<PAGE> 1
                                UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                 FORM 10-KSB
(Mark One)
  [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

     For the fiscal year ended       December 31, 1998
                                     ----------------
  [ ]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              0-22497
                                              ----------
                          Upland Energy Corporation
                     -----------------------------------
             (Exact name of registrant as specified in charter)

        Utah                                     87-0430780
------------------------------             -------------------------
State or other jurisdiction of             (I.R.S. Employer I.D. No.)
incorporation or organization

712 Arrowhead Lane, Murray, Utah                  84107
-----------------------------------------         ----------
(Address of principal executive offices)          (Zip Code)

Issuer's telephone number, including area code (801) 281-4966
                                               ---------------
Securities registered pursuant to section 12(b) of the Act:

Title of each class       Name of each exchange on which registered
        None                                  N/A
------------------        -----------------------------------------

Securities registered pursuant to section 12(g) of the Act:
                                   None
                             ---------------
                             (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. (1)  Yes [ ]  No [X]  (2)  Yes [X]  No  [ ]

  Check if disclosure of delinquent filers in response to Item 405
of Regulation S-B is not 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.    [ ]

<PAGE>
<PAGE> 2

     State issuer's revenues for its most recent fiscal year:  $203,708.

     State the aggregate market value of the voting stock held by
nonaffiliates computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of
a specified date within the past 60 days:  The Company does not
have an active trading market and it is, therefore, difficult, if
not impossible, to determine the market value of the stock.  Based
on the bid price for the Company's Common Stock at August 20, 1999, of $.463
per share, the market value of shares held by nonaffiliates would be
$1,649,294.

     As of August 20, 1999, the Registrant had 3,562,192 shares of common
stock issued and outstanding.

                   DOCUMENTS INCORPORATED BY REFERENCE

     List hereunder the following documents if incorporated by reference and
the part of the form 10-KSB (e.g., part I, part II, etc.) into which the
document is incorporated:  (1) Any annual report to security holders; (2) Any
proxy or other information statement; and (3) Any prospectus filed pursuant to
rule 424(b) or (c) under the Securities Act of 1933:  NONE

<PAGE>
<PAGE> 3
                                  PART I

                   ITEM 1. DESCRIPTION OF BUSINESS

HISTORY AND ORGANIZATION
------------------------

     Upland Energy Corporation, a Utah corporation (the "Company") was
originally organized in Utah on January 30, 1986, under the name Upland
Investment Corporation, to engage in the acquisition and/or development of
assets, properties or businesses of any kind.  The Company remained inactive
other than raising some capital through the sale of its shares of Common Stock
until 1991.

     During the 1991 fiscal year, the Company conducted negotiations with
respect to the acquisition of a Florida corporation involved in the
development of a fluid level monitoring system for underground fuel storage
tanks.  The acquisition was not completed; however, during the course of
negotiations, the Company loaned such company $25,000 pursuant to the terms of
a promissory note.  The note has not been repaid despite demand by the Company
and the Company has concluded that the note is uncollectible.

     In November 1993, the Company acquired G.S. & C., Inc., a Nevada
corporation ("GSC") in a stock for stock transaction.  GSC was organized under
the laws of Nevada on September 1, 1993.  Prior to the acquisition, the
Company effected a 1-for-2 reverse split in its issued and outstanding shares
of Common Stock reducing the number of shares outstanding immediately prior to
the acquisition of GSC from 13,990,000 to 6,995,000.  The Company then issued
25,297,500 post-split shares of its Common Stock to the shareholders of GSC in
exchange for all issued and outstanding shares of GSC.  In connection with the
transaction, the name of the Company was changed from Upland Investment
Corporation to Upland Energy Corporation to better reflect the Company's
business activities.  For financial statement purposes, the transaction has
been accounted for as a "reverse acquisition" as if GSC had acquired the
Company.  As a result, the financial statements included herewith present the
operations of GSC from inception and include Upland's operations only from the
date of the acquisition.

     The Company is engaged through the activities of its wholly-owned
subsidiary, GSC, in the business of exploring for and developing oil and gas
reserves.  Unless otherwise indicated, GSC and Upland are collectively
referred to herein as the "Company."

     On or about November 17, 1993, GSC entered into an operating agreement
(the "Operating Agreement") with KLM Exploration, Inc. and Kenneth L. Mason
(collectively "KLM") pursuant to which KLM transferred to GSC certain rights
and obligations of KLM under a farmout agreement (the "Farmout Agreement"),
dated August 28, 1993, entered into between KLM and Williams Natural Gas
Company ("Williams") with respect to certain property located in the state of
Kansas commonly referred to as the McLouth Natural Gas Storage Field ("McLouth
Field").  The Operating Agreement was approved by Williams and the Farmout
Agreement was amended to make certain changes agreed to by the parties.  GSC
paid KLM $100,000 pursuant to the terms of an earlier agreement in principle
as consideration for KLM entering into the Operating Agreement.  Through these
agreements, GSC turned over much of the daily control of these fields to KLM
and its operators.  The McLouth Field was originally acquired by Williams who
entered into the Farmout Agreement with KLM.  The Farmout Agreement


<PAGE> 4

provided KLM the right and obligation to develop the McLouth Field.  KLM then
entered into the agreements with GS&C who paid an initial fee of $100,000 as
consideration for entering into the Operating Agreement and Amended Farmout
Agreement.  Under the provisions of the agreements, KLM performed the
exploration, drilling and operation on the McLouth Field with the Company
providing limited financial support. The Company subsequently became
dissatisfied with the operation of the field by KLM and filed a lawsuit to
remove KLM as operator and for other damages.  This lawsuit was subsequently
settled and the Company became the operator of the field.

     In November 1993, GSC granted an aggregate of 2 1/4% overriding royalty
interest in the McLouth Field against its working interest to T. Kent Rainey,
Stefanie Gillen and Tony Cox, who at the time were directors of GSC, as
compensation for services rendered to GSC.  The services performed by the
individuals related to negotiating the Farmout Agreement on the McLouth Field.

     During 1995 and 1996, the Company focused on the McLouth Field.  However,
management refocused the Company's efforts towards the Hittle Field which,
based on geological test and initial drilling results, appears more promising
than the McLouth Field. The McLouth Field continued to remain unprofitable for
the Company and in July 1999, the Company entered into an agreement with Pace
Exploration, LLC to sell the field for $25,000 cash and the assumption of
$31,552 in debt on the field and all future obligation to William Natural Gas.
The Company felt the decision to sell the McLouth Field to Pace Exploration,
LLC was necessary to stop the monthly drain on the Company form the McLouth
Field.

     The Hittle Field originally consisted of approximately 560 acres and was
acquired for $6,000 in cash and a 15.6% royalty interest in the leases. In the
first quarter of 1997, the Company expanded its lease holdings on the Hittle
Field through the acquisition of an additional 880 acres at a cost of $3,800
with a 16.01% royalty interest remaining with the lessors.

     The Company drilled two initial wells, the Lewis H-1 ("LH-1") and the
Hittle H-1 (the "HH-1"), in the Hittle Field.  Both wells initially showed
promising results; however, the LH-1 well had to be shut down due to water
problems and reworked and the HH-1 is producing only approximately 22 barrels
of oil per day. The LH-1 has been reworked and is producing 5 barrels of oil
per day.

     In December 1998, the Company hired Pace Exploration to handle all of the
Company's operation and drilling on the Hittle Field.  Under the terms of the
Agreement, Pace Exploration received a twenty percent (20%) working interest
in the Hittle Field exclusive of the LH-1 and HH-1 wells.

     Under the direction of Pace Exploration, two additional wells were
drilled on the Hittle Field. One of these wells has been completed for
production and is producing approximately 14 barrels of oil per day. The other
well never produced oil in economic quantities and was shut down.







<PAGE>
<PAGE> 5
     ITEM 2. DESCRIPTION OF PROPERTIES

Oil and Gas Properties
----------------------

     The Company's oil and gas properties are located in Kansas.  The
properties now consist of only the Hittle Field with the sale of the McLouth
Field in July 1999.  The Company began exploration activities on the Hittle
Field in late 1996 and presently has drilled four wells on the field; three of
which have been completed for production, and one which was shut down. The
Hittle Field is subject to a farm out agreement with Pace Exploration who
receives a 20% working interest in the field. See: Part I, Item 1.
"Description of Business").

     In the oil and gas industry and as used herein, the word "gross" well or
acre is a well or acre in which a working interest is owned; the number of
gross wells is the total number of wells in which a working interest is owned.
A "net" well or acre is deemed to exist when the sum of fractional ownership
working interests in gross wells or acres equals one.  The number of net wells
or acres is the sum of the fractional working interests owned in gross wells
or acres.

The information presented in this section is in accordance with SEC guidelines
on oil and gas disclosure and in particular those found in Rule 4-10 of
regulation S-X.

Wells and Acreage
-----------------

     Shown below are tabulations of the productive oil (including casinghead
gas) wells and developed and undeveloped acreage owned by the Company as of
December 31, 1998.

                                              Gross Acreage
                                     -------------------------------
Productive Oil Wells                 Developed           Undeveloped
--------------------                 ---------           -----------
  Gross      Net(1)                Gross   Net(2)       Gross   Net(3)
  -----      ------                -----   ------       -----   ------
    16        14.4                  190    152.50        1560    1560

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

(1)   Based on a 100% ownership working interest on the McLouth Field and an
80% ownership working interest on the Hittle Field.

(2)   Calculated on 13 wells with a 100%  ownership working interest on the
McLouth Field and two wells with an 80% ownership interest on the Hittle
Field.

(3)   Corresponds to 940 undeveloped acres in the McLouth Field with a 100%
ownership interest and 1560 undeveloped acres in the Hittle Field with 100 %
ownership interest.

