UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, DC  20549

                                FORM 10-KSB

Annual Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934 [Fee Required]

For the fiscal year ended: December 31, 1996

Commission file number #1-13162

                            EMPIRIC ENERGY, INC.
              (Name of small business issuer in its charter)

              Texas                                     75-2455467
(State or other jurisdiction of                       (IRS Employer
incorporation or organization)                     Identification No.)

    8201 Preston Road, Suite 580
           Dallas, Texas                                   75225
(Address of principal executive offices)                (Zip Code)

          (214) 265-8392
(Registrant's telephone number, including area code)

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

Title of each class                       Name of each exchange 
                                          on which registered

Common Stock ($.01 par value)               Over The Counter

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X   No  

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form and no disclosure will be
contained, to the best of the 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.  X

SIGNATURES

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

                            EMPIRIC ENERGY, INC.


                            By: _______________________________________
                                James J. Ling, President


                            By: _______________________________________
                                Clyde E. Skeen, Chief Financial Officer



                            INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Empiric Energy, Inc.
Dallas, Texas

We have audited the accompanying balance sheets of Empiric Energy, Inc.
as of December 31, 1996, and 1995, and the related statements of
operations, changes in stockholders' equity, and cash flows for each of the
years in the three year the period ended December 31, 1996.  These
financial statements are the responsibility of the Company's management. 
Our responsibility is to express an opinion on these financial statements
based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Empiric Energy, Inc. at
December 31, 1996 and 1995, and the results of their operations and their
cash flows for each of the years in the three year period ended December
31, 1996 in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.  During the year ended
December 31, 1996, the Company incurred a net loss of $491,446,
including a ceiling test adjustment of $430,993.  Future working capital
requirements are dependent on the Company's ability to restore and
maintain profitable operations, to restructure it's financing arrangements,
and to continue it's present short-term financing, or obtain alternative
financing as required.  It is not possible to predict the outcome of future
operations or whether the necessary alternative financing may be arranged,
if needed.  Those conditions raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

Certified Public Accountants                      April 14, 1997


                          Empiric Energy, Inc.
                             Balance Sheets

ASSETS
                                                           December 31,
                                                     1996               1995 
Current assets
  Cash                                           $   1,084          $   3,198
Accounts receivable                                 69,217                - 
  Note receivable-Texoil (Note 3)                   31,000             31,000
       Total current assets                     $  101,301        $    34,198

Oil and gas properties, using full cost
 accounting (Note 1 and 3)
  Properties being amortized                     3,894,172          3,601,294 
  Properties not being 
       amortized (Note 1)                             -                65,000
                                                $3,894,172         $3,666,294
Less accumulated depreciation, depletion,
 amortization and impairment                     1,535,833          1,081,871
   Net oil and gas properties                   $2,358,339         $2,584,423

Other assets
  Other property and equipment, at cost,
   less accumulated depreciation                     4,133              8,267
  Other                                              2,742              6,213
       Total other assets                            6,875             14,480 
Total Assets                                    $2,466,515         $2,633,101


                                EMPIRIC ENERGY, INC.
                                   Balance Sheets

LIABILITIES AND STOCKHOLDERS' EQUITY
                                                         December 31,
                                                    1996              1995 
Current liabilities
   Accounts payable                          $    257,713        $    253,037 
   Due to stockholders                             22,627              22,628 
   Notes payable (Note 4)                         174,850             110,000
      Total current liabilities              $    455,190        $    385,665 

Long-term debt
   Senior Secured N/P (Note 4)                       -                267,520
                                                     -                267,520
       Total liabilities                     $    455,190        $    653,185

Stockholders' equity
   Preferred stock, $100, par value;
      authorized 2,000,000 shares;
      4,488 and none outstanding,
      respectively                                448,803                 -  
   Common stock, $0.01 par value;
      authorized 20,000,000 shares;
      4,330,737 and 4,055,537 shares
      outstanding, respectively                    43,307              40,555
   Additional paid-in capital                   3,579,342           3,508,043
   Retained deficits                           (2,060,127)         (1,568,681)
       Total stockholders' equity             $ 2,011,325         $ 1,979,917 

Total liabilities and stockholders'
    equity                                    $ 2,466,515         $ 2,633,102


                              EMPIRIC ENERGY, INC.
                            Statements of Operations
                                 December 31,

                                         1996            1995          1994 

Revenues
   Oil and gas sales               $    94,978      $   85,282     $  138,012
       Total revenues                   94,978          85,282        138,012

