<PAGE>   1
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                  FORM 10-QSB-A

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 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: 0-12185

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

                            DAUGHERTY RESOURCES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           PROVINCE OF BRITISH COLUMBIA                         NOT APPLICABLE
 (State or other jurisdiction of incorporation or              (I.R.S. EMPLOYER
                   organization)                             IDENTIFICATION NO.)

          120 PROSPEROUS PLACE, SUITE 201
                LEXINGTON, KENTUCKY                               40509-1844
     (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                     (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (606) 263-3948

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

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

         THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF SEPTEMBER 30, 1999, WAS 2,329,352.

         Transitional Small Business Disclosure Format (check one):
Yes [ ]No  [X] .


--------------------------------------------------------------------------------
================================================================================


<PAGE>   2




                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

         The information required by this Item 1 appears on pages 8 through 11
of this Report, and is incorporated herein by reference.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

         The following is a discussion of the Company's financial condition and
results of operations. This discussion should be read in conjunction with the
Financial Statements of the Company described in Item 1 of this Report.
Statements contained in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations," which are not historical facts may be
forward looking statements. Reliance upon such information involves risks and
uncertainties, including those created by general market conditions, competition
and the possibility that events may occur which could limit the ability of the
Company to maintain or improve its operating results or execute its primary
growth strategy. Although management believes that the assumptions underlying
the forward-looking statements are reasonable, any of the assumptions could be
inaccurate, and there can be no assurances that the forward-looking statements
included herein will prove to be accurate. The inclusion of such information
should not be regarded as a representation by management or any other person
that the objectives and plans of the Company will be achieved. Moreover, such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Readers
are cautioned not to place undue reliance on these forward-looking statements
that speak only as of the date hereof.

         Daugherty Resources, Inc., formerly Alaska Apollo Resources Inc., (the
"Company" or the "Registrant") is a diversified natural resources company with
assets in oil and gas, wood products manufacturing, and gold prospects.
Originally formed in 1979 to develop gold properties, the Company in the fourth
quarter of 1993, acquired its wholly owned subsidiary, Daugherty Petroleum, Inc.

         Since acquiring Daugherty Petroleum, Inc., in the fourth quarter of
1993 the Company has increased its reserves through the acquisition of oil and
gas properties in the Appalachian and Illinois Basins, and the drilling of wells
through joint venture and turnkey drilling programs, where Daugherty Petroleum,
Inc. is the primary decision maker. The Company continues to aggressively seek
acquisitions and drilling programs.

         At the Annual General Meeting held on June 30, 1999, shareholders
approved special resolutions, effective June 30, 1999, authorizing the
following:

                  1. Increasing the Company's authorized common shares from
10,000,000 common shares without par value to 100,000,000 common shares without
par value;

                  2. Altering the Memorandum of the Company so that the
authorized capital will be increased by creating 5,000,000 preferred shares
without par value;

                  3. Attaching special rights and restrictions to the common
shares and preferred shares;

         Effective June 29, 1998, the Company's stock was traded on The NASDAQ
Small Cap Market under the name Daugherty Resources, Inc. and the trading symbol
"NGASF". Effective March 15, 1999, the Company's symbol was changed to "NGAS".

         The creation of the preferred shares by the Company allowed the
acquisition of interests in certain oil and gas wells in Kentucky, Louisiana and
Tennessee from Environmental Energy, Inc., and its affiliated limited
partnerships. This acquisition has closed in the fourth quarter of 1999.

         The acquisition of Red River Hardwoods, Inc. in November of 1996
diversified the Company by adding lumber sales and manufacturing activities.
Since its acquisition, Red River's activities have been reflected on the


                                       2
<PAGE>   3

Company's Consolidated Financial Statements. However, on June 30, 1999, a Letter
of Intent was signed to sell Red River to H & S Lumber, Inc., Clay City, KY. A
definitive agreement was reached during August of 1999, that provided for H & S
to pay Daugherty Petroleum $537,000 and assume all of Red River's liabilities
with the exception of debt owed by Red River to Daugherty Petroleum. The sale
closed during December 1999 and has an effective date of June 30, 1999. The
agreement further provided for Red River's manufacturing operations to be
conducted by H & S pending the closing of the sale of the stock in the 80% owned
subsidiary. In the interim and pending the closing, the Company retained
ownership of the assets and responsibility for the secured debt, and H & S was
responsible for the operations of the facility and income and expenses related
thereto, plus debt service on secured debt. The sale of Red River allows the
Company's management to concentrate on expanding its core oil and gas
operations. These financial statements have been restated to reflect this
divestiture.

