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

                                   FORM 10-KSB

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

         For the fiscal year ended August 31, 2002

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

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

                           Commission File No. 0-6529

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

           Maryland                                               83-0214692
 ------------------------------                              ------------------
(State or other jurisdiction 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)

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

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

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

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

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

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

     Issuer's revenues for the fiscal year ended August 31, 2002 were
$2,270,163.

     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 15, 2002, was $32,117,499.*

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     The number of shares outstanding of each of the issuer's classes of common
equity as of November 15, 2002 was as follows:

         $.10 Par Value Common Stock                 6,501,518

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


<PAGE>

                                     PART I

ITEMS 1 and 2. DESCRIPTION OF BUSINESS AND PROPERTIES

Overview

     Double Eagle Petroleum Co. ( the "Company" or "Double Eagle"), which was
formed in Wyoming on January 13, 1972, and reincorporated in February 2001 in
the State of Maryland, explores for, develops, produces and sells crude oil and
natural gas. The Company concentrates its activities in areas in which it
believes it has accumulated detailed geologic knowledge and developed
significant management experience. Current areas of exploration and development
focus for the Company include the Green River Basin in southwestern Wyoming, the
Powder River Basin in northeastern Wyoming, the Washakie Basin in south central
Wyoming, the Wind River Basin in central Wyoming, and the Christmas Meadows area
in northeastern Utah. As of August 31, 2002, the Company owned interests in a
total of 380 producing wells, with oil constituting approximately 11 percent and
natural gas constituting approximately 89 percent of its production (assuming
six Mcf of gas production equals one barrel of oil production). The Company also
has undeveloped acreage in other basins and is evaluating the possibility of
additional activity in other areas. See "--Principal Areas Of Oil And Gas
Activity".

Forward-Looking Statements

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

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

                                       2

<PAGE>


     o    failure to obtain, or a decline in, oil or gas production, or a
          decline in oil or gas prices,
     o    incorrect estimates of required capital expenditures,
     o    increases in the cost of drilling, completion and gas collection or
          other costs of production and operations,
     o    an inability to meet growth projections, and
     o    other risk factors set forth under "--Risk Factors" in this annual
          report. In addition, the words "believe," "may," "could," "will,"
          "when," "estimate," "continue," "anticipate," "intend," "expect" and
          similar expressions, as they relate to Double Eagle, our business or
          our management, are intended to identify forward-looking statements.

Business Strategy

     The Company's strategy is to increase its cash flow and oil and gas
reserves by developing and marketing oil and gas prospects. Upon marketing a
prospect to another entity, the Company will attempt to receive a promoted or
carried interest in the initial well for the prospect. The Company will then
participate proportionately in the drilling of any development wells on the
prospect. In prior years, the Company had undertaken to assemble a large acreage
position and sell it to others while retaining a royalty position. By attempting
to direct 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 is now utilizing more resources for drilling rather than for lease
acquisition and has exposed the Company to more significant potential in each
prospect. 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.

     During fiscal 2002, the Company expended a significant amount of time
evaluating oil and gas producing properties for acquisition. These acquisitions
can provide a way for the Company to grow and these efforts are intended to
continue during fiscal 2003. The Company's staff will continue to attempt to
balance these efforts together with its exploration and development plans.

     The Company owns interests varying from very small percentages to large
percentages in its oil and gas prospects. These interests and prospects are
described below under "Principal Areas Of Oil And Gas Activity". They are owned
directly by the Company, and the remaining interests in these prospects are
owned by various partners. During fiscal 2003, the Company intends to develop
its prospects utilizing its cash balances together with cash flow from
operations and sales of a portion of the Company's interests to industry
partners as well as its line of credit. If the Company's available cash from
operations or from sales of interests to industry partners is lower than
anticipated, the Company's activities may be limited to a lower level than
planned. The Company anticipates that any limitations on its activities would
include expending smaller amounts in the Company's principal areas of activity,
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
were not limited by its available cash.

     The Company has focused its efforts on exploration for and development of
natural gas reserves, which constitute approximately 91.5% of the Company's
total existing reserves as of August 31, 2002. Natural gas is increasing its
share of the domestic energy usage and appears to be the preferred fuel for the
future. Furthermore, the Company's acreage holdings are located in those Rocky
Mountain Basins which, according to the United States Geological Survey, hold a
large percentage of the known and possible undeveloped natural gas resources in
the Continental United States.

                                       3

<PAGE>


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

                       Acreage By Wyoming Geologic Basin:
                              (At August 31, 2002)

                                                          Gross Acres
                                                          -----------
              Wind River Basin                               38,919
              Powder River Basin                             48,788
              Southwestern Wyoming                          169,600
                 Washakie Basin                             118,386
                 Green River Basin                           51,214

Principal Areas of Oil And Gas Activity

SUMMARY

     In 2003, Double Eagle will concentrate its efforts on developing the
Eastern Washakie coal bed natural gas play in southwestern Wyoming as well as
continuing the development of the tight gas sands at the Pinedale Anticline. The
Company also intends to continue its efforts to be able to drill the Christmas
Meadows Prospect.

SOUTHWESTERN WYOMING

     Double Eagle owns an interest in 169,600 acres in the natural gas prone
basins of southwestern Wyoming. Two developing areas, the Pinedale Anticline and
eastern Washakie Coal Bed natural gas play, now account for over 65% of the
Company's reserves and production.

                               PINEDALE ANTICLINE

     This area is in southwestern Wyoming, 10 miles south of the town of
Pinedale. In the late 1960s, a subsidiary of Questar Corporation, Wexpro,
drilled three wells in the Mesa Unit. The wells encountered gas, but the tight
formations would not yield gas at a commercial rate. The area sat idle until
late 1997 when a new operator, Ultra Petroleum, drilled three wells and used new
fracture stimulation techniques developed 20 miles south in the prolific Jonah
Field. The production rates were substantially greater than with prior efforts.
Wexpro's sister company, Questar Exploration, recently took over operations from
Ultra on the Mesa Unit lands and began an aggressive development project. Two of
the first three wells in this project were drilled on Double Eagle's leasehold
in the Mesa "B" Participating Area. The first well drilled by Questar, the Mesa
#3, reached a total depth of 13,055 feet on October 4, 1999. The Mesa #3 and the
subsequent Mesa #6 well were both completed with initial production rates in
excess of 11 million cubic feet per day. In this participating area, Double
Eagle has an 8.00% working interest in the shallow and 12.5% working interest in
the deep. As of November 2002, Double Eagle owns this interest in 17 producing
wells and three locations for the Lance Formation as well as nineteen locations
for potentially productive deeper formations including the Mesaverde. The Mesa
"B" Participating Area is responsible for 60% of Double Eagle's production.

                                       4

<PAGE>


Drilling is expected to continue through the winter on Section 16. Gross
recoverable reserves of these wells are predicted to be in excess of five
billion cubic feet per well. One well, the Mesa 6-16, was drilled deeper to the
Mesaverde where Double Eagle has 12.5% working interest, but the initial
completion of a few Mesaverde sands has not been impressive. Additional zones in
this well are scheduled to be completed this winter. Downspacing to 20 acres is
being considered for this sweetspot on the Pinedale Anticline. In the Mesa "C"
Participating Area, where Double Eagle has a carried 10% working interest after
payout, one well is producing, two wells are being completed and five additional
locations have been staked plus 16 locations that have not been staked as of
yet. In the Mesa "A" Participating Area, where Double Eagle has an overriding
royalty interest, there are nine producing wells, two undrilled locations staked
and two additional locations. Double Eagle believes that its overriding royalty
interest in this area is 1.56% while the operator believes it is .312%. The
Company currently is appealing a decision in favor of the operator. Pending
resolution, the Company is using the .312% overriding royalty interest for
purposes of its reserve report.

     Double Eagle entered the Pinedale Anticline in 1991, acquiring working and
overriding royalty interests from Arco. We also acquired undeveloped leasehold,
which we sold to Ultra in 1997, retaining an overriding royalty interest. In
September 1998, we acquired additional working interests from KCS Mountain
Resources. Currently, Double Eagle has working interests or overriding royalty
interests in 5,073 acres in and around this developing giant natural gas field.
The Pinedale Anticline is estimated by the United States Geological Survey to
contain several trillion cubic feet of natural gas which will be developed and
produced over the next two decades. An expansion of the Kern River Pipeline,
which is scheduled to be completed in May 2003, connects this field to a large
and expanding gas market in southern California. It is anticipated that this
property will continue to produce significant revenues for Double Eagle in the
future.

                  EASTERN WASHAKIE COAL BED NATURAL GAS PROJECT

     This play is a 40 mile long trend located from the town of Baggs north to
the town of Rawlins, in south central Wyoming. Over 100 wells have been drilled
by Double Eagle and Warren Resources/PEDCO to evaluate the potential of the
Mesaverde coal beds in this trend. The Mesaverde coals in this area differ from
those found in the Powder River Basin in that they are thinner zones, but have
higher gas content much like the coal beds found in the Uinta Basin of Utah
where there are several very successful coal bed projects. The Company has
acquired interests in 48,453 acres (21,414 net acres) and controls operations on
over 100 locations on 160 acre spacing in the fairway of this play. Similar
wells in the Drunkards Wash Field in the Uinta Basin, Utah are expected to
recover up to 6 billion cubic feet of natural gas per 160 acre drillsite.
Current estimates in the Washakie Basin have been up to 1.5 billion cubic feet,
but, without a prolonged production history, these estimates are crude at best.
Double Eagle and Warren Resources control the majority of the lands in the play.
Anadarko Petroleum Co. has reportedly purchased interests from Warren Resources
and controls every other section in the northern portion of the play. Results
from the early exploratory drilling by Double Eagle and Warren have been very
encouraging that this will be one of the better coal bed natural gas producing
areas in the country. The following descriptions are of development areas along
the fairway for this play.

                                 COW CREEK FIELD

     Double Eagle acquired the Cow Creek Field in the heart of the Eastern
Washakie Coal Bed Natural Gas Project from KCS Mountain Resources in April 1999.
We operate the field and own a 100% working interest. The Field had one
producing gas well. The Cow Creek #1-12 was producing, sporadically, 140,000
cubic feet of gas per day from the Dakota and Frontier Formations at 8,000 feet.
In the year 2000, two wells were re-completed in the Mesaverde coals and one was
producing at a rate of 140,000 cubic feet per day. These are the two initial
producing coal bed natural gas wells in southwestern Wyoming, where the United

                                       5

<PAGE>


States Geological Survey has calculated a potential resource of 314 trillion
cubic feet of natural gas in the coal beds. Four additional locations were
drilled in August 2001 and began selling gas in November 2001. The wells
encountered excellent gas shows while drilling and the coals were cored to
evaluate the gas contents. Initial indications are that the coals contain 200 to
more than 300 standard cubic feet of gas per ton of coal. Four additional wells
were drilled in September 2002 and were completed and hooked up to the sales
line in November 2002. All four of these wells have been perforated and fracture
stimulated with nitrogen foam fracs. In November 2002, we began bringing on the
new wells. The new wells are strong enough that we had to reconfigure the
facilities on several of the earlier wells and one of the new wells has enough
oil to require a different separator. The field is currently producing 1.4
million cubic feet per day from just three of our nine coal bed wells as we
finish the work on the others. The 32-12 well is producing 442,000 standard
cubic feet of natural gas and 1,056 barrels of water per day with 220 pounds of
flowing tubing pressure; the 11-7 is producing 703,000 standard cubic feet per
day and 300 barrels of water with 360 pounds flowing tubing pressure and the
22-7 is producing 116,000 standard cubic feet per day and 870 barrels of water
with 80 pounds flowing tubing pressure. All three wells are flowing naturally
and are being choked to ease them into production. The pressures that we have
encountered with these wells have been a challenge. In our experience, we have
not seen such high pressures and large quantities of free gas at shallow depths
in the coals. The coals are at a depth of 1,000 to 1,400 feet and required 11.5
pound per gallon drilling mud to drill. Ultimate recoverable reserves are
unknown as we can find no direct corollary. Estimates have ranged from 200
million to 1.5 billion cubic feet of natural gas per well. With 100% working
interest, this project is very important to Double Eagle. Four additional
locations in Cow Creek Field have been approved by the Bureau of Land
Management. Double Eagle plans to drill these wells in 2003. Additional drilling
in the Cow Creek Field will be done after the completion of an Environmental
Impact Study, which is expected to be completed in the summer of 2003.

