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

                                    FORM 10-K

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

         For the fiscal year ended August 31, 1996

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [No Fee Required]

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

                           Commission File No. 0-6529

                      DOUBLE EAGLE PETROLEUM AND MINING CO.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

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

777 Overland Trail (P.O. Box 766) Casper, Wyoming               82602
-------------------------------------------------            -----------
(Address of principal executive offices)                      (Zip Code)

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

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

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

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

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

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not 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-K or any amendment to this Form 10-K. [ ]


     The  aggregate  market  value of the voting  stock  held by  non-affiliates
computed  based on the average of the closing bid and asked prices of such stock
as of November 20, 1996, was $2,454,389.

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     The number of shares  outstanding of each of the issuer's classes of common
equity as of November 20, 1996 is as follows:

      $.10 Par Value Common Stock                     2,712,371
                                                      ---------

<PAGE>

                                     PART I

ITEMS 1 and 2. DESCRIPTION OF BUSINESS AND PROPERTIES

Overview

     The Company,  which was formed on January 13, 1972, explores for, develops,
produces  and sells crude oil and natural  gas.  The  Company  concentrates  its
activities in areas in which it has accumulated  detailed geologic knowledge and
developed significant  management  experience.  Current areas of exploration and
development focus for the Company include the Moxa Arch in southwestern Wyoming,
the Powder River Basin in  northeastern  Wyoming,  the  Washakie  Basin in south
central  Wyoming,  the Wind River Basin in central  Wyoming,  and the  Christmas
Meadows area in northeastern  Utah. The Company owns interests in a total of 184
producing wells, with oil constituting  approximately 55 percent and natural gas
constituting approximately 45 percent of its current production (assuming 10 Mcf
of gas production equals one barrel of oil production).

     The Company also has undeveloped  acreage in other basins and is evaluating
the possibility of additional activity in other areas. See "--Principal Areas Of
Oil And Gas Activity".

Forward-Looking Statements

     This Form 10-K includes "forward-looking  statements" within the meaning of
Section 27A of the  Securities Act Of 1933, as amended (the  "Securities  Act"),
and  Section  21E of the  Securities  Exchange  Act Of  1934,  as  amended  (the
"Exchange  Act").  All  statements  other than  statements  of  historical  fact
included in this Form 10-K,  including  without  limitation the statements under
"ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS--Financial  Condition,  Liquidity And Capital Resources", "ITEMS 1
AND 2. DESCRIPTION OF BUSINESS AND PROPERTIES--Business Strategy",  "--Principal
Areas Of Oil And Gas Activity", "--Zeolite Mining Activities", and "--Reserves",
and Note 14 to the Financial  Statements  located elsewhere herein regarding the
Company's  financial  position and  liquidity,  the amount of and its ability to
make debt service payments,  its strategies,  financial  instruments,  and other
matters, are forward-looking statements.  Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no  assurance  that such  expectations  will  prove to have  been  correct.
Important  factors that could cause actual results to differ materially from the
Company's  expectations  are  disclosed  in this  Form  10-K  including  without
limitation in conjunction with the  forward-looking  statements included in this
Form 10-K.

     The Company's intentions and expectations  described in this Form 10-K with
respect  to  possible  exploration  and  other  testing  activities   concerning
properties  in which it holds  interests  may be  deemed  to be  forward-looking
statements.  These statements are made based on management's  current assessment
of the exploratory merits of the particular  property in light of the geological
information  available at the time and based on the Company's  relative interest
in the  property  and  its  estimate  of its  share  of  the  exploration  cost.
Subsequently obtained information  concerning the merits of any property as well
as changes in estimated  exploration costs and ownership  interest may result in
revisions to management's  expectations  and intentions and thus the Company may
delete  one  or  more  of  these  intended  exploration   activities.   Further,
circumstances  beyond  the  Company's  control  may cause such  prospects  to be
eliminated from further consideration as exploration prospects.



<PAGE>

Business Strategy

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

     The Company intends to develop  several  prospects each year with a view to
taking  advantage  of advances in seismic and  drilling  technologies.  Of these
prospects,  between  five and ten each year will be intended as  unusually  high
potential,  higher risk prospects.  As indicated  above,  the Company intends to
market  its  prospects  on a basis  that will  allow the  Company  to  receive a
promoted or carried interest and thereby control its risk on the initial well on
each of these prospects.

     The Company owns  varying  interests  in its oil and gas  prospects.  These
interests and prospects are described below under  "--Principal Areas Of Oil And
Gas  Activity".  These  interests  are owned  directly  by the  Company  and the
remaining  interests in these prospects are owned by various industry  partners.
The Company  intends to develop its  prospects  utilizing  the  proceeds of this
Offering  as well as cash flow  from  operations  and sales of a portion  of the
Company's  interests to industry partners.  The estimated amounts to be expended
by the Company for its  interests  to bring  prospect  properties  into  revenue
producing  operation are set forth below. If the Offering is not completed or if
the  Company's  available  cash from  operations  or from sales of  interests to
industry  partners are lower than  anticipated,  the Company's  activities  will
decrease.   The  Company  anticipates  the  decreased  activities  will  include
expending  smaller  amounts in the  Company's  principal  areas of activity  and
attempting to sell a larger portion of the Company's  interests in its prospects
and  retaining  a  royalty  interest  or a  smaller  working  interest  in those
prospects  than the  Company  believes it would be able to retain if the Company
had more funds for  developing  these  prospects  and was not  required  to sell
additional interests.

Principal Areas Of Oil And Gas Activity

Moxa Arch

     During the past two years, the Company has participated in the drilling and
completion  of 53  successful  natural gas wells on the Moxa Arch in the Whiskey
Buttes and South Swan Fields of the Green River Basin in  southwestern  Wyoming.
The Company's  working  interests in these wells and other developed  acreage on
the Moxa Arch range  from 0.3  percent to 3.5  percent  and cover  approximately
15,500 gross acres. Amoco Production Company,  Marathon Oil Co., and Coastal Oil
& Gas Corp. each owns working interests in excess of 10 percent in this acreage.
The Company has a 100 percent  working  interest in an additional  approximately
8,800 undeveloped acres on which there currently is no planned activity.  Hollis
Oil & Gas Co. owns a 3.5 percent working  interest in 640 of the gross developed
acres in which the  Company  has a 3.5  percent  working  interest.  Stephen  H.
Hollis,  the  President  and a Director  of the  Company,  is a Vice  President,
Director  and  stockholder  of Hollis Oil & Gas Co.  and  William  N.  Heiss,  a
Director of the Company, is the President,  a Director and stockholder of Hollis

                                       -2-

<PAGE>


Oil & Gas Co. See "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS".  In
addition  to the 53 wells  drilled  during the past two years,  the  Company has
working  interests  in 47  producing  gas wells and a three  percent  overriding
royalty interest in another  producing well on approximately  4,000 gross acres,
all of which are located on the Moxa Arch.  Through August 31, 1996, the Company
had  expended  approximately  $372,000  on its Moxa  Arch  prospects,  including
approximately $330,000 for leasehold  acquisition,  rental payments and drilling
costs on the 15,500 gross developed acres, and $42,050 for leasehold acquisition
and rental  payments on the 8,800  undeveloped  acres.  The  Company  intends to
participate in the drilling of five to ten additional  development wells in 1997
at an estimated  average cost to the Company of  approximately  $7,500 per well.
Production  from the Company's  wells on the Moxa Arch is from the Frontier at a
depth of approximately 10,000 feet.

Powder River Basin

     Rabourn  Well.  The  Rabourn  Well,  in which the Company has a 100 percent
working  interest,  is located on a 400-acre  lease in the Powder River Basin in
Campbell County,  Wyoming. The Company drilled this well in 1981 and it had been
producing  at a steady  rate of 15  barrels of oil per day for a number of years
prior to April  1996,  when the  Company  fracture  stimulated  the  well.  This
resulted in  increased  production  which as of August 31, 1996 had  sustained a
rate of  approximately 55 barrels of oil per day. The Rabourn well produces from
the Muddy  Sandstone  formation  at a depth of  approximately  6,600  feet.  The
Company has expended  more than  $452,000 to acquire and develop this  prospect,
including  approximately  $46,000 for lease  acquisition and rental payments and
$406,000 for drilling,  completion,  and  recompletion  costs,  plus  additional
amounts for two unsuccessful wells that were attempted prior to 1985.

     Jepson Holler Draw Unit. Double Eagle owns a 0.058 percent working interest
in the  Jepson  Holler  Draw Unit,  Johnson  County,  Wyoming.  Ensign Oil & Gas
Company is starting to waterflood the unit to improve oil recovery.  In addition
to Ensign, Basin Exploration,  Inc. and EOS, Inc. each owns working interests in
excess of 10 percent in this unit.  Currently,  there are 18 producing wells, 34
water  injector  wells  and two water  supply  wells.  Ensign  plans to drill 26
additional  development  wells and seven water  injector  wells during 1997. The
Company  estimates  its cost to  participate  in this  project at  approximately
$7,700. The field produces oil from the Cretaceous  Shannon  Sandstone.  Through
August 31, 1996,  the Company had expended  approximately  $5,500 to acquire and
develop its interests in this prospect.

Washakie Basin

     James Creek Area. Each of the Company,  Credo Petroleum Corp., Farleigh Oil
Properties and R.K. O'Connell owns a 25 percent working interest in 10,383 gross
acres in the James  Creek area  approximately  30 miles  South of Rock  Springs,
Wyoming. In August 1995, the Company  participated in a successful  recompletion
that  resulted  in a well  producing  300 Mcf of gas per day from  the  Frontier
formation at approximately 4,405 feet. An offset location targeting the Frontier
formation at approximately  4,500 feet has been identified,  and the Company and
its  partners  intend to drill this well during the fall of 1997 at an estimated
net cost to the  Company of $83,000 to drill and  complete.  Through  August 31,
1996,  the Company had spent  approximately  $115,000 to acquire and develop its
interests in this prospect.

     Red Creek.  In  November  1994,  the  Company  sold a 100  percent  working
interest  in  approximately  10,650  acres in  Sweetwater  and Carbon  Counties,
Wyoming to Conoco, with the Company retaining a five percent overriding royalty


                                       -3-

<PAGE>

interest. In 1995, Conoco drilled an 11,244 foot Mesaverde test, which initially
flowed commercial quantities of natural gas. Conoco then fractured the well, and
this  resulted in  decreasing  the  production  significantly  and adding  water
production  in  quantities  substantial  enough to render  the well  uneconomic.
Conoco has announced its intention to undertake  additional drilling of wells on
this acreage during the remainder of 1996 and during 1997. The Company  received
an  amount  in  excess  of the  Company's  accumulated  costs  for the Red Creek
property  when the  Company  sold its working  interest  to Conoco.  Because the
Company holds an  overriding  royalty  interest,  the Company is not required to
make any additional expenditures with respect to this prospect.

     Rock Island Unit. In February 1996, the Company sold a 100 percent  working
interest in a 688-acre  lease in the Rock Island  Unit  located in the  Washakie
Basin to Yates Petroleum,  with the Company retaining a five percent  overriding
royalty  covering the  interests  sold to Yates.  An  exploratory  unit has been
formed among Yates, the Company and owners of other adjacent acreage.  Yates has
announced  its intention to drill a 16,000 foot Frontier test on this acreage in
late 1996. The Company received an amount in excess of the Company's accumulated
costs for the Rock Island property when the Company sold its working interest to
Yates. Because the Company holds an overriding royalty interest,  the Company is
not required to make any additional expenditures with respect to this prospect.

     Marianne Field. The Company purchased  additional  working interests in the
five wells in which the Company  previously had interests in the Marianne Field,
Sweetwater County,  Wyoming in August 1996. Current net production from the five
wells is net 50 Mcf per day to the Company.  A compressor  unit will be added in
the fall of 1996 to  attempt  to  increase  production.  The  Company's  working
interest  varies  from 2.9  percent  to 15.8  percent in the five wells in which
Credo Petroleum  Corporation,  Farleigh Oil Properties,  and R.K. O'Connell have
significant  interests.  The Company has spent approximately  $21,250 to acquire
and develop its interests in this prospect.

     State 1-36 Well. The Company owns a 75 percent working interest, and Hollis
Oil & Gas a 25 percent,  working  interest  in the State 1-36 Well  located on a
640-acre   lease  in  Sweetwater   County,   Wyoming.   The  Company  has  spent
approximately $276,000 to acquire and develop its interest in this well.


Wind River Basin

     Madden Anticline.  The Company owns interests in approximately  2,329 gross
and 448 net  acres on the  Madden  Anticline,  Fremont  County,  Wyoming.  These
interests  consist of working interests in 17 producing wells varying from .1 to
seven percent, at depths ranging from approximately  16,000 feet to 18,000 feet.
Other  significant  interest owners include W.A.  Moncrief,  Jr., BHP Petroleum,
Inc.  and Texaco,  Inc. As of August 31, 1996,  the  Company's  aggregate  daily
production  from these  wells was 300 Mcf.  In  general,  the  Madden  Anticline
produces over 100 million cubic feet of gas per day from seven formations in two
fields,  Long Butte Field and Madden Field, at depths which vary from 3,000 feet
to 25,000 feet.

     In October  1996,  the Company  drilled a test on an  undeveloped  480-acre
lease  on the  Madden  Anticline  at an  estimated  net cost to the  Company  of
$15,000.  The  Company's  after payout  interest in this acreage is 32.5 percent
unless a third  party  fails to drill a deep test well on this lease by November
1998,  in which case the  Company's  after payout  working  interest  will be 50
percent.  The  Company  initially  planned to plug this well  because it did not
appear to be capable of commercial production.


