<PAGE>





                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 10-Q

(Mark One)
 X             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
               THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                       June 30, 2001
                               -------------------------------------------------

                                       or


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

For the transition period ended
                               -------------------------------------------------
                        Commission file number: 0-10990


                            CASTLE ENERGY CORPORATION
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

<TABLE>
<CAPTION>

<S>                                                                                <C>
                         Delaware                                                  76-0035225
-------------------------------------------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation or Organization)                 (I.R.S. Employer Identification No.)


              One Radnor Corporate Center, Suite 250, 100 Matsonford Road, Radnor, Pennsylvania 19087
-------------------------------------------------------------------------------------------------------------------
(Address of Principal Executive Offices)                                                                 (Zip Code)
</TABLE>


Registrant's Telephone Number, Including Area Code       (610) 995-9400
                                                         --------------

--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)

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

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date: 6,632,884 shares of
Common Stock, $.50 par value outstanding as of August 13, 2001.



<PAGE>





                            CASTLE ENERGY CORPORATION


                                      INDEX


<TABLE>
<CAPTION>
                                                                            Page #

Part I.      Financial Information

             Item 1. Financial Statements:

<S>                                                                                                                 <C>
                     Consolidated Balance Sheets - June 30, 2001 (Unaudited) and September 30,
                     2000..........................................................................................       1

                     Consolidated Statements of Operations - Three Months Ended June 30, 2001
                     and 2000 (Unaudited)..........................................................................       2

                     Consolidated Statements of Operations - Nine Months Ended June 30, 2001
                     and 2000 (Unaudited)..........................................................................       3

                     Consolidated Statements of Cash Flows - Nine Months Ended June 30, 2001
                     and 2000 (Unaudited)..........................................................................       4

                     Consolidated Statements of Stockholders' Equity and Other Comprehensive
                     Income - Year Ended September 30, 2000 and Nine Months Ended June 30,
                     2001 (Unaudited)..............................................................................       5

                     Notes to the Consolidated Financial Statements (Unaudited)                                           6

                 Item 2. Management's Discussion and Analysis of Financial Condition and
                 Results of Operations.............................................................................      12

                 Item 3. Qualitative and Quantitative Disclosures About Market Risk                                      16


Part II.     Other Information

             Item 1. Legal Proceedings.............................................................................      17

             Item 6. Exhibits and Reports on Form 8-K..............................................................      17

  Signature  ......................................................................................................      18

</TABLE>








<PAGE>



PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                            CASTLE ENERGY CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                     ("000's" Omitted Except Share Amounts)
<TABLE>
<CAPTION>


                                                                                    June 30,   September 30,
                                                                                      2001          2000
                                                                                   ---------   -------------
                                      ASSETS                                      (Unaudited)

Current assets:
<S>                                                                                <C>          <C>
    Cash and cash equivalents ..................................................   $   5,225    $  11,525
    Restricted cash ............................................................         597        1,742
    Accounts receivable ........................................................       4,379        3,758
    Marketable securities ......................................................       6,001       10,985
    Prepaid expenses and other current assets ..................................         147          251
    Estimated realizable value of discontinued net refining assets .............         800          800
    Deferred income taxes ......................................................         642        2,256
    Note receivable - Penn Octane Corporation ..................................         500
                                                                                   ---------    ---------
      Total current assets .....................................................      18,291       31,317
Property, plant and equipment, net:
    Natural gas transmission ...................................................          52           55
    Furniture, fixtures and equipment ..........................................         223          258
    Oil and gas properties, net (full cost method):
            Proved properties ..................................................      40,018       29,218
            Unproved properties not being amortized ............................       1,295        1,447
Investment in Networked Energy LLC .............................................         423          500
Note receivable - Penn Octane Corporation ......................................                      500
                                                                                   ---------    ---------
            Total assets .......................................................   $  60,302    $  63,295
                                                                                   =========    =========


                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Dividend payable ...........................................................   $     331    $     333
    Accounts payable ...........................................................       3,143        2,433
    Accrued expenses ...........................................................         222          265
      Accrued taxes on appreciation of marketable securities ...................         833        2,628
      Stock subscription payable ...............................................                      150
      Net refining liabilities retained ........................................       3,204        3,204
                                                                                   ---------    ---------
      Total current liabilities ................................................       7,733        9,013
Long-term liabilities ..........................................................           8            6
                                                                                   ---------    ---------
            Total liabilities ..................................................       7,741        9,019
                                                                                   ---------    ---------
Commitments and contingencies
Stockholders' equity:
    Series B participating preferred stock; par value - $1.00; 10,000,000 shares
      authorized; no shares issued
    Common stock; par value - $0.50; 25,000,000 shares authorized;
      11,503,904 shares issued at June 30, 2001 and September 30, 2000 .........       5,752        5,752
    Additional paid-in capital .................................................      67,365       67,365
    Accumulated other comprehensive income - unrealized gains on
      marketable securities, net of taxes ......................................       1,482        4,671
    Retained earnings ..........................................................      44,468       42,422
                                                                                   ---------    ---------
                                                                                     119,067      120,210
    Treasury stock at cost - 4,871,020 shares at June 30, 2001 and
        4,791,020 shares at September 30, 2000 .................................     (66,506)     (65,934)
                                                                                   ---------    ---------
      Total stockholders' equity ...............................................      52,561       54,276
                                                                                   ---------    ---------
      Total liabilities and stockholders' equity ...............................   $  60,302    $  63,295
                                                                                   =========    =========
</TABLE>


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

                                       -1-

<PAGE>




                            CASTLE ENERGY CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     ("000's" Omitted Except Share Amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                             Three Months Ended June 30,
                                                                                 2001          2000
                                                                             -----------    -----------

Revenues:
<S>                                                                          <C>            <C>
    Oil and gas sales ....................................................   $     5,347    $     4,945
                                                                             -----------    -----------

