U.S. Securities And Exchange
                        Commission Washington, D.C. 20549

                                   FORM 10-KSB

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

         For the fiscal year ended December 31, 2003

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

         For the transition period from                 to
                                        ---------------    ---------------

                           Commission File No. 0-6529

                           DOUBLE EAGLE PETROLEUM CO.
                           --------------------------
                 (Name of small business issuer in its charter)

           Maryland                                             83-0214692
---------------------------------                          --------------------
  (State or other jurisdiction                              (I.R.S. Employer
of incorporation or organization)                          Identification No.)

777 Overland Trail (P.O. Box 766) Casper, Wyoming                  82601
-------------------------------------------------                ---------
(Address of principal executive offices)                        (Zip Code)

          Issuer's telephone number, including area code (307) 237-9330
                                                         --------------

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

Title of each class                   Name of each exchange on which registered
     None                                                None
     ----                                                ----

           Securities registered pursuant to Section 12(g) of the Act:
                           $.10 Par Value Common Stock
                                (Title of Class)

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

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B 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. [X]

     Issuer's revenues for the fiscal year ended December 31, 2003 were
$6,138,412.

     The aggregate market value of the voting stock held by non-affiliates
computed based on the average of the closing bid and asked prices of such stock
as of March 19, 2004, was $119,178,808.*

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     The number of shares outstanding of each of the issuer's classes of common
equity as of March 19, 2004 was as follows:

               $.10 Par Value Common Stock             8,464,404

*Without assuming that any of the issuer's directors or executive officers, or
the entity that owns 350,000 shares, is an affiliate, the shares of which they
are beneficial owners have been deemed to be owned by affiliates solely for this
calculation.


<PAGE>


PART I

ITEMS 1 and 2.  DESCRIPTION OF BUSINESS AND PROPERTIES

Overview

     Double Eagle Petroleum Co., which was formed as a Wyoming Corporation on
January 13, 1972, and reincorporated in February 2001 in the State of Maryland,
explores for, develops, produces and sells crude oil and natural gas. The
Company concentrates its activities in areas in which it believes it has
accumulated detailed geologic knowledge and developed significant management
experience. Current areas of exploration and development focus for the Company
include the Green River Basin in southwestern Wyoming, the Powder River Basin in
northeastern Wyoming, the Washakie Basin in south central Wyoming, the Wind
River Basin in central Wyoming, and the Christmas Meadows area in northeastern
Utah. As of December 31, 2003, the Company owned interests in a total of 421
producing wells, with oil constituting approximately seven percent and natural
gas constituting approximately 93 percent of its production (assuming six mcf of
gas production equals one barrel of oil production). The Company also has
undeveloped acreage in other basins and is evaluating the possibility of
additional activity in other areas. See "--Principal Areas Of Oil And Gas
Activity".

     Effective February 4, 2003, the Company changed its fiscal year end from
August 31 to December 31. Unless otherwise stated, references contained in this
report to fiscal year 2002 are based on an August 31 year end and fiscal year
2003 are based on a December 31 year end.

Forward-Looking Statements

     This Form 10-KSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act Of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act Of 1934, as amended (the
"Exchange Act"). All statements other than statements of historical fact,
included in this Form 10-KSB are forward-looking statements. These
forward-looking statements include, without limitation, statements located under
"ITEMS 1 AND 2. DESCRIPTION OF BUSINESS AND PROPERTIES--Business Strategy",
"--Principal Areas Of Oil And Gas Activity", "--Zeolite Mining Claims", and
"--Reserves", "ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Financial Conditions, Liquidity And
Capital Resources", and Notes to the Financial Statements located elsewhere
herein regarding the Company's financial position and liquidity, the amount of
and its ability to make debt service payments, its strategies, financial
instruments, and other matters. In addition, the words "believe," "may,"
"could," "will," "when," "estimate," "continue," "anticipate," "intend,"
"expect" and similar expressions, as they relate to Double Eagle, our business
or our management, are intended to identify forward-looking statements. Although
the Company believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that these expectations will
prove to be correct. Important factors that could cause actual results to differ
materially from the Company's expectations are disclosed in this Form 10-KSB,
including without limitation in the "--Risk Factors" section below and in
conjunction with the forward-looking statements included in this Form 10-KSB.

     The Company's intentions and expectations described in this Form 10-KSB
with respect to possible exploration and other testing activities concerning
properties in which it holds interests may be deemed to be forward-looking
statements. These statements are made based on management's current assessment
of the exploratory merits of the particular property in light of the geological
information available at the time and based on the Company's relative interest
in the property and its estimate of its share of the exploration costs.
Subsequently obtained information concerning the merits of any property as well

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<PAGE>


as changes in estimated exploration cost and ownership interests may result in
revisions to management's expectations and intentions and thus the Company may
delete one or more of these intended exploration activities. Further,
circumstances beyond the Company's control may cause such prospects to be
eliminated from further consideration as exploration prospects. Actual results
could differ materially from these forward-looking statements as a result of,
among other things:

     o    failure to obtain, or a decline in, oil or gas production, or a
          decline in oil or gas prices,
     o    incorrect estimates of required capital expenditures,
     o    increases in the cost of drilling, completion and gas collection or
          other costs of production and operations,
     o    an inability to meet growth projections, and
     o    other risk factors set forth under "--Risk Factors" in this annual
          report.

Business Strategy

     The Company's strategy is to increase its cash flow and oil and gas
reserves by developing and marketing oil and gas prospects. Upon marketing a
prospect to another entity, the Company will attempt to receive a promoted or
carried interest in the initial well for the prospect. The Company will then
participate proportionately in the drilling of any development wells on the
prospect. In prior years, the Company had undertaken to assemble a large acreage
position and sell it to others while retaining a royalty position. By attempting
to direct our focus to generation of geologic prospects with a promoted interest
at the exploratory phase and a participating interest at the development stage,
we are now utilizing more resources for drilling rather than for lease
acquisition and have exposed the Company to more significant potential in each
prospect. In this manner, we believe that in a shorter time period we will be
exposed to a greater number of opportunities to increase reserves and cash flow.

     During fiscal 2003, we expended a significant amount of time evaluating oil
and gas producing properties for acquisition. We believe that acquisitions could
provide a way for the Company to grow, and these efforts are intended to
continue during fiscal 2004. The Company's staff will continue to attempt to
balance these efforts together with its exploration and development plans.

     The Company owns interests varying from very small percentages to large
percentages in its oil and gas prospects. These interests and prospects are
described below under "Principal Areas Of Oil And Gas Activity". They are owned
directly by the Company, and the remaining interests in these prospects are
owned by various partners. During fiscal 2004, we intend to develop our
prospects utilizing our cash balances together with cash flow from operations
and sales of a portion of our interests to industry partners as well as our line
of credit. If our available cash from operations or from sales of interests to
industry partners is lower than anticipated, our activities may be limited to a
lower level than planned. We anticipate that any limitations on our activities
would include expending smaller amounts in our principal areas of activity,
attempting to sell a larger portion of our interests in our prospects, and
retaining a royalty interest or a smaller working interest in those prospects
than we believe we would be able to retain if we were not limited by its
available cash.

     We have focused our efforts on exploration for and development of natural
gas reserves, which constitute approximately 95% of our total existing reserves
as of December 31, 2003. Natural gas is increasing its share of the domestic
energy usage and appears to be the preferred fuel for the future. Furthermore,
our acreage holdings are located in those Rocky Mountain Basins which, according
to the United States Geological Survey, hold a large percentage of the known
undeveloped natural gas resources in the Continental United States.

                                       3

<PAGE>


     Double Eagle has worked to assemble an array of exploration and development
projects that range from offset locations of existing fields to high risk
"wildcat" ventures with large but uncertain potential. We intend to use our
available capital funds on projects having lower risk and to seek to find
industry partners to pay part or all of our drilling costs for the exploration
of the higher risk plays. This strategy is intended to provide the Company and
its stockholders with exposure to virtually all types of plays in the oil and
gas business.

                       Acreage By Wyoming Geologic Basin:
                                               (At December 31, 2003)
                                          Gross Acres           Net Acres
                                          -----------           ---------
Wind River Basin                           37,078                 6,463
Powder River Basin                         44,784                 6,137
Southwestern Wyoming                      169,279                63,286
     Washakie Basin                       125,489                54,444
     Green River Basin                     43,790                 8,842

Principal Areas of Oil And Gas Activity

SUMMARY

     In 2004, Double Eagle will concentrate its efforts on developing the
Eastern Washakie coal bed natural gas play in southwestern Wyoming, continuing
the development of the tight gas sands at the Pinedale Anticline, and pursuing
drilling of the Christmas Meadows Exploratory Project. The Mesa Unit on the
Pinedale Anticline produced 41% of our production in 2003 and constituted 51% of
our proved reserves at year-end. Cow Creek Unit in the Eastern Washakie coal bed
natural gas play produced 35% of our production in 2003 and constituted 35% of
our proved reserves at year-end.

SOUTHWESTERN WYOMING

     Double Eagle owns an interest in 169,279 acres in the natural gas prone
basins of southwestern Wyoming. Two developing areas, the Pinedale Anticline and
the eastern Washakie Coal Bed natural gas play, accounted for over 85% of our
proved reserves as of December 31, 2003, and over 75% of our 2003 production.
Continued drilling is expected in these two areas in 2004.

                               PINEDALE ANTICLINE

     This area is in southwestern Wyoming, 10 miles south of the town of
Pinedale. In the late 1960s, a subsidiary of Questar Corporation, Wexpro,
drilled three wells in the Mesa Unit. The wells encountered gas, but the tight
formations would not yield gas at a commercial rate. Double Eagle entered the
Pinedale Anticline in 1991, acquiring working and overriding royalty interests
from Arco. We also acquired undeveloped leasehold, which we sold to Ultra in
1997, retaining an overriding royalty interest. In September 1998, we acquired
additional working interests from KCS Mountain Resources. The area sat idle
until late 1997 when a new operator, Ultra Petroleum, drilled three wells and
used new fracture stimulation techniques developed 20 miles south in the
prolific Jonah Field. The production rates were substantially greater than with

                                       4

<PAGE>


prior efforts. Wexpro's sister company, Questar Exploration, took over
operations from Ultra on the Mesa Unit lands and began an aggressive development
project. Two of the first three wells in this project were drilled on Double
Eagle's leasehold in the Mesa "B" Participating Area. The first well drilled by
Questar, the Mesa #3, reached total depth of 13,055 feet on October 4, 1999. The
Mesa #3 and the subsequent Mesa #6 well were both completed with initial
production rates in excess of 11 million cubic feet per day. In 2003, the three
Participating Areas of the Mesa Unit produced a total of 19.9 billion cubic feet
of natural gas and 163,000 barrels of oil. Double Eagle's net production from
the Mesa Unit in 2003 was 558,750 thousand cubic feet and 3,844 barrels of oil.

     In the Mesa "A" Participating Area, where Double Eagle has an overriding
royalty interest, there are 12 producing wells and four wells staked on 20 acre
spacing. Double Eagle Petroleum Co. has an overriding royalty interest of .312%
with a net acre position of at least 1.875 acres under a gross of 600 acres in
the "A" Participating Area. These twelve wells produced a total of 6.2 billion
cubic feet of natural gas and 47,707 barrels of oil in 2003. An immaterial
portion of that production is attributable to Double Eagle's interest in the
Mesa "A" Participating Area.

     In the "B" Participating Area, where Double Eagle has 8% working interest
in the shallow and 12.5% working interest in the deep, there are 19 producers
and four wells staked on 20 acre spacing at year-end. Double Eagle Petroleum Co.
has a net acre position of 100 acres under a gross of 800 acres in the "B"
Participating Area. The "B" Participating Area produced 8.4 billion cubic feet
of natural gas and 61,899 barrels of oil in 2003. Double Eagle's attributable
share of this production constitutes more than 90% of Double Eagle's
attributable total production from all three of the Participating Areas of the
Mesa Unit for 2003.

     In the Mesa "C" Participating Area, where Double Eagle has a carried 10%
working interest after payout, eight wells were producing in December 2003, and
five additional locations have been staked. Double Eagle Petroleum Co. has a net
acre position of 65.27 acres under gross of 1,000 acres in the "C" Participating
Area. Payout is on a block basis and will occur whenever profits exceed costs
within the participating area. Therefore, it appears that Double Eagle Petroleum
Co. will bounce in and out of payout throughout the next 12 months as additional
wells are drilled. The eight existing wells produced over 26 million cubic feet
and 300 barrels of oil per day in December 2003 and 5.3 billion cubic feet with
53,805 barrels of oil in 2003. None of the 2003 production was attributable to
Double Eagle's interest because payout of costs had not been achieved.

     At year-end, Double Eagle has working interests or overriding royalty
interests in 4,840 acres in and around this developing natural gas field. An
expansion of the Kern River Pipeline, which was completed in May 2003, connects
this field to a large and expanding gas market in southern California. It is
anticipated that this property will continue to produce significant revenues for
Double Eagle in the future.

EASTERN WASHAKIE COAL BED NATURAL GAS PROJECT

     This play is a 40 mile long trend located in south central Wyoming, from
the town of Baggs at the south end to the town of Rawlins at the north end. Over
100 wells have been drilled by Double Eagle, Warren Resources/PEDCO and Anadarko
to evaluate the potential of the Mesaverde coal beds in this trend. The
Mesaverde coals in this area differ from those found in the Powder River Basin
in that they are thinner zones, but have higher gas content much like the coal
beds found in the Uinta Basin of Utah where there are several very successful
coal bed projects. Nevertheless, the productivity of coal beds is dependent not
only on specific natural gas content, but also on favorable permeability to

                                       5

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natural gas. Several wells in our Eastern Washakie play have shown extended
production of over 500 mcfpd with over one thousand barrels of water per day.
The Company has acquired interests in 52,107 acres (30,765 net acres) and
controls operations on over 10 existing locations and over 90 potential future
locations on 160 acre spacing in the fairway of this play. Double Eagle, Warren
Resources and Anadarko control the majority of the lands in the play. Results
from the early exploratory drilling by these companies have been very
encouraging. The following descriptions are of development areas along the
fairway for this play.

                                 COW CREEK FIELD

     We acquired the Cow Creek Field in the heart of the Eastern Washakie Coal
Bed Natural Gas Project from KCS Mountain Resources in April 1999. The field had
one producing gas well, the Cow Creek #1-12, which was producing, sporadically,
140,000 cubic feet of gas per day from the Dakota and Frontier Formations at
8,000 feet. In the year 2000, we recompleted two wells in the Mesaverde coals
and one was producing at a rate of 140,000 cubic feet per day. We believe that
these are the two initial producing coal bed natural gas wells in southwestern
Wyoming. We drilled four additional locations in August 2001 and began selling
gas in November 2001. The wells encountered excellent gas shows while drilling,
and the coals were cored to evaluate the gas contents. Initial indications are
that the coals contain 200 to more than 300 standard cubic feet of gas per ton
of coal, at a depth of 1,200 feet. We drilled four additional wells in September
2002, and we completed and hooked them up to the sales line in November 2002. We
drilled five additional wells in the fall of 2003, and we anticipate that they
will be producing in April 2004. On March 17, 2004, nine coal bed wells produced
4.848 million cubic feet of gas and sold 4.530 million cubic feet of natural
gas. The strongest well, CCU #13-7, produced 1.247 million cubic feet with 1,075
barrels of water. This well is on the crest of the structure and is flowing
without being pumped. The other eight wells ranged from .143 to .916 million
cubic feet per day of gas with 728 to 2,310 barrels of water per day. The
water/gas ratio is dropping in each of the wells, although the volume of water
has not diminished significantly. The five wells drilled around the existing
producers in the fall of 2003 will help draw down the reservoir pressure, and we
believe they will increase the gas volumes along the crest of the structure. We
look forward to being able to drill additional wells in this pod to properly
test the economic potential of these coals. Additional drilling is currently on
hold until the Environmental Impact Study is completed. This is expected in the
first quarter of 2005. Total production at the Cow Creek Unit in 2003 was
490,618 mcf net to Double Eagle.

