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

                                   Form 10-KSB

(Mark One)
[X]   Annual report under section 13 or 15(d) of the Securities Exchange Act of
      1934 for the fiscal year ended March 31, 1997
[ ]   Transition report under section 13 or 15(d) of the Securities Exchange Act
      of 1934 for the transition period from                      to
                                             --------------------    -----------

Commission file number: 0-21867

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

           Wyoming                                          84-0839926
 ------------------------------                         ------------------
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                          Identification No.)

716 College View Drive, Riverton, Wyoming                       82501
-----------------------------------------                      --------
(Address of principal executive offices)                      (Zip Code)

Issuer's telephone number: (307) 856-3800

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Act: 
                          Common Stock, $.01 Par Value

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months 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 fiscal year ended March 31, 1997 were $90,411.

The aggregate market value of the voting stock held by non-affiliates as of June
20,  1997 was $-0-.  (There is  currently  no trading  market  for the  issuer's
securities.)

The number of shares  outstanding  of the  issuer's  Common Stock as of June 20,
1997 was 885,481.

Documents incorporated by reference:  None

           Transitional Small Business Disclosure Format (Check one):
                             Yes        No   X
                                 -----     -----


<PAGE>

                                     Part I


Item 1. Description of Business
        -----------------------

Bishop  Capital  Corporation,  formerly  known as  Bishop  Cable  Communications
Corporation,  (the "Company") was originally  incorporated under the laws of the
State of Colorado on February 22, 1983 and reincorporated  under the laws of the
State of Wyoming on June 2, 1992. On November 22, 1995, the Company  changed its
name.  The  Company is  primarily  engaged in the  development  and sale of real
estate and has a royalty interest in a natural gas property.  At March 31, 1997,
the Company was a wholly-owned  subsidiary of a public company listed on Nasdaq.
On June 20,  1997,  the  shares of the  Company  were  distributed  as a partial
liquidating dividend as discussed below (the "Distribution").

In December 1995, the Company's parent corporation,  then known as Metro Capital
Corporation   ("Metro"),   upon  approval  of  its  shareholders,   completed  a
transaction  with Karlton Terry Oil Company and its affiliates  ("KTOC") whereby
KTOC  exchanged  certain oil and gas  properties  for 80% of the then issued and
outstanding  voting  securities of Metro (the  "Transaction"  or the "Metro/KTOC
Transaction").  The only class of  securities  of Metro  issued and  outstanding
prior to the Transaction was Common Stock. Under terms of the Transaction, Metro
issued  shares of newly created Class B Common Stock to KTOC in order to exclude
KTOC from  participation in a distribution of the Company's Common Stock.  Metro
and KTOC  previously  were not  affiliated.  Prior to and in connection with the
Transaction,  Metro  transferred  all of its assets to the  Company,  except for
$700,000 cash and an insignificant oil property prior to the Distribution. These
transferred  assets,  together with the Company's  previously owned assets, were
being operated autonomously by the prior management of Metro who became officers
and  directors  of the  Company  pursuant  to the  terms of  separate  five-year
Operating and Voting Agreements. Upon completion of the Transaction,  the parent
corporation's  name  was  changed  to  American  Rivers  Oil  Company  ("AROC").
Management of KTOC  succeeded to the board of directors and serve as officers of
AROC operating the oil and gas properties previously owned by KTOC. As a result,
AROC and the Company operate separate businesses under separate management.

The  Company's  operations,  prior to the  transfer of assets  from Metro,  were
primarily related to the development and sale of real estate. Liabilities of the
Company, consisting of trade accounts payable, were insignificant. In connection
with  the  Metro/KTOC  Transaction,   Metro  transferred  assets  of  $1,731,000
(excluding  $700,000  cash  and  an  insignificant  oil  property)  and  related
liabilities  of  $41,000  to  the  Company.   The  assets  transferred  included
$1,055,000  in cash and  marketable  securities,  net property and  equipment of
$200,000 and a net gas royalty interest of $400,000.

Pursuant to the terms of the Transaction,  AROC's Board of Directors on November
8, 1996 authorized a spin-off  distribution  of the Company's  Common Stock as a
partial liquidating dividend to AROC's Common shareholders of record on November
18, 1996 on the basis of one share of the Company's Common Stock for four shares

                                      -2-

<PAGE>


of AROC's Common Stock.  AROC's Class B Common  shareholders did not participate
in the Distribution. The Distribution occurred on June 20, 1997 and the separate
Operating and Voting Agreements  discussed above were terminated.  Subsequent to
the termination of these  agreements,  the officers and directors of the Company
are continuing in their positions.

The Company had four full-time employees as of March 31, 1997.

Real Estate Operations

In October 1993, the Company entered into two limited partnership  agreements to
purchase  approximately  90  contiguous  acres  of  land  in  Colorado  Springs,
Colorado.  The property  surrounding the acreage is primarily retail development
(restaurants,  major grocery chains, gas stations,  convenience stores and small
retailers) to serve nearby residential developments.  A summary of the Company's
participation in each partnership is as follows:

     (1) The Company contributed  $250,000 cash to the first partnership (Bishop
Powers,  Ltd.) which  purchased  approximately  55 acres of land for  commercial
development.  The Company,  as general  partner,  has an 81%  interest  with the
remaining 19% interest held by the limited  partner (Powers Golf LLC) who is the
general partner in the second  partnership  discussed below. The Company will be
allocated  100% of the income and losses  until it has been paid  $600,000  plus
interest thereon at 8% per annum (not to exceed $100,000) after which the income
and losses will be allocated 81% to the Company and 19% to the limited  partner.
The Company,  as general partner,  has exclusive  management of the partnership.
Any transfer of a limited partner's interest requires the written consent of the
general partner. The Company is planning a three phase development of commercial
pad  sites  for a 20 acre  parcel  with a  remaining  35 acre  parcel  not being
developed at the present time.

     (2) The Company  contributed  $100,000 cash to the second partnership (Z-H,
Ltd.)  which  purchased  approximately  35  acres  of land on  which  Z-H,  Ltd.
constructed  a  recreational  facility  consisting  of a 60 station golf driving
range, 36 holes of miniature golf, 9 baseball/softball  batting machines,  and a
1,200 square foot clubhouse. This facility, which encompasses all of the acreage
purchased,  commenced  operations  in July 1994.  The  Company,  as the  limited
partner,  has a 19% interest with the remaining 81% interest held by the general
partner  (Powers  Golf LLC).  There is no  affiliation  between  the Company and
Powers Golf LLC. The Company  contributed  an  additional  $250,000 when certain
financing  requirements  in the  partnership  consisting  of  $800,000  of  debt
financing were fulfilled by the general partner.  The Company is not a guarantor
of any debt in this  partnership and the general partner cannot incur additional
debt  without  the prior  written  consent of the  Company.  The  Company is not
required to make any  further  capital  contributions  to the  partnership.  The
Company also has the right of first refusal  relating to the sale of partnership
assets. The general partner has entered a non-binding letter of intent with an



                                       -3-

<PAGE>


unrelated   third-party   who  has  expressed  an  interest  in  purchasing  the
improvements and personal  property  together with a long-term ground lease. The
partnership  has incurred losses from operations  since  inception.  There is no
assurance  that the  operations  will become  profitable in the near future.  At
March  31,  1997,  the net  carrying  value of the  Company's  19%  interest  is
$215,000.

The undeveloped real estate is subject to local zoning laws and regulations. The
undeveloped  real  estate  must be  surveyed,  designed  and  platted  and  then
submitted to the appropriate governmental authorities for approval,  permits and
agreements  before it can  commence  development.  The ability of the Company to
obtain  necessary  approvals  and permits for its planned  development  is often
beyond the Company's control. The length of time necessary to obtain permits and
approvals  increases  the carrying  costs of  unimproved  land  acquired for the
purpose of  development.  The western  boundary of the  undeveloped  real estate
borders a drainage channel and appropriate governmental authorities will require
that certain  improvements be made along the drainage channel as sections of the
undeveloped  land are platted for  development.  The Company  estimates that the
total drainage channel improvement costs will approximate $400,000.

The  Company is  currently  developing  4.62 acres (5 lots) in Phase I of the 20
acre  parcel.  The  Phase  I  Concept  Plan  was  approved  by  the  appropriate
governmental authorities in April 1997 with the Final Plat approved and recorded
in May  1997.  The  estimated  costs  for  the  Phase  I site  development  work
consisting of grading,  utilities,  channel lining, storm sewer, paving and curb
and gutter are approximately $400,000. The Company anticipates completion of the
Phase I site  development work by August 1997. The site development work will be
funded  primarily by the proceeds  from the expected  closings of the three lots
sold.  The  Company,  which is  devoting  all of its  efforts  to Phase I of the
development,  is unable to project an estimated time frame for the  commencement
and completion of Phases II and III.