Expenses:
    Oil and gas production ...............................................         1,929          1,662
    General and administrative ...........................................         1,195          1,258
    Depreciation, depletion and amortization .............................           839          1,071
    Write off of option ..................................................                          119
    Impairment of foreign unproved properties ............................           873
                                                                             -----------    -----------
                                                                                   4,836          4,110
                                                                             -----------    -----------

Operating income .........................................................           511            835
                                                                             -----------    -----------

Other income:
        Interest income ..................................................           125            187
        Other income .....................................................            28              2
        Equity in loss of Networked Energy LLC ...........................           (44)
                                                                             -----------    -----------
                                                                                     109            189
                                                                             -----------    -----------

Income before provision for income taxes .................................           620          1,024
                                                                             -----------    -----------

    Provision for income taxes:
    State ................................................................             6
        Federal ..........................................................           217
                                                                             -----------    -----------
                                                                                     223
Net income ...............................................................   $       397    $     1,024
                                                                             ===========    ===========

Net income per share:
        Basic ............................................................   $       .06    $       .15
                                                                             ===========    ===========
        Diluted ..........................................................   $       .06    $       .15
                                                                             ===========    ===========

    Weighted average number of common and potential dilutive common shares
        outstanding:
       Basic .............................................................     6,632,884      6,866,357
                                                                             ===========    ===========
        Diluted ..........................................................     6,801,852      6,977,214
                                                                             ===========    ===========

</TABLE>

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

                                       -2-

<PAGE>





                            CASTLE ENERGY CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     ("000's" Omitted Except Share Amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                              Nine Months Ended June 30,
                                                                                2001            2000
                                                                             -----------    -----------

Revenues:
<S>                                                                          <C>            <C>
    Oil and gas sales ....................................................   $    17,057    $    12,348
                                                                             -----------    -----------

Expenses:
    Oil and gas production ...............................................         5,331          4,488
    General and administrative ...........................................         4,369          3,977
    Depreciation, depletion and amortization .............................         2,266          3,284
    Write off option .....................................................                          119
    Impairment of foreign unproved properties ............................           873
                                                                             -----------    -----------
                                                                                  12,839         11,868
                                                                             -----------    -----------

Operating income .........................................................         4,218            480
                                                                             -----------    -----------

Other income:
        Interest income ..................................................           569            581
        Other income (expense) ...........................................            36            (55)
        Equity in loss of Networked Energy LLC ...........................           (77)
                                                                             -----------    -----------
                                                                                     528            526
                                                                             -----------    -----------

Income before provision for income taxes .................................         4,746          1,006
                                                                             -----------    -----------

    Provision for income taxes:
       State .............................................................            47
        Federal ..........................................................         1,661
                                                                             -----------    -----------
                                                                                   1,708
                                                                             -----------    -----------
Net income ...............................................................   $     3,038    $     1,006
                                                                             ===========    ===========

Net income per share:
        Basic ............................................................   $       .46    $       .14
                                                                             ===========    ===========
        Diluted ..........................................................   $       .44    $       .14
                                                                             ===========    ===========

    Weighted average number of common and potential dilutive common shares
        outstanding:
       Basic .............................................................     6,647,304      7,001,047
                                                                             ===========    ===========
       Diluted ...........................................................     6,837,850      7,144,368
                                                                             ===========    ===========

</TABLE>



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

                                       -3-

<PAGE>




                            CASTLE ENERGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                ("000's" Omitted)
                                   (Unaudited)

<TABLE>
<CAPTION>



                                                                Nine Months Ended June 30,
                                                                     2001          2000
                                                                   --------      --------

<S>                                                                <C>           <C>
Net cash flow provided by operating activities ...............     $  9,015      $  2,522
                                                                   --------      --------

Net cash flows from investing activities:
       Investment in furniture, fixtures and equipment .......          (59)         (172)
       Investment in oil and gas properties ..................      (13,689)       (9,169)
       Investment in note receivable - Penn Octane Corporation                       (500)
                                                                   --------      --------
                                                                    (13,748)       (9,841)
                                                                   --------      --------

Net cash flows from financing activities:
         Dividends paid to stockholders ......................         (995)       (1,069)
         Acquisition of treasury stock .......................         (572)       (4,908)
                                                                   --------      --------
                                                                     (1,567)       (5,977)
                                                                   --------      --------
Net decrease in cash and cash equivalents ....................       (6,300)      (13,296)
Cash and cash equivalents - beginning of period ..............       11,525        22,252
                                                                   --------      --------
Cash and cash equivalents - end of period ....................     $  5,225      $  8,956
                                                                   ========      ========
</TABLE>


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

                                       -4-


<PAGE>


                           CASTLE ENERGY CORPORATION
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND
                           OTHER COMPREHENSIVE INCOME
                     ("000's" Omitted Except Share Amounts)

<TABLE>
<CAPTION>

                                                        Year Ended September 30, 2000 and
                                                    Nine Months Ended June 30, 2001 (Unaudited)
                                     ---------------------------------------------------------------------
                                                                                              Accumulated
                                           Common Stock        Additional                        Other
                                      ----------------------    Paid-In      Comprehensive   Comprehensive
                                      Shares          Amount    Capital         Income          Income
                                      ------          ------    -------         ------           ------

<S>                                  <C>            <C>         <C>           <C>              <C>
Balance - October 1, 1999......      6,828,646      $3,414      $67,365                        $2,396
Stock split retroactively
  applied......................      4,675,258       2,338
                                    ----------     ---------  ------------                     ------
Balance-September 30, 1999 -
  restated.....................     11,503,904       5,752       67,365                         2,396
Stock acquired.................
Dividends declared ($.20 per
  share).......................
Comprehensive income:..........
Net income.....................                                                 $5,069
Other comprehensive income:
  Unrealized gain on marketable
   securities, net of tax......                                                  2,275          2,275
                                                                               -------
                                                                                $7,344
                                    ----------     ---------  ------------     =======         ------
Balance - September 30, 2000...     11,503,904       5,752       67,365                         4,671
Stock acquired.................
Dividends declared ($.10 per
  share).......................
Comprehensive income (loss):
  Net income...................                                                 $3,038
  Other comprehensive income
    Unrealized (loss) on
     marketable securities,
     net of tax................                                                 (3,189)        (3,189)
                                                                              ---------
                                                                              ($   151)
                                    ----------     ---------  ------------     =======         ------
Balance - June 30, 2001........     11,503,904      $5,752      $67,365                        $1,482
                                    ==========      ======      =======                        ======

