# U.S. Securities and
Exchange Commission Washington, D.C. 20549

# Form 10-Q

# QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934

# For the Quarterly
period ended March 31, 2004

# Commission File No.
0-20975

# Tengasco, Inc. and
Subsidiaries(Exact name of small business issuer as specified in its charter)

|Tennessee                                                     |  | 87-0267438                       
|------------------------------------------------------------- |  | ---------------------------------
|State or other jurisdiction of  Incorporation or organization |  | (IRS Employer Identification No.)
|                                                              |  |                                  

# 603
Main Avenue, Suite 500, Knoxville, TN 37902(Address of principal
executive offices)

# (865-523-1124)(Issuers telephone number, including area code)

Check whether the issuer (1) filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
past 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
XNo__

State the number of shares
outstanding of each of the issuers classes of common equity, as of the latest
practicable date: 48,506,977 common shares at March 31, 2004.

---

# TENGASCO, INC. AND
SUBSIDIARIESTABLE OF CONTENTS

|PART I.  | FINANCIAL INFORMATION                                                                                                                                        | PAGE
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----
|         | ITEM 1.  FINANCIAL STATEMENTS *     Condensed Consolidated Balance Sheets as of March 31, 2004 and                    3-4
                 December 31, 2003 | 3   
|         | *    Consolidated Statements of Loss for the three months ended March 31,2004 and 2003                                                                       | 5   
|         | *    Consolidated Statements of Stockholders Equity for the three months ended March 31, 2004                                                                | 6   
|         | *     Consolidated Statements of Cash Flows for the three months ended March 31, 2004 and 2003                                                               | 7   
|         | *    Condensed Notes to Consolidated Financial Statements                                                                                                    | 8   
|         | ITEM 2. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                               | 12  
|         | ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                                                                           | 13  
|         | ITEM 4.  CONTROLS AND PROCEDURES                                                                                                                             | 14  
|PART II. | OTHER INFORMATIONITEM 1.  LEGAL PROCEEDINGS                                                                                                                  | 14  
|         | ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                                                                                                           | 15  
|         | ITEM 5. OTHER INFORMATION                                                                                                                                    | 16  
|         | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                                                                                     | 16  
|         | *    SIGNATURES                                                                                                                                              | 17  
|         | EXHIBITS                                                                                                                                                     | 18  
|         |                                                                                                                                                              |     

---

# CONDENSED CONSOLIDATED
BALANCE SHEETS

# ASSETS

|                                             | March 31, 2004
(Unaudited) | December 31, 2003
|-------------------------------------------- | -------------------------- | -----------------
|Current Assets:                              |                            |                  
|Cash and cash equivalents                    |                            |                  
|Investments                                  |                            |                  
|Accounts receivable, net                     |                            |                  
|Participants receivable                      |                            |                  
|Inventory                                    |                            |                  
|Current portion of loan fees, net            |                            |                  
|Other current assets                         |                            |                  
|Total current assets                         |                            |                  
|Oil and gas properties, net (on the basis of |                            |                  
|full cost accounting)                        |                            |                  
|Pipeline facilities, net                     |                            |                  
|Other property and equipment, net            |                            |                  
|Other                                        |                            |                  
|                                             |                            |                  

---

See accompanying notes
to condensed consolidated financial statements.

# TENGASCO, INC. AND
SUBSIDIARIES

# CONDENSED CONSOLIDATED
BALANCE SHEETS

# LIABILITIES AND
STOCKHOLDERS EQUITY

|                                                            | March 31, 2004
(Unaudited) | December 31, 2003
|----------------------------------------------------------- | -------------------------- | -----------------
|Current Liabilities                                         |                            |                  
|Current maturities of long-term debt                        |                            |                  
|Accounts payable-trade                                      |                            |                  
|Accrued interest payable                                    |                            |                  
|Notes payable to related parties                            |                            |                  
|Other accrued liabilities                                   |                            |                  
|Current shares subject to mandatory redemption              |                            |                  
|Total current liabilities                                   |                            |                  
|Shares subject to mandatory redemption                      |                            |                  
|Asset retirement obligations                                |                            |                  
|Long-term debt less current maturities                      |                            |                  
|Total liabilities                                           |                            |                  
|Stockholders' Equity                                        |                            |                  
|Common stock, $.001 per value, 50,000,000 shares authorized |                            |                  
|                                                            |                            |                  
|Additional paid-in-capital                                  |                            |                  
|Accumulated deficit                                         |                            |                  
|Accumulated other comprehensive loss                        |                            |                  
|Total stockholders' equity                                  |                            |                  
|                                                            |                            |                  

See accompanying notes
to condensed consolidated financial statements.

---

# TENGASCO, INC. AND
SIBSIDIARIES

# CONSOLIDATED
STATEMENTS OF LOSS

|                                                | For the Three
Months Ended
March 31,2004
(Unaudited) | For the Three
Months Ended
March 31, 2003
(Unaudited)
|----------------------------------------------- | ---------------------------------------------------- | -----------------------------------------------------
|
|Revenues and other income                       |                                                      |                                                      
|Oil and gas revenues                            |                                                      |                                                      
|Pipeline transportation  revenues               |                                                      |                                                      
|Interest income                                 |                                                      |                                                      
|Total revenues and other income                 |                                                      |                                                      
|Cost and other deductions                       |                                                      |                                                      
|Production costs and taxes                      |                                                      |                                                      
|Depletion, depreciation and amortization        |                                                      |                                                      
|Interest expense                                |                                                      |                                                      
|General and administrative cost                 |                                                      |                                                      
|Public Relations                                |                                                      |                                                      
|Professional fees                               |                                                      |                                                      
|Total cost and other deductions                 |                                                      |                                                      
|Net loss before  cumulative effect of change in |                                                      |                                                      
|accounting principle                            |                                                      |                                                      
|Cumulative Effect of a change in accounting     |                                                      |                                                      
|principle                                       |                                                      |                                                      
|Net loss                                        |                                                      |                                                      
|Dividends on preferred stock                    |                                                      |                                                      
|Net loss attributable to common stockholders    |                                                      |                                                      
|                                                |                                                      |                                                      
|Net loss attributable to common stockholders    |                                                      |                                                      
|per share basic and diluted:                    |                                                      |                                                      
|Operations                                      |                                                      |                                                      
|Cumulative effect of a change in accounting     |                                                      |                                                      
|principle                                       |                                                      |                                                      
|Total                                           |                                                      |                                                      
|Weighted average shares outstanding             |                                                      |                                                      
|                                                |                                                      |                                                      

See accompanying notes
to condensed consolidated financial statements.

---

# TENGASCO, INC. AND
SUBSIDIARIES

# CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITY

# (Unaudited)

|                                  | Common Stock
Shares | Amount | Additional
Paid in Capital | Accumulated Deficit | Accumulated
Other
Comprehensive | Total
|--------------------------------- | ------------------- | ------ | -------------------------- | ------------------- | ------------------------------- | -----
|Balance December 31, 2003         |                     |        |                            | 12,064,977          |                                 | $    
|Net Loss                          |                     |        |                            | --                  |                                 |      
|                                  |                     |        |                            |                     |                                 |      
|Common Stock Issued for exercised |                     |       
|options                           |                     |        |                            | 142,000             |                                 |      
|Common Stock Issued in            |                     |       
|Rights Offering                   |                     |        |                            | 36,300,000          |                                 |      
|                                  |                     |        |                            |                     |                                 |      
|                                  |                     |        |                            |                     |                                 |      
|                                  |                     |        |                            | 48,506,977          |                                 | $    
|                                  |                     |        |                            |                     |                                 |      

See accompanying notes
to condensed consolidated financial statements.

