<PAGE>   1
                     U.S. Securities and Exchange Commission

                             Washington, D. C. 20549

                                   FORM 10-KSB
(Mark One)

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

                   For the fiscal year ended February 29, 2000

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

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

                          Commission file number 0-8532

                              OAKRIDGE ENERGY, INC.

                 (Name of small business issuer in its charter)

                 UTAH                                 87-0287176
     (State or other jurisdiction of               (I.R.S. Employer
      incorporation or organization)              Identification No.)

         4613 JACKSBORO HIGHWAY
          WICHITA FALLS, TEXAS                            76302
(Address of principal executive offices)                (Zip Code)

                    Issuer's telephone number: (940) 322-4772

         Securities registered under Section 12(b) of the Exchange Act:

                                                  Name of each exchange on
       Title of each class                             which registered
       -------------------                         --------------------

              None                                            ----

         Securities registered under Section 12(g) of the Exchange Act:

                          COMMON STOCK, $.04 PAR VALUE
                                (Title of class)

         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 [X] NO [ ]

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

         State issuer's revenues for its most recent fiscal year.  $1,663,894

<PAGE>   2

         State the aggregate market value of the voting and non-voting common
         equity held by nonaffiliates computed by reference to the price at
         which the common equity was sold, or the average bid and asked prices
         of such common equity, as of a specified date within the past 60 days.

                         $3,051,400 AS OF JUNE 12, 2000

         State the number of shares outstanding of each of the issuer's classes
         of common equity, as of the latest practicable date.

                          4,476,923 AS OF JUNE 12, 2000

                       DOCUMENTS INCORPORATED BY REFERENCE

          Definitive Proxy Statement for Annual Meeting of Stockholders
               for Fiscal Year Ended February 29, 2000 - Part III


         Transitional Small Business Disclosure Format (check one):  YES [ ]  NO
         [X]

<PAGE>   3
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                            PAGE
                                                            ----
<S>                                                         <C>
PART I....................................................    1

ITEM 1.  DESCRIPTION OF BUSINESS..........................    1

         Summary of Developments in Fiscal 1998, 1999
           and 2000.......................................    1
         Oil and Gas Operations...........................    2
         Gravel Operations................................    3
         Carbon Junction Coal Mine........................    3
         Real Estate Held for Development.................    4
         Competition and Markets..........................    6
         Regulation.......................................    7
         Environmental and Health Controls................    8
         Operating Hazards and Uninsured Risks............    9
         Employees........................................    9

ITEM 2.  DESCRIPTION OF PROPERTY..........................    9

         Oil and Gas Properties...........................    9
               Reserves...................................    9
               Production.................................   10
               Lifting Costs and Average Sales Prices.....   10
               Sales Contracts and Major Customers........   11
               Developed Acreage and Productive Wells.....   11
               Undeveloped Acreage........................   12
               Drilling Activity..........................   13
         Coal and Gravel Properties.......................   13
         Real Estate......................................   15
         Office Building..................................   15

ITEM 3.  LEGAL PROCEEDINGS................................   15

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF
           SECURITY HOLDERS...............................   15

PART II...................................................   15

ITEM 5.  MARKET FOR COMMON EQUITY
           AND RELATED STOCKHOLDER MATTERS...............    15
</TABLE>


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<PAGE>   4
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                            PAGE
                                                            ----
<S>                                                         <C>
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR
           PLAN OF OPERATION.............................    16

         Results of Operations...........................    16
         Financial Condition and Liquidity...............    22
         Year 2000.......................................    23
         Forward-Looking Statements......................    23

ITEM 7.  FINANCIAL STATEMENTS............................    24

         Index to Financial Statements...................    24
         Report of Independent Auditors..................    25
         Independent Auditors' Report....................    26
         Balance Sheets as of February 29, 2000 and
           February 28, 1999.............................    27
         Statements of Operations for the years ended
           February 29, 2000 and February 28, 1999.......    29
         Statements of Stockholders' Equity for the
           years ended February 29, 2000 and February
           28, 1999......................................    30
         Statements of Cash Flows for the years ended
           February 29, 2000 and February 28, 1999.......    31
         Notes to Financial Statements...................    32
         Supplemental Oil and Gas Data...................    43

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
           ON ACCOUNTING AND FINANCIAL DISCLOSURE........    46

PART III.................................................    46

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
           CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
           OF THE EXCHANGE ACT...........................    46

ITEM 10. EXECUTIVE COMPENSATION..........................    46

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
           OWNERS AND MANAGEMENT.........................    46

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
           TRANSACTIONS..................................    46
</TABLE>


                                       ii
<PAGE>   5


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                            PAGE
                                                            ----
<S>                                                         <C>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K................    47

           Exhibits......................................    47
           Reports on Form 8-K...........................    47

SIGNATURES...............................................    48
</TABLE>


                                      iii
<PAGE>   6



                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

         Oakridge Energy, Inc. (the "Company") is engaged in the exploration for
and development, production and sale of oil and gas primarily in Texas. It also
receives lease and royalty income from gravel deposits in Colorado and holds
certain real estate in Colorado for development.

         The Company is a Utah corporation incorporated in 1969. The Company's
executive offices are located at 4613 Jacksboro Highway, Wichita Falls, Texas
76302. The Company's telephone number is (940) 322-4772.

SUMMARY OF DEVELOPMENTS IN FISCAL 1998, 1999 AND 2000

         Prior to fiscal 1998, the Company had discovered material oil and gas
reserves in Madison and Limestone Counties of East Texas and had developed a
substantial portion of them. The Company had also received a land use permit
enabling it to commence preliminary site work on the golf course portion of its
planned golf course/residential lots development on 1,965 acres of land owned by
the Company adjacent to Durango, Colorado. During fiscal 1998, the Company
developed most of the remainder of the East Texas reserves, cleared the major
brush off the land for the fairways portion of the golf course and secured the
water rights and applied for the necessary permits to install an irrigation
system for the golf course. In fiscal 1999, the Company completed the sale of
its interest in the Limestone County, Texas field to Mitchell Energy Corporation
for approximately $3.1 million in the early part of the year; however, in May
1998 Noel Pautsky, the long-time chief executive officer of the Company, died
unexpectedly in Durango, Colorado while on Company business. Mr. Pautsky's
death, along with the substantial decline in oil prices that occurred during the
remainder of the year, caused the Company to cut back its activity level for the
year, particularly in Colorado. Nevertheless, the Company did complete the
"roughing in" of the last nine holes of the golf course and secured the permits
to install the irrigation system, although it elected, for cost considerations,
to delay the installation of the irrigation system while it considered other
means of securing water for the entire development. In fiscal 2000, the Company
continued to restrict its oil and gas exploration activities; however, it has
recently committed to participate in an exploratory well to test all formations
through approximately 9,000 feet on a 10,700 gross acre prospect in Smith
County, Texas in which it will have a 25% interest. With respect to the
Company's planned Colorado real estate development, uncertainties pertaining to
the City of Durango's intentions in acquiring portions of the



<PAGE>   7

Company's land in Colorado to build a water reservoir and to construct a
collector or arterial road caused the Company to delay any further work on the
golf course during the year. See "Oil and Gas Operations" and "Real Estate Held
for Development" below and "Item 6. - Management's Discussion and Analysis or
Plan of Operation - Results of Operations."

OIL AND GAS OPERATIONS

         During fiscal 1999 and 2000, the Company's oil and gas operations were
primarily conducted in Madison, Freestone, Red River, Panola and Gregg Counties
of East Texas and in various areas of North Texas.

         With the death of Noel Pautsky, Sandra Pautsky, the Company's
President, and Danny Croker, the Company's Vice President, took over the
origination or selection of the exploration and development prospects in which
the Company participates. Until fiscal 1996, the Company typically utilized its
own funds to acquire oil and gas leases covering the lands comprising the
prospects. The leases were obtained directly from landowners as well as from
lease brokers and other operators not affiliated with the Company by direct
purchase, farmin and option agreements. The Company then conducted any
additional geological and/or geophysical operations considered appropriate. To
share costs, the Company usually sold interests in the prospects to a limited
number of industry participants and private investors.

         In recent fiscal years, the Company has purchased interests of varying
size in a number of exploration prospects which were originated by others (i.e.,
independent geologists or other independent oil and gas companies) in order to
broaden its exploratory activity exposure. These prospects covered lands in the
States of Texas, Nevada, Mississippi, New Mexico, Oklahoma and Kansas. In most
cases, the originator of the prospect had already assembled the leases and
performed most, if not all, of the necessary geological and/or geophysical work
before the interest in the prospects were offered for sale to the Company. Under
such circumstances, the Company typically paid a percentage of the initial
prospect costs greater than the percentage of ownership interest in the prospect
which the Company acquired.

         The Company has recently committed to participate in an exploratory
well to test all formations through approximately 9,000 feet on a new prospect
it is acquiring in Smith County of East Texas. This prospect covers
approximately 10,700 gross acres and



                                       2
<PAGE>   8

the Company will have a 25% working interest in it. The exploratory well is
scheduled to be commenced in the near future.

GRAVEL OPERATIONS

         The Company's gravel property is located on approximately 33 acres of
the 1,965 acres of land owned by the Company in fee in La Plata County,
Colorado. The Company received approximately $78,900 in royalty payments and
rentals during fiscal 2000 from its gravel contract and surface lease entered
into during fiscal 1994 with Durango Construction, Inc., now called Four Corners
Materials, Inc. ("Four Corners"), pursuant to which such company is mining sand,
gravel and rock products from the gravel permit area. The contract and lease
have remaining terms of approximately two years, and the terms may be extended
under certain conditions. The Company has recently discussed with Four Corners
adding approximately seven more acres of land to the contract and lease to give
Four Corners additional gravel reserves to mine. Four Corners would have the
responsibility for obtaining any needed amendment to the existing gravel mining
permit, which the Company transferred to Four Corners in fiscal 1998. In
consideration of the Company's inclusion of the additional acreage under the
contract and lease, Four Corners would perform, at the Company's expense, the
required land reclamation work on the Company's coal mine permit area located on
other portions of the property. See "Carbon Junction Coal Mine" below. A
definitive written agreement has not yet been signed with Four Corners
pertaining to the foregoing arrangement.

CARBON JUNCTION COAL MINE

         The Company owns the Carbon Junction coal mine which is also located on
its 1,965 acres of land in La Plata County, Colorado. The mine permit covers
236.9 acres of the property. After the Company obtained an updated appraisal of
the mine's coal deposits at the end of fiscal 1994 which concluded that the
deposits had no value, the Company has limited its operations at the Carbon
Junction mine since that time to maintenance and regulatory compliance
activities. In fiscal 2000, the Company abandoned any further attempts to mine
the coal deposits and commenced the required work to reclaim the land affected
by its surface mining operations conducted in years prior to fiscal 1994. The
Company has posted with the State of Colorado a reclamation performance bond in
the amount of $816,526 for its Carbon Junction mine operations. The Company has
recently had discussions with Four Corners concerning such company completing
the reclamation work at the Company's expense (see "Gravel Operations" above),
and Four Corners' engineering staff estimates that the reclamation work



                                       3
<PAGE>   9

can be completed for approximately $413,000. Consequently, during the fourth
quarter of fiscal 2000, the Company recorded approximately $413,000 for costs
associated with the reclamation of the Carbon Junction mine and surrounding
property. See "Item 6. - Management's Discussion and Analysis or Plan of
Operation - Results of Operations."

REAL ESTATE HELD FOR DEVELOPMENT

         The Company's planned golf course/residential lots development is
located on approximately 300 acres of the 1,965 acres of land owned by the
Company in La Plata County, Colorado. The land is located adjacent to Durango,
Colorado along the two principal highways leading into Durango from the south.
The entrance to the land is located approximately 2.5 miles southeast of the
City. The land is not currently in the City limits of Durango but possibly could
be annexed in the future.