      Fifteen of the above oil wells are all located on the McLouth Field,
which as noted above, has been sold. See notes 3 and the supplemental


<PAGE>
<PAGE> 6

information to the Company's December 31, 1998 and 1997, financial statements
for additional information regarding the Company's oil and gas properties and
producing activities and oil and gas reserves.  Such information is based on a
report prepared by Felix Ascanio who was the Company's president, and
therefore, should not be considered independent.

Drilling Activities
-------------------

     Set forth below is a tabulation of wells completed in the period
indicated in which the Company have participated and the results thereof for
the three most recent years ended December 31, 1998.

<TABLE>
<CAPTION>

                                   Year Ended December 31,
                       --------------------------------------------------
                            1996            1997             1998
                            ----            ----             ----
                       Gross    Net    Gross    Net     Gross    Net
                       -----    ---    -----    ---     -----    ---
<S>                   <C>      <C>    <C>      <C>     <C>      <C>
Exploratory:
     Dry                -0-     -0-     -0-     -0-      -0-     -0-
     Oil                -0-     -0-     -0-     -0-      -0-     -0-
     Gas                -0-     -0-     -0-     -0-      -0-     -0-
         Totals         -0-     -0-     -0-     -0-      -0-     -0-

Development:
     Dry                -0-     -0-     -0-     -0-      -0-     -0-
     Oil                 3       3       2(1)    2(1)     2       2
     Gas                -0-     -0-     -0-     -0-      -0-     -0-
         Totals          3       3       2       2        2       2
<FN>
(1) The LH-1 was subsequently shut down do to water problems.
</FN>
</TABLE>


Average Prices and Costs
------------------------

     The average sales prices of oil and gas for the current fiscal year and
the three previous fiscal years are as follows:

      Average Sales Price
      -------------------
  Year Ended           Oil           Gas
  December 31       (per BBL)     (per MCF)
  -----------       ---------     ---------
     1995            $12.27            NA
     1996            $16.34            NA
     1997            $14.45            NA
     1998            $11.41            NA

Production costs for such wells per equivalent barrel, which includes lifting
costs (electricity, fuel, water disposal, repairs and maintenance, pumper,
transportation, etc.), and production taxes, was $2.87, $3.07, and $4,70 for
the years ended December 31, 1998, 1997, and 1996, respectively.



<PAGE>
<PAGE> 7

Production and Sale of Oil and Gas
----------------------------------

     The oil from the McLouth Field is sold to one unaffiliated purchaser.
The sale of oil and gas is subject to price adjustments, production
curtailments, and similar provision in oil and gas purchase contracts, and the
sale of both oil and gas is subject to general economic and political
conditions affecting the production and price of crude oil and natural gas.
For the years ended December 31, 1998, and 1997, the Company produced
approximately 41.52 and 10.711 barrels of oil per day.

                      ITEM 3. LEGAL PROCEEDINGS

     The Company on April 21, 1998, filed a lawsuit against Felix Ascanio, the
former president of the Company, seeking repayment of promissory notes and a
declaratory judgment on the issue of whether Mr. Ascanio was terminated for
cause under the terms of his employment contract, and accordingly, entitled to
no severance payments under the terms of his employment agreement.  The action
was subsequently settled.  Under the terms of the settlement, Mr. Ascanio and
the Company agreed to cancel 141,689 shares of the Company in satisfaction of
Mr. Ascanio's promissory notes owed to the Company and as settlement of any
amounts the Company may owe Mr. Ascanio.  Mr. Ascanio also resigned as a
director of the Company and agreed to the cancellation of his remaining
options to purchase shares of the Company.  Additionally, Mr. Ascanio entered
into private transactions to sell, in a private transaction, the remainder of
his shares in the Company to existing shareholders of the Company.

     The Company's subsidiary GSC filed a lawsuit on October 19, 1996, against
KLM Exploration Company, Inc. in the District Court of Jefferson County,
Kansas.  The lawsuit entitled G.S.&C., Inc. vs. KLM Exploration Company, Inc.,
et al., case no. 96C-92, sought to remove KLM as operator of GSC's oil leases
in the McLouth Field, and for damages in excess of $500,000 for breach of
contract, and for an accounting.  This action was settled in July, 1998.
Pursuant to the terms of the settlement agreement, KLM turned over the
operation and its interest in the McLouth Field to the Company as complete
settlement of any and all claims the parties may have. The Company also agreed
to pay $15,000 per year for three years to the Williams Natural Gas Co.

     The Company's subsidiary GSC had a lawsuit filed against it on September
11, 1995, by the landowner of certain property in Kansas where the Company has
been drilling.  The lawsuit, entitled Herbert N. Edmonds and Eelsa D. Edmonds
vs. G.S. & C., Inc., in the District Court of Jefferson County, Kansas, case
no. 95-C-67, sought cancellation of the lease to GSC from the plaintiff and
quieting of title, plus cost, attorneys' fees and expenses.  On October 10,
1997, the court filed an order granting a summary judgment motion for Edmonds'
and ordered termination of the Edmonds B lease.  As the Company is no longer
interested in drilling on the lease, management determined that further legal
action on this matter would not be cost effective and accordingly, decided not
to appeal the decision.

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

      None.





<PAGE>
<PAGE> 8

     PART II

     ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock is quoted on the National Association of
Securities Dealers Electronic Bulletin Board under the symbol "UPLC."  Set
forth below are the high and low bid prices for the Company's Common Stock for
the last three years.  Although the Common Stock is quoted on the Electronic
Bulletin Board it has traded sporadically with low volume.  Consequently, the
information provided below may not be indicative of the Common Stock price
under different conditions. All prices listed herein reflect inter-dealer
prices, without retail mark-up, mark-down or commissions and may not represent
actual transactions.


Quarter Ended                 High Bid          Low Bid
-------------                 --------          -------

December 1996                 $3.125            $0.625

March 1997                    $3.875            $2.31
June 1997                     $5.625            $2.50
September 1997                $6.25             $4.25
December 1997                 $5.25             $3.50

March 1998                    $3.875            $2.625
June 1998                     $1.438            $1.188
September 1998                $1.188            $0.625
December 1998                 $1.340            $0.560

March 1999                    $1.375            $0.531
June 1999                     $0.531            $0.344

     At August 20, 1999, the high and low bid and asked price for the Common
Stock was $0.80 and $0.463, respectively.

     Since its inception, the Company has not paid any dividends on its Common
Stock, and the Company does not anticipate that it will pay dividends in the
foreseeable future.

      As of August 17, 1999, there were 3,562,192 shares of common stock
outstanding held by approximately 125 active holders of record, including
broker-dealers and clearing corporations holding shares on behalf of their
customers, as reported by the Company's transfer agent.

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

Liquidity and Capital Resources
---------------------------------------

     At December 31, 1998, the Company had assets of $1,026,366.  The majority
of these assets, $767,113, represented oil and gas properties with only
$244,626 in current assets.  During 1998, the Company used the majority of its
current assets and now must rely on loans from major shareholders and oil
revenues to cover its operating expenses. Additionally, the Company's deposits
of $225,000 at December 31, 1998, were used on oil drilling in the first part
of 1999.

     During 1998, the Company funded its operation and exploration expenses
through the sale of equity interest in the Company and shareholder loans.  The

<PAGE> 9

Company anticipates it will have to continue to rely on capital through equity
infusion or shareholder loans until its oil revenues increase.  The Company
has significantly cut expenses and is hopeful that with the sale of the
McLouth Field it will be able to pay ongoing expenses; however, the Company
would not be able to fund further drilling and exploration and would have to
rely on investors to help fund the further drilling and exploration.

     The Company's working capital at December 31, 1998, was negative
$112,441. Presently, the Company must rely on revenue from its operation and
loans from shareholders to cover ongoing operating expenses. The sale of the
McLouth Field reduces some of these payables and the Company is slowly paying
the others.

     In November and December 1998, the Company was able to raise an
additional $240,000 through the sale of promissory notes and warrants to fund
the drilling of two wells on the Hittle Field.  One of these wells was
completed for production and the other was not.

     With little revenue presently being produced, the Company will continue
to rely on the sale of its securities or loans to fund operations.  Based on
the working capital position of the Company, management estimates the Company
will need to obtain additional financing to perform further exploration on the
Hittle Field.

Results of Operations
---------------------

     For the year ended December 31, 1998, the Company had revenue of $203,708
which was up from $163,048 for the same period in 1997. The increase in
revenue was the result of the additional wells on the Hittle Field. The
Company anticipates oil revenue to increase even with the sale of the McLouth
Field. The increase in revenue will be only marginal, however, with the Hittle
Field currently producing less than 50 barrels of oil.
down, the Company expects revenues to remain low even with the addition of
another well on the Hittle field.

     Expenses for the year ended December 31, 1998, were $774,081 which were
up from $540,545 from the year ended December 31, 1997. Expenses for the year
ended December 31, 1998, were up principally due to an increased oil
exploration and dry hole and unsuccessful completion costs of $376,078.
General and administrative expenses were down as the Company has reduced its
payroll.

     For the year ended December 31, 1998, the Company continued to suffer
loses from operations with a net loss of $570,379.  This loss was up from the
$377,497 loss in 1997 as a result of the increase in dry hole costs.  The
Company anticipates it will continue to have a loss in 1999 as it incurred
additional unsuccessful drilling attempts and dry hole costs. The Company is
hopeful with the signing of the Pace Exploration contract that it will
maintain reduced general and administrative expenses relying on Pace
Exploration for the operation of the Hittle Field.  The Company will in turn
maintain only limited other business operations until revenues justify an
expansion of its corporate staff and other experts.

                   ITEM 7.  FINANCIAL STATEMENTS

     The financial statements of the Company are set forth immediately
following the signature page to this form 10-KSB.


<PAGE> 10
         ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                   ACCOUNTING AND FINANCIAL DISCLOSURE

     The Company has had no disagreements with its certified public
accountants with respect to accounting practices or procedures or financial
disclosure.