---

# TENGASCO, INC. AND
SUBSIDIARIES

# CONSOLIDATED
STATEMENTS OF CASH FLOWS

|                                                           | For the Three
Months Ended
March 31, 2004
(Unaudited) | For the Three
Months Ended
March 31, 2003
(Unaudited)
|---------------------------------------------------------- | ----------------------------------------------------- | -----------------------------------------------------
|Operating Activities                                       |                                                       |                                                      
|Net Loss                                                   |                                                       |                                                      
|                                                           |                                                       |                                                      
|Adjustments to reconcile net loss to net cash              |                                                       |                                                      
|used in operating activities:                              |                                                       |                                                      
|Depletion, depreciation and amortization                   |                                                       |                                                      
|Charitable donation, services paid in stock, stock options |                                                       |                                                      
|Gain on Sale of Equipment                                  |                                                       |                                                      
|Changes in assets and liabilities                          |                                                       |                                                      
|Accounts receivable                                        |                                                       |                                                      
|Participants receivable                                    |                                                       |                                                      
|Other Current Assets                                       |                                                       |                                                      
|Other Assets                                               |                                                       |                                                      
|Accounts payable                                           |                                                       |                                                      
|Accrued interest payable                                   |                                                       |                                                      
|Other accrued liabilities                                  |                                                       |                                                      
|Other                                                      |                                                       |                                                      
|                                                           |                                                       |                                                      
|                                                           |                                                       |                                                      
|Net cash used in operating activities                      |                                                       |                                                      
|                                                           |                                                       |                                                      
|Investing activities                                       |                                                       |                                                      
|Net additions to oil and gas properties                    |                                                       |                                                      
|Net additions to pipeline facilities                       |                                                       |                                                      
|Net cash used in investing activities                      |                                                       |                                                      
|                                                           |                                                       |                                                      
|Financing activities                                       |                                                       |                                                      
|Proceeds from exercise options                             |                                                       |                                                      
|Repayments of borrowings                                   |                                                       |                                                      
|Proceeds from borrowings                                   |                                                       |                                                      
|Net proceeds from issuance of common stock                 |                                                       |                                                      
|Net proceeds from rights offering                          |                                                       |                                                      
|                                                           |                                                       |                                                      
|Net cash provided by financing activities                  |                                                       |                                                      
|Net change in cash and cash equivalents                    |                                                       |                                                      
|Cash and cash equivalents, beginning of period             |                                                       |                                                      
|                                                           |                                                       |                                                      
|Cash and cash equivalents, end of period                   |                                                       |                                                      
|                                                           |                                                       |                                                      

See accompanying notes
to condensed consolidated financial statements.

---

# Tengasco, Inc. And
Subsidiaries

# Condensed Notes to Consolidated
Financial Statements

# (Unaudited)

(1)
           Basis of Presentation

| | The
accompanying unaudited consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information and with
the instructions to Form 10-Q and Item 210 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of only normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended March 31,
2004 are not necessarily indicative of the results that may be expected for the year ended
December 31, 2004. Additionally, deferred income taxes and income tax expense is not
reflected in the Companys financial statements due to the fact that the Company has
had recurring losses and deferred tax assets arising from net operating gloss
carry-forwards have been fully reserved. For further information, refer to the
Companys consolidated financial statements and footnotes thereto for the year ended
December 31, 2003 included in the Companys annual report on Form 10-K.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(2)
           Earnings Per Share

| | In
accordance with Statement of Financial Accounting Standards (SFAS) No. 128, Earnings
Per Share, basic and diluted loss per share are based on 17,723,812 and 11,764,321
weighted average shares outstanding for the quarter ended March 31, 2004 and December 31,
2003, respectively.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
the three-month periods ending March 31, 2004 and 2003, the Company had no vested,
unexercised, in the money options. As the Company was in a net loss position, any
potential common share equivalents would have been anti-dilutive.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company adopted the disclosure provision of the Statement of Financial Accounting
Standards (SFAS or statement) No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure, which amends SFAS No. 123. Accounting
for Stock-Based Compensation, SFAS No. 148 provides alternative methods of
transition for a voluntary change to the fair value based method of accounting for
stock-based employee compensation, which was originally provided under SFAS No. 123. The
Statement also improves the timeliness of disclosures by requiring the information be
included in interim, as well as annual, financial statements. The adoption of these
disclosure provisions did not have a material affect on the Companys March 31, 2004
consolidated results of operations, financial position, or cash flows.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SFAS
No. 123 encourages, but does not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The Company has chosen to continue
to account for stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. Accordingly, compensation cost for stock
options is measured as the excess, if any, of the quoted market price of the
Companys stock at the date of the grant over the amount an employee must pay to
acquire the stock. The option price of all the Companys stock options is equal to
the market value of the stock at the grant date. As such, no compensation expense is
recorded in the accompanying consolidated financial statements.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Had
compensation cost been determined based upon the fair value at the grant date for awards
under the stock option plan consistent with the methodology prescribed under SFAS No. 123,
the Companys pro forma net loss and net loss per share would have differed from the
amounts reported as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          | Year Ended
December 31, 2003 | Three Months
March 31, 2003 | Three Months
March 31, 2004
|----------------------------------------- | ---------------------------- | --------------------------- | ---------------------------
|Net loss as reported                      |                              |                             | $                          
|Stock-based employee compensation         |                              |                             |                            
|expense determined under fair value basis |                              |                             | $                          
|Pro forma net loss                        |                              |                             | $                          
|Earning per share:                        |                              |                             |                            
|Basic and diluted as reported             |                              |                             | $                          
|Basic and diluted pro forma               |                              |                             | $                          
|                                          |                              |                             |                            