         In fiscal 1996 and 1997, the Company had initiated the design of the
golf course and obtained a land use permit from La Plata County allowing it to
commence preliminary site work on the golf course, which covers approximately
170 of the 300-acre proposed development. The Company also repaired the heavy
earth-moving equipment which it had originally acquired for its coal operations
so that it could be used to perform as much of the golf course work as possible.
During fiscal 1998, the Company commenced and completed clearing the major brush
off the land and commenced leveling the land for the golf course fairways. The
Company also secured the necessary rights to use water from the nearby Animas
River for an irrigation system which it contemplated installing for the golf
course and purchased an additional 10 acres of land adjacent to the Animas River
as a site for the construction of a station to pump the water from the Animas
River through a line to the proposed system. In fiscal 1999, the Company
completed the "roughing in" of the last nine holes of the golf course and
obtained the permits from the various federal agencies to construct the pumping
station and waterline for the irrigation system. The Company had hoped to
commence construction of the station, line and system in the fall of 1998;
however, after obtaining an $800,000 cost estimate for laying only the water
line to the golf course water storage site and an estimated annual operating
cost of $36,000 to pump the water to the storage site, it elected to delay the
commencement of the construction until other alternatives for acquiring water
for the entire development could be fully evaluated.



                                       4
<PAGE>   10

         The selection of a consultant to assist the Company in preparing the
master plan and the completion of such master plan with a definitive cost
estimate was the primary objective for the Company with respect to the
development in fiscal 2000. Although the Company made progress in selecting a
consultant, it delayed final selection due to uncertainties involved in whether
a contemplated additional water reservoir to be constructed by the City of
Durango will be located on a portion of the Company's land and whether the City
will proceed with its planning staff's desire to construct a collector or
arterial road through the Company's land. The prospective water reservoir
location would take a portion of the back nine holes of the golf course as
originally designed and, if constructed, the road would take an additional
portion of such holes and direct significant traffic through the golf course.
Under such circumstances, the Company did not perform any significant work on
the golf course during fiscal 2000 because, if either or both of the City's
projects proceed, the golf course will likely have to be redesigned.

         During the fall of 1999, the City notified the Company that it was
interested in acquiring between 35 and 53 acres of land from the Company for the
proposed water reservoir, and in late February 2000 the City advised the Company
that it would obtain an appraisal of the land to assist in determining the
purchase price. The Company has had no feedback from the City since that time.
Once a final determination has been made by the City with respect to the
projects, the Company will select a consultant and proceed with the development
of its master plan. The Company is hopeful that all of the foregoing can be
completed in fiscal 2001, but there can be no assurance that will occur.

         Further work on the development will require the Company to obtain a
revised land use permit and master plan approval by La Plata County or
annexation of the Company's land by the City of Durango and approval by it. The
time period to obtain approval is unknown but could be lengthy. Any annexation
of the land by the City could further extend the time for approval.

         It should continue to be emphasized that, although the Company believes
that it has a good working relationship with the City and County governments, no
assurances can be given that a revised permit and master plan approval can be
obtained within satisfactory time frames and without burdensome conditions
attached.



                                       5
<PAGE>   11

COMPETITION AND MARKETS

         COMPETITION: A large number of companies and individuals are engaged in
the exploration for oil and gas, and most of the companies so engaged possess
substantially greater technical and financial resources than the Company.
Competition for desirable leases and suitable prospects for oil and gas drilling
operations is intense, and in the past the Company has experienced significant
competition in obtaining the services of drilling contractors and in purchasing
tubular goods and other materials necessary to drill and complete wells. In
fiscal 2000, the Company did not experience any difficulty in obtaining services
and materials because of its cut back in exploration activities, although the
significant product price increases which occurred in the industry during the
year caused demand for such services and materials to rise dramatically from
what was the case in fiscal 1999 when product prices were depressed.

         The gravel and coal industries are also highly competitive. A principal
competitive factor in both industries is product price. In addition, with
respect to coal, its quality and, in regard to major sales agreements, the
financial and organizational ability of the selling company to meet long-term
coal delivery requirements of utility companies, are important. With regard to
quality of coal, the important criteria include BTU (heating value), sulfur and
ash content.

         MARKETS: The Company's ability to produce and market oil and gas
profitably depends upon a number of factors which are beyond the control of the
Company, the effect of which cannot be accurately predicted or anticipated.
These factors include the availability of adequate pipeline and other
transportation facilities, the marketing of competitive fuels and other factors
affecting the availability of a ready market, such as fluctuating supply and
demand. Additional factors affecting the marketing of oil and gas include
imports and actions by foreign producing nations.

         After bottoming out during the fourth quarter of fiscal 1999, oil
prices began an upward trend that continued throughout fiscal 2000.
Consequently, the Company's average oil price received during fiscal 2000
increased $8.49 per barrel (approximately 71.7%) from that price received in
fiscal 1999, and this increase had a material positive effect on the Company's
revenues in fiscal 2000 and the amount of its estimated year end proven oil
reserves. Although current oil prices being received by the Company have
remained above an approximate $24.00 level, a



                                       6
<PAGE>   12

return to the oil price environment experienced by the Company in fiscal 1999
would have a material adverse effect on the Company's revenues and operating
cash flow and would result in decreases in the carrying value of the Company's
oil and gas properties.

         The Company's average gas price received also rose $.42 per MCF
(approximately 20.8%) during fiscal 2000 from $2.02 per MCF to $2.44 per MCF.
While certain of the Company's gas properties experience seasonal variations in
demand, the Company was not experiencing any significant curtailment, or an
inability to sell all of its deliverable gas, on an overall basis at February
29, 2000. See "Item 6. - Management's Discussion and Analysis or Plan of
Operation - Results of Operations."

         All of the Company's gravel resources are currently being marketed
through its contractual arrangements with Four Corners. The commencement of
reclamation work by the Company at the Carbon Junction coal mine has ended any
further efforts to market the coal deposits from such mine.

REGULATION

         OIL AND GAS: The production of oil and gas is subject to extensive
federal and state laws, rules, orders and regulations governing a wide variety
of matters, including the drilling and spacing of wells, allowable rates of
production, prevention of waste and pollution and protection of the environment.
In addition to the direct costs borne in complying with such regulations,
operations and revenues may be impacted to the extent that certain regulations
limit oil and gas production to below economic levels. The regulations are
generally designed to ensure that oil and gas operations are carried out in a
safe and efficient manner and to ensure that similarly situated operators are
provided with reasonable opportunities to produce their respective fair shares
of available oil and gas reserves. Since these regulations generally apply to
all oil and gas producers, the Company believes that these regulations do not
put the Company at a material disadvantage to other oil and gas producers.

         Certain sales, transportation and resales of natural gas by the Company
are subject to both federal and state laws and regulations, including, but not
limited to, the Natural Gas Act (the "NGA"), the Natural Gas Policy Act of 1978
(the "NGPA") and regulations promulgated by the Federal Energy Regulatory
Commission ("FERC") under the NGA, the NGPA and other statutes. The provisions
of the NGA and the NGPA, as well as the regulations



                                       7
<PAGE>   13

thereunder, are complex and can affect all who produce, resell, transport,
purchase or consume natural gas.

         Although FERC transportation regulations do not directly apply to the
Company because it is not engaged in rendering jurisdictional transportation
services, these regulations do affect the operations of the Company by virtue of
the need to deliver its gas production to markets served by interstate or
intrastate pipelines.

         COAL AND GRAVEL: The Company's coal operations in the past have been
subject to extensive regulation under the Surface Mining Control and Reclamation
Act of 1977 and the Colorado law of a similar nature and the Clean Air Act of
1990. The effects of such regulation have been to increase significantly the
lead time to commence actual surface coal mining operations, to make it more
costly for the Company's coal to be marketed and effectively to limit the
customers for the Company's coal to certain types of power plants. The Company's
gravel operations are subject to comparable regulation, but compliance standards
are less rigid.

ENVIRONMENTAL AND HEALTH CONTROLS

         The Company's operations are subject to numerous federal, state and
local laws and regulations relating to environmental and health protection.
These laws and regulations require the acquisition of a permit before drilling
commences, restrict the type, quantities and concentration of various substances
that can be released into the environment in connection with drilling and
production activities, limit or prohibit drilling activities on certain lands
lying within wilderness, wetlands and other protected areas and impose
substantial liabilities for pollution resulting from oil and gas operations.
These laws and regulations may also restrict air or other discharges resulting
from the operation of pipeline systems and other facilities in which the Company
may own an interest. Although the Company believes that compliance with
environmental laws and regulations will not have a material adverse effect on
operations or earnings, risks of substantial costs and liabilities are inherent
in oil and gas operations, and there can be no assurance that significant costs
and liabilities will not be incurred. Moreover, it is possible that other
developments, such as stricter environmental laws and regulations or claims for
damages to property or persons resulting from the Company's operations, could
result in substantial costs and liabilities.



                                        8
<PAGE>   14

OPERATING HAZARDS AND UNINSURED RISKS

         The Company's oil and gas operations are subject to all of the risks
normally incident to the oil and gas exploration and production business,
including blowouts, cratering, explosions, pollution and other environmental
damage, any of which could result in substantial losses to the Company due to
injury or loss of life, damage to or destruction of wells, production facilities
and other property, clean-up responsibilities, regulatory investigations and
penalties and suspensions of operations. As is common in the oil and gas
industry, the Company is not fully insured against certain of these risks either
because insurance is not available or because the Company has elected not to
insure due to high premium costs. The Company maintains comparable insurance
coverage for its coal and gravel operations.

EMPLOYEES

         As of June 12, 2000, the Company had four full-time employees and one
part-time employee. Two of the employees and the part-time employee were located
at the Company's executive offices, one was located at the Company's coal,
gravel and real estate development operations office in Durango, Colorado and
one was a field employee located in North Texas. The Company considers its
relations with its employees to be satisfactory.

ITEM 2.  DESCRIPTION OF PROPERTY.

     (a) OIL AND GAS PROPERTIES.

RESERVES

         Reference is made to "Supplemental Oil and Gas Data (Unaudited)"
included in the Notes to Financial Statements for additional information
concerning: (i) certain cost and revenue information pertaining to the Company's
oil and gas producing activities; (ii) estimates of the Company's oil and gas
reserves and changes in such reserves; and (iii) a standardized measure of the
discounted future net cash flows from the Company's oil and gas reserves and the
changes in such standardized measure. The engineering report with respect to the
Company's proved oil and gas reserves as of February 29, 2000 was prepared by
Stephens Engineering, independent petroleum engineers, Wichita Falls, Texas
("Stephens Engineering"). At such date, all of the Company's oil and gas
reserves were located in the United States and in the States of Texas,
Mississippi, Colorado, Oklahoma and New Mexico.



                                       9
<PAGE>   15

         No reserve reports pertaining to the Company's proved net oil or gas
reserves were filed with any Federal governmental authority or agency during the
fiscal year ended February 29, 2000, and no major discovery is believed to have
caused a significant change in the Company's estimates of proved reserves since
that date.

         The following table reflects Stephens Engineering's estimate of those
quantities of oil and gas which can be produced from the Company's proved
developed reserves as of February 29, 2000 during the fiscal year ending
February 28, 2001, using equipment installed and under economic and operating
conditions existing at February 29, 2000:

<TABLE>
<S>                                                  <C>
                           Oil (Bbls.).............. 46,671
                           Gas (MCF)................ 70,866
</TABLE>

The Company is not obligated to provide a fixed and determinable quantity of oil
and gas in the future under any of its existing contracts or arrangements.

