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 28, 2003

          [ ] 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. $1,256,959


<PAGE>

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.

                          $4,836,495 as of May 2, 2003


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

                          4,360,490 as of May 28, 2003

                       DOCUMENTS INCORPORATED BY REFERENCE

          Definitive Proxy Statement for Annual Meeting of Stockholders
               for Fiscal Year Ended February 28, 2003 - Part III


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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I...............................................................          1

ITEM 1.    Description of Business...................................          1

           Oil and Gas Operations....................................          1
           Gravel Operations.........................................          3
           Carbon Junction Coal Mine.................................          3
           Real Estate Held for Development..........................          4
           Competition and Markets...................................          8
           Regulation................................................         10
           Environmental and Health Controls.........................         11
           Operating Hazards and Uninsured Risks.....................         11
           Employees.................................................         12

ITEM 2.    Description of Property...................................         12

           Oil and Gas Properties....................................         12
                Reserves.............................................         12
                Production...........................................         13
                Lifting Costs and Average Sales Prices...............         13
                Sales Contracts and Major Customers..................         13
                Developed Acreage and Productive Wells...............         14
                Undeveloped Acreage..................................         15
                Drilling Activity....................................         15
           Coal and Gravel Properties................................         16
           Real Estate...............................................         17
           Office Building...........................................         17

ITEM 3.    Legal Proceedings.........................................         17

ITEM 4.    Submission of Matters to a Vote of
             Security Holders........................................         17

PART II..............................................................         17

ITEM 5.    Market for Common Equity
             and Related Stockholder Matters.........................         17











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<PAGE>

                                                                            Page
                                                                            ----

ITEM 6.    Management's Discussion and Analysis or
             Plan of Operation.......................................         18

           Results of Operations.....................................         18
           Financial Condition and Liquidity.........................         23
           Critical Accounting Policies and Estimates................         25
           Forward-Looking Statements................................         27

ITEM 7.    Financial Statements......................................         28

           Index to Financial Statements.............................         28
           Report of Independent Auditors............................         29
           Balance Sheets as of February 28, 2003 and 2002...........         30
           Statements of Operations for the years ended
             February 28, 2003 and 2002..............................         32
           Statements of Stockholders' Equity for the
             years ended February 28, 2003 and 2002..................         33
           Statements of Cash Flows for the years ended
             February 28, 2003 and 2002..............................         34
           Notes to Financial Statements.............................         35
           Supplemental Oil and Gas Data (Unaudited).................         45

ITEM 8.    Changes in and Disagreements With Accountants
             on Accounting and Financial Disclosure..................         48

PART III...........................................                           48

ITEM 9.    Directors, Executive Officers, Promoters and
             Control Persons; Compliance With Section 16(a)
             of the Exchange Act.....................................         48
ITEM 10.   Executive Compensation....................................         48
ITEM 11.   Security Ownership of Certain Beneficial Owners
             and Management and Related Stockholder Matters..........         48
ITEM 12.   Certain Relationships and Related
             Transactions............................................         48

ITEM 13.   Exhibits and Reports on Form 8-K..........................         49

           Exhibits..................................................         49
           Reports on Form 8-K.......................................         49

ITEM 14.   Controls and Procedures...................................         49

Signatures...........................................................         50











                                       ii


<PAGE>

                                     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.  The
Company 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.

         The Company has  restricted its oil and gas  exploration  activities in
the last three  fiscal  years as it has  conserved  its  limited  resources  for
utilization on a secondary recovery  waterflood project on its principal oil and
gas  producing  property in Madison  County,  Texas and its proposed real estate
development project adjacent to Durango,  Colorado.  In fiscal 2003, the Madison
County,  Texas  property  was unitized and the  installation  of the  waterflood
project was commenced. The Company also completed the previously arranged change
of  the  pricing  structure  of  its  Colorado  gravel   operations,   commenced
reclamation  work on its abandoned  Carbon Junction coal mine site and continued
to work toward  obtaining  the  necessary  governmental  approvals to be able to
commence  its  proposed  Colorado  real  estate  development.  See  "Oil and Gas
Operations,"  "Gravel  Operations," "Carbon Junction Coal Mine" and "Real Estate
Held for Development" below and "Item 6. - Management's  Discussion and Analysis
or Plan of Operation."

Oil and Gas Operations
----------------------

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

         Sandra  Pautsky,  the  Company's  President,   and  Danny  Croker,  the
Company's Vice President,  select the  exploration and development  prospects in
which the  Company  participates.  Since the  Company  is unable to  maintain  a
sizeable  exploration staff (i.e.,  geologists,  geophysicists,  landmen,  etc.)
because  of  its  limited  resources,  the  Company's  practice  is to  purchase
interests of varying size in exploration  prospects  originated by others (i.e.,
independent  geologists or other  independent  oil and gas  companies).  In most
cases,  the  originator  of the prospect has already  assembled  the oil and gas



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<PAGE>

leases and  performed  most,  if not all,  of the  necessary  geological  and/or
geophysical  work before the  interests in the prospects are offered for sale to
the Company.  Under such circumstances,  the Company typically pays a percentage
of the initial prospect costs greater than the percentage of ownership  interest
in the prospect which the Company acquires.  Due to its decision to conserve its
funds for expenditure on other projects,  the Company did not participate in the
drilling  of any  exploratory  or  development  wells in the  fiscal  year ended
February 28, 2003.


         The Company's principal producing oil and gas property for the past six
fiscal  years has been its 25%  interest in the BSR  (Sub-Clarksville)  Field in
Madison County,  Texas (the "Madison County,  Texas property").  In fiscal 2003,
the Madison County,  Texas property was responsible for approximately 64% of the
Company's  total oil and gas  revenues.  The property  consists of 28 wells with
proven developed producing  reserves;  the reservoir is approximately 7,700 feet
deep. The property is fully developed and production has steadily  declined from
it in the last three fiscal years.  As production  declined,  plans were made by
the operator of the property,  the Company and the other working interest owners
to install a secondary  recovery  project on the  property.  594,315  barrels of
proven  undeveloped  secondary oil reserves have been estimated by the Company's
independent  petroleum  engineers to be recoverable to the Company's interest in
the property by waterflooding the reservoir. In fiscal 2003, final royalty owner
and Texas  Railroad  Commission  approvals of the project were  obtained and the
property  was  unitized  and the project  commenced  effective as of December 1,
2002. Produced water from the property has been injected back into the reservoir
since 1999  through a dry hole  drilled on the property in the last stage of its
development.  A second well on the property is now being  converted into a water
injection well, and the operator of the property has plans to convert a total of
five  wells  (including  the  current  two) into  water  injection  wells and to
recomplete another well as a water supply well at a depth of approximately 4,100
feet in the next 12 months. The total flood life is expected to be approximately
16 years,  and the  project  may  ultimately  require  converting  a total of 11
producing  wells to water  injection  wells and  drilling one  additional  water
supply well.  The Company's  investment  cost for the project is estimated to be
approximately  $360,800,  which  includes its share of the cost for the proposed
water plant and the water  distribution  system and the drilling and  conversion
costs mentioned  above.  See "Item 6. - Management's  Discussion and Analysis or
Plan of Operation - Results of Operations."


                                       2
<PAGE>

Gravel Operations
-----------------

         The Company's  gravel property is now located on approximately 43 acres
of the  1,965  acres of land  owned by the  Company  in fee in La Plata  County,
Colorado.  Four Corners Materials,  Inc. ("Four Corners") mines sand, gravel and
rock products  from the gravel  permit area pursuant to its gravel  contract and
surface lease with the Company.  The original permit area covered 33 acres, but,
with the  Company's  consent,  Four  Corners  added an adjacent 9.9 acres of the
Company's land to the permit area in fiscal 2002 to give Four Corners additional
gravel reserves to mine. Four Corners'  contract and lease expired on January 1,
2002 and it has been  operating  since  that  time  under  the  terms of an oral
extension  of such  contract  and lease  made  between  the  Company's  and Four
Corners' managements which was not fully implemented until the fourth quarter of
fiscal 2003.  The extension  will allow Four Corners time to mine the additional
9.9 acres to full depletion. The Company has no current plans to continue gravel
mining on the property after the depletion of the 9.9 acres.

         In consideration of the Company's  inclusion of the additional  acreage
under the contract and lease and the term extension, Four Corners,  effective as
of July 1, 2001,  increased  the  royalty  paid to the Company  with  respect to
tonnage mined from the additional 9.9 acres and pays a new road usage fee to the
Company based on the tonnage mined. It also agreed to perform,  at the Company's
expense on a "cost  plus"  basis,  the  required  land  reclamation  work on the
Company's coal mine permit area located on other  portions of the property.  The
Company received approximately $288,700 in royalty payments, road usage fees and
surface  rentals  from Four Corners in fiscal 2003.  See "Carbon  Junction  Coal
Mine",  below and "Item 6. -  Management's  Discussion  and  Analysis or Plan of
Operation - Results of Operations."

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. Although the Company abandoned any further attempts
to mine the coal deposits in fiscal 2000,  Four Corners is currently  performing
the required work at the  Company's  expense to reclaim the land affected by the
Company's  prior surface  mining  operations.  Four Corners'  engineering  staff
estimates that the reclamation work can be completed for $413,000. Approximately
$232,400 has been expended by Four Corners on the reclamation work through April
2003,  and the  Company  anticipates  that  the  remainder  of the  work  can be



                                       3
<PAGE>

completed in fiscal 2004. The Company has previously recorded $413,000 for costs
associated  with the  reclamation  of the Carbon  Junction mine and  surrounding
property.  Consequently,  the reclamation  work should have no further impact on
the Company's statement of operations unless the actual costs of the work exceed
$413,000.

         The mine permit expires on July 31, 2003 but is in the process of being
renewed by the Company for an additional five-year term so that Four Corners can
complete the reclamation work. As a part of the renewal process, Four Corners is
assuming direct  responsibility  for the reclamation work on that portion of the
permit  area  currently  being  used  in  its  gravel  operations  (see  "Gravel
Operations",  above).  The  Company  has  posted  with the State of  Colorado  a
reclamation  performance  bond in the  approximate  amount of  $817,000  for its
former Carbon Junction mine operations. The Company has been advised that, after
the renewal mine permit is issued by the State of Colorado,  the Company  should
be able to obtain  the  release of  approximately  one-half  of its  reclamation
performance bond.