</TABLE>



<TABLE>
<CAPTION>

                                              Year Ended September 30, 2000 and
                                          Nine Months Ended June 30, 2001 (Unaudited)
                                      ---------------------------------------------------

                                                          Treasury Stock
                                      Retained     -------------------------
                                      Earnings     Shares         Amount           Total
                                      --------     ------         ------           -----

<S>                                    <C>          <C>            <C>           <C>
Balance - October 1, 1999......        $41,054      4,282,217      ($60,726)     $53,503
Stock split retroactively
  applied......................         (2,338)
                                       -------      ---------      --------      -------
Balance-September 30, 1999 -
  restated.....................         38,716      4,282,217       (60,726)      53,503
Stock acquired.................                       508,803        (5,208)      (5,208)
Dividends declared ($.20 per
  share).......................         (1,363)                                   (1,363)
Comprehensive income:..........
Net income.....................          5,069                                     5,069
Other comprehensive income:
  Unrealized gain on marketable
   securities, net of tax......                                                    2,275


                                       -------      ---------      --------      -------
Balance - September 30, 2000...         42,422      4,791,020       (65,934)      54,276
Stock acquired.................                        80,000          (572)        (572)
Dividends declared ($.10 per
  share).......................           (992)                                     (992)
Comprehensive income (loss):
  Net income...................          3,038                                     3,038
  Other comprehensive incom
    Unrealized (loss) on
     marketable securities,
     net of tax................                                                   (3,189)


                                       -------      ---------      --------      -------
Balance - June 30, 2001........        $44,468      4,871,020      ($66,506)     $52,561
                                       =======      =========      ========      =======

</TABLE>

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

                                       -5-

<PAGE>


                   Castle Energy Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements
                  (Dollars in thousands, except share amounts)
                                   (Unaudited)



Note 1 - Basis of Preparation

         The unaudited consolidated financial statements of Castle Energy
Corporation (the "Company") included herein have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
reclassifications have been made to make the periods presented comparable.
Although certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, the Company believes that the disclosures included herein are
adequate to make the information presented not misleading. Operating results for
the three-month and nine-month periods ended June 30, 2001 are not necessarily
indicative of the results that may be expected for the fiscal year ending
September 30, 2001 or subsequent fiscal periods. These unaudited consolidated
financial statements should be read in conjunction with the financial statements
and the notes thereto included in the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 2000.

         In the opinion of the Company, the unaudited consolidated financial
statements contain all adjustments necessary for a fair statement of the results
of operations for the three-month and nine-month periods ended June 30, 2001 and
2000 and for a fair statement of financial position at June 30, 2001.

Note 2 - September 30, 2000 Balance Sheet

         The amounts presented in the balance sheet as of September 30, 2000
were derived from the Company's audited consolidated financial statements which
were included in its Annual Report on Form 10-K for the fiscal year ended
September 30, 2000.

Note 3 - Discontinued Operations

         From August 1989 to September 30, 1995, several of the Company's
subsidiaries conducted refining operations. By December 12, 1995, the Company's
refining subsidiaries had sold all of their refining assets and the purchasers
had assumed all related liabilities, including contingent environmental
liabilities. In addition, in 1996, Powerine Oil Company ("Powerine"), one of the
Company's former refining subsidiaries, merged into a subsidiary of the
purchaser of the refining assets sold by Powerine and is no longer a subsidiary
of the Company. The Company's remaining refining subsidiaries own no refining
assets, have been inactive for over five years, and are inactive and in the
process of liquidation. As a result, the Company has accounted for its refining
operations as discontinued operations. Such discontinued refining operations
have not impacted the Company's operations since September 30, 1995, although
they may impact the Company's future operations.

Note 4 - Contingencies/Litigation

        Contingent Environmental Liabilities

        In December 1995, Indian Refining Limited Partnership ("IRLP"), an
inactive subsidiary of the Company, sold its refinery, the Indian Refinery, to
American Western Refining Limited Partnership ("American Western"), an
unaffiliated party. As part of the related purchase and sale agreement, American
Western assumed all environmental liabilities and indemnified IRLP with respect
thereto. Subsequently, American Western filed for bankruptcy and sold the Indian
Refinery to an outside party pursuant to a bankruptcy proceeding. We have been
informed that the new owner has dismantled the Indian Refinery.

        During fiscal 1998, the Company was informed that the United States
Environmental Protection Agency ("EPA") had investigated offsite acid sludge
waste found near the Indian Refinery and had investigated and remediated surface
contamination on the Indian Refinery property. Neither the Company nor IRLP was
initially named with respect to these two actions.


                                       -6-

<PAGE>


                   Castle Energy Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements
                  (Dollars in thousands, except share amounts)
                                   (Unaudited)



        In October 1998, the EPA named the Company and two of its refining
subsidiaries as potentially responsible parties for the expected clean-up of the
Indian Refinery. In addition, eighteen other parties were named including Texaco
Refining and Marketing, Inc. ("Texaco"), the refinery operator for over 50
years. A subsidiary of Texaco had owned the refinery until December of 1988. The
Company subsequently responded to the EPA indicating that it was neither the
owner nor the operator of the Indian Refinery and thus not responsible for its
remediation.

        In November 1999, the Company received a request for information from
the EPA concerning the Company's involvement in the ownership and operation of
the Indian Refinery. The Company responded to the EPA information request in
January 2000.