                                DOTY MOUNTAIN POD

     The Doty Mountain Pod is a coal bed methane pilot project located six miles
to the northeast of Cow Creek Field. Double Eagle has staked ten wells on
acreage owned 100% within this pod and drilling is anticipated in 2003. Warren
Resources delayed plans to drill five wells on their acreage within this pod
during the winter and will drill in 2003. Double Eagle will have no working
interest in the Warren wells. If the Cow Creek Project is successful, the Doty
Mountain Pod will provide an opportunity for the Company to extend the play.

                                  WILD COW UNIT

     The Wild Cow Unit is located six miles southeast of the Cow Creek Field.
Double Eagle purchased a 22.5% working interest in two sections (1,280 acres) in
the Wild Cow Unit (Cherokee Creek Field) in September 1999 from private
interests. This acreage has one producing gas well, which produces 100,000 cubic
feet per day from the Niobrara Formation, and one shut-in well. In a separate
transaction, Double Eagle purchased a 2.25% working interest in 5,266 acres of
leases surrounding these two sections. The Field and Unit operator, Merit
Energy, is developing proposals to enhance the production from existing wells
and the Company has entered into discussions with Merit to initiate a coal bed
methane project centering on the two sections which, like Cow Creek Field, sit
atop a closed geologic structure. Merit has announced plans to drill some coal
bed tests, but drilling has not begun.

                                  SUN DOG UNIT

     The Sun Dog Unit is adjacent to and east of Cow Creek Field. Warren
Resources operates the unit in which Double Eagle has an interest in 1,378
acres. Warren has drilled ten wells in which Double Eagle has no financial

                                       6

<PAGE>


interest. The ten wells have been producing since July 2002 and appear to have
started the desorption process. The success of this area that is not as
structurally advantaged as Cow Creek, helps in our evaluation of Double Eagle's
similar acreage. Warren and Double Eagle have shared data and experience in the
difficult job of developing this very unique play. Drilling will continue in the
Sun Dog Unit after the completion of the Environmental Impact Statement.

                                  BLUE SKY UNIT

     Warren Resources has begun drilling on a 24 well program in a pod located
six miles south of Cow Creek Field. Double Eagle owns interests in 10,546 acres
adjacent to the Blue Sky Unit.

POWDER RIVER BASIN

     The Powder River Basin is located in the northeastern part of Wyoming.
Today, the Basin is one of the most prolific basins in the Rocky Mountain Region
for the production of oil. The Basin is also the largest producer of coal in the
United States. In the last four years, the Basin has hosted the largest gas play
in North America, the Coal Bed Methane play. Some 50,000 wells are planned over
the next ten years, with most wells proposed to drill to depths of 500 to 2,500
feet. Current recovery predictions are as high as 500 million cubic feet per
well and spacing is as tight as one well per 40 acres. We own an interest in
39,940 acres of leases and 8,487 acres of minerals in the Powder River Basin.

                       BUFFALO PROSPECT (COAL BED METHANE)

     Double Eagle has joined a joint venture with J. M. Huber and others and now
has a 43% interest in 14,864 acres (5,763 net acres) near Buffalo, Wyoming on
the west flank of the Powder River Basin. A State Unit is being formed and two
2,000 foot wells are planned to be drilled prior to April 25, 2003. We acquired
a 66% working interest in leases covering 9,028 acres in the coal bed methane
play. This play is based on drilling by Texaco, which planned to mine the coal
in 1990. Michiwest Energy, J.M. Huber and Fidelity have drilled over 100 coal
bed gas wells and have staked locations for over 50 more near our leasehold. The
drilled wells are being tested and await pipeline capacity.

ROCKY MOUNTAIN OVERTHRUST

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

                           CHRISTMAS MEADOWS PROSPECT

     This prospect is on the north slope of the Uinta Mountains in northeastern
Utah, 30 miles south of Evanston, Wyoming. While shooting a regional seismic
grid in the 1970s, Gulf noted a large dome on one of the seismic lines.
Subsequent seismic by Gulf, American Quasar, Amoco, Chevron and others has
confirmed the dome. Amoco staked a well location to test the structure in 1980,
but gave up trying to get a drilling permit in 1982. Chevron then staked a well
and fought to get the necessary permits until 1994, when they gave up and turned
the project over to Amerac, who designated Double Eagle as its agent. We
received a drilling permit in the summer of 1995 and began building the road to
the location with our partners, Prima Oil & Gas and John Lockridge. Amerac,
Chevron and Judy Yates have farmed out their interests to Double Eagle, Prima
and Lockridge. One key to getting this well drilled is the resolution by the

                                       7

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United States Forest Service of an unleased 400 acre tract of land offsetting
the drillsite. On April 1, 1999, the Interior Board of Land Appeals (IBLA)
decided in our favor, "that the close proximity of the unleased tract to the
drillsite prevented them from developing the project". As a result of the IBLA
decision, Double Eagle asked for the unleased tract to be offered for lease. The
Forest Service published a draft Forest Plan Revision indicating this 400 acre
tract will be offered for lease. Public comment for the Draft Plan ended
November 1, 2001. Final Draft and Record of Decision is now expected in January
2003. Barring further delays, the tract should be offered for lease in the
spring of 2003 with drilling to commence in September 2003. Double Eagle owns a
3.82% working interest as well as a 25% interest in the farmouts from Chevron,
Amerac and Yates on the lands in the 23,000 acre Table Top Unit. We intend to
persevere on this project until it is completed.

                               SAGE CREEK PROSPECT

     The Company holds a 60% working interest in 1,892 acres of leases in the
southwestern Montana portion of the overthrust belt. This area appears to have
the potential to contain a giant oil and gas field similar in magnitude to those
fields present in the Wyoming portion of the overthrust belt whose reserves
exceed one billion barrels of oil equivalent. Amoco, Exxon and Marathon did
seismic work and drilled wells in this area during the 1980s but found no
commercial deposits. Double Eagle's main emphasis is directed at testing a well
location that was permitted in 1986, but was never drilled by Amoco. This area
is close to a Wilderness Study Area, and the Bureau of Land Management has just
started an environmental impact statement to address drilling in the area. Since
this process is expected to be completed in August 2005, the Company decided to
drop some of our leases instead of paying rentals while waiting on the EIS.
However, Double Eagle did keep the most critical acreage and those leases are
suspended by BLM until the EIS is completed. This leasehold, while small in
size, assures no other company can develop the play without Double Eagle. The
Company plans to continue to work at getting a well drilled on its acreage.

WIND RIVER BASIN

     Located in central Wyoming, the Wind River Basin is home to Wyoming's first
oil production, which began in 1884. Since that time, numerous fields have been
discovered in the Basin, including two very large natural gas accumulations in
the last five years, the Madden Anticline and the Cave Gulch Fields. We have
interests in 37,266 gross acres of leases in this Basin.

                                MADDEN ANTICLINE

     Madden Anticline is located in central Wyoming, 65 miles west of the town
of Casper. The anticline is 20 miles long and six miles wide laying in the
deepest part of the Wind River Basin. Two large natural gas fields, Madden and
Long Butte Fields, are being drilled and developed on the anticline. Double
Eagle owns a significant working interest in 2,955 acres on the anticline and
interests restricted in depth and size in an additional 12,000 acres.

Madden Field

     In October 2002, the Madden Field produced over 12 billion cubic feet of
natural gas, an average of 389 million per day, from six formations at depths of
3,000 to 25,000 feet. The unit's primary operator, Burlington Resources, plans
to drill a number of additional wells to produce from the lower Fort Union and
the deep Madison. Double Eagle produces from one lower Fort Union well and one
upper Fort Union well. The Company will produce these two wells to evaluate the
potential for offsets.

                                       8

<PAGE>


Long Butte Field

     The Long Butte Field produced over 7.5 million cubic feet of gas per day in
October 2002 from three producing formations. The field is located on the west
end of Madden Anticline and appears capable of production in several formations
including those being developed in Madden Field. The deep Madison and shallow
lower Fort Union pays have not been developed yet at Long Butte Field. A 3-D
seismic survey has been acquired and additional development is anticipated
within the next couple of years. Double Eagle owns between a 2% and 8.3325%
working interest in 1,514 gross acres at Long Butte Unit in individual leases.
These individual working interests are the basis for Double Eagle's 1.13%
working interests in the 10,280 acre Cody Participating Area.

                                 SOUTH SAND DRAW

     The South Sand Draw Field is located in the southern portion of the Wind
River Basin approximately 36 miles southeast of Riverton, Wyoming. We have been
acquiring leases near the Field for five years and currently have 1,936 acres
under lease, in which our working interest is 75%. In October 1999, Double Eagle
and our partner acquired the final lease and drilled a 6,500 foot test in Spring
2001. The South Sand Draw Unit #11-36 was completed as a Muddy Sandstone
producer and in October 2001 began selling gas. Current production is 239,000
cubic feet per day. Additional drillable prospects exist on the east side of our
leasehold and may be drilled in 2003.

MINING  ACTIVITY

                                 ZEOLITE CLAIMS

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

Production

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


                                       9
<PAGE>


                                            Oil and Gas Production
                                              Year ended, August 31,
                                 -----------------------------------------------
                                    2002              2001             2000
Quantities
               Oil (Bbls)           20,566           18,605            20,162
               Gas (Mcf)         1,009,543          518,147           446,134
Average Sales Price
              Oil ($/Bbl)          $22.68            $25.66           $25.11
              Gas ($/Mcf)           $1.77             $4.31            $2.71
Average Production Cost             $0.77             $1.25            $0.875
($/MCFE)

     The Company's oil and gas production is sold on the spot market except for
a firm commitment contract to sell 1,500 mcf's per day of natural gas for $2.38
per mcf during the months from August 2002 through March 2003 . During the year
ended August 31, 2002, purchases by Summit Energy, LLC represented more than 10
percent of total Company revenues. The Company believes that it would be able to
locate alternate customers in the event of the loss of this customer.

Productive Wells

     The following table categorizes certain information concerning the
productive wells in which the Company owned an interest as of August 31, 2002.


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

    COLORADO               -----            -----           2          .0590
    MISSISSIPPI                2             .0009      -----          -----
    MONTANA                    2             .0960      -----          -----
    NORTH DAKOTA              20             .2335      -----          -----
    OKLAHOMA               -----            -----           2          -----
    UTAH                   -----            -----           1          .0200
    WYOMING                   85            5.9897        266        15.8867
                              --            ------        ---        -------

    TOTAL                    109            6.3201        271        15.9657

Drilling, Acquisitions and Reserve Replacement Costs

     During the three years ended August 31, 2002, the Company added proved
reserves from acquisitions, extensions and discoveries of approximately
10,123,436 MCFE. Acquisitions, exploration and development expenditures during
this period were approximately $9,808,558, resulting in an average annual
reserve replacement cost of approximately $.97 per MCFE 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.