                                       6

<PAGE>


                                  SUN DOG UNIT

     The Sun Dog Unit is adjacent to and east of Cow Creek Field. Warren
Resources operates the unit in which Double Eagle has an interest in 1,378
acres. Warren has drilled ten wells in which Double Eagle has no financial
interest. The ten wells have been producing since July 2002 and appear to have
started the desorption process. The success of this area, which is not as
structurally advantaged as Cow Creek, helps in our evaluation of Double Eagle's
similar acreage. Warren, Anadarko and Double Eagle have shared data and
experience in the difficult job of developing this very unique play. Drilling is
scheduled to continue in the Sun Dog Unit after completion of the Environmental
Impact Statement. On March 17, 2004, ten wells at the Sun Dog Unit produced 2.7
million cubic feet of gas and 15,293 barrels of water. The best well, SDU #8-17,
produced 867 mcf and 2,010 barrels of water. As indicated above, Double Eagle
has no interest in any of these ten wells.

                                DOTY MOUNTAIN POD

     The Doty Mountain Pod is a coal bed methane pilot project located six miles
to the northeast of the Cow Creek Field. Double Eagle has staked ten wells on
acreage owned 100% within this pod and drilling was anticipated to begin in
2003, but has been delayed until 2004. Anadarko delayed plans to drill five
wells on its acreage within this pod during the winter and plans to drill in
2004. If the Cow Creek Project is successful, the Doty Mountain Pod will provide
an opportunity for the Company to extend the play, although there is no
assurance that it will be able to do so.

                                 BROWN COW UNIT

     The Brown Cow Unit is located six miles southeast of the Cow Creek Field
and is a coal bed natural gas unit overlying and surrounding the previously
existing Wild Cow Unit that was established for deeper objectives. Double Eagle
purchased a 22.5% working interest in two sections (1,280 acres) in the Wild Cow
Unit (Cherokee Creek Field) in September 1999 from private interests. This
acreage has one producing gas well, which produces 100,000 cubic feet per day
from the Niobrara Formation, and one shut-in well. In a separate transaction,
Double Eagle purchased a 2.25% working interest in 5,266 acres of leases
surrounding these two sections. In the Brown Cow Unit that encompasses 13,769
acres, Double Eagle Petroleum Co. owns a working interest of 2.85% and a net
revenue interest of 2.36%. The Unit operator, Merit Energy, drilled five coal
bed natural gas wells in the Brown Cow Unit during the 2003/2004 winter. The
wells have been completed and should begin producing gas soon. Double Eagle
Petroleum Co. has a 2.85% working interest in these wells.

                                  BLUE SKY UNIT

     Warren Resources has drilled a 12 well pod located six miles south of Cow
Creek Field. Double Eagle owns interests in 10,546 acres adjacent to the Blue
Sky Unit, but no interest in the Unit or the wells. These wells were drilled on
160 acre spacing and have been producing mostly water for the eight months that
they have been producing.

POWDER RIVER BASIN

     The Powder River Basin is located in the northeastern part of Wyoming.
Today, the Basin is one of the most prolific basins in the Rocky Mountain Region
for the production of oil. The Basin is also the largest producer of coal in the
United States. In the last five years, the Basin has hosted the largest gas play
in North America, the Coal Bed Methane play. Some 50,000 wells are planned over

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the next ten years, with most wells proposed to drill to depths of 500 to 2,500
feet. We own working interests in 44,784 acres of leases or minerals in the
Powder River Basin.

                       BUFFALO PROSPECT (COAL BED METHANE)

     Double Eagle has joined a joint venture with J. M. Huber and others with a
43% interest in 14,864 acres (5,763 net acres) near Buffalo, Wyoming on the west
flank of the Powder River Basin. A State Unit was being formed and two 2,000
foot wells were drilled prior to April 25, 2003. The two tests did not find a
thick enough coal to warrant further exploration.

ROCKY MOUNTAIN OVERTHRUST

     The Rocky Mountain Overthrust runs from Canada to Mexico and consists of
many traps created as the Pacific Continental plate was thrust on the
Continental Plate. Traps creating oil and gas fields have been located primarily
in Canada and Wyoming, several large fields have been discovered since the
1970s. The region is still relatively unexplored because, despite large reserve
potential, exploration in this area is very expensive and risky, and seismic
data has not been very reliable.

                           CHRISTMAS MEADOWS PROSPECT

     This prospect is on the north slope of the Uinta Mountains in northeastern
Utah, 30 miles south of Evanston, Wyoming. While shooting a regional seismic
grid in the 1970s, Gulf noted a large dome on one of the seismic lines.
Subsequent seismic by Gulf, American Quasar, Amoco, Chevron and others has
confirmed the dome, but there has not yet been, and there is no assurance that
there will be, confirmation of source rock, reservoir rock, sealing rock strata,
or a favorable time sequence for these factors - and all of these confirmations
are necessary for the existence of a hydrocarbon reservoir. Amoco staked a well
location to test the structure in 1982, but gave up trying to get a drilling
permit in 1986. Chevron then staked a well and fought to get the necessary
permits until 1994, when it gave up and turned the project over to Amerac, who
designated Double Eagle as its agent. We received a drilling permit in the
summer of 1995 and began building the road to the location with our partners,
Prima Oil & Gas and John Lockridge. Amerac, Chevron and Judy Yates have farmed
out their interests to Double Eagle, Prima and Lockridge. One key to getting
this well drilled was the resolution by the United States Forest Service of an
unleased 400 acre tract of land offsetting the drillsite. On November 24, 2003,
Double Eagle and partners leased this 400 acre tract of land and additional
lands. Combined with interests purchased from Chevron, Double Eagle Petroleum
Co. has under lease 41,237 gross acres, 10,150 net acres. Double Eagle owns a
28.49% working interest in the first well with a 25% interest in the farmouts
from Amerac and Yates on the lands in the 23,000 acre Table Top Unit. We intend
to persevere on this project until it is completed.

                               SAGE CREEK PROSPECT

     The Company holds a 60% working interest in 1,892 acres of leases in the
Sage Creek Prospect in the southwestern Montana portion of the overthrust belt.
We believe that this area appears to have potential similar to other areas in
the Wyoming portion of the overthrust belt. Amoco, Exxon and Marathon did
seismic work and drilled wells in this area during the 1980s but found no
commercial deposits. Double Eagle's main emphasis is directed at testing a well
location that was permitted in 1986, but was never drilled by Amoco. This area
is close to a Wilderness Study Area, and the Bureau of Land Management has just

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started an environmental impact statement to address drilling in the area. Since
this process is expected to be completed in August 2005, we decided to drop some
of our leases instead of paying rentals while waiting on the EIS. However, we
did keep the most critical acreage, and those leases are suspended by BLM until
the EIS is completed. This leasehold, while small in size, assures no other
company can develop the play without Double Eagle. The Company plans to continue
to work at getting a well drilled on its acreage.

WIND RIVER BASIN

     Located in central Wyoming, the Wind River Basin is home to Wyoming's first
oil production, which began in 1884. Since that time, numerous fields have been
discovered in the Basin, including two very large natural gas accumulations in
the last five years, the Madden Anticline and the Cave Gulch Fields. We have
interests in 37,078 gross acres and 6,463 net acres of leases in this Basin.


                                MADDEN ANTICLINE

     Madden Anticline is located in central Wyoming, 65 miles west of the town
of Casper. The anticline is 20 miles long and six miles wide laying in the
deepest part of the Wind River Basin. Two large natural gas fields, Madden and
Long Butte, are being drilled and developed on the anticline. We own a
significant working interest in 1,571 acres on the anticline and interests that
are restricted in depth and size in an additional 12,000 acres.

Madden Field

     In 2003, the Madden Field produced over 111 billion cubic feet of natural
gas, making the Field's cumulative production over one trillion cubic feet from
six formations at depths of 3,000 to 25,000 feet. In 2003, our net production at
Madden was 35,462 mcf. The unit's primary operator, Burlington Resources, plans
to drill a number of additional wells to produce from the lower Fort Union and
the deep Madison, as well as a currently drilling 20,000 foot test of the
Frontier Formation. We produce from one lower Fort Union well and one upper Fort
Union well. The Company will produce these two wells to evaluate the potential
for offsets.

Long Butte Field

     The Long Butte Field produced over 2.2 billion cubic feet of gas in 2003
from three producing formations, with 26,266 mcf of this amount was attributable
to our interest in 2003. The field is located on the west end of Madden
Anticline and appears capable of production in several formations including
those being developed in Madden Field. The deep Madison and shallow lower Fort
Union pays have not been developed yet at Long Butte Field. A 3-D seismic survey
has been acquired, and Double Eagle owns between a 2% and 8.3325% working
interest in 1,514 gross acres at Long Butte Unit in individual leases. These
individual working interests are the basis for Double Eagle's 1.13% working
interests in the 10,280 acre Cody Participating Area.

                                 SOUTH SAND DRAW

     The South Sand Draw Field is located in the southern portion of the Wind
River Basin approximately 36 miles southeast of Riverton, Wyoming. We have been
acquiring leases near the Field for five years and currently have 1,936 acres
under lease, in which our working interest is 75%. In October 1999, we and our
partner acquired the final lease and drilled a 6,500 foot test in Spring 2001.

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The South Sand Draw Unit #11-36 was completed as a Muddy Sandstone producer and
in October 2001 began selling gas. Additional drillable prospects exist on the
east side of our leasehold and may be drilled in 2004. Our net production at
South Sand Draw was 66,779 mcf in 2003.

MINING

                                 ZEOLITE CLAIMS

     Since 1972, Double Eagle has owned mining claims covering 320 acres of land
in Lander County, Nevada and 640 acres of land in Owyhee County, Idaho. Due to
natural outcrops, other sampling and analysis, the claims are believed to
overlie significant deposits of clinoptilolite, which is one of 34 naturally
occurring zeolites. Although the existence of these deposits has been indicated
for some time, no commercial mining operations have been conducted on the claims
because significant markets for zeolites have not yet been developed. Zeolites
currently are utilized commercially for small consumption items such as cat
litter, deodorant and aquarium filter material, but the amount of consumption
from these markets has not justified large scale production to date. In 2001, we
had the opportunity to submit bids to supply zeolite for several wastewater
projects. While we were not successful in securing these particular bids, we
will continue to respond to opportunities of this nature. We also joined with
another company to formulate a Zeolite/Bentonite mixture designed as an improved
cat litter. We are awaiting test results on this project. As always, we intend
to continue our efforts to find a large industrial use for our zeolites.

PRODUCTION

     The table below sets forth oil and gas production from our net interests in
producing properties for the year ended December 31, 2003, the four month period
ended December 31, 2002, and the years ended August 31, 2002 and 2001.
<TABLE>
<CAPTION>



                                                                    Oil and Gas Production
                                                              Four months
                                            Year ended           ended           Year ended          Year ended
                                            December 31,      December 31,       August 31,          August 31,
                                              2003               2002               2002               2001
                                           --------------------------------------------------------------------

<S>                                          <C>              <C>                 <C>              <C>
Quantities
   Oil (Bbls)                                 17,344              5,518             20,566             18,605
   Gas (Mcf)                               1,320,850            530,568          1,009,543            518,147
Average Sales Price
   Oil ($/Bbl)                                $28.37             $27.93             $22.68            $25.66
   Gas ($/Mcf)                                 $4.23              $2.09              $1.77             $4.31
Average Production Cost ($/Mcfe)               $0.72              $0.49              $0.53             $0.77

Average Production Tax ($/MCFE)                $0.51              $0.27              $0.24             $0.48
</TABLE>

                                       10

<PAGE>


     Our oil and gas production is sold on the spot market or on the monthly
index except for five firm commitment contracts. The Contracts commit us to sell
669,000 mmbtus of gas related to these contracts during the fiscal year ended
December 31, 2004. The quantity, term and price per mmbtu are as follows:

           Quantity Per Day            Term                       Price
           ----------------            ---------------            -----
           500 MMBTU                   4/1/04-10/31/04            3.83
           500 MMBTU                   1/1/04-12/31/04            4.63
           500 MMBTU                   1/1/04-12/31/04            4.51
           500 MMBTU                   11/1/03-3/31/04            4.85
           500 MMBTU                   11/1/03-10/31/04           4.58

     During the year ended December 31, 2003, purchases by Summit Energy, LLC
represented more than 10 percent of our total revenues. We believe that it would
be able to locate alternate customers in the event of the loss of this customer.

Productive Wells

     The following table categorizes certain information concerning the
productive wells in which the Company owned an interest as of December 31, 2003.
We operate 22 wells in the State of Wyoming. We do not operate wells in any
other State.

    PRODUCTIVE WELLS
    --------------------------------------------------------------------------
                                 OIL                               GAS
                        Gross           Net               Gross            Net
                       -------------------------------------------------------

    COLORADO            -----            -----                2          .0590
    MISSISSIPPI             2             .0009           -----          -----
    MONTANA                 2             .0960           -----          -----
    NORTH DAKOTA           22             .27147          -----          -----
    OKLAHOMA            -----            -----                2          -----
    UTAH                -----            -----                1          .0200
    WYOMING                85            5.9897             305        21.27812
                           --            ------             ---        --------

    TOTAL                 111            6.35807            310        21.35712

Drilling, Acquisitions and Reserve Replacement Costs

     From the period beginning September 1, 2001 through December 31, 2003, we
added proved reserves from acquisitions, extensions and discoveries of
approximately 16,454,196 MCFE. Acquisitions, exploration and development
expenditures during this period were approximately $15,104,543, resulting in an
average annual reserve replacement cost of approximately $.92 per MCFE over that
three year period.

     We drilled or participated in the drilling of wells as set forth in the
following table for the periods indicated. In certain of the wells in which we
participate, we have an overriding royalty interest and no working interest.

                                       11

<PAGE>
<TABLE>
<CAPTION>


  WELLS DRILLED
  ----------------------------------------------------------------------------------------------------------------
                            12 months ended         4 months ended          12 months ended      12 months ended
                            December 31, 2003       December 31, 2002       August 31, 2002      August 31, 2001
                            -------------------     -------------------     ----------------     -----------------
                            Gross           Net       Gross         Net      Gross       Net     Gross        Net
        EXPLORATORY
  -------------------------
<S>                             <C>         <C>         <C>         <C>         <C>       <C>       <C>        <C>
            Oil                 0           0           0           0           0         0         0          0
            Gas                 1          .02          0           0           1        .13        1         .75
         Dry Holes              2          .86          1          .02          1        .05        0          0

         Subtotal               3          .88          1          .02          2        .18        1         .75

        DEVELOPMENT
  -------------------------
            Oil                 2          .04          0           0           4        .08        6         .01
            Gas                 34         5.37         4          .01         45        5.63       23        .76
         Dry Holes              0           0           0           0           0         0         0          0

          Subtotal              36         5.41         4          .01         49        5.71       29        .77

           TOTALS               39         6.29         5          .03         51        5.89       30       1.52
  -------------------------

     All our drilling activities are conducted on a contract basis with
independent drilling contractors.



RESERVES

     The reserves for the 12/31/03 and 12/31/02 reports that are presented below
were reviewed by Netherland, Sewell and Associates. The reserves presented below
regarding oil and gas reserves as of 8/31/02 and 8/31/01 were prepared by J.
Stephen Mercer, an outside consulting petroleum engineer with Inverness
Management and Advisory Services, Inc., and reviewed by Ryder Scott Company, LP,
certified petroleum engineers, with the exception of the Cow Creek reserves in
the 8/31/02 report. The Cow Creek reserves for that report were reviewed by
Netherland, Sewell and Associates after previously having been reviewed by Ryder
Scott Company. Management believes now and believed at the time that Netherland
Sewell and Associates was better qualified to review the reserve information of
its Cow Creek coal bed natural gas development. Ryder Scott gave remaining
proved developed producing reserves of 875.5 million cubic feet for five initial
wells at Cow Creek and no proved undeveloped reserves. Netherland Sewell &
Associates gave remaining proved developed producing reserves of 892.1 million
cubic feet for the five initial wells and 2,053.8 million cubic feet for seven
proved undeveloped locations. All reserves are located within the continental
United States. The reserve estimates are developed using geological and
engineering data and interests and burdens information developed by the Company.
Reserve estimates are inherently imprecise and are continually subject to
revisions based on production history, results of additional exploration and
development, prices of oil and gas, and other factors. The outside reserve
engineers reviewed over 98% of our reserves. The notes following the table
should be read in connection with the reserve estimates.

