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


                                 FORM 10-KSB/A1


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

        For the fiscal year ended August 31, 1999

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 [No Fee Required]

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

                           Commission File No. 0-20879

                             PYR ENERGY CORPORATION
                  --------------------------------------------
                 (Name of small business issuer in its charter)


            Delaware                                         95-4580642
 -----------------------------                           ------------------
   (State or jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                          Identification No.)


 1675 Broadway, Suite 1150, Denver, CO                          80202
 -------------------------------------                         --------
(Address of principal executive offices)                      (Zip Code)

          Issuer's telephone number, including area code (303) 825-3748

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

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

           Securities registered pursuant to Section 12(g) of the Act:
                          $.001 Par Value Common Stock
                          ----------------------------
                                (Title of Class)

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


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


     Issuer's revenues for the fiscal year ended August 31, 1999 were $ 116,713


     The aggregate market value of the voting stock held by non-affiliates
computed based on the last sale price of such stock as of January 27, 2000, was
$33,732,944.*


                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     The number of shares outstanding of each of the issuer's classes of common
equity as of January 27, 2000 is as follows:

           $.001 Par Value Common Stock                 15,947,764

* Without asserting that any of the issuer's directors or executive officers, or
the entity that owns common stock and convertible preferred stock totalling the
equivalent of 3,106,929 shares of common stock and 93,750 warrants, or the
person and entities that own 840,850 shares and 94,375 warrants, is an
affiliate, the shares of which they are beneficial owners have been deemed to be
owned by affiliates solely for this calculation.


<PAGE>

                                     PART I

ITEMS 1 AND 2. DESCRIPTION OF BUSINESS AND PROPERTIES

Overview

     PYR Energy Corporation (the "Company" and "PYR") is a development stage
independent oil and gas exploration company whose strategic focus is the
application of advanced seismic imaging and computer-aided exploration
technologies in the systematic search for commercial hydrocarbon reserves,
primarily in the onshore western United States. The Company attempts to leverage
its technical experience and expertise with seismic data to identify exploration
and exploitation projects with significant potential economic return. The
Company currently intends to participate in exploration projects as a
non-operating, working interest owner, sharing both risk and rewards with its
joint venture partners. The Company has and will continue to pursue exploration
opportunities in regions where the Company believes significant opportunity for
discovery of oil and gas exists. By reducing drilling risk through seismic
technology, the Company seeks to improve the expected return on investment in
its oil and gas exploration projects.

     The Company was founded in 1996 by two geoscientists with extensive seismic
and geological experience in the western United States. The Company has
extensive experience in exploration, exploitation and the application of
advanced geophysical technologies. Its business plan involves the following
strategy:

     Focus on high impact exploration plays in the western United States
          *    Under-exploited or under-explored mature basins
          *    Gain access to large, non or under-performing acreage positions
          *    Focus on play concepts that are expandable within a basin or
               region.
     Use advanced seismic imaging, processing and visualization to reduce
     drilling risk
          *    Seismic captures resolution of trapping geometry
      Leverage technical expertise with outside capital resources
          *    Retain control of the pre-drill exploration process
          *    Retain sizable working interest in each prospect
          *    Use industry partners for local operating expertise

     The Company was incorporated in March 1996 in the state of Delaware under
the name Mar Ventures Inc. Effective as of August 6, 1997, the Company purchased
all the ownership interests of PYR Energy, LLC, an oil and gas exploration
company. Also on that date, the Company issued units of its common stock and
common stock purchase warrants for approximately $1,700,000 net of fees and
commissions. The warrants subsequently expired without exercise. Effective as of
November 12, 1997, the Company changed its name to PYR Energy Corporation.

     The Company's offices are located at 1675 Broadway, Suite 1150, Denver,
Colorado 80202. The telephone number is (303) 825-3748, telefax number is (303)
825-3768 and the Company's web site is www.pyrenergy.com.

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<PAGE>


Developments During Fiscal 1999

     In May of 1997, the Company and other working interest owners commenced
drilling on the Company's first exploration well - the Bellevue #1-17 on the
Company's East Lost Hills prospect. On November 23, 1998, the Bellevue #1-17
prospect well blew out and ignited after having reached a depth of approximately
17,600 feet out of targeted total depth of 19,000 feet. A relief well, the
Bellevue #1-17R, began drilling on December 18, 1998. On May 29, 1999 the relief
well successfully killed, and the operator plugged and abandoned, the original
well bore. The Bellevue #1-17R was then used to successfully sidetrack a
replacement well back into the target reservoir. Concurrent with commencing
completion operations, Berkley Petroleum, Inc. (a wholly owned subsidiary of
Berkley Petroleum Corporation (TSE-"BKP") ("Berkley")) of Calgary has taken over
as operator. Berkley is in the process of preparing the 1-17R replacement well
for production testing. In August of 1999, the Company and other working
interest owners commenced drilling a second well approximately two miles
northwest of the #1-17R well. This well targets the same resevoir formation
encountered with the #1-17 and #1-17R wells. See " - Southern San Joaquin Basin,
California".

     In October and November 1998, the Company issued $2.5 million of
Convertible Promissory Notes in a private placement to a limited group of
investors. In accordance with the private placement agreement, these notes have
been converted into the Company's convertible preferred stock which are now
convertible into the Company's common stock. See "Item 12. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS - Private Placement of Notes".

     In April 1999, the Company purchased working interests, ranging from 3.0%
to 3.75% in three additional deep Temblor exploration projects in the San
Joaquin Basin of California. These projects are called Cal Canal, Lucky Dog and
Pyramid Power. The Company's interest will be carried (non-cost bearing)
"through the tanks" in the initial test well in each of the three separate
exploration prospects. The first exploration well in the program (Cal Canal)
began drilling on June 15, 1999 and is operated by Berkley. See "Southern
San Joaquin Basin, California".

     On May 14, 1999, the Company completed a private placement resulting in
receipt of $7,000,000 (less commissions, fees and related expenses of
approximately $100,000) of funding through the sale of 4,375,000 shares of the
Company's Common Stock and 437,500 5-year warrants to purchase an additional
share of the Company's Common Stock at a price of $2.50. The warrants are
immediately exercisable, and all warrants expire on May 14, 2004. The Company
may, upon 30-days notice, repurchase any remaining outstanding warrants for $.01
per warrant at any time after the weighted average trading price of the
Company's Common Stock has been at least $6.00 for a 45 day period.

Disclosure Regarding Forward-Looking Statements And Cautionary Statements

Forward-Looking Statements
--------------------------

     This Annual Report on Form 10-KSB includes "forward-looking" statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). All statements other than statements of historical
facts included in this Annual Report, including without limitation statements
under "ITEMS 1 AND 2. DESCRIPTION OF BUSINESS AND PROPERTIES" and "ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION", regarding the Company's financial position, business strategy, and
plans and objectives of management of the Company for future operations and
capital expenditures, are forward-looking statements. Although the Company

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<PAGE>

believes that the expectations reflected in the forward-looking statements and
the assumptions upon which the forward-looking statements are based are
reasonable, it can give no assurance that such expectations and assumptions will
prove to have been correct. Additional statements concerning important factors
that could cause actual results to differ materially from the Company's
expectation ("Cautionary Statements") are disclosed below in the "-Cautionary
Statements" section and elsewhere in this Annual Report. All written and oral
forward-looking statements attributable to the Company or persons acting on its
behalf subsequent to the date of this Annual Report are expressly qualified in
their entirety by the Cautionary Statements.

Cautionary Statements
---------------------

     In addition to the other information contained in this Annual Report, the
following Cautionary Statements should be considered when evaluating the
forward-looking statements contained in this Annual Report.

Start-Up Nature Of The Company's Oil And Gas Business; Absence Of Profits

     The Company was formed in 1996, and does not have a history of sustained
profit from operations. The development of the Company's business will continue
to require substantial expenditures. The Company's future financial results will
depend primarily on its ability to locate hydrocarbons economically in
commercial quantities, to provide drilling site and target depth recommendations
resulting in profitable productive wells and on the market prices for oil and
natural gas. There can be no assurance that the Company will achieve or sustain
profitability or positive cash flows from operating activities in the near
future.

Oil And Gas Prices; Marketability Of Production

     Even if the Company is able to discover or acquire oil and gas production,
of which there is no assurance, the Company's revenues, profitability and
liquidity will be highly dependent upon prevailing prices for oil and natural
gas. Oil and gas prices can be extremely volatile and in recent years have been
depressed by excess total domestic and imported supplies. There can be no
assurance that current price levels can be sustained. Prices also are affected
by actions of state and local agencies, the United States and foreign
governments, and international cartels. These external factors and the volatile
nature of the energy markets make it difficult to estimate future prices of oil
and natural gas. Any substantial or extended decline in the price of oil and/or
natural gas would have a material adverse effect on the Company's financial
condition and results of operations, including reduced cash flow and borrowing
capacity. All of these factors are beyond the control of the Company. Sales of
oil and natural gas are seasonal in nature, leading to substantial differences
in cash flow at various times throughout the year. The marketability of the
Company's gas production, if any, will depend in part upon the availability,
proximity and capacity of gas gathering systems, pipelines and processing
facilities. Federal and state regulation of oil and gas production and
transportation, general economic conditions, changes in supply and changes in
demand all could adversely affect the Compan s ability to produce and market oil
and natural gas. If market factors were to change dramatically, the financial
impact on the Company could be substantial. The availability of markets and the
volatility of product prices are beyond the control of the Company and thus
represent a significant risk.

                                       3

<PAGE>


Reliance On Industry Participants

     The Company attempts to limit financial exposure on a project by project
basis by forming industry alliances where the Company's technical expertise can
be complemented with the financial resources and operating expertise of
established companies. If the Company were not able to form these industry
alliances, this could limit the Company's ability to fully implement its
business plan and could have a material adverse effect on the Company's
business, financial condition and results of operations

Non-Operator Status

     The Company focuses primarily on providing seismic imaging and analysis and
relies upon other project partners to provide and complete all other project
operations and responsibilities including operating, drilling, marketing and
project administration. As a result, the Company has only a limited ability to
exercise control over a significant number of a project's operations or the
associated costs of such operations. The success of a project is dependent upon
a number of factors which are outside of the Company's area of expertise and
project responsibilities. Such factors include: (i) the availability of
favorable term leases and required permitting for projects, (ii) the
availability of future capital resources by the Company and the other
participants to the purchasing of leases and the drilling of wells, (iii) the
approval of other participants to the purchasing of leases and the drilling of
wells on the projects and (iv) the economic conditions at the time of drilling,
including the prevailing and anticipated prices for oil and gas. The Company's
reliance on other project partners and its limited ability to directly control
certain project costs could have a material adverse effect on the realization of
expected rates of return on the Company's investment in certain projects.

Ability To Discover Reserves

     The Company's future success is dependent upon its ability to economically
locate oil and gas reserves in commercial quantities. Except to the extent that
the Company acquires properties containing proved reserves or conducts
successful exploration and development activities, or both, the proved reserves
of the Company, if any, will decline as reserves are produced. The Company's
ability to conduct successful exploration and development activities is
dependent upon a number of factors, including its participation in multiple
exploration projects and its technological capability to locate oil and gas in
commercial quantities. Because the Company may rely upon other industry
participants to develop the Company's exploration projects, no assurances can be
given that the Company will have the opportunity to participate in projects
which economically produce commercial quantities of hydrocarbons in amounts
necessary to meet its business plan or that the projects in which it elects to
participate will be successful. There can be no assurance that the Company's
planned projects will result in significant reserves or that the Company will
have future success in drilling productive wells at low reserve replacement
costs. The Company has not yet established any oil and gas production, nor has
it booked any proved reserves.

Substantial Capital Requirements And Liquidity

     In order to continue its oil and gas exploration plans fully, the Company
anticipates that it will need additional funding. In October and November 1998,
the Company closed a private placement resulting in a capital infusion of
$2,500,000. In May 1999, the Company completed an additional Private Placement
resulting in a capital infusion of $7,000,000. See "Item 12. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS--Private Placement Of Notes" and "Private

                                       4

<PAGE>


Placement of Common Shares". The Company anticipates that these funds will be
used entirely for existing projects. The Company does not have a steady source
of revenue to provide funding to sustain operations. There is no assurance that
the Company will be able to obtain a reliable source of revenue to sustain its
operations.

Risk Of Exploratory Drilling Activities

     Exploration for oil and natural gas is a speculative business involving a
high degree of risk, including the risk that no commercially productive oil and
gas reservoirs will be encountered. The cost of drilling, completing and
operating wells is often uncertain and drilling operations may be curtailed,
delayed or canceled as a result of a variety of factors including unexpected
formation and drilling conditions, pressure or other irregularities in
formations, equipment failures or accidents, as well as weather conditions,
compliance with governmental requirement and shortages or delays in the delivery
of equipment. There is no assurance that the expenditures made by the Company on
its oil and natural gas properties will result in discoveries of oil or natural
gas in commercial quantities. Some test wells, as a consequence, may not
ultimately be developed into producing wells and may be abandoned.

Competition

     The Company competes in the areas of oil and gas exploration with other
companies, many of which may have substantially larger financial and other
resources. From time to time, there may be competition for, and shortage of,
exploration, drilling and production equipment and these shortages could lead to
an increase in costs and to delays in operations that could have a material
adverse effect on the Company. The Company may therefore not be able to acquire
desirable properties or equipment required to develop its properties. Problems
of this nature also could prevent the Company from producing any oil and natural
gas it discovers at the rate it desires to do so.

General Risks Of Oil And Gas Operations

     The nature of the oil and gas business involves a variety of risks,
including the risks of operating hazards such as fires, explosions, cratering,
blowouts, such as the blowout at the exploratory well in which the Company has
an interest in East Lost Hills, and encountering formations with abnormal
pressures, the occurrence of any of which could result in losses to the Company.
The Company will maintain insurance against some, but not all, of these risks in
amounts that management believes to be reasonable in accordance with customary
industry practices. The occurrence of a significant event, however, that is not
fully insured could have a material adverse effect on the Company's financial
position. See "--Significant Properties--Southern San Joaquin Basin, California"
concerning the blowout at the East Lost Hills exploratory well.

Technology Changes

     The oil and gas industry is characterized by rapid and significant
technological advancements and introductions of new products and services
utilizing new technologies. As new technologies develop, the Company may be
placed at a competitive disadvantage, and competitive pressures may force the
Company to implement such new technologies at substantial cost. In addition,
other oil and gas finding companies may implement new technologies before the
Company, and consequently such companies may be able to provide enhanced
capabilities and superior quality compared with that which the Company is able
to provide. There can be no assurance that the Company will be able to respond

                                       5

<PAGE>


to such competitive pressures and implement such technologies on a timely basis
or at an acceptable cost. One or more of the technologies currently utilized by
the Company or implemented in the future may become obsolete. In such case, the
Company's business, financial condition and results of operations could be
materially adversely affected. If the Company is unable to utilize the most
advanced commercially available technology, the Company's business, financial
condition and results of operations could be materially and adversely affected.

Government Regulations And Environmental Risks

     The production and sale of oil and gas are subject to a variety of federal,
state and local government regulations including regulation concerning the
prevention of waste, the discharge of materials into the environment, the
conservation of oil and natural gas, pollution, permits for drilling operations,
drilling bonds, reports concerning operations, the spacing of wells, the
unitization and pooling of properties, and various other matters including
taxes. Many jurisdictions have at various times imposed limitations on the
production of oil and gas by restricting the rate of flow for oil and gas wells
below their actual capacity to produce. During the past few years there has been
a significant amount of discussion by legislators and the presidential
administration concerning a variety of energy tax proposals. There can be no
certainty that any such measure will be passed or what its effect will be on oil
and natural gas prices if it is passed. In addition, many states have raised
state taxes on energy sources and additional increases may occur, although there
can be no certainty of the effect that increases in state energy taxes would
have on oil and natural gas prices. Although the Company intends to be in
substantial compliance with applicable environmental and other government laws
and regulations, there can be no assurance that significant costs for compliance
will not be incurred in the future. The blowout of the East Lost Hills
exploratory well in which the Company has an interest raises a number of these
risks. Although a majority of the costs associated with the blow out have been
covered by insurance policies in effect when the blow out occurred, a portion of
the claims have not yet been reimbursed through one of the insurance policies.
The Company has advanced approximately $410,000 for its proportionate share of
the claims in order that these claims be paid directly to the claimants. The
Company believes that most, if not all, of these claims will ultimately be
reimbursed through insurance proceeds. The Company currently carries the
advanced funds as Reimbursable Property Costs on its August 31, 1999 Balance
Sheet.