                            PART III

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

     The names of the Company's executive officers and directors and the
positions held by each of them are set forth below:

Name                                       Position
----                                       --------

Lee Jackson                                President and Director
Michael L. Labertew                        Secretary, Treasurer and Director






































                    
<PAGE>
<PAGE> 11

     The term of office of each director is one year and until his successor
is elected at the Company's annual shareholders' meeting and is qualified,
subject to removal by the shareholders.  The term of office for each officer
is for one year and until a successor is elected at the annual meeting of the
board of directors and is qualified, subject to removal by the board of
directors.  The Company is actively searching for a third director

Biographical Information

     Set forth below is certain biographical information with respect to each
of the Company's officers and directors.

     Lee Jackson, age 71, has been retired since 1993 and spends his time
focusing on real estate management and investments.  Prior to retiring, Mr.
Jackson owned Jackson Insurance Agency which he later sold to his son.  Prior
to establishing his own insurance agency, Mr. Jackson was a real estate agent
and broker. Mr. Jackson was employed by Allstate Insurance for 17 years where
he was an agent, a commercial sales supervisor and sales manager.  Mr. Jackson
received his bachelor of science degree in business from the University of
Utah in 1951.

     Michael Labertew, age 35, was appointed a director and subsequently
secretary and treasure of the Company in 1998.  Mr. Labertew is and has been
for the last 9 years an attorney in Salt Lake City, Utah.  Mr. Labertew has a
bachelor of science degree from the University of Iowa and a Juris Doctorate
from the University of Utah.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     The Company believes that under the SEC's rules for reporting of
securities transactions by directors and executive officers, all required
reports have been timely filed, except Michael L. Labertew filed his form 3
late and one form 4 late; Felix Ascanio filed his form 3 late and two form 4's
late; Lee Jackson filed two form 4's late; Ervin Brown filed his form 3 late
and one form 4 late; and John Hobbs filed one form 4 late.
























<PAGE>
<PAGE> 12

                  ITEM 10.  EXECUTIVE COMPENSATION

     The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Company's last three completed
fiscal years to the Company's or its principal subsidiaries chief executive
officer and each of its other executive officers that received compensation in
excess of $100,000 during such period (as determined at December 31, 1998, the
end of the Company's last completed fiscal year):

                   SUMMARY COMPENSATION TABLE
                   --------------------------
<TABLE>
<CAPTION>

                                                        Long Term Compensation
                                                        ----------------------

                     Annual Compensation               Awards       Payouts
                                            Other      Restricted
Name and                                    Annual      Stock     Options  LTIP     All other
Principal Position Year  Salary   Bonus($) Compensation Awards   /SARs    Payout  Compensation
------------------ ----  ------   -------- ------------ ------   -------  ------  ------------
<S>              <C>     <C>     <C>      <C>          <C>      <C>      <C>     <C>
Lee Jackson         1998  $38,000   -0-       -0-         -0-    10,000     -0-       -0-
President
Felix A. Ascanio    1997  $60,000   -0-       -0-         -0-      -0-      -0-       -0-
President and CEO   1996  $60,000   -0-       -0-         -0-   325,000(1)  -0-       -0-

<FN>
(1)  Mr. Ascanio received 300,000 options at $0.20 and 25,000 options at $2.00 during 1996.
(2)  Mr. Jackson received 10,000 options at $0.625 per share in 1998.
</FN>
</TABLE>


Options/SAR Grants in Last Fiscal Year
--------------------------------------
The Following table sets forth information respecting all individual grants of
options and stock appreciation rights ("SARs") made during the fiscal year
ended December 31, 1998, to the named executive officer of the Company.

<TABLE>
<CAPTION>
                                  % of Total
               # of Securities    Options/SARS
               Underlying         Granted to                        Market Price
               Options/SARs       Employees in   Exercise or Base   on Date of
Name           Granted            Fiscal Year    Price ($/Share)    Grant         Expiration Date
----           ---------------    ------------   ----------------   ------------  ---------------
<S>            <C>               <C>             <C>                <C>           <C>
Lee Jackson           -0-              -0-                -0-               -0-             -0-


</TABLE>

Bonuses and Deferred Compensation:
---------------------------------

     None

Compensation Pursuant to Plans:
------------------------------





<PAGE>
<PAGE> 13

     All options received are pursuant to the Company's 1996 Stock Option Plan
which has reserved 650,000 shares for issuance under the plan.  Options are
issued under the plan at the discretion of the Company's board of directors.

Pension Table:
-------------

     Not Applicable


Other Compensation:
------------------

     None

Compensation of Directors:
-------------------------

     Directors of the Company receive only $100 per directors meeting
attended.

Termination of Employment and Change of Control Arrangement
-----------------------------------------------------------

     With the departure of Mr. Ascanio and Mr. John "Jack" Hobbs, none of the
Company's officers have an employment contract. One employee of the Company
has an  employment contract paying him $24,000 per year plus product bonus of
$0.05 per barrel through December 1999.

Officer and Director Remuneration
---------------------------------

     Mr. Jackson, the Company's current president receives a salary of
$3,000.00 per month and Mr. Labertew receives a salary of $0.00 per month.

     ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth the number of shares of the Company's
Common Stock, par value $0.001, held by each person who is believed to be the
beneficial owner of 5% or more of the 3,695,378 shares of the Company's common
stock outstanding at August 17, 1999, based on the Company's transfer agent's
list, representations and affidavits from shareholders and beneficial
shareholder lists provided by the Depository Trust and securities broker
dealers, and the names and number of shares held by each of the Company's
officers and directors and by all officers and directors as a group.

Title of   Name and Address          Amount and Nature of            Percent
Class      Of Beneficial Owner       Beneficial Ownership            of Class
--------   -------------------      ---------------------            --------

Common     Lee Jackson (1)               438,350                      11.86
           712 Arrowhead Lane
           Murray, Utah  84107

Common     The Depository Trust
            (Cede & Co.)               1,583,308                      42.85
           P.O. Box 222
           New York, New York  10274


<PAGE> 14

Common     Frank Gillen                  257,011                         6.95
           175 South Main, Ste. 1240
           Salt Lake City, Utah 84111

Officers, Directors and Nominees

Common     Lee Jackson, Director        ---------See Above---------

Common     Michael Labertew              -0-                             -0-
           Secretary/Treasurer, Director

All Officers, Directors, and
 Nominees as a Group (2 Persons)         438,350                        11.86
--------------------------------
(1) Mr. Jackson owns 343,350 shares in his own name and 100,000 shares in Lee
Jackson Investments. Mr. Jackson also owns 25,000 warrants and 25,000 options
to purchase  a like number of shares of Common Stock at an exercise price of
$2.00 per share.

         ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In January 1997, Felix Ascanio, the Company's president, and John Hobbs,
the Company's secretary, at that time, exercised options in the Company
delivering promissory notes in the amount of $55,000 and $80,000,
respectively, to the Company for their exercise price.  The promissory notes
were due January 17, 2001, with interest at eight and one half percent (8-1.2%).
In April 1997, the Company loaned Mr. Ascanio $84,376 and Mr. Hobbs $29,449 to
pay taxes due on the options exercised.  Due to Messrs. Ascanio's and Hobbs'
relationships to the Company, these transactions should not be considered arms
length.  Under the terms of a settlement agreement with Mr. Ascanio, all of
his debt to the Company was canceled and 141,689 of Mr. Ascanio's shares in
the Company returned to the Company for cancellation. Mr. Hobbs subsequently
paid his promissory notes off.

     During 1996, a shareholder and an officer of the Company advanced the
Company $3,600.  Of the $3,600 that was advanced, the Company paid $3,000 back
during the year leaving a balance of $600 which was paid in 1998.  The
advances are non-interest bearing.

     During 1998, Lee Jackson, the Company's new president loaned the Company
20,000 receiving a promissory note and for $5,000 at 10% interest due on June
1, 1999 and a promissory note for $15,000 which contains an option to convert
shares of Common Stock at the rate of $0.40 per share.


             ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:

                                Upland Energy Corporation

Date: August 30, 1999            By /s/Lee Jackson, President and Director
                                      (Principal Executive Officer)

<PAGE>
<PAGE> 15

Pritchett, Siler & Hardy, P.C.
Certified Public Accountants
430 East 400 South
Salt Lake City, Utah  84111
(801) 328-2727   Fax (801) 328-1123

                          INDEPENDENT AUDITOR'S REPORT
Board of Directors
UPLAND ENERGY CORPORATION AND SUBSIDIARY
Salt Lake City, Utah


We have audited the consolidated balance sheet of Upland Energy Corporation
and Subsidiary as of December 31, 1998, and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 1998 and 1997.  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 generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Upland Energy
Corporation and Subsidiary as of December 31, 1998, and the consolidated
results of their operations and their consolidated cash flows for the years
ended December 31, 1998 and 1997, in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern.  As discussed in Note 14, the Company has
experienced continuing operating losses the past few years and has current
liabilities in excess of current assets. These factors raise substantial doubt
about the ability of the Company to continue as a going concern.  Management's
plans with regard to these matters is also described in Note 14.  The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.

The ultimate realization of the Company's investment in oil and gas properties
is dependent upon the Company being able to economically recover and sell its
oil and gas reserves and to be able to fund the maintenance and operations of
its wells.  Further, the Company's estimates of oil and gas reserves were
produced internally by management and others who were not independent with
respect to the Company.  The financial statements do not include any
adjustments related to the uncertainty that the Company might not recover its
estimated reserves.

The Company has not presented the supplemental oil and gas information that
the Financial Accounting Standards Board has determined is necessary to
supplement, although not required to be part of, the basic financial
statements.  The missing supplemental information relates to reserves
quantities, capitalized costs related to oil and gas production activities,
results of operations of oil and gas production activities and a standardized
measure of discounted future net cash flows related to reserves quantities.