                                       12

<PAGE>


                                              Estimated Proved Reserves (1) (2)
                                              --------------------------------------------------------------------------
                                                  Year ended          4 months ended      Year ended       Year ended
                                                  12/31/2003          12/31/2002          8/31/2002        8/31/2001
                                              ------------------- ------------------- ---------------- -----------------

Proved Developed Oil Reserves (Bbls)                    179,228             195,771          184,953            169,944
Proved Undeveloped Oil Reserves (Bbls)                   29,729              26,702            5,100             19,488
Total Proved Oil Reserves (Bbls)                        208,957             222,473          190,053            189,432
Proved Developed Gas Reserves (Mcf)                  16,055,045          11,699,336        8,718,132          6,741,357
Proved Undeveloped Gas Reserves (Mcf)                 6,763,935           5,110,828        2,784,100          2,864,284
Total Proved Gas Reserves (Mcf)                      22,818,980          16,810,164       11,502,232          9,605,641
Total Proved Gas Equivalents (Mcfe) (3)              24,072,722          18,145,002       12,642,550         10,742,233
Present Value Of Estimated Future Net
Revenues                                            $56,325,300         $17,945,900       $7,672,000         $7,598,000
  Before income taxes  discounted at  10%(4)


(1)  The Company's annual reserve reports are prepared as of the last day of the
     Company's fiscal year.

(2)  The present value of estimated future net revenues as of each period shown
     was calculated using oil and gas prices being received by each respective
     property as of that date. The average prices utilized for August 31, 2002
     and 2001, respectively, were $1.99 per mcf of gas and $26.15 per barrel of
     oil (2002), $2.20 per mcf and $25.31 per barrel of oil (2001). The average
     prices utilized for December 31, 2003 and 2002, respectively, were $5.75
     per mcf and $30.20 per barrel of oil (2003), $3.13 per mcf and $25.41 per
     barrel of oil (2002).

(3)  Oil is converted to mcf of gas equivalent at one barrel equals 6,000 cubic
     feet.

(4)  This information, the "present value of estimated future net revenues
     before income taxes discounted at 10%", is referred to as the "Standardized
     Measure".

     Reference should be made to the supplemental oil and gas information
included in this Form 10-KSB for additional information pertaining to the
Company's proved oil and gas reserves as of the end of each of the last three
fiscal years.

ACREAGE

     The following tables set forth the gross and net acres of developed and
undeveloped oil and gas leases in which the Company had working interests and
royalty interests as of December 31, 2003. The category of "Undeveloped Acreage"
in the tables includes leasehold interests that may have been classified as
containing proved undeveloped reserves.

                                       13

<PAGE>


 WORKING INTERESTS
 -------------------------------------------------------------------------------------------------------------------
                          Developed                         Undeveloped
                          Acreage (1)                       Acreage (2)                   Total
                          ------------------------------------------------------------------------------------------

 STATE                    GROSS            NET              GROSS           NET           GROSS            NET
                          ------------------------------------------------------------------------------------------

 COLORADO                        0                0              80            80               80               80
 MONTANA                        29                1           2,757         1,222            2,786            1,223
 NORTH DAKOTA                2,240               49           2,560            64            4,800              113
 UTAH                          637               16          41,237        10,150           41,874           10,166
 WYOMING                    68,200            3,872         145,593        71,862          213,793           75,734

 TOTAL                      71,106            3,938         192,227        83,378          263,333           87,316

ROYALTY INTERESTS
--------------------------------------------------------------------------------------------------------------------
                           Developed                        Undeveloped
                           Acreage (1)                      Acreage (2)                  Total
                           -------------------------------- ---------------------------- ---------------------------

STATE                      GROSS           NET              GROSS           NET          GROSS             NET
                           --------------- ---------------- --------------- ------------ ----------------- ---------

COLORADO                       155                5           1,920          320             2,075             325
MISSISSIPPI                    160                1               0            0               160               1
MONTANA                        611               15               0            0               611              15
NORTH DAKOTA                 1,523               40           5,313          243             6,836             283
OKLAHOMA                       640                2               0            0               640               2
UTAH                             0                0          51,311           51            51,311              51
WYOMING                      8,640              144          29,992          813            38,632             957

TOTAL                       11,729              207          88,536        1,427           100,265           1,634
</TABLE>

(1)  Developed acreage is acreage assigned to producing wells for the spacing
     unit of the producing formation. Developed acreage in certain of the
     Company's properties that include multiple formations with different well
     spacing requirements may be considered undeveloped for certain formations,
     but have only been included as developed acreage in the presentation above.

(2)  Undeveloped acreage is lease acreage on which wells have not been drilled
     or completed to a point that would permit the production of commercial
     quantities of oil and gas regardless of whether such acreage contains
     proved reserves.

     Substantially all of the leases summarized in the preceding table will
expire at the end of their respective primary terms unless the existing leases
are renewed or production has been obtained from the acreage subject to the
lease prior to that date, in which event the lease will remain in effect until
the cessation of production. The following table sets forth the gross and net
acres subject to leases summarized in the preceding table that will expire
during the periods indicated:

                                       14

<PAGE>


                                              Acres Expiring
                                              ----------------------------
                                              Gross          Net
                                              ----------------------------
Twelve Months Ending:
    December 31, 2004                                21,116         12,729
    December 31, 2005                                16,183         13,519
    December 31, 2006 and later                     326,299         62,702



Risk Factors

     In evaluating the Company, careful consideration should be given to the
following risk factors, in addition to the other information included or
incorporated by reference in this annual report. In addition, the
"Forward-Looking Statements" located in this Form 10-KSB describe additional
uncertainties associated with our business and the forward-looking statements
included or incorporated by reference. Each of these risk factors could
adversely affect our business, operating results and financial condition, as
well as adversely affect the value of an investment in our common stock.

We have had operating losses in the past.

     We have reported net losses for the fiscal years ended August 31, 2002 and
for other previous years, as well as for the 4-month period ended December 31,
2002. There is no assurance that our current or future operations will be
profitable.

We depend on a key employee.

     We are highly dependent on the services of Stephen H. Hollis, our Chief
Executive Officer and President. The loss of Mr. Hollis could have a material
adverse effect on us. We do carry "key man" life insurance on Mr. Hollis in the
amount of $1,000,000.

We cannot predict the future price of oil and natural gas.

     Our revenues, profitability and liquidity are substantially dependent upon
prevailing prices for natural gas and oil, which can be extremely volatile and
in recent years have been depressed by excess total domestic and imported
supplies. Prices also are affected by actions of state and local agencies, the
United States and foreign governments, and international cartels. In addition,
sales of oil and natural gas are seasonal in nature, leading to substantial
differences in cash flow at various times throughout the year. These external
factors and the volatile nature of the energy markets make it difficult to
estimate future prices of oil and natural gas. Any substantial or extended
decline in the price of oil and/or natural gas would have a material adverse
effect on our financial condition and results of operations, including reduced
cash flow and borrowing capacity. All of these factors are beyond our control.

                                       15

<PAGE>


We could be adversely impacted by changes in the oil and gas market.

     The marketability of our oil and gas production depends in part upon the
availability, proximity and capacity of gas gathering systems, pipelines and
processing facilities. Federal and state regulation of oil and gas production
and transportation, general economic conditions, changes in supply and changes
in demand all could adversely affect our ability to produce and market its oil
and natural gas. If market factors were to change dramatically, the financial
impact could be substantial because we would incur expenses without receiving
revenues from the sale of production. The availability of markets is beyond our
control.

We may be unable to find additional reserves.

     Our revenues depend on whether we acquire or find additional reserves.
Unless we acquire properties containing proved reserves or conduct successful
exploration and development activities, or both, our proved reserves will
decline as reserves are produced. Our planned exploration and development
projects may not result in significant additional reserves. We may be unable to
drill productive wells at low reserve replacement costs.

Our stock price may be adversely impacted by our choice of accounting method.

     We use the "successful efforts" method for capitalizing costs of completed
oil and gas wells. Under the successful efforts method, only the costs
attributable to successful exploratory wells and the costs of development wells
within a producing field are reflected in property and equipment. Producing and
non-producing properties are evaluated periodically and, if conditions warrant,
an impairment allowance is provided. The impairment allowance is a one-time
charge to earnings which does not impact cash flow from operating activities,
but may result in a negative impression in the investment community and lower
stock prices.

Oil and gas operations are inherently risky.

     The nature of the oil and gas business involves a variety of risks,
including the risks of operating hazards such as fires, explosions, cratering,
blow-outs, and encountering formations with abnormal pressures. The occurrence
of any of these risks could result in losses. We maintain insurance against
some, but not all, of these risks. Management believes that the level of
insurance against these risks is reasonable and is in accordance with customary
industry practices. The occurrence of a significant event, however, that is not
fully insured could have a material adverse effect on our financial position and
results of operations.

New government regulation and environmental risks could increase our costs.

     The production and sale of oil and gas are subject to a variety of federal,
state and local government regulations. These include:

     o    the prevention of waste
     o    the discharge of materials into the environment
     o    the conservation of oil and natural gas, pollution, permits for
          drilling operations, drilling bonds, reports concerning operations
     o    the spacing of wells
     o    the unitization and pooling of properties

     Many jurisdictions have at various times imposed limitations on the
production of oil and gas by restricting the rate of flow for oil and gas wells
below their actual capacity to produce. Because current regulations covering our

                                       16

<PAGE>


operations are subject to change at any time, and despite our belief that we are
in substantial compliance with applicable environmental and other government
laws and regulations, we may incur significant costs for compliance in the
future.

Our prices may be impacted adversely by new taxes.

     The federal, state and local governments in which we operate impose taxes
on the oil and gas products we sell. In the past, there has been a significant
amount of discussion by legislators and presidential administrations concerning
a variety of energy tax proposals. In addition, many states have raised state
taxes on energy sources and additional increases may occur. We cannot predict
whether any of these measures would have an adverse impact on oil and natural
gas prices.

Our reserves and future net revenues may differ significantly from our
estimates.

     This Form 10-KSB contains estimates of our reserves and future net
revenues. We prepared these estimates and they were then reviewed by an
independent petroleum engineer. The estimates of reserves and future net
earnings are not exact and are based on many variable and uncertain factors;
therefore, the estimates may vary substantially depending, in part, on the
assumptions made and may be subject to adjustment either up or down in the
future. The actual amounts of production, revenues, taxes, development
expenditures, operating expenses, and quantities of recoverable oil and gas
reserves to be encountered may vary substantially from the estimated amounts. In
addition, estimates of reserves also are extremely sensitive to the market
prices for oil and gas.

There is limited liquidity in our shares.

     There is a limited market for our shares and an investor cannot expect to
liquidate his investment regardless of the necessity of doing so. The prices of
our shares are highly volatile. This could have an adverse effect on developing
and sustaining the market for our securities. In addition, there is no assurance
that an investor will be in a position to borrow funds using our shares as
collateral.

ITEM 3. LEGAL PROCEEDINGS

     We are not a party to any pending legal proceeding (nor is our property
subject of a pending legal proceeding) other than routine litigation incidental
to our business that may arise from time to time.

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

     Not applicable.

                                       17

<PAGE>


PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Market Information. Our Common Stock is traded in the over-the-counter
market and listed on the Nasdaq SmallCap Stock Market under the symbol "DBLE".

     The range of high and low sales prices for our Common Stock for each
quarterly period from July 1, 2001 through December 31, 2003, as reported by
Nasdaq, is as follows:

                                                   Common Stock ("DBLE")
                                                   ---------------------
                                                   High             Low

   July 1, 2001 - September 31, 2001             $   4.99      $   3.22
   October 1, 2001 - December 31, 2001               3.77          3.01

   January 1, 2002 - March 31, 2002                  4.61          3.44
   April 1, 2002 - June 30, 2002                     5.10          4.05
   July 1, 2002 - September 30, 2002                 4.05          2.78
   October 1, 2002 - December 31, 2002               6.11          3.60

   January 1, 2003 - March 31, 2003                  7.65          5.54
   April 1, 2003 - June 30, 2003                     7.95          6.04
   July 1, 2003 - September 30, 2003                12.20          7.40
   October 1, 2003 - December 31, 2003              16.46         10.11

     On March 19, 2004, the closing sales price for the Common Stock as reported
by Nasdaq was $14.08 per share.

     Holders. On March 19, 2004, the number of holders of record of common stock
was 1,684.

     Dividends. We have not paid any cash dividends since our inception. We
anticipate that all earnings will be retained for the development of our
business and that no cash dividends will be paid on our Common Stock in the
foreseeable future.

                                       18


<PAGE>


Equity Compensation Plan Information

     The following table provides information as of December 31, 2003 with
respect to shares of common stock that may be issued under Double Eagle's
existing equity compensation plans. We have four equity compensation plans--the
1996 Stock Option Plan, the 2000 Stock Option Plan, the 2002 Stock Option Plan
and the 2003 Stock Option and Compensation Plan.
<TABLE>
<CAPTION>


                                                                                            (c) Number of
                                    (a) Number of                (b)                        securities remaining
                                    securities to be             Weighted-average           available for future
                                    issued upon exercise         exercise price of          issuance under equity
                                    of outstanding               outstanding                compensation plans
                                    options, warrants            options, warrants          (excluding securities
Plan category                       and rights                   and rights                 reflected in column (a)
----------------------------        ----------------------       -------------------        ------------------------
<S>                                      <C>                         <C>                           <C>
Equity Compensation plans
approved by security
holders                                     180,626                $       5.43                     564,728 (1)

Equity Compensation plans
not approved by security
holders                                  80,860 (2)                $       4.54                         -0-

Total                                       261,486                $       5.15                     564,728
</TABLE>


(1) Represents no shares available for issuance under the 1996 Stock Option
Plan, no shares for issuance under the 2000 Stock Option Plan, 288,728 shares
available for issuance under the 2002 Stock Option Plan and 280,000 shares
available for issuance under the 2003 Stock Option and Compensation Plan.

(2) Certain options were granted to directors and officers outside of our plans
which were not approved by shareholders. These options vest over a three year
period from the grant date and expire three to five years from the grant date.

                                       19


<PAGE>


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

Introduction

     This discussion summarizes the significant factors affecting our operating
results, financial condition, and cash flows of Double Eagle Petroleum Co., for
the fiscal year ended August 31, 2002, the four month period ended December 31,
2002 and the fiscal year ended December 31, 2003. As previously indicated, we
have changed our fiscal year end from August 31 to December 31 accordingly, are
reporting a separate interim four-month period between the fiscal year ended
August 31, 2002 and the fiscal year ended December 31, 2003. This discussion
should be read in conjunction with the Letter to Stockholders, Financial
Statements and Notes to Financial Statements included in this Annual Report on
Form 10-KSB.

Overview

     The twelve months ended December 31, 2003 resulted in an increase in our
annual revenues to $6,138,412 primarily as a result of increasing oil and gas
production to 1,420,631 mcf equivalent combined with higher natural gas and oil
prices. For the four month period ended December 31, 2002 our revenues were
$1,255,218 and for the twelve month period ended August 31, 2002 our revenues
were $2,270,163.

     The higher revenues for the twelve months ended December 31, 2003 resulted
in net income of $971,822 as compared with a loss of ($107,788) for the four
month period ended December 31, 2002 and a loss of ($2,847,101) for the twelve
month period ended August 31, 2002. Impairments of properties in the twelve
month period ended December 31, 2003 were $170,309 as compared with no
impairments for the four month period ended December 31, 2002 and $2,040,844 for
the twelve month period ended August 31, 2002.

Operating Results

Year Ended 12/31/03 Compared with Four Month Period Ended 12/31/02

     Continued successful development drilling at the Cow Creek and Mesa Units
combined with higher oil and gas prices to create an increase of net cash
provided by operating activities to $3,238,885 for the twelve months ended
December 31, 2003. Net cash used in operating activities for the four months
ended December 31, 2002 was $(631,154). Production costs and taxes for the
twelve month period ended December 31, 2003 were $1,026,591 and $731,418
respectively. For the four month period ended December 31,2002, production costs
were $277,416 and production taxes were $150,580. Exploration costs for the
twelve month period ended December 31, 2003 were $231,244, primarily because of
seismic work at the Christmas Meadows Prospect and two non-operated dry
exploratory wells in the Powder River Basin. Exploration costs for the four
month period ended December 31, 2002 were $44,239. Total costs for the twelve
month period ended December 31, 2003 were $5,002,461 and $1,311,676 for the four
month period ended December 31, 2002. Net income was $971,822 for the twelve
months ended December 31, 2003 and a loss of ($107,788) for the four month
period ended December 31, 2002.