The Company entered into sales  agreements to sell the following tracts of land:
(i) 1.14 acre to Diamond  Shamrock  Refining and Marketing  Company for $388,850
for a combination gasoline sales,  convenience store and car wash facility; (ii)
1.04 acre to a Taco Bell  franchisee for not less than $350,000  (purchase price
to be adjusted  up if actual size of platted lot is greater  than size stated in
Purchase Agreement) for a fast-food facility; and (iii) .92 acre to State Bank &
Trust for $330,627  (purchase price to be adjusted if actual size of platted lot
exceeds or is less than size  stated in  Purchase  Agreement)  for a branch bank
facility. The Taco Bell closing occurred on June 9, 1997. The State Bank & Trust
closing was scheduled 10 days  following  notice from the Company that the final
plat had been recorded;  however,  State Bank & Trust  exercised their option to
extend the  closing  for a period of 45 days  (July 7,  1997) by giving  written
notice to the Company and providing an additional $25,000 non-refundable earnest
money deposit.  The Diamond  Shamrock  closing will occur when the purchaser has
obtained  all  required  permits  necessary  to  construct  the  facility on the
property;  however,  if  purchaser  has not  closed  within  180 days after plat
recordation, the contract will terminate.


                                       -4-

<PAGE>


In October 1995 the Company  acquired  approximately 5 acres of undeveloped real
estate  located  adjacent to a golf course in Riverton,  Wyoming for $80,000 and
developed the parcel into a 15 lot  subdivision.  The  improvements  (utilities,
drainage,   roadway,   etc.)  which  were   completed  in  September  1996  cost
approximately  $154,000.  The Company  had a one year  listing  agreement  which
expired  in June 1997 with a real  estate  brokerage  company  to market at a 6%
commission  rate the  improved  lots.  Management  is presently  evaluating  the
renewal of the listing agreement.

Under various federal, state and local laws, ordinances and regulations relating
to the protection of the environment, a current or previous owner of real estate
may be liable for the cost of removal or  remediation  of certain  hazardous  or
toxic  substances  disposed,  stored,  released,   generated,   manufactured  or
discharged  from, on, at, onto,  under or in such property.  Environmental  laws
often impose such liability  without regard to whether the owner knew of, or was
responsible for, the presence or release of such hazardous or toxic  substances.
The Company engaged an independent  environmental engineer to complete a Phase I
Environmental Assessment ("Assessment") on the 20 acre parcel being developed in
Colorado  Springs,  Colorado.  The Assessment did not reveal any  non-compliance
with  environmental  laws. The Company is not aware of any  non-compliance  with
environmental laws, environmental liability or other environmental claims on its
real estate  properties  that the Company  believes would likely have a material
adverse effect on the Company.

The success of the Company depends, among other factors, upon national and local
trends  of  the  economy,   including   interest  rates,   construction   costs,
governmental regulations and legislation,  including environmental requirements,
real estate  fluctuations,  retailing trends,  population  trends,  zoning laws,
availability of financing and capital on  satisfactory  terms and the ability of
the Company to compete with other owners and developers  with greater  resources
and whose management may have more experience than the Company's officers.

Natural Gas Royalty Interest

In December 1990, the Company  purchased a royalty  interest in certain  natural
gas  properties  located in Wyoming  from an  unrelated  third-party.  Since the
Company  did not have  access to reserve  information,  the  Company  engaged an
independent  petroleum geologist to review available  geologic,  engineering and
production data and to estimate the value for the natural gas royalty  interest.
Based on this study and other factors, the Company paid approximately $1,050,000
for the royalty  interests.  At March 31, 1997,  the net carrying  value of this
interest is $263,000. In connection with the purchase,  the Company formed a tax
partnership  (Bridger  Creek  Partnership)  which  allocates to the Company,  as
general  partner,  the first  $40,000 of annual net income (as defined) from the
partnership and 80% of annual net income in excess of $40,000. After the Company
has  received  cumulative  net  income of  $1,050,000,  plus  interest  at prime
adjusted  semi-annually,  the Company  will receive 60% of the annual net income
thereafter.

The  royalty  interest  is in the Madden  Unit which  produces  natural gas from
producing  horizons  between  5,500 and 24,000 feet. A gas  processing  plant in
which the Company has no ownership interest treats the "sour gas" produced from

                                       -5-

<PAGE>


the Madison formation (24,000 feet). The plant processes 50 MMCFD (million cubic
feet per day) from two  completed  Madison  wells.  The plant  products  include
methane,  sulfur and carbon  dioxide.  The  Company's  royalty  interest is only
subject  to plant  processing  costs and  severance  and ad valorem  taxes.  The
Company  and other  royalty  owners  are  currently  negotiating  with the plant
operator to eliminate the deduction of certain processing costs which may not be
in accordance with applicable state rules and regulations.

Item 2.  Description of Property
         -----------------------

The  Company's  principal  properties  consist of 55 acres of  undeveloped  real
estate in Colorado  and an improved 15 lot  subdivision  and natural gas royalty
interest in Wyoming. None of the properties are held subject to any encumbrance.

Real Estate Investment Policies

Although the Company has no formal  policy as to the  allocation of assets among
its real estate  investments,  the Company has limited such  investments  to its
present real estate holdings which were acquired  primarily for possible capital
gain.

The Company's  major  investment in real estate is 55 acres of undeveloped  real
estate in Colorado  Springs,  Colorado  which was  acquired in October  1993 and
consists of separate 20 acre and 35 acre parcels. The Colorado Springs, Colorado
area has sustained a consistent  growth in population over the past  twenty-five
years.  Population  forecasts for the year 2000 project a 20% increase over 1990
which  is  a  conservative  2%  annualized  growth  rate.   Several  new  retail
development  centers  and  residential  areas  north  and east of the  Company's
property have been  constructed or are in the planning  stages.  Demographic and
marketing studies by independent  third-parties  project higher retail sales and
population  growth over a five-year  period  within a one to five mile radius of
the Company's  property  which is zoned PBC-2 (Planned  Business  Center) and OC
(Office Complex).  The PBC zoning allows most commercial and retail uses and the
OC zoning permits office uses as well as destination restaurants.

The Company is presently  planning a three phase  development  of commercial pad
sites  for  the 20  acre  parcel.  Phase  I of the  development,  consisting  of
approximately  4.62 acres,  has five lots of which the Company has entered  into
sales  agreements  on three  lots.  Subsequent  to March 31,  1997,  the Phase I
Concept  Plan and  Final  Plat were  approved  by the  appropriate  governmental
authorities.  In June 1997,  the Phase I site  development  work  consisting  of
grading,  utilities,  channel  lining,  storm sewer,  paving and curb and gutter
commenced and is scheduled for completion in August 1997. The estimated costs of
$400,000 for this site  development  work is expected to be funded  primarily by
proceeds from the expected  closings of the three lots sold. The Company,  which
is  devoting  all of its  efforts  to Phase I of the  development,  is unable to
project an estimated time frame for the commencement and completion of Phases II
and III.


                                       -6-

<PAGE>


The  Company's  development  plan for the  remaining 35 acre parcel is presently
anticipated  to be a combination  of retail pad sites and an apartment  complex.
The  construction  of an  apartment  complex  will be based  upon a  variety  of
factors,  including  (i)  conditional  use permit  relating to the zoning;  (ii)
external  demographic  studies;  (iii) financial review as to the feasibility of
the proposed  project,  including  projected  profit margins,  return on capital
employed  and the capital  payback  period;  (iv)  competition  for the proposed
project;  (v) the  ability to obtain  financing  on  favorable  terms;  and (vi)
management's  judgment as to the real estate  market and  economic  trends.  The
Company would also consider various  financial  resources such as a partnership,
joint venture or other financing  arrangements to minimize risk. The Company has
not commenced any feasibility  studies or financial  reviews of the contemplated
usage of this parcel.

The Company does not anticipate any major  investments in real estate  mortgages
or  securities  of or  interests  in persons  primarily  engaged in real  estate
activities.

Reserves

Reserve  information  relating to the natural gas royalty  interest owned is not
included  because the  information  is not made  available  to royalty  interest
owners  by  Louisiana  Land  and  Exploration   Company,  the  operator  of  the
properties.  The Company's share of production from the royalty interest for the
year ended March 31, 1997 was 45,837 mcf.

Item 3.   Legal Proceedings
          -----------------

The Company is not a party to any pending  legal  proceedings  involving a claim
for damages  which amount  exceeds 10% of the current  assets of the Company and
its subsidiaries on a consolidated basis and no such proceedings are known to be
contemplated.

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

No matters were submitted to a vote of the Company's sole security holder during
the fourth quarter of the fiscal year ended March 31, 1997.













                                       -7-

<PAGE>


                                     Part II


Item 5.  Market for the Common Equity and Related Stockholder Matters
         ------------------------------------------------------------

Common Stock
------------

There  currently is no public market for the Company's  Common Stock.  Since the
Company  does not meet the entry  standards  to qualify for the Nasdaq  SmallCap
Market  listing,  trading  in the  securities,  if any,  will be  limited to the
over-the-counter "Bulletin Board" used by members of the National Association of
Securities  Dealers,  Inc.  Management is having  preliminary  discussions  with
several brokerage firms to be market makers for the Company's Common Stock.

As of June 20, 1997,  there were  approximately  2,000  holders of record of the
Company's common stock (which amount does not include the number of shareholders
whose shares are held of record by brokerage firms).

Dividends
---------

The Company has paid no dividends on its Common Stock and does not intend to pay
cash dividends in the foreseeable future. Payment of cash dividends,  if any, in
the future,  will be determined by the Company's  Board of Directors in light of
the Company's earnings,  financial condition and other relevant  considerations.
There are no  restrictions  on the  Company's  present or future  ability to pay
dividends.

