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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
--------------------------------------------------------------------------------

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

                  For the fiscal year ended September 30, 2000

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


                  ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
             (Exact name of registrant as specified in its charter)

                        Commission file number: 000-17325

           COLORADO                                     88-0218499
           --------                                     ----------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

    5444 WESTHEIMER ROAD, SUITE 1570, HOUSTON, TEXAS                  77056
    ------------------------------------------------                  -----
       (Address of Principal Executive Office)                     (Zip Code)

                                  713-626-4700
                                  ------------
              (Registrant's Telephone Number, Including Area Code)

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

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

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes [   ]  No [ X ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

The issuer had no revenues for the year ended September 30, 2000.

The aggregate market value of the voting stock held by non-affiliates of the
registrant, based on the last sales price of $0.23 per share on the "foreign
exchange" on September 7, 2001, was $60,509,165. As of September 7, 2001
registrant had 533,698,199 shares of common stock outstanding.

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                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                          PAGE
                                     PART I
<S>               <C>                                                                     <C>


Item 1.           Description of Business                                                   1

Item 2.           Description of Property                                                   5

Item 3.           Legal Proceedings                                                         5

Item 4.           Submission of Matters to a Vote of Security Holders                       6


                                     PART II


Item 5.           Market for Registrant's Common Stock and Related Shareholder Matters      6

Item 6.           Management's Discussion and Analysis of Financial Condition and
                  Plan of Operations                                                        8

Item 7.           Consolidated Financial Statements                                         12

Item 8.           Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure                                                  12

                                    PART III


Item 9.           Directors, Executive Officers, Promoters and Control Persons              12

Item 10.          Executive Compensation                                                    14

Item 11.          Security Ownership of Certain Beneficial Owners and Management            15

Item 12.          Certain Relationships and Related Transactions                            16

Item 13.          Exhibits and Reports on Form 8-K                                          17

                  Signatures                                                                18

</Table>


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         This annual report contains forward-looking statements. These
statements relate to future events or Environmental Remediation Holding
Corporation's ("Company" or "ERHC") future financial performance and involve
known and unknown risks, uncertainties and other factors that may cause ERHC or
its industry's actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by the forward-looking
statements.

         In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," or the negative of these terms
or other comparable terminology. These statements are only predictions. Actual
events or results may differ materially.

         Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, there can be no guarantee of future
results, levels of activity, performance, or achievements. Moreover, neither the
Company nor any other person assumes responsibility for the accuracy and
completeness of these forward-looking statements. The Company is under no duty
to update any of the forward- looking statements after the date of this report
to conform prior statements to actual results.


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

OVERVIEW

         ERHC is an independent oil and gas company and since 1996 has engaged
in the exploration, development, production and sale of crude oil and natural
gas properties. The Company's goal is to maximize its value through profitable
growth in oil and gas reserves and production in Sao Tome in central West Africa
and to acquire interests in non-producing oil and gas properties, particularly
high potential international prospects in known oil producing areas. The
Company's current focus is to exploit its only asset, which is an oil and gas
exploration concession in Sao Tome. Sao Tome is an island nation located in the
Gulf of Guinea off the coast of central West Africa. The Company has no other
operations.

         On February 15, 2001, pursuant to a Purchase Agreement dated December
31, 2000, as amended by a First Amendment dated January 31, 2001 (as amended,
the "Purchase Agreement"), between Chrome Energy, L.L.C., a Delaware limited
liability company ("Chrome"), Talisman Capital Opportunity Fund Ltd.
("Talisman"), and TC Hydro Carbon, Inc., a Delaware corporation ("TC Hydro
Carbon" or "TCHC" and, together with Talisman, the "Sellers"), Chrome purchased
from the Sellers for $6,000,000 cash the following: (a) 375,000,000 shares of
Company common stock ("Common Stock"), owned of record by TC Hydro Carbon; (b)
2,244,385 shares of Common Stock held and owned of record by Talisman; (c) a
convertible senior subordinated note from the Company due October 15, 2002, in
the principal amount of $750,000 owned and held by Talisman; (d) a convertible
note from the Company due October 26, 2000, in the principal amount of $500,000,
owned and held by Talisman; (e) a senior secured 8.0% exchangeable promissory
note, also referred to as the line of credit, from the Company due September 1,
2004, in the principal amount of $4,000,000 owned and held by TC Hydro Carbon;
(f) a warrant certificate dated as of October 26, 1998, owned and held by
Talisman providing the right to purchase 750,000 shares of Common Stock until
October 2008; (g) a warrant certificate dated as of October 26, 1998, owned and
held by Talisman providing the right to purchase 750,000 shares of Common Stock
until October 2008; (h) a warrant certificate dated as of October 15, 1997,
owned by Talisman providing the right to purchase 45,000 shares of Common Stock
until October 15, 2002; and (i) a warrant certificate dated as of April 23, 1999
owned by Talisman providing the right to purchase 1,000,000 shares of Common
Stock until April 2009. Subsequent to February 15, 2001, Chrome transferred to
its financial advisors an aggregate of 116,629,564 shares of Common Stock.

         As a result of the Purchase Agreement, Chrome Oil Services, Ltd., a
Bahamian corporation and the sole member of Chrome ("COS"), and Sir Emeka Offor,
a citizen of Nigeria and the sole shareholder, officer and director of COS,
Chrome beneficially owns 281,339,771 shares of Common Stock. Upon consummation
of the purchase by Chrome of the securities of the Company, the Company's three
directors prior to the February 15, 2001 elected three

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new directors. Immediately after the election of these new directors, the three
prior directors resigned from the board of directors. The new directors
appointed the new executive officers of the Company.

CORPORATE HISTORY; FORMER OPERATIONS

         The Company was formed in 1986, as a Colorado corporation, and was
engaged in a variety of businesses until 1996, at which time it began its
current operations as an independent oil and gas company. Since the commencement
of its oil and gas operations, the Company has acquired interests in the Nueces
River area of south Texas, which were abandoned in 1999, and has acquired
interests on the Uintah and Ouray Indian Reservations in Utah, which interests
were sold in August 1999. The Company also acquired a lease in oil fields
located in Wichita County, Texas, which was subsequently assigned to a former
shareholder. However, the Company may remain liable for certain plugging and
abandonment costs related to the interests in Wichita County, which is estimated
to be approximately $500,000.

CURRENT BUSINESS OPERATIONS

         In May 1997, the Company entered into an exclusive joint venture with
the Democratic Republic of Sao Tome and Principe ("DRSTP") (the "1997
Agreement). The 1997 Agreement is to manage the exploration, exploitation and
development of the potential oil and gas reserves onshore and offshore Sao Tome,
either through a joint venture or in collaboration with major international oil
exploration companies.

         In April 1998, the DRSTP granted approval to the joint venture to
proceed with the preparation and sale of leases of its oil concession rights. In
July 1998, the Company formed a joint venture with the DRSTP called the Sao Tome
and Principe National Petroleum Company, S.A. ("STPetro"), of which the Company
owned 49%. In July 1998, the formation of STPetro was promulgated into law. In
September 1998, the DRSTP and STPetro entered into a Technical Assistance
Agreement with a subsidiary of Mobil Corporation. As part of the 1997 Agreement,
the Company paid the DRSTP an aggregate concession fee of $5,000,000.

         In October 1999, the DRSTP claimed that the Company had breached
certain terms of the 1997 Agreement and announced the termination of the 1997
Agreement. The Company immediately exercised its rights to have the matter
settled via international arbitration.

         After the control acquisition by Chrome, the Company initiated
negotiations with the DRSTP concurrent with the arbitration process. In May
2001, the Company and the DRSTP reached a Memorandum of Agreement (the "2001
Agreement"), witnessed by the Federal Republic of Nigeria, which replaced the
1997 Agreement and suspended the arbitration process. The 2001 Agreement will be
embodied in a Consent Award to be issued by the arbitrator upon the ratification
of a treaty between the Federal Republic of Nigeria and the DRSTP. Although the
Company believes that this ratification will occur within the next six months,
there is no assurance that it will be completed in such time frame, if at all.
If the treaty is not ratified by May 2003, the 2001 Agreement will not become
effective, the parties will revert to the 1997 Agreement, which the DRSTP claims
has been breached, and the arbitration process will continue.

         The 2001 Agreement gives the Company rights to participate in
exploration and production activities in both the exclusive territorial waters
of Sao Tome (referred to as the "Exclusive Economic Zone") and an area between
Sao Tome and the Federal Republic of Nigeria that the two nations have
designated as a "Joint Development Zone." Since the 2001 Agreement replaces the
1997 Agreement, it requires the Company to relinquish its rights arising under
the 1997 Agreement, including any interest it had in STPetro.

         More specifically, if the 2001 Agreement becomes effective, the Company
will be entitled to the following:

         o   10% of the DRSTP share of all Profit Oil received from operations
             conducted in the Joint Development Zone. Profit Oil means the
             available crude oil and natural gas minus all royalty payments and
             costs associated with the exploration and development of such oil
             and gas.

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         o   5% of the DRSTP share of all Signature Bonuses paid by contractors
             operating within the Joint Development Zone. Signature Bonuses are
             funds paid by an operator or contractor to acquire the right to
             enter into an exploration and production agreement.

         o   A 1.5% overriding royalty interest in all the production of crude
             oil and natural gas in the Joint Development Zone.

         o   The option to acquire up to a 15% paid working interest in up to
             two Blocks of the Company's choice in the Joint Development Zone
             (this interest option must be exercised by the Company prior to
             the signature of an exploration and production agreement with an
             operator or contractor). A Block is an area designated as an
             individual unit for exploration or production of crude oil and
             natural gas.

         o   Subject to certain restrictions, the Company shall receive up to
             two blocks of the Company's choice in the Exclusive Economic Zone
             but outside the Joint Development Zone for development (the DRSTP
             will have the prior right to reserve up to a maximum of the first
             three Blocks).

         o   The option to acquire up to a 15% paid working interest in up to
             two blocks of the Company's choice in the Exclusive Economic Zone
             but outside the Joint Development Zone (this working interest
             option must be exercised by the Company prior to the signature of
             an exploration and production agreement with an operator). The
             Company would be required to pay its proportionate share of the
             signature bonus and all other costs related to the exploration and
             exploitation of the Blocks.

         The above is only a brief summary of the terms of the 2001 Agreement
and such summary does not purport to be complete and is qualified in its
entirety by reference to the text of the 2001 Agreement (any and all related
documents), which have been filed by the Company and which are available on the
SEC's web site at www.sec.gov.

GOVERNMENT REGULATION

         The development, production and sale of crude oil and natural gas is
subject to extensive laws and regulations, including environmental laws and
regulations. In the event the Company begins exploration and development of any
oil and gas properties, it may be required to make large expenditures to comply
with environmental and other governmental regulations. Matters subject to
regulation include:

         o   discharge permits for drilling operations;

         o   bonds for ownership, development and production of oil and gas
             properties;

         o   reports concerning operations;

         o   taxation.

         Under these laws and regulations, the Company could be liable for
personal injuries, property damage, oil spills, discharge of hazardous
materials, remediation and clean-up costs and other environmental damages. If
the Company failed to comply with these laws and regulations, it could result in
the suspension or termination of the Company's operations and subject it to
administrative, civil and criminal penalties. Moreover, these laws and
regulations could change in ways that substantially increase the Company's
costs. Accordingly, any of these liabilities, penalties, suspensions,
terminations or regulatory changes could have a materially adverse effect on the
Company's financial condition and results of operations.

EMPLOYEES

         The Company currently has four employees that provide services to the
Company pursuant to a management services agreement between the Company and an
operating company affiliated with Chrome and Sir Emeka Offor, the chairman of
the board of the Company.

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RISK FACTORS THAT MAY AFFECT THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION
OF THE COMPANY.

         You should carefully consider the risks described below before making
any investment decision related to the Company's securities. The risks and
uncertainties described below are not the only ones facing the Company.
Additional risks and uncertainties not presently known or that the Company
currently deems immaterial also may impair its business operations. If any of
the following risks actually occur, the Company's business could be harmed.

NO BUSINESS OPERATIONS

         The Company's sole asset is its interest from the 2001 Agreement, which
will not become effective until the treaty between the DRSTP and the Federal
Republic of Nigeria becomes effective. As such, until such time, the Company
will conduct no business operations under the Agreement, except to explore
opportunities for acquiring interests in non-producing oil and gas properties in
known oil producing areas. If the treaty does not become effective for any
reason, which is not expected, the 2001 Agreement will terminate and the parties
will revert to the 1997 Agreement, which is in arbitration. The failure of the
treaty to become effective could have a materially adverse effect on the
Company's operations.

CONCENTRATION OF CONTROL

         Chrome, which appointed the Company's board of directors, beneficially
owns approximately 50.7% of the Company's outstanding Common Stock. As a result,
Chrome has the ability to substantially influence, and may effectively control,
the outcome of corporate actions requiring stockholder approval, including the
election of directors. This concentration of ownership may have the effect of
delaying or preventing a change in control of the Company.

GOING CONCERN OPINION; LACK OF LIQUIDITY

         For the year ended September 30, 2000, the Company's independent
auditors stated that the Company's financial condition raises substantial doubts
about its ability to continue as a going concern. The Company has incurred net
losses of $1,958,880 and $19,727,835 in 2000 and 1999, respectively and has a
working capital deficit of $7,389,916 at September 30, 2000. Since the Company
currently has no business operations, the Company has no internal sources of
funding. The Company has been dependent on external sources of funding for its
prior operations, and will continue to be dependent on such sources until it is
able to generate sufficient operating cash flow, which may not occur on a timely
basis, if at all. Although the Company has received funding from its
shareholders in the past, it should not be assumed that such funds will be
available in the future.

LACK OF TRADING MARKET

         The Company's common stock currently trades on a "foreign exchange."
The Company's goal is to begin trading on the OTC Electronic Bulletin Board in
the near future, although there is no assurance that it will be successful in
doing so. The market for the Common Stock is limited, sporadic, and highly
volatile. As such, your ability to sell shares of Common Stock could be severely
limited.

PENNY STOCK REGULATIONS

         The Securities and Exchange Commission ("SEC") has adopted rules that
regulate broker-dealer practices in connection with transactions in "penny
stocks." Penny stocks generally are equity securities with a price of less than
$5.00. The penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document prepared by the SEC that provides information about
penny stocks and the nature and level of risks in the penny stock market. These
disclosure requirements may have the effect of reducing the level of trading
activity in any secondary market for a stock that becomes subject to the penny
stock rules. The Common Stock may be subject to the penny stock rules, and
accordingly, investors in the Common Stock may find it difficult to sell their
shares in the future, if at all.