Expenses
 Production                             86,087          58,472         80,583
 Depreciation, depletion,
     and amortization                   22,969          97,785         49,733
 General and admin.                    196,038         212,412        124,140
 Interest (Note 1)                      36,938            -            51,516
 Full cost ceiling
  adjustment (Note 1)                  430,993            -           830,969
      Total expenses              $    773,025      $  368,669     $1,136,942

Other Income
 Dividend income                        45,000          33,750           -  
 Interest income                         3,100           4,000           -  
 Other income                          138,500            -              -  
  Total other income              $    186,600      $   37,750           -  

Loss before provision
  for income taxes                    (491,446)       (245,636)      (998,929)

Provision for income
   taxes (Note 5)                         -               -              -   

Net loss                           $  (491,446)     $ (245,636)    $ (998,929)

Primary earnings per
    share (Note 1)                 $     (0.12)     $    (0.06)    $    (0.25)



<TABLE>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<CAPTION>
                                                                                                          Total
                                  Preferred               Common             Paid-In       Retained     Stkholders'
                               Shares    Amount      Shares      Amount      Capital      Earnings       Equity

<S>                            <C>       <C>      <C>         <C>          <C>          <C>          <C>
Balance at 12/31/93               -        -       6,032,500   $ 60,325     $1,554,684   $(324,115)   $1,290,894

Changes 1994:
  Reverse common stock
     split                        -        -      (3,016,200)   (30,162)        30,162        -          -

Conversion of notes               -        -         794,200      7,942      1,925,647        -        1,933,589

Net loss for year ended
    December 31, 1994             -        -            -           -            -        (998,929)     (998,929)
Balance at December 31,
   1994                           -        -       3,810,500     38,105      3,510,493  (1,323,044)    2,225,554

Changes 1995:
Stock issued in Texoil
   transaction                    -        -         225,000      2,250         (2,250)       -          -
Stock issued in Lyon
   Operating transaction          -        -          20,000        200           (200)       -          -

Net loss for year ended
   December 31, 1995              -        -            -           -            -        (245,636)     (245,636)
Balance at December 31,
    1995                          -        -       4,055,500     40,555      3,508,043  (1,568,680)    1,979,918

Changes 1996:
Stock issued                   4,488   $448,803      275,200      2,752         71,299        -           74,051

Net loss for the year ended
  December 31, 1996               -        -            -           -            -        (491,446)     (491,446)
                               4,488   $448,803    4,330,700   $ 43,307      3,579,342  (2,060,126)    1,562,523
</TABLE>

                               EMPIRIC ENERGY, INC.
                            Statements of Cash Flows
                                  December 31,

                                             1996         1995         1994
Cash flows from operating activities
 Net loss                                 $(491,446)   $(245,637)   $(998,929)
 Adjustments to reconcile net loss
  to net cash provided by operating
  activities
    DD&A                                     22,969       97,785       38,317
    Write-down as result of
      ceiling test                          430,993         -            - 
    Depreciation and amortization             7,605        4,435        7,047
    (Increase) decrease in:
      Accounts receivable-trade             (69,219)        -         118,172
      Prepaid expenses                          -           -            - 
      Other assets                              -         10,298       (9,602)
    Increase (decrease) in:
      Accounts payable and accrued
              expenses                        4,676      (51,809)     (79,030)

 Net cash provided by operating
      activities                            (94,422)    (184,927)    (924,026)
Cash flows from investing activities
   Loan made                                    -        (31,000)        -   
   Capital expenditures                    (227,878)    (410,949)     336,554
 Net cash used by investing 
     activities                            (227,878)    (441,949)     336,554
 Cash flows from financing activities
   Short-term notes payable                  64,850      110,000         -  
   Proceeds from issuance of convertible
     senior notes                               -        267,520   (1,384,991)
   Retirement of senior notes              (267,520)        -            -
   Proceeds from issuance of common
      stock                                  74,051         -       1,933,590
   Proceeds from issuance of preferred
      stock                                 448,803         -            -
   Proceeds from sale of oil and gas 
      properties                                -        250,000         -  
  Net cash provided by investing
      activities                            320,184      627,520      548,599

Net increase in cash and
  cash equivalents                           (2,116)         644      (38,873)
Cash and cash equivalents
  - at beginning of period                    3,198        2,554       41,428

Cash and cash equivalents
  - at end of period                      $   1,082     $  3,198     $  2,555


