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                     U.S. Securities and Exchange Commission

                             Washington, D. C. 20549

                                  FORM 10-KSB/A
                                 AMENDMENT NO. 2

(Mark One)

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

                   For the fiscal year ended February 29, 2004

          [ ] 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. $1,189,922

      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.

                          $5,667,219 AS OF MAY 20, 2005

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

                          4,284,867 AS OF MAY 31, 2005

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

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

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                                TABLE OF CONTENTS

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

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

         Oil and Gas Operations.......................................         1
         Gravel Operations............................................         3
         Carbon Junction Coal Mine....................................         4
         Real Estate Held for Development or Sale.....................         5
         Competition and Markets......................................         9
         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.......................        14
            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..........        18

PART II...............................................................        18

ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
         SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.........        18
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ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.......     19

         Results of Operations...........................................     19
         Financial Condition and Liquidity...............................     25
         Critical Accounting Policies and Estimates......................     27
         Forward-Looking Statements......................................     30

ITEM 7.  FINANCIAL STATEMENTS............................................     31

         Index to Financial Statements...................................     31
         Report of Independent Registered Public Accounting Firm.........     32
         Balance Sheets as of February 29, 2004 and February 28, 2003....     33
         Statements of Operations for the years ended February 29, 2004
          and February 28, 2003..........................................     35
         Statements of Stockholders' Equity for the years ended
          February 29, 2004 and February 28, 2003........................     36
         Statements of Cash Flows for the years ended February 29, 2004
          and February 28, 2003..........................................     37
         Notes to Financial Statements...................................     38
         Supplemental Oil and Gas Data (Unaudited).......................     51

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE.......................................     54

ITEM 8A. CONTROLS AND PROCEDURES.........................................     54

PART III.................................................................     54

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
          PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.....     54

         Directors and Executive Officers................................     54
         Section 16(a) Beneficial Ownership Reporting  Compliance........     56
         Audit Committee.................................................     56
         Audit Committee Financial Expert................................     56
         Nomination Procedures...........................................     56
         Code of Ethics..................................................     57

ITEM 10. EXECUTIVE COMPENSATION..........................................     57
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
          AND RELATED STOCKHOLDER MATTERS..............................       58

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................       59

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K..............................       60

         Exhibits......................................................       60
         Reports on Form 8-K...........................................       61

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES........................       61

         Audit Fees....................................................       61
         Audit-Related Fees............................................       61
         Tax Fees......................................................       61
         All Other Fees................................................       61
         Pre-Approval Policies and Procedures..........................       62

SIGNATURES.............................................................       63
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                                     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 royalty income and other fees from gravel deposits in
Colorado and holds certain real estate in Colorado for development or sale.

            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
recent 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 2004, the Company continued the
tightly controlled implementation of the waterflood project started in the last
quarter of fiscal 2003 and received the approval of the City of Durango for an
area plan encompassing its proposed real estate development project, a major
step forward with respect to the project. During the year, a dispute developed
with Oldcastle SW Group, Inc. dba Four Corners Materials ("Four Corners
Materials"), which was conducting mining operations on the Company's Colorado
gravel property and performing coal mine reclamation work on the Company's
behalf, that caused the Company to take back the responsibility for most of the
coal reclamation work. In addition, Sandra Pautsky, the Company's Chief
Executive Officer and principal shareholder, was diagnosed with cancer. Ms.
Pautsky has been the principal force pushing the Company's proposed real estate
development project and her expected necessary absences from work for treatments
and an operation in fiscal 2005, coupled with the risk involved to the Company
in committing so much of its limited financial resources to one project, caused
the Company to decide after the end of fiscal 2004 to attempt to sell its land
in the remainder of fiscal 2005. See "Oil and Gas Operations," "Gravel
Operations," "Carbon Junction Coal Mine" and "Real Estate Held for Development
or Sale - Decision to Sell Property" below and "Item 6. - Management's
Discussion and Analysis or Plan of Operation."

OIL AND GAS OPERATIONS

            For more than the last three fiscal years, the Company's oil and gas
operations were primarily conducted in Madison,

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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
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 29, 2004.

            The Company's principal producing oil and gas property for the past
seven fiscal years has been its 25% interest in the BSR (Sub-Clarksville) Field
in Madison County, Texas (the "Madison County, Texas property"). In fiscal 2004,
the Madison County, Texas property was responsible for approximately 63% of the
Company's total oil and gas revenues. The property consists of 27 wells with
proven developed producing reserves and two water injection wells; the reservoir
is approximately 7,700 feet deep. The property is fully developed for its
primary oil and gas reserves. 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. 585,361 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, 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 has now been converted into a water
injection well. The total flood life is expected to be approximately 16 years,
and the project may ultimately require

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converting a total of 10 producing wells to water injection wells and converting
two producing wells to water supply wells at a depth of approximately 4,100
feet. The Company's investment cost for the project is estimated to be
approximately $362,500, which includes its share of the cost for a proposed
water plant and water distribution system and the conversion costs mentioned
above. See "Item 6. - Management's Discussion and Analysis or Plan of Operation
- Results of Operations."

GRAVEL OPERATIONS

            The Company's gravel property is now located on approximately 45
acres of the 1,965 acres of land owned by the Company in fee in La Plata County,
Colorado. For some time, Four Corners Materials has been mining sand, gravel and
rock products from the gravel permit area pursuant to a gravel contract and
surface lease with the Company. The original permit area covered 33 acres, but,
with the Company's consent, Four Corners Materials added an adjacent 11.9 acres
(9.9 acres in one transaction, 2.0 in another) of the Company's land to the
permit area in fiscal 2002 to give Four Corners Materials additional gravel
reserves to mine. Four Corners Materials' original contract and lease expired on
January 1, 2002 and it had 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 Materials' managements which was not fully implemented until the fourth
quarter of fiscal 2003.

            In consideration of the Company's inclusion of the additional
acreage under the contract and lease and the term extension, Four Corners
Materials, effective as of July 1, 2001, increased the royalty paid to the
Company with respect to tonnage mined from the additional 11.9 acres and paid 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. In the first part of fiscal 2004, Four Corners
Materials mined gravel from the Company's land and performed coal mine
reclamation work on the Company's behalf pursuant to the foregoing terms, a
conditional right of entry to the Company's land granted Four Corners Materials
by the Company in April 2003 and a gravel permit expansion amendment filed by
Four Corners Materials and conditionally approved by the Colorado Division of
Minerals and Geology (the "Colorado DMG") in June 2003. Four Corners Materials
was to provide the bond necessary for such amended gravel permit. During the
second quarter of fiscal 2004 and while the Company was engaged in negotiations
with Four Corners Materials to grant it an

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additional and final approximate two acres to mine for gravel, Four Corners
Materials instructed the Colorado DMG to stop processing the bond that was to
secure the gravel permit amendment. The Company promptly notified Four Corners
Materials that its actions breached the terms of its oral contract with the
Company, the conditional right of entry grant and the grant permit amendment and
requested Four Corners Materials to terminate all gravel mining activities,
which it did in October 2003 after fully depleting the gravel reserves on the
9.9 acres and partially depleting such reserves on the 2.0 acres.

            The Company received approximately $206,400 in royalty payments,
road usage fees and surface rentals from Four Corners Materials in fiscal 2004.
In fiscal 2005, however, the Company expects to receive royalty revenues only
from the sale by Four Corners Materials of gravel stockpiled on the property
when it's mining activities ceases. The Company would be willing to lease the
property again for gravel mining but has no plans to conduct gravel mining
operations itself on the property. 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
currently covers 190 acres of the property. Although the Company abandoned any
further attempts to mine the coal deposits in fiscal 2000, Four Corners
Materials had been performing the required work at the Company's expense to
reclaim the land affected by the Company's prior surface mining operations. Four
Corners Materials' engineering staff had initially estimated that the
reclamation work could be completed for $413,000 and the Company had previously
recorded a reserve in that amount for costs associated with the reclamation of
the Carbon Junction mine and surrounding property. The Company's mine permit was
renewed in July 2003 for an additional five-year term so that the reclamation
work could be completed. As of November 30, 2003, such reclamation reserve had
been reduced to approximately $66,900 as a result of work performed by Four
Corners Materials and the Company.

            As a result of the Company's dispute with Four Corners Materials,
the Company took back from Four Corners Materials the responsibility to the
Colorado DMG to perform the coal mine reclamation work. After such assumption of
responsibility, a study subsequently performed at the Company's request by the
Company's

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mining consultant estimated that the Company's previous reserve should be
increased by $100,000 to cover fully the remaining reclamation, and the Company
recorded this amount in connection with its change in accounting principle
effective March 1, 2003. See "Item 7. - Financial Statements - Note E of Notes
to Financial Statements".

            Despite numerous meetings and discussions with Four Corners
Materials in an effort to resolve the dispute, the matter still remains
unresolved. Four Corners Materials has recently unilaterally amended its gravel
permit to include again under it approximately 17 acres that were formerly
included in the Company's coal permit. This action should allow the Company to
amend its coal permit to delete that acreage together with the additional
acreage that has been reclaimed to date and to obtain the release of a
substantial portion of the Company's $817,000 coal reclamation performance bond
posted with the State of Colorado. See "Item 6. - Management's Discussion and
Analysis or Plan of Operation."

REAL ESTATE HELD FOR DEVELOPMENT OR SALE

      LOCATION: The Company's planned real estate development now pertains to
approximately 1,400 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
discussion and comment.

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            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. The Company submitted a 20-year
conceptual plan for the 1,100 acres (the "Conceptual Plan") with the Company's
annexation application. The Conceptual Plan is subject to 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 property
(now expanded to approximately 1,400 acres) was prepared by the Company's
management with the assistance of its engineering and planning consultant in
Durango. Approximately 565 mountainous acres of the property that extend
northeast will remain in the County for possible development into 35-acre lots
in the future. The Company's mixed use development concept for the 1,400 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 and
business and commercial parks.

      APPROVAL OF AREA PLAN: In January 2004, after years of proposals, town
meetings, discussions and negotiations with the City of Durango's planning staff
concerning a preliminary Area Plan and changes thereto and hearings before the
City of Durango Planning Commission and the City of Durango City Council, a
final Area Plan was approved by the City of Durango City Council. The approval
of a final Area Plan constitutes a major step forward for the Company in its
efforts to develop its property.

            The Area Plan adopted by the City of Durango incorporates large
areas of open space and preserves hillsides, gulches and

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other natural features of the terrain, while allowing residential, commercial
and resort development opportunities around the proposed golf course and other
recreational properties as envisioned by the Company's Conceptual Plan.

