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

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

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

                                  FORM 10-QSB-A

                                SECOND AMENDMENT

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 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 JUNE 30, 1999, WAS 2,272,182.

         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.
The purchase of Daugherty Petroleum, Inc. and the subsequent purchase of 80% of
Red River Hardwoods, Inc. in the fourth quarter of 1996 have given the Company a
diversified revenue and asset base that is primarily located in Appalachia.

         Since acquiring Daugherty Petroleum, Inc., 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. Effective March 15,
1999, the Company's symbol was changed to "NGAS".

         The creation of the preferred shares by the Company will allow the
planned acquisition of interests in certain oil and gas wells in Kentucky,
Louisiana and Tennessee. Management believes this acquisition will close in the
third quarter of 1999.



                                       2
<PAGE>   3


         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
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 provides 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 and
approximately $170,000 owed to another lender. The sale closed during December
1999 and has an effective date of June 30, 1999. The agreement further provides
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 retains ownership of the assets and
responsibility for the secured debt, and H & S is responsible for the operations
of the facility and income and expenses related thereto, plus debt service on
secured debt. The sale of Red River will allow the Company's management to
concentrate on expanding its core oil and gas operations. This Second Amended
Form 10-QSB is being filed to restate the Company's financial statements as a
result of notification received on April 5, 2000 from the auditors of its
subsidiary, Daugherty Petroleum, Inc., that indicated the Company had failed to
properly apply the accounting rules relating to a sale and disposal of a
business segment. The error resulted when the Company recorded the disposition
of Red River Hardwoods in two separate components: 1) an increase in beginning
Shareholders Equity, and 2) a loss from discontinued operations. The proper
accounting for the disposition was to record the gain or loss on the sale and
the results of operations in the Statements of Income net of tax. In the Company
prepared financial statements previously filed in its first amended Form 10-QSB
dated January 12, 2000, the disposal of a business segment rules were not
correctly followed, and, as a result, the Company reported a loss of $269,363
rather than a gain of $933,272 on the disposition. The financial statements have
been restated to properly reflect the divestiture.

         The Company continues its tradition of realizing revenues from its oil
and gas operations. For the six months ending June 30, 1999, the Company drilled
four natural gas wells. By comparison, for the same period of 1998, the Company
drilled seven natural gas wells. Drilling operations for the first six 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 six 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. Daugherty
Petroleum, Inc. has reduced its dependence on activities as "turnkey driller"
for private investors and instead concentrated on joint ventures with industry
partners. During the first six months of 1999, approximately 61% of the
Company's revenues were derived from joint venture drilling. Natural gas and oil
operations and revenues accounted for 39% of the revenues.

         The Company plans to drill 15 wells during the last two quarters of
1999 and earn interests ranging from 12.5% to 50% interest in each well it
drills.

         Working capital for the period ending June 30, 1999, was a negative
$2,342,765 compared to the same period in 1998, when working capital was a
negative $2,626,659.

         During the first six 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 $104,484 from $192,291 to $296,775 accounts receivable
balances decreased $160,843 from $225,641 to $64,798. Other current assets such
as prepaids


                                       3
<PAGE>   4


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 $473,641 to
$891,573.

         Current liabilities for the period ended June 30, 1999 were $3,234,338
compared to $3,044,591 for the period ended June 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.
              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.

         -    INCREASING THE LINE OF CREDIT: The Company obtained a $1,000,000
              line of credit from Compass Bank of Houston, Texas in 1998. The
              Company expects to increase the line of credit in 1999.

         -    INSTALLATION OF ADDITIONAL NATURAL GAS GATHERING SYSTEM: The
              Company plans to expand its natural gas pipeline by 45,000 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 is sponsoring 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 is expected
              to take place prior to August 20, 1999. As of August 1, 1999,
              $800,000 had been committed.

         -    SALE OF RED RIVER HARDWOODS, INC.: The Company has 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.

RESULTS OF OPERATIONS

         For the six month period ending June 30, 1999, the Company's gross
revenues decreased $528,768 to $539,611 from $1,068,379 for the same period in
1998. The Company experienced a net loss from continuing operations of $516,859
in this period compared to a net loss of $473,421 in the same period of 1998.
The company reported net income on discontinued operations of $694,368 the six
months ended June 30, 1999 compared to income of $49,771 for the same period of
1998.

         The Company's gross revenues were derived from drilling contract
revenues of $326,834 (61%), and from natural gas and oil operations and
production revenues of $212,777 (39%).

         The decrease in gross revenues of $528,768 was primarily attributable
to the decreased drilling activities during the period. Contract revenues from
drilling activities decreased by $461,212 from $788,046 in the first six months
of 1998 to $326,834 in the first six months of 1999.