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

OIL AND GAS PROPERTIES

The Company follows the full cost method of accounting for oil and gas 
properties.  Under this method, all costs related to the acquisition, 
exploration for and development of oil and natural gas reserves are 
capitalized and accumulated in a single cost center representing the
Company's activities undertaken exclusively in the United States. Such costs
include lease acquisition cost, geological and geophysical expenditures, 
lease rentals on undeveloped properties, costs of drilling both productive 
and non-productive wells and general and administrative expenses directly 
related to exploration and development activities. Proceeds received from 
disposals are credited against accumulated costs except when the sale 
represents a significant disposal of reserves in which case a gain or loss 
is recognized.  Abandonments of properties are accounted for as adjustments 
of capitalized costs with no loss recognized.

The costs capitalized, including production equipment, are depreciated or 
depleted on the unit-of-production method, based on proved oil and natural 
gas reserves as determined by independent petroleum engineers. Oil and 
natural gas reserves are converted to equivalent units based upon the 
relative energy content which is six thousand cubic feet of natural gas to 
one barrel of crude oil. Depreciation of office and other property is 
computed generally using the straight-line method over the useful lives of 
the assets. 

The capitalized costs less accumulated depletion, depreciation and deferred 
taxes are limited to an amount which is not greater than the estimated future
net revenue from proved reserves using period-end prices less estimated future 
production-related general and administrative expenses, financing costs and 
income taxes, plus the cost (net of impairments) of undeveloped properties.

CAPITALIZED INTEREST

The Company capitalized interest of $8,126 in 1995 and $29,577 in 1994, 
respectively on expenditures made in connection with development projects 
that were not subject to current amortization.  Interest was capitalized only
for the period that activities were in progress to bring those projects to 
their intended use.
 
OIL AND GAS PROPERTIES NOT SUBJECT TO DEPRECIATION, DEPLETION AND
AMORTIZATION

For oil and gas development activities in which a determination has not been 
made about additional reserves that should be classified a proved or the well
or wells have been determined to be nonproductive the associated costs are not
included in the full cost pool for purposes of computing amortization. In 1995
those cost were $65,000.

CASH FLOWS PRESENTATION

For purposes of the Statement of Cash Flows cash equivalents include time 
deposits, certificates of deposit and all liquid debt instruments with 
original maturities of three months or less.


EARNINGS PER SHARE

Primary earnings per share amounts are computed based on the weighted average 
number of shares actually outstanding plus the shares that would be outstanding
assuming conversion of the senior convertible notes payables which are 
considered to be common stock equivalents.  Net loss has been adjusted for 
interest expense (net of tax) on the convertible debt.  The number of shares 
used in the computations were 4,162,733 in 1996, 3,933,019 in 1995 and 
3,734,186 in 1994.  Fully diluted earnings per share consisting of the 
weighted average of common shares outstanding plus the fully converted 
preferred stock are not presented because the effect would be anti-dilutive.

NOTE 2 - RELATED PARTY TRANSACTIONS

Hill Investors, Inc. ("Hill"), an affiliate of Mr. Ling, has entered into a 
three year management consulting agreement with the Company whereby Hill 
provides certain management consulting services, receiving therefor a monthly
fee of $7,500.  In the event of the death or disability of Mr. Ling or a 
reorganization of the Company occurs during the term of the agreement, the 
agreement shall automatically terminate (in the case of Mr. Ling's death or 
disability) or, in the case of a reorganization, the agreement may be 
terminated at Mr. Ling's option.  Upon any such termination for the foregoing
reasons such payments shall continue for a period of 36 months from the date 
of such termination.  Mr. Ling presently devotes the majority of his working
time and efforts to the business and affairs of the Company and expects to 
continue doing so for the foreseeable future.  Under the terms of the agreement
the Company is obligated to provide to Hill suitable office facilities and to 
reimburse it for expenses incurred in connection with Hill's or Mr. Ling's 
services to the Company including without limitation, the cost of providing
an automobile and health and life insurance for Mr. Ling.  Pursuant to the 
agreement, Hill is obligated to certain covenants of confidentiality and non-
competition and is entitled to receive the benefits of indemnification against
damages and cost of defense of litigation or claims resulting from certain 
acts in the course of performance of its or Mr. Ling's management duties as 
provided for in the Company's by-laws.  Hill provided consulting services at 
a cost of $90,000 in 1996, $60,000 in 1995, and $82,850 in 1994.