                                       10

<PAGE>
<TABLE>
<CAPTION>


                                                 WELLS DRILLED
-----------------------------------------------------------------------------------------------------------------
                                             Year Ended August 31,
-----------------------------------------------------------------------------------------------------------------

                                        2002                          2001                        2000
                                 Gross         Net             Gross            Net        Gross         Net
                              ------------ ------------- ------------------ ------------ ----------- ------------
        Exploratory
<S>                                <C>          <C>              <C>             <C>         <C>          <C>
Oil                                0            0                0               0           0            0
Gas                                1          .1250              1             .7500         1          .2353
Dry Holes                          1          .0500              0               0           0            0

          Subtotal                 2          .1750              1             .7500         1          .2353

        Development
Oil                                4           .07594            6             .0072         0            0
Gas                               45          5.62540           23             .7593         8          .4121
Dry Holes                          0            0                0               0           0            0

          Subtotal                49          5.70134           29             .7665         8          .4121

                      TOTALS      51          5.87634           30            1.5165         9          .6474


</TABLE>

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

Reserves

     The information presented below regarding the Company's oil and gas
reserves was prepared by an outside consulting petroleum engineer and reviewed
by Ryder Scott Company, LP, certified petroleum engineers, with the exception of
the Cow Creek reserves. The Cow Creek reserves were reviewed by Netherland
Sewell and Associates. Management felt Netherland Sewell and Associates were
better qualified to review the reserve information of this coal bed natural gas
development. Ryder Scott gave remaining proved developed producing reserves of
875.5 million cubic feet for five initial wells at Cow Creek and no proved
undeveloped reserves. Netherland Sewell & Associates gave remaining proved
developed producing reserves of 892.1 million cubic feet for the five initial
wells and 2,053.8 million cubic feet for seven proved undeveloped locations. All
reserves are located within the continental United States. The reserve estimates
are developed using geological and engineering data and interests and burdens
information developed by the Company. Reserve estimates are inherently imprecise
and are continually subject to revisions based on production history, results of
additional exploration and development, prices of oil and gas, and other
factors. The notes following the table should be read in connection with the
reserve estimates.

                                       11



<PAGE>
<TABLE>
<CAPTION>


                                                                Estimated Proved Reserves (1)(2)
                                                                          At August 31,
                                                        --------------------------------------------------
                                                              2002              2001            2000
                                                        ------------------ --------------- ---------------
<S>                                                              <C>             <C>              <C>
Proved Developed Oil Reserves (Bbls)                             177,904         169,944          162,500
Proved Undeveloped Oil Reserves (Bbls)                             5,100          19,488            5,600
               Total Proved Oil Reserves (Bbls)                  183,004         189,432          168,100
Proved Developed Gas Reserves (Mcf)                            8,718,132       6,741,357        4,060,246
Proved Undeveloped Gas Reserves (Mcf)                          2,784,100       2,864,284          889,100
                Total Proved Gas Reserves (Mcf)               11,502,232       9,605,641        4,949,346
Total Proved Gas Equivalents (Mcfe) (3)                       12,600,256      10,742,233        5,957,946
Present Value Of Estimated Future Net Revenues
  before income taxes  discounted at  10%                     $7,672,000      $7,598,000       $7,520,000


(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.

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

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

Acreage

     The following tables set forth the gross and net acres of developed and
undeveloped oil and gas leases in which the Company had working interests and
royalty interests as of August 31, 2002. The category of "Undeveloped Acreage"
in the tables includes leasehold interests that may have been classified as
containing proved undeveloped reserves.


                                       12
<PAGE>



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

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

 COLORADO                      0                0              80            80               80               80
 MONTANA                      29                1           4,070         1,353            4,099            1,354
 NORTH DAKOTA              2,000               46           2,400            39            4,400               85
 UTAH                        637               16          21,483         1,362           22,120            1,378
 WYOMING                  66,951            4,035         147,221        74,693          214,172           78,728

 TOTAL                    69,617            4,098         175,254        77,527          244,871           81,625


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

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

COLORADO                     155                5           1,920          320             2,075             325
MISSISSIPPI                  160                1               0            0               160               1
MONTANA                      611               15               0            0               611              15
NORTH DAKOTA               1,523               40           4,109          243             5,632             283
OKLAHOMA                     640                2               0            0               640               2
UTAH                           0                0          51,311           51            51,311              51
WYOMING                    8,401              134                        1,040            44,414           1,175
                          36,013

TOTAL                     11,490              197          93,353        1,654           104,843           1,852
</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:

                                       13



<PAGE>


                                                        Acres Expiring
                                                 -----------------------------
                                                     Gross           Net
                                                 -------------- --------------
Four Months Ending:
    December 31, 2002                                    2,629            947
Twelve Months Ending:
    December 31, 2003                                   21,801         11,061
    December 31, 2004                                   28,880         17,959
    December 31, 2005 and later                        296,404         53,510
Risk Factors

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

We have had operating losses in the past.

     We have reported net losses for the fiscal year ended August 31, 2002 and
for other previous years. There is no assurance that our current or future
operations will be profitable.

We depend on a key employee.

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

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

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

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

     The marketability of our oil and gas production depends in part upon the
availability, proximity and capacity of gas gathering systems, pipelines and
processing facilities. Federal and state regulation of oil and gas production
and transportation, general economic conditions, changes in supply and changes
in demand all could adversely affect our ability to produce and market its oil

                                       14



<PAGE>


and natural gas. If market factors were to change dramatically, the financial
impact could be substantial because we would incur expenses without receiving
revenues from the sale of production. The availability of markets is beyond our
control.

We may be unable to find additional reserves.

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

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

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

Oil and gas operations are inherently risky.

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

New government regulation and environmental risks could increase our costs.

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

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

     Many jurisdictions have at various times imposed limitations on the
production of oil and gas by restricting the rate of flow for oil and gas wells
below their actual capacity to produce. Because current regulations covering our
operations are subject to change at any time, and despite our belief that we are
in substantial compliance with applicable environmental and other government
laws and regulations, we may incur significant costs for compliance in the
future.

                                       15



<PAGE>


Our prices may be impacted adversely by new taxes.

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

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

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

There is limited liquidity in our shares.

     There is a limited market for our shares and an investor cannot expect to
liquidate his investment regardless of the necessity of doing so. The prices of
our shares are highly volatile. Due to the low price of the securities, many
brokerage firms may not effect transactions and may not deal with them as it may
not be economical for them to do so. This could have an adverse effect on
developing and sustaining the market for our shares securities. In addition,
there is no assurance that an investor will be in a position to borrow funds
using our shares as collateral.

ITEM 3. LEGAL PROCEEDINGS

     The Company was a party to two lawsuits concerning its dispute with Questar
Exploration & Production Co., Double Eagle Petroleum Co. v. Questar Exploration
& Production Co., et al (U. S. District Court, District of Colorado, Case No.
01D0366) and Double Eagle Petroleum Co., et al v. Questar Exploration &
Production Co., et al (Denver District Court, Case No. 01CV1095). In each of
these two cases, the Company claimed that a portion of production from wells
operated by Questar, in which the Company has interests, comes from deeper
formations in which the Company has a higher interest than other formations.
These lawsuits were settled in March 2002 upon mutually acceptable terms.

     The Company is not a party to any other 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

     Not applicable.




                                       16
<PAGE>


                                     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 the Nasdaq SmallCap Stock Market under the
symbol "DBLE". The Company's Units, each consisting of one share of Common Stock
and one Warrant, traded from December 1996 until October 1997, when the Units
were separated and the Warrants commenced trading under the symbol "DBLEW". The
warrants ceased trading in December 2001 upon their expiration. The range of
high and low sales prices for the Common Stock and Warrants (until their
expiration in December 2001) for each quarterly period for fiscal year ended
August 31, 2001 and 2002, as reported by Nasdaq, is as follows:

<TABLE>
<CAPTION>


                                 Warrants ("DBLEW")                   Common Stock ("DBLE")
                          ----------------------------------     ---------------------------------
Fiscal 2001                   High                 Low               High                Low
<S>                                <C>                 <C>                <C>                <C>
    First Quarter                  3.88                1.13               6.88               4.03
    Second Quarter                 2.25                1.43               5.13               4.28
    Third Quarter                  2.59                1.43               5.71               4.38
    Fourth Quarter                 2.50                 .80               5.59               3.73
 Fiscal 2002
    First Quarter                  1.10                 .26               4.20               3.00
    Second Quarter                  .70                 .45               4.25               3.40
    Third Quarter                     -                  -                5.10               3.80
    Fourth Quarter                    -                  -                4.64               2.78
</TABLE>


     On November 15, 2002, the closing sales price for the Common Stock as
reported by Nasdaq was $4.99 per share. The Warrants were traded through
December 17, 2001.

     Holders. On November 15, 2002, the number of holders of record of common
stock was 1,778.

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

Introduction

     This discussion summarizes the significant factors affecting the operating
results, financial condition, and cash flows of Double Eagle Petroleum Co., for
the three-year period ended August 31, 2002. This discussion should be read in
conjunction with the Letter to Stockholders, Financial Statements and Notes to
Financial Statements included in this Annual Report on Form 10-KSB.

Overview

     2002 resulted in the Company increasing its oil and gas production by 80%
over the prior year. Despite this increase, revenues from oil and gas sales were
down 12%, or $312,000 from the prior year, due to a drop in the average price
received for sales of natural gas. Increases in production costs resulting from
the increase in production, and increases in overhead expenses resulted in a
decline in income before depreciation, depletion and impairment from $843,000 in

                                       17



<PAGE>


2001 to $335,000 in 2002. Significant increases in depreciation and depletion,
and the recognition of $2,041,000 in impairments on properties resulted in a net
loss for the year of $2,847,000.

Operating Results

     The Company increased production of oil and gas, as measured by thousand
cubic feet equivalents (Mcfe's) in each of fiscal years 2002 and 2001. The
increase in 2002 was 80% over the prior year. The increase in Mcf's in 2002 can
be attributed to further development in the Mesa and Cow Creek Units and the
development of South Sand Draw. Contributing to the increase in Mcf's in 2001
were the drilling and completion of additional producing wells at Mesa and
Madden. In spite of the significant increase in production in 2002, lower gas
prices resulted in a decline in revenues from oil and gas sales of 12% as
compared to 2001. A rise in gas prices in 2001 resulted in a 49% increase in
revenues from oil and gas sales as compared to fiscal 2000.

     The increase in production volume led to an increase in the costs of oil
and gas production in 2002. Production costs incurred were $877,000 for 2002 as
compared to $787,000 for 2001. Production costs as a percentage of oil and gas
sales were 39% and 31% for the fiscal years 2002 and 2001, respectively.
Exploration expenses were 6% of oil and gas sales in each of the years 2002 and
2001. Depreciation and depletion expenses incurred during 2002 amounted to
$1,117,000, as compared with $506,000 incurred in 2001. Depreciation and
depletion in 2002 was 49.5% of oil and gas sales revenues versus 19.7% in 2001.
This is a result of conservative reserve estimates based on low natural gas
prices on August 31, 2002 and a lack of history in Pinedale and Cow Creek to
guide the reserve estimates. On December 1, 2002, gas prices in the Rocky
Mountains had increased 150% from August 31, 2002. General and administrative
expenses experienced an increase in 2002 of $156,164 over the prior year. This
increase is attributed mainly to additional personnel costs associated with the
development of the Cow Creek field. The Company also incurred $31,000 in bad
debts on sales of gas as a result of the Enron collapse. The Company recognized
impairments of $2,041,000 on the South Sand Draw, Graham, and the Madden fields
in 2002. There were no impairments recognized in 2001. The impairments in 2002
were a result of low natural gas prices, a failed re-completion attempt at
Madden, cost overruns at South Sand Draw and successful work on the Graham well
that occurred after year-end. No additional impairments are anticipated in 2003
barring any unforeseen changes in pricing and production.