/s/Pritchett, Siler & Hardy
May 13, 1999
Salt Lake City, Utah
<PAGE> 16
                 UPLAND ENERGY CORPORATION AND SUBSIDIARY
                      CONSOLIDATED BALANCE SHEET
                                 ASSETS

                                                            December 31,
                                                                 1998
                                                         _________________
CURRENT ASSETS:
  Cash                                                         $     4,890
  Oil revenue receivable                                             4,340
  Deposits                                                         225,000
Interest receivable - related parties                               10,396
                                                         _________________
          Total Current Assets                                     244,626

PROPERTY AND EQUIPMENT, net                                          4,627

OIL AND GAS PROPERTIES, net                                        767,113

RESTRICTED CASH                                                     10,000
                                                         _________________
                                                         $       1,026,366
                                                         _________________

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Notes payable - related parties                        $         245,000
  Accounts payable                                                 105,967
  Other accrued liabilities                                          6,100
                                                         _________________
         Total Current Liabilities                                 357,067

STOCKHOLDERS' EQUITY:
  Common stock; $.001 par value, 50,000,000
    shares authorized, 3,562,192 shares issued
    and outstanding at 1998                                          3,562
  Capital in excess of par value                                 2,188,300
  Retained earnings (deficit)                                   (1,382,333)
                                                         _________________
                                                                   809,529
  Less: notes receivable for common stock issued                  (140,230)
                                                         _________________
          Total Stockholders' Equity                               669,299
                                                         _________________
                                                         $       1,026,366
                                                         _________________

The accompanying notes are an integral part of this consolidated financial
statement.

<PAGE>
<PAGE> 17
                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF OPERATIONS

                                                      For the Years Ended
                                                        December 31,
                                              _______________________________
                                                     1998            1997
                                            _______________ _______________
REVENUE:
 Oil sales                                    $       203,708 $       163,048
                                              _______________ _______________
          Total Revenue                               203,708         163,048
                                              _______________ _______________

EXPENSES:
  Production expense                                  150,093          85,621
  Depreciation, depletion and
    amortization                                       57,454          44,650
  Dryhole, unsuccessful recompletions
    and exploration costs                             376,078               -
  General and administrative costs                    190,462         410,274
                                              _______________ _______________
          Total Expenses                              774,087         540,545
                                              _______________ _______________
LOSS FROM OPERATIONS                                 (570,379)       (377,497)

OTHER INCOME (EXPENSE):
  Interest Income                                      11,641          36,881
  Loss on disposition of assets                        (8,430)              -
                                              _______________ _______________
          Total Other Income (Expense)                  3,211          36,881
                                              _______________ _______________

LOSS BEFORE INCOME TAXES                             (567,168)       (340,616)

CURRENT TAX EXPENSE                                         -               -

DEFERRED TAX EXPENSE                                        -               -
                                              _______________ _______________
NET LOSS                                      $      (567,168)$      (340,616)
                                              _______________ _______________

LOSS PER COMMON SHARE                         $          (.16)$          (.10)
                                              _______________ _______________




The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE>
<PAGE> 18
                  UPLAND ENERGY CORPORATION AND SUBSIDIARY
               CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                       FROM DECEMBER 31, 1996 THROUGH
                            DECEMBER 31, 1998
<TABLE>
<CAPTION>
                                                        Common Stock         Capital in     Retained
                                                  ________________________    Excess of     Earnings
                                                    Shares        Amount      Par Value     (Deficit)
                                                  ___________   __________   ___________   _____________
<S>                                               <C>           <C>          <C>           <C>

BALANCE, December 31, 1996                          2,710,378        2,710     1,358,320        (474,549)

Director/officer options exercised for notes
  receivable, January 1997, at $.20 per share         325,000          325        64,675               -

Director/officer options exercised for notes
  receivable, January 1997, at $.70 per share         100,000          100        69,900               -

Issuance of 500,000 shares common
  stock for cash, February 1997, at $1.50
  per share, net of $25,000 of offering costs         500,000          500       724,500               -

Issuance of 55,000 shares common
  stock for  notes receivable, August 1997,
  at $2.00 per share                                   55,000           55       109,945               -

Issuance of 5,000 shares common
  stock for cash, October 1997, at $2.00
  per share                                             5,000            5         9,995               -

Net loss for the year ended
  December 31, 1997                                         -            -             -        (340,616)
                                                  ___________   __________   ___________   _____________
BALANCE, December 31, 1997                          3,695,378   $    3,695   $ 2,337,335   $    (815,165)
                                                  -----------   ----------   -----------   -------------
Cancellation of 133,186 shares of
 Common stock, May 1998, fair market
 Value was at $1.12 per share, for
 Cancellation of note receivable                     (133,186)        (133)     (149,035)

Net loss for the year ended
 December 31, 1998                                          -            -             -        (567,168)
                                                  -----------   ----------   -----------   -------------
BALANCE, December 31, 1998                          3,562,192   $    3,562   $ 2,188,300   $  (1,382,333)
                                                  ===========   ==========   ===========   =============

</TABLE>


The accompanying notes are an integral part of this consolidated financial
statement.

<PAGE>
<PAGE> 19
                UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                      Increase (Decrease) in Cash

                                                    For the Years Ended
                                                        December 31,
                                              _______________________________
                                                   1998            1997
                                              _______________ _______________
Cash Flows from Operating Activities:
  Net loss                                    $     (567,168) $     (340,616)
                                              _______________ _______________
  Adjustments to reconcile net income (loss) to
    net cash used in operating activities:
   Depreciation, depletion and amortization            57,454          44,650
   Non-cash expenses                                   87,200           7,145
   Dry hole expense                                   376,078               -
   Disposition of assets                                8,430               -
   Change in assets and liabilities:
     (Increase) decrease in oil revenue receivable     50,045         (45,640)
     (Increase) in advance receivable -
     related party                                     17,049         (17,049)
     (Increase) decrease in prepaid assets           (225,000)          1,778
     (Increase) decrease in deferred tax assets             -          77,737
     (Increase) in interest receivable   related
       parties                                              -         (14,417)
     Increase in accounts payable - related party     (13,335)         13,335
     Increase in accounts payable                     (15,679)        108,010
     (Decrease) in other accrued liabilities          (81,000)         87,000
     Increase (decrease) in deferred tax liability          -         (77,737)
                                              _______________ _______________
      Total Adjustments                               261,242         184,812
                                              _______________ _______________
      Net Cash (Used) by Operating Activities        (305,926)       (155,804)
                                              _______________ _______________
Cash Flows from Investing Activities:
  Purchase of property and equipment                        -         (35,233)
  Purchase of oil and gas properties                        -        (546,329)
  Receipts on notes receivable                         28,000          23,535
  Issuance of notes receivable                              -        (113,825)
                                              _______________ _______________
      Net Cash (Used) by Investing Activities          28,000        (671,852)
                                              _______________ _______________
Cash Flows from Financing Activities:
  Proceeds from issuance of common stock                    -         760,000
  Proceeds from notes payable - related parties       245,000               -
                                              _______________ _______________
      Net Cash Provided by Financing Activities       245,000         760,000
                                              _______________ _______________
Net Increase (Decrease) in Cash                       (32,926)        (67,656)

Cash at Beginning of Year                              37,816         105,472
                                              _______________ _______________
Cash at End of Year                           $         4,890 $        37,816
                                              _______________ _______________

                                    [Continued]
<PAGE> 20
                    UPLAND ENERGY CORPORATION AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                          Increase (Decrease) in Cash

                                  [CONTINUED]
                                                     For the Years Ended
                                                        December 31,
                                              _______________________________
                                                   1998            1997
                                              _______________ _______________
Supplemental Disclosures of Cash Flow Information:
  Cash paid during the year for
  Interest                                    $             - $             -
  Income taxes                                $             - $             -

Supplemental Disclosure of Noncash Investing and Financing Activities:
  For the year ended December 31, 1998:
     The  Company cancelled 133,186 shares of common stock from the  Company's
     former  president.   The stock was recorded at $1.12 per  share  and  was
     acquired by cancellation of a note receivable in the amount of $134,376.

     Legal  counsel billed the Company for legal services totaling $4,380,  of
     which $3,235 was offset against a $20,000 note receivable and $1,145  was
     offset against the corresponding interest receivable accrued on the note.

  For the year ended December 31, 1997:
     Legal  counsel billed the Company for legal services totaling $7,145,  of
     which  $6,535 was offset against a $20,000 note receivable and  $610  was
     offset against the corresponding interest receivable accrued on the note.

     Legal  counsel exercised options to purchase a total of 60,000 shares  of
     common  stock,  paid $10,000 cash and gave notes of $20,000  and  $90,000
     (for a total of $110,000) to the Company for consideration.

     The  prepaid  asset in the amount of $25,000 was reversed and  the  legal
     services  were  accounted  for as a non-cash offering  expense  which  is
     offset against proceeds from the stock offering.

     The  president  and secretary/treasurer exercised options to  purchase  a
     total  of  425,000 shares of common stock and gave notes of  $55,000  and
     $80,000  (for  a  total of $135,000), respectively, to  the  Company  for
     consideration.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.


<PAGE>
<PAGE> 21


                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Organization  - Upland Energy Corporation ["PARENT"] was incorporated  under
  the  laws  of  the  State of Utah on January 30, 1986 as  Upland  Investment
  Corporation.  Parent  changed its name to Upland Energy  Corporation  during
  November 1993.  G. S. & C., Inc. ["SUBSIDIARY"], was incorporated under  the
  laws  of  the  State of Nevada on September 1, 1993 and is  engaged  in  the
  development, production and selling of oil and gas in the State of Kansas.

  During  November 1993, PARENT acquired SUBSIDIARY in a transaction accounted
  for  as  a  recapitalization of subsidiary in a manner similar to a  reverse
  purchase.   Accordingly, Subsidiary is treated as the  purchaser  entity  in
  the transaction.

  Principles of Consolidation - The consolidated financial statements  include
  the   accounts  of  the  Company  and  its  wholly-owned  subsidiary.    All
  significant    intercompany   transactions   have   been    eliminated    in
  consolidation.

