U.S. Securities and Exchange Commission

                             Washington, D. C. 20549

                                  Form 10-KSB/A
(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


<PAGE>

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

                          $5,801,777 as of May 12, 2004


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

                          4,293,117 as of May 31, 2004

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None


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



<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

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

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

          Oil and Gas Operations........................................      1
          Gravel Operations.............................................      3
          Carbon Junction Coal Mine.....................................      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..................     13
                   Developed Acreage and Productive Wells...............     14
                   Undeveloped Acreage..................................     15
                   Drilling Activity....................................     15
          Coal and Gravel Properties....................................     16
          Real Estate...................................................     17
          Office Building...............................................     17

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

ITEM 4.   Submission of Matters to a Vote of
            Security Holders............................................     18

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

ITEM 5.   Market for Common Equity,
            Related Stockholder Matters and
            Small Business Issuer Purchases
            of Equity Securities........................................     18







                                        i


<PAGE>

                                                                            Page
                                                                            ----

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....................     26
          Forward-Looking Statements....................................     29

ITEM 7.   Financial Statements..........................................     30

          Index to Financial Statements.................................     30
          Report of Independent Auditors................................     31
          Balance Sheets as of February 29, 2004 and
            February 28, 2003...........................................     32
          Statements of Operations for the years ended
            February 29, 2004 and February 28, 2003.....................     34
          Statements of Stockholders' Equity for the
            years ended February 29, 2004 and
            February 28, 2003...........................................     35
          Statements of Cash Flows for the years ended
            February 29, 2004 and February 28, 2003.....................     36
          Notes to Financial Statements.................................     37
          Supplemental Oil and Gas Data (Unaudited).....................     47

ITEM 8.   Changes in and Disagreements With Accountants
            on Accounting and Financial Disclosure......................     50

ITEM 8A.  Controls and Procedures.......................................     50

PART III................................................................     50

ITEM 9.   Directors, Executive Officers, Promoters and
            Control Persons; Compliance With Section 16(a)
            of the Exchange Act.........................................     50

          Directors and Executive Officers..............................     50
          Section 16(a) Beneficial Ownership Reporting
            Compliance..................................................     52
          Audit Committee...............................................     52
          Audit Committee Financial Expert..............................     52
          Nomination Procedures.........................................     52
          Code of Ethics................................................     53

ITEM 10.  Executive Compensation........................................     53






                                       ii


<PAGE>

                                                                            Page
                                                                            ----


ITEM 11.  Security Ownership of Certain Beneficial Owners
            and Management and Related Stockholder Matters                   54

ITEM 12.  Certain Relationships and Related
            Transactions................................................     55

ITEM 13.  Exhibits and Reports on Form 8-K..............................     56

          Exhibits......................................................     56
          Reports on Form 8-K...........................................     57

ITEM 14.  Principal Accountant Fees and Services........................     57

          Audit Fees....................................................     57
          Audit-Related Fees............................................     57
          Tax Fees......................................................     57
          All Other Fees................................................     57
          Pre-Approval Policies and Procedures..........................     58

Signatures..............................................................     59

























                                       iii


<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

         Oakridge Energy, Inc. (the "Company") is engaged in the exploration for
and  development,  production  and sale of oil and gas  primarily in Texas.  The
Company  also  receives  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,  Freestone,  Red River,  Panola,
Gregg and Smith Counties of East Texas and in various areas of North Texas.

<PAGE>

         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 converting a total of 10 producing wells


                                        2

<PAGE>

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 additional and final  approximate two acres to mine for


                                        3

<PAGE>

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 its
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 mining consultant estimated that the Company's previous reserve should



                                        4

<PAGE>

be  increased  by  $100,000 to cover fully the  remaining  reclamation,  and the
Company made such increase as of year end, thereby bringing the total reserve at
February 29, 2004 to approximately $158,900.

         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.


                                        5

<PAGE>

         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 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.




                                        6

<PAGE>

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




                                        7

<PAGE>

         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 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


                                        8

<PAGE>

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
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




                                        9

<PAGE>

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



                                       10

<PAGE>

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






                                       11

<PAGE>

Employees
---------

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




                                       12

<PAGE>

                           Oil (Bbls.)..............     21,643
                           Gas (MCF)................     19,819

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:

Fiscal Year Ended                         Oil                 Gas
 February 28/29,                        (Bbls.)              (MCF)
 ---------------                        -------              -----

2004.............                       25,382               36,879
2003.............                       28,015               45,720
2002.............                       36,558               65,936

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:

                                                          Fiscal Year
                                                     Ended February 28/29,
                                               --------------------------------
                                                2004         2003         2002
                                               ------       ------       ------
         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

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



                                       13

<PAGE>

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,  LLC ("Orion") [NOTE:  Need full name] 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>
------------

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

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



                                       14

<PAGE>

(3)      Includes 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:

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

        Texas ..........................        11,741         3,904
        Arkansas .......................         2,428         1,214
                                           -----------   -----------

                                   Total        14,169         5,118
                                           ===========   ===========

         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
-----------------      ----------   ----------   ----------   ----------   ----------   ----------
<C>                    <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  expects,
however,  to continue the coal leases as they involve no significant  expense to
it.