Real Estate Held for Development
--------------------------------

         Location:  The Company's  planned mixed use  development  is located on
approximately  1,100 acres of the 1,965 acres of land owned by the Company in La
Plata County,  Colorado. The major highways intersecting the City of Durango and
La Plata  County are US Highway 550  running  north and south and US Highway 160
running east and west.  The Company's land is aligned with US Highway 160 and is
located on a mesa adjacent to and above the City of Durango. The property is not
currently within the City limits; however, certain portions of the property have
common boundaries to the City.

         Background and Approval  Process:  In September 2000, the Company filed
an  annexation  application  with the City of  Durango  for  1,100  acres of the
property.  The Company was aware that, prior to any action by the City regarding
annexation,  a plan had to be developed and approved by the City for the area in
which the Company's property is located (an "Area Plan"). An Area Plan evaluates
land  uses  within  a  specific  area to  determine  whether  the  uses  will be
compatible with each other.  Properties adjacent and nearby that may be impacted
by the  landowner  requesting  annexation  are studied.  Impacts to resources of
minerals,  coal, oil and gas, as well as wildlife,  archeological,  geologic and
environmental  hazards,   traffic,  public  facilities  and  infrastructure  are
reviewed.  Public  hearings  on the Area Plan  provide a forum for  neighborhood



                                       4
<PAGE>

discussion  and comment.  City planners  initially  advised the Company that the
time frame for the Area Plan approval should require approximately seven months.

         Once an Area Plan has been adopted, then an annexation impact report is
required to address the  physical  analysis of the  annexation  issue,  which is
supposed to be a considerably shorter process. Expected to occur in tandem with,
but late in the Area Plan process,  is the  submittal of the  Company's  20-year
conceptual  plan for the 1,100 acres (the  "Conceptual  Plan"),  which was filed
with the  Company's  annexation  application,  for review and public  comment in
neighborhood   meetings.   The  City   Planning   Commission   then  prepares  a
recommendation  to the City Council to approve,  approve with conditions or deny
the annexation application.

         Conceptual  Plan: The Conceptual  Plan for the development of the 1,100
acres was  prepared  by the  Company's  management  with the  assistance  of its
engineering and planning  consultant in Durango.  Approximately  865 mountainous
acres of the property  that extend  northeast  will remain in the County and are
intended  to be  developed  into  35-acre  lots  in the  future.  The  Company's
development  concept  for the  1,100  acres,  tentatively  called  "Oakridge  at
Durango",  is a  neighborhood  design  where  residential  villages  are  within
convenient  walking or biking distance to nearby  neighborhood  squares offering
life's daily essentials.  Within each square is a neighborhood business district
intended as a transitional area of light business uses between residential areas
and other features where shopping, services or office spaces are provided to the
nearby  neighborhoods.  In the center of each square  will be a small  community
park and plaza for  resting,  playing or eating  surrounded  by the  commercial,
office  and  service  businesses.  Houses  of  worship  and  day  care  will  be
conveniently  sited.  Residential  densities will shift from high-density in the
center of the  village to medium or less  density as the golf  course or rims of
the mesa are approached.  The Conceptual  Plan also includes a central  business
district intended primarily for areas of concentrated  indoor retail and service
businesses,  but not for "big box" or regional shopping malls. Also planned is a
resort and spa location that includes a golf course,  senior care facilities and
business and commercial parks.

         Following the filing of the Conceptual Plan, a neighborhood meeting was
held in  Durango in August  2001 to  discuss a  proposed  Area Plan for the area
including the  Company's  property.  No  opposition  to the  Company's  proposed
development  surfaced  at that  meeting or in any of the City's  planning  staff
discussions with the Company's neighbors in the area subsequent to the meeting.


                                       5
<PAGE>

In  town  meetings  held in  January  2002 as  part  of the  City's  process  of
revisiting its comprehensive plan developed in 1997, newspaper and other reports
indicated  that  it was  the  consensus  of the  citizens  participating  in the
meetings that the Company's  Ewing Mesa property was the preferred  location for
the  vast  majority  of  the  City's   projected   growth  in  residential   and
mixed-density housing through 2025. Nothing has developed since the January 2002
town meetings to make the Company's management believe that the community's view
of the Company's proposed development has changed.

         Negotiations   with  Mercy  Medical   Center  for  New  Hospital  Site:
Commencing in January 2001,  the Company began  negotiations  with Mercy Medical
Center of Durango,  Colorado ("Mercy") for Mercy to acquire  approximately 20 to
25 acres of the  Company's  land on which Mercy would  construct a new  hospital
(the  "new  Hospital").  A site for the new  Hospital  and  surrounding  medical
offices  had  been  included  in  the  Company's   original   Conceptual   Plan.
Negotiations were ultimately postponed in mid to late fiscal 2002 at the request
of Mercy's Board of Directors until it could be finally determined whether Mercy
would be provided funding for the land acquisition and construction costs of the
new Hospital by Catholic Health Initiative ("CHI"), Mercy's parent organization.
Subsequently,  in a change of position,  Mercy advised the Company that it would
consider  at  least  five  sites,  including  the  Company's  site,  for the new
Hospital.

         In March 2002 (early fiscal  2003),  Mercy  announced  that it had been
granted approval by CHI to place $76 million in its long-range  2003-2006 budget
for construction of the new Hospital and indicated to the Company that its Board
of Directors  would select the site for the Hospital by May 31, 2002 (the end of
the first quarter of fiscal  2003).  Management of the Company and the Company's
consultants on the project then met with Mercy's management,  certain members of
Mercy's Board of Directors and Mercy's  construction  consultants  to review the
Company's  proposed  site for the new Hospital  and to address any  questions or
issues  raised by the Mercy  group  with  respect  to the  Company's  site.  The
Director of the City's  planning  staff then advised the Company that it was his
preference that approval of the Area Plan which includes the Company's  property
be  delayed  until it could be  determined  whether  the new  Hospital  would be
constructed on the Company's site or elsewhere. The Company was later advised by
Mercy  that  the  date  for the  selection  of the new  Hospital  site  had been
postponed  until  Mercy's  construction  consultants  could  complete  their due
diligence work with respect to the sites of the three proposed finalists for the
new Hospital location, of which the Company site was one.



                                       6
<PAGE>

         In July 2002, after  approximately 19 months of negotiations with Mercy
pertaining  to a  site  for  the  new  Hospital,  the  Company  advised  Mercy's
management  and the  City of  Durango's  planning  staff  that the  Company  was
rescinding its outstanding  offer to sell Mercy  approximately 20 to 25 acres or
more of the  Company's  land for the new Hospital  site due to Mercy's  delay in
making the final site selection and the negative impact such delay was having on
the Company's obtaining the necessary governmental approvals to proceed with its
planned development. On September 7, 2002, it was publicly announced in Durango,
Colorado that Mercy had reached an agreement to acquire a site for  construction
of the new Hospital on land owned by the other two  finalists.  The Company then
promptly  amended its  Conceptual  Plan and filings  with the City of Durango to
proceed ahead with the new development  without the new Hospital being a part of
it once all necessary  governmental  approvals  are obtained.  The fact that the
Company's  site was not  selected as the  location  for the new Hospital has not
altered  the  Company's  belief as to the  significant  value that the  proposed
development will hold for the Company in the future.

         Current Status:  The Company's  management and consultants met with the
City's Planning and  Engineering  staffs to discuss a proposed draft of the Area
Plan which includes the Company's property and its relationship to the Company's
amended  Conceptual Plan in January 2003. In such meeting,  the Company believed
it received  assurances  from the City's planning staff that the Area Plan draft
would be submitted to the Company for review and a public  hearing would be held
before the City's  Planning  Commission  with respect to it in time for the City
Council  to act on the Area Plan at an early May,  2003  meeting.  Despite  such
assurances,  the date for the  draft of the  Area  Plan to be  submitted  to the
Company  for review  has been  postponed  a number of times and,  as of the date
hereof,  the draft of the Area Plan has still not been  submitted to the Company
for  review.  Latest  advice  from  the  Company's  consultants  based  on their
discussions  with the City's  planning  staff is that the draft of the Area Plan
will be  submitted  to the  Company  for  review on June 4,  2003 with  Planning
Commission  and City  Council  hearings  to follow on June 25, 2003 and July 15,
2003,  respectively.  There can be no assurances  that there will not be further
slippages in these dates.

         Notwithstanding the Company's  frustrations with respect to the delays,
two issues  must be  resolved  with the City  before the  Company  can expect to
obtain Area Plan,  Conceptual  Plan and  annexation  approval.  The first is the
City's  requirement  that the Company's  property be served by two access roads.
The sole  current  access is  located on the  western  end of the  property  and



                                       7
<PAGE>

services  incoming and outgoing traffic that includes gravel hauling trucks from
Four Corners'  gravel mining  activity.  The major portion of traffic within the
development  in the early stages is expected to be served by the western  access
since the initial phase of  development is intended for this area. The Company's
original  plan  called  for  construction  of an  alternate  access  road on the
southeast  side of its  property,  which  would  serve  gravel  mining  and land
development on the property.  This plan has now been set aside,  and the Company
is considering other sites for the alternate access road. The City's engineering
department is recommending as part of a proposed Area Plan that a minor arterial
roadway with limited  access be  constructed  as a bypass  across the  Company's
property  connecting U.S. Highway 550 to Horse  Gulch/Goeglein Road to the east.
The  Company  has  advised  the City  that it cannot  support a bypass  over the
Company's property.  However the issue is ultimately resolved,  the Company will
likely be responsible  for the  acquisition of any additional  land required for
the alternate  access road, its design and the obtaining of the required permits
and  approvals  for its  construction.  Colorado  Department  of  Transportation
approval as well as local approvals will be required  before  construction of an
alternate access road could begin.