PRODUCTION

         The following table shows for each of the three fiscal years ended
February 29, 2000 the total production attributable to the Company's oil and gas
interests:

<TABLE>
<CAPTION>
 FISCAL YEAR ENDED              OIL             GAS
  FEBRUARY 28/29              (BBLS.)          (MCF)
------------------            -------          -----
<S>                            <C>             <C>
2000.......................    61,220          110,051
1999.......................    87,345          133,478
1998.......................   147,911          437,064
</TABLE>

LIFTING COSTS AND AVERAGE SALES PRICES

         The Company's production (lifting) costs and average sales prices
received during each of the three fiscal years ended February 29, 2000 were as
shown in the following table:



                                       10
<PAGE>   16

<TABLE>
<CAPTION>
                                                  FISCAL YEAR
                                              ENDED FEBRUARY 28/29
                                            -----------------------
                                             2000    1999    1998
                                            ------  ------  -------
<S>                                         <C>     <C>     <C>
         Lifting Costs

         Per Equivalent Unit (Bbls.)...     $ 7.58  $ 5.27  $  3.36

         Average Sales Prices

         Oil (per Bbl.)................      20.32   11.83    18.28
         Gas (per MCF).................       2.44    2.02     2.30
</TABLE>

SALES CONTRACTS AND MAJOR CUSTOMERS

         The Company does not own any refining facilities and sells its oil
under short-term contracts at f.o.b. field prices posted by the principal
purchasers of oil in the areas in which the Company's producing properties are
located. During the fiscal year ended February 29, 2000, approximately 82% of
the Company's oil sales were made to Plains Marketing & Transportation. During
fiscal 2000, approximately 77% of the Company's gas sales were made on the spot
market to TXU Fuel.

         Substantially all of the Company's oil sales to Plains Marketing &
Transportation and its gas sales to TXU Fuel were from the Company's Madison
County, Texas property.

         In the opinion of management, the termination of any of the Company's
sales contracts would not adversely affect the Company's ability to sell its oil
and gas production at comparable prices.

DEVELOPED ACREAGE AND PRODUCTIVE WELLS

         As of February 29, 2000, the Company owned working and overriding
royalty interests in 9,192 gross (2,590 net) acres of developed oil and gas
leases and 73 gross (22.87 net) productive oil and gas wells.

         The following table summarizes the Company's developed acreage and
productive wells as of February 29, 2000:



                                       11
<PAGE>   17

<TABLE>
<CAPTION>
                              Developed Acreage(1)             Productive Wells(1)(3)
                          ----------------------------      ---------------------------
                             Gross(2)        Net(2)           Gross(2)         Net(2)
                          -------------   ------------      ------------     ---------
                          Oil     Gas      Oil     Gas      Oil     Gas    Oil     Gas
                          ---     ---      ---     ---      ---     ---    ---     ---
<S>                       <C>             <C>                <C>           <C>
Texas:
  Madison Co. .........   4,515      --   1,129      --      28      --    7.00     --
  All Other Cos........   2,121   1,914   1,187     177      32       9   14.03   1.49
Mississippi ...........      40      --       1      --       1      --     .01     --
Colorado ..............      --     242      --       4      --       1      --    .02
Oklahoma ..............      40      --       1      --       1      --     .03     --
New Mexico ............      --     320      --      91      --       1      --    .29
                          -----   -----   -----   -----   -----   -----   -----   ----

         Total ........   6,716   2,476   2,318     272      62      11   21.07   1.80
                          =====   =====   =====   =====   =====   =====   =====   ====
</TABLE>

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

(1)      Reversionary interests which may increase or decrease the interest
         shown have been disregarded for purposes of this table.

(2)      "Gross," as it applies to acreage or wells, refers to the number of
         wells or acres in which an interest is owned by the Company. "Net," as
         it applies to acreage or wells, refers to the sum of the fractional
         ownership interests owned by the Company in gross wells or gross acres.

(3)      Includes 12 gross (4.87 net) shut-in wells; excludes 6 gross (2.60 net)
         water injection wells.

UNDEVELOPED ACREAGE

         The following table shows the gross and net acres of undeveloped oil
and gas leases held by the Company at February 29, 2000:

<TABLE>
<CAPTION>
     STATE                          GROSS ACRES   NET ACRES
     -----                          -----------   ---------
<S>                                     <C>           <C>
     Texas ..........................   14,879        4,577
     Arkansas .......................    2,428        1,214
                                        ------       ------

                                Total   17,307        5,791
                                        ======       ======
</TABLE>

         All of the Company's undeveloped leases in the State of Arkansas cover
lands located in Miller County. In the absence of drilling activity which
establishes commercial reserves sufficient to justify retention, the Company's
leases on approximately 62% of its net acres will expire in fiscal 2001,
approximately 3% will



                                       12
<PAGE>   18

expire in fiscal 2002, 6% will expire in fiscal 2003, less than 1% will expire
in fiscal 2004 and 3% will expire in fiscal 2005. The remaining approximate 26%
of the Company's undeveloped acreage, which includes all of such acreage in the
State of Arkansas and a portion of such acreage in Gregg and Montague Counties,
Texas, is currently held in force by production from shallow depth horizons in
which the Company has no ownership interest.

DRILLING ACTIVITY

         The following table sets forth the results of the Company's drilling
activity for each of the three fiscal years ended February 29, 2000:

<TABLE>
<CAPTION>
                                         Exploratory Wells
                     -------------------------------------------------------------
       Fiscal Year             Gross                             Net
         Ended       ---------------------------   -------------------------------
     February 28/29  Productive  Dry       Total   Productive     Dry        Total
     --------------  ----------  ---       -----   ----------     ---        -----
<S>                   <C>        <C>        <C>       <C>         <C>         <C>
     1998..........     3          2         5         .38         .45         .83
     1999..........     2          6         8         .29        1.20        1.49
     2000..........     1          0         1         .33          --         .33
                       --         --        --        ----        ----        ----

       Total.......     6          8        14        1.00        1.65        2.65
                       ==         ==        ==        ====        ====        ====

<CAPTION>

                                        Development Wells
                     -------------------------------------------------------------
      Fiscal Year              Gross                                Net
         Ended       --------------------------       -----------------------------
     February 28/29  Productive   Dry     Total       Productive  Dry         Total
     --------------  ----------   ---     -----       ----------  ---         -----
<S>                  <C>          <C>     <C>         <C>         <C>         <C>
     1998              15            1      16         2.94       .25          3.19
     1999...........    4           --       4         1.00        --          1.00
     2000...........   --           --      --           --        --            --
                     ----         ----    ----        -----       ---          ----

       Total........   19            1      20         3.94       .25          4.19
                     ====         ====    ====        =====       ===          ====
</TABLE>

As of February 29, 2000, the Company was not in the process of drilling any
exploratory or development wells.

         (b) COAL AND GRAVEL PROPERTIES.

         As of February 29, 2000, the Company held 3,156 (1,787 net) acres of
coal leases as described in the following table:



                                       13
<PAGE>   19

<TABLE>
<CAPTION>
                                  GROSS ACRES      NET ACRES
                                  -----------      ---------
<S>                                   <C>          <C>
Colorado:
   La Plata Co.(1).............       1,825          456
   Routt Co.(2)................       1,331        1,331
                                      -----        -----
                  Total........       3,156        1,787
                                      =====        =====
</TABLE>

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

(1)      The leases were acquired in October 1990 and have remaining primary
         terms of approximately 15 years. No annual delay rentals or advance
         minimum royalties are required. See discussion following this table.

(2)      The lease was acquired in January 1991 and has a remaining primary term
         of approximately one year with annual delay rentals of $1 per acre and
         advance minimum royalties of $10 per acre.

         The Company's Carbon Junction coal mine is located upon the 1,825 acres
in La Plata County, Colorado described in the foregoing table. The renewal mine
permit issued by the State of Colorado for such coal mine pertains to
approximately 237 acres out of such 1,825 acres. The leases described in note
(1) to the table cover a 25% interest in the coal under the 1,825 acres. The
Company owns most of the surface estate and the other 75% interest in the coal
and has the executive rights (i.e., the exclusive right to sign coal leases) on
the 25% interest.

         In 1991, the Company purchased the surface estate, a 75% interest in
the coal and the executive rights to the remaining 25% interest in the coal of
200 additional acres in La Plata County adjacent to the 1,825 acre tract. The
Company has not yet leased the remaining 25% interest in the coal. By virtue of
its fee and lease ownership and the executive rights it holds, the Company
controls 100% of the above described 1,825 acre and 200 acre tracts. The Company
has ended any plans to attempt to operate the Carbon Junction coal mine and has
started the reclamation work on the land affected by its prior mining
operations. See "Item 1 - Description of Business - Carbon Junction Coal Mine."
The Company expects, however, to continue the coal leases as they involve no
significant expense to it.

         The Company also owns 55% of the gravel, oil, gas and other mineral
rights with respect to the 1,825 acre tract in La Plata County, Colorado and has
the executive rights on the remaining 45%. During fiscal 1998, the Company's
permit from the State of Colorado to mine gravel from 33 acres on such tract was



                                       14
<PAGE>   20

transferred to Four Corners, which is currently mining sand, gravel and rock
products from the permit area pursuant to its contract and lease with the
Company. See "Item 1. - Description of Business - Gravel Operations."

         (C)      REAL ESTATE.

         The surface of most of the land in La Plata County, Colorado described
in "Coal and Gravel Properties" above and adjacent acreage totaling 1,965 acres
is held for development by the Company. Approximately 300 acres of such land is
the subject of a planned golf course/residential lots development by the
Company. See "Item 1. - Description of Business - Real Estate Held for
Development."

         (D)      OFFICE BUILDING.

         The Company owns a one-story office building situated at 4613 Jacksboro
Highway in Wichita Falls, Texas in which its executive offices are located. The
building is located on .519 acres of land and contains 5,117 square feet of
space.

ITEM 3.  LEGAL PROCEEDINGS.

         The Company is not a party to any pending litigation. To the best
knowledge of the Company, there are no legal proceedings to which any director,
officer or affiliate of the Company, any owner of record or beneficially of more
than five percent (5%) of any class of voting securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company.

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

         No matter was submitted during the fourth quarter of the fiscal year
ended February 29, 2000 to a vote of the Company's security holders, through the
solicitation of proxies or otherwise.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

         The Company's common stock, $.04 par value, is traded in the
over-the-counter market. The following table shows the range of bid quotations
for the common stock during the two fiscal years ended February 29, 2000 by
quarters. Such quotations were furnished to the Company by the National
Quotation Bureau, LLC and



                                       15
<PAGE>   21


were supplied by The National Association of Securities Dealers ("NASD") through
the NASD OTC Bulletin Board, the NASD's automated system for reporting
NON-NASDAQ quotes and the National Quotation Bureau's Pink Sheets. The
quotations represent prices between dealers and do not include retail markups,
markdowns or commissions and do not necessarily represent actual transactions.

<TABLE>
<CAPTION>

PERIOD                                                            HIGH        LOW
------                                                          --------   --------

<S>                                                             <C>        <C>
Fiscal Year Ended February 28,
   1999:
         Quarter Ended May 31, 1998                             $   2.88   $   2.75
         Quarter Ended August 31, 1998                              2.88       2.88
         Quarter Ended November 30, 1998                            2.88       2.50
         Quarter Ended February 28, 1999                            2.50       2.13

Fiscal Year Ended February 29,
  2000:
         Quarter Ended May 31, 1999                             $   2.25   $   2.00
         Quarter Ended August 31, 1999                              2.50       1.75
         Quarter Ended November 30, 1999                            2.50       2.38
         Quarter Ended February 29, 2000                            2.38       2.25
</TABLE>

         As of May 10, 2000, the approximate number of holders of record of the
common stock of the Company was 482.