                                       16

<PAGE>

         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.

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

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

         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:

                                                           Average Price
                                       Total Number            Paid
     Period                        of Shares Purchased       per Share
-----------------                  -------------------     -------------
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
                                       =======                =======


         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 $150,860  ($.03 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
$101,154  increase  in the  Company's  net loss in fiscal  2004 was an  $100,000




                                       19

<PAGE>

increase in the Company's  reserve for coal mine reclamation costs that was made
as of year end.  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:

                                                        Percentage
                     Fiscal 2004      Fiscal 2003       Difference
                     -----------       -----------      ----------

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%


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




                                       20

<PAGE>

         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  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




                                       21

<PAGE>

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  $91,900  (10.6%)  in the  fiscal  year ended  February  29,  2004
primarily as a result of an approximate $65,300 (32.3%) 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 $23,000 (3.7%) 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.

         The  expenses of the  Company's  coal and gravel  operations  more than
tripled in fiscal 2004,  primarily  as the result of a $100,000  increase in the
Company's  reserve for coal mine reclamation costs made by the Company as of the
end of the year. 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


                                                                              22

<PAGE>

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,  and the Company
took such  action at year end.  Coal and  gravel  operating  expenses  were also
adversely impacted by higher testing and permitting  expenses and legal expenses
resulting  from the Four  Corners  Materials  dispute and ad valorem tax expense
that more than doubled.

         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 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."





                                       23

<PAGE>

         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 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.

         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."



                                       24

<PAGE>

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  benefitted 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 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




                                       25

<PAGE>

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.

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




                                       26

<PAGE>

assumptions that the Company believes to be reasonable under the  circumstances.
Actual results may differ from these estimates  under  different  assumptions or
conditions.  The Company  believes the following  critical  accounting  policies
affect its more  significant  judgments and estimates used in the preparation of
the Company's financial statements:

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

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

                                                                              27

<PAGE>

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 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.




                                       28

<PAGE>

The  factors  used to  determine  fair value  include,  but are not  limited to,
estimates  of proved  reserves,  future  commodity  pricing,  future  production
estimates,  anticipated  capital  expenditures and a discount rate  commensurate
with the risk associated with realizing the expected cash flows projected.

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

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

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


                                       29

<PAGE>

ITEM 7.  FINANCIAL STATEMENTS.

                          Index to Financial Statements

                                                                            Page
                                                                            ----

Report of Independent Auditors                                               31

Balance Sheets as of February 29, 2004 and
  February 28, 2003                                                          32

Statements of Operations for the years ended
  February 29, 2004 and February 28, 2003                                    34

Statements of Stockholders' Equity for the
  years ended February 29, 2004 and
  February 28, 2003                                                          35

Statements of Cash Flows for the years ended
  February 29, 2004 and February 28, 2003                                    36

Notes to Financial Statements                                                37

Supplemental Oil and Gas Data (Unaudited)                                    47
















                                       30

<PAGE>


                         Letterhead of Whitley Penn CPAs

                         REPORT OF INDEPENDENT AUDITORS




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

We have audited the accompanying balance sheets of Oakridge Energy, Inc., a Utah
corporation,  as of February 29, 2004 and  February  28,  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 auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Oakridge Energy,  Inc. as of
February 29, 2004 and February 28, 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 23, 2004






                                       31
<PAGE>
<TABLE>
<CAPTION>


                              OAKRIDGE ENERGY, INC.

                                 BALANCE SHEETS


                                                            February 29,   February 28,
                                                                2004           2003
                                                            ------------   ------------
<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                                6,696,277      6,651,197
    Less accumulated depletion and depreciation                6,195,590      6,058,833
                                                            ------------   ------------
                                                                 500,687        592,364
    Unproved properties                                          185,207        177,833
                                                            ------------   ------------
Net oil and gas properties                                       685,894        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


Other non-current assets                                         865,809        875,074
                                                            ------------   ------------
Total assets                                                $  8,404,198   $  8,967,652
                                                            ============   ============
</TABLE>



See accompanying notes to financial statements.