         The Company continues its tradition of realizing revenues from its oil
and gas operations. For the nine months ending September 30, 1999, the Company
drilled six natural gas wells, completed five natural gas wells and extended its
gathering system by 5500 feet. By comparison, for the same period of 1998, the
Company drilled ten natural gas wells, completed nine natural gas wells, and
extended its gas system by 10,500 feet. Drilling operations for the first nine
months of 1999 were primarily related to a joint venture on the Company's
farmout acreage acquired from Equitable Resources Energy Corporation.

LIQUIDITY

         The Company continues to acquire natural gas and oil properties.
Daugherty Petroleum, Inc. has provided the Company with a diversified asset base
that includes natural resources other than its original gold and silver mining
properties. During the first nine months of 1999, management continued to invest
in areas it deemed crucial in developing an infrastructure suitable to support
future growth. These areas included ongoing expenses in management, professional
and operational personnel, and other expenses deemed necessary to position the
Company for future acquisitions and financing.

         Historically, the Company's revenues have been from its interests in
the producing natural gas and oil wells it operates and in which it owns
interests, from its activities as "turnkey driller" and operator for various
drilling programs in its geographic area, and sales of wood products. During the
first nine months of 1999, approximately 64% of the Company's revenues were
derived from joint venture drilling. Natural gas and oil operations and revenues
accounted for 36% of the revenues.

         The Company plans to drill 5 wells during the last quarter of 1999 and
earn interests ranging from 15% to 50% interest in each well it drills.

         Working capital for the period ending September 30, 1999, was a
negative $1,826,603 compared to the same period in 1998, when working capital
was a negative $2,634,237.

         During the first nine months of 1999, and compared to the same period
in 1998, the changes in the composition of the Company's current assets were:
cash balances increased $309,393 from $337,142 to $646,535 accounts receivable
balances decreased $84,843 from $225,641 to $140,798. Other current assets such
as prepaids and notes receivable increased $530,000 from $0 to $530,000 due to
the sale of Red River Hardwoods, Inc. Overall, current assets increased by
$754,550 to $1,317,333.

         Current liabilities for the period ended September 30, 1999 were
$3,143,936 compared to $3,197,020 for the period ended September 30, 1998.

         While management believes that its cash flow resulting in operating
revenues will contribute significantly to its short-term financial commitments
and operating costs, it has continued to refine its long range strategy in 1999
to meet the Company's financial obligations. This strategy involves:


         -        ACQUISITION OF REVENUE-PRODUCING PROPERTIES: In November 1997,
                  Daugherty Petroleum signed a Letter of Intent to acquire
                  producing oil and gas properties in Kentucky, Louisiana and
                  Tennessee. In



                                        3

<PAGE>   4

                  October 1999 the company finalized this acquisition and
                  another acquisition in which interests in 24 natural gas wells
                  in Knox County, Kentucky were acquired. Management believes
                  that the addition of these properties will favorably impact
                  the Company's cash flow. Daugherty Petroleum is also
                  continually reviewing existing properties in its area of
                  interest that are for sale.

         -        INSTALLATION OF ADDITIONAL NATURAL GAS GATHERING SYSTEM: The
                  Company plans to expand its natural gas pipeline by 16,500
                  feet in 1999. The extension will allow for substantially more
                  natural gas to be transported to market from wells drilled in
                  1998 and 1999.

         -        CONVERTIBLE NOTE PRIVATE PLACEMENT: During the second and
                  third quarters of 1999, the Company sponsored a Convertible
                  Note Private Placement. The notes carry a five year term and
                  pay 10% interest. The notes are convertible to common stock at
                  125% of the lowest average bid ten days prior to the closing,
                  which took place on August 20, 1999. As of September 30, 1999,
                  $850,000 had been sold.