            The two issues that had to be resolved with the City of Durango
before the Area Plan could be adopted involved the location of a secondary
access road to serve the property and the density of housing in the proposed
development. The City required that the Company's property be served by more
than one access road. The sole current access is located on the western end of
the property and services incoming and outgoing traffic that includes gravel
hauling trucks. 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 was set aside, and
the Company considered other sites for the alternate access road. The City's
engineering department recommended as part of the 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 advised the City that it could not support a bypass
through the Company's property. This issue was ultimately resolved by the
Company's agreement to accept the minor arterial roadway concept and the City's
agreement to shift the location of the roadway to the perimeter of the property
so that the roadway would not cross the planned golf course.

            With respect to the density of housing issue, in its Conceptual
Plan, the Company had proposed 1,095 residential units on the property. The
City's planning staff had requested an increase in density to 2,500-3,000
residential units. A compromise was reached in the final Area Plan that supports
the construction of anywhere from 1,500 to 6,000 residential units.

            The next step in the process will be for the City of Durango, when
requested by the Company or any new owner (see "Decision to Sell Property,"
below), to approve the Company's previously filed annexation application and
Conceptual Plan. Then the preliminary and final development plans for the
property will have to be filed by the Company, reviewed by the Company's
planning staff, discussed at public hearings and finally approved by the City's
Planning Commission and City Council. At this stage, the Company is unable to
estimate the timetable for all of the foregoing to occur, although it believes
its annexation application and Conceptual Plan (or a conceptual plan submitted
by any new

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owner) could be acted upon promptly after its request to the City to do so.

      DECISION TO SELL PROPERTY: After finally obtaining approval of the Area
Plan, the Company has recently concluded that it would be prudent for it to
attempt to sell the property as a whole rather than developing the property
according to its Conceptual Plan and the Area Plan. The Company's decision was
based on two principal factors, one being the recent developments with respect
to the health of Sandra Pautsky, its Chief Executive Officer and principal
shareholder, who has been the moving force pushing the development of the
property since the death of her father, Noel Pautsky, in 1998. In fiscal 2004,
Ms. Pautsky was diagnosed with a life-threatening form of cancer. Although Ms.
Pautsky has continued to perform her duties with the Company in a diligent and
admirable manner since her diagnosis, she has been forced to be absent from the
office and, while undergoing treatments, has been unable to travel to Colorado.
The Company expects Ms. Pautsky's schedule to continue to be the same in fiscal
2005, including a longer period of absence due to a pending operation. Under the
circumstances, it would not be possible for Ms. Pautsky to devote the
significant time and effort to the property that its development would require.
Consequently, Ms. Pautsky's health concerns, coupled with the Company's growing
thought that it might not be prudent to concentrate all of its limited financial
resources on one major project, led the Company to conclude that it should
attempt to sell the property. The Company's officers, other than Ms. Pautsky,
have not been actively involved with respect to the Colorado land; however, in
the event that the Company should not sell the property, Ms. Pautsky's daughter,
a long-term employee of the Company, has been actively involved historically and
to date with the Company's actions in Colorado.

            During the period that the Company sought approval of an Area Plan
that would support its proposed development, the Company has been approached by
a number of parties, both locally based in Durango and located elsewhere, who
were interested in purchasing all or part of the property or joint venturing in
some respect with the Company in its development. Although the Company
consistently listened to such parties, it did not actively encourage such
parties or pursue any particular transaction with any of them. The Company,
after obtaining approval of the Area Plan in which the development will be
located, has been recontacted by interested parties to determine if a sale
transaction can be negotiated and consummated. If the Company is unable to
consummate a sale transaction at a price acceptable to the Company with any of
the parties from whom it has had prior contact, then it may elect to

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employ consultants, brokers or other advisors to assist in the Company's sale
efforts. The Company hopes to be able to complete a sale transaction in the
remainder of fiscal 2005, but if it is unable to do so, it reserves the right to
proceed again with the development of the property, should circumstances change.
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
fiscal 2003 and 2004, the Company did not experience any difficulty in obtaining
services and materials because of its lack of 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.

            Oil and gas prices have been on a generally upward trend since the
first quarter of fiscal 2003 and such prices had a materially positive effect on
the Company's revenues in fiscal 2004 and on the amount and present value of the
Company's estimated proven oil and gas reserves at year end. In fiscal 2004, the

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Company's average oil price received increased $3.14 per barrel (approximately
11.6%) from that received in fiscal 2003. The Company's average gas price
received for fiscal 2004 finished the year significantly higher than in fiscal
2003 (an increase of $1.92 per MCF, or approximately 55.3%); however, 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.

            While certain of the Company's gas properties experience seasonal
variations in demand, the Company was not experiencing any significant
curtailment, or an inability to sell all of its deliverable gas, on an overall
basis at February 29, 2004. See "Item 6. - Management's Discussion and Analysis
or Plan of Operation - Results of Operations."

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

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the operations of the Company by virtue of the need to deliver its gas
production to markets served by interstate or intrastate pipelines.

      COAL AND GRAVEL: The Company's coal operations in the past have been
subject to extensive regulation under the Surface Mining Control and Reclamation
Act of 1977 and the Colorado law of a similar nature and the Clean Air Act of
1990. The effects of such regulation have been to increase significantly the
lead time to commence actual surface coal mining operations, to make it more
costly for the 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

                                       11
<PAGE>

penalties and suspensions of operations. As is common in the oil and gas
industry, the Company is not fully insured against certain of these risks either
because insurance is not available or because the Company has elected not to
insure due to high premium costs. The Company maintains comparable insurance
coverage for its coal and gravel operations.

EMPLOYEES

            As of May 31, 2004, 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 29, 2004 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 29, 2004, 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 29, 2004 which can be produced
from the Company's proved developed reserves during the fiscal year ending
February 28, 2005, using equipment

                                       12
<PAGE>

installed and under economic and operating conditions existing at February 29,
2004:

<TABLE>
<S>                           <C>
Oil (Bbls.)..............     21,643
Gas (MCF)................     19,819
</TABLE>

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

PRODUCTION

            The following table shows for each of the three fiscal years ended
February 29, 2004 the total production attributable to the Company's oil and gas
interests:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED           OIL            GAS
 FEBRUARY 28/29,          (BBLS.)         (MCF)
-----------------         -------         ------
<S>                       <C>             <C>
2004.............          25,382         36,879
2003.............          28,015         45,720
2002.............          36,558         65,936
</TABLE>

LIFTING COSTS AND AVERAGE SALES PRICES

            The Company's production (lifting) costs and average sales prices
received during each of the three fiscal years ended February 29, 2004 were as
shown in the following table:

<TABLE>
<CAPTION>
                                            FISCAL YEAR
                                       ENDED FEBRUARY 28/29,
                                   ----------------------------
                                    2004       2003       2002
                                   ------     ------     ------
<S>                                <C>        <C>        <C>
Lifting Costs

Per Equivalent Unit (Bbls.)...     $17.70     $15.48     $12.63

Average Sales Prices

Oil (per Bbl.)................      30.22      27.08      23.46
Gas (per MCF).................       5.39       3.47       3.39
</TABLE>

                                       13
<PAGE>

SALES CONTRACTS AND MAJOR CUSTOMERS

            The Company does not own any refining facilities and sells its oil
under short-term contracts at f.o.b. field prices posted by the principal
purchasers of oil in the areas in which the Company's producing properties are
located. During the fiscal year ended February 29, 2004, approximately 68% of
the Company's oil sales were made to Teppco Crude Oil, L.P. ("Teppco") and
approximately 25% were made to Sunoco, Inc. During fiscal 2004, approximately
74% of the Company's gas sales were made under short-term contracts to Orion
Pipeline ("Orion")and approximately 13% were made to Dynegy Midstream Services,
L.P.

            Substantially all of the Company's oil sales to Teppco and its gas
sales to Orion were from the Company's Madison County, Texas property.

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

DEVELOPED ACREAGE AND PRODUCTIVE WELLS

            As of February 29, 2004, the Company owned working and overriding
royalty interests in 9,159 gross (2,571 net) acres of developed oil and gas
leases and 70 gross (21.92 net) productive oil and gas wells.

            The following table summarizes the Company's developed acreage and
productive wells as of February 29, 2004:

<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    -   27    -   6.75      -
  All Other Cos...     2,408  1,914  1,259  177   26   14  12.71   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   55   15  19.50   2.42
                       =====  =====  =====  ===  ===  ===  =====  =====
</TABLE>

                                       14
<PAGE>

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

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

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

(3)   Includes 17 gross (3.78 net) shut-in wells; excludes 6 gross (2.80 net)
      water injection wells.

UNDEVELOPED ACREAGE

            The following table shows the gross and net acres of undeveloped oil
and gas leases held by the Company at February 29, 2004:

<TABLE>
<CAPTION>
            STATE                GROSS ACRES   NET ACRES
            -----                -----------   ---------
<S>                              <C>           <C>
Texas.......................        11,741       3,904
Arkansas....................         2,428       1,214
                                    ------       -----

            Total...........        14,169       5,118
                                    ======       =====
</TABLE>

            All of the Company's undeveloped leases in the State of Arkansas
cover lands located in Miller County. In the absence of drilling activity which
establishes commercial reserves sufficient to justify retention, the Company's
leases on approximately 68.75% of its net acres will expire in fiscal 2005,
1.07% will expire in fiscal 2006, .29% will expire in fiscal 2007 and .15% will
expire in fiscal 2008. The remaining approximate 29.74% of the Company's
undeveloped acreage, which includes all of such acreage in the State of Arkansas
and a portion of such acreage in Gregg and Montague Counties, Texas, is
currently held in force by production. 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
29, 2004:

                                       15
<PAGE>

<TABLE>
<CAPTION>
                                Exploratory Wells
                         -------------------------------
 Fiscal Year                 Gross                 Net
    Ended           -----------------------  -----------------
February 28/29,     Productive   Dry  Total  Productive   Dry   Total
-----------------   ----------  ----  -----  ----------  -----  -----
<S>                 <C>         <C>   <C>    <C>         <C>    <C>
2002.............        -         1     1         -      .08    .08
2003.............        -         -     -         -        -      -
2004.............        -         -     -         -        -      -
                       ---       ---   ---       ---      ---    ---

     Total.......        -         1     1         -      .08    .08
                       ===       ===   ===       ===      ===    ===
</TABLE>

The Company did not participate in drilling any development wells during the
three fiscal years ended February 29, 2004, and, as of February 29, 2004, the
Company was not in the process of drilling or completing any wells.