                                       20

<PAGE>


Year Ended 12/31/03 Compared with Year Ended 8/31/02

We continued to increase natural gas reserves and producing wells during the
year ended December 31, 2003. A 25 percent increase in production and
significantly higher gas prices created net income of $971,822 in 2003 as
compared with a loss of ($2,873,508) for the 12 months ended August 31, 2002.
Reserves increased 89% from August 31, 2002 to December 31, 2003. We invested
$7,527,000 in successful development wells in 2003 as compared with $4,934,800
in the year ended August 31, 2002 considers costs included in accounts payable
at year end. General and administrative costs rose 35% from $920,466 for the 12
months ended August 31, 2002 to $1,249,520 for the 12 months ended December 31,
2003 as we added employees and a Denver office. Depreciation and depletion rose
42% with the increased production. Impairment of producing properties fell to
$170,309 in 2003 from $2,040,844 in the 12 months ended August 31, 2002.

The Year Ended 8/31/2002 Compared with Year Ended 8/31/2001

We increased production of oil and gas, as measured by thousand cubic feet
equivalents (Mcfe's), by 80% for fiscal year 2002 as compared with fiscal year
2001. The increase in Mcf's in 2002 can be attributed to further development in
the Mesa and Cow Creek Units and the development of South Sand Draw. In spite of
the significant increase in production in 2002, lower gas prices resulted in a
decline in revenues from oil and gas sales of 12% as compared with 2001.

The increase in production volume led to an increase in the costs of oil and gas
production in 2002. Production costs incurred were $877,000 for 2002 as compared
with $787,000 for 2001. Production costs as a percentage of oil and gas sales
were 39% and 31% for the fiscal years 2002 and 2001, respectively. Exploration
expenses were 6% of oil and gas sales in each of the years 2002 and 2001.
Depreciation and depletion expenses incurred during 2002 amounted to $1,117,000,
as compared with $506,000 incurred in 2001. Depreciation and depletion in 2002
was 49.5% of oil and gas sales revenues as compared with 19.7% in 2001. This is
a result of proved reserve estimates based on low natural gas prices on August
31, 2002 and a lack of history in Pinedale and Cow Creek to guide the reserve
estimates. On December 1, 2002, gas prices in the Rocky Mountains had increased
150% from August 31, 2002. General and administrative expenses experienced an
increase in 2002 of $156,164 over the prior year. This increase is attributed
mainly to additional personnel costs associated with the development of the Cow
Creek field. We also incurred $31,000 in bad debts on sales of gas as a result
of the Enron collapse. We recognized impairments of an aggregate of $2,041,000
on the South Sand Draw, Graham, and Madden fields in 2002. There were no
impairments recognized in 2001. The impairments in 2002 were primarily a result
of low natural gas prices, a failed re-completion attempt at Madden, cost
overruns at South Sand Draw and successful work on the Graham well that occurred
after year-end.

     The combination of lower gas prices, the increase in depreciation and
depletion expenses, and the impairments recognized resulted in a pre-tax net
loss of $2,873,508 in 2002. During 2001, we experienced pre-tax income of
$277,701.

Liquidity and Capital Resources
-------------------------------

     Our principal sources of capital have been the sale and issuance of common
stock, the internal generation of cash flow from operations, and the utilization
of a revolving line of credit. During 2003, we completed a private placement of
our common stock in which we sold 1,295,000 shares of common stock that
generated net proceeds of $11.6 million. We also drew down our revolving line of
credit by $2.85 million before repaying the full line in December 2003.

                                       21

<PAGE>


     The Company intends to continue its development program in 2004. Projects
in the Eastern Washakie Basin, near the Company's current production and new
development drilling in the Mesa Unit on the Pinedale Anticline of southwestern
Wyoming, are budgeted at $10 million. The Company will use existing cash
reserves and cash flow from operations to finance a portion of capital spending
requirement. The remaining portion of the 2004 development program is planned be
financed through the Company's existing $9 million line of credit.

     Net cash provided by (used in) operating activities was $3,238,885 in the
year ended December 31, 2003, $(631,154) for the four months ended December 31,
2002, and $119,000 for the twelve months ended August 31, 2002. Our net working
capital increased by $661,000 during 2003, from $(380,000) at December 31, 2002
to $281,000 at December 31, 2003. Our cash and cash equivalents increased by
$2,788,098in 2003, from $132,748 at December 31, 2002 to $2,920,846 at December
31, 2003.

     Net cash used in investing activities was $8,768,682 for the year ended
December 31, 2003, $1,348,144 for the four months ended December 31, 2002, and
$5,033,724 for the year ended August 31, 2002. Investing activities for 2003
included $6,680,995 for development drilling and field facilities at Cow Creek.
We also acquired additional interest in existing acreage, an interest in new
acreage near the Cow Creek field in the Eastern Washakie Basin, and interests in
other areas for $2,143,000. We expended $749,000 in new development drilling in
the Mesa Unit in the Pinedale Anticline of southwestern Wyoming.

     Net cash provided by financing activities was $8,318,000 for the year ended
December 31, 2003, $2,023,000 for the four months ended December 31, 2002, and
$4,923,000 for the year ended August 31, 2002. Sources of financing during 2003
consisted of $11,594,000 from the issuance of a private placement of common
stock and $974,000 from the exercise of stock options and warrants, offset by a
$4,250,000 repayment on the revolving line of credit.



Critical Accounting Policies And Estimates
------------------------------------------

     We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our Financial
Statements.

Reserve Estimates:

     Our estimates of oil and natural gas reserves, by necessity, are
projections based on geological and engineering data, and there are
uncertainties inherent in the interpretation of such data as well as the
projection of future rates of production and the timing of development
expenditures. Reserve engineering is a subjective process of estimating
underground accumulations of oil and natural gas that are difficult to measure.
The accuracy of any reserve estimate is a function of the quality of available
data, engineering and geological interpretation and judgment. Estimates of
economically recoverable oil and natural gas reserves and future net cash flows
necessarily depend upon a number of variable factors and assumptions, such as
historical production from the area compared with production from other
producing areas, the assumed effects of regulations by governmental agencies and
assumptions governing future oil and natural gas prices, future operating costs,
severance and excise taxes, development costs and workover and remedial costs,
all of which may in fact vary considerably from actual results. For these

                                       22

<PAGE>


reasons, estimates of the economically recoverable quantities of oil and natural
gas attributable to any particular group of properties, classifications of such
reserves based on risk of recovery, and estimates of the future net cash flows
expected there from may vary substantially. Any significant variance in the
assumptions could materially affect the estimated quantity and value of the
reserves, which could affect the carrying value of our oil and gas properties
and/or the rate of depletion of the oil and gas properties. Actual production,
revenues and expenditures with respect to our reserves will likely vary from
estimates, and such variances may be material.

     Many factors will affect actual net cash flows, including:

     o    the amount and timing of actual production;

     o    supply and demand for natural gas;

     o    curtailments or increases in consumption by natural gas purchasers;
          and

     o    changes in governmental regulations or taxation.

Property, Equipment and Depreciation:

     We follow the successful efforts method of accounting for oil and gas
properties. Under this method all productive costs incurred in connection with
the exploration for and development of oil and gas reserves are capitalized.
These capitalized costs include lease acquisition, geological and geophysical
work, delay rentals, drilling, completing and equipping oil and gas wells,
including salaries, benefits and other internal salary related costs directly
attributable to these activities. Costs associated with production and general
corporate activities are expensed in the period incurred. If the net investment
in oil and gas properties exceeds its net estimated realizable future value, the
excess is charged to expense as impairment. Normal dispositions of oil and gas
properties are accounted for as adjustments of capitalized costs, with no gain
or loss recognized. As a result, we are required to estimate our proved reserves
at the end of each quarter, which is subject to the uncertainties described in
the previous section.

                                       23

<PAGE>




DOUBLE EAGLE PETROLEUM CO.

ITEM 7. FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION

Index
                                                                           Page
                                                                         Numbers
                                                                         -------
(1)      Independent Auditor's Reports                                     F-1

         Financial Statements:
            Balance Sheets as of December 31, 2003 and 2002                F-3

            Statements of Operations for the year ended                    F-4
              December 31, 2003, four months ended December 31, 2002
              and the year ended August 31, 2002

            Statements of Changes in Stockholders' Equity for the year     F-5
              ended December 31, 2003, four months ended December 31, 2002
              and the year ended August 31, 2002

            Statements of Cash Flows for the year ended December 31,       F-6
              2003, four months ended December 31, 2002
              and  the year ended August 31, 2002

            Notes to Financial Statements                             F-7 - F-17

(2)      Supplemental Oil and Gas Information (Unaudited)            F-18 - F-20


                                     F-1(a)
<PAGE>


INDEPENDENT AUDITOR'S REPORT



The Shareholders and Board of Directors
Double Eagle Petroleum Co.
Casper, Wyoming

We have audited the accompanying balance sheets of Double Eagle Petroleum Co. as
of December 31, 2003 and 2002 and the related statements of operations,
stockholder's equity, and cash flows for the year ended December 31, 2003 and
the four months ended December 31, 2002. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Double Eagle Petroleum Co. as
of December 31, 2003 and 2002 and the results of its operations and its cash
flows for the year ended December 31, 2003 and the four months ended December
31, 2002, in conformity with accounting principles generally accepted in the
United States of America.

HEIN & ASSOCIATES LLP
Denver, Colorado
March 4, 2004

                                       F-1


<PAGE>


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT



The Stockholders and Board of Directors
Double Eagle Petroleum Co.

We have audited the accompanying balance sheet of Double Eagle Petroleum Co. as
of August 31, 2002, and the related statements of operations, changes in
stockholders' equity, and cash flows for the year ended August 31, 2002. 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 audit.

We conducted our audit 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 amount and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Double Eagle Petroleum Co. as
of August 31, 2002, and the results of its operations and its cash flows for the
year ended August 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.

                                    /s/ Lovelett, Skogen & Associates, P.C.

Casper, Wyoming
December 9, 2002


                                       F-2


<PAGE>



<PAGE>
<TABLE>
<CAPTION>


DOUBLE EAGLE PETROLEUM CO.
BALANCE SHEETS

December 31, 2003 and 2002                                                         2003                   2002
------------------------------------------------------------------------------------------------------------------
                                    ASSETS
<S>                                                                            <C>                    <C>
CURRENT ASSETS
    Cash and cash equivalents                                                  $  2,920,846           $    132,748
    Accounts receivable                                                           1,049,643                873,894
     Other current assets                                                            50,730                 25,166
                                                                               ------------           ------------
         Total Current Assets                                                     4,021,219              1,031,808

PROPERTIES AND EQUIPMENT
    Developed properties                                                         24,376,469             16,655,447
    Undeveloped properties                                                        3,017,954                942,118
    Corporate and other                                                             441,773                299,568
                                                                               ------------           ------------
                                                                                 27,836,196             17,897,133
    Less accumulated depreciation, depletion and impairment                      (8,533,685)            (6,985,842)
                                                                               ------------           ------------
         Net Properties and Equipment                                            19,302,511             10,911,291
                                                                               ------------           ------------

OTHER ASSETS                                                                        631,187                 11,125
                                                                               ------------           ------------

         TOTAL ASSETS                                                          $ 23,954,917           $ 11,954,224
                                                                               ============           ============

                                    LIABILITIES
CURRENT LIABILITIES
    Accounts payable                                                           $  3,256,375           $  1,201,570
    Accrued expenses                                                                139,502                 65,421
    Accrued production taxes                                                        344,234                145,244
                                                                               ------------           ------------
         Total Current Liabilities                                                3,740,111              1,412,235
                                                                               ------------           ------------

LONG-TERM DEBT                                                                         --                4,250,000
ASSET RETIREMENT OBLIGATION                                                         358,500                   --
                                                                               ------------           ------------

         Total Liabilities                                                        4,098,611              5,662,235
                                                                               ------------           ------------

                                    STOCKHOLDERS' EQUITY
Common stock, $.10 par value; 10,000,000 shares authorized; issued
  and outstanding 8,334,404 shares in 2003 and 6,521,518 in 2002                    833,440                652,152
Capital in excess of par value                                                   20,197,390              7,786,183
Accumulated Deficit                                                              (1,174,524)            (2,146,346)
                                                                               ------------           ------------

         Total Stockholders' Equity                                              19,856,306              6,291,989
                                                                               ------------           ------------

         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $ 23,954,917           $ 11,954,224
                                                                               ============           ============
See accompanying notes to financial statements

                                                          F-3


<PAGE>


DOUBLE EAGLE PETROLEUM CO.
STATEMENTS OF OPERATIONS

For the year ended December 31, 2003, the 4 month period            Year ended          4 mo.  ended       Year ended
ended December 31, 2002, the year ended August 31, 2002             December 31,        December 31,       August 31,
                                                                    2003                2002               2002
-------------------------------------------------------------------------------------------------------------------------

Revenues
    Oil and gas sales                                               $ 6,080,880          $ 1,251,120          $ 2,255,919
    Other income                                                         57,532                4,098               14,244
                                                                    -----------          -----------          -----------

         Total Revenues                                               6,138,412            1,255,218            2,270,163
                                                                    -----------          -----------          -----------

Costs and Expenses
    Production costs                                                  1,026,591              277,416              602,986
    Production taxes                                                    731,418              150,580              274,350
    Exploration expenses, including dry holes                           231,244               49,481              137,635
    General and administrative                                        1,249,520              332,931              920,466
    Depreciation, depletion, and amortization                         1,582,603              501,268            1,116,849
    Impairment of producing properties                                  170,309                 --              2,040,844
    Cost of non-producing leases sold                                    10,776                 --                   --
                                                                    -----------          -----------          -----------

         Total Costs and Expenses                                     5,002,461            1,311,676            5,093,130
                                                                    -----------          -----------          -----------

Income (Loss) from Operations                                         1,135,951              (56,458)          (2,822,967)

Other Income (Expense)
    Interest expense                                                   (174,629)             (51,330)             (50,541)
    Other                                                                  --                   --                 26,407
                                                                    -----------          -----------          -----------

                Total Other Income (Expense)                           (174,629)             (51,330)             (24,143)
                                                                    -----------          -----------          -----------

Income (Loss) before cumulative effect of change in
accounting principle                                                    961,322             (107,788)          (2,847,101)

Cumulative effect on change in accounting principle                      10,500                 --                   --
                                                                    -----------          -----------          -----------

Net Income (Loss)                                                   $   971,822          $  (107,788)         $(2,847,101)
                                                                    ===========          ===========          ===========

Income per share before cumulative effect of change in
accounting principle - basic and diluted                            $       .14          $      (.02)         $      (.47)

Cumulative effect of change in accounting principle                        --                   --                   --
                                                                    -----------          -----------          -----------

Net Income (Loss) per Common Share -  Basic and Diluted             $       .14          $      (.02)         $      (.47)
                                                                    ===========          ===========          ===========

 Average Shares Outstanding - Basic                                   7,027,426            6,506,461            6,069,148
                                                                    ===========          ===========          ===========

 Average Shares Outstanding - Diluted                                 7,163,206            6,506,461            6,069,148
                                                                    ===========          ===========          ===========

See accompanying notes to financial statements.