        On August 7, 2000, the Company received notice of a claim against it and
two of its inactive refining subsidiaries from Texaco and its parent. Texaco had
made no previous claims against the Company although the Company's subsidiaries
had owned the refinery from August 1989 until December 1995. In its claim,
Texaco demanded that the Company and its former subsidiaries indemnify Texaco
for all liability resulting from environmental contamination at and around the
Indian Refinery. In addition, Texaco demanded that the Company assume Texaco's
defense in all matters relating to environmental contamination at and around the
Indian Refinery, including lawsuits, claims and administrative actions initiated
by the EPA and indemnify Texaco for costs that Texaco has already incurred
addressing environmental contamination at the Indian Refinery. Finally, Texaco
also claimed that the Company and two of its inactive subsidiaries are liable to
Texaco under the Federal Comprehensive Environmental Response Compensation and
Liability Act as owners and operators of the Indian Refinery. The Company
responded to Texaco disputing the factual and theoretical basis for Texaco's
claims against the Company. The Company's management and special counsel
subsequently met with representatives of Texaco but the parties disagreed
concerning Texaco's claims.

        The Company and its special counsel believe that Texaco's claims are
utterly without merit and the Company intends to vigorously defend itself
against Texaco's claims and any lawsuits that may follow. In addition to the
numerous defenses that the Company has to Texaco's contractual claim for
indemnity, the Company and its special counsel believe that by the express
language of the agreement which Texaco construes to create an indemnity, Texaco
has irrevocably elected to forgo all rights of contractual indemnification it
might otherwise have had against any person, including the Company.

        In September 1995, Powerine sold the Powerine Refinery to Kenyen
Resources ("Kenyen"), an unaffiliated party. In January 1996, Powerine merged
into a subsidiary of Energy Merchant Corp. ("EMC"), an unaffiliated party, and
EMC assumed all environmental liabilities. In August 1998, EMC sold the Powerine
Refinery to a third party.

        In July of 1996, the Company was named a defendant in a class action
lawsuit concerning emissions from the Powerine Refinery. In April of 1997, the
court granted the Company's motion to quash the plaintiff's summons based upon
lack of jurisdiction and the Company is no longer involved in the case.

        Although the environmental liabilities related to the Indian Refinery
and Powerine Refinery have been transferred to others, there can be no assurance
that the parties assuming such liabilities will be able to pay them. American
Western, owner of the Indian Refinery, filed for bankruptcy and is in the
process of liquidation. EMC, which assumed the environmental liabilities of
Powerine, sold the Powerine Refinery to an unrelated party, which we understand
is still seeking financing to restart that refinery. Furthermore, as noted
above, the EPA named the Company as a potentially responsible party for
remediation of the Indian Refinery and has requested and received relevant
information from the Company. Estimated gross undiscounted clean up costs for
this refinery are at least $80,000 - $150,000 according to third parties. If the
Company were found liable for the remediation of the Indian Refinery, it could
be required to pay a percentage of the clean-up costs. Since the Company's
subsidiary only operated the Indian Refinery five years, whereas Texaco and
others operated it over fifty years, the Company would expect that its share of
remediation liability would be proportional to its years of operation, although
such may not be the case. Furthermore, as noted above, Texaco claimed that the
Company indemnified it for all environmental liabilities related to the Indian

                                       -7-

<PAGE>


                   Castle Energy Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements
                  (Dollars in thousands, except share amounts)
                                   (Unaudited)


Refinery. If Texaco were to sue the Company on this theory and prevail in court,
the Company could be held responsible for the entire estimated clean up costs of
$80,000-$150,000 or more. In such a case, this cost would be far in excess of
the Company's financial capability.

        An opinion issued by the U.S. Supreme Court in June 1998 in a comparable
matter supports the Company's position. Nevertheless, if funds for environmental
clean-up are not provided by these former and/or present owners, it is possible
that the Company and/or one of its former refining subsidiaries could be named
parties in additional legal actions to recover remediation costs. In recent
years, government and other plaintiffs have often sought redress for
environmental liabilities from the party most capable of payment without regard
to responsibility or fault. Whether or not the Company is ultimately held liable
in such a circumstance, should litigation involving the Company and/or IRLP
occur, the Company would probably incur substantial legal fees and experience a
diversion of management resources from other operations.

        Although the Company does not believe it is liable for any of its
subsidiaries' clean-up costs and intends to vigorously defend itself in such
regard, the Company cannot predict the ultimate outcome of these matters due to
inherent uncertainties.

        Litigation

           Long Trusts Lawsuit

           In November 2000, the Company and three of its subsidiaries were
defendants in a jury trial in Rusk County, Texas. The plaintiffs in the case,
the Long Trusts, are non-operating working interest owners in wells previously
operated by Castle Texas Production Limited Partnership ("CTPLP"), an inactive
exploration and production subsidiary of the Company. The wells were among those
sold to Union Pacific Resources Corporation ("UPRC") in May 1997. The Long
Trusts claimed that CTPLP did not allow them to sell gas from March 1, 1996 to
January 31, 1997 as required by applicable joint operating agreements, and they
sued CTPLP and the other defendants, claiming (among other things) breach of
contract, breach of fiduciary duty, conversion and conspiracy. The plaintiffs
sought actual damages, exemplary damages, pre-judgment and post-judgment
interest, attorney's fees and court costs. CTPLP counterclaimed for
approximately $150 of unpaid joint interests billings, interest, attorneys' fees
and court costs.

           After a three-week trial, the District Court in Rusk County submitted
36 questions to the jury which covered all of the claims and counterclaims in
the lawsuit. Based upon the jury's answers, the District Court entered judgement
granting plaintiffs' claims against the Company and its subsidiaries, as well as
CTPLP's counterclaim against the plaintiffs. Both plaintiffs and CTPLP have
filed post-judgement motions which include offers of remittitur. The District
Court has not formally acted on those motions, but it is expected that the Court
will enter an amended judgement in the next few weeks and that the net amount
awarded to the plaintiffs in an amended judgment will be approximately $2,700.
The Company and its subsidiaries have filed a notice of appeal with the Tyler
Court of Appeals and will continue to vigorously contest this matter.