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SUSCEPTIBILITY TO GENERAL ECONOMIC CONDITIONS

         The Company's revenues and results of operations will be subject to
fluctuations based upon the general economic conditions both in the United
States and internationally. If there were to be a general economic downturn or a
recession in the oil and gas industry, the Company's revenues could be
materially adversely effected. In the event of such an economic downturn, there
can be no assurance that the Company's business, operating results and financial
condition would not be materially and adversely affected.


ITEM 2.  DESCRIPTION OF PROPERTY

         The Company's office is located at 5444 Westheimer Road, Suite 1570,
Houston, Texas 77056. These premises are leased by COS, and pursuant to a
management services agreement, COS provides the space to the Company. This
lease, for approximately 1,900 sq. ft. of office space, expires in February
2006.


ITEM 3.  LEGAL PROCEEDINGS

         Except as described below, the Company is not aware of any other
material legal proceedings pending to which it is a party or its property is
subject. From time to time, the Company may be subject to proceedings, lawsuits
and other claims in the ordinary course of business, the resolution of which, in
the opinion of management should not have a materially adverse effect on the
Company's financial position. The Company is opposing vigorously each of the
claims discussed below and intends to continue to do so unless an agreeable
resolution may otherwise be secured with regard to each such claim.

ARBITRATION PROCEEDINGS WITH DRSTP. In 1999, the Company requested that the
President of the International Chamber of Commerce appoint an arbitrator to
decide the Company's claims against the DRSTP arising under the 1997 Agreement.
An arbitrator was appointed and, on March 17, 2000, the arbitrator issued an
order setting forth the deadlines for the parties to submit their defenses,
claims and counter-claims and the procedures for submission of evidence,
submission of documents, witnesses, testimony and examination. On May 21, 2001,
the Company and DRSTP agreed that, should a treaty between the Federal Republic
of Nigeria and DRSTP on the joint development of petroleum and other resources
in areas of the exclusive economic zone of the two nations become effective, the
2001 Agreement will then become effective and be in effect through September 30,
2024. Should a treaty not be entered between the two countries by May 21, 2003,
(i) the 2001 Agreement will be null and void and (ii) arbitration proceedings
regarding the agreements described in the paragraph will resume. No further
action has been taken by the Company or DRSTP and no treaty between DRSTP and
the Federal Republic of Nigeria has been signed. There can be no assurance that
a treaty will be entered, or that if a treaty is not entered, that the results
of any future arbitration proceedings will result favorably to the Company.

SAM L. BASS, JR. V. ERHC. U.S. District Court, Western District of Louisiana,
No. 6:99CV1668. This case was commenced in 1999 by a former officer and director
of the Company, asserting claims for past due salaries, penalty wages and
attorney's fees. The plaintiff is seeking damages of approximately $1.2 million
in damages. The named plaintiff in the case has died and his widow and
executrix, Sheila Bass, has substituted herself as plaintiff. The trial is set
for July 2002. The case is currently in the preliminary stages of discovery.

RICHARD MAGAR V. ERHC. U.S. District Court, Western District of Louisiana, No.
6:00CV1918. This case was commenced in 2000 by a former employee of the Company,
asserting claims for unpaid salaries in the amount of $79,000 and unpaid
business expenses of $2,000. The plaintiff has been deposed and the parties are
continuing discovery efforts. Although trial has been set for April 8, 2002, the
parties have agreed to mediate this dispute and are currently in the process of
setting a mutually agreeable mediation date.

JAMES A. GRIFFIN, ESQ. V. ERHC. Supreme Court, State of New York, County of
Nassau, Index No. 00-020472. This case was commenced in 2000 by a former officer
of the Company, asserting claims including breach of contract and wrongful
termination of employment. The plaintiff is seeking damages and a constructive
trust. The Company has

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denied these claims and has counterclaimed for damages. Discovery has yet to be
conducted with respect to the plaintiff's claims, and so the Company is
currently unable to assess accurately the potential for liability.

AL COTTEN V. ERHC. 15th Judicial District Court, Lafeyette, No. 99-4120-L. This
case was commenced in 1999 by a consultant and former director of the Company,
asserting claims for unpaid fees. The plaintiff originally sought $10,000 for
such fees, but recently amended his complaint to add a claim seeking payment of
400,000 shares of Common Stock allegedly promised to him in 1999. The parties
have begun discovery efforts. The trial is currently set for November 5, 2001,
but is in the process of being reset for January 2002.

SECURITIES AND EXCHANGE COMMISSION INVESTIGATION. In 2000, the Company was
advised by the SEC that it had begun an investigation of the Company's past
activities. The Company is cooperating fully with the SEC and has provided
documentary support as requested. Although the Company has been advised that the
focus of the investigation is actions taken by the Company prior to August 1999
there is no assurance that the investigation will not be expanded to later
dates. As of September 7, 2001, there has been no recent contact from the SEC
requesting additional information for the investigation.

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

         None.


                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         The Common Stock trades under the symbol "ERHC" on a "foreign
exchange." The market for the Common Stock is limited, sporadic, and highly
volatile. The following table sets forth the closing sales price per share of
the Common Stock for the past two fiscal years, as reported on the "foreign
exchange." These prices reflect inter-dealer prices, without retail mark-ups,
mark-downs or commissions, and may not necessarily represent actual
transactions.


                                                           HIGH            LOW

                  FISCAL YEAR 2000

First Quarter                                              $.06           $.02
Second Quarter                                             $.125          $.01
Third Quarter                                              $.12           $.01
Fourth Quarter                                             $.10           $.01


                  FISCAL YEAR 1999

First Quarter                                              $.83           $.25
Second Quarter                                             $.45           $.19
Third Quarter                                              $.37           $.107
Fourth Quarter                                             $.18           $.035

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         On September 7, 2001, the closing price of the Common Stock as reported
on the "foreign exchange" was $0.23. As of September 7, 2001, there were
approximately 2,132 record owners of the Common Stock. It is the Company's
present policy not to pay cash dividends and to retain future earnings to
support growth. Any payment of cash dividends in the future will be dependent
upon the amount of funds legally available, the Company's earnings, financial
condition, capital requirements, and other factors that the board of directors
may deem relevant. The Company has not paid any dividends during the last two
fiscal years and does not anticipate paying any cash dividends in the
foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

         In March 2001, the Company issued 10,000,000 shares of Common Stock to
an officer for services rendered in connection with the February 2001 change of
control transaction.

         In March 2001, the Company issued 18,500,000 shares of Common Stock to
a consultant for services rendered in connection with the February 2001 change
of control transaction.

         In March 2001, the Company issued 8,500,000 shares of Common Stock to a
law firm for attorneys' fees in connection with the settlement of a claim
against the Company.

         In October 1999, the Company issued 7,607,092 shares of Common Stock to
three creditors for the conversion of debt and payment of accrued interest and
penalties in the aggregate amount of $295,881.

         From November 1998 through September 1999, the Company issued 7,169,000
shares of Common Stock to miscellaneous persons in exchange for various goods
and consulting services in the aggregate amount of $1,034,902.

         In August 1999, the Company issued 397,040,000 shares of Common Stock
to 29 investors for cash in the aggregate amount of $2,102,000.

         In June 1999, the Company issued 4,580,000 shares of Common Stock to a
former officer for services rendered in the aggregate amount of $945,000.

         In June 1999, the Company issued 3,939,505 shares of Common Stock to a
stockholder in lieu of payment of loans payable and related accrued interest in
the aggregate amount of $771,712.

         In January and February 1999, the Company issued 7,780,653 shares of
Common Stock in settlement of claims against the Company in the aggregate amount
of $2,541,939.

         From November 1998 through September 1999, the Company issued
10,843,917 shares of Common Stock to several creditors in lieu of payment of
accounts payable in the aggregate amount of $770,223.

         From October 1998 through April 1999, the Company issued 31,490,850
shares of Common Stock to several noteholders for the conversion of debt and
payment of accrued interest and penalties in the aggregate amount of $6,002,064.

         In October 1998, the Company issued 6,000,000 shares of Common Stock to
three former officers for services rendered in the aggregate amount of
$3,780,000.

         The Company believes the above transactions were exempt from
registration pursuant to Section 4(2) of the Securities Act, as the recipients
were all accredited investors, and since the transactions were non-recurring and
privately negotiated. There were no underwritten offerings employed and no sales
commissions were paid in connection with the sales and issuances of the
unregistered securities in any of the transactions set forth above.

                                       7

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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATIONS

         You must read the following discussion of the results of the operations
and financial condition of the Company in conjunction with its consolidated
financial statements, including the notes included in this Form 10-KSB filing.
The Company's historical results are not necessarily an indication of trends in
operating results for any future period.

OVERVIEW

         ERHC is an independent oil and gas company and since 1996 has engaged
in the exploration, development, production and sale of crude oil and natural
gas properties. The Company's goal is to maximize its value through profitable
growth in oil and gas reserves and production in Sao Tome in central West Africa
and to acquire interests in non-producing oil and gas properties, particularly
high potential international prospects in known oil producing areas. The
Company's current focus is to exploit its only asset, which is an oil and gas
exploration concession in Sao Tome. The Company has no other operations.

CHANGE IN CONTROL

         In April 1999, ERHC Investor Group Inc. ("ERHCIG"), a group led by one
of the Company's noteholders entered into a letter of intent to acquire 51% of
the issued and outstanding shares of the Company (the "Letter of Intent"). The
Letter of Intent relied upon certain prior actions of the Board and final
closing was conditioned upon satisfactory terms and conditions in a securities
purchase agreement. The ERHCIG acquisition could be in one or more transactions
and ERHCIG was permitted to assign all or any part of its rights. The Letter of
Intent also provided for an initial closing at which ERHCIG would subscribe for
the requisite percentage of shares, subject only to the terms of the final
closing. In May 1999, management control of the Company effectively changed,
subject to the final closing.

         Pursuant to the Letter of Intent, the Company was required to secure a
standstill agreement from its convertible noteholders. The standstill agreement
essentially waived all interest and penalties from the effective date of the
agreement (April 23, 1999) through October 15, 1999, changed the conversion
feature of each note so each note's conversion terms were uniform, and fixed the
conversion price to be $0.20 per share. Each noteholder also agreed, until
October 15, 1999, (i) not to convert all or any part of their notes, (ii) not to
declare a default or seek acceleration of any payments under the notes; (iii)
not to commence any foreclosure or bankruptcy actions under the note; (iv) not
to declare an event of default or commence any arbitration action under any of
the transaction documents. In addition, all interest and penalties accrued
through the effective date of the standstill agreements were satisfied through
the issuance of Common Stock.

         Effective June 1999, the Company received the first installment under
the Letter of Intent totaling $1,046,000. The second installment of $1,000,000
under the Letter of Intent was to be paid to the DRSTP. As a condition precedent
to payment of the second installment the Company was to obtain a letter
confirming the DRSTP's intention to honor the 5% overriding royalty interest due
to the Company under the 1997 Agreement upon receipt of the last $1,000,000
payment. The Company secured this confirmation letter and in late June notified
ERHCIG that delivery of the $1,000,000 for the benefit of the DRSTP was
required. After receiving no responses to several requests, in July 1999, legal
counsel for the Company made written demand for such payment.

         After the failure of ERHCIG to perform on the second installment, the
Company was approached by one of its noteholders, Talisman. Talisman commenced
negotiations with the Company and made alternative proposals to fund the second
installment. In August 1999, the Board of Directors met to review the position
of ERHCIG and to consider the final proposal offered by Talisman on behalf of TC
Hydro Carbon Inc., a company under the control of principals in Talisman. After
consideration of the alternatives and the risk of losing the DRSTP concession if
the final payment was not made to the DRSTP, the Board voted to find ERHCIG in
default and to accept the TCHC offer. Further, the Board acknowledged receipt of
the $1,046,000 from the members of ERHCIG and agreed to issue 20,920,000 shares
of common stock of the Company.

                                       8

<Page>


         In August 1999, the Company and TCHC executed a securities purchase
agreement ("TCHC SPA") under which the Company issued 375 million shares at an
aggregate purchase price of $1,000,000 and executed an agreement with TCHC
whereby TCHC agreed to provide a working capital line of credit in the aggregate
amount of $4,000,000 to be drawn down by the Company over a 24 month period. The
terms of such working capital line of credit allows for monthly draw downs of no
more than $350,000 and it is evidenced by a non-revolving promissory note
bearing eight percent interest per annum. Under such note, each installment is
convertible into shares of Common Stock at a conversion rate of $.20 per share
180 days from the advance of each installment. New officers and directors were
elected in August 1999 and this management served the Company as of September
30, 2000.

         New management received sufficient assurances to meet the requirements
enumerated in the escrow agreement annexed to the TCHC SPA. After
representatives of Talisman met with representatives of DRSTP, the $1,000,000
received from TCHC was deposited into an escrow account established in the
Company's name and was wired to the DRSTP on August 20, 1999. The Company
thereby met its commitment to DRSTP for payment of the concession fee in full.

RESULTS OF OPERATIONS

YEAR ENDED SEPTEMBER 30, 2000 COMPARED TO YEAR ENDED SEPTEMBER 30, 1999

         During the year end September 30, 2000, the Company incurred a net loss
of $1,958,880, compared to a net loss of $19,727,835 for the year ended
September 30, 1999. The majority of the decrease in net loss is due to the
Company's decreased level of business operations during 2000 caused by its
capital constraints. The majority of the prior year net loss was due to normal
general and administrative expenses required to support the ongoing operations
of the Company, accrued interest and penalties on its convertible debt and
certain write offs and abandonments of assets as the Company realigned its
business focus and exited its United States operations. Net loss per common
share was $0.00 basic and diluted compared to a net loss per common share of
$(0.16) basic and diluted for the year ended September 30, 1999.

         During 2000 and 1999, the Company had no revenues from which cashflows
could be generated to support operations and thus relied on borrowings funded
from its existing line of credit provided by TC Hydro Carbon.

         For the year ended September 30, 2000, the Company's independent
auditors stated that the Company's financial condition raises substantial doubts
about its ability to continue as a going concern.

LIQUIDITY AND CAPITAL RESOURCES

         Historically, the Company has financed its operations from the sale of
its debt and equity securities (including the issuance of its securities in
exchange for goods and services) and bank and other debt. The Company had
expected to finance its operations and further development plans during fiscal
1999 and 2000 in part through additional debt or equity capital and in part
through cash flow from operations. However, due to the fact that the Company's
registration statement was not declared effective during 1999, the Company
realized that additional debt and equity financing was unavailable. Under the
terms of the Letter of Intent, the Company secured standstill agreements from
its noteholders which waived further interest and penalties until October 15,
1999, resulting in a substantial savings to the Company.