         -        SALE OF RED RIVER HARDWOODS, INC.: The Company signed a Letter
                  of Intent to sell its 80% stake in Red River. The sale closed
                  during December 1999 and has an effective date of June 30,
                  1999. The sale of Red River will allow the Company's
                  management to concentrate on expanding its core oil and gas
                  operations. These financial statements have been restated to
                  reflect this divestiture.

         -        INCREASE OF JOINT VENTURE DRILLING: Because of lower energy
                  prices the Company's joint venture efforts were hampered the
                  first nine months of 1999. However, higher oil and gas prices
                  have sparked an interest in joint venture interests in natural
                  gas drilling. During the third quarter the company developed a
                  drilling program sponsored by Daugherty Petroleum that is
                  being sold during the forth quarter of 1999.

RESULTS OF OPERATIONS

         For the nine-month period ending September 30, 1999, the Company's
gross revenues decreased $656,878 to $973,149 from $1,630,027 for the same
period in 1998. The majority of the decrease was attributable to decreased
turnkey drilling operations. The Company experienced a net loss from continuous
operations of $747,445 in this period compared to a net loss of $745,464 in the
same period of 1998. The company experienced a net loss on discontinued
operations of $520,267 for the nine months ended September 30, 1999 compared to
426,862 for the same period in 1998. Management believes that the sale of Red
River Hardwoods will result in losses being substantially less in future
periods.

         The Company's gross revenues were derived from drilling contract
revenues of $618,495 (64%), from natural gas and oil operations and production
revenues of $354,654 (36%).

         The decrease in gross revenues of $656,878 was primarily attributable
to the decreased in drilling activity during the period. Contract revenues from
drilling activities decreased by $584,807 from $1,203,302 in the first nine
months of 1998 to $618,495 in the first nine months of 1999.

         During the first nine months of 1999, total direct costs decreased by
$576,015 to $741,519 compared to $1,317,534 in the first nine months of 1998.
These direct costs included drilling and related costs for six natural gas
wells.



                                       4
<PAGE>   5



YEAR 2000 INFORMATION

         The Company's field and administrative operations have been reviewed
for Year 2000 Compliance. Normal upgrades will result in essential operations
being Year 2000 compliant. Some remaining operations, such as non-essential
personal computers and non-financial software products, can be easily upgraded
at nominal cost and inconvenience. The Company has contacted its gas purchasers
and third party software and service vendors concerning Year 2000 compliance.
Those third parties not already compliant have indicated that they are working
to be compliant. The Company will be preparing contingency plans regarding those
third parties that do not currently meet Year 2000 compliance standards. Costs
incurred to date, future costs, implementation of contingency plans and
completion of modifications or replacements have not been and are not expected
to be material or pose a material risk.


                                     PART II
                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         None.

ITEM 5.  OTHER INFORMATION.

         Not Applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)   List of Documents Filed with this Report.
               -----------------------------------------
                                                                           PAGE
                                                                           ----

         (1)   Balance Sheet for the Period Ended September 30, 1999 ...     i
               Income Statement for the Period Ended September 30,
               1999 ....................................................ii-iii
               Segmented Information....................................    iv
               Computation of Per Share Earnings........................     v

         All schedules have been omitted since the information required to be
submitted has been included in the financial statements or notes or has been
omitted as not applicable or not required.

         (2)      Exhibits--

                  The exhibits indicated by an asterisk (*) are incorporated by
                  reference.

         EXHIBIT
         NUMBER    DESCRIPTION OF EXHIBIT
         ------    ----------------------

            3(a)*   Memorandum and Articles for Catalina Energy & Resources
                    Ltd., a British Columbia corporation, dated January 31,
                    1979, filed as an exhibit to Form 10 Registration Statement
                    filed May 25, 1984. File No. 0-12185.

            3(b)*   Certificate for Catalina Energy & Resources Ltd., a British
                    Columbia corporation, dated November 27, 1981, changing the
                    name of Catalina Energy & Resources Ltd. to Alaska Apollo
                    Gold Mines Ltd., and further changing the authorized capital
                    of the Company from 5,000,000 shares of common stock,
                    without par value per share, to 20,000,000 shares of common
                    stock, without par value per share, filed as an exhibit to
                    Form 10 Registration Statement filed May 25, 1984.
                    File No. 0-12185.