         The Company did not pay any dividends during the two fiscal years ended
February 29, 2000. There are currently no restrictions upon the Company's
ability to pay dividends; however, the Company does not anticipate paying any
dividends in fiscal 2001.

         The Company did not make any sales of equity securities during the two
fiscal years ended February 29, 2000.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

         The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto included in Item 7.

RESULTS OF OPERATIONS

         During the fiscal year ended February 29, 2000, the Company incurred a
net loss of $548,136 ($.12 per share) compared to a net loss of $525 ($.00 per
share) during the fiscal year ended




                                       16
<PAGE>   22

February 28, 1999. During the fourth quarter of fiscal 2000, the Company
recorded approximately $413,000 in reclamation costs for its Carbon Junction
coal mine in Colorado as reclamation work commenced on the mine and surrounding
property, and this charge adversely affected fiscal 2000 results. In addition,
fiscal 1999 results were substantially aided by a significant gain the Company
recognized on the sale of its Limestone County, Texas property in the first
quarter of that year, and the absence of any comparable income in fiscal 2000
was another reason for the increased net loss in the current year. The Company
did make substantial improvement in its operations in fiscal 2000, reducing its
loss from operations from approximately $1,547,000 in fiscal 1999 to
approximately $851,200 in fiscal 2000 due to improved oil and gas revenues and
reductions in most areas of operating expenses.

         Oil and gas revenues increased approximately $230,100 (17.0%) in the
fiscal year ended February 29, 2000 primarily as a result of substantially
improved oil prices as oil and gas production levels both declined materially.
At the end of fiscal 1999, worldwide crude oil prices were at their lowest level
in at least 40 years, adjusted for inflation. Oil prices increased steadily,
however, in fiscal 2000 because of production cuts by OPEC and other leading oil
exporters, reduced inventories and anticipated increased demand. By November
1999, crude oil prices had reached their highest levels since the 1990 Persian
Gulf War and have remained at levels above $24 during the first quarter of
fiscal 2001 to date. As a result of the foregoing, the Company's average oil
price received in fiscal 2000 increased 71.7% - from $11.83 per barrel in fiscal
1999 to $20.32 per barrel in fiscal 2000. The percentage increase was even more
dramatic in comparing the Company's average price received during the fourth
quarter of fiscal 1999, when a low point in prices occurred, with that received
in the fourth quarter of fiscal 2000, when a high point in prices resulted. In
the fourth quarter of fiscal 1999, the Company's average oil price received was
$10.31 per barrel; in the fourth quarter of fiscal 2000, such average price was
$26.63 per barrel, an 158.3% increase. The Company's average gas price received
in fiscal 2000 was approximately $.42 per MCF (20.8%) higher than in fiscal 1999
($2.44 per MCF vs. $2.02 per MCF). Although this increase was significant, it
was not as important to the Company as the increase in oil prices that occurred
during fiscal 2000 as the Company's reserves, revenues and production are
heavily oil weighted.

         Revenues from the Company's principal oil and gas property in Madison
County, Texas increased approximately $91,700 (8.3%) in fiscal 2000 due to the
improved oil and gas prices


                                       17
<PAGE>   23


received. This increase was accomplished despite significant declines in
production during the year. Sales of oil production declined from 77,860 barrels
in fiscal 1999 to 50,184 barrels in fiscal 2000 (35.5%) and associated gas sales
fell from 78,969 MCF to 59,333 MCF (11.3%) in the same periods. The Madison
County, Texas property is now fully developed. Production from the property
peaked in fiscal 1998, started an expected decline in fiscal 1999 despite the
addition of three gross (.75 net) development wells during that year and
continued the decline in fiscal 2000. Although some of the wells are still
flowing naturally and production from them could increase when they are placed
on pumps, the Company expects overall production from the property to drop
gradually each year until a contemplated secondary recovery project is
implemented. At February 29, 2000, the Company's independent petroleum engineers
estimated proven undeveloped oil reserves attributable to a secondary recovery
project on the property to be 447,637 barrels. It should be emphasized that any
such project is probably at least two years away, has not been approved by the
operator of the property and the other working interest owners and there can be
no assurance that it will be successful.

         The higher oil and gas prices in fiscal 2000 had a positive effect on
the Company's proven oil and gas reserves and the present worth of the future
net revenues from such reserves, as estimated by the Company's independent
petroleum engineers at February 29, 2000, the opposite effect from what occurred
at the fiscal 1999 year end. As explained in last year's Form 10-KSB, under the
method required by the Securities and Exchange Commission ("SEC") for estimating
proven reserves, the product prices actually being received at year end must be
used, without escalations (other than those established by contract), in all
calculations made over the life of the reserves. Because of the low prices being
received by the Company at February 28, 1999, the various adverse effects of
such prices on the Company's proven reserves were listed in the report and the
statement was made that the Company believed that the independent petroleum
engineers' estimates at February 28, 1999 presented a "worst case scenario" with
respect to the Company's proven reserves. Last year's statement by the Company
was proven to be correct by the effect of the February 29, 2000 higher product
prices on the independent petroleum engineers' reserve estimates at February 29,
2000. The following table compares the Company's estimated proved developed
producing oil and gas reserves, the future net revenues from such reserves and
the present value of such reserves at February 28, 1999 and February 29, 2000:



                                       18
<PAGE>   24

<TABLE>
<CAPTION>

                                                                            PERCENTAGE
                                FEBRUARY 28, 1999   FEBRUARY 29, 2000       DIFFERENCE
                                -----------------   -----------------       ----------

<S>                             <C>                 <C>                    <C>
Oil Reserves (Bbls.)                    295,096               295,360           +    .1%
Gas Reserves (MCF)                      453,155               386,711            - 14.7%
Future Net Revenues             $     1,588,211       $     4,677,618           + 194.5%
Present Value of
Future Net Revenues             $     1,180,350       $     3,258,310           + 176.0%
</TABLE>


         The increased estimates in future net revenues and in the present value
of future net revenues from the Company's proved developed producing oil and gas
reserves at February 29, 2000 reflected in the foregoing table occurred after
sales of approximately 62,200 barrels of oil and 102,900 MCF of gas by the
Company in fiscal 2000 and without any significant additions to reserves being
made by the Company during the year.

         The table is presented to illustrate again for shareholders the effect
that the particular date used in estimating and valuing reserves has when oil
and gas prices have wide swings during the fiscal year. The Company can give no
assurance that the actual results obtained from the production of its proved
developed producing reserves will be comparable to the estimates shown in the
table.

         The Company has two sources of gravel revenues. One is from the
Company's surface lease with Four Corners which permits such company to mine the
Company's gravel reserves, and the other is the royalty the Company receives
from Four Corners' gravel sales. Revenues from the Company's gravel operations
decreased approximately $2,500 (3.0%) in fiscal 2000 as the Company's royalty
income fell slightly due to the lower level of gravel sales made by Four Corners
from the Company's property during the year. Rentals received by the Company
from the surface lease were the same in both fiscal years. The Company had no
coal revenues in either fiscal year.

         The Company scaled back its exploration and development activities in
fiscal 2000. As a result, the expenses of the Company's oil and gas operations
declined approximately $750,900 (32.4%) in fiscal 2000 as all categories of such
expenses decreased with the exception of lease operating expense. Depletion and
depreciation expense declined the most, approximately $605,900 (52.4%). In
fiscal 1999, the Company incurred substantial depletion and depreciation expense
due to a significant increase in




                                       19
<PAGE>   25

the per barrel amortization rate resulting from the Company's lower oil reserves
at year end, particularly with respect to the Company's Madison, Red River,
Freestone and Panola County properties in Texas. After the expense incurred in
fiscal 1999 and with the more favorable fiscal 2000 year end prices, depletion
and depreciation expense declined approximately $602,100 from these four
properties alone in fiscal 2000.

         Lease operating expense (which includes well operating expense,
engineering expense and production and ad valorem taxes) increased approximately
$24,000 (3.9%) in fiscal 2000. Operating expense from the Madison County, Texas
property increased approximately $59,700 as a result of more wells being in
operation for the full year compared to fiscal 1999 and greater per well expense
being incurred as the field matured. In addition, a full year of expense was
incurred on the Panola County, Texas property and operating expense also
increased on the Freestone and Gregg County, Texas properties. The effect of the
foregoing increases was partially offset by an approximate $40,400 decline in
operating expense on the Company's North Texas properties. Production taxes
increased approximately $9,800 (14.5%) in fiscal 2000 due to the higher oil and
gas revenues during the year but ad valorem taxes declined approximately $21,500
(44.1%) due to reduced valuations resulting from the lower oil and gas prices
that prevailed at the valuation date at the start of the year. Engineering
expense was at roughly the same level in both years.

         Lease impairment expense decreased approximately $19,000 in fiscal
2000. Most of such expense was attributable to the Vivian Parker #2 well in
Gregg County, Texas where reserves obtained did not fully support the expenses
incurred. In fiscal 1999, the Company had impairment expense associated with an
exploratory well in Panola County, Texas and three wells on the Freestone
County, Texas property. Exploration expense (i.e., geological and geophysical
expense, abandoned and expired leasehold expense and dry hole expense) fell
approximately $150,100 (44.6%) in fiscal 2000. Geological and geophysical
expense decreased approximately $26,100 (98.6%) in fiscal 2000 as the Company
incurred almost no such expense due to its cut back in exploration activity
during the year. Dry hole expense declined approximately $223,100 (72.0%) in
fiscal 2000 as the Company participated in only one well in which some zones
were dry during the year as compared to a number of dry holes in fiscal 1999. In
fiscal 2000, the Company dropped leases on prospects in New Mexico, Kansas and
in three areas of East Texas. As a result, abandoned and expired leasehold
expense increased approximately $99,100. The Company did not abandon any leases
in fiscal 1999.



                                       20
<PAGE>   26

     The expenses of the Company's coal and gravel operations increased by
approximately $371,800 in fiscal 2000 due to the effect of recording $413,000
for reclamation costs associated with the Company's Carbon Junction mine and
surrounding property during the fourth quarter of the year after reclamation
work commenced. See "Item 1. - Description of Business - Carbon Junction Coal
Mine." The Company will not incur any further expense as the reclamation costs
are incurred unless the total reclamation costs exceed the $413,000 estimate.
Absent such charge for reclamation costs, the expenses of the Company's coal and
gravel operations were lower by approximately $41,200 (37.4%) in fiscal 2000 as
virtually all categories of operating expense declined with substantial
reductions in engineering expense and gravel depletion expense leading the way.
Real estate development expense decreased approximately $49,000 (63.1%) in
fiscal 2000 as the Company restricted work on the golf course for most of the
year due to uncertainties involved in whether the City of Durango would acquire
portions of its land for construction of a water reservoir and a collector or
arterial road. See "Item 1. - Description of Business - Real Estate Held for
Development."

         General and administrative expense declined approximately $40,000
(8.4%) in fiscal 2000. Lower auditing, employee benefits, general depreciation
and miscellaneous expenses and the absence during the year of any fees for the
letters of credit supporting the land reclamation bonds required for the
Company's coal permit in Colorado were the principal reasons for the decline.

         Other income (expense) decreased significantly in fiscal 2000, falling
from approximately $1,397,800 in income in fiscal 1999 to approximately $1,000
in income in fiscal 2000. This negative swing of approximately $1,396,800 was
the main reason for the Company's increased net loss for the year compared to
the prior year. In fiscal 1999, the Company realized an approximate $1,551,600
gain from the sale of its Limestone County, Texas property during the first
quarter of the year. In fiscal 2000, no material sales of oil and gas properties
occurred; however, the Company recorded a negative adjustment of $130,138 to the
prior year's gain to settle a dispute that arose during the year over the
ownership of a portion of the sale proceeds attributable to one of the wells
involved in the sale. Interest income and other, net income (expense) declined
approximately $33,000 (23.0%) in fiscal 2000 due to lower interest income
resulting from the reinvestment of maturing funds at lower rates of interest. In
fiscal 1999, other income (expense) was adversely effected by writedowns
totaling approximately $297,500 in the carrying value of the Company's
investment in an equity security, which were made at





                                       21
<PAGE>   27


various intervals during the year following declines in the fair value of the
security that were considered to be other than temporary. The Company did not
suffer any further writedowns with respect to such equity security in fiscal
2000.