         The Company presently intends to utilize any available sources of funds
to provide for general corporate overhead and to continue to pursue its
interests in Sao Tome.

         The Company is in ongoing negotiations to raise general operating funds
and funds for specific projects. Management will be required to, and expects to,
raise additional capital through the issuance of debt securities and offerings
of equity securities to fund the Company's operations, and will attempt to
continue raising capital resources until such time as the Company generates
revenues sufficient to maintain itself as a viable entity. However, there is no
assurance that such financing will be obtained.

                                       9

<Page>


         The Company has available a $5 million working capital line of credit
from a shareholder with total borrowings of approximately $445,000 as of
September 7, 2001. It is expected that the Company will continue to borrow funds
from this shareholder in the future but there is no assurance that funds will be
made available or under similar terms. In prior years, the Company was able to
raise funds in a timely manner, but there is no evidence that it will continue
to do so in the future.

WORKING CAPITAL

         As of September 30, 2000, the Company had negative working capital of
$7,389,916 of which $4,632,291 relates to convertible debt and related accrued
interest. As of September 30, 2000, the Company had available a $4.0 million
senior secured 8% exchangeable promissory note, or line of credit, with TC Hydro
Carbon, of which $2,444,944 had been advanced to the Company. The Company
expects to utilize this line of credit, which was assumed by Chrome in February
2001, in order to sustain minimum operations relative to continuing to develop
and promote its interests in DRSTP. Where possible, the Company may seek to
preserve cash resources by settling obligations through the issuance of shares
of the Common Stock or by the issuance of convertible debt instruments.

         During February 2001, a Purchase Agreement was executed by and between
Chrome and TCHC effecting a change a control and the $4.0 million line of credit
was assumed by Chrome. Chrome and the Company agreed to amend and restate the
line of credit into a $2.2 million note and Chrome has made available, a new
working capital line of credit in the amount of $1.8 million at terms similar to
the earlier line of credit. The Company has borrowed the entire $1.8 million
under that line of credit. In addition, in February 2001 Chrome made available
to the Company, a two-year $5 million line of credit, which accrues interest at
a rate of 10% per annum. As of September 7, 2001, the Company had borrowed
approximately $445,000 under this line of credit. This note is convertible into
shares of Common Stock at rate of $.20 per share.

EQUITY TRANSACTIONS

         During the year ended September 30, 1999, the Company completed various
private offerings and issuances of its Common Stock for cash and in exchange for
various goods and services. The Company issued 397,040,000 shares of Common
Stock generating cash proceeds of $2,102,000. The Company issued 7,169,000
shares of Common Stock in exchange for goods and services that had a total value
of $1,034,902. The shares issued for goods and services primarily included
obligations for various consulting services. The Company issued 10,843,917
shares of Common Stock to settle accounts payable valued at $770,223 and
4,580,000 shares of Common Stock to settle accrued salary of $945,000 owed to
one former officer of the Company for past services. In addition, the Company
issued 6,000,000 shares of Common Stock to three former officers for services
rendered in the aggregate amount of $3,780,000.

         In October 1998, the Company received conversion notices on $412,350 of
the convertible debt issued in July and August 1998. This debt, and accrued
interest amounting to $7,497 was converted into 1,210,686 shares of Common Stock
under the applicable conversion formulas.

         Effective April 1999, the Company negotiated standstill agreements with
substantially all of its convertible noteholders. Under its terms, all interest
and penalties accrued through the effective date of the standstill agreements
were converted to common stock of the Company. Accordingly, the Company issued
12,815,321 shares of Common Stock in exchange for accrued interest of $562,848
and accrued penalties of $1,831,392.

         In April 1999, the Company received conversion notices on $750,000 of
the convertible debt issued in November 1997. This debt, and accrued interest
and penalties thereon of $400,110, was converted into 5,750,550 shares of common
stock. Also in April 1999, the Company received conversion notices on $1,362,650
of the convertible debt issued in July and August 1998. This debt, and accrued
interest and penalties of $675,216, was converted into 11,714,293 shares of
Common Stock.

         In October 1999, the Company received a conversion notice on $150,000
of the convertible debt issued in July 1998. This debt, and accrued interest and
penalties of $145,881, was converted into 7,607,092 shares of Common Stock.

                                       10

<Page>


CONVERTIBLE DEBT PAYABLE TO SHAREHOLDERS

         During 1997, the Company issued two notes payable to stockholders who
are also officers and directors in exchange for cash of $1,842,405. These notes
had no stated maturity date and an 8.5% interest rate. The notes are convertible
into restricted Common Stock at 50% of the average bid price for the month in
which the loan was made. During 1999, the remaining unpaid balance of $771,712,
including accrued and unpaid interest of $56,744, was converted into 3,939,505
shares of Common Stock.

         In August 1999, in conjunction with the change in control of the
Company involving TCHC, the Company entered into a $4.0 million senior secured
8.00% exchangeable promissory note, or line of credit. This note and any unpaid
and accrued interest is convertible into Common Stock of the Company at a
conversion price of $0.20 per share. On September 30, 2000, if this line of
credit was converted using the conversion price of $0.20 per share, the Company
would be required to issue 13,095,725 shares of Common Stock based on an
outstanding principal amount of $2,444,944, and accrued interest of $174,190.

DRSTP GEOLOGICAL DATA

         In July 1997, the Company acquired substantial geologic data and other
information from an independent source in exchange for 1,000,000 shares of
Common Stock. This data was valued at $2,000,000 based on an agreement with the
seller that the Company would repurchase these shares for $2,000,000 at a rate
of 25% per quarter should the seller so choose. In December 1997, the Company
repurchased 250,000 shares of its Common Stock for $500,000 in cash. Due to
unavailability of cash resources, the Company was unable to acquire the
remaining shares when presented by the seller. Accordingly, the seller sold
those shares in the open market with the proceeds generated from the sales
offsetting the obligations owed by the Company. Under the agreement's terms of
default, the seller requested that the Company make whole the seller's shortfall
incurred from disposition of the stock at less than $2.00 per share.
Accordingly, the Company issued an additional 6,999,917 shares of Common Stock
and paid cash of $222,500 during fiscal year 1999 and $122,000 during fiscal
year 2000, leaving a remaining obligation in accounts payable of approximately
$246,000 at September 30, 2000. The additional cost of $1,091,875 associated
with the settlement of this obligation was expensed during fiscal year 2000.

KINGSBRIDGE SETTLEMENT

         During 1998, the Company took action to cancel the Kingsbridge Equity
Line of Credit dated March 1998. The original negotiated cancellation agreement
required the Company to pay $100,000 in cash and issue warrants for 100,000
shares of common stock. The Company did not complete the negotiated cancellation
and Kingsbridge made application to arbitrate the outstanding issues with the
Company. During September 1999, the Company paid $85,000 in full and final
settlement of this cancellation.

UINTA SETTLEMENT

         In April 1998, Uinta Oil and Gas, Inc. ("Uinta") filed suit in Utah
relating to the Company's October 1997 acquisition of 22 oil and gas wells in
Utah. The other two joint sellers of these wells, along with Uinta, filed a
formal demand for arbitration as the purchase agreement required. During the
year ended September 30, 1999 the Company reached an agreement with Uinta and
issued 7,780,653 shares of Common Stock with a total value of $2,541,939 on the
date of issue. Upon disposition of these oil and gas properties the full amount
of the settlement has been charged to write-offs and abandoments in the
September 30, 1999 statement of operations.

CAPITAL EXPENDITURES AND BUSINESS PLAN

         The 1997 DRSTP Agreement required the Company to pay a $5,000,000
concession fee to the Sao Tome government. In September 1997, the Company
received a Memorandum of Understanding ("the DRSTP MOU") from the Sao Tome
government, which allowed the Company to pay this concession fee within five
days after Sao Tome files the relevant official maritime claims maps with the
United Nations and the Gulf of Guinea Commission.

                                       11

<Page>


In December 1997, the Company paid $2,000,000 of this concession fee to Sao
Tome. In June 1998, it paid $1,000,000 of this concession fee, and in August
1998, it paid an additional $1,000,000 of this concession fee. During fiscal
year 1999, the Company engaged in various activities relative to continuing to
develop and promote its interest in DRSTP. In August 1999, the Company paid the
final $1,000,000 of the concession fee. At this time, the Company does not
anticipate that the DRSTP agreement will require significant outlays of capital
resources other than potential legal and professional expenses required to
further develop and promote its interests in DRSTP.


ITEM 7.  CONSOLIDATED FINANCIAL STATEMENTS

         The information required under Item 310(a) of Regulation S-B is
included in this report as set forth in the "Index to Consolidated Financial
Statements." See F-1 for Index to Consolidated Financial Statements.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

            In January 2000, Durland & Company resigned as the Company's
independent auditors. Based upon available information, the Company is unaware
of any matter of accounting principles or practices, financial statement
disclosure, or auditing scope and procedures which, if not resolved to the
satisfaction of Durland & Company, would have caused Durland & Company to make
references to the matter in connection with the audit of the Company's financial
statements for the fiscal year ended September 30, 1998. The audit reports of
Durland & Company on the Company's financial statements for the fiscal year
ended September 30, 1998 contained an explanatory paragraph regarding
uncertainty as to the Company's ability to continue as a going concern.

            In February 2001, the Company engaged Pannell Kerr Forster of Texas,
P.C. of Houston, Texas as its principal independent accountants to audit its
financial statements, and the board of directors approved this engagement in
February 2001.


                                    PART III


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

         Since February 2001, the following directors and executive officers
have served the Company.

       NAME             AGE            POSITION

 Sir Emeka Offor        42       Chairman of the board

Chude Mba               43       Chief executive officer, president and director

Nicolae Luca            42       Director

Eze Echesi              45       Chief financial officer

Peter C. Ntephe         34       Secretary



         SIR EMEKA OFFOR has served as the chairman of the board of ERHC since
February 2001. In addition to his duties as chairman, Sir Emeka Offor is
currently chairman of Chrome Consortium, chief executive officer of COS and vice
chairman of African Express Bank PLC, positions he has held at various times
since 1995. Apart from owning

                                       12

<Page>


majority interests in these companies, Sir Emeka Offor has majority interests in
aviation and insurance companies. Sir Emeka Offor is the sole manager of Chrome,
the Company's majority shareholder. In addition, Sir Emeka Offor is a director
and sole shareholder of COS, a company which provides management, administrative
and consulting services to the Company.

         CHUDE MBA has served as a director and as president of ERHC since
February 2001. Since February 2001, Mr. Mba has served as president of Chrome.
Since February 1999, Mr. Mba has served as group financial advisor of COS and
Chrome Consortium (Nigeria) and an advisor to the board of directors of African
Express Bank. From June 1993 to February 1999, Mr. Mba was a principal of MBA &
Co (Chartered Accountants), a financial and banking consulting firm with
operations in Lagos, Nigeria and London, UK. Mr. Mba has management experience
spanning two decades in the financial services and banking industries. Mr. Mba
is a chartered accountant and spends approximately 50% of his working time on
ERHC company business.

         NICOLAE LUCA has served as a director since February 2001.  Since April
1998, Mr. Luca has also served as the technical director for COS. From January
1995 to April 1998, Mr. Luca was a technical specialist for Comrint Ltd., a
Nigeria-based petrochemical plant maintenance and engineering company. Mr. Luca
has a bachelor of science in mechanical engineering. Mr. Luca spends
approximately 10% of his working time on ERHC company business.

         EZE ECHESI has served as chief financial officer of ERHC since February
2001. Since December 2000, Mr. Echesi has served as a financial advisor to Nimek
Investments, a Nigeria-based investment holding company with interests in
banking, insurance, energy and aviation. From January 1996 to December 2000, Mr.
Echesi was the chief operating officer of operations in Africa for Minaj Systems
Ltd., an international private broadcasting organization. Mr. Echesi spends
approximately 10% of his working time on ERHC company business.

         PETER C. NTEPHE has served as secretary of ERHC since February 2001.
Since June 1999, Mr. Ntephe has served as the senior special assistant to the
chairman of the Nigerian Senate committee on judicial and legal matters. Between
1987 and May 1999, Mr Ntephe was a partner of Ntephe, Smith and Wills, a
Lagos-based law firm. Mr. Ntephe spends approximately 20% of his working time on
ERHC company business.

             All officers serve at the discretion of the board of directors.
There are no family relationships between or among any executive officers and
directors.

         The Company entered into a management services agreement with COS in
February 2001. Pursuant to that agreement, COS provides the Company with
management and business development services, in addition to providing
specialized services in the areas of refinery maintenance, engineering design,
and upstream oil industry services. COS provides the Company with such services
for a management fee of approximately $68,000 per month. Messrs. Mba, Echesi,
and Ntephe are employees of COS that provide services to the Company and these
persons receive salaries and expense reimbursement from COS, not from the
Company.

         The Company has not entered into any employment agreements with its
officers. To date, members of the board of directors have not received any
compensation, but have been reimbursed for expenses incurred in the performance
of their duties as directors. In the future, the Company may decide to pay
directors.

DIRECTORS AND OFFICERS DURING FISCAL YEARS 1999 AND 2000

         In February 2001, August 1999 and April 1999, majority ownership of
ERHC Common Stock changed, resulting in the election of new directors and the
appointment of new officers. The following individuals were officers and
directors of the Company for the following periods during the fiscal years 1999
and 2000:

<Table>
<Caption>

NAME                                POSITION                                    PERIOD SERVED
<S>                                 <C>                                         <C>

Geoffrey Tirman                     President, chief executive officer          August 1999 to February 2001
                                    and director

Laura Kleber                        Chief financial officer, treasurer          August 1999 to February 2001

                                       13

<Page>


                                    and director

Mark Lee                            Vice president and director                 August 1999 to February 2001

Brian Ladin                         Secretary and director                      August 1999 to February 2001

Noreen Wilson                       Chief financial officer and director        July 1998 to November 1998
                                    Director                                    August 1999 to January 2000

Ernest Chu                          Chief financial officer, treasurer          April 1999 to August 1999
                                    and director

Steven Warner                       President, chief executive officer          April 1999 to August 1999
                                    and director

Lee Hendelson                       Secretary and director                      April 1999 to August 1999

Nano Rita                           Director                                    February 1999 to April 1999

James A. Griffin                    Secretary and treasurer                     July 1998 to April 1999
                                    Director                                    July 1998 to August 1999

James R. Callendar, Sr.             Vice president and chief operating officer  July 1998 to August 1999
                                    Director                                    July 1998 to January 2000

Robert McKnight                     Director and president of subsidiary        July 1998 to August 1999
                                    Chief financial officer                     November 1998 to August 1999

Kenneth M. Waters                   Director                                    July 1998 to August 1999

Sam L. Bass, Jr.                    Vice president and director                 July 1998 to April 1999

William Beaton                      Director                                    July 1998 to April 1999

Al Cotten                           Director                                    January 1999 to April 1999

</Table>

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

             Section 16(a) of the Exchange Act requires the Company's directors
and executive officers, and persons who own beneficially more than ten percent
(10%) of the Common Stock, to file reports of ownership and changes of ownership
with the Securities and Exchange Commission. Copies of all filed reports are
required to be furnished to the Company pursuant to Section 16(a). The Company
is unable to determine whether its officers and directors prior to February 2001
have complied with their filing requirements. The Company's current officers and
directors have filed their Form 3s, with the exception of Mr. Mba who intends to
file a Form 3 shortly.


