SHAREHOLDER
                                   REPORT
                               APRIL 15, 1997


Dear Shareholder:

  The fiscal year ended December 31, 1996 reflects a cash loss of $37,484 after
eliminating the non-cash accounting loss of $430,993, attributed to special 
accounting procedures as outlined in Note 1 on Page F-8 of the Notes to 
Financial Statements.  This represents a cash loss of about 9/10ths of a cent
per share (.009 cents) as compared with a cash loss per share during 1995 of 
about 3 1/3 cents per share (.0339 cents).  The total book loss for calendar 
years 1995 and 1996 was $245,636 and $491,446, respectively. 

The Management would like to point out certain items and events that are not 
reflected in the Financial Statements or Notes related to same.

                     MISSISSIPPI OIL & GAS RESERVES  

  The Mississippi oil and gas reserves are carried on Empiric's balance sheet 
at $1.6 million.  The actual reserve values at December 31, 1996 as determined
by H. J. Gruy & Associates, an independent engineering firm, is $3.45 million,
with a current value (10% discounted) is $2.23 million.  The understated value
of $630,000 represents a reserve for future adjustments, if needed, and more 
than offsets the "non-cash" writeoff of $430,993 incurred during the year 1996.

  Empiric has not been able to produce the Mississippi oil and gas reserves due
to a shut down of the Tchula Gas Plant due to circumstances beyond the control 
of Empiric.  Empiric is currently negotiating and working with the present 
Plant owner to reopen the Plant.  In fact, Empiric is seeking funding to 
purchase the gas processing facility.  In addition, Empiric has indicated its 
interest to participate in the drilling of one or two new wells located in the 
vicinity of the Plant.  The successful completion of this project will 
substantially enhance the value of Empiric's Mississippi assets and related 
cash flow. Empiric hopes to fund and reactivate the project by early or mid 
summer 1997.

                    WESTAR "INFILL" DRILLING PROGRAM

  (For additional details, please refer to Part 1, Item 1 in the attached 
10-KSB).  At year end, Empiric had a 55% working interest in three gas wells in 
Westmoreland and Indiana Counties, Pennsylvania, in various stages of 
completion and production but with estimated reserves of approximately 3.17 Bcf
 of gas.  Further, an additional five drilling sites were established with 
financing for same committed by Empiric and its investors with a working 
interest of approximately 60%.

  A total of eight wells have been completed with seven producing and the 
eighth well scheduled to be producing by the end of April 1997.  The total 
reserves are estimated to be approximately 6.6 Bcf of gas.  Empiric's net 
interest after all royalties, back in, carried interests, etc., is estimated 
to be 2.5 Bcf, with revenues of $5.0 to $6.5 million depending on future gas 
prices. Production for the eight wells should stabilize in the next several 
weeks, at which time, Empiric will have an independent engineering firm 
evaluate Empiric's reserve interest.  It is expected that the discounted 
present value (10%) will be in the $3.5 to $4.0 million range or equivalent 
to approximately 75 cents per share outstanding.  The wells are expected to 
collectively produce 2.0 MMCF per day.  Gas prices over the past year have 
ranged from $1.90 to $5.00 per Mcf, with an average of approximately $3.00 per
Mcf.

  Empiric estimates that approximately one-third (1/3) of the reserves (cash 
flow) will be generated in the first three years and the Empiric investors 
repaid well within that time frame.

                             NEW FINANCING PROGRAMS

  Empiric is currently negotiating with the existing investors and other 
industry sources to substantially increase the number of wells drilled on a 
quarterly basis, as well as provide financing for other projects including 
the development of a portion of Empiric's Texas Panhandle leases.  Empiric 
has listed approximately 13,000 acres in the Panhandle for sale.

                            DEBT RETIREMENT PROGRAM

 In order to assure the financial viability of Empiric, a number of Empiric's
interested shareholders, including Management, exchanged approximately $500,000
of indebtedness for Empiric's common stock, ranging from 50 cents to $1.00 per 
share.  This exchange provided Empiric with $500,000 in equity that more than 
of fset the "accounting" charge of $430,993.

 Empiric's Management is still in the process of exchanging assets or common
shares for a future reduction or elimination of indebtedness in an amount equal
to approximately $150,000.  This program would leave Empiric with a total 
indebtedness of approximately $300,000.

                               TEXOIL ENERGY, INC.

  Empiric currently owns 1.0 million common shares and $750,000 liquidation 
value preferred shares, convertible into 750,000 common shares.  Texoil has a
number of Canadian institutional and individual shareholders with energy-
related background and experience.  Texoil, although currently inactive, is 
expected to be reactivated with financing and assets furnished by its 
shareholders and institutional shareholders in Canada who are interested in 
refinancing Texoil and creating a public market for Texoil in Canada.  Texoil
principal assets in approximately 4,000 leasehold acres, which are contiguous 
to Empiric's Texas Panhandle acreage.  This objective, if accomplished, would 
add substantial value to Empiric's ownership of Texoil securities.

                              HISTORICAL DATUM

 Empiric has had a very difficult two year period as a result of the original 
public offering that raised only $2.5 million (90% of which was subscribed to 
by Management, associates and friends) instead of $5.0 million.  These funds 
primarily retired indebtedness with Empiric having only a small amount of 
working capital and still a substantial amount of short-term debt.

 Management feels that Empiric has now turned the corner and will not only
continue to attract industry investors to participate in the current drilling
program, but industry sources or financial institutions will take an 
equity/debt investment position that will permit Empiric to participate in or 
expand its current operations, but also recruit a well-known industry executive
to come in as Empiric's President and Chief Operating Officer.  The 
accomplishment expanding the existing drilling programs, the development of 
new programs and a new Chief Operating Officer should substantially enhance 
the valueof Empiric common shares. 

  Please call the undersigned for any comments or questions regarding this 
report.

                                EMPIRIC ENERGY, INC.



                                 _________________________________
                                 James J. Ling, President



                                 _________________________________
                                 Clyde E. Skeen, Chief Financial Officer