            COAL AND GRAVEL PROPERTIES.

            As of February 29, 2004, 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 11
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 renewed
its mine permit in July 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

                                       16
<PAGE>

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 Materials. The Company subsequently allowed Four
Corners Materials to extend the permitted area by an additional 11.9 acres. Four
Corners Materials is no longer mining sand, gravel and rock products from the
permit area. 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 1,400 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.

                                       17
<PAGE>

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

            No matter was submitted during the fourth quarter of the fiscal year
ended February 29, 2004 to a vote of the Company's security holders, through the
solicitation of proxies or otherwise.

                                     PART II

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

            The Company's common stock, $.04 par value, is traded in the
over-the-counter market. The following table shows the range of bid quotations
for the common stock during the two fiscal years ended February 29, 2004 by
quarters. Such quotations were furnished to the Company by the National
Quotation Bureau, LLC and were supplied by The National Association of
Securities Dealers ("NASD") through the NASD OTC Bulletin Board, the NASD's
automated system for reporting NON-NASDAQ quotes and the National Quotation
Bureau's Pink Sheets. The quotations represent prices between dealers and do not
include retail markups, markdowns or commissions and do not necessarily
represent actual transactions.

<TABLE>
<CAPTION>
              PERIOD                        HIGH      LOW
              ------                       ------    ------
<S>                                        <C>       <C>
Fiscal Year Ended February 28,
 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

Fiscal Year Ended February 29,
 2004:

     Quarter Ended May 31, 2003            $ 3.90    $ 3.40
     Quarter Ended August 31, 2003           4.40      3.40
     Quarter Ended November 30, 2003         4.50      4.05
     Quarter Ended February 29, 2004         4.35      4.20
</TABLE>

            As of May 28, 2004, the approximate number of holders of record of
the common stock of the Company was 453.

            The Company did not pay any dividends during the two fiscal years
ended February 29, 2004. There are currently no restrictions upon the Company's
ability to pay dividends; however, the Company does not anticipate paying any
dividends in fiscal 2005.

                                       18
<PAGE>

            The Company did not make any sales of its equity securities during
the two fiscal years ended February 29, 2004.

            The following table shows all purchases of the Company's shares of
common stock made by the Company during each month of the fourth quarter of the
Company's fiscal year ended February 29, 2004:

<TABLE>
<CAPTION>
                                          AVERAGE PRICE
                       TOTAL NUMBER           PAID
     PERIOD         OF SHARES PURCHASED     PER SHARE
-----------------   -------------------   -------------
<S>                 <C>                   <C>
December 1, 2003
    through
December 31, 2003                     -      $     -

January 1, 2004
    through
January 31, 2004                      -            -

February 1, 2004
    through
February 29, 2004                 2,000         4.38
                                  -----      -------

          Total                   2,000      $  4.38
                                  =====      =======
</TABLE>

            The Company has no publicly announced plans or programs to purchase
its shares of common stock. The one share purchase was made in a private
transaction directly with the stockholder involved.

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 $266,974 ($.06 per share) in the
fiscal year ended February 29, 2004 compared to a net loss of $49,706 ($.01 per
share) in the fiscal year ended February 28, 2003. The principal reason for the
$217,268 increase in the Company's net loss in fiscal 2004 was an approximate
$161,800

                                       19
<PAGE>

expense related to the cumulative effect of an accounting change, net of income
tax benefit, upon the adoption of Statement of Financial Accounting Standard
("SFAS") No. 143, Accounting for Asset Retirement Obligations. See "Item 7.-
Financial Statements - Note E. of Notes to Financial Statements." Other material
factors impacting the Company's results of operations in fiscal 2004 were
slightly improved oil and gas revenues accompanied by significantly lower oil
and gas operating expenses and lower levels of gravel and other income.

            Oil and gas revenues increased approximately $15,200 (1.6%) in the
fiscal year ended February 29, 2004 due to significant increases in the
Company's average oil and gas prices received during the year as oil and gas
production sales volumes again declined. During the fourth quarter of fiscal
2004, however, oil and gas revenues declined approximately 4.1% compared to the
prior year despite an increase in the Company's average gas price received as
the Company's average oil price received approximated that of the prior year.
Fees in the amount of $36,600 and $37,400 received by the Company in fiscal 2004
and 2003, respectively, for serving as operator of most of the Company's North
Texas area properties are included in oil and gas revenues.

            The following table compares the Company's oil and gas revenues and
average prices received by the Company and its sales volumes of oil and gas
during fiscal 2004 with those of fiscal 2003:

<TABLE>
<CAPTION>
                                                         PERCENTAGE
                           FISCAL 2004    FISCAL 2003    DIFFERENCE
                           -----------    -----------    ----------
<S>                        <C>            <C>            <C>
Oil:

Revenues                   $   772,484    $   774,551       -  .3%
Volume (Bbls.)                  25,565         28,600       -10.6
Average Price
 (per Bbl.)                      30.22          27.08       +11.6

Gas:

Revenues                   $   166,750    $   142,385       +17.1%
Volume (MCF)                    30,953         41,064       -24.6
Average Price
 (per MCF)                 $      5.39           3.47       +55.4%
</TABLE>

                                       20
<PAGE>

Non-material amounts of natural gas liquids revenues and sales volumes for both
years are excluded from the foregoing table.

            Notwithstanding the overall increase in the Company's oil and gas
revenues in fiscal 2004, revenues from the Madison County, Texas property
declined approximately $44,200 (7.1%) as the significantly higher average oil
and gas prices received for production from the property were not sufficient to
offset the effect of lower sales volumes. The Madison County, Texas property has
been fully developed for its primary oil and gas reserves for some time. The
property was unitized in fiscal 2003 and a secondary recovery (waterflood)
project on the property was commenced in the last quarter of that year. The
secondary recovery project has been implemented in a tightly controlled manner
by the operator of the property, which intends to complete the project out of
the property's cash flow, if possible, rather than incurring a substantial part
of the project's installation expense upfront at one time. During fiscal 2004, a
second producing well was converted to a water injection well but no other
significant project costs were incurred. The operator has advised the Company
that it is optimistic that production volumes will stabilize in fiscal 2005 and
believes that a trend can be seen in that direction already. Production
stabilization should be aided by two pumping units which will be installed on
formerly flowing oil wells. The installation of these units should produce
improved results for such wells. Any increase in oil production volumes from the
property is now not expected to occur until fiscal 2006 at the earliest due to
the substantial lag time for 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 continued strong
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.

            Although the Company's gravel revenues through the first three
quarters of fiscal 2004 were substantially ahead of such revenues for fiscal
2003, revenues for the full fiscal year wound up declining by approximately
$82,300 (28.5%). During the fourth quarter of fiscal 2003, the Company received
approximately $196,800 in revenues as a result of the implementation during that
period, but effective as of July 1, 2001, of a new road usage fee and an
increased royalty rate for tonnage mined from the 9.9 acres added to Four
Corners Materials' mining area. As a result of the Company's dispute with Four
Corners Materials which developed

                                       21
<PAGE>

during the second quarter of fiscal 2004 and Four Corners Materials' cessation
of mining activities in the third quarter, the Company received substantially
reduced revenues from gravel sales and road usage fees in the fourth quarter of
fiscal 2004, resulting in an approximate $182,800 decline in revenues for that
quarter and the overall decline in gravel revenues for the full fiscal year. The
Company expects to receive some revenues through the first half of fiscal 2005
from the sale by Four Corners Materials of gravel stockpiled on the property
when its mining activities ceased but none after that time. The Company would
lease the property again for gravel operations but has no intention of
conducting any operations itself. The Company had no coal revenues in either
fiscal 2003 or 2004.

            The expenses of the Company's oil and gas operations decreased
approximately $71,000 (8.2%) in the fiscal year ended February 29, 2004
primarily as a result of an approximate $63,800 (31.6%) decline in depletion and
depreciation expense, the absence of any lease impairment expense and
significantly reduced exploration costs. The decline in depletion and
depreciation expense was attributable to the Madison County, Texas property and
was due to lower sales production volumes for the year and a lower per barrel
amortization rate resulting from the lower proven oil and gas reserves for the
property at the fiscal 2004 year end as compared to the prior year. Depletion
expense should continue to reduce for this property as its depletable balance
lowers. In fiscal 2003, the Company incurred approximately $49,000 in
exploration costs due to expired leasehold expense, primarily with respect to a
prospect in Red River County, Texas. The Company only incurred very nominal
exploration costs in fiscal 2004. There were no dry hole costs in either fiscal
2003 or 2004 as the Company did not participate in the drilling of any wells in
these years. The lease operating portion of overall oil and gas operating
expenses did increase, however, by approximately $42,500 (6.9%) in fiscal 2004.
Such increase was mainly attributable to the addition of one field employee for
all of fiscal 2004 but only a portion of fiscal 2003 as well as accretion
expense related to the discount on the asset retirement obligations.

            The expenses of the Company's coal and gravel operations more than
doubled in fiscal 2004, primarily as the result of higher testing and permitting
expenses, legal expenses related to the coal properties and ad valorem taxes
which increased over fiscal 2003 by approximately $19,200, $17,300 and $16,200,
respectively. The testing and permitting as well as legal expenses were higher
as a

                                       22
<PAGE>

result of the dispute with Four Corners Materials. As of February 29, 2004, the
Company has an approximate $152,000 recorded as a liability for its retirement
obligation related to the reclamation of the property surrounding the Company's
previous coal mining operations. This liability was reassessed and increased in
fiscal 2004 in connection with the change in accounting principle previously
mentioned. This increase in the reserve grew out of instructions given by Four
Corners Materials to the Colorado Division of Minerals and Geology in the second
quarter of the fiscal year to stop processing the bond that was to secure the
amendment of the Company's gravel permit intended to allow Four Corners
Materials to perform coal mine reclamation work on the Company's behalf. The
Company believes that the actions of Four Corners Materials breached the terms
of its oral contract with the Company as well as the Company's conditional right
of entry grant and the gravel permit amendment and notified Four Corners
Materials to such effect at the time, but such actions by Four Corners Materials
nevertheless caused the Company to have to take back the responsibility for the
remaining coal mine reclamation work that had been shifted to Four Corners
Materials. A study subsequently undertaken at the Company's request by the
Company's mining consultant estimated that the Company's previous reserve should
be increased by $100,000 to cover fully the reclamation work. This amount was
recorded by the Company in connection with its change in accounting principle,
effective March 1, 2003. See "Item 7. - Financial Statements - Note E. of Notes
to Financial Statements."