                                       -4-

<PAGE>


However,  the Company is reevaluating its plans as a result of a build up of gas
pressure during the  commencement of plugging and because there are existing gas
wells  producing  on both sides of this  lease.  Hollis Oil & Gas Co.  owns a 15
percent, Prima Oil & Gas Co. owns a 35 percent, and Lockridge Operating Co. owns
(subject to its  obligation  to drill a deep test well by November  1998) a 17.5
percent working interest in this lease. In addition, Hollis Oil & Gas Co. owns a
25 percent  working  interest  in 402.9  gross  acres in the Long Butte Field in
which the Company holds a 50 percent working interest.

     There currently is significant  drilling  activity on Madden  Anticline and
the Company  plans to be involved  in up to two  development  wells in this area
through fiscal 1997 at a cost to the Company of approximately $79,600 per well.

     The  Company  has  expended  approximately  $271,000 to date to acquire and
develop its interests in the Madden Anticline area.

     South Sand Draw.  The  Company has a 100  percent  working  interest in 735
acres in the South  Sand Draw  area of  Fremont  County,  Wyoming.  The  Company
believes that because of the  stratigraphically  and structurally complex nature
of this prospect, 3-D seismic should be undertaken prior to designating drilling
locations  and target  zones.  In July 1996,  the Company  spent $110 an acre to
acquire  leases  covering  approximately  69 net acres based on its  preliminary
analysis of this  prospect,  resulting in aggregate  expenditures  of $15,000 on
this prospect.  Adjacent acreage owned by other entities  includes  existing oil
production  from  the  Phosphoria  and  Tensleep  formations  and  existing  gas
production from the Frontier formation.  The Company is seeking partners for the
3-D seismic work,  exploration and development of its South Sand Draw acreage in
an attempt to commence its initial test well during 1997. The Company intends to
attempt  to  retain a  carried  interest,  for  which no  expenditures  would be
required, in this acreage.

     Graham No. 2 Well.  The Company owns a 75 percent  working  interest in the
Graham  No. 2 Well,  which is located  on a  363-acre  lease in Natrona  County,
Wyoming.   The  remaining  25  percent   working   interest  is  owned  by  J.N.
Incorporated.  The Company  originally  drilled  this well in 1981.  The initial
zones were  depleted and the well was shut-in in 1992 after paying out in excess
of its  costs of  approximately  $441,000.  The  Company  has  identified  seven
prospective  zones,  and if it is able to obtain  an  additional  partner,  will
attempt  to  recomplete  this  well to a new  zone  in the  same  formation.  By
obtaining an additional partner,  the Company believes that it can undertake the
recompletion without additional out-of-pocket cost to the Company,  although the
Company's interest in the well would be reduced.

     Cooper  Reservoir.  The Company owns a 20 percent  working  interest in 840
gross acres in Cooper Reservoir Field in Natrona County,  Wyoming.  Hollis Oil &
Gas Co. owns a five  percent  working  interest in this  acreage.  See "ITEM 13.
CERTAIN  RELATIONSHIPS  AND RELATED  TRANSACTIONS".  The remaining 75 percent of
working interests are owned by Prima Oil & Gas Co., Lockridge Operating Co., and
Alpha Development. Intoil, Inc. has staked a location to drill a well offsetting
the  Company's  acreage;  however  there is no  assurance  that the well will be
drilled.  To  date,  the  Company  has  expended  approximately  $2,600  on this
prospect,  primarily for lease acquisition and rental payment costs. The Company
is marketing  this prospect to  prospective  partners and,  based on discussions
with the owners of the remaining  interests,  anticipates  that its initial test
well will be drilled  during the summer of 1997 to the Fort Union  formation  at
approximately 4,500 feet. The net cost to the Company for this well is estimated
to be approximately $80,000.


                                       -5-

<PAGE>

     Waltman Field. The Company owns a 20 percent working  interest,  and Hollis
Oil & Gas a five percent working  interest,  in 1,120 gross acres in the Waltman
Field  immediately  north of the Cooper  Reservoir Field. A well drilled on this
acreage  in 1995 was a dry hole.  Through  August  31,  1996,  the  Company  had
expended approximately $59,000 for its interest in this acreage and the well.

Utah

     Christmas  Meadows.  The Company owns a 100 percent working interest in 800
acres that are included in a pool of approximately 20,840 acres in the Table Top
Unit, Summit County,  Utah. The Company's working interest in the pooled acreage
is approximately  3.8 percent.  Through various farm out  arrangements  with the
holders of other pooled acreage, the Company has the right to earn an additional
24.1 percent  working  interest  before payment (18.075 percent after payout) in
all the pooled acreage by drilling a test well on the pooled acreage. Holders of
10 percent or greater  working  interests in the pooled acreage consist of Prime
Oil & Gas Co. and Lockridge  Operating Co. Seismic work has been  undertaken and
drilling permits received for an initial test well.  However,  approximately 400
acres that are adjacent to the drillsite for the initial test well have not been
made  available  for  leasing by the  federal  government.  The  Company and its
industry  partners  believe  that it would be  imprudent  to drill the test well
until the adjacent lands are leased. Because the adjacent federal lands have not
been made available for leasing, the Company and its industry partners requested
that the lease period on their current  federal leases be suspended so that they
would not expire prior to the federal  government's making the adjacent unleased
lands  available  for  leasing.  This  request  was denied by the Bureau Of Land
Management,  and the  Company and its  industry  partners  currently  are in the
process of appealing this decision. The Company's partners have been informed by
the U.S.  Department  Of Interior,  Office Of Hearings  And  Appeals,  that this
appeal  process  will  prevent the unit leases  from  expiring  until the appeal
decision is made. Because of these complications,  drilling of the test well has
been  delayed  until at least the summer of 1997.  In the event that the Company
and its industry  partners are not  successful in their appeal of the suspension
of the leases,  the leases  will expire  according  to their  terms.  The leases
directly  controlled  by the  Company  within the Table Top Unit will  expire in
approximately  four  years,  while the leases  held by certain of the  Company's
industry  partners  will expire prior to the summer of 1997.  As a result of the
unsettled  nature of these  issues,  there can be no assurance  that the Company
will be able to market and drill this  prospect in the near future.  The Company
estimates   that  its  net  cost  to  participate  in  the  test  well  will  be
approximately  $325,000,  although  the  Company  is  attempting  to bring in an
additional  partner to reduce the Company's working interest and share of costs.
Through  August 31, 1996, the Company had expended  approximately  $323,000 with
respect  to  its  Christmas  Meadows   interests,   including  costs  for  lease
acquisitions,   rental  payments,  and  road  construction,   and  has  received
approximately $236,000 from sales of interests in this prospect.


Zeolite Mining Activities

     The Company has owned since 1972 placer mining claims covering 320 acres of
land in Lander  County,  Nevada and 640 acres of land in Owyhee  County,  Idaho,
which,  because of natural  outcrops and because of other sampling and analysis,
are believed to overlie significant deposits of clinoptilolite,  which is one of
34 naturally  occurring  zeolites.  Although the existence of these deposits has
been indicated for some time, no commercially significant mining operations have
been  conducted  on the  Company's  property  because  significant  markets  for
zeolites have not yet developed.  Zeolites  currently are utilized  commercially
for small  consumption  items such as cat litter,  deodorant and aquarium filler
material,  but the amount of  consumption  from these  markets has not justified
large scale production to date.


                                       -6-

<PAGE>

Continuing  efforts are being made by other  entities to develop more  extensive
markets for the use of zeolites, particularly with respect to agricultural uses,
such as feed  supplement,  soil amendment,  agriculture  deodorant and pesticide
carriers.  For accounting  purposes,  these properties are carried at a total of
$385 on the Company's financial statements.

     In September  1996,  the Company  entered  into a mining lease  pursuant to
which Mr. Hayden Rader leased the Company's  zeolite placer mining claims.  This
mining lease and a previous  agreement with the lessee provide for the lessee to
pay a  production  royalty  of $8 per ton for each  ton of  minerals  mined  and
removed from the properties  subject to the lease.  (The Company will receive $7
of this $8 per ton royalty,  and a third party will receive $1 of this  amount.)
The lease may be  terminated  by the lessee with  respect to all or a portion of
the  properties at any time without any further  obligation.  During the term of
the lease, the lessee will undertake any assessment work and pay any maintenance
fees necessary to maintain the claims in good  standing.  The lessee paid to the
Company  $10,000  as an  option  fee and an  additional  $15,000  as the  option
exercise price upon entering into the mining lease. To the extent that the lease
is still in effect, the lessee shall be required to pay a lease bonus of $50,000
in  September  1997 and  annual  advance  royalties  of  $100,000  beginning  in
September 1998.  These advance  royalties will be credited against the amount of
the royalty otherwise payable in the case of any production.

     The lessee  currently is attempting to develop  markets for sale of zeolite
from  these  properties.  There is no  assurance  that any such  markets  can be
developed or that any such sales will occur.

Production

     The table below sets forth oil and gas  production  from the  Company's net
interests in producing properties for each of its last three fiscal years.

<TABLE>
<CAPTION>
                                                       Oil And Gas Production
                                            -------------------------------------------
                                                           Year Ended
                                                            August 31,
                                            -------------------------------------------
                                               1994            1995            1996
                                            ----------      ----------      -----------

<S>                                           <C>             <C>              <C>   
Quantities
  Oil (Bbls)............................       11,107           9,528           17,352
  Gas (Mcf).............................       53,287          68,862          140,179



Average Sales Price
  Oil ($/Bbls)..........................       $16.37          $16.52           $21.42
  Gas ($/Mcf)...........................        $1.32           $1.40            $1.16


Average Production Cost
 ($/BOE)................................        $3.14           $2.74            $2.98
</TABLE>

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


                                                   -7-

<PAGE>

     The  Company's  oil and gas  production  is sold on the spot market and the
Company  does  not  have  any  production  that is  subject  to firm  commitment
contracts.  During the year  ended  August 31,  1996,  purchases  by each of two
customers,  Texaco Trading & Transportation,  Inc. and Amoco Production Company,
represented more than 10 percent of total Company revenues. Neither of these two
customers,  or any other  customers of the Company,  has a firm sales  agreement
with the Company. The Company believes that it would be able to locate alternate
customers in the event of the loss of one or both of these customers.

Productive Wells

     The  following  table  categorizes  certain   information   concerning  the
productive wells in which the Company owned an interest as of August 31, 1996.
<TABLE>
<CAPTION>


                                                           Productive Wells
                                           --------------------------------------------------
                                                   Oil                             Gas
                                           -------------------            -------------------
                                            Gross         Net             Gross           Net
                                            -----         ---             -----           ---
<S>                                       <C>             <C>             <C>             <C>
Wyoming   
  Moxa Arch ............................       --           --            102.00         0.45      

  Powder River Basin ...............        26.00         1.03                --           --

  Washakie Basin ...................          --           --              24.00         1.36

  Wind River Basin .................          --           --              15.00         1.03

Other Productive Wells .............        17.00         0.73                --           --

         Total .....................        43.00         1.76            141.00         2.84

</TABLE>


Drilling, Acquisitions And Reserve Replacement Costs

     During the three years ended  August 31,  1996,  the Company  added  proved
reserves from  acquisitions,  extensions,  discoveries and reserve  revisions of
approximately   197,358  BOE.  Capital  expenditures  during  this  period  were
approximately $994,945,  resulting in an average annual reserve replacement cost
of approximately $5.04 per BOE over that three year period.

     The Company  drilled or  participated in the drilling of wells as set forth
in the  following  table for the periods  indicated.  In certain of the wells in
which the Company  participates,  the Company has an overriding royalty interest
and no working interest.


                                       -8-

<PAGE>
<TABLE>
<CAPTION>

                                                       Wells Drilled
                         -----------------------------------------------------------------------

                                                   Year Ended August 31,
                         -----------------------------------------------------------------------
                                1994                      1995                      1996
                         -----------------        ------------------         -------------------
                         Gross         Net         Gross         Net         Gross           Net
                         -----        -----        -----        -----        -----          -----
<S>                       <C>          <C>           <C>          <C>          <C>            <C>
Exploratory
  Oil................      0             0             0           0            0              0
  Gas................      0             0             0           0            0              0
  Dry Holes..........      0             0             3          .3            1           .125
                           -             -             -          --            -           ----
      Subtotal.......      0             0             3          .3            1           .125
                           -             -             -          --            -           ----


Development
  Oil................      0             0             0           0            0              0
  Gas................     28            .5            12          .3            7           .029
  Dry Holes..........      0             0             2          .2            0              0
                           -             -             -          --            -              -
          Subtotal...     28            .5            14          .5            7           .029
                          --            --            --          --            -           ----

              Totals:     28            .5            17          .8            8           .154
                          ==            ==            ==          ==            =           ====
</TABLE>

     All the Company's  drilling  activities  are conducted on a contract  basis
with independent drilling contractors.

Reserves

     The following  reserve  related  information for the years ended August 31,
1994,  1995,  and  1996 is based  on  estimates  prepared  by the  Company.  The
Company's  reserve estimates are developed using geological and engineering data
and  interests  and  burdens  information  developed  by  the  Company.  Reserve
estimates  are  inherently  imprecise and are  continually  subject to revisions
based on production history,  results of additional exploration and development,
prices of oil and gas, and other factors.  The notes  following the table should
be read in connection with the reserve estimates.

