year                  ended December 31, 2005- |   |     |      |                               |   |                                        |   |                                    |   |   |   |   |   |
| Marketing                                      |   |     |      |                               |   |                                        |   |                                    |   |   |   |   |   |
| -                  Crude oil                   |   | $        | 2,117,578 |                               | $      | 13,489                                      |   | $                                       | 733    |   | $ | 167 |   |
| -                  Natural gas                 |   |     | 13,063    |                               |   | 8,436                                       |   |                                    | 58     |   |   | 12 |   |
| -                  Refined products            |   |     | 161,388   |                               |   | 556                                         |   |                                    | 461    |   |   | 337 |   |
| Marketing                  Total               |   |     | 2,292,029 |                               |   | 22,481                                      |   |                                    | 1,252  |   |   | 516 |   |
| Transportation                                 |   |     | 57,458    |                               |   | 5,714                                       |   |                                    | 3,130  |   |   | 11,188 |   |
| Oil                  and gas                   |   |     | 15,346    |                               |   | 6,765                                       |   |                                    | 2,678  |   |   | 7,424 |   |
|                                           |   | $        | 2,364,833 |                               | $      | 34,960                                      |   | $                                       | 7,060  |   | $ | 19,128 |   |
| Year                  ended December 31, 2004- |   |     |      |                               |   |                                        |   |                                    |   |   |   |   |   |
| Marketing                                      |   |     |      |                               |   |                                        |   |                                    |   |   |   |   |   |
| -                  Crude oil                   |   | $        | 1,885,221 |                               | $      | 10,684                                      |   | $                                       | 571    |   | $ | 1,157 |   |
| -                  Natural gas                 |   |     | 8,675     |                               |   | 3,810                                       |   |                                    | 46     |   |   | 38 |   |
| -                  Refined products            |   |     | 117,072   |                               |   | (897                                        | )      |                                    | 594    |   |   | 83 |   |
| Marketing                  Total               |   |     | 2,010,968 |                               |   | 13,597                                      |   |                                    | 1,211  |   |   | 1,278 |   |
| Transportation                                 |   |     | 47,323    |                               |   | 5,687                                       |   |                                    | 2,125  |   |   | 6,736 |   |
| Oil                  and gas                   |   |     | 10,796    |                               |   | 2,362                                       |   |                                    | 2,949  |   |   | 4,147 |   |
|                                           |   | $        | 2,069,087 |                               | $      | 21,646                                      |   | $                                       | 6,285  |   | $ | 12,161 |   |

|                                                   |   | Years                  Ended December 31, |   |
|--------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                   |   | 2006                                      |   | 2005 |   | 2004 |   |
| Segment                  operating earnings            |   | $                                         | 23,503 |   | $ | 34,960 |   | $ | 21,646 |   |
| -                  General and administrative expenses |   |                                      | (8,536 | ) |   | (9,668 | ) |   | (7,867 | ) |
| Operating                  earnings                    |   |                                      | 14,967 |   |   | 25,292 |   |   | 13,779 |   |
| -                  Interest income                     |   |                                      | 965    |   |   | 188 |   |   | 62 |   |
| -                  Interest expense                    |   |                                      | (159   | ) |   | (128 | ) |   | (107 | ) |
| Earnings                  from continuing operations   |   |                                      |   |   |   |   |   |   |   |   |
| before                  income taxes                   |   | $                                         | 15,773 |   | $ | 25,352 |   | $ | 13,734 |   |

----

|                                |   | Years                  Ended December 31, |    |
|-------------------------------------|--------|-------------------------------------------|---------|
|                                |   | 2006                                      |    | 2005 |   |
| Marketing                           |   |                                      |    |   |   |   |   |
| -                  Crude oil        |   | $                                         | 116,917 |   | $ | 135,235 |   |
| -                  Natural gas      |   |                                      | 80,346  |   |   | 90,344 |   |
| -                  Refined products |   |                                      | 16,286  |   |   | 14,730 |   |
| Marketing                  Total    |   |                                      | 213,549 |   |   | 240,309 |   |
| Transportation                      |   |                                      | 23,764  |   |   | 28,412 |   |
| Oil                  and gas        |   |                                      | 25,918  |   |   | 20,780 |   |
| Other                               |   |                                      | 26,056  |   |   | 23,161 |   |
|                                |   | $                                         | 289,287 |   | $ | 312,662 |   |