     Costs and expenses increased by $611,485, or 37% in 2001 over 2000. The
increase can be attributed to an increase in production costs resulting from the
increase in production volume, and legal costs incurred to defend the Company's
ownership position in the Mesa Unit.

     The combination of lower gas prices, the increase in depreciation and
depletion expenses, and the impairments recognized resulted in a pre-tax net
loss of $2,873,508 in 2002. During 2001 and 2000, the Company experienced
pre-tax income of $277,701 and $125,244, respectively.

                        Financial Condition and Liquidity
                        ---------------------------------

     During 2002, the Company continued its strategy of increasing its oil and
gas production by furthering development of its oil and gas properties. The
Company expended $4,935,000 in the development of its oil and gas properties.
These expenditures included $3,287,000 in development costs on the Mesa Unit,
and $1,400,000 in development costs on Cow Creek. Overall, the Company's total
capital investment in producing and non-producing oil and gas properties
increased to $15,336,000. During 2001, the Company's investment in oil and gas
properties increased by $2,518,000. The increases in capitalized expenditures
are primarily in support of the Company's goal to increase reserves, production
and revenues, through low risk developmental drilling, workovers, and
acquisitions.

                                       18



<PAGE>


     The capital expenditures in 2002 were financed by a draw on the Company's
line of credit arrangement of $1,250,000, and by proceeds from the issuance of
common stock of $3,759,000. The Company's working capital position improved by
$191,000 for 2002. The capital expenditures in 2001 were financed by $1,556,000
in net cash flows from operating activities, by a draw on the Company's line of
credit of $500,000, and by issuance of common stock of $419,000. The Company's
working capital position decreased by $293,000 in 2001.

     The Company utilizes a $4,250,000 line of credit arrangement in meeting its
development expenditures and its short-term operating needs. The Company owed
$2,250,000 and $1,000,000 on its line of credit at the end of fiscal years 2002
and 2001, respectively. Double Eagle's primary financing objective is to
maintain a conservative balance sheet, using appropriate levels of equity and
long-term debt to finance non-current assets and permanent working capital
needs.

     At August 31, 2002, 414,500 warrants were outstanding allowing for the
purchase of the Company's stock at $1.375 per share. Each warrant entitles the
holder to purchase one share of stock. These warrants expire October 16, 2003.
As the Company's stock is currently trading above the exercise price, it is
anticipated that at least some of these warrants will be exercised. The proceeds
from the exercise of the warrants will be used to further the Company's
development of its oil and gas properties.

         During fiscal 2002, the Company has committed $1,400,000 towards the
     development of oil and gas properties. The Company anticipates expending,
but
has not committed to, an additional $5,000,000 in further development of the
Eastern Washakie coal bed natural gas play. This $6,400,000 in capital
expenditures is expected to be financed with the Company's operating line of
credit, from cash flows from operations and additional stock offerings.

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

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

Reserve Estimates:

     Our estimates of oil and natural gas reserves, by necessity, are
projections based on geological and engineering data, and there are
uncertainties inherent in the interpretation of such data as well as the
projection of future rates of production and the timing of development
expenditures. Reserve engineering is a subjective process of estimating
underground accumulations of oil and natural gas that are difficult to measure.
The accuracy of any reserve estimate is a function of the quality of available
data, engineering and geological interpretation and judgment. Estimates of
economically recoverable oil and natural gas reserves and future net cash flows
necessarily depend upon a number of variable factors and assumptions, such as
historical production from the area compared with production from other
producing areas, the assumed effects of regulations by governmental agencies and
assumptions governing future oil and natural gas prices, future operating costs,
severance and excise taxes, development costs and workover and remedial costs,
all of which may in fact vary considerably from actual results. For these
reasons, estimates of the economically recoverable quantities of oil and natural
gas attributable to any particular group of properties, classifications of such
reserves based on risk of recovery, and estimates of the future net cash flows
expected there from may vary substantially. Any significant variance in the
assumptions could materially affect the estimated quantity and value of the
reserves, which could affect the carrying value of our oil and gas properties
and/or the rate of depletion of the oil and gas properties. Actual production,
revenues and expenditures with respect our reserves will likely vary from
estimates, and such variances may be material.

                                       19



<PAGE>


     Many factors will affect actual net cash flows, including:

     o    the amount and timing of actual production;

     o    supply and demand for natural gas;

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

     o    changes in governmental regulations or taxation.

Property, Equipment and Depreciation:

     We follow the successful efforts method of accounting for oil and gas
properties. Under this method all productive costs incurred in connection with
the exploration for and development of oil and gas reserves are capitalized.
These capitalized costs include lease acquisition, geological and geophysical
work, delay rentals, drilling, completing and equipping oil and gas wells,
including salaries, benefits and other internal salary related costs directly
attributable to these activities. Costs associated with production and general
corporate activities are expensed in the period incurred. Interest costs related
to unproved properties and properties under development also are capitalized to
oil and gas properties. If the net investment in oil and gas properties exceeds
an amount equal to the sum of (1) the standardized measure of discounted future
net cash flows from proved reserves, and (2) the lower of cost or fair market
value of properties in process of development and unexplored acreage, the excess
is charged to expense as additional depletion. Normal dispositions of oil and
gas properties are accounted for as adjustments of capitalized costs, with no
gain or loss recognized. As a result, we are required to estimate our proved
reserves at the end of each quarter, which is subject to the uncertainties
described in the previous section.




                                       20
<PAGE>



                           DOUBLE EAGLE PETROLEUM CO.

             ITEM 7. FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION

                                      Index
                                                                       Page
                                                                     Numbers
                                                                     -------

(1)      Report of Independent Certified Public Accountants            F-1
         Financial Statements:
                  Balance Sheets as of August 31, 2002
                    and 2001                                           F-2
                  Statements of Operations for the years ended
                    August 31, 2002, 2001 and 2000                     F-3
                  Statements of Stockholders' Equity for the
                    years ended August 31, 2002, 2001 and 2000         F-4
                  Statements of Cash Flows for the years ended
                    August 31, 2002, 2001 and 2000                     F-5
                  Notes to Financial Statements                     F-6 - F-12

(2)      Supplemental Oil and Gas Information (Unaudited)          F-13 - F-16



                                     F-1(a)

<PAGE>


                       LOVELETT, SKOGEN & ASSOCIATES, P.C.
                       -----------------------------------

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS





The Stockholders and Board of Directors
Double Eagle Petroleum Co.

We have audited the accompanying balance sheets of Double Eagle Petroleum Co. as
of August 31, 2002 and 2001, and the related statements of operations, changes
in stockholders' equity, and cash flows for the years ended August 31, 2002,
2001, and 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the 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 Co. as
of August 31, 2002 and 2001, and the results of its operations and its cash
flows for the years ended August 31, 2002, 2001, and 2000, in conformity with
accounting principles generally accepted in the United States of America.

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

Casper, Wyoming
December 9, 2002



                                       F-1



<PAGE>
<TABLE>
<CAPTION>

DOUBLE EAGLE PETROLEUM CO.
BALANCE SHEETS

August 31, 2002 and 2001                                                             2002                   2001
--------------------------------------------------------------------------------------------------------------------
                                    ASSETS
<S>                                                                              <C>                    <C>
CURRENT ASSETS
    Cash and cash equivalents                                                    $     89,342           $     81,562
    Accounts receivable                                                               518,553                301,284
     Prepaid expenses                                                                   8,524                 13,776
                                                                                 ------------           ------------
         Total Current Assets                                                         616,419                396,622

PROPERTIES AND EQUIPMENT
    Developed properties                                                           14,458,308              9,523,508
    Undeveloped properties                                                            877,360                831,959
    Corporate and other                                                               286,563                235,605
                                                                                 ------------           ------------
                                                                                   15,622,231             10,591,072
    Less accumulated depreciation, depletion and impairment                        (6,484,574             (3,326,881
                                                                                 ------------           ------------
         Net Properties and Equipment                                               9,137,657              7,264,191
                                                                                 ------------           ------------

OTHER ASSETS                                                                           11,125                 11,125
                                                                                 ------------           ------------

         TOTAL ASSETS                                                            $  9,765,201           $  7,671,938
                                                                                 ============           ============

                                LIABILITIES
CURRENT LIABILITIES
    Accounts payable                                                             $    953,783           $    888,587
    Accrued production taxes                                                          184,345                220,777
                                                                                 ------------           ------------
         Total Current Liabilities                                                  1,138,128              1,109,364
                                                                                 ------------           ------------

DEFERRED INCOME TAXES                                                                    --                   26,407

LONG-TERM DEBT                                                                      2,250,000              1,000,000
                                                                                 ------------           ------------

         Total Liabilities                                                          3,388,128              2,135,771
                                                                                 ------------           ------------


                              STOCKHOLDERS' EQUITY
Common stock, $.10 par value; 10,000,000 shares authorized; issued
  and outstanding 6,500,518 shares in 2002 and 5,106,534 in 2001                      650,052                510,653
Capital in excess of par value                                                      7,765,579              4,146,040
(Accumulated Deficit) Retained earnings                                            (2,038,558)               879,474
                                                                                 ------------           ------------

         Total Stockholders' Equity                                                 6,377,073              5,536,167
                                                                                 ------------           ------------

         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $  9,765,201           $  7,671,938
                                                                                 ============           ============

See accompanying notes to financial statements.



                                                           F-2
<PAGE>



DOUBLE EAGLE PETROLEUM CO.
STATEMENTS OF OPERATIONS

For the years ended August 31, 2002, 2001 and 2000                 2002                 2001                 2000
---------------------------------------------------------------------------------------------------------------------

Revenues
    Oil and gas sales                                         $ 2,255,919           $ 2,567,713           $ 1,724,497
    Sales of nonproducing leases                                    4,181                 9,821
                                                                                                          -----------
    Other income                                                   14,244                 9,562                26,197
                                                              -----------           -----------           -----------

         Total Revenues                                         2,270,163             2,581,456             1,760,515
                                                              -----------           -----------           -----------

Costs and Expenses
    Production costs                                              602,986               483,886               284,997
    Production taxes                                              274,350               303,314               211,613
    Exploration expenses, including dry holes                     135,070               147,744               134,320
    Write-offs and abandonments                                     2,565                38,979                 5,121
    General and administrative                                    920,466               764,302               462,482
    Depreciation and depletion                                  1,116,849               505,782               427,218
    Impairment of producing properties                          2,040,844                  --                 108,252
    Cost of non-producing leases sold                                --                   3,743                 2,262
                                                              -----------           -----------           -----------

         Total Costs and Expenses                               5,093,130             2,247,750             1,636,265
                                                              -----------           -----------           -----------

(Loss) Income from Operations                                  (2,822,967)              333,706               124,250

Other Income (Expenses)
    Interest income                                                   199                11,937                17,661
    Interest expense                                              (50,740)              (66,947)              (32,145)
    Gain (loss) on sale of assets                                    --                    (995)               15,478
                                                              -----------           -----------           -----------
                                                                  (50,541)              (56,005)                  994
                                                              -----------           -----------           -----------

(Loss) Income before Income Taxes                              (2,873,508)              277,701               125,244

Income Tax Credit (Expense)                                        26,407               (26,407)                 --
                                                              -----------           -----------           -----------

Net (Loss) Income                                             $(2,847,101)          $   251,294           $   125,244
                                                              ===========           ===========           ===========

Net (Loss) Earnings per Common Share - Basic                  $     (.469)          $      .051           $      .026

Net (Loss) Earnings per Common Share - Diluted                $     (.469)          $      .043           $      .023
                                                              ===========           ===========           ===========

 Average Shares Outstanding - Basic                             6,069,148             4,954,896             4,760,223
                                                              ===========           ===========           ===========

 Average Shares Outstanding - Diluted                           6,069,148             5,860,718             5,418,515
                                                              ===========           ===========           ===========

See accompanying notes to financial statements.