            Four Corners Materials has recently unilaterally amended its gravel
permit to include a portion of the acreage (i.e., the so-called south pit area)
that was formerly included in the Company's coal permit. This action should
allow the Company to amend its coal permit to delete that acreage. The Company
has not yet made any determination as to whether Four Corners Materials' recent
action will affect the reduction of the amount of its coal reclamation reserve
and is still considering pursuing its legal remedies against Four Corners
Materials for the actions it took.

            Real estate development expense declined approximately $11,600
(50.9%) in fiscal 2004 primarily due to lower depreciation expense as a result
of the sale during the first quarter of the year of a trailer formerly used in
the Company's operations. General and administrative expenses were essentially
unchanged in amount in fiscal 2004 from the fiscal 2003 level as a significant
increase in employee benefits expense resulting from the inclusion of family
members of employees in the Company's health insurance

                                       23
<PAGE>

plan and higher general depreciation and insurance expenses were counterbalanced
by lower contributions, engineering, website and miscellaneous expenses.

            In the first quarter of fiscal 2005, the Company paid Sandra
Pautsky, the Company's Chief Executive Officer, a bonus of $315,000 in
consideration of her extraordinary services over a number of years with respect
to the Company's proposed Colorado real estate development project. Although the
Company believes that such bonus was well deserved, it will have an adverse
effect on the Company's results of operations, certainly in the first quarter of
fiscal 2005 and possibly for the full year. See "Item 10. - Executive
Compensation."

            Other income declined approximately $59,800 (67.6%) in fiscal 2004
compared to fiscal 2003. Other income consists of two primary components -
interest and dividend income and other net income. Other net income consists
primarily of the gain or loss on any sale of oil and gas properties, the gain or
loss on the sale of other assets and investment income or loss. Investment
income or loss is currently entirely attributable to the Company's interest in a
limited partnership which operates a small gas pipeline in the East Texas area.
Interest and dividend income declined approximately $2,200 in fiscal 2004.
Interest income alone declined over $23,800 due to the effect of lower interest
rates, but dividend income on the Company's equity investment increased
approximately $21,600. The Company is uncertain whether it can expect to receive
dividend income from its equity investment at the same high level in fiscal
2005. Other net income changed from an approximate $30,000 income item in fiscal
2003 to an approximate $27,600 loss item in fiscal 2004, an approximate $57,600
difference. All of the difference was attributable to the gain (loss) on the
sale of other assets component. In fiscal 2003, the Company recognized a gain on
the sale of its workover rig of approximately $38,700, but in fiscal 2004 the
Company suffered an $18,600 loss on the sale of a trailer used in its real
estate operations. As to the remaining other net income components, an
approximate $3,000 gain on the sale of oil and gas properties in fiscal 2003 was
roughly offset by a smaller loss from the Company's interest in the limited
partnership in fiscal 2004 than in fiscal 2003.

            The Company's provision for income tax benefit in fiscal 2004 was
slightly higher than what would be expected to be the case if such provision
were computed by applying the U.S. Federal

                                       24
<PAGE>

corporate tax rate to the pretax loss in such year primarily as the result of a
revision of a prior year provision estimate. In fiscal 2003, such provision was
lower than what would be expected principally due to the effect of state and
local income taxes.

            As previously mentioned, the Company recognized an expense of
$161,800 as a cumulative effect of an accounting change, net of an income tax
benefit, upon the adoption of SFAS No. 143. See Item 7. - Financial Statements -
Note E. of Notes to Financial Statements."

            The Company's weighted average shares outstanding decreased
approximately 1.6% in the fiscal year ended February 29, 2004 due to the
purchase of approximately 64,400 shares of the Company's stock made by the
Company from related parties and other shareholders during the year. See "Item
7. - Financial Statements - Note F. of Notes to Financial Statements."

FINANCIAL CONDITION AND LIQUIDITY

            During fiscal 2004, notwithstanding that the Company did not
participate in any exploratory or development drilling for the second straight
year and generally tried to restrict its expenditures on operational and
investing activities, all aspects of the Company's activities were net users of
cash, resulting in a reduction in the Company's cash and cash equivalents at
year end of approximately $521,600.

            The Company's operating activities, which traditionally have been
net providers of cash, instead used approximately $151,000 in cash in fiscal
2004 despite the Company's slight increase in oil and gas revenues during the
year. In fiscal 2003, the Company's operating activities provided approximately
$252,200 in funds, although such provision was substantially benefited by the
receipt of an approximate $321,700 federal income tax receivable during the
year.

            The Company's investing activities used approximately $117,000 in
funds (approximately $23,800 less than in fiscal 2003) as additions to oil and
gas properties and real estate held for development aggregating approximately
$142,200 were substantially greater than the proceeds from minor sales of oil
and gas properties and proceeds from sales of property and equipment totaling
approximately $25,200. The Company's financing activities (entirely purchases of
the Company's common stock) used

                                       25
<PAGE>

approximately $253,600 in funds in fiscal 2004, up from $160,200 in fiscal 2003
due to increases in the number of shares purchased and in the Company's stock
price during the year. At February 29, 2004, the Company still had no
indebtedness and cash, cash equivalents and investment securities available for
sale aggregated approximately $3,290,200.

            Given the Company's decision to attempt to sell, rather than
develop, its Colorado real estate in fiscal 2005, which should eliminate the
need for any substantial drawdown of the Company's cash reserves or the need to
obtain additional debt or equity financing, the Company expects to fund its
contemplated oil and gas and coal reclamation operations during fiscal 2005 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. There should be no
significant funds available from gravel operations in fiscal 2005 because of the
cessation of mining activities, and the bonus paid to the Company's Chief
Executive Officer in the first quarter of fiscal 2005 will further reduce the
available funds, although more than sufficient funds should be available to the
Company for operations.

            Although the Company's average oil and gas product prices received
increased significantly during fiscal 2004, prices have remained strong in the
first quarter of fiscal 2005 with oil prices reaching 20-year high levels in
early May. The Company does not anticipate that its average oil and gas prices
received in fiscal 2005 will exceed or necessarily even be equivalent to those
received during fiscal 2004 but currently believes that sales production volumes
from the Madison County, Texas properties have a good chance to be maintained at
prior year levels for the first time in six years. If that is the case, cash
flow from the Company's oil and gas properties should improve in fiscal 2005.
The Company's fiscal 2005 operations should also benefit from the contemplated
release of a significant portion of the Company's $817,000 coal mine reclamation
bond to the State of Colorado sometime during the year. The Company had thought
that a portion of the coal reclamation bond would be released in fiscal 2004,
but the actions taken by Four Corners Materials during the year effectively
prevented that from happening.

                                       26
<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 (the "Commission") 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

                                       27
<PAGE>

which will ultimately determine the proper 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
gas attributable to any

                                       28
<PAGE>

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.

            ASSET RETIREMENT OBLIGATIONS: Effective March 1, 2003, the Company
adopted SFAS No. 143, Accounting for Asset Retirement Obligations. The asset
retirement obligations represent the estimated present value of the amounts
expected to be incurred to plug, abandon, and remediate the producing properties
at the end of their productive lives, in accordance with state laws, as well as
the estimated costs associated with the reclamation of the property surrounding
and including the Company's previous coal mining operations. The Company
determines the asset retirement obligations by calculating the present value of
estimated cash flows related to the liability. The asset retirement obligations

                                       29
<PAGE>

are recorded as a liability at the estimated present value as of the asset's
inception, with an offsetting increase to producing properties. Periodic
accretion of the discount related to the estimated liability is recorded as an
expense in the statement of operations.

            The estimated liability is determined using significant assumptions,
including current estimates of plugging and abandonment costs, annual inflation
of these costs, the productive lives of wells, and a risk-adjusted interest
rate. Changes in any of these assumptions can result in significant revisions to
the estimated asset retirement obligations. Revisions to the asset retirement
obligations are recorded with an offsetting change to producing properties,
resulting in prospective changes to depletion and depreciation expense and
accretion of the discount. Because of the subjectivity of assumptions and the
relatively long lives of most of the wells, the costs to ultimately retire the
Company's wells may vary significantly from prior estimates.

FORWARD-LOOKING STATEMENTS

            Certain information included in this Annual Report on Form 10-KSB
and other materials filed by the Company with the Commission 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. 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.

                                       30
<PAGE>

ITEM 7. FINANCIAL STATEMENTS.

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                               PAGE
                                                                               ----
<S>                                                                            <C>
Report of Independent Registered Public Accounting Firm                         32

Balance Sheets as of February 29, 2004 and
  February 28, 2003                                                             33

Statements of Operations for the years ended
  February 29, 2004 and February 28, 2003                                       35

Statements of Stockholders' Equity for the
  years ended February 29, 2004 and
  February 28, 2003                                                             36

Statements of Cash Flows for the years ended
  February 29, 2004 and February 28, 2003                                       37

Notes to Financial Statements                                                   38

Supplemental Oil and Gas Data (Unaudited)                                       51
</TABLE>

                                       31
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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 29, 2004 and 2003, 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 standards of the Public Company
Accounting Oversight Board (United States). 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 29, 2004 and 2003, 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.

/s/ Whitley Penn

Fort Worth, Texas
April 17, 2004

                                       32
<PAGE>

                              OAKRIDGE ENERGY, INC.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               FEBRUARY 29,     FEBRUARY 28,
                                                                   2004             2003
                                                               ------------     ------------
                                                                (RESTATED)
<S>                                                            <C>              <C>
ASSETS
Current assets:
    Cash and cash equivalents                                   $2,853,798       $3,375,427
    Trade accounts receivable                                      150,564          274,869
    Investment securities available for sale                       436,378          260,817
    Prepaid expenses and other                                      20,698           21,196
                                                                ----------       ----------
Total current assets                                             3,461,438        3,932,309

Oil and gas properties, at cost, using the
    successful efforts method of accounting:
    Proved developed properties                                  6,979,596        6,651,197
    Less accumulated depletion and depreciation                  6,215,903        6,058,833
                                                                ----------       ----------
                                                                   763,693          592,364
    Unproved properties                                            185,207          177,833
                                                                ----------       ----------
Net oil and gas properties                                         948,900          770,197

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                  8,046,348        8,027,008
                                                                ----------       ----------
Net coal and gravel properties                                     265,859          285,199

Other property and equipment, net of accumulated
    depreciation of $376,406 in 2004 and $352,062 in 2003          138,540          162,884

Real estate held for development or sale                         2,986,658        2,941,989

Deferred income taxes                                               56,649                -

Other non-current assets                                           865,809          875,074
                                                                ----------       ----------

Total assets                                                    $8,723,853       $8,967,652
                                                                ==========       ==========
</TABLE>

See accompanying notes to financial statements.