        Special counsel to the Company does not consider an unfavorable outcome
to this lawsuit probable. The Company's management and special counsel believe
that several of the plaintiffs' primary legal theories are contrary to
established Texas law and that the Court's charge to the jury was fatally
defective. They further believe that any judgment for plaintiffs based on those
theories or on the jury's answers to certain questions in the charge cannot
stand and will be reversed on appeal. As a result, the Company has not accrued
any liability for this litigation. Nevertheless, to pursue the appeal, the
Company and its subsidiaries will be required to post a bond to cover the net
amount of damages awarded to the plaintiffs and to maintain that bond until the
resolution of the appeal (which may take several years).


                                       -8-

<PAGE>


                   Castle Energy Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements
                  (Dollars in thousands, except share amounts)
                                   (Unaudited)


           Larry Long Litigation

           The parties agreed to settle this lawsuit for a $250 payment by the
Company. The governing court has recently approved this settlement and the
Company expects to make payment before the end of the fiscal quarter ended
September 30, 2001.

           MGNG Litigation

           The parties agreed to settle this lawsuit by reducing an account
payable to MGNG from one of the Company's subsidiaries by $325. The parties are
still finalizing the related settlement agreement.

           Powerine Severance Pay Litigation

           On February 9, 2001, the Company was served with a lawsuit filed in
the Superior Court of California, County of Los Angeles, Central District. The
plaintiff, the State Labor Commissioner of the State of California, sued the
Company and fourteen other defendants for unpaid severance pay on behalf of
several former employees of various entities that owned the Powerine Refinery in
Santa Fe Springs, California. The suit sought damages of $1,500, including $500
of punitive damages. Management of the Company believes that the Company is not
liable for any of the damages sought and engaged a special counsel to defend it
against the lawsuit. It appears that the plaintiffs merely sued all parties
having any connection whatsoever with the Powerine Refinery without regard to
guilt or actual operation of that refinery.

        In March 2001, the plaintiffs dismissed the Company from the case with
prejudice.

Note 5 - New Accounting Pronouncements

        Statement of Financial Accounting Standards No. 133, as amended,
Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), was
issued by the Financial Accounting Standards Board in June 1998. SFAS 133
standardizes the accounting for derivative instruments, including certain
derivative instruments embedded in other contracts. Under the standard, entities
are required to carry all derivative instruments in the statement of financial
position at fair value. The accounting for changes in the fair value (i.e.,
gains or losses) of a derivative instrument depends on whether such instrument
has been designated and qualifies as part of a hedging relationship and, if so,
depends on the reason for holding it. If certain conditions are met, entities
may elect to designate a derivative instrument as a hedge of exposures to
changes in fair values, cash flows, or foreign currencies. If the hedged
exposure is a fair value exposure, the gain or loss on the derivative instrument
is recognized in earnings in the period of change together with the offsetting
loss or gain on the hedged item attributable to the risk being hedged. If the
hedged exposure is a cash flow exposure, the effective portion of the gain or
loss on the derivative instrument is reported initially as a component of other
comprehensive income (not included in earnings) and subsequently reclassified
into earnings when the forecasted transaction affects earnings. Any amounts
excluded from the assessment of hedge effectiveness, as well as the ineffective
portion of the gain or loss, is reported in earnings immediately. Accounting for
foreign currency hedges is similar to the accounting for fair value and cash
flow hedges. If the derivative instrument is not designated as a hedge, the gain
or loss is recognized in earnings in the period of change. The Company adopted
FAS 133 effective October 1, 2000.

        Since July 2000, the Company has not used freestanding derivative
instruments to hedge its production and has used no embedded derivative
instruments. The adoption of SFAS 133 has therefore had no impact on the
Company's results of operations or financial condition.

         Statement of Financial Accounting Standards No. 141, "Business
Combinations" ("SFAS No. 141") and Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142") were issued in
July 2001. SFAS No. 141 requires that all business combinations be accounted for
under the purchase method of accounting and that certain acquired intangible
assets in a business combination be recognized and reported as assets apart from
goodwill. SFAS No. 142 requires that amortization of goodwill be replaced with
periodic tests of the

                                       -9-

<PAGE>


                   Castle Energy Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements
                  (Dollars in thousands, except share amounts)
                                   (Unaudited)


goodwill's impairment at least annually in accordance with the provisions of
SFAS No. 142 and that intangible assets other than goodwill be amortized over
their useful lives. The Company will adopt SFAS No. 141 immediately and SFAS No.
142 in the first quarter of fiscal 2003. Amortization of goodwill related to the
Company's investment in Networked Energy LLC for the nine-month period ended
June 30, 2001 was $7. The Company does not believe that its future adoption of
SFAS 142 will have a material effect on its results of operations.

Note 6 - Derivative Financial Instruments

        On June 1, 1999, the Company acquired all of the oil and gas assets of
AmBrit Energy Corp. ("AmBrit"). In July 1999, the Company hedged approximately
69% of its anticipated consolidated crude oil production (then approximately
32,000 barrels per month) and approximately 50% of its anticipated consolidated
natural gas production (then approximately 300,000 mcf per month) for the period
from September 1, 1999 to July 31, 2000. The Company used futures contracts to
hedge such production. The average hedged prices for crude oil and natural gas,
which are based upon futures prices on the New York Mercantile Exchange, were
$20.02 per barrel of crude oil and $2.64 per mcf of gas. The Company settled all
of its outstanding natural gas hedges in November 1999. For the three and nine
month periods ended June 30, 2000, oil and gas sales decreased $285 and $1,269,
respectively, as a result of hedging activities. Hedging activities did not
impact oil and gas sales for the three and nine month periods ended June 30,
2001.

Note 7 - Information Concerning Reportable Segments

        For the periods ended June 30, 2000 and 2001, the Company operated in
only one segment of the energy industry: oil and gas exploration and production.
Until May 31, 1999, the Company also operated in the natural gas marketing
segment of the energy industry.