                                                            F-3
<PAGE>


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

For the years ended August 31, 2002, 2001 and 2000
-----------------------------------------------------------------------------------------------------------------------------

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

Balance,
  August 31, 1999                  4,365,401        $   436,540        $ 2,667,276        $   502,936        $ 3,606,752

Net Income                              --                 --                 --              125,244            125,244


Repurchase of                        (22,000)            (2,200)           (66,550)           (68,750)
     Common Stock                       --

Common Stock
 Issued                              488,000             48,800          1,153,418               --            1,202,218
                                 -----------        -----------        -----------        -----------        -----------

Balance at
  August 31, 2000                  4,831,401        $   483,140        $ 3,754,144        $   628,180        $ 4,865,464

Net Income                              --                 --                 --              251,294            251,294

Repurchase
of                                   (38,919)            (3,892)          (172,423)              --             (176,315)
Common Stock

Common Stock
 Issued                              314,052             31,405            564,319               --              595,724
                                 -----------        -----------        -----------        -----------        -----------

Balance at
   August 31, 2001                 5,106,534        $   510,653        $ 4,146,040        $   879,474          5,536,167

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

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

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

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


See accompanying notes to financial statements.

                                                           F-4


<PAGE>


DOUBLE EAGLE PETROLEUM CO.
STATEMENTS OF CASH FLOWS

For the Years ended August 31, 2002, 2001 and 2000                    2002                2001               2000
---------------------------------------------------------------------------------------------------------------------

Cash Flows from Operating Activities

    Net (loss) income                                              $(2,847,101)       $   251,294        $   125,244
    Adjustments to reconcile net (loss) income to net cash
     Provided by operating activities:
        Depreciation, depletion and impairments                      3,157,693            505,782            535,470
        Abandonments and loss on investments                             2,565             38,979              5,121
        Gain on sale of non-producing leases                              --                 (438)            (7,559)
        Loss (gain) on sale of other assets                               --                  995            (15,478)
        Directors fees paid in stock                                    15,200             18,124               --
        Deferred income taxes                                          (26,407)            26,407               --
        Changes in operating assets and liabilities:
           Accounts receivable                                        (217,269)           193,309           (198,608)
           Prepaid expenses                                              5,252             (8,846)             4,439
           Accounts payable                                             65,196            367,609            295,246
           Accrued production taxes                                    (36,432)           181,167             22,321
                                                                   -----------        -----------        -----------

    Net cash provided by operating activities                          118,697          1,574,382            766,196
                                                                   -----------        -----------        -----------

Cash Flows from Investing Activities

    Proceeds from sales of properties and assets                          --                4,181             61,821
    Other asset (additions)                                            (50,958)           (43,707)            (5,000)
    Other asset redemptions                                               --               25,500               --
    Acquisitions of producing properties and equipment              (4,934,800)        (2,482,249)        (1,922,716)
    Acquisitions of non-producing properties                           (47,966)           (39,471)          (121,484)
                                                                   -----------        -----------        -----------

    Net cash (used in) investing activities                         (5,033,724)        (2,535,746)        (1,987,379)
                                                                   -----------        -----------        -----------

Cash Flows from Financing Activities
    Issuance of common stock                                         3,767,682            401,285          1,133,468
    Net borrowings under line of credit arrangements                 1,250,000            500,000            192,102
    Purchase of Company stock                                          (94,875)              --                 --
    Repayment of long-term debt                                           --                 --             (200,501)
                                                                   -----------        -----------        -----------

    Net cash provided by  financing activities                       4,922,807            901,285          1,125,069
                                                                   -----------        -----------        -----------

Increase (Decrease) in Cash and Cash Equivalents                         7,780            (60,079)           (96,114)

Cash and cash equivalents at beginning of year                          81,562            141,641            237,755
                                                                   -----------        -----------        -----------

Cash and cash equivalents at end of year                           $    89,342        $    81,562        $   141,641
                                                                   ===========        ===========        ===========

Supplemental Disclosures of Cash and Non-Cash
 Transactions

    Cash paid during the year for interest                         $    47,944        $    65,224        $    28,055
     Repurchase and  issuance of common stock                      $      --          $   180,000        $    68,750
     Directors' fees paid in stock                                 $    15,200        $    18,124        $      --

See accompanying notes to financial statements.



                                                               F-5

</TABLE>



<PAGE>



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

1.   Summary of Significant Accounting Policies

     Nature of Business

     Double Eagle was incorporated under Wyoming law in 1972 and reincorporated
     under Maryland law in 2001 for the purpose of exploration, development, and
     production of oil, gas and other minerals in the Rocky Mountain region of
     the United States. 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.

     Accounting for Oil and Gas Activities

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

     Revenues from the sale of oil and gas production are recognized when title
     passes, net of royalties.

     Depreciation, depletion and amortization

     Depreciation and depletion 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 in the property.
     Unproved oil and gas interests are carried at original acquisition costs
     including filing and title fees.

     Office facilities, equipment and vehicles are recorded at cost.
     Depreciation is recorded using straight-line and accelerated methods over
     the estimated useful lives of 10 to 40 years for office facilities, 3 to 10
     years for office equipment, and 7 years for vehicles.

     Maintenance, repairs and renewals which neither materially add to the value
     of the property nor appreciably prolong its life are charged to expense as
     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 the mining operations. Subsequent to the
     time that zeolite mines reach operational status, all operational
     expenditures are charged to expense in the period incurred.

     Cash and Cash Equivalents

     For purposes of preparing the statement of cash flows, currency on hand,
     demand deposits, money market accounts, treasury bills and certificates of
     deposits with short-term maturities are considered to be cash and cash
     equivalents.


                                      F-6

<PAGE>



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

1. Summary of Significant Accounting Policies (continued)

     Income taxes

     Income taxes are determined under an asset and liability approach. The
     income statement effect is derived from changes in deferred income taxes on
     the balance sheet. This approach gives consideration to the future tax
     consequences associated with differences between financial accounting and
     tax basis of assets and liabilities. These differences relate to items such
     as depreciable and depletable properties, exploratory and intangible
     drilling costs, and non-producing leases.

     Net Income (Loss) per Share

     The Company has adopted SFAS No. 128, "Earnings Per Share," which requires
     the reporting of both basic and diluted earnings per share. Basic earnings
     per share is computed by dividing income available to common shareholders
     by the weighted average number of common shares outstanding for the period.
     Diluted earnings per share reflects the potential dilution that could occur
     if options or other contracts such as outstanding warrants to issue common
     stock were exercised or converted into common stock. In a year in which a
     net loss occurs, the conversion of options or other contracts such as
     warrants is ignored as the conversion would reduce the actual loss per
     share.

     Stock-Based Compensation

     The Company accounts for stock options using Accounting Principles Board
     Opinion No 25 (APB 25).

     Use of Estimates

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

     New Pronouncements

     The Company is reviewing recently released accounting pronouncements. The
     Company does not expect these pronouncements will have any significant or
     material impacts on the Company's financial statements.

2.   Employee Benefit Plan

     The Company maintains a Simple Employee Pension Plan covering substantially
     all employees meeting minimum eligibility requirements. Employer
     contributions are determined solely at management's discretion. Employer
     contributions for the years ended August 31, 2002, 2001 and 2000 were
     $16,319, $15,700 and $17,322, respectively.

3.    Operating Line of Credit

     The Company utilized a $3,000,000 line of credit, secured by oil and gas
     producing properties, as part of its cash management program. The interest
     rate on the line of credit is at the Prime Rate published in the Wall
     Street Journal. The line of credit's interest rate is currently 4.75% and
     its maturity date is January 3, 2004. Amounts outstanding under this and
     previous line of credit arrangements were $2,250,000 and $1,000,000 for the
     years ended August 31, 2002 and 2001, respectively. Subsequent to year end
     the Company's line of credit was increased to $4,250,000.


                                      F-7

<PAGE>



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

4.   Financial Instruments

     The following disclosures on the estimated fair value of financial
     instruments are presented in accordance with SFAS 107 "Disclosure about
     Fair Value of Financial Instruments". Fair value, as defined in SFAS 107,
     is the amount at which the instrument could be exchanged currently between
     willing parties. The carrying amounts of cash and cash equivalents, trade
     receivables and payables, and notes payable approximated fair value as of
     August 31, 2002 and 2001 because of the short-term maturities of these
     items. The difference between the carrying amounts and the estimated fair
     values of the Company's other financial instruments recognized on the
     balance sheets at August 31, 2002 and 2001 were immaterial.

5.   Contingencies

     The Company is subject to extensive federal, state and local environmental
     laws and regulations. These requirements, which change frequently, regulate
     the discharge of materials into the environment. The Company believes it is
     in compliance with existing laws and regulations.

6.   Impairment of Long-Lived Assets

     SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
     requires that an asset be evaluated for impairment when the carrying amount
     of an asset exceeds the sum of the undiscounted estimated future cash flows
     of the asset. In accordance with the provisions of SFAS 144, the Company
     reviews the carrying values of its long-lived assets whenever events or
     changes in circumstances indicate that such carrying values may not be
     recoverable. If, upon review, the sum of the undiscounted pretax cash flows
     is less than the carrying value of the asset group, the carrying value is
     written down to estimated fair value. Individual assets are grouped for
     impairment purposes at the lowest level for which there are identifiable
     cash flows that are largely independent of the cash flows of other groups
     of assets, generally on a field-by-field basis. The fair value of impaired
     assets is determined based on quoted market prices in active markets, if
     available, or upon the present values of expected future cash flows using
     discount rates commensurate with the risks involved in the asset group. The
     long-lived assets of the Company, which are subject to evaluation, consist
     primarily of oil and gas properties. The Company recognized a non-cash
     charge on producing properties during the years 2002, 2001 and 2000 of
     $2,040,844, $-0- and $108,252, respectively, for those properties whose
     carrying values exceeded the undiscounted future net cash flows.

7.   Income Taxes

     The income tax expense (credit) amounts reported on the income statement
     are composed entirely of deferred income taxes. The tax effects of
     temporary differences that gave rise to significant portions of the
     deferred tax liabilities and deferred tax assets as of August 31, 2002 and
     2001 were as follows:
<TABLE>
<CAPTION>

                                                                                   2002                  2001
                                                                              ---------------       ---------------
<S>                                                                          <C>                   <C>
           Deferred tax assets:
                Net operating loss carry-forwards                           $        336,065      $         98,470
                Asset impairments                                                    353,605                47,479
                                                                              ---------------       ---------------
                                                                                     689,670               145,949
                                                                              ---------------       ---------------
            Deferred tax liabilities - intangible drilling costs            $        244,370      $        172,356
                                                                              ---------------       ---------------

           Net deferred tax liabilities (assets)                                    (445,300)               26,407
           Valuation allowance:                                                      445,300                   -
                                                                              ---------------       ---------------
           Net deferred tax liabilities (assets)                            $            -        $         26,407
                                                                              ===============       ===============


     At August 31, 2002, the Company had a net operating loss carryforward for
     regular income tax reporting purposes of approximately $2,240,000, which
     will begin expiring in 2007.