                                       5
<PAGE>   6

            3(c)*   Certificate of Change of Name for Alaska Apollo Gold Mines
                    Ltd., a British Columbia corporation, dated October 14,
                    1992, changing the name of Alaska Apollo Gold Mines Ltd. to
                    Alaska Apollo Resources Inc., and further changing the
                    authorized capital of the Company from 20,000,000 shares of
                    common stock, without par value per share, to 6,000,000
                    shares of common stock, without par value per share.

           3(d)*    Altered Memorandum of Alaska Apollo Resources Inc., a
                    British Columbia corporation, dated September 9, 1994,
                    changing the authorized capital of the Company from
                    6,000,000 shares of common stock, without par value per
                    share, to 20,000,000 shares of common stock, without par
                    value per share.

          3(e)*     Certificate of Change of Name for Alaska Apollo Resources
                    Inc., a British Columbia corporation, dated June 24, 1998,
                    changing the name of Alaska Apollo Resources Inc. to
                    Daugherty Resources, Inc. and further changing the
                    authorized capital of the Registrant from 20,000,000 shares
                    of common stock, without par value per share, to 50,000,000
                    shares of common stock, without par value, and authorizing
                    the creation of 6,000,000 shares of preferred stock, without
                    par value per share. (File No.0-12185).

          3(f)*     Altered Memorandum of Daugherty Resources, Inc., a British
                    Columbia corporation, dated June 24, 1998, changing the
                    authorized common stock of the Registrant from 50,000,000
                    shares of common stock, without par value per share, to
                    10,000,000 shares of common stock, without par value.
                    (File No.0-12185).

          3(g)*     Altered Memorandum of Daugherty Resources, Inc., a British
                    Columbia corporation, dated June 25, 1998, changing the
                    authorized preferred stock of the Registrant from 6,000,000
                    shares of preferred stock, without par value per share, to
                    1,200,000 shares of preferred stock, without par value.
                    Filed as an exhibit to Form 8-K, by the Company for
                    reporting an event on June 29, 1998. (File No.0-12185).

          3(h)*     Special Resolution of Daugherty Resources, Inc., a British
                    Columbia corporation, dated June 30, 1999, changing the
                    authorized capital of the Registration from 10,000,000
                    shares of common stock, without par value per share, to
                    100,000,000 shares of common stock, without par value per
                    share, and from 1,200,000 shares of preferred stock, without
                    par value per share, to 5,000,000 shares of preferred stock,
                    without par value per share. Altered Memorandum of Daugherty
                    Resources, Inc., dated June 30, 1999, changing the
                    authorized capital of the Company to 105,000,000 shares
                    divided into 5,000,000 shares of preferred stock, without
                    par value and 100,000,000 common shares without par value.
                    Special Resolution of Daugherty Resources, Inc., a British
                    Columbia corporation, dated June 30, 1999, altering Article
                    23.1(b) of the Company Articles by substituting a new
                    Article 23.1(b) that sets forth the conditions and terms
                    upon which the preferred shares can be converted to common
                    stock. Filed as an exhibit to Form 8-K, for the Company for
                    reporting an event on October 25, 1999. (File No.0-12185)

          4*        See Exhibit No. 3(a), (b). (c), (d), (e), (f), and (g).

          10(a)*    Alaska Apollo Resources Inc. 1997 Stock Option Plan,  filed
                    as Exhibit 10(a) to Form 10-K for the Company for the fiscal
                    year ended December 31, 1996. (File No. 0-12185).

          10(b)*    Incentive Stock Option Agreement by and between Alaska
                    Apollo Resources Inc. and William S. Daugherty dated March
                    7, 1997, filed as Exhibit 10(b) to Form 10-K for the Company
                    for the fiscal year ended December 31, 1996. (File No.
                    0-12185).

           10(c)*   Warrant Agreement by and between Alaska Apollo Resources
                    Inc. and Jayhead Investments Limited dated March 7, 1997,
                    filed as Exhibit 10(c) to Form 10-K for the Company for the
                    fiscal year ended December 31, 1996. (File No. 0-12185).




                                       6
<PAGE>   7

          10(d)*    Warrant Agreement by and between Alaska Apollo Resources
                    Inc. and Trio Growth Trust dated March 7, 1997, filed as
                    Exhibit 10(d) to Form 10-K for the Company for the fiscal
                    year ended December 31, 1996. (File No. 0-12185).