Item 6. Management Discussion and Analysis of Financial Condition and Results of
        Operations
        ------------------------------------------------------------------------

The  Company  believes  that  this  report  contains   certain   forward-looking
statements,  as defined in the Private Securities Litigation Reform Act of 1995,
including,  without  limitation,  statements  containing  the words  "believes,"
"anticipates,"  "estimates,"  "expects,"  "may" and words of similar import,  or
statements of management's  opinion.  Such  forward-looking  statements  involve
known and unknown  risks,  uncertainties  and other  factors which may cause the
actual  results,  performance  or  achievements  of the Company to be materially
different  from any future  results,  performance or  achievements  expressed or
implied by such forward-looking statements.

The  financial  statements  for the fiscal year ended March 31, 1996 include the
consolidated  operating  results and cash flows of Metro until  December 8, 1995
when  the  change  of  control   occurred  in  connection  with  the  Metro/KTOC
Transaction  described in Item 1.  Beginning  in December  1995,  the  financial
statements reflect only the operations of the Company.

The following  discussion and analysis  should be read in  conjunction  with the
Company's Consolidated Financial Statements and Notes thereto.


                                       -8-

<PAGE>


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

The  Company's  net loss for the fiscal year ended  March 31, 1997 was  $524,000
compared to a net loss of $144,000  for fiscal  1996.  The net loss  increase of
$380,000 in fiscal 1997 is primarily due to a decrease of $626,000 or 91% in the
net gain on sale of marketable  securities offset by a $150,000 or 100% decrease
in professional fees related to the Metro/KTOC  Transaction and a $64,700 or 11%
decrease in general and administrative expenses.

The fiscal 1996 net loss of $144,000  decreased  by $442,000 or 79% over the net
loss  for  fiscal  1995  primarily  due to a  gain  on the  sale  of  marketable
securities of $688,400 offset by $150,000 of  professional  fees relating to the
Metro/KTOC Transaction.

Fiscal 1997 Compared to Fiscal 1996

The  Company's  gas  royalty  revenue  increased  $20,500 or 29% in fiscal  1997
compared to fiscal 1996.  Although  natural gas production  decreased 7% (45,837
mcf in 1997 compared to 49,184 mcf in 1996),  the average sales price of natural
gas increased 43% ($1.94 per mcf in 1997 compared to $1.36 per mcf in 1996).

Although gas processing and production  taxes related to the natural gas royalty
interest  remained  comparable  between the two years,  the current  fiscal year
reflects a decrease in ad valorem  taxes paid over the prior  fiscal  year.  (Ad
valorem  taxes are  assessed  and payable in the current year based on the prior
calendar year's production revenue.)

General  and  administrative  expenses  decreased  $64,700 or 11% in fiscal 1997
compared  to fiscal  1996  primarily  due to a  general  reduction  in  overhead
expenses.

Depreciation  and  amortization  decreased  $31,400 or 20% in the  current  year
primarily  due to a change in the  estimated  remaining  life of the gas royalty
interest to 20 years,  effective  January 1, 1997, based on management's  review
and evaluation of new data.

Interest and dividend income decreased $27,000 or 38% in fiscal 1997 from fiscal
1996 due to the sale of marketable equity and fixed income securities.

Rental income  increased  $1,300 or 10% in the current year primarily due to the
short-term rental of office space to a non-affiliated third party.

The net gain on sale of marketable  securities  decreased $626,400 or 91% in the
current year. In the prior year, the Company sold equity  securities  with a low
cost basis to generate cash in connection with the Metro/KTOC Transaction.

The net  unrealized  loss on  marketable  securities  of $26,000 in the  current
fiscal year results  from all  marketable  securities  being  reclassified  from
available-for-sale securities to trading securities,  effective January 1, 1997,
based on management's re-evaluation of the Company's investment policies.


                                       -9-

<PAGE>



Equity in limited  partnership  loss  decreased  $15,000  or 28% in fiscal  1997
compared to fiscal 1996.  The limited  partnership's  operations  in fiscal 1997
reflected  a 6% increase in  revenues  with a  corresponding  decrease of 12% in
costs and  expenses  when  compared to the prior year.  Although the loss in the
current year  decreased  compared to the prior year,  there is no assurance that
the operations will continue to improve or become profitable in the near future.

Interest expense of $10,800 in fiscal 1997 related to the margin account payable
to broker.

Fiscal 1996 Compared to Fiscal 1995

Gas royalty  revenue  increased by $1,800 or 3% from fiscal 1995 to fiscal 1996.
Natural gas production was 49,148 mcf in fiscal 1996, or a 25% increase compared
to 1995 (39,383 mcf) and was  primarily  due to the "sour" gas  treatment  plant
becoming operational in March 1995. The production increase, however, was offset
by a 21% decrease in the average  sales price of natural gas  ($1.36/mcf in 1996
compared to $1.72/mcf in 1995).

The only costs  incurred in connection  with the  Company's  natural gas royalty
interests  are for gas plant  processing  charges and  severance  and ad valorem
taxes. These costs increased by $9,600 or 100% in fiscal 1996 compared to fiscal
1995 due  primarily  to the gas plant,  which  processes  "sour  gas",  becoming
operational  in March 1995.  The Company and other royalty  owners are presently
negotiating  with the plant operator to decrease the plant  processing  cost per
mcf being charged to the royalty owners.

General and  administrative  expenses  increased  $234,000 or 17% in fiscal 1996
compared to fiscal  1995  resulting  primarily  from legal and  consulting  fees
incurred  in  connection  with the  December  1995  Metro/KTOC  Transaction  and
compensation  expense being  recorded in connection  with the issuance of common
stock to employees from the Company's stock bonus plan and two outside directors
receiving common stock as compensation for services.

Depreciation and amortization  decreased $6,500 or 4% in fiscal 1996 compared to
fiscal 1995 as a result of a decrease in depreciable assets.

Interest and dividend income decreased $19,000 or 21% in fiscal 1996 from fiscal
1995 due to the sale of marketable equity and fixed income securities.

Rental income decreased $6,000 or 32% in fiscal 1996 from fiscal 1995 due to the
nonrenewal of an office lease in fiscal 1995.

The gain on sale of marketable  securities  in fiscal 1996 of $688,000  resulted
primarily from the sale  of  equity  securities  with a low  cost  basis  in


                                      -10-

<PAGE>


connection  with the  Metro/KTOC  Transaction.  The Company does not  anticipate
having a gain of this magnitude in the near future.

The equity in limited  partnership loss represents the Company's share of losses
as  a  19%  limited  partner  in  a  golf  driving  range,  miniature  golf  and
baseball/softball  batting cage recreational facility which commenced operations
in July 1994.

The discontinued operations of an oil property relates to the oil property which
was not  transferred  to the  Company  in  connection  with  the  December  1995
Metro/KTOC Transaction.

Financial Condition

At March 31, 1997, the Company had working capital of $409,400.

The following summary table reflects  comparative cash flows for the Company for
the two years ended March 31, 1997:

                                                            Years Ended
                                                              March 31,
                                                     ------------------------
                                                        1997           1996
                                                     ---------      ---------
     Net cash used in operating activities           $ (71,600)     $(321,200)
     Net cash used provided by investing activities     51,600        262,700
     Net cash  used in financing activities               --            --

Net cash used in operating activities decreased $249,600 in fiscal 1997 compared
to fiscal 1996  primarily due to net proceeds  realized from the sale of trading
securities.

Net cash provided by investing  activities  was $51,600 for the year ended March
31, 1997 as compared to  $262,700 in the prior year.  The Company  utilized  net
cash proceeds of $188,100 from the purchase and sale of marketable securities in
the current  fiscal year for land  development  costs of  $153,600,  purchase of
equipment for $9,500 and funding of operating  activities.  The land development
costs primarily relate to improvements on the 15 lot subdivision in Wyoming. The
Company  loaned  $100,000 to its parent  company which was  subsequently  repaid
during the current  year. In fiscal 1996,  net cash proceeds of $1,095,500  from
the purchase  and sale of  marketable  securities  were  primarily  utilized for
capital  expenditures  of  $154,700,  the  transfer  of  $700,000  cash  in  the
Metro/KTOC Transaction and funding of operating activities.

There were no cash flows from financing  activities for the year ended March 31,
1997. The Company had short-term  borrowings and repayments of $60,000 in fiscal
1996.

The Company's material  commitments for capital  expenditures in the next twelve
months will be in conjunction  with the  development of a 20 acre parcel located
in Colorado Springs, Colorado. The Company plans to develop this parcel in three
phases.  The Concept Plan and Final Plat relating to Phase I of the  development


                                      -11-

<PAGE>


(consisting of  approximately  4.62 acres) have been approved by the appropriate
governmental authorities. The Company has entered into sales contracts for three
of five lots and closings are scheduled to occur in June,  July and August 1997.
The  Company  engaged  outside  consultants  to develop  specifications  and bid
packages for roadway,  drainage channel and on-site (grading,  utilities,  etc.)
improvements  related to Phase I. The  Company  has  awarded a  contract  in the
amount of $400,000 for site improvements which are to commence in June 1997 with
a  scheduled  completion  date in August  1997.  The Company  expects  that such
expenditures  will be funded primarily by proceeds realized from the closings of
the 3 lots sold.

Impact of Inflation

The Company  cannot  determine the precise  effects of inflation.  However,  the
impact of general price  inflation has not had a material  adverse effect on the
results of the Company's operations.

Item 7.  Financial Statements

Information  with respect to this item appears on page F-1 of this report.  Such
information is incorporated herein by reference.