         The second  issue  involves  the  density  of  housing in the  proposed
development.  In  its  amended  Conceptual  Plan,  the  Company  proposed  1,095
residential  units on the property.  The City's  planning staff has requested an
increase in density to 2,500-3,000 residential units.

         The Company  currently  believes  that  common  ground can be found for
resolving  the two issues with the City so that an Area Plan, a Conceptual  Plan
and  annexation of the Company's  property can be approved by mid to late fiscal
2004,  thereby  allowing  the Company to proceed  with the  construction  of the
infrastructure  for the first phase of the development and the alternate  access
road. See "Item 6. - Management's Discussion and Analysis or Plan of Operation -
Financial Condition and Liquidity."

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





                                       8
<PAGE>



fiscal 2003, the Company did not experience any difficulty in obtaining services
and materials because of its cut back in exploration and development activities.

         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.

         The Company's average oil price received continued the general downward
trend established in fiscal 2002 during the first quarter of fiscal 2003. By the
second quarter of fiscal 2003,  however,  oil prices began their improvement and
by the end of the year,  fueled by an impressive surge during the fourth quarter
attributable  to the  pending  war with Iraq,  the  Company's  average oil price
received had increased $3.62 per barrel (approximately 15.4%) from that received
in fiscal 2002.  This increase had a material  positive  effect on the Company's
revenues in fiscal 2003 (particularly  during the fourth quarter) and the amount
and present  value of its estimated  year end proven oil  reserves.  Current oil
prices being received by the Company have receded  somewhat from year end levels
after the  conclusion of the Iraq war. The Company's  average gas price received
for fiscal 2003 finished the year slightly  higher than in fiscal 2002 ($.08 per
MCF).  The effect of changes in gas prices on the Company's  revenues and proven
reserves  is  not  as  great  as  changes  in oil  prices  due to the  Company's
significant weighting in favor of oil production after the sale of the Company's
Limestone County, Texas gas field in fiscal 1999.

         While  certain of the  Company's  gas  properties  experience  seasonal
variations  in  demand,   the  Company  was  not  experiencing  any  significant



                                       9
<PAGE>

curtailment,  or an inability to sell all of its deliverable  gas, on an overall
basis at February 28, 2003. 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 arrangements with Four Corners.

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 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





                                       10
<PAGE>


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 coal to be marketed and  effectively  to limit the  customers for
the 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.

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.


                                       11
<PAGE>

Employees
---------

         As of May 26, 2003,  the Company had six full-time  employees.  Four of
the employees were located at the Company's executive offices and two were field
employees  located in North Texas. The Company  considers its relations with its
employees to be satisfactory.

ITEM 2.  DESCRIPTION OF PROPERTY.

         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  28, 2003 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 and Oklahoma.

         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 28, 2003, 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 as of February 28, 2003 which can be produced from the
Company's proved  developed  reserves during the fiscal year ending February 28,
2004,  using  equipment  installed and under  economic and operating  conditions
existing at February 28, 2003:

                           Oil (Bbls.)..............     23,454
                           Gas (MCF)................     39,267





                                       12
<PAGE>

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 28, 2003 the total production attributable to the Company's oil and gas
interests:

Fiscal Year Ended                                     Oil              Gas
 February 28,                                       (Bbls.)           (MCF)
-----------------                                -------------    -------------
2003.............                                    28,015           45,720
2002.............                                    36,558           65,936
2001.............                                    47,368           85,632

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 28, 2003 were as
shown in the following table:

                                                        Fiscal Year
                                                     Ended February 28,
                                             --------------------------------
                                             2003           2002         2001
                                             ----           ----         ----
         Lifting Costs
         -------------

         Per Equivalent Unit (Bbls.)...     $15.48         $12.63      $ 9.88

         Average Sales Prices

         Oil (per Bbl.)................      27.08          23.46       29.96

         Gas (per MCF).................       3.47           3.39        4.72

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 28, 2003,  approximately  75% of
the Company's oil sales were made to BP Amoco and approximately 18% were made to
Sunoco,  Inc. During fiscal 2003,  approximately  75% of the Company's gas sales
were made on the spot market to TXU Energy  Trading and  approximately  11% were
made to Dynegy Midstream Services, L.P.




                                       13
<PAGE>

         Substantially  all of the  Company's  oil sales to BP Amoco and its gas
sales to TXU  Energy  Trading  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  28,  2003,  the Company  owned  working and  overriding
royalty  interests  in 9,159 gross  (2,571 net) acres of  developed  oil and gas
leases and 74 gross (23.40 net) productive oil and gas wells.

         The following  table  summarizes  the Company's  developed  acreage and
productive wells as of February 28, 2003:
<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>       <C>       <C>       <C>       <C>
Texas:
  Madison Co. .........     4,515      --       1,129      --          28      --        7.00      --
  All Other Cos........     2,408     1,914     1,259       177        29        14     13.94      2.40
Mississippi ...........        40      --           1      --           1      --         .01      --
Colorado ..............      --         242      --           4      --           1      --         .02
Oklahoma ..............        40      --           1      --           1      --         .03      --
                          -------   -------   -------   -------   -------   -------   -------   -------


         Total ........     7,003     2,156     2,390       181        59        15     20.98      2.42
                          =======   =======   =======   =======   =======   =======   =======   =======
</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.




                                       14
<PAGE>

(3)      Includes 20 gross (6.75 net) shut-in wells; excludes 5 gross (2.55 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 28, 2003:

         State                           Gross Acres        Net Acres
         -----                           -----------       -----------

         Texas.......................         12,131             4,002
         Arkansas....................          2,428             1,214
                                         -----------       -----------

                        Total......           14,559             5,216
                                         ===========       ===========

         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  66.3% of its net acres will expire in fiscal 2004, 3.5%
will expire in fiscal  2005,  .7% will expire in fiscal 2006 and .3% will expire
in fiscal 2007.  The remaining  approximate  29.2% 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,  Montague  and Smith  Counties,  Texas,  is
currently held in force by production.  The Company has no ownership interest in
the Miller County, Arkansas productive acreage.

Drilling Activity

         The following table sets forth the results of the Company's exploratory
drilling activity for each of the three fiscal years ended February 28, 2003:
<TABLE>
<CAPTION>

                                              Exploratory Wells
                 ---------------------------------------------------------------------------
 Fiscal Year                          Gross                          Net
    Ended        ------------------------------------   ------------------------------------
 February 28,    Productive      Dry         Total      Productive       Dry        Total
                 ----------   ----------   ----------   ----------   ----------   ----------
<S>              <C>          <C>          <C>          <C>          <C>          <C>
2001 .....                1         --             1           .25         --            .25
2002 .....             --             1            1          --            .08          .08
2003 .....             --           --           --           --           --           --
                 ----------   ----------   ----------   ----------   ----------   ----------

     Total                1            1            2          .25          .08          .33
                 ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>




                                       15
<PAGE>

The Company did not  participate  in drilling any  development  wells during the
three fiscal years ended  February 28, 2003,  and, as of February 28, 2003,  the
Company was not in the process of drilling or completing any wells.

         Coal and Gravel Properties.

         As of February 28, 2003, the Company held 1,825 (456 net) acres of coal
leases covering lands in La Plata County,  Colorado. The leases were acquired in
October 1990 and have  remaining  primary terms of  approximately  12 years.  No
annual delay rentals or advance minimum royalties are required.

         The  Company's  Carbon  Junction  coal mine is located  upon such 1,825
acres.  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 Company's
leases 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 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 is in
the process of renewing its mine permit  which  expires on July 31, 2003 only so
that the  required  reclamation  work on the land  affected by its prior  mining
operations  can be  completed.  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
transferred to Four Corners. In fiscal 2002, the Company allowed Four Corners to
extend the permitted area by an additional 9.9 acres.  Four Corners is currently
mining sand,  gravel and rock products from the permit area pursuant to its oral



                                       16
<PAGE>


contract  and  surface  lease  extension  with  the  Company.  See  "Item  1.  -
Description  of  Business  - Gravel  Operations"  and  "Item  6. -  Management's
Discussion and Analysis or Plan of Operation - Results of Operations."

         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  1,100 acres of such land
is the subject of a planned mixed use development by the Company. See "Item 1. -
Description of Business - Real Estate Held for Development."

         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 28, 2003 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  28, 2003 by
quarters.  Such  quotations  were  furnished  to the  Company  by  the  National
Quotation  Bureau,  LLC  and  were  supplied  by  The  National  Association  of




                                       17
<PAGE>

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.

Period                                                          High       Low
------                                                          ----       ---

Fiscal Year Ended February 28,
 2002:
         Quarter Ended May 31, 2001                            $ 2.63    $ 2.13
         Quarter Ended August 31, 2001                           2.63      2.05
         Quarter Ended November 30, 2001                         2.63      2.25
         Quarter Ended February 28, 2002                         2.64      2.25

Fiscal Year Ended February 28,
 2003:
         Quarter Ended May 31, 2002                            $ 2.35    $ 2.35
         Quarter Ended August 31, 2002                           3.25      2.35
         Quarter Ended November 30, 2002                         3.70      2.85
         Quarter Ended February 28, 2003                         3.70      3.10

         As of May 16, 2003, the approximate  number of holders of record of the
common stock of the Company was 464.

         The Company did not pay any dividends during the two fiscal years ended
February  28,  2003.  There are  currently no  restrictions  upon the  Company's
ability to pay dividends;  however,  the Company does not anticipate  paying any
dividends in fiscal 2004.

         The Company did not make any sales of its equity  securities during the
two fiscal years ended February 28, 2003.

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

         The  Company  had a net loss of $49,706  ($.01 per share) in the fiscal
year ended February 28, 2003 compared to a net loss of $288,091 ($.06 per share)
in the fiscal year ended  February 28, 2002. The reduction in the Company's loss



                                       18
<PAGE>

in fiscal 2003 was due to improved  gravel  revenues and other income  (expense)
again became a  significant  income  contributor  as oil and gas revenues  again
declined materially.