ITEM 10.   EXECUTIVE COMPENSATION

             The following table sets forth certain information regarding
compensation paid by the Company to its chief executive officer and other
executive officers who received total annual salary and bonus that exceeded
$100,000 during the periods involved.


                                       14

<Page>


                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                       ANNUAL COMPENSATION             LONG TERM COMPENSATION
                                       -------------------             ----------------------
<S>                        <C>         <C>         <C>         <C>                 <C>
                                                                              AWARDS
                                                                              ------
Name and                   FISCAL                                 Restricted       Securities Underlying
PRINCIPAL POSITIONS          YEAR      SALARY ($)  BONUS ($)   STOCK AWARD(S)($)      OPTIONS/SARS (#)
-------------------        ------      ----------  ---------   -----------------   ---------------------

Geoffrey Tirman
Chief Executive Officer
(from 8/99 to 2/01)          2000         --          --              --                   --
                             1999         --          --              --                   --
                             1998         --          --              --                   --
</Table>

                          OPTION GRANTS IN FISCAL 2000

<Table>
<Caption>
                            Number of Securities      Percent of Total Options /
                          Underlying OPTIONS/SARS           SARs Granted to         Exercise or       Expiration
                                     -------------
         NAME                    GRANTED (#)           EMPLOYEES IN FISCAL YEAR  BASE PRICE ($/SH)       DATE
         ----                    -----------           ------------------------  -----------------       ----
Geoffrey Tirman                      --                           --                     --               --
<S>                       <C>                         <C>                           <C>               <C>

</Table>

                       AGGREGATED OPTION EXERCISES IN 2000
                           AND YEAR-END OPTION VALUES


<Table>
<Caption>
                             Shares          Value           Number of Unexercised           Value of Unexercised
                                                  -
         NAME             ACQUIRED ON     REALIZED ($)         OPTIONS AT FY-END             IN-THE-MONEY OPTIONS
         ----             ------------    ------------         -----------------             --------------------
                          EXERCISE (#)
                                                          EXERCISABLE    UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE

<S>                      <C>              <C>             <C>            <C>             <C>           <C>
Geoffrey Tirman                --              --             --              --              --             --

</Table>

ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

             The following table and notes thereto set forth certain information
regarding beneficial ownership of the Common Stock as of September 7, 2001 by
(i) each person known by the Company to beneficially own more than five percent
of the Common Stock, (ii) each directors, (iii) each named executive officer and
(iv) all directors and officers of the Company as a group.

                            SHARES OF COMMON STOCK
NAME AND ADDRESS               BENEFICIALLY OWNED     PERCENTAGE OF VOTING POWER

 Sir Emeka Offor                  281,339,771                    50.7%

Chude Mba                         10,000,000                     1.9%

Nicolae Luca                          --                          --

Eze Echesi                            --                          --

Peter C. Ntephe                       --                          --

Chrome Energy, LLC                281,339,771                    50.7%

All officers and directors
as a group (5 persons)            302,947,161                    52.4%


                                       15

<Page>


         The address of each beneficial owner is c/o Environmental Remediation
Holding Corporation, 5444 Westheimer Road, Suite 1570, Houston, Texas 77056.

         Shares beneficially owned and percentage of ownership are based on
533,698,199 shares of Common Stock outstanding as of September 7, 2001.
Beneficial ownership is determined in accordance with the rules of the SEC and
generally includes voting or dispositive power with respect to such shares.

         COS is the sole member of Chrome.  Sir Emeka Offor is the sole manager
of Chrome and the sole shareholder and director of COS. Mr. Mba is the president
of Chrome, but disclaims all beneficial ownership in the shares owned by Chrome.

         Of the 281,339,771 shares beneficially owned by Chrome, includes: (a)
260,614,871 shares of Common Stock owned of record; (b) 11,000,000 shares of
Common Stock to be issued due to the conversion of the 8.0% note in the
principal amount of $2,200,000; (c) 3,158,335 shares of Common Stock assuming
the conversion of a 20.0% note in the principal amount of $631,667; (d)
4,021,565 shares of Common Stock assuming the conversion of a 5.5% note in the
principal amount of $804,313; and (e) 750,000, 750,000, 45,000, and 1,000,000
shares of Common Stock underlying four warrants, which have expiration dates
ranging from October 2002 to April 2009, an exercise price of $.25 per share,
and each of which is currently exercisable. The number of shares of Common Stock
that the above-described notes are convertible into, includes only shares of
Common Stock that may issued upon the conversion of the principal amounts and do
not include any shares that may be issued upon the conversion of interest which
has been accruing since February 2001.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Please see the discussion in Item 1 above for a detailed discussion of
Chrome's February 2001 acquisition of a controlling interest in the Company.
Also, please see Item 11 for a description of the shares of Common Stock and
securities convertible into Common Stock that Chrome retained in the
transaction.

         As more fully described in Item 9 above, the Company has entered into a
management services agreement with COS. In addition to being the sole manager of
Chrome, Sir Emeka Offor is the sole director and shareholder of COS. As such,
COS is an affiliate of Sir Emeka Offor and Chrome.

         In February 2001, pursuant to the change of control transaction, Chrome
assumed from Talisman a working capital line of credit made available to the
Company which provided for borrowings of up to $4 million, of which
approximately $2.2 million was then outstanding. That note was amended and
restated in February 2001 to provide that the principal then outstanding shall
accrue interest at a rate of 8% per annum and shall expire in February 2003.
Chrome has also made available a new working capital line of credit in the
amount of $1.8 million. As of September 7, 2001, the Company had borrowed
approximately $1.8 million from this new line of credit. Borrowings under this
new line of credit, which expires in September 2004, bear interest at 8% per
annum and may be converted into shares of Common Stock at a conversion price of
$.20 per share.

         In addition, pursuant to the February 2001 change of control
transaction, Chrome made available to the Company, a two-year $5 million line of
credit, which accrues interest at a rate of 10% per annum. As of September 7,
2001, the Company had borrowed approximately $445,000 under this line of credit.
This note is convertible into shares of Common Stock at rate of $.20 per share.

         In March 2001, the Company issued to an entity controlled by Mr. Mba,
10,000,000 shares for services rendered in the February 2001 change of control
transaction.


                                       16

<Page>


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      The following exhibits are to be filed as part of the annual
                  report:

    EXHIBIT NO.   IDENTIFICATION OF EXHIBIT

         Exhibit 10.1      Purchase Agreement dated as of December 31, 2000,
                           among Talisman Capital Opportunity Fund, Ltd., TC
                           Hydro Carbon, Inc. and Chrome Energy, LLC.
                           (Incorporated by reference to Exhibit 1 of Form 8-K
                           filed March 2, 2001).

         Exhibit 10.2      First Amendment Agreement between Kevin Bartley et
                           al., and Chrome Energy, LLC dated February 9, 2001.
                           (Incorporated by reference to Exhibit 2 of Form 8-K
                           filed March 2, 2001).

         Exhibit 10.3      Memorandum of Agreement dated as of May 21, 2001,
                           among The Government of the Democratic Republic of
                           Sao Tome and Principe and the Company.
                           (Incorporated by reference to Exhibit 1 of Form 8-K
                           filed June 5, 2001).

         Exhibit 10.4      Management and Administrative Services Agreement by
                           and between Chrome Oil Services, Ltd. and the
                           Company. (Filed herewith).

         Exhibit 10.5      $5,000,000 Term Loan Agreement by and between Chrome
                           Energy, LLC and the Company dated February 15, 2001.
                           (Filed herewith).


         (b)      Form 8-K Filings

                  None.


                                       17

<Page>


                                   SIGNATURES


         In accordance with the Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                   Environmental Remediation Holding Corporation




                               By: //S// CHUDE MBA
                               -------------------------------------------------
                                   Chude Mba, President

                               Date: September 21, 2001


         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.


SIGNATURE                        TITLE                              DATE


//S// SIR EMEKA OFFOR            Chairman of the board       September 21, 2001
-----------------------------
Sir Emeka Offor


//S// CHUDE MBA                  President and Director      September 21, 2001
-----------------------------
Chude Mba


//S// NICOLAE LUCA               Director                    September 21, 2001
-----------------------------
Nicolae Luca


//S// EZE ECHESI                 Chief Financial Officer     September 21, 2001
-----------------------------
Eze Echesi


//S// PETER C. NTEPHE            Secretary                   September 21, 2001
-----------------------------
Peter C. Ntephe


                                       18

<Page>


                  ENVIRONMENTAL REMEDIATION HOLDING CORPORATION


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



                                                                         PAGE

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                  F-2

CONSOLIDATED FINANCIAL STATEMENTS

     Balance Sheets as of September 30, 2000 and 1999                     F-3

     Statements of Operations for the Years Ended
     September 30, 2000 and 1999                                          F-4

     Statements of Shareholders' Equity (Deficit)
     for the Years Ended September 30, 2000 and 1999                      F-5

     Statements of Cash Flows for the Years Ended
     September 30, 2000 and 1999                                          F-6

     Notes to Financial Statements                                        F-7








                                       F-1

<Page>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



Board of Directors and Shareholders
Environmental Remediation Holding Corporation

We have audited the accompanying consolidated balance sheets of Environmental
Remediation Holding Corporation as of September 30, 2000 and 1999, and the
related consolidated statements of operations, cash flows, and shareholders'
equity (deficit) for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Environmental Remediation Holding Corporation as of September 30, 2000 and 1999,
and the consolidated results of its operations and its cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has incurred net losses of
$1,958,880 and $19,727,835 in 2000 and 1999, respectively, and has a working
capital deficit of $7,389,916 at September 30, 2000. These conditions and other
factors discussed in Note 2 raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans regarding the resolution of
these issues are also discussed in Note 2. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.



/S/      PANNELL KERR FORSTER OF TEXAS, P.C.
 -------------------------------------------
         Pannell Kerr Forster of Texas, P.C.

         Houston, Texas
         September 7, 2001




                                       F-2

<Page>


<Table>
<Caption>

ENVIRONMENTAL REMEDIATION HOLDING CORPORATION

CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------------
                                                                  SEPTEMBER 30,
                                                       -------------------------------
                                                            2000             1999
                                                       --------------- ---------------
<S>                                                    <C>             <C>
                                     ASSETS

CURRENT ASSETS
Cash                                                   $       15,333  $        73,808
Restricted cash                                                15,811           15,811
Prepaid expenses and other current assets                      24,211          165,386
                                                       --------------  ---------------

          Total current assets                                 55,355          255,005
                                                       --------------  ---------------

Investment in STPetro, S.A.                                    49,000           49,000
Due from STPetro, S.A.                                      1,076,557        1,045,351
DRSTP concession fee                                        5,000,000        5,000,000
                                                       --------------  ---------------

Total assets                                           $    6,180,912  $     6,349,356
                                                       --------------  ---------------

                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable and other accrued liabilities         $    1,799,945  $     2,098,411
Accrued officers salaries                                   1,013,035        1,013,035
Accrued interest and penalties                                753,541          154,826
Current portion of convertible debt, net                    3,878,750        3,528,750
                                                       --------------  ---------------

       Total current liabilities                            7,445,271        6,795,022
                                                       --------------  ---------------

LONG TERM LIABILITIES
Convertible debt, shareholder                               2,444,944        1,509,881
Convertible debt, net of current portion                    3,550,000        3,640,757
                                                       --------------  ---------------

       Total long term liabilities                          5,994,944        5,150,638
                                                       --------------  ---------------

Total liabilities                                          13,440,215       11,945,660
                                                       --------------  ---------------

SHAREHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.0001 par value; authorized
   10,000,000 shares; none issued and outstanding                -                -
Common stock, $0.0001 par value; authorized
   950,000,000 shares; issued and outstanding
   495,456,917 and 487,849,825 at September 30,
   2000 and 1999, respectively                                 49,546           48,785
Additional paid-in capital in excess of par                43,602,094       43,306,974
Accumulated (deficit)                                     (50,910,943)     (48,952,063)
                                                         -------------   -------------

Total shareholders' (deficit)                              (7,259,303)      (5,596,304)
                                                         -------------   -------------

Total liabilities and shareholders' (deficit)            $  6,180,912    $   6,349,356
                                                         --------------  -------------
</Table>


See accompanying notes to consolidated financial statements.


                                      F-3

<Page>

ENVIRONMENTAL REMEDIATION HOLDING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<Table>
<Caption>
                                                    YEAR ENDED SEPTEMBER 30,
                                                 ------------------------------
                                                     2000             1999
                                                 --------------   -------------
<S>                                              <C>              <C>

COSTS AND EXPENSES
General and administrative                        $  1,214,284    $  10,108,259
Depreciation                                              -             327,564
Interest expense                                       744,596        2,675,441
Write-offs and abandonments                               -           6,616,571
                                                 -------------    -------------

Net loss                                          $ (1,958,880)   $ (19,727,835)
                                                  ------------    -------------


Net loss per common share - basic and diluted     $       -       $       (0.16)
                                                  ------------    -------------
Weighted average number of common shares
outstanding                                        493,581,196      120,005,321
                                                  ------------    -------------
</Table>


See accompanying notes to consolidated financial statements.