<TABLE>
<CAPTION>

                                                                   Estimated Proved Reserves (1)(2)
                                                          -----------------------------------------------

                                                                            At August 31,

                                                          -----------------------------------------------
                                                              1994              1995              1996
                                                          -----------       ------------      -----------

<S>                                                         <C>                 <C>              <C>    
Proved Developed Oil Reserves (Bbls)....................    104,612             95,383           188,580

Proved Undeveloped Oil Reserves (Bbls)..................        ---                ---               ---

     Total Proved Oil Reserves (Bbls)...................    104,612             95,383           188,580

Proved Developed Gas Reserves (Mcf).....................  1,844,343          1,935,164         2,082,591
</TABLE>



                                                      -9-

<PAGE>
<TABLE>
<CAPTION>


<S>                                                             <C>                  <C>                 <C>   
Proved Undeveloped Gas Reserves (Mcf)......................            ---                ---               ---

     Total Proved Gas Reserves (Mcf).......................      1,844,343          1,935,164         2,082,591

Total Proved Crude Oil Equivalents (BOE)...................        289,046            288,899           396,839

Present Value Of Estimated Future Net Revenues before
income taxes (in thousands), discounted
 at 10%....................................................     $1,243,115           $863,312        $2,449,299
</TABLE>

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

(1)  The Company's annual reserve reports are prepared as of August 31, which is
     the last day of the Company's fiscal year.

(2)  The present  value of  estimated  future net revenues as of each date shown
     was calculated using oil and gas prices as of that date.

     Reference should be made to Note 11, Oil And Gas Producing  Activities,  to
the Financial  Statements included in this Form 10-K for additional  information
pertaining to the Company's proved oil and gas reserves as of the end of each of
the last three fiscal years.

Acreage

     The  following  tables set forth the gross and net acres of  developed  and
undeveloped  oil and gas leases in which the Company had working  interests  and
royalty  interests as of August 31, 1996. The category of "Undeveloped  Acreage"
in the tables includes leasehold interests that already may have been classified
as containing proved undeveloped reserves.
<TABLE>
<CAPTION>

                                              WORKING INTERESTS

                                             Developed                  Undeveloped
                                             Acreage (1)                 Acreage (2)                 Total
                                       -----------------------    -----------------------    ----------------------
State Of Location (Area)                 Gross          Net         Gross          Net         Gross         Net
                                       ----------    ---------    ----------   ----------    ----------   ---------
<S>                                      <C>            <C>          <C>          <C>          <C>          <C>
Wyoming:

  Moxa Arch...........................    15,520          63         8,807        8,807        24,327        8,870

  Powder River Basin..................    15,020         408         6,524        2,796        21,544        3,204

  Washakie Basin......................     2,400         617        47,168       28,772        49,568       29,389

  Wind River Basin....................    14,499         525         6,676        5,956        21,175        6,481

Utah:

  Christmas Meadows...................         0           0        21,403        1,363        21,403        1,363

Other.................................       666          17        13,951       12,337        14,617       12,354

    Total.............................    48,105       1,630       104,529       60,031       152,634       61,661
</TABLE>

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


                                                      -10-

<PAGE>
<TABLE>
<CAPTION>

                                                 ROYALTY INTERESTS

                                                       Developed                  Undeveloped
                                                      Acreage (1)                 Acreage (2)               Total
                                              ------------------------   ------------------------    ---------------------
State Of Location (Area)                         Gross          Net         Gross          Net         Gross         Net
                                              -----------   ----------   -----------    ---------    ----------    -------
<S>                                             <C>            <C>         <C>            <C>          <C>          <C>
Wyoming:

  Moxa Arch..............................        1,320           20         2,830          103         4,150          123

  Powder River Basin.....................        1,480            3         2,360          102         3,840          105

  Washakie Basin.........................        1,973            5        13,903          562        15,876          567

  Wind River Basin.......................        8,960          280             0            0         8,960          280

Other....................................        1,826           86         5,880          272         7,706          358

     Total...............................       15,559          394        24,973        1,039        40,532        1,433
</TABLE>


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

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

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

    December 31, 1996.......................         1,933            1,683

    December 31, 1997.......................         4,061            2,465

    December 31, 1998.......................         2,875            1,915

    December 31, 1999 and later.............        60,406           44,416


                                      -11-

<PAGE>


ITEM 3. LEGAL PROCEEDINGS

     The  Company is not a party to any  pending  legal  proceeding  (nor is the
Company's  property  subject of a pending  legal  proceeding)  that the  Company
believes would have a material adverse effect on the Company.


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

     On June 20, 1996, a special meeting of the  shareholders of the Company was
held. At that meeting,  the following  matters were approved by the shareholders
by the votes indicated below.

         (1)      A proposal  to  increase  the number of  authorized  shares of
                  Common Stock to 10,000,000 received 2,314,881 shares voting in
                  favor  of the  proposal,  28,360  shares  voting  against  the
                  proposal, and 4,020 abstaining.

         (2)      A  proposal  to adopt  the 1996  Stock  Option  Plan  received
                  2,257,425  shares  voting  in  favor of the  proposal,  86,546
                  shares  voting   against  the   proposal,   and  3,290  shares
                  abstaining.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Market   Information.   The  Company's   Common  Stock  is  traded  in  the
over-the-counter  market and listed on NASDAQ under the symbol "DBLE". The range
of high and low bid prices for each quarterly  period during the two most recent
fiscal  years  ended  August  31,  1995 and 1996,  as  reported  by NASDAQ is as
follows:

                                                High                   Low
                                             ---------              ---------
Fiscal 1995

         First Quarter                          $.62                   $.50

         Second Quarter                          .75                    .62

         Third Quarter                           .75                    .50

         Fourth Quarter                         1.37                    .50

Fiscal 1996

         First Quarter                          1.62                    .87

         Second Quarter                         1.50                    .87

         Third Quarter                          1.75                   1.00

         Fourth Quarter                         1.62                   1.12


     The quotations set forth above reflect inter-dealer prices,  without retail
mark-up,  mark-down or commission  and may not reflect actual  transactions.  On
December 10, 1996 the closing high bid price for the Common Stock as reported by
NASDAQ was $1.25 per share and the closing low asked price was $1.4375.


                                      -12-

<PAGE>


     Holders.  On December 10, 1996,  the number of  shareholders  of record was
approximately 2,045.

     Dividends. The Company has not paid any cash dividends since its inception.
The Company  anticipates  that all earnings will be retained for the development
of its business  and that no cash  dividends on its Common Stock will be paid in
the foreseeable future.

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                        DOUBLE EAGLE PETROLEUM AND MINING COMPANY
                                             ITEM 6. SELECTED FINANCIAL DATA

                                           1996             1995             1994              1993             1992
                                      ------------     -------------     ------------     -------------     ------------
<S>                                  <C>              <C>               <C>              <C>               <C>          
Total revenues                       $     649,651    $      933,486    $     499,357    $      655,977    $     709,596

Income (Loss) before cumulative
 effect of accounting change               (21,143 )          15,291         (173,028 )         (76,421 )         36,752

Income (Loss) before cumulative
 effect of accounting change per
 share                                        (.01 )             .01             (.08 )            (.04 )            .02

Cash dividends per common
 shares                                          -                 -                -                 -                -

At Year End:

Total assets                             2,540,918         2,235,220        2,030,406         2,004,968        2,265,005

Long-term obligations                            -                 -                -                 -                -

Working capital                           (263,679 )         173,390           60,494           144,999           72,334

Stockholders' equity                     1,922,012         1,943,155        1,796,613         1,928,229        1,970,680
</TABLE>
        

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Liquidity And Capital Resources
-------------------------------

     During the year ended August 31, 1996, the Company's operations resulted in
negative working capital of ($264,000) compared with positive working capital of
$173,000 at August 31,  1995.  The $437,000  decrease  was due to the  Company's
incurring a significant  expense to fracture  stimulate and recomplete  three of
its  producing  wells,  and costs to  acquire  additional  interests  in certain
prospects. One of the three recompletions, that of the Rabourn Well, resulted in
substantially  increased  production  from that well.  These  transactions  were
initially paid for with borrowed funds, and a majority of the debt was repaid in
the two quarters  ended May 31, 1996 and February  28, 1996,  respectively.  The
funds were  borrowed  from a  commercial  bank  pursuant  to a demand  loan that
accrued  interest  at a rate per annum equal to one  percentage  point above the
bank's prime rate.

     Management  believes  that the  Company's  liquidity is  sufficient to meet
future cash needs for operations;  however, without obtaining additional capital
from a  proposed  public  offering  of the  Company's  securities  or from other
sources  (which other  sources are currently  unknown),  the Company will not be
able to pursue the same  number of oil and gas  projects on the same basis as it
would like. The Company has budgeted approximately  $1,270,000 to pursue oil and
gas projects during fiscal 1997 assuming the  availability  of additional  funds
and approximately $310,000 if additional funding is not available.  See "ITEMS 1
and 2.  DESCRIPTION OF BUSINESS AND  PROPERTIES--Principal  Areas Of Oil And Gas
Activity". It is not anticipated that the Company will undertake future material
sales of oil and gas  properties  for the  primary  purpose of  raising  working
capital.  Based on the  factors  described  above,  the  Company's  current  and
anticipated sources of cash funds,  together with revenues from operations,  are
expected  to provide  sufficient  liquidity  to fund the  Company's  anticipated
operations through fiscal 1997.

     Revenues  from the sale of oil and gas  increased  significantly  in fiscal
1996,  and certain of these funds were  reinvested  in  capitalized  development
activities.  Although  this  reinvestment  resulted in a short-term  decrease in
working  capital,  it is anticipated to result in increased future cash flows as
shown in Note 11 to the financial statements. The Company is not the operator on
the wells in which it holds interests;  therefore, no inventories of oil and gas
are reflected on its financial statements.  Accounts receivable at year end were
more than double the prior year, primarily due to increased production from

                                      -13-

<PAGE>



the Rabourn Well. In addition,  accounts  receivable  and accounts  payable were
both  significant at year end due to the work being performed on the Graham Unit
to which the Company bills joint interest parties for 25%.

     As  discussed  below  under  "--Results  Of  Operations",  the  Company has
experienced  an increase in production and in production  expenses.  The Company
anticipates  that  the  Company's  increased  production,   primarily  from  the
Company's Rabourn well, together with the increased sales prices for oil and gas
currently  being  received by the Company,  will lead to increased  revenues and
cash flows from operations and improved  liquidity for the Company.  The Company
believes this will be the case even though the Company's  production  costs will
increase  as  production  increases  because  the  marginal  costs of  producing
additional oil and gas from existing wells is small compared with the additional
production revenue being generated by those additional  production costs. To the
extent the Company's exploration costs increase,  this will reduce the Company's
liquidity;  however,  as  discussed  above,  the  Company  believes  that it has
sufficient liquidity to meet future cash needs for operations.

     The  Company's  liquidity  has been  reduced  recently  due to decreases in
interest  income as a result of  smaller  cash  balances  earning  interest  and
interest  expense  resulting from the use of borrowed funds to finance a portion
of recently  increased oil and gas activities.  Both of these factors are caused
primarily by the Company's recent  increases in oil and gas activities.  Because
of the relatively  small amount the Company has received from interest income in
past  periods  ($4,474 in fiscal  1996,  $18,122 in fiscal  1995,  and $6,621 in
fiscal 1994) and the relatively small amount of interest expense incurred by the
Company  ($10,594 in fiscal 1996 and none in fiscal 1995 and 1994),  the Company
does not believe that the decrease in interest income and the increase in income
expense will have a material  adverse  effect on the  Company's  liquidity.  For
additional  information  concerning  these  matters,  see below,  "--Results  Of
Operations".

     During the year ended August 31, 1996,  gas balancing  arrangements  had no
material effect on operations or liquidity and capital resources.  Because there
has been no  significant  fluctuation  in the units of gas and the price used to
value the  receivable,  no  adjustment  has been made to the asset.  In the near
future,  the Company  intends to contact the  operator and initiate a settlement
for the imbalance.

     The Company's revenues and profitability are substantially dependent on the
prevailing prices for oil and natural gas. The volatility of oil and gas prices,
particularly  in the western  United States where the Company's  properties  are
located,  could have a material  adverse  effect on the Company's  liquidity and
operations.

                              Results Of Operations
                              ---------------------

Year Ended August 31, 1996 Compared To Year Ended August 31, 1995
-----------------------------------------------------------------

     The Company  experienced  a net loss for the year ended  August 31, 1996 of
$(21,143)  compared to net income for the prior year of  $15,291.  The change is
due mainly to the sale of several of the  Company's  nonproducing  properties in
the first quarter of fiscal 1995, yielding a profit of $363,600, compared to the
sale of  nonproducing  properties  in fiscal 1996 yielding a profit of $115,600.
Without  considering  proceeds from sales of  properties,  the Company had a net
loss from  operations of $(139,638)  for the year ended August 31, 1996 compared
to a net loss of $(387,583)  for the year ended August 31, 1995,  primarily as a
result of increased  production and lower  write-offs and  abandonments.  During
fiscal 1996, the Company incurred write-off and abandonment expenses of $92,793,
consisting of approximately $64,400 for leases that were  abandoned  or allowed 


                                      -14-

<PAGE>

to expire and an additional  approximately  $28,400 in costs related to drilling
unsuccessful  wells,  or dry holes.  This compares to write-off and  abandonment
expenses of $213,090 in fiscal 1995,  consisting of  approximately  $158,100 for
abandoned  and expired  leases and an additional  approximately  $55,000 for dry
hole costs.

     Revenue from oil and gas sales increased by  approximately  $169,600 in the
year ended  August 31, 1996  compared to the year ended  August 31,  1995.  This
increase  primarily can be  attributed to a workover  performed on the Company's
Rabourn Well,  which  accounted for $118,000 of the increase,  added  production
from the  purchase  of  producing  gas  properties  in the first  quarter of the
current year,  which accounted for $43,000 of the increase,  the recompletion of
the Britz Federal Well in a different  zone,  which accounted for $18,000 of the
increase,  and  increases  in average  oil prices from $16.25 per barrel in 1995
compared  to $21.42  per  barrel  in 1996.  Because  there was no gas  balancing
agreement  adjustment  in 1996,  revenues  were not  increased  as they  were by
$19,000 in 1995.