(3)
           Liquidity

| | The
Company continues to be in the early stages of its oil and gas related operating history
as it endeavors to expand its operations. Accordingly, the Company has incurred continuous
losses through these operating stages and has an accumulated deficit of $31,860,816 and a
working capital deficit of $2,448,957 as of March 31, 2004. During 2002, the Company was
informed by its primary lender that the entire amount of its outstanding credit facility
was immediately due and payable, as provided for in the Credit Agreement. The Company
disputed its obligation to make this payment and has resolved the dispute as discussed in
Note 10. The Company believes that now that its dispute has been resolved and that it has
obtained additional funds through its Rights Offering discussed in Note 9, it will be
able to obtain long-term financing to allow the Company to continue drilling and to locate
and develop other properties. If such funding for additional drilling becomes available,
the Company plans to drill new wells in locations it has identified in Kansas on its
existing leases in response to drilling activity in the area, which it believes will
establish new areas of oil production. However, no assurances can be made that such
financing will be obtained. The inability of the Company to obtain additional long-term
financing could impair the Companys ability to meet its other obligations as they
become due.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(4)
           New Accounting Pronouncements

| | In
March 2004, The Emerging Issues Task Force (EITF) reached a consensus that
mineral rights, as defined in EITF Issue No. 04-02, Whether Mineral Rights are
Tangible or Intangible Asset, are tangible assets and that they should be removed as
examples of intangible assets in SFAS Nos. 141 and 142. The FASB has recently ratified
this consensus and directed the FASB staff to amend SFAS Nos. 141 and 142 through the
issuance of FASB Staff Positions FSP FAS 141-1 and FSP FAS 142-1. Historically the Company
has included the cost of such mineral rights as tangible assets, which is consistent with
the EITFs consensus. As such, EITF 04-02 will not affect Tengascos
consolidated condensed financial statements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
December 2003, the FASB issued Interpretation No. 46R, Consolidation of Variable
Interest Entities (FIN 46), which requires the consolidation of certain
entities that are determined to be variable interest entities (VIEs). An
entity is considered to be a VIE when either (i) the entity lacks sufficient equity to
carry on its principal operations, (ii) the equity owners of the entity cannot make
decisions about the entitys activities or (iii) the entitys equity neither
absorbs losses or benefits from gains. The Company owns no interests in variable interest
entities, and therefore this new interpretation has not affected the Companys
consolidated financial statements
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2003, the FASB issued Statement of Financial Accounting Standard No. 150,
Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity (SFAS 150). SFAS 150 establishes standards for
how an issuer classifies and measures in its statement of financial position certain
financial instruments with characteristics of both liabilities and equity and it requires
that an issuer classify a financial instrument within its scope as a liability. SFAS 150
was effective for financial instruments entered into or modified after May 31, 2003 for
public companies. Restatement is not permitted. Adoption of this standard during 2003
resulted in a reclassification to a liability and restatement of the Companys assets
to restricted fair values of the Companys Series A, B and C preferred stock subject
to mandatory redemption. Accordingly, for the year ended December 31, 2003, the Company
recognized cumulative gain from a change in accounting principle of approximately
$1,247,000. This cumulative gain results from the difference between the carrying amount
of the preferred shares and the fair value of the shares after adoption. Accretion
totaling $354,735 has been recognized as interest expense for the period from July 1, 2003
through December 31, 2003. In the first quarter of 2004, $134,194.50 was recognized as
interest expense.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(5)
           Letter of Credit Agreement

| | On
November 8, 2001, the Company signed a credit facility with the Energy Finance Division of
Bank One, N.A. in Houston, Texas whereby Bank One extended to the Company a revolving line
of credit of up to $35 million. The initial borrowing base under the facility was $10
million. The interest rate is the Bank One base rate plus one-quarter percent.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
November 9, 2001, funds from this credit line were used to (1) refinance existing
indebtedness on the Companys Kansas properties, (2) to repay the internal financing
provided by directors and shareholders on the Companys completed 65-mile Tennessee
intrastate pipeline system, (3) to repay a note payable to Spoonbill, Inc., (4) to repay a
purchase money note due to M.E. Ratliff, who at the time was the Companys Chief
Executive Officer and Chairman of the Board of Directors, for purchase by the Company of a
drilling rig and related equipment, (5) to repay in full the remaining principal of the
working capital loan due December 31, 2001 to Edward W.T. Gray III, who at that time was a
director of the Company. All of these obligations incurred interest at a rate
substantially greater than the rate being charged by Bank One under the credit facility.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
April 5, 2002, the Company received a notice from Bank One stating that it had
redetermined and reduced the borrowing base under the Credit Agreement by $6,000,000 to
$3,101,766. Bank One demanded that the Company pay the $6,000,000 within thirty days of
the notice. The Company filed a lawsuit in Federal Court to prevent Bank One form
exercising any rights under the Credit Agreement. The Company has been paying $200,000 per
month toward the outstanding balance of the credit facility. As of May1, 2004, the
outstanding balance due to Bank One under the Credit Agreement was $ 4,101,796.66. On May
13, 2004 the Company entered into an agreement, settling its lawsuit with Bank One. See
Note 10, Bank One Litigation Settlement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(6)
           Notes Payable

| | From
December 2002 through December 9, 2003, Dolphin Offshore Partners, L.P.
(Dolphin) acquired a total of an 85% undivided interest in the Companys
Tennessee and Kansas pipelines as collateral for a series of seven loans. In the first
five of these transactions totaling $1,650,000, Peter E. Salas, a Director of the Company
and the general partner and controlling person of Dolphin, negotiated the terms of the
loans directly with management, which terms were approved by management in view of the
Companys immediate needs, financial condition and prospective alternatives and under
circumstances in which Dolphin was not generally engaged in the business of lending money.
These loans were made on terms that management believes were at least as favorable to the
Company as it could have obtained through arms-length negotiations with unaffiliated third
parties. The Companys Board approved the sixth and seventh loans on December 3 and
9, 2003, in the amounts of $225,000 and $250,000, respectively, with no participation by
Mr. Salas in the meeting or the vote, which was unanimous by the seven other Directors
present at the meeting. In addition, the Company has entered into a continuing security
agreement, which was approved by the Board with no participation by Mr. Salas in the
meeting or vote, which was unanimous by the seven other Directors present at the meeting,
providing the terms of Dolphins security interest collateralizing all of its loans.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
December 24, 2003, Dolphin loaned the Company the sum of $1,000,000 which was used for
working capital and to pay all interest and principal in full of the 1998 convertible loan
to the Company refereed to as the Lutheran note then being held by several persons. This
loan is evidenced by a separate promissory note bearing interest at the rate of 12% per
annum, with payments of interest only payable quarterly and the principal balance payable
on April 4, 2004. The obligations under the loan are secured by an undivided interest
in the Companys Tennessee and Kansas pipelines and the security agreement referred
to above.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
February 2, 2004, Dolphin loaned the Company the sum of $225,000 which was used for making
payment of principal and interest to Bank One for February, 2004. This loan is evidenced
by a separate promissory note bearing interest at the rate of 12% per annum, with payments
of interest only payable quarterly and the principal balance payable on April 4,
2004. The obligations under the loan are secured by an undivided interest in the
Companys Tennessee and Kansas pipelines and the security agreement referred to
above. All notes payable to Dolphin and secured by an interest in the pipelines were
repaid on March 30, 2004 from the proceed received by the Company from its Rights
Offering.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(7)
           Litigation Settlements

