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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                       __________________________________

                                   FORM 10-KSB
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                     FOR THE FISCAL YEAR ENDED JUNE 30, 2001
                         COMMISSION FILE NUMBER 0-28814

                        ASPEN GROUP RESOURCES CORPORATION
           (NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

     Yukon, Canada                                          98-0164357
     (State or other Jurisdiction                           (I.R.S. Employer
     of Incorporation or Organization)                      Identification No.)

                              3300 Bank One Center
                               100 North Broadway
                             Oklahoma City, OK 73102
               (Address of Principal Executive Offices) (Zip Code)
                                 (405) 606-8500
                (Issuer's Telephone Number, Including Area Code)

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:
                         Common Stock, without par value
                                (Title of Class)

     Check  whether the Issuer (1) has 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 Issuer was required to file such reports) and (2) has
been  subject  to  such  filing  requirements  for  the  past  90  days.

Yes [X]    No [_]

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation  S-B  contained  in  this  form,  and  no disclosure will be
contained,  to  the  best  of  the  Issuer'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.  [  ]

     The  Issuer's  revenues  for  the  fiscal  year  ended  June 30, 2001, were
$10,549,274.

     The  Issuer  had  19,325,657  shares  of  common  stock  outstanding  as of
September  11,  2001.

     The  aggregate  market value of the voting and non-voting common stock held
by  non-affiliates  of  the Issuer, computed by reference to the average bid and
asked  prices  of  such  common  stock as of September 11, 2001, was $9,297,086.




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<PAGE>
<TABLE>
<CAPTION>
                   2001 ANNUAL REPORT (S.E.C. FORM 10-KSB)

                                      INDEX

                       Securities and Exchange Commission
                           Item Number and Description


                                     PART I

                                                                              PAGE
                                                                              ----
<S>      <C>                                                                  <C>
Item 1   Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
Item 2   Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Item 3   Legal  Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . .  14
Item 4   Submission of Matters to a Vote of Security Holders 14


                                     PART II

Item 5   Market for the Company's Common Stock and Related Stockholder
         Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
Item 6   Management's Discussion and Analysis or Plan of Operation . . . . . .  17
Item 7   Financial  Statements . . . . . . . . . . . . . . . . . . . . . . . .  20
Item 8   Changes in and Disagreements with Accountants on Accounting and
         Financial  Disclosure . . . . . . . . . . . . . . . . . . . . . . . .  41


                                    PART III

Item 9   Directors, Executive Officers, Promoters and Control Persons;
         Compliance With Section 16(a) of the Exchange Act . . . . . . . . . .  41
Item 10  Executive  Compensation . . . . . . . . . . . . . . . . . . . . . . .  43
Item 11  Security Ownership of Certain Beneficial Owners and Management. . . .  45
Item 12  Certain Relationships and Related Transactions. . . . . . . . . . . .  46


                    PART IV AND SIGNATURES AND EXHIBIT INDEX

Item 13  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . .  47
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
</TABLE>


<PAGE>
                                   DEFINITIONS
                            As used in this document:
                         "Mcf" means thousand cubic feet
                         "MMcf" means million cubic feet
                         "Bcf" means billion cubic feet
     "MMBtu" means million British thermal units, a measure of heating value
                               "Bbl" means barrel
                     "Mbo" means thousands of barrels of oil
                         "MMBbls" means million barrels
                      "Boe" means equivalent barrels of oil
                 "Mboe" means thousand equivalent barrels of oil
                 "MMBoe" means million equivalent barrels of oil
                     "Oil" includes crude oil and condensate
                        "NGLs" means natural gas liquids
                       "Bopd" means barrels of oil per day


                               REVERSE STOCK SPLIT

     Unless  otherwise  stated, all historical information regarding outstanding
shares  of  Common Stock has been restated on the basis of the Company's 7-for-1
reverse  stock  split  which  took  effect  February  12,  2001.


                                  U.S. DOLLARS

     Unless  otherwise  stated,  all  dollar amounts are stated in U.S. dollars.


                 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

     THIS  REPORT  INCLUDES  "FORWARD-LOOKING  STATEMENTS" WITHIN THE MEANING OF
SECTION  27A  OF  THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE
SECURITIES  EXCHANGE  ACT  OF  1934,  AS  AMENDED,  ALL  STATEMENTS  OTHER  THAN
STATEMENTS  OF  HISTORICAL  FACTS  INCLUDED OR INCORPORATED BY REFERENCE IN THIS
REPORT, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE COMPANY'S FUTURE
FINANCIAL  POSITION,  BUSINESS  STRATEGY, BUDGETS, PROJECTED COSTS AND PLANS AND
OBJECTIVES  OF MANAGEMENT FOR FUTURE OPERATIONS, ARE FORWARD-LOOKING STATEMENTS.
IN  ADDITION,  FORWARD-LOOKING STATEMENTS GENERALLY CAN BE IDENTIFIED BY THE USE
OF  FORWARD-LOOKING  TERMINOLOGY  SUCH  AS  "MAY,"  "WILL,"  "EXPECT," "INTEND,"
"PROJECT,"  "ESTIMATE,"  "ANTICIPATE,"  BELIEVE,"  OR "CONTINUE" OR THE NEGATIVE
THEREOF  OR  VARIATIONS  THEREON  OR  SIMILAR TERMINOLOGY.  ALTHOUGH THE COMPANY
BELIEVES  THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE
REASONABLE,  IT  CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE
BEEN  CORRECT.  IMPORTANT  FACTORS  THAT  COULD  CAUSE  ACTUAL RESULTS TO DIFFER
MATERIALLY  FROM  THE  COMPANY'S  EXPECTATIONS  ("CAUTIONARY  STATEMENTS")  ARE
DISCLOSED UNDER "ITEM 1.  BUSINESS - RISK FACTORS" AND ELSEWHERE IN THIS REPORT.
ALL  SUBSEQUENT  WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE
COMPANY,  OR  PERSONS  ACTING  ON  ITS  BEHALF, ARE EXPRESSLY QUALIFIED IN THEIR
ENTIRETY BY THE CAUTIONARY STATEMENTS.  THE COMPANY ASSUMES NO DUTY TO UPDATE OR
REVISE  ITS FORWARD-LOOKING STATEMENTS BASED ON CHANGES IN INTERNAL ESTIMATES OR
EXPECTATIONS  OR  OTHERWISE.


<PAGE>
                                     PART I

ITEM  1.     BUSINESS
             --------

GENERAL

     Aspen  Group Resources Corporation (referred to herein as either "Aspen" or
the "Company" and formerly known as "Cotton Valley Resources Corporation") is an
independent energy company engaged in the acquisition, exploitation, development
and operation of oil and gas properties with a geographic focus in major oil and
gas producing regions in the United States.  The Company was incorporated in the
Province  of  Ontario,  Canada,  originally  as Cotton Valley Energy Limited, on
February 15, 1995.  From its inception through October 11, 1999, the Company was
a  development  stage  company  engaged  principally  in  organization  and
capitalization  activities  and  had  not  generated  material net revenues from
operations.

RESTRUCTURING

     During  the  fiscal year 1999, the Company experienced cash flow difficulty
as  a  result  of  a  decline  in  oil and gas prices as well as the significant
reduction  in  demand for oilfield equipment and services.  The Company was also
unable  to  complete  the  effectiveness  of  a registration statement under the
United  States  Securities  of  1933  (the  "Securities Act") for the securities
underlying  certain  convertible debentures and remained, for much of the fiscal
year  of  1999,  in  default  under the terms of such convertible debentures. In
response  to  these  conditions,  the  Company, during the first fiscal quarter,
curtailed  proposed  capital  projects and other business operations and reduced
its  staff  from  over  40  employees to two field employees on payroll plus two
officers  who  worked  throughout  the  year  for  deferred  salaries.

     During  January through April 1999 the Company entered into agreements with
over 50 vendors to whom it owed more than $750,000 to eliminate the debt through
the  issuance  of  shares of Common Stock.  As of June 30, 1999, the Company had
issued  571,429  shares  of  Common  Stock  at  $1.75  per  share reflecting the
reduction  of  approximately  $1,300,000  of  liabilities.  During calendar year
1999,  the  Company  assigned substantially all of its properties to its secured
lenders  in  exchange  for  releases  from  the  secured  indebtedness.

ACQUISITIONS

     Since September 16, 1999, the Company has completed several acquisitions of
oil  and  gas  properties  or  of  companies  primarily  engaged  in oil and gas
exploration and development.  The following is a summary of the most substantial
of  these  acquisitions.

     EAST  WOOD ACQUISITION. On September 16, 1999 (but effective July 1, 1999),
the  Company  acquired  50%  of the outstanding common stock of East Wood Equity
Venture,  Inc.  from  Jack  E.  Wheeler,  the  current Chairman, Chief Executive
Officer  and  a  Director  of  the  Company and others in exchange for 6,604,414
restricted  shares  of Common Stock. On February 28, 2000, the Company purchased
the  remaining  50%  of  the outstanding capital stock of East Wood from Farrell
Kahn  and  others in exchange for the issuance of 3,747,271 restricted shares of
Common  Stock  and  the  Company's promissory note for $3,000,000. East Wood was
principally engaged in the business of the acquisition, development, exploration
and  operation  of  producing  oil  and  gas  properties.  At  the  time  of the
acquisition,  the  main concentration of East Wood's properties were in Oklahoma
with  335  wells  and Texas with 30 wells. Approximately 80% of these wells were
gas  wells.

     BRISCOE  ACQUISITION.  Effective  May  1,  2000,  Aspen  acquired through a
merger  with  Briscoe  Oil  Operating,  Inc.  a  55%  undivided  interest in 171
properties located in 21 counties in Oklahoma, Texas, and Kansas for $3,000,000.
Effective  May 1, 2000, Aspen also acquired 17 producing oil and gas properties,
equipment,  vehicles  and  a  10-year  equipment facility yard lease from L.C.B.
Resources,  Inc., which was paid by the issuance of 571,429 restricted shares of
Common  Stock.  Briscoe Oil Operating, Inc. and L.C.B. Resources, Inc. were both
controlled  by  Lenard  Briscoe,  a  current  Director  of  the  Company.  This
acquisition  added  245  Mbo  of  oil PDP oil reserves and 7,536 Mmcf of net gas
reserves  for  an  acquisition  cost  of  $3.10/  Net  Boe.


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<PAGE>
     EL DORADO FIELD ACQUISITIONS.  Aspen acquired a significant interest in the
El  Dorado  field  prior to June 30, 2000, through acquisitions from The Flowers
Estate and MOG Oil and Gas Company.  These acquisitions increased Aspen's proven
oil  reserves  by  over  1,600,000  Bbls  for  an acquisition cost of $2.60/Bbl,
including  future  development  costs  expected  to  be  $1.125  million.

     OTHER  FISCAL  2000  ACQUISITIONS.  Effective  January 1, 2000, the Company
acquired  49  producing,  operated wells in Oklahoma from EDB Oil Properties for
$313,718  which  was paid by the issuance of 260,714 restricted shares of Common
Stock.

     Effective the same date, the Company closed smaller projects with Fer-Scher
Exploration,  L.L.C.,  Red Terra Resources Company, Sebenius & Associates 1982-1
Joint Venture and SGH, Inc.  The total allocated cost of these four projects was
$562,105  paid  by  a combination of cash and restricted shares of Common Stock.

     Effective April 1, 2000, the Company acquired certain oil and gas interests
and  all  of the outstanding common stock of Mercer Oil and Gas Company from Ron
Mercer,  the  current President of the Company, in exchange for cash and 142,857
restricted  shares  of  Common  Stock.

     Effective  May  5,  2000, the Company acquired an interest in approximately
3,775  gross  acres  and  several  producing oil and gas properties in the Tiger
Hunton  Unit  Development  Project  in  Seminole  County, Oklahoma from Oak Tree
Natural  Resources, L.L.C. for a cash purchase price of $55,940 and a commitment
to  future  development  costs  of  approximately  $500,000.

     FISCAL 2001 ACQUISITIONS.   Effective August 1, 2000, the Company purchased
interests  in  158  oil  and  gas properties primarily located in the Arkoma and
Anadarko  Basins  of Oklahoma, increasing its interest in 130 wells currently in
inventory by an additional 5.88235% and royalty and overriding royalty interests
in  28  wells  from  PGGB  Oil  and Gas Partnership for a cash purchase price of
$131,164.

     Effective  August 1, 2000, the Company purchased interests in approximately
400 oil and gas properties located in the Arkoma and Anadarko Basins of Oklahoma
from  Old  Dominion  Oil  Corporation  for  a  cash  purchase price of $644,930.

     Effective  August  1, 2000, the Company purchased interests in 41 producing
wells,  leases,  property  and  equipment  located in Butler County, Kansas from
Crawford  Oil  Company and Leiker-Crawford Oil Company for a cash purchase price
of  $1,743,604.

     Effective  January  1,  2001, the Company purchased from Muras Energy, Inc.
working  interests ranging up to 45% in 36 wells in 16 different counties in the
Anadarko  Basin  of  Western  Oklahoma  and  certain  other  assets  for  a cash
consideration  of  $475,250  and  the  issuance  of 119,048 restricted shares of
Common  Stock.

     Effective  April  1,  2001,  the  Company  purchased  from C.B. Oil Company
working  interests  averaging  34%  in  43 wells in 14 different counties in the
Anadarko  Basin  of  Western  Oklahoma  and  certain  other  assets  for  a cash
consideration  of  $2,299,907.

     OTHER  ACQUISITIONS.  The  Company  is  actively  engaged in pursuing other
acquisition  opportunities  to  further develop its business opportunities.  The
Company assesses each of the acquisition prospects as presented to management of
the  Company,  and  continually makes decisions as to whether to actively pursue
such  opportunities.  At  any  time  the  Company  may  be assessing one or more
potential  acquisitions.


                                        3
<PAGE>
CREDIT  FACILITY

     On  April  28,  2000,  Local Oklahoma Bank, N.A. loaned Aspen Energy Group,
Inc. amounts up to $25,000,000, as set forth in a Credit Agreement of that date.
The  loan is subject to, and limited by, a borrowing base based primarily on the
value  of the Company's oil and gas properties.  The commitment of Local reduces
over  time based upon a monthly commitment reduction.  As of September 20, 2001,
the  borrowing  base was $25,000,000 and the amount outstanding was $15,140,000.
The  loan  accrues  interest at a rate based upon Chase Manhattan Prime plus one
half  of one percent per annum.  The purpose of the loan is to provide financing
for  the  acquisition  and  development  of  oil  and  gas  properties.

RISK  FACTORS

     Holders  of  the Common Stock and future investors in the Company should be
aware  of  the  following  factors  in  evaluating  their  investment  in Aspen.