         During the first six months of 1999, total direct costs decreased by
$515,118 to $403,406 compared to $918,524 in the first six months of 1998. These
direct costs included drilling and related costs for four natural gas wells.

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



                                       4
<PAGE>   5


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.
                  -----------------------------------------

<TABLE>
<CAPTION>
                                                                               PAGE
                                                                               ----

<S>               <C>                                                           <C>
         (1)      Balance Sheet for the Period Ended June 30, 1999.........      i
                  Income Statement for the Period Ended June 30, 1999......     ii-iii
                  Computation of Per Share Earnings........................     iv
</TABLE>

         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.

            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.


                                       5
<PAGE>   6

            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).

            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).

            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



                                       6
<PAGE>   7

                    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).

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

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

                                   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:  April 10, 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,             April 10, 2000
------------------------                  Director of the Registrant
WILLIAM S. DAUGHERTY



James K. Klyman*                          Director of the Registrant                  April 10, 2000
----------------
JAMES K. KLYMAN



Charles L. Cotterell*                     Director of the Registrant                  April 10, 2000
---------------------
CHARLES L. COTTERELL
</TABLE>





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



                                       7
<PAGE>   8

DAUGHERTY RESOURCES. INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(United States Dollars)
Unaudited


<TABLE>
<CAPTION>
                                                                    6/30/98             6/30/99
                                                                 ------------         ------------
<S>                                                              <C>                  <C>
                                     ASSETS
                                     ------

CURRENT ASSETS
--------------

  Cash                                                           $    192,291         $    296,775
  Accounts receivable                                                 225,641               64,798
  Inventory                                                                 -                    -
  Other current assets                                                      -              530,000
                                                                 ------------         ------------

              TOTAL CURRENT ASSETS                                    417,932              891,573

OIL & GAS PROPERTIES (NET)                                          4,279,872            4,614,704
--------------------------

MINING PROPERTY (NET)                                              11,232,229           11,232,229
---------------------

PROPERTY & EQUIPMENT (NET)                                            128,634              103,327
--------------------------

OTHER ASSETS
------------

  Related party loans                                                 756,087              256,427
  Bonds & deposits                                                     41,000               41,000
  Other assets                                                        153,978               99,297
  Goodwill, net of amortization of $1,028,997                         939,523              760,567
                                                                 ------------         ------------
                                                                    1,890,588            1,157,291
                                                                 ------------         ------------

              TOTAL ASSETS                                       $ 17,949,255         $ 17,999,124
                                                                 ============         ============


                       LIABILITIES & STOCKHOLDER'S EQUITY
                       ----------------------------------

CURRENT LIABILITIES
-------------------

  Short-term loans & notes                                       $     32,000         $  1,029,177
  Current portion of LT debt                                          909,421              141,000
  Accounts payable                                                    476,292              441,073
  Accrued liabilities                                                 506,724              794,167
  Drilling prepayments                                              1,120,154              828,921
                                                                 ------------         ------------

              TOTAL CURRENT LIABILITIES                             3,044,591            3,234,338

LONG-TERM LIABILITIES                                                 925,107            1,591,902
---------------------

PAYABLE TO RELATED PARTIES                                             37,612              181,219
--------------------------                                       ------------         ------------
                                                                    4,007,310            5,007,459

MINORITY INTEREST                                                           -                    -
-----------------

STOCKHOLDER'S EQUITY
--------------------

  Common stock                                                     21,054,304           21,319,145
  Common stock subscribed                                                   -                    -
  Additional paid in capital                                                -                    -
  Retained earnings (deficit)                                      (6,638,938)          (7,541,258)
  Current income (loss)                                              (473,421)            (786,222)
                                                                 ------------         ------------
                                                                   13,941,945           12,991,665
                                                                 ------------         ------------

              TOTAL LIABILITIES &
                STOCKHOLDER'S EQUITY                             $ 17,949,255         $ 17,999,124
                                                                 ============         ============
</TABLE>


Unaudited-Internally prepared by Company management


                                       i

<PAGE>   9

DAUGHERTY RESOURCES, INC.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(United States Dollars)
Unaudited

<TABLE>
<CAPTION>
                                                               For the six month period ended

                                                                      6/30/98                            6/30/99
                                                               ----------------------            ---------------------

<S>                                                            <C>            <C>                <C>           <C>
GROSS REVENUE                                                  $ 1,068,379    100.00%            $ 539,611     100.00%
-------------

DIRECT EXPENSES                                                    918,524     85.97%              403,406      74.76%
---------------                                                   --------     ------             --------      ------