| | On
April 2, 2003 and by agreed order filed May 5, 2003, all claims were settled and the
lawsuit was dismissed in C.H. Fenstermaker & Associates, Inc. v. Tengasco, Inc.: No.
3:01-CV-283, in the United States District Court for the Eastern District of Tennessee, at
Knoxville. The settlement provides that the amount claimed to be owed by the Company to
Caddum was reduced to $297,000 which is to be paid by note due May 1, 2004, with interest
only payable monthly at an annual interest rate of 4.75 percent. This note was repaid on
March 31, 2004, from the proceeds received by the Company from its Rights Offering.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
May 10, 2004 the Court entered its final order approving the fairness of the settlement to
the class, dismissing the action pursuant to a Settlement Stipulation, and fully releasing
the claims of the class members in Paul Miller v. M. E. Ratliff and Tengasco, Inc.,Number 3:02-CV-644 in the United States District Court for the Eastern District of
Tennessee, Knoxville, Tennessee. This action sought certification of a class action to
recover on behalf of a class of all persons who purchased shares of the Companys
common stock between August 1, 2001 and April 23, 2002, unspecified damages allegedly
caused by violations of the federal securities laws. In January, 2004 all parties reached
a settlement subject to court approval. On April 29, 2004, a final hearing for approval of
the settlement was held. The Court entered its order approving the settlement on May 10,
2004. Class members may file their claims against the settlement fund through July 15,
2004. The fund will be disbursed in accordance with the claims filed. Under the
settlement, the Company paid into a settlement fund the amount of $37,500 to include all
costs of administration, contributed 150,000 shares of stock of Miller Petroleum, Inc.
owned by the Company and will issue 300,000 warrants to purchase a share of the
Companys common stock for a period of three years from date of issue at $1 per share
subject to adjustments. All expenses including attorneys fees are to be paid out of
these settlement funds.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(8)
           Cumulative Effect of a Change in Accounting Principle

| | Effective
January 1, 2003, the Company implemented the requirements of Statement of Financial
Accounting Standards No. 143 (SFAS 143), Accounting for Asset Retirement
Obligations. Among other things, SFAS 143 requires entities to record a liability
and corresponding increase in long-lived assets. Over the passage of time, accretion of
the liability is recognized as an operation expense and the capitalized cost is depleted
over the estimated useful life of the related asset. Additionally, SFAS 143 requires that
upon initial application of these standards, the Company must recognize a cumulative
effect of a change in accounting principle corresponding to the accumulated accretion and
depletion expense that would have been recognized had this standard been applied at the
time the long-lived assets were acquired or constructed. The Companys asset
retirement obligations relate primarily to the plugging, dismantling and removal of wells
drilled to date.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Using
a credit-adjusted risk fee rate of 12%, an estimated useful life of wells ranging from
30-40 years, and estimated plugging and abandonment cost ranging from $5,000 per well to
$10,000 per well, the Company has recorded a non-cash charge related to the cumulative
effect of a change in accounting principle of $351,204 in its statement of operations. Oil
and gas properties were increased by $260,191, which represents the present value of all
future obligations to retire the wells at January 1, 2003, net of accumulated depletion on
this cost through that date. A corresponding obligation totaling $611,395 has also been
recorded as of January 1, 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(9)
                      Rights Offering

| | On
October 17, 2003, the Company filed a Registration Statement on Form S-1 with the
Securities and Exchange Commission (SEC). On February 13, 2004, the SEC deemed
the Registration Statement on Form S-1 effective.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Rights Offering was a distribution to the holders of the Companys common stock
outstanding at the record date, February 27, 2004, at no charge, of nontransferable
subscription rights at the rate of one right to purchase three shares of the
Companys common stock for each share of common stock owned at the subscription price
of $0.75 in the aggregate, or $0.25 per each share purchased.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Each
subscription right, in addition to the right to purchase three shares of common stock,
carried with it an over-subscription privilege. The over-subscription privilege provided
stockholders that exercise all of their basic subscription privileges with the opportunity
to purchase those shares that were not purchased by other stockholders through the
exercise of their basic subscription privileges, at the same subscription price per
share.  In no event could any subscriber purchase shares of the Companys common
stock in the offering that, when aggregated with all of the shares of the Companys
common stock otherwise owned by the subscriber and his, her or its affiliates, would
immediately following the closing represent more than 50% of the Companys issued and
outstanding shares.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
provided in the Rights Offering, 7,029,604 rights were exercised pursuant to the basic
subscription privilege, resulting in the purchase of 21,088,812 shares at $0.25 per share
for gross proceeds to the Company of $5,272,203 resulting from the basic subscription
privilege. A total of 15,211,118 rights were exercised pursuant to the oversubscription
privilege, resulting in additional gross proceeds to the Company of $3,802,797. Of the
shares purchased pursuant to the Rights Offering 14,966,344 shares were purchased by
Directors, Officers and owners of 10% of the Companys outstanding common stock.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
the time the Rights Offering closed on March 18, 2004 all 36.3 million shares offered had
been subscribed and, as a result, the Company raised approximately $9.1 million. The total
number of shares subscribed actually exceeded the 36.3 million shares available for
issuance under the offering. Consequently, all shares subscribed for under the basic
privilege were issued and the number of shares issued under the over-subscription
privilege was proportionately reduced to equal the number of remaining shares. The
allocation and issuance of the oversubscribed shares was made by Mellon Investor Services,
the Companys subscription agent who also returned payments for those over-subscribed
shares that were not available.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
net proceeds of the Rights Offering have been used to pay non-bank indebtedness in the
aggregate amount of approximately $6 million (including up to $3,850,000 in principal
amount plus accrued interest owed by the Company to Dolphin) and to pay $1,157,00 as a
portion of the Companys settlement with Bank One. The balance of the net
proceeds will be used for working capital purposes, including the drilling of
additional wells.At December 31, 2003, the Company incurred costs in connection
with the Rights Offering of $223,003, which are reflected in the consolidated balance
sheet in other current assets. This asset was offset against gross proceeds in March 2004,
when such proceeds were received by the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(10)
           Bank One Litigation Settlement

| | As
of May 1, 2004, the principal amount owed by the Company under the credit facility with
Bank One signed on November 8, 2001 was $4,101,601.61. On Thursday, May 13, 2003, the
Company and the Bank One executed a written agreement resolving all claims against each
other. Pursuant to that agreement, the Company agreed to pay the sum of $3,657,000 to the
Bank by May 18, 2004, in full satisfaction of its obligations to the Bank and to
immediately release all claims against the Bank and to dismiss the litigation. In turn,
Bank One agreed to immediately release all its claims against the Company, dismiss the
litigation and to execute releases of its liens on all of the Companys properties
securing the credit facility upon receipt of the agreed payment. Bank One retained a right
to seek specific performance of the May 13, 2004 agreement if payment were not made by May
18, 2004 and to recover attorneys fees if such relief were sought. The Company and
the Bank each agreed to bear all of its own costs, expenses, and attorneys fees
incurred to date.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
May 18, 2004, the Company paid Bank One, the agreed upon settlement in the amount of
$3,657,000. The funds were obtained from proceeds of a bridge loan from Dolphin Offshore
Partners, LP (Dolphin) (the managing partner of Dolphin is Peter E. Salas, a
member of the Board of Directors), in the principal amount of $2,500,000 bearing interest
at 12% per annum and payable interest only monthly beginning June 18, 2004 with
the principal amount due May 20, 2005. The loan is secured by a first lien on the
Companys Tennessee and Kansas producing properties and the Tennessee pipeline. The
balance of the settlement amount of $1,157,000 was paid from funds available to the
Company from the proceeds of the rights offering. Upon receipt this payment, an agreed order signed by the Company and the Bank dismissing
all claims in litigation was filed with the court on May 20, 2004 and entry by the court is anticipated immediately.
No hearing or approval of the settlement by tbe court is required.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