                                       F-4

<Page>


<Table>
<Caption>

ENVIRONMENTAL REMEDIATION HOLDING CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
-----------------------------------------------------------------------------------------------------------------------------------

                               Common Stock                                  Beneficial                                   Total
                         ------------------------                  APIC         Conv.     Deferred        Accum.      Shareholders'
                            Shares      Amounts       APIC       Warrants      Feature      Comp.         Deficit        Deficit
                         -----------  -----------  ------------  ----------  -----------  ----------   -------------  -------------
<S>                      <C>          <C>          <C>           <C>         <C>          <C>          <C>            <C>

Balance at
 September 30, 1998       25,999,900  $  2,600   $25,020,717   $207,502    $ 1,387,500  $(125,000)   $(29,224,228)  $(2,730,909)

Common stock issued
 for cash                397,040,000    39,704     2,062,296       -              -          -               -        2,102,000

Common stock issued        7,169,000       717     1,034,185       -              -          -               -        1,034,902
 for services

Common stock issued
 for conversion of
 debt and payment
 of accrued interest
 and penalties            31,490,850     3,149     5,998,915       -              -          -               -        6,002,064

Common stock issued
 for accounts payable     10,843,917     1,084       769,139       -              -          -               -          770,223

Common stock issued
 for officer's salary
 and bonuses              10,580,000     1,058     4,723,942       -              -          -               -        4,725,000

Common stock issued
 for shareholder loans
 and accrued interest
 payable                   3,939,505       394       771,318       -              -          -               -          771,712

Common stock issued
 for Uinta settlement      7,780,653       778     2,541,161       -              -          -               -        2,541,939

Settlement with BAPCO     (7,744,000)     (774)   (2,709,626)      -              -          -               -       (2,710,400)

Reclassifications            750,000        75     3,094,927   (207,502)    (1,387,500)      -               -        1,500,000

Amortization of
 deferred comp.                 -         -             -          -              -       125,000            -          125,000

Net loss                        -         -             -          -              -          -        (19,727,835)  (19,727,835)
                         -----------  --------   -----------   --------    -----------  ---------    ------------   -----------

Balance at
 September 30, 1999      487,849,825    48,785    43,306,974       -              -          -        (48,952,063)   (5,596,304)

Common stock issued
 for conversion of
 debt and payment
 of accrued interest
 and penalties             7,607,092       761       295,120       -              -          -               -          295,881

Net loss                        -         -             -          -              -          -        (1,958,880)    (1,958,880)
                         -----------  --------   -----------   --------    -----------  ---------    -----------    -----------

Balance at
 September 30, 2000      495,456,917  $ 49,546   $43,602,094   $   -       $      -     $    -       $(50,910,943)  $(7,259,303)
                         -----------  --------   -----------   --------    -----------  ---------    ------------   -----------
</Table>


See accompanying notes to consolidated financial statements.


                                       F-5

<Page>


<Table>
<Caption>

ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------------------------------------
                                                                                             YEAR ENDED SEPTEMBER 30,
                                                                                      ----------------------------------------
                                                                                            2000                  1999
                                                                                      ------------------    ------------------
<S>                                                                                   <C>                   <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                               $   (1,958,880)      $   (19,727,835)
Adjustments to reconcile net loss to net cash used by
operating activities:
     Amortization of deferred compensation                                                       -                  125,000
     Amortization of beneficial conversion feature
       and convertible debt expenses                                                          409,242               542,693
     Amortization of offering costs                                                              -                   30,000
     Stock issued for services rendered                                                          -                1,034,902
     Stock issued for officer bonuses                                                            -                3,780,000
     Stock issued for interest and penalties on convertible debt                                 -                2,520,615
     Depreciation and depletion                                                                  -                  327,564
     Write-offs and abandonments                                                                 -                6,616,571
Changes in operating assets and liabilities:
   Accounts receivable                                                                           -                  (40,635)
   Prepaid expenses and other current assets                                                  141,175              (212,214)
   Due from STPetro, S.A.                                                                     (31,207)             (593,075)
   Suspended revenue                                                                             -                   14,873
   Accounts payable and other accrued liabilities                                            (298,464)            1,403,420
   Accrued officers salaries                                                                     -                  284,050
   Accrued interest and penalties                                                             744,596               154,826
                                                                                      ---------------       ---------------

Net cash used in operating activities                                                        (993,538)           (3,739,245)
                                                                                      ---------------       ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
DRSTP concession fee payment                                                                     -               (1,000,000)
Acquisition of property and equipment                                                            -                 (112,099)
                                                                                      ---------------       ---------------

Net cash used in investing activities                                                            -               (1,112,099)
                                                                                      ---------------       ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of convertible debt, net                                                      -                1,300,000
Proceeds from convertible debt, shareholder                                                   935,063             1,509,881
Payments on shareholder loans payable, net                                                       -                  (16,360)
Payments on long-term debt                                                                       -                   (6,728)
Proceeds from issuance of common stock                                                           -                2,102,000
                                                                                      ---------------       ---------------

Net cash provided by financing activities                                                     935,063             4,888,793
                                                                                      ---------------       ---------------

Net increase (decrease) in cash                                                               (58,475)               37,449

Cash, beginning of year                                                                        73,808                36,359
                                                                                      ---------------       ---------------

Cash, end of year                                                                      $       15,333       $        73,808
                                                                                       --------------       ---------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Noncash financing and investing activities: Stock issued in exchange for:
   Services                                                                            $         -          $     1,034,902
   Accrued interest and penalties                                                      $      145,881       $     3,477,064
   Convertible debt                                                                    $      150,000       $     2,525,000
   Shareholder loan payable and accrued interest                                       $         -          $       771,712
   Accounts payable settlement                                                         $         -          $       770,223
   Uinta settlement                                                                    $         -          $     2,541,939
   Accrued officers salary and stock bonuses                                           $         -          $     4,725,000
</Table>



See accompanying notes to consolidated financial statements.


                                       F-6
<Page>

                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL BUSINESS AND NATURE OF OPERATIONS

Environmental Remediation Holding Corporation, ("ERHC" or the "Company"), is an
independent oil and gas company. The Company's goal is to maximize its value
through profitable growth in oil and gas reserves and production in Sao Tome and
to acquire interests in non-producing oil and gas properties, particularly high
potential international prospects in known oil producing areas. The Company's
current focus is to exploit its only existing asset which is an oil and gas
exploration concession in Sao Tome, an island nation located in the Gulf of
Guinea off the coast of central West Africa.

The Company was formed in 1986, as a Colorado corporation, and was engaged in a
variety of businesses until 1996, at which time it began its current operations
as an independent oil and gas company. Since the commencement of its oil and gas
operations, the Company has acquired interests in the Nueces River area of south
Texas, which expired in September 2000, and has acquired interests on the Uintah
and Ouray Indian Reservations in Utah, which interests were sold in August 1999.
The Company also acquired a lease in oil fields located in Wichita County,
Texas, which was subsequently assigned to a former shareholder.

In May 1997, the Company entered into an exclusive joint venture with the
Democratic Republic of Sao Tome and Principe ("DRSTP") (the "1997 DRSTP
Agreement"). The 1997 DRSTP Agreement required the Company to pay a $5,000,000
concession fee to the Sao Tome government. The 1997 DRSTP Agreement is to manage
the exploration, exploitation and development of the potential oil and gas
reserves onshore and offshore Sao Tome, either through a joint venture or in
collaboration with major international oil exploration companies. The Company
has no other operations. (See Note 13).

CHANGE IN CONTROL
In April 1999, ERHC Investor Group Inc. ("ERHCIG"), a group led by one of the
Company's noteholders entered into a letter of intent to acquire 51% of the
issued and outstanding shares of the Company, (the "Letter of Intent"). The
Letter of Intent relied upon certain prior actions of the Board and final
closing was conditioned upon satisfactory terms and conditions in a securities
purchase agreement. The ERHCIG acquisition could be in one or more transactions
and ERHCIG was permitted to assign all or any part of its rights. The Letter of
Intent also provided for an initial closing at which ERHCIG would subscribe for
the requisite percentage of shares, subject only to the terms of the final
closing. In May 1999, management control of the Company effectively changed,
subject to the final closing.

Pursuant to the Letter of Intent, ERHC was required to secure a standstill
agreement from its convertible note holders. The standstill agreement
essentially waived all interest and penalties from the effective date of the
agreement (April 23, 1999) through October 15, 1999, changed the conversion
feature of each note so each note's conversion terms were uniform, and fixed the
conversion price to be $0.20 per share. Each noteholder also agreed, until
October 15, 1999, (i) not to convert all or any part of their notes, (ii) not to
declare a default or seek acceleration of any payments under the notes, (iii)
not to commence any foreclosure or bankruptcy actions under the note, and (iv)
not to declare an event of default or commence any arbitration action under any
of the transaction documents. In addition, all interest and penalties accrued
through the effective date of the standstill agreement were satisfied through
the issuance of common stock of the Company.

Effective June 1999, the Company received the first installment under the Letter
of Intent totaling $1,046,000. The second installment of $1,000,000 under the
Letter of Intent was to be paid to the DRSTP. As a condition precedent to
payment of the second installment the Company was to obtain a letter confirming
the DRSTP's intention to honor the 5% overriding royalty interest due to the
Company under the 1997 DRSTP Agreement upon receipt of the last $1,000,000
payment. The Company secured this confirmation letter and in late June notified
ERHCIG that delivery of the $1,000,000 for the benefit of the DRSTP was
required. After receiving no


                                      F-7

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


responses to several requests, in July 1999 legal counsel for the Company made
written demand for such payment.

After the failure of ERHCIG to perform on the second installment, the Company
was approached by one of its noteholders, Talisman Capital Opportunity Fund Ltd.
("Talisman Capital"). Talisman Capital commenced negotiations with the Company
and made alternative proposals to fund the second installment. In August 1999,
the Board of Directors met to review the position of ERHCIG and to consider the
final proposal offered by Talisman Capital on behalf of TC Hydro Carbon Inc.
("TCHC"), a company under the control of principals in Talisman Capital. After
consideration of the alternatives and the risk of losing the DRSTP concession if
the final payment was not made to the DRSTP, the Board voted to find ERHCIG in
default and to accept the TCHC offer. Further, the Board acknowledged receipt of
the $1,046,000 from the members of ERHCIG and agreed to issue 20,920,000 shares
of common stock of the Company.

In August 1999, the Company and TCHC executed a securities purchase agreement
("TCHC SPA") under which the Company issued 375 million shares at an aggregate
purchase price of $1,000,000 and executed an agreement with TCHC whereby TCHC
agreed to provide a working capital line of credit in the aggregate amount of
$4,000,000 to be drawn down by the Company over a 24 month period. The terms of
such working capital line of credit allows for monthly draw downs of no more
than $350,000 and is evidenced by a non-revolving promissory note bearing eight
percent interest per annum. Such note is a convertible into shares of the
Company at a conversion rate of $.20 per share 180 days from the advance of each
installment.

As of August 6, 1999 control of the Company effectively changed and as of
September 30, 2000 the Company remained in the control of TCHC. (See Note 14)

New management received sufficient assurances to meet the requirements
enumerated in the escrow agreement annexed to the TCHC SPA. After
representatives of Talisman Capital met with representatives of DRSTP, the
$1,000,000 received from TCHC was deposited into an escrow account established
in the Company's name and was wired to the DRSTP on August 20, 1999. The Company
thereby met its commitment to DRSTP for payment of the concession fee in full.

BASIS OF PRESENTATION
The consolidated financial statements include the accounts of ERHC and Bass
American Petroleum Company ("BAPCO"), its wholly-owned subsidiary. Intercompany
accounts and transactions have been eliminated in consolidation. The
consolidated financial statements for 2000 and 1999 include all adjustments
which in the opinion of management are necessary for fair presentation. (See
Note 10)

USE OF ESTIMATES
The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America. In
preparing the financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period for the years
then ended. Actual results could differ significantly from those estimates.

CASH EQUIVALENTS
The Company considers all highly liquid debt instruments with an original
maturity of three months or less to be cash equivalents.

CONCENTRATION OF RISKS
The Company primarily transacts its business with one financial institution.
From time to time the amount on deposit in that one institution exceeds the
$100,000 federally insured limit. The balances are maintained in demand accounts
to minimize risk.


                                      F-8
<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


IMPAIRMENT OF LONG-LIVED ASSETS
The Company evaluates the recoverability of long-lived assets when events and
circumstances indicate that such assets might be impaired. The Company
determines impairment by comparing the undiscounted future cash flows estimated
to be generated by these assets to their respective carrying amounts.
Impairments are charged to operations in the period to which events and
circumstances indicate that such assets might be impaired.

INCOME TAXES
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109 - "Accounting for Income Taxes",
which provides for an asset and liability approach in accounting for income
taxes. Under this approach, deferred tax assets and liabilities are recognized
based on anticipated future tax consequences, using currently enacted tax laws,
attributable to differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases.

DEFERRED OFFERING COSTS
Deferred offering costs represent capitalized payments made in connection with
the Company's proposed public offering. These costs are charged to additional
paid-in-capital as the cash proceeds for the offerings are received. In the
event the monies are not raised, these costs are charged to operations.

COMMON STOCK ISSUED FOR GOODS RECEIVED AND SERVICES RENDERED
-------------------------------------------------------------
The Company has issued shares of common stock for goods received and services
rendered. The costs of the goods or services are valued according to the terms
of relative agreements or market value on the date of obligation. The cost of
the goods or services has been charged to operations.

NET LOSS PER SHARE
Net loss per common share - basic is computed by dividing the net loss by the
weighted average number of shares of common stock outstanding during the period.
Net loss per share - diluted is not presented because the inclusion of common
share equivalents would be anti-dilutive.

NOTE 2 - GOING CONCERN

The Company's current liabilities exceed its current assets by $7,389,916 at
September 30, 2000. The Company has incurred net losses of $1,958,880 and
$19,727,835 in 2000 and 1999, respectively. These conditions raise substantial
doubt as to the ability of the Company to continue as a going concern. The
Company is in ongoing negotiations to raise general operating funds and funds
for specific projects. Management will be required to, and expects to, raise
additional capital through the issuance of debt securities and offerings of
equity securities to fund the Company's operations, and will attempt to continue
raising capital resources until such time as the Company generates revenues
sufficient to maintain itself as a viable entity. However, there is no assurance
that such financing will be obtained.

The Company's sole asset is its interest from the 1997 DRSTP Agreement, which
will not become effective until the treaty between the DRSTP and the Federal
Government of Nigeria becomes effective (See Note 14.) The failure of the treaty
to become effective could have a materially adverse effect on the Company's
operations.

The Company has available a $4 million working capital line of credit from a
shareholder with total borrowings of $2,444,944 as of September 30, 2000. It is
expected that the Company will continue to borrow funds from its shareholder in
the future but there is no assurance that funds will be made available or under
similar terms. In prior years, the Company was able to raise funds in a timely
manner, but there is no assurance that they will continue to do so in the
future. The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. If the Company is unable to
continue as a going concern, the values realized from the Company's assets may
be less than the carrying amounts reported in its financial statements. The
accompanying financial statements do not include any adjustments relating to the
recoverability and

                                      F-9
<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


classification of asset carrying amounts or the amount and classification of
liabilities that might result should the Company be unable to continue as a
going concern.