                                       33
<PAGE>

                              OAKRIDGE ENERGY, INC.

                           BALANCE SHEETS (CONTINUED)

<TABLE>
<CAPTION>
                                                             FEBRUARY 29,      FEBRUARY 28,
                                                                2004              2003
                                                             -----------       -----------
                                                             (RESTATED)
<S>                                                          <C>               <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                         $    67,492       $   112,692
    Accrued expenses                                              49,473            75,071
    Deferred income taxes                                         86,490            21,585
                                                             -----------       -----------
Total current liabilities                                        203,455           209,348

Asset retirement obligations                                     606,105           319,019
Deferred income taxes                                                  -           115,030
                                                             -----------       -----------
Total liabilities                                                809,560           643,397

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                                         16,684,193        16,951,167
    Accumulated other comprehensive income                       147,457            36,801
                                                             -----------       -----------
                                                              18,043,054        18,199,372
Less treasury stock, at cost; 5,851,724 shares in 2004
    and 5,787,313 in 2003                                     10,128,761         9,875,117
                                                             -----------       -----------
Total stockholders' equity                                     7,914,293         8,324,255
                                                             -----------       -----------

Total liabilities and stockholders' equity                   $ 8,723,853       $ 8,967,652
                                                             ===========       ===========
</TABLE>

See accompanying notes to financial statements.

                                       34
<PAGE>

                              OAKRIDGE ENERGY, INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                     YEAR ENDED         YEAR ENDED
                                                                     FEBRUARY 29,       FEBRUARY 28,
                                                                        2004               2003
                                                                     -----------        -----------
                                                                     (RESTATED)
<S>                                                                  <C>                <C>
Revenues:
    Oil and gas                                                      $   983,498        $   968,252
    Gravel                                                               206,424            288,707
                                                                     -----------        -----------
Total revenues                                                         1,189,922          1,256,959

Operating expenses:
    Oil and gas:
      Depletion and depreciation                                         138,267            202,096
      Lease operating                                                    656,561            614,088
      Lease impairment                                                         -                642
      Exploration costs                                                        6             48,965
                                                                     -----------        -----------
    Total oil and gas                                                    794,834            865,791

    Coal and gravel                                                      106,823             47,848
    Real estate development                                               11,203             22,837
    General and administrative                                           467,888            467,520
                                                                     -----------        -----------
Total operating expenses                                               1,380,748          1,403,996
                                                                     -----------        -----------

Loss from operations                                                    (190,826)          (147,037)

Other income                                                              28,627             88,414
                                                                     -----------        -----------

Loss before income taxes and cumulative
    effect of accounting change                                         (162,199)           (58,623)

Income tax benefit                                                       (57,018)            (8,917)
                                                                     -----------        -----------

Net loss before cumulative effect of accounting change                  (105,181)           (49,706)

Cumulative effect of accounting change, net of tax benefit              (161,793)                 -
                                                                     -----------        -----------

Net loss                                                             $  (266,974)       $   (49,706)
                                                                     ===========        ===========

BASIC AND DILUTED LOSS PER COMMON SHARE:
    Net loss before cumulative effect of accounting change           $     (0.02)       $     (0.01)

    Cumulative effect of accounting change, net of tax benefit             (0.04)                 -
                                                                     -----------        -----------

    Net loss                                                         $     (0.06)       $     (0.01)
                                                                     ===========        ===========

Weighted average common shares outstanding                             4,332,735          4,403,740
                                                                     ===========        ===========
</TABLE>

See accompanying notes to financial statements.

                                       35
<PAGE>


                              OAKRIDGE ENERGY, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

         YEARS ENDED FEBRUARY 29, 2004 (RESTATED) AND FEBRUARY 28, 2003

<TABLE>
<CAPTION>

                                                                      ACCUMULATED
                                            ADDITIONAL                   OTHER                                  COMPREHENSIVE
                                 COMMON       PAID-IN     RETAINED   COMPREHENSIVE   TREASURY                       INCOME
                                  STOCK       CAPITAL     EARNINGS       STOCK         STOCK          TOTAL         (LOSS)
                                ---------   ----------  ------------ ------------- ------------    -----------  -------------
<S>                             <C>         <C>         <C>          <C>           <C>             <C>          <C>
Balance at March 1, 2002        $ 406,312    $805,092   $ 17,000,873    $ 23,242   $ (9,714,886)   $ 8,520,633

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

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

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

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

Balance at February 28, 2003      406,312     805,092     16,951,167      36,801     (9,875,117)     8,324,255

Purchases of treasury stock             -           -              -           -       (253,644)      (253,644)

Net loss                                -           -       (266,974)          -              -       (266,974)   $(266,974)

Change in unrealized gain
    on investment securities,
    net of income taxes                 -           -              -     110,656              -        110,656      110,656
                                ---------    --------   ------------    --------   ------------    -----------    ---------

Comprehensive loss for year                                                                                       $(156,318)
                                                                                                                  =========

Balance at February 29, 2004    $ 406,312    $805,092   $ 16,684,193    $147,457   $(10,128,761)   $ 7,914,293
                                =========    ========   ============    ========   ============    ===========
</TABLE>

See accompanying notes to financial statements.

                                       36
<PAGE>

                              OAKRIDGE ENERGY, INC.

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                           YEAR ENDED        YEAR ENDED
                                                                          FEBRUARY 29,       FEBRUARY 28,
                                                                              2004              2003
                                                                          ------------       ------------
                                                                           (RESTATED)
<S>                                                                       <C>                <C>
OPERATING ACTIVITIES
    Net loss                                                              $  (266,974)       $   (49,706)
    Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
      Cumulative effective of accounting change, net of tax benefit           161,793                  -
      Depletion and depreciation                                              183,415            256,229
      Accretion of discount on asset retirement obligations                    26,018                  -
      Gain on sales of oil and gas properties                                    (238)            (3,029)
      (Gain) loss on sales of property and equipment                           18,602            (38,711)
      Loss on investment in limited partnership                                 9,265             11,784
      Abandoned leaseholds                                                          6             48,964
      Oil and gas lease impairment                                                  -                642
      Deferred income taxes                                                   (76,779)           (29,565)
      Changes in operating assets and liabilities:
        Trade accounts receivable                                             124,305           (195,573)
        Federal income taxes receivable                                             -            321,739
        Prepaid expenses and other                                                498             (4,134)
        Accounts payable and accrued expenses                                 (70,798)            23,964
        Asset retirement obligations                                         (260,140)           (90,411)
                                                                          -----------        -----------
Net cash provided by (used in) operating activities                          (151,027)           252,193

INVESTING ACTIVITIES
    Additions to oil and gas properties                                       (52,459)           (20,132)
    Additions to real estate held for development or sale                     (89,737)          (116,338)
    Additions to other property and equipment                                       -           (105,034)
    Proceeds from sales of oil and gas properties                                 238              3,318
    Proceeds from sales of property and equipment                              25,000             97,390
                                                                          -----------        -----------
Net cash used in investing activities                                        (116,958)          (140,796)

FINANCING ACTIVITY
    Purchases of treasury stock                                              (253,644)          (160,231)
                                                                          -----------        -----------

Net decrease in cash and cash equivalents                                    (521,629)           (48,834)
Cash and cash equivalents at beginning of year                              3,375,427          3,424,261
                                                                          -----------        -----------

Cash and cash equivalents at end of year                                  $ 2,853,798        $ 3,375,427
                                                                          ===========        ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Income taxes paid                                                     $    23,388        $    23,388
                                                                          ===========        ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
    Change in unrealized gain on investment
      securities, net of income taxes                                     $   110,656        $    13,559
                                                                          ===========        ===========
</TABLE>

See accompanying notes to financial statements.

                                       37
<PAGE>

                              OAKRIDGE ENERGY, INC.

                          NOTES TO FINANCIAL STATEMENTS

                     FEBRUARY 29, 2004 AND 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. SUMMARY OF 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 financial
statements when the fair value is different than the carrying value. The
estimated fair value of accounts receivable, accounts payable, and accrued
expenses approximates their carrying amounts due to the relatively short
maturity of these instruments.

                                       38
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

CASH AND CASH EQUIVALENTS

Cash equivalents of approximately $2,820,000 and $2,850,000 at February 29, 2004
and February 28, 2003, 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.

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:

      -     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.

      -     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.

      -     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 29, 2004 or February 28, 2003.

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 2004 or 2003.

Dividend and interest income are recognized when earned. Gains and losses on
securities sold are computed under the specific identification method.

                                       39
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

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.

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 an asset retirement obligation approximating $152,000 and
$319,000 at February 29, 2004 or February 28, 2003, respectively, for estimated
costs associated with the reclamation of the property surrounding and including
the Company's previous 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.

                                       40
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

REAL ESTATE HELD FOR DEVELOPMENT OR SALE

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. The cost of the property
remains as a non-current asset since the Company may proceed with the
development if it is unable to complete a sale transaction.

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 2004, the Company recorded no impairment
losses related to its proved oil and gas properties. Approximately $600 in
impairment losses were recorded in 2003. 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.

INVESTMENT IN PARTNERSHIP

The Company uses the equity method of accounting for its investment in
partnership. The investment in partnership of approximately $49,000 and $58,000
at February 29, 2004 or February 28, 2003, 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 $9,000 and
$12,000 during 2004 and 2003, 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.

                                       41
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

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 OR LOSS PER COMMON SHARE

Basic earnings (loss) 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 (loss) 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.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In 2001, the Financial Accounting Standards Board issued SFAS No. 143,
Accounting for Asset Retirement Obligations, which was effective for fiscal
years beginning after June 15, 2002. SFAS No. 143 requires legal obligations
associated with the retirement of long-lived assets to be recognized at their
fair value at the time that the obligations are incurred. Oil and gas producing
companies incur this liability upon acquiring or drilling a well. Upon initial
recognition of a liability, the cost is capitalized as part of the related
long-lived asset and allocated to expense over the useful life of the asset.
Periodic accretion of the discount on asset retirement obligations is recorded
as an expense in the statement of operations. Prior to adoption of SFAS No. 143,
the Company accrued for any estimated asset retirement obligations, net of
estimated salvage value, as part of the calculation of depletion and
depreciation. This method resulted in recognition of the obligation over the
life of the property on a unit-of-production basis, with the estimated
obligation netted in property costs as part of the accumulated depletion and
depreciation balance. The Company adopted SFAS No. 143 effective March 1, 2003.
The effect of adopting SFAS No. 143 was the recognition of additional long-term
liability of approximately $421,000, an increase to property costs of
approximately $283,000, an increase to accumulated depletion and depreciation of
approximately $19,000, and a cumulative effect of accounting change loss, net of
an income tax benefit, of approximately $162,000.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current-year
presentation.

