<PAGE>   1



                                  FORM 10-K

                      SECURITIES AND EXCHANGE COMMISSION

                           WASHINGTON, D. C. 20549

             X  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
            ---       THE SECURITIES EXCHANGE ACT OF 1934


                   For the fiscal year ended March 31, 1999

                                      OR

              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
         ---           THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________to __________


COMMISSION FILE NUMBER 0-18691

                            NORTH COAST ENERGY, INC.
             (Exact name of Registrant as specified in its charter)



       DELAWARE                                                   34-1594000
(State of incorporation)                                      (I.R.S. Employer
                                                             Identification No.)


1993 CASE PARKWAY
TWINSBURG, OHIO   44087-2343
(Address of principal executive offices)                         (Zip Code)


     Registrant's telephone number, including area code (330) 425-2330

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


                          COMMON STOCK, $.01 PAR VALUE
                                (Title of class)

     SERIES A 6% CONVERTIBLE NON-CUMULATIVE PREFERRED STOCK, $0.01 PAR VALUE
                                (Title of class)

        SERIES B CUMULATIVE CONVERTIBLE PREFERRED STOCK, $0.01 PAR VALUE
                                (Title of class)

               WARRANTS TO PURCHASE COMMON STOCK, $0.01 PAR VALUE
                                (Title of class)




<PAGE>   2


Indicate by check mark whether the Registrant (1) has filed all Reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to the filing
requirements for the past 90 days.

                                Yes X  No   .
                                   ---   ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
           ---

As of June 10, 1999, the Registrant had outstanding 4,556,814 shares of Common
Stock, 73,816 shares of Series A Preferred Stock, and 232,864 shares of Series B
Preferred Stock. All shares have been restated to reflect the 1 for 5 reverse
common stock split effective June 7, 1999.

The aggregate market value of Common Stock held by non-affiliates of the
Registrant at June 10, 1999 was $4,636,818 which value has been computed on the
basis of $4.125 per share of Common Stock, the mean between the closing bid and
ask price as reported for that day on Nasdaq.


              DOCUMENTS OR PARTS THEREOF INCORPORATED BY REFERENCE


                                Part of Form 10-K
                                -----------------

                       Part III (Items 10, 11, 12, and 13)

                       Document Incorporated by Reference
                       ----------------------------------

Portions of the Registrant's definitive Proxy Statement to be used in connection
with its 1999 Annual Meeting of Stockholders.

Except as otherwise indicated, the information contained in this Report is as of
March 31, 1999.


<PAGE>   3





                                     PART I


ITEM 1.  BUSINESS.

GENERAL

         North Coast Energy, Inc., a Delaware corporation, with its subsidiaries
and predecessors, ("North Coast" or the "Company"), is an independent natural
gas and oil company engaged in exploration, development and production
activities primarily in the Appalachian Basin. The Company's strategy focuses
primarily on its acquisition of proved developed and undeveloped properties and
on the enhancement, drilling and development of such properties. As used in this
Annual Report on Form 10-K, the terms "Company" and "North Coast" mean North
Coast Energy, Inc., its subsidiaries and predecessors, unless the context
otherwise requires.

         As of March 31, 1999, North Coast owned interests in 1,711 wells,
operating 1,574 of these wells, 385 of which are operated for the drilling
programs ("Drilling Programs") for which North Coast serves as managing general
partner. In connection with the drilling and development of the wells it
operates, North Coast currently owns approximately 500 miles of natural gas
gathering pipelines, which transport gas from 1,251 wells. At March 31, 1999,
the Company had estimated net proved reserves of approximately 52.5 Bcf of
natural gas and 425,200 barrels of oil.

         The Company began operations in 1981 with the formation of its first
Drilling Program. In 1987, the Company expanded its operations by acquiring
Capital Oil & Gas, Inc. which also operated in the Appalachian Basin. In 1990,
the Company acquired the assets and properties of 21 Drilling Programs which it
had sponsored through an exchange offer (the "Exchange Offer") through which the
Company issued publicly traded stock.

         Subsidiaries. The Company's sole active subsidiary is NCE Securities,
Inc. ("NCE Securities"), a member of the NASD and a broker dealer registered
with the SEC and licensed in three states. NCE Securities' only business
activity is the performance of its responsibilities as placement agent and, to a
limited degree, the sale of partnership interests in North Coast sponsored
Drilling Programs.

EXPLORATION AND DEVELOPMENT

         Exploration and development activities conducted by the Company have
primarily involved the acquisition of proved undeveloped oil and gas properties
and the drilling and development of such properties in conjunction with Drilling
Programs and joint ventures. Management has chosen to sponsor limited
partnerships and joint ventures to increase the funds available to the Company
and enable it to engage in a greater number of drilling opportunities. In
addition, the interest the Company owns in the Drilling Programs adds to the
Company's reserves and produces additional sources of income for the Company,
including revenues from serving as general contractor for drilling operations,
management services, oilfield service operations, and gas-gathering and
marketing services which are provided to the Drilling Programs.

         The Company's strategy focuses on increasing its natural gas and oil
reserves, as well as production, drilling and oil field service revenues, by
acquiring undeveloped oil and gas properties in the Appalachian Basin and
financing and conducting the drilling and development of these properties in
conjunction with the Drilling Programs. The Company is pursuing a strategy of
increasing reserves through drilling and development in conjunction with the
Drilling Programs and the acquisition of other gas and oil companies, or
partnerships and producing properties.

AREAS OF OPERATION

         The Appalachian Basin is located in close proximity to major natural
gas markets in the northeast United States. This proximity to a substantial
number of large commercial and industrial gas markets, coupled with the
relatively stable nature of Appalachian Basin production and the availability of
transportation facilities has resulted

                                       1

<PAGE>   4

in generally higher wellhead prices for Appalachian natural gas than those
prices available in the Gulf Coast and Mid-continent regions. The Appalachian
Basin is the oldest gas and oil-producing region in the United States and
includes portions of Ohio, Pennsylvania, New York, West Virginia, Kentucky and
Tennessee. Historically, most production in the Appalachian Basin has been from
wells drilled to a number of relatively shallow blanket formations at depths of
1,000 to 7,500 feet. These formations are generally characterized as long-lived
reserves that produce for more than 20 years.

         To date, the Company's drilling operations in the Appalachian Basin
have principally involved drilling to the Clinton/Medina sandstone geologic
formation. This formation is an oil and gas bearing sandstone formation, which
underlies a large section of eastern Ohio and western Pennsylvania in varying
thicknesses and at depths ranging generally from 2,800 to 7,500 feet.
Substantially all of the wells that the Company drills in this area have
estimated depths of between 3,500 and 6,700 feet.

         The Company also maintains leasehold acreage in portions of Ohio and
Pennsylvania with other potential producing formations. Although there are
variances in the nature and characteristics of these producing formations, they
are generally typical of the Appalachian area.

ACQUISITIONS

         Acquisition Strategy

         The Company's acquisition strategy focuses on properties and other oil
and gas entities that can provide:

         A. enhanced cash flow,
         B. additional drilling and development opportunities,
         C. synergies with North Coast properties,
         D. enhancement potential of current operations, or
         E. economies of scale and cost efficiencies.

         Since 1994 the Company has completed the acquisition of the working
interest in approximately 1,100 wells, various gas gathering systems and
additional drilling locations. The Company has also acquired additional
interests in its prior Drilling Programs by offering investors an exit strategy
from the Drilling Programs.

         Recent Acquisitions

         In fiscal 1999, the Company acquired the assets of Kelt Ohio, Inc.
("Kelt") including the working interest and operations of over 900 wells located
in Ohio, well drilling, servicing and oilfield equipment, natural gas
compressors and gas gathering systems and additional drilling locations.
Additionally, the Company acquired certain oil and gas interests and operations
in 28 wells in Ohio and Pennsylvania previously owned by an employee of the
Company and 7 wells and a gas gathering system from Range Resources Corporation
(formerly Lomak Petroleum), an affiliate of the Company. During fiscal 1999, the
Company acquired additional interests in prior Drilling Programs at a cost of
approximately $450,000.

DRILLING ACTIVITY

         North Coast continually evaluates undeveloped prospects originated by
its staff or other independent geologists as well as other gas and oil
companies. If review of a prospect indicates that it may be geologically and
economically attractive, the Company will attempt to obtain a lease of the
mineral rights on the acreage.

         Typically, the Company will acquire the entire working interest in a
lease in consideration of paying a lease bonus and annual rentals subject to a
landowner's royalty and, where the property is acquired through a third party,
possibly an overriding royalty interest. If a prospect is selected for drilling
through a Drilling Program, the Company assigns the minimum required acreage for
a well to such entity. In such a case, the Company retains the balance of the
leasehold acreage.

                                       2

<PAGE>   5

DRILLING PROGRAMS

         From the Company's inception in 1981 through March 31, 1999, North
Coast has raised approximately $87,000,000 and has sponsored 49 Drilling
Programs to engage in oil and gas drilling and development operations.

         Each Drilling Program has been conducted as a separate limited
partnership with the Company serving as managing general partner of each.
Currently, North Coast serves as the managing general partner of 28 Drilling
Programs. To maintain the marketability of its Drilling Programs, the Company
continually reviews program structure and performance and makes modifications
from program to program, as it deems appropriate. These modifications have
included changes to the compensation arrangements between the Company and the
Drilling Programs, including charges for its drilling and administrative
services, and changes in the Company's interest in the Drilling Programs.

         The Company acts as operator and general contractor for drilling and
production operations, undertaking to drill and complete Drilling Program wells
and to serve as operator for producing wells for producing well operations. In
the Drilling Programs, typically the entire working interest in the leasehold is
acquired by the program, although only the minimum required acreage for a well
is assigned by the Company to the Drilling Program.

         As managing general partner, North Coast is subject to full liability
for the obligations of the Drilling Programs although it is indemnified by each
program to the extent of the assets of the Drilling Programs under certain
circumstances. The partnership interests in the Drilling Programs constitute
securities and the Company is subject to potential liability for failure to
comply with applicable federal and state securities laws and regulations.

         Typically, each Drilling Program is structured as a "functional
allocation" program whereby the non-industry investors contribute cash in an
aggregate amount equal to the intangible drilling and development costs to be
incurred for the Drilling Program's wells. The Company contributes the drill
sites to the Drilling Program and agrees to contribute all tangible equipment
necessary to drill, complete and produce each well, as well as organizational
and syndication costs of the Drilling Program. The allocation of partnership
revenues in each Drilling Program may vary depending upon the structure chosen
by the Company, with the Company's initial percentage interest ranging from 20%
to 40%.

         Interests in North Coast's Drilling Programs are sold to investors
through securities dealers registered with the NASD. In each program, NCE
Securities, acts as placement agent and enters into selling agreements with a
number of broker-dealers to assist it in selling the interests.

         The Drilling Programs raised $3.0 million during fiscal 1997, $2.7
million during fiscal 1998, and $3.5 million in fiscal 1999 from investors. The
Company intends to continue its efforts to market its Drilling Programs and
increase the number of wells drilled and operated.

DRILLING SERVICES

         North Coast derives revenue and net income from the drilling services
it provides to the Drilling Programs. North Coast enters into turnkey (fixed
price) contracts with the Drilling Programs to drill program wells. Pursuant to
these drilling contracts, the Company is responsible for the drilling and
development of the wells. The Company subcontracts with third parties for the
performance of a substantial portion of the operations required to drill,
complete and equip these wells for production. Although the Company manages and
supervises all necessary drilling and related service and equipment operations
on these wells, there are a number of third party services to obtain, including
contract drilling, fracturing, logging and pipeline construction which are
performed by subcontractors who specialize in those operations. Since North
Coast contracts with the Drilling Programs on a turnkey basis, North Coast is
responsible for drilling and completing the wells, regardless of the actual
cost. Consequently, North Coast is subject to the risk that prices incurred in
the actual drilling and development operations could increase beyond its
contract price thereby rendering its drilling contracts less profitable or
unprofitable. Moreover, difficulties

                                       3

<PAGE>   6

encountered in drilling and completion operations can substantially increase
costs, sometimes without recourse for North Coast. The Company continually
monitors the cost incurred in drilling, completion and production operations and
reviews its turnkey contract prices for each Drilling Program in order to reduce
the risk of unprofitable drilling operations. These turnkey drilling prices are
subject to change based on competition, the return sought by Drilling Programs
investors, North Coast's revenue and profit considerations and other industry
conditions.

OIL FIELD SERVICE OPERATIONS

         As of March 31, 1999, North Coast operated 1,574 wells, all of which
were located in Ohio and Pennsylvania. As operator of producing wells, North
Coast is responsible for the maintenance and verification of all production
records, contracting for oil and gas sales, distribution of production proceeds
and information, and compliance with various state and federal regulations.
Generally, the Company provides the routine day-to-day production operations for
producing wells and also subcontracts certain oil field operations.

         North Coast receives a monthly operating fee for each producing well it
operates for third parties and is reimbursed for most unaffiliated third party
costs associated with operations and production of the wells. The Drilling
Programs and third parties each pay North Coast their specified operating fee
based upon their aggregate interest in the wells, exclusive of North Coast's
ownership interest.

GAS-GATHERING ACTIVITIES

         In connection with the drilling and development of the wells that it
operates, North Coast has constructed and owns approximately 500 miles of
gas-gathering pipelines in various counties throughout eastern Ohio and western
Pennsylvania. These pipelines carry natural gas from the wellhead to the gas
transmission systems of various utilities for sale to such utilities, to natural
gas brokers purchasing gas for resale to others or to industrial purchasers
pursuant to self-help gas purchase arrangements. These systems gathered gas from
1,251 wells as of March 31, 1999. The Company continues its construction of new
pipelines and the establishment of compressor facilities in order to expand the
number of purchasers available to the Company.

         For such gas-gathering services, the Company collects certain
allowances from public utilities, end-users or other natural gas purchasers,
including natural gas brokers. These gathering fees or transportation allowances
averaged approximately $.20 per Mcf of natural gas at March 31, 1999.

MARKETS

         The ability of the Company to market oil and gas depends to an extent,
on factors beyond its control. The potential effects of governmental regulation
and market factors including alternative domestic and imported energy sources,
available pipeline capacity, and general market conditions are not entirely
predictable.

         Natural Gas. Natural gas is generally sold pursuant to individually
negotiated gas purchase contracts, which vary in length from spot market sales
of a single day to term agreements that may extend several years. Customers of
the Company purchasing natural gas include marketing affiliates of the major
pipeline companies, natural gas marketing companies, and a variety of
commercial/public authorities, industrial, and institutional end users who
ultimately consume the gas. Gas purchase contracts define the terms and
conditions unique to each of these sales. The price received for natural gas
sold on the spot market may vary daily reflecting changing market conditions.

         As discussed, the deliverability and price of natural gas are subject
to both governmental regulation and supply/demand forces. During the past
several years, regional natural gas surpluses and shortages have occurred
resulting in wide fluctuations in the prices paid to producers.

         The lengths of the contracts as defined in the "Term" provision in the
Company's gas purchase agreements vary widely. Additionally, several of the
Company's contracts provide for monthly pricing which are derived from published
NYMEX or Appalachian price indexes. The Columbia Transmission (TCO) and
Consolidated Natural

                                       4
<PAGE>   7


Gas (CNG) Index prices, which create a basis for spot sales prices in the Mid
Atlantic and northeastern United States, ranged from $1.73 to $2.50 per Mcf
during fiscal 1999. As of March 31, 1999, approximately 50% of the Company's
natural gas contracts are fixed price contracts with industrial end-users. The
prices received from these contracts range between $1.97 and $4.43 per Mcf. The
remainder of the Company's natural gas contracts are with utilities and
marketers. Approximately 60% of the gas produced to fulfill the contractual
obligations to utilities and marketers during the summer months contain fixed
prices ranging from $1.75 to $2.972 per Mcf, while 40% of the gas produced to
fulfill the contractual obligations to utilities and marketers contain market
sensitive provisions during the winter months. The range of Appalachian unit
pricing during the winter of 1998/1999 was from $1.73 to $2.25 per Mcf. For the
fiscal year ended March 31, 1999, the Company received an average price of $2.57
per Mcf. During fiscal 1999, Interstate Gas Supply, Inc. purchased 52% of the
gas produced by North Coast, which comprised 26% of the Company's total revenues
for the year.

         Due to the seasonality of supply and demand, prices paid by purchasers
for natural gas will continue to fluctuate. The Company has pursued a strategy
of varying the length and pricing provisions of its gas purchase contracts so as
to maintain flexibility to react to those fluctuating prices. Due to current
market conditions, the duration of recently renegotiated fixed price contracts
has been limited to a year or less. Should market trends change, the Company
will endeavor to commit a larger portion of its natural gas to longer-term
arrangements to optimize revenues derived from these sales.

         During the past several years, an overabundance of natural gas supplies
and promulgation of State and Federal regulations pertaining to the sale,
transportation, and marketing of natural gas resulted in increasing competition
and declining prices. It is likely that supply and demand factors will continue
to be the driving force in the evolving marketplace.