     LIMITED  OPERATING HISTORY; CAPITAL INTENSIVE BUSINESS; NEED FOR ADDITIONAL
FUNDS.  From  its  inception in February 1995 through June 30, 1999, the Company
was  engaged  principally  in organization and capitalization activities and was
not able to generate material net revenues from operations until the merger with
East  Wood  and  the  change  of  management.  The  Company's business is highly
capital  intensive  requiring  continuous development and acquisition of oil and
gas  reserves.  In  addition,  capital  is  required  to  operate and expand the
Company's  oil  field  operations and purchase equipment.  At June 30, 2001, the
Company  had  a  working capital deficit of approximately $928,974.  The Company
anticipates,  based  on its currently proposed plans and assumptions relating to
its operations, including borrowings from its line of credit, together with cash
expected  to be generated from operations, that it will be able to meet its cash
requirements  for  at  least  the  next  12  months.  However,  if such plans or
assumptions  change  or prove to be inaccurate, the Company could be required to
seek additional financing sooner than currently anticipated.  The Company has no
commitments  to  obtain any additional debt or equity financing and there can be
no  assurance  that  additional funds will be available, when required, on terms
favorable to the Company. Any future issuances of equity securities would likely
result  in  dilution  to  the  Company's  then  existing  Shareholders while the
incurring  of additional indebtedness would result in increased interest expense
and  debt service changes.  See "Management's Discussion and Analysis or Plan of
Operations."

     HISTORY  OF  LOSSES.  Although  the Company's operations were profitable in
fiscal years 2000 and 2001 following the merger with East Wood and the change of
management,  the  Company  had  historically  incurred  losses, including a loss
before  income  tax  benefits of $13,324,086 in 1999.  The Company's accumulated
deficit  as  of  June  30,  2001  was $12,884,201.  The Company has historically
funded  its operating losses, acquisitions and expansion costs primarily through
a  combination  of  private offerings of debt and equity securities and proceeds
from  the  exercise  of  options  and  warrants.

     SIGNIFICANT CAPITAL EXPENDITURES NECESSARY FOR UNDEVELOPED PROPERTIES.  The
Company  has  substantial  oil  and  gas reserves which are classified as Proved
Undeveloped  Reserves, meaning very little production currently exists. Recovery
of  the  Company's  Proved Undeveloped Reserves will require significant capital
expenditures.  Management  estimates  that  aggregate  capital  expenditures  of
approximately  $18,700,000  will be required to fully develop these reserves, of
which  $2,400,000  is  expected  to  be  incurred during the next 12 months.  No
assurance can be given that the Company's estimates of capital expenditures will
prove  accurate, that its financing sources will be sufficient to fund fully its
planned  development  activities  or  that development activities will be either
successful  or  in  accordance  with  the Company's schedule.  Additionally, any
significant  decrease  in  oil and gas prices or any significant increase in the
cost  of  development  could  result in a significant reduction in the number of
wells  drilled  and/or  reworked.  No assurance can be given that any wells will
produce  oil  or  gas  in  commercially  profitable  quantities.

     EXPLORATION  AND  DEVELOPMENT  RISKS;  WATERFLOOD  PROJECTS.  The  Company
intends  to  increase its development activities and development drilling of oil
and  gas  reserves.  Even  though  development  drilling  carries less risk than
exploration  drilling, there is risk that production will not be obtained and/or
that  production  will be insufficient to recover drilling and completion costs.
The  cost  of  drilling,  completing and operating wells is often uncertain. The
Company's  drilling operations may be curtailed, delayed or canceled as a result
of  numerous  factors,  including title problems, weather conditions, compliance
with  governmental  requirements  and  shortages  or  delays  in the delivery of


                                        4
<PAGE>
equipment.  Furthermore,  completion  of  a well does not assure a profit on the
investment  or  a  recovery  of  drilling,  completion  and  operating  costs.

     There  are  certain  risks  associated  with secondary recovery operations,
especially  the  use  of  waterflooding  techniques  and  drilling activities in
general.  Part  of  the Company's inventory of development prospects consists of
waterflood  projects.  Waterflooding  involves  significant capital expenditures
and  uncertainty  as  to  the  total  amount  of  secondary reserves that can be
recovered.  In  waterflood  operations,  there  is generally a delay between the
initiation  of  water injection into a formation containing hydrocarbons and any
increase  in  production  that  may  result.  The  operating  cost  per  unit of
production  of waterflood projects is generally higher during the initial phases
of  such  projects  due to the purchase of injection water and related costs, as
well  as  during  the  later  stages  of  the  life of the project as production
declines.  The  degree  of  success,  if  any, of any secondary recovery program
depends  on  a large number of factors, including the porosity of the formation,
the  technique  used  and  the  location  of  injector  wells.

     VOLATILITY  OF  OIL  AND GAS PRICES.  The Company's revenues, profitability
and the carrying value of its oil and gas properties are substantially dependent
upon  prevailing  prices  of,  and  demand  for,  oil  and  gas and the costs of
acquiring, finding, developing and producing reserves.  The Company's ability to
maintain  or  increase  its  borrowing  capacity,  to  repay  current  or future
indebtedness,  and  to  obtain  additional  capital  on  favorable terms is also
substantially  dependent  upon oil and gas prices. Historically, the markets for
oil  and gas have been volatile and are likely to continue to be volatile in the
future.  Prices for oil and gas are subject to wide fluctuations in response to:
(i) relatively minor changes in the supply of, and demand for, oil and gas; (ii)
market uncertainty; and (iii) a variety of additional factors such as the recent
terrorists  attacks  on  New  York  and  Washington, all of which are beyond the
Company's  control.  These  factors  include  domestic  and  foreign  political
conditions, the price and availability of domestic and imported oil and gas, the
level  of  consumer  and  industrial  demand,  weather,  domestic  and  foreign
government  relations,  the  price  and  availability  of  alternative fuels and
overall  economic  conditions.  Furthermore,  the marketability of the Company's
production  depends  in  part  upon  the availability, proximity and capacity of
gathering  systems,  pipelines  and processing facilities. Volatility in oil and
gas  prices  could affect the Company's ability to market its production through
such  systems,  pipelines  or facilities. Substantially all of the Company's gas
production  is  currently sold to gas marketing firms or end users either on the
spot  market on a month-to-month basis at prevailing spot market prices or under
long-term  contracts  based  on current spot market prices. The Company normally
sells  its  oil  under  month-to-month  contracts  with a variety of purchasers.
Accordingly,  the Company's oil and gas sales expose it to the commodities risks
associated  with  changes in market prices.  During the past year, Aspen entered
into several six month and one year fixed price contracts (all of which have now
terminated)  in  order  to  mitigate  the  effect  of such price declines on the
Company.

     UNCERTAINTY OF ESTIMATES OF RESERVES AND FUTURE NET CASH FLOWS. This Annual
Report  contains  estimates of the Company's oil and gas reserves and the future
net  cash  flows  from  those  reserves,  which have been prepared or audited by
certain  independent  petroleum  consultants.  There  are numerous uncertainties
inherent  in  estimating quantities of reserves of oil and gas and in projecting
future rates of production and the timing of development expenditures, including
many factors beyond the Company's control.  The reserve estimates in this Annual
Report  are  based  on various assumptions, including, for example, constant oil
and gas prices, operating expenses, capital expenditures and the availability of
funds  and,  therefore,  are inherently imprecise indications of future net cash
flows.  Actual  future  production,  cash  flows,  taxes,  operating  expenses,
development  expenditures and quantities of recoverable oil and gas reserves may
vary  substantially  from  those  assumed  in  the  estimates.  Any  significant
variance in these assumptions could materially affect the estimated quantity and
value  of reserves set forth in this Annual Report.  Additionally, the Company's
reserves  may  be  subject  to  downward  or  upward  revision based upon actual
production  performance,  results  of  future  development  and  exploration,
prevailing  oil  and  gas prices and other factors, many of which are beyond the
Company's  control.

     The present value of future net reserves discounted at 10% (the "PV-10") of
Proved Reserves referred to in this Annual Report should not be construed as the
current  market  value  of  the  estimated  Proved  Reserves  of  oil  and  gas
attributable  to  the  Company's  properties.  In  accordance  with  applicable
requirements  of  the Commission, the estimated discounted future net cash flows
from  Proved  Reserves are generally based on prices and costs as of the date of
the estimate, whereas actual future prices and costs may be materially higher or
lower.  Actual future net cash flows also will be affected by: (i) the timing of
both  production  and  related expenses; (ii) changes in consumption levels; and
(iii) governmental regulations or taxation.  In addition, the calculation of the
present  value  of the future net cash flows using a 10% discount as required by
the  Commission is not necessarily the most appropriate discount factor based on


                                        5
<PAGE>
interest  rates  in  effect  from  time  to  time  and risks associated with the
Company's  reserves  or  the  oil  and gas industry in general. Furthermore, the
Company's  reserves  may  be  subject  to downward or upward revision based upon
actual  production, results of future development, supply and demand for oil and
gas,  prevailing oil and gas prices and other factors.  See "Properties--Oil and
Gas  Reserves."

     Under  full  cost  accounting,  the  Company  would  be  required to take a
non-cash charge against earnings to the extent capitalized costs of acquisition,
exploration  and  development (net of depletion and depreciation), less deferred
income  taxes,  exceed the PV-10 of its Proved Reserves and the lower of cost or
fair  value  of unproved properties after income tax effects.  See "Management's
Discussion  and  Analysis  or  Plan  of  Operations."

     OPERATING  HAZARDS  AND  UNINSURED  RISKS;  PRODUCTION  CURTAILMENTS.  The
Company's oil and gas business involves a variety of operating risks, including,
but  not limited to, unexpected formations or pressures, uncontrollable flows of
oil,  gas,  brine  or  well  fluids  into the environment (including groundwater
contamination),  blowouts,  fires, explosions, pollution and other risks, any of
which  could result in personal injuries, loss of life, damage to properties and
substantial  losses.  Although the Company carries insurance at levels, which it
believes, are reasonable, it is not fully insured against all risks. The Company
does  not carry business interruption insurance.  Losses and liabilities arising
from  uninsured  or under-insured events could have a material adverse effect on
the  financial  condition  and  operations  of  the  Company.

     From  time to time, due primarily to contract terms, pipeline interruptions
or weather conditions, the producing wells in which the Company owns an interest
have  been  subject  to  production  curtailments.  The  curtailments range from
production  being  partially  restricted to wells being completely shut-in.  The
duration  of  curtailments  varies  from  a few days to several months.  In most
cases  the Company is provided only limited notice as to when production will be
curtailed  and  the duration of such curtailments.  The Company is not currently
experiencing  any  material  curtailment  of  its  production.

     LAWS  AND  REGULATIONS.  The Company's operations are affected by extensive
regulation  pursuant  to  various  federal, state and local laws and regulations
relating  to  the  exploration  for  and  development, production, gathering and
marketing  of  oil  and  gas.  Matters  subject  to regulation include discharge
permits  for  drilling  operations,  drilling  and  abandonment  bonds  or other
financial  responsibility  requirements,  reports  concerning  operations,  the
spacing of wells, unitization and pooling of properties and taxation.  From time
to  time,  regulatory  agencies  have  imposed price controls and limitations on
production  by  restricting  the  rate of flow of oil and gas wells below actual
production  capacity  in  order  to  conserve  supplies  of  oil  and  gas.

     ENVIRONMENTAL  RISKS.  Operations  of  the  Company  are  also  subject  to
numerous  environmental  laws,  including  but  not  limited to, those governing
management  of  waste,  protection  of  water,  air  quality,  the  discharge of
materials  into  the  environment  and  preservation  of  natural  resources.
Noncompliance  with  environmental  laws and the discharge of oil, gas, or other
materials  into  the  air,  soil  or  water  may give rise to liabilities to the
government  and  third  parties, including civil and criminal penalties, and may
require  the  Company  to  incur  costs  to  remedy  the  discharge.  Laws  and
regulations  protecting  the  environment  have  become more stringent in recent
years,  and  may  in certain circumstances impose retroactive, strict, and joint
and several liability rendering entities liable for environmental damage without
regard  to  negligence  or  fault.  From  time to time the Company has agreed to
indemnify  sellers  of  producing  properties from whom the Company has acquired
reserves  against  certain  liabilities for environmental claims associated with
such  properties.  There  can  be  no assurance that new laws or regulations, or
modifications  of  or new interpretations of existing laws and regulations, will
not  increase substantially the cost of compliance or otherwise adversely affect
the  Company's  oil  and gas operations and financial condition or that material
indemnity  claims  will not arise against the Company with respect to properties
acquired  by  or  from  the  Company.  While  the  Company  does  not anticipate
incurring  material  costs  in  connection  with  environmental  compliance  and
remediation,  it  cannot  guarantee  that  material  costs will not be incurred.

     DEPENDENCE ON KEY PERSONNEL.   The Company depends to a large extent on the
services  of  Jack  E.  Wheeler,  the  Company's Chairman of the Board and Chief
Executive  Officer  and Ronald L. Mercer, President and Chief Operating Officer.
The  loss  of  the services of either of these individuals could have a material
adverse  effect  on the Company's operations.  The Company has entered into five
year  employment  contracts  with  both  of  these  executive  officers, and has
obtained key personnel life insurance.  The Company believes that its success is
also dependent on its ability to continue to employ and retain skilled technical
personnel.


                                        6
<PAGE>
     CONCENTRATION OF VOTING POWER.  The Company's Executive Officers, Directors
and  their  affiliates  beneficially  own  approximately  28%  of  the Company's
outstanding Common Stock.  As a result, Officers, Directors and their affiliates
will  have  the ability to exert significant influence over the business affairs
of the Company, including the ability to influence the election of directors and
results  of  voting  on  all  matters  requiring  shareholder  approval.

     CONFLICTS  OF  INTERESTS.  Certain  Officers, Directors and related parties
have engaged in business transactions with the Company which were not the result
of  arm's  length  negotiations between independent parties. Management believes
that  the  terms of these transactions were as favorable to the Company as those
that  could  have  been  obtained  from  unaffiliated  parties  under  similar
circumstances.  All  future  transactions between the Company and its affiliates
will  be  on  terms  no  less favorable than could be obtained from unaffiliated
third parties and will be approved by a majority of the disinterested members of
the  Board  of  Directors  of  the  Company.

     PUBLIC  MARKET  AND POSSIBLE VOLATILITY OF SECURITIES.  The Common Stock is
traded  on  the  OTC Bulletin Board and the Toronto Stock Exchange.  The trading
price  of  the Common Stock could be subject to wide fluctuations in response to
quarter-to-quarter  variations  in  operating results, announcements of drilling
results by the Company and other events or factors.  In addition, the U.S. stock
market  has  from time to time experienced extreme price and volume fluctuations
which  have  particularly affected the market price for many companies and which
often  have  been  unrelated  to  the  operating performance of these companies.
These  broad  market  fluctuations  may adversely affect the market price of the
Company's  securities.

     NO DIVIDENDS.  The Company's Board of Directors presently intends to retain
all  of  its  earnings for the expansion of its business.  The Company therefore
does  not  anticipate  the  distribution  of  cash  dividends in the foreseeable
future.  Any  future  decision  of  the Company's Board of Directors to pay cash
dividends  will  depend,  among  other  factors,  upon  the  Company's earnings,
financial  position  and  cash  requirements.