     Production  costs and taxes increased by  approximately  $46,600 due to the
increase in oil and gas production and sales revenue.

     Exploration costs decreased by $7,000 during the year ended August 31, 1996
when  compared to the year ended  August 31,  1995.  The  decrease  primarily is
attributable to lower geological expenses.

     Overall costs and expenses  decreased by approximately  $241,300 during the
year ended August 31, 1996 when  compared to the prior year,  due primarily to a
decrease  in the  cost of  properties  sold and a  decrease  in  write-offs  and
abandonments  of  $120,000,  a  decrease  in dry hole  costs of  $28,000,  and a
decrease in exploration costs of $7,000 due to lower geological expenses.

     Interest income decreased by approximately $13,000 from 1995 to 1996 due to
a  decrease  in funds  being  available  for  investments  as they were used for
property  workovers  as described  above.  The Company  also  incurred  interest
expense of $10,000 in 1996 in connection with its bank line of credit.

     Depreciation  and  depletion  expense  increased by  approximately  $28,000
during the year ended  August 31,  1996  compared  to the  previous  year.  This
increase can be attributed to increased  production from properties  acquired in
1995 and  increased  production  and costs from  recompletions  and  development
activities in 1996 described above.

     Other income  increased  $65,000 in 1996 compared to 1995  primarily due to
charging a management fee of $37,000 to joint interest parties for the Company's
operations  on  development  of a major  prospect.  The Company also  recognized
$32,000 in revenue in 1996 as a result of the determination that no post-closing
reductions  in the purchase  price were  required with respect to the Buck Creek
Field property sold by the Company in 1994.

     General and administrative  expenses were up slightly during fiscal 1996 as
a result of additional travel costs by Company personnel for purposes associated
with raising  additional  capital and monitoring  workover and recompletion well
projects and showing a developmental prospect to interested individuals.

     Year Ended August 31, 1995 Compared To August 31, 1994.
     -------------------------------------------------------

     The Company  experienced  net income for the year ended  August 31, 1995 of
approximately $15,291 compared to a net loss of approximately $(341,616) for the
year ended August 31, 1994. The change is due primarily to sales of nonproducing
                                   
                                      -15-

<PAGE>

properties in 1995 that were  substantially  greater than sales in 1994. Without
considering  proceeds from sales of properties and producing  wells, the Company
had a net loss from  operations  of $(387,583) in the year ended August 31, 1995
compared to a net loss from  operations  of  $(337,502)  in 1994  primarily as a
result of higher production,  and correspondingly  higher sales from production,
and higher  interest  income and an increase in write-offs and  abandonments  in
1995.  During  fiscal  1995,  the Company  incurred  write-off  and  abandonment
expenses of $213,090,  consisting  of  approximately  $158,100 for abandoned and
expired  leases and $55,000 for dry hole  expenses,  compared to  write-off  and
abandonment  expenses of $195,457 in fiscal 1994,  consisting  of  approximately
$137,000 for abandoned and expired leases and $58,500 for dry hole costs.

     Revenues  from sales of oil and gas were up slightly  during the year ended
August 31, 1995 as compared with the year ended August 31, 1994. The decrease in
price per Mcf of gas was partly offset by an increase in the  production of gas.
Production  of gas increased by 10,000 Mcf of gas and $16,000 as a result of the
Company's  acquisition of an additional working interest in producing properties
in the Whiskey  Butte Field  during the year ended  August 31, 1995 and by 7,650
Mcf of gas and $14,000 as a result of the  acquisition of an overriding  royalty
interest in the Farson Road Unit near the end of the year ended August 31, 1994.
Revenue from the sales of oil and gas decreased by $7,000 from the Graham Unit's
having been shut in and  $32,000  from the sale of the Buck Creek Field in 1994.
The revenue from the Rabourn Well was stable as the $2.50 decrease in per barrel
price was  equally  offset by an 825  barrel  increase  in  production.  Lastly,
production  from the Long Butte  property  decreased  by 40% and the lower price
from the 1-36 State Well resulted in $10,000 less revenue.  Sales and production
of oil  decreased  as a  result  of the  Company  selling  its  older  producing
properties in the Buck Creek Field in fiscal 1994.

     During the year ended August 31, 1995,  the Company  recognized  $19,500 in
oil and gas  sales as a result of the gas  balancing  agreement  on the  Whiskey
Butte Field.

     Sales   and   gains  on  sales  of   non-producing   properties   increased
significantly   when  compared  with  the  previous  year.  Gains  on  sales  of
nonproducing properties totaled $406,000 for fiscal 1995 compared to $67,700 for
the previous  year.  The Company sold a block of Wyoming leases during the first
quarter at a substantial gain.

     There were no sales of  producing  properties  during the year ended August
31, 1995.

     Interest income increased  approximately $11,500 in fiscal 1995 compared to
fiscal 1994,  due to increased  interest  rates and the Company's  improved cash
position as a result of the aforementioned nonproducing properties transaction.

     Total production costs decreased  slightly during the year ended August 31,
1995 as a result of the sale of the properties in the Buck Creek Field in fiscal
1994. Production taxes increased by $11,000 as a result of the increased oil and
gas revenue and additional  taxes  attributable to working  interests during the
current year.

     Exploration  expenses  increased  by $22,000  in the year ended  August 31,
1995.  This  is  primarily   attributable  to  the  expiration  of  $129,000  of
nonproducing  leases in North Dakota.  Dry hole costs of $55,000 incurred during
fiscal  1995 were  comparable  to the $58,000  abandonment  of a property in the
prior year.  Lease rental costs during the year ended August 31, 1995  increased
by $13,000 as a result of higher rental  requirements  for some of the Company's
newer properties.  Also,  geological expenses increased by $9,000 as the Company
was aggressively evaluating the production capabilities of its properties.


                                      -16-

<PAGE>

     General and administrative  expenses remained  relatively stable during the
two years.

     Depreciation and depletion increased by $6,500 during the year ended August
31, 1995 compared  with the prior fiscal year,  during the year ended August 31,
1994.  This increase is a result of increased  production and the acquisition of
the additional working interest in the Whiskey Butte Field discussed earlier.

     The  deferred  income  tax  benefit of  $30,000  of the  previous  year was
replaced  with a deferred  tax expense of $3,000  during 1995 as a result of the
adoption of SFAS No. 109 in the previous year.

     The  above-mentioned  events and factors led to the Company's net income of
$15,000 during the year ended August 31, 1995 compared to a net loss of $340,000
in the prior year.





                                      -17-

<PAGE>

                    DOUBLE EAGLE PETROLEUM AND MINING COMPANY
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                      Index
                                                                 Page Numbers

(1)   Report of Independent Certified Public Accountants             F-1

      Financial Statements:

         Balance Sheets as of August 31, 1996 and 1995               F-2


         Statements of Operations for the years ended
           August 31, 1996, 1995, and 1994                           F-3

         Statement of Stockholders' Equity for the years
           ended August 31, 1996, 1995, and 1994                     F-4

         Statements of Cash Flow for the years ended
           August 31, 1996, 1995, and 1994                           F-5

         Notes to Financial Statements                           F-6 - F-14

(2)   Additional financial information required to be
        furnished pursuant to the requirements on Form 10-K

      Report of Independent Certified Public Accountants
        on Schedules                                                 F-15

      Schedules:

          V Property and Equipment                                   F-16

          VI Accumulated Depreciation and Depletion of
              Property and Equipment                                 F-17


All other schedules are omitted because they are inapplicable,  not required, or
the information is included in the financial statements or notes thereto.



                                      -18-

<PAGE>

                    HOCKER, LOVELETT, HARGENS & YENNIE, P.C.


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS





The Stockholders and Board of Directors
Double Eagle Petroleum and Mining Company

We have audited the balance sheets of Double Eagle  Petroleum and Mining Company
as of August  31,  1996 and 1995,  and the  related  statements  of  operations,
stockholders'  equity,  and cash flows for the years ended August 31, 1996, 1995
and 1994.  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 amount and disclosures in the financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Double Eagle  Petroleum and
Mining Company as of August 31, 1996 and 1995, and the results of its operations
and its cash  flows for the years  ended  August  31,  1996,  1995 and 1994,  in
conformity with generally accepted accounting principles.


                                /S/ Hocker, Lovelett, Hargens & Yennie, P.C.

Casper, Wyoming
October 18, 1996



                                                        F-1

<PAGE>
<TABLE>
<CAPTION>
                                    DOUBLE EAGLE PETROLEUM AND MINING COMPANY
                                                  BALANCE SHEETS
                                             AUGUST 31, 1996 AND 1995

                                                                      1996                1995
                                                                 --------------      --------------
         ASSETS
<S>                                                               <C>                 <C>   
CURRENT ASSETS
    Cash and cash equivalents - Note 2                           $        41,232     $       268,385
    Accounts receivable - Note 8                                         119,465              41,337
    Prepaid expense                                                       41,731                   -
                                                                  --------------      --------------
         Total                                                           202,428             309,722

OTHER ASSETS
    Accounts receivable - Note 3                                          82,277              82,277
    Investment, at cost                                                    8,541               9,000
    Other                                                                 11,500              11,500
                                                                  --------------      --------------
         Total                                                           102,318             102,777

PROPERTY AND EQUIPMENT,  at cost, net of accumulated
  depreciation and depletion and impairment allowance
  - Notes 4 and 8 (Successful efforts method used
  for oil and gas properties)                                          2,236,172           1,822,721
                                                                  --------------      --------------

         Total                                                   $     2,540,918     $     2,235,220
                                                                  ==============      ==============

         LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Accounts payable                                             $       185,474     $       110,432
    Accrued production taxes                                              30,633              25,900
    Note payable - Note 14                                               250,000                   -
                                                                  --------------      --------------
         Total                                                           466,107             136,332

DEFERRED TAX LIABILITY, net - Note 5                                     152,799             155,733
                                                                  --------------      --------------
         Total                                                           618,906             292,065

STOCKHOLDERS' EQUITY - Notes 6 and 8 Common stock,
      $.10 par value; authorized - 10,000,000 shares;
      issued and outstanding - 2,712,371 shares                          271,237             271,237
    Capital in excess of par value                                       886,254             886,254
    Retained earnings                                                    764,521             785,664
                                                                  --------------      --------------
         Total                                                         1,922,012           1,943,155
                                                                  --------------      --------------

         Total                                                   $     2,540,918     $     2,235,220
                                                                  ==============      ==============
</TABLE>

See accompanying notes to financial statements.

                                                     F-2

<PAGE>
<TABLE>
<CAPTION>

                                        DOUBLE EAGLE PETROLEUM AND MINING COMPANY
                                                 STATEMENTS OF OPERATIONS
                                   FOR THE YEARS ENDED AUGUST 31, 1996, 1995, AND 1994


                                                                         1996              1995                1994
                                                                   --------------     --------------     ---------------
<S>             <C>
REVENUES - Note 7
    Sales of oil and gas                                          $       417,114    $       247,461    $        235,411
    Sales of nonproducing properties                                      130,000            634,979              78,244
    Sale of wells                                                               -                  -             136,495
    Interest                                                                4,474             18,122               6,621
    Other, primarily zeolite royalties in 1995 and 1994                    98,063             32,924              30,000
    Gain on sale of investments                                                 -                  -              12,586
                                                                   --------------     --------------     ---------------
         Total                                                            649,651            933,486             499,357

COSTS AND EXPENSES
    Production                                                             79,532             45,009              51,600
    Production taxes                                                       41,750             29,679              18,667
    Cost of nonproducing properties sold                                   14,439            228,992              10,540
    Cost of wells sold                                                          -                  -              69,736
    Exploration                                                            84,685             91,705              69,341
    Write offs and abandonments                                            92,793            213,090             195,457
    Interest                                                               10,594                  -                   -
    General and administrative                                            243,035            228,021             214,947
    Depreciation and depletion                                            106,900             78,586              72,108
                                                                   --------------     --------------     ---------------
         Total                                                            673,728            915,082             702,396
                                                                   --------------     --------------     ---------------

INCOME (LOSS) BEFORE INCOME TAXES                                         (24,077 )           18,404            (203,039 )

INCOME TAX EXPENSE (CREDIT) - Note 5
    Current                                                                     -                  -                   -
    Deferred                                                               (2,934 )            3,113             (30,011 )
                                                                   --------------     --------------     ---------------
         Total                                                             (2,934 )            3,113             (30,011 )
                                                                   --------------     --------------     ---------------

INCOME (LOSS) BEFORE CUMULATIVE EFFECT
  OF ACCOUNTING CHANGE                                                    (21,143 )           15,291            (173,028 )

CUMULATIVE EFFECT OF ACCOUNTING CHANGE
  - Note 5                                                                      -                  -            (168,588 )
                                                                   --------------     --------------     ---------------

NET INCOME (LOSS)                                                 $       (21,143 )  $        15,291    $       (341,616 )
                                                                   ==============     ==============     ===============

INCOME (LOSS) PER COMMON AND
  COMMON EQUIVALENT SHARE
    Before cumulative effect of accounting
       change                                                     $          (.01 )  $           .01    $           (.08 )
    Cumulative effect of accounting change                                    .00                .00                (.07 )
                                                                   --------------     --------------     ---------------

    After cumulative effect of accounting
      change                                                      $          (.01 )  $           .01    $           (.15 )
                                                                   ==============     ==============     ===============

COMMON STOCK AND COMMON STOCK
   EQUIVALENT SHARES OUTSTANDING                                        2,712,371          2,450,590           2,317,166
                                                                   ==============     ==============     ===============
</TABLE>

See accompanying notes to financial statements.