          10(e)*    Warrant Agreement by and between Alaska Apollo Resources
                    Inc. and Exergon Capital S.A. dated March 7, 1997, filed as
                    Exhibit 10(e) to Form 10-K for the Company.

          11        Computation of Per Share Earnings.

          24        Powers of Attorney.

          27        Financial Data Schedule.

          (b)*      Reports on Form 8-K.
                    ---------------------

                    Agreement of Purchase and Sale by and between Environmental
                    Energy Partners I, Ltd.,Environmental Energy Partners II,
                    Ltd., Environmental Operating Partners, Ltd., Environmental
                    Holding, LLC, Environmental Processing Partners, Ltd.,
                    Environmental Energy, Inc., and Environmental
                    Operating,Inc., as Sellers and Daugherty Petroleum, Inc., as
                    Buyer, and Daugherty  Resources, Inc. as Accommodating
                    Party, dated as of January 26, 1999, filed as an Exhibit to
                    Form 8-K by the Company for reporting an event on May 25,
                    1999 (File No. 0-12185).

                    Agreement for the Purchase and Sale by and between H&S
                    Lumber, Inc., Buyer, and Daugherty Petroleum,Inc., Seller,
                    for the sale of Red River Hardwoods, Inc., an 80% subsidiary
                    of Daugherty Petroleum, Inc., which was effective
                    June 30,1999,and closed December 1, 1999, filed as Exhibit
                    10.1 to Form 8-K by the Company for reporting an event on
                    December 9,1999 (File No. 0-12185).

                    See, Item 3(h) above.

          (c)       Financial Statement Schedules.
                    ------------------------------

                    No schedules are required, as all information required has
                    been presented in the audited financial statements.




                                       7
<PAGE>   8



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf of the
undersigned hereunto duly authorized.

                                           DAUGHERTY RESOURCES, INC.


                                           By:  /s/ William S. Daugherty
                                              ----------------------------------
                                                 William S. Daugherty, President


Dated:  January 12, 2000

         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/ William S. Daugherty      Chairman of the Board, President,
---------------------------       Director of the Registrant                January 12, 2000
WILLIAM S. DAUGHERTY



James K. Klyman*                  Director of the Registrant                January 12, 2000
---------------------------
JAMES K. KLYMAN


                                                                            January 12, 2000
Charles L. Cotterell*             Director of the Registrant
---------------------------
CHARLES L. COTTERELL







*By /s/William S. Daugherty
--------------------------------
        William S. Daugherty,
        Attorney-in-Fact



</TABLE>





                                       8



<PAGE>   9
DAUGHERTY RESOURCES. INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(United States Dollars)
Unaudited
<TABLE>
<CAPTION>


                                                                                         9/30/98                 9/30/99
                                                                                   ------------------        ---------------
                                                                ASSETS
                                                                ------
<S>                                                                                  <C>                      <C>
CURRENT ASSETS
  Cash                                                                               $    337,142             $    646,535
  Accounts receivable                                                                     225,641                  140,798
  Inventory                                                                                  --                       --
  Other current assets                                                                       --                    530,000
                                                                                     ------------             ------------

              TOTAL CURRENT ASSETS                                                        562,783                1,317,333

OIL & GAS PROPERTIES (NET)                                                              4,388,332                4,582,621

MINING PROPERTY (NET)                                                                  11,227,733               11,232,229

PROPERTY  & EQUIPMENT (NET)                                                               123,395                   93,127

OTHER ASSETS
  Related party loans                                                                     717,493                   95,706
  Bonds & deposits                                                                         41,000                   41,000
  Other assets                                                                            182,437                  317,450
  Goodwill, net of amortization of $1,073,736                                             894,784                  715,828
                                                                                     ------------             ------------
                                                                                        1,835,714                1,169,984
                                                                                     ------------             ------------

              TOTAL ASSETS                                                           $ 18,137,957             $ 18,395,294
                                                                                     ============             ============