     EXCHANGE  RATE  FLUCTUATIONS.  The  Company  is exposed to foreign exchange
risks  since  it  has granted stock options and warrants denominated in Canadian
currency  while  the  majority  of  its  expenditures  will  be in United States
dollars.  Any  significant  reduction  in  the  value of the Canadian dollar may
decrease  the  value of funds in United States dollars the Company receives upon
exercise  of  warrants  and  options.

COMPETITION

     Competition  in  the  oil  and  gas  industry  is  intense generally. Aspen
believes  that  price  is  the  determinative factor in competition for drilling
prospects, equipment and labor.  Major and independent oil and gas companies and
syndicates  actively  bid for desirable oil and gas properties and equipment and
labor  required  to  operate and develop them.  Many of Aspen's competitors have
substantially  greater  financial  resources  and  exploration  and  development
budgets  than  those  of the Company.  Therefore, competitors may be able to pay
more for desirable leases and to evaluate, bid for and purchase a greater number
of  properties  or  prospects  than  the financial or personnel resources of the
Company  will  permit.

MARKETS

     GENERAL.  Oil  and  gas operating revenues are highly dependent upon prices
and  demand for oil and gas.  Numerous factors beyond Aspen's control can impact
the  prices  of  its oil and gas.  Decreases in oil and gas prices would have an
adverse  effect  on  the  Company's proved reserves, revenues, profitability and
cash  flow.  Aspen has not engaged in any crude oil and gas price swaps or other
hedging  transactions to reduce its exposure to price fluctuations.  The Company
may,  however,  engage  in  other  similar  transactions  from  time  to time as
management  deems  advisable.

     GAS  SALES.  During  fiscal  year  2001,  the  Company sold its gas to many
different  purchasers,  one  of which, Duke Energy Field Services, accounted for
approximately  19%  of  total  gas  revenues.

     OIL  SALES.  Aspen  sells its oil production under short-term and long-term
arrangements  at  prices  no  less  than  the  purchaser's posted prices for the
respective  areas  less  standard deductions.  Management believes that numerous


                                        7
<PAGE>
buyers  are  available  for  the  Company's  oil.  During  fiscal year 2001, the
Company  sold  its  oil  to  many  different  purchasers,  one  of which, Plains
Marketing  L.P. accounted for more than 63% of the Company's total oil revenues.

REGULATION

     Oil  and  gas  exploration,  production  and related operations are heavily
regulated  by  federal and state authorities.  Failure to comply with applicable
law can result in substantial penalties.  The cost of regulatory compliance will
increase  Aspen's  cost  of  doing  business  and  affect  its  profitability.
Regulation  of  oil  and  gas  activities has changed many times.  Consequently,
Aspen  is  unable  to  predict  the future cost or impact of complying with such
laws.  Texas  requires  drilling  permits  and  bonds  and operating reports and
imposes other burdens relating to oil and gas exploration and production.  Texas
also  requires  conservation  measures,  including  pooling  of  oil  and  gas
properties,  establishing  maximum  production rates from oil and gas wells, and
spacing,  plugging and abandoning wells.  These laws limit the rate at which oil
and  gas  can  be  produced  from  Aspen's  properties.

     The  transportation  and sale of gas in interstate commerce is regulated by
United  States  law  and  the  Federal  Energy  Regulatory  Commission.

OPERATING  HAZARDS  AND  UNINSURED  RISKS

     The  acquisition,  development,  exploration  for,  and  production,
transportation  and  storage  of, crude oil, gas liquids and gas involves a high
degree  of  risk,  which even a combination of experience, knowledge and careful
evaluation  may  not be able to overcome.  Aspen's operations are subject to all
of  the  risks  normally  incident  to drilling gas and oil wells, operating and
developing  gas  and  oil properties, transporting, processing, and storing gas,
including  encountering  unexpected formations or pressures, premature reservoir
declines,  blow-outs,  equipment  failures and other accidents, craterings, sour
gas  releases,  uncontrollable flows of oil, gas or well fluids, adverse weather
conditions,  pollution,  other  environmental  risks,  fires  and  spills.  Oil
production requires high levels of investment and has particular economic risks,
such  as  retaining  wall  failure, fires, explosions, gaseous leaks, spills and
migration  of harmful substances, any of which can cause personal injury, damage
to  property,  equipment  and the environment, and result in the interruption of
operations.  Aspen  is  also  subject to deliverability uncertainties related to
the  proximity  of  its  reserves  to pipeline and processing facilities and the
inability  to  secure  space on pipelines that deliver oil and gas to commercial
markets.  Although  Aspen  maintains  insurance  in  accordance  with  customary
industry  practice,  it is not fully insured against all of these risks, nor are
all  such  risks insurable.  Losses resulting from the occurrence of these risks
could  have  a  material  adverse  impact  on  the  Company.

EMPLOYEES

     At  September 14, 2001, the Company had 27 full-time corporate employees of
which  6  were  management.  The  Company  has experienced no work stoppages and
management  considers its relations with employees to be good.  The Company uses
contract  services  in its field operations and employs independent consultants,
as  needed, to evaluate Company prospects, reserves and other oil and gas assets
for  potential  acquisitions.

FACILITIES

     The  Company  occupies  approximately  9,454 square feet of office space at
3300  Bank  One  Center,  Oklahoma City, Oklahoma 73102, under a five year lease
that  expires  on  September  30,  2004.  Monthly  base  rent  is  $8,745.

     The  Company leases approximately 7,132 square feet of office space at 6510
Abrams Road, Suite 300, Dallas, Texas 75231 under a five year lease that expires
on April 30, 2003.  Currently three separate tenants are subletting a portion of
this  space.  The  net  cost  to  the  Company  is  $5,875  per  month.

     The  Company  obtained  a lease of a 20-acre equipment yard for 10 years as
part of the acquisition from L.C.B. Resources, Inc.  The property includes three
freestanding  pre-fab  buildings, each approximately 25,000 square feet in size.
The  lease  expires  May,  2010,  and  the  lease  payments  have  been prepaid.

     The  Company  obtained  a  10-acre yard facility including an 1,800 sq. ft.
office  building,  a shop building and warehouse as part of the United Cementing
acquisition.  There  are  no  rent  payments  associated  with  this  property.


                                        8
<PAGE>
RECENT  DEVELOPMENTS

     NORTH EAST NEW MEXICO BASIN.  Effective July 2, 2001, Aspen acquired 61,843
net  acres of leasehold interest in the North East New Mexico Basin over an area
of approximately 100,000 gross acres for $179,000.  This results in Aspen owning
an average 62% working interest with an estimated 53% net revenue interest.  The
area  is  prospective  of coal-bed methane, shale gas and Pennsylvanian ages gas
reservoirs.  Even  though the Company has not completed its plan of development,
Aspen  is  encouraged  by  the  potential  and the large acreage position it now
holds.

     CB  OIL  COMPANY.  On  August  1,  2001  (but  effective April 1, 2001) the
Company  acquired  producing properties from CB Oil Company for $2.25 million in
cash.  The acquired properties are located in the Anadarko Basin in west central
Oklahoma.  As  operator,  Aspen's  average  working interest in these properties
will be 33.37% with an average net revenue interest of 26.47%.  This acquisition
added  an  estimated  275,000  net  Bbl of oil and 3 Bcf of gas to the Company's
reserves.  It  also  increased  Aspen's land position by 27,520 gross acres in a
core  area  of  Aspen's  operations  in  central  Oklahoma.

     UNITED  CEMENTING  AND  ACID  CO.,  INC.  On  August 9, 2001 (but effective
January  1,  2001),  Aspen  acquired  United  Cementing  and  Acid  Co., Inc., a
privately-held  oilfield  service company headquartered in El Dorado, Kansas for
$1,040,000  in cash and $250,000 in restricted stock.  United Cementing operates
a  cementing and acidizing business providing oil field services integral to oil
and  gas  operations.  The  Company  has  sold 25% of United Cementing to Lenard
Briscoe,  a  Director  of  the  Company,  for  $312,500.

     SACO  OIL  COMPANY.  On September 7, 2001 (but effective April 1, 2001) the
Company  purchased from Saco Oil Company working interests in 44 producing wells
and  certain  other assets for a cash consideration of $1,125,000.  The acquired
properties  comprise  39 leases and are primarily located in the El Dorado Field
in  Kansas.


ITEM  2.     PROPERTIES
             ----------

LIST  OF  PROPERTIES

     MEANS  (QUEEN  SAND)  UNIT.  The  Aspen Means (Queen Sand) Unit consists of
approximately  2,600 acres on six leases in north central Andrews County, Texas.
Production  began  in  1954  and  secondary recovery was initiated in 1960.  The
Company  purchased  the  leases in 1996 for the purpose of instituting a 20-acre
infill  redevelopment  program.  An  engineering  report,  as  of June 30, 2001,
estimates  that  the  Means  (Queen  Sand)  Unit contains net proved undeveloped
reserves  of  3,092,000  MMBbls.  The  Company  estimates that it will require a
capital  investment  of  approximately  $11,260,000  to  develop  this property.
During  fiscal year 2001 the Company purchased, and delivered to the Means Unit,
or  the  nearby city of Odessa, Texas, approximately $500,000 of equipment to be
used  in  the  waterflood  project.

     MID-CONTINENT.  Aspen  owns  interest  in approximately 1,200 wellbores, of
which  97%  are  in the Mid Continent area. The majority of the wellbores are in
the  Anadarko  Basin  of western Oklahoma and The Texas Panhandle. The Company's
value is mostly from the production of these wellbores producing from the Atoka,
Granite  Wash,  Morrow,  Red  Fork  and  other  formations.

     There  are  several geologic provinces within the Mid-Continent area.  Most
of  these  provinces  have  established hydrocarbon production, i.e., the Arkoma
Basin  is  predominately  dry  gas while the Anadarko has both oil and gas.  The
Nemaha  Ridge  area  and  the  Golden  Trend are predominately oil, while recent
activity  in  the  northeastern  part  of  the  state  has  been  in  shale  gas
development.

     Geologically,  the  Anadarko  Basin  began  as a rift in the North American
plate.  This  rift valley was initially filled with volcanic material from vents
on either side of the rift.  During the Late Cambrian when rifting subsided, the
sea  invaded  the rift valley from the southeast.  The earliest sediments (known
as  the Arbuckle Group) were sandstones, limestones and dolomites; all deposited
in  a  shallow sea environment.  It is estimated that approximately 2000 feet of
the Arbuckle Group sediments were deposited.  The true thickness of the Arbuckle
Group  in  the "Deep Anadarko" is unknown; a deep test drilled in Washita County
to  a  thickness  of  more  than  31,000  feet  penetrated  only 200 feet of the


                                        9
<PAGE>
Arbuckle.  The  Arbuckle  Group does produce throughout the State and production
is  usually  associated  with  a  structural  component.

     An additional 7,000 to 10,000 feet of limestones were deposited through the
Mississippian Period.  In many places the top of the Mississippian is an erosion
surface  with a "Chat" interval or with enhanced porosity due to exposure and/or
structural  movement.   The  open ocean was completely gone by the Triassic Age.
Production  from  the  Pennsylvanian  is  mainly  stratigraphic,  with  multiple
sandstones  within  each formation (the Morrow/Springer has multiple sandstones,
10  to  15  individual  sandstones  in  one  area  is  not  unusual).

     The Anadarko Basin has been divided into the "Deep" and "Shelf" areas.  The
"Deep  Anadarko"  includes the counties of Beckham, Blaine, Caddo, Custer, Roger
Mills,  and Washita (the Central Western Oklahoma Counties).  Drilling depths in
these  Counties  are  generally  deeper  than  10,000  feet;  17,000 feet is not
uncommon for the Morrow/Springer Formation.  In Beckham, Custer, Roger Mills and
Washita  Counties  the  "Granite  Wash"  is a prolific gas producer with several
intervals  (each  of  these  zones  can  be several hundreds of feet thick) from
Desmoisian  to  Atokan age.  These zones are limestone, dolomite, shale mixtures
that  were washed in from the mountain front, with deposition primarily from the
south.

     The  earlier  Pennsylvanian  (Morrow/Springer) sandstones were deposited in
relatively  deep  water  as  long  shore  and near shore bars generally trending
northwest-southeast  (parallel  to  the  Basin).  The  eastern side of the "Deep
Anadarko"  includes  Blaine,  Canadian  and  Grady  Counties.   This  area  also
included  the  Blaine  County  Embayment,  an  area  known  for  overpressure
Morrow/Springer sandstones (these sands were deposited in an embayment and range
from  fluvial  to  delta  front  sands  instead  of  deep  water  sands  and the
depositional trend within the embayment is generally north-south).  This area of
the  Basin  is  primarily  productive  from  the  Pennsylvanian  sandstones.

     Reserves can range from 1 to 30+ BCF per interval with many wells producing
from  the  deepest interval first and then some years later will recomplete from
the  shallow  zones.  Spacing  is  typically  based  on 640 acres, but increased
density  drilling  is  common.  For  example  the  "Granite  Wash"  is now being
developed  in many areas to 160 acre spacing (from 1 well per Section to 4 wells
per  Section).

     Most  of  Aspen's  operated  wells  are on the "Shelf Area" of the Anadarko
Basin.  These  wells  are generally 7000-9000 feet deep and produce with the aid
artificial lift.  The wells are characteristically low volume gas wells but have
relative  long  lives.

     The  "Shelf"  area of the Anadarko encompasses the northwestern part of the
state  as  well  as  part  of  the  Panhandles of Oklahoma and Texas.  This area
produces  from  zones  ranging  from  the  Arbuckle to the Permian.  Most of the
production  is  from  multiple stratigraphic sandstones, 'reefal' limestones and
massive  limestone.  The  majority  of  the production is from the Pennsylvanian
sandstones  and  limestones.  The  older  and  deeper  limestone  production  is
generally  dependent  of  porosity  development  associated with structure.  The
majority of the production, however, is stratigraphically controlled.  The major
depositional  trends  for the sandstones are from north to south or northeast to
southwest,  depending  on  the  geographic  area.

     Drilling  depths  are  generally  less  than  10,000 feet and don't usually
require  intermediate  casing  or  special drilling programs.  Spacing can range
from  640  acres  to  40  acres  depending  on  the  area,  formation  and  well
classification  (oil  or  gas).  Increased  density drilling is as common on the
"Shelf"  area  as  it is in the "Deep" Anadarko.  Reserves are from both oil and
gas  and  can range from a few BCF's gas and a few thousand barrels of oil to 5+
BCF's  and  tens  of  thousands  of  barrels  of  oil.

     The  "Golden  Trend"  is  an area in south-central Oklahoma, bounded by the
Nemaha  and  Pauls  Valley uplifts on the east and the southeastern embayment of
the Anadarko.  This area is known for prolific oil production from stratigraphic
traps.  The  Upper  Pennsylvanian  sands  are  the  best  producers, these sands
successively  lap on to the Pauls Valley uplift.  The overall Deese (the primary
sequence  of  sands)  interval  is  several  thousand  feet  thick.