  Property  and  Equipment  -  Property and  equipment  are  stated  at  cost.
  Expenditures  for  major  renewals and betterments that  extend  the  useful
  lives  of  property  and equipment are capitalized,  upon  being  placed  in
  service.   Expenditures for maintenance and repairs are charged  to  expense
  as  incurred.  Depreciation is computed using the straight-line  method  for
  financial  reporting purposes, with accelerated methods used for income  tax
  purposes.   The  estimated  useful  lives  of  property  and  equipment  for
  purposes of financial reporting range from five to seven years.

  Oil  and Gas Properties - The Company uses the successful efforts method  of
  accounting  for oil and gas producing activities.  Under that method,  costs
  are accounted for as follows:

     a.Geological  and geophysical costs and costs of carrying  and  retaining
       undeveloped properties are charged to expense as incurred.

     b.Costs  of drilling exploratory wells and exploratory-type stratigraphic
       test  wells  that  do not find proved reserves are charged  to  expense
       when the wells do not find proved reserves.

     c.Costs of acquiring properties, costs of drilling development wells  and
       development-type  stratigraphic  test  wells,  and  costs  of  drilling
       successful  exploratory wells and exploratory-type  stratigraphic  test
       wells are capitalized.

     d.The  capitalized  costs  of wells and related equipment  are  amortized
       over  the  life of proved developed reserves that can be produced  from
       assets  represented  by those capitalized costs.   Mineral  acquisition
       costs (leasehold) are amortized as the proved reserves are produced.

     e.Costs  of unproved properties are assessed periodically, and a loss  is
       recognized if the properties are impaired.
<PAGE> 22
                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]

  Revenue  Recognition - The Company's revenue is generated primarily  by  the
  production  and  sale of oil and gas.  Revenue from oil  and  gas  sales  is
  recognized when the product is transferred to the purchaser.

  Stocked  Based  Compensation  - The Company accounts  for  its  stock  based
  compensation in accordance with Statement of Financial Accounting  Standards
  (SFAS)  No. 123, "Accounting for Stock-Based Compensation".  This  statement
  establishes  an  accounting  method  based  on  the  fair  value  of  equity
  instruments  awarded to employees as compensation.  However,  companies  are
  permitted  to  continue  applying  previous  accounting  standards  in   the
  determination  of net income with disclosure in the notes to  the  financial
  statements  of the differences between previous accounting measurements  and
  those  formulated by the new accounting standard.  The Company  has  adopted
  the  disclosure  only provisions of SFAS No. 123, accordingly,  the  Company
  has elected to determine net income using previous accounting standards.

  Earnings  (Loss)  Per Share - The Company accounts for earnings  (loss)  per
  share  in  accordance with Statement of Financial Accounting  Standards  No.
  128,  "Earnings  Per  Share," which requires the Company  to  present  basic
  earnings  per  share  and  dilutive earning per share  when  the  effect  is
  dilutive.   The  computation of earnings (loss) per share is  based  on  the
  weighted  average  number of shares outstanding during the period  presented
  [See Note 13].

  Cash  and  Cash Equivalents - For purposes of the statements of cash  flows,
  the  Company considers all highly liquid debt investments purchased  with  a
  maturity of three months or less to be cash equivalents.

  Restricted Cash - The Company maintains a certificate of deposit of  $10,000
  for   collateral  for  a  performance  bond  related  to  its  oil  and  gas
  operations.

  Income  Taxes  -  The Company accounts for income taxes in  accordance  with
  Statement of Financial Accounting Standards No. 109, "Accounting for  Income
  Taxes."   This  statement  requires  an asset  and  liability  approach  for
  accounting for income taxes [See Note 7].

  Dividend Policy - The Company has not paid any dividends on common stock  to
  date  and  does  not  anticipate paying dividends on  common  stock  in  the
  foreseeable future.

  Reclassification of Financial Statements - The financial statements for  all
  periods prior to December 31, 1998 have been reclassified to conform to  the
  titles and headings used in the December 31, 1998 financial statements.

  Accounting  Estimates  -  The  preparation of the  financial  statements  in
  conformity   with   generally   accepted  accounting   principles   requires
  management  to  make  estimates and assumptions  that  affect  the  reported
  amounts of assets and liabilities, the disclosures of contingent assets  and
  liabilities at the date of the financial statements and the reported  amount
  of  revenues and expenses during the reporting period. Actual results  could
  differ from those estimated.

<PAGE> 23

                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]

Recently  Enacted  Accounting  Standards  -  In June 1997, (SFAS) No's. 130,
"Reporting  Comprehensive Income"  and  131, "Disclosures about Segments of
an Enterprise and  Related Information"  were issued.  SFAS No. 130 requires
that all  items  that  are  required   to  be  recognized  as  comprehensive
income  be  reported  in  a  financial  statement that is displayed with the
same prominence as the  other financial   statements.   SFAS  No.  131  sets
standards   for   reporting  information  about  operating  segments  in the
financial statements. SFAS No. 131 also sets standards for the   disclosures
about  products,   major customers,  and  geographical areas.  SFAS  No. 132
provides   for  disclosures  about   pensions   and   other  post-retirement
benefits.  Although   such statements  are  not effective until fiscal years
beginning  after  December 15,  1997, had such statements been  adopted  for
the periods presented, their effect  on  the  financial statements would not
have  been   significant.   SFAS   No.   133,  "Accounting  for   Derivative
Instruments and  Hedging  Activities" dictates the  accounting standards for
Derivative Instruments  and  Hedging Activities and is effective for  fiscal
years  beginning  after  June  15,  1999.  SFAS  No.  134,  "Accounting  for
Mortgage-Backed  Securities..."  relates  to Mortgage  Backed  Securities and
has no applicability to  the  Company.  Had such  SFAS's  been  adopted  for
the periods presented, their  effect  on  the financial statements would not
have been significant.

NOTE 2 - NOTES RECEIVABLE - RELATED PARTIES

  Notes  receivable, which include related parties [See Note  6],  consist  of
  the following at December 31:

                                                                      1998
                                                                    _________
  Note receivable from legal counsel in the original
    amount of $20,000 received as consideration for
    exercise of stock options, interest at 8.5% per
    annum, due on or before January 17, 2001,
    unsecured, unpaid accrued interest of $0                          10,230

  Note receivable from a former officer for exercise
    of stock options, interest at 8.5% per annum,
    due on or before January 17, 2001, unsecured,
    unpaid accrued interest of $0                                     40,000

  Note receivable from legal counsel received as
    consideration for exercise of stock options, interest
    at 8.5% per annum, due on or before January 17,
    2001, unsecured, unpaid accrued interest of $10,396               90,000
                                                                 ___________
                                                                  $  140,230
                                                                 ___________

  The  notes  receivable are presented on the balance sheet as a reduction  to
  stockholders' equity because the Company issued common stock for the notes.


<PAGE> 24

                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - NOTES PAYABLE - RELATED PARTIES

  During  November  through December 1998, the Company  raised  an  additional
  $245,000   in  financing  by  issuing  convertible  promissory  notes   with
  redeemable  warrants  in units of $5,000 each.  Each  unit  consisted  of  a
  convertible  promissory  note for $5,000 and 5,000  redeemable  warrants  to
  purchase  the  Company's common stock at $.875 per share.   The  convertible
  promissory  notes  have a maturity of one year, bear  interest  at  12%  per
  annum,  and  are  secured by the oil production from  the  Company's  Hittle
  Field  in  Central  Kansas.  The promissory notes are convertible  into  the
  Company's  common stock, at the holder's option, at the rate  of  one  share
  for  each  $1.50 of principal and accrued but unpaid interest.  The warrants
  are  exercisable  for two years from the date of exercising  the  conversion
  feature  of  the  promissory  note.   Each  warrant  is  redeemable  at  the
  redemption price of $.10 per warrant on the company's 30 day written  notice
  to  the  holders if the closing bid price for the Common Stock, as  reported
  on  the  National  Associations of Securities  Dealers  Electronic  Bulletin
  Board,  is  $1.50 per share or more for ten consecutive trading days  or  is
  $1.50 per share or more for 15 trading days in any 30 trading day period.

NOTE 4 - PROPERTY AND EQUIPMENT

  The  following  is  a  summary of property and equipment  -  at  cost,  less
  accumulated depreciation as of December 31:

                                                         1998        1997
                                                      ___________ ___________
    Furniture and office equipment                    $     8,602 $    12,328
    Vehicle                                                     -      29,278
    Less:  accumulated depreciation                        (3,975)     (9,597)
                                                      ___________ ___________
         Total                                        $     4,627 $    32,009
                                                      ___________ ___________

  Depreciation  expense charged to operations was $1,842 and  $7,112  for  the
  years ended December 31, 1998 and 1997.

NOTE 5 - OIL AND GAS PROPERTIES

  Upon  placing oil and gas properties and production equipment  in  use,  the
  unit-of-production  method, based upon estimates  of  proven  developed  and
  undeveloped  reserves,  is  used  in the  computation  of  depreciation  and
  depletion.   For  the  year ended December 31, 1998 and  1997,  the  Company
  recorded depletion of $55,612 and $37,538, respectively.



<PAGE>
<PAGE> 25
                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - OIL AND GAS PROPERTIES [Continued]

  The  estimates  of  oil and gas reserves used by the Company  were  produced
  internally  by management and others who were not independent  with  respect
  to  the  Company (who subsequently are no longer employed by  the  Company).
  The  Company has experienced continuing operating losses the past few  years
  and  has  experienced some cash flow shortages.  Due to the cash  shortages,
  management  has  not  hired an independent reserve engineer  to  update  its
  reserve  information.   Accordingly,  the  Company  has  not  presented  the
  supplemental   oil  and  gas  information  that  the  Financial   Accounting
  Standards  Board  has  determined is necessary to supplement,  although  not
  required  to  be  part  of,  the basic financial  statements.   The  missing
  supplemental  information relates to reserves quantities, capitalized  costs
  related to oil and gas production activities, results of operations  of  oil
  and  gas  production  activities and a standardized  measure  of  discounted
  future  net  cash flows related to reserve quantities.  Management,  in  the
  past,  has  also depended on related parties and others to provide financing
  plus additional capital through sale of its common stock.