                                                        F-3

<PAGE>
<TABLE>
<CAPTION>

                                        DOUBLE EAGLE PETROLEUM AND MINING COMPANY
                                            STATEMENTS OF STOCKHOLDERS' EQUITY
                                   FOR THE YEARS ENDED AUGUST 31, 1996, 1995, AND 1994


                                                                         Capital                               Total
                                  Shares                                in Excess                              Stock-
                                   Out-              Common              of Par            Retained           holders'
                                 standing             Stock               Value            Earnings            Equity
                              --------------     --------------      --------------     --------------     --------------
<S>                            <C>              <C>                 <C>               <C>                  <C>   
Balance,
 August 31, 1993                  2,062,371    $       206,237     $       610,003    $     1,111,989    $     1,928,229

Net Loss                                  -                  -                   -           (341,616 )         (341,616 )

Common Stock
 Issued                             300,000             30,000             180,000                  -            210,000
                             --------------     --------------      --------------     --------------     --------------

Balance,
 August 31, 1994                  2,362,371            236,237             790,003            770,373          1,796,613

Net Income                                -                  -                   -             15,291             15,291

Common Stock
 Issued                             350,000             35,000              96,251                  -            131,251
                             --------------     --------------      --------------     --------------     --------------

Balance,
 August 31, 1995                  2,712,371            271,237             886,254            785,664          1,943,155

Net Loss                                  -                  -                   -            (21,143 )          (21,143 )
                             --------------     --------------      --------------     --------------     --------------

Balance,
 August 31, 1996                  2,712,371    $       271,237     $       886,254    $       764,521    $     1,922,012
                             ==============     ==============      ==============     ==============     ==============

</TABLE>


See accompanying notes to financial statements.

                                                    F-4

<PAGE>
<TABLE>
<CAPTION>

                                        DOUBLE EAGLE PETROLEUM AND MINING COMPANY
                                                 STATEMENTS OF CASH FLOWS
                                   FOR THE YEARS ENDED AUGUST 31, 1996, 1995, AND 1994


                                                                  1996               1995               1994
                                                             --------------      --------------     ---------------
<S>                                                           <C>                <C>                 <C>    
CASH FLOWS FROM OPERATING ACTIVITIES:
    Cash from oil and gas sales                              $       437,508    $       232,803    $        295,394
    Cash paid for production, exploration
     and general and administrative                                 (434,833 )         (394,269 )          (333,124 )
    Interest received                                                  4,474             18,122               6,621
    Interest paid                                                    (10,594 )                -                   -
                                                              --------------     --------------     ---------------
         Net Cash Used in Operating
           Activities                                                 (3,445 )         (143,344 )           (31,109 )

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sales of properties                                130,000            634,979             214,739
    Proceeds from sale of investments                                      -                  -              14,810
    Purchases of properties                                         (603,708 )         (322,710 )          (411,660 )
    Purchase of investment                                                 -             (9,000 )                 -
                                                              --------------     --------------     ---------------
         Net Cash Provided by (Used in)
          Investing Activities                                      (473,708 )          303,269            (182,111 )

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of common  stock                                -                  -             210,000
    Proceeds from bank loan                                          392,500                  -                   -
    Repayment of bank loan                                          (142,500 )                -                   -
                                                              --------------     --------------     ---------------
         Net Cash Provided by Financing Activities                   250,000                  -
                                                              --------------     --------------     ---------------

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                              (227,153 )          159,925              (3,220 )

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF YEAR                                                  268,385            108,460             111,680
                                                              --------------     --------------     ---------------

CASH AND CASH EQUIVALENTS AT
  END OF YEAR                                                $        41,232    $       268,385    $        108,460
                                                              ==============     ==============     ===============

</TABLE>



SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

During the year ended  August 31, 1995,  the Company  issued  350,000  shares of
common stock with a market value of $131,250 as partial  payment on the purchase
of oil and gas producing properties.





See accompanying notes to financial statements.

                                       F-5


<PAGE>

                    DOUBLE EAGLE PETROLEUM AND MINING COMPANY
                          NOTES TO FINANCIAL STATEMENTS

The  Company  was  incorporated  under  Wyoming  law in 1972 for the  purpose of
exploring,  developing  and producing  oil, gas and other  minerals in the Rocky
Mountain  region of the United  States.  Its oil and gas  production  is sold to
major companies of the petroleum  industry under terms requiring  payment within
sixty days.  The prices  received  for its oil and gas are very  volatile due to
economic  conditions  within the  industry.  Income from mineral  production  is
nominal and received in the form of minimum annual royalties.

1.    Significant Accounting Policies

      This summary of significant  accounting policies is presented to assist in
      understanding the Company's financial statements:

      a.    Cash and Cash  Equivalents  - For purposes of the  Statement of Cash
            Flows,  the Company  considers  all highly  liquid debt  instruments
            purchased  with a  maturity  of  three  months  or  less  to be cash
            equivalents.

      b.    Property and Equipment - The Company uses the  "successful  efforts"
            method for  capitalizing  the costs of  completed  oil and gas wells
            whereby only the costs attributable to successful  exploratory wells
            and the costs of  development  wells  within a  producing  field are
            reflected  in property and  equipment.  Producing  and  nonproducing
            properties are evaluated periodically, and if conditions warrant, an
            impairment allowance is provided. The costs of exploratory wells are
            charged to  expense in the period in which the wells are  determined
            to be  unsuccessful.  Depletion and  depreciation of the capitalized
            costs for  producing  oil and gas  properties  are  provided  by the
            unit-of-production method based on proved oil and gas reserves.

            Uncompleted  wells and  equipment  are  reflected  at the  Company's
            incurred cost and represent  costs of drilling and equipping oil and
            gas wells that are not completed as of the balance sheet date.

            The  costs  of  unproved   leases   which  become   productive   are
            reclassified   to  proved   properties   when  proved  reserves  are
            discovered on the property.

            Unproved oil and gas interests  are carried at original  acquisition
            costs including filing and title fees. Annual rentals and geological
            and geophysical expenditures are charged to expense when incurred.

            Zeolite  properties  include the original costs to acquire and stake
            the claims and the  preliminary  evaluation  and  development  costs
            which are  necessary  prior to  commencement  of mining  operations.
            Subsequent to the time that zeolite mines reach operational  status,
            all  operational  expenditures  are charged to expense in the period
            incurred.

            Office  facilities and equipment are recorded at cost.  Depreciation
            of office  facilities and equipment is recorded using  straight-line
            and accelerated  methods over the estimated  useful lives of 7 to 40
            years  for  office  facilities  and 5 years  for  office  equipment.
            Maintenance and repairs are charged to expense as incurred.


                                      F-6

<PAGE>


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


1.    Significant Accounting Policies (Continued)

      c.    Bad  Debts  -  The  direct  write  off  method  of  accounting   for
            uncollectible  accounts receivable is utilized whereby an account is
            written off only when determined to be uncollectible. The results of
            this method do not vary materially from the preferred method.

      d.    Investment  - The  accompanying  financial  statements  include  the
            investment in an  unconsolidated  partnership,  in which the Company
            owns a 30%  interest.  The  investment  is carried at cost under the
            equity method.  The earnings (loss) from the investment is reflected
            as other income in the Statement of Operations due to  immateriality
            to the financial statements.

      e.    Income Taxes - Effective September 1, 1993, the Company adopted SFAS
            Statement  No. 109,  "Accounting  for Income  Taxes." Under SFAS No.
            109, deferred income taxes are provided for the tax effect of timing
            differences  arising  from  certain  costs  and  expenses  which are
            recognized  in  different  periods  for  income  tax  and  financial
            reporting purposes.

      f.    Estimates - The  preparation  of financial  statements in conformity
            with generally accepted accounting principles requires management to
            make estimates and  assumptions  that affect the reported assets and
            liabilities  and disclosure of contingent  assets and liabilities at
            the date of the  financial  statements  and the reported  amounts of
            revenues and expenses  during the reporting  period.  Actual results
            could differ from those estimates.

      g.    Income  (Loss)  Per  Share -  Earnings  per  share  is  based on the
            weighted-average  number of shares of common  stock  outstanding  in
            each year. There would have been no material  dilutive effect on net
            income  per share for 1995 if  outstanding  stock  options  had been
            exercised.

      h.    Revenue   Recognition  -  Revenue  includes  sales  to  unaffiliated
            organizations  in connection with net working  interests and royalty
            interests.  Excluded  from gross  revenue  are  royalty  payments to
            owners and net profit  disbursements  to  partners.  Production  and
            severance taxes are included as part of production costs and are not
            deducted in determining gross revenue.

            In accordance  with EITF 90-22,  the  gas-balancing  arrangement  is
            accounted for by the entitlements  method. The Company has reflected
            sales revenue and a corresponding  receivable for its  proportionate
            share of the gas sold by  Amoco.  The  receivable  is  valued at the
            lower  of the  price in  effect  at the  time of  production  or the
            current market value.

2.    Off Balance Sheet Risk of Financial Instruments

      Interest  bearing  time  deposits  are held by the Company in a commercial
      bank  which at times  may be in excess of the  Federal  Deposit  Insurance
      Corporation's  maximum  limits.  The following is a summary of the insured
      and uninsured bank balances at August 31:

<TABLE>
<CAPTION>

                                          1996                             1995
                             -------------------------------   ------------------------------
                                Carrying           Bank           Carrying          Bank
                                 Amount           Balance          Amount          Balance
                             --------------   --------------   --------------  --------------
<S>                           <C>              <C>              <C>             <C>         
         Insured              $     41,232     $     82,627     $    100,962    $    100,962
         Uninsured                       -                -          167,423         185,750


</TABLE>
                                                      F-7

<PAGE>

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


3.    Gas Balancing Arrangement

      The Company has a 100%  ownership in a producing gas well which is located
      in a unitized field operated by a major oil company.  At the end of fiscal
      year 1992-93, there was an imbalance, caused by the gas purchasing company
      recognizing  purchase contracts with certain, but not all, interest owners
      in the field while it continued to take all gas  produced.  The  Company's
      portion of the  underbalance at August 31, 1994 was estimated to be 40,000
      mcf's and at August  31,  1995 and 1996,  80,000  mcf's as a result of the
      Company purchasing  additional  ownership in the well. An estimated payout
      for the  underbalance of $1 per mcf is used to value the  receivable.  The
      Company  has not  received  payment  or  settlement  for its  share of the
      imbalance to date.

4.    Property and Equipment

      A summary of property and equipment is as follows:

<TABLE>
<CAPTION>
                                                           1996                                 1995
                                            -----------------------------------   ----------------------------------
                                                                 Accumulated                          Accumulated
                                                                Depreciation                         Depreciation
                                                 Cost            & Depletion           Cost           & Depletion
                                            ----------------   ----------------   ---------------   ----------------
<S>                                       <C>                <C>                <C>               <C>              
       Zeolite mining properties          $             385  $               -  $            385  $               -
       Unproved oil and gas interests               423,482                  -           488,278                  -
       Proved oil interests                         653,267            200,857           516,055            161,407
       Completed wells and related
        equipment                                 2,356,059          1,204,456         1,977,564          1,146,453
       Wells in process                             125,431                  -            71,570                  -
       Condominium office facility                  130,049             65,067           130,049             62,447
       Office equipment                              53,465             35,586            37,886             28,759
                                            ----------------   ----------------   ---------------   ----------------

            Total                         $       3,742,138  $       1,505,966  $      3,221,787  $       1,399,066
                                            ================   ================   ===============   ================
</TABLE>

5.    Income Taxes

      Effective  September 1, 1993, the Company  adopted  Statement of Financial
      Accounting Standards No. 109, "Accounting for Income Taxes", which applies
      an asset and liability  approach requiring the recognition of deferred tax
      assets  and   liabilities   with  respect  to  the  expected   future  tax
      consequences  of  events  that  have  been  recognized  in  the  financial
      statements and tax returns.  All of the Company's  earnings are located in
      the United States.

<TABLE>
<CAPTION>


                                                   1996                 1995                 1994
                                              ----------------     ----------------     ----------------
<S>                                            <C>                  <C>                <C>   
       Income Tax Expense (Credit)
             Current                        $               -    $               -    $               -
             Deferred                                  (2,934 )              3,113              (30,011 )


</TABLE>

                                                       F-8
<PAGE>


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5.    Income Taxes (Continued)

      Deferred tax liabilities (assets) are comprised of the following at August
      31:
<TABLE>
<CAPTION>

                                                                 1996                 1995
                                                            ----------------     ----------------
       Tax effects of temporary differences
       ------------------------------------------------
       <S>                                                 <C>                  <C>              
       1st year federal lease rentals                     $           2,821    $           3,850
       Intangible drilling costs                                    381,698              332,826
       Percentage depletion                                         133,083              133,083
       Depreciation                                                   2,193                2,193
       Tax basis surrendered property                                   113                  113
       Production taxes                                               2,844                2,844
                                                           ----------------     ----------------
         Total Long Term Deferred Tax Liabilities                   522,752              474,909

       Depletion of intangible drilling costs                      (240,283 )           (233,279 )
       Net operating loss carryforwards                            (128,703 )            (84,941 )
       Other                                                           (967 )               (956 )
                                                           ----------------     ----------------
          Total Long Term Deferred Tax Assets                      (369,953 )           (319,176 )
                                                           ----------------     ----------------

          Net Long Term Deferred Tax Liabilities          $         152,799    $         155,733
                                                           ================     ================

      At August 31, 1996,  the Company has unused  deductions  and credits which
      may be applied against future taxable income and which expire as follows:



                           Percent Depletion
                             In Excess of        Net Operating
          Year Ending       Cost Depletion            Loss             Investment
          August 31,                              Carryforward         Tax Credits
       ------------------  ------------------   -----------------   ------------------
           <S>               <C>                  <C>                 <C>             
             1997           $              -     $             -     $         11,643
             1998                          -                   -               19,397
             1999                          -                   -                9,630
             2000                          -                   -                4,306
             2001                          -                   -                  580
             2003                          -             191,551                    -
             2004                          -              49,017                    -
             2007                          -              78,344                    -
             2008                          -              28,442                    -
             2009                          -             143,210                    -
             2010                          -              73,765                    -
             2011                          -             293,691                    -
          Indefinite               1,467,244                   -                    -
                             ---------------      --------------      ---------------

             Total          $      1,467,244     $       858,020     $         45,556
                             ===============      ==============      ===============
</TABLE>

      Investment tax credits for financial  purposes are the same as those shown
      for tax reporting purposes.