Variability Of Operating Results

     The Company's operating results, as a start up company in the oil and gas
industry, may vary significantly during any financial period. These variations
may be caused by significant periods of time between each of the Company's
discoveries and developments, if any, of oil or natural gas properties in
commercial quantities. These variations may also be caused by the volatility
associated with oil and gas prices. See "Oil And Gas Prices; Marketability Of
Production".

Risks Associated With Management Of Growth

     Because of its small size, the Company desires to grow extremely rapidly in
order to achieve certain economies of scale. Although there is no assurance that
this rapid growth will occur, to the extent that it does occur it will place a
significant strain on the Company's financial, technical, operational and
administrative resources. As the Company increases its services and enlarges the
number of projects it is evaluating or in which it is participating, there will
be additional demands on the Company's financial, technical and administrative
resources. The failure to continue to upgrade the Company's technical,

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<PAGE>


administrative, operating and financial control systems or the occurrence of
unexpected expansion difficulties, including the recruitment and retention of
geoscientists and engineers, could have a material adverse effect on the
Company's business, financial condition and results of operations.

Dependence On Key Personnel

     The Company will be highly dependent on the services of D. Scott
Singdahlsen and its other geological and geophysical staff members. The loss of
the services of any of them could have a material adverse effect on the Company.
The Company does not have an employment contract with Mr. Singdahlsen or any
other employee.

Concentration Of Risks; Lack Of Diverse Business Operations

     The Company is currently pursuing only the oil and gas exploration
business. Although the Company is involved in other oil and gas projects, it is
concentrating the majority of its initial oil and gas exploration efforts on
approximately 100,000 gross and 45,000 net exploratory acres in the San Joaquin
basin. Although the Company is involved in eight separate and distinct projects
in the San Joaquin basin, the Company's exploration efforts are concentrated in
this same general area and this lack of diverse business operations subjects the
Company to a certain degree of concentration of risks. The future success of the
Company may be dependent upon its success in discovering and developing oil and
gas in commercial quantities on its San Joaquin properties and upon the general
economic success of the oil and gas industry.

Certain Definitions

     Unless otherwise indicated in this Annual Report, natural gas volumes are
stated at the legal pressure base of the state or area in which the reserves are
located at 60(degree)Fahrenheit. Oil equivalents are determined using the ratio
of 6 Mcf of natural gas to one barrel of crude oil, condensate or natural gas
liquids so that 6 Mcf of natural gas are referred to as one barrel of oil
equivalent or "BOE".

     As used in this Annual Report, the following terms have the following
specific meanings: "Mcf" means thousand cubic feet, "Bcf" means billion cubic
feet, "Bbl" means barrel, "MBbl" means thousand barrels, "MMBoe" means million
barrels of oil equivalent, "MMBbl" means million barrels, "MMBO" means million
barrels of oil, "BBO" means billion barrels of oil and "Tcf" means trillion
cubic feet.

     With respect to information concerning the Company's working interests in
wells or drilling locations, "gross" gas and oil wells or "gross" acres is the
number of wells or acres in which the Company has an interest, and "net" gas and
oil wells or "net" acres are determined by multiplying "gross" wells or acres by
the Company's working interest in those wells or acres. A "working interest" in
an oil and gas lease is an interest that gives the owner the right to drill,
produce, and conduct operating activities on the property and to receive a share
of production of any hydrocarbons covered by the lease. A working interest in an
oil and gas lease also entitles its owner to a proportionate interest in any
well located on the lands covered by the lease, subject to all royalties,
overriding royalties and other burdens, to all costs and expenses of
exploration, development and operation of any well located on the lease, and to
all risks in connection therewith.

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     A "development well" is a well drilled as an additional well to the same
horizon or horizons as other producing wells on a prospect, or a well drilled on
a spacing unit adjacent to a spacing unit with an existing well capable of
commercial production and which is intended to extend the proven limits of a
prospect. The latter type of development well drilling is known as "step-out
drilling". An "exploratory well" is a well drilled to find commercially
productive hydrocarbons in an unproved area, or to extend significantly a known
prospect.

     "Reserves" means natural gas and crude oil, condensate and natural gas
liquids on a net revenue interest basis, found to be commercially recoverable.
"Proved developed reserves" includes proved developed producing reserves and
proved developed behind-pipe reserves. "Proved developed producing reserves"
includes only those reserves expected to be recovered from existing completion
intervals in casing of existing wells when the cost of making such reserves
available for production is relatively small compared to the cost of a new well.
"Proved undeveloped reserves" includes those reserves expected to be recovered
from new wells on proved undrilled acreage or from existing wells where a
relatively major expenditure is required for recompletion.

     "Infill drilling" means drilling of an additional well or additional wells
in order to more adequately drain a reservoir.

     "Stratigraphic trap" means a barrier that impedes the migration of
hydrocarbons caused by either a nonporous formation sealing off the top edge of
a reservoir bed or by a change of porosity and permeability within the reservoir
bed itself. "Strategraphic play" means a prospect targeted to test a
strategraphic trap.

     "API" means a measure of gravity based on standards set by the American
Petroleum Institute.

     "Carried  through the tanks"  means the Company  will not incur any capital
cost for this portion of its working  interest  until  commercial  quantities of
hydrocarbons are being produced and are generating revenues.  At this point, the
Company will become  responsible  for paying any  additional  capital  costs and
lease operating expenses as well as receiving its share of revenues from sales.

     "Cretaceous D-Sand and J-Sand reservoirs" means sandstone reservoirs that
contain hydrocarbons of Cretaceous age that are found in the Denver basin of
Colorado, Wyoming and Nebraska.

     "Cretaceous incised valley-filled reservoirs" means sandstone reservoirs of
Cretaceous age that were deposited in valleys carved into underlying strata
during a period of falling sea level.

     "Cretaceous reservoirs" means rock reservoirs most commonly comprised of
sandstone that were deposited during the Cretaceous Period. The Cretaceous
Period occurred between 66 and 144 million years before present.

     "Down-spaced drilling" means a method of development drilling whereby well
density in a given area is increased by drilling between existing wells.

     "Palynology analysis" means an analysis of a rock sequence through
examination of contained spores and/or pollen. A method of age dating strata.

     "Reserve capture" means the quantification of hydrocarbon reserves as a
result of drilling and testing a reservoir.

     "Steam floods" means a secondary recovery technique whereby steam is
injected into a hydrocarbon reservoir in an effort to mobilize heavy (tarry)
oil.

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     "Subthrust structure" means a fold of strata which is found beneath a
thrust fault.

     "Swept reservoir pods" means distinct sandstone units that have been
depleted of hydrocarbons through the secondary recovery method of waterflooding.

     "Thrusted anticlinal feature" means a fold of geologic strata that is
bounded by a thrust fault, which is a fault that results in older strata
overlying younger strata.

     "Turbidite" means a stratigraphic sequence deposited by turbidity currents,
commonly associated with submarine canyons.











                           (Intentionally Left Blank)


                                       9


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                                    Strategy

     The Company's business strategy is to continue to enhance shareholder value
by leveraging its technical experience and expertise with seismic technology to
identify exploration and exploitation projects with significant potential
reserves and economic results based on the application of appropriate technology
and suitable project risk management. The Company's ongoing goal is to increase
its reserve base through a focus on mature hydrocarbon basins where it believes
that the historical under- utilization of seismic technology creates tremendous
opportunities. It is the Company's view point that the systematic application of
advanced seismic imaging and visualization to exploration can significantly
reduce drilling risk and enhance financial results. The Company's strategy is to
focus on applying seismic technology to explore properties that lie within these
mature basins and that offer oil and gas reserves that would be materially
significant to the Company.

     The Company has a three-pronged corporate approach for the application of
exploration technology in these mature basins. The three components of this
strategy are set forth below:

     o    Internal generation of exploration and exploitation prospects with
          special emphasis on seismic application to structural and
          stratigraphic play concepts.

     o    Identification and exploitation of non-performing and under-utilized
          existing seismic surveys and acreage positions in which the
          application of technical expertise and advanced interpretation and
          visualization methodologies could significantly impact drilling
          results.

     o    Development of alliances with exploration and production companies
          that lack advanced technical resources and expertise.

Exploration and Operating Approach

     The Company focuses its technical resources on obtaining the highest
quality subsurface image through advanced geological and geophysical methods,
which it believes are more likely to result in the cost effective identification
of oil and gas reserves that are materially significant. The Company is
committed to providing its technical team with access to the required tools and
support necessary to retain a competitive advantage in today's exploration
environment. The Company strives to provide its geoscientists with the most
advanced imaging and analytical technology available and provides employee
incentives to utilize for the recruitment and motivation of these technical
experts.

     The Company adheres to a disciplined approach to selective project
participation. The Company participates only in those projects that it believes
are likely to maximize the return on its capital investment, have significant
reserve growth potential, and benefit from the application of advanced seismic
technology. The Company believes that these factors result in a positive impact
to the finding-cost and production economics. The Company actively and
continually manages its portfolio of exploration and exploitation projects. The
aggressive portfolio management enables the Company to maximize the investment
of available capital in a limited number of high impact geologic plays and
projects.

     The Company generates many of its exploration and exploitation projects
internally, and therefore is not dependent on outside parties for project flow.
The Company strives to control all the pre-drill exploration phases, including
the acreage position and the application of seismic technology. With the

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resulting project control, the Company is in the position to fully manage the
exploration process and determine, subject to its financial resources, the
appropriate level of working interest that it retains in the drilling of any
associated wells. The Company aggressively leverages its project control and
technical expertise to potential industry partners thereby maximizing return on
investment while controlling capital exposure. The Company does not intend to
operate the drilling of project wells, but intends to retain the flexibility to
maintain a sufficient working interest in projects to enhance leverage of its
technical resources and influence operator actions.

Significant Projects

     The Company's exploration activities are primarily focused on the southern
San Joaquin basin of California. The Company also has projects in selective
Rocky Mountain areas. Advanced seismic imaging of the structural and
stratigraphic complexities common to these regions provides the Company with
enhanced ability to identify significant hydrocarbon potential. A number of
these projects, especially in the San Joaquin basin, offer multiple drilling
opportunities with individual wells having the potential capability of
encountering multiple reservoirs.

     The following provides a summary and status of the Company's exploration
areas and significant projects. While actively pursuing specific exploration
activities in each of the following areas, the Company is continually reviewing
additional opportunities in these core areas and in other areas that meet
certain exploration and exploitation criteria. There is no assurance that
drilling opportunities will continue to be identified in the current project
portfolio or that they will be successful if drilled.

Southern San Joaquin Basin, California

     The San Joaquin basin of California has proven to be one of the most
productive hydrocarbon producing basins in the continental United States. To
date, the approximately 14,000 square mile basin has produced in excess of 13
billion barrels of oil equivalent, and contains 25 fields classified as giant,
with cumulative production of more than 100 MMBoe.

     The San Joaquin basin contains six of the 25 largest oil fields in the U.S.
All six of these fields were discovered between 1890 and 1911, a full decade
prior to the discovery of the first giant Texas oil field. The basin accounts
for 34 percent of California's actively producing fields, yet produces more than
75 percent of the state's total oil and gas production. Most of the production
within the basin is located along the western and southern end of Kern County.
San Joaquin basin production totals for 1998 reported by the California
Department of Oil and Gas for all producers in the aggregate indicate total
production of 254.62 MMBoe. Of this figure, Kern County accounts for over 90
percent of the oil production from the San Joaquin Basin.

     Exploration Opportunity. For the 100 plus years of its productive life, the
San Joaquin basin has been dominated by major oil companies and large fee
acreage holdings. As a result of these conditions, the basin has generally been
under-explored by independent exploration and production companies, groups that
usually bring advanced technologies to their exploration efforts. The large
fields in the basin were all discovered on surface anticlines and produce mostly
heavy oil from depths of less than 5,000 feet. As a consequence, basin operators
have employed only those advanced engineering technologies related to enhanced
production practices including steam floods and most recently, horizontal
drilling.

                                       11

<PAGE>


     The basin as a whole has suffered from a lack of applied exploration
technology and deep drilling. Approximately one percent of the total basin wells
have been drilled to a depth greater than 12,000 feet. Additional 1998
statistics indicate that the average well depth drilled during the year was just
slightly more than 1,800 feet.

     With limited exploration in the San Joaquin basin since the "boom" days of
the early 1980s, the Company believes that multiple exploration opportunities
are available. Deep basin targets, both structural and stratigraphic in nature,
remain largely untested with modern seismic technology and the drill bit. In
addition, retrenchment of the majors in the basin has caused many of them to
rethink their policies regarding their large fee acreage positions. For the
first time in history, many of these companies have opened up these fee acreage
positions to outside exploration by aggressive independent companies.

     East Lost Hills. During 1997, the Company identified and undertook
technical analysis of a deep, large untested structure in the footwall of the
Lost Hills thrust. This prospect lies directly east of and structurally below
the existing Lost Hills field, which has produced in excess of 350 MMBoe from
shallow pay zones in a large thrusted anticlinal feature.

     This unconventional deep prospect had significant structural and reservoir
risk, but the potential for large reserves made it an attractive play. In a
joint effort with Denver based Armstrong Resources LLC ("Armstrong"), the
Company has analyzed and interpreted over 350 miles of high-resolution 2-D
seismic data to help refine the structural mapping of the prospect. Advanced
pre-stack depth migration and interpretation clearly defines a deep sub-thrust
structure. Two wells drilled to the east of the prospect, in the mid-1970s,
proved the productivity potential of free oil (42 degree API) and gas at depths
below 17,000 feet. Ongoing source rock and maturation modeling suggests that the
oil generation window exists at depths between 15,000 and 17,000 feet, and that
early migration of hydrocarbons should preserve reservoir quality at East Lost
Hills.

     In early 1998, the Company and Armstrong entered into an exploration
agreement with a number of established Canadian joint interest partners to
participate in the drilling of an initial exploratory well to fully evaluate the
feature. PYR received cash consideration for its share of acreage in this play
and a carried 6.475% working interest through the tanks in the initial
exploration well. PYR owns an additional 4.1% working interest for a total
working interest of 10.575%.

     On May 15, 1998, an initial exploration well, the Bellevue Resources et al.
#1-17 East Lost Hills well, located in SE1/4. Sec 17, T26S, R21E, Kern County,
California, commenced drilling. The well was designed to test prospective
Miocene sandstone reservoirs in the Temblor Formation below 17,000 feet. During
September 1998, the well was sidetracked in an attempt to gain better structural
position and delineate potential uphole pay. On November 23, 1998, the well was
drilling at 17,600 feet toward a total depth of 19,000 feet when it blew out and
ignited. No personal injuries resulted, and an expert well control team was
engaged to contain the fire. Surface containment facilities were installed and
liquid and gas production were contained and were transported to processing and
disposal facilities. A snubbing unit was deployed to attempt a surface control
kill of the Bellevue #1-17, but, after eight kill attempts, was not successful.

     A majority of the costs associated with the blow out have been covered by
insurance policies in effect when the blow out occurred. A portion of the claims
have not yet been reimbursed through one of the insurance policies. The Company
has advanced approximately $410,000 for its proportionate share of the claims in
order that these claims be paid directly to the claimants. The Company believes

                                       12

<PAGE>


that most, if not all of these claims will ultimately be reimbursed through
insurance proceeds. The Company currently carries the advanced funds as
Reimbursable Property Costs on its August 31, 1999 Balance Sheet.