         Crude Oil. Oil produced from the Company's properties is generally sold
at the prevailing field price to one or more of a number of unaffiliated
purchasers in the area. Generally, purchase contracts for the sale of oil are
cancelable on 30 days notice. The price paid by these purchasers is generally an
established, or "posted," price that is offered to all producers. The Company
received an average price of $11.39 per barrel for its oil during fiscal 1999;
however, during the last several years prices paid for crude oil have fluctuated
substantially. The price posted for purchase contracts for the sale of oil at
March 31, 1999 was $13.75. Future oil prices are difficult to predict due to the
impact of worldwide economic trends, coupled with supply and demand variables,
and such non-economic factors as the impact of political considerations on OPEC
pricing policies and the possibility of supply interruptions. Oil production
comprised approximately 6% of North Coast's total oil and gas production
calculated on an equivalent Mcf basis for fiscal 1999. Therefore a price
increase or decrease in oil prices has a minimal affect on revenues when
compared to the affect of the price of natural gas. To the extent that the
prices, which the Company receives for its crude oil, decline from current
levels, revenues from oil production will be reduced accordingly.

COMPETITION

         The gas and oil industry is highly competitive in all phases. The
Company encounters strong competition from other independent oil companies in
acquiring economically desirable properties as well as in marketing production
therefrom and obtaining external financing. Many of the Company's competitors
may have financial resources, personnel and facilities substantially greater
than those of the Company.


REGULATION

         Exploration and Production. The exploration, production and sale of
natural gas and oil are subject to various types of local, state and federal
laws and regulations. Such laws and regulations govern a wide range of matters,
including the drilling and spacing of wells, allowable rates of production,
restoration of surface areas, plugging and abandonment of wells and requirements
for the operation of wells. Such regulations may adversely affect the rate at
which the Company's wells produce gas and oil. In addition, legislation and new
regulations concerning gas and oil exploration and production operations are
constantly being reviewed and proposed. Most of the states in which the Company
owns and operates properties have laws and regulations governing several of the

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<PAGE>   8

matters enumerated above. Compliance with the laws and regulations affecting the
gas and oil industry generally increases the Company's cost of doing business
and consequently affects its profitability.

         Environmental Matters. The discharge of oil, gas or other pollutants
into the air, soil or water may give rise to liabilities to the government and
third parties and may require the Company to incur costs to remedy the
discharge. Natural gas, oil or other pollutants (including salt water brine) may
be discharged in many ways, including from a well or drilling equipment at a
drill site, leakage from pipelines or other gathering and transportation
facilities, leakage from storage tanks and sudden discharges from damage or
explosion at natural gas facilities or gas and oil wells. Discharged
hydrocarbons may migrate through soil to water supplies or adjoining property,
giving rise to additional liabilities. A variety of federal and state laws and
regulations govern the environmental aspects of natural gas and oil production,
transportation and processing and may, in addition to other laws, impose
liability in the event of discharges (whether or not accidental), failure to
notify the proper authorities of a discharge, and other noncompliance with those
laws. Compliance with such laws and regulations may increase the cost of gas and
oil exploration, development and production although the Company does not
currently anticipate that compliance will have a material adverse effect on
capital expenditures or earnings of the Company.

         The Company does not believe that its environmental risks are
materially different from those of comparable companies in the oil and gas
industry. The Company believes its present activities substantially comply, in
all material respects, with existing environmental laws and regulations.
Nevertheless, no assurance can be given that environmental laws will not, in the
future, result in a curtailment of production or material increase in the cost
of production, development or exploration or otherwise adversely affect the
Company's operations and financial condition. Although the Company maintains
liability insurance coverage for certain liabilities from pollution, such
environmental risks generally are not fully insurable; the amount of such
coverage is currently $1,000,000 and is provided on a "claims made" basis.

         Marketing and Transportation. The interstate transportation and sale
for resale of natural gas is regulated by the Federal Energy Regulatory
Commission (the "FERC") under the Natural Gas Act of 1938 ("NGA"). The wellhead
price of natural gas is also regulated by FERC under the authority of the
Natural Gas Policy Act of 1978 ("NGPA"). The Natural Gas Wellhead Decontrol Act
of 1989 (the "Decontrol Act"), which was enacted on July 26, 1989, eliminated
all gas price regulation effective January 1, 1993. In addition, FERC recently
has proposed several rules or orders concerning transportation and marketing of
natural gas. The impact of these rules and other regulatory developments on the
Company cannot be predicted.

         In 1992 FERC finalized Order 636, regulations pertaining to the
restructuring of the interstate transportation of natural gas. Pipelines serving
this function have since been required to "unbundle" the various components of
their service offerings, which include gathering, transportation, storage, and
balancing services. In their current capacity, pipeline companies must provide
their customers with only the specific service desired, on a non-discriminatory
basis. Although North Coast is not an interstate pipeline, the Company believes
the changes brought about by Order 636 have increased competition in the
marketplace, resulting in greater market volatility.

         Various rules, regulations and orders, as well as statutory provisions
may affect the price of natural gas production and the transportation and
marketing of natural gas.


OPERATING HAZARDS AND UNINSURED RISKS

         The Company's gas and oil operations are subject to all operating
hazards and risks normally incident to drilling for and producing gas and oil,
such as encountering unusual formations and pressures, blow-outs, environmental
pollution, and personal injury. The Company will maintain such insurance
coverage as it believes to be appropriate, taking into account the size of the
Company and its proposed operations. The Company currently does not maintain
insurance coverage for physical loss or damage to equipment located on the wells
or for selected properties (such as crude oil stored in tanks). The Company's
insurance policies also have standard exclusions. Losses can occur from an
uninsurable risk or in amounts more than existing insurance coverage. The
occurrence of an event, which is not insured or not fully insured, could have an
adverse impact on the Company's revenues and earnings.

                                       6
<PAGE>   9
EMPLOYEES

         At March 31, 1999, the Company had 81 employees, including 48 field
employees. No employees are represented by a union and the Company believes that
it maintains good relations with its employees.

FORWARD-LOOKING STATEMENTS

         This Annual Report on Form 10-K contains forward-looking statements
that involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that may cause such a difference include, but are not limited to, the
competition within the oil and gas industry, the price of oil and gas in the
Appalachian Basin area, the weather in the Company's geographic region, possible
acquisitions by the Company, the cost of the locating and drilling oil and gas
wells in the Appalachian Basin area, the amount of funds raised in the fiscal
2000 Drilling Programs, equity investment, available financing and the ability
to locate productive oil and gas prospects for development by the Company.

ITEM 2.  PROPERTIES.

Oil and Gas Properties
----------------------

         In the following tables, "gross" refers to the total acres or wells in
which the Company has a working interest and "net" refers to gross acres or
wells multiplied by the Company's percentage working interests therein. Royalty
interests held by the Company will not affect the Company's working interests
(net wells) in its properties and will not be reflected in net wells.

         PROVED RESERVES. The following table reflects the estimates of North
Coast's proved reserves as of March 31, 1999.

                                    RESERVES

<TABLE>
<CAPTION>
                <S>                                       <C>
                  Oil Reserves (Bbls):
                    Proved Developed                           322,700
                    Proved Undeveloped                         102,500
                                                            ----------
                             Total                             425,200

                  Gas Reserves (Mcf):
                    Proved Developed                        41,214,000
                    Proved Undeveloped                      11,307,000
                                                            ----------
                             Total                          52,521,000
</TABLE>

         PRODUCTION. The following table summarizes the net oil and gas
production (on a rounded basis), average sales prices, and average production
(operating) expenses per equivalent unit of production for the periods
indicated.


                                   PRODUCTION
<TABLE>
<CAPTION>

                       Production               Sales Price            Average Operating
Years Ended          Oil        Gas                                   Cost per Equivalent
March 31:          (Bbls)      (Mcf)          Per Bbl  Per Mcf               Mcf (1)
---------          ------      -----          -------  -------               -------
<S>             <C>       <C>               <C>       <C>                   <C>
    1997          16,200    1,153,000         $20.65    $2.43                 $.62 (2)
    1998          13,900    1,116,000         $16.18    $2.50                 $.70 (3)
    1999          28,100    2,688,000         $11.39    $2.57                 $.91

</TABLE>

         (1) For calculation of average operating cost per equivalent Mcf, the
             standard ratio of 6:1 for gas to oil was used.

                                       7
<PAGE>   10

         (2) Includes costs of the Company's enhancement program and rework of
             two wells in the Gulf Coast area of interest.

         (3) Includes costs for the rework of ten wells located in Pennsylvania
             and relocation of production facilities in Louisiana.

         PRODUCTIVE WELLS. The following table sets forth the number of gross
and net productive oil and gas wells of the Company as of March 31, 1999. Wells
are classified as gas or oil according to their predominant product stream.

                                PRODUCTIVE WELLS
                     Gross Wells (1)                       Net Wells

                  Oil    Gas     Total               Oil      Gas        Total
                  ---    ---     -----               ---      ---        -----
                  26    1,685    1,711               9.76   1,268.11    1,277.87

         (1) Gross wells include 92 wells in which the Company owns a royalty
             interest.

         ACREAGE. The following table sets forth the Developed and Undeveloped
Acreage of the Company, on both a gross and net basis, as of March 31, 1999. The
amounts included in proved undeveloped acreage recognizes only the acreage
directly offsetting locations to wells that have indicated commercial production
in the objective formation which North Coast fully expects to drill in the near
future.

                               LEASEHOLD ACREAGE

                      Total Leasehold Acreage:

                            Gross Acres                   155,600
                            Net Acres                     135,500

                      Developed Acreage:

                            Gross Acres                    77,900
                            Net Acres                      57,800

                      Proved Undeveloped Acreage:

                            Gross Acres                     3,300
                            Net Acres                       3,300

         DRILLING ACTIVITY. The following table sets forth the results of
drilling activities on the Company's properties. Such information and the
results of prior drilling activities should not be considered as necessarily
indicative of future performance, nor should it be assumed that there is
necessarily any correlation between the number of productive wells drilled and
the oil and gas reserves generated thereby.

         All wells were drilled by March 31 of their respective years and are
reflected in the Drilling Activities table. Wells in which the Company owns only
a royalty interest are not reflected in the table below.

                               DRILLING ACTIVITIES

Fiscal year ended March 31,
---------------------------
<TABLE>
<CAPTION>
                                                               1997              1998             1999
                                                               ----              ----             ----
       <S>                                                  <C>               <C>               <C>
         Exploratory Wells (1)
                  Productive
                           Gross                                  0                 0                 0
                           Net                                    0                 0                 0
                  Dry

</TABLE>

                                       8

<PAGE>   11

<TABLE>
<CAPTION>

       <S>                                                  <C>               <C>               <C>

                           Gross                                  0                 0                 0
                           Net                                    0                 0                 0

         Development Wells (2)
                  Productive (3)
                           Gross                                 20                16                37
                           Net                                 3.88              4.50             20.20
                  Dry
                           Gross                                  0                 1                 0
                           Net                                    0               .22                 0

         Total Wells (4)
                  Productive
                           Gross                                 20                16                37
                           Net                                 3.88              4.50             20.20
                  Dry
                           Gross                                  0                 1                 0
                           Net                                    0               .22                 0

</TABLE>

(1) Exploratory Wells are those wells drilled outside the confines of a known
    productive reservoir area.

(2) Development Wells are those wells drilled within the confines of a known
    productive reservoir.

(3) The number of productive wells for fiscal 1999 includes 7 gross wells and
    4.6 net wells as productive development wells that are awaiting pipeline
    connection or well completion operations at March 31, 1999.

(4) Total Wells is the sum of the Exploratory and Development Wells.

FACILITIES

         North Coast owns a 12,000 square foot building, its corporate
headquarters, in Twinsburg, Ohio. The office facility is in a centralized
location, which during fiscal 1997 allowed the Company to relocate certain
operations and its personnel from its Cleveland and Youngstown offices. The
Youngstown facility owned by North Coast is used for field operations. As part
of the Kelt acquisition, North Coast held a six-month lease on Kelt's facility
in Cambridge, Ohio, and exercised an option to purchase the property for $27,187
during fiscal 1999. The facility is used in the Company's field operations

ITEM 3.  LEGAL PROCEEDINGS.

         There are no material pending legal proceedings to which the Company is
a party or to which any of its property is subject.


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

         During the fourth quarter of the fiscal year ended March 31, 1999,
there were no matters submitted to a vote of security holders through the
solicitation of proxies or otherwise.

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

         The Common Stock is traded on the Nasdaq SmallCap Market under the
symbol "NCEB". The following tables sets forth, for the fiscal periods indicated
the high and low bid and ask prices for the Common Stock.

                                       9

<PAGE>   12


                                  Common Stock
                      (Amounts rounded to the nearest 32nd)

<TABLE>
<CAPTION>

                                                                     High                          Low
                                                                     ----                          ---
                                                                Bid        Ask               Bid        Ask
                                                                ---        ---               ---        ---
<S>                                                        <C>        <C>               <C>         <C>
FISCAL 1998

 First Quarter..............................................$ 5         $ 5-5/32          $ 3-7/16   $ 3-3/4
 Second Quarter.............................................  5-15/16     6-9/16            4-1/16     4-7/32
 Third Quarter..............................................  4-27/32     5-5/32            2-21/32    3-7/16
 Fourth Quarter.............................................  5           5-5/32            2-21/32    3-1/8

FISCAL 1999

 First Quarter..............................................$ 5-15/16   $ 6-1/4           $ 3-3/4    $ 4-7/32
 Second Quarter.............................................  5-5/16      5-5/8             2-3/16     2-13/16
 Third Quarter..............................................  4-11/16     5                 2-1/2      2-13/16
 Fourth Quarter.............................................  4-3/8       4-11/16           2-1/2      2-13/16

</TABLE>

         As of June 10, 1999, there were approximately 4,556,814 shares of
Common Stock outstanding, which were held by approximately 1,300 holders of
record. On June 7, 1999 a 1 for 5 reverse stock split became effective thereby
reducing the number of shares of outstanding Common Stock from 22,784,070 to
4,556,814.

         Holders of Series A Preferred Stock are entitled to receive semi-annual
non-cumulative cash dividends at an annual rate of $.60 per share. Such
dividends are payable on June 1 and December 1 of each year. The Series A
Preferred Stock is convertible to 2.3 shares of Common Stock prior to the
reverse stock split and is convertible to .46 shares of Common Stock after the
reverse stock split. The holders of Series B Preferred Stock are entitled to
receive quarterly cumulative cash dividends at an annual rate of $1.00 per
share. The Series B Preferred Stock is convertible to 6.56 shares of Common
Stock prior to the reverse stock split and is convertible to 1.311 shares of
Common Stock after the stock split. For the year ended March 31, 1999, the
Company paid $201,724 in aggregate cash dividends on its Series B Preferred
Stock.

         Whenever dividends on the Series B Preferred Stock have not been paid
for an amount equal to six quarterly dividend payments, the number of directors
of the Company may be increased, and the holders of the Series B will be
entitled to elect such additional directors on the Board of Directors. Such
voting right will terminate when all such distributions accrued and in default
have been paid in full or set apart of payment. The Company has dividends in
arrears on its Series B Preferred Stock of $326,010 at March 31, 1999.

         The Company has never paid any cash dividends on its Common Stock and
is currently restricted from paying cash dividends on any of its common stock
under the terms of its credit facility. The Company currently intends to retain
future earnings in order to provide funds for use in the operation of its
business.

ITEM 6.  SELECTED FINANCIAL DATA.

         The following table sets forth selected financial data for the Company
for each of the five fiscal years in the period ended March 31, 1999, 1998,
1997, 1996 and 1995.

<TABLE>
<CAPTION>

                                                                 Years Ended March 31
                                                      (In thousands, except per share amounts)
                                             1999            1998          1997         1996        1995
                                             ----            ----          ----         ----        ----
<S>                                       <C>            <C>           <C>          <C>         <C>

</TABLE>
                                       10
<PAGE>   13

<TABLE>
<CAPTION>

<S>                                       <C>            <C>           <C>          <C>         <C>
Revenues                                    $ 13,942       $ 8,591       $ 9,665      $ 10,860    $ 15,275
Net Income (Loss)                                870           262           292        (1,254)        295
Net Income (Loss) per Share(1)                   .16          (.00)         (.10)        (1.19)       (.25)
Total Assets                                  43,573        22,312        21,229        20,243      21,136
Long-term Debt (less current portion)         21,494         7,171        10,721         8,955       6,197

</TABLE>

(1)  Net Income (Loss) per share has been restated to reflect stock dividends
     and all per share amounts have been restated to give retroactive effect to
     the reverse stock split effective June 7, 1999.

     The following table sets forth summary unaudited financial information on a
quarterly basis for the past two years.

<TABLE>
<CAPTION>


                                                      (In thousands, except per share amounts)
                                                                       1999
                                                                       ----
                                              June 30         Sept. 30        Dec. 31          Mar. 31
                                              -------         --------        -------          -------

<S>                                        <C>             <C>             <C>              <C>
Revenues                                      $2,506          $2,601          $3,057           $5,778
Net Income (Loss)                                (97)             12             261              694
Net Income (Loss) per share (1)                (0.05)          (0.01)           0.04             0.14
Total Assets                                  40,176          42,389          43,994           43,573
Long Term Debt (less current portion)         24,641          21,672          20,734           21,494

                                                                       1998
                                                                       ----
                                              June 30         Sept. 30        Dec. 31          Mar. 31
                                              -------         --------        -------          -------

Revenues                                       1,849           1,554           1,967            3,220
Net Income (Loss)                                 76            (121)             63              244
Net Income (Loss) per share (1)                 0.00           (0.08)          (0.00)            0.01
Total Assets                                  20,362          20,880          23,475           22,312
Long Term Debt (less current portion)         10,624           6,581           6,565            7,171

</TABLE>

(1)  Net Income (Loss) per share has been restated to reflect stock dividends
     and all per share amounts have been restated to give retroactive effect to
     the reverse stock split effective June 7, 1999.