         The Company's provision for income taxes was a benefit item in both
fiscal years due to the pre-tax losses incurred. The amount of the benefit in
fiscal 1999 was greater than what would be normally expected from the Company's
loss level due to the effect of statutory depletion and a revision of a prior
year's estimated tax provision.

         The Company's weighted average shares outstanding declined
approximately 3.1% during the fiscal year ended February 29, 2000 as compared to
such shares outstanding at year end 1999. Purchases made by the Company in
fiscal 2000 totaled 104,931 shares, 75,000 of which were made from the Noel
Pautsky Estate. The Company has no current plans to purchase any further
material amount of shares from the Estate of Noel Pautsky.

FINANCIAL CONDITION AND LIQUIDITY

         During fiscal 2000, the Company's activity level was down, and the
Company tightly controlled its expenditures. The Company's operating activities
funded its investing and financing activities, resulting in a small increase in
cash and cash equivalents at February 29, 2000 (approximately $58,000). Although
the Company reported a net loss from operations in fiscal 2000, such operations
actually provided approximately $360,200 in net cash due to the effect of
significant non-cash charges for depletion and depreciation, abandoned
leaseholds and lease impairments. Investing activities used only approximately
$6,700 in funds during the year as proceeds from sales and redemptions of
investment securities and sales of oil and gas properties totaled approximately
$186,000 and almost offset additions to oil and gas properties, coal and gravel
properties, real estate held for development and other property and equipment
aggregating approximately $192,700. The Company's financing activities (entirely
purchases of shares of the Company's stock) used approximately $295,500. At
February 29, 2000, the Company had no indebtedness and cash, cash equivalents
and investment securities available for sale totaling approximately $2,917,700.

         Assuming that oil and gas prices do not retreat significantly from
current levels during the remainder of fiscal 2000, the Company expects to fund
its contemplated operations during the year and any purchases of the Company's
stock that it





                                       22
<PAGE>   28


makes from its cash and cash equivalents, sales or maturities of all or a
portion of its investment securities available for sale and the anticipated cash
flow from its oil and gas properties. If oil and gas prices fall substantially
below current levels, the Company will likely take a more limited approach in
its expenditures for oil and gas operations and real estate development.

YEAR 2000

         The transition to the year 2000 had no significant impact on the
Company's computer systems, and the Company does not foresee any material system
failures in fiscal 2001. The Company had prepared for the year 2000 through the
replacement of its computers and the updating of its software and network
systems at a cost of approximately $21,000. The Company had also identified
significant third parties whose year 2000 compliance could affect it and
formally inquired about their year 2000 status. The Company is not aware of any
significant third parties who have experienced a material year 2000 system
failure.

FORWARD-LOOKING STATEMENTS

         Certain information included in this Annual Report on Form 10-KSB and
other materials filed by the Company with the SEC contains forward-looking
statements relating to the Company's operations and the oil and gas industry.
Such forward-looking statements are based on management's current projections
and estimates and are identified by words such as "expects," "intends," "plans,"
"believes," "estimates," "foresees" and similar words. These statements are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual results may differ
materially from what is expressed in such forward-looking statements.

         Among the factors that could cause actual results to differ materially
are crude oil and natural gas price fluctuations, failure to achieve expected
production from existing and future exploration and development projects, higher
than estimated coal reclamation costs and potential delays with respect to, or
failure to obtain, governmental permits and approvals necessary to proceed with
real estate development. In addition, these forward-looking statements may be
affected by general domestic and international economic and political
conditions.



                                       23
<PAGE>   29


ITEM 7.  FINANCIAL STATEMENTS.

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                              PAGE
                                                                              ----


<S>                                                                          <C>
Report of Independent Auditors                                                 25


Independent Auditors' Report                                                   26

Balance Sheets as of February 29, 2000 and
     February 28, 1999                                                         27

Statements of Operations for the years ended
     February 29, 2000 and February 28, 1999                                   29

Statements of Stockholders' Equity for the
     years ended February 29, 2000 and
     February 28, 1999                                                         30

Statements of Cash Flows for the years ended
     February 29, 2000 and February 28, 1999                                   31

Notes to Financial Statements                                                  32

Supplemental Oil and Gas Data                                                  43

</TABLE>


                                       24
<PAGE>   30

                         REPORT OF INDEPENDENT AUDITORS




To the Board of Directors and Stockholders
Oakridge Energy, Inc.

We have audited the balance sheet of Oakridge Energy, Inc. (the Company) as of
February 29, 2000, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oakridge Energy, Inc. as of
February 29, 2000, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.




Whitley Penn
Fort Worth, Texas
April 26, 2000


                                       25
<PAGE>   31


                          INDEPENDENT AUDITORS' REPORT




To the Board of Directors and Stockholders
Oakridge Energy, Inc.


We have audited the accompanying balance sheet of Oakridge Energy, Inc. (the
Company) as of February 28, 1999, and the related statements of operations,
stockholders' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oakridge Energy, Inc. as of
February 28, 1999, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.



KPMG LLP.
Dallas, Texas
May 7, 1999


                                       26
<PAGE>   32
                              OAKRIDGE ENERGY, INC.
                                 BALANCE SHEETS
                     FEBRUARY 29, 2000 AND FEBRUARY 28, 1999

<TABLE>
<CAPTION>
                                                                              2000            1999
                                                                          ------------    ------------
<S>                                                                       <C>             <C>
ASSETS
Current assets:
     Cash and cash equivalents                                            $  2,672,543    $  2,614,499
     Trade accounts receivable                                                 196,836         139,556
     Investment securities available for sale                                  245,175         425,350
     Deferred income taxes                                                     283,925         303,784
     Prepaid expenses and other                                                179,736          74,372
                                                                          ------------    ------------
Total current assets                                                         3,578,215       3,557,561

Oil and gas properties, at cost, using the successful efforts method of
  accounting:
     Proved developed properties                                             6,234,659       6,453,058
     Accumulated depletion and depreciation                                 (4,908,202)     (4,447,294)
                                                                          ------------    ------------
                                                                             1,326,457       2,005,764
     Unproved properties                                                       199,881         277,927
                                                                          ------------    ------------
Net oil and gas properties                                                   1,526,338       2,283,691

Coal and gravel properties, at cost:
     Undeveloped properties                                                  6,064,706       6,063,374
     Mining and service equipment                                            2,674,222       2,674,222
                                                                          ------------    ------------
                                                                             8,738,928       8,737,596
     Accumulated depletion and depreciation                                 (8,402,067)     (8,384,397)
                                                                          ------------    ------------
Net coal and gravel properties                                                 336,861         353,199

Other property and equipment, net of accumulated
     depreciation of $321,775 in 2000 and $686,404 in 1999                     150,955         183,260

Real estate held for development                                             2,761,119       2,704,381

Other noncurrent assets                                                      1,010,875       1,082,826
                                                                          ------------    ------------

Total assets                                                              $  9,364,363    $ 10,164,918
                                                                          ============    ============
</TABLE>




                                       27
<PAGE>   33



                              OAKRIDGE ENERGY, INC.
                           BALANCE SHEETS (CONTINUED)
                     FEBRUARY 29, 2000 AND FEBRUARY 28, 1999


<TABLE>
<CAPTION>
                                                                     2000            1999
                                                                 ------------    ------------
<S>                                                              <C>             <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                            $     91,155    $    106,380
     Accrued expenses                                                  75,750          80,243
                                                                 ------------    ------------
Total current liabilities                                             166,905         186,623

Reserve for reclamation costs                                         413,000              --
Deferred income taxes                                                 122,392         464,917
Commitment and contingencies                                               --              --
                                                                 ------------    ------------

Total liabilities                                                     702,297         651,540

Stockholders' equity:
     Common stock, par value $.04 per share, 20,000,000 shares
        authorized, 10,157,803 shares issued                          406,312         406,312
     Additional paid-in capital                                       805,092         805,092
     Retained earnings                                             17,050,509      17,598,645
     Accumulated other comprehensive loss - unrealized loss on
        investment securities, net of income taxes                   (131,372)       (123,700)
                                                                 ------------    ------------
                                                                   18,130,541      18,686,349
Less treasury stock, at cost; 5,645,130 shares in 2000 and
     5,540,199 shares in 1999                                       9,468,475       9,172,971
                                                                 ------------    ------------

Total stockholders' equity                                          8,662,066       9,513,378
                                                                 ------------    ------------

Total liabilities and stockholders' equity                       $  9,364,363    $ 10,164,918
                                                                 ============    ============
</TABLE>





                                       28

<PAGE>   34












                              OAKRIDGE ENERGY, INC.
                            STATEMENTS OF OPERATIONS
           FOR THE YEARS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 1999

<TABLE>
<CAPTION>
                                                               2000            1999
                                                           ------------    ------------
<S>                                                        <C>             <C>
Revenues:
     Oil and gas                                           $  1,585,002    $  1,354,859
     Gravel                                                      78,892          81,349
                                                           ------------    ------------
                                                              1,663,894       1,436,208

Operating expenses:
     Oil and gas:
        Depletion and depreciation                              549,693       1,155,584
        Lease operating                                         640,041         616,005
        Lease impairment                                        193,103         212,113
        Exploration costs                                       186,173         336,250
                                                           ------------    ------------
                                                              1,569,010       2,319,952

     Coal and gravel                                            482,128         110,377
     Real estate                                                 28,698          77,677
     General and administrative                                 435,275         475,233
                                                           ------------    ------------
Total operating expenses                                      2,515,111       2,983,239
                                                           ------------    ------------

Loss from operations                                           (851,217)     (1,547,031)

Other income (expenses):
     Interest income and other, net                             110,671         143,681
     Gain (loss) on sales of oil and gas properties            (109,705)      1,551,560
     Write-down of investment securities                             --        (297,470)
                                                           ------------    ------------
Total other income (expenses)                                       966       1,397,771
                                                           ------------    ------------

Loss before income taxes                                       (850,251)       (149,260)

Income tax benefit                                             (302,115)       (148,735)
                                                           ------------    ------------

Net loss                                                   $   (548,136)   $       (525)
                                                           ============    ============

Basic and diluted earnings per common share                $      (0.12)   $         --
                                                           ============    ============

Weighted average shares outstanding                           4,584,902       4,732,891
                                                           ============    ============
</TABLE>











                                       29

<PAGE>   35




                              OAKRIDGE ENERGY, INC.
                       STATEMENTS OF STOCKHOLDERS' EQUITY
           For the Years Ended February 29, 2000 and February 28, 1999



<TABLE>
<CAPTION>
                                                                                        ACCUMULATED
                                                        ADDITIONAL                         OTHER
                                         COMMON          PAID-IN         RETAINED      COMPREHENSIVE
                                          STOCK          CAPITAL         EARNINGS           loss
                                      -------------    -------------   -------------    -------------
<S>                                   <C>              <C>             <C>              <C>
Balance at February 28, 1998          $     406,312    $     805,092   $  17,599,170    $    (100,993)

Purchases of treasury stock                      --               --              --               --

Net loss                                         --               --            (525)              --

Change in unrealized losses
    on investment securities,
    net of income taxes                          --               --              --          (22,707)
                                      -------------    -------------   -------------    -------------

Comprehensive loss for year


Balance at February 28, 1999                406,312          805,092      17,598,645         (123,700)