  The  ultimate  realization  of  the Company's  investment  in  oil  and  gas
  properties is dependent upon the Company being able to economically  recover
  and  sell a minimum quantity of its oil and gas reserves and to be  able  to
  fund  the maintenance and operations of its wells.  The financial statements
  do  not  include any adjustments related to the uncertainty that the Company
  might not recover its estimated reserves.

  Robinson  Project  -  During  October through  December  1997,  the  Company
  entered  into  five oil and gas leases for a total of 498.12  acres  on  the
  McLouth  field,  located in Jefferson County, Kansas.  Each lease  agreement
  provides  for  the  Company to lease the property for a term  of  ten  years
  ["PRIMARY  TERM"]  and as long thereafter as oil, liquid hydrocarbons,  gas,
  or  their respective constituent products, are produced.  If operations  for
  drilling  are  not  commenced on or before one year from the  date  of  each
  lease,  each lease shall terminate.  If however, on or before one year  from
  the  date  of each lease the Company pays an additional rental of $5.00  per
  acre  per  lease, the Company may defer commencement of drilling  operations
  for  an  additional period of 12 months on each lease.  In like  manner  and
  upon  payments  of  $5.00 per acre per lease, the commencement  of  drilling
  operations  may  be  further deferred (without cancellation  of  lease)  for
  additional  periods  of  12  months each  during  the  PRIMARY  TERM.   Upon
  production, a royalty fee of 12.5% of total sellable production  is  payable
  to  the  property owner of each producing lease.  No operations for drilling
  ever  commenced  on  any of these leases and all of these  lease  agreements
  expired.

  On  December 1, 1997, the Company paid $70 and entered into an oil  and  gas
  lease  for  70  acres  on the McLouth field, located  in  Jefferson  County,
  Kansas.   The lease agreement provides for the Company to lease the property
  for  a  term  of  120 days ["PRIMARY TERM"] and as long thereafter  as  oil,
  liquid  hydrocarbons,  gas,  or their respective constituent  products,  are
  produced.   If operations for drilling are not commenced on or before  March
  31,  1998,  the  lease shall terminate.  Upon production, a royalty  fee  of
  18.8%  of  total sellable production is payable to the property  owner.   No
  operations  for  drilling  ever  commenced and  the  lease  was  terminated.
  During 1998, all costs associated with this project have been expensed.
<PAGE> 26

                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - OIL AND GAS PROPERTIES [Continued]

  Hittle  Project  -  During 1998 the Company capitalized $0 additional  funds
  into the Hittle Project.  During 1997, the Company included $558,861 in  oil
  and  gas properties for the Hittle field.  This included initial investments
  into  several new leases as well as drilling costs.  During September  1997,
  the  Company  began producing on the Hittle field.  During April  1997,  the
  Company  entered into seven oil and gas leases for a total of 880  acres  on
  the  Hittle  field, located in Cowley County, Kansas.  The lease  agreements
  provide  for  the Company to lease the property for a term of two  or  three
  years  ["PRIMARY TERM"] and as long thereafter as oil, liquid  hydrocarbons,
  gas,  or their respective constituent products, are produced.  If operations
  for  drilling are not commenced on or before one year from the date of  each
  lease,  each lease shall terminate.  If however, on or before one year  from
  the  date  of  each lease, the Company pays an additional  rental  for  each
  lease  of  $5.00  or  $1.00 per acre depending on lease  ($4,040  total  for
  renewal  of  all  seven  leases),  the Company  may  defer  commencement  of
  drilling operations for an additional period of 12 months.

  In  like  manner and upon payments of $5.00 or $1.00 per acre  depending  on
  lease,  the  commencement  of drilling operations may  be  further  deferred
  (without  cancellation of lease) for additional periods of  12  months  each
  per  lease  during  the PRIMARY TERM.  Upon production,  a  royalty  fee  of
  12.5%,  15.6%, or 18.8%, of total sellable production is payable to property
  owner.   The  Company paid the $5.00 rental per acre on all of these  leases
  and deferred commencement of drilling.

  During September, 1993 the Company entered into a "farm-out" agreement  with
  Kenneth  L.  Mason,  individually  and  KLM  Exploration,  Inc.,  a   Kansas
  corporation  (collectively referred to as "KLM"), wherein the Company  would
  perform  drilling and production operations on leases currently "farmed-out"
  to  KLM from Williams Natural Gas Company.  The agreement provided that  KLM
  would  assign its interests  in the properties to the Company in return  for
  a  cash  payment  of $100,000 and a 25% working interest  in  the  location,
  carried through the tanks resulting in a net royalty interest, after  taking
  all  other  interest holders into account, of 58.5%.  KLM would operate  the
  wells  for  a  fee  of  $75-$100 per well.  The operating  contract  had  no
  termination   date.   KLM's  farm-out  agreement  with  the  other   company
  terminates  when  production activities cease.   During  1996,  the  Company
  filed  a  lawsuit against KLM who in turn filed a counterclaim  against  the
  Company.   During  February 1998, the Company settled litigation  with  KLM.
  As  settlement  of  the litigation, KLM turned over the  operation  and  its
  interest in the McLouth field to the Company and the Company agreed  to  pay
  $1,500 for certain equipment.

NOTE 6 - RELATED PARTY TRANSACTIONS

  During  1997  the  Secretary/Treasurer of the Company gave  a  note  to  the
  Company  in the amount of $29,449 at 8.5% interest per annum.  The  note  is
  due  in  full  on  or  before  July 8, 1998. During  1998,  this  note  plus
  corresponding interest was paid in full.

  During April 1998 the Company sold a vehicle to the company's president  for
  $16,600.
<PAGE> 27
                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - RELATED PARTY TRANSACTIONS [Continued]

  During January 1997, the secretary/treasurer of the Company exercised  stock
  options  for  the  purchase of shares of the Company's  common  stock.   The
  secretary  of  the  Company  gave a note to the Company  in  the  amount  of
  $80,000  at  8.5% interest per annum.  This note was to be repaid  in  three
  equal installments of principle and interest per year and was to be paid  in
  full  on  or  before  January 17, 2001.  At December 31,  1998,  the  unpaid
  balance  on  the note amounted to $40,000 with accrued interest of  $0  [See
  Note  2].   The  note has been accounted for as a reduction to stockholders'
  equity.

  During  1996  the president of the Company advanced the Company  $200.   The
  advances  were non-interest bearing and as of December 31, 1997, the  unpaid
  balance  was  $200.   During the year ended December 31, 1998,  the  Company
  settled the advances from the president of the Company

  During  1996 the secretary/treasurer of the Company advanced the  Company  a
  total  of $3,600.  The advances were non-interest bearing and as of December
  31, 1998, the unpaid balance was $0.

NOTE 7 - INCOME TAXES

  The  Company  accounts  for  income taxes in accordance  with  Statement  of
  Financial  Accounting  Standards (SFAS) No.  109,   "Accounting  for  Income
  Taxes".   SFAS  No. 109 requires the Company to provide a net  deferred  tax
  asset  or  liability equal to the expected future tax benefit or expense  of
  temporary  reporting  differences between book and tax  accounting  and  any
  available operating loss or tax credit carryforwards.  At December 31,  1998
  and  1997,  the total of all deferred tax assets was $774,896 and  $717,459,
  respectively,  and  the total of the deferred tax liabilities  was  $189,178
  and  $358,325, respectively.  The amount of and ultimate realization of  the
  benefits  from the deferred tax assets for income tax purposes is dependent,
  in  part,  upon the tax laws then in effect, the Company's future  earnings,
  and  other  future  events,  the  effects  of  which  cannot  presently   be
  determined.  Because of the uncertainty surrounding the realization  of  the
  deferred  tax  assets, the Company has established a valuation allowance  of
  $585,719 and $359,133 as of December 31, 1998 and 1997, respectively,  which
  has  been offset against the deferred tax assets.  The net increase  in  the
  valuation  allowance  during  the years ended December  31,  1998  and  1997
  amounted to approximately $226,586 and $155,949, respectively.

  As  of  December  31, 1998 and 1997, the Company has net tax operating  loss
  [NOL]  carryforwards  available to offset its future income  tax  liability.
  The  NOL carryforwards have been used to offset deferred taxes for financial
  reporting   purposes.   The  Company  has  federal  NOL   carryforwards   of
  approximately   $1,851,978 that expire in various  years  between  2001  and
  2018.



<PAGE>
<PAGE> 28

                   UPLAND ENERGY CORPORATION AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - INCOME TAXES [Continued]

  The  components  of  income tax expense from continuing operations  for  the
  years ended December 31, 1998 and 1997 consist of the following:

                                                           December 31,
                                                    _________________________
                                                        1998         1997
                                                    ____________ ____________
  Current income tax expense:
   Federal                                          $          - $          -
   State                                                       -            -
                                                    ____________ ____________
    Net current tax expense                                    -            -
                                                    ____________ ____________
  Deferred tax expense (benefit) arising from:

  Excess of tax over financial accounting
    depreciation                                    $   (169,147)$    168,554
  Net operating loss carryforwards                       (89,628)    (370,050)
  Excess of financial accounting over tax
    compensation - APB 25                                      -       77,737
  Litigation reserve                                      32,190      (32,190)
  Valuation allowance                                    226,585      155,949
                                                    ____________ ____________
    Net deferred tax expense                        $          - $          -
                                                    ____________ ____________

  Deferred income tax expense results primarily from the reversal of
  temporary timing differences between tax and financial statement income.