     On December 18, 1998, a relief well, the Bellevue #1-17R, began drilling.
This well was initially expected to intersect the wellbore of the Bellevue #1-17
at a depth of about 13,500 feet. However, as drilling continued and the
characteristics of the blowout were examined, it was determined that it would be
necessary to intersect the wellbore below 16,000 feet. The relief well was
drilled to 16,668 feet, where it intersected the original well bore. On May 29,
1999, the Bellevue #1-17 well was killed by pumping heavy mud and cement into
the well bore. This well bore has been plugged and abandoned and the relief well
has been successfully used to sidetrack a replacement well into the targeted
Temblor Zone. The Bellevue 1-17R well was production tested in December and
flowed gas at rates ranging between 1.3 and 5.0 MMCFPD. Condensate and water was
also obtained during the test. Pressure built-up analysis indicated that only
the uppermost sand unit encountered in 1-17R was contributing to the flow. The
uncemented production liner in 1-17R makes stimulation efforts very difficult,
hence the participants have decided to review the options of either a sidetrack
of 1-17R in order to redrill the Temblor section or to drill a new well from
surface.

     On August 26, 1999, the participants in this prospect commenced drilling a
second well at East Lost Hills to further explore the Temblor Formation. This
well is approximately two miles to the northwest of the original well. The
target depth for this well is 19,000 feet. In order to have a better chance to
reach total depth, a drilling rig capable of drilling to 30,000 feet was brought
in to drill this well. As of January 27, 2000, this well has been drilled to a
depth of 18,237 feet, approximately 1,000 feet into the Temblor formation. Total
depth remains at 20,000 feet, and is expected to be reached late in the first
quarter of calendar year 2000. It is expected that an intermediate casing string
will be run prior to completion to total depth.


     At the present time, the participants may drill one or more additional
wells in this prospect during calendar year 2000.

     Deep Temblor Exploration Program - Cal Canal, Lucky Dog and Pyramid Power.
In April 1999, the Company purchased a working interest in three additional deep
exploration projects in the San Joaquin basin of California. These three
projects are in addition to the exploration program initiated by the recent deep
drilling at East Lost Hills, and all three lay outside the East Lost Hills joint
venture area. Pursuant to the agreement, the Company purchased working
interests, ranging from 3.00% to 3.75%, in each of the three exploration
prospect areas. The Company's interest will be carried (non-cost bearing)
"through the tanks" in the initial test well in each of the three separate
exploration prospects.

     The three exploration prospects in this program, targeting the Temblor
Formation at depths ranging from 15,000 to 19,000 feet, are expected to be
drilled in sequence with the same rig. Berkley will operate the other
exploration projects in the Deep Temblor Exploration Program as well as the
future operations at East Lost Hills.


     The first exploration well in the program (Cal Canal) began drilling on
June 15, 1999 and is operated by Berkley. This well was drilled to 18,100 feet.
Completion operations commenced on January 20, 2000. Non commercial hydrocarbon
flow rates were obtained from the initial perforated 10 foot zone in the lower
McDonald. Several additional zones remain to be tested in the Temblor, McDonald
and upper McDonald. Participants have decided to defer further completion or
deepening of the existing well bore until information regarding reservoir
quality and performance is obtained from additional on-going drilling efforts in
the San Joaquin basin.


     Wedge Prospect and Bull Dog Prospect. PYR has created these exploration
opportunities and is in the process of presenting these prospects to potential
industry partners. These prospects will target the Temblor Formation in the San
Joaquin basin, similar to the East Lost Hills and Deep Temblor Exploration
Program. PYR currently controls 100% of the gross acreage in these areas and
intends to sell a portion of its interest to industry partners for a cash
consideration while retaining a working interest in the exploration wells and
adjoining acreage. PYR controls approximately 21,000 acres in these prospects
and expects to drill 1 or 2 exploration wells during calendar 2000.

                                       13

<PAGE>


     Rectang Force Prospect. PYR owns 30% of approximately 3,800 acres in this
San Joaquin basin prospect. This is another prospect that targets the Temblor
Formation. PYR may elect to participate in the drilling of an initial
exploration well here at the current 30% ownership, or may elect to sell down
its interest for cash and/or a carried working interest in the initial well.
This prospect is still in the development stage and no drilling plans are
currently in place.

     Southeast Maricopa. PYR holds a 100% working interest in this acreage.
During 1998, PYR acquired new 3-D seismic data over approximately 56 square
miles using Western Geophysical Company as the seismic contractor. PYR is
currently presenting this prospect to potential industry participants and
intends to generate an up front cash consideration and a carried working
interest in an initial exploration well here. Through lease and option, PYR has
a 100% working interest in approximately 14,000 gross acres in this project.

     School Road Prospect. On June 1, 1998, the Company executed a participation
agreement with Houston based Seneca Resources, Inc. for the Company's School
road acreage. The drill to earn agreement provided PYR with a cash consideration
and a "carried through the tanks" working interest in an initial exploration
well. This well commenced drilling on July 28, 1998 and, after drilling to a
total depth of 12,508 feet, was plugged and abandoned. The Company charged
$15,000 as a dry hole impairment in fiscal 1998. After further evaluation of the
prospect, the Company has determined that it is unlikely that the Company will
pursue additional drilling on this acreage. Accordingly, the Company has
recorded an impairment of approximately $285,000 against its basis in this
project.

     Rocky Mountain Areas. The Company is in the process of developing
exploration plays in three separate high potential prospect areas. PYR intends
to replicate the approach taken with the California projects by controlling the
pre-drill exploration phase including developing the geological background,
identifying potential oil and/or gas reservoirs via seismic imaging, and
controlling the land position. After these tasks are complete, the Company
intends to take each prospect to potential industry partners in order to
generate up front cash and drilling activity. The Company currently controls,
through lease or option, approximately 104,000 gross and 52,000 net acres in
these projects. The Company expects these projects will be ready for
presentation around mid-year of calendar year 2000.

Geological and Geophysical Expertise

     The Company's oil and gas finding capabilities are dependent upon the
effective application of seismic imaging technologies. The Company has assembled
a technically experienced staff of in-house geologists and geophysicists with
extensive experience involving the utilization of advanced seismic data imaging
and analysis, who have collectively participated in more than 100 3-D seismic
projects in diverse geological trends.

     The Company also has access, both in-house and through consultants, to
state-of-the-art exploration hardware and software applications. The Company
owns a computer aided exploration workstation running the full suite of
GeoGraphix geologic mapping and analysis software. Additionally, the Company
owns one geophysical workstation employing SeisX 2-D and 3-D seismic
interpretation and analysis software. Through a strategic alliance with a
Denver-based 3-D seismic consulting firm (Interactive Earth Sciences
Corporation), the Company has full access to multiple UNIX-based seismic
interpretation workstations running the complete Schlumberger/GeoQuest seismic

                                       14

<PAGE>


analysis software package. Through this relationship, the Company also has full
access to GMA seismic modeling software as well as Paradigm Geophysical's
GeoDepth pre-stack depth migration software package.

Drilling Activities

     During 1999, the Company participated in the drilling of the initial
exploration well at Cal Canal in its Deep Temblor exploration project. The
Company owns a 3.75% working interest in this prospect and because of its
ownership interest being carried through the tanks, the Company has no capital
cost commitment on this initial well until the well has been completed and is
producing. However, there is no assurance this well will ever be commercially
productive. The Company is also participating in a step-out well at its East
Lost Hills Project that commenced drilling on August 26, 1999. PYR owns a
10.575% working interest in this well and the surrounding acreage and is paying
its full 10.575% of the drilling costs. Although there is no assurance that any
additional exploration wells will be drilled, the Company anticipates the
drilling of from two to five additional exploratory wells during 2000, depending
on ongoing exploration efforts in California and in the Rocky Mountains.

Production

     The Company currently does not own any oil or gas production. The Company
has no immediate plans to acquire or purchase any production. The Company also
has no booked reserves at the current time and any near-term reserve additions
would result solely from successful exploration efforts and any successful
development thereof.

Acreage

     The Company currently controls, through lease, farmout, and option, the
following approximate acreage position as detailed below:


       State                            Gross Acres             Net Acres
       -----                            -----------             ---------
       California                         100,000                 45,000
       Rocky Mountain Areas               175,000                122,000
       --------------------               -------                -------
       TOTAL                              275,000                167,000


Competitive Advantage

     The Company believes that the cumulative experience of its technical and
management team, with past exposure to more than 100 seismic projects covering
approximately 1,500 square miles in diverse geologic trends throughout the
world, results in a strong competitive advantage relative to current competition
in these focus areas. The Company currently has four full-time geoscientists and
a landman who are specialists in a variety of technical exploration aspects and
have extensive experience and expertise in numerous geologic regions.

     The Company's expertise in the application of advanced seismic
interpretation methods includes many of the "cutting-edge" technologies
necessary in today's competitive exploration environment. These advanced
techniques include seismic visualization, attribute analysis, geostatistical
modeling, pre-stack depth migration, and the integration of geological and
engineering data in support of reservoir characterization. These advanced
seismic interpretation methods allow the Company to leverage its seismic
experience and expertise with significant exploration and exploitation
opportunities.

                                       15

<PAGE>


     The Company generates the majority of its exploration and exploitation
projects internally, and therefore is not dependent on third parties for project
flow. This results in full control of all pre-drill exploration phases including
the acreage position and application of seismic technology.


ITEM 3.  LEGAL PROCEEDINGS

     The Company is not a party to any current or pending legal proceeding (nor
are any of the Company's properties subject to a pending legal proceeding).


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

     Not applicable.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


     The Company's Common Stock has been traded in the over-the-counter market
and has been quoted on the OTC Bulletin Board since November 1996. Effective as
of November 12, 1997, the Company's trading symbol was changed from "MRVI" to
"PYRX". Effective December 8, 1999, the Company's Common Stock began trading on
The American Stock Exchange under the trading symbol "PYR".


     The table below presents the range of high and low sales prices for the
Company's Common Stock during each of the quarters indicated as reported by the
OTC Bulletin Board.

                                                    Sales Prices
                                                    ------------
       Quarter Ended                            High            Low
       -------------                            ----            ---

     November 30, 1996                          .125            .12
     February 28, 1997                          .0625           .0625
     May 31, 1997                               .1875           .1875
     August 31, 1997                           1.6875           .25
     November 30, 1997                         2.00            1.4375
     February 28, 1998                         1.875            .6875
     May 31, 1998                              1.4375           .70
     August 31, 1998                           1.1875           .41
     November 30, 1998                         3.5625           .4375
     February 28, 1999                         5.00            1.375
     May 31, 1999                              3.00            1.75
     August 31, 1999                           5.125           2.125


     On January 27, 2000, the closing sales price for the Company's Common Stock
was $3.25 per share.


                                       16

<PAGE>


Number Of Stockholders Of Record


     On January 27, 2000, the number of stockholders of record of the Company
was approximately 1,475.


Dividend Policy

     The Company has not declared or paid any cash dividends on its Common Stock
since its formation and does not presently anticipate paying any cash dividends
on its Common Stock in the foreseeable future. The Company currently intends to
retain any future earnings to finance the expansion and continued development of
its business.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The following is a discussion and comparison of the financial condition and
results of operations of the Company as of and for the twelve months ended
August 31, 1999 ("1999"), and as of and for the twelve months ended August 31,
1998 ("1998"). This discussion should be read in conjunction with the Company's
Financial Statements, the notes related thereto, and the other financial data
included elsewhere in this Annual Report on Form 10-KSB.

Overview

     The Company is a developoment stage independent oil and gas exploration
company whose strategic focus is the application of advanced seismic imaging and
computer aided exploration technologies in the systematic search for commercial
hydrocarbon reserves, primarily in the onshore western United States. The
Company attempts to leverage its technical experience and expertise with seismic
data to identify exploration and exploitation projects with significant
potential economic return. The Company intends to participate in selected
exploration projects as a non-operating, working interest owner, sharing both
risk and rewards with its partners. The Company has pursued, and will continue
to pursue, exploration opportunities in regions where the Company believes
significant opportunity for discovery of oil and gas exists. By attempting to
reduce drilling risk through seismic technology, the Company seeks to improve
the expected return on investment in its oil and gas exploration projects.

     During 1999, the Company incurred approximately $876,000 for costs related
to continued leasing and optioning of acreage, $1,094,000 for positions in
additional exploration projects in California, $313,000 for costs relating to
seismic and $480,000 in drilling costs associated with deep exploratory drilling
at the Company's East Lost Hills project. The Company had no revenues from oil
and gas production during 1999.

     During 1998, the Company incurred approximately $439,000 for acquisition of
acreage, $2,046,000 for costs relating to 3-D seismic acquisition and $118,000
in drilling costs at East Lost Hills.

     The Company currently anticipates that it will participate in the drilling
of at least two exploratory wells during its fiscal year ending August 31, 2000
("2000"), although the number of wells may increase as additional projects are

                                       17

<PAGE>


added to the Company's portfolio. However, there can be no assurance that any
such wells will be drilled and if drilled that any of these wells will be
successful. See "ITEMS 1 AND 2. DESCRIPTION OF BUSINESS AND PROPERTIES-Start-Up
Nature Of The Company's Oil And Gas Business; Absence Of Profits."

     The Company's future financial results continue to depend primarily on (i)
the Company's ability to discover commercial quantities of hydrocarbons; (ii)
the market price for oil and gas; (iii) the Company's ability to continue to
source and screen potential projects; and (iv) the Company's ability to fully
implement its exploration and development program. There can be no assurance
that the Company will be successful in any of these respects or that the prices
of oil and gas prevailing at the time of production will be at a level allowing
for profitable production. See "ITEMS 1 AND 2. DESCRIPTION OF BUSINESS AND
PROPERTIES-Start-Up Nature of The Company's Oil And Gas Business; Absence Of
Profits," "- Substantial Capital Requirements And Liquidity" and "- Risks Of
Exploratory Drilling Activities."


Results of Operations

     The twelve months ended August 31, 1999 ("1999") compared with the twelve
months ended August 31, 1998 ("1998")

     Oil and Gas Revenues and Expenses. At August 31, 1999, the Company did not
own any producing or proved oil and gas properties, and no oil and gas
production revenues or expenses had been recorded by the Company. The Company
recorded an impairment against its "School Road" Project of $285,000 in 1999 and
recorded a dry hole impairment of $15,000 associated with its unsuccessful
exploration well drilled in 1998 on its "School Road" acreage.

     Consulting Fee Revenue. The Company generated $10,000 from consulting fees
in 1998. These revenues are considered to be ancillary to the Company's focus of
generating revenues from oil and gas production. These revenues have ceased
completely and are not expected to occur at any time in the future.

     General and Administrative Expense. The Company incurred $743,000 and
$675,000 in general and administrative expenses during 1999 and 1998,
respectively. The increase results from incurring costs associated with the
hiring of additional technical and administrative personnel in pursuit of the
development of the Company's exploration and exploitation plan.

     Dry Hole, Impairment and Abandonments. During 1998, the Company recorded a
dry hole impairment of $15,000 associated with the drilling of an unsuccessful
exploration well on its School Road Acreage. In 1999, the Company re-evaluated
School Road and recorded an impairment of approximately $285,000 against its
basis in this project. Also in 1999, the Company has abandoned projects and has
recorded an abandonment cost of approximately $21,000 associated with these
projects.

     Interest Expense. The Company recorded $183,000 in interest expense during
1999, predominately associated with the 10% Convertible Debentures that were
outstanding from October 26, 1998 through April 16, 1999. Per the Convertible
Debenture agreement, the Company elected to pay this interest by issuing 53,326
shares of the Company's common stock. The Company had nominal interest expense
during 1998.