Note 8 - Stock Split

        On December 29, 1999, the Company's Board of Directors declared a stock
split in the form of a 200% stock dividend applicable to all stockholders of
record on January 12, 2000. The additional shares were paid on January 31, 2000
and the Company's shares first traded at post split prices on February 1, 2000.
The stock split applied only to the Company's outstanding shares on January 12,
2000 (2,337,629 shares) and did not apply to treasury shares (4,491,017 shares)
on that date. As a result of the stock split 4,675,258 additional shares were
issued and the Company's common stock book value was increased $2,338 to reflect
additional par value applicable to the additional shares issued to effect the
stock split. All share changes, including those affecting the recorded book
value of common stock, have been recorded retroactively.

Note 9 - Romanian Drilling Program

        Of the five initial Romanian wells in which the Company participated,
three wells have been or are expected to be plugged and abandoned, one well is
currently being tested and appears to have commercial quantities of natural gas
and one well has been drilled with negative results but is expected to be
further tested uphole. The Company has also agreed to participate in a sixth
well, a wildcat well to be drilled in the Black Sea. Drilling of this well is
expected to commence in September or October of 2001.

Note 10 - Line of Credit

        The Company and an energy bank continue to negotiate a line of credit.
Although the Company originally sought a $40,000 line of credit it anticipates
that the line of credit ultimately granted will be substantially less than this
amount due to the precipitous decline in energy prices over the last two months.
Given such price volatility, there can be no assurance that the Company will
ultimately receive the line of credit it seeks.

Note 11 - Acquisition of East Texas Properties

        On April 30, 2001, the Company consummated the purchase of several East
Texas oil and gas properties from a private company. The effective date of the
purchase was April 1, 2001. These properties included majority interests

                                      -10-

<PAGE>


                   Castle Energy Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements
                  (Dollars in thousands, except share amounts)
                                   (Unaudited)


in twenty-one (21) operated producing oil and gas wells and interests in
approximately 6,500 gross acres in three counties in East Texas. The Company
estimates the proved reserves acquired were approximately 12.5 billion cubic
feet of natural gas and 191,000 barrels of crude oil. The consideration paid,
net of purchase price adjustments, was $9,992. The Company used its own
internally generated funds to make the purchase. The Company expects its future
depletion rate to increase approximately 16% as a result of the purchase.


                                      -11-

<PAGE>



Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations.

              ("$000's" Omitted Except Share and Per Unit Amounts)

RESULTS OF OPERATIONS

        All statements other than statements of historical fact contained in
this report are forward-looking statements. Forward-looking statements in this
report generally are accompanied by words such as "anticipate," "believe,"
"estimate," or "expect" or similar statements. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove correct.
Factors that could cause the Company's results to differ materially from the
results discussed in such forward-looking statements are disclosed in this
report, including without limitation in conjunction with the expected cash
sources and expected cash obligations discussed below. All forward-looking
statements in this Form 10-Q are expressly qualified in their entirety by the
cautionary statements in this paragraph.

           From August 1989 to September 30, 1995, two of the Company's
subsidiaries conducted refining operations. By December 12, 1995, the Company's
refining subsidiaries had sold all of their refining assets. In addition,
Powerine merged into a subsidiary of EMC and was no longer a subsidiary of the
Company. The Company's other refining subsidiary, IRLP, owns no refining assets
and is in the process of liquidation. As a result, the Company accounted for its
refining operations as discontinued operations in the Company's financial
statements as of September 30, 1995 and retroactively. Accordingly, discussion
of results of operations has been confined to the results of continuing
exploration and production operations and the anticipated impact, if any, of
liquidation of the Company's remaining inactive refining subsidiaries and
contingent environmental liabilities of the Company and its refining
subsidiaries.

           Exploration and Production

         Key exploration and production data for the nine month periods ended
June 30, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>

                                                                                    Nine Months Ended June 30,
                                                                                    2001                 2000
                                                                                   ------               ------
Production Volumes:
------------------
<S>                                                                               <C>                  <C>
        Barrels of crude oil (net).................................               202,038              220,123
        Mcf (thousand cubic feet) of natural gas (net).............             2,393,829            2,871,925
        Mcf equivalents (net) *....................................             3,606,057            4,192,663

Oil/Gas Prices:-
      Crude Oil/Barrel:
           Gross...................................................                $26.75               $26.08
           Hedging effects.........................................                                      (5.53)
                                                                                   ------               ------
           Net of hedging..........................................                $26.75               $20.55
                                                                                   ======               ======

        Natural Gas/Mcf:
        ---------------
           Gross...................................................                $ 4.87               $ 2.75
           Hedging effects.........................................                                      (0.02)
                                                                                   ------               ------
           Net of hedging..........................................                $ 4.87               $ 2.73
                                                                                   ======               ======

Oil and Gas Production Expenses/Mcf Equivalent.....................                $ 1.48               $ 1.07**
----------------------------------------------                                     ======               ======
</TABLE>

*    Barrels of crude oil have been converted to mcf based upon relative energy
     content of 6 MCF of natural gas per barrel of crude oil.

**   Re-computed to reflect reduction of oil and gas production expenses by
     amount of revenues earned from well operations.

           Oil and gas sales increased $4,709 or 38.1% from the first nine
months of fiscal 2000 to the first nine months of fiscal 2001. The increase was
caused by offsetting factors.

           Oil and gas sales decreased $1,728 due to a decrease in production.
Crude oil production decreased 8.2%, and natural gas production and equivalent
mcf production decreased 16.6% and 14.0%, respectively. A significant portion of
the decrease in natural gas production related to properties acquired from
AmBrit on June 1, 1999. In many

                                      -12-

<PAGE>



cases the decreases in gas production approximated the decline curves expected.
In a few cases, however, the decreases significantly exceeded the expected
production declines. Furthermore, although the Company drilled nine exploratory
wells in fiscal 2000, only one of these was completed as a producer. As a
result, the Company has not replaced the production lost due to declining
production from its existing properties.

           Oil and gas sales increased $6,437 from the first nine months of
fiscal 2000 to the first nine months of fiscal 2001 as a result of increased
prices. The increase was especially evident in the gross price received by the
Company for natural gas. The average price received increased 77.1% from $2.75
per mcf for the nine months ended June 30, 2000 to $4.87 per mcf for the nine
months ended June 30, 2001. The natural gas prices received by the Company for
the quarter ended March 31, 2001 were the highest ever received by the Company
in any fiscal quarter. Since April 2001, however, natural gas prices have
declined significantly - in many cases declining 25%-30% from April of 2001 to
June of 2001.