     It  is  also known for the prolific oil production from the Simpson/Bromide
(Ordovician) sands.  Production from the Ordovician sands, however, is generally
found associated with structures.  (The formations typically need a structure to
trap  hydrocarbons  above water.)  Structure in this area is very complex and it
is  highly  faulted  with  its  major  structural  axis trending almost directly
east-west.  This  arch  contains many known structural features that produce oil


                                       10
<PAGE>
and  gas  (Fields  such  as  Cement, Lindsay and Maysville are along this arch).
This  area  has  had  established  production  since  the  late  1940's  and
exploration/exploitation  continues  today with advances in seismic and drilling
technology finding additional prospective formations and traps.  Drilling depths
can  vary  widely  depending of the area and target formation.  Oil is the major
production  -  some  formations  such  as  the  Bromide can flow up to 300 BOPD.

     The  "Hugoton"  is an area encompassing far northern Oklahoma, the Oklahoma
Panhandle  and  western  Kansas.  This  was  an  embayment  of the Anadarko with
sediments  being deposited predominately from the north and northwest.  The area
is  dominated  by  natural gas production from shallow Permian sands (most wells
are  less  than  3,000  feet).  The area is also known for its large deposits of
helium.  For  many  years  only the shallow Permian gas was exploited and deeper
formations  were  not  tested.  During  the past twenty years this area has been
slowly  being  developed  for  the  deeper  producing formations.  Pennsylvanian
sandstones  and  the Mississippian limestones are favorite targets.  These zones
are  generally  stratigraphically  controlled.

     Drilling  depths  for the Mississippian are usually less than 6,000 feet in
the  Hugoton,  making  it  an attractive area for drilling.  The biggest problem
here  is  getting  an  acreage  position  due  to the spacing of the Permian and
Kansas'  rules  for  additional  drilling.

     The  Arkoma  Basin  lies  in  southeastern  Oklahoma  and central Arkansas.
Geologically  it  is  bounded by the Ozark Plateau to the north and the Quachita
Overthrust  Belt  to the south.  The Basin was separated from the Anadarko Basin
by a series of volcanic islands and uplifts associated with the tectonics of the
region.  The  Arkoma  produces  mainly  dry  gas  from  the  Pennsylvanian  age
sandstones.  Production  is  from  stratigraphic  traps,  structural  traps  and
combination of the two.  There are some areas where the production is controlled
by the faults (forming boundaries and stacking formations within blocks) and yet
there  are  areas  where  faulting  is  not  important at all to the production.

     Depending  on  the  area of the Basin, drilling depths can range from a few
thousand  feet  to  17,000+  feet  and prospect definition can range from simple
stratigraphic  correlations and geologic mapping to state of the art 3D seismic.
This  area  is currently enjoying increased activity as shale gas formations are
now being exploited and seismic prospects have opened up new discoveries such as
the  Potato  Hills  Field.

     NEW  MEXICO ACREAGE ACQUISITION.  The Sierra Grande Uplift of NE New Mexico
joins  the  Dalhart  Basin  of  the  Texas  Panhandle in the north half of Union
County,  New  Mexico.  These  features  are  tectonic  of  Mid  Pennsylvanian to
Wolfcampian  (Permian)  age.  These  strata  consist  of  arkosic  sandstone,
conglomerate and shale. The arkosic sediments were derived from the granite core
of  these  elements  and  were  deposited  as  alluvial  fans  and  fan  deltas.

     Structure  of  the  Sierra  Grande  uplift  appear  to have been controlled
primarily  by high angle faulting (normal and reverse). In the southern parts of
Union  County  and  Northeastern  part of Harding County commercial CO2 is being
produced.  The  northern part of Union County has many hydrocarbon shows in past
exploration  efforts  from  900  feet  deep  to  5000  feet  deep.

     Aspen recently acquired 61,843 net acres of leasehold interest in this area
over  an  area of 61,843 gross acres. This results in Aspen owning an average of
100%  GWI with an estimated 85% average NRI. The area is prospective of coal-bed
methane, shale gas, and Pennsylvanian aged gas reservoirs. Even though Aspen has
not  completed  its  Plan  of  Development,  the  Company  is  encouraged by the
potential  and  the  large position it now holds. According to one analysis by a
geological  engineer,  the  potential could be as great as 100 BCF from the coal
beds  alone.

     EL  DORADO  FIELD.  The  El  Dorado Field of central southeast Kansas has a
long history of oil production and development.  Aspen has acquired interests in
over  200  wells within the past two years in this Field.  Current Company gross
production  is  approximately 450 BOPD from several different horizons including
the  Admire,  the  Mississippi,  the  Simpson  and  the  Viola.  Aspen  recently
completed  a  successful five well drilling program in the Field and third party
engineers  have identified several additional development opportunities on these
leases.


                                       11
<PAGE>
TITLE  OF  PROPERTIES

     Aspen  follows  industry  practice when acquiring undeveloped properties on
minimal  title investigation. A title opinion is obtained before drilling begins
on  the  properties.  Title  opinions  cover the majority of Aspen's properties.
The  Company's properties are subject to royalty interests and can be subject to
liens  incident  to  operating  agreements,  liens  for  current taxes and other
burdens  (although  none  exist  at  the  present time and in the event they are
filed)  Aspen  does not believe they will materially interfere with their use or
value.  Aspen  may  incur  additional  expenses  in  obtaining  titles  or doing
remedial  work  on  the  titles, but in the opinion of management these expenses
would  not  be  material.

OIL  AND  GAS  RESERVES

     Aspen's  reserves consist primarily of proved and probable reserves located
in  the States of Kansas, Oklahoma and Texas.  Reserve estimates were made using
industry-accepted  methodology  including  extrapolation  of performance trends,
volumetrics,  material  balance  and  statistical  analysis  of  analogs.  The
evaluator's  professional  judgment  and experience were used to select the most
appropriate  method  and  to  determine  the reasonableness of the results.  The
estimates  were  made  in  accordance  with  oil  and  gas  reserve  definitions
promulgated  by  the  U.S.  Securities  and  Exchange  Commission  (the  "SEC").

     The  following  table  summarizes  Aspen's estimated net proved oil and gas
reserves  as  of  June  30,  2001 as estimated by American Energy Advisors, Inc.

<TABLE>
<CAPTION>
                                                           TOTAL RESERVES
                                                           --------------
ITEM                                           Oil Bbls       Gas Mcf       Mboe
----                                         ---------------  ----------  ----------
<S>                                         <C>              <C>         <C>

    RESERVES
        Proved producing
          Oil (Bbl)                               1,344,552  14,666,212   3,788,920
        Proved nonproducing
           Oil (Bbl)                                 14,983   1,874,153     327,341
        Proved undeveloped
          Oil (Bbl)                               4,111,338  15,947,434   6,769,243

        Total Proved
          Oil (Bbl)                               5,470,873  32,487,799  10,885,504

     ESTIMATED FUTURE NET REVENUES
     BEFORE INCOME TAXES
        Proved producing                    $ 45,173,063.00
        Proved nonproducing                    5,870,262.00
        Proved undeveloped                   115,545,711.00

          Total                             $166,589,036.00

     ESTIMATED FUTURE NET REVENUES
     BEFORE INCOME TAXES DISCOUNTED AT 10%
        Proved producing                    $ 22,924,709.00
        Proved nonproducing                    2,091,178.00
        Proved undeveloped                    56,649,765.00

          Total                             $ 81,665,652.00
</TABLE>

- - Prices  based  on  $26.98  per  Bbl  of  oil  and  $2.66 per MMBtu of gas.

     The  reserve  data  set  forth  in  this Annual Report is only an estimate.
Numerous uncertainties are inherent in estimating oil and gas reserves and their
values,  including  many  factors  beyond  the  control of the producer. Reserve


                                       12
<PAGE>
engineering  is  a subjective process of estimating underground accumulations of
oil  and  gas  that  cannot  be measured in an exact manner. The accuracy of any
reserve  estimate  is  a  function  of  the  quality  of  available  data and of
engineering  and geological interpretation and judgment.  As a result, estimates
of  different  engineers  often  vary.  In  addition,  estimates of reserves are
subject  to  revision  by the results of later drilling, testing and production.
Accordingly,  reserve  estimates often differ from the quantities of oil and gas
ultimately  recovered.  The meaningfulness of estimates is highly dependent upon
the  accuracy  of  the  assumptions  upon  which  they  are  based.

     In  general,  oil  and  gas  production  declines as reserves are depleted.
Except  to  the  extent  that  Aspen  acquires  proven  reserves  or succeeds in
exploring and developing its own reserves, or both, Aspen's proven reserves will
decline  as  they  are  produced.  Aspen's  future  oil  and  gas production is,
therefore,  highly  dependent  upon its ability to acquire or develop additional
reserves.

DRILLING  ACTIVITY

     With  gas  prices  reaching  historic  highs for the last 20 years, the gas
dominated  Mid-Continent  Region  of Oklahoma and Texas was the focus of Aspen's
exploitation  and  development  during  the  fiscal  year.  Aspen  initiated  an
aggressive development program during which it participated in the drilling of 6
wells  in  Texas  and  27  wells in Oklahoma for a total of 33 new wells with 31
economic  completions.  This  94%  completion  success  rate  resulted  in Aspen
participating  in 33 gross wells and 1.01 net wells for a total drilling cost of
approximately  $773,000.00  In  addition  to  the exploitation drilling program,
Aspen also participated in the successful recompletion and/or rework of 15 wells
during  the  year.

     These  drilling  activities  during  the  year resulted in Aspen adding net
proved  reserves  of 751,567 Mcf and 17.2 Mbo, or 142 Mboe for a finding cost of
$4.15  per  Boe  which is significantly below the industry average.  The present
discounted  value  added  to  Aspen's  present worth for these new wells is over
$1,000,000.00.

     The  Company  has  budgeted $2,000,000.00 for the drilling of over 60 wells
during  the  upcoming year.  Reflective of this effort, since June 30, 2001, the
Company  is  currently  participating  in  the drilling and completion of 19 new
wells.  There  are  19 additional wells in which Aspen has approved the drilling
AFE's  and should commence drilling operations on each of these new wells within
the next 60 days.  Additionally, the Company has received 27 new well proposals,
which  are  currently  being  evaluated  by  its  technical  staff.

OIL  AND  GAS  WELLS

     The  following  table sets forth the number of productive oil and gas wells
in which the Company had a working interest at June 30, 2001. During fiscal year
2001,  the  average price received for oil and gas sales was $29.45 per Boe, and
the  average  cost  of production was $6.09 per Boe, where Boe is defined as the
barrel  of  oil  equivalent  using  6  Mcf  of  gas to one barrel of oil.  Aspen
Energy's  full  cost  pool  was  amortized  at  the  rate  of  $5.66  per  Boe.

<TABLE>
<CAPTION>
                               PRODUCTIVE WELLS
                          Gross (1)         Net (2)
                          -------------------------
Location                  Oil  Gas  Total   Oil     Gas    Total
-----------------------------------------------------------------
<S>                       <C>  <C>  <C>    <C>     <C>     <C>
Kansas                    126    3    129  117.13     .72  117.85
Oklahoma                  100  857    957   22.58  169.82  192.40
Texas                      34   43     77   32.07    3.42   35.49
Other                       0   37     37       0    2.08    2.08

Total                     260  940  1,200  171.78  176.04  347.82
                          =======================================
<FN>
------------------
(1)  The  number  of gross wells is the total number of wells in which a working
     interest  is  owned.
(2)  The number of net wells is the sum of fractional working interests owned in
     gross  wells  expressed  as  whole  numbers  and  fractions  thereof.
</TABLE>


                                       13
<PAGE>
OIL  AND  GAS  ACREAGE

     The  following  table  summarizes  the  Company's developed and undeveloped
leasehold  acreage  at  June  30,  2001.

<TABLE>
<CAPTION>
                           DEVELOPED         UNDEVELOPED
                       ------------------------------------
<S>                    <C>       <C>       <C>      <C>
                        719,357   168,836   65,177   65,177
                        Gross(1)  Net(2)    Gross(1) Net(2)

Kansas                   12,055     7,418        0        0
Oklahoma                677,402   148,512      434      434
Texas                    29,900    12,906    2,900    2,900
New Mexico                    0         0   61,843   61,843
<FN>
-----------------
(1)  The  number  of gross acres is the total number of acres in which a working
     interest  is  owned.
(2)  The number of net acres is the sum of fractional working interests owned in
     gross  acres  expressed  as  whole  numbers  and  fractions  thereof.
</TABLE>


ITEM  3.     LEGAL  PROCEEDINGS
             ------------------

     The  Company  is  not  currently party to any legal proceedings which would
have  a  material  adverse  effect  on  the  Company.


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

     No  matters were submitted to Shareholders during the fourth quarter of the
fiscal  year.


                                     PART II

ITEM  5.     MARKET  FOR  THE  COMPANY'S  COMMON  STOCK  AND RELATED STOCKHOLDER
             -------------------------------------------------------------------
             MATTERS
             -------

MARKET  INVESTMENTS

     The Common Stock began trading through the Canadian Dealing Network ("CDN")
on  June  24,  1996,  under  the  symbol "CVZC" and ceased trading on the CDN on
October  2,  2000,  when  the  shares  commenced trading on the Canadian Venture
Exchange  ("CDNX").  The  following  table  sets  forth  the  high  and  low bid
information  for the Company's Common Stock in United States dollars as reported
on  the  CDN  or  CDNX,  as applicable, for the periods indicated reflecting the
consolidation  on  a 1 for 7 basis effective February 12, 2001.  The information
in  the table reflects inter-dealer prices, without retail mark-up, mark-down or
commission,  and  may  not  necessarily  represent  actual  transactions.  From
December 31, 1997 to June 30, 1999, there were no significant trades on the CDN.


                                       14
<PAGE>
                                      CDN-CDNX (U.S. DOLLARS)
                                      -----------------------

                                        HIGH       LOW
                                      ---------  --------

       July 1 - September 30, 1999    $    2.59  $   0.70
       October 1 - December 31, 1999  $    1.54  $   0.98
       January 1 - March 31, 2000     $    0.98  $   0.84
       April 1 - June 30, 2000        $    2.66  $   1.96
       July 1 - September 30, 2000    $   1.925  $   1.40
       October 1 - December 31, 2000  $    2.58  $   0.56
       January 1 - February 26, 2001  $    2.25  $   0.98

     The  Common  Stock  began  trading on The Toronto Stock Exchange ("TSE") on
February  26,  2001, under the symbol "ASR."  The following table sets forth the
high  and  low  sales  prices for the Common Stock for the periods indicated, in
Canadian  dollars.

                                     TSE (CANADIAN DOLLARS)
                                     ----------------------

                                         HIGH        LOW
                                     -----------  ----------

       February 26 - March 31, 2001  $      1.95  $     1.60
       April 1 - June 30, 2001       $      2.40  $     1.25
       July 1 - September 14, 2001   $      1.50  $     1.15

     The  Company's  Common  Stock  began  trading  through  the NASD Electronic
Bulletin  Board  on January 14, 1997 under the symbol "CTVYF."  On July 1, 1997,
the  Company's symbol was changed to "CTVY."  The Company's Common Stock was not
traded  through  the NASD Electronic Bulletin Board after October 17, 1997 until
June  2,  1999  when the Common Stock returned to trading on the NASD Electronic
Bulletin  Board under the symbol "KTNV."  At present, the Common Stock trades on
the NASD Electronic Bulletin Board under the symbol "ASPG."  The following table
sets forth the high and low transaction information for the Common Stock in U.S.
currency as reported on the Electronic Bulletin Board for the periods indicated.