     Depreciation, Depletion and Amortization. The Company recorded no depletion
expense from oil and gas properties in 1999 or 1998. At August 31, 1999 and
1998, the Company did not own any proved reserves and had no oil or gas

                                       18

<PAGE>


production. The Company recorded $24,000 and $22,000 in depreciation expense
associated with capitalized office furniture and equipment during 1999 and 1998,
respectively. The Company also recorded nominal amortization expense associated
with organization costs during 1999 and 1998.

     Gain On Sale of Oil and Gas Properties. During 1998, the Company sold a
portion of its East Lost Hills project to industry partners for a total of
$850,000, resulting in a net gain to the Company of $556,000. The Company has
retained a working interest in this property of 10.575%.

     During the fiscal year ended August 31, 1999, the Company's carrying costs
for undeveloped oil and gas properties increased by a net amount of
approximately $2,560,000. This net increase is comprised of expenditures on
undeveloped oil and gas prospects of approximately $2,889,000, and property
abandonments and impairments of approximately $330,000.

     During 1998, the Company sold interests in two of its prospects, School
Road and East Lost Hills. Proceeds of $200,000 from the sale of a partial
interest in the School Road prospect were charged against the full cost pool as
this sale did not materially alter the Company's full cost pool as of the date
of sale. Proceeds of $850,000 were received from the sale of part of the
Company's interest in its East Lost Hills project. As the sale of this interest
in East Lost Hills was greater than 25% of the Company's undeveloped oil and gas
prospects as of the date of sale, gain was recognized in the financial
statements for the year ended August 31, 1998 in the amount of $556,000 and the
Company's carrying cost of undeveloped oil and gas prospects was reduced by the
basis in the interest sold of $294,000.

Liquidity and Capital Resources

     At August 31, 1999, the Company had a working capital amount of $5,021,000.
In May of 1999, the Company issued 4,375,000 shares of its common stock in
exchange for $7,000,000 in cash. As part of this transaction, the Company also
issued 437,500 warrants to purchase one common share for each warrant issued at
a price of $2.50 per share. In November of 1998, the Company had issued a total
of $2,500,000 in 10% convertible notes. These notes automatically converted to
10% convertible preferred stock when the Company's stockholders approved
authorization of the preferred stock at the Company's stockholders meeting held
on April 16, 1999. The Company incurred costs of approximately $82,000 in
connection with this issuance of the notes and recorded costs attributable to
the issuance of warrants of approximately $57,000. To date, the Company has
funded its oil and gas exploration activities principally through cash provided
by the sale of its securities.

     Cash used in investing activities during 1999 totaled $9,037,000. Of this
amount, $3,523,000 was used in conjunction with the Company's oil and gas
exploration and exploitation plan, $5,091,000 was used to invest in government
backed securities, $410,000 was used to advance payments to claimants related to
the blow out at the Company's East Lost Hills Prospect and $13,000 was used for
office furniture and equipment.

     The Company had no outstanding long-term debt at August 31, 1999 other than
a capital lease obligation and has not entered into any commodity swap
arrangements or hedging transactions. Although it has no current plans to do so,
it may enter into commodity swap and/or hedging transactions in the future in
conjunction with oil and gas production. Nevertheless, there can be no assurance
that the Company will ever have oil and gas production.

                                       19

<PAGE>


     It is anticipated that the future development of the Company's business
will require additional (and possibly substantial) capital expenditures.
Depending upon the extent of success of the Company's ability to sell additional
prospects for cash, the level of industry participation in the Company's
exploration projects, the continuing results at East Lost Hills and the Deep
Temblor exploration program, the Company may require from $2,000,000 to over
$10,000,000 for capital expenditures relating to exploration and potential
development of its projects during the 12 month period ending August 31, 2000.
See "ITEMS 1 AND 2. DESCRIPTION OF BUSINESS AND PROPERTIES-Substantial Capital
Requirements And Liquidity". The Company intends to attempt to limit capital
expenditures by forming industry alliances and exchanging an appropriate portion
of its interest for cash and/or a carried interest in its exploration projects.
Although currently there are no commitments for additional funding, the Company
may need to raise additional funds to cover capital expenditures. See "ITEMS 1
AND 2. DESCRIPTION OF BUSINESS AND PROPERTIES-- Disclosure Regarding
Forward-Looking Statements And Cautionary Statements--Cautionary Statements" and
"--Significant Properties--Southern San Joaquin Basin, California".


Year 2000 Compliance

     Year 2000 compliance is the ability of computer hardware and software to
respond to the problems posed by the fact that computer programs traditionally
have used two digits rather than four digits to define an applicable year. As a
consequence, any of the Company's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
interruption of operations, including temporary inability to perform seismic
analysis and to perform accounting functions and delays in the receipt of
payments from purchasers of oil and gas production, if any. The Company
currently has reviewed the Company's computers and software as well as other
material equipment that utilizes imbedded computer chips, such as facsimile
machines and telephone systems, and has not found any information suggesting
that the Company is vulnerable to potential Year 2000 failures in these areas.
The Company has confirmed with the maker of its accounting software that it is
Year 2000 compliant. In addition, the Company has confirmed with the vendors
that it believes are its most significant vendors, and does not feel there is
significant risk for the Company associated with Year 2000 failures. The
Company's contingency plans include doing business with other vendors in the
event that a vendor is disrupted by Year 2000 failures. The Company has
identified other potential vendors for this purpose.




                                       20


<PAGE>


ITEM 7.  FINANCIAL STATEMENTS

     The Financial Statements that constitute Item 7 are attached at the end of
this Annual Report on Form 10-KSB. An index to these Financial Statements is set
forth below:

                                                                       Page
                                                                       ----

         Independent Auditor's Report                                   F-2

         Balance Sheet
                  August 31, 1999                                       F-3

         Statements of Operations
                  Years ended August 31, 1998 and 1999
                  And cumulative amounts from Inception
                  To August 31, 1999.                                   F-4

         Statements of Members'/Stockholders' Equity
                  Period from Inception (May 31, 1996) to
                  December 31, 1996, Eight Months Ended
                  August 31, 1997 and Years Ended August
                  31, 1998 and 1999.                                  F-5, F-6

         Statements of Cash Flows
                  Years ended August 31, 1998 and 1999
                  And cumulative amounts from Inception
                  To August 31, 1999.                                 F-7 - F-8

         Notes To Financial Statements                                F-9 - F-19

All other schedules are omitted because they are inapplicable, not required, or
the information is included in the financial statements or notes thereto.


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

     Not applicable.


                                       21


<PAGE>

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

     The directors and executive officers of the Company, their respective
positions and ages, and the year in which each director was first elected, are
set forth in the following table. Each director has been elected to hold office
until the next annual meeting of stockholders and thereafter until his successor
is elected and has qualified. Additional information concerning each of these
individuals follows the table.

<TABLE>
<CAPTION>


           Name                 Age          Position with the Company         Director Since
           ----                 ---          -------------------------         --------------
<S>                            <C>        <C>                                   <C>
D. Scott Singdahlsen             41      Chief Executive Officer,                   1997
                                         President, and Chairman
                                         Of the Board

Robert B. Suydam                 61      Vice President--Geology and Director       1998

Andrew P. Calerich               35      Chief Financial Officer and Secretary       ---

Keith F. Carney                  43      Director                                   1997

S. L. Hutchison                  66      Director                                   1999

Bryce W. Rhodes                  46      Director                                   1999

Kenneth R. Berry, Jr.            47      Vice President-Land                        1999
</TABLE>

     D. Scott Singdahlsen has served as President, Chief Executive Officer, and
Chairman of the Board of the Company since August 1997. Mr. Singdahlsen
co-founded PYR Energy, LLC in 1996, and served as General Manager and
Exploration Coordinator. In 1992, Mr. Singdahlsen co-founded Interactive Earth
Sciences Corporation, a 3-D seismic management and interpretation consulting
firm in Denver, where he served as vice president and president and lead seismic
interpretation specialist from 1992 to 1996. Prior to forming Interactive Earth
Sciences Corporation, Mr. Singdahlsen was employed as a Development Geologist
for Chevron USA in the Rocky Mountain region. At Chevron, Mr. Singdahlsen was
involved in 3-D seismic reservoir characterization projects and geostatistical
analysis. Mr. Singdahlsen started his career at UNOCAL as an Exploration
Geologist in Midland, Texas. Mr. Singdahlsen earned a B.A. in Geology from
Hamilton College and a M.S. in Structural Geology from Montana State University.


     Robert B. Suydam has served as a Director of the Company since October
1998. Mr. Suydam has served as Vice-President - Geology of the Company since
August 1997 and was Secretary of the Company from August 1997 until May 1998.
Mr. Suydam co-founded PYR Energy, LLC in 1996 and served as Chief Geologist.
From 1985 until 1996, Mr. Suydam served as exploration coordinator for Snyder
Oil, Gerrity Oil, and Energy Minerals in Denver. Prior to this employment, Mr.
Suydam served as Vice President of Exploration for National Oil Company, and as
Exploration Manager for Hamilton Brothers Oil Company in Denver and Calgary. Mr.
Suydam started his career as an exploration geologist at Texaco in Denver,
Calgary, and New Orleans. Mr. Suydam earned a B.S. and M.S. in Geology from the
University of Wyoming. Effective December 31, 1999, Mr. Suydam retired as an
employee of the Company and resigned from the Board of Directors.


                                       22

<PAGE>


     Andrew P. Calerich has served as Chief Financial Officer of the Company
since August 1997, as Secretary of the Company since May 1998 and as Vice
President since August of 1999. From 1993 to 1997, Mr. Calerich was a business
consultant specializing in accounting for private oil and gas producers in
Denver. From 1990 to 1993, Mr. Calerich was employed as corporate Controller at
a public oil and gas company in Denver. Mr. Calerich began his professional
career in public accounting in the tax department at Arthur Andersen & Company.
Mr. Calerich is a Certified Public Accountant and earned B.S. degrees in both
Accounting and Business Administration at Regis College.

     Keith F. Carney has served as a Director of the Company since August 1997.
Since October 1997, Mr. Carney has been Executive Vice-President of Cheniere
Energy, Inc., a Houston based public oil and gas exploration company. From July
1997 until October 1997, Mr. Carney served as Chief Financial Officer of
Cheniere Energy. After earning his M.B.A. degree from the University of Denver
in 1992, Mr. Carney was employed as a Securities Analyst in the oil and gas
exploration/production sector with Smith Barney, Inc. Mr. Carney began his
career as an exploration Geologist at Shell Oil after earning B.S. and M.S.
degrees in Geology from Lehigh University.

     S. L. Hutchison has been a Director of the Company since April 1999, when
he was nominated and elected to the Board in connection with the sale by the
Company of convertible promissory notes issued in a private placement
transaction in October and November 1998. Since 1979, Mr. Hutchison has served
as Vice President and Chief Financial Officer of Victory Oil Company, an oil and
gas production company based in California, and other companies in the Victory
Group of Companies. Also during that period, Mr. Hutchison has served as
Vice-President and Chief Financial Officer and a Director of Crail Capital, a
real estate investment company that is owned by Victory Oil Company, and Victex,
Inc., a real estate and oil and gas company. Mr. Hutchison also serves as Chief
Financial Officer and a director of each of the Crail Johnson Foundation and the
Independent Oil Producers Agency, and is the Treasurer and a director of the Los
Angeles Maritime Institute. Mr. Hutchison received a Bachelor's degree in
accounting from the University of Washington in 1954.

     Bryce W. Rhodes has been a Director of the Company since April 1999, when
he was nominated and elected to the Board in connection with the sale by the
Company of convertible promissory notes issued in a private placement
transaction in October and November 1998. Since 1996, Mr. Rhodes has served as
Vice President of Whittier Energy Company ("WEC"), an oil and gas investment
company. Mr. Rhodes served as Investment Manager of WEC from 1990 until 1996.
Mr. Rhodes received B.A. degrees in Geology and Biology from the University of
California, Santa Cruz, in 1976 and an MBA degree from Stanford University in
1979.

     Kenneth R. Berry, Jr. has served as Vice President of land since August,
1999 and as land manager for the Company since October 1997. Mr. Berry is
responsible for the management of all land issues including leasing and
permitting. Mr. Berry has 23 years of experience as an independent landman.
Prior to joining the Company, Mr. Berry served as the managing land consultant
for Swift Energy Company in the Rocky Mountain region. Mr. Berry began his
career in the land department with Tenneco Oil Company after earning a B.A.
degree in Petroleum Land Management at the University of Texas - Austin.

                                       23

<PAGE>


Board And Committee Meetings

     The Board of Directors met nine times during the fiscal year ended August
31, 1999 and, except for one meeting, all directors were present at each of
those meetings.

     The Board of Directors currently has a Compensation Committee which met
three times during the fiscal year ended August 31, 1999 and all members of the
Compensation Committee participated in those meetings. The Compensation
Committee has the authority to establish policies concerning compensation and
employee benefits for employees of the Company. The Compensation Committee
reviews and makes recommendations concerning the Company's compensation policies
and the implementation of those policies and determines compensation and
benefits for executive officers. The Compensation Committee currently consists
of Messrs. Carney, (Chairman), Hutchison and Rhodes, each of whom is an outside
director.

     The Board of Directors currently has an audit committee consisting of
Messrs. Hutchison (Chairman), Carney and Rhodes. The audit committee did not
meet formally during the fiscal year ending August 31, 1999.

Section 16(a) Beneficial Ownership Reporting Compliance


     Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's common stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
The Company believes that during the year ended August 31, 1999, its officers,
directors and holders of more than 10% of the Company's common stock complied
with all Section 16(a) filing requirements, except Keith F. Carney, a director
of the Company, was late in filing a Form 4 required to be filed for May 1999.
The report concerned one transaction in May 1999, which consisted of Mr.
Carney's purchase of shares and warrants in a private placement by the Company.
In making these statements concerning compliance with Section 16(a), the Company
has relied upon the written representations of its directors and officers and
the Company's review of the monthly statements of changes filed with the Company
by its officers and directors.



ITEM 10. EXECUTIVE COMPENSATION


Summary Compensation Table

     The following table sets forth in summary form the compensation received
during each of the Company's last three successive completed fiscal years by D.
Scott Singdahlsen, the Chief Executive Officer, President and Chairman Of The
Board of the Company. No executive officer of the Company, including the Chief
Executive Officer and the Chairman Of The Board, received total salary and bonus
exceeding $100,000 during any of the last three fiscal years.

                                       24

<PAGE>
<TABLE>
<CAPTION>

                                        Summary Compensation Table
                                        --------------------------

                                                                        Long Term Compensation
                                                                        ----------------------
                                    Annual Compensation                         Awards                     Payouts
                                    -------------------                         ----------------------------------
                                                                          Restricted
                                                              Other Annual   Stock       LTIP     All other
     Name and             Fiscal       Salary        Bonus    Compensation  Awards ($)  Options    Payouts   Compensation
 Principal Position        Year         ($)(1)       ($)(2)     ($)(3)                    (#)       ($)(4)      ($)(5)
-------------------------------------------------------------------------------------------------------------------------

<S>                        <C>         <C>             <C>         <C>         <C>        <C>         <C>         <C>
D. Scott Singdahlsen       1999        $77,917        -0-         -0-         -0-        -0-         -0-         -0-
Chief Executive Officer,
President and Chairman     1998        $75,000        -0-         -0-         -0-        -0-         -0-         -0-
Of the Board
                           1997        $10,250        -0-         -0-         -0-        -0-         -0-         -0-
</TABLE>

----------

(1)  The dollar value of base salary (cash and non-cash) received during the
     year indicated. Includes $4,000 paid as consulting fees to Mr. Singdahlsen
     by PYR Energy, LLC during the period from January 1, 1997 through August 6,
     1997.

(2)  The dollar value of bonus (cash and non-cash) received during the year
     indicated.

(3)  During the period covered by the Summary Compensation Table, the Company
     did not pay any other annual compensation not properly categorized as
     salary or bonus, including perquisites and other personal benefits,
     securities or property.