                                       42
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

C. RESTATEMENT

The February 29, 2004 balance sheet and the related statements of operations,
stockholders' equity, and cash flows for the year ended February 29, 2004 have
been restated to account for the cumulative effect of an accounting change, net
of the income tax benefit, upon the adoption of SFAS No. 143 (see Note E) as
well as additional depletion, accretion of discount, and the related income tax
effect. The restated financial statements reflect the Company's recording of the
estimated present value of the amounts expected to be incurred to plug, abandon,
and remediate the Company's producing oil and gas properties and the reclamation
costs associated with the property surrounding the Company's previous coal
mining operations. The effects of the restatement are summarized as follows:

BALANCE SHEET AS OF FEBRUARY 29, 2004

<TABLE>
<CAPTION>
                                  AS PREVIOUSLY                    RESTATED
                                    REPORTED       ADJUSTMENT       BALANCE
                                  -------------  --------------   -----------
<S>                               <C>            <C>              <C>
Total assets                      $   8,404,198  $      319,655   $ 8,723,853

Total liabilities                       373,791         435,769       809,560
                                  -------------  --------------   -----------
Total stockholders equity         $   8,030,407  $     (116,114)  $ 7,914,293
                                  =============  ==============   ===========
</TABLE>

STATEMENT OF OPERATIONS FOR THE YEAR ENDED FEBRUARY 29, 2004

<TABLE>
<CAPTION>
                                  AS PREVIOUSLY                   RESTATED
                                    REPORTED       ADJUSTMENT      BALANCE
                                  -------------  --------------  ------------
<S>                               <C>            <C>             <C>
Loss before income taxes and
   cumulative effect of
   accounting change              $   (234,672)  $      72,473   $  (162,199)

Income tax benefit                     (83,812)         26,794       (57,018)

Net loss before cumulative
   effect of accounting change        (150,860)         45,679      (105,181)

Cumulative effect of
   accounting change, net of
   income tax benefit                        -        (161,793)     (161,793)
                                  ------------   -------------   -----------

Net loss                          $   (150,860)  $    (116,114)  $  (266,974)
                                  ============   =============   ===========
</TABLE>

                                       43
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

D. INVESTMENT SECURITIES

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

<TABLE>
<CAPTION>
                                   GROSS       GROSS
                      AMORTIZED  UNREALIZED  UNREALIZED     FAIR
     2004               COST       GAINS       LOSSES      VALUE
-----------------     ---------  ----------  ----------  ----------
<S>                   <C>        <C>         <C>         <C>
Equity securities     $ 202,430  $  233,948  $        -  $  436,378
                      =========  ==========  ==========  ==========
</TABLE>

<TABLE>
<CAPTION>
                                    GROSS      GROSS
                      AMORTIZED  UNREALIZED  UNREALIZED     FAIR
      2003              COST        GAINS      LOSSES       VALUE
-----------------     ---------  ----------  ----------  ----------
<S>                   <C>        <C>         <C>         <C>
Equity securities     $ 202,430  $   58,387  $        -  $  260,817
                      =========  ==========  ==========  ==========
</TABLE>

E. ASSET RETIREMENT OBLIGATIONS

Pursuant to SFAS No. 143, Accounting for Asset Retirement Obligations, the
Company has recognized the fair value of its asset retirement obligations
related to the plugging, abandonment, and remediation of oil and gas producing
properties as well as the reclamation of the property surrounding the Company's
previous coal mining operations from March 1, 2003 (implementation date)
forward. The present value of the estimated asset retirement costs has been
capitalized as part of the carrying amount of the related long-lived assets,
which approximated $283,000. The liability has been accreted to its present
value at the end of the year. Upon initial implementation, the Company
recognized an additional long-term liability of approximately $421,000 and a
cumulative effect of the change in accounting principle, net of tax of
approximately $162,000 due to accretion from the acquisition date to the
implementation date less depletion recapture due to the estimated salvage values
of the properties as well as oil and gas equipment. The Company evaluated 82
wells, and has determined a range of abandonment dates between May 2005 and
August 2024 and a present value of the estimated total salvage value of
$318,000. The following represents a reconciliation of the asset retirement
obligations for the year ended February 29, 2004:

<TABLE>
<S>                                                              <C>
Asset retirement obligation at beginning of year                 $ 580,087
Accretion of discount                                               26,018
                                                                 ---------
Asset retirement obligation at end of year                       $ 606,105
                                                                 =========
</TABLE>

                                       44
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

F. INCOME TAXES

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

<TABLE>
<CAPTION>
                                   CURRENT   DEFERRED       TOTAL
                                   -------   ---------    ---------
<S>                                <C>       <C>          <C>
Year ended February 29, 2004:
     U.S. Federal                  $ 3,498   $ (73,674)   $ (70,176)
     State and local                16,265      (3,107)      13,158
                                   -------   ---------    ---------
                                   $19,763   $ (76,781)   $ (57,018)
                                   =======   =========    =========

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)
                                   =======   =========    =========
</TABLE>

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:

<TABLE>
<CAPTION>
                                                                2004       2003
                                                              --------   --------
<S>                                                           <C>        <C>
Computed "expected" tax expense (benefit)                     $(55,148)  $(19,932)
State and local income taxes, net of federal income
  tax benefit                                                    8,684     13,111
Other, primarily revision of prior year provision
  estimate                                                     (10,554)    (2,096)
                                                              --------   --------
                                                              $(57,018)  $ (8,917)
                                                              ========   ========
</TABLE>

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities, at February 29, 2004
and February 28, 2003, are presented below:

<TABLE>
<CAPTION>
                                                                2004       2003
                                                              --------   --------
<S>                                                           <C>        <C>
Deferred tax assets:
   Net operating loss carryforward                            $179,147   $ 30,166
   Alternative minimum tax credit carryforward                  98,739     98,607
   Asset retirement obligations                                224,077    117,941
                                                              --------   --------
Total deferred tax assets                                      501,963    246,714
</TABLE>

                                       45
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

F. INCOME TAXES - CONTINUED

<TABLE>
<CAPTION>
                                                               2004          2003
                                                             ---------    ---------
<S>                                                          <C>          <C>
Deferred tax liabilities:
   Oil and gas properties and other property and
     equipment, principally due to depletion and
     depreciation                                             (400,119)    (309,399)
   Coal properties, principally due to differences
     in depletion                                              (45,195)     (52,345)
   Unrealized gain on investment securities
     available for sale                                        (86,490)     (21,585)
                                                             ---------    ---------
Total deferred tax liabilities                                (531,804)    (383,329)
                                                             ---------    ---------
Net deferred tax liability                                   $ (29,841)   $(136,615)
                                                             =========    =========

Included in the balance sheet as:
  Deferred income taxes, current                             $ (86,490)   $ (21,585)
  Deferred income taxes, non-current                            56,649     (115,030)
                                                             ---------    ---------
Net deferred tax liability                                   $ (29,841)   $(136,615)
                                                             =========    =========
</TABLE>

Based on the future reversal of existing taxable temporary differences, future
earnings expectations, and the utilization of various tax planning strategies,
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 29, 2004, 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 $485,000, which
will expire in fiscal 2023 and 2024 and is available to reduce the Company's
future taxable income.

G. 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 29,
2004 and February 28, 2003:

                                       46
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

G. SEGMENT INFORMATION AND MAJOR CUSTOMERS - CONTINUED

<TABLE>
<CAPTION>
                                                               2004              2003
                                                             ---------         ----------
<S>                                                         <C>                <C>
Business segment revenue:
   Oil and gas                                              $  983,498         $  968,252
   Gravel                                                      206,424            288,707
                                                            ----------         ----------
                                                            $ 1,189,92         $1,256,959
                                                            ==========         ==========

Business segment profit (loss):
   Oil and gas                                              $  188,664         $  102,461
   Coal and gravel                                              99,601            240,859
   Real estate development                                     (11,203)           (22,837)
   General corporate                                          (467,888)          (467,520)
                                                            ----------         ----------
Loss from operations                                          (190,826)          (147,037)

Other income                                                    28,627             88,414
                                                            ----------         ----------

Loss before income taxes and cumulative effect of
  accounting change                                         $ (162,199)        $  (58,623)
                                                            ==========         ==========

Business segment assets:
   Depreciation, depletion and amortization:
     Oil and gas                                            $  138,267         $  202,096
     Coal and gravel                                            19,339             21,448
     Real estate development                                     1,465             14,016
     General corporate                                          24,344             18,669
                                                            ----------         ----------
                                                            $  183,415         $  256,229
                                                            ==========         ==========

   Capital expenditures:
     Oil and gas                                            $   52,459         $   20,132
     Real estate development                                    89,737            116,338
     General corporate                                               -            105,034
                                                            ----------         ----------
                                                            $  142,196         $  241,504
                                                            ==========         ==========

   Total assets:
     Oil and gas                                            $4,495,572         $4,739,858
     Coal and gravel                                           265,859            285,199
     Real estate development                                 2,986,658          2,941,989
     General corporate                                         975,764          1,000,606
                                                            ----------         ----------
                                                            $8,723,853         $8,967,652
                                                            ==========         ==========
</TABLE>

                                       47
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

G. SEGMENT INFORMATION AND MAJOR CUSTOMERS - CONTINUED

Oil sales to two customers, which accounted for more than 10% of the Company's
total oil sales, approximated $522,000 (68%) and $191,000 (25%) for the year
ended February 29, 2004. Two customers accounted for approximately $578,000
(75%) and $143,000 (18%) of the Company's total oil sales for the year ended
February 28, 2003. Gas sales to two customers approximated $123,000 (74%) and
$22,000 (13%) of the Company's total gas sales for the year ended February 29,
2004. Two customers accounted for approximately $106,000 (75%) and $15,000 (11%)
of the Company's gas sales for the year ended February 28, 2003. Lease operating
payments primarily made to a principal operator on the Company's oil and gas
producing properties approximated $413,000 and $364,000 in 2004 and 2003,
respectively.

H. 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 2004, the Company purchased 47,500 shares of the Company's common
stock at prices ranging from $3.65 to $4.33 per share from related parties and
such prices approximated the share price paid by the Company to other
unaffiliated stockholders at the time of purchase. 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 at the time of purchase.