                                       32
<PAGE>
<TABLE>
<CAPTION>

                              OAKRIDGE ENERGY, INC.

                           BALANCE SHEETS (continued)


                                                         February 29,   February 28,
                                                             2004           2003
                                                         ------------   ------------
<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

Reserve for reclamation costs                                 158,879        319,019
Deferred income taxes                                          11,457        115,030
                                                         ------------   ------------
Total liabilities                                             373,791        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                                      16,800,307     16,951,167
    Accumulated other comprehensive income                    147,457         36,801
                                                         ------------   ------------
                                                           18,159,168     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                                  8,030,407      8,324,255
                                                         ------------   ------------

Total liabilities and stockholders' equity               $  8,404,198   $  8,967,652
                                                         ============   ============

</TABLE>











See accompanying notes to financial statements.


                                       33
<PAGE>

                              OAKRIDGE ENERGY, INC.

                            STATEMENTS OF OPERATIONS


                                                           Year Ended
                                                   February 29,    February 28,
                                                       2004            2003
                                                   ------------    ------------
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                        136,758         202,096
      Lease operating                                   637,090         614,088
      Lease impairment                                     --               642
      Exploration costs                                       6          48,965
                                                   ------------    ------------
    Total oil and gas                                   773,854         865,791

    Coal and gravel                                     200,276          47,848
    Real estate development                              11,203          22,837
    General and administrative                          467,888         467,520
                                                   ------------    ------------
Total operating expenses                              1,453,221       1,403,996
                                                   ------------    ------------

Loss from operations                                   (263,299)       (147,037)

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

Loss before income taxes                               (234,672)        (58,623)

Income tax benefit                                      (83,812)         (8,917)
                                                   ------------    ------------

Net loss                                           $   (150,860)   $    (49,706)
                                                   ============    ============

Basic and diluted loss per common share            $      (0.03)   $      (0.01)
                                                   ============    ============

Weighted average common shares outstanding            4,332,735       4,403,740
                                                   ============    ============





See accompanying notes to financial statements.


                                       34
<PAGE>
<TABLE>
<CAPTION>

                              OAKRIDGE ENERGY, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

               Years Ended February 29, 2004 and February 28, 2003

                                                                                   Accumulated
                                                  Additional                         other
                                   Common           paid-in         Retained      comprehensive
                                   stock            capital         earnings         income
                                -------------    -------------   -------------    -------------
<S>                             <C>              <C>             <C>              <C>
Balance at March 1, 2002        $     406,312    $     805,092   $  17,000,873    $      23,242

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

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

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

Comprehensive loss for year


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

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

Net loss                                 --               --          (150,860)            --

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

Comprehensive loss for year


Balance at February 29, 2004    $     406,312    $     805,092   $  16,800,307    $     147,457
                                =============   =============    =============   =============


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

Balance at March 1, 2002        $  (9,714,886)   $   8,520,633

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

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

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

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

Balance at February 28, 2003       (9,875,117)       8,324,255

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

Net loss                                 --           (150,860)   $    (150,860)

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

Comprehensive loss for year                                       $     (40,204)
                                                                  =============

Balance at February 29, 2004    $ (10,128,761)   $   8,030,407
                                =============    =============
</TABLE>


See accompanying notes to financial statements.

                                       35
<PAGE>
<TABLE>
<CAPTION>

                              OAKRIDGE ENERGY, INC.

                            STATEMENTS OF CASH FLOWS


                                                                Year Ended
                                                       February 29,    February 28,
                                                           2004            2003
                                                       ------------    ------------
<S>                                                    <C>             <C>
Operating Activities
    Net loss                                           $   (150,860)   $    (49,706)
    Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
      Depletion and depreciation                            181,906         256,229
      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                                (103,573)        (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
        Reserve for reclamation costs                      (160,140)        (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           (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    $     21,216
                                                       ============    ============

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.

                                       36
<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.   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 approximate their carrying amounts due to the relatively short maturity
of their instruments.



                                       37
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


B.   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 equity securities.  The Company's  investments
are classified at the time of purchase into one of three categories as follows:

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

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

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

The  Company  did not have any  securities  classified  as held to  maturity  or
trading as of February 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.




                                       38
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


B.   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 a reserve  approximating  $159,000 and $319,000 at February 29,
2004 and February 28, 2003,  respectively,  for estimated costs  associated with
the  reclamation  of the property  surrounding  and including the Company's coal
mining operations. The reserve is based on an outside engineer's estimate and is
included as a long-term liability in the accompanying balance sheets.