(4)  The Company does not have in effect any plan that is intended to serve as
     incentive for performance to occur over a period longer than one fiscal
     year except for the Company's 1997 Stock Option Plan.

(5)  All other compensation received that the Company could not properly report
     in any other column of the Summary Compensation Table including annual
     Company contributions or other allocations to vested and unvested defined
     contribution plans, and the dollar value of any insurance premiums paid by,
     or on behalf of, the Company with respect to term life insurance for the
     benefit of the named executive officer, and, the full dollar value of the
     remainder of the premiums paid by, or on behalf of, the Company.

                                       25

<PAGE>


1997 Stock Option Plan

     In August 1997, the Company's 1997 Stock Option Plan (the "1997 Plan") was
adopted by the Board of Directors of the Company and subsequently approved by
the Company's stockholders. Pursuant to the 1997 Plan, the Company may grant
options to purchase an aggregate of 1,000,000 shares of the Company's Common
Stock to key employees, directors, and other persons who have contributed or are
contributing to the success of the Company. The options granted pursuant to the
1997 Plan may be either incentive options qualifying for beneficial tax
treatment for the recipient or nonqualified options. The 1997 Plan may be
administered by the Board of Directors or by an option committee. Administration
of the 1997 Plan includes determination of the terms of options granted under
the 1997 Plan. At August 31, 1998, options to purchase 246,000 shares were
outstanding under the 1997 Plan. During fiscal year ended August 31, 1999,
options to purchase 585,000 additional shares were granted and options to
purchase 10,000 shares terminated so that, as of August 31, 1999, options to
purchase 821,000 shares were outstanding and 179,000 shares may be granted
pursuant to the 1997 Plan.

Compensation Of Outside Directors

     Currently, Directors are not compensated for serving as a director.
Directors are reimbursed for direct expenses incurred in attending meetings and
for other expenses incurred on behalf of the Company.

Employment Contracts And Termination of Employment And Change-In-Control
Arrangements

     The Company does not have any written employment contracts with respect to
any of its officers or other employees. The Company has no compensatory plan or
arrangement that results or will result from the resignation, retirement, or any
other termination of an executive officer's employment with the Company or from
a change-in-control of the Company or a change in an executive officer's
responsibilities following a change-in-control, except that the 1997 Plan
provides for vesting of all outstanding options in the event of the occurrence
of a change-in-control.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


     As of January 27, 2000, there were 15,947,764 shares of the Company's $.001
par value common stock (the "Common Stock") outstanding. The following table
sets forth certain information as of January 27, 2000, with respect to the
beneficial ownership of the Company's Common Stock by each director, by all
executive officers and directors as a group, and by each other person known by
the Company to be the beneficial owner of more than five percent of the
Company's Common Stock:


                                       26

<PAGE>
<TABLE>
<CAPTION>
Name and Address of                         Number of Shares                 Percentage of
Beneficial Owner                            Beneficially Owned (1)           Shares Outstanding
----------------                            ----------------------           ------------------

<S>                                         <C>                                     <C>

D. Scott Singdahlsen                          1,940,000 (2)                          12.2%
1675 Broadway, Suite 1150
Denver, Colorado  80202

Keith F. Carney                                 123,900 (3)                             *
915 Bay Oaks Road
Houston, Texas  77008

S.L. Hutchison                                3,243,895 (4)                          18.7%
c/o Victory Oil Company
222 West Sixth Street, Suite 1010
San Pedro, California  90731

Bryce W. Rhodes                                  83,478 (5)                             *
c/o Whittier Energy Company
462 Stevens Avenue, Suite 109
Solana Beach, California  92075

All Executive Officers
and Directors as a group                      5,749,136 (3)(4)(5)(6)(7)              32.6%
(six persons)

PinOak Inc.                                   1,300,000 (8)                           8.2%
5037 South Oak Court
Littleton, Colorado  80127

Victory Oil Company                           3,106,929 (9)                          18.0%
222 West Sixth Street, Suite 1010
San Pedro, California  90731

Thomas E. Claugus                               935,225 (10)                          5.8%
2100 RiverEdge Parkway, Suite 840
Atlanta, Georgia  30328
</TABLE>

----------
*        Less than one percent.

(1)  "Beneficial ownership" is defined in the regulations promulgated by the
     U.S. Securities and Exchange Commission as having or sharing, directly or
     indirectly (i) voting power, which includes the power to vote or to direct
     the voting, or (ii) investment power, which includes the power to dispose
     or to direct the disposition of shares of the common stock of an issuer.
     The definition of beneficial ownership includes shares underlying options
     or warrants to purchase common stock, or other securities convertible into
     common stock, that currently are exercisable or convertible or that will
     become exercisable or convertible within 60 days. Unless otherwise
     indicated, the beneficial owner has sole voting and investment power.

(2)  Includes 100,000 shares held by a trust of which Mr. Singdahlsen's minor
     son is the beneficiary.

                                       27

<PAGE>


(3)  Includes currently exercisable options to purchase 10,000 shares at
     $1.28125 per share until May 26, 2001, and currently exercisable options to
     purchase 2,500 shares for $4.00 per share until December 20, 2002. Also
     includes currently exercisable warrants to purchase 2,400 shares at $2.50
     per share until May 14, 2004.

(4)  Includes 66,666 shares of common stock that have been or may be issued upon
     the conversion of Series A Preferred Stock held by Mr. Hutchison and
     currently exercisable options to purchase 2,500 shares for $4.00 per share
     until December 20, 2002. Also includes the shares shown as beneficially
     owned by Victory Oil Company as described in note (9) below. Mr. Hutchison
     is the Vice President and Chief Financial Officer of Victory Oil Company.
     Mr. Hutchison disclaims beneficial ownership of the shares beneficially
     owned by Victory Oil Company.




(5)  Includes 13,000 shares of common stock owned by Mr. Rhodes and 23,531
     shares of common stock owned by Adventure Seekers Travel, Inc. and 44,446
     shares that may be issued upon the conversion of Series A Preferred Stock
     held by Adventure Seekers. Adventure Seekers is owned by Mr. Rhodes' wife
     and Mr. Rhodes is the President of Adventure Seekers. Also includes
     currently exercisable warrants to purchase 2,400 shares at $2.50 per share
     until May 14, 2004, and currently exercisable options to purchase 2,500
     shares for $4.00 per share until December 20, 2002.

(6)  Includes 2,500 shares of common stock that are held by Andrew P. Calerich,
     our Vice President, Chief Financial Officer, and Secretary. Also includes
     the following options to purchase common stock, all of which are currently
     exercisable and held by Mr. Calerich: options to purchase up to 50,000
     shares for $1.50 per share until August 12, 2002; options to purchase up to
     12,500 shares for $1.28 per share until May 26, 2001; and options to
     purchase up to 60,000 shares for $.6875 per share until September 11, 2003.
     Also includes 31,000 shares and currently exercisable warrants to purchase
     1,600 shares for $2.50 per share until May 14, 2004 held by Mr. Calerich's
     wife's individual retirement account.


(7)  Includes the following securities which were reported on a Form 3, Initial
     Statement Of Beneficial Ownership Of Securities, previously filed by
     Kenneth R. Berry, Jr., who is our Vice President of Land: an aggregate of
     65,640 shares owned by various entities, IRAs, and trusts with which Mr.
     Berry, or his spouse or minor daughter, is associated; currently
     exercisable warrants to purchase up to 3,125 shares at $2.50 per share
     until May 14, 2004 that are held by an entity which is owned by Mr. Berry;
     currently exercisable warrants to purchase up to 1,500 shares for $2.50 per
     share until May 14, 2004 that are beneficially owned by Mr. Berry's minor
     daughter; currently exercisable options to purchase up to 50,000 shares for
     $1.50 per share until November 10, 2002; currently exercisable options to
     purchase up to 20,000 shares for $1.28 per share until May 26, 2001; and
     currently exercisable options to purchase up to 60,000 shares for $.6875
     per share until September 11, 2003.


(8)  These shares are owned of record by PinOak Inc. This information is based
     on information provided by our transfer agent and a Form 3, Initial
     Statement Of Beneficial Ownership Of Securities, previously filed by Robert
     Suydam. Mr. Suydam, the President of PinOak, was an employee, director and
     officer of the Company until his retirement and resignation from all
     positions with the Company effective as of December 31, 1999. PinOak is
     owned by Mr. Suydam's wife.


(9)  Includes 1,111,112 shares of common stock that may be issued upon the
     conversion of Series A Preferred Stock held by Victory Oil Company. Also
     includes 100,000 shares owned by Crail Fund, a partnership that is owned by
     the shareholders of Victory Oil Company. Also includes currently
     exercisable warrants to purchase 93,750 shares for $2.50 per share until
     May 14, 2004. Also includes the following securities owned by four trusts,
     which securities may be considered to be beneficially owned by Victory Oil
     Company as described on a Form 4, Statement Of Changes In Beneficial
     Ownership, filed by Victory with the SEC to report transactions during
     November 1999: an aggregate of 58,464 shares of common stock and an
     aggregate of 111,115 shares of common stock that may be issued upon the
     conversion of Series A Preferred Stock held by the trusts.




                                       28

<PAGE>





(10) Includes securities owned by Thomas E. Claugus, GMT, Inc., Bay Resource
     Partners Offshore Fund, Ltd., and Bay Resource Partners, L.P.
     (collectively, the "Claugus Group"). Securities of the Company beneficially
     owned by the Claugus Group were first reported in the Schedule 13D filed by
     the Claugus Group on May 28, 1999. Securities of the Company beneficially
     owned by the Claugus Group include an aggregate of 840,850 shares and
     currently exercisable warrants to purchase 94,375 shares for $2.50 per
     share until May 14, 2004.



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

1998 Private Placement Of Notes
-------------------------------


     In November 1998, the Company completed the sale of convertible promissory
notes (the "Notes") in the total amount of $2,500,000 in a private placement
transaction pursuant to exemptions from federal and state registration
requirements. Victory Oil Company ("Victory") purchased $1.0 million of Notes,
and trusts for whom the Whittier Trust Company and Whittier Trust Company of
Nevada, Inc. (the "Whittier Trust Companies") serve as Trustee purchased
$500,000 of the notes. In addition, a company owned by Bryce Rhodes' wife
purchased $40,000 of Notes. The remaining Notes were sold to other investors.
For a description of the Notes and the Series A Preferred stock into which the
Notes may be converted, see below, "DESCRIPTION OF SECURITIES".


     In connection with the sale of the Notes, the Company agreed to add, and
the stockholders of the Company subsequently approved the election of, S.L.
Hutchison and Bryce W. Rhodes to the Board of Directors. Mr. Hutchison is the
Chief Financial Officer of Victory and Mr. Rhodes is a Vice President of WEC.

     As a condition to the sale of the Notes, D. Scott Singdahlsen and Robert B.
Suydam, who are directors and officers of the Company, entered into a voting
agreement (the "Voting Agreement") with the purchasers of the Notes. Pursuant to
the Voting Agreement, Mr. Singdahlsen and Mr. Suydam each agreed, respectively,
that he will vote all the shares of Common Stock of the Company owned by him in
favor of the election of two nominees of the investors to serve on the Board of
Directors of the Company and for the re-election of those nominees or other
nominees at any time that the aggregate percentage ownership of common equity of
the Company underlying the Notes or Series A Preferred owned by the investors is
20 percent or more of the outstanding Common Stock. At the annual meeting of
stockholders held on April 16, 1999, all of Mr. Singdahlsen's and Mr. Suydam's
shares were voted in favor of the two nominees. Mr. Singdahlsen and Mr. Suydam
are required to vote for only one nominee at any time after the aggregate
percentage ownership of common equity of the Company owned by the investors is
less than 20 percent and greater than or equal to 10 percent of the outstanding
Common Stock. The obligation of Mr. Singdahlsen and Mr. Suydam to vote for any
nominees of the investors terminates at any time after the percentage ownership
of common equity of the Company owned by the investors is less than 10 percent
of the outstanding Common Stock. Mr. Singdahlsen and Mr. Suydam are not required
to vote for the designated board members at any time that the holders of the
Series A Preferred have the right voting separately as a class to elect those
designated board members.


May 1999 Private Placement Of Units
-----------------------------------


     In May 1999, the Company completed a private placement of $7,000,000 of
Units at $16 per Unit, with each Unit consisting of 10 shares of Common Stock
and a warrant to purchase one share of Common Stock at an exercise price of
$2.50 per share until May 14, 2004. The private placement was made pursuant to
exemptions from federal and state registration requirements. 93,750 Units for
$1,500,000 and 7,875 Units for $126,000 were purchased by Victory.



                                       29

<PAGE>


     Except as described above, during the fiscal year ended August 31, 1998,
there were no transactions between the Company and its directors, executive
officers or known holders of greater than five percent of the Company's Common
Stock in which the amount involved exceeded $60,000 and in which any of the
foregoing persons had or will have a material interest.

DESCRIPTION OF SECURITIES

     The Company's authorized capital consists of 30,000,000 shares of $.001 par
value Common Stock and 1,000,000 shares of $.001 par value preferred stock. The
Company had 14,579,580 shares of Common Stock issued and outstanding as of
December 3, 1999, and these outstanding shares were held by approximately 1,475
stockholders. The Company also had outstanding 22,979 shares of Series A
Preferred Stock held by 55 holders. There also are outstanding warrants to
purchase 175,000 shares of Common Stock that are held by two holders and
additional warrants to purchase 434,375 shares of Common Stock held by 51
holders. The following is a description of the Company's securities.

Common Stock

     Each share of the Common Stock is entitled to share equally with each other
shares of Common Stock in dividends from sources legally available therefore,
when, as, and if declared by the Board of Directors and, upon liquidation or
dissolution of the Company, whether voluntary or involuntary, to share equally
in the assets of the Company that are available for distribution to the holders
of the Common Stock. Each holder of Common Stock of the Company is entitled to
one vote per share for all purposes, except that in the election of directors,
each holder shall have the right to vote such number of shares for as many
persons as there are directors to be elected. Cumulative voting shall not be
allowed in the election of directors or for any other purpose, and the holders
of Common Stock have no preemptive rights, redemption rights or rights of
conversion with respect to the Common Stock. All outstanding shares of Common
Stock and all shares underlying the Warrants when issued will be fully paid and
nonassessable by the Company. The Board of Directors is authorized to issue
additional shares of Common Stock within the limits authorized by the Company's
Certificate Of Incorporation and without stockholder action.

     All shares of Common Stock have equal voting rights and voting rights are
not cumulative. The holders of more than 50 percent of the shares of Common
Stock of the Company could, therefore, if they chose to do so and unless subject
to a voting agreement to the contrary, elect all the directors of the Company.

     The Company has not paid any cash dividends since its inception.

     The Company has reserved a sufficient number of shares of Common Stock for
issuance upon the exercise of options under the Company's 1997 Stock Option
Plan.


Notes

     In November 1998, the Company completed the sale of convertible promissory
notes (the "Notes") in the total amount of $2,500,000 in a private placement
transaction pursuant to exemptions from federal and state registration
requirements.

                                       30

<PAGE>


     The Notes were automatically converted into shares of Series A Preferred
Stock (the "Series A Preferred") at the rate of one share for each $100
principal amount of Notes upon approval by the stockholders of the Series A
Preferred on April 16, 1999. As a result, no Notes currently are outstanding.
For a description of the Series A Preferred, see below "- Series A Preferred
Stock".

     Upon conversion of the Notes into Series A Preferred, the Company paid
accrued interest on the Notes with Common Stock at a rate based on the weighted
average trading price of the Common Stock for 45 days prior to the interest
payment date. The aggregate number of shares issued as payment of accrued
interest on the Notes was 53,326.