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

OVERVIEW

         North Coast is engaged in the acquisition and enhancement of developed
properties and the exploration, development and production of undeveloped
natural gas and oil properties, primarily in conjunction with the Drilling
Programs it sponsors and manages. North Coast derives its revenues from its own
oil and gas production and turnkey drilling, well operations, gas gathering,
transportation and gas marketing services performed under contract with the
Drilling Programs.

         North Coast's proved developed natural gas reserves increased to 41.2
Bcf for fiscal 1999 from 15.1 Bcf for the fiscal year ended March 31, 1998 and
proved developed oil reserves increased to 322,700 barrels from 126,700 barrels.
The increase in proved developed reserves resulted primarily from the Kelt
acquisition coupled with the purchase of the working interest in 35 wells and
the purchase of partnership interests from certain of the Company's Drilling
Program investors. The proved gas reserves (developed and undeveloped) increased
to 52.5 Bcf for fiscal 1999 from 17.8 Bcf for fiscal 1998. The increase in
proved gas reserves was due to the increases mentioned previously for the proved
developed reserves coupled with the upward revision to the proved undeveloped
reserves for drilling locations that were proved through the Company's recent
Drilling Programs. Proved oil reserves (developed and undeveloped) increased to
425,200 barrels for fiscal 1999 from 135,700 barrels for fiscal

                                       11

<PAGE>   14

1998. North Coast recognizes as proved undeveloped reserves only the potential
oil and gas which can reasonably be expected to be recovered from drillable
locations which it owned (or had rights to) at fiscal year end which are
directly offsetting locations to wells that have indicated commercial production
in the objective formation and which North Coast fully expects to drill in the
very near future. Changes in the Standardized Measure of Discounted Future Net
Cash Flows are set forth in Note 13 of the Company's financial statements. The
above mentioned additions and sales of natural gas, coupled with the development
costs associated with undeveloped acreage, create timing differences which are
reflected in the other category of the Standardized Measure. Of the Company's
total proved reserves, approximately 78% are proved developed and approximately
22% are proved undeveloped based upon equivalent unit Mcfs. Proved undeveloped
acreage requires considerable capital expenditures to develop. Management
believes that a significant percentage of the proved undeveloped reserves should
be recovered in future years, although no assurance of such recovery can be
given.

         The following table is a review of the results of operations of the
Company for the fiscal years ended March 31, 1999, 1998 and 1997. All items in
the table are calculated as a percentage of total revenues.

<TABLE>
<CAPTION>

Revenues:                                                                  1999          1998          1997
                                                                           ----          ----          ----
<S>                                                                      <C>           <C>           <C>
      Oil and gas production                                                52%           35%           33%
      Drilling revenues                                                     26            35            39
      Well operating, transportation and other                              15            19            19
      Administrative and agency fees                                         7            11             9
                                                                           ---            --            --

           Total Revenues                                                  100%          100%          100%
                                                                           ----          ----          ----

Expenses:
      Oil and gas production expenses                                       19%           10%            8%
      Drilling costs                                                        21            29            30
      Oil and gas operations                                                 9             8            10
      General and administrative expenses                                   15            26            24
      Depreciation, depletion, amortization, impairment and other           18            15            14
      Abandonment of oil and gas properties                                  0             0             1
      Provision (credit) for income taxes                                    0             0             0
      Other                                                                 12             9            10
                                                                           ---            --            --
      Total Expenses                                                        94%           97%           97%
                                                                           ---            --            --

       Net Income                                                           6%            3%            3%
                                                                           ===            ==            ==

      Net Income (loss) Applicable to Common Stock(1)                       5%            0%           (2%)
                                                                           ===            ==            ==
</TABLE>


      (1)  Dividends were paid or accrued on the Series B cumulative preferred
           stock in the amount of $236,654, $268,264 and $458,606 for fiscal
           1999, 1998, and 1997.

         The following discussion and analysis reviews the results of operations
and financial condition for the Company for the years ended March 31, 1997, 1998
and 1999. This review should be read in conjunction with the Financial
Statements and other financial data presented elsewhere herein.

COMPARISON OF FISCAL 1999 TO FISCAL 1998

REVENUES

         Oil and gas production increased from 1.2 bcf equivalent in fiscal 1998
to 2.9 bcf equivalent in fiscal 1999. Oil and gas production revenues increased
$4,219,834(140%) to $7,233,763 for fiscal 1999 compared to $3,013,929 for fiscal
1998 primarily due to the increased production of which 96% is from natural gas.
This increase in oil and gas revenue and production is primarily associated with
approximately 760 producing oil and gas properties acquired from Kelt. The Kelt
acquisition wells comprised 1.56 bcf equivalent of the total production in
fiscal 1999. Gas revenues were also affected by the sale of natural gas from the
Kelt properties, which was contracted on June 15, 1998 for a

                                       12
<PAGE>   15


period of one year at a price of approximately $2.85 per Mcf. The increase in
oil and gas production revenues also reflects approximately $320,000 in
production revenues resulting from the Company's third quarter purchase of
interests in prior Drilling Programs. The Company received an average price of
$11.39 and $16.18 per barrel of oil for fiscal 1999 and 1998, respectively, and
$2.57 and $2.50 per Mcf for natural gas for fiscal 1999 and 1998, respectively.

            Drilling revenues increased by $697,787 (23%) to $3,686,158 for
fiscal 1999 compared to $2,988,371 for fiscal 1998 due to the increase in the
number of wells recognized in revenue for the comparable periods. Drilling
revenues were recognized on 23 wells for fiscal 1999 compared to 20 wells for
fiscal 1998. The Company raised $3,515,000 for its fiscal 1999 Drilling Program
compared to $2,718,000 for its fiscal 1998 Drilling Programs.

         For fiscal 1999, well operating, transportation and other revenues
increased $439,605 (27%) compared to fiscal 1998. This increase was primarily
due to the increase in revenue from gas transportation and oilfield services,
which was a result of the Kelt acquisition. North Coast has utilized the
oilfield equipment from the acquisition to provide services to its oilfield
operations.

EXPENSES

         Oil and gas production expense increased to $2,601,555 for fiscal 1999
from $840,346 for fiscal 1998 primarily due to the Kelt acquisition coupled with
an increase resulting from the fiscal third quarter purchase of interests in
prior Drilling Programs. The Kelt wells accounted for approximately $1.5 million
of the total oil and gas production expense for fiscal 1999. North Coast's
average operating cost per equivalent Mcf increased to $0.91 for the year ended
March 31, 1999 compared to $0.70 for the year ended March 31, 1998 primarily due
to the integration of the assets and operating staff from the Kelt acquisition
for the year ended March 31, 1999.

         Drilling costs for fiscal 1999 compared to fiscal 1998 increased
$410,714 (16%). This increase between comparable periods was due to the larger
number of drilling program wells drilled and completed during the fiscal year
ended 1999 compared to the fiscal year ended 1998. North Coast's profit margin
was 21% for fiscal 1999 compared to 16% for fiscal 1998 primarily due to weather
conditions being more conducive for drilling activity in fiscal 1999 than in
fiscal 1998. In September, the Company initiated an enhancement and development
program focused on completing wells acquired from Kelt and the development of
selective proved undeveloped reserves. At March 31, 1999, the Company had
expended approximately $3.1 million on its enhancement program. The Company does
not recognize drilling revenue or expense on these drilling development
activities.

         Oil and gas operations expenses increased $547,842 (84%) for fiscal
1999 compared to fiscal 1998. This increase was due to an increase in gas
purchases related to unaffiliated third party gas sales of approximately
$60,000, increased costs associated with the utilization of oil field equipment
acquired in the Kelt acquisition of approximately $170,000, and the increase in
costs due to the integration of the Kelt operations.

         General and administrative expense decreased $107,013 (5%) primarily as
a result of a reallocation of overhead expenses related to integration of the
assets acquired from Kelt as well as a reduction in consulting fees in fiscal
1999 compared to fiscal 1998. As a percentage of revenues, general and
administrative expense decreased from 26% in fiscal 1998 to 15% in fiscal 1999
also due to the Kelt acquisition. Subsequent to fiscal 1999, North Coast made
certain payments to a former executive of the Company which will be reflected in
general and administrative expense in fiscal 2000.

         Depreciation, depletion, amortization, impairment, and other increased
$1,237,344 (100%) for fiscal 1999 compared to fiscal 1998. The increase is
primarily due to the increased depletion associated with the wells acquired from
Kelt and the increased depreciation associated with the oilfield equipment and
saleslines also acquired from Kelt.

         Interest expense increased to $1,841,108 for fiscal 1999 from $839,342
for fiscal 1998. This increase reflects the increase in the average outstanding
borrowings for the comparable periods due to the increase in debt associated
with the Kelt acquisition, the investment in the enhancement and development
activities and North Coast's contributions to the Drilling Program wells.

                                       13
<PAGE>   16
         Income from operations for fiscal 1999 increased to $2,624,437 from
$1,033,918 for fiscal 1998. The increase in income from operations was primarily
due to higher production volumes, the increased price of natural gas and
increased drilling revenues. The aforementioned increases in volumes, price, and
drilling revenue also increased the Company's net income $608,076 (232%) to
$870,214 for fiscal 1999 from $262,138 for fiscal 1998.

COMPARISON OF FISCAL 1998 TO FISCAL 1997

REVENUES

         Oil and gas production revenues decreased $123,627 (4%) to $3,013,929
for fiscal 1998 compared to $3,137,556 for fiscal 1997. On an equivalent basis,
production declined to 1.20 bcf equivalent in fiscal 1998 from 1.25 bcf
equivalent in fiscal 1997. Oil revenues decreased approximately $110,000 due to
a decrease in the oil production and a decrease in the average price received
for oil by the Company. For fiscal 1998 the Company received an average price of
$16.18 per barrel of oil and $2.50 per Mcf of natural gas compared to an average
price of $20.65 per barrel of oil and $2.43 per Mcf of natural gas received
during fiscal 1997.

         Drilling revenues decreased $795,259 (21%) for fiscal 1998 compared to
fiscal 1997 due to the decrease in the number of wells recognized in revenue.
The Company recognized revenues for fiscal 1998 on 20 wells as compared to 29
wells for fiscal 1997.

         Revenues generated from well operating, transportation and other
decreased $237,198 (13%) for fiscal 1998 compared to fiscal 1997. This decrease
was primarily due to a decrease in unaffiliated third party gas sales. The
unaffiliated third party gas sales fluctuate from year to year based upon the
availability of these types of transactions.

         Revenue from administrative and agency fees, which are based on a
percentage of the total investor capital raised in all of the Drilling Programs,
increased by $81,727 (9%) for fiscal 1998 compared to fiscal 1997 due to the
formation of the Drilling Programs in fiscal 1998. The administrative fees
derived from the fiscal 1998 Drilling Programs were charged a one-time fee equal
to 4.5% of total capital raised compared to the prior years programs which are
charged an annual fee equal to 2% of total capital raised.

EXPENSES

         Oil and gas production expense increased $63,183 (8%) for fiscal 1998
as compared to fiscal 1997. This increase was primarily due to additional costs
incurred with relocation of certain production facilities in the Gulf Coast area
and costs associated with reworking wells in Pennsylvania.

         Drilling costs for fiscal 1998 compared to fiscal 1997 decreased
$360,027 (13%) due to the decreased number of wells completed between comparable
periods. The profit margin on drilling revenue decreased to 16% for fiscal 1998
compared to 24% for fiscal 1997. The decrease in the drilling profit margin
between comparable periods was due to actual completion costs over the estimated
accruals from wells recognized in drilling income coupled with increased general
and administrative costs allocated to drilling activities. Net drilling income
decreased approximately $435,000 between fiscal year ends due to the fewer
number of wells drilled and completed.

         Oil and gas operations expense decreased $324,271 (33%) for fiscal 1998
as compared to fiscal 1997. This decrease was primarily due to reduced natural
gas purchases associated with unaffiliated third party gas sales.

         Interest expense decreased to $839,342 for fiscal 1998 from $1,055,409
for fiscal 1997. This decrease was primarily due to the reduction of the
borrowings under the Company's Credit Facility and other debt by utilizing funds
received from the sale of common stock. At March 31, 1998, $6,565,265 was
outstanding under the Company's Credit Facility, as compared to $8,640,000 at
March 31, 1997.

         Net income was $262,138 for fiscal 1998 compared to $291,750 for fiscal
1997. The decrease reflects the decreased drilling activity and production
revenues between comparable periods.


                                       14


<PAGE>   17


INFLATION AND CHANGES IN PRICES

         While the costs of operations have been and will continue to be
affected by inflation, oil and gas prices have fluctuated during recent years
and generally have not followed the same pattern as inflation. With today's
global economy, especially in the area of oil and natural gas, Management
believes that other forces of the economy and world events, such as OPEC, the
weather, economic factors, and the effects of supply of natural gas in the
United States and regionally have a more immediate effect on current pricing
than inflation. North Coast received an average price of $11.39 and $16.18 per
barrel for fiscal 1999 and 1998, respectively, and $2.57 and $2.50 per Mcf for
natural gas for fiscal 1999 and 1998, respectively. On average, Appalachian
natural gas prices decreased $0.41/Mcf from fiscal year 1998 to fiscal year
1999. However, North Coast experienced a $0.07/Mcf increase for its natural gas
during this period. For the 24 month period ending March 31, 1999, the CNG and
TCO Appalachian natural gas index pricing decreased $0.71 Mcf on average from
$2.85 to $2.14, while North Coast's average price increased $0.14 Mcf, from
$2.43 to $2.57. The increase North Coast received can be attributed to a change
in marketing strategy including (1) aggressively targeting small to medium-sized
commercial end-users, and (2) balancing the remainder of the Company's gas
prices between spot Appalachian based prices and NYMEX based prices. This
strategy allows North Coast the greatest opportunity to exceed the average
regional prices, while minimizing the effects of a negative fluctuation. The
industry-wide weakness of natural gas prices can be attributed to the effects of
a relatively mild winter, which lessened demand for natural gas. Although it is
anticipated that there will be a decline in gas prices during the summer months,
the demand for gas by storage facilities, coupled with the anticipated
nationwide hot summer, may keep gas prices above last summer's. Other variables
potentially effecting gas prices are increased competition from Canadian gas,
effects of gas storage and possibly FERC Order 636. The FERC Order 636 may have
contributed to the lower spot market prices by mandating an unbundling of
pipeline service and allowing open access to a variety of geographical markets.
Management cannot predict what long-term effects FERC Order 636 will have on
either spot market prices or longer term gas contracts.

         Currently, North Coast sells natural gas under both fixed price
contracts and on the spot market. The spot market price North Coast receives for
gas production is related to several variables, including the weather and the
effects of gas storage. The Company anticipates that spot market prices will
continue to fluctuate in response to various factors primarily weather and
market conditions.

         In an effort to position itself to take advantage of future increases
in demand for natural gas, North Coast continues to construct new pipeline
systems in the Appalachian Basin and to contract with other pipeline systems in
the region to transport natural gas production from Company wells.

LIQUIDITY AND CAPITAL RESOURCES

         North Coast's working capital was $2,399,000 at March 31, 1999 compared
to $782,000 at March 31, 1998. The increase of $1,617,000 in working capital
reflects the funds received from the formation of the fiscal 1999 Drilling
Program and the general increase in working capital resulting from the
additional Kelt wells. As of March 31, 1999, the Company had $20,827,635
outstanding under its Credit Facility.

         The following table summarizes the Company's financial position at
March 31, 1999 and 1998:

<TABLE>
<CAPTION>

(Amounts in Thousands)                                       1999                       1998
----------------------                                       ----                       ----
                                                    Amount           %         Amount           %
                                                    ------           -         ------           -
<S>                                             <C>              <C>     <C>                 <C>
Working capital                                     $  2,399         6       $    782            4
Property and equipment                                36,418        89         18,789           95
Other                                                  1,857         5            275            1
                                                    --------       ---       --------          ---
     Total                                          $ 40,674       100       $ 19,846          100
                                                    ========       ===       ========          ===

Long-term debt                                      $ 21,494        53       $  7,171           36
Deferred income taxes and other liability              1,238         3            336            2

</TABLE>

                                       15


<PAGE>   18

<TABLE>
<CAPTION>

<S>                                             <C>              <C>     <C>                 <C>
Stockholders' equity                                  17,942        44         12,339           62
                                                    --------       ---       --------          ---
     Total                                          $ 40,674       100       $ 19,846          100
                                                    ========       ===       ========          ===
</TABLE>

CAPITAL RESOURCES AND REQUIREMENTS

         The oil and gas exploration and development activities of North Coast
historically have been financed through the Drilling Programs, through
internally generated funds, and from bank financing.

         The following table summarizes North Coast's Statements of Cash
Flows for the years ended March 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>

(Amounts in Thousands)                                   1999                 1998                   1997
                                                         ----                 ----                   ----
                                                    Dollars    %         Dollars     %             Dollars   %
                                                    -------    -         -------     -             -------   -

<S>                                               <C>         <C>        <C>        <C>           <C>        <C>
Net cash provided by operating activities          $  2,385    11%        $ 1,186    46%           $ 1,162    48%
Net cash used for investing activities              (20,913)  (94)         (2,122)  (82)            (1,827)  (76)
Net cash provided by financing activities            18,906    85           1,012    39                616    26
                                                   --------    --         -------    --            -------    --
Increase (decrease) in cash and cash equivalent    $    378     2%        $    76     3%           $   (49)   (2)%
                                                   ========    ==         =======    ==            =======    ==
</TABLE>

(1)   All items in the previous table are calculated as a percentage of total
      cash sources. Total cash sources include the following items, if positive:
      cash flow from operations before working capital changes, changes in
      working capital, net cash provided by investing activities and net cash
      provided by financing activities, plus any decrease in cash and cash
      equivalents.