                                      F-4

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

For the years ended December 31, 2003, 4 month period ended December 31, 2002
and the year ended August 31, 2002
--------------------------------------------------------------------------------------------------------------------------

                                                                     Additional                             Total
                              Outstanding         Common             Paid In             (Accumulated       Stockholders'
                              Shares              Stock              Capital             Deficit)           Equity
                              --------------      --------------     --------------     ---------------     --------------

Balance at
  September 1, 2001              5,106,534        $    510,653        $  4,146,040        $    879,474        $  5,536,167

Net Loss                              --                  --                  --            (2,847,101)         (2,847,101)


Repurchase of                      (18,603)             (1,860)            (22,084)            (70,931)            (94,875)
 Common Stock


Common Stock
 Issued                          1,412,587             141,259           3,641,623                --             3,782,882
                              ------------        ------------        ------------        ------------        ------------

Balance at
  August 31, 2002                6,500,518        $    650,052        $  7,765,579        $ (2,038,558)       $  6,377,073

Net Loss                              --                  --                  --              (107,788)           (107,788)

Common Stock
 Issued                             21,000               2,100              20,604                --                22,704
                              ------------        ------------        ------------        ------------        ------------

Balance at
   December  31, 2002            6,521,518        $    652,152        $  7,786,183        $ (2,146,346)          6,291,989

Net Income                            --                  --                                   971,822             971,822

Common Stock
Issued:

Private Placement                1,295,000             129,500          11,464,785                --            11,594,285
Exercise of Warrants               300,500              30,050             383,138                --               413,188
Options exercised and
Shares issued for
compensation                       217,386              21,738             563,284                                 585,022
                              ------------        ------------        ------------        ------------        ------------

Balance at
  December  31, 2003             8,334,404        $    833,440        $ 20,197,390        $ (1,174,524)       $ 19,856,306
                              ============        ============        ============        ============        ============


See accompanying notes to financial statements.

                                                     F-5
<PAGE>


DOUBLE EAGLE PETROLEUM CO.
STATEMENTS OF CASH FLOWS                                            Year ended          Four Months        Year ended
                                                                    December 31,        ended              August 31,
For the Year ended December  31, 2003, Four Months ended            2003                December 31,       2002
December 31, 2002 and Year ended August 31, 2002                                        2002
-----------------------------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities

    Net income (loss)                                               $    971,822       $   (107,788)      $ (2,847,101)
    Adjustments to reconcile net income (loss) to net cash
     Provided by (used in) operating activities:
        Depreciation, depletion, amortization and impairments          1,752,912            501,268          3,157,693
        Abandonments and loss on investments                              19,845              5,242              2,565
        Cumulative effect of change in accounting principle              (10,500)              --                 --
        Accretion of plugging liability                                    6,000
        Loss (gain) on sale of other assets                              (24,296)              --                 --
        Directors fees paid in stock                                      24,600               --               15,200
        Other                                                               --                 --              (26,407)
        Changes in operating assets and liabilities:
           Accounts receivable                                          (175,748)          (355,341)          (217,269)
           Prepaid expenses                                              (25,565)           (16,642)             5,252
           Accounts payable and accrued expenses                         500,824           (618,792)            65,196
           Accrued production taxes                                      198,991            (39,101)           (36,432)
                                                                    ------------       ------------       ------------

    Net cash provided by (used in) operating activities                3,238,885           (631,154)           118,697
                                                                    ------------       ------------       ------------

Cash Flows from Investing Activities

    Proceeds from sales of properties and assets                          35,072               --                 --
    Other asset                                                          (40,000)              --              (50,958)
    Acquisitions of producing properties and equipment                (6,478,831)        (1,265,139)        (4,934,800)
    Acquisitions of non-producing properties                          (2,284,923)           (83,005)           (47,966)
                                                                    ------------       ------------       ------------

    Net cash (used in) investing activities                           (8,768,682)        (1,348,144)        (5,033,724)
                                                                    ------------       ------------       ------------

Cash Flows from Financing Activities
    Issuance of common stock                                          11,594,285             22,704          3,767,682
    Exercise of options and warrants                                     973,610               --                 --
    Net borrowings under line of credit arrangements                   2,850,000          2,000,000          1,250,000
    Purchase of Company stock                                               --                 --              (94,875)
    Repayment of long-term debt                                       (7,100,000)              --                 --
                                                                    ------------       ------------       ------------

    Net cash provided by  financing activities                         8,317,895          2,022,704          4,922,807
                                                                    ------------       ------------       ------------

Increase in Cash and Cash Equivalents                                  2,788,098             43,406              7,780

Cash and cash equivalents at beginning of period                         132,748             89,342             81,562
                                                                    ------------       ------------       ------------

Cash and cash equivalents at end of period                          $  2,920,846       $    132,748       $     89,342
                                                                    ============       ============       ============
Supplemental Disclosures of Cash and Non-Cash
 Transactions

    Cash paid during the year for interest                          $    193,508       $     65,224       $     47,944
     Additions to developed properties included in
     accounts payable                                               $  1,980,000       $    932,000       $       --
     Additions to developed properties for retirement
     obligations                                                    $    352,500       $       --         $       --
     Additions to other assets included in accounts payable         $    580,062       $       --         $       --
     Cashless exercise of options                                   $    164,430       $       --         $       --

See accompanying notes to financial statements.

                                                           F-6
</TABLE>

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1.   Summary of Significant Accounting Policies

     Nature of Business

     Double Eagle was incorporated under Wyoming law in 1972 and reincorporated
     under Maryland law in 2001 for the purpose of exploration, development, and
     production of oil, gas and other minerals in the Rocky Mountain region of
     the United States. The prices received for its oil and gas are volatile due
     to economic conditions within the industry.

     Change in Fiscal Year End

     In 2003 the Company elected to change its fiscal year end from August 31 to
     December 31. Therefore the accompanying financial statements reflect the
     Company's financial position and results of operations for the year ended
     August 31, 2002 (fiscal 2002), the four months ended December 31, 2002 and
     the year ended December 31, 2003 (fiscal 2003).

     Cash, Cash Equivalents, and Short Term Investments

     Cash in excess of daily requirements is invested in money markets and
     certificates of deposit with maturities 90 days or less. Such investments
     are deemed to be cash equivalents for purposes of the financial statements.

     Revenue Recognition

     The Company recognizes oil and gas revenues for only its ownership
     percentage of total production under the entitlement method.

     Oil and Gas Properties

     Double Eagle uses the successful efforts method of accounting for oil and
     gas producing activities. Under this method, acquisition costs for proved
     and unproved properties are capitalized when incurred. Exploration costs,
     including geological and geophysical costs, the costs of carrying and
     retaining unproved properties and exploratory dry hole drilling costs, are
     expensed. Development costs, including the costs to drill and equip
     development wells, and successful exploratory drilling costs that locate
     proved reserves, are capitalized. In addition, the Company limits the total
     amount of unamortized capitalized costs for each property to the value of
     future net revenues, based on current prices and costs.

     Depreciation, depletion and amortization of the capitalized costs for
     producing oil and gas properties are computed on the units-of-production
     method based on proved oil and gas reserves. Depletion, depreciation and
     amortization for the year ended December 31, 2003, four month period ended
     December 31, 2002 and the year ended August 31, 2002 was $1,582,603
     $501,268 and $1,116,849, respectively. Double Eagle invests in unevaluated
     oil and gas properties for the purpose of exploration and development of
     proved reserves. The costs of unproved leases which become productive are
     reclassified to proved properties when proved reserves are discovered in
     the property. Unproved oil and gas interests are carried at the lower of
     cost or estimated fair market value and are not subject to amortization.

                                      F-7

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

1.   Summary of Significant Accounting Policies (continued)

     Change in Accounting Principle

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
     Retirement Obligations," which addresses financial accounting and reporting
     for obligations associated with the retirement of tangible long-lived
     assets and the associated asset retirement costs. The standard applies to
     legal obligations associated with the retirement of long-lived assets that
     result from the acquisition, construction, development and/or normal use of
     the asset. The Company's asset retirement obligations relate primarily to
     the retirement of oil and gas properties; and related production
     facilities, lines and other equipment used in the field operations.

     SFAS No. 143 requires that the fair value of a liability for an asset
     retirement obligation be recognized in the period in which it is incurred,
     if a reasonable estimate of fair value can be made. The fair value of the
     liability is added to the carrying amount of the associated asset. This
     additional carrying amount is then depreciated over the life of the asset.
     The liability increases due to the passage of time based on the time value
     of money until the obligation is settled.

     SFAS No. 143 was adopted by the Company as of July 1, 2003. The
     implementation of SFAS No. 143 resulted in a cumulative effect of change
     in accounting principle of $10,500. During 2003 an increase of $353,000, in
     oil and gas properties reflected the present value of the future asset
     retirement obligation and an offsetting increase in liabilities represents
     the establishment of an asset retirement obligation liability. As of
     December 31, 2003, an expense of $6,000 was recorded for the current year's
     accretion expense on the liability and the proforma effect on prior periods
     presented herein is immaterial.

     Leaseholds

     In June 2001, the Financial Standards Board ("FASB") issued SFAS No. 141,
     "Business Combinations," which requires the purchase method of accounting
     for business combinations initiated after June 30, 2001 and eliminates the
     pooling-of- interests method. In July 2001, the FASB issued SFAS No. 142,
     "Goodwill and Other Intangible Assets," which discontinues the practice of
     amortizing goodwill and indefinite lived intangible assets and initiates an
     annual review for impairment. Intangible assets with a determinable useful
     life will continue to be amortized over that period. The FASB and
     representatives of the accounting staff of the Securities and Exchange
     Commission ("SEC") are currently engaged in discussions regarding the
     application of certain provisions of SFAS 141 and SFAS 142 to companies in
     the extractive industries, including oil and gas companies. The FASB and
     SEC staff are considering whether the provisions of SFAS 141 and SFAS 142
     require registrants to classify costs associated with mineral rights,
     including both proved and unproved lease acquisition costs, as intangible
     assets in the balance sheet, apart from other capitalized oil and gas
     property costs, and provide specific footnote disclosures. Historically,
     the Company has included oil and gas lease acquisition costs as a component
     of oil and gas properties.

     The Company did not change or reclassify contractual mineral rights
     included in oil and gas properties on the balance sheet upon adoption of
     SFAS No. 141. The Company believes its current accounting of such mineral
     rights as part of crude oil and natural gas properties is appropriate under
     the successful efforts method of accounting. However, if the FASB and SEC
     staff determine that costs associates with mineral rights not held under
     fee title and pursuant to the guidelines of SFAS No. 141 are required to be
     classified as long term intangible assets, then the reclassified amount as
     of December 31, 2003 would be approximately $3,772,000. Management does not
     believe that the ultimate outcome of this issue will have a significant
     impact on the Company's cash flows, results of operations or financial
     condition.

                                      F-8

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

     Other Equipment

     Office facilities, equipment and vehicles are recorded at cost.
     Depreciation is recorded using straight-line and accelerated methods over
     the estimated useful lives of 10 to 30 years for office facilities, 3 to 10
     years for office equipment, and 7 years for vehicles.

     Impairment of Long-Lived Assets

     SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
     requires that an asset be evaluated for impairment when the carrying amount
     of an asset exceeds the sum of the undiscounted estimated future cash flows
     of the asset. In accordance with the provisions of SFAS 144, the Company
     reviews the carrying values of its long-lived assets whenever events or
     changes in circumstances indicate that such carrying values may not be
     recoverable. If, upon review, the sum of the undiscounted pretax cash flows
     is less than the carrying value of the asset group, the carrying value is
     written down to estimated fair value. Individual assets are grouped for
     impairment purposes at the lowest level for which there are identifiable
     cash flows that are largely independent of the cash flows of other groups
     of assets, generally on a field-by-field basis. The fair value of impaired
     assets is determined based on quoted market prices in active markets, if
     available, or upon the present values of expected future cash flows using
     discount rates commensurate with the risks involved in the asset group. The
     long-lived assets of the Company, which are subject to evaluation, consist
     primarily of oil and gas properties. The Company recognized a non-cash
     charge on producing properties during the years ending December 31, 2003,
     and the year ending August 31, 2002 of $170,309 and $2,040,844,
     respectively, for those properties whose carrying values exceeded the
     expected undiscounted future net cash flows.

     Other Assets

     Included in other assets in 2003 is a deposit of $580,000 for future oil
     and gas compressors, expected to be installed in early 2004.

     Stock Based Compensation

     The Company has elected to follow APB Opinion No. 25 and related
     interpretations in accounting for its stock options and grants to employees
     and directors since the alternative fair market value accounting provided
     for under Statement of Financial Accounting Standards (SFAS) No. 123
     requires use of grant valuation models that were not developed for use in
     valuing employee stock options and grants. Under APB Opinion No. 25, if the
     exercise price of the Company stock grants and options equal the fair value
     of the underlying stock on the date of grant, no compensation expenses are
     recognized.

     If compensation costs for the Company's stock-based compensation plans had
     been determined based on the fair value at the grant dates for awards under
     those plans consistent with the method of SFAS No. 123, then the Company's
     net income (loss) per share would have been adjusted to the pro forma
     amounts indicated below:

                                      F-9


<PAGE>
<TABLE>
<CAPTION>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------------------------------------------------------------------------------------------

                                                             Fiscal year            4 Months          Fiscal year
                                                             ended                  ended             ended
                                                             December 31,           December 31,      August 31,
                                                             2003                   2002              2002
                                                             ------------           ------------      -----------
<S>                                                           <C>                  <C>             <C>
     Net income (loss) as reported                           $ 971,822              $(107,788)       $(2,847,101)
     Deduct: stock based compensation                         (188,889)                  --             (148,528)
                                                             ---------              ---------        -----------
     Cost under SFAS 123
     Pro Forma net income (loss)                             $ 782,933              $(107,788)       $(2,995,629)
                                                             =========              =========        ===========
     Reported net income per common share                    $     .14              $    (.02)       $      (.47)
                                                             =========              =========        ===========
     - basic and diluted
     Pro forma net income per common share                   $     .11              $    (.02)       $      (.49)
                                                             =========              =========        ===========
     basic and diluted


     Pro forma information regarding net income is required by SFAS 123. Options
     granted were estimated using the Black-Scholes valuation model. The
     following weighted average assumptions were used for the twelve months
     ended August 31, 2002, the four months ended December 31, 2002 and the
     twelve months ended December 31, 2003.


                                                 Fiscal year      4 months        Fiscal year
                                                 ended            ended           ended
                                                 December 31,     December 31,    August 31,
                                                 2003             2002            2002
                                                 ------------     -----------     -----------

         Volatility                                  55%               -             39%
         Expected life of options (in years)           3               -               3
         Dividend Yield                                -               -               -
         Risk free interest rate                    2.6%               -           3.75%
</TABLE>


     Income Taxes

     Income taxes are determined under an asset and liability approach. The
     Company follows the asset and liability method of accounting for deferred
     income taxes. Deferred tax assets and liabilities are determined based upon
     the temporary differences between the financial statement and tax basis of
     assets and liabilities.

                                      F-10

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

     Per Share Amounts

     Basic income net income (loss) per share is computed using the weighted
     average number of common shares outstanding during the period. Diluted net
     income (loss) per share reflects the potential dilution that would occur if
     options or other contracts such as outstanding warrants to issue common
     stock were exercised using the average market price for the company's stock
     for the period. Total potential dilutive shares at December 31, 2003, was
     261,486. In a year in which a net loss occurs, the conversion of options or
     other contracts such as options and warrants are ignored as the conversion
     would be antidilutive.

     Accounting Estimates

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period. Actual results could differ from those
     estimates. Significant estimates used in the presentation of these
     financial statements include estimated lives of assets and timing and costs
     associated with the Company's asset retirement obligation. Other
     significant estimates also include proved oil and gas reserves quantities
     and the associated present value of estimated future cash flows which are
     the basis for the calculation of the depreciation, depletion and impairment
     for oil and gas properties as well as the future net realizable value of
     the Company's deferred tax assets.

     Receivables and Credit Policies

     The Company has joint interest billing receivables which represent
     reimbursable operating expenses and other costs due from their party
     working interest owners in wells that the Company operates. The receivable
     is recognized when the cost is incurred and the related payable and the
     Company's share of the cost is recorded. The Company also has trade
     receivables consisting of oil and gas sales, which under normal terms are
     due approximately 45 days after production. Receivables are reviewed
     periodically and appropriate actions are taken on past due amounts, if any.

2.   Notes Payable

     The Company maintains a $9,000,000 revolving line of credit, collateralized
     by oil and gas producing properties, as part of its cash management
     program. The interest rate on the line of credit is at the Prime Rate
     published in the Wall Street Journal. The interest rate on the line of
     credit as of December 31, 2003 is 4.0% and the maturity date is April 30,
     2005. During the year ended December 31, 2003, the Company took advances
     against the line totaling $2,850,000. On October 31, 2003, the line was
     fully paid and no additional draws against the line have been made. The
     amount outstanding under this line of credit at December 31, 2003 and
     December 31, 2002 was $-0- and $4,250,000, respectively.