  A  reconciliation  of income tax expense at the federal  statutory  rate  to
  income tax expense at the Company's effective rate is as follows:

                                                           December 31,
                                                    _________________________
                                                        1998         1997
                                                    ____________ ____________
  Computed tax at the expected federal
    statutory rate                                  $  (206,437) $   (115,810)
  Other                                                  (1,933)         (357)
  Excess of financial accounting over tax
    compensation - APB 25                                     -       (29,563)
  State income taxes, net of federal income
    tax benefits                                        (18,215)     ( 10,219)
  Valuation allowance                                   226,585       155,949
                                                   ____________  ____________
  Computed tax at the effective income tax rates   $          -  $          -
                                                   ____________  ____________


<PAGE>
<PAGE> 29
                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - INCOME TAXES [Continued]

  The  temporary  differences and carryforwards gave  rise  to  the  following
  deferred tax asset (liability) at December 31, 1998 and 1997:

                                                          1998         1997
                                                     ____________ ____________
  Excess of tax over book accounting
    depreciation                                        (189,178)    (358,325)
  Contribution carryover                                      37           37
  NOL carryforwards                                      774,859      685,232
  Litigation reserve                                           -       32,190

  As  of  December  31,  1998 and 1997, the deferred taxes  reflected  in  the
  consolidated balance sheet are as follows:

                                                         1998         1997
                                                   ____________ ____________
  Short term asset (liability)                       $          - $          -
  Long term asset (liability)                        $          - $          -

NOTE 8 - COMMON STOCK TRANSACTIONS

  During  August  1998, the Company granted options to purchase 50,000  shares
  of  the  Company's  common stock at $1.00 per share to  its  legal  counsel.
  However,  during  November  1998  the Company  canceled  these  options  and
  granted  legal  counsel options to purchase 50,000 shares of  the  Company's
  common  stock  at $.625 per share.  During August 1998, the Company  granted
  options to a new director to purchase 10,000 shares of the Company's  common
  stock  at  $1.00  per  share.   However, during November  1998  the  company
  canceled these options and granted legal counsel options to purchase  10,000
  shares  of  the  Company's  common stock at $.625  per  share.  Also  during
  November  1998  the  Company granted two officers and  shareholders  of  the
  company  options  to purchase 20,000 shares (10,000 each) of  the  Company's
  common stock at $.625 per share.

  During  1998 the Company cancelled 133,186 shares of common stock  from  the
company's  former president.  The market value of the shares  was  at  $1.12
per  share.   The shares were purchased by cancellation of a note receivable
in the amount of $139,376 that was canceled along with the shares.

  On December 16, 1996 the Board of Directors resolved that 60,000  shares  of
common stock be reserved for issuance upon exercise of  options  granted  to
legal counsel for services to be performed  in  the  amount of $25,000.  The
exercise price for the  options is  $2.00,  the options vest on December 16,
1996, and the options expire on December 16, 2001.  The  cost  of  the legal
services has been accounted for as an addition to  prepaid  expenses  and  a
charge to additional paid-in capital.  The prepaid  expense  reversed during
1997 and was offset against additional paid-in capital as a  stock  offering
expense.  The  options had previously been granted during 1996 in connection
with services to be performed in 1997.  The Company received cash of $10,000
and two notes  receivable  totaling  $110,000  (a $90,000 note and a $20,000
note) as  consideration  for the exercise price of the  options.  Both notes
provide for interest at  8.5%  per annum and are to be  repaid in full on or
before January 17, 2001.  The note  for  $90,000  may  be  paid  for by  the
cancellation of obligations owed by the  Company  for  legal services.   The
Company  received  total  proceeds  of $120,000 for exercise of the options.
Both  notes  have  been classified as a reduction of stockholders' equity on
the balance sheet.
<PAGE> 30

                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - COMMON STOCK TRANSACTIONS [Continued]

  On  October  1, 1996, the Board of Directors resolved that 120,000  (initial
shares)  and 155,000 (restricted shares) unissued shares of common stock  be
granted upon exercise of options granted to an officer of the Company  under
the  terms  of  his  employment agreement with  the  Company.   The  120,000
(initial  shares) and 155,000 (restricted shares) options have  an  exercise
price  of  $.20,  vest on September 1, 1996 and expire on August  31,  1998.
All  255,000  options  were  exercised  during  January,  1997.  The Company
received a note receivable as consideration for the exercise price.

  Private  Offering  - During August 1996, the Company issued  500,000  units,
for  cash at $.70 per unit, which consisted of one share of common stock and
one  common  stock  purchase warrant in a private placement  offering.   The
purchase  warrant  allows  the holder to purchase another  share  of  common
stock  at  an exercise price of $1.50.  Total proceeds amounted to $350,000.
The   Company  issued  50,000  units  of  common  stock  and  warrants   for
commissions  of  $35,000 in connection with the private placement  offering.
During  February, 1997, the Company made an offering to the holders  of  the
Company's   currently  outstanding  common  stock  purchase   warrants   who
exercised their existing warrants by February 21, 1997, to receive  one  new
common  stock  purchase warrant (exercisable into one share of common  stock
at  an  exercise  price of $2.00 per share) for every two existing  warrants
exercised.   The Company believes the offering was exempt from  registration
with  the Securities and Exchange Commission under Rule 506 of Regulation  D
as  promulgated under the Securities Act of 1933, as amended.  The  existing
warrants  were  exercisable into one share of common stock  at  an  exercise
price  of  $1.50 per share.  During February 1997, 500,000 of  the  existing
warrants  were  exercised  and  the  Company  received  total  proceeds of
$750,000.

  On  December 15, 1996 the Board of Directors resolved that 100,000 shares of
common  stock be reserved for issuance upon exercise of options  granted  to
four  officers of the Company.  The exercise price for the options is $2.00,
and  the options vest on December 15, 1996 and expire on December 15,  2001.
During  the  year  ended  December 31, 1998, 25,000 of  these  options  were
cancelled  as  part of the settlement agreement with the  president  of  the
Company.

  During  November, 1996 the Board of Directors resolved that 150,000 unissued
shares  of common stock be granted upon exercise of options, under  a  stock
option  plan, to an officer of the Company under the terms of his employment
agreement  with the Company. Of the 150,000 options granted, 50,000  options
have  an  exercise price of $.20, vest on November 12, 1996  and  expire  on
August  31, 1998.  The remaining 100,000 options have an exercise  price  of
$.70,  vest on November 12, 1996  and  expire  on  August  31, 1998.  During
January  1997,  the  secretary/treasurer of  the  Company  exercised options
for a total of 150,000 shares of  common  stock.   The  first  50,000 shares
were   exercised  at  $.20  per  share  and  the  remaining  100,000  shares
were  exercised at $.70 per share.  The options had previously been  granted
during  1996  in  connection  with  an employment  agreement.   The  Company
received  a note receivable as consideration for the exercise price  of  the
options.

  Warrants   -  At  December  31,  1998,  the  Company  had  500,000  warrants
outstanding to purchase common stock at $2.00 per share and 50,000  warrants
to   purchase  common  stock  at  $1.50  per  share  and  245,000   warrants
outstanding  to purchase common stock at $.875 per share.  The warrants  all
have a three year life [See Note 3].

<PAGE> 31

                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - COMMON STOCK TRANSACTIONS [Continued]

  Stock Options - The Company applies APB Option No. 25 in accounting for  its
options granted under the employment agreements.  Compensation of $0 and  $0
was  recorded  in 1998 and 1997 respectively.  The Corporation  has  adopted
the   disclosure-only  provisions  of  Statement  of  Financial   Accounting
Standards  No. 123, "Accounting for Stock-Based Compensation."   The  effect
on  net  income  from  the  adoption of Statement  of  Financial  Accounting
Standards No. 123 "Accounting for Stock Based Compensation" are the same.

  The  fair  value  of each option granted is estimated on  the  date  granted
using  the  Black-Scholes option pricing model with the following  weighted-
average  assumptions used for grants during the period  ended  December  31,
1998,  risk-free interest rates of 6.33%, expected dividend yields of  zero,
expected life of 5 years, and expected volatility 78%.

 A  summary  of  the status of the options granted under the Company's  stock
  option  plan  at December 31, 1998 and 1997, and changes during the  periods
  then ended are presented in the table below:

                                   Year Ended               Year Ended
                                December 31, 1998       December 31, 1997
                          _________________________ _________________________
                               Weighted Average         Weighted Average
                           Shares  ExercisePrice    Shares  Exercise Price
                          _________ _______________ _________ _______________
  Outstanding at
    beginning of period     100,000 $          2.00   525,000 $           .64
  Granted                   140,000            0.78    60,000            2.00
  Exercised                       -               -  (485,000)            .32
  Forfeited                       -               -         -               -
  Canceled                  (85,000)           1.30         -               -
                          _________ _______________ _________ _______________
  Outstanding  at end of
    Period                  155,000 $          1.28   100,000 $          2.00
                          _________ _______________ _________ _______________
  Weighted average fair value
    of options granted      155,000 $          1.28    60,000 $          2.00
                          _________ _______________ _________ _______________

NOTE 8 - COMMON STOCK TRANSACTIONS [Continued]

  A  summary  of  the  status of the options outstanding under  the  Company's
  stock option plan at December 31, 1998 is presented below:

                    Options Outstanding                Options Exercisable
      _____________________________________________ _________________________
Range of          Weighted-Average Weighted-Average          Weighted-Average
Exercise  Number     Remaining         Exercise       Number      Exercise
 Prices  Outstanding Contractual Life   Price       Exercisable     Price
_____________________________________________________________________________
   2.00      75,000         4 Years            2.00      75,000          2.00
   .625      80,000         5 Years            .625      80,000          .625
_____________________________________________________________________________
             155,000                                    155,000

<PAGE> 32

                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

  The  Company  accounts  for  option agreements under  Accounting  Principles
Board  Opinion  No.  25,  "Accounting for Stock Issued  to  Employees",  and
related  interpretations.   Had compensation cost  for  these  options  been
determined,  based  on the fair value at the grant dates  for  awards  under
these  agreements,  consistent with the method prescribed  by  Statement  of
Financial   Accounting  Standards  No.  123,  "Accounting  for   Stock-Based
Compensation",  the Company's net loss would have been the proforma  amounts
as indicated below:
                                                      For the Years Ended
                                                       December 31,
                                              _______________________________
                                                   1998            1997
                                              _______________ _______________
     Net Loss applicable to
     common stockholders          As reported $     (567,168) $     (340,616)
                                     Proforma $     (567,168) $     (340,694)

     Earnings per Share           As reported $         (.16) $         (.10)
                                     Proforma $         (.16) $         (.10)

NOTE 9 - CONTINGENCIES

  Litigation  -  The Company may become or is subject to investigation,  claim
or  lawsuit  ensuring  out of the normal conduct of its business,  including
those  related to environmental, safety and health, commercial transactions,
etc.   The  Company  is  currently not aware of any  such  items,  which  it
believes  could  have  a material adverse affect on its  financial  position
except as disclosed below.