Contemporaneously with the formation of the Company in October, 1992, Hill was
issued 1,750,000 shares of the Company's common stock (the "Shares") in 
consideration for Hill's: (i) assignment to the Company of its working interest
in the Smith Well in Holmes County, Mississippi; (ii) causing other 
unaffiliated persons who owned substantially all of the remaining working 
interest in the Smith Well to assign their interests in the well to the Company
in consideration for Hill's transfer to them of a total of 236,422 of the 
Shares; and (iii) making available to the Company the opportunity to enter into
the farmout agreement which had been negotiated by Hill with Richmond 
Petroleum, under which the Company subsequently earned its interest in the 
Richmond acreage.  Of the Shares assigned by Hill to owners of interests in the
Smith Well, 29,400 shares were transferred to Clyde Skeen Business Consultants,
Inc., the majority of the stock of which is owned by Clyde E. Skeen, 
Secretary, Treasurer and a Director of the Company.  Additionally, for services
rendered in the formation of the Company, Hill assigned to three persons a 
total of 87,500 of the Shares, including 50,000 shares to Clyde Skeen Business
Consultants, Inc.  Clyde Skeen Business Consultants, Inc. provided consulting 
services at a cost of $21,000 in 1995, and $36,000 in 1994.

As a result of the Texoil transaction described in Note 3 below the Company 
now owns approximately 23 percent of Texoil Energy Limited's common stock and 
100 percent of the 6% preferred stock.  If the 6% preferred stock were 
converted into Texoil Energy Limited's common stock, Empiric would own 
approximately 34 percent of Texoil's outstanding common stock.  The Company has
no plans to convert the preferred stock into common stock.  In addition, the
President of the Company is now a director of Texoil Energy Limited.

On December 31. 1995 the Company issued to two stockholders of the Company
$267,520, in senior secured notes payable bearing interest at 8% payable each
six months with the principal due in thirty-six months from that date in 
exchange for accounts payable owing to the stockholders.

NOTE 3 - ACQUISITION AND SALE OF OIL AND GAS PROPERTIES

In 1992 the Company acquired undivided interests in a producing well located in
Mississippi.  Current production from this well is being retained by the 
operator of the well to offset costs it incurred in a major reworking program.
 Upon receipt of full payment and satisfaction of this obligation, future 
revenue will revert to Empiric Energy, Inc.  This property was recorded at its
fair market value of $1.6 million. This value was based on the discounted value
of estimated reserves of the property less a provision for all claims and 
encumbrances which may be assessed against the property as estimated by 
management.  The estimated reserves were determined by independent professional
engineers.  In exchange for this property and other valuable assets, including
the opportunity to acquire the working interests in the Panhandle properties 
and for obtaining the initial financing to form the company, 1.75 million 
shares of stock and $125,000 in convertible senior notes were issued. 

In 1993 the Company acquired an additional 28.5% undivided interest in property
in the Texas Panhandle.  This additional interest was acquired for the 
assumption of the debts of the former operator and included a substantial 
amount of supplies.  The amount of the debts assumed plus other expenditures 
related to the transaction totaled approximately $450,000.  Part of this 
additional interest in the property was sold shortly thereafter for $450,000.
The supplies were used on the Company's projects in the Panhandle.

Pursuant to an agreement dated March 23, 1995, between the Company and Texoil 
Energy, Ltd. (Texoil), a Canadian corporation, Texoil acquired one-half of the
Company's interest in approximately 9,300 acres of oil and casinghead gas 
leases in Moore and Potter Counties, Texas, including the 7,000 acres on the
Brent Ranch, and 225,000 shares of the Company's Common Stock.  In 
consideration, the Company received $128,750 cash and a $121,250 note due in
August, 1995, 1,000,000 shares of Texoil Common stock and $750,000 principal
amount of 6% preferred stock, convertible into 750,000 shares of Texoil Common
Stock.

On December 21, 1995, the Company entered into an agreement with Lyon Operating
Co., Inc. for the purchase of an undivided 72% of the leasehold or working 
interest in approximately 1,223 acres of land situated in Clay and Jack 
Counties, Texas.  For this interest the Company paid $30,000 cash, a promissory
note for $35,000 with interest at eight percent (8%) payable on or before March
21, 1996, and 20,000 shares of the Company's stock. The Company is currently in
default in payment of this note.