                                      F-8
<PAGE>



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

8.   Commitments

     Drilling projects in which the Company has committed to or anticipates it
     will participate in as of August 31, 2002 are as follow:

                                      Expenditures             Estimated Cost
           Project                    To Date                   To Complete                 Totals
           --------------------       -----------------        -------------------       --------------

           Cow Creek               $      2,449,759         $       1,400,000         $      3,849,759
                                      -----------------        -------------------       --------------
9.   Market Risk


     The Company's major market risk exposure is in the pricing applicable to
     its oil and gas production. Realized pricing is primarily driven by the
     prevailing worldwide price for crude oil and spot prices applicable to its
     natural gas production. Historically, prices received for oil and gas
     production have been volatile and unpredictable and price volatility is
     expected to continue. Monthly oil price realizations ranged from a low of
     $17.97 per barrel to a high of $26.51 a barrel during fiscal 2002. Gas
     price realizations ranged from a monthly low of $.98 per Mcf to a monthly
     high of $3.01 per Mcf during the same period.

10.  Stock Options and Warrants

     Stock option plans approved by the stockholders provide for granting of
     options to employees, directors and others for purchase of common stock
     generally at prices between the "bid" and "ask" prices at the time of
     grant. Generally, options granted expire three years after the date of
     grant. The changes in the outstanding stock options during the three years
     ended August 31, 2002, 2001 and 2000 are summarized as follows:


                                           2002                           2001                             2000
                              ----------------------------     ----------------------------   ------------------------------
                                                  Wt. Avg.                       Wt. Avg.                         Wt. Avg.
                                Shares            Ex. Pr.        Shares           Ex. Pr.       Shares            Ex. Pr.
                              -----------       ----------     ----------      ------------   ------------     -------------

     Beginning of year            168,786       $    3.448       214,646       $      2.196      200,000       $       1.514
     Granted                       55,000            3.800        64,140              4.531       84,646               3.094
     Exercised/Purchased          (20,000)           1.328      (110,000)             1.636      (70,000)              1.375
     Expired                         --           --                --             --               --              --
                              -----------                      ---------                      ----------

     End of year                  203,786       $    3.751       168,786       $      3.448      214,646       $       2.196

     Unoptioned shares
     Available at year end        326,214                         81,214                         145,354
                              ===========                      =========                      ==========


                                                                 F-9

<PAGE>



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

10. Stock Options and Warrants (continued)

     On occasion, the Board of Directors grants stock options not covered under
     the plans approved by the stockholders, to individuals and companies that
     perform services for the Company. Changes in these stock options for the
     same three-year period are as follows:


                                         2002                          2001                           2000
                             ------------------------------   ------------------------      --------------------------

                                              Wt  Avg.                       Wt. Avg.                       Wt. Avg.
                             Shares           Ex Pr.           Shares        Ex. Pr.           Shares        Ex. Pr.
                             -------------    -------------   -----------   ----------      ------------   -----------

    Beginning of year        465,714       $  3.314            388,354      $  2.772           243,000     $  1.629

    Granted                     38,250        3.800            122,360         4.531           145,354        4.682

    Exercised                (198,000)        1.594            (45,000)        1.944                  -            -

    Expired                        -               -                  -             -                 -            -
                             -------------    -----------      ------------    -----------     ----------     ----------

    End of year               305,964      $  4.488            465,714      $  3.314           388,354    $   2.772
                             ========                          =======                         =======

     Currently outstanding are 414,500 warrants allowing for the purchase of one
     share of common stock at a price of $1.375. These warrants expire October
     16, 2003.

11.  Stock Based Compensation

     In 1995, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standards No. 123 "Accounting for Stock-Based
     Compensation". As permitted by SFAS No. 123, the Company continues to apply
     the recognition and measurement provisions of Accounting Principles Board
     Opinion No. 25, "Accounting for Stock Issued to Employees". For the year
     2002, the Company would have recognized a net loss of $(2,955,017), and a
     loss per share - basic and diluted of $(.487) had compensation expense been
     determined for stock options based on the fair values at grant dates
     consistent with SFAS No. 123. In 2001 the Company would have recognized a
     net loss of $(150,160), and a loss per share - basic and diluted of $(.03).
     The Company's pro forma 2000 net loss and basic and diluted loss per share
     would have been $(128,448) and $(.03) respectively.

     The pro forma amounts were estimated using the Black-Scholes option-pricing
     model with the following assumptions for 2002, 2001 and 2000:

                                                                  2002         2001           2000
                                                               ---------     ---------      --------
     Weighted average expected life (years)                          3.0           3.0           3.0
     Expected volatility                                              39%           65%         1.25%
     Risk free interest rate                                        3.75%         5.50%         6.50%
     Weighted average fair value of options granted            $    3.80     $    4.53      $   2.31

</TABLE>



                                                    F-10
<PAGE>



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



12.  Related Party Transactions

     The Company was a party to a consulting agreement with a member of the
     board of directors (Consultant). The Consultant provided the Company with
     the first right to participate in all oil and gas transactions in which the
     Consultant or Consultant's designee had the right to participate, or for
     which Consultant was otherwise compensated for finding participants. In
     consideration of Consultant's providing services to the Company, the
     Company issued options to purchase up to 91,250 shares of the Company's
     restricted common stock at exercise prices of $1.375 to $4.531 per share.
     In addition, the Company was required to reimburse the Consultant's
     expenses for up to $12,000 per year to cover travel and other expenses. The
     Company leases office space from a Company owned by this board member on a
     month-to-month basis. Amounts paid on this lease agreement were $5,850 in
     2002.

     A Company owned by a member of the board of directors acts as the operator
     on a property owned by the Company. The related company also performs
     services on other producing properties in which Double Eagle owns an
     interest and on drilling projects in which Double Eagle participates.
     Amounts paid by Double Eagle to the company were $60,860, $73,487 and
     $61,686 for the years ended August 31, 2002, 2001 and 2000, respectively.
     Amounts owed by Double Eagle to the Company were $6,574, $7,173 and $4,337
     for the years ended August 31, 2002, 2001 and 2000, respectively.

     The Company participates as a partner in various drilling projects and
     acts as an operator on certain drilling projects. A Company owned by a
     member of the board of directors is a participant in one of the drilling
     projects in which Double Eagle acts as an operator. Amounts paid to Double
     Eagle by the company were $6,574, $28,661 and $37,564 for the years ended
     August 31, 2002, 2001 and 2000, respectively. The related company also
     holds an ownership interest in a producing property in which Double Eagle
     holds an ownership interest.

13.  Concentration of Credit Risk and Major Customers

     The Company invests its cash primarily in deposits with major banks.
     Certain deposits may, at times, be in excess of federally insured limits
     ($37,351, $165,802 and $180,901 at August 31, 2002, 2001 and 2000,
     respectively). The Company has not incurred losses related to such cash
     balances.

     Sales to major unaffiliated customers (customers accounting for 10 percent
     or more of gross revenue), all representing purchasers of oil and gas, for
     each of the years ended August 31, 2002, 2001 and 2000 are as follows:

                                  2002           2001             2000
                              ------------    -----------    -------------

           Customer A         $  1,018,877    $   837,669    $     449,364
           Customer B                    -             -           210,333


                                      F-11

<PAGE>



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

14.  Litigation

     The Company was a party to two lawsuits concerning its dispute with Questar
     Exploration & Production Co., Double Eagle Petroleum Co. v. Questar
     Exploration & Production Co., et al (U. S. District Court, District of
     Colorado, Case No. 01D0366) and Double Eagle Petroleum Co., et al v.
     Questar Exploration & Production Co., et al (Denver District Court, Case
     No. 01CV1095). In each of these two cases, the Company claimed that a
     portion of production from wells operated by Questar in which the Company
     has interests, comes from deeper formations in which the Company has a
     higher interest than other formations. The lawsuits were settled in March
     2002 upon mutually acceptable terms.

     The Company is not a party to any other pending legal proceedings (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.



                                      F-12

<PAGE>



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

--------------------------------------------------------------------------------
Oil and Gas Reserves

The information presented below regarding the Company's oil and gas reserves was
prepared by an outside consulting petroleum engineer and reviewed by Ryder Scott
Company, LP, certified petroleum engineers, with the exception of the Cow Creek
reserves. The Cow Creek reserves were reviewed by Netherland Sewell and
Associates. Management felt Netherland Sewell and Associates were better
qualified to review the reserve information of this coal bed natural gas
development. Ryder Scott gave remaining proved developed producing reserves of
875.5 million cubic feet for five initial wells at Cow Creek and no proved
undeveloped reserves. Netherland Sewell & Associates gave remaining proved
developed producing reserves of 892.1 million cubic feet for the five initial
wells and 2,053.8 million cubic feet for seven proved undeveloped locations. All
reserves are located within the continental United States.

Proved oil and gas reserves are the estimated quantities of crude oil, natural
gas, and natural gas liquids which geological and engineering data demonstrate
with reasonable certainty to be recoverable in future years from known
reservoirs under existing economic and operating conditions. Proved developed
oil and gas reserves are those expected to be recovered through existing wells
with existing equipment and operating methods. The determination of oil and gas
reserves is highly complex and interpretive. The estimates are subject to
continuing changes as additional information becomes available

Estimated net quantities of proved developed reserves of oil and gas for the
years ended August 31, 2002, 2001 and 2000 are as follows:
<TABLE>
<CAPTION>



          Natural Gas (Thousands of cubic feet)                      2002               2001                2000
         -------------------------------------------------------------------------------------------------------------

<S>                                                                <C>                 <C>                <C>
         Beginning of year                                         9,605,641           4,949,346          4,090,010
         Revisions of prior estimates                             (1,472,615)            42,161            121,522
         Discoveries                                               4,378,749           5,132,281          1,183,948
         Purchases of reserves in place                                    -                   -                 -
         Production                                               (1,009,543)          (518,147)           (446,134)
                                                              --------------    ---------------     ---------------
         End of year                                              11,502,232          9,605,641           4,949,346
                                                              ==============    ===============     ===============
         Proved developed reserves                                 8,718,132          6,752,345           4,060,246
                                                              ==============    ===============     ===============
         % of proved developed reserves                                75.8%               70.3%              82.0%


         Oil (Barrels)                                             2002               2001                2000
         -------------------------------------------------------------------------------------------------------------

         Beginning of year                                           189,432             164,500            152,169
         Revisions of prior estimates                                  3,363              13,338              9,813
         Discoveries                                                                      30,199             22,680
                                     10,775
         Purchases of reserves in place                                    -                   -                 -
         Production                                                  (20,566)            (18,605)           (20,162)
                                                              --------------     ---------------     --------------
         End of year                                                 183,004             189,432            164,500
                                                              ==============     ===============     ==============
         Proved developed reserves                                   177,904             169,944            162,500
         % of proved developed reserves                                97.2%               89.7%              98.8%

89% of the proved developed gas reserves and 98% of the proved developed oil
reserves were in producing status as of August 31, 2002.