         Oil and gas revenues  decreased  approximately  $140,200 (12.6%) in the
fiscal  year  ended  February  28,  2003  due to the  continued  decline  in the
Company's  oil and gas  production  sales  volumes  as,  due to price  increases
occurring in the last half of the fiscal year,  the Company's  average oil price
received for the year increased significantly and its average gas price received
increased  marginally.  During the fourth  quarter of fiscal  2003,  oil and gas
revenues  increased  approximately  40.1% compared to the prior year despite the
production  declines.  Fees in the amount of $39,000 and $37,400 received by the
Company in fiscal 2002 and 2003,  respectively,  for serving as operator of most
of the  Company's  North  Texas  area  properties  are  included  in oil and gas
revenues.

         Oil revenues declined  approximately 11.0% from approximately  $870,300
in the fiscal  year ended  February  28, 2002 to  approximately  $774,600 in the
fiscal year ended  February  28, 2003 as oil sales  production  levels fell from
approximately  37,100  barrels to  approximately  28,600 barrels  (-22.9%).  The
effect of the lower sales production volumes was partially offset by an increase
in the Company's average oil price received from approximately $23.46 per barrel
to  approximately  $27.08 per barrel (+15.4%).  Gas revenues  decreased 21.6% to
approximately $142,400 in fiscal 2003 from approximately $181,600 in fiscal 2002
reflecting  an  approximate  12,500 MCF decline in gas sales  production  volume
(-23.3%)  partially offset by an $.08 per MCF rise in the Company's  average gas
price received  ($3.47 per MCF in fiscal 2003 vs. $3.39 per MCF in fiscal 2002).
The increases in the Company's average oil and gas prices received that occurred
durign  fiscal 2003 were  beneficial to the Company but such prices still remain
far short of the levels reached in fiscal 2001. Non- material amounts of natural
gas liquids  revenues and sales volumes from the Company's  principal  producing
property in Madison County, Texas and the North Texas area are excluded from the
foregoing discussion.

         Revenues from the Madison County,  Texas property again tracked overall
results for fiscal 2003, decreasing  approximately $123,700 (16.5%) due to lower
production  sales volumes  offset  somewhat by higher average oil and gas prices
received;  however,  in the fourth  quarter of fiscal 2003,  revenues  from this



                                       19
<PAGE>

property  increased  approximately  36.4% reflecting the highest average oil and
gas prices received for the fiscal year. The Madison County,  Texas property has
been fully  developed  for over three  years,  and the Company  expects  overall
production  from the  property  to  continue to decline in fiscal 2004 while the
secondary recovery project on the property is implemented. At February 28, 2003,
the Company's  independent  petroleum engineers estimated proven undeveloped oil
reserves  attributable to the secondary  recovery  project on the property to be
594,315  barrels,  an increase of 41,113  barrels  (7.4%) from the prior  year's
estimate. Although the project had been approved in fiscal 2003 by the operator,
the Company and the other working interest owners, final royalty owner and Texas
Railroad   Commission   approvals  were  not  obtained  until  mid-fiscal  2003.
Unitization  of the property was  concluded  and  implementation  of the project
commenced as of December 1, 2002. Although the Company is counting on production
from the  waterflood to reverse the decline in oil revenues from this  property,
it is not  expected to occur until  fiscal 2005 at the very  earliest due to the
installation  time for the waterflood and the  substantial  lag time between the
initiation of water  injection,  the buildup of sufficient water volumes to push
the  incremental  secondary  oil  reserves  to  producing  wells and the  actual
production  of  the   incremental   reserves.   Notwithstanding   the  Company's
expectations with respect to the waterflood,  it should again be emphasized that
there  can  be  no  assurance  that  the  secondary  recovery  project  will  be
successful.

         During the fourth  quarter of fiscal 2003, the Company was finally able
to implement its previously agreed upon extension of Four Corners' gravel mining
contract and surface lease.  Pursuant to the extension,  effective as of July 1,
2001,  the  Company  receives a new road usage fee of $.27 per ton mined by Four
Corners and the royalty  rate for tonnage  mined from the 9.9 acres added to the
mining area was  increased  from $.35 to $.64 per ton.  The Company also reduced
the amount of rentals paid under Four Corners' surface lease from the Company to
their  pre-fiscal  2002  level and gave Four  Corners a credit  against  the new
royalty to be paid by it to the  Company for the  additional  $20,000 in surface
lease  rentals  paid by Four  Corners in fiscal  2002 and 2003  pursuant  to the
previous arrangement. As a result of the foregoing,  revenues from the Company's
gravel operations increased  approximately  $205,100 (245.4%) in the fiscal year
ended February 28, 2003 reflecting a one-time accrual of approximately  $145,800
made in the  fourth  quarter  for the new road usage fee and  increased  royalty
income of approximately $79,300 (182.0%) for the year.  Approximately $59,800 of



                                       20
<PAGE>

the increase in royalty  income was booked in the fourth  quarter and  reflected
the increased royalty rate for the expanded mining area. Rentals received by the
Company  from its surface  lease with Four  Corners in fiscal 2003 were  $20,000
less than the prior year due to the credit  given by the Company to Four Corners
under the  extension  arrangement.  The Company  had no coal  revenues in either
fiscal 2002 or 2003.

         The  expenses  of  the  Company's  oil  and  gas  operations  decreased
approximately  $160,600  (15.6%) in the  fiscal  year ended  February  28,  2003
primarily  as a result of an  approximate  $135,600  decline  in  depletion  and
depreciation  expense and smaller  reductions  in the amount of lease  operating
expense   (approximately   $36,600,   5.6%)   and   lease   impairment   expense
(approximately  $13,500,  95.5%).  The  decline in  depletion  and  depreciation
expense was  attributable to the Madison  County,  Texas property and was due to
lower production sales volumes for the year and a lower per barrel  amortization
rate  resulting  from the higher oil and gas prices in effect at the fiscal 2003
year end as compared to the prior year. The lease operating expense decrease was
also mainly  attributable to the Madison  County,  Texas property as the Company
was able to avoid the major  workover  expense on one well on the property  that
occurred  in the  prior  year and  declines  in the  other  categories  of lease
operating  expense  (equipment  repairs,  production  and ad  valorem  taxes and
engineering  expense)  were  offset  by an  increase  in field  payroll  expense
resulting  from the  addition  of one  employee in this area.  The Company  only
incurred a nominal amount of lease impairment  expense with respect to the Utley
gas unit in Freestone  County,  Texas in fiscal 2003  compared to  approximately
$14,100  of such  expense  in  fiscal  2002.  Exploration  expense  was the only
category  of oil and gas  operating  expense to  increase  in fiscal 2003 rising
approximately  $25,100,  or 105.2%.  The  increase  in  exploration  expense was
primarily due to approximately $47,100 in expired leasehold expense with respect
to a prospect in Red River County, Texas and was partially offset by the lack of
any dry hole  expense  during the year.  In fiscal  2002,  the Company  incurred
approximately  $19,800  in such  expense  with  respect  to its  interest  in an
exploratory well drilled in Wilbarger County, Texas.

         The  expenses  of  the  Company's  coal  and  gravel   operations  fell
approximately  $9,300 (16.2%) during the fiscal year ended February 28, 2003 due
to the savings  resulting  from no longer having an employee on the property and
the absence of any  engineering  expense  during the year.  In fiscal 2002,  the
Company incurred the expense of obtaining a required updated  engineering report


                                       21
<PAGE>

with respect to the sediment  pond located on the site of the  Company's  former
coal  operations  as a part  of its  reclamation  efforts.  Increased  depletion
expense of approximately  $6,800 with respect to the additional tonnage mined by
Four  Corners on the  expanded  mining  area  partially  offset the  payroll and
engineering expense savings.

         Real estate development expense decreased approximately $19,900 (46.5%)
during  fiscal 2003 as compared to the prior year.  In fiscal 2002,  the Company
incurred legal fees in its  negotiations  with Mercy for it to acquire a portion
of the Company's  proposed "Oakridge at Durango" planned real estate development
at Durango,  Colorado for a new Hospital site, location maintenance expenses and
expenses related to preparing and printing a brochure to be used to identify and
market the proposed  development.  In fiscal 2003, the Company did not incur any
local maintenance or brochure expenses and its legal fees for the year were less
after Mercy in mid-year selected another site to build the new Hospital.

         General and  administrative  expense  increased  approximately  $22,600
(5.1%) in the fiscal  year ended  February  28, 2003 due to  increased  employee
benefit  expense of  approximately  $22,800  attributable  to  including  family
members of employees under the Company's  health  insurance  plan.  Increases in
general and administrative  expense resulting from the initial  installation and
operation of the Company's web site and in payroll, governmental and shareholder
reporting and general  depreciation  expenses were counterbalanced by reductions
in  legal,  travel  and  engineering  expenses  and the  absence  of any  office
redecorating expense.

         Other income (expense) changed from an approximate  $8,700 expense item
in  fiscal  2002 to an  approximate  $88,400  income  item in  fiscal  2003,  an
improvement of  approximately  $97,100,  with the interest income and other, net
component of the item being mainly  responsible  for the  improvement.  Interest
income alone fell approximately $94,800 (64.2%) due to the effect of lower rates
as dividend  income was  approximately  the same in both years.  The increase in
other,  net income,  however,  more than  covered  the  decline in interest  and
dividend  income.  In fiscal 2003, the Company  recognized a gain on the sale of
its workover rig of approximately  $38,700. In addition, the Company's loss from
its interest in a limited partnership which owns and operates a gas pipeline was
approximately  $53,500 lower than in the prior year. In fiscal 2002, the Company
also incurred an approximate  $102,600 loss on its equity  investment  available



                                       22
<PAGE>

for sale. There was no comparable loss or other expense incurred in fiscal 2003.
Gains on sales of oil and gas  properties  were minor and at  approximately  the
same level in fiscal 2002 and 2003.

         The Company's provisions for income tax benefit in fiscal 2002 and 2003
were lower than what would be  expected to be the case if such  provisions  were
computed by applying the U.S. Federal corporate tax rate to the pretax losses in
such  years as the  result of the  effect of state  and local  income  taxes and
revisions of prior year provision estimates.