6.    Common Stock

      Under  an  employee's   incentive   stock  option  plan  approved  by  the
      stockholders  in January,  1993,  200,000 shares of common stock have been
      authorized and reserved for issuance to employees.  Options  granted under
      this plan cannot exceed ten years from the date of grant. The option price
      is equal to the  market  value of the  common  stock on date of grant.  At
      August  31,  1996,  there were six  options  outstanding  for two  hundred
      thousand shares to current employees of the Company.  The term in which to
      exercise is three years from the date of each grant.  As of May 1996,  the
      Board  approved the Company's  1996 Stock Option Plan covering  options to
      acquire an aggregate of 200,000  shares of common  stock.  No options have
      been granted  under the 1996 Stock Option Plan,  which was approved by the
      Company's stockholders in June 1996.

                                      F-9
<PAGE>

 
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


6.    Common Stock (Continued)

      Changes in  the  exercisable status of options outstanding under the 1993 
      plan at August 31, are as follows:
<TABLE>
<CAPTION>

                                                           Shares
                                  ----------------------------------------------------------
                                       1996                 1995                 1994
                                  ----------------     ----------------     ----------------
     <S>                           <C>                  <C>                   <C>   
       Beginning of year                  200,000              120,000               60,000
       Granted                             60,000               80,000               60,000
       Expired/Exercised                  (60,000 )                  -                    -
                                  ----------------     ----------------     ----------------
       End of year                        200,000              200,000              120,000
       Option price                $.75, $.875          $.75, $.875       $.875 and $1.1875
                                    and $1.18           and $1.1875
</TABLE>

      Subsequent to August 31, 1996, the Company purchased the stock options for
      30,000 shares from one employee.

      The Board of Directors  has  authorized  the purchase and  retirement of a
      maximum of 200,000 shares of the Company's outstanding common stock. As of
      August 31, 1996,  27,960 shares have been purchased to date and retired at
      a per share cost of $1.50 to $10.00.  Subsequent  to August 31, 1996,  the
      Board of  Directors  terminated  authorization  of this  stock  repurchase
      program.

7.    Major Customers

      Certain  customers  who accounted  for more than 10%  individually  of the
      Company's oil and gas sales are as follows:

<TABLE>
<CAPTION>


                                              Year Ended August 31,
                            ----------------------------------------------------------
                                 1996                 1995                 1994
                            ----------------     ----------------     ----------------
       <S>                   <C>                   <C>                 <C>          
       Company A             $            -        $          -        $      21,308
       Company B                    256,114               91,120               89,668
       Company C                          -               27,761               27,946
       Company D                     58,131               52,522               66,057
</TABLE>

8.    Related Party Transactions

      During the year ended August 31, 1995, the Company acquired certain proved
      oil and gas leases  and  overriding  royalties  from a related  party.  In
      addition to $71,300 cash,  the Company issued 350,000 shares of restricted
      common stock with a market value of $131,250 for a total purchase price of
      $202,550.

      The Company and certain  directors,  stockholders  and investees are joint
      holders in proved and unproved oil and gas  properties.  During the normal
      course of business,  the Company pays or receives monies and in turn bills
      or  pays  the  interest  holders  for  their  respective   shares.   These
      transactions are immaterial in amount when compared to the Company's total
      receipts and  expenditures.  They are  accounted for as part of the normal
      joint interest billing function.

      During the year ended  August 31,  1994,  the Company  conducted a private
      placement  offering of 300,000  shares of its previously  unissued  common
      stock at  $.70/share.  The stock was  offered  in 10,000  share  blocks to
      holders-of-record  owning  10,000  shares or more.  Of the 300,000  shares
      sold,  255,715  shares  were  purchased  by the  Chairman  of the Board of
      Directors which provided $179,000 of working capital for the Company.

                                      F-10
<PAGE>

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

  9.     Segment Information

         The  Company's   dominant  segment  is  oil  and  gas  exploration  and
         development.  Revenues  and  assets  of the  Company's  zeolite  mining
         segment account for less than 10% of total revenues and total assets.

10.      Statements of Cash Flows

         Reconciliation  of Net  Income  (Loss)  to Net Cash  Used By  Operating
          Activities at August 31,:

<TABLE>
<CAPTION>


                                                                   1996               1995                1994
                                                              ---------------    ----------------    ---------------
       <S>                                                  <C>                <C>                 <C>               
          Net Income (Loss)                                 $        (21,143 ) $          15,291   $       (341,616 )
          Adjustments to reconcile net income (loss) to
           net cash used in operating activities:
               Depreciation and depletion                            106,900              78,586             72,108
               Sales of properties                                  (130,000 )          (634,979 )         (214,739 )
               Sale of investments                                         -                   -            (14,810 )
               Costs of properties disposed                           83,357             387,068            278,687
               Cost of investments sold                                    -                   -              2,224
               Deferred taxes - net                                   (2,934 )             3,113            138,577
               (Increase) Decrease In:
                   Accounts receivable                               (78,128 )           (50,080 )           22,481
                   Prepaid expense                                   (41,731 )                 -                  -
                   Other                                                 459               2,498              7,502
               (Decrease) Increase In:
                   Accounts payable                                   75,042              57,959             32,677
                   Accrued production taxes                            4,733              (2,800 )          (14,200 )
                                                             ---------------    ----------------    ---------------
               Total Adjustments                                      17,698            (158,635 )          310,507
                                                             ---------------    ----------------    ---------------

          Net Cash Used In Operating Activities             $         (3,445 ) $        (143,344 ) $        (31,109 )
                                                             ===============    ================    ===============
</TABLE>

          Costs of properties  disposed is further  scheduled as follows for the
         years ended August 31,:
<TABLE>
<CAPTION>

                                                                   1996               1995                1994
                                                             ---------------    ----------------    ---------------
          <S>                                               <C>                <C>                           <C>   
          Cost of wells sold                                $              -   $               -   $         69,736
          Cost of leases sold                                         14,439             228,992             10,540
          Surrendered and expired leases                              64,420             157,821            136,982
          Write off of prior year capitalized dry hole
             costs or abandonments                                     4,498                 255             61,429
                                                             ---------------    ----------------    ---------------

           Cash flow adjustment                             $         83,357   $         387,068   $        278,687
                                                             ===============    ================    ===============
</TABLE>

11.      Oil and Gas Producing Activities

         Capitalized costs relating to oil and gas activities at August 31:
<TABLE>
<CAPTION>

                                                                   1996               1995                1994
                                                             ---------------    ----------------    ---------------
        <S>                                                 <C>                <C>                 <C>             
          Proved properties                                 $      3,009,326   $       2,493,619   $      2,221,394
          Unproved properties                                        548,913             559,848            779,649
                                                             ---------------    ----------------    ---------------
                                                                   3,558,239           3,053,467          3,001,043
          Accumulated depreciation and depletion                   1,405,313           1,307,860          1,240,855
                                                             ---------------    ----------------    ---------------

               Net                                          $      2,152,926   $       1,745,607   $      1,760,188
                                                             ===============    ================    ===============
</TABLE>

                                      F-11

<PAGE>


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)



11.      Oil and Gas Producing Activities (Continued)

         Costs incurred in oil and gas property  acquisition,  exploration,  and
         development activities for the years ended August 31,:
<TABLE>
<CAPTION>


                                                  1996               1995                1994
                                            ---------------    ----------------    ---------------
         <S>                               <C>                 <C>                 <C>    
          Property acquisition:
             Proved                        $        123,440   $         207,346   $         13,433
             Unproved                                27,834              95,442            343,795
          Exploration                               177,478             304,795            264,798
          Development                               436,855             143,649             24,960
                                            ---------------    ----------------    ---------------

               Total                       $        765,607   $         751,232   $        646,986
                                            ===============    ================    ===============
</TABLE>

         Results of operations for oil and gas producing  activities,  excluding
         corporate overhead and interest costs, for the years ended August 31,:
<TABLE>
<CAPTION>

                                                                   1996               1995                1994
                                                             ---------------    ----------------    ---------------
         <S>                                                <C>                <C>                 <C>             
          Revenues                                          $        417,114   $         247,461   $        235,411
          Production costs                                          (121,282 )           (74,688 )          (70,267 )
          Exploration expenses                                      (177,478 )          (304,795 )         (264,798 )
          Depreciation and depletion                                 (97,453 )           (73,949 )          (67,607 )
          Income tax (expense) credit                                  2,934              (3,113 )           30,011
                                                             ---------------    ----------------    ---------------

          Results of operations from producing activities   $         23,835   $        (209,084 ) $       (137,250 )
                                                             ===============    ================    ===============

         Reserve quantity information (unaudited) for the years ended August 31,
         (all located in the United States):

                                                                        1996
                                                      ----------------------------------------
          Proved developed reserves:                     Oil (bbl's)            Gas (mcf's)
                                                      -----------------     ------------------
                Beginning of year                                95,383              1,935,164
                Revisions of previous estimates                 110,049                 22,940
                Discoveries                                         500                 50,500
                Purchased                                             -                214,166
                Production                                      (17,352 )             (140,179 )
                                                      -----------------     ------------------

                End of year                                     188,580              2,082,591
                                                      =================     ==================


                                                                        1995
                                                      ----------------------------------------
          Proved developed reserves:                     Oil (bbl's)            Gas (mcf's)
                                                      -----------------     ------------------
                Beginning of year                               104,612              1,844,343
                Revisions of previous estimates                     299                 (3,329 )
                Discoveries                                           -                 90,000
                Purchased                                             -                 73,012
                Production                                       (9,528 )              (68,862 )
                                                      -----------------     ------------------

                End of year                                      95,383              1,935,164
                                                      =================     ==================

</TABLE>


                                                    F-12

<PAGE>
                   

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

11.      Oil and Gas Producing Activities (Continued)
<TABLE>
<CAPTION>

                                                                       1994
                                                     ----------------------------------------
          Proved developed reserves:                    Oil (bbl's)            Gas (mcf's)
                                                     -----------------     ------------------
                <S>                                   <C>                  <C>      
                Beginning of year                              118,715              1,703,588
                Revisions of previous estimates                  2,507                  2,041
                Discoveries                                     12,314                256,000
                Purchased                                            5                 11,506
                Producing Properties Sold                      (17,822 )              (75,505 )
                Production                                     (11,107 )              (53,287 )
                                                     -----------------     ------------------

                End of year                                    104,612              1,844,343
                                                     =================     ==================
</TABLE>

         The above  reserve  information  is based on estimates  prepared by the
         Company.  Proved  developed oil and gas reserves are those which can be
         expected to be recovered through existing wells with existing equipment
         and  operating  methods.  Proved  undeveloped  oil and gas reserves are
         those which are expected to be recovered  from new wells on  undrilled,
         proved  acreage,  or  from  existing  wells  where a  relatively  major
         expenditure is required for  completion.  Management does not feel that
         the Company  has any  proved,  undeveloped  reserves.  All  information
         presented pertains to proved, developed reserves.

         Standardized  measure of  discounted  future net cash flows and changes
         therein  relating  to  proved  oil  and  gas  reserves  at  August  31,
         (unaudited):
<TABLE>
<CAPTION>

                                                           1996               1995                1994
                                                      ---------------    ----------------    ---------------
<S>                                                 <C>                <C>                 <C>             
          Future cash flows                         $      6,455,189   $       3,349,951   $      4,147,146
          Future production costs                         (1,595,675 )        (1,481,310 )       (1,456,421 )
          Future income taxes (1)                         (1,360,515 )          (635,338 )         (914,847 )
                                                      ---------------    ----------------    ---------------
          Future net cash flows                            3,498,999           1,233,303          1,775,878
          10% annual discount                             (1,049,700 )          (369,991 )         (532,763 )
                                                      ---------------    ----------------    ---------------

          Discounted future net cash flows          $      2,449,299   $         863,312   $      1,243,115
                                                      ===============    ================    ===============
</TABLE>

          (1) The  income  tax is 34% of the  future  cash flows less the future
          production costs adjusted for net operating loss carryforwards.

          The following are the principal sources of changes in the standardized
          measure of discounted future net cash flows for the years ended August
          31, (unaudited):
<TABLE>
<CAPTION>

                                                                   1996               1995                1994
                                                             ---------------    ----------------    ---------------
<S>                                                         <C>                <C>                 <C>               
          Sales, net of production costs                    $       (295,832 ) $        (142,966 ) $       (268,931 )
          Net changes in prices and production costs                 304,917            (344,196 )          379,995
          Discoveries and purchases                                  183,900              57,054             37,296
          Development costs                                         (737,773 )           (76,577 )          (59,481 )
          Revisions of previous quantity estimates                 2,044,444               2,570             55,675
          Accretion of discount                                       86,331             124,312            125,265
                                                             ---------------    ----------------    ---------------

          Net changes                                       $      1,585,987   $        (379,803 ) $        269,819
                                                             ===============    ================    ===============
</TABLE>

          The preceding is a standardized  measure of the discounted  future net
          cash  flows and  changes  applicable  to proved  oil and gas  reserves
          required  by SFAS 69 of the FASB.  The future  cash flows are based on
          estimated oil and gas reserves utilizing prices and costs in effect as
          of year end  discounted at 10% per year and assuming  continuation  of
          existing economic conditions.