I. 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 29, 2004 and February 28, 2003, 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.

                                       48
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

J. QUARTERLY OPERATING RESULTS (UNAUDITED)

Quarterly results of operations for 2004 and 2003 were as follows:

<TABLE>
<CAPTION>
                                        FIRST       SECOND     THIRD      FOURTH      FULL
              2004                     QUARTER     QUARTER    QUARTER     QUARTER     YEAR
---------------------------------     ---------   ---------   --------   --------   ---------
<S>                                   <C>         <C>         <C>        <C>        <C>
Total revenues                        $ 280,123   $ 334,674   $310,575   $264,550   $1,189,922

Loss from operations                    (83,804)    (32,460)   (31,395)   (43,167)    (190,826)

Net loss before cumulative effect
   of accounting change                 (58,913)    (17,135)    (2,006)   (27,127)    (105,181)

Cumulative effect of accounting
   change, net of income tax
   benefit                             (161,793)          -          -          -     (161,793)
                                      ---------   ---------   --------   --------   ----------
Net loss                              $(220,706)  $ (17,135)  $ (2,006)  $(27,127)  $ (266,974)
                                      =========   =========   ========   ========   ==========

Basic and diluted loss
   per common share

   Net loss before cumulative
   effect of accounting change        $    (.01)  $    (.00)  $   (.00)  $   (.01)  $     (.02)

   Cumulative effect of
   accounting change, net of
   income tax benefit                      (.04)          -          -          -         (.04)
                                      ---------   ---------   --------   --------   ----------
   Net loss                                (.05)  $    (.00)  $   (.00)  $   (.01)        (.06)
                                      =========   =========   ========   ========   ==========
</TABLE>

During the fourth quarter of fiscal 2004, the Company recorded additional gravel
revenues of approximately $100,000 (before income taxes) as a result of a
revised estimate of reclamation costs by an independent third party.

                                       49
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

J.    QUARTERLY OPERATING RESULTS (UNAUDITED) - CONTINUED

<TABLE>
<CAPTION>
                                  FIRST       SECOND        THIRD       FOURTH         FULL
            2003                 QUARTER      QUARTER      QUARTER      QUARTER        YEAR
-----------------------------   ---------    ---------    ---------    ---------    -----------
<S>                             <C>          <C>          <C>          <C>          <C>
Total revenues                  $ 284,968    $ 264,880    $ 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)   $ (38,415)   $ (31,278)   $ (30,554)   $   (49,706)
                                =========    =========    =========    =========    ===========
Basic and diluted earnings
   (loss) per common share      $     .00    $    (.01)   $    (.01)   $     .01    $      (.01)
                                =========    =========    =========    =========    ===========
</TABLE>

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).

                                       50
<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 29, 2004 and February 28, 2003, follows:

<TABLE>
<CAPTION>
                                        2004        2003
                                       -------     -------
<S>                                    <C>         <C>
Acquisition of proved properties       $45,080     $13,211
                                       =======     =======
Acquisition of unproved properties     $ 7,379     $ 6,921
                                       =======     =======
Exploration costs                      $     6     $48,965
                                       =======     =======
</TABLE>

RESULTS OF OPERATIONS FOR PRODUCING ACTIVITIES

The following table presents the results of operations for the Company's oil and
gas producing activities for the years ended February 29, 2004 and February 28,
2003:

<TABLE>
<CAPTION>
                                                                    2004                     2004
                                                               -------------             -------------
<S>                                                            <C>                       <C>
Revenues                                                       $     983,498             $     968,252
Production costs                                                    (656,561)                 (614,088)
Depletion, depreciation, and valuation provisions
                                                                    (138,267)                 (202,738)
Exploration costs                                                         (6)                  (48,965)
                                                               -------------             -------------
                                                                     188,664                   102,461
Income tax expense                                                    64,146                    34,837
                                                               -------------             -------------
Results of operations for producing activities (excluding
  corporate overhead and interest costs)                       $     124,518             $      67,624
                                                               =============             =============
</TABLE>

RESERVE QUANTITY INFORMATION

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

                                       51
<PAGE>

                              OAKRIDGE ENERGY, INC.

              SUPPLEMENTAL OIL AND GAS DATA (UNAUDITED) (CONTINUED)

RESERVE QUANTITY INFORMATION - CONTINUED

<TABLE>
<CAPTION>
                                                  OIL           GAS
                                                (Bbls.)        (MCF)
                                                -------       -------
<S>                                             <C>           <C>
PROVED DEVELOPED AND UNDEVELOPED RESERVES:

  Balance at March 1, 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
     Revisions of previous estimates              5,757       (11,389)
     Production                                 (25,384)      (36,879)
                                                -------       -------
  Balance at February 29, 2004                  675,587        92,886
                                                =======       =======

PROVED DEVELOPED RESERVES:

  February 28, 2002                             134,931       265,475
                                                =======       =======
  February 28, 2003                             100,899       141,154
                                                =======       =======
  February 29, 2004                              90,226        92,886
                                                =======       =======
</TABLE>

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

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

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

                                       52
<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 29, 2004 and February 28, 2003, respectively, which represents the
present value of estimated future cash flows using a discount rate of 10% a
year, follows:

<TABLE>
<CAPTION>
                                                                   2004                 2003
                                                              -------------         -------------
<S>                                                           <C>                   <C>
Future cash inflows                                           $  22,303,757         $  23,675,638
Future production and development costs                          (5,820,350)           (6,058,249)
Future income tax expenses                                       (2,484,501)           (2,314,200)
                                                              -------------         -------------

Future net cash flows                                            13,998,906            15,303,189

10% annual discount for estimated timing of cash flows           (4,235,816)           (3,945,469)
                                                              -------------         -------------
Standardized measure of discounted future net cash flows      $   9,763,090         $  11,357,720
                                                              =============         =============

Beginning of year                                             $  11,357,720         $   5,299,860
  Sales of oil and gas, net of production costs                    (346,414)             (354,164)
  Extensions, discoveries, and improved recoveries, less
     related costs                                                  331,949               295,654
  Accretion of discount                                           1,135,772               529,986
  Net change in sales and transfer prices, net of
     production costs                                              (663,461)            5,330,972
  Changes in estimated future development costs                     (36,295)                    -
  Net change in income taxes                                        564,677            (2,301,325)
  Changes in production rates (timing and other)                 (2,772,188)            1,864,530
  Revisions of previous quantities                                  191,330               692,207
                                                              -------------         -------------

End of year                                                   $   9,763,090         $  11,357,720
                                                              =============         =============
</TABLE>

                                       53
<PAGE>

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

         The Company did not change its independent registered public accounting
firm or have any disagreements with them on accounting and financial disclosure
issues in the fiscal year ended February 29, 2004.

ITEM 8A. CONTROLS AND PROCEDURES.

         The term "disclosure controls and procedures" is defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, or the Exchange
Act. This term refers to the controls and procedures of a company that are
designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified by the Securities and
Exchange Commission. Our management, including our Chief Executive Officer and
Principal Financial Officer, has evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this annual
report. Based upon that evaluation, our Chief Executive Officer and Principal
Financial Officer have concluded that our disclosure controls and procedures
were effective as of the end of the period covered by this annual report.

         There were no changes to our internal control over financial reporting
during our last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

         The following table provides certain information pertaining to the
Company's directors and executive officers:

                                       54
<PAGE>

<TABLE>
<CAPTION>
                            BUSINESS EXPERIENCE       YEAR FIRST
                          AND CURRENT POSITIONS         BECAME
 NAME AND AGE                 WITH COMPANY             DIRECTOR
--------------------   ----------------------------    ---------
<S>                    <C>                            <C>
Sandra Pautsky - 62    Chairperson of the Board         1986
                       of Directors of the Company
                       since July 1998,
                       President since June 1998
                       and Secretary-Treasurer
                       since May 1992

Danny Croker - 55      Vice President and Assistant     1992
                       Secretary - Treasurer of the
                       Company since May 1992 and
                       owner of Exlco, Inc., oil
                       and gas operations

Randy Camp - 51        Partner in the firm of Moore,    1992
                       Camp, Phillips & Co., L.L.P.
                       (or its predecessor firms),
                       Certified Public Accountants,
                       Wichita Falls, Texas for more
                       than the past five years

Carol J. Cooper - 57   Certified Public Accountant,     N/A
                       Principal Accounting Officer
                       of the Company since July
                       1998 and Principal Financial
                       Officer of the Company since
                       October 2002
</TABLE>

         Danny Croker is Sandra Pautsky's stepbrother. There are no other family
relationships among any of the directors or executive officers of the Company.
Sandra Pautsky may be considered to be the parent of the Company by virtue of
her beneficial ownership of approximately 71% of the Company's outstanding
common stock and her positions with the Company. See "Item 11.-Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters." Each of the directors and executive officers holds office from the
date of his or her election for a period of one year or until his or her
successor has been elected. None of the directors or executive officers is
involved in any legal proceedings in which he or she is a party adverse or has a
material interest adverse to the Company. None of the directors or executive
officers has been involved in any legal

                                       55
<PAGE>

proceedings which are material to an evaluation of his or her ability or
integrity.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and persons who beneficially own more than 10% of the
Company's common stock to file with the Commission initial reports of beneficial
ownership and reports of changes in beneficial ownership of the Company's common
stock. The rules promulgated by the Commission under Section 16(a) of the
Exchange Act require those persons to furnish the Company with copies of all
reports filed with the Commission pursuant to Section 16(a).

         Based solely on the Company's review of copies of forms it received and
on written representations from the foregoing persons, the Company believes that
during the fiscal year ended February 29, 2004 all filing requirements under
Section 16(a) of the Exchange Act were met on a timely basis by such persons.

AUDIT COMMITTEE

         The Company does not have a separately-designated standing audit
committee. Instead, the entire Board of Directors acts as the audit committee
for the Company.

AUDIT COMMITTEE FINANCIAL EXPERT

         Although the Company does not have a separately-designated audit
committee, a member of the Company's Board of Directors, Randy Camp, meets the
requirements to be considered an audit committee financial expert and is
independent as defined in Rule 4200(a)(15) of the National Association of
Securities Dealers, Inc. listing standards.

NOMINATION PROCEDURES

         The Company has not made any changes to the procedures by which
security holders may recommend nominees to the Company's Board of Directors
since the Company last provided disclosure to security holders in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A of the Exchange Act.

                                       56
<PAGE>

CODE OF ETHICS

         Pursuant to the requirements of Item 406 of Regulation S-B, the
Company's "Code of Ethical Conduct for Senior Officers," which is currently in
effect, is filed as Exhibit 14 to this report.