Purchases of treasury stock                      --               --              --               --

Net loss                                         --               --        (548,136)              --

Change in unrealized losses
    on investment securities,
    net of income taxes                          --               --              --           (7,672)
                                      -------------    -------------   -------------    -------------

Comprehensive loss for year


Balance at February 29, 2000          $     406,312    $     805,092   $  17,050,509    $    (131,372)
                                      =============    =============   =============    =============
</TABLE>




<TABLE>
<CAPTION>
                                         TREASURY                       COMPREHENSIVE
                                          STOCK            TOTAL             LOSS
                                      -------------    -------------    -------------
<S>                                   <C>              <C>              <C>
Balance at February 28, 1998          $  (8,368,688)   $  10,340,893

Purchases of treasury stock                (804,283)        (804,283)

Net loss                                         --             (525)            (525)

Change in unrealized losses
    on investment securities,
    net of income taxes                          --          (22,707)         (22,707)
                                      -------------    -------------    -------------

Comprehensive loss for year                                             $     (23,232)
                                                                        =============

Balance at February 28, 1999             (9,172,971)       9,513,378

Purchases of treasury stock                (295,504)        (295,504)

Net loss                                         --         (548,136)        (548,136)

Change in unrealized losses
    on investment securities,
    net of income taxes                          --           (7,672)          (7,672)
                                      -------------    -------------    -------------

Comprehensive loss for year                                             $    (555,808)
                                                                        =============

Balance at February 29, 2000          $  (9,468,475)   $   8,662,066
                                      =============    =============
</TABLE>




                                       30
<PAGE>   36


                              OAKRIDGE ENERGY, INC.
                            STATEMENTS OF CASH FLOWS
           For the Years Ended February 29, 2000 and February 28, 1999


<TABLE>
<CAPTION>
                                                                             2000           1999
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
Cash flows from operating activities:
    Net loss                                                             $   (548,136)   $       (525)
    Adjustments to reconcile net loss to net cash
       provided by (used in) operating activities:
       Depletion and depreciation                                             615,747       1,246,079
       (Gain) loss on sale of oil and gas properties                          109,705      (1,551,560)
       Abandoned leaseholds                                                    99,103          39,683
       Oil and gas lease impairment                                           193,103         212,113
       Reclamation costs                                                      413,000              --
       Deferred income taxes                                                 (322,666)       (479,437)
       Write-down of investment securities                                         --         297,470
       Other                                                                  (89,226)         26,383
       Changes in operating assets and liabilities:
          Trade accounts receivable                                           (57,280)        246,797
          Prepaid expenses and other noncurrent assets                        (33,413)          6,006
          Federal income taxes                                                     --         (49,768)
          Accounts payable and accrued expenses                               (19,718)       (148,273)
                                                                         ------------    ------------
Net cash provided by (used in) operating activities                           360,219        (155,032)

Cash flows from investing activities:
    Additions to oil and gas properties                                      (107,256)     (1,510,118)
    Additions to coal and gravel properties                                    (1,332)             --
    Additions to real estate held for development                             (72,748)       (245,247)
    Additions to other property and equipment                                 (11,327)        (34,670)
    Proceeds from sales and redemptions of investment securities              159,155       1,250,959
    Proceeds from sale of oil and gas properties                               26,837       3,056,102
    Proceeds from sale of limited partnership                                      --         116,968
    Investments in limited partnerships                                            --          57,233
    Other                                                                          --           5,581
                                                                         ------------    ------------
Net cash provided by (used in) investing activities                            (6,671)      2,696,808

Cash flows from financing activity:
    Purchases of treasury stock                                              (295,504)       (804,283)
                                                                         ------------    ------------

Net increase in cash and cash equivalents                                      58,044       1,737,493
Cash and cash equivalents at beginning of year                              2,614,499         877,006
                                                                         ------------    ------------

Cash and cash equivalents at end of year                                 $  2,672,543    $  2,614,499
                                                                         ============    ============
</TABLE>







                                       31
<PAGE>   37

                              OAKRIDGE ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000



A. NATURE OF BUSINESS

Oakridge Energy, Inc. (the "Company") is engaged in the exploration for and
development, production and sale of oil and gas primarily in Texas. It also
receives lease and royalty income from gravel deposits in Colorado and holds
certain real estate in Colorado for development.

The Company is a Utah corporation incorporated in 1969. The Company's executive
offices are located in Wichita Falls, Texas.


B. SIGNIFICANT ACCOUNTING POLICIES

A summary of the Company's significant accounting policies consistently applied
in the preparation of the accompanying financial statements follows:

STATEMENT OF CASH FLOWS

Cash equivalents of approximately $2,429,000 and $2,499,000 at February 29, 2000
and February 28, 1999, respectively, consisted of interest-bearing cash
deposits. For purposes of the statements of cash flows, the Company considers
all cash and highly liquid investments with original maturities of three months
or less to be cash equivalents.

Supplemental disclosure of cash flow information:

<TABLE>
<CAPTION>
                             2000              1999
                       ---------------   ---------------
<S>                    <C>               <C>
Interest paid          $            --   $            --
                       ===============   ===============


Income taxes paid      $            --   $       295,000
                       ===============   ===============
</TABLE>

INVESTMENT SECURITIES

Investment securities consist of a certificate of deposit with a bank, corporate
notes and equity securities. The Company's investments are classified at the
time of purchase into one of three categories as follows:

     o    Held to Maturity Securities - Debt securities that the Company has the
          positive intent and ability to hold to maturity are reported at
          amortized cost, adjusted for the amortization or accretion of premiums
          and discounts.

     o    Trading Securities - Debt and equity securities that are bought and
          held principally for the purpose of selling them in the near term are
          reported at fair value, with unrealized gains and losses included in
          earnings.

                                       32
<PAGE>   38
                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)



B. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

INVESTMENT SECURITIES - CONTINUED

     o    Available for Sale Securities - Debt and equity securities not
          classified as either held to maturity securities or trading securities
          are reported at fair value, with unrealized gains and losses excluded
          from earnings and reported as a separate component of stockholders'
          equity (net of tax effects).

The Company did not have any securities classified as held to maturity or
trading as of February 29, 2000 and February 28, 1999.

A decline in the market value of any available for sale or held to maturity
security below cost that is deemed to be other than temporary results in a
reduction of the carrying amount to fair value. The impairment is charged to
earnings and a new cost basis for the security is established. During 1999, the
Company recorded impairment charges of approximately $297,000. No impairment
charges were recorded during 2000. Dividend and interest income are recognized
when earned. Gains and losses on securities sold are computed under the specific
identification method.

OIL AND GAS PROPERTIES

The Company uses the successful efforts method of accounting for oil and gas
producing activities. Costs to acquire mineral interests in oil and gas
properties, to drill exploratory wells that find proved reserves, and to drill
and equip development wells are capitalized. Geological and geophysical costs,
costs to drill exploratory wells that do not find proved reserves, and
nonproducing leasehold abandonments are expensed as incurred.

Unproved oil and gas properties are periodically assessed for impairment of
value and a loss is recognized at the time of impairment by providing an
impairment allowance. Capitalized costs of producing oil and gas properties are
depleted and depreciated by the units-of-production method based on proved oil
and gas reserves as estimated by an independent petroleum reservoir engineering
firm.

Upon sale or retirement of a proved property, the cost and related accumulated
depletion and depreciation are eliminated from the property accounts, and any
resulting gain or loss is recognized.

COAL AND GRAVEL PROPERTIES

Costs attributable to the acquisition and development of coal and gravel
properties are capitalized, while costs incurred to maintain the properties are
expensed. Undeveloped coal and gravel properties, which are individually
significant, are periodically assessed for impairment of value and a loss is
recognized at the time of impairment by providing an impairment allowance.
Capitalized costs of producing properties are depleted on a property-by-property
basis using the units-of-production method.



                                       33
<PAGE>   39

                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)



B. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

COAL AND GRAVEL PROPERTIES - CONTINUED

In 1994, the Company recorded an impairment allowance for substantially all the
carrying value of the undeveloped coal properties and related assets. As of
February 29, 2000, the Company recorded a reserve of $413,000 in costs
associated with the reclamation of the property surrounding and including the
Company's coal mining operations. The amount recorded is based on an estimate
from an outside engineer and is included as a long-term liability in the
accompanying balance sheets.

Depreciation on mining and service equipment is calculated using accelerated and
straight-line methods over the estimated useful lives of the assets. Upon sale
or abandonment, the cost of the equipment and related accumulated depreciation
are removed from the accounts and any gains or losses thereon are recognized.

OTHER PROPERTY AND EQUIPMENT

Depreciation on other property and equipment is calculated using accelerated and
straight-line methods over the estimated useful lives of the assets. Upon sale
or abandonment, the cost of the equipment and related accumulated depreciation
are removed from the accounts and any gains or losses thereon are recognized.

REAL ESTATE HELD FOR DEVELOPMENT

Real estate held for development is carried at cost, which is not in excess of
net realizable value. Real estate development and construction costs directly
identifiable with real estate held for development are capitalized.

IMPAIRMENT OF LONG-LIVED ASSETS

The carrying value of property and equipment is periodically evaluated under the
provisions of Statement of Financial Accounting Standard (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." SFAS No. 121 requires long-lived assets and certain
identifiable intangibles to be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. When it is determined that an asset's estimated future net cash
flows will not be sufficient to recover its carrying amount, an impairment loss
must be recorded to reduce the carrying amount to its estimated fair value.



                                       34
<PAGE>   40

                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


B. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

IMPAIRMENT OF LONG-LIVED ASSETS - CONTINUED

Under SFAS No. 121, the Company evaluates impairment of proved oil and gas
properties on a field-by-field basis. On this basis, certain fields may be
impaired because they are not expected to recover their entire carrying value
from future net cash flows. During the years ended February 29, 2000 and
February 28, 1999, the Company recorded impairment losses of approximately
$193,000 and $212,000, respectively, related to its proved oil and gas
properties. The fair values of the impaired proved oil and gas properties were
determined by using the present value of expected future cash flows. If
estimated future cash flows are not achieved with respect to certain fields,
further write-downs may be required.

INCOME TAXES

Deferred income taxes are determined using the liability method in accordance
with SFAS No. 109, "Accounting for Income Taxes". Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. In addition, a valuation allowance is established to reduce any
deferred tax asset for which it is determined that it is more likely than not
that some portion of the deferred tax asset will not be realized.

EARNINGS PER COMMON SHARE

Basic earnings per share is calculated by dividing net income (loss) (available
to common shareholders) by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution that could occur if accounts or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the Company. For the years and
quarters presented herein, basic and diluted earnings (loss) per share are the
same.

REVENUE RECOGNITION

The Company recognizes revenue as oil and gas are produced based on contracted
or estimated sales prices. Estimated revenue is subject to adjustments based on
final settlement. Such adjustments are reflected in revenue when received.

                                       35
<PAGE>   41

                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


B. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

INVESTMENT IN PARTNERSHIPS

The Company uses the equity method of accounting for investments in partnerships
where the Company has the ability to exercise significant influence over such
entities. Investment in partnerships of approximately $194,000 and $249,000 at
February 29, 2000 and February 28, 1999, respectively, are included in other
noncurrent assets in the accompanying balance sheets. The Company recognized
losses pertaining to its interests in partnerships of approximately $55,000 and
$64,000 for the years ended February 29, 2000 and February 28, 1999,
respectively, which are included in interest income and other, net in the
accompanying statements of operations.

FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with the reporting requirements of SFAS No. 107, "Disclosures
About Fair Value of Financial Instruments," the Company calculates the fair
value of its assets and liabilities which qualify as financial instruments under
this statement and includes this additional information in the notes to the
financial statements when the fair value is different than the carrying value of
those financial instruments. The estimated fair value of cash equivalents,
accounts receivable and accounts payable approximate their carrying amounts due
to the relatively short maturity of their instruments.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts in the financial statements and accompanying
notes. Actual results could differ from these estimates and assumptions.