Series A Preferred Stock

     The following is a summary of the rights of the Series A Preferred:

     o    Each share of Series A Preferred has a face value of $100 per share.

     o    An annual dividend of 10% is payable on the Series A Preferred
          semi-annually. The payment will be made either in cash or in Common
          Stock, at the option of the Company. If paid with Common Stock, the
          Common Stock will be issued at a rate based on a 45 day weighted
          average trading price of the Common Stock.

     o    The Series A Preferred is convertible, in whole or in part, into
          Common Stock at the rate of one share of Common Stock for each $.60 of
          face value of Series A Preferred (or 166.67 shares of Common Stock for
          each $100 face amount share of Series A Preferred). The conversion
          right may be exercised at any time and from time to time.

     o    The Company has the right to require holders to convert their Series A
          Preferred into Common Stock in the following circumstances:

          o    The Company has the right to require that one-third of the
               outstanding Series A Preferred be redeemed or converted at any
               time after October 26, 1999, provided that the market value of
               the Company's Common Stock is at least $2.40 per share, based on
               a 45-day weighted average trading price. At October 26, 1999 the
               Company had exceeded the $2.40 per share requirement and has
               initiated the redemption/conversion process.

          o    The Company has the right to require that two-thirds of the
               outstanding Series A Preferred be redeemed or converted at any
               time after October 26, 2000, provided that the market value of
               the Common Stock is at least $3.60 per share.

          o    The Company has the right to require all of the outstanding
               Series A Preferred be redeemed or converted beginning at any time
               after October 26, 2000, provided that the market value of the
               Common Stock is at least $4.80 per share.

                                       31

<PAGE>


          o    The Company shall have the right, beginning October 26, 2000, to
               require that all the outstanding Series A Preferred be redeemed
               or converted if the Corporation has accumulated retained earnings
               equal to or greater than $3,750,000.

     o    In a vote of stockholders, other than for the election of directors of
          the Company, the holders of the Series A Preferred are entitled to
          vote the number of votes equal to the number of shares into which the
          Series A Preferred may be converted, or 167 votes for each share of
          Series A Preferred.

     o    The holders of the Series A Preferred, as a separate class, have the
          right to elect two members of the Board of Directors of the Company
          when 10,000 or more shares of Series A Preferred are outstanding. If
          the Board of Directors is increased to a number greater than six, the
          holders of the Series A Preferred may elect one-third of the total
          number of directors when 10,000 or more shares are outstanding. When
          more than 5,000 shares but less than 10,000 shares of Series A
          Preferred are outstanding, the holders of Series A Preferred have the
          right to elect one member of the Board of Directors. If the Board of
          Directors is increased to a number greater than six, the holders of
          the Series A Preferred may elect one-sixth of the total number of
          directors when more than 5,000 shares but less an 10,000 shares are
          outstanding.


Warrants

     In connection with the sale of the Notes, the Company issued warrants to
purchase up to 175,000 shares of the Company's Common Stock at an at an exercise
price of $.75 per share. All of the warrants currently are exercisable and all
of them expire on October 26, 2003. The Company has the right to repurchase some
or all of the warrants before that time, depending on whether the trading price
of the Company's Common Stock meets or exceeds certain goals. At October 26,
1999, the Company had met certain goals that enable the Company to repurchase
58,333 warrants. The warrant holders have been notified and have elected to
exercise this component of their warrants. The Company is in the process of
completing this transaction. See also, "TRANSACTIONS BETWEEN THE COMPANY AND
RELATED PARTIES - 1998 Private Placement Of Notes".

     The Company also has outstanding warrants to purchase up to an aggregate of
434,375 shares of Common Stock that were issued in the May 1999 private
placement. The warrants are exercisable at $2.50 per share until May 14, 2004.


                                     PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

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

         See "ITEM 7. FINANCIAL STATEMENTS".

(a)(3)   Exhibits.
         ---------

                                       32

<PAGE>

                                  Exhibit Index

Number            Description
------            -----------

3.1               Certificate Of Incorporation filed with the Delaware Secretary
                  Of State on March 27, 1996 (1)


3.2               Certificate Of Amendment to the Certificate Of Incorporation
                  effective as of November 12, 1997 filed with the Delaware
                  Secretary Of State. (5)


3.3               Bylaws (7)


10.1              Asset Transfer, Assignment and Assumption Agreement dated
                  April 16, 1996 between the Registrant and Bexy Communications,
                  Inc. (2)

10.2              Form of Purchase And Sale Agreement dated as of July 31, 1997
                  between the Registrant and a member of PYR Energy, LLC (4)

10.3              Purchase And Sale Agreement effective as of August 6, 1997
                  between the Registrant and Buddy Young (4)

10.4              1997 Stock Option Plan (3)

10.5              Convertible Note Purchase Agreement dated October 26, 1998
                  between the Registrant and various investors (6)

27.1              Financial Data Schedule
--------------------

(1)  Incorporated by reference from the Registrant's Registration Statement on
     Form 10-SB filed with the Securities And Exchange Commission ("SEC") on
     June 18, 1996, File No. 0-20879.

(2)  Incorporated by reference from the Registrant's Amendment No. 1 to
     Registration Statement on Form 10-SB filed with the SEC on July 3, 1996,
     File No. 0-20879.

(3)  Incorporated by reference from the Registrant's Preliminary Information
     Statement filed with the SEC on October 8, 1997.

(4)  Incorporated by reference from the Registrant's Registration Statement on
     Form SB-2 filed with the SEC on October 24, 1997, File No. 333-38665.

(5)  Incorporated by reference from the Registrant's Form 10-KSB/A1 for the year
     ended August 31, 1997.

(6)  Incorporated by reference from Exhibit 2 to the Schedule 13D filed by
     Victory Oil Company and other filing parties on November 5, 1998.


(7)  Previously filed as Exhibit 3.3 to Registrant's Annual Report on Form
     10-KSB filed with the SEC on December 6, 1999.


(b)      Reports On Form 8-K.


     During the fourth quarter of the fiscal year ended August 31, 1999, the
Registrant filed three Current Reports on Form 8-K reporting events that
occurred on June 1, 1999, June 21, 1999 and July 16, 1999. These events
consisted of the dissemination of press releases by the Company and were
reported under "ITEM 5. OTHER EVENTS".


                                       33

<PAGE>

                             PYR ENERGY CORPORATION
                          (A Development Stage Company)






                                      INDEX


  Independent Auditor's Report                                           F-2

  Balance Sheet
      August 31, 1999                                                    F-3

  Statements of Operations
      Years Ended August 31, 1998 and 1999 and
      Cumulative Amounts from Inception to August 31, 1999               F-4

  Statements of Members'/Stockholders' Equity
      Period from Inception (May 31, 1996) to
      December 31, 1996, Eight Months Ended
      August 31, 1997 and Years Ended August 31, 1998 and 1999         F-5 - F-6

  Statements of Cash Flows
      Years Ended August 31, 1998 and 1999 and
      Cumulative Amounts from Inception to August 31, 1999             F-7 - F-8

  Notes to Financial Statements                                       F-9 - F-19




                                      F - 1



<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


To The Board of Directors and Stockholders
PYR ENERGY CORPORATION

We have audited the accompanying balance sheet of PYR Energy Corporation (a
development stage company) as of August 31, 1999, the related statements of
operations, members'/stockholders' equity and cash flows for the two years then
ended, and cumulative amounts from inception to August 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PYR Energy Corporation as of
August 31, 1999, and the results of its operations and its cash flows for the
two years then ended and cumulative amounts from inception to August 31, 1999 in
conformity with generally accepted accounting principles.



/s/  Wheeler Wasoff, PC.

Denver, Colorado
October 8, 1999

                                      F - 2

<PAGE>

                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                                  BALANCE SHEET
                                 AUGUST 31, 1999

                                     ASSETS

CURRENT ASSETS
   Cash                                                            $    117,905
   Marketable securities                                              5,111,062
   Accounts receivable                                                    3,082
   Prepaid expenses                                                      10,347
                                                                   ------------


        Total Current Assets                                          5,242,396
                                                                   ------------

PROPERTY AND EQUIPMENT                                                5,106,847
                                                                   ------------
OTHER ASSETS
    Reimbursable property costs                                         410,000
    Deposit                                                               3,278
                                                                   ------------
                                                                        413,278
                                                                   ------------
                                                                   $ 10,762,521
                                                                   ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable and accrued liabilities                       $    179,839
    Current portion of capital lease obligation                           1,600
                                                                   ------------

        Total Current Liabilities                                       181,439
                                                                   ------------

CAPITAL LEASE OBLIGATION                                                  1,062
                                                                   ------------
COMMITMENTS AND CONTINGENCIES (Notes 4 and 9)

STOCKHOLDERS' EQUITY
    Preferred stock, $.001 par value;
     Authorized 1,000,000 shares
     Series A - Authorized 25,000 shares;
     Issued and outstanding 22,979 shares                                    23
    Common stock, $.001 par value;
     Authorized 30,000,000 shares
     Issued and outstanding 14,408,620 shares                            14,409
    Capital in excess of par value                                   11,925,537
    Deficit accumulated during the development stage                 (1,359,949)
                                                                   ------------

                                                                     10,580,020
                                                                   ------------

                                                                   $ 10,762,521
                                                                   ============



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

                                      F - 3


<PAGE>
<TABLE>
<CAPTION>


                                                   PYR ENERGY CORPORATION
                                                (A Development Stage Company)
                                                  STATEMENTS OF OPERATIONS


                                                                                                    Cumulative
                                                                                                       from
                                                                  Years Ended                      Inception to
                                                                  August 31,                         August 31,
                                                         1998                    1999                  1999
                                                     -----------------------------------           ------------
REVENUES
<S>                                                  <C>                    <C>                    <C>
    Consulting fees                                  $     10,000           $       --             $    127,528
    Interest                                               36,145                116,713                158,454
                                                     ------------           ------------           ------------

                                                           46,145                116,713                285,982
                                                     ------------           ------------           ------------
OPERATING EXPENSES
    General and administrative                            675,245                743,115              1,562,039
    Dry hole, impairment and abandonments                  15,000                306,369                321,369
    Interest                                                  488                183,256                184,095
    Depreciation and amortization                          22,416                 24,380                 47,847
                                                     ------------           ------------           ------------


                                                          713,149              1,257,120              2,115,350
                                                     ------------           ------------           ------------
OTHER INCOME
    Gain on sale of oil and gas prospects                 556,197                   --                  556,197
                                                     ------------           ------------           ------------

                                                         (110,807)            (1,140,407)            (1,273,171)
INCOME APPLICABLE TO
PREDECESSOR LLC (Note 1)                                     --                     --                  (35,868)
                                                     ------------           ------------           ------------


NET (LOSS)                                           $   (110,807)          $ (1,140,407)          $ (1,309,039)
                                                     ============           ============           ============

NET (LOSS) PER
COMMON SHARE - BASIC AND DILUTED (Note 2)
                                                     $      (.012)          $      (.105)          $      (.167)
                                                     ============           ============           ============

WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING (Note 2)                                    9,154,804             10,823,645              7,817,851
                                                     ============           ============           ============



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

                                                          F - 4


<PAGE>

                                                      PYR ENERGY CORPORATION
                                                  (A Development Stage Company)
                                           STATEMENTS OF MEMBERS'/STOCKHOLDERS' EQUITY
                                   PERIOD FROM INCEPTION (MAY 31, 1996) TO DECEMBER 31, 1996,
                               EIGHT MONTHS ENDED AUGUST 31, 1997 AND YEARS ENDED AUGUST 31, 1998 AND 1999

                                                                                                                        Deficit
                                                        Preferred Stock           Common Stock                        Accumulated
                                                        ---------------           ------------         Capital in      During the
                                              Members'                                                 Excess of      Development
                                              Equity    Shares   Amount        Shares      Amount      Par Value         Stage
-----------------------------------------------------------------------------------------------------------------------------------

Inception, May 31, 1996                     $    --       --   $      --          --     $      --     $      --      $      --
Initial member contributions - cash             5,000     --          --          --            --            --             --
Member contribution- services                  12,000     --          --          --            --            --             --
Distributions to members                      (24,000)    --          --          --            --            --             --
Net income                                     18,963     --          --          --            --            --             --
                                            ---------  --------   ---------   -----------   -----------   -----------    -----------
Balance, December 31, 1996                     11,963     --          --          --            --            --             --
Member contributions - cash                    23,000     --          --          --            --            --             --
Member contribution - services                 24,000     --          --          --            --            --             --
Distributions to members                      (42,000)    --          --          --            --            --             --
Net income - January 1, 1997
 to August 5, 1997                             16,905     --          --          --            --            --             --
Issuance of common stock to
 members of PYR Energy,
 LLC upon merger ($.008 per share)            (33,868)    --          --     4,000,000         4,000        29,868           --

Recapitalization of shares issued
 by Mar prior to merger                          --       --          --     1,059,804         1,060          (724)          --
Sales of common stock pursuant
 to private placement at
 $.25 per share                                  --       --          --     2,095,000         2,095       521,655           --

Sale of common stock pursuant
 to private placement at
 $.75 per share                                  --       --          --     2,000,000         2,000     1,498,000           --

Costs of private placements offerings            --       --          --          --            --        (280,711)          --
Net (loss) August 6, 1997
 to August 31, 1997                              --       --          --          --            --            --          (57,825)
                                            ---------  ------   ----------  -----------   -----------   -----------    -----------
Balance, August 31, 1997                         --       --          --     9,154,804         9,155     1,768,088        (57,825)
Net (loss)                                       --       --          --          --            --            --         (110,807)
                                            ---------  ------   ----------  -----------   -----------   -----------    -----------
Balance, August 31, 1998                    $    --       --          --     9,154,804    $     9,155   $ 1,768,088    $  (168,632)



                            The accompanying notes are an integral part of the financial statements

                                                              F - 5


<PAGE>


                                                     PYR ENERGY CORPORATION
                                                  (A Development Stage Company)
                                     STATEMENTS OF MEMBERS'/STOCKHOLDERS' EQUITY (continued)
                                   PERIOD FROM INCEPTION (MAY 31, 1996) TO DECEMBER 31, 1996,
                               EIGHT MONTHS ENDED AUGUST 31, 1997 AND YEARS ENDED AUGUST 31, 1998 AND 1999


                                                                                                                       Deficit
                                            Preferred Stock                     Common Stock                         Accumulated
                                            ---------------                     ------------         Capital in      During the
                                 Members'                                                             Excess of      Development
                                 Equity    Shares        Amount            Shares         Amount      Par Value         Stage
-----------------------------------------------------------------------------------------------------------------------------------

Balance Forward                  $ --          --      $       --         9,154,804    $      9,155   $  1,768,088    $  (168,632)
Issuance of preferred stock
 for convertible notes             --        25,000              25            --              --        2,499,976            --
Unamortized convertible note
 financing costs                   --          --              --              --              --          (73,319)           --
Issuance of common stock for
 interest on convertible debt,
 at $2.19 per share                --          --              --            53,326              53        116,769            --
Issuance of common stock
 warrants for financing costs      --          --              --              --              --           56,833            --
Conversion of preferred
 stock to common stock
 at $.60 per share                 --        (2,021)             (2)       (336,833)            337           (335)           --
Sale of common stock pursuant
 to private placement for cash
 of $1.60 per share                --          --              --         4,375,000           4,375      6,995,625            --

Costs of private placement         --          --              --              --              --          (83,155)           --
Exercise of private placement
 warrants for cash of $2.50
 per share                         --          --              --             3,125               3          7,809            --
Issuance of common stock for
 property valued at $.75
 per share                         --          --              --           266,666             267        199,733            --
Issuance of common stock for
 property at valued $2.00
 per share                         --          --              --           218,866             219        437,513            --
Preferred dividends paid                                                       --              --             --           (50,910)
Net (loss)                         --          --              --              --              --             --        (1,140,407)
                                 ------   ---------    ------------    ------------    ------------   ------------    ------------

Balance August 31, 1999          $ --        22,979    $         23      14,408,620    $     14,409   $ 11,925,537    $ (1,359,949)
                                 ======   =========    ============    ============    ============   ============    ============



                            The accompanyinotes are an integral part of the financial statements.