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
           Financial Disclosure
          ----------------------------------------------------------------------
     
     None










                                      -12-

<PAGE>


                                    Part III


Item 9.  Directors and Executive Officers of the Registrant
         --------------------------------------------------

     a. Identification of Directors and Executive Officers

            Name                     Age                  Office
            ----                     ---                  ------
      Robert E. Thrailkill           66         Chairman of the Board, President
                                                and Chief Executive Officer

      John A. Alsko                  56         Secretary/Treasurer and Director

      Robert J. Thrailkill           38         Vice President and Director

     Robert E. Thrailkill.  Mr.  Thrailkill has been President,  Chief Executive
Officer and Director of the Company  since its inception in February  1983.  Mr.
Thrailkill  previously  served as  Chairman  of the Board,  President  and Chief
Executive  Officer of Metro Capital  Corporation,  the  Company's  former parent
corporation,  from  February  1981 to  December  1995 at which  time there was a
change in control.  Mr. Thrailkill's  business background spans over 32 years of
management   responsibility  in  privately  and  publicly-held   companies.  Mr.
Thrailkill devotes full time to the business of the Company.

     John A.  Alsko.  Mr.  Alsko  was  appointed  as  Secretary/Treasurer  and a
Director of the Company in November 1995.  Previously,  Mr. Alsko served as Vice
President - Finance of Metro Capital  Corporation from February 1987 to December
1995.  Prior to joining  Metro Capital  Corporation,  he was employed in various
financial positions with other privately and publicly-held  companies and public
accounting firms. Mr. Alsko is a Certified Public Accountant.

     Robert J.  Thrailkill.  Mr.  Thrailkill  was appointed as Vice  President -
Operations  and a Director  of the  Company in November  1995.  Previously,  Mr.
Thrailkill  served as Director of Operations of Metro Capital  Corporation  from
January 1989 to December 1995.  Prior to joining Metro Capital  Corporation,  he
was  employed  in  various  supervisory  and  managerial  positions  with  other
companies.

The  directors  of the Company are elected to hold office  until the next annual
meeting of  shareholders  or until a successor  has been elected and  qualified.
Officers of the Company are elected  annually by the Board of Directors and hold
office until their successors are duly elected and qualified.

No arrangement or  understanding  exists between any of the above  directors and
officers pursuant to which any one of those persons were selected to such office
or position. None of the directors hold directorships in other companies.

                                      -13-

<PAGE>


     b. Identification of Certain Significant Employees

           Not applicable.

     c. Family Relationships

          Robert J. Thrailkill is the son of Robert E. Thrailkill.

     d. Involvement in Certain Legal Proceedings

          Not applicable.

     e. Compliance with Section 16(a) of the Securities Exchange Act of 1934

          Not applicable.

Item 10.  Executive Compensation
          -----------------------

     a. Summary Compensation Table

The following table sets forth the compensation  received by the Chief Executive
Officer for the years ended March 31, 1997,  1996 and 1995.  No other  executive
officer had total annual salary and bonus exceeding  $100,000 for the year ended
March 31, 1997.

<TABLE>
<CAPTION>


                                                                                        Long Term
      Name                         Annual Compensation                             Compensation Awards
      and              --------------------------------------------          ----------------------------------                  
   Principal                                           Other Annual            Restricted             Options
    Position           Year     Salary     Bonus       Compensation          Stock Award ($)          SARS (#)
    --------           ----     ------     -----       ------------          ---------------          --------
<S>                    <C>     <C>        <C>         <C>        <C>           <C>                   <C>    <C>
Robert E. Thrailkill   1997    $145,000   $  --       $   46,200 (2)           $    --               45,000 (3)
President, Chief       1996     145,000      --               --                  22,500 (4)         25,000 (5)
Executive Officer      1995     145,000      --               --                  15,500 (6)         50,000 (7)
and Director (1)

</TABLE>

--------------
     (1) Robert E. Thrailkill was the Chief  Executive  Officer of Metro Capital
Corporation  ("Metro")  from  February  1981 to  December  1995 when a change in
control  occurred.  In December  1995,  Mr.  Thrailkill  became Chief  Executive
Officer of Bishop Capital Corporation,  a wholly-owned subsidiary of Metro, into
which the  majority  of  assets of Metro  were  transferred  when the  change in
control  occurred.  Metro  subsequently  changed its name to American Rivers Oil
Company  ("AROC").  On June 20, 1997, the Company's Common Stock was distributed
to AROC's Common shareholders as a partial liquidating dividend.

     (2) Consists of 40,300  registered  shares allocated and issued from AROC's
1987  Stock  Bonus  Plan with a fair  market  value of $1.31  per share  (22,000
shares) and $.94 per share (18,300 shares) on the award dates.

                                      -14-

<PAGE>


     (3) Consists of AROC's securities underlying options exercisable on date of
grant  (July 31,  1996) at a per share  exercise  price of $1.38 and expires two
years thereafter.
     (4) Consists of 15,000  shares  allocated and issued from AROC's 1987 Stock
Bonus Plan with a fair market value of $1.50 per share on the award date.
     (5) Consists of AROC's securities underlying options exercisable on date of
grant (October 11, 1995) at a per share exercise price of $1.65 and expires five
years thereafter.
     (6) Consists of 25,000  shares  allocated and issued from AROC's 1987 Stock
Bonus Plan with a fair market value of $.62 per share on the award date.
     (7) Consists of AROC's securities underlying options exercisable on date of
grant (September 6, 1994) at a per share exercise price of $.68 and expires five
years thereafter.

The columns for "Long-Term  Incentive Plan Payouts" and "All Other Compensation"
were omitted from the Summary  Compensation Table since there was no information
reportable for the three years ended March 31, 1997.

     b. Option/SAR Grants Table

     The  Company  does not have any stock  option  plans or  outstanding  Stock
Appreciation Rights ("SARs").

     c. Aggregated Option Exercise and Fiscal Year-End Option Value Table

     The Company  does not have any stock  options nor any SARs  outstanding  at
March 31, 1997.

     d. Compensation of Directors

     There are no current  arrangements  for the  compensation  of directors for
services  rendered  since the current  directors  are  employees of the Company.
There are no other arrangements  whereby any of the Company's directors received
compensation for services as a director during fiscal 1997.

     e. Employment Contracts and Termination of Employment and Change-in-Control
        Arrangements.

     In November 1995, a Management Agreement (the "Agreement") was entered into
between the Company,  Robert E.  Thrailkill,  the Company's  President,  and the
Company's previous parent company.  The Agreement is for a five year term and is
renewable from year to year thereafter  unless  terminated  previously by either
party. Under the Agreement, Mr. Thrailkill is paid an annual salary of $145,000,
which salary may be  increased  by the Board of  Directors  from time to time in
accordance  with normal  business  practices  of the  Company;  his expenses are
reimbursed  in  accordance  with  the  Company's  policies  and  procedures;  he




                                      -15-

<PAGE>


participates in and receives established employee benefits and he is entitled to
participate  in  any  future  benefit  made  available  by  the  Company  to its
executives.  The  Agreement  terminates  upon  death  or  disability  and may be
terminated by the Company for cause (as defined in the Agreement). The Agreement
may also be terminated upon a breach of the Agreement, and in the event there is
a change in  control  of the  Company  (as  defined  in the  Agreement).  If the
Agreement is terminated because of a breach of the Agreement by the Company or a
change in control,  the Company  shall pay severance pay equal to the product of
(a) the annual salary rate in effect multiplied by (b) the greater of the number
of years  (including  partial years)  remaining in the term of employment or the
number three.  The Agreement  provides that upon death, the Company shall pay an
amount equal to the annual salary; upon disability, the Company shall pay salary
for the balance of the term of the Agreement (less amounts paid by insurance) or
until the executive becomes gainfully  employed,  whichever is sooner; and, upon
termination  for  cause,  the  Company  shall  pay  any  salary  due  up to  the
termination date.

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

     a. Security Ownership of Certain Beneficial Owners

The  following  table shows,  as of June 20, 1997,  those  persons  known by the
Company  to be the  beneficial  owners of more than 5% of the  Company's  Common
Stock:

<TABLE>
<CAPTION>

                                                         Amount and Nature
                          Name and Address                 of Beneficial           Percent
Title of Class           of Beneficial Owner                Ownership              of Class
--------------           -------------------                ---------              --------
<S>                       <C>                               <C>                    <C> 
Common Stock              Haddon, Inc.                       93,750                 10.6%
                          c/o Coal Contractors
                          Gowen Mine
                          Fern Glen, PA 18241-2145  (1)

Common Stock              Robert E. Thrailkill               78,720                  8.9%
                          716 College View Drive
                          Riverton, WY 82501

Common Stock              Consult & Assist                   68,750                  7.8%         
                          P.O. Box 9856
                          Rancho Santa Fe, CA 92067  (2)

Common Stock              Francarep, Inc.                    68,750                  7.8%
                          50 Av. des Champs-Elysees
                          75008 Paris, France  (3)
</TABLE>