COMPREHENSIVE INCOME

On March 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 established standards for reporting and presentation of
comprehensive income and its components in a full set of financial statements.
Comprehensive income (loss) consists of net income (loss) and net unrealized
gains (losses) on securities and is presented in the consolidated statements of
stockholders' equity. SFAS No. 130 requires only additional disclosures in the
financial statements; it does not affect the Company's financial position or
results of operations.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which is
required to be adopted in years beginning after June 15, 2000. SFAS No. 133
permits early adoption as of the beginning of any fiscal quarter after its
issuance. The Company has not yet determined what the effect of SFAS No. 133
will be on the earnings and financial position of the Company and the expected
date of adoption by the Company is not yet known.

C. INVESTMENT SECURITIES



                                       36
<PAGE>   42
                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


The amortized cost and fair values of investment securities available for sale
as of February 29, 2000 and February 28, 1999 are as follows:

<TABLE>
<CAPTION>
                                                    GROSS               GROSS
                                 AMORTIZED        UNREALIZED          UNREALIZED            FAIR
     2000                          COST             GAINS               LOSSES              VALUE
     ----                      ------------      ------------        ------------       ------------
<S>                            <C>               <C>               <C>                <C>
Equity securities              $    453,603      $         --        $   (208,428)      $    245,175
                               ============      ============        ============       ============
</TABLE>


<TABLE>
<CAPTION>
                                                    GROSS             GROSS
                                 AMORTIZED        UNREALIZED        UNREALIZED            FAIR
     1999                          COST             GAINS             LOSSES              VALUE
     ----                      ------------      ------------      ------------       ------------
<S>                            <C>               <C>               <C>                <C>
Certificate of deposit         $     59,156      $         --      $         --       $     59,156

Equity securities                   453,603                --          (187,705)           265,898
Corporate notes                     100,014               282                --            100,296
                               ------------      ------------      ------------       ------------
     Total current             $    612,773      $        282      $   (187,705)      $    425,350
                               ============      ============      ============       ============
</TABLE>


D. INCOME TAXES

The Company's income tax benefit attributable to income from continuing
operations consists of the following:

<TABLE>
<CAPTION>
                                      CURRENT         DEFERRED           TOTAL
                                    ----------       ----------       ----------
<S>                                 <C>              <C>              <C>
Year ended February 29, 2000:
     U.S. Federal                   $   (1,037)      $ (317,567)      $ (318,604)
     State and local                    21,588           (5,099)          16,489
                                    ----------       ----------       ----------

                                    $   20,551       $ (322,666)      $ (302,115)
                                    ==========       ==========       ==========
<CAPTION>
                                      CURRENT         DEFERRED           TOTAL
                                    ----------       ----------       ----------
<S>                                 <C>              <C>              <C>

Year ended February 28, 1999:
     U.S. Federal                   $  277,555       $ (492,770)      $ (215,215)
     State and local                    53,147           13,333           66,480
                                    ----------       ----------       ----------

                                    $  330,702       $ (479,437)      $ (148,735)
                                    ==========       ==========       ==========
</TABLE>


                                       37
<PAGE>   43
                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


D. INCOME TAXES - CONTINUED

Income tax benefit for the years presented differs from the "expected" federal
income tax benefit for those years, computed by applying the statutory U.S.
Federal corporate tax rate of 34% to pretax loss, as a result of the following:

<TABLE>
<CAPTION>
                                                                2000             1999
                                                             ----------       ----------
<S>                                                          <C>              <C>
Computed "expected" tax benefit                              $ (289,085)      $  (50,748)
State and local income taxes, net of federal income
  tax benefit                                                    10,883           43,876
Statutory depletion                                                  --          (73,100)
Other, primarily revision of prior year
  provision estimate                                           (23,913)          (68,763)
                                                             ----------       ----------
                                                             $ (302,115)      $ (148,735)
                                                             ==========       ==========
</TABLE>

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at February 29, 2000 and
February 28, 1999 are presented below:

<TABLE>
<CAPTION>

                                                           2000              1999
                                                        ----------       ----------
<S>                                                     <C>              <C>
Deferred tax assets:
   Unrealized loss on investment securities
     available for sale                                 $  283,925       $  268,645
   Alternative minimum tax credit carryforward             103,221           35,139
   Accrued reclamation costs                               152,686               --
                                                        ----------       ----------
                                                           539,832          303,784
Deferred tax liabilities:
   Oil and gas properties and other property and
     equipment, principally due to depletion and
     depreciation                                         (306,855)        (390,420)
   Coal properties, principally due to differences
     in depletion                                          (71,444)         (74,497)
                                                        ----------       ----------
                                                          (378,299)        (464,917)
                                                        ----------       ----------
Net deferred tax asset (liability)                      $  161,533       $ (161,133)
                                                        ==========       ==========
Included in the balance sheet as:
  Deferred income taxes, current                        $  283,925       $  303,784
  Deferred income taxes, non-current                      (122,392)        (464,917)
                                                        ----------       ----------
Net deferred tax asset (liability)                      $  161,533       $ (161,133)
                                                        ==========       ==========
</TABLE>


                                       38
<PAGE>   44

                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


D. INCOME TAXES - CONTINUED

Based on the future reversal of existing taxable temporary differences and
future earnings expectations, management of the Company believes it is more
likely than not that deferred tax assets will be realized or settled, and
accordingly, no valuation allowance has been recorded. The alternative minimum
tax credit carryforward, which has no expiration date, is available to reduce
the Company's future taxable income.


E. SEGMENT INFORMATION AND MAJOR CUSTOMERS

The following information is presented in accordance with SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." The
Company's adoption of SFAS No. 131 in 1999 and applied retroactively, did not
alter the composition of its reportable segments. The Company is engaged in oil
and gas, coal and gravel activities and real estate development. The Company has
identified such segments based on management responsibility and the nature of
the Company's products, services and costs. There are no major distinctions in
geographical areas served as all operations are in the United States. The
Company measures segment profit (loss) as income (loss) from operations. Total
assets are those assets controlled by each reportable segment. The following
table sets forth certain information about each segment's financial information
for the years ended February 29, 2000 and February 28, 1999:

<TABLE>
<CAPTION>
                                                            2000               1999
                                                        ------------       ------------
<S>                                                     <C>                <C>
Business segment revenue:
   Oil and gas                                          $  1,585,002       $  1,354,859
   Gravel                                                     78,892             81,349
                                                        ------------       ------------
                                                        $  1,663,894       $  1,436,208
                                                        ============       ============

Business segment profit (loss):
   Oil and gas                                          $     15,992       $   (965,093)
   Coal and gravel                                          (403,236)           (29,028)
   Real estate development                                   (28,698)           (77,677)
   General corporate                                        (435,275)          (475,233)
                                                        ------------       ------------
Loss from operations                                        (851,217)        (1,547,031)

Interest income and other, net                               110,671            143,681
Gain (loss) on sales of oil and gas properties              (109,705)         1,551,560
Write-down of investment securities                               --           (297,470)
                                                        ------------       ------------
Loss before income taxes                                $   (850,251)      $   (149,260)
                                                        ============       ============
</TABLE>


                                       39
<PAGE>   45

                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


E. SEGMENT INFORMATION AND MAJOR CUSTOMERS - CONTINUED

<TABLE>
<CAPTION>
                                                       2000               1999
                                                   ------------      ------------
<S>                                                <C>               <C>
Business segment assets:
   Depreciation, depletion and amortization:
     Oil and gas                                   $    549,693      $  1,155,584
     Coal and gravel                                     17,671            36,519
     Real estate development                             16,009            15,175
     General corporate                                   32,374            38,801
                                                   ------------      ------------

                                                   $    615,747      $  1,246,079
                                                   ============      ============

   Capital expenditures:
     Oil and gas                                   $    107,256      $  1,510,118
     Coal and gravel                                      1,332                --
     Real estate development                             72,748           245,247
     General corporate                                   11,327                --
                                                   ------------      ------------

                                                   $    192,663      $  1,755,365
                                                   ============      ============

   Total assets:
     Oil and gas                                   $  5,119,166      $  5,980,706
     Coal and gravel                                    336,861           353,199
     Real estate development                          2,761,119         2,704,381
     General corporate                                1,147,217         1,126,632
                                                   ------------      ------------

                                                   $  9,364,363      $ 10,164,918
                                                   ============      ============
</TABLE>

Oil sales to a customer which accounted for more than 10% of the Company's total
oil sales aggregated approximately $1,038,000 (82%) and $1,035,000 (99%) in 2000
and 1999, respectively. Gas sales to a customer which accounted for more than
10% of the Company's total gas sales aggregated approximately $192,000 (77%) in
2000. Gas sales to a customer which accounted for more than 10% of the Company's
total gas sales aggregated approximately $203,000 (75%) in 1999. The Company
primarily uses one operator on its oil and gas producing properties and lease
operating payments made to this operator approximated $455,000 and $1,327,000 in
2000 and 1999, respectively.


F. RELATED PARTY TRANSACTIONS

In the normal course of business, the Company owns interests in various oil and
gas properties in which certain stockholders and affiliates also own interests.

During fiscal year 2000, the Company purchased 75,000 shares of the Company's
common stock from the Estate of the former President at $2.8125 per share which
approximated the share price paid by the Company to other unaffiliated
stockholders.

                                       40
<PAGE>   46

                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


F. RELATED PARTY TRANSACTIONS - CONTINUED

During fiscal year 1999, the Company purchased 20,000 shares of the Company's
common stock from the Company's President at $3.20 per share and 60,000 shares
from the Estate of the former President at $3.10 per share, respectively, which
approximated the share price paid by the Company to other unaffiliated
stockholders.


G. COMMITMENTS AND CONTINGENCIES

From time to time, the Company is subject to certain claims and litigation
arising in the normal course of business. In the opinion of management, the
outcome of such matters will not have a materially adverse effect on the
financial statements of the Company.

As of February 29, 2000 and February 28, 1999, the Company has pledged
interest-bearing cash deposits approximating $817,000 to secure letters of
credit in favor of the Colorado Bureau of Land Management for state requirements
regarding land reclamation based on future operations with respect to coal and
gravel properties. These pledged cash deposits are included in other noncurrent
assets in the accompanying balance sheets.


H. QUARTERLY OPERATING RESULTS (UNAUDITED)

Quarterly results of operations for 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                       FIRST             SECOND              THIRD            FOURTH               FULL
             2000                     QUARTER            QUARTER            QUARTER           QUARTER              YEAR
             ----                   ------------       ------------       ------------      ------------       ------------
<S>                                 <C>                <C>                <C>               <C>                <C>
Total revenues                      $    346,459       $    427,000       $    437,350      $    453,085       $  1,663,894
Loss from operations                    (171,509)           (35,502)            78,651          (722,857)          (851,217)
Net income (loss)                        (76,462)             8,176             53,120          (532,970)          (548,136)
Basic and diluted earnings
   (loss) per common share                  (.02)               .00                .01              (.11)              (.12)
</TABLE>

During the fourth quarter of fiscal 2000, the Company recorded an adjustment of
approximately $193,000 (before income taxes) to record impairment losses related
to its proved oil and gas properties in accordance with SFAS No. 121. Also
during the fourth quarter of fiscal 2000, the Company recorded an adjustment of
$413,000 (before income taxes) to record reclamation costs associated with the
Company's coal mine.