                                                              F - 6


<PAGE>

                                                   PYR ENERGY CORPORATION
                                                (A Development Stage Company)
                                                  STATEMENTS OF CASH FLOWS


                                                                     Years Ended                      Cumulative
                                                                     August 31                      Amounts from
                                                              1998                  1999              Inception
                                                        ----------------------------------          ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss)                                              $   (110,807)         $ (1,140,407)         $ (1,273,171)
Adjustments to reconcile net (loss) to
 net cash provided by operating activities
   Depreciation and amortization                              22,416                24,380                47,847
   Contributed services                                         --                    --                  36,000
   Gain on sale of oil and gas prospects                    (556,197)                 --                (556,197)
   Dry hole, impairment and abandonments                      15,000               306,369               321,369
   Common stock issued for interest on debt                     --                 116,822               116,822
   Amortization of financing costs                              --                  26,939                26,939
   Amortization of marketable securities                        --                 (20,263)              (20,263)
 Changes in assets and liabilities
   Decrease (increase) in accounts receivable                 10,000                (3,082)               (3,082)
  (Increase) in prepaids                                     (12,700)               (3,451)              (18,742)
  (Decrease) increase in accounts payable                    (25,858)              135,450               165,405
   Other                                                        --                  10,000                 6,249
                                                        ------------          ------------          ------------
Net cash (used) by operating activities                     (658,146)             (547,243)           (1,150,824)
                                                        ------------          ------------          ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Cash paid for furniture and equipment                     (43,407)              (13,067)              (85,955)
   Cash paid for undeveloped oil and gas properties       (1,406,613)           (3,522,969)           (5,227,760)
   Proceeds from sale of oil and gas properties            1,050,078                  --               1,050,078
   Cash paid for marketable securities                          --              (5,090,799)           (5,090,799)
   Cash paid for reimbursable property costs                    --                (410,000)             (410,000)
                                                        ------------          ------------          ------------
Net cash (used) in investing activities                     (399,942)           (9,036,835)           (9,764,436)
                                                        ------------          ------------          ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Members capital contributions                                --                    --                  28,000
   Distributions to members                                     --                    --                 (66,000)
   Cash from short-term borrowings                              --                    --                 285,000
   Repayment of short-term borrowings                           --                    --                (285,000)
   Proceeds from sale of common stock                           --               7,000,000             9,023,750
   Proceeds from sale of convertible debt                       --               2,500,001             2,500,001
   Proceeds from exercise of warrants                           --                   7,812                 7,812
   Cash paid for offering costs                                 --                (126,580)             (407,291)
   Cash received upon recapitalization and merger               --                    --                     336
   Payments on capital lease                                  (1,093)               (1,440)               (2,533)
   Preferred dividends paid                                     --                 (50,910)              (50,910)
                                                        ------------          ------------          ------------
Net cash (used) provided by financing activities              (1,093)            9,328,883            11,033,165
                                                        ------------          ------------          ------------

NET (DECREASE) INCREASE IN CASH                           (1,059,181)             (255,195)              117,905
CASH, BEGINNING OF PERIODS                                 1,432,281               373,100                  --
                                                        ------------          ------------          ------------
CASH, END OF PERIODS                                    $    373,100          $    117,905          $    117,905
                                                        ============          ============          ============


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

                                                        F - 7

</TABLE>

<PAGE>


                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                      YEARS ENDED AUGUST 31, 1998 AND 1999
                  AND PERIOD FROM INCEPTION TO AUGUST 31, 1999

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

     During the years ended August 31, 1998 and 1999, the Company paid cash for
     interest of $488 and $371, respectively, on a capital lease.

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

     In August 1997, 4,000,000 shares of common stock were issued to the members
     of PYR Energy, LLC ("PYR LLC") in exchange for 100 percent of the ownership
     interests in PYR LLC, for which the net members' equity in PYR LLC was
     $33,868. These shares were issued pursuant to a plan of reorganization and
     merger effective August 6, 1997 (Notes 1 and 3).

     During 1996 and 1997 the President of the Company performed services for
     PYR LLC valued at $12,000 and $24,000, respectively. The value of these
     services was charged to members' equity as a non-cash capital contribution.

     During the year ended August 31, 1998, the Company entered into a capital
     lease obligation of $5,195 for office equipment.

     During the year ended August 31, 1999, the Company issued common stock,
     valued at $637,732, as partial consideration for oil and properties; issued
     common stock, valued at $116,822 for interest on convertible debt; and
     issued warrants, valued at $56,833, as partial consideration for commission
     on the sale of convertible debt.



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


                                      F - 8


<PAGE>


                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 1 - ORGANIZATION AND BUSINESS COMBINATION

     PYR Energy Corporation (the "Company"), is an independent energy company
     engaged in the exploration and acquisition of crude oil and natural gas
     reserves in the Western United States, primarily California, and is
     considered a development stage company as defined by Statement of Financial
     Accounting Standards (SFAS) No. 7. The Company's predecessor, Mar Ventures
     Inc. ("Mar"), was incorporated under the laws of the State of Delaware on
     March 27, 1996 for the purpose of producing and marketing traditional
     television programming and marketing its film library. Mar was a public
     company which had no significant operations as of July 31, 1997. On August
     6, 1997 Mar acquired all the interests in PYR Energy LLC ("PYR LLC") (a
     Colorado Limited Liability Company organized on May 31, 1996), a
     development stage company as defined by SFAS No. 7. PYR LLC, an independent
     exploration company, was engaged in the acquisition of oil and gas
     properties for exploration and exploitation in the Rocky Mountain region
     and California. Effective August 6, 1997, Mar transferred to its former
     president substantially all its assets and liabilities that were related to
     its film library operations. The net assets of Mar exchanged pursuant to
     the transaction with PYR LLC are as follows:

                     Cash                               $   336
                     Assets                               1,605
                     Liabilities                         (1,605)
                                                        -------
                                                        $   336
                                                        =======

     Upon completion of the acquisition of PYR LLC by Mar, PYR LLC ceased to
     exist as a separate entity. Mar remained as the legal surviving entity and,
     effective November 12, 1997, Mar changed its name to PYR Energy
     Corporation. For financial reporting purposes, the business combination was
     accounted for as an additional capitalization of Mar (a reverse acquisition
     with PYR LLC as the acquirer). The operations of PYR LLC are the only
     continuing operations of the Company. Prior to the business combination,
     Mar loaned $275,000 to PYR LLC for amounts owed by PYR LLC with respect to
     its oil and gas operations. The loan was eliminated in conjunction with the
     successful completion of the combination of PYR LLC and Mar.

     The Company is an exploration stage oil and gas company and as of August
     31, 1999, has not earned any production revenue nor recognized proved
     reserves on any of its properties. The Company's efforts, since August
     1997, have been in financing activities and the acquisition of unproven
     properties and related seismic data. The Company has entered into
     participation and farm-in agreements with industry partners on certain of
     its properties pursuant to which these partners have acquired, for cash,
     interests in the Company's properties. During the year ended August 31,
     1998, drilling of two test wells was commenced, with one well being plugged
     and abandoned and the other suffering a blowout. During the year ended
     August 31, 1999 the Company continued its acquisition of unproven
     properties and related seismic data with industry partners, and is
     participating in exploration of the properties, including the drilling of
     exploratory wells.









                                      F - 9





<PAGE>

                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     PROPERTY AND EQUIPMENT

     Furniture and equipment is recorded at cost. Depreciation and amortization
     of assets under capital lease is provided by use of the straight-line
     method over the estimated useful lives of the related assets of three to
     five years.

     Expenditures for replacements, renewals, and betterments are capitalized.
     Maintenance and repairs are charged to operations as incurred.

     OIL AND GAS PROPERTIES

     The Company follows the full cost method to account for its oil and gas
     exploration and development activities. Under the full cost method, all
     costs incurred which are directly related to oil and gas exploration and
     development are capitalized and subjected to depreciation and depletion.
     Depletable costs also include estimates of future development costs of
     proved reserves. Costs related to undeveloped oil and gas properties may be
     excluded from depletable costs until such properties are evaluated as
     either proved or unproved. The net capitalized costs are subject to a
     ceiling limitation. Gains or losses upon disposition of oil and gas
     properties are treated as adjustments to capitalized costs, unless the
     disposition represents a significant portion of the Company's proved
     reserves. A separate cost center is maintained for expenditures applicable
     to each country in which the Company conducts exploration and/ or
     production activities.

     Undeveloped oil and gas prospects consist of leases and acreage acquired by
     the Company for its exploration and development activities, including the
     cost of seismic data acquisition and evaluation, and drilling costs for
     exploration wells. The cost of these non-producing leases is recorded at
     the lower of cost or fair market value.

     The Company has adopted SFAS No. 121 "Accounting for the Impairment of
     Long-Lived Assets and for Long-Lived Assets to Be Disposed of" which
     requires that long-lived assets to be held and used be reviewed for
     impairment whenever events or changes in circumstances indicate that the
     carrying amount of an asset may not be recoverable. Oil and gas properties
     accounted for using the full cost method of accounting, a method utilized
     by the Company, are excluded from this requirement, but will continue to be
     subject to the ceiling test limitations.

     At August 31, 1999 the Company has determined that an impairment loss of
     $285,229 on unproved oil and gas properties be recognized.

                                     F - 10


<PAGE>


                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     MARKETABLE SECURITIES

     All investments are accounted for under SFAS No. 115, "Accounting for
     Certain Investments in Debt and Equity Securities." The Company determines
     the appropriate classification at time of purchase. Securities are
     classified as held-to-maturity when the Company has the positive intent and
     ability to hold the securities to maturity. Held-to-maturity securities are
     stated at cost, adjusted for amortization of premiums and discounts to
     maturity. Marketable securities not classified as held-to- maturity are
     classified as available-for-sale. Available-for-sale securities are carried
     at fair value, which is based on quoted prices. Unrealized gains and
     losses, net of tax, are reported as a separate component of shareholders'
     equity. The cost of securities available-for-sale is adjusted for
     amortization of premiums and discounts to maturity. Interest and
     amortization of premiums and discounts for all securities are included in
     interest income. Realized gains and losses are included in other income.
     Cost of securities sold is determined on a specific identification basis.

     FINANCING COSTS

     Financing costs include expenses incurred in conjunction with the Company's
     private placement of convertible notes. These costs were amortized over the
     term of the notes and charged to interest expense up to the date of
     conversion to preferred stock. At conversion, unamortized financing costs
     were charged to capital in excess of par value.

     ORGANIZATION COSTS

     Costs related to the organization of the Company have been capitalized and
     are being amortized over a period of five years.

     INCOME TAXES

     The Company has adopted the provisions of SFAS No. 109, "Accounting for
     Income Taxes". SFAS 109 requires recognition of deferred tax liabilities
     and assets for the expected future tax consequences of events that have
     been included in the financial statements or tax returns. Under this
     method, deferred tax liabilities and assets are determined based on the
     difference between the financial statement and tax basis of assets and
     liabilities using enacted tax rates in effect for the year in which the
     differences are expected to reverse.

     PYR LLC was taxed as a Limited Liability Company until August 6, 1997, and
     was not subject to federal and state income tax. Earnings and losses
     through that date were included in the personal tax returns of its members,
     and PYR LLC did not record an income tax provision.

     At August 31, 1999, the Company had a net operating loss carryforward of
     approximately $1,800,000 that may be offset against future taxable income
     through 2019.

     The Company has fully reserved the $351,000 tax benefit of operating loss
     carryforwards, by a valuation allowance of the same amount, because the
     likelihood of realization of the tax benefit cannot be determined. Of the
     total tax benefit, $327,000 is attributable to 1999.




                                     F - 11

<PAGE>


                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Temporary differences between the time of reporting certain items for
     financial and tax reporting purposes consist primarily of exploration costs
     on oil and gas properties, and impairment pursuant to SFAS No. 121.

     USE OF ESTIMATES

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

     The oil and gas industry is subject, by its nature, to environmental
     hazards and clean-up costs. At this time, management knows of no
     substantial costs from environmental accidents or events for which it may
     be currently liable; except for the Company's liabilities related to the
     blowout of November 23, 1998. The Company has advanced what management
     believes to be the total remaining costs to claimants. (See Note 4) In
     addition, the Company's oil and gas business makes it vulnerable to changes
     in wellhead prices of crude oil and natural gas. Such prices have been
     volatile in the past and can be expected to be volatile in the future. By
     definition, proved reserves are based on current oil and gas prices and
     estimated reserves. Price declines reduce the estimated quantity of proved
     reserves and increase annual amortization expense (which is based on proved
     reserves).

     (LOSS) PER SHARE

     (Loss) per common share is computed based on the weighted average number of
     common shares outstanding during each period. Common shares issued to the
     members of PYR LLC upon completion of Mar's merger with PYR LLC (Note 1)
     are considered outstanding for all periods presented. Convertible equity
     instruments, such as stock options and warrants, are not considered in the
     calculation of net loss per share as their inclusion would be antidilutive.

     SHARE BASED COMPENSATION

     In October 1995, SFAS No. 123 "Accounting for Stock-Based Compensation" was
     issued. This standard defines a fair value based method of accounting for
     an employee stock option or similar equity instrument. This statement gives
     entities a choice of recognizing related compensation expense by adopting
     the new fair value method or to continue to measure compensation using the
     intrinsic value approach under Accounting Principles Board (APB) Opinion
     No. 25. The Company has elected to utilize APB No. 25 for measurement; and
     will, pursuant to SFAS No. 123, disclose supplementally the pro forma
     effects on net income and earnings per share of using the new measurement
     criteria.

     CASH EQUIVALENTS

     For purposes of reporting cash flows, the Company considers as cash
     equivalents all highly liquid investments with a maturity of three months
     or less at the time of purchase. On occasion, the Company has cash in banks
     in excess of federally insured amounts.



                                     F - 12



<PAGE>


                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     NEW TECHNICAL PRONOUNCEMENTS

     In June 1998 SFAS No. 133 "Accounting for Derivative Instruments and
     Hedging Activities: was issued for fiscal years beginning after June 15,
     1999, Adoption of SFAS No. 133 is not expected to have an inpact on the
     Company's financial statements.

     In October 1998 SFAS No. 134 "Accounting for Mortgage Broker Securities:
     was issued for fiscal years beginning after December 15, 1998. Adoption of
     SFAS No. 134 is not expected to have an impact on the Company's financial
     statements.

     In February 1999 SFAS No. 135 "Rescission of FASB Statement No. 75 and
     Technical Corrections" was issued for fiscal years beginning after February
     15, 1999. Adoption of SFAS No. 135 is not expected to have an impact on the
     Company's financial statements.

     In June 1999 SFAS No. 136 "Transfers of Assets to a Not-For-Profit
     Organization or Charitable Trust that Raises or Holds Contributions for
     Others" was issued for fiscal years beginning after December 15, 1999.
     Adoption of SFAS No. 136 is not expected to have an impact on the Company's
     financial statements.

     In June 1999 SFAS No. 137 "Accounting for Derivative Instruments and
     Hedging Activities - Deferral of the Effective Date of FASB Statements No.
     133" was issued. Adoption of SFAS No. 137 is not expected to have an impact
     on the Company's financial statements.

NOTE 3 - MARKETABLE SECURITIES

     At August 31, 1999, the Company held investments in marketable securities
     which were classified as held-to-maturity. Securities classified as
     held-to-maturity at August 31, 1999 consisted of securities with a maturity
     date within one year, and are classified as Marketable Securities as a part
     of Current Assets. These securities are stated at amortized cost.