                                      -16-

<PAGE>


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

     (1) Haddon,  Inc.  ("Haddon") is  wholly-owned by Denis Bell, a director of
AROC. Haddon owned working interests in the oil and gas properties  exchanged by
KTOC in the Metro/KTOC  Transaction  which were acquired on the closing date for
$175,000 cash and 367,945 shares of Class B Common Stock of which 175,000 shares
were  converted  into  Common  Stock  in  accordance   with  the  terms  of  the
Transaction. Haddon also purchased 200,000 shares of AROC Common Stock from AROC
in a  subsequent  and  separate  private  placement  transaction.  Mr.  Bell was
nominated as a director by KTOC  management and elected in conjunction  with the
Metro/KTOC  Transaction.  There was no affiliation between Metro and Haddon/Bell
prior to the Metro/KTOC Transaction.
     (2) All shares are beneficially owned by Georg Ligenbrink.
     (3) All shares are beneficially owned by Georges Babinet.

     b. Security Ownership of Management

The following  table shows, as of June 20, 1997,  management's  ownership of the
Company's Common Stock:

<TABLE>
<CAPTION>

                                                                  Amount and Nature
                                  Name and Address                  of Beneficial            Percent
   Title of Class                of Beneficial Owner                  Ownership              of Class
   --------------                -------------------              -----------------          --------
<S>                             <C>                                    <C>                    <C>
Common Stock                    Robert E. Thrailkill                    78,720                 8.9%
                                716 College View Drive
                                Riverton, WY 82501

Common Stock                    John A. Alsko                           19,563                 2.2%
                                716 College View Drive
                                Riverton, WY 82501

Common Stock                    Robert J. Thrailkill                    15,938                 1.8%
                                716 College View Drive
                                Riverton, WY 82501

Common Stock                    All officers and directors
                                as a group (three persons)             114,221                12.9%
</TABLE>

Item 12.  Certain Relationships and Related Transactions
          ----------------------------------------------

     a. Certain Relationships

     There were no  transactions  during the last two fiscal years,  or proposed
transactions,  in which the Company  was or is to be a party with any  director,
executive  officer  or any member of the  immediate  family of any  director  or
executive officer having a direct or indirect material interest of more than 10%
in any business or professional entity involved in such transactions.

                                      -17-

<PAGE>


     b. Indebtedness of Management

     No officer or  director  of the  Company  has been  indebted to the Company
directly or indirectly during fiscal year 1997 in an amount exceeding $60,000.

     c. Transactions with Parent of Issuer

     In connection with the Metro/KTOC  Transaction in December 1995, the assets
of Metro which were transferred to the Company were operated autonomously by the
prior management of Metro pursuant to the terms of separate five-year  Operating
and Voting Agreements which were terminated on June 20, 1997.

     d. Transactions with Promoters

     Not applicable













                                      -18-

<PAGE>


                                     Part IV


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

     a. Exhibits

          3.1  Articles of Incorporation  and Bylaws  (incorporated by reference
               to  Exhibits  3.1  and  3.2  of  the   Registrant's   Form  10-SB
               Registration Statement filed December 11, 1996). (1)

          10.1 Management  Agreement  dated  December 8, 1995  between  American
               Rivers Oil Company (formerly Metro Capital  Corporation),  Bishop
               Capital   Corporation   (formerly  Bishop  Cable   Communications
               Corporation) and Robert E. Thrailkill  (incorporated by reference
               to  Exhibit  10.1 of the  Registrant's  Form  10-SB  Registration
               Statement filed December 11, 1996). (1)

          10.2 Purchase  Option  Agreement  dated August 28, 1996 between Bishop
               Powers,  Ltd., a Colorado  Limited  Partnership,  Bishop  Capital
               Corporation as General Partner and Diamond Shamrock  Refining and
               Marketing  Company  (incorporated by reference to Exhibit 10.2 of
               the Registrant's Form 10-SB Registration Statement filed December
               11, 1996). (1)

          10.3 Contract  to Sell Real Estate  dated  November  14, 1996  between
               Bishop  Powers,  Ltd.,  a Colorado  Limited  Partnership,  Bishop
               Capital Corporation as General Partner and 123 Cascade Associates
               LLC   (incorporated   by   reference   to  Exhibit  10.3  of  the
               Registrant's Form 10-SB Registration Statement filed December 11,
               1996). (1)

          10.4 Agreement  for the  Purchase and Sale of  Commercial  Real Estate
               dated  March 3, 1997  between  Bishop  Powers,  Ltd.,  a Colorado
               Limited  Partnership,   Bishop  Capital  Corporation  as  General
               Partner and State Bank & Trust of Colorado Springs  (incorporated
               by  reference to Exhibit  10.4 of the  Registrant's  Form 10-SB/A
               Registration Statement filed March 17, 1997). (1)

          10.5 Operating  Agreement  dated  December  8, 1995  between  American
               Rivers Oil Company (formerly Metro Capital Corporation),  Karlton
               Terry Oil Company and Bishop Capital Corporation (formerly Bishop
               Cable Communications  Corporation)  (incorporated by reference to
               Exhibit  10.5  of  the  Registrant's  Form  10-SB/A  Registration
               Statement filed March 17, 1997). (1)

          10.6 Voting  Agreement dated December 8, 1995 between  American Rivers
               Oil Company (formerly Metro Capital  Corporation),  Karlton Terry
               Oil Company and Bishop Capital Corporation (formerly Bishop Cable


                                      -19-

<PAGE>


               Communications Corporation) (incorporated by reference to Exhibit
               10.6 of the  Registrant's  Form  10-SB/A  Registration  Statement
               filed March 17, 1997). (1)

        10.7   Bishop Powers, Ltd. Limited  Partnership  Agreement dated October
               15, 1993 between  Bishop  Capital  Corporation  (formerly  Bishop
               Cable  Communications  Corporation) as General Partner and Powers
               Golf LLC as Limited Partner (incorporated by reference to Exhibit
               10.7 of the  Registrant's  Form  10-SB/A  Registration  Statement
               filed March 17, 1997). (1)

        10.8   Z-H, Ltd.  Limited  Partnership  Agreement dated October 15, 1993
               between  Powers Golf LLC as General  Partner  and Bishop  Capital
               Corporation (formerly Bishop Cable Communications Corporation) as
               Limited Partner (incorporated by reference to Exhibit 10.8 of the
               Registrant's Form 10-SB/A Registration  Statement filed March 17,
               1997). (1)

        10.9   Agreement of Bridger Creek  Partnership  dated  December 31, 1990
               between  Bishop  Capital  Corporation  (successor  to interest of
               Metro  Capital  Corporation)  and Mr. and Mrs.  William N. Spratt
               (incorporated  by reference  to Exhibit 10.9 of the  Registrant's
               Form 10-SB/A Registration Statement filed March 17, 1997). (1)

       10.10   Construction  Contract  dated June 5, 1997 between Bishop Capital
               Corporation as General Partner of Bishop Powers, Ltd. and Pioneer
               Sand Company, Inc.

          21   Subsidiaries  of the  Registrant  (incorporated  by  reference to
               Exhibit  21  of  the  Registrant's   Form  10-SB/A   Registration
               Statement filed March 17, 1997). (1)

          27   Financial Data Schedule (submitted only in electronic format).


------------------
          (1)  Not filed herewith. In accordance with Rule 12b-32 of the General
               Rules and Regulations under the Securities  Exchange Act of 1934,
               reference  is  made  to a  document  previously  filed  with  the
               Commission.

     b. Reports on Form 8-K

        None








                                      -20-

<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.

                                               BISHOP CAPITAL CORPORATION
                                               (Registrant)


Date:  June 20, 1997                           By:   /s/ Robert E. Thrailkill
                                                   --------------------------
                                                    Robert E. Thrailkill
                                                    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 date indicated.


Date:  June 20, 1997                                 /s/  Robert E. Thrailkill
                                                    ---------------------------
                                                    Robert E. Thrailkill
                                                    Chairman of the Board of
                                                    Directors
                                                   (Principal Executive Officer)


Date:  June 20, 1997                                /s/  John A. Alsko
                                                   ----------------------------
                                                   John A. Alsko
                                                   Treasurer/Director
                                                   (Principal Financial and
                                                   Accounting Officer)


Date:  June 20, 1997                                /s/  Robert J. Thrailkill
                                                    ---------------------------
                                                    Robert J. Thrailkill
                                                    Vice President/Director




                                      -21-

<PAGE>
                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                          INDEX TO FINANCIAL STATEMENTS


                                                                        PAGE
                                                                        ----

Independent Auditor's Report............................................F-2

Consolidated Balance Sheet - March 31, 1997.............................F-3

Consolidated Statements of Operations - For the Years
    Ended March 31, 1997 and 1996.......................................F-4

Consolidated Statements of Changes in Stockholders'
    Equity - For the Years Ended March 31, 1997 and 1996................F-5

Consolidated Statements of Cash Flows - For the Years
    Ended March 31, 1997 and 1996.......................................F-6

Notes to Consolidated Financial Statements..............................F-7



                                       F-1

<PAGE>






                          INDEPENDENT AUDITOR'S REPORT



Board of Directors
Bishop Capital Corporation
Riverton, Wyoming


We have audited the  accompanying  consolidated  balance sheet of Bishop Capital
Corporation and subsidiaries as of March 31, 1997, and the related  consolidated
statements of operations,  changes in stockholders'  equity,  and cash flows for
the years ended  March 31, 1997 and 1996.  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  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of Bishop  Capital
Corporation  and  subsidiaries  as of March 31,  1997,  and the results of their
operations  and their cash flows for the years ended March 31, 1997 and 1996, in
conformity with generally accepted accounting principles.