NOTE 3 - RESTRICTED CASH

At September 30, 2000 and 1999, the Company has restricted cash of $15,811,
which is invested in an interest-bearing certificate of deposit, pledged as
collateral for a performance bond covering certain oil and gas properties in
Wichita Falls, Texas. These oil and gas properties were abandoned and written
off during the year ended September 30, 1999 and the Company is currently
investigating the release of the performance bond.

NOTE 4 - PROPERTY AND EQUIPMENT

Investments in oil and natural gas properties are accounted for using the full
cost method of accounting. All costs associated with the acquisition,
exploration and development of oil and natural gas properties are capitalized.

Property and equipment is recorded at cost. Maintenance and repair costs are
charged to expense as incurred. When items of property or equipment are sold or
retired, the related costs are removed from the accounts and any gains or losses
are reflected as income or expense.

Depreciation was computed on the straight-line method for financial reporting
purposes, based on the estimated useful lives of the assets. Autos and trucks
were depreciated over a three to five year life, field equipment over a five to
15 year life, office furniture over a three to five year life, and the building
over a 30 year life. Depreciation expense totaled $327,564 during the year ended
September 30, 1999.

Depletion (including provisions for future abandonment and restoration costs) of
all capitalized costs of proved oil and gas producing properties is expensed
using the unit-of-production method by individual fields as the proven developed
reserves are produced. Since there was no oil and gas production during the
years ended September 30, 2000 and 1999, no depletion expense was recorded.

In addition, the capitalized costs of oil and natural gas properties are subject
to a "ceiling test" whereby to the extent that such capitalized costs subject to
amortization in the full cost pool (net of depletion, depreciation and
amortization and related deferred taxes) exceed the present value (using a 10%
discount rate) of estimated future net after-tax cash flows from proved oil and
natural gas reserves, such excess costs are charged to operations as ceilings
test charges. Impairment of oil and natural gas properties is assessed on a
quarterly basis. Once incurred an impairment of oil and natural gas properties
is not reversible at a later date.

During the year ended September 30, 1999, the Company implemented its exit
strategy for its United States oil and gas properties and disposed of or
abandoned and wrote off the following:

         o   An undivided 7/8 net revenue with a 100% working interest in a 100
             well lease located in the Gunsite Sand Lease in Ector, Texas.

         o   An undivided 7/8 interest in a 100 well lease located in the
             Woodbine Sand Lease Block in Henderson County, Texas.

         o   A 3/8 undivided interest in a natural gas well that had been
             plugged and abandoned approximately 10 years previous.

         o   Interests in 22 wells on seven oil, gas and mineral leases located
             in Uintah and Duchesne Counties, Utah, acquired from three
             joint owners. The purchase agreement was closed on October 8,
             1997, at which time the Company received the lease assignment.
             The terms of the acquisition were for the Company to pay
             $250,000 in cash and issue 250,000 shares of the Company's
             common stock at each of the following four dates: closing,
             December 30, 1997, March 30, 1998 and June 30, 1998. The
             Company


                                      F-10

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


             also was required to guarantee that the bid price on the date the
             Rule 144 restrictions lapse will be no less than $2.00 per share or
             the Company is required to either issue additional shares or pay
             the difference in cash, at the Company's option.  See Note 10 for
             discussion of final settlement with Uintah.

         o   The Company negotiated the sale of its Utah oil and gas operations
             to Mountain Oil, Inc. ("Mountain Oil"). The sale included the
             Company's rights, title and working, royalty and overriding
             interests in its oil and gas leases as well as any existing oil and
             gas production equipment, materials, fixtures and improvements. In
             addition Mountain Oil acquired the Company's existing office space,
             furniture, fixtures and computer hardware and software. As
             consideration for the sale, Mountain Oil assumed the Company's
             accounts payable associated with these operations, subject to
             certain restrictions as defined by the agreement. Mountain Oil also
             assumed certain performance bonds required by the State of Utah to
             conduct operations on certain of the leases conveyed. The Company
             was released from its obligation to maintain such bonds. No cash
             proceeds were received in the conveyance.

         o   Leases on oil and gas properties located in and around Wichita
             Falls, Texas were not renewed and were allowed to revert back to
             the existing landowners, including any interests in known amounts
             of proved reserves. The Company retained ownership of certain
             production equipment in and around approximately 180 wells on said
             leases, but this equipment is deemed to have very little value and
             will be salvaged by the Plugging and Abandonment Company when
             certain wells are required to be plugged. Accordingly, these
             properties were abandoned and leasehold and equipment costs were
             written off. The Company is potentially responsible for plugging
             the remaining wells on these leases for which $500,000 has been
             accrued to satisfy any future obligation for plugging costs, net of
             estimated salvage.

As a result of the above abandonments and dispositions the Company recognized a
loss of $3,161,657 which is recorded within write-offs and abandonments in the
September 30, 1999 statement of operations.

NOTE 5 - MASTER SERVICE AGREEMENT

In September 1996 Bass Environmental Services Worldwide, Inc., ("BESW"), entered
into a master service agreement with Chevron to plug and abandon oil wells
located in the Gulf of Mexico off the coast of Louisiana. In April 1997, BESW
assigned this contract to the Company in exchange for 3,000,000 shares of the
Company's common stock. Chevron reissued the contract in the Company's name. At
the time of the acquisition, BESW was controlled by Sam Bass, the CEO of ERHC.
The Company valued this acquisition on the basis of the par value of the
Company's common stock given up, or $300, because no historical cost basis could
be individually determined and the contract has minimal value until the Company
has built or purchased the equipment to commercialize the contract. As a part of
the settlement with BAPCO discussed in Note 10, this agreement was assigned to a
new corporation held for the benefit of Mr. Bass or his assigns.

NOTE 6 - NOTES PAYABLE

CONVERTIBLE DEBT
The following describes the original terms of the Company's convertible debt at
the indicated dates of issuance:

         In November 1997, the Company issued 5.5% convertible senior
         subordinated secured notes due 2002 in exchange for $4,300,000 cash.
         These notes are convertible into shares of the Company's common stock
         at a conversion price no less than $1.25 per share. If all of the notes
         are converted at the lowest possible price, the Company would be
         required to issue 3,440,000 shares of common stock. These notes also
         carried warrants for an additional 283,800 shares of common stock with
         an exercise price of $3.17 per share, or total additional proceeds to
         the Company of $899,636 in cash in the event all of the warrants are
         exercised.

         In April 1998, the Company issued 12% convertible subordinated
         unsecured notes due January 1999 in exchange for $300,000 cash. These
         notes are convertible into shares of the Company's common stock at

                                      F-11

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         a conversion price of $1.50 per share. If all of these notes are
         converted, the Company will be required to issue 200,000 shares of
         common stock. These notes also carried warrants for an additional
         210,000 shares of common stock with an exercise price of $1.25 per
         share, or total additional proceeds to the Company of $262,500 in
         cash in the event all of the warrants are exercised.

         In June 1998, the Company issued 12% convertible subordinated unsecured
         notes due December 1999 in exchange for $425,000 cash. These notes are
         convertible into shares of the Company's common stock at a conversion
         price of $1.00 per share. If all of these notes are converted, the
         Company will be required to issue 425,000 shares of common stock. These
         notes also carried warrants for an additional 531,250 shares of common
         stock with an exercise price of $0.50 per share for the first two
         years, and $0.85 per share thereafter, or total additional proceeds to
         the Company of $265,625, or $451,563 in cash in the event all of the
         warrants are exercised.

         In June 1998, the Company issued 5.5% convertible subordinated
         unsecured notes due June 2000 in exchange for $1,250,000 cash and
         $43,750 of broker fees. These notes are convertible into shares of the
         Company's common stock at a conversion price to be determined by a
         stated formula. If all of these notes are converted using the
         conversion price at the issuance date ($0.69517), the Company will be
         required to issue 1,798,124 shares of common stock. These notes also
         carried warrants for an additional 230,000 shares of common stock with
         an exercise price of $0.8634 per share, or total additional proceeds to
         the Company of $198,582 in cash in the event all of the warrants are
         exercised.

         In July 1998, the Company issued 8.0% convertible subordinated
         unsecured notes due July 2000 in exchange for $1,200,000 cash. These
         notes are convertible into shares of the Company's common stock at a
         conversion price to be determined by a stated formula. If all of these
         notes are converted using the conversion price at the issuance date
         ($0.478723), the Company will be required to issue 2,506,668 shares of
         common stock. In connection with this funding, the Company issued
         warrants for 108,000 shares of common stock with an exercise price of
         $0.74375 per share, or total proceeds to the Company of $80,325 in cash
         if all of the warrants are exercised.

         In July 1998, the Company issued 8.0% convertible subordinated
         unsecured notes due August 2000 in exchange for $275,000 cash. These
         notes are convertible into shares of the Company's common stock at a
         conversion price to be determined by a stated formula. If all of these
         notes are converted using the conversion price at the issuance date
         ($0.644878), the Company will be required to issue 426,437 shares of
         common stock. In connection with this funding, the Company issued
         warrants for 24,750 shares of common stock with an exercise price of
         $0.73125 per share, or total proceeds to the Company of $18,098 in cash
         if all of the warrants are exercised.

         In August 1998, the Company issued 8.0% convertible subordinated
         unsecured notes due August 2000 in exchange for $1,010,000 cash. These
         notes are convertible into shares of the Company's common stock at a
         conversion price to be determined by a stated formula. If all of these
         notes are converted using the conversion price of the issuance date
         ($0.979813), the Company will be required to issue 1,030,809 shares of
         common stock. In connection with this funding, the Company issued
         warrants for 90,900 shares of common stock with an exercise price of
         $0.9938 per share, or total proceeds to the Company of $90,336 in cash
         if all of the warrants are exercised.

         In October 1998, the Company issued a 20% convertible subordinated
         unsecured note to Talisman Capital, due October 2000 in exchange for
         $500,000 cash. This note is convertible into shares of the Company's
         common stock at a conversion price to be determined by a stated
         formula. If the note was converted using the conversion price at the
         issuance date ($1.00), the Company will be required to issue 500,000
         shares of common stock. This note also carried warrants for an
         additional 1,500,000 shares of common stock with an exercise price of
         $0.40 per share, or total additional proceeds to the Company of
         $600,000 in cash in the event all of the warrants are exercised.


                                      F-12

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          In October 1998, the Company issued 12% convertible subordinated
          unsecured notes due December 31, 1999 in exchange for $800,000 cash.
          These notes are convertible into shares of the Company's common stock
          at a conversion price to be determined by a stated formula. If all of
          these notes are converted using the conversion price at the issuance
          date ($1.25), the Company will be required to issue 640,000 shares of
          common stock. These notes also carried "A" and "B" warrants for an
          additional 1,200,000 and 1,200,000 shares of common stock,
          respectively, with exercise prices of $0.50 and $3.00 per share, or
          total additional proceeds to the Company of $4,200,000 in cash in the
          event all of the warrants are exercised.

          In October 1998, the Company received conversion notices on $412,350
          of the convertible debt issued in July and August 1998. This debt, and
          accrued interest amounting to $7,497, was converted into 1,210,686
          shares of common stock under the applicable conversion formulas.

          In April 1999, the Company received conversion notices on $750,000 of
          the convertible debt issued in November 1997. This debt, and accrued
          interest and penalties thereon of $400,110, was converted into
          5,750,550 shares of common stock. Also in April 1999, the Company
          received conversion notices on $1,362,650 of the convertible debt
          issued in July and August 1998. This debt, and accrued interest and
          penalties of $675,216, was converted into 11,714,293 shares of common
          stock.

          Effective April 1999, the Company negotiated a Standstill Agreement
          with each of its convertible noteholders. The Standstill Agreement
          essentially waived all interest and penalties from the effective date
          of the agreement (April 23, 1999) through October 15, 1999, changed
          the conversion feature of each note so each note's conversion terms
          were uniform, and fixed the conversion price to be $0.20 per share.
          Each noteholder also agreed, until October 15, 1999, (i) not to
          convert all or any part of their notes, (ii) not to declare a default
          or seek acceleration of any payments under the notes; (iii) not to
          commence any foreclosure or bankruptcy actions under the note; (iv)
          not to declare an event of default or commence any arbitration action
          under any of the transaction documents. In addition all interest and
          penalties accrued through the effective date of the Standstill
          Agreement were converted to common stock of the Company. Accordingly,
          the Company issued 12,815,321 shares of common stock in exchange for
          accrued interest of $562,848 and accrued penalties of $1,831,392.

          In October 1999, the Company received a conversion notice on $150,000
          of the convertible debt issued in July 1998. This debt, and accrued
          interest and penalties of $145,881, was converted into 7,607,092
          shares of common stock.

          CONVERTIBLE DEBT PAYABLE TO SHAREHOLDERS
          During 1997, the Company issued two notes payable to shareholders who
          are also officers and directors in exchange for cash of $1,842,405.
          These notes had no stated maturity date and an 8.5% interest rate. The
          notes are convertible into restricted common stock at 50% of the
          average bid price for the month in which the loan was made. During
          1999, the remaining unpaid balance of $771,712, including accrued and
          unpaid interest of $56,744, was converted into 3,939,505 shares of
          common stock.

          In August 1999, in conjunction with the change in control of the
          Company involving TCHC, the Company entered into a $4.0 million senior
          secured 8.00% exchangeable promissory note (the "Line of Credit").
          This note and any unpaid and accrued interest is convertible into
          common stock of the Company at a conversion price of $0.20 per share.
          If this Line of Credit was converted at September 30, 2000 using the
          conversion price of $0.20 per share, the Company would be required to
          issue 13,095,725 shares of common stock based on an outstanding
          principal amount of $2,444,955, and accrued interest of $174,190.


                                      F-13

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          As stated at Note 14, under the escrow agreement with Chrome Energy,
          L.L.C., the terms of the Company's convertible debt were revised and
          maturity dates were extended to January 31, 2003.

NOTE 7 - ACCRUED SALARIES

          At September 30, 2000 and 1999 the Company has accrued salaries of
          $1,013,035 owed to two former officers of the Company. The amounts and
          rights claimed by these officers are subject to lawsuits in which the
          Company is negotiating a final settlement. As of September 30, 2000 no
          agreement has been reached, but the Company expects that a negotiated
          settlement may result in the issuance of additional shares of common
          stock of the Company (See Note 14). During the year ended September
          30, 1999, one former officer converted $945,000 of accrued officer's
          salary into 4,580,000 shares of common stock of the Company in full
          settlement of salary earned in previous periods.