ITEM 10. EXECUTIVE COMPENSATION.

         The following table sets forth information regarding compensation for
services in all capacities to the Company for the three fiscal years ended
February 29, 2004 of the Company's Chief Executive Officer. No executive officer
of the Company received total annual salary and bonus exceeding $100,000 in any
of such years.

<TABLE>
<CAPTION>
                                ANNUAL COMPENSATION
      NAME AND               ------------------------     ALL OTHER
PRINCIPAL POSITION    YEAR    SALARY          BONUS     COMPENSATION(1)
--------------------  ----   --------        --------   ---------------
<S>                   <C>    <C>             <C>        <C>
Sandra Pautsky        2004   $ 85,000        $  7,083        $ 204
President and         2003     85,000           7,083          204
 Principal Executive  2002     85,000           7,083          204
 Officer
</TABLE>

----------

(1)      All other compensation consisted of Company paid life insurance
         premiums.

         In April 2004, the Board of Directors of the Company approved (with Ms.
Pautsky abstaining) and the Company paid Sandra Pautsky, the Company's Chief
Executive Officer, a bonus of $315,000 in consideration of her extraordinary
services over a number of years with respect to the Company's proposed real
estate development project at Durango, Colorado, which culminated with the Area
Plan approval obtained in January 2004.

         The Company does not have employment agreements with any of its
executive officers, has no material bonus, profit-sharing or stock option plans
or pension or retirement benefits. The Company has a group health insurance plan
which it makes available to all employees of the Company and their family
members on a non-discriminatory basis. Pursuant to such plan, $25,000 in life
insurance benefits are provided for all employees of the Company, with the
amount of such benefits provided decreasing as certain age levels are reached.

                                       57
<PAGE>

         Executive officers of the Company who are also directors do not receive
any fee or remuneration for services as members of the Board of Directors. Randy
Camp, the one director who is not an employee of the Company, received an annual
fee of $3,000 for serving as a director in the fiscal year ended February 29,
2004.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS.

         The following table shows the beneficial ownership of the Company's
common stock as of May 31, 2004 by: (i) each person known by the management of
the Company to own more than 5% of the Company's outstanding common stock; (ii)
each executive officer and director; and (iii) the executive officers and
directors of the Company as a group.

<TABLE>
<CAPTION>
   NAME AND ADDRESS                      AMOUNT                PERCENT
         OF                           BENEFICIALLY               OF
   BENEFICIAL OWNER                      OWNED                  CLASS
----------------------------          ------------              -----
<S>                                   <C>                      <C>
Sandra Pautsky
4613 Jacksboro Highway
Wichita Falls, Texas 76302            3,045,323(1)              70.94%

Estate of Noel Pautsky,
  Deceased
4613 Jacksboro Highway
Wichita Falls, Texas 76302              696,091                 16.21

Flem Noel Pautsky, Jr. Trust
4613 Jacksboro Highway
Wichita Falls, Texas 76302              908,247                 21.16

Noel Pautsky Trust
4613 Jacksboro Highway
Wichita Falls, Texas 76302              700,000                 16.31

Robert S. Allen
125 Ashlyn Ridge
McDonough, Georgia 30252                256,700                  5.98

Danny Croker                                  -                     -

Randy Camp                                  100                     *

Carol J. Cooper                               -                     -
</TABLE>

                                       58
<PAGE>

<TABLE>
<CAPTION>
NAME AND ADDRESS                        AMOUNT                 PERCENT
      OF                              BENEFICIALLY               OF
BENEFICIAL OWNER                         OWNED                  CLASS
----------------------                -----------              -------
<S>                                   <C>                      <C>
Executive officers and
directors as a group
(four persons)                        3,045,423(2)              70.94
</TABLE>

----------

*        Represents less than 1% of outstanding common stock.

(1)      Includes: (i) 740,985 shares owned directly by Ms. Pautsky; (ii)
         696,091 shares owned by the Estate of Noel Pautsky, Deceased (the "Noel
         Pautsky Estate"), of which Ms. Pautsky is the Independent Executrix;
         (iii) 700,000 shares owned by the Noel Pautsky Trust of which Ms.
         Pautsky is the Trustee and one of four beneficiaries; and (iv) 908,247
         shares owned by the Flem Noel Pautsky, Jr. Trust, of which Ms. Pautsky
         is the Trustee. Ms. Pautsky disclaims any beneficial ownership of the
         shares owned by the Noel Pautsky Estate and the Noel Pautsky Trust in
         excess of 90,698 and 175,000 shares, respectively. Ms. Pautsky also
         disclaims any beneficial ownership of the shares owned by the Flem Noel
         Pautsky, Jr. Trust.

(2)      Includes all shares beneficially owned by Sandra Pautsky, Danny Croker,
         Randy Camp and Carol J. Cooper.

         The Company does not have any securities authorized for issuance under
equity compensation plans.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Sandra Pautsky is an executive officer, director and beneficial owner
of in excess of 5% of the Company's outstanding common stock. In addition, the
Noel Pautsky Estate, the Flem Noel Pautsky, Jr. Trust and the Noel Pautsky Trust
are the beneficial owners of in excess of 5% of the Company's outstanding common
stock.

         Ms. Pautsky, the Noel Pautsky Estate, the Flem Noel Pautsky, Jr. Trust
and the Noel Pautsky Trust each own undivided working interests in certain of
the oil and gas leases in the North Texas area in which the Company also owns an
undivided working interest and of which the Company serves as the operator. The
Noel

                                       59
<PAGE>

Pautsky Estate also owns an undivided working interest in the oil and gas leases
in Miller County, Arkansas in which the Company owns an undivided working
interest. In accordance with standard operating procedures, the Company submits
joint interest billings to such related parties and the other unaffiliated
working interest owners in the properties which the Company operates on a
monthly basis for their respective pro-rata shares of the costs incurred on the
properties and the Company's fee for serving as operator for the preceding
month. In addition, Exlco, Inc. ("Exlco"), 100% of whose outstanding stock is
owned by Danny Croker, an executive officer and director, is allocated and bears
a portion of the Company's office rent and supplies and bills the Company
periodically for costs incurred on the Company's behalf, which billings are
offset against the Company's billings to Exlco.

         At February 28, 2002, Ms. Pautsky, the Noel Pautsky Estate, the Flem
Noel Pautsky, Jr. Trust, the Noel Pautsky Trust and Exlco had accounts payable
to the Company, representing their then unpaid joint interest and other
billings, aggregating $6,524. During the two fiscal years ended February 29,
2004, the Company submitted monthly joint interest and other billings to such
five parties totaling $42,722, and such parties paid the Company an aggregate of
$47,484 with respect to such joint interest and other billings, leaving a
balance of $1,762 owed by Exlco to the Company at February 29, 2004. The Company
is following the same operating procedures outlined above in the fiscal year
ending February 28, 2005.

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

   (a)   EXHIBITS

         (3)(i)(a) Articles of Incorporation of the Company dated May 9, 1969
                   filed as Exhibit A(1) to the Company's Form 10 and
                   incorporated herein by reference; and

               (b) Amendment to Articles of Incorporation of the Company dated
                   October 22, 1982 filed as Exhibit 28(a) to the Company's
                   Current Report on Form 8-K dated November 4, 1982 and
                   incorporated herein by reference.

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

                                       60
<PAGE>

                  (14)     Code of Ethical Conduct of Senior Officers.

                  (31)     Rule 13a-14(a)/Rule 15d-14a Certifications of Sandra
                           Pautsky and Carol J. Cooper.

                  (32)     Section 1350 Certifications of Sandra Pautsky and
                           Carol J. Cooper.

   (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. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

         The independent registered public accounting firm of Whitley Penn
audited the financial statements of the Company for the fiscal year ended
February 29, 2004. Whitley Penn has audited the Company's financial statements
for the five fiscal years ended February 29, 2004.

AUDIT FEES

         Whitley Penn's fees for the fiscal year 2003 and 2004 audits of the
Company's financial statements and the reviews of quarterly reports on Form
10-QSB during such years were $41,400 and $27,778, respectively.

AUDIT-RELATED FEES

         The Company did not incur any audit-related fees from Whitley Penn
during the fiscal years ended February 28, 2003 and February 29, 2004.

TAX FEES

         Fees billed by Whitley Penn to the Company for preparation of the
Company's federal income tax returns for the fiscal years ended February 28,
2003 and February 29, 2004 were $10,000 and $5,979, respectively.

ALL OTHER FEES

         Aggregate fees billed for all other services rendered by Whitley Penn
during the fiscal year ended February 28, 2003 were $1,080 and included the
review of proxy materials for the 2002 Annual Meeting of Stockholders and
attendance at such meeting. No

                                       61
<PAGE>

other services were rendered by Whitley Penn during the fiscal year ended
February 29, 2004.

PRE-APPROVAL POLICIES AND PROCEDURES

         As indicated under Item 9, the Company does not have a
separately-designated audit committee and the Board of Directors of the Company
acts in that capacity. Prior to the Company's engagement of Whitley Penn to
render the audit and non-audit services set forth above, such engagement was
approved by the Company's Board of Directors.

                                       62
<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 31, 2005

         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 31, 2005                  DATE: May 31, 2005

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

DATE: May 31, 2005                  DATE: May 31, 2005

                                       63
<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 purchase, sale, reorganization, arrangement, liquidation or
         succession - not applicable.

    (3)(i)(a)  Articles of Incorporation of the Registrant dated May 9, 1969
               filed as Exhibit A(1) to the Registrant's Form 10 and
               incorporated herein by reference; and

          (b)  Amendment to Articles of Incorporation of the Registrant dated
               October 22, 1982 filed as Exhibit 28(a) to the Registrant's
               Current Report on Form 8-K dated November 4, 1982 and
               incorporated herein by reference.

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

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

    (9)  Voting trust agreement and amendments - not applicable.

    (10) Material contracts - not applicable.

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

    (13) Annual report to security holders for the last fiscal year, Form 10-Q
         or 10-QSB or quarterly report to security holders - not applicable.

    (14) Code of ethics - Code of Ethical Conduct of Senior Officers filed
         herewith.

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

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

    (20) Other documents or statements to security holders or any document
         incorporated by reference - not applicable.

    (21) Subsidiaries of the small business issuer - not applicable.

<PAGE>

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

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

    (24) Power of attorney - not applicable.

    (31) Rule 13a-14(a)/Rule 15d-14(a) Certifications - filed herewith.

    (32) Section 1350 Certifications - filed herewith.

    (99) Additional exhibits - not applicable.