                                      F-13
<PAGE>



                                       51

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

Capitalized Costs Relating to Oil and Gas Producing Activities

The aggregate amount of capitalized costs relating to crude oil and natural gas
producing activities and the aggregate amount of related accumulated
depreciation, depletion and amortization at August 31, 2002, 2001 and 2000 are
as follows:

                                                                   2002               2001                2000
         -------------------------------------------------------------------------------------------------------------

         Proved properties                                  $     14,458,308   $       9,523,508   $      7,002,000
         Unproved properties                                         877,360             831,959            835,210
                                                              --------------    ----------------    ---------------
                                                                  15,335,668          10,355,467          7,837,210
         Accumulated depreciation and depletion
         and impairment allowance                                  6,340,162           3,195,020          2,699,161
                                                              --------------    ----------------    ---------------

         Net capitalized costs                              $      8,995,506   $       7,160,447   $      5,138,049
                                                              ==============    ================    ===============

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

Costs incurred in property acquisitions, exploration, and development activities
for the years ended August 31, 2002, 2001 and 2000 were as follows:

                                                                   2002               2001                2000
         -------------------------------------------------------------------------------------------------------------

           Property acquisitions - proved                   $             -    $           1,497   $         56,923
           Property acquisitions - unproved                           47,966              39,471            143,908
           Exploration                                               137,635             186,723            139,441
           Development                                             4,934,800           2,520,011          1,831,519
                                                             ---------------    ----------------    ---------------

               Total                                        $      5,120,401   $       2,747,702   $      2,171,791
                                                             ===============    ================    ===============

Results of Operations from Oil and Gas Producing Activities

The results of operations for the Company's oil and gas producing activities for
the years ended August 31, 2002, 2001 and 2000 were as follows:

                                                                   2002               2001                2000
         -------------------------------------------------------------------------------------------------------------

           Operating revenues                               $      2,255,919   $       2,567,713   $      1,724,497
           Costs and expenses
             Production                                              877,336             787,200            496,610
             Exploration                                             137,635             186,723            139,441
             Depreciation, depletion and impairment                3,013,281             495,859            535,470
                                                             ---------------    ----------------    ---------------
                                                                   4,028,252           1,469,782          1,171,521
                                                             ---------------    ----------------    ---------------

           Income (loss) before Income Taxes                      (1,772,333)          1,097,931            552,976

           Income Tax (Expense) Benefit                               26,407             373,297            188,012
                                                             ---------------    ----------------    ---------------

               Results of operations                        $     (1,745,926)  $         724,634   $        364,964
                                                             ===============    ================    ===============



                                                                F-14
<PAGE>



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

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

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

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

Under the Standardized Measure, future cash inflows were estimated by applying
year-end oil and gas prices to the estimated future production of year-end
proved reserves. Futures cash inflows were reduced by estimated future
development and production costs based upon year-end costs in order to arrive at
net cash flow before tax. Future income tax expense has been computed by
applying year-end statutory rates to future pretax net cash flows and the
utilization of net operating loss carryforwards. Use of a 10% discount rate is
required by SFAS 69.

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

Standardized Measure is as follows:

                                                                    2002               2001                2000
         ----------------------------------------------------------------------------------------------------------

           Future cash inflows                              $     27,118,000   $      24,860,000   $     19,087,000
           Futures production and development costs              (13,059,000)         (9,697,000)        (5,776,000)
           Future income taxes                                    (2,609,000)         (2,584,000)        (2,557,000)
                                                             ---------------    ----------------    ---------------
           Future net cash flows                                  11,450,000          12,579,000         10,754,000
           10% annual discount rate                               (6,387,000)         (7,565,000)        (5,791,000)
                                                             ---------------    ----------------    ---------------

               Discounted future net cash flows             $      5,063,000   $       5,014,000   $      4,963,000
                                                             ===============    ================    ===============



                                                            F-15

<PAGE>



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

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

                                                                   2002               2001                2000
         -------------------------------------------------------------------------------------------------------------

           Balance, beginning of the year                   $      5,014,000   $       4,963,000   $      3,180,000

           Sales, net of production costs                         (1,379,000)         (1,781,000)        (1,228,000)
           Net changes in prices and production costs              2,713,000         (11,319,000)         1,485,000
           Discoveries and purchase of reserves in place           4,554,000          14,816,000          2,622,000
           Development costs incurred                             (4,935,000)         (2,520,000)        (1,832,000)
           Revisions of previous quantity estimates               (1,405,000)            359,000            418,000
           Accretion of discount                                     501,000             496,000            318,000
                                                             ---------------    ----------------    ---------------

               Balance, end of the year                     $      5,063,000   $       5,014,000   $      4,963,000
                                                             ===============    ================    ===============


</TABLE>


                                      F-16

<PAGE>


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

    Not applicable.


                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

Directors And Executive Officers

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

Name                        Age       Positions
----                        ---       ---------
Stephen H. Hollis            52       Chairman Of The Board; President;
                                      Treasurer and Director
D. Steven Degenfelder        46       Vice President
Robert D. Brady, Jr.         44       Vice President of Engineering & Operations
Carol A. Osborne             50       Secretary
Thomas J. Vessels            53       Director
Ken M. Daraie                43       Director
Beth McBride                 44       Director
Roy G. Cohee                 53       Director
Thomas A. Prendergast        69       Director

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

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

                                       21



<PAGE>


and is past President of the Wyoming Association of Professional Landmen. Mr.
Degenfelder is a Certified Professional Landman and received his degree in
Business Administration from Texas Tech University in 1979.

     Robert D. Brady, Jr. has served as Vice President of Engineering and
Operations since April 2002. He has 24 years experience in natural gas and oil
industry operations. Mr. Brady was Operations Manager for Prima Oil & Gas from
October 2000 until April 2002. Prior to working for Prima, Mr. Brady was Vice
President of Engineering and Operations for Evergreen Operating Corporation. He
graduated from the Colorado School of Mines in 1984 with a Bachelor of Science
degree in Petroleum Engineering. He has been a member of the Society of
Petroleum Engineers since 1982.

     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.

     Thomas J. Vessels has served as a Director of the Company since January
1999. He has served since October 1997 as the Managing Partner of Tundra
Resources, LLC, a Denver, Colorado investment company that invests and
facilitates investments in the Rocky Mountain region. Mr. Vessels served as
Chairman of the Board of Vessels Energy, Inc., formerly Vessels Oil & Gas Co.,
from 1995 until the sale of that company in March 1998. Mr. Vessels also served
as President and Chief Executive Officer of Vessels Energy, Inc. from 1984 until
1995. Vessels Energy Inc. was involved in natural gas and oil production and
exploration as well as gas processing and marketing. Mr. Vessels was on the
Board of the Colorado Oil & Gas Association, a current chairman of Colorado
Minerals, Energy, Geology Policy Advisory Board, past President of the
Independent Petroleum Association of Mountain States and past President of the
Colorado Petroleum Association. Mr. Vessels received his B.A. degree from
Gonzaga University in Spokane, Washington in 1972.

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

     Beth McBride has served as a Director of the Company since January 25,
2001. She has been President and member of the Board of Directors of Legacy
Energy Corporation since co-founding the company in 1990. Legacy Energy
Corporation is a privately held oil and gas exploration company in Denver,
Colorado. Ms. McBride was a geophysicist for Superior Oil Company in Houston,
Texas from 1981 through 1984, and held various exploration positions with Mobil
Oil Corporation in Dallas, Texas and Denver, Colorado from 1985 to 1990. Ms.
McBride received a B.Sc. degree in Geophysical Engineering from Colorado School
of Mines in 1980.

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

                                       22



<PAGE>


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

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16 (a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers, and
holders of more than 10% of the Company's Common Stock to file with the
Securities And Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
The Company believes that during the fiscal year ended August 31, 2002, its
officers, directors and holders of more than 10% of its outstanding Common Stock
complied with all Section 16(a) filing requirements. In making these statements,
the Company has relied upon the written representations of its directors and
officers.

ITEM 10.  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 Stephen H.
Hollis, the Company's Chief Executive Officer and President. Other than Mr.
Hollis, no employee of the Company received total salary and bonus exceeding
$100,000 during any of the last three fiscal years.
<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,       2002           $72,000       $48,000     25,000              -0-
Chief Executive          2001           $72,000       $30,000     50,000              -0-
Officer and President    2000           $72,000       $22,500     50,000              -0-

------------------
(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, 2002 to the Company's
Chief Executive Officer and President. See "--Stock Option Plans".

                                       23



<PAGE>


               Option Grants For Fiscal Year Ended August 31, 2002


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

Stephen H. Hollis,               25,000              ---                  $3.80                1/24/2005
  Chief Executive Officer
and President
       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, 2002 by the Company's
Chief Executive Officer and President, and the fiscal year-end value of
unexercised options held by the Chief Executive Officer and President.

                           Aggregated Option Exercises
                      For Fiscal Year Ended August 31, 2002
                           And Year-End Option Values


                                                                                               Value of
                                                                                               Unexercised
                                                                          Number of            In-The-Money
                                                                          Unexercised          Options at
                                                                          Options at Fiscal    Fiscal Year-End
                                 Shares                                   Year-End (#)(3)      ($)(4)
                                 Acquired on         Value                Exercisable/         Exercisable/
Name                             Exercise (#) (1)    Realized ($)(2)      Unexercisable        Unexercisable
-----------------------------    ------------------  -------------------  -------------------  -------------
Stephen H. Hollis,                           36,500              $97,158            125,000/0             $7,813/$0
Chief Executive Officer
and President

</TABLE>

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

(1)  The number of shares received upon exercise of options during the fiscal
     year ended August 31, 2002.

(2)  With respect to options exercised during the Company's fiscal year ended
     August 31, 2002, 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, 2002
     separated between those options that were exercisable and those options
     that were not exercisable.

(4)  For all unexercised options held as of August 31, 2002, the aggregate
     dollar value of the excess of the market value of the stock underlying
     those options over the exercise price of those unexercised options, based
     on the closing price of the Company's Common Stock on August 31, 2002. The
     closing bid price for the Company's Common Stock on August 31, 2002 was
     $3.25 per share.

Stock Option Plans

     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

                                       24



<PAGE>


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, 2002,
options to purchase 30,000 shares of Common Stock were outstanding under the
1996 Plan and no additional options could be granted under the 1996 Plan.

     The 2000 Stock Option Plan. On December 14, 1999, the Board of Directors of
the Company approved the Company's 2000 Stock Option Plan (the "2000 Plan"),
which was subsequently approved by the Company's stockholders. Pursuant to the
2000 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 2000 Plan may be either incentive options qualifying for
beneficial tax treatment for the recipient or non-qualified options. The 2000
Plan is administered by an option committee that determines the terms of the
options, subject to the requirements of the 2000 Plan. At August 31, 2002,
options to purchase 173,786 shares of Common Stock were outstanding under the
2000 Plan and options to purchase an additional 26,214 shares could be granted
under the 2000 Plan.

     The 2002 Stock Option Plan. In December 2001, the Board of Directors of the
Company approved the Company's 2002 Stock Option Plan (the "2002 Plan"), which
subsequently was approved by the Company's stockholders. Pursuant to the 2002
Plan, the Company may grant options to purchase an aggregate of 300,000 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 2002 Plan may be either incentive options qualifying for
beneficial tax treatment for the recipient or non-qualified options. The 2002
Plan is administered by an option committee that determines the terms of the
options subject to the requirements of the 2002 Plan. At August 31, 2002,
options to purchase no shares of Common Stock were outstanding under the 2002
Plan and options to purchase an additional 300,000 shares could be granted under
the 2002 Plan. No options have been granted under the 2002 Plan.

     2003 Stock Option And Compensation Plan. In November 2002, the Board of
Directors approved the Company's 2003 Stock Option And Compensation Plan (the
"2003 Plan"). Pursuant to the 2003 Plan, the Company may grant options to
purchase an aggregate of 300,000 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 2003 Plan may be
incentive options qualifying for beneficial tax treatment for the recipient or
they may be non-qualified options. The 2003 Plan is administered by an option
committee that determines the terms of the options subject to the requirements
of the 2003 Plan, except that the option committee shall not administer the 2003
Plan with respect to automatic grants of shares and options to directors of the
Company who are not also employees of the Company ("Outside Directors"). The
option committee may be the entire Board or a committee of the Board. Outside
Directors automatically receive options to purchase 10,000 shares pursuant to
the 2003 Plan at the time of their election as an Outside Director and
thereafter on the first business day after each annual meeting of stockholders
if still an Outside Director at that time. These Outside Directors options are
exercisable at the time of grant. The exercise price for options granted to
Outside Directors is equal to the fair market value of the Company's common
stock on the date of grant. All options granted to Outside Directors expire
three years after the date of grant. The 2003 Plan also provides that Outside
Directors will receive 2,000 shares of common stock at the time of their
election as an Outside Director and on the first business day after each annual
meeting of stockholders during the term of the 2003 Plan while they remain
Outside Directors. Grants of options and shares pursuant to the Plan are
conditioned upon the approval of the Plan by the Company's stockholders on or
before November 19, 2003. The Company plans to seek stockholder approval for the
2003 Plan at the annual meeting currently scheduled for January 27, 2003.