         The   Company's   weighted   average   shares   outstanding   decreased
approximately .8% in the fiscal year ended February 28, 2003 due to the purchase
of  approximately  48,200 shares of the Company's stock made by the Company from
non-affiliates during the year.

Financial Condition and Liquidity
---------------------------------

         During fiscal 2003, the Company's  expenditures continued to be tightly
controlled and its activity level reduced as the Company did not  participate in
any  exploratory or development  drilling and husbanded its cash for utilization
on the Company's  proposed  secondary  recovery  project on its Madison  County,
Texas property and its proposed real estate  development  at Durango,  Colorado.
Nevertheless, cash and cash equivalents were reduced by approximately $48,800 at
year end.

         The Company's operating activities  contributed  approximately $252,200
in funds (down  approximately  $33,000 from fiscal 2002) despite the significant
decline in oil and gas revenues  that  occurred  during the year.  The Company's
investing  activities used  approximately  $140,800 in funds as additions to oil
and gas  properties,  real estate held for  development  and other  property and
equipment  aggregating  approximately  $241,500 were substantially  greater than
proceeds from the sales of oil and gas  properties,  the Company's  workover rig
and other property  totaling  approximately  $100,700.  The Company's  financing
activities (entirely purchases of the Company's common stock) used approximately
$160,200 in funds.  At February 28, 2003,  the Company had no  indebtedness  and
cash, cash equivalents and investment  securities  available for sale aggregated
approximately $3,636,200.

         Although current oil and gas prices have retreated  somewhat from their
fiscal 2003 year end levels,  the  Company  believes  that oil and gas prices in



                                       23
<PAGE>

fiscal 2004 will likely not fall below  fiscal 2003  levels.  Consequently,  the
Company expects to fund its contemplated  operations  during fiscal 2004 and any
purchases  of the  Company's  stock  that  it  makes  from  its  cash  and  cash
equivalents,  sales of all or a portion of its investment  securities  available
for  sale  and any  cash  flow  from  its oil and gas  properties.  The  Company
anticipates  that the cash flow from its oil and gas  properties  in fiscal 2004
will again be below that which  resulted in fiscal 2003,  even if product prices
are at the same levels, due to the institution of the secondary recovery project
on the Madison County, Texas property during the year which will reduce revenues
from the property during the installation  and initial water injection  periods.
The Company should benefit,  however, from the release of approximately one-half
of the Company's  $817,700 coal mine  reclamation  bond to the State of Colorado
sometime during the first half of the year.

         Whether the Company will need to secure additional  financing in fiscal
2004 is strictly  dependent  upon if and when the Company  obtains the necessary
governmental  approvals  to be able to proceed  with its  Colorado  real  estate
development.  If the  Company is  successful  in  obtaining  such  approvals  by
mid-year, the Company may need to secure financing,  possibly by as early as the
latter  part of fiscal  2004 or the first  part of  fiscal  2005,  to be able to
complete  the  infrastructure  for the first  phase of the  development  and the
construction of an alternate access road to the property. The Company's existing
cash  reserves  should be  sufficient  to allow the  Company  to  initiate  both
projects.  If such approvals  continue to be delayed,  however,  as has been the
case  for  much of  fiscal  2003  and all of  fiscal  2004 to  date,  additional
financing  may not be needed  by the  Company  until  the mid to latter  part of
fiscal 2005. To obtain such financing,  the Company will likely explore possible
sales of the Company's equity securities in the public markets or obtaining bank
borrowings. The Company will also explore selling parts of the property to other
companies who would  develop  specific  portions of it. During fiscal 2003,  the
Company  received a number of very positive site location  inquiries  from third
parties as well as significant interest from substantial builders/developers who
expressed  interest in participating in the property.  There can be no assurance
that any of these  financing  options  will be  available  to the  Company  when
needed.


                                       24
<PAGE>

Critical Accounting Policies and Estimates
------------------------------------------

The foregoing discussion and analysis of the Company's results of operations and
financial condition and liquidity is based upon the financial statements,  which
have been  prepared  in  accordance  with  U.S.  generally  accepted  accounting
principles.  The preparation of these financial  statements requires the Company
to make  estimates  and  judgments  that affect the reported  amounts of assets,
liabilities,   revenues  and  expenses.  The  Company's  significant  accounting
policies are  described in Note B to the  financial  statements.  In response to
Securities and Exchange  Commission  ("SEC")  Release No.  33-8040,  "Cautionary
Advice Regarding Disclosure About Critical Accounting Policies," the Company has
identified  certain of these  policies as being of particular  importance to the
portrayal of the  Company's  results of operations  and  financial  position and
which require the application of significant judgment by management. The Company
analyzes its estimates, including those related to oil and gas revenues, oil and
gas  properties,  income  taxes,  contingencies  and  litigation,  and bases its
estimates  on  historical  experience  and various  other  assumptions  that the
Company  believes to be reasonable under the  circumstances.  Actual results may
differ from these  estimates  under  different  assumptions or  conditions.  The
Company  believes the following  critical  accounting  policies  affect its more
significant  judgments and estimates  used in the  preparation  of the Company's
financial statements:

Successful  Efforts Method of Accounting:  The Company  accounts for its natural
gas  and  crude  oil  exploration  and  development   activities  utilizing  the
successful efforts method of accounting.  Under this method, costs of productive
exploratory wells,  development dry holes and productive wells, costs to acquire
mineral  interests and  three-dimensional  (3-D) seismic costs are  capitalized.
Exploration costs, including personnel costs, certain geological and geophysical
expenses including two-dimensional (2-D) seismic costs and delay rentals for oil
and gas leases, are charged to expense as incurred.  Exploratory  drilling costs
are  initially  capitalized,  but  charged  to  expense  if and when the well is
determined  not to have found reserves in commercial  quantities.  The sale of a
partial interest in a proved property is accounted for as a cost recovery and no
gain or loss is recognized.

The  application  of  the  successful  efforts  method  of  accounting  requires
managerial  judgment to determine the proper  classification of wells designated
as  developmental  or  exploratory  which will  ultimately  determine the proper





                                       25
<PAGE>

accounting  treatment  of the  costs  incurred.  The  results  from  a  drilling
operation  can take  considerable  time to analyze  and the  determination  that
commercial  reserves  have been  discovered  requires both judgment and industry
experience.  Wells  may be  completed  that are  assumed  to be  productive  but
actually  deliver oil and gas in quantities  insufficient to be economic,  which
may result in the abandonment of the wells at a later date. Wells may be drilled
that target geologic  structures that are both  developmental and exploratory in
nature and an  allocation  of costs is  required  to  properly  account  for the
results.  The  evaluation of oil and gas leasehold  acquisition  costs  requires
managerial  judgment to estimate the fair value of these costs with reference to
drilling  activity  in a given  area.  Drilling  activities  in an area by other
companies may also effectively condemn leasehold positions.

The successful efforts method of accounting can have a significant impact on the
operational results reported when the Company is entering a new exploratory area
in hopes of  funding  an oil and gas  field  that  will be the  focus of  future
development drilling activity. The initial exploratory wells may be unsuccessful
and will be expensed.

Reserve  Estimates:  The  Company's  estimates  of  oil  and  gas  reserves,  by
necessity, are projections based on geologic and engineering data, and there are
uncertainties  inherent  in the  interpretation  of  such  data  as  well as the
projection  of  future  rates  of  production  and  the  timing  of  development
expenditures.   Reserve  engineering  is  a  subjective  process  of  estimating
underground  accumulations  of oil and gas that are  difficult  to measure.  The
accuracy of any reserve estimate is a function of the quality of available data,
engineering   and   geological   interpretation   and  judgment.   Estimates  of
economically  recoverable  oil  and gas  reserves  and  future  net  cash  flows
necessarily  depend upon a number of variable factors and  assumptions,  such as
historical  production  from  the  area  compared  with  production  from  other
producing areas, the assumed effects of regulations by governmental agencies and
assumptions  governing  future  oil  and gas  prices,  future  operating  costs,
severance taxes,  development  costs and workover gas costs, all of which may in
fact vary considerably from actual results. The future drilling costs associated
with reserves assigned to proved undeveloped  locations may ultimately  increase
to an extent that these reserves may be later  determined to be uneconomic.  For
these reasons,  estimates of the economically  recoverable quantities of oil and




                                       26
<PAGE>

gas attributable to any particular group of properties,  classifications of such
reserves  based on risk of recovery  and  estimates of the future net cash flows
expected  therefrom  may vary  substantially.  Any  significant  variance in the
assumptions  could  materially  affect the  estimated  quantity and value of the
reserves,  which could affect the carrying  value of the  Company's  oil and gas
properties  and/or the rate of depletion of the oil and gas  properties.  Actual
production,  revenues and  expenditures  with respect to the Company's  reserves
will likely vary from estimates and such variances may be material.

Impairment  of Oil and  Gas  Properties:  The  Company  reviews  its oil and gas
properties   for   impairment  at  least   annually  and  whenever   events  and
circumstances  indicate a decline in the recoverability of their carrying value.
The  Company  estimates  the  expected  future  cash  flows  of its  oil and gas
properties  and compares  such future cash flows to the  carrying  amount of the
properties to determine if the carrying amount is  recoverable.  If the carrying
amount exceeds the estimated  undiscounted  future cash flows,  the Company will
adjust the carrying  amount of the oil and gas  properties  to their fair value.
The  factors  used to  determine  fair value  include,  but are not  limited to,
estimates  of proved  reserves,  future  commodity  pricing,  future  production
estimates,  anticipated  capital  expenditures and a discount rate  commensurate
with the risk associated with realizing the expected cash flows projected.

Given the  complexities  associated  with oil and gas reserve  estimates and the
history of price  volatility  in the oil and gas markets,  events may arise that
would  require the Company to record an  impairment  of the recorded book values
associated with oil and gas properties.  The Company has recognized  impairments
this year and in prior years and there can be no assurance that impairments will
not be recognized in the future.