Results
of Operations and Financial Condition

Kansas

| | During
the first three months of 2004, the Company produced and sold 29,635 barrels of oil and
67,582 Mcf of natural gas from its Kansas Properties comprised of 149 producing oil wells
and 59 producing gas wells. The first three months production of 29,635 barrels of oil
compares to 32,807 barrels produced in the first three months of 2003. The first three
months production of 67,582 Mcf of gas compares to 64,438 Mcf produced in the first three
months of 2003. In summary, the first three months production reflected expected continued
 production levels from the Kansas Properties, which have been in production for
many years. The decrease in oil production reflects a normal decline curve for the Kansas
properties. This decline has not been offset by additional drilling and well work-overs
due to the Bank One litigation. The revenues from the Kansas properties were $999,707 in
the first three months of 2004 compared to $1,165,422 in 2003.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Tennessee

| | During
the first three months of 2004, the Company produced gas from 23 wells in the Swan Creek
field, which it sold in Kingsport, Tennessee to Eastman Chemical Company (Eastman).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Natural
gas production from the Swan Creek field for the first three months of 2004 was an average
of 617 Mcf per day during that period as compared to 1,241 Mcf per day in the first three
months of 2003. The first three months production reflected expected natural decline in
production from the existing Swan Creek gas wells which were first brought into production
in mid-2001 upon completion of the Companys pipeline. This natural decline is normal
for any producing well, and this decline as experienced on existing wells in Swan Creek
was not unexpected.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Comparison
of the Quarters Ending March 31, 2004 and 2003

| | The
Company recognized $1,332,350 in oil and gas revenues from its Kansas Properties and the
Swan Creek Field during the first three months of 2004 compared to $1,923,915 in the first
three months of 2003. The decrease in revenues was due to a decrease in production from
Kansas and Swan Creek oil sales and from gas sales in Swan Creek. Kansas gas sales also
declined by approximately $130,297 due to an unusually high price received in March of
2003 of $8.64 per Mcf, as compared to $4.11 in 2004. The decrease in pipeline
transportation revenues is directly related to the decrease in gas volumes in Swan Creek.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company realized a net loss attributable to common shareholders of $1,125,778 ($0.06) per
share of common stock), during the first three months of 2004 compared to a net loss in
the first three months of 2003 to common shareholders of $793,545 ($0.07) per share of
common stock).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Production
costs and taxes in the first three months of 2004 of $871,581 increased from $769,909 in
the first three months of 2003. The difference of $101,672 was due to a reclassification
of insurance cost related to field activities of $98,369 from general and administrative costs. An additional $20,633 was paid
in property taxes in Kansas.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Depreciation,
depletion, and amortization expense for the first three months of 2004 was $608,164
compared to $630,942 in the first three months of 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
the first three months the Company reduced it general and administrative costs by $222,977
from 2003.This was due to the insurance reclassifications. Management has also made an effort to control costs in every aspect of its
operations, including a reduction in personnel from 2003 levels.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Professional
fees, in the first three months of 2004 have remained at a high level, primarily due to
costs incurred for legal and accounting services as a result of the Bank One lawsuit.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Interest
expense for the first quarter of 2004 increased from the first quarter of 2003 to $413,858
from $153,356. The increase was due to the issuance of notes to Dolphin during the first
quarter of 2004. These notes were paid on March 20, 2004. Dividends on the Companys
Preferred Stock in the amount of $134,194 were recognized as interest expense in the first
quarter of 2004 due to the Companys adoption of SFAS 150, discussed in Note 4 of the
Companys Condensed Notes to Consolidated Financial Statements.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Liquidity and Capital
Resources

| | On
November 8, 2001, the Company signed a credit facility agreement (the Credit
Agreement) with the Energy Finance Division of Bank One, N.A. in Houston Texas
(Bank One). The Company instituted litigation in May 2002 based on certain
actions taken by Bank One under the agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
harmful effects upon operations of the Company caused by the actions of Bank One and the
litigation with Bank One were dramatic. First, the action of Bank One had the effect of
totally cutting off any additional funds to the Company to support Company operations.
Further, the funds loaned to the Company by Bank One were to refinance the Companys
indebtedness and no funds were then available to pay this large repayment obligation to
Bank One, even if such action by the Bank had been proper, which the Company vigorously
and continually denied. The principal reason the Company had entered into the Bank One
credit agreement was to provide for additional funds to promote the growth of the Company.
Consequently, as a result of Bank Ones unwarranted actions no additional funds under
the credit facility agreement were available for additional drilling that the Company had
anticipated performing in 2002 and 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Second,
the existence of the dispute with Bank One, compounded by the fact that an effect of Bank
Ones action was to cause the Companys auditors to indicate that there was an
uncertainty over the Companys ability to continue as a going concern, significantly
discouraged other institutional lenders from considering a variety of additional or
replacement financing options for drilling and other purposes that may have ordinarily
been available to the Company. Third, the dispute caused Bank One to fail to grant
permission under the existing loan agreements with the Company to permit the Company to
formulate drilling programs involving potential third party investors that may have
permitted additional drilling to occur. Finally, this dispute has caused the Company to
incur significant legal fees to protect the Companys rights.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
May 13, 2004, the Company resolved its dispute with Bank One. See, Part II, Item 1, Legal
Proceedings. The Company believes that now that its dispute has been resolved it will be
able to obtain long term financing to allow the Company to continue drilling and to locate
and develop other properties. However, no assurances can be made that such financing will
be obtained.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | When
funding for additional drilling becomes available, the Company plans to drill wells in
 new locations it has identified in Kansas on its existing
leases in response to drilling activity in the area establishing new areas of oil
production. Although the Company successfully drilled the Dick No. 7 well in Kansas in
2001 and completed the well as an oil well, it was not able to drill any new wells in
Kansas in 2002 or 2003 due to lack of funds available for such drilling caused by the Bank
One situation. The Company is hopeful now that the Bank One matter has been resolved that
it will soon be able to obtain financing necessary to resume drilling and well work-overs
in Kansas to maximize production from the Kansas Properties.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 3 QUANTITATIVE AND
QUALITATIVE DISCLOSURE ABOUT MARKET RISK