           Oil and gas production expenses increased $843 or 18.8% from the
first nine months of fiscal 2000 to the first nine months of fiscal 2001. For
the nine months ended June 30, 2000, such expenses were only $1.07 per
equivalent mcf of production versus $1.48 per equivalent mcf of production for
the nine months ended June 30, 2001. This 38.3% increase is attributable to
several factors. Many components of oil and gas production expense (such as
pumper salaries and the costs to operate field offices) are essentially fixed
and thus increase on a per unit of production basis when production decreases -
as was the case during the nine months ended June 30, 2001. In addition, the
Company's properties are older and such properties typically incur higher
production expenses than newer properties that have recently been drilled.
Production costs have also increased recently because of increased prices
charged for well services and supplies by well service companies.

           General and administrative costs increased $392 or 9.9% from the
first nine months of fiscal 2000 to the first nine months of fiscal 2001. The
increase was primarily caused by increased legal costs and non-recurring costs
of $181 related to the Company's effort to sell its oil and gas properties. The
increased legal costs for the nine months ended June 30, 2001 relate primarily
to the Long Trusts litigation (see Note #4 to the consolidated financial
statements).

           Depreciation, depletion and amortization decreased $1,018 or 31.0%
from the first nine months of fiscal 2000 to the first nine months of fiscal
2001. Of this decrease, $947 related to depletable oil and gas properties and
the remaining $71 related to depreciable equipment and furniture and fixtures.
The decrease in depletion was caused by two factors. Decreased production
accounted for $436 and a decrease in the depletion rate from $.74 per equivalent
mcf to $.60 per equivalent mcf accounted for $511.

           The impairment provision of $873 for the nine months ended June 30,
2001 relates to the Company's Romanian drilling program. It represents the
Company's investment in drilling two dry holes on one of its drilling
concessions. There was no analogous impairment provision for the nine month
period ended June 30, 2000. As of June 30, 2001, the Company had provided a 100%
impairment reserve against all of the costs incurred on two of the three
Romanian drilling concessions in which it participated in the drilling of
wildcat wells. The three wells drilled on these two concessions resulted in dry
holes. At June 30, 2001, the Company's remaining investment consists of $1,254
in its third Romanian drilling concession and $41 related to the Ulysses well to
be drilled in the Black Sea.

           No tax provision for the nine months ended June 30, 2000 was recorded
because the Company did not previously recognize a deferred tax asset. The tax
provision for the nine months ended June 30, 2001 represents the reduction of a
deferred tax asset recorded at September 30, 2000 at an effective tax rate of
36%. The deferred tax asset at September 30, 2000 resulted when the Company
re-evaluated its ability to generate sufficient taxable income to utilize the
gross deferred tax asset attributable to its tax carryforwards. A similar net
deferred tax asset was not recorded at September 30, 1999.

           Earnings per Share

           On December 29, 1999, the Company's Board of Directors declared a
stock split in the form of a 200% stock dividend applicable to all stockholders
of record on January 12, 2000. The effect of the stock split was to triple the
number of shares outstanding. The stock split did not apply to the Company's
treasury stock. The stock split is reflected retroactively in share amounts and
earnings per share computations in the accompanying financial statements.

           In addition, since October 1, 1999, the Company has reacquired
588,803 shares of its common stock. As a result of these share acquisitions,
earnings per share have been higher than would be the case if no shares had been
repurchased.

                                      -13-

<PAGE>





LIQUIDITY AND CAPITAL RESOURCES

        During the nine months ended June 30, 2001, the Company generated $9,015
from operating activities. During the same period the Company invested $13,689
in oil and gas properties and $572 to reacquire shares of its common stock. In
addition, it paid $995 in stockholder dividends. At June 30, 2001, the Company
had $5,225 of unrestricted cash, $10,558 of working capital and no long-term
debt.

        Discontinued Refining Operations

        Although the Company's former and present subsidiaries have exited the
refining business and third parties have assumed environmental liabilities, if
any, of such subsidiaries, the Company and several of its subsidiaries may
remain liable for contingent environmental liabilities (see Note 4 to the
consolidated financial statements included in Item 1 of this Form 10-Q).

        Expected Sources and Uses of Funds

        a. Estimated Future Cash Expenditures


           As of June 30, 2001, the estimated future cash expenditures of the
           Company for the period from July 1, 2001 to September 30, 2002 were
           as follows:

<TABLE>
<CAPTION>

<S>                                                                                       <C>
1.   Development drilling on existing acreage...................................          $14,148
2.   Remaining drilling on Romanian concession - two wildcat wells..............              200
3.   Offshore Romanian well in Black Sea........................................            1,250
4.   Dividends..................................................................            1,655
5.   Escrow for litigation......................................................            2,700
                                                                                        ---------
                                                                                          $19,953
</TABLE>

             Additional Drilling/Acquisitions - if the planned well to be
             drilled in the Black Sea is successful, the Company may increase
             its investment in Romania significantly and could conceivably spend
             $10,000- $15,000 or more if new oil and/or gas fields are
             discovered.