         As the above table indicates, North Coast's cash provided by operating
activities increased to $2,385,000 for fiscal 1999 compared to $ 1,186,000 for
fiscal 1998 primarily due to the Kelt acquisition.

         Net cash used for investing activities increased to $20,913,000 for
fiscal 1999 from $2,122,000 for fiscal 1998. This increase was primarily due to
the Kelt acquisition. In the fiscal fourth quarter it was determined that the
drilling rig acquired in the Kelt acquisition was not being utilized as
effectively as initially planned and was sold to a third party. North Coast also
invested approximately $3.1 million in drilling and development activities
associated with completing wells acquired from Kelt and the development of
proved undeveloped reserves.

         Net cash from financing activities increased approximately $17,894,000
for fiscal 1999 compared to fiscal 1998. This increase reflects the Company's
borrowings under its credit facility to finance the Kelt acquisition. Also
reflected is the receipt of $5 million from NUON on September 29, 1998 for the
issuance of Common Stock of the Company and the subsequent payment of a portion
of the Company's Credit Facility.

         On February 9, 1998, the Company entered into an agreement with ING
(US) Capital Corporation to replace the $20 million revolving credit facility
with its previous lender. An amended credit facility dated May 29, 1998 ("Credit
Agreement") expanded the Company's $20 million revolving credit facility with
ING ("ING") to a $25 million revolving credit facility ("Credit Facility"). The
Credit Agreement also provides for a borrowing base which is determined
semiannually by the lender based upon the Company's financial position, oil and
gas reserves, as well as outstanding letters of credit ($150,000 at March 31,
1999), as defined. The Credit Agreement requires payment of an agent fee (0.75%
for Credit Agreement) on amounts available and 1/2% commitment fee on amounts
not borrowed up to the available line. At March 31, 1999, the Company's
borrowing base was $25 million subject to reduction for the outstanding letters
of credit. Available borrowings under the facility at March 31, 1999 were
$4,022,365 and may subsequently be adjusted upon the semiannual reserve study
and borrowing base determination (see Note 4 to the Company's March 31, 1999
financial statements). The Credit Facility provides that the payment of cash
dividends with respect to the Common Stock of the Company is prohibited. As of
March 31, 1999, the Company had $20,827,635 outstanding under the Credit
Facility, and was in compliance with its loan covenants. Amounts borrowed under
the Credit Facility bear interest at the prime rate of the lending bank plus
 .75% or LIBOR plus 2.50%. The line of credit is reviewed semi-annually and
extended by an amendment to the current facility or converted to a term loan on
July 2, 2000. The lender has performed its September 30, 1998 semi-annual
borrowing

                                       16

<PAGE>   19
base review and has provided a third amendment to the Credit Facility which
continues the facility without payment of principal until September 30, 2000.
The lender has indicated that, in the future, it intends to discontinue lending
in the oil and gas business in the United States and has requested that the
Company find another lender. North Coast is currently reviewing options with
several lenders that are interested in providing at least a $25 million credit
facility.

         The amounts borrowed under its revolving line of credit are secured by
the Company's receivables, inventory, equipment and a first mortgage on certain
of the Company's interests in oil and gas wells and reserves. The mortgage notes
are secured by certain land and buildings.

         In addition, at March 31, 1999, the Company had approximately $44,290
outstanding under a mortgage note payable for its facility in Youngstown. The
mortgage note bears interest at the rate of 8% and requires the Company to make
monthly payments of approximately $1,019 through July 2003. The Company
purchased a building for its headquarters and entered a mortgage note on May 13,
1996 for $540,000 over a 15-year term with an interest rate of 8.58% to be
renegotiated every five years. The amount outstanding under the mortgage note at
March 31, 1999 was $487,673.

         On September 29, 1998, the Company sold an additional 1,149,425 shares
of its Common Stock for $5 million to NUON International bv, a limited liability
company organized under the laws of the Netherlands ("NUON"), pursuant to the
terms of a stock purchase agreement ("Agreement") by and between the Company and
NUON dated August 1, 1997. By exercising its option to purchase additional
shares by September 30, 1998, NUON's stock ownership increased to 51% of the
Company's outstanding Common Stock. NUON also exercised the right to appoint two
directors at the Company's December 1998 Annual Meeting. The Company issued
26,800 warrants representing the right of the holders to purchase one share of
Common Stock for $4.375 per share in connection with the sale of Common Stock to
NUON. Pursuant to the terms of the Agreement and subject to the satisfaction of
certain conditions, NUON may purchase an additional 1,149,426 shares of Common
Stock by September 30, 1999. The Company is also obligated to issue 26,800
warrants if NUON purchases the additional 1,149,426 shares with 13,400 of the
potential warrants due to an officer of the Company. The additional warrants
represent the right to purchase one share of Common Stock for $4.375 per share.

         The Company acquired certain assets and assumed certain obligations of
Kelt, headquartered in Cambridge, Ohio. The Kelt acquisition was made pursuant
to a Purchase and Sale Agreement dated April 8, 1998 and amended May 12, 1998.
The purchase price for the acquired assets was approximately $16 million. The
Company funded the acquisition using cash and an increase in its credit
facility.

         On April 30, 1999, the Company's chief executive officer resigned and
under a separation agreement is entitled to certain payments in lieu of his
existing employment contract and payments for non-compete, a warrant to purchase
common stock. In addition, under certain conditions the Company could be
obligated to purchase this former executives stock for $4.375 a share. North
Coast would not be obligated to purchase the former executive's shares if NUON
elects to purchase his shares prior to September 30, 1999 in accordance with the
separation agreement. However, NUON would have the right to reduce its option
under the 1997 Purchase and Sale Agreement to the extent to which it purchases
the former executive's shares. NUON is not obligated to exercise its option to
acquire 1,149,426 shares or to acquire the former chief executive officer's
shares. Management of North Coast believes that general economic conditions and
various sources of available capital, including current available borrowings
under the Credit Facility, NUON's exercise of their option shares and funds
raised in Drilling Programs will be sufficient to fund the Company's
obligations, operations and meet debt service requirements through fiscal 2000.

YEAR 2000 READINESS DISCLOSURE

         The Company has developed an action plan and identified the resources
required to convert its computer systems and software applications to achieve
Year 2000 compliance with no anticipated effect on its customers or disruption
of its business operations. The Company has already implemented the first three
phases of its four-phase action plan. In Phase One, the Company assessed its
information technology ("IT") and non-IT systems. The term "computer equipment
and software" includes systems that are commonly thought of as IT systems,
including accounting, data processing, telephone, scanning equipment and other
miscellaneous systems. Those items not considered IT systems include alarms, fax
machines and monitors for field operations. Both IT and non-IT systems

                                       17


<PAGE>   20

may contain embedded technology which complicates Year 2000 identification and
assessment efforts.

         In Phase Two, the Company tested existing systems and determined
whether those systems suspect to Year 2000 compliance problems should be
replaced. In Phase Three, the Company replaced systems and software because of
the Year 2000 issue and because the Kelt acquisition necessitated newer and more
compatible systems. The Company estimates that the cost to complete Phases One,
Two and Three, which primarily includes the purchase of software and hardware
upgrades under normal maintenance agreements with third party vendors, will be
approximately $60,000. To date, the Company has incurred approximately 83.0% of
these anticipated costs.

         Phase Four of the Company's action plan involves the implementation of
the Company's Year 2000 compliant software and the reevaluation of all of the
Company's material systems. North Coast intends to complete this phase of its
action plan by the end of the second quarter of fiscal year 2000. The Company
may engage independent consultants to assist in completing Phase Four. The
additional cost of these independent consultants has not been determined and has
not yet been included in the Company's Year 2000 compliance cost estimates.

         In addition, the Company has discussed Year 2000 compliance issues with
its vendors and customers. Although the Company has no reason to believe that
its vendors and customers will not be Year 2000 compliant, the Company is unable
to determine the extent to which Year 2000 issues will effect its vendors and
customers. The Company continues to discuss procedures necessary to address this
issue with its vendors and customers.

         The Company presently does not plan to incur significant operational
problems due to the Year 2000 issue. However, there can be no assurance that the
Year 2000 issue will not materially impact the Company's financial condition or
results of operations, or adversely effect its relationship with customers,
vendors and others. Additionally, there can be no assurance that the Year 2000
issues of other entities will not have a material impact on the Company's
systems or results of operations. The Company plans to establish a contingency
plan for dealing with the most reasonably likely worse case scenario. To date
such a scenario has not been clearly identified. North Coast plans to complete
such analysis and contingency planning by the second quarter of fiscal year
2000.

ACCOUNTING STANDARDS

         In June 1997, SFAS 130, "Reporting Comprehensive Income," was issued.
SFAS 130 established new standards for reporting comprehensive income and its
components and is effective for fiscal years beginning after December 15, 1997.
In June 1997, the Financial Accounting Standards Board issued SFAS 131, "
Disclosure About Segments of an Enterprise and Related Information." SFAS 131
changed the standards for reporting financial results by operating segments,
related products and services geographical areas and major customers. In
February 1998, SFAS 132, Employers' Disclosures About Pensions and Other
Postretirement Benefits, was issued. SFAS 132 standardizes the disclosure
requirements for pension and other postretirement benefit plans but does not
change the measurement or recognition of those plans. SFAS 132 is effective for
fiscal years beginning after December 15, 1997. In June 1998, SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities," was issued. SFAS
133 establishes accounting and reporting standards for derivative instruments
and hedging activities. SFAS 133 is effective for fiscal years beginning after
June 15, 1999. The effect of the adoption or anticipated adoption of the above
standards had no, or is expected to have no, material effect on the Company's
financial statements.

ITEM 7.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

    The Company does not have any derivative financial instruments as of March
31, 1999.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA.

     The following pages contain the Financial Statements and supplementary data
required by Item 8 of Part II of Form 10-K.

                                       18

<PAGE>   21


ITEM 9.           DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

     Not Applicable.
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by this Item 10 as to the Directors of the Company
is incorporated herein by reference to the information set forth under the
caption "Information Concerning Nominees for Directors" in the Company's
definitive Proxy Statement for the 1999 Annual Meeting of Stockholders, since
such Proxy Statement will be filed with the Securities and Exchange Commission
not later than 120 days after the end of the Company's fiscal year pursuant to
Regulation 14A. Information required by this Item 10 as to the Executive
Officers of the Company is included in Part I of this Annual Report on Form
10-K.

     Executive Officers of the Registrant*

     Timothy Wagers, age 39, joined North Coast in 1983 and currently is
Treasurer and Chief Financial Officer. Mr. Wagers is also responsible for
overseeing the accounting for partnership distributions, oil and gas production
and tax reporting, and for monitoring well costs. He received a Bachelor of
Science in Accounting from the University of Akron. From 1982 through 1983, Mr.
Wagers was employed by Hausser + Taylor, independent certified public
accountants, as a staff accountant auditing various entities including oil and
gas partnerships. Mr. Wagers is a certified public accountant, a member of the
Ohio Society of Certified Public Accountants, the Ohio Petroleum Accountants
Society, and the American Institute of Certified Public Accountants.

     Thomas A. Hill, age 41, was elected Secretary and General Counsel of North
Coast Energy in August 1987. Mr. Hill joined Capital Oil & Gas, Inc. in 1984,
before its acquisition by North Coast. He graduated from Hiram College with a
Bachelor of Arts degree in History and Political Science and from George
Washington University National Law Center with a Juris Doctor degree. Mr. Hill
is a member of the Mahoning County Bar Association and Eastern Mineral Law
Foundation.

    *The description of the Company's executive officers called for in this item
is included herein pursuant to instruction 3 to Section (b) of Item 401 of
Regulation S-K.

ITEM 11.  EXECUTIVE COMPENSATION.

     The information required by this Item 11 is incorporated by reference to
the information set forth under the caption "Executive Compensation" in the
Company's definitive Proxy Statement for the 1999 Annual Meeting of
Stockholders, since such Proxy Statement will be filed with the Securities and
Exchange Commission not later than 120 days after the end of the Company's
fiscal year pursuant to Regulation 14A.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information required by this Item 12 is incorporated by reference to
the information set forth under the captions "Principal Shareholders" and "Share
Ownership of Directors and Officers" in the Company's definitive Proxy Statement
for the 1999 Annual Meeting of Stockholders, since such Proxy Statement will be
filed with the Securities and Exchange Commission not later than 120 days after
the end of the Company's fiscal year pursuant to Regulation 14A.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information required by this Item 13 is incorporated by reference to
the information set forth under the caption "Transactions with Management" in
the Company's definitive Proxy Statement for the 1999 Annual Meeting of
Stockholders, since such Proxy Statement will be filed with the Securities and
Exchange Commission not later than 120 days after the end of the Company's
fiscal year pursuant to Regulation 14A.

                                       19
<PAGE>   22

                                     PART IV
                                     -------

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)  (1)  Financial Statements

     The following Consolidated Financial Statements of the Registrant and its
subsidiaries are included in Part II, Item 8:

<TABLE>
<CAPTION>

                                                                Page(s)

<S>                                                           <C>    <C>
Auditors' Reports on the Financial Statements                   F-3  - F-4
Consolidated balance sheets                                     F-5  - F-6
Consolidated statements of operations                           F-7
Consolidated statements of stockholders' equity                 F-8
Consolidated statements of cash flows                           F-9  - F-10
Notes to consolidated financial statements                      F-11 - F-31
</TABLE>

(a)  (2)  Financial Statements Schedules

     All schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.

(a)  (3)  Exhibits

     Reference is made to the Exhibit Index.

(b) Reports on Form 8-K:

     The Company's current report on Form 8-K dated April 5, 1999.

                                       20

<PAGE>   23



                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

                       1999 CONSOLIDATED FINANCIAL REPORT


                                      F-1

<PAGE>   24




                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

                                    CONTENTS



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

                                                                       Page
                                                                       ----

AUDITORS' REPORTS ON THE FINANCIAL STATEMENTS                        F-3 - F-4

FINANCIAL STATEMENTS
    Consolidated balance sheets                                      F-5 - F-6
    Consolidated statements of operations                               F-7
    Consolidated statements of stockholders' equity                     F-8
    Consolidated statements of cash flows                            F-9 - F-10
    Notes to consolidated financial statements                      F-11 - F-31

                                      F-2

<PAGE>   25



                    Report of Independent Public Accountants
                    ----------------------------------------


To the Board of Directors and Stockholders
North Coast Energy, Inc.
Cleveland, Ohio


        We have audited the accompanying consolidated balance sheet of North
Coast Energy, Inc. (a Delaware corporation) and subsidiaries as of March 31,
1999, and the related consolidated statements of operations, stockholders'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of North
Coast Energy, Inc. and subsidiaries as of March 31, 1999, and the consolidated
results of their operations and their cash flows for the year then ended, in
conformity with generally accepted accounting principles.



/s/ Hausser + Taylor LLP


Cleveland, Ohio
May 28, 1999
  except for Note 5 dated
  June 29, 1999
                                      F-3

<PAGE>   26




                    Report of Independent Public Accountants
                    ----------------------------------------


To the Board of Directors and Stockholders
North Coast Energy, Inc.
Cleveland, Ohio


        We have audited the accompanying consolidated balance sheet of North
Coast Energy, Inc. (a Delaware corporation) and subsidiaries as of March 31,
1998, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the two fiscal years in the period ended March
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of North
Coast Energy, Inc. and subsidiaries as of March 31, 1998, and the consolidated
results of their operations and their cash flows for each of the two fiscal
years in the period ended March 31, 1998, in conformity with generally accepted
accounting principles.


/s/ Arthur Andersen LLP

Cleveland, Ohio
June 4, 1998

                                      F-4

<PAGE>   27


                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                             March 31, 1999 and 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                           1999            1998
                                                                           ----            ----
        ASSETS
        ------
      <S>                                                          <C>             <C>
        CURRENT ASSETS
         Cash and equivalents                                         $  1,956,617    $  1,578,984
         Accounts receivable:
          Trade, net                                                     2,740,394       1,311,714
          Affiliates                                                       115,278          96,011
         Inventories                                                       210,556         189,223
         Deferred income taxes                                              57,000          26,000
         Refundable income taxes                                            38,000          38,000
         Prepaid expenses                                                  180,000           8,057
                                                                      ------------    ------------

            Total current assets                                         5,297,845       3,247,989

        PROPERTY AND EQUIPMENT, at cost
         Land                                                               97,822          93,437
         Oil and gas properties (successful efforts)                    42,964,679      25,754,748
         Pipelines                                                       6,543,928       4,380,772
         Vehicles                                                          937,613         420,026
         Furniture and fixtures                                            588,473         508,417
         Building and improvements                                         823,225         786,689
                                                                      ------------    ------------
                                                                        51,955,740      31,944,089

        Less accumulated depreciation, depletion, amortization and
         impairment                                                    (15,537,255)    (13,155,288)
                                                                      ------------    ------------

                                                                        36,418,485      18,788,801

        OTHER ASSETS
         Advanced royalties                                              1,570,000              --
         Other, net                                                        287,137         274,726
                                                                      ------------    ------------
                                                                         1,857,137         274,726




                                                                      ------------    ------------
                                                                      $ 43,573,467    $ 22,311,516
                                                                      ============    ============
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.