HEIN + ASSOCIATES LLP

Denver, Colorado
May 15, 1997, except for the last two sentences of
  Note 1, as to which the date is June 20, 1997



                                       F-2

<PAGE>



                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 1997



                                     ASSETS
                                     ------
CURRENT ASSETS:
    Cash and equivalents                                            $    46,735
    Marketable securities                                               449,917
    Receivables:
         Gas royalties                                                   15,489
         Interest and other                                               8,985
    Notes receivable - officers                                          25,000
    Prepaid expenses and other                                           11,380
                                                                    -----------
             Total current assets                                       557,506

PROPERTY AND EQUIPMENT:
    Building                                                            212,157
    Furniture and fixtures                                               63,162
    Vehicles and equipment                                               41,846
                                                                    -----------
                                                                        317,165
    Less accumulated depreciation                                      (121,436)
                                                                    -----------
             Net property and equipment                                 195,729
                                                                    -----------

OTHER ASSETS:
    Land under development                                              565,336
    Investment in limited partnership                                   214,589
    Gas royalty interest, net of accumulated amortization
         of $803,617                                                    263,434
    Notes receivable                                                     37,719
    Other assets, net                                                     4,290
                                                                    -----------
             Total other assets                                       1,085,368
                                                                    -----------

TOTAL ASSETS                                                        $ 1,838,603
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

    Accounts payable and accrued expenses                           $    43,044
    Payable to broker                                                    85,106
    Customer deposit - related party                                     20,000
                                                                    -----------
         Total current liabilities                                      148,150

COMMITMENTS (Notes 5 and 7)

STOCKHOLDERS' EQUITY:
    Preferred stock, no par value; 5,000,000 shares
         authorized, no shares issued                                      --
    Common stock, $.01 par value; 15,000,000 shares
         authorized; 885,481 shares issued and outstanding                8,855
    Capital in excess of par value                                    2,245,995
    Accumulated deficit                                                (564,397)
                                                                    -----------
             Total stockholders' equity                               1,690,453
                                                                    -----------


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $ 1,838,603
                                                                    ===========




       See accompanying notes to these consolidated financial statements.

                                       F-3

<PAGE>
<TABLE>
<CAPTION>

                                        BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                                           CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                         FOR THE YEARS ENDED
                                                                               MARCH 31,
                                                                   ----------------------------------
                                                                      1997                    1996
                                                                   ---------                ---------

REVENUE -
<S>                                                                <C>                      <C>      
   Gas royalties                                                   $  90,411                $  69,931


COSTS AND EXPENSES:
   Gas processing and production taxes                                19,129                   19,192
   General and administrative                                        517,285                  581,936
   Professional fees related to reverse acquisition                     --                    150,000
   Depreciation and amortization                                     121,339                  152,718
                                                                   ---------                ---------
                                                                     657,753                  903,846
                                                                   ---------                ---------

LOSS FROM OPERATIONS                                                (567,342)                (833,915)

OTHER INCOME (EXPENSE):
   Interest income                                                    33,006                   51,094
   Dividend income                                                    11,092                   20,061
   Rental income                                                      13,963                   12,686
   Net gain on sale of marketable securities                          62,005                  688,400
   Net unrealized loss on marketable securities                      (25,992)                    --
   Equity in limited partnership loss                                (39,523)                 (54,606)
   Interest expense                                                  (10,789)                    --
   Other, net                                                           (720)                  (1,745)
   Discontinued operations of oil property                              --                    (25,850)
                                                                   ---------                ---------

NET LOSS                                                           $(524,300)               $(143,875)
                                                                   =========                =========

NET LOSS PER SHARE                                                 $    (.59)               $    (.16)
                                                                   =========                =========

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                        885,481                  885,481
                                                                   =========                =========











                            See accompanying notes to these consolidated financial statements.

                                                            F-4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                    BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                             CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                    FOR THE YEARS ENDED MARCH 31, 1997 AND 1996



                                Common Stock             Treasury Stock                   
                          -----------------------   -----------------------     Capital in    Unrealized   Retained
                           Number of                Number of                     Excess of    Holding     Earnings
                           Shares        Amount      Shares         Amount       Par Value      Gain       (Deficit)       Total
                          ---------    ----------   ---------    -----------    -----------  -----------  -----------  ------------

<S>                       <C>          <C>          <C>          <C>            <C>          <C>          <C>          <C>        
BALANCES, April 1, 1995   2,700,689    $  27,007    1,101,234    $(1,736,062)   $ 3,030,711  $   528,936  $ 1,584,498  $ 3,435,090

  Commitment to
   issue common
   stock for services       150,000        1,500         --             --          223,500         --           --        225,000
  Net change in
   unrealized
   holding gain                --           --           --             --             --       (462,052)        --       (462,052)
  Consummation of
   reverse acquisition
   and reflect capital
   structure of Bishop   (1,965,208)     (19,652)  (1,101,234)     1,736,062     (1,088,187)        --     (1,480,720)    (852,497)
  Net loss                     --           --           --             --             --           --       (143,875)    (143,875)
                        -----------    ---------  -----------    -----------    -----------  -----------   ----------    ---------

BALANCES, March 31, 1996    885,481        8,855         --             --        2,166,024       66,884      (40,097)   2,201,666

  Issuance of AROC
   common stock for            
   employee
   compensation                --           --           --             --           79,971         --           --         79,971
  Net change in
   unrealized
   holding gain                --           --           --             --             --        (66,884)        --        (66,884)
  Net loss                     --           --           --             --             --           --       (524,300)    (524,300)
                        -----------    ---------  -----------    -----------    -----------  -----------  -----------  -----------

BALANCES, March 31, 1997    885,481    $   8,855         --      $      --      $ 2,245,995  $      --    $  (564,397) $ 1,690,453
                        ===========    =========  ===========    ===========    ===========  ===========  ===========  ===========








                                  See accompanying notes to these consolidated financial statements.

                                                            F-5

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                       BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                 
                                                                                   For The Years Ended
                                                                                         March 31,
                                                                              ---------------------------------
                                                                                 1997                  1996
                                                                              -----------           -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                           <C>                   <C>         
     Net loss                                                                 $  (524,300)          $  (143,875)
     Adjustments to reconcile net loss
      to net cash used in operating activities:
             Depreciation and amortization                                        121,339               155,185
             Issuance of common stock for services                                   --                 225,000
             Issuance of AROC common stock for employee                              
                 compensation                                                      79,971                  --
             Equity in limited partnership loss                                    39,523                54,606
             Write-down of investment                                                --                  25,000
             Net gain on sale of marketable securities                            (62,005)             (688,400)
             Net unrealized loss on marketable securities                          25,992                  --
             Changes in operating assets and liabilities:
                 (Increase) decrease in:
                      Marketable securities                                       175,891                  --
                      Gas royalties receivable                                     (6,090)                3,655
                      Interest and other receivables                                4,273                 8,003
                      Receivables from AROC                                        21,524               (23,579)
                      Prepaid expenses                                              8,634                (1,680)
                      Other assets                                                 (1,000)               14,126
                 Increase (decrease) in:
                      Accounts payable and accrued expenses                       (40,498)               30,770
                      Customer deposit                                               --                  20,000
                      Payable to broker                                            85,106                  --
                                                                              -----------            ----------                    
             Net cash used in operating activities                                (71,640)             (321,189)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of marketable securities                                           (477,837)             (169,979)
     Proceeds from sale of marketable securities                                  665,894             1,265,512
     Funds advanced under notes receivable                                       (120,000)              (42,522)
     Proceeds from collection of notes receivable                                 146,639                64,461
     Land acquisition and development costs                                      (153,627)             (133,473)
     Purchase of property and equipment                                            (9,464)              (21,274)
     Transfer of cash in reverse acquisition                                         --                (700,000)
                                                                              -----------           -----------
             Net cash provided by investing activities                             51,605               262,725

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from borrowings                                                        --                  60,000
     Principal payments on borrowings                                                --                 (60,000)
                                                                              -----------           -----------
             Net cash used in financing activities                                   --                    --
                                                                              -----------           -----------

NET DECREASE IN CASH AND EQUIVALENTS                                              (20,035)              (58,464)

CASH AND EQUIVALENTS, beginning of year                                            66,770               125,234
                                                                              -----------           -----------

CASH AND EQUIVALENTS, end of year                                             $    46,735           $    66,770
                                                                              ===========           ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
     Cash paid for interest                                                   $    10,089           $       830
                                                                              ===========           ===========








                           See accompanying notes to these consolidated financial statements.

                                                          F-6
</TABLE>

<PAGE>


                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1. BASIS OF PRESENTATION:
   ----------------------

     Reverse  Acquisition - In October 1995, Metro Capital  Corporation  (Metro)
     and  Karlton  Terry  Oil  Company  (KTOC)  entered  into an Asset  Purchase
     Agreement  whereby KTOC agreed to exchange  certain oil and gas  properties
     (the  "Contributed  Properties") for a total of 7,717,820 shares of Class B
     common stock of Metro,  which represented 80% of the issued and outstanding
     voting securities of Metro. On November 29, 1995, the shareholders of Metro
     approved this transaction and the closing occurred on December 8, 1995. The
     shareholders  also approved  changing the name of the Company from Metro to
     American Rivers Oil Company (AROC).