**(11)        Quarterly Financial Data (Unaudited) - **

|                          |   |     |      | Earnings                  from |   |                          |   |      |   |
|-------------------------------|--------|----------|-----------|--------------------------------|--------|-------------------------------|--------|-----------|--------|
|                          |   |     |      | Continuing                     |   |                          |   |      |   |
|                          |   |     |      | Operations                     |   | Net                  Earnings |   | Dividends |   |
|                          |   |     |      |                           |   | Per                           |   |      |   | Per |   |   |   | Per |   |
|                          |   | Revenues |      | Amount                         |   | Share                         |   | Amount    |   | Share |   | Amount |   | Share |   |
| **2006                  -**   |   |     |      |                           |   |                          |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March                  31     |   | $        | 488,028   |                           | $      | 3,644                         |   | $         | .86    |   | $ | 3,644 |   | $ | .86 |   | $ | - |   | $ | - |   |
| June                  30      |   |     | 595,000   |                           |   | 4,038                         |   |      | .96    |   |   | 4,038 |   |   | .96 |   |   | - |   |   | - |   |
| September                  30 |   |     | 624,998   |                           |   | 1,677                         |   |      | .40    |   |   | 1,677 |   |   | .40 |   |   | - |   |   | - |   |
| December                  31  |   |     | 538,577   |                           |   | 1,124                         |   |      | .27    |   |   | 1,124 |   |   | .27 |   |   | 1,771 |   |   | .42 |   |
|                          |   | $        | 2,246,603 |                           | $      | 10,483                        |   | $         | 2.49   |   | $ | 10,483 |   | $ | 2.49 |   | $ | 1,771 |   | $ | .42 |   |
|                          |   |     |      |                           |   |                          |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **2005                  -**   |   |     |      |                           |   |                          |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March                  31     |   | $        | 527,643   |                           | $      | 2,910                         |   | $         | .69    |   | $ | 2,851 |   | $ | .68 |   | $ | - |   | $ | - |   |
| June                  30      |   |     | 542,195   |                           |   | 1,849                         |   |      | .44    |   |   | 1,886 |   |   | .44 |   |   | - |   |   | - |   |
| September                  30 |   |     | 637,007   |                           |   | 4,996                         |   |      | 1.18   |   |   | 5,297 |   |   | 1.26 |   |   | - |   |   | - |   |
| December                  31  |   |     | 657,988   |                           |   | 7,014                         |   |      | 1.66   |   |   | 7,607(1 | ) |   | 1.80 |   |   | 1,560 |   |   | .37 |   |
|                          |   | $        | 2,364,833 |                           | $      | 16,769                        |   | $         | 3.97   |   | $ | 17,641 |   | $ | 4.18 |   | $ | 1,560 |   | $ | .37 |   |

----

**(12)**
**Oil        and Gas Producing Activities (Unaudited)**

*Oil        and Gas Producing Activities (Unaudited) - *

|                                        |   | Years                  Ended December 31, |   |
|---------------------------------------------|--------|-------------------------------------------|--------|
|                                        |   | 2006                                      |   | 2005 |   | 2004 |   |
| Property                  acquisition costs |   |                                      |   |   |   |   |   |   |   |   |
| Unproved                                    |   | $                                         | 1,885  |   | $ | 1,460 |   | $ | 574 |   |
| Proved                                      |   |                                      | -      |   |   | - |   |   | - |   |
| Exploration                  costs          |   |                                      |   |   |   |   |   |   |   |   |
| Expensed                                    |   |                                      | 2,902  |   |   | 3,078 |   |   | 2,504 |   |
| Capitalized                                 |   |                                      | 2,173  |   |   | 927 |   |   | 1,565 |   |
| Development                  costs          |   |                                      | 6,290  |   |   | 5,037 |   |   | 2,210 |   |
| Total                  costs incurred       |   | $                                         | 13,250 |   | $ | 10,502 |   | $ | 6,853 |   |

|                                                 |   | December                  31, |    |
|------------------------------------------------------|--------|-------------------------------|---------|
|                                                 |   | 2006                          |    | 2005 |   |
|                                                 |   |                          |    |   |   |
| Unproved                  oil and gas properties     |   | $                             | 4,166   |   | $ | 5,857 |   |
| Proved                  oil and gas properties       |   |                          | 56,837  |   |   | 46,254 |   |
|                                                 |   |                          | 61,003  |   |   | 52,111 |   |
| Accumulated                  depreciation, depletion |   |                          |    |   |   |   |   |
| and                  amortization                    |   |                          | (38,139 | ) |   | (34,536 | ) |
|                                                 |   |                          |    |   |   |   |   |
| Net                  capitalized cost                |   | $                             | 22,864  |   | $ | 17,575 |   |