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

Certain  information  included  in this  Annual  Report on Form 10-KSB and other
materials  filed by the Company  with the  Securities  and  Exchange  Commission
("SEC") contain 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,"  "anticipates" and
similar words.  These  statements are not guarantees of future  performance  and
involve  certain  risks,  uncertainties  and  assumptions  that are difficult to
predict.


                                       27
<PAGE>

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  and the timing of  receipt  of  revenues  from  existing  and future
exploration  and development  projects  (including,  particularly,  the recently
implemented  secondary recovery project on the Madison County,  Texas property),
higher than  estimated  coal  reclamation  costs and 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.

ITEM 7.  FINANCIAL STATEMENTS.

                          Index to Financial Statements

                                                                            Page
                                                                            ----

Report of Independent Auditors                                                29

Balance Sheets as of February 28, 2003 and 2002                               30

Statements of Operations for the years ended
  February 28, 2003 and 2002                                                  32

Statements of Stockholders' Equity for the
  years ended February 28, 2003 and 2002                                      33

Statements of Cash Flows for the years ended
  February 28, 2003 and 2002                                                  34

Notes to Financial Statements                                                 35

Supplemental Oil and Gas Data (Unaudited)                                     45







                                       28
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS




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

We have audited the accompanying balance sheets of Oakridge Energy, Inc., a Utah
corporation,  as of February 28, 2003 and 2002,  and the related  statements  of
operations,  stockholders' equity and cash flows for the years 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Oakridge Energy,  Inc. as of
February 28, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended in  conformity  with  accounting  principles  generally
accepted in the United States of America.





Fort Worth, Texas
April 17, 2003















                                       29
<PAGE>
<TABLE>
<CAPTION>

                              OAKRIDGE ENERGY, INC.

                                 BALANCE SHEETS


                                                                 February 28,
                                                               2003         2002
                                                            ----------   ----------
<S>                                                         <C>          <C>
Assets
Current assets:
    Cash and cash equivalents                               $3,375,427   $3,424,261
    Trade accounts receivable                                  274,869       79,296
    Federal income taxes receivable                               --        321,739
    Investment securities available for sale                   260,817      239,304
    Prepaid expenses and other                                  21,196       17,062
                                                            ----------   ----------
Total current assets                                         3,932,309    4,081,662

Oil and gas properties, at cost, using the successful
    efforts method of accounting:
    Proved developed properties                              6,651,197    6,641,165
    Less accumulated depletion and depreciation              6,058,833    5,858,985
                                                            ----------   ----------
                                                               592,364      782,180
    Unproved properties                                        177,833      219,876
                                                            ----------   ----------
Net oil and gas properties                                     770,197    1,002,056

Coal and gravel properties, at cost:
    Undeveloped properties                                   5,850,424    5,850,424
    Mining and service equipment                             2,461,783    2,461,783
                                                            ----------   ----------
                                                             8,312,207    8,312,207
    Less accumulated depletion and depreciation              8,027,008    8,005,561
                                                            ----------   ----------
Net coal and gravel properties                                 285,199      306,646

Other property and equipment, net of accumulated
    depreciation of $352,062 in 2003 and $353,192 in 2002      162,884      135,199

Real estate held for development                             2,941,989    2,839,668

Other non-current assets                                       875,074      886,858
                                                            ----------   ----------

Total assets                                                $8,967,652   $9,252,089
                                                            ==========   ==========
</TABLE>




See accompanying notes.

                                       30
<PAGE>
<TABLE>
<CAPTION>

                              OAKRIDGE ENERGY, INC.

                           BALANCE SHEETS (continued)


                                                                February 28,
                                                             2003          2002
                                                         -----------   -----------
<S>                                                      <C>           <C>
Liabilities and Stockholders' Equity
Current liabilities:
    Accounts payable                                     $   112,692   $    78,178
    Accrued expenses                                          75,071        85,621
    Deferred income taxes                                     21,585        13,682
                                                         -----------   -----------
Total current liabilities                                    209,348       177,481

Reserve for reclamation costs                                319,019       409,430
Deferred income taxes                                        115,030       144,545
                                                         -----------   -----------
Total liabilities                                            643,397       731,456

Commitments and contingencies                                   --            --

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                                     16,951,167    17,000,873
    Accumulated other comprehensive income                    36,801        23,242
                                                         -----------   -----------
                                                          18,199,372    18,235,519
Less treasury stock, at cost; 5,787,313 shares in 2003
    and 5,739,096 in 2002                                  9,875,117     9,714,886
                                                         -----------   -----------
Total stockholders' equity                                 8,324,255     8,520,633
                                                         -----------   -----------

Total liabilities and stockholders' equity               $ 8,967,652   $ 9,252,089
                                                         ===========   ===========
</TABLE>

















See accompanying notes.
                                       31
<PAGE>

                              OAKRIDGE ENERGY, INC.

                            STATEMENTS OF OPERATIONS


                                                       Year Ended February 28,
                                                         2003           2002
                                                     -----------    -----------
Revenues:
    Oil and gas                                      $   968,252    $ 1,108,448
    Gravel                                               288,707         83,585
                                                     -----------    -----------
                                                       1,256,959      1,192,033

Operating expenses:
    Oil and gas:
      Depletion and depreciation                         202,096        337,708
      Lease operating                                    614,088        650,710
      Lease impairment                                       642         14,095
      Exploration costs                                   48,965         23,867
                                                     -----------    -----------
                                                         865,791      1,026,380

    Coal and gravel                                       47,848         57,113
    Real estate development                               22,837         42,707
    General and administrative                           467,520        444,917
                                                     -----------    -----------
Total operating expenses                               1,403,996      1,571,117
                                                     -----------    -----------

Loss from operations                                    (147,037)      (379,084)

Other income (expense):
    Interest income and other, net                        85,385        (12,342)
    Gain on sales of oil and gas properties                3,029          3,681
                                                     -----------    -----------
Total other income (expense)                              88,414         (8,661)
                                                     -----------    -----------

Loss before income taxes                                 (58,623)      (387,745)

Income tax benefit                                        (8,917)       (99,654)
                                                     -----------    -----------

Net loss                                             $   (49,706)   $  (288,091)
                                                     ===========    ===========

Basic and diluted loss per common share              $     (0.01)   $     (0.06)
                                                     ===========    ===========

Weighted average common shares outstanding             4,403,740      4,440,284
                                                     ===========    ===========











See accompanying notes.

                                       32
<PAGE>
<TABLE>
<CAPTION>

                              OAKRIDGE ENERGY, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                     Years Ended February 28, 2003 and 2002
                                                                                       Accumulated
                                                      Additional                          other
                                       Common          paid-in          Retained      comprehensive
                                       stock           capital          earnings      income (loss)
                                   -------------    -------------    -------------    -------------
<S>                                <C>              <C>              <C>              <C>
Balance at March 1, 2001           $     406,312    $     805,092    $  17,288,964    $     (63,910)

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

Net loss                                    --               --           (288,091)            --

Change in unrealized gain (loss)
    on investment securities,
    net of income taxes                     --               --               --             87,152
                                   -------------    -------------    -------------    -------------

Comprehensive loss for year


Balance at February 28, 2002             406,312          805,092       17,000,873           23,242

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

Net loss                                    --               --            (49,706)            --

Change in unrealized gain (loss)
    on investment securities,
    net of income taxes                     --               --               --             13,559
                                   -------------    -------------    -------------    -------------

Comprehensive loss for year


Balance at February 28, 2003       $     406,312    $     805,092    $  16,951,167    $      36,801
                                   =============    =============    =============    =============


                                     Treasury                        Comprehensive
                                      stock              Total       income (loss)
                                   -------------    -------------    -------------

Balance at March 1, 2001           $  (9,596,982)   $   8,839,476

Purchases of treasury stock             (117,904)        (117,904)

Net loss                                    --           (288,091)   $    (288,091)

Change in unrealized gain (loss)
    on investment securities,
    net of income taxes                     --             87,152           87,152
                                   -------------    -------------    -------------

Comprehensive loss for year                                          $    (200,939)
                                                                     =============

Balance at February 28, 2002          (9,714,886)       8,520,633

Purchases of treasury stock             (160,231)        (160,231)

Net loss                                    --            (49,706)   $     (49,706)

Change in unrealized gain (loss)
    on investment securities,
    net of income taxes                     --             13,559           13,559
                                   -------------    -------------    -------------

Comprehensive loss for year                                          $     (36,147)
                                                                     =============

Balance at February 28, 2003       $  (9,875,117)   $   8,324,255
                                   =============    =============
</TABLE>


See accompanying notes.


                                       33
<PAGE>
<TABLE>
<CAPTION>

                              OAKRIDGE ENERGY, INC.

                            STATEMENTS OF CASH FLOWS


                                                                Year Ended February 28,
                                                                   2003           2002
                                                               -----------    -----------
<S>                                                            <C>            <C>
Operating Activities
    Net loss                                                   $   (49,706)   $  (288,091)
    Adjustments to reconcile net loss to net cash
      provided by operating activities:
      Depletion and depreciation                                   256,229        379,085
      Gain on sales of oil and gas properties                       (3,029)        (3,681)
      Gain on sales of property and equipment                      (38,711)        (2,000)
      Loss on sales and redemptions of investment securities          --          102,570
      Loss on investment in limited partnership                     11,784         65,253
      Abandoned leaseholds                                          48,964          4,127
      Oil and gas lease impairment                                     642         14,095
      Deferred income taxes                                        (29,565)       112,812
      Changes in operating assets and liabilities:
        Trade accounts receivable                                 (195,573)       107,167
        Federal income taxes receivable                            321,739       (234,490)
        Prepaid expenses and other                                  (4,134)          (731)
        Accounts payable and accrued expenses                       23,964         32,684
        Reserve for reclamation costs                              (90,411)        (3,570)
                                                               -----------    -----------
Net cash provided by operating activities                          252,193        285,230

Investing Activities
    Additions to oil and gas properties                            (20,132)        (4,139)
    Additions to real estate held for development                 (116,338)       (56,663)
    Additions to other property and equipment                     (105,034)       (25,464)
    Proceeds from sales of oil and gas properties                    3,318          8,251
    Proceeds from sales of property and equipment                   97,390          2,000
    Investment in limited partnership                                 --           (5,000)
                                                               -----------    -----------
Net cash used in investing activities                             (140,796)       (81,015)

Financing Activity
    Purchases of treasury stock                                   (160,231)      (117,904)
                                                               -----------    -----------

Net increase (decrease) in cash and cash equivalents               (48,834)        86,311
Cash and cash equivalents at beginning of year                   3,424,261      3,337,950
                                                               -----------    -----------

Cash and cash equivalents at end of year                       $ 3,375,427    $ 3,424,261
                                                               ===========    ===========
</TABLE>




See accompanying notes.