                                       OTCBB (U.S. DOLLARS)
                                       --------------------

                                          HIGH         LOW
                                      ------------  ----------

       July 1 - September 30, 1999    $       3.85  $     0.70
       October 1 - December 31, 1999  $       2.03  $     0.77
       January 1 - March 31, 2000     $       3.92  $     0.77
       April 1 - June 30, 2000        $       4.13  $     1.60
       July 1 - September 30, 2000    $       2.73  $     1.22
       October 1 - December 31, 2000  $       2.24  $     0.87
       January 1 - March 31, 2001     $       1.69  $     0.63
       April 1 - June 30, 2001        $       1.52  $     0.81
       July 1 - September 14, 2001    $       1.09  $     0.75

     HOLDERS.  As  of  September 11, 2001, there were approximately 1,093 record
holders  of  the  Company's  Common  Stock.

DIVIDENDS

     The  Company has not previously paid any cash dividends on its Common Stock
and  does  not anticipate or contemplate paying dividends on the Common Stock in
the  foreseeable  future.  It  is the present intention of management to utilize
all available funds for the development of the Company's business.  In addition,
the  Company  may  not  pay  any dividends on common equity unless and until all
dividend  rights  on  outstanding  preferred stock, if any, have been satisfied.


                                       15
<PAGE>
The  only  other  restrictions that limit the ability to pay dividends on common
equity or that are likely to do so in the future, are those restrictions imposed
by  law  or  by  certain  credit  agreements.  Dividends  paid  to  non-Canadian
residents  would  be  subject  to  Canadian  withholding  tax.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

     During  the  year  ended  June  30,  2001, the Company issued securities in
transactions  not  requiring  registration  in reliance upon exemptions from the
registration  requirements of the Securities Act of 1933 (the "Securities Act").
The  price of the securities issued in the following transactions was determined
in each instance by the Board of Directors based primarily upon the then current
bid  prices  of the Common Stock of the Company on the date(s) of agreements for
issuance  in  its  principal  trading  market  and  the  restriction  on  the
transferability  of  such  securities. The unregistered sale of these securities
above  were  made  in  reliance  upon  Section 4(2) of the Securities Act, which
provide  exemptions  for  transactions  not  involving  a  public offering.  The
Company  determined  that  the purchasers of these securities were sophisticated
investors  who  had  the  financial  ability  to  assume the risk of their total
investment,  acquired  them  for  their  own  account and not with a view to any
distribution  thereof to the public.  The certificates evidencing the securities
sold  to United States residents bear legends stating that the shares are not to
be offered, sold or transferred other than pursuant to an effective registration
statement  under  the  Securities  Act  or  an  exemption from such registration
requirements.

     ACQUISITIONS.  In acquisitions of oil and gas properties during fiscal year
2001,  the  Company  issued  a  total  of  369,048 shares of Common Stock to the
owners  of  such  properties  in exchange for properties valued at approximately
$786,072.

     CAPITAL-RAISING  PLACEMENTS.  During fiscal year 2001, the Company issued a
total  of  1,419,285  shares  of  Common  Stock  to investors in exchange for an
aggregate  net  investment  (exclusive  of commissions and costs) of $1,434,557.
These  issuances  took  place  at  the times and for the consideration set forth
below:

                               Number
       Issuance Date         of Shares     Purchase Price
       -------------------  ------------  ----------------

       July, 2000                60,714   $      76,500(1)
       September, 2000          125,000         157,000(1)
       October, 2000              3,571           4,500(1)
       April, 2001          1,230,000(3)      1,196,557(2)
---------------
(1)  Exercise  of  warrants  ($1.26)  issued  in prior year's private placement.
(2)  Net  of  selling  commissions  and  other  costs  of  sale.
(3)  Represents  special  warrants  to  purchase  1,230,000  shares. The warrant
     holder  has paid the exercise price in full and may exercise the warrant at
     any  time.

     STOCK  FOR SERVICES AND INDEBTEDNESS.  During fiscal year 2001, the Company
issued  a  total  of  260,068  shares  of  Common  Stock in exchange for various
services,  having  an  estimated  aggregate  value  of  $486,500.

                       Number    Debt/Value
       Issuance Date  of Shares   Services
       -------------  ---------  -----------

       October, 2000     23,969  $    30,500
       October, 2000    214,286      420,000
       April, 2001       21,813       36,000

     OTHER  STOCK  OPTION  GRANTS.  During  the  year  ended  June 30, 2001, the
Company  granted  stock  options  to acquire a total of 721,423 shares of Common
Stock  for  an  exercise price of $1.33 per share and stock options to acquire a
total  of 28,572 shares for an exercise price of $1.96 per share.  These options
were  granted to employees, officers and Directors of the Company.  All of these
options  are  currently  outstanding.


                                       16
<PAGE>
ITEM  6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION
             ----------------------------------------------------------------

FISCAL  YEAR  2001  AS  COMPARED  TO  FISCAL  YEAR  2000

     During the fiscal year ended June 30, 2001, the Company had net earnings of
$2,100,524  on  revenues of $10,549,274 as compared with net earnings of $94,116
on  revenues  of  $3,481,718  for  the  fiscal  year  ended  June  30,  2000.

     Revenue for the 2001 fiscal year was $10,549,274 compared to $3,481,718 for
2000,  an  increase  of  $7,067,556  or  203%.  This  increase  is  primarily
attributable to an 190% increase in oil and gas sales during the 2001 year.  The
increase  in  oil  and  gas  sales is a result of the acquisition of oil and gas
properties  and  higher  energy  prices.

     Expenses  for  the  2001  fiscal  year  amounted  to $7,397,721 compared to
$2,709,973  for  2000,  an  increase  of  $4,687,748  or  173%.  The increase is
attributable  to:

     an  increase  in  oil  and  gas  production  expenses  associated  with the
     increased  number  of  wells  in  which  the  company  has  participation.
     an  increase  in  general  and administrative expenses of $1,385,634 mostly
     related  to  additional  staff.
     an  increase  of  $1,833,559  in  oil  and  gas production costs related to
     increased  oil  and  gas  sales  and
     an increase of $1,125,097 in depreciation and depletion directly related to
     increased  oil  and  gas  sales.

     Operating  income was $3,151,553 in 2001 compared to an operating income of
$771,745  in  2000  as  a  result  of  increased  sales.

     Interest  and  financing  expense  for  the 2001 fiscal year was $1,085,286
compared  to $665,362 in 2000, an increase of $419,924 or 63%.  This increase is
attributable  to  bank debt incurred and a note payable given in connection with
the  acquisition  and  development  of  oil  and  gas  properties.

FISCAL  YEAR  2000  AS  COMPARED  TO  FISCAL  YEAR  1999

     During the fiscal year ended June 30, 2000, the Company had net earnings of
$94,116  on revenues of $3,481,718 as compared with a net loss of $11,479,086 on
revenues  of $980,966 for the fiscal year ended June 30, 1999.  During 1999, the
Company  recorded  a  loss  on disposal of assets of $9,807,576 and provided for
further  loss of $1,262,000 in respect of impairment in the value of oil and gas
properties.  These  two  items  comprise  96.4%  of  the  1999  loss.

     Revenue  for  the  2000 fiscal year was $3,481,718 compared to $980,966 for
1999,  an increase of $2,500,752 or 254.9%.  This increase is attributable to an
1200.3%  increase  in  oil  and  gas  sales offset by decreased equipment sales.
During  the  2000  year, the Company ceased its equipment sales operations.  The
increase  in  oil  and  gas  sales is a result of the acquisition of oil and gas
properties  and  higher  energy  prices.

     Expenses  for  the  2000  fiscal  year  amounted  to $2,709,973 compared to
$2,478,161  for  1999,  an  increase  of  $231,812  or  9.4%.  The  increase  is
attributable  to:

     - a decrease in equipment sales related expenses of $592,475 resulting from
     the  cessation  of  this  business  activity,
     -  a  decrease  in  general  and administrative expenses of $869,219 mostly
     related  to  the  elimination  of  penalties  associated  with a failure to
     register  certain  convertible  debentures  in  1999,
     -  more  than  offset  by an increase of $737,757 in oil and gas production
     costs  related  to  increased  oil  and  gas  sales,
     - an increase of $956,720 in depreciation and depletion directly related to
     increased  oil  and  gas  sales.

     Operating  income  was  $771,745  in  2000 compared to an operating loss of
     $1,497,195  in  1999  as  a  result  of  increased  sales.


                                       17
<PAGE>
     Interest  and  financing  expense  for  the  2000  fiscal year was $665,362
     compared  to  $399,289  in  1999,  an  increase  of $266,073 or 66.6%. This
     increase  is attributable to bank debt incurred and a note payable given in
     connection  with the acquisition and development of oil and gas properties.

LIQUIDITY  AND  CAPITAL  RESOURCES

     On  June  30,  2001, the Company had cash of $907,794 and a working capital
deficit  of $928,794 calculated by subtracting current liabilities of $4,831,424
from current assets of $3,902,450.  Included in the working capital deficit is a
$2,321,243  current maturities of long term debt that management expects will be
refinanced  within  the  next  12  months.

     The  Company  intends  to  fund  its  2001  development activities from the
proceeds  of  private  placements of equity instruments, exercise of outstanding
options  and  warrants,  traditional  bank debt and institutional reserves based
financing.  There  is  no  assurance  the  Company  will  be successful in these
efforts.

OTHER  MATTERS

     In  June  1998,  the  Financial  Accounting  Standards  Board (FASB) issued
Statement  of  Financial  Accounting  Standards  (SFAS)  No. 133, Accounting for
Derivative  Instruments  and Hedging Activities which establishes accounting and
reporting  standards  for  derivative  instruments, including certain derivative
instruments  embedded  in  other  contracts  (collectively  referred  to  as
derivatives),  and  for  hedging  activities.  SFAS No. 133 is effective for all
fiscal  quarters of all fiscal years beginning after June 15, 2001.  The Company
does  not  anticipate  a material impact on its financial position or results of
operations.

     In  June  2000,  the  FASB  issued  SFAS  No.  138,  Accounting for Certain
Derivative Instruments and Certain Hedging Activities. This statement amends the
accounting  and  reporting standards of SFAS No. 133 for certain instruments and
certain  hedging activities. SFAS No. 138 also amends SFAS No. 133 for decisions
made by the Board relating to the Derivative Implementation Group (DIG) process.
Certain decisions arising from the DIG process that required specific amendments
to  SFAS  No. 133 are incorporated in this Statement. The statement is effective
concurrently  with  SFAS  No. 133 according to the provisions of paragraph 48 of
SFAS  No.  133.  The  Company  does  not  anticipate  a  material  impact on its
financial  position  or  results  of  operations.

     In  December  1999,  the  Securities  and  Exchange Commission issued Staff
Accounting  Bulletin (SAB) No. 101 which summarizes certain of the staff's views
in  applying  generally accepted accounting principles to revenue recognition in
financial  statements.  SAB  No.  101  did  not  have  a  material impact on the
Company's  financial  position  or  results  of  operations.

     In June 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS
No.  142,  Goodwill  and  Other Intangible Assets, collectively, the Statements.
These  Statements  drastically  change the accounting for business combinations,
goodwill  and  intangible  assets.  Statement  141  eliminates  the
pooling-of-interests  method  of accounting for business combinations except for
qualifying  business  combinations  that  were  initiated prior to July 1, 2001.
Statement  141  also  changes  the criteria to recognize intangible assets apart
from  goodwill.  Under  Statement  142, goodwill and indefinite lived intangible
assets are no longer amortized but are reviewed annually for impairment, or more
frequently if impairment indicators arise. Separable intangible assets that have
finite  lives  will  continue  to  be  amortized  over  their  useful lives. The
amortization provisions of Statement 142 apply to goodwill and intangible assets
acquired  after  June  30,  2001. With respect to goodwill and intangible assets
acquired prior to July 1, 2001, the amortization provisions of Statement 142 are
affective  upon adoption of Statement 142. Pre-existing goodwill and intangibles
will  be  amortized  during  the transition period until adoption. Companies are
required  to  adopt  Statement 142 in their fiscal year beginning after December
15,  2001. Early adoption is permitted for companies with fiscal years beginning
after  March  15, 2001. The Company does not anticipate a material impact on its
financial  position  or  results  of  operations.


                                       18
<PAGE>
ESTIMATED  RESERVES

     A  slight majority of Aspen's oil and gas properties are proved undeveloped
reserves.  Aspen  emphasizes  that  reserve  estimates  of  new  discoveries  or
undeveloped  properties  are  more imprecise than those of producing oil and gas
properties.  Accordingly,  these  estimates are expected to change materially as
future  information  becomes  available.




                                       19
<PAGE>
ITEM  7.     FINANCIAL  STATEMENTS
             ---------------------

                        ASPEN GROUP RESOURCES CORPORATION
                                AND SUBSIDIARIES


                                    CONTENTS


                                                                            PAGE
                                                                            ----


Independent  Auditor's  Report. . . . . . . . . . . . . . . . . . . . . .     21

Consolidated  Financial  Statements

    Consolidated  Balance  Sheet. . . . . . . . . . . . . . . . . . . . .     22

    Consolidated  Statements  of  Earnings. . . . . . . . . . . . . . . .     23

    Consolidated  Statement  of  Changes in Stockholders' Equity. . . . .  24-26

    Consolidated  Statements  of  Cash  Flows . . . . . . . . . . . . . .     27

    Notes  to  Consolidated  Financial  Statements. . . . . . . . . . . .  28-41




                                       20
<PAGE>


          INDEPENDENT  AUDITOR'S  REPORT




          Board  of  Directors
          Aspen  Group  Resources  Corporation


          We  have  audited the accompanying consolidated balance sheet of Aspen
          Group  Resources  Corporation and subsidiaries as of June 30, 2001 and
          the  related  consolidated  statements  of  earnings,  changes  in
          stockholders'  equity  and cash flows for each of the two years in the
          period  ended  June  30,  2001.  These  financial  statements  are the
          responsibility  of  the Company's management. Our responsibility is to
          express  an opinion on these financial statements based on our audits.

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

          In  our  opinion,  the  consolidated  financial statements referred to
          above present fairly, in all material respects, the financial position
          of  Aspen  Group Resources Corporation and subsidiaries as of June 30,
          2001,  and  the  results  of their operations and their cash flows for
          each of the two years in the period ended June 30, 2001, in conformity
          with  accounting principles generally accepted in the United States of
          America.



          Lane  Gorman  Trubitt  L.L.P.