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

Other Property and Equipment

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




                                       39
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)



B.   Significant Accounting Policies - continued

Real Estate Held for Development or Sale

Real  estate  held for  development  or sale 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 and 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 other income
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.




                                       40
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)



B.   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 Per Common Share

Basic  earnings per common  share is  calculated  by dividing net income  (loss)
(available  to common  stockholders)  by the weighted  average  number of common
shares  outstanding  for the period.  Diluted  earnings  (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  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.  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. The
Company adopted SFAS No. 143 effective March 1, 2003; however, it did not have a
material effect on the operations or financial position of the Company.

Reclassifications

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




                                       41
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


C.   Investment Securities

The amortized cost and fair values of investment  securities available for sale,
as of February 29, 2004 and February 28, 2003, are as follows:

                                                          Gross         Gross
                            Amortized     Unrealized    Unrealized       Fair
      2004                     Cost         Gains         Losses        Value
-----------------          -----------   -----------   -----------   -----------

Equity securities          $   202,430   $   233,948   $      --     $   436,378
                           ===========   ===========   ===========   ===========

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

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


D.   Income Taxes

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

                                        Current        Deferred        Total
                                      -----------    -----------    -----------

Year ended February 29, 2004:
     U.S. Federal                     $     3,498    $  (100,468)   $   (96,970)
     State and local                       16,265         (3,107)        13,158
                                      -----------    -----------    -----------

                                      $    19,763    $  (103,575)   $   (83,812)
                                      ===========    ===========    ===========


                                        Current        Deferred        Total
                                      -----------    -----------    -----------

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

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




                                       42
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


D.   Income Taxes - continued

Income tax expense (benefit) for the years presented differs from the "expected"
federal income tax expense  (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:

                                                            2004         2003
                                                         ---------    ---------

Computed "expected" tax expense (benefit)                $ (79,788)   $ (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                                       (12,708)      (2,096)
                                                         ---------    ---------

                                                         $ (83,812)   $  (8,917)
                                                         =========    =========

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:

                                                            2004         2003
                                                         ---------    ---------
Deferred tax assets:
   Net operating loss carryforward                       $ 179,147    $  30,166
   Alternative minimum tax credit
     carryforward                                           98,739       98,607
   Reserve for reclamation costs                            58,738      117,941
                                                         ---------    ---------
                                                           336,624      246,714

Deferred tax liabilities:
   Oil and gas properties and other property
     and equipment, principally due to
     depletion and depreciation                           (302,886)    (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)
                                                         ---------    ---------
                                                          (434,571)    (383,329)
                                                         ---------    ---------
Net deferred tax asset (liability)                       $ (97,947)   $(136,615)
                                                         =========    =========

Included in the balance sheets as:
  Deferred income taxes, current                         $ (86,490)   $ (21,585)
  Deferred income taxes, non-current                       (11,457)    (115,030)
                                                         ---------    ---------
Net deferred tax asset (liability)                       $ (97,947)   $(136,615)
                                                         =========    =========




                                       43
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


D.   Income Taxes - continued

Based on the future  reversal  of existing  taxable  temporary  differences  and
future  earnings  expectations,  management  of the Company  believes it is more
likely than not that  deferred  tax assets  will be  realized  or  settled,  and
accordingly, no valuation allowance has been recorded. At February 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 accumulated net operating
loss carryforwards of approximately  $485,000,  which will expire in fiscal 2023
and 2024 and are available to reduce the Company's future taxable income.


E.   Segment Information and Major Customers

The  following  information  is  presented  in  accordance  with  SFAS No.  131,
Disclosures about Segments of an Enterprise and Related Information. The Company
is  engaged  in oil  and  gas,  coal  and  gravel  activities  and  real  estate
development.  The Company  has  identified  such  segments  based on  management
responsibility  and the nature of the  Company's  products,  services and costs.
There are no major  distinctions in geographical  areas served as all operations
are in the United States.  The Company  measures segment profit (loss) as income
(loss) from operations.  Business segment assets are those assets  controlled by
each  reportable  segment.  The following  table sets forth certain  information
about the financial information of each segment for the years ended February 29,
2004 and February 28, 2003:

                                                         2004           2003
                                                     -----------    -----------

Business segment revenue:
   Oil and gas                                       $   983,498    $   968,252
   Gravel                                                206,424        288,707
                                                     -----------    -----------

Total business segment revenue                       $ 1,189,922    $ 1,256,959
                                                     ===========    ===========