*Estimated        Oil and Natural Gas Reserves (Unaudited) - *

----

|                                             |   | Years                  Ended December 31, |   |
|--------------------------------------------------|--------|-------------------------------------------|--------|
|                                             |   | 2006                                      |   | 2005 |   | 2004 |   |
|                                             |   | Natural                                   |   |   |   | Natural |   |   |   | Natural |   |   |   |
|                                             |   | Gas                                       |   | Oil |   | Gas |   | Oil |   | Gas |   | Oil |   |
|                                             |   | (Mcf’s)                             |   | (Bbls.) |   | (Mcf’s) |   | (Bbls.) |   | (Mcf’s) |   | (Bbls.) |   |
| Total                  proved reserves-          |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning                  of year               |   |                                      | 9,643  |   |   | 396 |   |   | 10,950 |   |   | 436 |   |   | 8,971 |   |   | 438 |   |
| Revisions                  of previous estimates |   |                                      | (2,473 | ) |   | (45 | ) |   | (1,120 | ) |   | 42 |   |   | 122 |   |   | (52 | ) |
| Oil                  and gas reserves sold       |   |                                      | -      |   |   | - |   |   | (441 | ) |   | (61 | ) |   | - |   |   | - |   |
| Extensions,                  discoveries and     |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| other                  reserve additions         |   |                                      | 2,734  |   |   | 121 |   |   | 1,642 |   |   | 46 |   |   | 3,166 |   |   | 121 |   |
| Production                                       |   |                                      | (1,604 | ) |   | (76 | ) |   | (1,388 | ) |   | (67 | ) |   | (1,309 | ) |   | (71 | ) |
| End                  of year                     |   |                                      | 8,300  |   |   | 396 |   |   | 9,643 |   |   | 396 |   |   | 10,950 |   |   | 436 |   |
|                                             |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proved                  developed reserves-      |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| End                  of year                     |   |                                      | 8,300  |   |   | 396 |   |   | 9,643 |   |   | 396 |   |   | 10,220 |   |   | 410 |   |

*Standardized        Measure of Discounted Future Net Cash Flows from Oil and Gas Operations and        Changes Therein (Unaudited) - *

|                                                       |   | YYears                  Ended December 31, |    |
|------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                       |   | 2006                                       |    | 2005 |   | 2004 |   |
|                                                       |   |                                       |    |   |   |   |   |
| Future                  gross revenues                     |   | $                                          | 69,540  |   | $ | 110,720 |   | $ | 83,668 |   |
| Future                  costs -                            |   |                                       |    |   |   |   |   |   |   |   |
| Lease                  operating expenses                  |   |                                       | (20,677 | ) |   | (26,674 | ) |   | (20,128 | ) |
| Development                  costs                         |   |                                       | (684    | ) |   | (600 | ) |   | (1,228 | ) |
| Future                  net cash flows before income taxes |   |                                       | 48,179  |   |   | 83,446 |   |   | 62,312 |   |
| Discount                  at 10% per annum                 |   |                                       | (17,904 | ) |   | (35,124 | ) |   | (27,771 | ) |
| Discounted                  future net cash flows          |   |                                       |    |   |   |   |   |   |   |   |
| before                  income taxes                       |   |                                       | 30,275  |   |   | 48,322 |   |   | 34,541 |   |
| Future                  income taxes, net of discount at   |   |                                       |    |   |   |   |   |   |   |   |
| 10%                  per annum                             |   |                                       | (11,505 | ) |   | (18,362 | ) |   | (11,744 | ) |
| Standardized                  measure of discounted        |   |                                       |    |   |   |   |   |   |   |   |
| future                  net cash flows                     |   | $                                          | 18,770  |   | $ | 29,960 |   | $ | 22,797 |   |