          Dallas,  Texas
          August  10,  2001


                                       21
<PAGE>
<TABLE>
<CAPTION>
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2001

                                     ASSETS
                                     ------


<S>                                                                  <C>
CURRENT ASSETS
  Cash                                                               $    907,794
  Accounts receivable
    Trade                                                               2,209,026
    Other                                                                   5,730
  Materials and supplies inventory                                        438,845
  Prepaid expenses                                                        341,055
                                                                     -------------
    Total current assets                                                3,902,450
                                                                     -------------

PROVED OIL & GAS PROPERTIES (FULL COST METHOD)                         47,646,027
  net of accumulated depletion of $3,737,393


PROPERTY AND EQUIPMENT
  net of accumulated depreciation of $2,027,013                         2,515,943

OTHER ASSETS
  Notes receivable                                                        203,000
  Note receivable - related party                                         125,000
  Nonmarketable security                                                  236,119
  Prepaid expenses                                                        115,500
  Deposits and other assets                                               108,880
                                                                     -------------

      TOTAL ASSETS                                                   $ 54,852,919
                                                                     =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

CURRENT LIABILITIES
  Accounts payable
    Trade                                                            $  1,599,349
    Revenue distribution                                                  632,284
  Accrued expenses                                                        127,955
  Accrued interest                                                        150,593
                                                                     -------------
                                                                        2,510,181
  Current maturities of long-term debt                                  2,321,243
                                                                     -------------
    Total current liabilities                                           4,831,424
                                                                     -------------

LONG-TERM DEBT, LESS CURRENT MATURITIES                                15,164,533

MINORITY INTERESTS                                                            222

STOCKHOLDERS' EQUITY
  Preferred stock, no par value, authorized-unlimited, issued-none              -
     issued-none
  Common stock, no par value, authorized-unlimited,
    issued - 19,075,657 shares                                         45,935,125
  Less subscriptions for 122,535 shares                                  (214,436)
  Warrants and beneficial conversion feature                            2,020,252
  Accumulated deficit                                                 (12,884,201)
                                                                     -------------
    Total stockholders' equity                                         34,856,740
                                                                     -------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $ 54,852,919
                                                                     =============
</TABLE>


See  accompanying  notes  to  these  financial  statements.


                                       22
<PAGE>
<TABLE>
<CAPTION>
                       CONSOLIDATED STATEMENTS OF EARNINGS
                       YEARS ENDED JUNE 30, 2001 AND 2000


                                                  2001          2000
                                              ------------  ------------
<S>                                           <C>           <C>
REVENUE
  Oil and gas sales                           $10,055,440   $ 3,461,803
  Equipment sales                                       -        19,915
  Product and service revenues                    493,834             -
                                              ------------  ------------
    Total revenues                             10,549,274     3,481,718
                                              ------------  ------------

EXPENSES
  Oil and gas production                        2,787,550       953,991
  Cost of equipment sold                                -        10,357
  Operating expenses                              353,815             -
  General and administrative                    2,015,210       629,576
  Depreciation and depletion                    2,241,146     1,116,049
                                              ------------  ------------
    Total expenses                              7,397,721     2,709,973
                                              ------------  ------------

EARNINGS FROM OPERATIONS                        3,151,553       771,745

OTHER INCOME (EXPENSE)
  Interest and financing expense               (1,085,286)     (665,362)
  Other income                                     34,479       236,992
                                              ------------  ------------
    Total other                                (1,050,807)     (428,370)
                                              ------------  ------------

EARNINGS BEFORE INCOME
   TAXES AND MINORITY INTERESTS                 2,100,746       343,375

INCOME TAX BENEFIT                                      -             -
                                              ------------  ------------

NET EARNINGS BEFORE
   MINORITY INTERESTS                           2,100,746       343,375

MINORITY INTERESTS                                    222       249,259
                                              ------------  ------------

NET EARNINGS                                  $ 2,100,524   $    94,116
                                              ============  ============

NET EARNINGS PER SHARE                        $       .11   $       .01

NET EARNINGS PER SHARE - ASSUMING DILUTION    $       .10   $       .01

WEIGHTED AVERAGE SHARES                        18,825,709    11,953,798

WEIGHTED AVERAGE SHARES - ASSUMING DILUTION
                                               20,084,953    12,080,212
</TABLE>


See  accompanying  notes  to  these  financial  statements.


                                       23
<PAGE>
<TABLE>
<CAPTION>
                                 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                            YEARS ENDED JUNE 30, 2001 AND 2000

                                                                                      Common Stock
                                                               Common Stock            Subscribed         Special Shares
                                                           -----------------------  -------------------  -----------------
                                                            Shares       Amount     Shares     Amount    Shares    Amount
                                                           ---------  ------------  -------  ----------  -------  --------
<S>                                                        <C>        <C>           <C>      <C>         <C>      <C>

BALANCES, June 30, 1999                                    3,881,903  $23,548,537   122,535  $(214,436)        -  $      -

Issuance of shares in August 1999 to related parties
    for settlement of debt  ($1.12 per share)                446,429      500,000         -          -         -         -
Issuance of shares in August 1999 for
    services related to the acquisition  of oil and gas       85,714       96,000         -          -         -         -
    properties ($1.12 per share)
Exercise of warrants in September 1999 for
   services related to the acquisition  of oil and gas        79,048       88,533         -          -         -         -
    properties ($1.12 per share)
Issuance of shares in September 1999 for services
   related to the acquisition  of oil and gas properties
   ($1.53 per share)                                         142,857      218,750         -          -         -         -
Issuance of shares in September 1999 for services
   related to the acquisition  of oil and gas properties      42,857       48,000         -          -         -         -
   ($1.12 per share)
Issuance of shares and warrants in private
    offering which closed in September 1999                  171,429      300,000         -          -         -         -
    ($1.75 per share)
Issuance of shares and special warrants in
   September 1999 for the acquisition  of East Wood        6,604,414    5,895,840         -          -         -         -
   ($.89 per share)
Issuance of shares in September 1999 for services
   related to the acquisition  of oil and gas properties     114,285      128,000         -          -         -         -
   ($1.12 per share)
Costs related to sales of stock                                    -      (39,448)        -          -         -         -
Exercise of warrants in December 1999 for
   services related to the acquisition  of oil and gas
   properties ($1.12 per share)                               77,619       86,933         -          -         -         -
Issuance of shares and warrants in private
    offering which closed in December 1999
    ($1.23 per share)                                        160,408      196,500         -          -         -         -
Costs related to sales of stock                                    -      (95,470)        -          -         -         -
Issuance of shares in January 2000 for services
   related to the acquisition  of oil and gas properties     142,857      125,000         -          -         -         -
   ($.88 per share)
Issuance of shares and warrants in private
    offering which closed in  February 2000                  571,429      600,000         -          -         -         -
    ($1.05 per share)
Issuance of shares in February 2000 for the
   acquisition  of East Wood  ($2.41 per                   3,747,271    9,033,170         -          -         -         -
   share)


                                                             Warrants
                                                               and
                                                            Beneficial
                                                            Conversion     Accumulated
                                                             Feature         Deficit        Total
                                                           ------------  --------------  -----------
<S>                                                        <C>           <C>             <C>

BALANCES, June 30, 1999                                    $    823,695  $ (15,078,841)  $9,078,955

Issuance of shares in August 1999 to related parties
    for settlement of debt  ($1.12 per share)                         -              -      500,000
Issuance of shares in August 1999 for
    services related to the acquisition  of oil and gas               -              -       96,000
    properties ($1.12 per share)
Exercise of warrants in September 1999 for
   services related to the acquisition  of oil and gas                -              -       88,533
    properties ($1.12 per share)
Issuance of shares in September 1999 for services
   related to the acquisition  of oil and gas properties
   ($1.53 per share)                                                  -              -      218,750
Issuance of shares in September 1999 for services
   related to the acquisition  of oil and gas properties              -              -       48,000
   ($1.12 per share)
Issuance of shares and warrants in private
    offering which closed in September 1999                           -              -      300,000
    ($1.75 per share)
Issuance of shares and special warrants in
   September 1999 for the acquisition  of East Wood                   -              -    5,895,840
   ($.89 per share)
Issuance of shares in September 1999 for services
   related to the acquisition  of oil and gas properties              -              -      128,000
   ($1.12 per share)
Costs related to sales of stock                                       -              -      (39,448)
Exercise of warrants in December 1999 for
   services related to the acquisition  of oil and gas
   properties ($1.12 per share)                                       -              -       86,933
Issuance of shares and warrants in private
    offering which closed in December 1999
    ($1.23 per share)                                                 -              -      196,500
Costs related to sales of stock                                       -              -      (95,470)
Issuance of shares in January 2000 for services
   related to the acquisition  of oil and gas properties              -              -      125,000
   ($.88 per share)
Issuance of shares and warrants in private
    offering which closed in  February 2000                           -              -      600,000
    ($1.05 per share)
Issuance of shares in February 2000 for the
   acquisition  of East Wood  ($2.41 per                              -              -    9,033,170
   share)
</TABLE>


See  accompanying  notes  to  these  financial  statements.


                                       24
<PAGE>
<TABLE>
<CAPTION>
                                   CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                               YEARS ENDED JUNE 30, 2001 AND 2000

                                                                                                                        Warrants
                                                                                      Common Stock                         and
                                                                Common Stock           Subscribed       Special Shares  Beneficial
                                                           -----------------------  ------------------  --------------  Conversion
                                                             Shares      Amount     Shares    Amount    Shares  Amount   Feature
                                                           ----------  -----------  -------  ---------  ------  ------  ----------
<S>                                                        <C>         <C>          <C>      <C>        <C>     <C>     <C>
Exercise of warrant in February 2000 for services
   related to the acquisition  of oil and gas properties       84,762     203,988         -         -        -       -        -
   ($2.41 per share)
Exercise of warrants in March 2000
   ($1.05 per share)                                           57,143      60,000         -         -        -       -        -
Exercise of warrants in March 2000
   ($1.26 per share)                                           57,143      72,000         -         -        -       -        -
Exercise of warrants in March 2000
   ($2.10 per share)                                           85,714     180,000         -         -        -       -        -
Exercise of warrants in March 2000
   ($1.26 per share)                                          209,218     263,614         -         -        -       -        -
Exercise of options in March 2000
   ($1.75 per share)                                           17,143      30,000         -         -        -       -        -
Costs related to sales of stock                                     -     (97,520)        -         -        -       -        -
Issuance of shares in April  2000 for
    services ($1.05 - $1.82 per share)                         45,788      55,800         -         -        -       -        -
Issuance of shares in April  2000 for
    services ($.98 per share)                                  85,714      84,360         -         -        -       -        -
Issuance of shares in April  2000 for
    services ($.88 per share)                                 285,714     250,000         -         -        -       -        -
Issuance of shares in April 2000 for the
   acquisition  of oil and gas properties  ($1.20 per         260,714     313,718         -         -        -       -        -
   share)
Issuance of shares in April 2000 to related parties
    for settlement of debt  ($1.40 per share)                 183,016     256,223         -         -        -       -        -
Issuance of shares in May 2000 for the
   acquisition  of oil and gas properties  ($2.63 per          92,857     243,750         -         -        -       -        -
   share)
Issuance of shares in May 2000 for the
   acquisition  of oil and gas properties  ($2.41 per         134,286     323,172         -         -        -       -        -
   share)
Exercise of warrants in June 2000
   ($2.41 per share)                                           44,286      96,875         -         -        -       -        -
Issuance of shares in June 2000 for the
   acquisition  of oil and gas properties  ($2.41 per         142,857     343,800         -         -        -       -        -
   share)

Net earnings                                                        -           -         -         -        -       -        -
                                                           ----------  -----------  -------  ---------  ------  ------  -------

BALANCES, June 30, 2000                                    18,054,875  43,410,125   122,535  (214,436)       -       -  823,695
                                                           ----------  -----------  -------  ---------  ------  ------  -------


                                                             Accumulated
                                                               Deficit         Total
                                                           ---------------  -----------
<S>                                                        <C>              <C>
Exercise of warrant in February 2000 for services
   related to the acquisition  of oil and gas properties                -      203,988
   ($2.41 per share)
Exercise of warrants in March 2000
   ($1.05 per share)                                                    -       60,000
Exercise of warrants in March 2000
   ($1.26 per share)                                                    -       72,000
Exercise of warrants in March 2000
   ($2.10 per share)                                                    -      180,000
Exercise of warrants in March 2000
   ($1.26 per share)                                                    -      263,614
Exercise of options in March 2000
   ($1.75 per share)                                                    -       30,000
Costs related to sales of stock                                         -      (97,520)
Issuance of shares in April  2000 for
    services ($1.05 - $1.82 per share)                                  -       55,800
Issuance of shares in April  2000 for
    services ($.98 per share)                                           -       84,360
Issuance of shares in April  2000 for
    services ($.88 per share)                                           -      250,000
Issuance of shares in April 2000 for the
   acquisition  of oil and gas properties  ($1.20 per                   -      313,718
   share)
Issuance of shares in April 2000 to related parties
    for settlement of debt  ($1.40 per share)                           -      256,223
Issuance of shares in May 2000 for the
   acquisition  of oil and gas properties  ($2.63 per                   -      243,750
   share)
Issuance of shares in May 2000 for the
   acquisition  of oil and gas properties  ($2.41 per                   -      323,172
   share)
Exercise of warrants in June 2000
   ($2.41 per share)                                                    -       96,875
Issuance of shares in June 2000 for the
   acquisition  of oil and gas properties  ($2.41 per                   -      343,800
   share)

Net earnings                                                       94,116       94,116
                                                           ---------------  -----------

BALANCES, June 30, 2000                                       (14,984,725)  29,034,659
                                                           ---------------  -----------
</TABLE>


See  accompanying  notes  to  these  financial  statements.


                                       25
<PAGE>
<TABLE>
<CAPTION>
                                CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                           YEARS ENDED JUNE 30, 2001 AND 2000

                                                                                      Common Stock
                                                                Common Stock           Subscribed        Special Shares
                                                           -----------------------  -------------------  ---------------
                                                             Shares      Amount     SHARES     AMOUNT    Shares  Amount
                                                           ----------  -----------  -------  ----------  ------  -------
<S>                                                        <C>         <C>          <C>      <C>         <C>     <C>
Exercise of warrants in July 2000
   ($1.26 per share)                                           60,714       76,500        -          -        -        -
Exercise of warrants in September 2000
   ($1.26 per share)                                          125,000      157,500        -          -        -        -
Issuance of shares in October  2000 for
    services ($1.05 - $1.97 per share)                         23,969       30,500        -          -        -        -
Issuance of shares in October 2000 for services
   related to the acquisition  of oil and gas properties      214,286      420,000        -          -        -        -
   and equipment ($1.97 per share)
Issuance of shares in October 2000 for the
   acquisition  of oil and gas properties, inventory          571,429    1,800,000        -          -        -        -
   and equipment ($3.15 per share)
Exercise of warrants in November 2000
   ($1.26 per share)                                            3,571        4,500        -          -        -        -
Issuance of special  warrants in private
    offering which closed in April 2001                             -            -        -          -        -        -
    ($10.50 per share)
Costs related to issuance of special warrants                       -            -        -          -        -        -
Issuance of shares in April 2001 for
    services ($.98 - 2.52 per share)                           21,813       36,000        -          -        -        -


Net earnings                                                        -            -        -          -        -        -
                                                           ----------  -----------  -------  ----------  ------  -------

BALANCES, June 30, 2001                                    19,075,657  $45,935,125  122,535  $(214,436)       -  $     -
                                                           ==========  ===========  =======  ==========  ======  =======


                                                            Warrants
                                                              and
                                                           Beneficial
                                                           Conversion    Accumulated
                                                             Feature       Deficit        Total
                                                           -----------  -------------  ------------
<S>                                                        <C>          <C>            <C>
Exercise of warrants in July 2000
   ($1.26 per share)                                                -              -        76,500
Exercise of warrants in September 2000
   ($1.26 per share)                                                -              -       157,500
Issuance of shares in October  2000 for
    services ($1.05 - $1.97 per share)                              -              -        30,500
Issuance of shares in October 2000 for services
   related to the acquisition  of oil and gas properties            -              -       420,000
   and equipment ($1.97 per share)
Issuance of shares in October 2000 for the
   acquisition  of oil and gas properties, inventory                -              -     1,800,000
   and equipment ($3.15 per share)
Exercise of warrants in November 2000
   ($1.26 per share)                                                -              -         4,500
Issuance of special  warrants in private
    offering which closed in April 2001                     1,845,000              -     1,845,000
    ($10.50 per share)
Costs related to issuance of special warrants                (648,443)             -      (648,443)
Issuance of shares in April 2001 for
    services ($.98 - 2.52 per share)                                -              -        36,000


Net earnings                                                        -      2,100,524     2,100,524
                                                           -----------  -------------  ------------

BALANCES, June 30, 2001                                    $2,020,252   $(12,884,201)  $34,856,740
                                                           ===========  =============  ============
</TABLE>


See  accompanying  notes  to  these  financial  statements.