                                      F-5

<PAGE>   28
                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                             March 31, 1999 and 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                        1999             1998
                                                                        ----             ----
       LIABILITIES AND STOCKHOLDERS' EQUITY
       ------------------------------------
<S>                                                             <C>              <C>
CURRENT LIABILITIES
 Current portion of long-term debt                                 $     97,600    $     88,300
 Accounts payable                                                     2,355,982       1,824,740
 Accrued expenses                                                       444,808         250,073
 Billings in excess of costs on uncompleted contracts                        --         302,881
                                                                   ------------    ------------
    Total current liabilities                                         2,898,390       2,465,994

LONG-TERM DEBT, net of current portion                               21,493,922       7,171,035

ACCRUED PLUGGING LIABILITY                                              872,408              --

DEFERRED INCOME TAXES, net                                              366,200         335,200

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
 Series A, 6% Noncumulative Convertible Preferred stock, par
  value $.01 per share; 563,270 shares authorized; 73,816 and
  75,481 issued and outstanding (aggregate liquidation value of
  $738,160 and $754,810, respectively)                                      738             755
 Series B, Cumulative Convertible Preferred stock, par
  value $.01 per share; 625,000 shares authorized; 232,864 and
  268,264 issued and outstanding (aggregate liquidation value of
  $2,328,640 and $2,682,640, respectively plus dividends in
  arrears of $326,010 and $335,330, respectively)                         2,329           2,683
 Undesignated Serial Preferred stock, par value $.01 per share;
  811,730 shares authorized; none issued and outstanding                     --              --
 Common stock, par value $.01 per share; 60,000,000 shares
  authorized; 4,556,814 and 3,322,586 issued and outstanding
  (see Note 6G)                                                          45,568          33,226
 Additional paid-in capital                                          21,914,939      16,992,140
 Retained deficit                                                    (4,021,027)     (4,689,517)
                                                                   ------------    ------------
    Total stockholders' equity                                       17,942,547      12,339,287
                                                                   ------------    ------------

                                                                   $ 43,573,467    $ 22,311,516
                                                                   ============    ============
</TABLE>

       The accompanying notes are an integral part of there consolidated
                             financial statements.

                                      F-6

<PAGE>   29

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                    Years Ended March 31, 1999, 1998 and 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                               1999            1998            1997
                                                               ----            ----            ----
<S>                                                    <C>              <C>             <C>
REVENUE
 Oil and gas production                                   $  7,233,763    $  3,013,929    $  3,137,556
 Drilling revenues                                           3,686,158       2,988,371       3,783,630
 Well operating, transportation and other                    2,062,213       1,622,608       1,859,806
 Administrative and agency fees                                960,166         965,724         883,997
                                                          ------------    ------------    ------------
                                                            13,942,300       8,590,632       9,664,989

COSTS AND EXPENSES
 Oil and gas production expenses                             2,601,555         840,346         777,163
 Drilling costs                                              2,927,302       2,516,588       2,876,615
 Oil and gas operations                                      1,200,514         652,672         976,943
 General and administrative expenses                         2,108,948       2,215,961       2,307,994
 Depreciation, depletion, amortization, impairment
  and other                                                  2,479,544       1,242,200       1,385,570
 Abandonment of oil and gas properties                              --          88,947          73,528
                                                          ------------    ------------    ------------
                                                            11,317,863       7,556,714       8,397,813
                                                          ------------    ------------    ------------

INCOME FROM OPERATIONS                                       2,624,437       1,033,918       1,267,176

OTHER INCOME (EXPENSE)
 Interest income                                                82,505          62,263          47,491
 Other                                                           4,380           5,299          32,492
 Interest expense                                           (1,841,108)       (839,342)     (1,055,409)
                                                          ------------    ------------    ------------
                                                            (1,754,223)       (771,780)       (975,426)

INCOME BEFORE PROVISION (CREDIT) FOR
 INCOME TAXES                                                  870,214         262,138         291,750

PROVISION (CREDIT) FOR INCOME TAXES
 Current                                                            --          12,000          (5,100)
 Deferred                                                           --         (12,000)          5,100
                                                          ------------    ------------    ------------
                                                                    --              --              --
                                                          ------------    ------------    ------------
NET INCOME                                                $    870,214    $    262,138    $    291,750
                                                          ============    ============    ============

NET INCOME (LOSS) APPLICABLE TO COMMON STOCK
 (after dividends on cumulative Preferred Stock of
 $236,654, $268,264 and $458,606, respectively)           $    633,560    $     (6,126)   $   (166,856)
                                                          ============    ============    ============

NET INCOME (LOSS) PER SHARE (basic and diluted)           $       0.16    $         --    $      (0.10)
                                                          ============    ============    ============

</TABLE>


       The accompanying notes are an integral part of these consolidated
                             financial statements.


                                      F-7
<PAGE>   30
                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                    Years Ended March 31, 1999, 1998 and 1997
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                  Series A                       Series B
                                              Preferred Stock                 Preferred Stock                  Common Stock
                                          --------------------------- --------------------------------- --------------------------
                                            Shares        Amount            Shares        Amount           Shares         Amount
                                          -----------  -------------  --------------  ----------------  -----------  -------------
<S>                                      <C>        <C>                  <C>         <C>              <C>            <C>
     BALANCE, MARCH 31, 1996,
      AS PREVIOUSLY REPORTED               305,200    $      3,052         464,665    $      4,647       8,040,148    $     80,402

      1-for-5 reverse stock split
       effective June 7, 1999                   --              --              --              --      (6,432,118)        (64,322)
                                          --------    ------------    ------------    ------------    ------------    ------------

     BALANCE, MARCH 31, 1996               305,200           3,052         464,665           4,647       1,608,030          16,080

      Net income                                --              --              --              --              --              --
      Shares converted                    (228,249)         (2,282)       (195,201)         (1,952)        537,811           5,378
      Dividends on Series A Preferred
       stock ($.30 per share)                   --              --              --              --              --              --
      Dividends on Series B Preferred
       stock ($.50 per share)                   --              --              --              --              --              --
     Issuance of stock bonus common
       shares                                   --              --              --              --           4,938              50
                                          --------    ------------    ------------    ------------    ------------    ------------

     BALANCE, MARCH 31, 1997                76,951             770         269,464           2,695       2,150,779          21,508
      Net income                                --              --              --              --              --              --
      Shares converted                      (1,470)            (15)         (1,200)            (12)          3,273              33
      Dividends on Series B Preferred
       stock ($.25 per share)                   --              --              --              --              --              --
      Issuance of common stock                  --              --              --              --       1,165,144          11,651
      Issuance of stock bonus common
       shares                                   --              --              --              --           3,390              34
                                          --------    ------------    ------------    ------------    ------------    ------------

     BALANCE, MARCH 31, 1998                75,481             755         268,264           2,683       3,322,586          33,226
      Net income                                --              --              --              --              --              --
      Shares converted                      (1,665)            (17)        (35,400)           (354)         81,333             813
      Dividends on Series B Preferred
       stock ($.85 per share)                   --              --              --              --              --              --
      Issuance of common stock                  --              --              --              --       1,149,425          11,494
      Issuance of stock bonus common
       shares                                   --              --              --              --           3,470              35
                                          --------    ------------    ------------    ------------    ------------    ------------
     BALANCE, MARCH 31, 1999                73,816    $        738         232,864    $      2,329       4,556,814    $     45,568
                                          ========    ============    ============    ============    ============    ============
</TABLE>

<TABLE>
<CAPTION>

                                                     Additional                 Total
                                               Paid-in         Retained      Stockholders'
                                               Capital         Deficit          Equity
                                           --------------  --------------  ---------------
<S>                                       <C>             <C>              <C>
     BALANCE, MARCH 31, 1996,
      AS PREVIOUSLY REPORTED                $ 12,082,969    $ (4,852,465)   $  7,318,605

      1-for-5 reverse stock split
       effective June 7, 1999                     64,322              --              --
                                            ------------    ------------    ------------

     BALANCE, MARCH 31, 1996                  12,147,291      (4,852,465)      7,318,605

      Net income                                      --         291,750         291,750
      Shares converted                            (1,144)             --              --
      Dividends on Series A Preferred
       stock ($.30 per share)                         --         (91,542)        (91,542)
      Dividends on Series B Preferred
       stock ($.50 per share)                         --        (232,332)       (232,332)
     Issuance of stock bonus common
       shares                                     23,080              --          23,130
                                            ------------    ------------    ------------

     BALANCE, MARCH 31, 1997                  12,169,227      (4,884,589)      7,309,611
      Net income                                      --         262,138         262,138
      Shares converted                                (6)             --              --
      Dividends on Series B Preferred
       stock ($.25 per share)                         --         (67,066)        (67,066)
      Issuance of common stock                 4,812,322              --       4,823,973
      Issuance of stock bonus common
       shares                                     10,597              --          10,631
                                            ------------    ------------    ------------

     BALANCE, MARCH 31, 1998                  16,992,140      (4,689,517)     12,339,287
      Net income                                      --         870,214         870,214
      Shares converted                              (442)             --              --
      Dividends on Series B Preferred
       stock ($.85 per share)                         --        (201,724)       (201,724)
      Issuance of common stock                 4,913,506              --       4,925,000
      Issuance of stock bonus common
       shares                                      9,735              --           9,770
                                            ------------    ------------    ------------
     BALANCE, MARCH 31, 1999                $ 21,914,939    $ (4,021,027)   $ 17,942,547
                                            ============    ============    ============
</TABLE>



       The accompanying notes are an integral part of these consolidated
                             financial statements.

                                      F-8
<PAGE>   31
                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                    Years Ended March 31, 1999, 1998 and 1997

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


<TABLE>
<CAPTION>
                                                                   1999            1998          1997
                                                                   ----            ----          ----
<S>                                                           <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                  $    870,214   $    262,138   $    291,750
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation, depletion, amortization, impairment
       and other                                                 2,479,544      1,242,200      1,385,570
      Abandonment of oil and gas properties                           --           88,947         73,528
      Loss (gain) on sale of property and equipment                  2,008         (1,609)        20,400
      Deferred income taxes                                           --          (12,000)         5,100
      Stock bonus                                                    9,770         10,631           --
      Change in:
        Accounts receivable                                     (1,447,947)       (19,692)        49,561
        Inventories and other current assets                      (193,276)        12,179       (102,127)
        Refundable income taxes                                       --           12,000         65,000
        Other assets, net                                          241,701       (109,154)        23,109
        Accounts payable                                           531,242        (62,667)      (521,662)
        Accrued expenses                                           194,735        (70,182)        39,690
        Billings in excess of costs on uncompleted contracts      (302,881)      (166,480)      (167,986)
                                                              ------------   ------------   ------------
          Total adjustments                                      1,514,896        924,173        870,183
                                                              ------------   ------------   ------------
            Net cash provided by operating activities            2,385,110      1,186,311      1,161,933

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                           (4,824,062)    (2,124,052)    (2,025,561)
  Acquisition of net assets of Kelt Ohio, Inc.                 (16,488,876)          --             --
  Proceeds on sale of property and equipment                       400,000          2,000        198,669
                                                              ------------   ------------   ------------
            Net cash used by investing activities              (20,912,938)    (2,122,052)    (1,826,892)
</TABLE>


 The accompanying notes are an integral part of these consolidated
 financial statements.

                                     F-9
<PAGE>   32
                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                    Years Ended March 31, 1999, 1998 and 1997
--------------------------------------------------------------------------------




<TABLE>
<CAPTION>
                                                                 1999           1998            1997
                                                                 ----           ----            ----
<S>                                                          <C>            <C>            <C>
CASH FLOWS FROM FINANCING ACTIVITIES
  Payments of accounts payable used to finance property
    and equipment additions                                  $       --     $    (87,161)  $    (70,964)
  Borrowings under revolving credit facility                   20,062,370      6,765,265      2,080,000
  (Repayments) borrowings under note payable to
    stockholder                                                      --       (1,453,674)        84,883
  Repayment of borrowings under revolving credit facility      (5,800,000)    (8,840,000)    (1,000,000)
  Payments on long-term debt                                     (107,315)      (106,698)      (140,656)
  Cash paid for deferred financing fees                          (150,000)       (88,223)       (12,900)
  Proceeds from issuance of long-term debt                        177,130         65,031           --
  Net proceeds from issuance of common stock                    4,925,000      4,823,973           --
  Distributions and dividends                                    (201,724)       (67,066)      (323,874)
                                                             ------------   ------------   ------------
      Net cash provided by financing activities                18,905,461      1,011,447        616,489
                                                             ------------   ------------   ------------

INCREASE (DECREASE) IN CASH AND
  EQUIVALENTS                                                     377,633         75,706        (48,470)

CASH AND EQUIVALENTS AT BEGINNING OF
  YEAR                                                          1,578,984      1,503,278      1,551,748
                                                             ------------   ------------   ------------

CASH AND EQUIVALENTS AT END OF YEAR                          $  1,956,617   $  1,578,984   $  1,503,278
                                                             ============   ============   ============


Supplemental disclosures of cash flow information:
  Cash paid during the year for:
    Interest                                                 $  1,763,000   $    887,000   $  1,032,000
    Income taxes                                                  103,000         51,000         52,000

Supplemental disclosures of noncash investing and financing
  activities:
    Long-term debt incurred for the purchase of property
      and equipment                                          $       --     $       --     $    638,000
    Accounts payable incurred for the purchase of property
      and equipment                                                  --           22,000         87,000
    Accounts payable incurred for deferred financing                 --           88,000           --

</TABLE>

 The accompanying notes are an integral part of these consolidated financial
                                 statements.

                                      F-10
<PAGE>   33

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.           ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

             A.   Organization - North Coast Energy, Inc. ("North Coast"), a
                  Delaware corporation, was formed in August 1988 to engage in
                  the exploration, development and production of oil and gas,
                  the acquisition of producing oil and gas properties, and the
                  organization and management of oil and gas partnerships.

             B.   Principles of Consolidation - The consolidated financial
                  statements include the accounts of North Coast Energy, Inc.
                  and its wholly owned subsidiaries (collectively, "the
                  Company"), North Coast Operating Company ("NCOC") and NCE
                  Securities, Inc. ("NCE Securities"). In addition, the
                  Company's investments in oil and gas drilling partnerships,
                  which are accounted for under the proportional consolidation
                  method, are reflected in the accompanying financial
                  statements. The Company's ownership of revenues in these
                  drilling partnerships is as follows:

<TABLE>
<CAPTION>

                <S>                                                                      <C>
                  Capital Drilling Fund 1986-1 Limited Partnership                          13.2%

                  North Coast Energy/Capital Appalachian Drilling Program Limited Partnership:
                    1987-1                                                                  51.2%
                    1987-2                                                                  45.1%
                    1988-1                                                                  43.9%
                    1988-2                                                                  48.6%
                    1989                                                                    36.0%

                    North Coast Energy Appalachian Drilling Program Limited Partnership:
                    1990-1                                                                  44.7%
                    1990-2                                                                  36.2%
                    1990-3                                                                  42.3%
                    1991-1                                                                  37.0%
                    1991-2                                                                  33.6%
                    1991-3                                                                  38.2%
                    1992-1                                                                  28.3%
                    1992-2                                                                  37.9%
                    1992-3                                                                  54.0%
                    1993-1                                                                  42.6%
                    1993-2                                                                  38.7%
                    1993-3                                                                  36.7%
                    1994-1                                                                  37.7%
                    1994-2                                                                  29.4%
                    1994-3                                                                  33.5%
                    1995-1                                                                  20.0%
                    1995-2                                                                  20.0%
                    1996-1                                                                  20.0%
                    1996-2                                                                  20.0%
                    1997-1                                                                  38.2%
                    1997-2                                                                  22.1%
                    1998-1                                                                  20.1%


             All significant intercompany accounts and transactions have been eliminated.

</TABLE>

                                      F-11

<PAGE>   34


                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1.      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
             (CONTINUED)

             C.   Cash Equivalents - Investments having an original maturity of
                  90 days or less that are readily convertible into cash have
                  been included in, and are a significant portion of, the cash
                  and equivalents balances.

             D.   Property and Equipment - Property and equipment are stated at
                  cost and are depreciated or depleted principally on methods
                  and at rates designed to amortize their costs over their
                  estimated useful lives (proved oil and gas properties using
                  the unit-of- production method based upon estimated proved
                  developed oil and gas reserves, pipelines using the
                  straight-line method over 10 to 25 years, vehicles, furniture
                  and fixtures using accelerated methods over 5 to 7 years,
                  building and improvements using accelerated methods over 31.5
                  years).

             E.   Oil and Gas Investments and Properties - The Company uses the
                  successful efforts method of accounting for oil and gas
                  producing activities. Under successful efforts, costs to
                  acquire mineral interests in oil and gas properties, to drill
                  and equip exploratory wells that find proved reserves, and to
                  drill and equip developmental wells are capitalized.

                  Costs to drill exploratory wells that do not find proved
                  reserves, costs of developmental wells on properties the
                  Company has no further interest in, geological and geophysical
                  costs, and costs of carrying and retaining unproved properties
                  are expensed.