# Commodity Risk

| | The
Companys major market risk exposure is in the pricing applicable to its oil and gas
production. Realized pricing is primarily driven by the prevailing worldwide price for
crude oil and spot prices applicable to natural gas production. Historically, prices
received for oil and gas production have been volatile and unpredictable and price
volatility is expected to continue. Monthly oil price realizations ranged from a low of
$23.44 per barrel to a high of $33.60 per barrel during 2003. Gas price realizations
ranged from a monthly low of $3.69 per Mcf to a monthly high of $9.11 per Mcf during the
same period. The Company did not enter into any hedging agreements in 2003 or the first
quarter of 2004, to limit exposure to oil and gas price fluctuations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Interest Rate Risk

| | At
December 31, 2003, the Company had debt outstanding of approximately $16.1 million
including, as of that date, $5.1 million owed on its revolving credit facility with Bank
One. The interest rate on the Bank One revolving credit facility is variable based on the
financial institutions prime rate plus 0.25%. The Companys remaining debt of
$11 million has fixed interest rates ranging from 6% to 12%. As a result, the
Companys annual interest costs in 2003 fluctuated based on short-term interest rates
on approximately 32% of its total debt outstanding at December 31, 2003. The impact on
interest expense and the Companys cash flows of a 10 percent increase in Bank
Ones prime rate (approximately 0.5 basis points) would be approximately $22,000,
assuming borrowed amounts under the Bank One credit facility remained at the same amount
owed as of December 31, 2003. The Company did not have any open derivative contracts
relating to interest rates at December 31, 2003.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Forward-Looking
Statements and Risk

| | Certain
statements in this report, including statements of the future plans, objectives, and
expected performance of the Company, are forward-looking statements that are dependent
upon certain events, risks and uncertainties that may be outside the Companys
control, and which could cause actual results to differ materially from those anticipated.
Some of these include, but are not limited to, the market prices of oil and gas, economic
and competitive conditions, inflation rates, legislative and regulatory changes, financial
market conditions, political and economic uncertainties of foreign governments, future
business decisions, and other uncertainties, all of which are difficult to predict.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | There
are numerous uncertainties inherent in estimating quantities of oil and gas reserves and
in projecting future rates of production and the timing of development expenditures. The
total amount or timing of actual future production may vary significantly from reserves
and production estimates. The drilling of exploratory or developmental wells can involve
significant risks, including those related to timing, success rates and cost overruns.
Lease and rig availability, complex geology and other factors can also affect these risks.
Additionally, fluctuations in oil and gas prices, or a prolonged period of low prices, may
substantially adversely affect the Companys financial position, results of
operations and cash flows.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM
4 CONTROLS AND PROCEDURES

# Controls and Procedures

| | The Company
maintains disclosure controls and procedures that are designed to ensure that information
required to be disclosed by the Company in reports that it files or submits under the Securities
Exchange Act, is recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms and that such information is accumulated and
communicated to our management, including the Company's Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required disclosures. In
designing and evaluating the disclosure controls and procedures, management recognizes
that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving the desired control objectives, and management
necessarily is required to apply its judgment in evaluating the cost-benefit relationship
of possible controls and procedures. As of the end of the period covered by this report,
and under the supervision and with the participation of the management, including its
Chief Executive Officer and Chief Financial Officer, management evaluated the effectiveness of the
design and operation of these disclosure controls and procedures. Based on this evaluation
and subject to the foregoing, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures were effective in reaching a
reasonable level of assurance of achieving managements desired controls and
procedures objectives.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | There
have been no changes in the Company's internal controls over financial reporting that occurred
during the Company's most recent fiscal quarter that have materially affected, or are reasonably
likely to affect, the Company's internal control over financial reporting.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
part of a continuing effort to improve the Company's business processes management is evaluating its
internal controls and may update certain controls to accommodate any modifications to its
business processes or accounting procedures.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Changes in Internal
Controls

| | During
the period covered by this quarterly report, there have not been any changes in the
Companys internal controls that have materially affected or are reasonably likely to
materially affect, the Companys internal controls over financial reporting.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

PART
II OTHER INFORMATION

ITEM 1 LEGAL
PROCEEDINGS

| | To
the knowledge of management, no federal, state or local governmental agency is presently
contemplating any proceeding against the Company that would have a result materially
adverse to the Company. To the knowledge of management, no director, executive officer or
affiliate of the Company or owner of record or beneficially of more than 5% of the
Companys common stock is a party adverse to the Company or had a material interest
adverse to the Company in any proceeding.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.       
               Tengasco, Inc., Tengasco Land and Mineral Corporation and Tengasco Pipeline
               Corporation v. Bank One, NA, Docket No. 2:02-CV-118 in the Eastern District
               of Tennessee, Northeastern Division at Greeneville.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
November 8, 2001, the Company signed a credit facility with Bank One, N.A. in Houston,
Texas whereby Bank One extended to the Company a revolving line of credit of up to $35
million. The initial borrowing base under the facility was $10 million.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
April 5, 2002, the Company received a notice from Bank One stating that it had
re-determined and reduced the then-existing borrowing base under the Credit Agreement by
$6,000,000 to $3,101,777. Bank One demanded that the Company pay the $6,000,000 within
thirty days. On May 2, 2002, the Company filed suit in federal court to restrain Bank One
from taking any steps pursuant to its Credit Agreement to enforce its demand that the
Company reduce its loan obligation or else be deemed in default and for damages resulting
from the wrongful demand. The Company sought a jury trial and actual damages sustained by
it as a result of the wrongful demand, in the amount of $51,000,000 plus punitive damages
in the amount of $100 million.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
July 1, 2002, Bank One filed its answer and counterclaim, alleging that its actions were
proper under the terms of the Credit Agreement, and in the counterclaim, seeking to
recover all amounts it alleges to be owed under the Credit Agreement, including principal,
accrued interest, expenses and attorneys fees in the approximate amount of $9
million. The Company continued to pay the sum of $200,000 per month of principal due
under the original terms of the Credit Agreement, plus interest.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of May 1, 2004, the principal amount owed by the Company under the credit facility, with
Bank One was $4,101,601.61. On Thursday, May 13, 2003, the Company and Bank One executed a
written agreement resolving all claims against each other. Pursuant to that agreement, the
Company agreed to pay the sum of $3,657,000 to Bank One by May 18, 2004, in full
satisfaction of its obligations to Bank One and each of the parties agreed to the
dismissal of the lawsuit and to release their claims against each other. Bank One agreed
to execute releases of its liens on all of the Companys properties securing the
credit facility upon receipt of the agreed payment. The Company and the Bank agreed
to bear all of their own costs, expenses, and attorneys fees incurred to date. The
settlement payment was made by the Company on May 18, 2004. See Part II, Item 5, Other
Information.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.       
               Paul Miller v. M. E. Ratliff and Tengasco, Inc.,Docket Number
               3:02-CV-644 in the United States District Court for the Eastern District of
               Tennessee, Knoxville, Tennessee.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | This
action was commenced in November 2002 and sought certification of a class action to
recover on behalf of a class of all persons who purchased shares of the Companys
common stock between August 1, 2001 and April 23, 2002, damages in an amount not specified
which were allegedly caused by violations of the federal securities laws, specifically
Rule 10b-5 issued under the Securities Exchange Act of 1934 as to the Company and Malcolm
E. Ratliff, the Companys former Chief Executive Officer and a Director, and Section
20(a) the Securities Exchange Act of 1934 as to Mr. Ratliff. The complaint alleges that
documents and statements made to the investing public by the Company and Mr. Ratliff
misrepresented material facts regarding the business and finances of the Company. As of
January 30, 2004, a written stipulation of settlement documenting the settlement terms was
signed by counsel for all parties. The stipulation of settlement was presented to the
Court on February 27, 2004 for a determination of initial fairness and initiation of other
procedures leading to a final hearing. At the hearing, the Court granted initial approval
of the settlement as proposed and established periods for determination of the class and
dates for a final settlement hearing approving disbursement of settlement funds to any
class members. Under the settlement, the Company has paid into a settlement fund the
amount of $37,500 to include all costs of administration, and has also contributed 150,000
shares of stock of Miller Petroleum, Inc. that is currently owned by the Company that had
been accepted in payment of an obligation owed to the Company by Miller Petroleum. The
Company also contributed to the settlement fund the Companys agreement to issue
300,000 warrants to purchase a share of the Companys common stock for a period of
three years from date of issue at $1 per share. The number or price of the warrants is to
be adjusted to account for the additional shares sold pursuant to the rights offering made
by the Company or other stated events. All expenses including attorneys fees as are
awarded by the court on final hearing are to be paid out of the settlement funds. The
parties stipulated the existence of a class for settlement purposes only. On April 29,
2004, a final hearing for approval of the settlement was held in federal court in
Knoxville, Tennessee. On May 10, 2004 the Court entered its final order approving the
fairness of the settlement to the class, dismissing the action pursuant to the Settlement
Stipulation, and fully releasing the claims of the class members. Pursuant to the
Settlement Stipulation and the Courts final order, class members may file their
claims against the settlement fund through July 15, 2004. The fund will be disbursed in
accordance with the claims filed. No further court approval is required or contemplated,
although the Court retains jurisdiction to enforce the settlement stipulation and the
Courts final order.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM
2 CHANGES IN SECURITIES AND USE OF PROCEEDS