NOTE 8 - ACCRUED INTEREST AND PENALTIES

          Accrued interest and penalties consisted of the following:

                                                          September 30,
                                                 ---------------------------
                                                     2000           1999
                                                 ------------  -------------

          Accrued interest - shareholder loans   $    174,190  $      8,945
          Accrued interest - convertible debt         579,351        20,256
          Accrued penalties - convertible debt          -           125,625
                                                 ------------  ------------

          Total                                  $    753,541  $    154,826
                                                 ------------  ------------

NOTE 9 - INCOME TAXES

          At September 30, 2000 the Company has a consolidated net operating
          loss carry-forward ("NOL") of approximately $47,000,000 expiring
          through 2020. The Company has a $16,163,724 deferred tax asset
          resulting from this NOL. The loss carryforwards are subject to certain
          limitations under the Internal Revenue Code including Section 382 of
          the Tax Reform Act of 1986. ERHC believes that the utilization of
          these net operating loss carryforwards could be significantly limited
          due to the August 1999 change in ownership and the 1999 BAPCO
          settlement. The ultimate realization of the resulting net deferred tax
          asset is dependent upon generating sufficient taxable income prior to
          expiration of the NOLs. Due to the nature of these NOLs and since
          realization is not assured, management has established a valuation
          allowance relating to the deferred tax asset for both 2000 and 1999 in
          an amount equal to the deferred tax asset.

NOTE 10 - SHAREHOLDERS' EQUITY(DEFICIT)

          The Company has authorized 950,000,000 shares of $0.0001 par value
          common stock and 10,000,000 shares of $0.0001 par value preferred
          stock.

          From time to time, in order to fund operating activities of the
          Company, common stock is issued for cash or in exchange for goods or
          services. Generally, offerings of the Company's common stock include
          warrants to acquire common stock of the Company at fixed exercise
          prices. Occasionally, depending on the nature of the offering and
          restrictions imposed on the shares being acquired, the exercise price
          of the warrant may be below the fair market value of the underlying
          common stock on the date of issuance.

          During the year ended September 30, 1999, the Company completed
          various private offerings of its common stock for cash in the amount
          of $2,102,000 and issued 397,040,000 shares. In addition, the

                                      F-14

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          Company issued 7,169,000 shares of common stock in exchange for goods
          and services for a total value of $1,034,902, primarily for consulting
          services. The Company issued 10,843,917 shares of common stock to
          settle accounts payable valued at $770,223 and 10,580,000 shares of
          common stock to settle accrued salary of $945,000 owed to one officer,
          and bonuses of $3,780,000 to three officers of the Company for past
          services.

          CONVERTIBLE DEBT, NET
          In October 1998, the Company received conversion notices on $412,350
          of the convertible debt issued in July and August 1998. This debt, and
          accrued interest of $7,497, was converted into 1,210,686 shares of
          common stock under the applicable conversion formulas.

          Effective April 1999, the Company negotiated Standstill Agreements
          with substantially all of its convertible noteholders. The Standstill
          Agreement essentially waived all interest and penalties from the
          effective date of the agreement (April 23, 1999) through October 15,
          1999, changed the conversion feature of each note so each note's
          conversion terms were uniform, and fixed the conversion price to be
          $0.20 per share. Each noteholder also agreed, until October 15, 1999,
          (i) not to convert all or any part of their notes, (ii) not to declare
          a default or seek acceleration of any payments under the notes, (iii)
          not to commence any foreclosure or bankruptcy actions under the note,
          and (iv) not to declare an event of default or commence any
          arbitration action under any of the transaction documents. In addition
          all interest and penalties accrued through the effective date of the
          Standstill Agreement were converted to common stock of the Company.
          Accordingly, the Company issued 12,815,321 shares of common stock in
          exchange for accrued interest of $562,848 and accrued penalties of
          $1,831,392.

          In April 1999, the Company received conversion notices on $750,000 of
          the convertible debt issued in November 1997. This debt, and accrued
          interest and penalties of $400,110, was converted into 5,750,550
          shares of common stock. Also in April 1999, the Company received
          conversion notices on $1,362,650 of the convertible debt issued in
          July and August 1998. This debt, and accrued interest and penalties of
          $675,216, was converted into 11,714,293 shares of common stock.

          In October 1999, the Company received a conversion notice on $150,000
          of the convertible debt issued in July 1998. This debt, and accrued
          interest and penalties of $145,881, was converted into 7,607,092
          shares of common stock.

          CONVERTIBLE DEBT PAYABLE TO SHAREHOLDERS
          During 1997, the Company issued two notes payable to shareholders who
          are also officers and directors in exchange for cash of $1,842,405.
          These notes had no stated maturity date and an 8.5% interest rate. The
          notes are convertible into restricted common stock at 50% of the
          average bid price for the month in which the loan was made. During
          1999, the remaining unpaid balance of $771,712, including accrued and
          unpaid interest of $56,744, was converted into 3,939,505 shares of
          common stock.

          In August 1999, in conjunction with the change in control of the
          Company involving TCHC, the Company entered into a $4.0 million senior
          secured 8.00% exchangeable promissory note (the "Line of Credit").
          This note and any unpaid and accrued interest is convertible into
          common stock of the Company at a conversion price of $0.20 per share.
          On September 30, 2000, if this Line of Credit was converted using the
          conversion price of $0.20 per share, the Company would be required to
          issue 13,095,725 shares of common stock based on an outstanding
          principal amount of $2,444,944, and accrued interest of $174,190.

          DRSTP GEOLOGICAL DATA
          In July 1997, the Company acquired substantial geologic data and other
          information from an independent source in exchange for 1,000,000
          shares of the Company's common stock. This data was valued at
          $2,000,000 based on an agreement with the seller that the Company
          would repurchase these


                                      F-15

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          shares for $2,000,000 at a rate of 25% per quarter should the seller
          so choose. In December 1997, the Company repurchased 250,000 shares of
          its common stock for $500,000 in cash. Due to the unavailability of
          cash resources, the Company was unable to acquire the remaining shares
          when presented by the seller. Accordingly, the seller sold those
          shares in the open market with the proceeds generated from the sales
          offsetting the obligations owed by the Company. Under the agreement's
          terms of default the seller requested that the Company make whole the
          seller's shortfall incurred from disposition of the stock at less than
          $2.00 per share. Accordingly, the Company issued an additional
          6,997,917 shares of common stock of the Company and paid cash of
          $222,500 during fiscal year 1999 and $122,000 in fiscal year 2000,
          leaving a remaining obligation in accounts payable of approximately
          $246,000 at September 30, 2000. The additional cost of $1,091,875
          associated with the settlement of this obligation was expensed during
          fiscal year 2000.

          BASS AMERICAN PETROLEUM COMPANY
          On April 9, 1997, the Company acquired 100% of the issued and
          outstanding common stock of Bass American Petroleum Company,
          ("BAPCO"), which was accounted for as a purchase. In exchange, the
          Company issued 7,744,000 shares of common stock for such shares of
          BAPCO. BAPCO had been an inactive company for several years, however
          BAPCO owned a variety of oil well production enhancing equipment,
          which is proprietary to, but not patented by BAPCO. The transaction
          was in essence an asset acquisition. At the time of the acquisition,
          BAPCO was 100% owned by the Chairman, President and CEO of ERHC. The
          Company began using BAPCO as the operator of the various oil and
          natural gas leases it acquired.

          On April 8, 1999, after investigation and due consideration of the
          options available to the Company regarding certain of its assets, the
          Board voted to realign assets between itself and its subsidiary,
          BAPCO. Following such realignment, BAPCO, as realigned, was
          transferred to a new corporation, unrelated to ERHC, formed for the
          benefit of Sam Bass or his assigns. This corporation exchanged the
          7,744,000 shares which Mr. Bass and such companies received from the
          1997 BAPCO transactions for all shares in the new corporation. The
          exchanged shares were returned to the Company and canceled during the
          fourth quarter of 1999.

          In addition, BAPCO assigned all rights, title and interest, if any, in
          the leases in the Uintah, Wichita Falls, Nueces and MIII oil and gas
          properties to ERHC. ERHC was responsible for perfecting the interest
          in these properties. Additionally the Company agreed to assume certain
          liabilities of the oil and natural gas properties which consisted of
          then outstanding accounts payable and environmental obligations. BAPCO
          also removed itself as operator of these properties.

          BAPCO retained certain rights, titles and interests of certain assets
          and including but not limited to certain environmental remediation
          equipment, a license and rights under the Chevron Master Service
          Agreement.

          Accordingly this transaction resulted in the reduction of net property
          and equipment by approximately $3.2 million. The common stock and
          additional paid in capital accounts were adjusted to reflect the
          return and cancellation of 7,744,000 common shares based on the $0.35
          per share common stock price on April 8, 1999. The settlement of this
          transaction resulted in a loss of $467,400 being recorded in
          write-offs and abandonments in the 1999 statement of operations.

          PROCURA FINANCIAL CONSULTANTS, CC("PFC")
          Under the May 1997 Agreement between the DRSTP and the Company, PFC is
          a party to the Agreement. The Company and PFC are negotiating an
          agreement whereby the Company would issue common shares to PFC in
          exchange for PFC foregoing its rights under the 1997 DRSTP Agreement.
          The Company has issued, but not delivered 2,000,000 shares in
          anticipation of settling this negotiation. On February 10, 2001, this
          transaction was settled (See Note 14).

                                      F-16

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          ARBITRATION SETTLEMENTS
          During 1998, the Company took action to cancel the Kingsbridge Equity
          Line of Credit dated March 1998. The original negotiated cancellation
          agreement required the Company to pay $100,000 in cash and issue
          warrants for 100,000 shares of common stock. The Company did not
          complete the negotiated cancellation and Kingsbridge made application
          to arbitrate the outstanding issues with the Company. During September
          1999, the Company paid $85,000 in full and final settlement of this
          cancellation.

          In April 1998, Uinta Oil and Gas, Inc. ("Uinta") filed suit in Utah
          relating to the Company's October 1997 acquisition of 22 oil and gas
          wells in Utah. The other two joint sellers of these wells, along with
          Uinta, filed a formal demand for arbitration as the purchase agreement
          required. During the year ended September 30, 1999 the Company reached
          an agreement with Uinta and issued 7,780,653 shares of common stock
          with a total value of $2,541,939 on the date of issue. Upon
          disposition of these oil and gas properties the full amount of the
          settlement has been charged to write-offs and abandoments in the
          September 30, 1999 statement of operations (See Note 4).

          WARRANTS
          From time to time, in order to fund operating activities of the
          Company, common stock and convertible debt are issued for cash and
          common stock is issued in exchange for goods or services. Generally,
          offerings of the Company's common stock and convertible debt include
          warrants to acquire common stock of the Company at fixed exercise
          prices. Occasionally, depending on the nature of the offerings (common
          stock or debt) and restrictions imposed, the exercise price of the
          warrant may be below the fair market value of the underlying common
          stock on the date of issuance. As of September 30, 2000 and 1999 the
          Company has outstanding 8,242,825 warrants to acquire the Company's
          common stock at exercise prices that range from $0.25 to $3.17 per
          share, or total proceeds to the Company of $8,326,522 in cash at an
          average exercise price of $1.01 if all of the warrants are exercised.
          These warrants expire on various dates throughout the period October
          28, 2000 to April 22, 2009.

NOTE 11 - DEFERRED COMPENSATION

          During 1996, ERHC issued 755,043 shares of common stock into escrow in
          exchange for services to be rendered by a consultant under a four year
          contract. These services were valued at $125,000 per year, and the
          Company is amortizing this deferred compensation expense at a rate of
          $31,250 per quarter. This consultant later became ERHC's Chairman,
          President and CEO. The final quarter of amortization ended on
          September 30, 1999.

NOTE 12 - COMMITMENTS AND CONTINGENCIES

          LEASE COMMITMENTS
          At September 30, 2000, the Company had no material non-cancelable
          lease commitments.

          LITIGATION AND OTHER CONTINGENCIES
          From time to time, certain potential obligations are presented to the
          Company that may have originated during periods not under existing
          management's control. These alleged obligations are generally for
          goods and services for which the Company has no record. The Company
          actively investigates these claims as they arise. All known material
          obligations of the Company have been recorded and are reflected in the
          financial statements, but there is no certainty that all material
          claims have been presented to the Company nor have the benefits of
          available statutes of limitations been considered, should they apply
          (See Note 14).

          The Company is subject to other legal proceedings which have arisen in
          the ordinary course of business and have not been fully adjudicated.
          Although there can be no assurance as to the ultimate disposition of


                                      F-17

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          these matters and the proceedings disclosed above, in the opinion of
          management, based upon information available at this time, the cost of
          defense or settlement of these actions, individually or in the
          aggregate, will not have a materially adverse effect on the financial
          position, results of operations, or cash flows of the Company (See
          Note 14).

NOTE 13 - SAO TOME CONCESSION

          CONCESSION FEE PAYMENT
          The 1997 DRSTP Agreement required the Company to pay a $5,000,000
          concession fee to the Sao Tome government. In September 1997, the
          Company received a Memorandum of Understanding (the "DRSTP MOU") from
          the Sao Tome government, which allowed the Company to pay this
          concession fee within five days after Sao Tome files the relevant
          official maritime claims maps with the United Nations and the Gulf of
          Guinea Commission. In December 1997, the Company paid $2,000,000 of
          this concession fee to Sao Tome. In June 1998, it paid $1,000,000 of
          this concession fee and in August 1998, the Company paid $1,000,000 of
          this concession fee. During fiscal year 1999, the Company engaged in
          various activities relative to continuing to develop and promote its
          interest in the DRSTP. In August 1999, the Company paid the final
          $1,000,000 of the concession fee from proceeds of the sale of common
          stock to TCHC during the fourth quarter of fiscal year 1999.

          In October 1999, the government of DRSTP claimed that the Company had
          breached certain terms of the 1997 DRSTP Agreement and announced a
          termination of the Agreement. The Company immediately exercised its
          rights to have the matter settled via international arbitration in
          accordance with the terms of the 1997 DRSTP Agreement. The arbitration
          process continued through fiscal year 2000 (See Note 14).

          INVESTMENT IN AND ADVANCES TO STPETRO, S.A.
          In July 1998, the government of the Democratic Republic of Sao Tome
          and Principe established the Sao Tome and Principe National Petroleum
          Company, SA ("STPetro") as the national petroleum company. The charter
          established the initial ownership of STPetro as 51% by DRSTP and 49%
          by ERHC in exchange for $51,000 and $49,000, respectively. Through
          September 30, 1999, the Company expended $1,045,351 on behalf of
          STPetro. During fiscal year 2000, the Company borrowed $31,207 under
          the TCHC line of credit to pay other expenses and obligations relative
          to STPetro (See Note 14).