                  Unproved oil and gas properties that are significant are
                  periodically assessed for impairment of value and a loss is
                  recognized at the time of impairment by providing an
                  impairment allowance. Other unproved properties are expensed
                  when surrendered or expired.

                  When a property is determined to contain proved reserves, the
                  capitalized costs of such properties are transferred from
                  unproved properties to proved properties and are amortized by
                  the unit-of-production method based upon estimated proved
                  developed reserves. To the extent that capitalized costs of
                  groups of proved properties having similar characteristics
                  exceed the estimated future net cash flows, the excess
                  capitalized costs are written down to the present value of
                  such amounts. Estimated future net cash flows are determined
                  based primarily upon the estimated future reserves related to
                  the Company's current proved properties and, to a lesser
                  extent, certain future net cash flows related to operating and
                  administrative fees due the Company related to its management
                  of various partnerships. The Company follows SFAS No. 121
                  which requires a review for impairment whenever circumstances
                  indicate that the carrying amount of an asset may not be
                  recoverable. Impairment is recorded on a drilling program or
                  property specific basis, as applicable.

                  On sale or abandonment of an entire interest in an unproved
                  property, gain or loss is recognized, taking into
                  consideration the amount of any recorded impairment if the
                  property had been assessed. If a partial interest in an
                  unproved property is sold, the amount received is treated as a
                  reduction of the cost of the interest retained.

                                      F-12

<PAGE>   35

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1.      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
             (CONTINUED)

             F.   Revenue Recognition - The Company recognizes revenue on
                  drilling contracts using the completed contract method of
                  accounting for both financial reporting purposes and income
                  tax purposes. This method is used because the typical contract
                  is completed in three months or less and financial position
                  and results of operations do not vary significantly from those
                  which would result from use of the percentage-of-completion
                  method.

                  Provisions for estimated losses on uncompleted contracts are
                  made in the period in which such losses are determined.
                  Billings in excess of costs on uncompleted contracts are
                  classified as current liabilities.

                  Oil and gas production revenue is recognized as income as it
                  is extracted and sold from the properties. Other revenue is
                  recognized at the time it is earned and the Company has a
                  contractual right to such revenue.

             G.   Per Share Amounts - The computation of basic and diluted
                  earnings per share does not assume the conversion of the
                  unconverted Series A (1998 and 1997) and Series B (1999, 1998
                  and 1997) Preferred stock or the effect of warrants and stock
                  options outstanding (1999, 1998 and 1997) due to either, the
                  average market price of the common shares being lower than the
                  prices of all of the options and warrants currently
                  outstanding, or the effect being anti-dilutive. For the year
                  ended March 31, 1999, the conversion of Series A stock had the
                  effect of increasing the denominator (average outstanding
                  shares) by 17,116 shares.

                  The average number of outstanding shares used in computing
                  basic (diluted) net loss per share was 3,949,818 (3,966,934),
                  2,821,298 (2,821,298) and 1,648,155 (1,648,155) for the years
                  ended March 31, 1999, 1998 and 1997, respectively.

             H.   Risk Factors - The Company operates in an environment with
                  many financial risks including, but not limited to, the
                  ability to acquire additional economically recoverable oil and
                  gas reserves, the continued ability to market drilling
                  programs, the inherent risks of the search for, development of
                  and production of oil and gas, the ability to sell oil and gas
                  at prices which will provide attractive rates of return, and
                  the highly competitive nature of the industry and worldwide
                  economic conditions. The Company's ability to expand its
                  reserve base, diversify its operations and continue its
                  marketing efforts for and investments in drilling programs is
                  also dependent upon the Company's ability to obtain the
                  necessary capital through operating cash flow, additional
                  borrowings or additional equity funds.

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

                                      F-13

<PAGE>   36

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 1.      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
             (CONTINUED)

             J.   Financial Instruments - The Company's financial instruments
                  include cash and equivalents, accounts receivable, accounts
                  payable and debt obligations. The book value of cash and
                  equivalents, accounts receivable and accounts payable are
                  considered to be representative of fair value because of the
                  short maturity of these instruments. The Company believes that
                  the carrying value of its borrowings under its bank credit
                  facility and other debt obligations approximates their fair
                  value as they bear interest at adjustable interest rates which
                  change periodically to reflect market conditions. The
                  Company's accounts receivable are concentrated in the oil and
                  gas industry. The Company does not view such a concentration
                  as an unusual credit risk.

             K.   Reclassifications - Certain reclassifications were made to
                  prior period financial statement presentations to conform with
                  current period presentations.

NOTE 2.      ACQUISITION OF KELT OHIO, INC.

             Effective April 8, 1998, the Company acquired significantly all of
             the assets and operations and assumed certain liabilities of Kelt
             Ohio, Inc. ("Kelt") pursuant to a Purchase and Sale Agreement dated
             April 8, 1998 (as amended May 12, 1998). The assets acquired from
             Kelt, an oil and gas producer headquartered in Cambridge, Ohio,
             include approximately 900 natural gas and oil wells, undeveloped
             acreage, brine disposal facilities, drilling and service rigs, and
             natural gas compressors and gas gathering systems. The Company
             funded the acquisition primarily with borrowings under its
             revolving credit facility.

             The acquisition cost (which includes approximately $16,000,000 paid
             to Kelt and direct acquisition costs of $488,876 incurred by the
             Company) was allocated to the net assets acquired based on
             estimated fair values and no goodwill was recorded. The estimated
             fair value of tangible assets and liabilities acquired was
             $17,488,876 and $1,000,000, respectively. The acquisition has been
             accounted for as a purchase and, accordingly, the operating results
             related to the acquisition are included in the Company's
             consolidated statement of operations for significantly all (April
             8, 1998 - March 31, 1999) of the Company's fiscal 1999 year.

             The following summary presents fiscal 1998 pro forma consolidated
             results of operations as if the acquisition had occurred on April
             1, 1997 and includes adjustments for estimated amounts of
             depreciation, depletion and amortization of fixed assets acquired
             based on their estimated fair values and increased interest
             expense. The pro forma amounts include Kelt's operation based on
             Kelt's fiscal year ended December 31, 1997. The pro forma results
             are for illustrative purposes only and do not purport to be
             indicative of the actual results which would have occurred had the
             transaction been consummated as of an earlier date, nor are they
             indicative of results of operations which may occur in the future.
             These results do not reflect any synergies that may or may not be
             achieved.

                                      F-14

<PAGE>   37


                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE 2.      ACQUISITION OF KELT OHIO, INC. (CONTINUED)

<TABLE>
<CAPTION>

                                                                            (Unaudited)
                                                                            Year Ended
                                                                          March 31, 1998
                                                                          --------------
<S>                                                                      <C>
             REVENUES                                                      $ 13,211,603

             COSTS AND EXPENSES                                              10,860,061
                                                                           ------------
             INCOME FROM OPERATIONS                                           2,351,542

             OTHER INCOME                                                        67,562

             OTHER EXPENSE - Interest                                         2,448,094
                                                                           ------------
             NET LOSS                                                      $    (28,990)
                                                                           ============
             NET LOSS, applicable to common stock (after preferred stock
               dividends of $268,264)                                      $   (297,254)

             BASIC AND DILUTED EARNINGS, per common share                  $      (0.11)

             Weighted average number of shares outstanding                    2,821,298

</TABLE>

NOTE 3.      BILLINGS IN EXCESS OF COSTS ON UNCOMPLETED CONTRACTS

             Billings in excess of costs on uncompleted contracts consist of the
following at March 31:

<TABLE>
<CAPTION>
                                                             1999      1998
                                                             ----      ----

<S>                                                     <C>        <C>
                Billings on uncompleted contracts         $     -    $ 335,920
                Costs incurred on uncompleted contracts         -       33,039
                                                          -------    ---------
                                                          $     -    $ 302,881
                                                          =======    =========
</TABLE>

             At March 31, 1999, all contracts were completed.

NOTE 4.      LEASE COMMITMENTS

             Prior to the year ended March 31, 1999, the Company leased real and
             personal property under operating leases. Total rental expense
             under the operating leases for the years ended March 31, 1998 and
             1997 amounted to approximately $6,000 and $43,000, respectively. In
             1997 rent expense of approximately $34,000 was incurred pursuant to
             the lease of the Company's previous corporate headquarters from one
             of the Company's stockholders. There was no rental expense incurred
             for any operating leases for the year ended March 31, 1999 and the
             Company has no noncancelable operating leases which require future
             minimum rental payments.

                                      F-15

<PAGE>   38

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 5.      LONG-TERM DEBT

             Long-term debt consists of the following at March 31:

<TABLE>
<CAPTION>
                                                                         1999          1998
                                                                         ----          ----

           <S>                                                     <C>           <C>
             Revolving credit notes payable - bank                   $20,827,635   $ 6,565,265

             Mortgage note payable to a bank, secured by land
              and a building, requiring monthly payments of
              approximately $1,019 (including interest at 8%)
              through July 2003                                           44,290        52,571

             Mortgage note payable to a bank, secured by land
              and a building, requiring monthly payments of
              approximately $5,248 (including interest at 8.58%)
              through May 2001. Thereafter, the balance of the
              note will be amortized over a ten-year period, at
              an interest rate to be renegotiated every five years       487,673       507,404

             Various installment notes payable in aggregate
              monthly installments (including interest) of $6,984
              at March 31, 1999, through 2004                            231,924       134,095
                                                                     -----------   -----------
                                                                      21,591,522     7,259,335
             Less current portion                                         97,600        88,300
                                                                     -----------   -----------
                                                                     $21,493,922   $ 7,171,035
                                                                     ===========   ===========

</TABLE>



             On February 9, 1998, the Company entered into an agreement with ING
             (U.S.) Capital LLC (successor in interest to ING (U.S.) Capital
             Corporation) ("ING Capital") to replace the $20,000,000 revolving
             credit facility with its previous lender. On May 29, 1998, the
             Company entered into an amended Credit Agreement with its lender
             increasing the Credit Facility from $20,000,000 to $25,000,000. The
             Agreement provides for a borrowing base which is determined
             semi-annually by the lender based upon the Company's financial
             position, oil and gas reserves, as well as outstanding letters of
             credit ($150,000 at March 31, 1999), as defined. At March 31, 1999,
             the Company's borrowing base was $25,000,000 subject to reduction
             for the outstanding letters of credit. Available borrowings under
             the facility at March 31, 1999 were $4,022,365 and may subsequently
             change based upon the semi-annual reserve study and borrowing base
             determination.

             In June 1999, the Company and ING Capital entered into an amended
             credit agreement that extended the commitment period until and
             including July 2, 2000. At the termination of the commitment
             period, borrowings on the note are due and payable in 20 equal
             quarterly installments beginning in September 2000. ING Capital has
             indicated to the Company that sometime in the future it will
             discontinue lending to the oil and gas industry. The Company is
             currently in the process of reviewing its options and financing
             needs with several prospective lenders.

                                      F-16

<PAGE>   39

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 5.      LONG-TERM DEBT (CONTINUED)

             Amounts outstanding under the reducing revolving line of credit
             bear interest at the lending bank's prime rate plus .75% or LIBOR
             plus 2.50%, or approximately 7.65% and 8.5% at March 31, 1999 and
             March 31, 1998, respectively. The weighted average interest rate on
             these borrowings was 8.3%, 10.1% and 9.9% for the years ended March
             31, 1999, 1998 and 1997, respectively. The agreement requires the
             Company to pay a commitment fee of .5% on the unused amount of
             available borrowings. The agreement contains certain restrictive
             covenants, including working capital, current ratio, tangible net
             worth, and EBITDA calculations, as defined. Additionally, the
             Company is restricted from paying cash dividends on any of its
             common stock under the terms of its credit facility. The Company
             was in compliance with all covenants and restrictions at March 31,
             1999.

             The revolving credit facility and the notes are collateralized by
             substantially all of the Company's assets including receivables,
             inventory, equipment and a first mortgage on certain of the
             Company's interests in oil and gas wells and reserves.

             Future maturities of long-term debt for the years ended March 31
             are as follows:


<TABLE>
<CAPTION>

                       <S>                               <C>
                         Fiscal 2000                         $     97,600
                         Fiscal 2001                            3,226,261
                         Fiscal 2002                            4,257,981
                         Fiscal 2003                            4,245,190
                         Fiscal 2004                            4,212,994
                         Thereafter                             5,551,496
                                                             ------------
                                                             $ 21,591,522
                                                             ============

</TABLE>


             The carrying amount of the Company's long-term debt approximates
             fair value, as all of the Company's significant debt instruments
             carry adjustable interest rates which change periodically to
             reflect market conditions.

NOTE 6.      STOCKHOLDERS' EQUITY

             A.   Sale of Common Stock

                  In September 1997, the Company sold 1,149,426 shares of its
                  common stock for $5 million to NUON International bv ("NUON"),
                  a limited liability company organized under the laws of the
                  Netherlands, pursuant to the terms of a stock purchase
                  agreement ("Agreement") by and between the Company and NUON
                  dated August 1, 1997. In September 1998, NUON exercised its
                  option under the Agreement to purchase an additional 1,149,425
                  shares of common stock for $5,000,000 which increased NUON's
                  ownership to 51% of the Company's outstanding common stock.
                  Pursuant to the terms of the Agreement and subject to the
                  satisfaction of certain conditions, including the development
                  of a plan of complementary business, NUON may purchase an
                  additional 1,149,426 shares of common stock by September 30,
                  1999 to bring its total ownership to 3,448,277 shares of the
                  Company's common stock.

                                      F-17

<PAGE>   40

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6.      STOCKHOLDERS' EQUITY (CONTINUED)

             A.   Sale of Common Stock (Continued)

                  The proceeds from the sale of common stock was utilized to
                  reduce the amount outstanding under the Company's Credit
                  Facility with the remaining proceeds being used for working
                  capital purposes.

             B.   Preferred Stock

                  The Board of Directors of North Coast has designated 563,270
                  shares of the 2,000,000 shares of preferred stock authorized
                  as Series A, 6% Convertible Noncumulative Preferred stock
                  (Series A Preferred stock) and 625,000 shares of Preferred
                  stock as Series B, Cumulative Convertible Preferred stock
                  (Series B Preferred stock).

                  Stockholders of Series A Preferred stock are entitled to vote
                  such shares on any and all matters submitted to a vote of the
                  stockholders of the Company based upon the number of votes
                  such stockholders would have if the Series A Preferred stock
                  had been converted into shares of common stock of the Company.
                  Holders of shares of Series A Preferred stock are entitled to
                  receive, when and if declared by the Board of Directors,
                  noncumulative cash dividends at an annual rate of $.60 per
                  share. Shares of Series A Preferred stock are senior to shares
                  of common stock with respect to such cash dividends and junior
                  to shares of Series B Preferred stock.

                  Series A Preferred stock is convertible, at the stockholder's
                  option, into shares of common stock at the conversion rate of
                  .46 shares of common stock for each share of Series A
                  Preferred stock converted.

                  All of, but not less than all, the outstanding shares of
                  Series A Preferred stock shall, at the option of North Coast,
                  be converted into fully paid and nonassessable shares of
                  common stock at the conversion price, upon the consummation of
                  the sale of shares of common stock of North Coast pursuant to
                  an effective registration statement under the Securities Act
                  of 1933, as amended; provided that such sale yields gross
                  proceeds to the Corporation of not less than $5,000,000 and is
                  made at a public offering price per share of not less than 1.5
                  times the conversion price in effect on such date.

                  In the case where North Coast issues warrants or rights to
                  purchase shares of common stock of the Company, each record
                  holder of outstanding shares of Series A Preferred stock will
                  receive the kind and amount of such warrants or rights so
                  issued which such holder would have been entitled to upon such
                  issuance had all of the holders of shares of Series A
                  Preferred stock been converted, as defined.

                  The Series A Preferred stock is redeemable at the option of
                  North Coast at a price of $10 per share. North Coast does not
                  have any obligation to redeem the Series A Preferred stock.

                                      F-18

<PAGE>   41

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6.      STOCKHOLDERS' EQUITY (CONTINUED)

             B.   Preferred Stock (Continued)

                  In the event of a voluntary or involuntary liquidation,
                  dissolution or winding up of North Coast, holders of the
                  Series A Preferred stock are entitled to be paid $10 per share
                  out of the assets of North Coast but after payment of other
                  indebtedness of North Coast, after payment or distribution to
                  the holders of Series B Preferred stock, but prior to any
                  distribution to holders of the common stock.

                  Holders of shares of Series B Preferred stock are entitled to
                  receive, when, as and if declared by the Board of Directors,
                  cash dividends at an annual rate of $1.00 per share, payable
                  quarterly.

                  In the event of any liquidation, dissolution or winding up of
                  the Company, holders of shares of Series B Preferred stock are
                  entitled to receive the liquidation preference of $10 per
                  share, plus an amount equal to any accrued and unpaid
                  dividends to the payment date, before any payment or
                  distribution is made to the holders of common stock and Series
                  A Preferred stock, as defined. After payment of the
                  liquidation preference, the holders of such shares will not be
                  entitled to any further participation in any distribution of
                  assets by the Company.