     The held-to-maturity securities at August 31, 1999 include the following:



                                                      Amortized        Fair
                                                        Cost           Value
                                                     ----------     ----------
         U.S. Government backed discount notes,
         face value of $5,255,000                    $5,111,062     $5,106,000


                                     F - 13

<PAGE>

                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 4 - PROPERTY AND EQUIPMENT

     Property and equipment at August 31, 1999 consists of the following:


     Furniture and equipment                                  $     85,955
     Asset under capital lease                                       5,195
                                                              ------------
                                                                    91,150
     Less accumulated depreciation and amortization                (47,373)
                                                              ------------
                                                                    43,777
                                                              ------------
     Undeveloped oil and gas prospects                           5,348,299
     Less impairment                                              (285,229)
                                                              ------------
                                                                 5,063,070
                                                              ------------
                                                              $  5,106,847
                                                              ============

     Information relating to the Company's costs incurred in its oil and gas
     operations during the year ended August 31, 1999 is summarized as follows:

     Property acquisition - Unproved properties               $  2,085,584
     Exploration costs                                             792,616
                                                              ------------
                                                              $  2,878,200
                                                              ============

     Property acquisition costs include costs incurred to purchase, lease, or
     otherwise acquire a property. Exploration costs include the costs of
     geological and geophysical activity, and drilling and equipping exploratory
     wells.

     During the year ended August 31, 1998, the Company charged $15,000 to
     operations as an allocation of its cost basis in a dry hole in which it had
     a carried working interest. This allocation was based on the Company's
     estimate that this drill location had no future value. The Company reviews
     and determines the cost basis of drilling prospects on a drilling location
     basis. During the year ended August 31, 1999 the Company abandoned
     properties with a carrying cost of $21,140 and, in addition, recorded an
     impairment loss on undeveloped oil and gas properties in the amount of
     $285,229.

     Depreciation expense for the years ended August 31, 1998 and 1999 was
     $22,321 and $24,111, respectively.

     On November 23, 1998, the Company's test well being drilled on its East
     Lost Hills prospect suffered a blowout. A majority of the costs associated
     with the blowout have been covered by insurance policies in effect when the
     blowout occurred. A portion of the claims has not yet been received from
     one of the insurance policies. The Company has paid $410,000 for its
     proportionate share of the claims. The Company believes that most, if not
     all of these claims will ultimately be reimbursed through insurance
     proceeds. The accompanying financial statements reflect the costs advanced
     as Reimbursable Property Costs at August 31,1999. Any amounts not
     reimbursed will be capitalized as oil and gas property costs.



                                     F - 14





<PAGE>


                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 5 - CAPITAL LEASE OBLIGATION

     Capitalized lease obligation at August 31, 1999 consists of a lease for
     office equipment, repayable in monthly installments of $150 with interest
     at 10.5%.

     Maturity of this  obligation  is as follows:  year ending August 31, 2000 -
     $1,600; 2001 - $1,062.

     Future minimum payments on capitalized leases are as follows:

     Year ending August 31,
     2000                                                          $1,803
     2001                                                           1,080
                                                                   ------
                                                                    2,883
     Less amount representing interest                                221
                                                                   ------
     Present value of net minimum lease payments                    2,662
     Less current maturity                                          1,600
                                                                   ------
     Long-term portion                                             $1,062
                                                                   ======

NOTE 6 - CONVERTIBLE NOTES PAYABLE

     In November 1998 the Company completed the sale of $2,500,000, 10%
     convertible notes, due October 1999. The notes were convertible into an
     aggregate 25,000 shares of a newly designed Series A Preferred Stock of the
     Company. The Company obtained shareholder approval for authorization of the
     Series A Preferred Stock and, in April 1999, all notes were converted to
     Series A Preferred Stock. Accrued interest due as of the date of conversion
     of $116,822 was paid by the issuance of 53,326 shares of common stock,
     valued at $2.19 per share. In conjunction with the sale of $1,500,000 of
     the notes, the Company paid a finder's fee consisting of $45,000 and
     warrants to purchase 175,000 shares of the Company's common stock at an
     exercise price of $.75 per share for a period of five years. The warrants
     were valued at $56,833.

NOTE 7 - STOCKHOLDERS' EQUITY

     PREFERRED STOCK

     In April 1999 the shareholders of the Company approved an amendment to the
     Certificate of Incorporation wherein the Company was authorized to issue
     1,000,000 shares of preferred stock, with a par value of $.001 per share.
     The Board of Directors authorized the designation of a "Series A Preferred
     Stock," consisting of 25,000 shares, face value of $100 per share, 10%
     cumulative dividend payable in cash or shares of common stock on January 1
     and July 1 of each year. Holders of Series A Preferred Stock receive
     preference in the event of any liquidation, dissolution or winding up of
     the Company. The shares of Series A Preferred Stock are convertible into
     shares of common stock of the Company at an initial conversion price of
     $.60 per share.

     In April 1999 the holders of convertible notes (Note 6) converted the notes
     to 25,000 shares of Series A Preferred Stock. As of August 31, 1999, 2,021
     shares of Series A Preferred Stock were converted to 336,833 shares of
     common stock at a conversion price of $.60 per share.

     At August 31, 1999 accrued, undeclared dividends on Series A Preferred
     Stock was $39,814.


                                     F - 15

<PAGE>

                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 7 - STOCKHOLDERS' EQUITY (CONTINUED)

     COMMON STOCK

     Effective August 6, 1997 Mar completed a merger with PYR LLC (Note 1). In
     conjunction with the merger, the members of PYR LLC received 4,000,000
     shares of common stock of Mar. These shares were recorded at the net member
     equity of PYR LLC as of that date of $33,868. The 1,059,804 Mar shares
     outstanding as of the date of merger were recapitalized to the net assets
     of Mar of $336. For financial statement reporting purposes, this
     transaction was treated as a reverse acquisition whereby PYR LLC was
     considered the surviving and reporting entity. For legal purposes, however,
     Mar remained as the surviving entity, therefore the capital structure of
     the Company was accordingly restated.

     In July 1997, the Company completed the sale of common stock and warrants
     pursuant to a private placement as follows:

     *    2,095,000 units, at a price of $.25 per unit,  consisting of 2,095,000
          shares of common  stock,  warrants  to  purchase  1,047,500  shares of
          common stock at an exercise  price of $1.25 per share  before  October
          31, 1997, and warrants to purchase 1,047,500 shares of common stock at
          an  exercise  price  of $1.75  per  share  before  January  31,  1998.
          Subsequent to the offering,  each of the warrant  expiration dates was
          extended one or more times,  and all the warrants  ultimately  expired
          without having been exercised.

     In August 1997, the Company completed the sale of common stock and warrants
     pursuant to a private placement as follows:

     *    2,000,000 units, at a price of $.75 per unit,  consisting of 2,000,000
          shares of common  stock,  warrants  to  purchase  1,000,000  shares of
          common stock at an exercise  price of $1.25 per share  before  October
          31, 1997, and warrants to purchase 1,000,000 shares of common stock at
          an  exercise  price  of $1.75  per  share  before  January  31,  1998.
          Subsequent to the offering,  each of the warrant  expiration dates was
          extended one or more times,  and all the warrants  ultimately  expired
          without having been exercised.

     Proceeds from these offerings were $523,750 and $1,500,000, respectively,
     before costs of the offerings of $280,711.

     In May 1999 the Company completed the sale of 437,500 units of common stock
     and warrants pursuant to a private placement at a price of $16 per unit.
     Each unit consisted of 10 shares of common stock and one warrant to
     purchase one share of common stock at an exercise price of $2.50 per share
     for a period of five years. The Company may repurchase the warrants for
     $.001 per warrant at any time after the weighted average trading price of
     the Company's common stock has been at least $6.00 per share for a 45-day
     period. Proceeds from the offering were $7,000,000, before costs of the
     offering of $83,155. As of August 31, 1999 warrant holders had exercised
     3,125 warrants.

     During the year ended August 31, 1999 the Company issued shares of common
     stock valued at the non-discounted trading market price as of the date of
     the transaction, in conjunction with the assignment to the Company of
     certain undeveloped oil and gas prospects located in California as follows:

     *    266,666 shares,  valued at $.75 per share, as full  consideration  for
          property received
     *    218,866 shares,  valued at $2.00 per share,  as partial  consideration
          for property received.

                                     F - 16

<PAGE>


                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 7 - STOCKHOLDERS' EQUITY (CONTINUED)

     WARRANTS

     In 1999, the Company issued warrants to purchase 175,000 shares of common
     stock at an exercise price of $.75 per share through October 26, 2003 as
     partial consideration for a commission in conjunction with the private
     placement of convertible notes. The warrants are valued at $56,833, using
     the Black-Scholes option pricing model. In May 1999, in conjunction with
     the sale of 437,500 Units of common stock and warrants as described above,
     the Company issued warrants to purchase 437,500 shares of common stock at
     an exercise price of $2.50 through May 14, 2004.

     At August 31, 1999 the status of outstanding warrants is as follows:

          Issue               Shares         Exercise            Expiration
          Date             Exercisable         Price                Date
     ---------------------------------------------------------------------------

     October 26, 1998         175,000          $  .75           October 26, 2003
     May 14, 1999             434,375          $ 2.50           May 14, 2004

     At August 31, 1999 the per share weighted average exercise price of
     outstanding warrants was $2.00 per share.

NOTE 8 - STOCK OPTION PLAN

     In August 1997, the Board of Directors approved the 1997 Stock Option Plan
     (the "1997 Plan"). Pursuant to the 1997 Plan, the Company may grant options
     to purchase 1,000,000 shares of the Company's common stock to key employees
     and other persons who have or are contributing to the success of the
     Company. The options granted pursuant to the 1997 Plan may be either
     incentive options qualifying for beneficial tax treatment for the recipient
     or non-qualified options. The 1997 Plan will be administered by the Option
     Committee, which may consist of either (i) the Company's Board of
     Directors, or (ii) a Committee, appointed by the Board of Directors, of two
     or more non-employee directors. No option may be exercisable more than ten
     years after the granting of the option, and no options may be granted under
     the 1997 Plan after August 13, 2007. The exercise price of incentive
     options granted can not be less than the fair market value of the
     underlying common stock on the date the options are granted.

     The status of outstanding options granted pursuant to the 1997 Plan is as
     follows:
<TABLE>
<CAPTION>

                                                   Number          Weighted Avg.      Weighted Avg.
                                                  of Shares       Exercise Price       Fair Value
                                                  ---------       --------------       ----------

<S>                                               <C>                <C>                 <C>
     Options Outstanding - July 1, 1997            171,000            $1.50               $ --
     (None exercisable)
     Expired                                       (60,000)
     Granted                                       135,000            $1.40               $ .31
                                                   -------

     Options Outstanding - August 31, 1998         246,000            $1.46               $ .26
     (37,000 exercisable)
     Expired                                       (10,000)
     Granted                                       585,000             $1.10              $ .92
                                                  --------

     Options Outstanding - August 31, 1999         821,000             $1.20              $ .74
                                                  ========
     (139,000 exercisable)

</TABLE>

                                     F - 17

<PAGE>


                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 8 - STOCK OPTION PLAN (CONTINUED)

     The Company has adopted the disclosure-only provisions of SFAS No. 123. Had
     compensation cost for the Company's stock option plan been determined based
     on the fair value at the grant date consistent with the provisions of SFAS
     No. 123, the Company's net loss and loss per share for 1999 would have been
     increased to the pro forma amounts indicated below:

     Net (loss) applicable to common stockholders - as reported    $ (1,140,407)
                                                                   ============
     Net (loss) applicable to common stockholders - pro forma      $ (1,187,322)
                                                                   ============
     (Loss) per share - as reported                                $      (.105)
                                                                   ============
     (Loss) per share - pro forma                                  $      (.110)
                                                                   ============
     Weighted average fair value of options granted in 1999        $        .92
                                                                   ============

     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes option-pricing model with the following weighted-average
     assumptions used for grants: dividend yield of 0%; expected volatility of
     25% to 161%; discount rate of 5.50%; and expected lives of 3 to 5 years.

     At August 31, 1999 the number of options exercisable was 139,000, the
     weighted average exercise price of these options was $1.44, the weighted
     average contractual life of the options was 5 years and the exercise price
     was $1.28 to $1.50 per share.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

     The Company has entered into a non-cancelable lease, as amended, for office
     facilities. Minimum payments due under this lease are as follows:

     Years ending August 31,
     2000                                                     $      41,105
     2001                                                            41,105

     Rent expense was $35,539 and $40,816 for the years ended August 31, 1998
     and 1999, respectively.

     In conjunction with the Company's working interests in undeveloped oil and
     gas prospects, the Company must pay approximately $700,000 in delay rentals
     and other costs during fiscal year ended August 31, 2000 to maintain the
     right to explore these prospects.

     The Company may be subject to various possible contingencies which are
     derived primarily from interpretations of federal and state laws and
     regulations affecting the oil and gas industry. Although management
     believes it has complied with the various laws and regulations, new rulings
     and interpretations may require the Company to make adjustments.

NOTE 10 - RELATED PARTY TRANSACTIONS

     In 1998 the Company paid $43,530 for services provided to the Company by an
     entity controlled by a former director of the Company.





                                     F - 18

<PAGE>

                             PYR ENERGY CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

NOTE 11 - FINANCIAL INSTRUMENTS

     FAIR VALUE

     The carrying amount reported in the balance sheet for cash, prepaid
     expenses, accounts payable and accrued liabilities approximates fair value
     because of the immediate or short-term maturity of these financial
     instruments. Fair value of marketable securities approximates amortized
     cost due to the short-term period to maturity.

     CONCENTRATION OF CREDIT RISK

     Financial instruments which potentially subject the Company to
     concentrations of credit risk consist of cash and marketable securities.
     The Company maintains cash accounts at one financial institution. The
     Company periodically evaluates the credit worthiness of financial
     institutions, and maintains cash accounts only in large high quality
     financial institutions, thereby minimizing exposure for deposits in excess
     of federally insured amounts. Marketable securities consist of U.S.
     Government backed discount notes. The Company believes that credit risk
     associated with these investments is remote.

NOTE 12 - SEGMENT REPORTING

     In June 1997, SFAS No. 131, "Disclosure about Segments of an Enterprise and
     Related Information" was issued, which amends the requirements for a public
     enterprise to report financial and descriptive information about its
     reportable operating segments. Operating segments, as defined in the
     pronouncement, are components of an enterprise about which separate
     financial information is available that is evaluated regularly by the
     Company in deciding how to allocate resources and in assessing performance.
     The financial information is required to be reported on the basis that is
     used internally for evaluating segment performance and deciding how to
     allocate resources to segments. The Company has adopted SFAS No. 131 for
     the year ended August 31, 1999.

     The Company has one reportable segment, oil and gas producing activities.
     The Company has concentrated its oil and gas acquisition and exploration
     activities in the western United States, primarily in California and the
     Rocky Mountain region. All significant activities in this segment have been
     with industry partners.

     The Company has not earned any revenue from its oil and gas activities nor
     recorded proved reserves at August 31, 1999.

NOTE 13 - COMPREHENSIVE INCOME

     There are no adjustments necessary to net (loss) as presented in the
     accompanying statements of operations to derive comprehensive income in
     accordance with SFAS No. 130, "Reporting Comprehensive Income."

                                     F - 19

<PAGE>

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                 PYR ENERGY CORPORATION


Date: January 28, 2000           By:  /s/ D. Scott Singdahlsen
                                      ------------------------------------------
                                   D. Scott Singdahlsen, Chief Executive Officer

     In accordance with the requirements of the Exchange Act, 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>


       Signatures                                  Title                                      Date
       ----------                                  -----                                      ----
<S>                                      <C>                                           <C>

/s/ D. Scott Singdahlsen                Chief Executive Officer, President             January 28, 2000
-------------------------------------   and Chairman Of The Board
D. Scott Singdahlsen


/s/ Keith F. Carney                     Director                                       January 28, 2000
-------------------------------------
Keith F. Carney


/s/ S. L. Hutchison                     Director                                       January 28, 2000
-------------------------------------
S. L. Hutchison


/s/ Bryce W. Rhodes                     Director                                       January 28, 2000
-------------------------------------
Bryce W. Rhodes


/s/ Andrew P. Calerich                  Chief Financial Officer and Secretary          January 28, 2000
-------------------------------------
Andrew P. Calerich
</TABLE>