                                      F-11

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

3.   Commitments

     Oil and Gas Sale Commitments

     The Company committed to sell 669,000 MMBTU of gas in 2004, through five
     contracts with a gas marketer as follows. Should the Company be unable to
     deliver the gas, which is not anticipated, it would be required to purchase
     such amounts on the open market to fulfill these contracts.


                Quantity Per Day            Term                      Price
                ----------------            ----                      -----
                500 MMBTU                   4/1/04-10/31/04           $3.83
                500 MMBTU                   1/1/04-12/31/04            4.63
                500 MMBTU                   1/1/04-12/31/04            4.51
                500 MMBTU                   11/1/03-3/31/04            4.85
                500 MMBTU                   11/1/03-10/31/04           4.58


     Major Customers

     Sales to one major unaffiliated customer (customers accounting for 10
     percent or more of gross revenue), for fiscal year ended December 31, 2003,
     the four months ended December 31, 2002 and the fiscal year ending August
     31, 2002 are $4,587,000, $773,000 and $1,018,877, respectively. The
     Company, however, believes that it is not dependent upon this customer due
     to the nature of its product, but as described above has entered into sales
     contracts with this customer to deliver gas.

     Lease Commitments

     The Company leases office facilities in Littleton, Colorado under an
     operating lease agreement which expires April 30, 2006. The lease agreement
     requires payments of $31,000 in 2004, $33,000 in 2005 and $11,000 in 2006.
     Rent expense for this facility in 2003 was $20,000. The Company has no
     other capital leases and no other operating lease commitments.

     Employee Benefit Plan

     The Company maintains a Simplified Employee Pension Plan covering
     substantially all employees meeting minimum eligibility requirements.
     Employer contributions are determined solely at management's discretion.
     Employer contributions for fiscal 2003, four months ended December 31, 2002
     and fiscal 2002 were $24,260, $5,233 and $16,319 respectively.


                                      F-12

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

4.   Income Taxes

     The tax effects of temporary differences that gave rise to significant
     portions of the deferred tax liabilities and deferred tax assets as of
     December 31, 2003 and December 31, 2002 were as follows:

                                                   December 31,     December 31,
                                                      2003             2002
                                                   ------------     ------------
Deferred tax assets:
     Net operating loss carry-forwards             $ 1,921,000      $   980,000
     Percentage depletion carry-forward                160,000          120,000
     Asset impairments                                 893,000          875,000
                                                   -----------      -----------
                                                     2,974,000        1,975,000
                                                   -----------      -----------
 Deferred tax liabilities - intangible
   drilling costs
                                                    (2,049,000)        (692,000)
                                                   -----------      -----------

Net deferred tax assets                                925,000        1,283,000
Valuation allowance:                                  (925,000)      (1,283,000)
                                                   -----------      -----------
Net deferred tax assets                            $      --        $      --
                                                   ===========      ===========


     At December 31, 2003, the Company had a net operating loss carryforward for
     regular income tax reporting purposes of approximately $5,167,000, which
     will begin expiring in 2007. During fiscal 2003, the four months ended
     December 31, 2002 and fiscal 2002, the deferred tax allowance increased by
     $358,000, $837,000 and $445,300, respectively.

     Reconciliation of the Company's effective tax rate of 0% to the expected
     federal tax rate of 34% is as follows:


                                              Fiscal    4 months        Fiscal
                                               2003     ended            2002
                                                        December 31,
                                                        2002
                                              ------    ------------    -------

Expected Federal Tax Rate                       34%          (34%)      (34%)
Permanent Differences - Change in
Valuation Allowance                            (34%)          34%        34%
                                                ---          ---         ---
Actual Tax Rate                                  0%            0%         0%
                                                ===          ===         ===


                                      F-13

<PAGE>
DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

5.   Stockholders' Equity

     Sale of Common Stock - Private Placement

     In October 2003, the Company initiated a private placement of its common
     stock and sold 1,295,000 shares of restricted stock at $9.00 per share. In
     connection with the offering, the Company incurred $61,000 of costs, which
     were offset against the gross proceeds of $11,655,000. The Company is
     currently in the process of registering the resales of these shares under
     Form S-3 with the Securities and Exchange Commission.

     Stock Options

     Stock option plans approved by the stockholders provide for granting of
     options to employees, directors and others for purchase of common stock
     generally at prices between the "bid" and "ask" prices at the time of
     grant. Generally, options granted expire three years after the date of
     grant. The changes in the outstanding stock options during the twelve
     months ended December 31, 2003, the four months ended December 31, 2002 and
     the twelve months ended August 31, 2002 are summarized as follows:
<TABLE>
<CAPTION>

                                December 31, 2003             December 31, 2002             August 31, 2002
                              -----------------------     ------------------------      ------------------------
                                             Wt. Avg.                    Wt. Avg.                       Wt. Avg.
                               Shares        Ex. Pr.       Shares        Ex. Pr.         Shares         Ex. Pr.
                              -------       --------      --------      ----------      --------       ---------

<S>                           <C>           <C>            <C>          <C>              <C>           <C>
Beginning of period           203,786       $  3.751       203,786      $    3.751       168,786       $   3.448
Granted                        61,486          8.190          --             --           55,000           3.800
Exercised/Purchased           (84,646)         3.196          --             --          (20,000)          1.328
Expired                          --             --            --             --             --             --
                             --------                     --------                      --------

End of period                 180,626       $  5.427       203,786      $    3.751       203,786       $   3.751

Unoptioned shares
Available at year end         564,728                      326,214                       326,214
                             ========                     ========                      ========

                                                            F-14

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

     Stock Options (continued)

     On occasion, the Board of Directors grants stock options not covered under
     the plans approved by the stockholders, to individuals and companies that
     perform services for the Company. The changes in the outstanding stock
     options during the twelve months ended December 31, 2003, the four months
     ended December 31, 2002, and the twelve months ended August 31, 2002 are
     summarized as follows:

                                December 31, 2003             December 31, 2002             August 31, 2002
                              ----------------------      ------------------------      ------------------------
                                             Wt. Avg.                    Wt. Avg.                       Wt. Avg.
                               Shares        Ex. Pr.       Shares        Ex. Pr.         Shares         Ex. Pr.
                              -------       --------      --------      ----------      --------       ---------

    Beginning of year          305,964     $   4.488       305,964       $   4.488       465,714      $    3.314

    Granted                        --           --           --              --           38,250           3.80

    Exercised for cash         (91,854)         3.25         --              --         (198,000)          1.594

    Cashless exercise          (32,886)         --           --              --            --              --

    Expired                   (100,364)         4.68         --              --            --              --
                             ---------     ---------      --------       ---------     ---------       ---------

    End of year                 80,860     $  4.5403       305,964       $   4.488       305,964       $   4.488
                             =========                    ========                     =========
</TABLE>

     The fair value per share of options granted as determined under the Black
     Scholz method in fiscal 2003, four months ended December 31, 2002 and
     fiscal year 2002 were $3.07, $-0-, and $2.59, respectively. All options
     vest when granted.

     During 2003, the Company issued 32,886 shares of common stock under a
     cashless exercise of 100,000 options, based on the difference between the
     market price at the date of exercise and the option price. No expense was
     recorded as the fair value of the options immediately prior to exercise
     equaled the fair value of the stock received.

     Total options outstanding as of December 31, 2003 are 257,486. The
     expiration dates and weighted average exercise prices are as follows:

                                                               Weighted Average
                 Expiration                  Shares            Exercise Price
                 ----------                  ------            --------------

                 Year 2004                   130,000                4.53

                 Year 2005                    70,000                3.80

                 Year 2006                    61,486                8.19

     Subsequent to December 31, 2003, 33,000 of additional options were issued
     to officers and directors at the market price of $14.00 per share. These
     options expire in three years (unaudited).

     Stock Warrants

     In December of 1998, the Company issued 374,750 warrants at $1.375 per
     share, which was between the "bid" and "ask" prices at the time of the
     grant. By December 31, 2003, all warrants were exercised prior to their
     expiration date.

                                      F-15


<PAGE>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

6.   Related Party Transactions

      A company owned by a member of the board of directors acts as the operator
     on a property owned by Double Eagle. The related company also performs
     services on other producing properties in which Double Eagle owns an
     interest and on drilling projects in which Double Eagle participates.
     Amounts paid by Double Eagle to the company were $68,241, $19,513, $60,860
     for fiscal 2003, the four months ended December 31, 2002 and fiscal 2002,
     respectively.

7.   Oil and Gas Activities

     Capitalized Costs Relating to Oil and Gas Producing Activities

     The aggregate amount of capitalized costs relating to crude oil and natural
     gas producing activities and the aggregate amount of related accumulated
     depreciation, depletion and amortization at December 31, 2003, December 31,
     2002 and August 31, 2002 are as follows:

<TABLE>
<CAPTION>
                                                               December 31,       December 31,        August 31,
                                                              2003               2002                2002

<S>                                                         <C>                <C>                 <C>
         Proved properties                                  $     24,376,469   $      16,655,447   $     14,458,308
         Unproved properties                                       3,017,954             942,118            877,360
                                                              ---------------    ----------------    ---------------
                                                                  27,394,423          17,597,565         15,335,668
         Accumulated depreciation and depletion
         and impairment allowance                                 (8,346,123)         (6,831,405)        (6,340,162)
                                                              --------------    ----------------    ---------------

         Net capitalized costs                              $     19,048,300   $      10,766,160   $      8,995,506
                                                              ==============    ================    ===============


     Costs incurred in Oil and Gas Property Acquisitions, Exploration and Development Activities

     Costs incurred in property acquisitions, exploration, and development
activities for the year ended December 31, 2003, four months ended December 31,
2002 and year ended August 31, 2002 were as follows:

                                                              December 31,       December 31,        August 31,
                                                              2003               2002                2002
         ----------------------------------------------------------------------------------------------------------

           Property acquisitions - unproved                        2,287,510              83,005             47,966
           Exploration                                               231,244              49,481            137,635
           Development                                             7,564,244           2,197,139          4,934,800
                                                              --------------     ---------------    ---------------

               Total                                        $     10,082,998   $       2,329,625   $      5,120,401
                                                              ==============     ===============    ===============

                                      F-16

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------


Results of Operations from Oil and Gas Producing Activities

The results of operations for the Company's oil and gas producing activities for
the year ended December 31, 2003, four months ended December 31, 2002 and the
year ended August 31, 2002:

                                                              December 31,       December 31,        August 31,
                                                              2003               2002                2002
         -------------------------------------------------------------------------------------------------------------

           Operating revenues                               $      6,080,880   $       1,251,120   $      2,255,919
           Costs and expenses
             Production                                            1,758,009             427,996            877,336
             Exploration                                             231,244              49,481            137,635
             Depreciation, depletion and impairment                1,720,548             491,243          3,013,281
                                                             ---------------    ----------------    ---------------
                                                                   3,709,801             968,720          4,028,252
                                                             ---------------    ----------------    ---------------

           Income (loss) before Income Taxes                $      2,371,079   $         282,400   $     (1,772,333 )
                                                            ================   =================   ================

                                      F-17
<PAGE>


DOUBLE EAGLE PETROLEUM CO.
SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED)
--------------------------------------------------------------------------------
Oil and Gas Reserves

     The reserves for the 12/31/03 and 12/31/02 reports that are presented below
were reviewed by Netherland Sewell and Associates. The reserves presented below
regarding the Company's oil and gas reserves as of 8/31/02 were prepared by J.
Stephen Mercer, an outside consulting petroleum engineer with Inverness
Management and Advisory Services, Inc., and reviewed by Ryder Scott Company, LP,
certified petroleum engineers, with the exception of the Cow Creek reserves in
the 8/31/02 report. The Cow Creek reserves for that report were reviewed by
Netherland Sewell and Associates. All reserves are located within the
continental United States. The reserve estimates are developed using geological
and engineering data and interests and burdens information developed by the
Company. Reserve estimates are inherently imprecise and are continually subject
to revisions based on production history, results of additional exploration and
development, prices of oil and gas, and other factors. The notes following the
table should be read in connection with the reserve estimates.

Estimated net quantities of proved developed reserves of oil and gas for the
year ended December 31, 2003, four month period ended December 31, 2002 and year
ended August 31, 2002, are as follows:


 Natural Gas (Thousands of cubic feet)           12/31/2003              12/31/2002             8/31/2002
                                            --------------------   ---------------------  --------------------

Beginning of year                                     16,810,164              11,505,232             9,605,641
Revisions of prior estimates                          (2,013,517)                261,155            (1,472,615)
Discoveries                                            9,343,183               5,574,345             4,378,749
Purchases of reserves in place                                 -                                             -
Production                                            (1,320,850)               (530,568)           (1,009,543)
                                            --------------------   ---------------------  --------------------
End of year                                           22,818,980              16,810,164            11,502,232
                                            ====================   =====================  ====================
Proved developed reserves                             16,055,045              11,699,336             8,718,132
                                            ====================   =====================  ====================
% of proved developed reserves                             70.4%                   69.6%                 75.8%


Oil (Barrels)                                   12/31/2003             12/31/2002              8/31/2002
                                           ---------------------  ---------------------  ----------------------

Beginning of year                                       222,473                190,053                 189,432
Revisions of prior estimates                            (25,115)                (3,544)                 10,363
Discoveries                                              28,943                 41,482                  10,775
Purchases of reserves in place                                -                      -                       -
Production                                              (17,344)                (5,518)                (20,517)
                                          ---------------------  ---------------------  ----------------------
End of year                                             208,957                222,473                 190,053
                                          =====================  ====================== ======================
Proved developed reserves                               179,228                195,771                 184,953
                                          =====================  =====================  ======================
% of proved developed reserves                              85%                    88%                   97.2%
</TABLE>

88% of the proved developed gas reserves and 100% of the proved developed oil
reserves were in producing status as of December 31, 2003.

                                      F-18
<PAGE>


DOUBLE EAGLE PETROLEUM CO.
SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED)
--------------------------------------------------------------------------------

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil
and Gas Reserves

The following information has been developed utilizing procedures prescribed by
SFAS 69 "Disclosures About Oil and Gas Producing Activities" and based on
natural gas and crude oil reserves and production volumes estimated by the
Company. It may be useful for certain comparison purposes, but should not be
solely relied upon in evaluating the Company or its performance. Further,
information contained in the following table should not be considered as
representative or realistic assessments of future cash flows, nor should the
Standardized Measure of Discounted Future Net Cash Flows be viewed as
representative of the current value of the Company.

The Company believes that the following factors should be taken into account in
reviewing the following information: (1) future costs and selling prices will
probably differ from those required to be used in these calculations; (2) due to
future market conditions and governmental regulations, actual rates of
production achieved in future years may vary significantly from the rate of
production assumed in these calculations; (3) selection of a 10% discount rate
is arbitrary and may not be reasonable as a measure of the relative risk
inherent in realizing future net oil and gas revenues; and (4) future net
revenues may be subject to different rates of income taxation.

Under the Standardized Measure, future cash inflows were estimated by applying
year-end oil and gas prices to the estimated future production of year-end
proved reserves. Futures cash inflows were reduced by estimated future
development and production costs based upon year-end costs in order to arrive at
net cash flow before tax. Future income tax expense has been computed by
applying year-end statutory rates to future pretax net cash flows and the
utilization of net operating loss carryforwards. Use of a 10% discount rate is
required by SFAS 69. As of December 31, 2003, the average spot daily price of
natural gas was $5.75 as compared to monthly index prices of $4.40 at OPAL and
$4.44 for CIG. In accordance with the rules for preparing oil and gas reserve
disclosures, the Company's independent reserve engineer used the higher year end
price. The Company believes, however, this spike in year end prices may have
been somewhat of an aberration due to volatilities in the market.

Management does not rely solely upon the following information in making
investment and operating decisions. Such decisions are based upon a wide range
of factors, including estimates of probable, as well as proved reserves, and
varying price and cost assumptions considered more representative of a range of
possible economic conditions that may be anticipated.