     Metro's assets, except for $700,000 cash and an insignificant oil property,
     were  transferred  at their  historical  carrying  value to a  wholly-owned
     subsidiary,    Bishop   Capital   Corporation,    formerly   Bishop   Cable
     Communications  Corporation  ("Bishop"  or the  "Company"),  where they are
     being operated  autonomously  by the prior  management of Metro pursuant to
     the terms of  separate  five-year  Operating  and  Voting  Agreements.  The
     Operating  Agreement  provides  that  Bishop's  management  will  have sole
     authority  and  discretion  with respect to the business,  operations,  and
     assets of Bishop.  The Voting  Agreement  appoints  Bishop's  president  as
     attorney and proxy to vote in his sole and absolute discretion,  all of the
     shares of all classes of the common  stock of AROC and/or  Bishop  owned by
     them with respect to any matter  brought  before the  shareholders  of AROC
     and/or Bishop relating to or involving exclusively Bishop.

     Accordingly, the accompanying financial statements include the consolidated
     operating  results and cash flows of Metro until  December 8, 1995 when the
     change of control  occurred.  Beginning in December 1995, the  accompanying
     financial statements reflect only the operations of Bishop.

     Change in Capital  Structure  and Spinoff - Since  inception of the Company
     there have been 4,500,000 shares of common stock  outstanding.  In November
     1996,  the Board of  Directors  of AROC (the  Company's  sole  stockholder)
     agreed to make a pro rata  distribution  of 885,481 shares of the Company's
     common stock to AROC's common  stockholders  (excluding  holders of Class B
     common stock) of record on November 18, 1996. The pro rata  distribution of
     shares occurred on June 20, 1997, and the remaining 3,614,519 shares of the
     Company's common stock owned by AROC were canceled.  Accordingly, all share
     and per share amounts in the  accompanying  financial  statements have been
     retroactively restated to give effect to the change in capital structure.


2. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
   --------------------------------------------------------------------

     Nature of Operations - The Company is primarily  engaged in the development
     and sale of real  estate and also has a royalty  interest  in a natural gas
     property.

     Principles of Consolidation - The Company's  subsidiaries consist of Bishop
     Powers,  Ltd.  and Bridger  Creek  Partnership  in which the Company  holds
     general partner  interests of 81% and 80%,  respectively.  The accompanying
     financial   statements  include  the  accounts  of  the  Company  and  both
     majority-owned  partnerships.  All material  intercompany  transactions and
     accounts have been eliminated in consolidation.

                                       F-7

<PAGE>


                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




     Property  and  Equipment  -  Property  and  equipment  is  stated  at cost.
     Depreciation is provided by the straight-line  method over estimated useful
     lives of three to thirty-one years.

     Maintenance   and  repairs  are  charged  to  expense  as   incurred,   and
     expenditures  for major  improvements  are  capitalized.  When  assets  are
     retired or otherwise  disposed  of, the  property  accounts are relieved of
     costs and accumulated depreciation, and a gain or loss is recognized.

     Land  Under  Development  - Land  under  development  is stated at cost and
     approximately $331,000 relates to acquisition costs at March 31, 1997.

     Impairment of Long-lived Assets - The Company periodically compares the net
     carrying   value  of  long-lived   assets  to  the  related   estimates  of
     undiscounted  future cash flows for such assets.  If the net carrying value
     exceeds the estimated  cash flows,  then  impairment  will be recognized to
     reduce the carrying value to the estimated fair value.

     Gas Royalty  Interest - Through December 31, 1996, the gas royalty interest
     was being amortized  utilizing the  straight-line  method over an estimated
     life of eight years.  Effective January 1, 1997, management determined that
     the  estimated  remaining  life of the gas royalty  interest  was 20 years,
     based upon information that the operator released publicly.  As a result of
     this change in estimate,  amortization expense for the year ended March 31,
     1997, was reduced by approximately $30,000 (approximately $.03 per share).

     Cash Equivalents - The Company considers all highly liquid debt instruments
     purchased  with an  original  maturity  of three  months or less to be cash
     equivalents.

     Marketable    Securities   -   Management    determines   the   appropriate
     classification   of  its   investments  at  the  time  of  acquisition  and
     reevaluates  such   determination  at  each  balance  sheet  date.  Trading
     securities  are carried at fair value,  with  unrealized  holding gains and
     losses included in earnings.  Available-for- sale securities are carried at
     fair value, with unrealized  holding gains and losses, net of tax, reported
     as a separate component of stockholders' equity.  Realized gains and losses
     on all securities are computed based on average cost.

     Through  December 31, 1996, all securities were classified as available for
     sale.  Effective  January 1, 1997,  management  reevaluated  the  Company's
     investment  policies and began  classifying all securities as trading since
     management's  intent is to hold the securities  principally for the purpose
     of selling them in the near term.  This  reclassification  had no effect on
     earnings.

     Investments - The Company's 19% ownership interest in a limited partnership
     (Z-H, LTD.) is stated at cost, adjusted for its share of losses incurred.

     Income Taxes - The Company  accounts  for income taxes under the  liability
     method,  which requires  recognition of deferred tax assets and liabilities
     for the expected future tax  consequences of events that have been included
     in the financial statements or tax returns. Under this method, deferred tax
     assets and liabilities are determined  based on the difference  between the
     financial  statement and tax bases of assets and liabilities  using enacted
     tax rates.

                                       F-8

<PAGE>


                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




     AROC  includes the  Company's  operations  in its  consolidated  income tax
     return.  Income taxes are allocated  between AROC and the Company as if the
     Company was a separate taxpayer.

     Stock-Based   Compensation   -  The  Company   accounts   for   stock-based
     compensation  using the  intrinsic  value method  prescribed  in Accounting
     Principles   Board  Opinion  No.  25,   "Accounting  for  Stock  Issued  to
     Employees," and related interpretations. Accordingly, compensation cost for
     stock  options  granted to employees is measured as the excess,  if any, of
     the quoted market price of the  Company's  (or AROC's)  common stock at the
     measurement date (generally, the date of grant) over the amount an employee
     must pay to acquire the stock.

     In October 1995,  the  Financial  Accounting  Standards  Board issued a new
     statement titled  "Accounting for Stock-Based  Compensation" (FAS 123). The
     new statement is effective for fiscal years  beginning  after  December 15,
     1995.  FAS 123  encourages,  but does not  require,  companies to recognize
     compensation  expense for grants of stock, stock options,  and other equity
     instruments to employees  based on fair value.  Companies that do not adopt
     the fair value  accounting  rules must  disclose the impact of adopting the
     new method in the notes to the financial statements. Transactions in equity
     instruments with  non-employees for goods or services must be accounted for
     by the fair value  method.  The  Company  has elected not to adopt the fair
     value accounting  prescribed by FAS 123 for employees,  and will be subject
     only to the disclosure requirements prescribed by FAS 123.

     Accounting   Estimates  -  The  preparation  of  financial   statements  in
     conformity  with  generally   accepted   accounting   principles   requires
     management  to make  estimates  and  assumptions  that  affect the  amounts
     reported in the financial statements and the accompanying notes. The actual
     results could differ from those estimates.

     The Company's  financial  statements  are based on a number of  significant
     estimates,  including the amortization period for the gas royalty interest,
     realizability  of the  carrying  value of land  under  development  and the
     limited partnership  investment  discussed in Note 5, and the determination
     of other than temporary impairment of marketable securities.  The Company's
     estimates  are  expected  to  change  as  additional   information  becomes
     available and it is reasonably possible that such estimates will materially
     change in the forthcoming year.

     Net Loss Per  Share - The net loss per  share  calculation  is based on the
     weighted  average  number  of  shares  outstanding  during  each  year,  as
     retroactively  restated  for the  changes in capital  structure  due to the
     reverse acquisition and spin-off as discussed in Note 1.

     Reclassifications  - Certain  reclassifications  have been made to the 1996
     financial   statements  to  conform  to  the   presentation  in  1997.  The
     reclassifications had no effect on the 1996 net loss.



                                       F-9

<PAGE>


                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



3. MARKETABLE SECURITIES:
   ----------------------

     The cost and estimated fair market value of trading securities at March 31,
     1997 were as follows:

                                                                       Net
                                                      Fair         Unrealized
                                                     Market           Gains
                                        Cost          Value         (Losses)
                                        ----          -----         --------

     U.S. Treasury securities         $172,758       $163,525      $ (9,233)
     Redeemable preferred
       securities                       89,500         92,000         2,500
     Equity securities                 213,651        194,392       (19,259)
                                      --------       --------      --------

                                      $475,909       $449,917      $(25,992)
                                      ========       ========      ========

     Cash proceeds  from the sale of  available-for-sale  securities  during the
     years  ended  March  31,  1997  and  1996  were  $665,894  and  $1,265,512,
     respectively.  Net gains from available-for-sale securities sold during the
     year ended March 31, 1997  amounted to $51,340  (gross gains of $69,511 and
     gross losses of $18,171). Net gains from available-for-sale securities sold
     during the year ended March 31, 1996  amounted to $688,400  (gross gains of
     $701,152 and gross losses of $12,752).


4. GAS ROYALTY INTEREST:
   ---------------------

     In December 1990, the Company  purchased a royalty  interest in certain gas
     properties  located in Wyoming for approximately  $1,067,000.  At March 31,
     1997, the net carrying value of this interest amounts to $263,434. Revenues
     related to this royalty interest are affected by local gas  transportation,
     processing, and marketing arrangements.  Reserve disclosures related to the
     gas  royalty  interest  are  not  presented   because  the  information  is
     unavailable from the operator of the properties.