                                                 F-13

<PAGE>

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

11.       Oil and Gas Producing Activities (Continued)

          The  standardized  measure of  discounted  future net cash  flows,  in
          management's  opinion,  should be examined with caution. The basis for
          this table is  management's  reserve  study which  contains  imprecise
          estimates of quantities and rates of production of reserves. Revisions
          of previous  estimates can have a significant impact on these results.
          Also,   exploration   costs  in  one  year  may  lead  to  significant
          discoveries  in later  years  and may  significantly  change  previous
          estimates of proved reserves and their valuation.

          Therefore,  the  standardized  measure of  discounted  future net cash
          flows is not  necessarily  a "best  estimate" of the fair value of the
          Company's proved oil and gas properties.

12.       Subsequent Event

          On October 11, 1996 the Company filed a Registration Statement on Form
          SB-2 with the Securities and Exchange  Commission  with respect to the
          sale of additional shares of stock.

13.       Fair Values of Financial Instruments

          Statement of Financial Accounting Standards No.107, "Disclosures About
          Fair Value of  Financial  Instruments,"  requires  disclosure  of fair
          value  information  for certain  financial  instruments.  The carrying
          amounts for trade  receivables and payables are considered to be their
          fair  values.  The  difference  between the  carrying  amounts and the
          estimated fair values of the Company's other financial  instruments at
          August 31, 1996 and 1995 were immaterial.

14.       Note Payable

          The  Company  owes  $250,000  on a bank  line of  credit  which is due
          December  1,  1996 at an  initial  variable  interest  rate of  8.75%.
          Subsequent to year end, the line-of-credit was increased to $350,000.


                                      F-14

<PAGE>





                    HOCKER, LOVELETT, HARGENS & YENNIE, P.C.





               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                                  ON SCHEDULES






To the Stockholders and Board of Directors
Double Eagle Petroleum and Mining Company




In  connection  with our  audit of the  financial  statements  of  Double  Eagle
Petroleum and Mining Company as of August 31, 1996 and 1995, and for each of the
three years ended August 31, 1996,  1995 and 1994,  which report is incorporated
by  reference,  we also audited  supporting  schedules V and VI. In our opinion,
these  schedules  present  fairly,  when read in  conjunction  with the  related
financial statements, the financial data required to be set forth therein.





                                   /S/ Hocker, Lovelett, Hargens & Yennie, P.C.








Casper, Wyoming
October 18, 1996

                                      F-15

<PAGE>
<TABLE>
<CAPTION>

                                        DOUBLE EAGLE PETROLEUM AND MINING COMPANY
                                           SCHEDULE V - PROPERTY AND EQUIPMENT


                  Column A                         Column B          Column C          Column D               Column E
---------------------------------------------   ---------------   ----------------  ----------------       ----------------
                                                  Balance At                                                 Balance At
                                                  Beginning          Additions                                 End Of
               Classification                     Of Period           At Cost         Retirements              Period
---------------------------------------------  ---------------   ----------------  ----------------       ----------------
<S>                                            <C>                <C>             <C>                        <C>
Year ended August 31, 1994
    Zeolite mining properties                 $            385  $               - $               -      $             385
    Unproved oil and gas interest                      585,915            343,795           150,062 (A)            779,648
    Proved oil interests                               323,515             20,525            28,131                315,909
    Completed wells and equipment                    2,955,392             49,359         1,099,266 (B)          1,905,485
    Wells in process                                         -                  -                 -                      -
    Office equipment                                    28,140              2,222                 -                 30,362
    Condominium office facility                        127,299              2,750                 -                130,049
                                               ---------------   ----------------  ----------------       ----------------

           Total                              $      4,020,646  $         418,651         1,277,459              3,161,838
                                               ===============   ================  ================       ================

Year ended August 31, 1995
    Zeolite mining properties                 $            385  $               - $               -      $             385
    Unproved oil and gas interest                      779,648             95,443           386,813 (A)            488,278
    Proved oil interests                               315,909            207,346             7,200                516,055
    Completed wells and equipment                    1,905,485             72,079                 -              1,977,564
    Wells in process                                         -             71,570                 -                 71,570
    Office equipment                                    30,362              7,524                 -                 37,886
    Condominium office facility                        130,049                  -                 -                130,049
                                               ---------------   ----------------  ----------------       ----------------

           Total                              $      3,161,838  $         453,962 $         394,013      $       3,221,787
                                               ===============   ================  ================       ================

Year ended August 31, 1996
    Zeolite mining properties                 $            385  $               - $               -      $             385
    Unproved oil and gas interest                      488,278             27,834            92,630 (A)            423,482
    Proved oil interests                               516,055            137,212                 -                653,267
    Completed wells and equipment                    1,977,564            378,495                 -              2,356,059
    Wells in process                                    71,570             58,359             4,498                125,431
    Office equipment                                    37,886             15,579                 -                 53,465
    Condominium office facility                        130,049                  -                 -                130,049
                                               ---------------   ----------------  ----------------       ----------------

           Total                              $      3,221,787  $         617,479 $          97,128      $       3,742,138
                                               ===============   ================  ================       ================
</TABLE>
(A)      Includes  property  abandonments of $136,982,  $157,821 and $64,420 for
         the years ended August 31, 1994, 1995 and respectively.
(B)      Includes impairment allowance of $54,567.



                                                             F-16
<PAGE>

<TABLE>
<CAPTION>
                                        DOUBLE EAGLE PETROLEUM AND MINING COMPANY
                                   SCHEDULE VI - ACCUMULATED DEPRECIATION AND DEPLETION
                                                OF PROPERTY AND EQUIPMENT


                  Column A                           Column B           Column C          Column D           Column E
---------------------------------------------     ----------------   ---------------   ----------------   ---------------
                                                                       Additions
                                                    Balance At         Charged To                           Balance At
                                                     Beginning         Costs And                              End Of
               Classification                        Of Period          Expenses         Retirements          Period
---------------------------------------------     ----------------   ---------------   ----------------   ---------------
<S>                                              <C>                <C>                <C>                <C>
Year ended August 31, 1994
    Proved oil interests (A)                    $         153,987  $         14,190  $          20,267  $        147,910
    Completed wells and equipment (A)                   2,011,042            53,417            971,514         1,092,945
    Office equipment (B)                                   25,328             1,642                  -            26,970
    Condominium office facility (C)                        56,740             2,859                  -            59,599
                                                 ----------------   ---------------   ----------------   ---------------

           Total                                $       2,247,097  $         72,108  $         991,781  $      1,327,424
                                                 ================   ===============   ================   ===============

Year ended August 31, 1995
    Proved oil interests (A)                    $         147,910  $         20,441  $           6,944  $        161,407
    Completed wells and equipment (A)                   1,092,945            53,508                  -         1,146,453
    Office equipment (B)                                   26,970             1,789                  -            28,759
    Condominium office facility (C)                        59,599             2,848                  -            62,447
                                                 ----------------   ---------------   ----------------   ---------------

           Total                                $       1,327,424  $         78,586  $           6,944  $      1,399,066
                                                 ================   ===============   ================   ===============

Year ended August 31, 1996
    Proved oil interests (A)                    $         161,407  $         39,450  $               -  $        200,857
    Completed wells and equipment (A)                   1,146,453            58,003                  -         1,204,456
    Office equipment (B)                                   28,759             6,827                  -            35,586
    Condominium office facility (C)                        62,447             2,620                  -            65,067
                                                 ----------------   ---------------   ----------------   ---------------

           Total                                $       1,399,066  $        106,900  $               -  $      1,505,966
                                                 ================   ===============   ================   ===============
</TABLE>
(A) Depreciated by units of production method.
(B) Five year lives,  depreciated by an  accelerated  method.
(C)  Seven  to forty  year  lives,  depreciated  by declining balance method.


                                                       F-17
<PAGE>




ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     Not applicable.




                                      -19-

<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

Directors And Executive Officers

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

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

Richard B. Laudon               62             Chairman Of The Board; Treasurer;
                                               and Director

Stephen H. Hollis               46             President; and Director

Carol A. Osborne                44             Secretary

Tom R. Creager                  37             Director

John R. Kerns                   65             Director

William N. Heiss                44             Director



     Dr. Richard B. Laudon has served as the Chairman Of The Board and Treasurer
of the  Company  since  January  1972.  In addition  Dr.  Laudon has served as a
Vice-President  of the Company since January 1996. From 1972 until January 1994,
Dr.  Laudon  served as the  President  of the Company.  Dr.  Laudon held various
geological positions with Esso Corporation from 1959 to 1969. He was employed as
a senior  geologist for an affiliate of United Nuclear  Corporation from 1969 to
1970, and was an independent consulting geologist until 1972. Dr. Laudon was the
President of the Rocky  Mountain  Section of American  Association  of Petroleum
Geologists in 1986. Dr. Laudon  received a Bachelor of Science Degree in Geology
from the University of Tulsa in 1956, a Master of Science Degree in Geology from
the  University  of Wisconsin in 1957,  and a Doctorate of Philosophy in Geology
from the University of Wisconsin in 1959.

     Stephen H. Hollis has served as the  President of the Company since January
1994 and previously served as a Vice-President of the Company from December 1989
through  January 1994.  Mr. Hollis has served as a Director of the Company since
December 1989. Mr. Hollis has served as the  Vice-President  of Hollis Oil & Gas
Co., a small oil and gas company, since January 1994 and served as the President
of Hollis Oil & Gas Co. from June 1986 through  January  1994.  Mr. Hollis was a
geologist for an affiliate of United Nuclear Corporation from 1974 to 1977 and a
consulting  geologist from 1977 to 1979. In 1979, Mr. Hollis joined Marathon Oil
Company and held various  positions until 1986, when he founded Hollis Oil & Gas
Co. Mr. Hollis is a past President of the Wyoming  Geological  Association.  Mr.
Hollis  received a B.A. Degree in Geology from the University of Pennsylvania in
1972 and a  Masters  Degree in  Geology  from Bryn  Mawr  College  in 1974.  One
transaction  in  January  1996,  required  to be  reported  by Mr.  Hollis  on a
Statement  Of  Change  In  Beneficial  Ownership  Of  Securities  on Form 4, was
reported late with the Securities And Exchange  Commission  ("SEC") on a Form 5,
Annual Statement Of Changes In Beneficial Ownership.

     John R. Kerns has served as a Director of the Company  since  January 1972.
From  January  1972 until  January  1980,  Mr.  Kerns served as Secretary of the
Company. Mr. Kerns was a geologist for Tenneco Oil Company from 1960 to 1968 and


                                      -20-

<PAGE>

and has been an independent  consulting  geologist since that time. He is a past
President  of the Wyoming  Geological  Association  and a past  President of the
Rocky Mountain Section of the American Association of Petroleum Geologists.  Mr.
Kerns  received a B.A.  Degree in Geology from Oregon  University  in 1952 and a
Masters Degree in Geology from the University of Arizona in 1958.

     William  N. Heiss has served as a Director  of the  Company  since  January
1996. Mr. Heiss owned a mineral brokerage business until 1981, when he went into
private law practice,  emphasizing  mineral and real property law. Mr. Heiss has
served as a Director and the Secretary of Hollis Oil & Gas Co. since 1987 and as
President  since January 1994. He is a member of the Rocky Mountain  Mineral Law
Foundation,  and the  Natrona  County and Wyoming Bar  Associations.  Mr.  Heiss
received a B.A. Degree in mathematics from Indiana University in 1970 and a J.D.
degree  from  the  University  of  Wyoming  in 1978.  An  Initial  Statement  Of
Beneficial Ownership on Form 3 required to be filed by Mr. Heiss in January 1996
was  reported  late with the SEC on a Form 5,  Annual  Statement  Of  Changes In
Beneficial Ownership.

     Tom R. Creager has served as a Director of the Company  since January 1996.
Since October 1991, Mr. Creager has been President and Senior Portfolio  Manager
with  Pinnacle  West  Asset  Management,  Inc.,  a firm  engaged  in  investment
management  and research  and as a  consultant  to CPA  Consulting  Group,  P.C.
working in the areas of taxation,  business and financial consulting.  From 1985
to 1991,  he worked in public  accounting  primarily  in income tax  areas.  Mr.
Creager has served as a Director of Hollis Oil & Gas Co.  since July 1989.  From
1983 until 1985,  Mr.  Creager was  employed  by an oil and gas  contractor  and
supply company as corporate  controller.  Mr. Creager  received a B.A. Degree in
Accounting  from the  University  of Wyoming in 1983.  An Initial  Statement  Of
Beneficial  Ownership  on Form 3 required to be filed by Mr.  Creager in January
1996 was reported late with the SEC on a Form 5, Annual  Statement Of Changes In
Beneficial Ownership.

     Carol A. Osborne has served as the  Secretary of the Company  since January
1996 and  previously  served as the  Assistant  Secretary  of the  Company  from
December 1989 until January  1996.  In addition,  Ms.  Osborne has served as the
Company's  Office  Manager  since  1981.  An  Initial  Statement  Of  Beneficial
Ownership  on Form 3 required  to be filed by Ms.  Osborne  in January  1996 was
reported  late  with  the  SEC on a Form  5,  Annual  Statement  Of  Changes  In
Beneficial Ownership.