                                       34
<PAGE>

                              OAKRIDGE ENERGY, INC.

                          NOTES TO FINANCIAL STATEMENTS

                                February 28, 2003




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. The Company
also  receives  lease and royalty  income from gravel  deposits in Colorado  and
holds  certain  real  estate  in  Colorado  for  development.  The  Company  was
incorporated  in Utah in 1969 and its  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:

Basis of Accounting

The accounts are  maintained  and the  financial  statements  have been prepared
using the accrual basis of accounting in accordance with  accounting  principles
generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America 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

The Company  reports  comprehensive  income in accordance with the provisions of
Statement  of  Financial   Accounting  Standards  ("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
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.

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  approximates  their carrying amounts due to the
relatively short maturity of their instruments.



                                       35
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


B.   Significant Accounting Policies - continued

Cash and Cash Equivalents

Cash equivalents of approximately $2,850,000 and $2,805,000 at February 28, 2003
and 2002, respectively, consisted of interest-bearing cash deposits. 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:

                                  2003         2002
                               ----------   ----------

Interest paid                  $     --     $     --
                               ==========   ==========

Income taxes paid              $   21,216   $   19,178
                               ==========   ==========

The changes in the unrealized gain (loss) on investment  securities,  net of the
related income tax effects,  of approximately  $14,000 and $87,000 for the years
ended February 28, 2003 and 2002,  respectively,  are non-cash  transactions for
purposes of the cash flow statements.

Trade Accounts Receivable

The Company  performs  ongoing credit  evaluations  of its customers'  financial
condition and extends credit to virtually all of its customers. Credit losses to
date have not been significant and have been within  management's  expectations.
In the event of complete non-performance by the Company's customers, the maximum
exposure to the Company is the outstanding  accounts  receivable  balance at the
date of non-performance.

Investment Securities

Investment securities consist of a certificate of deposit with a bank 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.




                                       36
<PAGE>

                              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  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 28, 2003 or 2002.

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.  No  impairment
charges were recorded during 2003 or 2002.

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
non-producing 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.



                                       37
<PAGE>

                              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.  The
Company also has a reserve  approximating  $319,000 and $409,000 at February 28,
2003 and 2002, respectively, for estimated costs associated with the reclamation
of the property  surrounding and including the Company's coal mining operations.
The  reserve is based on an outside  engineer's  estimate  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 does not exceed net
realizable  value.  Real estate  development  and  construction  costs  directly
identifiable with such property are capitalized.

Impairment of Long-Lived Assets

The carrying value of property and equipment is periodically evaluated under the
provisions  of SFAS No.  144,  Accounting  for the  Impairment  or  Disposal  of
Long-Lived  Assets.   SFAS  No.  144  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 the estimated  future net cash flows
of an asset 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.

Under SFAS No.  144,  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  2003 and  2002,  the  Company  recorded
impairment losses of approximately  $600 and $14,000,  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.


                                       38
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


B.   Significant Accounting Policies - continued

Investment in Partnership

The  Company  uses  the  equity  method  of  accounting  for its  investment  in
partnership.  The investment in partnership of approximately $58,000 and $70,000
at February 28, 2003 and 2002,  respectively,  are included in other non-current
assets  in the  accompanying  balance  sheets.  The  Company  recognized  losses
pertaining  to its  interest in the  partnership  of  approximately  $12,000 and
$65,000  during  2003 and 2002,  respectively,  which are  included  in interest
income and other, net in the accompanying statements of operations.

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.

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 common  share is  calculated  by dividing net income  (loss)
(available  to common  stockholders)  by the weighted  average  number of common
shares  outstanding for the period.  Diluted  earnings per common 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
common share are the same.



                                       39
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


C.   Investment Securities

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

                                   Gross         Gross
                     Amortized   Unrealized   Unrealized      Fair
     2003              Cost        Gains        Losses       Value
-----------------   ----------   ----------   ----------   ----------

Equity securities   $  202,430   $   58,387   $     --     $  260,817
                    ==========   ==========   ==========   ==========


                                   Gross         Gross
                     Amortized   Unrealized   Unrealized      Fair
     2002              Cost        Gains        Losses       Value
-----------------   ----------   ----------   ----------   ----------



Equity securities   $  202,430   $   36,874   $     --     $  239,304
                    ==========   ==========   ==========   ==========




D.   Income Taxes

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

                                  Current       Deferred         Total
                                -----------    -----------    -----------
Year ended February 28, 2003:
     U.S. Federal               $       784    $   (28,679)   $   (27,895)
     State and local                 19,864           (886)        18,978
                                -----------    -----------    -----------

                                $    20,648    $   (29,565)   $    (8,917)
                                ===========    ===========    ===========

                                  Current       Deferred         Total
                                -----------    -----------    -----------
Year ended February 28, 2002:
     U.S. Federal               $  (233,702)   $   109,428    $  (124,274)
     State and local                 21,236          3,384         24,620
                                -----------    -----------    -----------

                                $  (212,466)   $   112,812    $   (99,654)
                                ===========    ===========    ===========



                                       40
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


D.   Income Taxes - continued

Income tax expense (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 pre-tax income (loss), as a result of
the following:

                                                            2003         2002
                                                         ---------    ---------

Computed "expected" tax expense (benefit)                $ (19,932)   $(131,833)
State and local income taxes, net of federal income
  tax benefit                                               13,111       16,250
Other, primarily revision of prior year provision
  estimate                                                  (2,096)      15,929
                                                         ---------    ---------

                                                         $  (8,917)   $ (99,654)
                                                         =========    =========

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

                                                            2003         2002
                                                         ---------    ---------
Deferred tax assets:
   Net operating loss carryforward                       $  30,166    $    --
   Alternative minimum tax credit
     carryforward                                           98,607       96,904
   Reserve for reclamation costs                           117,941      151,366
                                                         ---------    ---------
                                                           246,714      248,270

Deferred tax liabilities:
   Oil and gas properties and other property and
     equipment, principally due to depletion and
     depreciation                                         (309,399)    (332,591)
   Coal properties, principally due to differences
     in depletion                                          (52,345)     (60,274)
   Unrealized gain on investment securities
     available for sale                                    (21,585)     (13,632)
                                                         ---------    ---------
                                                          (383,329)    (406,497)
                                                         ---------    ---------
Net deferred tax asset (liability)                       $(136,615)   $(158,227)
                                                         =========    =========

Included in the balance sheet as:
  Deferred income taxes, current                         $ (21,585)   $ (13,632)
  Deferred income taxes, non-current                      (115,030)    (144,595)
                                                         ---------    ---------
Net deferred tax asset (liability)                       $(136,615)   $(158,227)
                                                         =========    =========



                                       41
<PAGE>

                              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. At February 28, 2003, the
Company has an  alternative  minimum tax credit  carryforward  of  approximately
$99,000,  which has no expiration  date and is available to reduce the Company's
future  taxable  income.  Additionally,  the  Company has a net  operating  loss
carryforward of approximately  $82,000,  which will expire in fiscal 2023 and 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
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.  Business segment assets are those assets  controlled by
each  reportable  segment.  The following  table sets forth certain  information
about the  financial  information  of each segment for the years ended  February
28,:

                                                         2003           2002
                                                     -----------    -----------

Business segment revenue:
   Oil and gas                                       $   968,252    $ 1,108,448
   Gravel                                                288,707         83,585
                                                     -----------    -----------

                                                     $ 1,256,959    $ 1,192,033
                                                     ===========    ===========


Business segment profit (loss):
   Oil and gas                                       $   102,461    $    82,068
   Coal and gravel                                       240,859         26,472
   Real estate development                               (22,837)       (42,707)
   General corporate                                    (467,520)      (444,917)
                                                     -----------    -----------

Loss from operations                                    (147,037)      (379,084)

Interest income and other, net                            85,385        (12,342)
Gain on sales of oil and gas properties                    3,029          3,681
                                                     -----------    -----------

Loss before income taxes                             $   (58,623)   $  (387,745)
                                                     ===========    ===========


                                       42
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


E.   Segment Information and Major Customers - continued


                                                         2003           2002
                                                     -----------    -----------
Business segment assets:
   Depreciation, depletion and amortization:
     Oil and gas                                     $   202,096    $   337,708
     Coal and gravel                                      21,448         14,700
     Real estate development                              14,016         14,318
     General corporate                                    18,669         12,359
                                                     -----------    -----------

                                                     $   256,229    $   379,085
                                                     ===========    ===========

   Capital expenditures:
     Oil and gas                                     $    20,132    $     4,139
     Real estate development                             116,338         56,663
     General corporate                                   105,034         25,464
                                                     -----------    -----------

                                                     $   241,504    $    86,266
                                                     ===========    ===========

   Total assets:
     Oil and gas                                     $ 4,739,858    $ 4,815,249
     Coal and gravel                                     285,199        306,646
     Real estate development                           2,941,989      2,839,668
     General corporate                                 1,000,606      1,290,526
                                                     -----------    -----------

                                                     $ 8,967,652    $ 9,252,089
                                                     ===========    ===========



Oil sales to two customers,  which  accounted for more than 10% of the Company's
total oil sales,  approximated  $578,000  (75%) and $143,000  (18%) for the year
ended  February 28, 2003.  Two customers  accounted for  approximately  $633,000
(73%) and  $146,000  (17%) of the  Company's  total oil sales for the year ended
February 28, 2002.  Gas sales to two customers  approximated  $106,000 (75%) and
$15,000 (11%) of the Company's  total gas sales for the year ended  February 28,
2003. One customer  accounted for approximately  $137,000 (76%) of the Company's
gas sales  for the year  ended  February  28,  2002.  Lease  operating  payments
primarily made to a principal  operator on its oil and gas producing  properties
approximated $364,000 and $415,000 in 2003 and 2002, 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 2003, the Company  purchased 26,700 shares of the Company's common
stock from a related  party at $3.50 per  share,  which  approximated  the share
price paid by the Company to other unaffiliated stockholders.  No such purchases
of common stock from related parties occurred during fiscal 2002.