     In  connection  with the  purchase,  the Company  formed a tax  partnership
     (Bridger  Creek  Partnership),  which  allocates  to the  Company the first
     $40,000  of annual net income  from the  partnership  and 80% of annual net
     income in excess of $40,000.  After the  Company  receives  cumulative  net
     income of $1,050,000  plus interest at prime  adjusted  semi-annually,  the
     Company  will  be  entitled  to  60%  of  the  annual  net  income  of  the
     partnership.  Through March 31, 1997, the minority  interest's share of the
     partnership's profits and cash flows has not been material.


5. PARTNERSHIPS:
   -------------

     In  October  1993,  the  Company  became the  general  partner of a limited
     partnership  to develop or sell 55 acres of  undeveloped  real estate.  The
     Company contributed $250,000 cash for its 81% general partnership interest.
     The  remaining  19%  interest  is held by the  limited  partner  who is the
     general partner in the  partnership  described  below.  The Company will be
     allocated  100% of the income and losses  until it has been paid  $700,000,
     

                                      F-10

<PAGE>


                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     after which the  allocation  will be  apportioned  according  to  ownership
     interests.  Through March 31, 1997, this partnership has not recognized any
     profits  and there have not been any cash  distributions  to the  partners.
     However,  at March 31, 1997,  the Company had entered into three  contracts
     with unrelated  parties for the sale of  approximately  three acres of land
     for an aggregate  sales price of  $1,070,000.  The closings are  contingent
     upon  certain  regulatory  approvals  and the  Company is  required to make
     additional  capital  improvements to the properties at an estimated cost of
     approximately $400,000.

     The Company also became a limited partner in a limited  partnership,  which
     purchased  approximately  35 acres of undeveloped land adjacent to the land
     mentioned  above.  The  partnership   constructed  a  golf  driving  range,
     miniature golf, and batting  facility which was completed in July 1994. The
     Company contributed $350,000 cash for its 19% partnership  interest,  which
     is reported under the equity method of accounting.

     Following is a summary of condensed  financial  information  pertaining  to
     this limited partnership:

     Balance sheet data at March 31, 1997:

        Current assets                                 $   11,700
        Noncurrent assets                                 962,800
        Current liabilities                                43,700
        Noncurrent liabilities                          1,193,400

                                                         YEARS ENDED MARCH 31,
                                                        -----------------------
                                                          1997          1996
                                                        ---------     ---------
     Operations data:
      Revenue                                           $ 276,000     $ 262,000
      Costs and expenses                                  484,000       549,000
                                                        ---------     ---------

     Net loss                                           $(208,000)    $(287,000)
                                                        =========     =========


     Company's equity in limited partnership loss       $ (40,000)    $ (55,000)
                                                        =========     =========



     The land owned by the  partnerships  discussed above is located in Colorado
     Springs,  Colorado  and,  accordingly,  the  value of these  properties  is
     directly affected by local economic and operating conditions.  At March 31,
     1997, there is a difference of approximately  $265,000 between the carrying
     value of the  Company's  investment  and its 19% interest in the assets and
     liabilities  of the  limited  partnership.  This  difference  is  primarily
     attributable to the value of the land.



                                      F-11

<PAGE>


                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



6. INCOME TAXES:
   -------------

     The items that give rise to the  components of the net  long-term  deferred
     tax asset as of March 31, 1997, are as follows:

     Gas royalty interest                                       $ 265,000
     Net operating loss carryforward                              168,000
     Other                                                        (23,000)
                                                                 --------
       Deferred tax asset                                         410,000

     Less valuation allowance                                    (410,000)
                                                                ---------

       Net deferred tax asset                                    $    --
                                                                 ========

     For the year ended  March 31,  1997,  the  valuation  allowance  related to
     deferred tax assets  increased by approximately  $190,000.  As of March 31,
     1997,  Bishop has a net operating loss  carryforward for Federal income tax
     purposes of approximately  $450,000.  Due to the spin-off discussed in Note
     1, utilization of this  carryforward  will be subject to limitations  under
     IRS Section 382. If not previously utilized,  this carryforward will expire
     primarily in 2012.


7. COMMITMENTS:
   ------------

     Effective December 1995, a five-year management agreement (the "Agreement")
     was  entered  into  between  the  Company,  the  Company's  president  (the
     "Executive")   and  AROC.  The  Agreement,   which  supersedes  a  previous
     employment agreement,  provides for minimum annual compensation of $145,000
     plus  employee  benefits.  On  the  last  day of  September  of  each  year
     thereafter,  the term of the Agreement shall be  automatically  extended an
     additional year unless, prior to such last day of September, the Company or
     the  Executive  shall  have  delivered  written  notice  that  the  term of
     employment  will not be extended.  The  Agreement  may be terminated by the
     Company only upon the death or disability of the Executive or for cause. If
     the Executive is terminated without cause, the Company would be required to
     pay as severance pay an amount equal to the Executive's salary in effect as
     of the  date of  termination  multiplied  by the  greater  number  of years
     remaining in the term of employment or the number three.

     The Company also entered into a three-year employment agreement in December
     1995  with  two  other   officers   which  provide  for  aggregate   annual
     compensation  of $85,000 plus employee  benefits.  The agreements  shall be
     automatically  extended an  additional  year on  September  30 of each year
     thereafter  unless written notice is given by either party that the term of
     employment will not be extended.  The agreements may be terminated upon the
     death or disability of the individual officer or for cause.




                                      F-12

<PAGE>


                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



8. FINANCIAL INSTRUMENTS:
   ----------------------

     Statement of Financial Accounting Standards No. 107 requires the Company to
     disclose the fair value of certain  financial  instruments in its financial
     statements.  Accordingly,  at March 31, 1997, management's best estimate is
     that  the  carrying  amount  of  cash  and  equivalents,  notes  and  other
     receivables,  accounts  payable,  accrued  expenses,  payable to broker and
     customer  deposits,  approximates  fair value due to the short  maturity of
     these instruments. Due to the short operating history of the business owned
     by the limited  partnership  discussed in Note 5,  management  is unable to
     estimate  the fair value of the  Company's  19% limited  partner  interest.
     However,  management believes that fair value exceeds the carrying value at
     March 31, 1997.


9. RELATED PARTY TRANSACTIONS:
   ---------------------------

     During the year ended  March 31,  1997,  the Company  loaned an  additional
     $100,000 to AROC which was subsequently collected during the year. The note
     provided  for  interest  at 10%  and  was  collateralized  by oil  and  gas
     properties in  Louisiana.  During the year ended March 31, 1996, an officer
     paid a  $20,000  cash  deposit  to the  Company  for the sale of land.  The
     purchase price for the land is estimated to be $45,000, but closing has not
     yet  occurred and the deposit is included in current  liabilities  at March
     31, 1997.

     The Company has notes  receivable  for a total of $25,000 from two officers
     of the Company.  The officers pledged 25,000 shares of AROC common stock as
     collateral for the notes.


10. STOCK-BASED COMPENSATION:
    ------------------------

     Stock Grants - The Company has never issued any stock options,  warrants or
     similar  instruments.  However,  in connection with the reverse acquisition
     discussed  in Note 1,  150,000  shares of AROC common  stock were issued to
     consultants  in 1996 for services  provided to the Company,  resulting in a
     charge to  operations  for  $225,000.  Additionally,  during the year ended
     March 31, 1997,  AROC issued  70,000  shares of its common stock to certain
     employees of the Company for  services  performed on behalf of the Company.
     The Company  recognized a charge to operations  for the fair value of these
     shares of $79,971.

     Pro Forma  Stock-Based  Compensation  Disclosures - The Company applies APB
     Opinion 25 and related  interpretations  in  accounting  for stock  options
     which were granted to its employees by AROC.  Accordingly,  the Company did
     not recognize  any  compensation  cost for options  granted to employees in
     1997 and 1996 since the market prices of AROC's common stock did not exceed
     the  exercise  prices on the dates of grant.  In July 1996,  AROC granted a
     two-year option to an officer to purchase 45,000 shares of its common stock
     at an  exercise  price of $1.38 per share.  During the year ended March 31,
     1996, AROC granted  ten-year  options to officers to purchase 25,000 shares
     of its  common  stock for $1.50  per  share  and a  five-year  option to an
     officer to purchase 25,000 shares of its common stock for $1.65 per share.

                                      F-13

<PAGE>


                   BISHOP CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     If  compensation  cost had been  recognized  using  the fair  value  method
     prescribed by FAS 123 rather than the intrinsic  value method under APB 25,
     the  Company's  net loss and net loss per share would have been  changed to
     the pro forma amounts indicated below.

                                                        Year Ended March 31,
                                                ------------------------------
                                                   1997                1996
                                                -----------         ----------
       Net loss:
            As reported                          $(524,300)          $(143,875)
            Pro forma                            $(551,300)          $(203,875)

       Net loss per share:
            As reported                          $    (.59)          $    (.16)
            Pro forma                            $    (.62)          $    (.23)


     The  fair  value  of each  employee  option  granted  in 1997  and 1996 was
     estimated on the date of grant using the Black-Scholes option-pricing model
     with the following weighted average assumptions:


                                                 Year Ended March 31,
                                               ------------------------
                                                1997              1996
                                               ------            ------

       Expected volatility                      75.0%             75.0%
       Risk-free interest rate                   6.5%              6.2%
       Expected dividends                        -                  -
       Expected terms (in years)                 1.8               3.7







                                      F-14