| | During
the quarter, certain Directors and Officers of the Company exercised options granted to
them pursuant to the Tengasco, Inc. Stock Incentive Plan and purchased the following
number of shares of the Companys common stock at the exercise price of $0.50 per
share, which was the market price of the stock on the date the options were granted:
Richard T. Williams- 50,000 shares; Peter Salas- 24, 000 shares; Sheila Sloan- 8,000
shares; Steve Akos- 24,000 shares; and Robert Devereux- 24,000 shares.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
October 17, 2003, the Company filed a Registration Statement on Form S-1 with the SEC for
a rights offering of the Companys common stock (the "Rights Offering"). On December
29, 2003; February 11, 2004; and February 13, 2004, the Company filed amendments to the
Registration Statement. On February 13, 2004, the SEC deemed effective the Registration
Statement on Form S-1 as amended.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Rights Offering was a distribution to the holders of the Companys common stock
outstanding at the record date, February 27, 2004, at no charge, of nontransferable
subscription rights at the rate of one right to purchase three shares of the
Companys common stock for each share of common stock owned at the subscription price
of $0.75 in the aggregate, or $0.25 per each share purchased.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
record date for the Rights Offering was set as of February 27, 2004. The offering
expired at 5:00 p.m., New York City time, on March 18, 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------

| | Each
subscription right in addition to the right to purchase three shares of common stock
carried with it an over-subscription privilege. The over-subscription privilege provided
stockholders that exercise all of their basic subscription privileges with the opportunity
to purchase those shares that were not purchased by other stockholders through the
exercise of their basic subscription privileges at the same subscription price per share.
In no event could any subscriber purchase shares of the Companys common stock in the
offering that, when aggregated with all of the shares of the Companys common stock
otherwise owned by the of the shares of the Companys common stock otherwise owned by
the subscriber and his, her or its affiliates, would immediately following the closing
represent more than 50% of the Companys issued and outstanding shares.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
the time the Rights Offering closed on March 18, 2004 all 36.3 million shares offered had
been subscribed and, as a result the Company raised approximately $9.1 million. The total
number of shares subscribed for actually exceeded the 36.3 million shares available for
issuance under the offering. Consequently, all shares subscribed for under the basic
privilege were issued and the number shares issued under the over subscription privilege
was proportionately reduced to equal the number of remaining shares. The allocation and
issuance of the oversubscribed shares was made by Mellon Investor Services, the
Companys subscription agent who also returned payments for those oversubscribed
shares that were not available.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Pursuant
to the Rights Offering, 7,029,604 rights were exercised pursuant to the basic subscription
privilege, resulting in the purchase of 21,088,812 shares at $0.25 per share for gross
proceeds to the Company of $5,272,203. A total of 15,211,188 shares were purchased
pursuant to the oversubscription privilege, resulting in additional gross proceeds to the
Company of $3,802,797.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
net proceeds of the Rights Offering have been used to pay non-bank indebtedness in the
aggregate amount of approximately $6 million (including up to $3,850,000 in principal
amount plus accrued interest owed by the Company to Dolphin Offshore Partners, L.P., the
general partner of which is Peter E. Salas a director of the Company) and to pay
$1,157,000 of the Companys settlement with Bank One. The balance of the net
proceeds will be used for working capital purposes, including the drilling of
additional wells.  At December 31, 2003, the Company incurred costs in connection
with the Rights Offering of $223,003, which are reflected in the consolidated balance
sheet as an asset. This asset will be offset against gross proceeds to pay Bank One, when
received by the Company.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM
5 OTHER INFORMATION

| | On
February 2, 2004, Dolphin loaned the Company the sum of $225,000 which was used for making
payment of principal and interest to Bank One for February, 2004. This loan was evidenced
by a separate promissory note bearing interest at the rate of 12% per annum, with payments
of interest only payable quarterly and the principal balance payable on April 4,
2004. The obligations under the loan were secured by an undivided interest in the
Companys Tennessee and Kansas pipelines and the security agreement referred to
above. All notes payable to Dolphin and secured by an interest in the pipelines were
repaid on March 30, 2004 from the proceed received by the Company from its Rights
Offering.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following persons that are the Companys Directors, Officers or owners of more than
ten percent of the Companys outstanding common stock purchased the numbers of shares
in the Rights Offering indicated as follows: Stephen W. Akos (Director) 48,868 shares;
Jeffrey R. Bailey (Director, President) 66,287 shares; Robert L. Devereux (Director)
412,457 shares; Richard T. Williams (Director, Chief Executive Officer) 190,000 shares;
Dolphin Offshore Partners, L.P. 14,248,732 shares.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
May 18, 2004, Dolphin loaned the Company $2,500,000 bearing interest at 12% per annum with
interest payable monthly beginning June 18, 2004 and principal payable on May 20, 2005,
which loan is secured by a first lien on the companys Tennessee and Kansas producing
properties and the Tennessee pipeline. The proceeds of the loan were used to fund in part
the settlement of the Bank One litigation. See, Part II, Item 1, Legal Proceedings.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
May 5, 2004, the Company completed the drilling to the Knox formation of the Hazel Sutton
#3 well in the Swan Creek field in Hancock County, Tennessee. Well logs and pressure tests
indicate that this portion of the Knox gas reservoir is already being drained by other
wells, and completing the Hazel Sutton #3 as a Knox gas well would not add significantly
to the total volume of gas that will ultimately be produced from the Knox reservoir.
Instead, the well will be completed as a Trenton gas well. On May 18, 2004, the Stephen
Lawson #8 was drilled to the Knox formation in the Swan Creek field in Hancock County, Tennessee. It is
anticipated that this well will produce commercial quantities of gas from the Knox
reservoir.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM
6 EXHIBITS AND REPORTS ON FORM 8-K

(a)       
          The following exhibits are filed with this report.