                                                 LIABILITIES & STOCKHOLDER'S EQUITY
                                                 ----------------------------------
CURRENT LIABILITIES
  Short-term loans & notes                                                           $      7,000             $  1,029,165
  Current portion of LT debt                                                            1,206,862                  138,656
  Accounts payable                                                                        490,537                  424,702
  Accrued liabilities                                                                     469,967                  869,153
  Drilling prepayments                                                                  1,022,654                  682,260
                                                                                     ------------             ------------

              TOTAL CURRENT LIABILITIES                                                 3,197,020                3,143,936

LONG-TERM LIABILITIES                                                                   1,081,110                2,450,938

PAYABLE TO RELATED PARTIES                                                                 34,409                   17,571
                                                                                     ------------             ------------
                                                                                        4,312,539                5,612,445

MINORITY INTEREST                                                                            --                       --

STOCKHOLDER'S EQUITY
  Common stock                                                                         21,209,821               21,352,915
  Common stock subscribed                                                                    --                       --
  Additional paid in capital                                                                 --                       --
  Retained earnings (deficit)                                                          (6,638,939)              (7,541,258)
  Current income (loss)                                                                  (745,464)              (1,028,808)
                                                                                     ------------             ------------
                                                                                       13,825,418               12,782,849
                                                                                     ------------             ------------

              TOTAL LIABILITIES &
                STOCKHOLDER'S EQUITY                                                 $ 18,137,957             $ 18,395,294
                                                                                     ============             ============


Unaudited-Internally prepared by Company management

</TABLE>




                                        i
<PAGE>   10


DAUGHERTY RESOURCES, INC.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(United States Dollars)
Unaudited
<TABLE>
<CAPTION>
                                                      For the nine month period ended

                                                                     9/30/98                     9/30/99
                                                      ------------------------------    ------------------------------

<S>                                                   <C>                    <C>        <C>                   <C>
GROSS REVENUE                                         $ 1,630,027            100.00%    $   973,149           100.00%

DIRECT EXPENSES                                         1,317,534             80.83%        741,519            76.20%
                                                      -----------           -------     -----------         --------

              GROSS PROFIT                                312,493             19.17%        231,630            23.80%

GENERAL & ADMINISTRATIVE EXPENSES
  Salaries & wages                                        228,361             14.01%        242,341            24.90%
  Accounting & audit                                       67,349              4.13%         51,969             5.34%
  Advertising & promotion                                     512              0.03%           --               0.00%
  Amortization                                            134,217              8.23%        134,217            13.79%
  Bad debts                                                  --                0.00%           --               0.00%
  Depreciation                                             48,300              2.96%         30,600             3.14%
  General consulting                                      112,580              6.91%         34,380             3.53%
  Insurance                                                27,270              1.67%         24,706             2.54%
  Legal                                                   101,561              6.23%         96,263             9.89%
  Office & general                                        108,053              6.63%        110,542            11.36%
  Payroll & property tax                                   19,243              1.18%         14,590             1.50%
  Rent                                                     35,391              2.17%         42,163             4.33%
  Repairs & maintenance                                     6,201              0.38%          6,326             0.65%
  Shareholder & investor information                       51,977              3.19%         14,342             1.47%
  Travel & entertainment                                   39,883              2.45%         44,218             4.54%
                                                      -----------           -------     -----------         --------

              TOTAL G & A EXPENSES                        980,898             60.18%        846,657            87.00%

OTHER INCOME (EXPENSE)
  Interest & dividend income                               41,058              2.52%         35,586             3.66%
  Miscellaneous                                              --                0.00%           --               0.00%
  Gain (loss) on sale of equipment                           --                0.00%           --               0.00%
  Interest expense                                       (118,117)            -7.25%       (168,004)          -17.26%
                                                      -----------           -------     -----------         --------

INCOME BEFORE INCOME TAX & OTHER                         (745,464)           -45.73%       (747,445)         -76.81%

  Income tax expense (benefit)                               --                0.00%           --              0.00%

DISCONTINUED OPERATIONS
  Income (loss) from discontinued operations             (426,862)           -26.19%       (238,904)         -24.55%
   Gain (loss) on disposal                                   --                0.00%       (281,363)         -28.91%
                                                      -----------           -------     -----------         --------

              NET INCOME (LOSS)                       $(1,172,326)           -71.92%    $(1,267,712)        -101.36%
                                                      ===========           =======     ===========         ========