                                       26
<PAGE>
<TABLE>
<CAPTION>
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              YEARS ENDED JUNE 30, 2001 AND 2000


                                                                                                      2001           2000
                                                                                                  -------------  ------------
<S>                                                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net earnings                                                                                    $  2,100,524   $    94,116
  Adjustments to reconcile net earnings to net cash
      provided by (used by) operating activities:
    Depreciation and depletion                                                                       2,241,146     1,116,049
    Amortization                                                                                       227,664       112,954
    Common stock and warrants issued for services
        and other expenses                                                                              66,500        28,800
    Minority interest                                                                                      222             -
    Change in assets and liabilities net of effects from purchase of
      East Wood Equity Venture, Inc.
        Accounts receivable                                                                           (755,433)   (1,031,451)
        Prepaid expenses                                                                               (43,030)     (140,283)
        Accounts payable and accrued liabilities                                                     1,560,734      (397,696)
        Materials and supplies inventory                                                                13,521        20,345
                                                                                                  -------------  ------------
      Net cash provided by (used by) operating activities                                            5,411,848      (197,166)
                                                                                                  -------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from sale of oil and gas properties                                                         168,272       241,989
  Oil and gas properties purchased                                                                  (6,058,006)   (5,201,091)
  Other                                                                                                      -          (950)
  Exploration and development costs capitalized                                                     (2,953,347)     (646,614)
  Issuance of notes receivable                                                                        (303,000)            -
  Issuance of note receivable - related party                                                         (125,000)            -
  Purchase of United Cementing & Acid Co., Inc.                                                     (1,250,000)            -
  Acquisition of property and equipment                                                               (396,373)     (170,032)
                                                                                                  -------------  ------------
      Net cash used by investing activities                                                        (10,917,454)   (5,776,698)
                                                                                                  -------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Sale of common stock and exercise of warrants                                                      2,083,500     1,702,114
  Cash acquired in acquisition                                                                               -        66,816
  Costs related to sale of stock and issuance of notes payable                                        (648,443)     (232,438)
  Issuance of notes payable and long-term debt                                                       4,918,742    10,081,425
  Issuance of related party note payable                                                               200,000             -
  Repayment of notes payable and long-term debt                                                       (459,645)   (5,333,890)
                                                                                                  -------------  ------------
      Net cash provided by financing activities                                                      6,094,154     6,284,027
                                                                                                  -------------  ------------

NET INCREASE IN CASH                                                                                   588,548       310,163

CASH - BEGINNING OF PERIOD                                                                             319,246         9,083
                                                                                                  -------------  ------------

CASH - END OF PERIOD                                                                              $    907,794   $   319,246
                                                                                                  =============  ============

SUPPLEMENTAL INFORMATION
  Cash paid for interest                                                                          $  1,079,286   $   584,285
  Conversion of debt and other liabilities to common stock                                                   -       756,223
  Oil and gas property acquired with note payable                                                            -     3,000,000
  Oil and gas properties acquired with common stock                                                          -    16,497,200
  Issuance of common stock for acquisition consulting fees                                             420,000       748,329
  Prepaid expenses acquired with common stock                                                                -       361,360
  Equipment and other assets acquired with common stock Extinguishment of convertible debentures     1,800,000             -
  Purchase of nonmarketable security with note payable                                                 236,119             -
  Proceeds from sale of 25% of United Cementing & Acid Co., Inc.                                       312,500             -
  Noncash collections on notes receivable                                                              100,000             -

  Purchase of East Wood Equity Venture, Inc.
     Current assets, net of cash acquired                                                         $          -   $   374,850
     Oil and gas properties, net                                                                             -     5,804,002
     Office furniture and equipment, net                                                                     -        15,748
     Liabilities assumed                                                                                     -    (4,965,234)
                                                                                                  -------------  ------------
                                                                                                  $          -   $ 1,229,366
                                                                                                  =============  ============
</TABLE>


See  accompanying  notes  to  these  financial  statements.


                                       27
<PAGE>
1.   NATURE  OF  OPERATIONS
     ----------------------

     The  Company  is  an independent energy company engaged in the acquisition,
     exploitation,  development,  and operation of oil and gas properties with a
     geographical  focus  in  major  oil  &  gas producing regions in the United
     States  of  America.  The Company was in the development stage through June
     30,  1999.  The  year ended June 30, 2000 is the first year during which it
     was  considered  an  operating  company.

     The  Company  was  incorporated under the laws of Ontario, Canada as Cotton
     Valley  Energy  Limited on February 15, 1995. On June 14, 1996, the Company
     merged  with  Arjon Enterprises, Inc., an Ontario corporation and reporting
     issuer  in  Ontario.  As  a  result  of  that merger the Company's name was
     changed  to Cotton Valley Resources Corporation. The Company continued from
     Ontario  to  the  Yukon Territory pursuant to Articles of Continuance dated
     February  9,  1998.  On February 28, 2000 the Company's name was changed to
     Aspen  Group  Resources  Corporation.

2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
     ----------------------------------------------

     Oil  and  Gas  Properties
     -------------------------
     The  Company  follows  the  full-cost  method of accounting for oil and gas
     properties. Accordingly, all costs associated with acquisition, exploration
     and  development  of  oil  and  gas  reserves,  including  directly related
     overhead  costs,  are  capitalized into a "full-cost pool". A separate full
     cost  pool  is  established  for  U.S.  and  non-U.S.  properties.

     All  capitalized  costs  of oil and gas properties, including the estimated
     future  costs  to  develop  proved  reserves,  are  amortized  on  the
     unit-of-production  method  using  estimates  of  proved  reserves.  Costs
     directly  associated  with  the  acquisition  and  evaluation  of  unproved
     properties  are  excluded  from  the  amortization  base  until the related
     properties  are  evaluated.  Such  unproved  properties  are  assessed
     periodically  and  a  provision  for  impairment  is  made to the full-cost
     amortization  base  when  appropriate.

     Sales  of  oil and gas properties are credited to the full-cost pool unless
     the  sale  would  have  a  significant  effect  on  the  amortization rate.
     Abandonments  of properties are accounted for as adjustments to capitalized
     costs  with no loss recognized. Oil and gas drilling and workover equipment
     used  primarily  on  the Company's properties are included in the full cost
     pool.

     The net capitalized costs are subject to a "ceiling test" which limits such
     costs  to  the  aggregate  of  the  estimated  present  value of future net
     revenues  from  proved  reserves discounted at ten percent based on current
     economic  and  operating  conditions.

     The  various  properties  are  located  in eleven states with a predominate
     focus  in  Oklahoma,  Kansas  and  Texas.

     The  recoverability  of  amounts  capitalized for oil and gas properties is
     dependent  upon  the  identification  of economically recoverable reserves,
     together  with  obtaining  the necessary financing to exploit such reserves
     and  the  achievement  of  profitable  operations.

     Revenue  Recognition
     --------------------
     Revenue  is accrued and recognized in the month the oil and gas is produced
     and  sold.

     Inventories
     -----------
     Inventories,  which  consist primarily of oilfield equipment, acidizing and
     cementing  products,  and supplies held for resale, are stated at the lower
     of  cost  or  market  using  the  first-in,  first-out  (FIFO)  method.

     Property  and  Equipment
     ------------------------
     Property  and  equipment  is  recorded  at  cost  and  depreciated  on  a
     straight-line  basis  over  the  estimated  useful  lives  of  the  assets.

     Debenture  Financing  Costs
     ---------------------------
     Debenture  financing costs are being amortized ratably over the life of the
     related  debenture.


                                       28
<PAGE>
     Nonmarketable  Security
     -----------------------
     The  nonmarketable security, representing a 5% common stock investment in a
     closely held corporation acquired in March 2001, is accounted for using the
     cost  method  of  accounting.  A  readily  determinable  fair  value is not
     available.

     Basis  of  Presentation
     -----------------------
     The  Company's assets and principal activities are in the United States and
     its  functional  currency is the U.S. dollar; accordingly, the accompanying
     financial statements are presented in U.S. dollars. The effects of exchange
     rate  changes  on  transactions  denominated  in  Canadian dollars or other
     currencies are charged to operations. Foreign exchange gains or losses were
     insignificant  for  all  periods  presented.

     Income  Taxes
     -------------
     Income  taxes  are provided for the tax effects of transactions reported in
     the  financial  statements and consist of taxes currently due, if any, plus
     net  deferred  taxes  related primarily to differences between the bases of
     assets and liabilities for financial and income tax reporting. Deferred tax
     assets  and  liabilities  represent  the  future tax return consequences of
     those  differences,  which  will  either  be taxable or deductible when the
     assets  and  liabilities  are  recovered  or  settled.  Deferred tax assets
     include recognition of operating losses that are available to offset future
     taxable  income  and tax credits that are available to offset future income
     taxes. Valuation allowances are recognized to limit recognition of deferred
     tax  assets  where  appropriate.  Such  allowances  may  be  reversed  when
     circumstances  provide  evidence  that  the  deferred  tax assets will more
     likely  than  not  be  realized.

     Net  Earnings  Per  Share
     -------------------------
     Per  share  information  is  based on the weighted average number of common
     stock  and  common  stock equivalent shares outstanding. As required by the
     Securities and Exchange Commission rules, all warrants, options, and shares
     issued  within  a  year  prior  to  the  initial  filing  of a registration
     statement  are  assumed  to  be  outstanding  for  each  year presented for
     purposes  of  the  earnings  per  share  calculation.

     Cash  Flow  Statement
     ---------------------
     For  purposes  of  the  statements of cash flows, the Company considers all
     highly liquid debt instruments purchased with an original maturity of three
     months  or  less  to  be  cash  equivalents.

     Advertising  Costs
     ------------------
     The  Company's  policy is to expense all advertising costs in the period in
     which they are incurred. Advertising and promotion expense was $276,651 and
     $155,175  for  the  years  ended  June  30,  2001  and  2000  respectively.

     Stock-Based  Compensation
     -------------------------
     Statement  of  Financial  Accounting  Standards  No.  123  - Accounting for
     Stock-Based  Compensation  (SFAS  123), which was effective for the Company
     beginning  with  its 1997 fiscal year, requires recognition of compensation
     expense  for  grants  of stock, stock options, and other equity instruments
     based on fair value. If the grants are to employees, companies may elect to
     disclose  only  the  pro  forma  effect  of  such  grants on net income and
     earnings  per  share  in  the notes to financial statements and continue to
     account for the grants pursuant to APB Opinion No. 25, Accounting for Stock
     Issued  to  Employees.  The  Company  has  elected the pro forma disclosure
     alternative  for  employee  grants.

     Use  of  Estimates
     ------------------
     The  preparation  of  the  Company's  consolidated  financial statements in
     conformity  with  generally  accepted  accounting  principles  requires the
     Company  to make estimates and assumptions that affect the amounts reported
     in  these financial statements and accompanying notes. Actual results could
     differ  from  those  estimates. Significant assumptions are required in the
     valuation  of  proved  oil  and  gas reserves, which as described above may
     affect  the  amount  at which oil and gas properties are recorded. It is at
     least reasonably possible those estimates could be revised in the near term
     and  those  revisions  could  be  material.


                                       29
<PAGE>
     Principles  of  Consolidation
     -----------------------------
     The  consolidated  financial statements include the accounts of the Company
     and its majority-owned subsidiaries. All material intercompany accounts and
     transactions  of  consolidated  subsidiaries  have  been  eliminated  in
     consolidation.

     Accounting  Pronouncements
     --------------------------
     In  June  1998,  the  Financial  Accounting  Standards  Board (FASB) issued
     Statement  of Financial Accounting Standards (SFAS) No. 133, Accounting for
     Derivative  Instruments and Hedging Activities which establishes accounting
     and  reporting  standards  for  derivative  instruments,  including certain
     derivative  instruments  embedded in other contracts (collectively referred
     to  as  derivatives), and for hedging activities. SFAS No. 133 is effective
     for  all fiscal quarters of all fiscal years beginning after June 15, 2001.
     The Company does not anticipate a material impact on its financial position
     or  results  of  operations.

     In  June  2000,  the  FASB  issued  SFAS  No.  138,  Accounting for Certain
     Derivative  Instruments  and  Certain  Hedging  Activities.  This statement
     amends  the  accounting and reporting standards of SFAS No. 133 for certain
     instruments  and  certain hedging activities. SFAS No. 138 also amends SFAS
     No.  133  for  decisions  made  by  the  Board  relating  to the Derivative
     Implementation  Group (DIG) process. Certain decisions arising from the DIG
     process  that required specific amendments to SFAS No. 133 are incorporated
     in  this  Statement.  The statement is effective concurrently with SFAS No.
     133  according  to  the  provisions  of  paragraph  48 of SFAS No. 133. The
     Company  does not anticipate a material impact on its financial position or
     results  of  operations.

     In  December  1999,  the  Securities  and  Exchange Commission issued Staff
     Accounting  Bulletin  (SAB) No. 101 which summarizes certain of the staff's
     views  in  applying  generally  accepted  accounting  principles to revenue
     recognition  in  financial  statements. SAB No. 101 did not have a material
     impact  on  the  Company's  financial  position  or  results of operations.