                                       43
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


G.   Commitments and Contingencies

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  results  of  operations  or
financial position of the Company.

As of February 28, 2003 and 2002, 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 non-current assets
in the accompanying balance sheets.


H.   Quarterly Operating Results (Unaudited)

Quarterly results of operations for 2003 and 2002 were as follows:
<TABLE>
<CAPTION>

               2003                    First         Second          Third         Fourth         Full
                                      Quarter        Quarter        Quarter        Quarter        Year
---------------------------------   -----------    -----------    -----------    -----------   -----------
<S>                                     <C>            <C>            <C>            <C>       <C>
Total revenues                          284,968        264,882        245,474        461,635   $ 1,256,959
Income (loss) from operations           (71,655)       (76,525)       (65,195)        66,338      (147,037)
Net income (loss)                       (10,837)       (38,145)       (31,278)        30,554       (49,706)
Basic and diluted earnings (loss)
   per common share                         .00           (.01)          (.01)           .01          (.01)

During the fourth quarter of fiscal 2003, the Company recorded additional gravel
revenues  of  approximately  $186,000  (before  income  taxes)  as a  result  of
renegotiating  the royalty it  receives in regards to the gravel  mined from the
Company's Colorado real estate property  (approximately $92,000 recorded for the
first three quarters of fiscal 2003).

               2003                    First         Second          Third         Fourth         Full
                                      Quarter        Quarter        Quarter        Quarter        Year
---------------------------------   -----------    -----------    -----------    -----------   -----------

Total revenues                      $   388,263    $   330,254    $   273,147    $   200,369   $ 1,192,033
Income (loss) from operations           (60,338)       (23,806)       (49,843)      (245,097)     (379,084)
Net income (loss)                        (3,089)        13,222         (7,238)      (290,986)     (288,091)
Basic and diluted earnings
   (loss) per common share                  .00            .00            .00           (.06)         (.06)
</TABLE>

During the fourth quarter of fiscal 2002, the Company  recorded an adjustment of
approximately   $194,000  (before  income  taxes)  to  record  depreciation  and
depletion on oil and gas  properties  (approximately  $144,000  recorded for the
first three  quarters of fiscal 2002),  primarily  due to lower  reserve  levels
determined  as of year end by an  independent  petroleum  reservoir  engineering
firm.




                                       44
<PAGE>

                              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 28, follows:

                                                          2003          2002
                                                      -----------   -----------

Acquisition of unproved properties                    $    20,132   $     4,139
                                                      ===========   ===========

Exploration costs                                     $    48,965   $    23,867
                                                      ===========   ===========

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 28,:

                                                         2003           2002
                                                     -----------    -----------

Revenues                                             $   968,252    $ 1,108,448
Production costs                                        (614,088)      (650,710)
Depletion, depreciation, and valuation
  provisions                                            (202,738)      (351,803)
Exploration costs                                        (48,965)       (23,867)
                                                     -----------    -----------
                                                         102,461         82,068
Income tax expense                                        34,837         27,903
                                                     -----------    -----------
Results of operations for producing activities
  (excluding corporate overhead and interest
  costs)                                             $    67,624    $    54,165
                                                     ===========    ===========

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.



                                       45
<PAGE>

                              OAKRIDGE ENERGY, INC.

              SUPPLEMENTAL OIL AND GAS DATA (UNAUDITED) (continued)

Reserve Quantity Information - continued

                                                         Oil            Gas
                                                       (Bbls.)         (MCF)
                                                    ------------    -----------

Proved developed and undeveloped reserves:

  Balance at March 1, 2001                               695,779        282,082
     Revisions of previous estimates                      28,625         48,651
     Production                                          (36,271)       (65,258)
                                                    ------------    -----------

  Balance at February 28, 2002                           688,133        265,475
     Revisions of previous estimates                      35,096        (78,601)
     Production                                          (28,015)       (45,720)
                                                    ------------    -----------

  Balance at February 28, 2003                           695,214        141,154
                                                    ============    ===========

Proved developed reserves:

  February 28, 2001                                      192,227        282,082
                                                    ============    ===========

  February 28, 2002                                      134,931        265,475
                                                    ============    ===========

  February 28, 2003                                      100,899        141,154
                                                    ============    ===========

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 pre-tax net
cash  flows  relating  to  the  Company's  proved  oil  and  gas  reserves.  The
standardized measure of discounted future cash flows at




                                       46
<PAGE>

                              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 28, which  represents the present value of estimated  future cash flows
using a discount rate of 10% a year, follows:

                                                       2003            2002
                                                   ------------    ------------

Future cash inflows                                $ 23,675,638    $ 13,617,067
Future production and development costs              (6,058,249)     (5,160,595)
Future income tax expenses                           (2,314,200)     (1,166,999)
                                                   ------------    ------------

Future net cash flows                                15,303,189       7,289,473

10% annual discount for estimated timing of cash
  flows                                              (3,945,469)     (1,989,613)
                                                   ------------    ------------

Standardized measure of discounted future net
  cash flows                                       $ 11,357,720    $  5,299,860
                                                   ============    ============



Beginning of year                                  $  5,299,860    $  9,925,990
  Sales of oil and gas, net of production costs        (354,164)       (457,738)
  Extensions, discoveries, and improved
     recoveries, less  related costs                    295,654         295,654
  Accretion of discount                                 529,986         992,599
  Net change in sales and transfer prices, net of
     production costs                                 5,330,972      (4,210,958)
  Net change in income taxes                         (2,301,325)      1,799,551
  Changes in production rates (timing and other)      1,864,530      (2,984,306)
  Revisions of previous quantities                      692,207         (60,932)

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

End of year                                        $ 11,357,720    $  5,299,860
                                                   ============    ============



                                       47
<PAGE>

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

         The Company did not change its independent  public  accountants or have
any disagreements with them on accounting and financial disclosure issues in the
fiscal year ended February 28, 2003.

                                    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  28, 2003 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  28, 2003 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 AND RELATED STOCKHOLDER MATTERS.

         The Company does not have any securities  authorized for issuance under
equity  compensation  plans.  The remainder of 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 28,
2003 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  28, 2003 to be filed with the SEC not later
than 120 days after the end of such year.







                                       48
<PAGE>


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 incorpo  rated herein by
                           reference.

         (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.

ITEM 14. CONTROLS AND PROCEDURES.

         Sandra  Pautsky,   the  Company's  President  and  principal  executive
officer,  and Carol J. Cooper, the Company's principal  financial officer,  have
evaluated the effectiveness of the Company's  disclosure controls and procedures
[as  defined  in Rule  13a-14(c)  of The  Securities  Exchange  Act of 1934 (the
"Act")] as of a date  within 90 days of the filing  date of this report and have
concluded that the Company's disclosure controls and procedures are effective to
ensure that  information  required to be disclosed by the Company in the reports
that it files or submits under the Act is recorded,  processed,  summarized  and
reported within the time periods specified in the SEC's rules and forms.

         There have been no changes in the Company's  internal controls or other
factors that could significantly affect these controls subsequent to the date of
their evaluation by Ms. Pautsky and Ms. Cooper, and no significant  deficiencies
or material weaknesses were identified with respect to such internal controls.




























                                       49
<PAGE>

                                   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: May 28, 2003


         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, Principal
    (Principal Executive                              Financial Officer and
    Officer) and Director                             Accounting Officer

DATE: May 28, 2003                                DATE: May 28, 2003




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


DATE: May 28, 2003                                DATE: May 28, 2003















                                       50
<PAGE>

                                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.

         (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  incor  porated  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 appli cable.

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

         (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.

         (99)     Additional exhibits - not applicable.













                                       51
<PAGE>

                                  CERTIFICATION


         I,  Sandra  Pautsky,  President  and  Principal  Executive  Officer  of
Oakridge Energy, Inc. certify that:

         1. I have  reviewed  this  annual  report on Form  10-KSB  of  Oakridge
Energy, Inc.;

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

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

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) designed  such  disclosure  controls and  procedures  to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

         b) evaluated the effectiveness of the registrant's  disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
annual report (the "Evaluation Date"); and

         c)  presented  in  this  annual  report  our   conclusions   about  the
effectiveness  of disclosure  controls and procedures based on our evaluation as
of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

         a) all significant  deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this annual  report  whether or not there were  significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: May 28, 2003                             By /s/ Sandra Pautsky
                                                 -------------------------------
                                                 Sandra Pautsky, President and
                                                    Principal Executive Officer
                                                    of Oakridge Energy, Inc.







<PAGE>

                                  CERTIFICATION


         I, Carol J. Cooper,  Principal  Financial  Officer of Oakridge  Energy,
Inc. certify that:

         1. I have  reviewed  this  annual  report on Form  10-KSB  of  Oakridge
Energy, Inc.;

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

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

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) designed  such  disclosure  controls and  procedures  to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

         b) evaluated the effectiveness of the registrant's  disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
annual report (the "Evaluation Date"); and

         c)  presented  in  this  annual  report  our   conclusions   about  the
effectiveness  of disclosure  controls and procedures based on our evaluation as
of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

         a) all significant  deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this annual  report  whether or not there were  significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: May 28, 2003                                 By /s/ Carol J. Cooper
                                                     ---------------------------
                                                     Carol J. Cooper, Principal
                                                        Financial Officer of
                                                        Oakridge Energy, Inc.