                  Generally, each outstanding share of Series B Preferred stock
                  has no vote, however in certain instances required by Delaware
                  General Corporation Law or by the certificate of designation,
                  each share will be entitled to one-fifth vote, excluding
                  shares held by the Company or any entity controlled by the
                  Company, which shares shall have no voting rights. So long as
                  any Series B Preferred stock is outstanding, the Company
                  cannot, without the affirmative vote of the holders of at
                  least 66 2/3 percent of all outstanding shares of Series B
                  Preferred stock, voting separately as a class, (i) amend,
                  alter or repeal any provision of the Company's Restated
                  Certificate of Incorporation or Bylaws so as to affect
                  adversely the relative rights, preferences, qualifications,
                  limitations or restrictions of the Series B Preferred stock,
                  (ii) authorize or issue, or increase the authorized amount of,
                  any additional class or series of stock of the Corporation, or
                  any security convertible into stock of such class or series,
                  having rights senior to the Series B Preferred stock as to
                  dividends or liquidation, or (iii) effect any reclassification
                  of the Series B Preferred stock. Additionally, the Series A
                  Preferred stock's certificate of designation restricts the
                  ability to significantly modify the Company's capital
                  structure where such modification could be at a detriment to
                  the Series B Preferred stockholders.

                  Whenever distributions on the Series B Preferred stock have
                  not been paid, as defined, the number of directors of the
                  Company may be increased, and the holders of the Series B will
                  be entitled to elect such additional directors to the Board of
                  Directors, as defined. Such voting right will terminate when
                  all such distributions accrued and in default have been paid
                  in full or set apart for payment, as defined. The amount of
                  dividends in arrears attributable to Series B Preferred is
                  $326,010 ($1.40 per share) as of March 31, 1999.

                                      F-19

<PAGE>   42


                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6.      STOCKHOLDERS' EQUITY (CONTINUED)

             B.   Preferred Stock (Continued)

                  Effective December 18, 1995, the Series B Preferred stock was
                  redeemable at the option of the Company, at $10 per share plus
                  any accrued and unpaid dividends, as defined.

                  There is no mandatory redemption or sinking fund obligation
                  with respect to the Series B Preferred stock. In the event
                  that the Company has failed to pay accrued dividends on the
                  Series B Preferred stock, it may not redeem any of the
                  outstanding shares of the Series B Preferred stock until all
                  such accrued and unpaid distributions have been paid in full.

                  The holders of Series B Preferred stock have the right,
                  exercisable at their option, to convert any or all of such
                  shares into 1.311 (1.15 per share of Preferred stock plus .161
                  per share related to Preferred dividends in arrears at March
                  31, 1999) shares of common stock.

                  In fiscal 1997, the Company commenced a conversion offer to
                  its Preferred shareholders (Series A and B) to convert their
                  shares into common stock with additional shares offered as an
                  incentive. Pursuant to the conversion offer in fiscal 1997,
                  228,249 shares of Preferred Series A were tendered and
                  exchanged for 228,249 shares of common stock and 195,201
                  shares of Preferred Series B were tendered and exchanged for
                  309,562 shares of common stock.

             C.   Common Stock Warrants

                  Warrants issued in connection with the Series B Preferred
                  stock entitled the holders thereof to purchase .23 shares of
                  common stock with each warrant at a price of $13.05 per share,
                  as defined. The warrants issued in connection with the Series
                  B Preferred stock expired on December 18, 1997. There were
                  2,500,000 Series B warrants outstanding at March 31, 1997.

                  The Company has granted Range Resources, a shareholder of the
                  Company, certain warrants to purchase 40,000 shares of common
                  stock at $6.00 per share and 60,000 shares of common stock at
                  $5.00 per share, as defined. These warrants were exercisable
                  on June 13, 1995 and expire on or have expired on June 13,
                  2000 and 1998, respectively. The warrants may be redeemed by
                  the Company for $.50 per share at its option upon 30 days
                  written notice.

                  In fiscal 1999 and 1998, in conjunction with the NUON
                  Agreement, the Company issued (each year) warrants to purchase
                  26,800 shares of common stock for $4.375 per share. The
                  Company is obligated to issue additional warrants to
                  purchase 26,800 additional shares of common stock for $4.375
                  per share if NUON purchases an additional 1,149,426 shares
                  of common stock by September 30, 1999. These warrants (half
                  of which are issued or issuable to a director/officer)
                  expire five years from date of issuance.

                                      F-20

<PAGE>   43

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6.      STOCKHOLDERS' EQUITY (CONTINUED)

             D.   Series B Unit Warrants

                  In connection with the issuance of the Series B Preferred
                  stock, the underwriter of the issue received 50,000 warrants
                  to purchase Series B Units at $12.00 per unit. A Series B Unit
                  consists of one share of Series B Preferred stock and five
                  warrants to purchase .23 shares of common stock at $13.05 per
                  share. These warrants expired, with none being exercised, on
                  December 18, 1997.

             E.   Stock Options and Stock Appreciation Rights

                  North Coast has a stock option plan ("the Option Plan") to
                  provide incentives to stimulate interest in the development
                  and financial success of the Company. The Option Plan provides
                  for the granting of stock options to purchase common stock at
                  an option price determined by North Coast's Compensation
                  Committee ("the Committee"). Options granted during 1999, 1998
                  and 1997 have been at fair market value of the stock at the
                  date of grant. The Committee shall determine the expiration
                  date but no option shall be exercisable for a period of more
                  than 10 years. The aggregate fair market value of the common
                  stock exercisable for the first time during any calendar year
                  shall not exceed $100,000. Options granted under the Option
                  Plan terminate upon the employee leaving the Company. The
                  Company, from time to time, may issue additional options
                  outside the plan. The plan expires August 17, 1999.

                  Stock option transactions during 1999, 1998 and 1997 are
                  summarized as follows:

<TABLE>
<CAPTION>

                                                          Options             Price
                                                        Outstanding           Range
                                                        -----------        -----------
                        <S>                             <C>              <C>
                         March 31, 1996                    99,966

                         Options exercised                    (20)               $3.90
                         Options granted                    3,620                $3.90
                         Options canceled                    (895)         $3.90-$6.90
                                                          -------

                         March 31, 1997                   102,671

                         Options exercised                    (50)                $3.90
                         Options canceled                 (41,273)         $3.90-$24.55
                                                          -------

                         March 31, 1998                    61,348

                         Options granted                   20,000                $4.38
                         Options canceled                 (46,428)         $3.90-$8.10
                                                          -------

                         March 31, 1999                    34,920
                                                          =======

</TABLE>

                                      F-21


<PAGE>   44

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 6.      STOCKHOLDERS' EQUITY (CONTINUED)

             E.   Stock Options and Stock Appreciation Rights (Continued)

                  In the year ended March 31, 1999, the Company granted 20,000
                  options to a Company director at $4.375 per share with 6,667
                  shares vesting on that date and 6,667 vesting each year after.

                  A summary of stock options outstanding and exercisable at
                  March 31, 1999 follows:

<TABLE>
<CAPTION>
                                                                            Options      Option
                            Exercisable at March 31, 1999 through:        Outstanding     Price
                            --------------------------------------        -----------     -----
                           <S>                                            <C>         <C>
                            January 18, 2000                                  3,500       $8.10
                            May 17, 2001                                      8,740       $4.90
                            March 19, 2003                                      920       $6.90
                            September 4, 2006                                 1,760       $3.90
                            April 15, 2003                                    6,667       $4.38
                                                                             ------
                                                                             21,587
                            Non vested options                               13,333       $4.38
                                                                             ------

                                 Total                                       34,920
                                                                             ======

</TABLE>


                  Stock appreciation rights may be awarded by the Committee at
                  the time or subsequent to the time of the granting of options.
                  Stock appreciation rights awarded shall provide that the
                  option holder shall have the right to receive an amount equal
                  to 100% of the excess, if any, of the fair market value of the
                  shares of common stock covered by the option over the option
                  price payable, as defined. No stock appreciation rights have
                  been awarded under the plan.

                  The Company has adopted the disclosure-only provisions of
                  Statement of Financial Accounting Standards No. 123,
                  "Accounting for Stock Based Compensation." Accordingly, no
                  compensation cost has been recognized for the stock option
                  plans. Had compensation cost for the Company's two stock
                  option plans been determined based on the fair value at the
                  grant date for awards in fiscal 1999, 1998 and 1997 consistent
                  with the provisions of SFAS No. 123, the Company's net income
                  per share would not change.

             F.   Stock Bonus Plan

                  The Company has a Key Employees Stock Bonus Plan ("the Bonus
                  Plan") to provide key employees, as defined, with greater
                  incentive to serve and promote the interests of the Company
                  and its shareholders. The aggregate number of shares of common
                  stock which may be issued as bonuses shall be 46,000 shares of
                  common stock, as defined. The expenses of administering the
                  Bonus Plan shall be borne by the Company. The Bonus Plan will
                  terminate on February 1, 2001. The Company issued 3,470 and
                  3,340 shares of common stock related to this plan during
                  fiscal 1999 and 1998, respectively, and 25,120 shares of
                  common stock since inception.

                                      F-22
<PAGE>   45

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6.      STOCKHOLDERS' EQUITY (CONTINUED)

             G.   Reverse Stock Split

                  On March 17, 1999, the Company's Board of Directors authorized
                  a 1-for-5 reverse split of its common stock effective June 7,
                  1999 for stockholders of record at the close of business on
                  May 12, 1999. The par value of the common stock was not
                  changed. All share and per-share amounts in the accompanying
                  consolidated financial statements have been restated to give
                  retroactive effect to the reverse stock split.

NOTE 7.      INCOME TAXES

             The Company accounts for income taxes under the Statement of
             Financial Accounting Standards No. 109, "Accounting for Income
             Taxes" (SFAS 109). SFAS 109 is an asset and liability approach that
             requires the recognition of deferred tax assets and liabilities for
             the expected future tax consequences of events that have been
             recognized in the Company's consolidated financial statements or
             tax returns.

             Income taxes differed from the amount computed by applying the
             federal statutory rates to pretax book income as follows:

<TABLE>
<CAPTION>

                                                  1999                  1998                   1997
                                         -------------------- ---------------------- --------------------
                                           Amount       %        Amount        %        Amount        %
                                         ----------- -------- ------------- -------- ------------- ------
             <S>                        <C>         <C>        <C>        <C>        <C>          <C>
               Provision based on
                 the statutory rate      $ 296,000    34.0       $ 89,000    34.0       $ 99,000     34.0

               Tax effect of:
                 Statutory depletion      (306,000)  (35.2)      (132,000)  (50.4)      (143,000)   (49.0)
                 Other - net                10,000     1.2         43,000    16.4         44,000     15.0
                                         ---------   -----       --------   -----       --------    -----

                      Total              $       -       -       $      -       -       $      -        -
                                         =========   =====       ========   =====       ========    =====
</TABLE>

                                      F-23

<PAGE>   46

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7.      INCOME TAXES (CONTINUED)

             The components of the net deferred tax liability as of March 31,
             1999 and 1998 were as follows:
<TABLE>
<CAPTION>

                                                                      1999            1998
                                                                      ----            ----
              <S>                                                <C>             <C>
               DEFERRED TAX LIABILITIES
                Property and equipment                            $(1,322,000)     $ (389,000)
                Other, net                                                  -         (30,200)
                                                                  -----------      ----------
                 Total deferred tax liabilities                    (1,322,000)       (419,200)

               DEFERRED TAX ASSETS
                Alternative minimum tax credit carryforwards          397,000         397,000
                Net operating loss carryforwards                    1,181,000         640,000
                Other financial reserves                               57,000          30,000
                Less:  valuation allowance                           (622,200)       (957,000)
                                                                  -----------      ----------
                 Total deferred tax assets                          1,012,800         110,000
                                                                  -----------      ----------
                 Net deferred tax liability                       $  (309,200)     $ (309,200)
                                                                  ===========      ==========


</TABLE>



             As of March 31, 1999, the Company had operating loss, percentage
             depletion and alternative minimum tax credit carryforwards of
             approximately $3,500,000, $1,900,000 and $397,000, respectively.
             The 34% tax effect of the percentage depletion carryover has been
             shown as a reduction of the deferred tax liability related to
             property and equipment in the above presentation. The operating
             loss carryforwards begin to expire in 2012. The percentage
             depletion and alternative minimum tax carryforwards can be carried
             forward indefinitely. Realization of these items is subject to
             certain limitations and is contingent upon future earnings.
             Additionally, a significant portion of the carryforwards may be
             subject to limitations imposed by Internal Revenue Code Section
             382, which could further restrict the Company's utilization and
             realization of such carryforwards. Due to the uncertainty of the
             realization of certain tax carryforwards, the Company has
             established a valuation allowance against these carryforward
             benefits in the amount of $622,200.

NOTE 8.      PROFIT SHARING PLAN

             The Company has a profit sharing plan that provides retirement and
             death benefits to participants and covers substantially all
             employees. Company contributions are discretionary and are
             allocated to the participants' accounts based upon their
             compensation and are subject to a graded vesting schedule which
             allows 20% vesting after two years of vesting service with an
             additional 20% vesting for each complete year of vesting service
             thereafter. Contributions of approximately $50,000, $30,000 and
             $20,000 were accrued or paid for the years ended March 31, 1999,
             1998 and 1997, respectively.

             North Coast provides no significant post-retirement and/or
             post-employment benefits other than the profit sharing plan
             discussed above.

                                      F-24

<PAGE>   47

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 9.      OTHER COMMITMENTS AND CONTINGENCIES

             North Coast Energy, Inc., as general partner of several limited
             partnerships, has committed to fund certain costs (primarily
             tangible well costs and saleslines additions) of the partnerships
             as they are incurred. At March 31, 1999, management estimates the
             commitment to fund such costs to be approximately $438,000. The
             commitment is expected to be funded by September 30, 1999.

             The Company shares in unlimited liability to third parties with
             respect to the operations of the partnerships it has sponsored and
             may be liable to limited partners for losses attributable to breach
             of fiduciary obligations. In certain partnerships, certain
             investors have participated as co-general partners in such
             partnerships. To make such investments more acceptable to potential
             investors (from a standpoint of risks to such investors), North
             Coast has agreed to indemnify these investor-general partners from
             any partnership liability which they may incur in excess of their
             contributions.

             The Company has entered into employment contracts with certain of
             its officers that provide for a minimum annual salary and
             incentives based on the Company's sales and profitability. The
             commitment, including minimum incentives, amounts to $330,000,
             $330,000 and $430,000, respectively, for the years ending March 31,
             1999, 1998 and 1997 plus CPI adjustments. In addition, each
             employment contract provides for: reimbursement of certain business
             expenses; life insurance of $1,000,000; disability benefits for a
             stated period of time as defined; and termination benefits of
             between one and three years' salary.

             Subsequent to March 31, 1999, Charles M. Lombardy, Jr., the Chief
             Executive Officer of the Company, was paid $370,000 in lieu of
             continuing his employment contract by signing a separation
             agreement with the Company. Additionally, Lombardy received a ten
             year warrant to purchase, at $5.00 per share, 60,000 shares of the
             Company's common stock. The Company, also subsequent to year-end,
             escrowed approximately $800,000 for the payment of dividend
             arrearages associated with the Series B Preferred stock and the
             purchase of the former Chief Executive Officer's common shares. The
             Company is obligated to purchase the 107,301 common shares for
             $470,000 if NUON does not exercise its option to purchase such
             shares. If NUON does exercise their option to purchase these
             shares, it will directly reduce the amount of common shares NUON
             would be required to purchase under the NUON Agreement (see Note
             6A).

NOTE 10.     INDUSTRY SEGMENTS AND MAJOR CUSTOMERS

             North Coast and its subsidiaries operate in a single industry
             segment, the acquisition, exploration and development of oil and
             gas properties. North Coast and its subsidiaries both originate and
             acquire prospects and drill, or cause to be drilled, such prospects
             through joint drilling arrangements with other independent oil
             companies or through limited partnerships sponsored by the Company.

             The Company's revenue is derived from oil and gas production and
             oil and gas related activities. Gas production revenues represented
             96%, 93% and 89% of total oil and gas production revenues for the
             years ended March 31, 1999, 1998 and 1997, respectively. In 1999
             (1998), the Company sold gas to major purchasers that accounted for
             52% (32%) and 13% (21%) of its gas production revenues. In 1997,
             the Company sold gas to major purchasers that accounted for 18%,
             18% and 12%, respectively, of its gas production revenues. A
             significant portion of trade accounts receivable at March 31, 1999
             and 1998 was attributable to these purchasers.

                                      F-25

<PAGE>   48

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 11.     RELATED PARTY TRANSACTIONS

             The Company believes that the terms of related party transactions
             are as favorable to the Company as could have been obtained from
             unaffiliated third parties.

             Accounts receivable from affiliates consist primarily of
             receivables from the partnerships managed by the Company and are
             for administrative fees charged to the partnerships and to
             reimburse the Company for amounts paid on behalf of the
             partnerships. Significantly all of the Company's revenues, other
             than oil and gas production revenue, are generated from or a result
             of the organization and management of oil and gas partnerships
             sponsored by the Company. During the year ended March 31, 1999, the
             Company acquired limited partnership interests in oil and gas
             drilling programs that it had sponsored at a cost of approximately
             $450,000.

             During fiscal 1999, a company owned by an employee of the Company
             repaired two compressors for $51,000 and the Company paid a $37,500
             finder's fee to an employee. During fiscal 1998, the Company
             purchased wells and a pipeline from a shareholder for $62,000,
             purchased 28 wells from an employee for $339,000 and paid a $75,000
             finder's fee to an employee.