Business segment profit (loss):
   Oil and gas                                       $   209,644    $   102,461
   Coal and gravel                                         6,148        240,859
   Real estate development                               (11,203)       (22,837)
   General corporate                                    (467,888)      (467,520)
                                                     -----------    -----------

Loss from operations                                    (263,299)      (147,037)

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

Loss before income taxes                             $  (234,672)   $   (58,623)
                                                     ===========    ===========




                                       44
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


E.   Segment Information and Major Customers - continued

                                                            2004         2003
                                                         ----------   ----------

Business segment assets:
   Depreciation, depletion and amortization:
     Oil and gas                                         $  136,758   $  202,096
     Coal and gravel                                         19,339       21,448
     Real estate development                                  1,465       14,016
     General corporate                                       24,344       18,669
                                                         ----------   ----------

                                                         $  181,906   $  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                                         $4,175,917   $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
                                                         ----------   ----------

                                                         $8,404,198   $8,967,652
                                                         ==========   ==========

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.


F.   Related Party Transactions

In the normal course of business,  the Company owns interests in various oil and
gas properties in which certain  stockholders and affiliates also own interests.
During fiscal 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 each 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 stockholder at the time of purchase.



                                       45
<PAGE>
<TABLE>
<CAPTION>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)


G.   Commitments and Contingencies

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

As of  February  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.


H.   Quarterly Operating Results (Unaudited)

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

                                       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
Income (loss) from operations           (83,804)       (32,460)       (31,395)      (115,640)      (263,299)
Net income (loss)                       (58,913)       (17,135)        (2,006)       (72,806)      (150,860)
Basic and diluted earnings (loss)
   per common share                        (.01)          (.00)          (.00)          (.02)          (.03)

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

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

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




                                       46
<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:

                                         2004          2003
                                     -----------   -----------

Acquisition of proved properties     $    45,080   $    13,211
                                     ===========   ===========
Acquisition of unproved properties   $     7,379   $     6,921
                                     ===========   ===========
Exploration costs                    $         6   $    48,965
                                     ===========   ===========

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

                                                            2004         2003
                                                         ---------    ---------

Revenues                                                 $ 983,498    $ 968,252
Production costs                                          (637,090)    (614,088)
Depletion, depreciation, and valuation provisions
                                                          (136,758)    (202,738)
Exploration costs                                               (6)     (48,965)
                                                         ---------    ---------
                                                           209,644      102,461
Income tax expense                                          71,279       34,837
                                                         ---------    ---------
Results of operations for producing activities
  (excluding corporate overhead and interest costs)
                                                         $ 138,365    $  67,624
                                                         =========    =========

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.



                                       47
<PAGE>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (continued)



Reserve Quantity Information - continued

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

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
                                                       ==========    ==========

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




                                       48
<PAGE>
<TABLE>
<CAPTION>

                              OAKRIDGE ENERGY, INC.

                    NOTES TO FINANCIAL STATEMENTS (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:

                                                             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 ss
     recoveries, le 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>




                                       49
<PAGE>

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

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

ITEM 8A. CONTROLS AND PROCEDURES.

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

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

                                    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:












                                       50

<PAGE>

                          Business Experience               Year First
                         and Current Positions                 Became
  Name and Age              With Company                      Director

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

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



                                       51

<PAGE>

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.



                                       52

<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.

                                   Annual Compensation
    Name and                      ---------------------       All Other
Principal Position       Year     Salary          Bonus     Compensation(1)
------------------       ----     ------          -----     ---------------

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

(1)  All other compensation consisted of Company paid life insur ance 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.




                                       53

<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.

Name and Address                       Amount                 Percent
      of                            Beneficially                of
Beneficial Owner                       Owned                   Class
----------------                    ------------              -------

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                          -                       -





                                       54

<PAGE>

Name and Address                       Amount                 Percent
      of                            Beneficially                of
Beneficial Owner                       Owned                   Class
----------------                    ------------              -------

Executive officers and
directors as a group
(four persons)                      3,045,423(2)               70.94

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

* 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



                                       55
<PAGE>

Noel 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 incorpo rated herein by reference.




                                       56
<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  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 other  services  were rendered by Whitley Penn
during the fiscal year ended February 29, 2004.


                                       57
<PAGE>

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.




































                                       58
<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, 2004


         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, 2004                                    DATE: May 31, 2004




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


DATE: May 31, 2004                                     DATE: May 31, 2004










                                       59



<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  change in  certifying  accountant  - not appli
                      cable.

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



<PAGE>


           (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.

           (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.