NOTE 4 - NOTES PAYABLE AND CURRENT PORTION OF LONG-TERM DEBT

Notes payable consists of:
                                                  1996              1995

Senior secured notes dated December
  31, 1995 due December 31, 1998 with
  interest at 8%                                $    -            $ 267,520

Bank note due on demand with
  interest at 12%                                 100,000            75,000

Lyon Operating Co., Inc. dated December
  21, 1995 due March 21, 1996                      35,000            35,000

Other notes payable, 
     due on demand                                 39,850            22,628
Total                                           $ 205,195         $ 400,148
Less portion due within one year                 (205,195)         (132,628)

Total long-term debt                            $    -            $  67,520

On December 31, 1995, the Company issued $267,520, in senior secured notes
payable bearing interest at 8%, payable each six (6) months.  The full amount
of the principal was due thirty-six (36) months from that date.  The notes were
issued to two stockholders of the Company. On October 1, 1996, these notes were
exchanged for the Company's preferred stock.

The Company is in default on the note due Lyon Operating Co.

NOTE 5 - INCOME TAXES

The company has available net operating loss carry forward to reduce future 
taxable income and income taxes which will expire for financial and tax 
purposes as follows:

                                  Financial                  Tax

December 31, 2007                $   37,661             $   505,161
December 31, 2008                   286,454                 823,485
December 31, 2009                   998,929                 627,142
December 31, 2010                   245,636                 220,357
December 31, 2011                   491,447                 172,485
                                 $2,450,736              $2,348,630

The Company believes that the tax benefit computed under FASB 109 would not 
likely be realized and would be fully reserved.

NOTE 6- LEGAL PROCEEDINGS

The lessors of the Brent Ranch filed a lawsuit in the District Court of Moore 
County, Texas, on July 19, 1995, against Empiric Energy, Inc. for damages and
termination of the Oil and Casinghead Gas Lease between the parties dated 
October 7, 1993, as amended.  Plaintiffs allege that the Company breached the
terms of the lease by: (i) failing to plug and abandon six wells on the lease
drilled by others; (ii) failing to pay liquidated damage payments by July 15,
1995, for four wells that were required to be drilled by June 22, 1995, but 
were not drilled; (iii) breach of implied covenants and expressed covenants in
the lease to reasonably develop the lease; and, (iv) failing to  make minimum 
royalty payments due under the lease.  Plaintiffs seek damages, termination of
the lease, court costs, attorney's fees, and interest.

Pursuant to a partial summary judgment proceeding in October 1995, the Court 
determined that the Company was liable to the lessors for $200,000 for 
liquidated damages, costs and attorney fees. The Company and the lessors 
settled the matter in February 1996,  upon the following terms: The Company 
released all of its interest in the Brent Ranch leases, paid $25,000 in cash 
and agreed to complete plugging and clean-up of the six inactive wells drilled
by others. The Company was released from its obligation to drill eight 
additional wells on the Brent Ranch lease and had the right for 60 days to sell
the last well drilled to a third-party who has the gas rights and keep the sale
proceeds. These rights were subsequently sold for $10,000.

In some instances the Company has entered into installment payout arrangements
with certain creditors to retire the related indebtedness involved  and in 
some cases the Company has entered into agreed judgements with forbearance to 
permit time for raising funds to satisfy such claims. In some of these cases 
the Company has defaulted on such agreements.

NOTE 7- OIL AND GAS DATA

The following tables provide additional information about the Company's oil and
gas development and production activities.

CAPITALIZED COSTS

Following is a summary of costs incurred in oil and gas property acquisition and
development activities:

                                  1996             1995            1994

Unproved properties:
   Acquisitions                $   -             $130,000        $ 62,500
   Developments                 227,878           144,823          96,302
Proved Properties:
   Acquisitions                    -                 -            348,683
   Developments                    -                 -               -
                               $227,878          $274,823        $507,485

Following is a summary of oil and gas producing activities for the year ended 
December 31, 1996 and 1995: (excluding corporate overhead and financing costs)

                                  1996             1995             1994

Oil and gas sales              $ 94,978         $  85,282        $ 138,012
Production costs                (86,583)          (58,472)         (80,353)
Depreciation, depletion and
   amortization                 (22,969)          (97,785)         (49,733)
                               $(14,574)        $ (70,975)       $   7,696
Income tax expense                 -                  -               -
Results of operations for
  oil and gas producing
  activities                   $(14,574)        $ (70,975)       $   7,696


RESERVE INFORMATION (UNAUDITED)

The following estimates of proved and proved developed reserve quantities and 
related standardized measure of discounted net cash flow are estimates only 
by independent petroleum engineers, and do not purport to reflect realizable 
values or fair market values of the Company's reserves.  The Company emphasizes
that reserve estimates are inherently imprecise and that estimates of new 
discoveries are more imprecise than those of producing oil and gas properties.
Accordingly, these estimates are expected to change as future information 
becomes available.  All of the Company's reserves are located in the United
States.