----

|                                                                    |   | Years                  Ended December 31, |    |
|-------------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                    |   | 2006                                      |    | 2005 |   | 2004 |   |
| Beginning                  of year                                      |   | $                                         | 29,960  |   | $ | 22,797 |   | $ | 18,371 |   |
| Revisions                  to reserves proved in prior years -          |   |                                      |    |   |   |   |   |   |   |   |
| Net                  change in prices and production costs              |   |                                      | (14,234 | ) |   | 16,308 |   |   | 2,306 |   |
| Net                  change due to revisions in quantity estimates      |   |                                      | (12,078 | ) |   | (6,334 | ) |   | (534 | ) |
| Accretion                  of discount                                  |   |                                      | 3,512   |   |   | 2,777 |   |   | 1,835 |   |
| Production                  rate changes and other                      |   |                                      | (998    | ) |   | 2,405 |   |   | (1,280 | ) |
| Total                  revisions                                        |   |                                      | (23,798 | ) |   | 15,156 |   |   | 2,327 |   |
| Sale                  of oil and gas reserves                           |   |                                      | -       |   |   | (1,623 | ) |   | - |   |
| New                  field discoveries and extensions, net of future    |   |                                      |    |   |   |   |   |   |   |   |
| production                  costs                                       |   |                                      | 18,445  |   |   | 12,769 |   |   | 12,194 |   |
| Sales                  of oil and gas produced, net of production costs |   |                                      | (12,694 | ) |   | (12,521 | ) |   | (7,815 | ) |
| Net                  change in income taxes                             |   |                                      | 6,857   |   |   | (6,618 | ) |   | (2,280 | ) |
| Net                  change in standardized measure of discounted       |   |                                      |    |   |   |   |   |   |   |   |
| future                  net cash flows                                  |   |                                      | (11,190 | ) |   | 7,163 |   |   | 4,426 |   |
| End                  of year                                            |   | $                                         | 18,770  |   | $ | 29,960 |   | $ | 22,797 |   |

*Results        of Operations for Oil and Gas Producing Activities (Unaudited) -*

|                                                         |   | Years                  Ended December 31, |   |
|--------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                         |   | 2006                                      |   | 2005 |   | 2004 |   |
|                                                         |   |                                      |   |   |   |   |   |
| Revenues                                                     |   | $                                         | 16,950 |   | $ | 15,346 |   | $ | 10,796 |   |
| Costs                  and expenses -                        |   |                                      |   |   |   |   |   |   |   |   |
| Production                                                   |   |                                      | (4,256 | ) |   | (2,825 | ) |   | (2,981 | ) |
| Producing                  property impairment               |   |                                      | (841   | ) |   | - |   |   | - |   |
| Exploration                                                  |   |                                      | (2,895 | ) |   | (3,078 | ) |   | (2,504 | ) |
| Depreciation,                  depletion and amortization    |   |                                      | (3,603 | ) |   | (2,678 | ) |   | (2,949 | ) |
| Operating                  income before income taxes        |   |                                      | 5,355  |   |   | 6,765 |   |   | 2,362 |   |
| Income                  tax expense                          |   |                                      | (1,875 | ) |   | (2,368 | ) |   | (803 | ) |
| Operating                  income from continuing operations |   | $                                         | 3,480  |   | $ | 4,397 |   | $ | 1,559 |   |

----

----

----

| 2.   | All                financial schedules have been omitted because they are not applicable                or                the required information is shown in the financial statements or                notes                thereto. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.   | Exhibits                required to be filed |
|----------------|----------------------------------------------|

----

----

**SIGNATURES**

|                                                             | ADAMS                  RESOURCES & ENERGY, INC.       |
|------------------------------------------------------------------|-----------------------------------------------------------|
|                                                             | (Registrant)                                              |
|                                                             |                                                      |
|                                                             |                                                      |
| By                  /s/Richard                  B. Abshire  | By                  /s/                  K. S. Adams, Jr. |
| (Richard                  B. Abshire,                            | (K.                  S. Adams, Jr.,                       |
| Vice                  President, Director                        | Chairman                  of the Board and                |
| and                  Chief Financial Officer)                    | Chief                  Executive Officer)                 |

| By                  /s/ Frank T. Webster                       | By                  /s/                  E. C. Reinauer, Jr.  |
|----------------------------------------------------------------|---------------------------------------------------------------|
| (Frank                  T. Webster, Director)                  | (E.                  C. Reinauer, Jr., Director)              |
|                                                           |                                                          |
|                                                           |                                                          |
|                                                           |                                                          |
| By                  /s/                  Larry E. Bell         | By                  /s/                  E. Jack Webster, Jr. |
| (Larry                  E. Bell, Director)                     | (E.                  Jack Webster, Jr., Director)             |
|                                                           |                                                          |
|                                                           |                                                          |
|                                                           |                                                          |
| By                  /s/                  William B. Wiener III |                                                          |
| (William                  B. Wiener III, Director)             |                                                          |
|                                                           |                                                          |
|                                                           |                                                          |
|                                                           |                                                          |
|                                                           |                                                          |
|                                                           |                                                          |

----

**EXHIBIT      INDEX**