<TABLE>
<CAPTION>
                                       FIRST              SECOND             THIRD             FOURTH              FULL
             1999                     QUARTER            QUARTER            QUARTER           QUARTER              YEAR
             ----                   ------------       ------------       ------------      ------------       ------------
<S>                                 <C>                <C>                <C>               <C>                <C>
Total revenues                      $    433,836       $   380,082        $    351,401      $    270,889       $  1,436,208
Loss from operations                    (139,344)         (130,510)           (198,410)       (1,078,767)        (1,547,031)
Net income (loss)                        870,447           (56,581)           (214,791)         (599,600)              (525)
Basic and diluted earnings
   (loss) per common share                   .03              (.01)               (.05)             (.13)              (.00)
</TABLE>



                                       41
<PAGE>   47

                              OAKRIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


H. QUARTERLY OPERATING RESULTS (UNAUDITED) - CONTINUED

     During the first, second and third quarters of fiscal 1999, the Company
     recorded adjustments of approximately $107,000, $27,000 and $164,000,
     respectively, (before income taxes) to record impairment charges on
     available-for-sale securities for an other than temporary decline in market
     value below cost of certain investment securities. The Company recognized a
     gain of $1,551,560 from sales of oil and gas properties in the first
     quarter of fiscal 1999. The Company recorded approximately $789,000 in
     depreciation and depletion on oil and gas properties during the fourth
     quarter of fiscal 1999 ($367,000 recorded for the first three quarters),
     primarily due to reduction in reserve estimates associated with the decline
     in oil and gas prices.



                                       42
<PAGE>   48



                              OAKRIDGE ENERGY, INC.
                    SUPPLEMENTAL OIL AND GAS DATA (UNAUDITED)


The following tables set forth supplementary disclosures for oil and gas
producing activities in accordance with SFAS No. 69, "Disclosures About Oil and
Gas Producing Activities".

COSTS INCURRED

A summary of costs incurred in oil and gas property acquisition, development,
and exploration activities (both capitalized and charged to expense) for the
years ended February 29, 2000 and February 28, 1999 follows:

<TABLE>
<CAPTION>
                                            2000             1999
                                         ----------      ----------
<S>                                      <C>             <C>
Acquisition of unproved properties       $   54,820      $   57,589
                                         ==========      ==========

Development costs                        $   52,436      $1,452,529
                                         ==========      ==========

Exploration costs                        $  186,173      $  336,250
                                         ==========      ==========
</TABLE>

RESULTS OF OPERATIONS FOR PRODUCING ACTIVITIES

The following table presents the results of operations for the Company's oil and
gas producing activities for the years ended February 29, 2000 and February 28,
1999:

<TABLE>
<CAPTION>
                                                            2000                1999
                                                        ------------       ------------
<S>                                                     <C>                <C>
Revenues                                                $  1,585,002       $  1,354,859
Production costs                                            (640,041)          (616,005)
Depletion, depreciation, and valuation provisions           (742,796)        (1,367,697)
Exploration costs                                           (186,173)          (336,250)
                                                        ------------       ------------
                                                              15,992           (965,093)
Income tax benefit (expense)                                  (5,437)           328,132
                                                        ------------       ------------
Results of operations for producing activities
  (excluding corporate overhead and interest costs)     $     10,555       $  (636,961)
                                                        ============       ============
</TABLE>

RESERVE QUANTITY INFORMATION

The following table presents the Company's estimate of its proved oil and gas
reserves all of which are located in the United States. The Company emphasizes
that reserve estimates are inherently imprecise and that estimates of reserves
related to new discoveries are more imprecise than those for producing oil and
gas properties. Accordingly, the estimates are expected to change as future
information becomes available. The estimates have been prepared with the
assistance of an independent petroleum reservoir engineering firm. Oil reserves,
which include condensate and natural gas liquids, are stated in barrels and gas
reserves are stated in thousands of cubic feet.


                                       43
<PAGE>   49

                              OAKRIDGE ENERGY, INC.
              NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)


RESERVE QUANTITY INFORMATION - CONTINUED

<TABLE>
<CAPTION>
                                                           OIL              GAS
                                                         (Bbls.)           (MCF)
                                                        ----------       ----------
<S>                                                        <C>            <C>
PROVED DEVELOPED AND UNDEVELOPED RESERVES:
  Balance at February 28, 1998                             872,142        1,819,017
     Sales of minerals in place                             (1,084)      (1,312,487)
     Revisions of previous estimates                       (41,797)         (52,245)
     Extensions and discoveries                             15,703          132,348
     Production                                            (87,345)        (133,478)
                                                        ----------       ----------
  Balance at February 28, 1999                             757,619          453,155
     Revisions of previous estimates                        39,368           41,605
     Extensions and discoveries                              7,230            2,002
     Production                                            (61,220)        (110,051)
                                                        ----------       ----------
  Balance at February 29, 2000                             742,997          386,711
                                                        ==========       ==========
PROVED DEVELOPED RESERVES:
  February 28, 1998                                        325,946        1,684,528
                                                        ==========       ==========
  February 28, 1999                                        295,096          453,155
                                                        ==========       ==========
  February 29, 2000                                        295,360          386,711
                                                        ==========       ==========
</TABLE>

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOW
     AND CHANGES THEREIN RELATING TO PROVED OIL AND GAS RESERVES

The following table, which presents a standardized measure of discounted future
cash flows and changes therein relating to proved oil and gas reserves, is
presented pursuant to SFAS No. 69. In computing this data, assumptions other
than those required by the Financial Accounting Standards Board could produce
different results. Accordingly, the data should not be construed as being
representative of the fair market value of the Company's proved oil and gas
reserves.

Future cash inflows were computed by applying existing contract and year-end
prices of oil and gas relating to the Company's proved reserves to the estimated
year-end quantities of those reserves. Future price changes were considered only
to the extent provided by contractual arrangements in existence at year-end.
Future development and production costs were computed by estimating the
expenditures to be incurred in developing and producing the proved oil and gas
reserves at the end of the year, based on year-end costs. Future income tax
expenses were computed by applying the year-end statutory tax rate, with
consideration of future tax rates already legislated, to the future pretax net
cash flows relating to the Company's proved oil and gas reserves. The
standardized measure of discounted future cash flows at


                                       44
<PAGE>   50
                              OAKRIDGE ENERGY, INC.
              SUPPLEMENTAL OIL AND GAS DATA (UNAUDITED)(CONTINUED)



STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOW
     AND CHANGES THEREIN RELATING TO PROVED OIL AND GAS RESERVES - CONTINUED

February 29, 2000 and February 28, 1999, which represent the present value of
estimated future cash flows using a discount rate of 10% a year, follows:

<TABLE>
<CAPTION>
                                                                      2000               1999
                                                                  ------------       ------------
<S>                                                               <C>                <C>
Future cash inflows                                               $ 19,824,157       $  7,624,686
Future production and development costs                             (6,342,850)        (4,297,549)
Future income tax expenses                                          (1,888,345)          (537,771)
                                                                  ------------       ------------
Future net cash flows                                               11,592,962          2,789,366

10% annual discount for estimated timing of cash flows              (3,219,432)          (859,036)
                                                                  ------------       ------------
Standardized measure of discounted future net cash flows          $  8,373,530       $  1,930,330
                                                                  ============       ============

Beginning of year                                                 $  1,930,330       $  3,872,480
  Sales of oil and gas, net of production costs                       (944,961)          (738,854)
  Extensions, discoveries, and improved recoveries, less
     related costs                                                     374,414            422,352
  Accretion of discount                                                193,033            387,248
  Net change in sales and transfer prices, net of
     production costs                                                5,962,578         (1,176,238)
  Changes in estimated future development costs                        (24,570)         1,164,640
  Net change in income taxes                                        (2,459,328)           582,540
  Sales of reserves in place                                                --         (2,214,788)
  Changes in production rates (timing and other)                     2,881,415           (237,021)
  Revisions of previous quantities                                     460,619           (132,029)
                                                                  ------------       ------------
End of year                                                       $  8,373,530       $  1,930,330
                                                                  ============       ============
</TABLE>


                                       45
<PAGE>   51
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

         The resignation of the firm of KPMG LLP as the Company's independent
public accountants on July 6, 1999, and the selection by the Company on January
14, 2000 of the firm of Whitley Penn as the independent public accountants to
examine the financial statements of the Company for the fiscal year ended
February 29, 2000 have been previously reported by the Company.

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

         The information required by this item is incorporated by reference to
the definitive proxy statement for the Company's Annual Meeting of Stockholders
for the fiscal year ended February 29, 2000 to be filed with the SEC not later
than 120 days after the end of such year.

ITEM 10. EXECUTIVE COMPENSATION.

         The information required by this item is incorporated by reference to
the definitive proxy statement for the Company's Annual Meeting of Stockholders
for the fiscal year ended February 29, 2000 to be filed with the SEC not later
than 120 days after the end of such year.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The information required by this item is incorporated by reference to
the definitive proxy statement for the Company's Annual Meeting of Stockholders
for the fiscal year ended February 29, 2000 to be filed with the SEC not later
than 120 days after the end of such year.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information required by this item is incorporated by reference to
the definitive proxy statement for the Company's Annual Meeting of Stockholders
for the fiscal year ended February 29, 2000 to be filed with the SEC not later
than 120 days after the end of such year.


                                       46
<PAGE>   52


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  EXHIBITS

          (3)(ii) By-Laws of the Company dated May 23, 1975 filed as Exhibit
                  A(4) to Form 10 and incorporated herein by reference.

          (27)    Financial Data Schedule.

     (b)  REPORTS ON FORM 8-K - There were no reports on Form 8-K filed by the
          Company during the last quarter of the period covered by this report.


                                       47
<PAGE>   53
                                   SIGNATURES

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


OAKRIDGE ENERGY, INC.



By /s/ Sandra Pautsky
   --------------------------
   Sandra Pautsky, President

DATE: June 13, 2000


         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.



By /s/ Sandra Pautsky                        By /s/ Carol J. Cooper
   --------------------------                   --------------------------------
   Sandra Pautsky, President                    Carol J. Cooper, Chief
     (Chief Executive Officer                     Accounting Officer
     and Chief Financial
     Officer) and Director

DATE: June 13, 2000                          DATE: June 13, 2000




By /s/ Danny Croker                          By /s/ Randy Camp
   --------------------------                   --------------------------------
   Danny Croker, Director                       Randy Camp, Director


DATE: June 13, 2000                          DATE: June 13, 2000


                                       48
<PAGE>   54
                                INDEX TO EXHIBITS

         The exhibits filed with this Registration Statement are filed in
accordance with the requirements of Item 601 of Regulation S-B for filings on
Form 10-KSB. For convenient reference, each exhibit is listed according to the
number assigned to it in the Exhibit Table of such Item 601.

<TABLE>
<CAPTION>
    EXHIBIT
      NO.                      DESCRIPTION
    -------                    -----------
<S>            <C>
     (2)       Plan of acquisition, reorganization, arrangement, liquidation, or
               succession - not applicable.

     (3)(ii)   By-laws - By-Laws of the Registrant dated May 23, 1975 filed as
               Exhibit A(4) to Form 10 and incorporated herein by reference.

     (4)       Instruments defining the rights of security holders, including
               indentures - not applicable.

     (9)       Voting trust agreement - not applicable.

     (10)      Material contracts - not applicable.

     (11)      Statement re computation of per share earnings - not applicable.

     (13)      Annual or quarterly reports, Form 10-Q - not appli- cable.

     (16)      Letter on change in certifying accountant - not applicable.

     (18)      Letter on change in accounting principles - not applicable.

     (21)      Subsidiaries of the registrant - not applicable.

     (22)      Published report regarding matters submitted to vote - not
               applicable.

     (23)      Consent of experts and counsel - not applicable.

     (24)      Power of attorney - not applicable.

     (27)      Financial Data Schedule.

     (99)      Additional exhibits - not applicable.
</TABLE>