Proved reserves are estimated reserves of crude oil (including condensate and 
natural gas liquids) and natural gas that geological and engineering data 
demonstrate with reasonable certainty to be recoverable in future years from 
known reservoirs under existing economic and operating conditions.  Proved 
developed reserves are those expected to be recovered through existing wells,
equipment, and operating methods.

The following table is a summary of the reserve quantity information (oil 
reserves are stated in barrels and gas reserves are stated in thousand cubic 
feet):
<TABLE>
<CAPTION>
                                                Year Ended December 31,
                                 1996                    1995                   1994
                             Oil         Gas        Oil       Gas          Oil       Gas
                            (Bbl)       (Mcf)      (Bbl)      (Mcf)       (Bbl)      (Mcf)

 <S>                       <C>         <C>         <C>       <C>         <C>       <C>
Balance Beginning of
 the year                  240,542     2,992460    278,675   3,082,079   363,231   3,308,548

Revisions of previous
  estimates               (113,780)    (294,626)   (21,876)    (40,359)  (83,082)   (222,155)
Extensions and discoveries
Production                  (4,436)        (274)   (16,257)    (49,260)   (1,474)     (4,314)
Balance At End of
  the year                 122,326    2,697,560    240,542   2,992,460   278,675   3,082,079

Proved Developed Reserves:
Balance at beginning
   of year                  98,736    2,636,097    117,682   2,678,680   170,698   2,830,875

Balance at end of
  the year                  99,667    2,640,616     98,736   2,636,097   117,682   2,678,860
</TABLE>

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
(UNAUDITED)

The standardized measure of discounted future net cash flows is computed by 
applying year-end prices of oil and gas (with consideration of price changes 
only to the extent provided by contractual arrangements) to the estimated 
future production of proved oil and gas reserves, less estimated future 
expenditures (based on year-end costs) to be incurred in developing and 
producing the proved reserves, less estimated future income tax expenses 
(based on year-end statutory tax rates, with consideration of future tax 
rates alreadylegislated) to be incurred on pre-tax net cash flows less tax 
basis of properties and available credits, and assuming continuation of 
existing economic conditions.  The estimated future net cash flows are then 
discounted using a rate of 10 percent a year to reflect the estimated timing
of the future cash flows.

                                    1996              1995           1994

Future cash inflows             $ 4,656,234       $ 6,799,704     $ 6,659,528
Future production and
 development costs                 (998,984)       (2,467,943)     (2,598,407)
Future income tax expense             -                 -               -    
Future net cash flows             3,657,250         4,331,761       4,061,121
10% Annual discount for est.
  timing of cash flows           (1,295,911)       (1,592,764)     (1,684,169)
Standardized measure of
  discounted future net cash
  flows                         $ 2,361,339       $ 2,738,997     $ 2,376,952

NOTE 8 REVERSE STOCK SPLIT

On March 24, 1994, the Board of Directors authorized a 1-for-2 reverse stock 
split of common stock to stockholders of record on March 24, 1994.  Per-share
amounts in the accompanying financial statements have been adjusted for the 
split.

NOTE 9 UNAUDITED QUARTERLY INFORMATION

The following table presents unaudited summary information on a quarterly basis
for 1996 and 1995:

                         March 31       June 30        Sept. 30       Dec. 31
1996
Revenues                 $ 31,817      $ 33,913       $  30,301     $  32,697
Expenses                 $ 74,361      $100,389       $ 175,790     $ 423,487
Net Income                (42,545)     $(66,475)      $(145,488)    $(237,940)
Net income per share       $(0.01)       $(0.01)         $(0.04)      $(0.06)

                         March 31       June 30        Sept. 30       Dec. 31
1995
Revenues                 $ 33,048      $ 24,417        $ 19,810      $  8,007
Expenses                 $ 47,040      $115,525        $101,916      $104,189
Net Income               $(13,991)     $(91,108)       $(82,106)     $(58,431)
Net income per share       $(0.01)       $(0.02)         $(0.02)     $.(0.01)