NOTE 14 - SUBSEQUENT EVENTS

          CHANGE OF CONTROL AND PURCHASE AGREEMENT
          On February 15, 2001, pursuant to a Purchase Agreement dated December
          31, 2000, as amended by a First Amendment thereto dated January 31,
          2001 (as amended, the "Purchase Agreement"), between Chrome Energy,
          L.L.C., a Delaware limited liability company ("Chrome"), Talisman
          Capital Opportunity Fund Ltd. ("Talisman"), and TC Hydro Carbon, Inc.,
          a Delaware corporation ("TC Hydro Carbon" and, together with Talisman,
          the "Sellers"), Chrome purchased from the Sellers for $6,000,000 cash
          the following: (i) 375,000,000 shares of ERHC common stock, par value
          $.0001 per share (the "Common Stock"), owned of record by TC Hydro
          Carbon; (ii) 2,244,385 shares of the Common Stock held and owned of
          record by Talisman; (iii) a convertible senior subordinated note from
          ERHC due October 15, 2002, in the principal amount of $750,000 owned
          and held by Talisman (the "5.5% Note"); (iv) a convertible note from
          ERHC due October 26, 2000, in the principal amount of $500,000, owned
          and held by Talisman (the "20% Note"); (v) a senior secured 8.00%
          exchangeable promissory note from ERHC due September 1, 2004, in the
          principal amount of $4,000,000 owned and held by TC Hydro Carbon (the
          "Line of Credit"); (vi) a warrant certificate dated as of October 26,
          1998, owned and held by Talisman providing the right to purchase
          750,000 shares of the Common Stock until October 26, 2008; (vii) a
          warrant certificate dated as of October 26, 1998, owned and held by
          Talisman providing the right to purchase 750,000 shares of the Common
          Stock until October 26, 2008; (viii) a warrant certificate dated as of
          October 15, 1997, owned by Talisman providing the right to purchase
          45,000 shares of the


                                      F-18

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                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          Common Stock until October 15, 2002; and (ix) a warrant certificate
          dated as of April 23, 1999 owned by Talisman providing the right to
          purchase 1,000,000 shares of Common Stock until April 22, 2009.
          Subsequent to February 15, 2001, Chrome transferred to its financial
          advisors an aggregate of 116,629,564 shares of Common Stock acquired
          in this transaction.

          CHANGE OF COMPANY MANAGEMENT
          Upon consummation of the purchase by Chrome of the foregoing
          securities of the Company, the Company's three directors prior to
          February 15, 2001 (the "Talisman Directors") elected three new
          directors. Immediately after the election of these new directors, the
          Talisman Directors resigned from the board of the Company. The new
          directors elected the new executive officers of the Company.

          As a result of the February 15, 2001 Purchase Agreement Chrome Oil
          Services Limited, a Bahamian corporation and the sole member of Chrome
          ("COS"), and Sir Emeka Offor, a citizen of Nigeria and the sole
          shareholder, officer and director of COS, Chrome beneficially owns
          281,339,771 shares of the Company's Common Stock.

          SETTLEMENT AGREEMENT - DERIVATIVE LAWSUIT
          In connection with the transactions contemplated by the Purchase
          Agreement, Chrome is a party to a First Amended Agreement dated
          February 9, 2001 (the "Derivative Settlement"), whereby the parties
          thereto have agreed to dismiss with prejudice a derivative lawsuit
          (styled ENVIRONMENTAL REMEDIATION HOLDING CORPORATION, DERIVATIVELY BY
          AND THROUGH KEVIN BARTLEY ET AL V. TALISMAN CAPITAL OPPORTUNITY FUND
          L.P. ET AL) previously filed by certain of the Company's shareholders
          against several of the Company's former directors and controlling
          shareholders. This agreement was executed prior to the Purchase
          Agreement noted above. Pursuant to the Derivative Settlement, the
          following actions will, to the extent not already completed, be
          consummated within a commercially reasonable time:

              (a) under the terms of the line of credit and the Derivative
          Settlement, the Company will execute a new note with Chrome for
          $2,200,000 of the advances made by TC Hydro Carbon outstanding for
          more than 180 days as of January 31, 2001. Such note and the accrued
          interest thereon is convertible at any time at a conversion price of
          $0.20 per share;

              (b) the 5.5% Note will be cancelled and the Company will execute a
          new convertible note payable to Chrome for $804,313, representing the
          outstanding principal balance of the 5.5% Note and all accrued
          interest thereon as of January 31, 2001. Such note is convertible, at
          Chrome's option, into shares of Common Stock at $0.20 per share; and

              (c) the 20% Note will be cancelled and the Company will execute a
          new convertible note payable to Chrome for $631,667 representing the
          outstanding principal balance of the 20% Note and all accrued interest
          thereon, as of January 31, 2001. Such note is convertible, at Chrome's
          option, into shares of common stock at $0.20 per share.

          In addition, to settle certain legal obligations of the plaintiffs of
          the Derivative Lawsuit, the Company agreed to issue 8.5 million shares
          of common stock to the plaintiffs' attorney.

          ESCROW AGREEMENTS (CHROME)
          During January 2001, Chrome entered into escrow agreements with a
          financial institution for the benefit of the holders of $6,141,250 or
          97.4% of the aggregate principal amount of the Company's outstanding
          convertible debt securities, which, together with the convertible debt
          securities held by Chrome, constitutes 100% of all of the Company's
          outstanding convertible debt securities at that date. These escrow
          agreements provide for the amendment of the outstanding convertible
          debt held by the parties to the escrow agreements so that (i) the
          maturity date is extended to January 31, 2003, (ii) interest will be


                                      F-19

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                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          payable by the Company on January 31, 2002 and at maturity, (iii) the
          conversion price is fixed at $0.20 per share, subject to standard
          anti-dilution adjustments, and (iv) all prior defaults by the Company
          are waived. Substantially all note holders agreed to the amended
          terms. Original notes were canceled and replaced with new debt
          instruments.

          LINES OF CREDIT (CHROME)
          In connection with the Purchase Agreement between Chrome and TCHC, the
          TCHC $4.0 million line of credit was acquired and assumed by Chrome.
          Chrome and the Company subsequently agreed to amend and restate the
          line of credit into a $2.2 million note and Chrome has made available,
          a new working capital line of credit in the amount of $1.8 million at
          terms similar to the TCHC line of credit. In addition, as provided for
          by the settlement of the derivative lawsuit on February 9, 2001,
          Chrome executed an additional $5.0 million senior convertible
          promissory note ("$5.0 Million Line of Credit") bearing interest at a
          rate of 10% per annum, maturing in 2004. The $5.0 million Line of
          Credit is convertible at the lesser of $0.20 per share or such price
          as shall be determined by the Board of Directors of ERHC based on an
          independent determination by a recognized investment banker.

          SETTLEMENT AGREEMENT (PROCURA)
          On February 10, 2001, Chrome entered into an Assignment and Settlement
          Agreement with Procura Financial Consultants, C.C., a South African
          closely-held corporation ("Procura"), and STP Energy Corporation, a
          British Virgin Islands international business company ("STP"). Procura
          and STP had asserted claims and rights against the Company's business
          opportunities and contractual relationships with the Democratic
          Republic of Sao Tome and Principe claiming, among other things, to be
          a joint venture partner of the Company in such relationship and also
          an indirect participant in STPetro, S.A., the national petroleum
          company of the DRSTP in which the Company owns a 49% equity interest.
          Under the Assignment and Settlement Agreement, Procura and STP
          assigned all such claims and rights to Chrome in exchange for $550,000
          cash paid by Chrome. To the extent that any such claims were not
          assigned or not assignable to Chrome, Procura and STP released and
          covenanted not to sue the Company and the DRSTP. Although the Company
          is not a party to the Assignment and Settlement Agreement, Chrome has
          indicated its intention to contribute the Procura and STP assigned
          claims and rights to the Company, subject to approval of the Company's
          board of directors and repayment to Chrome of the cash consideration
          it paid to acquire such claims and rights.

          CONCESSION FEE AGREEMENT
          After the control acquisition by Chrome, the Company initiated
          negotiations with the DRSTP concurrent with the arbitration process.
          On May 21, 2001, the Company and the DRSTP reached a Memorandum of
          Agreement, witnessed by the Federal Republic of Nigeria, ("2001 DRSTP
          Agreement") which replaced the 1997 DRSTP Agreement and suspended the
          arbitration process. The 2001 DRSTP Agreement will be embodied in a
          Consent Award to be issued by the Arbitrator upon the ratification of
          a treaty between the Federal Republic of Nigeria and the DRSTP
          relative to the Joint Development Zone ("JDZ") between the countries.
          Should a treaty between the Federal Republic of Nigeria and DRSTP on
          the joint development of petroleum and other resources in areas of the
          exclusive economic zone of the two nations become effective, the 2001
          DRSTP Agreement will then become effective and be in effect through
          September 30, 2024. Should a treaty not be entered between the two
          countries by May 21, 2003, (i) the 2001 DRSTP Agreement will be null
          and void and (ii) the parties will revert to the 1997 DRSTP Agreement
          and the arbitration proceedings regarding the agreements will resume.
          No further action has been taken by the Company or the DRSTP and no
          treaty between the DRSTP and the Federal Republic of Nigeria has been
          signed. There can be no assurance that a treaty will be entered, or
          that if a treaty is not entered, that the results of any future
          arbitration proceedings will result favorably to the Company.

          This 2001 DRSTP Agreement gives ERHC rights to participate in
          exploration and production activities in both the exclusive
          territorial waters of the DRSTP (its Exclusive Economic Zone "EEZ")
          and an area between DRSTP and the Federal Republic of Nigeria that the
          two nations have designated as a JDZ.


                                      F-20

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          Since the 2001 DRSTP Agreement replaces the 1997 DRSTP Agreement, it
          requires the Company to relinquish its rights arising under the 1997
          DRSTP Agreement including any interest it had in STPetro.

                    If the 2001 DRSTP Agreement becomes effective, the Company
                    will be entitled to the following:

                    o   10% of the DRSTP share of all Profit Oil received from
                        operations conducted in the Joint Development Zone.
                        Profit Oil means the available crude oil and natural gas
                        minus all royalty payments and costs associated with the
                        exploration and development of such oil and gas.

                    o   5% of the DRSTP share of all Signature Bonuses paid by
                        contractors operating within the Joint Development Zone.
                        Signature Bonuses are funds paid by an operator or
                        contractor to acquire the right to enter into an
                        exploration and production agreement.

                    o   A 1.5% overriding royalty interest in all the production
                        of crude oil and natural gas in the Joint Development
                        Zone.

                    o   The option to acquire up to a 15% paid working interest
                        in up to two Blocks of the Company's choice in the Joint
                        Development Zone (this interest option must be exercised
                        by the Company prior to the signature of an exploration
                        and production agreement with an operator or
                        contractor). A Block is an area designated as an
                        individual unit for exploration or production of crude
                        oil and natural gas.

                    o   Subject to certain restrictions, the Company shall
                        receive up to two blocks of the Company's choice in the
                        Exclusive Economic Zone but outside the Joint
                        Development Zone for development (the DRSTP will have
                        the prior right to reserve up to a maximum of the first
                        three Blocks).

                    o   The option to acquire up to a 15% paid working interest
                        in up to two blocks of the Company's choice in the
                        Exclusive Economic Zone but outside the Joint
                        Development Zone (this working interest option must be
                        exercised by the Company prior to the signature of an
                        exploration and production agreement with an operator).
                        The Company would be required to pay its proportionate
                        share of the signature bonus and all other costs related
                        to the exploration and exploitation of the Blocks.

              SHAREHOLDERS' EQUITY
              In addition to the 8.5 million shares of common stock issued to
              the plaintiffs' attorney in connection with the Derivatives
              Settlement, during March 2001 the Company issued 10 million shares
              of common stock to an officer and 18.5 million shares of common
              stock to a consultant for services rendered in connection with the
              February 2001 change of control transaction.

              SEC INVESTIGATION
              During the year ended September 30, 2000, the Company was advised
              by the Enforcement Division of the Securities and Exchange
              Commission ("SEC") that they had begun an investigation of the
              Company's past activities. The Company is cooperating fully with
              the SEC's investigation and has provided documentary support as
              requested. Although the Company has been advised that the focus of
              the investigation is actions taken by the Company prior to August
              1999 there is no assurance that the investigation will not be
              expanded to later dates. As of September 7, 2001 there has been no
              recent contact from the SEC requesting additional information for
              the investigation. Until the Company receives notice informing
              otherwise, the investigation by the SEC remains pending.


                                      F-21

<Page>


                 ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


              PENDING LITIGATION AND OTHER CONTINGENCIES
              Following the August 1999 change in control of the Company, new
              management and the new board of directors have been required to
              expend significant Company resources to settle claims and expenses
              arising out of the conduct of prior management. In addition, the
              Company faces additional unresolved claims and disputes, including
              suits seeking recoveries in excess of $1.0 million brought by
              prior officers for back salary and disputes with third parties
              regarding the Company's rights to proceed under its STPetro
              offshore petroleum development joint venture with DRSTP. The
              Company is defending its position vigorously, but there is no
              certainty that the Company will prevail. The Company is proceeding
              in the hope that a settlement can be reached. As of September 30,
              2000, officers salaries of $1,013,035 have been accrued and
              management believes this amount will be sufficient to settle any
              amount that may be due.

              Additionally, from time to time, certain potential obligations are
              presented to the Company that may have originated during periods
              not under existing management's control. These alleged obligations
              are generally for goods and services for which the Company has no
              record. The Company actively investigates these claims as they
              arise. All known material obligations of the Company have been
              recorded and reflected in the financial statements, but there is
              no certainty that all material claims have been presented to the
              Company nor have the benefits of available statutes of limitations
              been considered, should they apply.

              COMMITMENTS
              The Company entered into a management services agreement with
              Chrome Oil Services, Ltd ("COS") in February 2001. Pursuant to
              that agreement, COS provides the Company with management and
              business development services in addition to providing specified
              services in the areas of refinery maintenance, engineering design,
              and upstream oil industry services. COS provides these services to
              the Company for a management fee of approximately $68,000 per
              month. Messrs. Mba, Echesi, and Ntephe are employees of COS that
              provide services to the Company and these persons receive salaries
              and expense reimbursement from COS, not from the Company.

              The Company's Houston, Texas office is leased by COS, pursuant to
              the management services agreement, and is provided for the Company
              pursuant to such agreement. This lease, for approximately 1,900
              sq. ft. of office space, expires February 2006.

              The Company has not entered into any employment agreements with
              its officers. To date, members of the board of directors have not
              received any compensation, but have been reimbursed for expenses
              incurred in the performance of their duties. In the future, the
              Company may decide to pay its directors.

              The Company currently has four employees that provide services to
              the Company pursuant to the management services agreement with
              COS.




                                      F-22