Standardized Measure is as follows:

<TABLE>
<CAPTION>
                                                                        4 months
                                                                         ended
                                                   December 31,       December 31,         August 31,
                                                       2003               2002                2002
         ---------------------------------------------------------------------------------------------

<S>                                             <C>                <C>                 <C>
           Future Cash Inflows                  $    136,525,000   $     57,329,000   $     27,118,000
           Future Production Costs                   (34,734,000)       (17,935,000)       (10,641,000)
           Future Development Costs                   (3,593,000)        (2,885,000)        (2,418,000)
           Future Income Tax                         (23,508,000)        (6,880,000)          (533,000)
                                                 ---------------   ----------------    ---------------
                Future net cash flows                 74,690,000         29,629,000         13,526,000
                10% Discount                         (31,849,000)       (15,066,000)        (6,141,000)
                                                 ---------------   ----------------    ---------------

         Discounted Future Net Cash Flows       $     42,841,000   $     14,563,000   $      7,385,000
                                                 ===============   ================    ===============


                                      F-19

<PAGE>


DOUBLE EAGLE PETROLEUM CO.
SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED)
--------------------------------------------------------------------------------

The following is an analysis of the changes in the Standardized Measure:

                                                             Year               4 months           Year
                                                             ended              ended              ended
                                                             December 31,       December 31,       August 31,
                                                             2003               2002               2002
   -------------------------------------------------------------------------------------------------------------------

     Balance, beginning of the year                         $     14,563,000   $       7,385,000   $      6,352,000

     Sales of oil and gas,  net of production costs               (4,323,000)           (823,000)        (1,379,000)
     Extensions and discoveries                                   23,423,000           6,259,000          2,531,000
     Net change in sales prices, net of production costs          21,171,000           5,227,000           (939,000)
     Purchase of reserves in place                                         -                   -                  -
     Revisions of Quantity Estimates                              (2,760,000)            119,000           (783,000)
     Accretion of Discount                                         1,456,000             244,000            635,000
     Net change in income taxes                                   (9,538,000)         (3,120,000)           886,000
     Changes in future development costs                            (637,000)           (420,000)          (662,000)
     Changes in rates of production and other                       (514,000)           (308,000)           744,000
                                                             ---------------    ----------------    ---------------

         Balance, end of the year                           $     42,841,000   $      14,563,000   $      7,385,000
                                                             ===============    ================    ===============
</TABLE>


                                      F-20

<PAGE>



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

There have been no disagreements between the Company and its independent
auditors on any matter of accounting principles or practices or financial
statement disclosure or auditing scope or procedure since the Company's
inception of a nature which, if not resolved, would have caused the accountant
to make reference in connection with its report. On October 13, 2003, we
replaced Lovelett, Skogen & Associates, P.C. as our independent accountants and
engaged Hein + Associates LLP as our principal accountant to audit our financial
statements. The decision to change was approved by the Board of Directors.
Lovelett, Skogen & Associates, P.C.'s report on the financial statements for
either of the past two years did not contain an adverse opinion and was not
modified as to uncertainty, audit scope or accounting principles. A current
report on Form 8-K or disclaimer of opinion was filed with the SEC on October
15, 2003 regarding the change of auditors.

ITEM 8A.  CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. Based on an evaluation carried
out under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, during the
90-day period prior to the filing of this report, our Chief Executive Officer
and Chief Financial Officer believe that our disclosure controls and procedures,
as defined in Securities Exchange Act Rules 13a-14 and 15d-14, are, to the best
of their knowledge, effective.

Changes in internal controls. Subsequent to the date of this evaluation, our
Chief Executive Officer and Chief Financial Officer are not aware of any
significant changes in our internal controls over financial reporting, including
any corrective actions with regard to significant deficiencies and material
weakness, or in other factors that could significantly affect these controls to
ensure that information required to be disclosed by us, in reports that we file
or submit under the Securities Act, is recorded, processed, summarized, and
reported within the time periods specified in Securities and Exchange Commission
rules and regulations.
                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

Directors and Executive Officers:

             The directors and executive officers of the Company are as follows:

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

Stephen H. Hollis            53             Chairman Of The Board; President;
                                             and Director

David C. Milholm             54             Chief Financial Officer

D. Steven Degenfelder        47             Vice President

Carol A. Osborne             52             Secretary

Ken M. Daraie                44             Director

Beth McBride                 45             Director

Roy G. Cohee                 54             Director

Thomas A. Prendergast        70             Director

                                       45

<PAGE>


     Stephen H. Hollis has served as the President and Chief Executive Officer
of the Company since January 1994 and previously served as a Vice-President of
the Company from December 1989 through January 1994. Mr. Hollis has served as a
Director of the Company since December 1989. Mr. Hollis has served as the
Vice-President of Hollis Oil & Gas Co., a small oil and gas company, since
January 1994 and served as the President of Hollis Oil & Gas Co. from June 1986
through January 1994. Mr. Hollis was a geologist for an affiliate of United
Nuclear Corporation from 1974 to 1977 and a consulting geologist from 1977 to
1979. In 1979, Mr. Hollis joined Marathon Oil Company and held various positions
until 1986, when he founded Hollis Oil & Gas Co. Mr. Hollis is a past President
of the Wyoming Geological Association and past President of the Rocky Mountain
Section of the AAPG. Mr. Hollis received a B.A. Degree in Geology from the
University of Pennsylvania in 1972 and a Masters Degree in Geology from Bryn
Mawr College in 1974.

     David C. Milholm has served as our Chief Financial Officer since May 1,
2003. Prior to joining the Company, Mr. Milholm served as a financial consultant
to several energy companies between 2001 and 2003. From 1995 to 2001, Mr.
Milholm served as Vice President, Chief Operating Officer and Chief Financial
Officer of AlloSource, a Denver based biomedical company. Before that Mr.
Milholm held Controller positions with Western Gas Resources, BWAB Inc. and
Wintershall Oil and Gas Corp. Mr. Milholm began his career with Price Waterhouse
Cooper in Denver where he became a Certified Public Accountant. Mr. Milholm
received his MBA from the University of Denver in 1973 and his BSBA in
Accounting from Colorado State University in 1972.

     D. Steven Degenfelder has served as our Vice-President since February 1998.
Mr. Degenfelder began his career in the oil and gas business as a roustabout in
the oil fields of southeast New Mexico. After graduating from college, he held
various land management positions with Marathon Oil Company from 1979 to 1981,
Paintbrush Petroleum Corporation from 1981 to 1985 and Tyrex Oil Company from
1985 to 1995, where he served as Vice President and Director. Mr. Degenfelder
served as Deputy Director of the Wyoming Office of State Lands and Investments
from 1995 to 1997. He currently serves on the Board of Directors of the
Petroleum Association of Wyoming and is Chairman of the Natrona County Planning
and Zoning Commission. He is a member of the American Association of
Professional Landmen and is past President of the Wyoming Association of
Professional Landmen. Mr. Degenfelder is a Certified Professional Landman and
received his degree in Business Administration from Texas Tech University in
1979.

     Carol A. Osborne has served as the Secretary of the Company since January
1996 and previously served as the Assistant Secretary of the Company from
December 1989 until January 1996. In addition, Ms. Osborne has served as the
Company's Office Manager since 1981.

     Ken M. Daraie has served as a Director of the Company since February 1997.
Mr. Daraie began his career with Sun Exploration and Production Co. as a
Petroleum Engineer from 1982 to 1990. In 1990, he joined Conoco, Inc., in
Casper, where he held engineering positions until 1994. From 1994 to 1995, Mr.
Daraie worked for the Fluor Daniel Corporation and Barlow & Haun, Inc. as
Project Manager and General Manager, respectively. In 1995, Mr. Daraie founded
Continental Industries, LC, an independent oil and gas production/service
company, where he currently serves as President. Mr. Daraie is a past Chairman
of the Board of Energy West Federal Credit Union and currently serves on the
Casper Planning and Zoning Commission. Mr. Daraie received a Bachelor's Degree
in Physics from Baylor University in 1979 and a Bachelor of Science Degree in
Petroleum Engineering from the University of Texas in 1982.

     Beth McBride has served as a Director of the Company since January 25,
2001. She has been President and member of the Board of Directors of Legacy
Energy Corporation since co-founding the company in 1990. Legacy Energy
Corporation is a privately held oil and gas exploration company in Denver,
Colorado. Ms. McBride was a geophysicist for Superior Oil Company in Houston,
Texas from 1981 through 1984, and held various exploration positions with Mobil

                                       46

<PAGE>


Oil Corporation in Dallas, Texas and Denver, Colorado from 1985 to 1990. Ms.
McBride received a B.Sc. degree in Geophysical Engineering from Colorado School
of Mines in 1980.

     Roy G. Cohee has served as a Director of the Company since January 25,
2001. He has served as President of C & Y Transportation Co. since 1986. C & Y
Transportation Co. started business in Casper, Wyoming in 1966 and is a
privately held company focused on the transportation and storage of oil field
equipment and supplies throughout the Western U.S. and Canada. Mr. Cohee has
been with C & Y Transportation Co. since its beginning in 1966. Mr. Cohee was
elected to his first term in the Wyoming House of Representatives in 1998 and
currently in his second term and sits on the House Highways and Transportation
Committee and the House Revenue Committee.

     Thomas A. Prendergast is a Certified Public Accountant and graduated from
Fordham University in 1955 with a Bachelor of Science Degree. He has served as a
Director of the Company since July 2002. Since 1986, Mr. Prendergast has been
Chairman of the Board of Scot Holdings, Inc., a Texas based investment company.
Mr. Prendergast also served as Chairman of Market Guide, Inc. until September
1999, when it merged with another internet company. Mr. Prendergast has served
as a Director on 16 public boards in various industries. Mr. Prendergast was a
founder and President of the El Paso Community College in El Paso, Texas, where
he served for thirteen years.

2003 Meetings and Committees of the Board of Directors

     Double Eagle's Board of Directors held six meetings during the year ended
December 31, 2003. Each director attended at least 75% of the Board and
committee meetings he or she was eligible to attend. The standing committees of
the board include the Audit Committee and the Compensation Committee. The Audit
Committee and the Compensation Committee each consists entirely of non-employee
directors. The Board has not appointed a nominating committee.

     The Audit Committee reviews the adequacy of systems and procedures for
preparing the financial statements and the suitability of internal financial
controls. The Audit Committee also reviews and approves the scope and
performance of the independent auditors' work. Thomas A. Prendergast and Roy G.
Cohee serve as members of the Audit Committee and Thomas A. Prendergast serves
as chairman of the Audit Committee. The Audit Committee met five times during
the fiscal year ended December 31, 2003.

Audit Committee Financial Expert

     Thomas A. Prendergast is an audit committee financial expert, as defined by
the rules and regulations of Regulation S-B of the Securities Exchange Act, who
serves on our audit committee. He is independent as defined by the applicable
listing standards of the Nasdaq Stock Market.

Audit Committee Charter

     Our Board of Directors has adopted a written charter for the Audit
Committee. The Committee will review and assess the adequacy of the Audit
Committee charter annually.


                                       47

<PAGE>


Code of Ethics

     We have adopted a code of ethics that applies to our executive officers,
including Mr. Hollis, our President and Chief Executive Officer, and Mr.
Milholm, our Chief Financial Officer.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16 (a) of the Securities Exchange Act of 1934, as amended requires
our directors, executive officers, and holders of more than 10% of our Common
Stock to file with the Securities And Exchange Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities. We believe that during the fiscal year ended December 31, 2003, our
officers, directors and holders of more than 10% of our outstanding Common Stock
complied with all Section 16(a) filing requirements. In making these statements,
we have relied upon the written representations of our directors and officers.

ITEM 10.  EXECUTIVE COMPENSATION

Summary Compensation Table

     The following table sets forth in summary form the compensation received
during each of our last three completed fiscal years by Stephen H. Hollis, our
Chief Executive Officer and President, and by Bob D. Brady, Jr., former Vice
President of the Company (collectively, the "Named Executive Officers"). Other
than the "Named Executive Officers", no employee of the Company received total
salary and bonus exceeding $100,000 during any of the last three fiscal years.

Annual Compensation
<TABLE>
<CAPTION>

                                                                                       Long-Term
                                                                                       Compensation
                                                                   Long-Term           Securities        Other Annual
Name and                 Fiscal Year    Salary        Bonus        Compensation        underlying        Compen-
Principal Position       Ended          ($)(1)        ($)          Restricted Stock    Options           sation($)
---------------------    -------------  ------------  ---------    ----------------    -------           ------------
<S>                           <C>       <C>           <C>                     <C>         <C>                 <C>
Stephen H. Hollis,            2003      $108,000      $68,592                -0-          12,000             -0-
Chief Executive               2002      $ 72,000      $48,000                -0-          25,000             -0-
Officer and President         2001      $ 72,000      $30,000                -0-          50,000             -0-

Bob D. Brady, Jr.,            2003      $109,000      $13,000            $   -0-           6,743             -0-
Vice President (2)            2002      $ 72,674          -0-            $48,000             -0-             -0-
                              2001                        -0-                -0-             -0-             -0-
                                             -0-

(1) The dollar value of base salary (cash and non-cash) received.

(2) Mr. Brady's employment with us terminated on February 20, 2004.

                                       48

<PAGE>


Option Grants Table

     The following table sets forth information concerning individual grants of
stock options made during the fiscal year ended December 31, 2003 to the
Company's Named Executive Officers. See "--Stock Option Plans".


     Option Grants For Fiscal Year Ended December 31, 2003
     -----------------------------------------------------

                                                     % of Total
Name                                                 Options Granted
------                           Options             to Employees in      Exercise or Base     Expiration
                                 Granted (#)         Fiscal Year          Price ($/Sh)         Date
                                 -----------         -----------          ------------         ----

Stephen H. Hollis,                    12,000                 32%                 $6.15                2/4/06
  Chief Executive Officer
  and President

Bob D. Brady, Jr.                      6,743                 18%                $14.83               11/11/06
  Vice President (1)

(1) Mr. Brady's employment with us terminated February 20, 2004.

     Aggregated Option Exercises And Fiscal Year-End Option Value Table.

     The following table sets forth information concerning each exercise of
stock options during the fiscal year ended December 31, 2003 by the Named
Executive Officers, and the fiscal year-end value of unexercised options held by
our Chief Executive Officer and President.

Aggregated Option Exercises
For Fiscal Year Ended December 31, 2003
And Year-End Option Values

                                                                                               Value of
                                                                                               Unexercised
                                                                          Number of            In-The-Money
                                                                          Unexercised          Options at
                                                                          Options at Fiscal    Fiscal Year-End
                                 Shares                                   Year-End (#)(3)      ($)(4)
                                 Acquired on         Value                Exercisable/         Exercisable/
Name                             Exercise (#) (1)    Realized ($)(2)      Unexercisable        Unexercisable
-----------------------------    ------------------  -------------------  -------------------  -------------
Stephen H. Hollis,                           50,000             $165,312             87,000/0           $931,388/$0
 Chief Executive Officer
and President
Bob D. Brady, Jr. ,                             -0-                  -0-              6,743/0                 -0-/0
Vice President (5)
--------------------
</TABLE>

(1)  The number of shares received upon exercise of options during the fiscal
     year ended December 31, 2003.

(2)  With respect to options exercised during the Company's fiscal year ended
     December 31, 2003, the dollar value of the difference between the option
     exercise price and the market value of the option shares purchased on the
     date of the exercise of the options.

                                       49

<PAGE>


(3)  The total number of unexercised options held as of December 31, 2003
     separated between those options that were exercisable and those options
     that were not exercisable.

(4)  For all unexercised options held as of December 31, 2003, the aggregate
     dollar value of the excess of the market value of the stock underlying
     those options over the exercise price of those unexercised options, based
     on the closing price of the Company's Common Stock on December 31, 2003.
     The closing bid price for the Company's Common Stock on December 31, 2003
     was $15.25 per share.

(5)  Mr. Brady's employment with us terminated on February 20, 2004.

Stock Option Plans

     The 1996 Stock Option Plan. In May 1996, our Board of Directors approved
our 1996 Stock Option Plan (the "1996 Plan"), which subsequently was approved by
our stockholders. Pursuant to the 1996 Plan, we may grant options to purchase an
aggregate of 200,000 shares of our common stock to key employees, directors, and
other persons who have or are contributing to our success. The options granted
pursuant to the 1996 Plan may be either incentive options qualifying for
beneficial tax treatment for the recipient or non-qualified options. The 1996
Plan is administered by an option committee that determines the terms of the
options subject to the requirements of the 1996 Plan. At December 31, 2003, no
options to purchase shares of Common Stock were outstanding under the 1996 Plan
and no additional options could be granted under the 1996 Plan.