                                       25



<PAGE>


Compensation Of Outside Directors

     Outside Directors are paid $500 for each meeting of the Board Of Directors
that they attend. In addition, if the 2003 Plan is approved by stockholders,
each Outside Director will receive 2,000 shares of common stock each year and
options to purchase 5,000 shares each year pursuant to the 2003 Plan. Directors
also are reimbursed for expenses incurred in attending meetings and for other
expenses incurred on behalf of the Company. In January 2002, each Outside
Director at that time was granted options to purchase 10,000 shares of Common
Stock for $3.80 per share. These options expire January 24, 2005. If the 2003
Plan is approved by stockholders, Outside Directors will receive the stock and
options described above under "-- 2003 Stock Option And Compensation Plan."

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table summarizes certain information as of November 15, 2002
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 November 15, 2002
                                                 -----------------------
                                                              Percentage Of
Name And Address Of                          Number Of            Class
Beneficial Owner                             Shares           Beneficially Owned
--------------------------------------------------------------------------------

Stephen H. Hollis (1)                         717,100(1)            10.8%
2037 S. Poplar
Casper, Wyoming 82601
Ken M. Daraie                                  57,000(2)                *
Thomas J. Vessels                             478,050(3)             7.1%
Tundra Resources LLC
1610 Wynkoop Street
Suite 100
Denver, Colorado  80202
Beth McBride                                   23,100(4)                *
Roy G. Cohee                                   22,475(5)                *
Thomas A. Prendergast                          24,600(8)                *
Directors and Officers as a group        1,566,330(1)(2)            22.0%
(Nine Persons)                        (3)(4)(5)(6)(7)(8)
Hollis Oil & Gas Co. (6)                         350,000             5.4%
---------------
* Less than one percent.

(1)  Includes options held by Mr. Hollis purchase 50,000 shares for $3.09375 per
     share that expire January 26, 2003, options to purchase 50,000 shares for
     $4.531 per share that expire January 25, 2004 and options to purchase
     25,000 shares for $3.80 per share that expire on January 24, 2005. In
     addition to 242,000 shares owned directly by Mr. Hollis, the table above
     includes 350,000 shares of common stock owned by Hollis Oil & Gas Co. Mr.
     Hollis is an officer, director and 51 percent owner of Hollis Oil & Gas Co.

                                       26



<PAGE>


(2)  Includes options to purchase 10,000 shares for $3.09375 per share that
     expire January 26, 2003, options to purchase 10,000 shares for $4.53125 per
     share that expire January 25, 2004 and options to purchase 5,000 shares for
     $3.80 per share that expire January 24, 2005.

(3)  Consists of 125,550 shares held by Mr. Vessels, 76,750 shares held by his
     wife, 3,000 shares held in trust for the benefit of Mr. Vessels' minor
     children, warrants to purchase 76,750 shares for $1.375 per share until
     October 16, 2003 held by Mr. Vessels, warrants to purchase 76,750 shares on
     the same terms held by Mr. Vessels' wife, warrants to purchase 3,000 shares
     on the same terms held in trust for Mr. Vessels' children, options to
     purchase 10,000 shares for $3.09375 per share until January 26, 2003,
     options to purchase 46,500 shares for $4.531 per share until January 25,
     2004, and options to purchase 23,250 shares for $3.80 per share until
     January 24, 2005, held by Mr. Vessels.

(4)  Includes options to purchase 10,000 shares for $4.531 per share that expire
     January 25, 2004 and options to purchase 5,000 shares for $3.80 per share
     that expire January 24, 2005.

(5)  Includes options to purchase 10,000 shares for $4.531 per share that expire
     January 25, 2004 and options to purchase 5,000 shares for $3.80 per share
     that expire January 25, 2005.

(6)  In addition to the shares described in footnotes (1), (2), (3), (4), (5)
     and (8), the shares owned by Directors and Officers as a Group, includes:
     25,542 shares, options to purchase 20,000 shares for $3.09375 per share
     until January 26, 2003, options to purchase 20,000 shares for $4.531 per
     share until January 25, 2004 and options to purchase 10,000 shares for
     $3.80 per share until January 24, 2005 held by Carol Osborne, our
     Secretary; 50,463 shares, options to purchase 40,000 shares for $3.09375
     per share until January 26, 2003, options to purchase 40,000 shares for
     $4.531 per share until January 25, 2004 and options to purchase 20,000
     shares for $3.80 per share until January 24, 2005 held by D. Steven
     Degenfelder, our Vice President; and 10,000 shares held by Robert Brady,
     our Vice President of Engineering and Operations.

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

(8)  The shares shown as beneficially owned by Thomas Prendergast are owned of
     record by Scot Holding Inc., which is wholly-owned by Mr. Prendergast's
     family. Mr. Prendergast is a Director and Chairman of Scot Holding, Inc.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     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--Cave Gulch", "--Wind River Basin--Madden Anticline", "--Wind River
Basin--Waltman Field".

                                       27



<PAGE>


     In November 1998, the Company completed a private placement offering of
374,750 units of Common Stock and Common Stock Purchase Warrants for $1.375 per
unit. Each unit consists of one share of Common Stock and a warrant to purchase
one share of Common Stock for $1.375 per share until October 16, 2003. The
warrants are redeemable by the Company at a price of $.001 per warrant
commencing April 2001 if the Company's Common Stock trades at a price of at
least $3.00 per share for 20 of the 30 trading days preceding the date on which
the Company gives notice of redemption. Thomas J. Vessels and his wife purchased
153,500 of the units and established trusts for the benefit of Mr. Vessels'
minor children with a purchase of 1,000 units for each of the three children. In
addition, the Company entered into a consulting agreement with Mr. Vessels
pursuant to which Mr. Vessels agreed to assist the Company in locating possible
oil and gas transactions in which the Company may participate. This agreement
was in effect until January 30, 2000. The Company agreed to issue to Mr. Vessels
options to purchase 36,500 shares of Common Stock for $1.375 per share until
October 16, 2001 and to reimburse Mr. Vessels for up to $1,000 per month in
expenses incurred in performing services on behalf of the Company during the
term of the agreement. In October 2001, Mr. Vessels exercised all these options.
The Company also agreed to cause Mr. Vessels to be elected to the Board of
Directors and to nominate Mr. Vessels to serve as a director during the term of
this agreement. Pursuant to this agreement Mr. Vessels was elected as a director
at the Annual Meeting of Shareholders held in January 1999. Since the expiration
of this agreement, Mr. Vessels has continued to assist the Company in locating
possible oil and gas transactions and the Company has reimbursed Mr. Vessel's
out of pocket expenses for these services. In addition, the Company compensated
Mr. Vessels for these services by issuing him options to purchase 36,500 shares
on January 26, 2000 for $3.09375 until January 26, 2003, options to purchase
36,500 shares on January 25, 2001 for $4.53125 until January 25, 2004, and
options to purchase 18,250 shares on January 24, 2002 for $3.80 until January
24, 2005.

ITEM 13.  CONTROLS AND PROCEDURES

     (a) Evaluation of disclosure controls and procedures

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

     (b) Changes in internal controls

     Subsequent to the date of this evaluation, the Chief Executive Officer and
Principal Financial Officer is not aware of any significant changes in the
Company's internal controls, including any corrective actions with regard to
significant deficiencies and material weakness, or in other factors that could
significantly affect these controls to ensure that information required to be
disclosed by the Company, in reports that it files or submits under the
Securities Act of 1934, is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission rules and
regulations.

                                     PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

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

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

(a)(3) Exhibits.

                                       28



<PAGE>


                                  Exhibit Index



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

3.1(a)     Articles Of Incorporation filed with the Maryland Secretary Of State
           on January 23, 2001.

3.1(b)     Certificate of Correction filed with the Maryland Secretary of State
           on February 15, 2001 concerning the Articles of Incorporation.

3.1(c)     Articles of Merger filed with the Maryland Secretary Of State on
           February 15, 2001.

3.2        Bylaws

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).

       (b) Reports On Form 8-K. During the last quarter of the fiscal year ended
           August 31, 2001, the Company filed no reports on Form 8-K.


                                       29
<PAGE>



                                   SIGNATURES

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

                                                     DOUBLE EAGLE PETROLEUM CO.



Date:  December 12, 2002                             /s/ Stephen H. Hollis
                                                     ---------------------------
                                                         Stephen H. Hollis


     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, 2002                           /s/ Stephen H. Hollis
                                                 ---------------------------
                                                 Stephen H. Hollis, Director

Date: December 12, 2002                           /s/ Thomas J. Vessels
                                                 ---------------------------
                                                 Thomas J. Vessels, Director

Date: December 12, 2002                           /s/ Ken M. Daraie
                                                 ---------------------------
                                                  Ken M. Daraie, Director

Date:  December 12, 2002                         /s/ Beth McBride
                                                  Beth McBride, Director

Date:  December 12, 2002                         /s/ Roy G. Cohee
                                                 ---------------------------
                                                 Roy G. Cohee, Director

Date:  December 12, 2002                         /s/Thomas A. Prendergast
                                                 ---------------------------
                                                 Thomas A. Prendergast, Director


                                       30



<PAGE>


                                 CERTIFICATIONS

     I, Stephen H. Hollis, certify that:

     1.   I have reviewed this annual report on Form 10-KSB of Double Eagle
          Petroleum Company;

     2.   Based on my knowledge, this annual report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this annual report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this annual report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this annual report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and have:

          a)   designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly during the period in which this
               annual report is being prepared;

          b)   evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this annual report (the "Evaluation Date"); and

          c)   presented in this annual report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of registrant's board of directors (or persons
          performing the equivalent functions):

          a)   all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and

          b)   any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this annual report whether there were significant changes in internal
          controls or in other factors that could significantly affect internal
          controls subsequent to the date of our most recent evaluation,
          including any corrective actions with regard to significant
          deficiencies and material weaknesses.


Date:  December 12, 2002                             /s/ Stephen H. Hollis
                                                     ---------------------------
                                                         Stephen H. Hollis
                                                         Chief Executive Officer



                                       31



<PAGE>


     I, Stephen H. Hollis, certify that:

     1.   I have reviewed this annual report on Form 10-KSB of Double Eagle
          Petroleum Company;

     2.   Based on my knowledge, this annual report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this annual report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this annual report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this annual report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and have:

          a)   designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly during the period in which this
               annual report is being prepared;

          b)   evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this annual report (the "Evaluation Date"); and

          c)   presented in this annual report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of registrant's board of directors (or persons
          performing the equivalent functions):

          a)   all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and

          b)   any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this annual report whether there were significant changes in internal
          controls or in other factors that could significantly affect internal
          controls subsequent to the date of our most recent evaluation,
          including any corrective actions with regard to significant
          deficiencies and material weaknesses.


Date:  December 12, 2002                     /s/ Stephen H. Hollis
                                             -----------------------------------
                                                 Stephen H. Hollis
                                                 Principal Financial Officer




                                       32