| | 10.47
Promissory Note dated May 18, 2004 from Tengasco, Inc. and Tengasco Pipeline Corporation
as Maker to Dolphin Offshore Partners, LP as Holder in the principal amount of $2,500,000
bearing interest at 12% per annum, payable interest only monthly beginning June 18, 2004
with principal due May 20, 2005, prepayable without penalty, and secured by the
Companys Tennessee and Kansas producing properties and the Tennessee pipeline.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.1    Certification    of    Chief    Executive    Officer,     pursuant    to    Exchange    Act  Rule, Rule 13a-14a/15d-14a.
| | --------------------------------------------------------------------------------------------------------------------------------

| | 31.2 Certification of Chief Financial Officer, pursuant Exchange Act Rule, Rule 13a-14a/15d-14a
| | -----------------------------------------------------------------------------------------------

| | 31.1              Certifications  of Chief Executive  Officer  pursuant to 18 U.S.C section 1350 as adopted  pursuant to section 906 of
                                          the Sarbanes - Oxley Act of 2002.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.2              Certifications  of Chief  Financial  Officer  pursuant to 18 U.S.C  section  1350 as adopted  pursuant to section 906
                                          of the Sarbanes-Oxley Act of 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)    
          The Company did not file or furnish any current reports on Form 8-K during the
          quarter covered by this report.

---

# SIGNATURES

Pursuant to the  requirements  of the Securities and Exchange Act of 1934, the Registrant  duly caused thisreport
to be signed on its behalf by the undersigned hereto duly authorized.Dated: May 20, 2004  TENGASCO, INC.

|
|

---

# Exhibit 31.1

# CERTIFICATION

I, Richard T. Williams, certify that:

1.    
          I have reviewed this Quarterly Report on Form 10-Q of Tengasco, Inc. for the
               quarter ended March 31, 2004.

2.    
          Based on my knowledge, this report does not contain any untrue statement of a
               material fact or omit to state a material fact necessary to make the statements
               made, in light of the circumstances under which such statements were made, not
               misleading with respect to the period covered by this report;

3.    
          Based on my knowledge, the financial statements, and other information included
               in this report, fairly present in all material respects the financial condition,
               results of operations and cash flows of the Registrant as of, and for, the
               periods presented in this report;

4.    
          The Registrants other certifying officer(s) and I are responsible for
               establishing and maintaining disclosure controls and procedures (as defined in
               Exchange Act Rules (13a-15(e) and 15d-15(e)) and internal control over financial
               reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the
               registrant and have: ;

| | (a) | Designed such disclosure controls and procedures, or caused such disclosure
               controls and procedures to be designed under our supervision, to ensure that
               material information relating to the registrant, including its consolidated
               subsidiaries, is made know to us by others within those entities, particularly
               during the period in which this report is being prepared:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Designed such internal control over financial reporting, or caused such internal
               control over financial reporting to be designed under our supervision, to
               provide reasonable assurance regarding the reliability of financial reporting
               and the preparation of financial statements for external purposes in accordance
               with generally accepted accounting principles;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Evaluated the effectiveness of the registrants disclosure controls and
               procedures and presented in this report our conclusions about the effectiveness
               of the disclosure controls and procedures, as of the end of the period covered
               by this report based on such evaluation, and;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | Disclosed in this report any change in the registrants internal control
               over financial reporting that the occurred during the registrants most
               recent fiscal quarter (the registrants fourth fiscal quarter in the case
               of an annual report) that has materially affected, or is reasonably likely to
               materially affect, the registrants internal control over financial
               reporting; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.    
          The Registrants other certifying officers and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrants auditors and the audit committee of the Registrants
          board of directors (or persons performing the equivalent functions);

| | (a) | All significant deficiencies and material weaknesses in the design or operation
               of internal control over financial reporting which are reasonably likely to
               adversely affect the Registrants ability to record, process, summarize and
               report financial information; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Any fraud, whether or not material, that involves management or other employees
               who have a significant role in the Registrants internal control over
               financial reporting.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dated: May 20, 2004

|
|

---

# Exhibit 31.2

# CERTIFICATION

I, Mark A. Ruth, certify that:

1.    
          I have reviewed this Quarterly Report on Form 10-Q of Tengasco, Inc. for the
               quarter ended March 31, 2004.

2.    
          Based on my knowledge, this report does not contain any untrue statement of a
               material fact or omit to state a material fact necessary to make the statements
               made, in light of the circumstances under which such statements were made, not
               misleading with respect to the period covered by this report;

3.    
          Based on my knowledge, the financial statements, and other information included
               in this quarterly report, fairly present in all material respects the financial
               condition, results of operations and cash flows of the Registrant as of, and
               for, the periods presented in this report;

4.    
          The Registrants other certifying officer(s) and I are responsible for
               establishing and maintaining disclosure controls and procedures (as defined in
               Exchange Act Rules (13a-15(e) and 15d-15(e)) and internal control over financial
               reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the
               registrant and have:

| | (a) | Designed such disclosure controls and procedures, or caused such disclosure
               controls and procedures to be designed under our supervision, to ensure that
               material information relating to the registrant, including its consolidated
               subsidiaries, is made know to us by others within those entities, particularly
               during the period in which this report is being prepared:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Designed such internal control over financial reporting, or caused such internal
               control over financial reporting to be designed under our supervision, to
               provide reasonable assurance regarding the reliability of financial reporting
               and the preparation of financial statements for external purposes in accordance
               with generally accepted accounting principles;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Evaluated the effectiveness of the registrants disclosure controls and
               procedures and presented in this report our conclusions about the effectiveness
               of the disclosure controls and procedures, as of the end of the period covered
               by this report based on such evaluation, and;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | Disclosed in this report any change in the registrants internal control
               over financial reporting that the occurred during the registrants most
               recent fiscal quarter (the registrants fourth fiscal quarter in the case
               of an annual report) that has materially affected, or is reasonably likely to
               materially affect, the registrants internal control over financial
               reporting; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.    
          The Registrants other certifying officers and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrants auditors and the audit committee of the Registrants
          board of directors (or persons performing the equivalent functions);

| | (a) | All significant deficiencies and material weaknesses in the design or operation
               of internal control over financial reporting which are reasonably likely to
               adversely affect the Registrants ability to record, process, summarize and
               report financial information; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Any fraud, whether or not material, that involves management or other employees
               who have a significant role in the Registrants internal control over
               financial reporting.Dated May 20, 2004
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

---

# Exhibit 32.1

# CERTIFICATION

Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 I hereby certify that:

I
have reviewed the Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.

To
the best of my knowledge this Quarterly Report on Form 10-Q (i) fully complies with the
requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934 (15
U.S.C. 78m (a) or 78o (d)); and, (ii) the information contained in this Report fairly
present, in all material respects, the financial condition and results of operations of
Tengasco, Inc. and its subsidiaries during the period covered by this report.

| | 
| | 

Dated:
May 20, 2004

|
|

# Exhibit 32.2

# CERTIFICATION

Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 I hereby certify that:

I
have reviewed the Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.

To
the best of my knowledge this Quarterly Report on Form 10-Q (i) fully complies with the
requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934 (15
U.S.C. 78m (a) or 78o (d)); and, (ii) the information contained in this Report fairly
present, in all material respects, the financial condition and results of operations of
Tengasco, Inc. and its subsidiaries during the period covered by this report.

| | 
| | 

Dated:
May 20, 2004

|
|