  During  1996, the Company filed a lawsuit against an operator of  the  wells
in  the  McLouth field.  The Company claims the operator failed to  service,
maintain,  and  operate the wells in a reasonable manner.  The  Company  was
asking  for  damages  in  excess  of  $500,000.   The  operator  asserted  a
counterclaim against the Company for breech of contract alleging damages  in
excess  of  $500,000.  During the year ended December 31, 1998, the  Company
negotiated  a  settlement agreement with the operator  wherein  the  Company
would  prepay  the plugging costs in the amount of $15,000 in 1998,  $15,000
in  1999  and  $15,000 in 2000.  All lawsuits and countersuits were  dropped
and the Company took over as operator of the wells in the McLouth field.

 During  1995,  a lawsuit was filed against the Company by the landowners  of
one  of  the  Company's  three developed oil leases in  the  McLouth  field,
generally referred to as the "B" lease.  The "B" lease contains two  of  the
Company's fifteen productive wells.  During the year ended 1995 the  Company
chose  not  to produce or further develop on the "B" lease until  resolution
of  the  lawsuit  with the landowners.  The Company has answered  the  suit,
denied  the  plaintiffs' claims, and asserted a counterclaim and affirmative
defenses.   The  Company disputed the plaintiffs' claims  and  defended  the
case  vigorously to protect its interest in the lease.  During October 1997,
the  district judge entered an order granting summary judgement in favor  of
the   plaintiffs  and  decreed  cancellation  of  the  "B"  Lease.   It   is
management's and their counsel's opinion that the court's entry  of  summary
judgement  for plaintiffs was erroneous under both the facts  and  the  law.
However,  management subsequently determined during 1998 not to  appeal  the
summary judgement.  The  remaining  assets  not  covered  by  the  allowance
previously accrued have been written off.

<PAGE>
<PAGE> 33
                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9   CONTINGENCIES [Continued]

  During  May  1998, the  Company  settled  a   litigation  with  the   former
 president  of the  Company by purchasing 133,186  shares  of  the  Company's
common stock from the  president and canceling them.  The  market  value of
the stock  was  $1.12 per  share.  All amounts owed to the  Company  by  the
president were canceled in connection with this agreement.

  Realization of Wells - The  Company  has  depended  on  related  parties and
others to provide financing through  loans  and additional  purchase  of its
common stock.   The  ultimate realization  of  the  Company's investment  in
oil  and  gas  properties  is dependent  upon  the  Company  being  able  to
economically recover  and  sell  a minimum  quantity  of  its  oil  and  gas
reserves and to be able  to  fund  the maintenance  and  operations  if  is
wells.  The financial statements  do  not  include  any  adjustments related
to the uncertainty that the Company might not recover its estimated reserves.

NOTE 10 - COMMITMENTS AND AGREEMENTS

  Employment  Agreements - During December, 1997 the Company entered  into  an
employment  agreement with the production supervisor.  The agreement  has  a
one  year term and provides for a minimum salary of $24,000 per year  during
the  term  of  the agreement.  The agreement also provides for a  production
bonus  of five cents per barrel on all oil produced on the Company's  Hittle
Field  in  Kansas and any subsequent field developed by the  Company  during
the  term  of  this  agreement.   During  1998,  the  Company  extended  the
employment agreement with the production supervisor for another year.

  During  October,  1996 the Company entered into employment  agreements  with
two of its officers.  The agreement with the president of the Company has  a
two  year term and provides for a minimum salary of $60,000 per year  during
the  term of the agreement.  The agreement also provides for commissions  of
$1.50  per  barrel of oil shipped in any month in excess of  2,000  barrels.
Lastly,  the agreement provides for stock options to purchase up to  275,000
shares  of  common stock.   The options may be exercised at any  time  after
September  1,  1996 [See Note 8].  During 1998, the Company  terminated  the
employment  of  the  president  of  the  Company.  The  agreement  with  the
secretary/treasurer of the Company  has  a  two-year   term   and   provides
for   a   yearly  minimum  salary  of   $36,000.     The secretary/treasurer
also received options to purchase up  to  150,000  shares  of  common  stock
which may be exercised at any time after November 12,  1996 [See   Note  8].
During  1998,  the  secretary/treasurer  terminated   his  employment   with
the  Company.  These employment  agreements  amended  any  prior  employment
agreements  and  canceled any  options  granted  in  the  prior   employment
agreements.

  During  November  1998  the  company  entered  into  a  one-year  employment
agreement  with  the Company's new president.  The terms  of  the  agreement
include  a  base  salary of $3,000 per month that can be  paid  in  cash  or
converted  to  stock at market value.  As of December 31, 1998  the  Company
had not paid out any salary but under this agreement has accrued $6,000 of
unpaid salary.

  Operating  Agreement  -  During  December  1998,  the  Company  hired   Pace
Exploration  to  handle all of the Company's operation and drilling  on  the
Hittle  Field.  Under the terms of the Agreement, Pace Exploration  received
a twenty percent working interest in the Hittle Field.


<PAGE>
<PAGE> 34

                   UPLAND ENERGY CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10   COMMITMENTS AND AGREEMENTS [Continued]

 Rental  Agreements - The Company has entered into various office  space  and
equipment  rental  agreements in the normal course  of  its  business.   The
agreements  are  on a month to month basis and, accordingly,  are  accounted
for  on a monthly basis.  The minimum amounts presently being paid on  those
agreements  is  approximately $2,400 per month.  During  1998,  the  Company
terminated  its  office  space agreements and  entered  into  an  additional
equipment  rental  agreement with monthly payments of $1,795.   The  Company
then terminated the additional equipment rental agreement in December 1998.

NOTE 11 - RESTRICTED CASH

  The  Company has a $10,000 certificate of deposit with an interest  rate  of
4.60%  annually.   The  certificate of deposit is renewed  annually  and  is
pledged  as  collateral for a performance bond related to the Company's  oil
and gas operations.

NOTE 12 - CONCENTRATION OF CREDIT RISKS

  The  Company sells substantially all of its oil production to two purchasers
because  it  is able to negotiate more favorable terms with the  purchasers.
If  the  purchasers  stopped buying products from the Company,  the  Company
would  be  forced to contract with other purchasers available in  the  areas
where  the oil is produced.  The effect of a purchaser pulling out would  at
least put a temporary downward pressure on prices in the area but it is  not
currently  possible  for the Company to estimate how the  Company  would  be
affected.   Management believes that its oil is a commodity that is  readily
marketable  and that the marketing method it follows is typical  of  similar
companies in the industry.

NOTE 13 - EARNINGS (LOSS) PER SHARE

  The  following data show the amounts used in computing earnings  (loss)  per
share and the effect on income and the weighted average number of shares  of
dilutive  potential common stock for the years ended December 31,  1998  and
1997:

                                                    For the Years Ended
                                                       December 31,
                                               _______________________________
                                                   1998            1997
                                               _______________ _______________
  Income (loss) from continuing operations
     applicable to common stock               $     (567,168) $     (340,616)
                                              _______________ _______________
  Income (loss) available to common stockholders
     used in earnings (loss) per share        $     (567,168) $     (340,616)
                                              _______________ _______________
  Weighted average number of common shares used in
     earnings (loss) per share outstanding during
     the period                                    3,648,026       3,565,542
                                              _______________ _______________

  Dilutive  earnings  per share was not presented, as  its  effect  was  anti-
  dilutive for the years ended December 31, 1998 and 1997.

<PAGE> 35

                   UPLAND ENERGY CORPORATION AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - GOING CONCERN

  The  accompanying financial statements  have  been prepared in conformity
with generally  accepted accounting principles which  contemplate continuation
of the  Company  as  a  going   concern.   However,  the  Company  has   not
yet established   profitable  operations  and  has  incurred  significant
losses. Further, the Company has current liabilities  in  excess of current
assets  at  December 31, 1998.   These  factors  raise substantial doubt about
the ability of the  Company  to continue  as  a going concern.  In this
regard, management is  proposing   to  raise  additional   funds  through
loans  and/or  through additional sales of  its  common  stock and/or sale  of
non-profitable  wells which  funds  will  be  used to  assist  in
establishing on-going operations. There is  no  assurance  that  the  Company
will  be  successful  in  raising this  additional  capital  or achieving
profitable operations.  The financial  statements do  not  include any
adjustments that might result from these uncertainties.

NOTE 15 - SUBSEQUENT EVENTS

  New  Wells  -  During 1999, the Company applied its deposit of $225,000  and
drilled  two  additional wells on the Hittle Field.  These wells  have  been
completed  for  production, one well was a dry  hole  and  the  company  has
planned to use it as a disposal well.  The other well is producing oil.

  Receipt of Note Receivable - During 1999, the Company received $40,000  from
a former officer for amounts owed the Company [see note 2].