DEFICIT, beginning of period                           (6,638,939)                      $(7,541,259)
DEFICIT, end of period                                 (7,384,403)                      $(8,570,067)


Shares outstanding                                      2,183,783                         2,329,352

EARNINGS PER SHARE                                         ($0.54)                           ($0.54)

</TABLE>


Unaudited-Internally prepared by Company management






                                      ii
<PAGE>   11


DAUGHERTY RESOURCES, INC.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(United States Dollars)
Unaudited
<TABLE>
<CAPTION>

                                                                            For the nine month period ended

                                                                                 9/30/98               9/30/99
                                                                            ------------------     ----------------

<S>                                                                            <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                            $  (745,464)           $(1,028,808)
  Adjustments to reconcile net income (loss) to net cash
  cash provided by operating activities:
    Depreciation, depletion, & amortization                                        302,355                308,817
    Minority interest                                                                 --
    Changes in current assets & liabilities
      (Increase) decrease in:
        Accounts receivable                                                        (31,764)                (1,311)
        Inventory                                                                     --                     --
        Other current assets                                                        51,935               (487,795)
      Increase (decrease) in:
        Short-term loans & notes                                                   (37,500)               887,336
        Accounts payable                                                          (347,762)              (145,120)
        Accrued liabilities                                                        176,171                108,878
        Drilling prepayments                                                      (380,653)              (243,250)
                                                                               -----------            -----------
              Net cash provided by (used in) operating activities               (1,012,682)              (601,253)


CASH FLOWS FROM INVESTING ACTIVITIES
  Change in oil & gas properties                                                  (364,689)              (110,835)
  Change in mining properties                                                         --                     --
  Change in property & equipment                                                   (60,961)                (1,322)
  Change in other assets                                                            37,653                (62,044)
                                                                               -----------            -----------
              Net cash provided by (used in) investing activities                 (387,997)              (174,201)


CASH FLOWS FROM FINANCING ACTIVITIES
  Issuance of common stock                                                         252,871                143,094
  Change in long-term liabilities                                                  595,467                340,219
  Change in payable to related party                                              (306,742)               442,920
                                                                               -----------            -----------
              Net cash provided by (used in) financing activities                  541,596                926,233
                                                                               -----------            -----------

NET INCREASE (DECREASE) IN CASH                                                   (859,083)               150,779

CASH AT BEGINNING OF PERIOD                                                      1,196,225                495,756
                                                                               -----------            -----------

CASH AT END OF PERIOD                                                          $   337,142            $   646,535
                                                                               ===========            ===========



</TABLE>






Unaudited-Internally prepared by Company management




                                       iii


<PAGE>   12


DAUGHERTY RESOURCES, INC.
SEGMENTED INFORMATION
For the nine month period ended September 30, 1999
(United States Dollars)
Unaudited
<TABLE>
<CAPTION>


                                                                                     WOOD
                                              OIL & GAS             MINING         PRODUCTS*        CORPORATE              TOTAL
                                              ---------             ------         ---------        ---------              -----


<S>                                        <C>                  <C>               <C>             <C>                  <C>
GROSS EXTERNAL REVENUE                     $    973,149               --              --                  --           $    973,149

INTERSEGMENT REVENUES                              --                 --              --                  --                   --

INTEREST REVENUE                                 26,093               --              --                 9,493               35,586

INTEREST EXPENSE                                153,799               --              --                14,205              168,004

DEPRECIATION                                     10,200               --              --                20,400               30,600

DEPLETION                                       144,000               --              --                  --                144,000

AMORTIZATION OF GOODWILL                           --                 --              --               134,217              134,217


SEGMENT PROFIT (LOSS)                      $   (504,368)              --          (520,267)           (243,077)        $ (1,267,712)
                                           ============         ==========        ========        ============         ============


SEGMENT ASSETS                             $  4,723,419         11,232,229            --             2,439,646         $ 18,395,294
                                           ============         ==========        ========        ============         ============

EXPENDITURES FOR SEGMENT
      ASSETS                               $    110,835               --              --                 1,322         $    112,157
                                           ============         ==========        ========        ============         ============


*Discontinued operation.
</TABLE>

Unaudited-Internally prepared by Company management






                                       iv