              GROSS PROFIT                                         149,855     14.03%              136,205      25.24%

GENERAL & ADMINISTRATIVE EXPENSES
---------------------------------

  Salaries & wages                                                 108,940     10.20%              184,088      34.11%
  Accounting & audit                                                56,246      5.26%               44,969       8.33%
  Advertising & promotion                                              512      0.05%                    -       0.00%
  Amortization                                                      89,478      8.38%               89,478      16.58%
  Bad debts                                                              -      0.00%                    -       0.00%
  Depreciation                                                      32,200      3.01%               20,400       3.78%
  General consulting                                                66,871      6.26%               30,530       5.66%
  Insurance                                                         13,361      1.25%               14,588       2.70%
  Legal                                                             50,288      4.71%               79,498      14.73%
  Office & general                                                  75,063      7.03%               59,109      10.95%
  Payroll & property tax                                            10,202      0.95%                9,839       1.82%
  Rent                                                              22,611      2.12%               28,444       5.27%
  Repairs & maintenance                                              1,952      0.18%                2,622       0.49%
  Shareholder & investor information                                28,738      2.69%                8,340       1.55%
  Travel & entertainment                                            25,106      2.35%               21,492       3.98%
                                                                -----------   -------         -------------   --------

              TOTAL G & A EXPENSES                                 581,568     54.43%              593,397     109.97%

OTHER INCOME (EXPENSE)
----------------------

  Interest & dividend income                                        29,132      2.73%               27,277       5.05%
  Miscellaneous                                                          -      0.00%                    -       0.00%
  Gain (loss) on sale of equipment                                       -      0.00%                    -       0.00%
  Interest expense                                                 (70,840)    -6.63%              (86,944)    -16.11%
                                                                -----------   -------         -------------   --------

INCOME (LOSS) BEFORE INCOME TAX & OTHER                           (473,421)   -44.31%             (516,859)    -95.78%
---------------------------------------

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

DISCONTINUED OPERATIONS
-----------------------

  Income (loss) from discontinued operations                        49,771      4.66%             (238,904)    -44.27%
  Gain (loss)  on disposal                                              -       0.00%              933,270     172.95%
                                                                -----------   -------         -------------   --------

              NET INCOME (LOSS)                                 $ (423,650)   -39.65%         $    177,509      32.90%
                                                                ===========   =======         =============   ========


DEFICIT, beginning of period                                    (6,638,938)                   $ (8,504,989)
DEFICIT, end of period                                          (7,112,359)                   $ (8,327,480)


Shares outstanding                                               1,964,351                       2,272,182

EARNINGS PER SHARE                                                  ($0.22)                          $0.08
</TABLE>



Unaudited-Internally prepared by Company management

                                       ii

<PAGE>   10

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

<TABLE>
<CAPTION>
                                                                            For the six month period ended

                                                                                  6/30/98                         6/30/99
                                                                              -----------------               -----------------

<S>                                                                               <C>                              <C>
CASH FLOWS FROM OPERATING ACTIVITIES

  Net income (loss)                                                               $ (473,421)                      $ 177,509
  Adjustments to reconcile net income (loss) to net cash
  cash provided by operating activities:
    Depreciation, depletion, & amortization                                          195,516                         205,878
    Gain on sale of subsidiary                                                             -                        (963,731)
    Changes in current assets & liabilities (Increase) decrease in:

        Accounts receivable                                                          (31,764)                         74,689
        Inventory                                                                          -                               -
        Other current assets                                                          51,935                        (487,795)
    Increase (decrease) in:
        Short-term loans & notes                                                     (12,500)                        887,348
        Accounts payable                                                            (362,006)                       (128,749)
        Accrued liabilities                                                          212,928                          33,892
        Drilling prepayments                                                        (283,153)                        (96,589)
                                                                                  ----------                       ---------
              Net cash provided by (used in) operating activities                   (702,465)                       (297,548)


CASH FLOWS FROM INVESTING ACTIVITIES

  Change in oil & gas properties                                                    (210,229)                        (59,602)
  Change in mining properties                                                         (4,496)                              -
  Change in property & equipment                                                     (50,100)                         (1,322)
  Change in other assets                                                              66,112                         120,793
                                                                                  ----------                       ---------
              Net cash provided by (used in) investing activities                   (198,713)                         59,869


CASH FLOWS FROM FINANCING ACTIVITIES

  Issuance of common stock                                                            97,354                         109,324
  Change in long-term liabilities                                                    142,023                        (516,473)
  Change in payable to related party                                                (342,133)                        445,847
                                                                                  ----------                       ---------
              Net cash provided by (used in) financing activities                   (102,756)                         38,698
                                                                                  ----------                       ---------

NET INCREASE (DECREASE) IN CASH                                                   (1,003,934)                       (198,981)
-------------------------------

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

CASH AT END OF PERIOD                                                             $  192,291                       $ 296,775
---------------------                                                             ==========                       =========
</TABLE>










Unaudited-Internally prepared by Company management

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