     The 2000 Stock Option Plan. In December 1999, our Board of Directors
approved the Company's 2000 Stock Option Plan (the "2000 Plan"), which was
subsequently approved by our stockholders. Pursuant to the 2000 Plan, we may
grant options to purchase an aggregate of 200,000 shares of our common stock to
key employees, directors, and other persons who have or are contributing to our
success. The options granted pursuant to the 2000 Plan may be either incentive
options qualifying for beneficial tax treatment for the recipient or
non-qualified options. The 2000 Plan is administered by an option committee that
determines the terms of the options, subject to the requirements of the 2000
Plan. At December 31, 2003, options to purchase 145,354 shares of Common Stock
were outstanding under the 2000 Plan and no additional options to purchase could
be granted under the 2000 Plan.

     The 2002 Stock Option Plan. In December 2001, our Board of Directors
approved our 2002 Stock Option Plan (the "2002 Plan"), which subsequently was
approved by our stockholders. Pursuant to the 2002 Plan, we may grant options to
purchase an aggregate of 300,000 shares of our common stock to key employees,
directors, and other persons who have or are contributing to our success. The
options granted pursuant to the 2002 Plan may be either incentive options
qualifying for beneficial tax treatment for the recipient or non-qualified
options. The 2002 Plan is administered by an option committee that determines
the terms of the options subject to the requirements of the 2002 Plan. At
December 31, 2003, options to purchase 11,272 shares of Common Stock were
outstanding under the 2002 Plan and options to purchase an additional 284,728
shares could be granted under the 2002 Plan.

     2003 Stock Option And Compensation Plan. In November 2002, our Board of
Directors approved our 2003 Stock Option And Compensation Plan (the "2003
Plan"), which was subsequently approved by our stockholders. Pursuant to the
2003 Plan, we may grant options to purchase an aggregate of 300,000 shares of
our Common Stock to key employees, directors, and other persons who have or are
contributing to our success. The options granted pursuant to the 2003 Plan may
be incentive options qualifying for beneficial tax treatment for the recipient
or they may be non-qualified options. The 2003 Plan is administered by an option

                                       50

<PAGE>


committee that determines the terms of the options subject to the requirements
of the 2003 Plan, except that the option committee shall not administer the 2003
Plan with respect to automatic grants of shares and options to directors of the
Company who are not also employees of the Company ("Outside Directors"). The
option committee may be the entire Board or a committee of the Board. Outside
Directors automatically receive options to purchase 10,000 shares pursuant to
the 2003 Plan at the time of their election as an Outside Director and
thereafter on the first business day after each annual meeting of stockholders
if still an Outside Director at that time. These Outside Directors options are
exercisable at the time of grant. The exercise price for options granted to
Outside Directors is equal to the fair market value of our common stock on the
date of grant. All options granted to Outside Directors expire three years after
the date of grant. The 2003 Plan also provides that Outside Directors will
receive 2,000 shares of common stock at the time of their election as an Outside
Director and on the first business day after each annual meeting of stockholders
during the term of the 2003 Plan while they remain Outside Directors. At
December 31, 2003, no options to purchase shares of common stock were
outstanding and 20,000 shares of common stock had been issued under the 2003
Plan, and options to purchase an additional 280,000 shares could be granted
under the Plan.

Compensation Of Outside Directors

     Outside Directors are paid $500 for each meeting of the Board of Directors
that they attend. In addition, each Outside Director will receive 2,000 shares
of common stock and options to purchase 5,000 shares each year pursuant to the
2003 Plan. Directors also are reimbursed for expenses incurred in attending
meetings and for other expenses incurred on our behalf. In February 2003, we
issued 2,000 shares of common stock to each outside Director at that time and
each Outside Director at that time was granted options to purchase 5,000 shares
of Common Stock for $6.15 per share. These options expire February 4, 2006.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table summarizes certain information as of March 19, 2004
with respect to the beneficial ownership of our common stock (i) by our
directors, (ii) by stockholders known by us to own 5% or more of our common
stock, and (iii) by all officers and directors as a group.

                                       51

<PAGE>


                                                      As Of March 19, 2004
                                                                   Percentage Of
                                                                        Class
Name And Address Of                           Number Of           Beneficially
Beneficial Owner                                 Shares                 Owned
--------------------------------------------------------------   ------------
Stephen H. Hollis (1)                          733,200(1)                 8.75%
3350 Misty Mountain Road
Casper, Wyoming 82601

Ken M. Daraie                                  64,000(2)                    *
6621 S. Poplar
Casper, Wyoming  82601

Beth McBride                                   30,100(3)                    *
5801W. 33rd Ave.
Wheatridge, Colorado  80212

Roy G. Cohee                                   29,825(4)                    *
2046 Rustic Driive
Casper, Wyoming  82601

Thomas A. Prendergast                          31,600(7)                    *
725 Montoya Oak
El Paso, Texas  79932

Directors and Officers as a group           1,566,330(1)(2)              13.24%
(Eight Persons)                             (3)(4)(5)(6)(7)

Hollis Oil & Gas Co. (6)                        350,000                   4.19%

---------------
* Less than one percent.

(1)  Includes options held by Mr. Hollis to purchase 25,000 shares for $3.80 per
     share that expire on January 24, 2005 and options to purchase 12,000 shares
     for $6.15 per share that expire on February 4, 2006. In addition to 346,200
     shares owned directly by Mr. Hollis, the table above includes 350,000
     shares of common stock owned by Hollis Oil & Gas Co. Mr. Hollis is an
     officer, director and 51 percent owner of Hollis Oil & Gas Co.

(2)  Includes 44,000 shares held by DL Family Limited Partnership in which Mr.
     Daraie is a general partner, 10,000 shares held by Mr. Daraie, options to
     purchase 5,000 shares for $3.80 per share that expire January 24, 2005 and
     options to purchase 5,000 shares for $6.15 per share that expire on
     February 4, 2006.

(3)  Includes options to purchase 5,000 shares for $3.80 per share that expire
     January 24, 2005 and options to purchase 5,000 shares for $6.15 per share
     that expire on February 4, 2006.

(4)  Includes options to purchase 5,000 shares for $3.80 per share that expire
     January 25, 2005 and options to purchase 5,000 shares for $6.15 per share
     that expire on February 4, 2006.

(5)  In addition to the shares described in footnotes (1), (2), (3), (4), and
     (7), the shares owned by Directors and Officers as a Group, includes:
     20,270 shares, options to purchase 10,000 shares for $3.80 per share until

                                       52

<PAGE>


     January 24, 2005 and options to purchase 6,000 shares for $6.15 per share
     that expire on February 4, 2006 held by Carol Osborne, our Secretary;
     81,685 shares, options to purchase 20,000 shares for $3.80 per share until
     January 24, 2005 and options to purchase 6,000 shares for $6.15 per share
     that expire on February 4, 2006 held by D. Steven Degenfelder, our Vice
     President; and options to purchase 6,743 shares for $14.83 per share that
     expire on November 11, 2006 held by David C. Milholm, our Chief Financial
     Officer.

(6)  The shares owned by Hollis Oil & Gas Company are shown or included as
     beneficially owned three times in the table: once as beneficially owned by
     Hollis Oil & Gas Company, again under the beneficial ownership of Mr.
     Hollis, and also as a part of the shares beneficially owned by Directors
     and Officers as a group.

(7)  Includes 24,600 shares beneficially owned of record by Scot Holding Inc.,
     which is wholly-owned by Mr. Prendergast's family of which Mr. Prendergast
     is a Director and Chairman, 2,000 shares held by Mr. Prendergast and
     options to purchase 5,000 shares for $6.15 per share that expire on
     February 4, 2006, held by Mr. Prendergast.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In November 1998, the Company completed a private placement offering of
374,750 units of Common Stock and Common Stock Purchase Warrants for $1.375 per
unit. Each unit consists of one share of Common Stock and a warrant to purchase
one share of Common Stock for $1.375 per share until October 16, 2003. The
warrants are redeemable by the Company at a price of $.001 per warrant
commencing April 2001 if the Company's Common Stock trades at a price of at
least $3.00 per share for 20 of the 30 trading days preceding the date on which
the Company gives notice of redemption. Thomas J. Vessels and his wife purchased
153,500 of the units and established trusts for the benefit of Mr. Vessels'
minor children with a purchase of 1,000 units for each of the three children. In
addition, the Company entered into a consulting agreement with Mr. Vessels
pursuant to which Mr. Vessels agreed to assist the Company in locating possible
oil and gas transactions in which the Company may participate. This agreement
was in effect until January 30, 2000. The Company agreed to issue to Mr. Vessels
options to purchase 36,500 shares of Common Stock for $1.375 per share until
October 16, 2001 and to reimburse Mr. Vessels for up to $1,000 per month in
expenses incurred in performing services on behalf of the Company during the
term of the agreement. In October 2001, Mr. Vessels exercised all these options.
The Company also agreed to cause Mr. Vessels to be elected to the Board of
Directors and to nominate Mr. Vessels to serve as a director during the term of
this agreement. Pursuant to this agreement Mr. Vessels was elected as a director
at the Annual Meeting of Shareholders held in January 1999. Mr. Vessels no
longer serves on our Board. Since the expiration of this agreement, Mr. Vessels
has continued to assist the Company in locating possible oil and gas
transactions and the Company has reimbursed Mr. Vessel's out of pocket expenses
for these services. In addition, the Company compensated Mr. Vessels for these
services by issuing him options to purchase 36,500 shares on January 26, 2000
for $3.09375 until January 26, 2003, options to purchase 36,500 shares on
January 25, 2001 for $4.53125 until January 25, 2004, and options to purchase
18,250 shares on January 24, 2002 for $3.80 until January 24, 2005. All of these
options either have expired or have been exercised.

     A company owned by Ken M. Daraie, a member of the Board of Directors, acts
as operator on a property owned by us. That company also performs services on
other producing properties in which Double Eagle owns an interest and on
drilling projects in which Double Eagle participates. Amounts paid by Double
Eagle to this company were $68,241, $19,513 and $60,860 for fiscal 2003, the
four months ended December 31, 2002 and fiscal 2002, respectively.

                                       53

<PAGE>


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)(1) and (a)(2)  Financial Statements And Financial Statement Schedules

See "ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA-- Index" on page F-1(a)

(a)(3) Exhibits.
       --------

Exhibit Index

Exhibit No.                Description
-----------                -----------

3.1(a)     Articles of Incorporation filed with the Maryland Secretary of State
           on January 23, 2001 (incorporated by reference from Exhibit 3.1(a) of
           the Company's Annual Report on Form 10-KSB for the year ended August
           31, 2001).

3.1(b)     Certificate of Correction filed with the Maryland Secretary of State
           on February 15, 2001 concerning the Articles of Incorporation
           (incorporated by reference from Exhibit 3.1(b) of the Company's
           Annual Report on Form 10-KSB for the year ended August 31, 2001).

3.1(c)     Articles of Merger filed with the Maryland Secretary of State on
           February 15, 2001 (incorporated by reference from Exhibit 3.1(c) of
           the Company's Annual Report on Form 10-KSB for the year ended August
           31, 2001).

3.1(d)     Certificate of Correction filed with the Maryland Secretary of State
           (incorporated by reference from Exhibit 3 of the Company's Quarterly
            Report on Form 10-QSB for the quarter ended November 30, 2001).

3.2        Bylaws (incorporated by reference from Exhibit 3.2 of the Company's
           Annual Report on Form 10-KSB for the year ended August 31, 2001).

4.1        Form of Warrant Agreement concerning Common Stock Purchase Warrants
           (incorporated by reference from Exhibit 4.3 of the Amendment No. 1 to
           the Registrant's Registration Statement on Form SB-2 filed on
           November 27, 1996, SEC Registration No. 333-14011).

14.1      Code of Ethics

31.1      Certification of Chief Executive Officer pursuant to Section 302 of
           the Sarbanes-Oxley Act of  2002

31.2      Certification of Chief Financial Officer pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002

32.1      Certification of Chief Executive Officer pursuant to Section 906 of
          the Sarbanes-Oxley Act of 2002

32.2      Certification of Chief Financial Officer pursuant to Section 906 of
          the Sarbanes-Oxley Act of 2002

                                       54

<PAGE>


(b) Reports On Form 8-K.
    -------------------

                  On October 15, 2003, we filed a Form 8-K under Item 4 to
           report a change in our certifying accountant and under Item 5 to
           announce we had entered into an equipment financing facility with
           Commercial Federal Bank.

                  On October 21, 2003, we filed a Form 8-K under Item 5 to
           announce that we were undertaking a private placement of our common
           stock.

                  On November 21, 2003, we furnished an earnings release on Form
           8-K under Item 12 for the third quarter of 2003.

                  On December 12, 2003, we filed a Form 8-K under Item 9 to
           announce that we intended to present or distribute materials attached
           as an exhibit to Form 8-K from time to time on and after December 12,
           2003.



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

     The aggregate fees billed for professional services rendered by Lovelett,
Skogen & Associates P.C. for its audit of our annual financial statements and
its review of our financial statements included in Forms 10-QSB in fiscal years
2002 and 2003 were $15,641 and $15,321, respectively. The aggregate fees billed
for professional services rendered by HEIN + Associates LLP for its audit of our
annual financial statements and its reviews of our financial statements included
in Forms 10-QSB in fiscal year 2003 were $32,500.

Audit Related Fees

     There were no fees billed for audit related services by Lovelett, Skogen &
Associates P.C. in fiscal years 2002 and 2003. The aggregate fees billed for
audit related services by Hein + Assocates LLP in fiscal year 2003 were $9,140.
These fees were accrued in connection with the implementation of new accounting
pronouncements.

Tax Fees

     There were no fees billed in by our independent auditors in each of fiscal
years 2003 and 2002 for professional services for tax compliance, tax advice or
tax planning.

All Other Fees

     There were no fees billed in by our independent auditors each of fiscal
years 2003 and 2002 for professional services other than the services described
above.

Audit Committee Pre-Approval

     Our Audit Committee Charter provides that either (i) the Audit Committee
shall pre-approve all auditing and non-auditing services of the independent
auditor, subject to de minimus exceptions for other than audit, review or attest
services that are approved by the Audit Committee prior to completion of the
audit; or (ii) that the engagement of the independent auditor be entered into
pursuant to pre-approved policies and procedures established by the Audit

                                       55

<PAGE>


Committee, provided that the policies and procedures are detailed as to the
particular services and the Audit Committee is informed of each service. The
Audit Committee pre-approved 100% of HEIN + Associates LLP fees for audit
services in fiscal year 2003. Audit-related fees for services performed by HEIN
+ Associates LLP in fiscal year 2003 were not recognized by us at the time of
the engagement to be non-audit services. Except as indicated above, there were
no fees other than audit fees for fiscal years 2002 and 2003, and the auditors
engaged performed all the services described above with their full time
permanent employees.



                                       56
<PAGE>


SIGNATURES
----------

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

    DOUBLE EAGLE PETROLEUM CO.



Date:  April 2, 2004                             /s/ Stephen H. Hollis
                                                 -------------------------------
                                                 Stephen H. Hollis,
                                                 Chief Executive Officer
                                                 and President


     Pursuant to the requirements of the Securities Exchange Act Of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


Date: April 2, 2004                              /s/ Stephen H. Hollis
                                                 -------------------------------
                                                 Stephen H. Hollis,
                                                 Chief Executive Officer,
                                                 President and Director

Date:   April 2, 2004                            /s/ David C. Milholm
                                                 -------------------------------
                                                 David C. Milholm
                                                 Chief Financial Officer

Date:   April 2, 2004                            /s/ Ken M. Daraie
                                                 -------------------------------
                                                 Ken M. Daraie, Director

Date:   April 2, 2004                            /s/ Beth McBride
                                                 Beth McBride, Director

Date:   April 2, 2004                            /s/ Roy G. Cohee
                                                 -------------------------------
                                                 Roy G. Cohee, Director

Date:   April 2, 2004                            /s/ Thomas A. Prendergast
                                                 -------------------------------
                                                 Thomas A. Prendergast, Director


                                       57