NOTE 12.     ACCOUNTING STANDARDS

             In June 1997, SFAS 130, "Reporting Comprehensive Income," was
             issued. SFAS 130 established new standards for reporting
             comprehensive income and its components and is effective for fiscal
             years beginning after December 15, 1997. In June 1997, the
             Financial Accounting Standards Board issued SFAS 131, "Disclosure
             About Segments of an Enterprise and Related Information." SFAS 131
             changed the standards for reporting financial results by operating
             segments, related products and services, geographical areas and
             major customers. In February 1998, SFAS 132, "Employers'
             Disclosures About Pensions and Other Postretirement Benefits," was
             issued. SFAS 132 standardizes the disclosure requirements for
             pension and other postretirement benefit plans but does not change
             the measurement or recognition of those plans. SFAS 132 is
             effective for fiscal years beginning after December 15, 1997. In
             June 1998, SFAS 133, "Accounting for Derivative Instruments and
             Hedging Activities," was issued. SFAS 133 establishes accounting
             and reporting standards for derivative instruments and hedging
             activities. SFAS 133 is effective for fiscal years beginning after
             June 15, 1999. The effect of the adoption or anticipated adoption
             of the above standards had no, or is expected to have no, material
             effect on the Company's financial statements.

                                      F-26

<PAGE>   49


                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 13.     SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING
             ACTIVITIES (UNAUDITED)

             The following supplemental unaudited oil and gas information is
             required by Statement of Financial Accounting Standards (SFAS) No.
             69, "Disclosures About Oil and Gas Producing Activities."

             The tables on the following pages set forth pertinent data with
             respect to the Company's oil and gas properties, all of which are
             located within the United States.

                    CAPITALIZED COSTS RELATING TO OIL AND GAS
                             PRODUCING ACTIVITIES

<TABLE>
<CAPTION>
                                                                           March 31,
                                                          ------------------------------------------
                                                              1999           1998           1997
                                                              ----           ----           ----
              <S>                                        <C>            <C>            <C>
                 Proved oil and gas properties            $ 42,964,679   $ 25,754,748   $ 24,290,505

                 Accumulated depreciation, depletion,
                 amortization and impairment               (12,742,541)   (10,892,238)   (10,488,719)
                                                          ------------   ------------   ------------

                 Net capitalized costs                    $ 30,222,138   $ 14,862,510   $ 13,801,786
                                                          ============   ============   ============

</TABLE>



               COSTS INCURRED IN OIL AND GAS PRODUCING ACTIVITIES

<TABLE>
<CAPTION>
                                                           Year Ended March 31,
                                                --------------------------------------
                                                     1999          1998         1997
                                                     ----          ----         ----
<S>                                           <C>              <C>         <C>
                 Property acquisition costs     $ 13,687,040     $ 277,742   $ 124,384
                 Exploration costs                   110,295       194,503     121,809
                 Development costs                 4,125,422     2,149,440   1,477,312

</TABLE>

                                      F-27


<PAGE>   50

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13.     SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING
             ACTIVITIES (UNAUDITED) (CONTINUED)


             RESULTS OF OPERATIONS FOR OIL AND GAS PRODUCING ACTIVITIES

<TABLE>
<CAPTION>
                                                                                 March 31,
                                                                 -------------------------------------------
                                                                     1999           1998           1997
                                                                     ----           ----           ----
               <S>                                             <C>            <C>            <C>
                 Oil and gas production                          $ 7,233,763    $ 3,013,929    $ 3,137,556
                 (Loss) gain on sale of oil and gas properties        (2,008)         1,700        (26,031)
                 Production costs                                 (2,601,555)      (840,346)      (777,163)
                 Exploration expenses                               (110,295)      (194,503)      (121,809)
                 Depreciation, depletion, amortization,
                  impairment and other                            (1,863,012)      (627,636)      (695,877)
                 Abandonment of oil and gas properties                    --        (88,947)       (73,528)
                                                                 -----------    -----------    -----------
                                                                   2,656,893      1,264,197      1,443,148

                 Provision for income taxes                          561,056        278,123        347,460
                                                                 -----------    -----------    -----------
                 Results of operations for oil and gas
                  producing activities (excluding corporate
                  overhead and financing costs)                  $ 2,095,837    $   986,074    $ 1,095,688
                                                                 ===========    ===========    ===========

</TABLE>


             Provision for income taxes was computed using the statutory tax
             rates for the years ended March 31, 1999, 1998 and 1997 and
             reflects permanent differences, including the Partnership's results
             of operations for oil and gas producing activities that are
             reflected in the Company's consolidated income tax provision
             (credit) for the periods.

                                      F-28

<PAGE>   51

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13.     SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING
             ACTIVITIES (UNAUDITED) (CONTINUED)

               ESTIMATED QUANTITIES OF PROVED OIL AND GAS RESERVES

<TABLE>
<CAPTION>
                                                                     Oil           Gas
                                                                    (BBLS)        (MCF)
                                                                   -------     ----------

               <S>                                               <C>         <C>
                 Balance, March 31, 1996                           195,200     20,048,000

                  Extensions, discoveries and other additions           --      2,267,000
                  Production                                       (16,200)    (1,153,000)
                  Revision of previous estimates                   (58,800)    (3,121,000)
                  Sales of minerals in place                            --     (1,082,000)
                                                                   -------     ----------

                 Balance, March 31, 1997                           120,200     16,959,000

                  Extensions, discoveries and other additions        3,000      1,333,000
                  Production                                       (13,900)    (1,116,000)
                  Revision of previous estimates                    26,400      1,153,000
                  Sales of minerals in place                            --       (527,000)
                                                                   -------     ----------

                 Balance, March 31, 1998                           135,700     17,802,000

                  Extensions, discoveries and other additions      264,100     34,976,000
                  Production                                       (28,100)    (2,688,000)
                  Revision of previous estimates                    53,500      2,682,000
                  Sales of minerals in place                            --       (251,000)
                                                                   -------     ----------

                 Balance, March 31, 1999                           425,200     52,521,000
                                                                   =======     ==========

                 PROVED DEVELOPED RESERVES
                  March 31, 1996                                   151,800     16,303,000
                  March 31, 1997                                   120,200     14,472,000
                  March 31, 1998                                   126,700     15,087,000
                  March 31, 1999                                   322,700     41,214,000
</TABLE>

                                      F-29

<PAGE>   52

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13.     SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING
             ACTIVITIES (UNAUDITED) (CONTINUED)

            STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS

<TABLE>
<CAPTION>

                                                                                          March 31,
                                                                    ----------------------------------------------------
                                                                         1999                1998               1997
                                                                         ----                ----               ----
               <S>                                                <C>                <C>                <C>
                 Future cash inflows from sales of oil
                  and gas                                           $ 142,552,000       $ 46,349,000       $ 44,379,000
                 Future production and development
                  costs                                               (58,702,000)       (15,175,000)       (15,442,000)
                 Future income tax expense                            (24,774,000)        (8,959,000)        (8,145,000)
                                                                    -------------       ------------       ------------

                 Future net cash flows                                 59,076,000         22,215,000         20,792,000
                 Effect of discounting future net cash
                  flows at 10% per annum                              (33,650,000)       (11,557,000)       (10,447,000)
                                                                    -------------       ------------       ------------
                 Standardized measure of discounted
                  future net cash flows                             $  25,426,000       $ 10,658,000       $ 10,345,000
                                                                    =============       ============       ============

</TABLE>



                     CHANGES IN THE STANDARDIZED MEASURE OF
                        DISCOUNTED FUTURE NET CASH FLOWS

<TABLE>
<CAPTION>
                                                                                    Year Ended March 31,
                                                                     -------------------------------------------------
                                                                         1999               1998              1997
                                                                         ----               ----              ----

              <S>                                                 <C>                <C>               <C>
                 Balance, beginning of year                          $ 10,658,000       $ 10,345,000      $ 13,262,000
                 Extensions, discoveries and other
                  additions                                            24,948,000            728,000         1,301,000
                 Sales of oil and gas, net of production
                  costs                                                (4,632,000)        (2,173,000)       (2,355,000)
                 Net changes in prices and production
                 costs                                                 (3,058,000)            26,000        (3,567,000)
                 Revisions of previous quantity
                  estimates                                             2,272,000          1,122,000        (1,477,000)
                 Sales of minerals in place                              (107,000)          (259,000)         (859,000)
                 Net change in income taxes                            (6,367,000)          (246,000)        2,257,000
                 Accretion of discount                                  1,066,000          1,035,000         1,326,000
                 Other                                                    646,000             80,000           457,000
                                                                     ------------       ------------      ------------
                 Balance, end of year                                $ 25,426,000       $ 10,658,000      $ 10,345,000
                                                                     ============       ============      ============
</TABLE>

                                      F-30

<PAGE>   53

                    NORTH COAST ENERGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13.     SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING
             ACTIVITIES (UNAUDITED) (CONTINUED)

             Under the guidelines of SFAS No. 69, estimated future cash flows
             are determined based on year-end prices for crude oil, current
             allowable prices applicable to expected natural gas production,
             estimated production of proved crude oil and natural gas reserves,
             estimated future production and development costs of reserves based
             on current economic conditions, and the estimated future income tax
             expenses, based on year-end statutory tax rates (with consideration
             of true tax rates already legislated) to be incurred on pretax net
             cash flows less the tax basis of the properties involved. Such cash
             flows are then discounted using a 10% rate.

             The estimated quantities of proved oil and gas reserves and
             standardized measure of discounted future net cash flows include
             reserves from proved undeveloped acreage. The proved undeveloped
             acreage includes only the acreage directly offsetting locations to
             wells that have indicated commercial production in the objective
             formation and which North Coast expects to drill in the near future
             using prices, operating costs and development costs expected in the
             area of interest. The quantities for fiscal 1999, 1998 and 1997
             were reviewed by an independent petroleum engineering firm.

             The methodology and assumptions used in calculating the
             standardized measure are those required by SFAS No. 69. It is not
             intended to be representative of the fair market value of the
             Company's proved reserves. The valuation of revenues and costs does
             not necessarily reflect the amounts to be received or expended by
             the Company. In addition to the valuations used, numerous other
             factors are considered in evaluating known and prospective oil and
             gas reserves.

                                      F-31
<PAGE>   54




                                   SIGNATURES

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

                            NORTH COAST ENERGY, INC.
<TABLE>
<CAPTION>

<S>                            <C>                                             <C>
By /s/ Saul Siegel                Chief Executive Officer                        June 21, 1999
------------------
Saul Siegel
</TABLE>

    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.

<TABLE>
<CAPTION>

Signature                                       Title                                 Date
---------                                       -----                                 ----
<S>                            <C>                                             <C>
/s/ Saul Siegel                   Chief Executive Officer and Director           June 21, 1999
-------------------------         (principal executive officer)
Saul Siegel

/s/ Garry Regan                   Chairman of the Board;                         June 21, 1999
-------------------------         President and Director
Garry Regan

/s/ Timothy Wagers                Treasurer and Chief Financial Officer          June 21, 1999
-------------------------         (principal accounting and financial officer)
Timothy Wagers

/s/ Leo J.M.J. Blomen             Director                                       June 24, 1999
-------------------------
Leo J.M.J. Blomen

                                  Director                                       June   , 1999
-------------------------
Jos J.M. Smits

/s/ Ralph L. Bradley              Director                                       June 24, 1999
-------------------------
Ralph L. Bradley

-------------------------         Director                                       June __, 1999
John H. Pinkerton

/s/ C. Rand Michaels              Director                                       June 24, 1999
-------------------------
C. Rand Michaels

/s/ Dominic A. Visconsi           Director                                       June 21, 1999
-------------------------
Dominic A. Visconsi

/s/ Carel Kok                     Director                                       June 24, 1999
-------------------------
Carel Kok

/s/S.F.E. (Bas) Rosenbaum         Director                                       June 24, 1999
-------------------------
S.F.E. (Bas) Rosenbaum


</TABLE>

                                       21

<PAGE>   55

                                  Exhibit Index
                                  -------------

<TABLE>
<CAPTION>

Exhibit                                                                                               Sequential
Number                     Description of Documents                                                      Page
------                     ------------------------                                                      ----


<S>           <C>                                                                                     <C>
  3.1         Certificate of Incorporation of the Registrant dated August 30, 1988.                       (B)

  3.2         Certificate of Stock Designation of the Registrant filed September 12, 1988.                (B)

  3.3         Certificate of Stock Designation of the Registrant filed September 14, 1989.                (B)

  3.4         Certificate of Correction filed March 22, 1991.                                             (C)

  3.5         Certificate of Amendment to Certificate of Incorporation filed November 4, 1992.            (A)

  3.6         Certificate of Stock Designation filed December 29, 1992.                                   (D)

  3.7         Certificate of Amendment to Certificate of Incorporation filed August 29, 1994.             (G)

  3.8         Certificate of Amendment of Certificate of Incorporation filed December 16, 1998.           (J)

 10.1         1988 Stock Option Plan.                                                                     (B)

 10.2         Form of Profit Sharing Plan.                                                                (B)

 10.3         Form of Indemnity Agreement between the Registrant and each of its Directors and            (B)
              executive officers.

 10.4         North Coast Energy, Inc. Key Employees Stock Bonus Plan.                                    (B)

 10.5         Stock Option Agreement dated as of May 17, 1991 between Registrant and Timothy              (C)
              Wagers.

 10.6         Stock Option Agreement dated as of May 17, 1991 between the Registrant and                  (C)
              Thomas A. Hill.

 10.7         Option Agreement dated February 22, 1994 by and between Registrant and                      (E)
              Charles M. Lombardy, Jr.

 10.8         Option Agreement dated February 22, 1994 by and between Registrant and Garry Regan.         (E)

 10.9         Warrant to purchase 200,000 shares of Common Stock of the Company.                          (G)

 10.10        Warrant to purchase 300,000 shares of Common Stock of the Company.                          (G)

 10.11        Restated Employment Agreement dated May 3, 1995 by and between Registrant and               (H)
              Charles M. Lombardy, Jr.

 10.12        Restated Employment Agreement dated May 3, 1995 by and between Registrant and               (H)
              Garry Regan.

</TABLE>

                                       22

<PAGE>   56

<TABLE>
<CAPTION>

<S>          <C>                                                                                           <C>
 10.13        Open End Mortgage and Promissory Note by and between ING Capital and                          -
              the Company dated February 9, 1998.
</TABLE>

<TABLE>
<CAPTION>

Exhibit                                                                                               Sequential
Number                    Description of Documents                                                      Page
-----                     ------------------------                                                      ----

<S>          <C>                                                                                        <C>
10.14         Purchase and Sale Agreement dated April 8, 1998 between Kelt Ohio, Inc., and                (I)
              North Coast Energy, Inc.

10.15         Ratification and Amendment to Purchase and Sale Agreement dated May 12, 1998                (I)
              between Kelt Ohio, Inc., and North Coast Energy, Inc.

10.16         First Amendment to Credit Agreement and Promissory Note dated May 29,                       (I)
              1998 between ING (U.S.) Capital Corporation and North Coast Energy, Inc.

10.17         Second Amendment to Credit Agreement and Promissory Note dated September                     -
              2, 1998 between ING (U.S.) Capital Corporation and North Coast Energy, Inc.

10.18         Warrants to purchase 300,000 shares (pre-split) of Common Stock of the Company.              -

10.19         Separation Agreement dated April 30, 1999 by and among North Coast Energy, Inc.,
              NUON International, bv, Charles M. Lombardy, Jr., and Betty M. Lombardy.                     -

10.20         Third Amendment to Credit Agreement and Promissory Note dated June 23, 1999                  -
              between ING (U.S.) Capital Corporation and North Coast Energy, Inc.

21.1          List of Subsidiaries.                                                                       (E)

23.1          Consent of Hausser + Taylor LLP.                                                             _

23.2          Consent of Arthur Andersen LLP.                                                              _

27.1          Financial Data Schedule                                                                      *

</TABLE>

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


  (A)          Incorporated herein by reference to the appropriate exhibit to
               the Registrant's Registration Statement on Form S-2 (Reg. No.
               33-54288).

  (B)          Incorporated herein by reference to the appropriate exhibits to
               the Company's Registration Statement on Form S-1 (File No.
               33-24656).

  (C)          Incorporated herein by reference to the appropriate exhibit to
               the Registrant's Annual Report on Form 10-K for the fiscal year
               ended March 31, 1991.

  (D)          Incorporated herein by reference to the appropriate exhibit to
               the Registrant's Annual Report on Form 10-K for the fiscal year
               ended March 31, 1993.

  (E)          Incorporated herein by reference to the appropriate exhibit to
               the Registrant's Annual Report on Form 10-K for the fiscal year
               ended March 31, 1994.

  (F)          Incorporated herein by reference to the appropriate exhibit to
               the Registrant's Quarterly Report on form 10-Q for the fiscal
               quarter ended September 30, 1994.

                                       24

<PAGE>   57

  (G)          Incorporated herein by reference to the appropriate exhibit to
               the Registrant's Annual Report on Form 10-K for the fiscal year
               ended March 31, 1995.

  (H)          Incorporated herein by reference to the appropriate exhibit to
               the Registrant's Annual Report on Form 10-K for the fiscal year
               ended March 31, 1996.

  (I)          Incorporated herein by reference to the appropriate exhibit to
               the Registrant's Report on Form 8-K dated June 12, 1998.

  (J)          Incorporated herein by reference to the appropriate exhibits to
               the Company's Registration Statement on Form S-1 (File No.
               33-71855).


*Exhibit 27.1 furnished for Securities and Exchange Commission purposes only.

                                       24