             In July 2000, the Company engaged Energy Spectrum Advisors of
             Dallas, Texas to advise the Company concerning strategic
             alternatives, including the possible sale of its domestic oil and
             gas assets. In December 2000, several companies submitted bids for
             the Company's oil and gas assets. The total of the highest bids for
             all of the Company's properties aggregated approximately $48,000
             with an effective date of October 1, 2000. The Company's Board of
             Directors decided not to sell its oil and gas assets at the prices
             offered. As a result, the Company is again seeking acquisitions in
             the energy sector, including oil and gas properties, gas marketing
             and pipeline operations and other investments. In April 2001, the
             Company acquired oil and gas properties in East Texas for $9,992
             (see Note 11 to the financial statements in Item 1). There can,
             however, be no assurance that the Company will be able to make
             further acquisitions of energy sector assets at prices it considers
             favorable. If the Company is able to acquire energy sector assets
             at favorable prices, its expenditures will exceed the estimated
             future expenditures listed above.

         b. Repurchase of Company Shares - as of August 6, 2001, the Company had
            repurchased 4,871,020 shares of its common stock (13,853,000 shares
            after taking into account the 200% stock dividend which was
            effective January 31, 2000) at a cost of $66,506. The Company's
            Board of Directors has authorized the repurchase of up to 396,946
            additional shares to provide an exit vehicle for investors who want
            to liquidate their investment in the Company. The decisions whether
            to repurchase such additional shares and/or to increase the
            repurchase authorization above the current level will depend upon
            the market price of the Company's stock, tax considerations, the
            number of stockholders seeking to sell their shares and other
            factors.

         c. Recurring Dividends - the Company's Board of Directors adopted a
            policy of paying a $.20 per share annual dividend ($.05 per share
            quarterly) in June of 1997. The Company expects to continue to pay
            such dividend until the Board of Directors, in its sole discretion,
            changes such policy.


                                      -14-

<PAGE>




         d. Required Escrow Fund - Litigation - the Company expects it will be
            required to escrow approximately $2,700 for a lengthy period -
            perhaps several years - as it appeals a jury verdict in the Long
            Trusts' litigation. (See Note 4 to the consolidated financial
            statements included in Item #1 of this Form 10-Q.)

         e. Additional Investment in Networked Energy LLC - ("Networked") - the
            Company may consider additional equity or debt investments depending
            upon the progress of and cash needs of Networked.

         f. Estimated Future Sources of Funds


             At June 30, 2001, the Company had available the following sources
of funds:


Unrestricted cash - June 30, 2001...........................        $  5,225
Marketable securities.......................................           6,001
                                                                    --------
                                                                     $11,226

        The Company's line of credit expired February 29, 2001, but the Company
is currently in the process of negotiating a line of credit and believes it will
be able to consummate such line of credit before September 30, 2001. However,
there can be no assurance such will be the case.

        In addition, the Company anticipates significant future cash flow from
exploration and production operations.

        If the Company is unable to fund its future cash expenditures from these
sources, it may decide to curtail future planned drilling activities or
investments.

        The realization of anticipated cash flows are subject to most of the
risks enumerated below. In addition, the realization from the sale of the
Company's investment in the common stock of Penn Octane Corporation ("Penn
Octane") and Delta Petroleum Company ("Delta"), which is shown under the caption
"marketable securities" on the consolidated balance sheets, is dependent on the
market values of such stock and the Company's ability to liquidate its Penn
Octane and Delta stock investments at or near such market values. Since Penn
Octane and Delta are thinly capitalized and traded, liquidation of a large
volume of Penn Octane and/or Delta stock without significantly lowering the
market price may be impossible.

        The foregoing discussions do not contemplate any adverse effects from
the risk factors listed below:

         a. Contingent environmental liabilities. The Company is not insured for
            such liabilities.

         b. Reserve price risk - the effect of price changes on unhedged oil and
            gas production. Gas prices have recently declined significantly and
            the Company is unhedged.

         c. Exploration and production reserve risk - the effect of not finding
            the oil and gas reserves sought during new drilling.

         d. Reserve risk - the effect of differences between estimated and
            actual reserves and production.

         e. Public market for Company's stock - the effect of a limited market
            for the Company's shares.

         f. Future of the Company - the Company has changed its strategic
            objectives and goals.

         g. Foreign operation risks. Since the Company has already incurred
            $3,000 and expects to spend at least $1,450 in the next quarter to
            complete required drilling on the last two of its required five
            wells in the Romanian concessions and expects to participate in
            drilling an additional well in the Black Sea, it continues to be
            subject to foreign operational risks. Such risks include the
            shortage of available drilling rigs, the shortage of experienced
            drilling rig crews, the lack of access to drilling and lease
            operating equipment and supplies and the risks inherent in drilling
            in offshore waters. The Company's interests are also subject to
            certain foreign country risks over which the Company has no control
            - including political risk, the risk of additional taxation and the
            possibility that foreign operating requirements and procedures may
            reduce estimated profitability.

         h. Other risks including general business risks, insurance claims
            against the Company in excess of insurance recoveries, tax
            liabilities resulting from tax audits, drilling risks and litigation
            risk.

                                      -15-

<PAGE>



         i. Availability of drilling rigs. The Company expects to drill several
            domestic wells in the next year. As a result of higher oil and gas
            prices, several exploration and production companies are drilling
            more wells than in prior years and there are currently fewer
            drilling rigs available than there is demand for such rigs. As a
            result, the Company expects to wait longer and pay more to drill
            wells in the future.

        The above risks are discussed at greater length in the Company's Form
10-K for the year ended September 30, 2000.

Item 3.      QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

        The Company has not hedged its remaining expected crude oil and natural
gas production. As a result, the Company remains at risk with respect to such
unhedged expected production. If oil and gas market prices increase, oil and gas
sales applicable to the unhedged production will increase. If oil and gas market
prices decrease, oil and gas sales related to such unhedged production will
decrease.


                                      -16-

<PAGE>



                           PART II. OTHER INFORMATION


Item 1.      Legal Proceedings

        For information regarding lawsuits, reference is made to Item 3 of the
Company's Form 10-K (Annual Report) for the fiscal year ended September 30,
2000. Also see Note 4 to the March 31, 2001 financial statements included in
Part I.

Item 6.    Exhibits and Reports on Form 8-K

           (A)   Exhibits:
                    Exhibit 11.1 -       Statement re: Computation of Earnings
                                         Per Share

           (B)  Reports on Form 8-K:     None



                                      -17-

<PAGE>





                                    SIGNATURE


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


Date:      August 13, 2001                      CASTLE ENERGY CORPORATION
       ------------------------



                                                /s/Richard E. Staedtler
                                                -------------------------
                                                Richard E. Staedtler
                                                Chief Financial Officer
                                                Chief Accounting Officer





















                                      -18-