ITEM 11.  EXECUTIVE COMPENSATION

Summary Compensation Table

     The following  table sets forth in summary form the  compensation  received
during each of the Company's  last three  completed  fiscal years by each of the
Company's  President  and  Chairman  Of The Board.  No  employee  of the Company
received total salary and bonus exceeding  $100,000 during any of the last three
fiscal years.

                                      -21-

<PAGE>
<TABLE>
<CAPTION>

                                                    Annual Compensation

                                                                       Long-Term         Other Annual
Name and                 Fiscal Year      Salary          Bonus        Compensation--     Compen-
Principal Position       Ended            ($)(1)          ($)          Options (#)       sation ($)
-----------------------  ---------------  --------------  -----------  ----------------  ----------
<S>                      <C>              <C>              <C>         <C>                <C>
Stephen H. Hollis,       1996             $53,700         -0-          50,000            -0-
President
                         1995             $53,700         -0-          70,000            -0-

                         1994             $53,700         -0-          50,000            -0-

Richard B. Laudon,       1996             $53,700         -0-          -0-               -0-
Chairman Of The
Board                    1995             $53,700         -0-          -0-               -0-

                         1994             $53,700         -0-          -0-               -0-
</TABLE>


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

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


Option Grants Table

     The following table sets forth information  concerning individual grants of
stock options made during the fiscal year ended August 31, 1996 to the Company's
President and Chairman Of The Board. See "--Stock Option Plans".

<TABLE>
<CAPTION>


                                    Option Grants For Fiscal Year Ended August 31, 1996

                                                       % of Total
                                                       Options Granted
                                 Options               to Employees in        Exercise or Base        Expiration
Name                             Granted (#)           Fiscal Year            Price ($/Sh)            Date
----------------------------     -----------           -----------------      ------------------      ----------
<S>                              <C>                   <C>                    <C>                     <C>  
Stephen H. Hollis,               50,000                100                    1.18                    1/22/99
  President
Richard B. Laudon,               -0-                   -0-                    N/A                     N/A
  Chairman Of The Board
</TABLE>


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

     The  following  table sets forth  information  concerning  each exercise of
stock  options  during the fiscal year ended  August 31,  1996 by the  Company's
President  and  Chairman  Of  The  Board,  and  the  fiscal  year-end  value  of
unexercised options held by the President and Chairman Of The Board.


                                      -22-

<PAGE>
<TABLE>
<CAPTION>

                                                Aggregated Option Exercises
                                           For Fiscal Year Ended August 31, 1996
                                                And Year-End Option Values

                                                                                                      Value of
                                                                                                      Unexercised
                                                                              Number of               In-The-Money
                                                                              Unexercised             Options at
                                                                              Options at Fiscal       Fiscal Year-End
                                                                              Year-End (#)(3)         ($)(4)
                                 Shares
                                 Acquired on           Value                  Exercisable/            Exercisable/
Name                             Exercise (#) (1)      Realized ($)(2)        Unexercisable           Unexercisable
-------------------------------  --------------------  ---------------------  ----------------------  -------------
<S>                                       <C>                    <C>                <C>               <C>    
Stephen H. Hollis,                        0                      0                  170,000/0           $38,750/$0
 President
Richard B. Laudon,                        0                      0                        0/0                $0/$0
 Chairman Of The Board
</TABLE>

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

(1)  The number of shares  received upon  exercise of options  during the fiscal
     year ended August 31, 1996.

(2)  With respect to options  exercised  during the Company's  fiscal year ended
     August 31,  1996,  the dollar  value of the  difference  between the option
     exercise  price and the market value of the option shares  purchased on the
     date of the exercise of the options.

(3)  The  total  number  of  unexercised  options  held as of  August  31,  1996
     separated  between  those options that were  exercisable  and those options
     that were not exercisable.

(4)  For all  unexercised  options  held as of August 31,  1996,  the  aggregate
     dollar  value of the  excess of the  market  value of the stock  underlying
     those options over the exercise price of those exercised options,  based on
     the bid price of the Company's Common Stock on August 31, 1996. The closing
     bid price for the Company's  Common Stock on August 31, 1996 was $1.125 per
     share.



Stock Option Plans

     The 1993 Stock Option Plan. In November 1992, the Board Of Directors of the
Company approved the Company's Stock Option Plan (1993) (the "1993 Plan"), which
subsequently  was approved by the Company's  stockholders.  Pursuant to the 1993
Plan,  the Company may grant options to purchase an aggregate of 200,000  shares
of the  Company's  common  stock  to key  employees  of the  Company,  including
officers and directors who are salaried  employees who have  contributed  in the
past or who may be  expected  to  contribute  materially  in the  future  to the
successful  performance of the Company. The options granted pursuant to the 1993
Plan  are  intended  to be  incentive  options  qualifying  for  beneficial  tax
treatment  for the  recipient.  The  1993  Plan  is  administered  by an  option
committee that determines the terms of the options  subject to the  requirements
of the 1993 Plan. At August 31, 1996,  options to purchase  200,000  shares were
outstanding  under the 1993 Plan. In September 1996,  options to purchase 30,000
shares held by Carol A. Osborne were repurchased by the Company for an aggregate
of $13,200.  As a result,  options to purchase an additional 30,000 shares could
be granted under the 1993 Plan.


                                      -23-

<PAGE>


    The 1996 Stock  Option  Plan.  In May 1996,  the Board of  Directors  of the
Company  approved the Company's 1996 Stock Option Plan (the "1996 Plan"),  which
subsequently  was approved by the Company's  stockholders.  Pursuant to the 1996
Plan,  the Company may grant options to purchase an aggregate of 200,000  shares
of the Company's common stock to key employees, directors, and other persons who
have or are  contributing  to the success of the  Company.  The options  granted
pursuant  to the 1996  Plan  may be  either  incentive  options  qualifying  for
beneficial tax treatment for the recipient or  non-qualified  options.  The 1996
Plan is  administered  by an option  committee that  determines the terms of the
options  subject to the  requirements  of the 1996 Plan.  At August 31, 1996, no
options  were  outstanding  under the 1996 Plan and options to purchase  200,000
could be granted under the 1993 Plan.

Compensation Of Outside Directors

     Directors  of the  Company  who  are  not  also  employees  of the  Company
("Outside  Directors")  are paid $400 for each meeting of the Board Of Directors
that they  attend.  Directors  also are  reimbursed  for  expenses  incurred  in
attending meetings and for other expenses incurred on behalf of the Company.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table  summarizes  certain  information as of August 31, 1996
with respect to the  beneficial  ownership of the Company's  common stock (i) by
the Company's directors,  (ii) by stockholders known by the Company to own 5% or
more of the Company's common stock, and (iii) by all officers and directors as a
group.                                    
                                       


                                                     As Of August 31, 1996
                                                --------------------------------
                                                                   Percentage Of
                                                                       Class
Name And Address Of                              Number Of         Beneficially
Beneficial Owner                                  Shares               Owned
----------------                                ----------         -------------

Dr. Richard B. Laudon                            569,147               21.0%
3737 West 46th
Casper, Wyoming 82604

Carol A. Osborne                                     200                --*

John R. Kerns                                     77,203                2.8%

Stephen H. Hollis (4)                            544,900(1)            20.1%
2037 S. Poplar
Casper, Wyoming 82601

William N. Heiss (4)                             350,000(2)            12.9%

Tom R. Creager(4)                                351,500(3)            13.0%

Directors and Officers as a group              1,192,950(1)(4)         41.4%
(Six Persons)

Hollis Oil & Gas Co. (4)                         350,000               12.9%

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

* Less than one percent.

(1)  Includes  options held by Mr.  Hollis to purchase  50,000  shares of Common
     Stock that expire January 19, 1997,  options to purchase 70,000 shares that
     expire January 19, 1998, and options to purchase  50,000 shares that expire
     January  22,  1999.  In  addition to 24,900  shares  owned  directly by Mr.
     Hollis,  the table above includes  350,000  shares of the Company's  Common
     Stock owned by Hollis Oil & Gas Co. Mr. Hollis is an officer,  director and
     51 percent owner of Hollis Oil & Gas Co.


                                      -24-

<PAGE>

(2)  These  shares are owned by Hollis Oil & Gas Co.  Mr.  Heiss is an  officer,
     director and 30% beneficial owner of Hollis Oil & Gas Co.

(3)  Includes 350,000 shares of Common Stock of the Company held by Hollis Oil &
     Gas Co. Mr. Creager is a director of Hollis Oil & Gas Co.

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


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During the year ended August 31, 1995, the Company  acquired certain proved
oil and gas  leases  and  overriding  royalties  from  Hollis  Oil & Gas Co.  In
addition to $71,300 cash, the Company issued 350,000 shares of restricted Common
Stock with a market value of $131,250,  for a total  purchase price of $202,550.
Mr.  Stephen H.  Hollis,  the  President  and a Director  of the  Company,  is a
Vice-President,  Director and a stockholder  of Hollis Oil & Gas Co. Mr. William
N. Heiss, currently a Director of the Company, is the President, a Director, and
a  stockholder  of Hollis  Oil & Gas Co.  Mr.  Heiss was not a  Director  of the
Company at the time of this  transaction.  The purchase  price was determined by
negotiations  between the  Company and Hollis Oil & Gas Co. and  approved by the
Company's  Board Of Directors  with Mr. Hollis  abstaining.  The Company did not
obtain an independent  appraisal of the interest purchased from Hollis Oil & Gas
Co.,  however,  it is the  Company's  position that this  transaction  was on as
favorable terms as would have been obtained from an independent third party.

     The Company and certain directors, officers and stockholders of the Company
are joint  holders in proved and  unproved  oil and gas  properties.  During the
normal course of business, the Company pays or receives monies and in turn bills
or pays the interest holders for their respective shares. These transactions are
immaterial  in  amount  when  compared  to  the  Company's  total  receipts  and
expenditures.  They  are  accounted  for as part of the  normal  joint  interest
billing  function.  See  also,  "ITEMS 1. and 2.  DESCRIPTION  OF  BUSINESS  AND
PROPERTIES--Principal  Areas Of Oil And Gas Activity--  Moxa Arch",  "--Washakie
Basin--State 1-36 Well",  "--Wind River  Basin--Madden  Anticline",  and "--Wind
River Basin--Waltman Field".

     During the year ended  August 31,  1994,  the  Company  completed a private
placement offering of 300,000 shares of its previously  unissued common stock at
$.70 per share to provide  funding  for the  Company.  The stock was  offered in
10,000 share blocks to  holders-of-record  owning  10,000 shares or more. Of the
300,000 shares sold,  255,715 shares were purchased by Dr. Richard  Laudon,  the
Chairman Of The Board Of Directors of the Company.



                                      -25-

<PAGE>

                                     PART IV


ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K

(a)(1) and (a)(2)  Financial Statements And Financial Statement Schedules
       See "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA -- Index" on
       page 18.

(a)(3)   Exhibits.

                                  Exhibit Index


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

3.1(a)    Articles Of Incorporation filed with the Wyoming Secretary Of State on
          January 13, 1972 (incorporated by reference from Exhibit 3.1(a) of the
          Registrant's  Registration Statement on Form SB-2 filed on October 11,
          1996, SEC Registration No. 333-14011).


3.1(b)    Articles of Amendment of Registrant  filed with the Wyoming  Secretary
          Of State on February 27, 1984  (incorporated by reference from Exhibit
          3.1(b) of the Registrant's  Registration  Statement on Form SB-2 filed
          on October 11, 1996, SEC Registration No. 333-14011).

3.1(c)    Articles Of Amendment of Registrant  filed with the Wyoming  Secretary
          Of State on July 9,  1996  (incorporated  by  reference  from  Exhibit
          3.1(c) of the Registrant's  Registration  Statement on Form SB-2 filed
          on October 11, 1996, SEC Registration No. 333-14011).

3.2       Bylaws (incorporated by reference from Exhibit 3.2 of the Registrant's
          Registration  Statement  on Form SB-2 filed on October 11,  1996,  SEC
          Registration No. 333-14011).

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

10.1      Agreement  dated May 26, 1995 between the  Registrant and Hollis Oil &
          Gas  Co.   (incorporated   by  reference  from  Exhibit  10.1  of  the
          Registrant's  Registration Statement on Form SB-2 filed on October 11,
          1996, SEC Registration No. 333-14011).

23.1      Consent of Hocker, Lovelett, Hargens & Yennie, P.C.

27        Financial Data Schedule


(b)  Reports  On Form 8-K.  During the last  quarter  of the  fiscal  year ended
     August 31, 1996, the Company filed no reports on Form 8-K.


                                      -26-

<PAGE>


                                   SIGNATURES

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

                                         DOUBLE EAGLE PETROLEUM AND MINING CO.



Date:  December 12, 1996                   /s/ Richard B. Laudon
                                          ----------------------
                                         Richard B. Laudon, Chief Executive,
                                         Operational, and Financial Officer


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



Date:  December 12, 1996                          /s/ Stephen H. Hollis
                                                -----------------------
                                                Stephen H. Hollis, Director



Date:  December 12, 1996                          /s/ Richard B. Laudon
                                                -----------------------
                                                Richard B. Laudon, Director



Date:  December 12, 1996                          /s/ Tom R. Creager
                                                --------------------
                                                Tom R. Creager, Director



Date:  December 12, 1996                          /s/ John R. Kerns
                                                -------------------
                                                John R. Kerns, Director



Date:  December 12, 1996                          /s/ William N. Heiss
                                                ----------------------
                                                William N. Heiss, Director








                                      -27-