     In June 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS
     No.  142,  Goodwill  and  Other  Intangible  Assets,  collectively,  the
     Statements. These Statements drastically change the accounting for business
     combinations,  goodwill  and intangible assets. SFAS No. 141 eliminates the
     pooling-of-interests  method of accounting for business combinations except
     for  qualifying  business combinations that were initiated prior to July 1,
     2001. SFAS No. 141 also changes the criteria to recognize intangible assets
     apart  from  goodwill.  Under  SFAS  No. 142, goodwill and indefinite lived
     intangible  assets  are  no  longer amortized but are reviewed annually for
     impairment,  or  more  frequently if impairment indicators arise. Separable
     intangible assets that have finite lives will continue to be amortized over
     their  useful  lives.  The amortization provisions of SFAS No. 142 apply to
     goodwill  and  intangible assets acquired after June 30, 2001. With respect
     to  goodwill  and  intangible  assets  acquired  prior to July 1, 2001, the
     amortization provisions of SFAS No. 142 are affective upon adoption of SFAS
     No. 142. Pre-existing goodwill and intangibles will be amortized during the
     transition  period until adoption. Companies are required to adopt SFAS No.
     142  in their fiscal year beginning after December 15, 2001. Early adoption
     is  permitted  for  companies  with  fiscal years beginning after March 15,
     2001.  The  Company  does not anticipate a material impact on its financial
     position  or  results  of  operations.

     Reclassifications
     -----------------
     Certain  reclassifications  have  been  made  to  the prior years financial
     statements  to  conform  to  the  current  year  presentation.

3.   ACQUISITIONS
     ------------

     East  Wood  Equity  Venture,  Inc.
     ----------------------------------
     During  August  1999 the Company organized a Texas corporation Aspen Energy
     Group,  Inc  (AEG)  as a wholly-owned subsidiary. On September 16, 1999 AEG
     entered  into  an  agreement, effective July 1, 1999, to acquire 50% of the
     outstanding equity shares of East Wood Equity Venture, Inc. (East Wood), an
     oil  and  gas company, in exchange for the Company issuing 3,571,429 shares
     of  common  stock, and 3,032,985 special warrants (each exercisable for one
     share). On February 28, 2000, the Company acquired the remaining 50% of the
     outstanding equity shares of East Wood for 3,747,271 shares of common stock
     and  issuance  of a note payable in the amount of $3,000,000. For financial
     statement  purposes  the  acquisition  was accounted for as a purchase and,
     accordingly  East Wood's results are included in the consolidated financial


                                       30
<PAGE>
     statements  since the date of acquisition. The aggregate purchase price was
     approximately  $17.9 million, which exceeded the net assets of East Wood by
     approximately  $16.6  million.  The  excess  was  allocated  to oil and gas
     properties  and  is  being  amortized.

     The  following unaudited pro forma data summarize the results of operations
     for  the  years ended June 30, 2001 and 2000 as if the acquisition had been
     completed  on  July  1,  1999.

     Pro Forma Information      2001         2000
                             -----------  ----------

     Net sales               $10,549,274  $3,481,718
     Net earnings            $ 2,100,524  $  343,375
     Net earnings per share  $       .11  $      .03

     These pro forma amounts do not purport to be indicative of the results that
     would  have  actually been obtained if the acquisition had occurred on July
     1,  1998  or  that  may  be  obtained  in  the  future.

     Mercer  Oil  and  Gas  Co.
     --------------------------
     Effective  April  1,  2000,  the  Company  entered  into  a  share purchase
     agreement  to  acquire  100% of Mercer Oil and Gas Company (Mercer), an oil
     and gas company, for 142,857 shares. Mercer is a company affiliated with an
     officer  of  the  Company.  Prior  to  the  closing  of  the share purchase
     agreement,  the Company purchased certain oil and gas property interests of
     Mercer  for  $300,000  in  cash.  For  financial  statement  purposes  the
     acquisition  was  accounted for as a purchase. The aggregate purchase price
     was  $343,800.  The  pro  forma effects of the acquisition has no effect on
     revenues,  earnings  or  per  share  amounts  as  Mercer  had no results of
     operations  prior  to  the  date  of  acquisition.

     United  Cementing  &  Acid  Co.,  Inc.
     --------------------------------------
     Effective  January  1,  2001,  the  Company  entered  into a share purchase
     agreement  to acquire 100% of United Cementing & Acid Co., Inc. (United), a
     privately  held  oilfield service company. For financial statement purposes
     the  acquisition  was  accounted  for as a purchase. The aggregate purchase
     price  was  $1,250,000. On April 13, 2001, the Company entered into a share
     purchase  agreement to sell 25% of United to a director of the Company. The
     aggregate  sale  price  was  $312,500. For financial statement purposes the
     acquisition  was  accounted  for  as  a  purchase and, accordingly United's
     results  are  included  in  the consolidated financial statements since the
     date  of  acquisition.  The  net  purchase price exceeded the net assets of
     United  by approximately $691,000. The excess was allocated to property and
     equipment  and  is  being  depreciated.

     The  following unaudited pro forma data summarize the results of operations
     for  the  years ended June 30, 2001 and 2000 as if the acquisition had been
     completed  on  July  1,  1999,  the  beginning  of  the  2000  fiscal year.


     Pro Forma Information             2001         2000
                                    -----------  ----------

     Net sales                      $11,114,856  $4,424,571
     Net earnings                   $ 2,282,062  $  295,211
     Net earnings (loss) per share  $       .12  $      .03

     These pro forma amounts do not purport to be indicative of the results that
     would  have  actually been obtained if the acquisition had occurred on July
     1,  1999  or  that  may  be  obtained  in  the  future.

4.   PROPERTY  AND  EQUIPMENT
     ------------------------

     Property  and  equipment  consist  of  the  following:

                                                      Estimated
                                                    Useful Lives
                                                    ------------
     Office furniture and equipment  $     553,364   5 -10 years
     Equipment                           1,073,088   5 -10 years
     Vehicles                            2,168,298       5 years
     Buildings and improvements            508,658      25 years
     Land                                  239,548
                                     -------------

                                     $   4,542,956
                                     =============


                                       31
<PAGE>
     Depreciation  charged  to  expense amounted to $298,901 and $48,734 in 2001
     and  2000,  respectively.

5.   NOTES  RECEIVABLE
     -----------------

     Notes  receivable  consist  of  the  following:

     Note receivable from a director, nonintererest bearing,
     75,000 due on or before June 29, 2004 and the remainder
     on or before June 29, 2005                                   $125,000

     Note receivable from a corporation, nonintererest bearing,
     due on demand                                                 100,000

     Note receivable from a corporation, nonintererest bearing,
     due on demand                                                 103,000
                                                                  --------

                                                                  $328,000
                                                                  ========

6.   NOTES  PAYABLE  AND  LONG-TERM  DEBT
     ------------------------------------

     On  April 28, 2000, the Company entered into a credit agreement with a bank
under  which  it  may  borrow up to $25,000,000 limited to the borrowing base as
determined  by  the  lender.  The  commitment amount was $14,640,000 at June 30,
2001.  At  June  30, 2001, there was $13,816,060 of outstanding borrowings under
this  agreement.  Interest  on  outstanding  borrowings currently accrues at the
bank's  base  rate  of  interest plus one-quarter percent (base rate is 7.00% at
June  30,  2001).  The  agreement also provides for a commitment fee of one-half
percent  per  annum on the average unused portion of the commitment.  A facility
fee  of  one-half  percent  is  assessed for increases in the commitment amount.

     The  facility is secured by the Company's oil and gas properties. Under the
terms  of  the  credit  agreement,  the  Company is required to maintain certain
financial  ratios  and other financial conditions. At June 30, 2001, the Company
was  in  compliance  with  those  loan  covenants.

     Interest  is  payable  monthly  and  the  credit agreement requires monthly
     commitment  reductions  as  determined  by  lender.  The monthly commitment
     reduction  amount  as  of  June 30, 2001 was $180,000. The credit agreement
     matures  on  April  10,  2004.

     The  Company  has an unsecured note payable to a bank, dated June 26, 2001,
     in  the  original  amount  of  $300,000; payable in monthly installments of
     $3,650, including interest at 7.50%, with all unpaid interest and principal
     due  on  June  26,  2004.  At  June  30,  2001  the outstanding balance was
     $300,000.

     The  Company  has  a  note  payable  to a bank, dated June 26, 2001, in the
     original  amount  of  $200,000;  payable in monthly installments of $4,848,
     including  interest at the base rate plus one-half percent, with all unpaid
     interest and principal due on June 26, 2005. The note payable is secured by
     substantially all of the Company's assets. At June 30, 2001 the outstanding
     balance  was  $200,000.

     In connection with the acquisition of a nonmarketable security, the Company
     issued  a $250,000 noninterest bearing note payable. The note is payable in
     monthly  installments of $10,000, including imputed interest at 7.50%, with
     all  unpaid interest and principal due on January 1, 2003. The note payable
     is  secured by the nonmarketable security. At June 30, 2001 the outstanding
     balance  was $169,715, which is net of the unamortized discount of $10,285.

     In  connection  with the acquisition of certain oil and gas properties, the
     Company,  on  February  28,  2000,  issued a $3,000,000 convertible 9% note
     payable.  During  fiscal  2001,  the  note  payable  was  modified  to  be
     noninterest  bearing. All unpaid principal and interest is due on or before
     December  31,  2002;  provided that at any time the Company proposes to pay


                                       32
<PAGE>
     this  note payable, the Company has the right, at their sole option, to pay
     all  or any portion of the amount outstanding by the issuance to the payees
     of  2,857,143  shares  of  common  stock  of  the  Company.

     Aggregate  maturities  of  notes  payable  and long-term debt for the years
     subsequent  to  June  30,  2001  are  as  follows:  2002, $2,321,243; 2003,
     $5,299,177;  2004,  $9,809,491;  and  2005,  $55,865.

7.   STOCKHOLDERS'  EQUITY
     ---------------------

     During  the  year  ended  June  30,  2001,  the Company initiated a private
     placement of 1,230,000 Special Warrants at $1.50 each for gross proceeds of
     $1,845,000.  Each  Special Warrant is exchangeable for one unit (one common
     share  and one-half common share purchase warrant) on or before the earlier
     of  (i)  the  fifth business day after the date of issuance of a Prospectus
     Receipt  by  the securities regulatory authority in Ontario, Canada or (ii)
     April  4,  2002,  without additional payment. Each Special Warrant that has
     been  not  exercised  prior  to  the  expiration  date will be deemed to be
     exercised immediately prior thereto. Because the Prospectus Receipt had not
     been  issued by August 2, 2001, each of the Special Warrants exercised will
     entitle  the  holder,  without additional payment, to receive 1.1 units for
     each  Special  Warrant so exercised, or deemed exercised. Each whole common
     share  purchase  warrant  is exercisable for one common share at a price of
     $1.80,  subject  to  adjustment in certain events, until April 4, 2003. The
     common  stock  purchase warrants may be redeemed at a price of $.01 subject
     to  certain  events. The Special Warrants were issued pursuant to an agency
     agreement,  and  the  Company  will  be  filing a prospectus to qualify the
     common shares and common share purchase warrants issuable upon the exercise
     of  the  Special  Warrants.

     In  fiscal  year  2001, additional options and warrants were granted as set
     forth  below.

     -    Options to acquire 678,571 shares for $1.33 per share through December
          21,  2003  were  granted to certain officers, employees and directors.

     -    Options  to  acquire 42,857 shares for $1.33 per share through October
          25,  2003  were  granted to certain officers, employees and directors.

     -    Options to acquire 28,572 shares for $1.96 per share through September
          27,  2003  were  granted to certain officers, employees and directors.

     -    Options  to acquire 71,429 shares for $1.65 per share through February
          22,  2003  were  granted to certain officers, employees and directors.

     -    Options  to  acquire 2,304 shares for $2.17 per share through June 14,
          2001  were  granted  in  connection  with  services  rendered.

     During  the  year  ended June 30, 2000, the Company initiated three private
     placement  of  its common stock, with warrants attached as set forth below.

     -    The  Company  sold 171,429 shares and 171,429 warrants exercisable for
          $2.10  per  share  until  September 30, 2002 for proceeds of $300,000.

     -    The  Company  sold 160,408 shares and 160,408 warrants exercisable for
          $1.26  per  share  until  June  15,  2001  for  proceeds  of $196,500.

     -    The  Company  sold 571,429 shares and 571,429 warrants exercisable for
          $1.26  per  share  until  June  15,  2001  for  proceeds  of $600,000.

     In  fiscal  year  2000, additional options and warrants were granted as set
     forth  below.

     -    Options to acquire 17,143 units (one common share and one common share
          purchase  warrant) for $1.75 per share through September 30, 2001 were
          granted  in  connection  with  a  private  placement.  This option was
          exercised  in  fiscal 2000 and the common share purchase warrants were
          issued  and  are exercisable for $2.10 per share through September 30,
          2002.


                                       33
<PAGE>
     -    Options to acquire 16,041 units (one common share and one common share
          purchase  warrant)  for  $1.26  per  share  through June 15, 2001 were
          granted  in  connection  with  a  private  placement.

     -    Options to acquire 57,143 units (one common share and one common share
          purchase  warrant)  for  $1.26  per  share  through June 15, 2001 were
          granted  in  connection  with  a  private  placement.  This option was
          exercised  in  fiscal 2000 and the common share purchase warrants were
          issued  and are exercisable for $1.26 per share through June 15, 2001.

     -    Options  to acquire 285,714 shares for $1.12 - $2.17 per share through
          August  27,  2000  were  granted  in  connection  with an acquisition.
          Options  to  acquire 14,286 shares for $.98 per share through February
          1,  2006  were  granted  in  connection  with  services  rendered.

     -    Options  to  acquire  1,142,857  shares  for  $1.68  per share through
          February  22,  2003  were  granted  to certain officers, employees and
          directors.  At  June  30,  2001, exercise prices of options range from
          $.98  to  $14.56.

     The  following  tables  summarizes  the option and warrant activity for the
     years  ended  June  30,  2001  and  2000:

<TABLE>
<CAPTION>
                                          June 30, 2001         June 30, 2000
                                      ---------------------  ---------------------
                                                  Weighted                Weighted
                                                   Average                Average
                                        Number    Exercise     Number    Exercise
                                      of Shares     Price    of Shares     Price
                                      ----------  ---------  ----------  ---------
<S>                                   <C>         <C>        <C>         <C>
     Outstanding, beginning of year   2,057,827   $    3.01    794,829   $    7.70
     Granted to:
       Employees, officers and          821,429        1.38  1,142,857        1.68
       directors
       Others                             2,304        2.17  1,367,878        1.40
       Expired/canceled                (387,067)       7.23   (535,661)       5.18
       Exercised                       (189,285)       1.26   (712,076)       1.54
                                      ----------             ----------
     Outstanding, end of year         2,305,208        2.51  2,057,827        3.01
                                      ==========             ==========
</TABLE>

     All  outstanding  warrants  and  options,  except  for  3,571 options, were
     exercisable  at  June  30,  2001. If not previously exercised, warrants and
     options  outstanding  at  June  30,  2001  will  expire  as  follows:

                                  Number    Weighted Average
           Year Ending June 30,  Of Shares   Exercise Price
          ---------------------  ---------  -----------------
                 2002              323,780  $            7.08
                 2003            1,174,286               1.68
                 2004              792,857               1.91
                 2005                3,571                .98
                 2006               10,714                .98
                                 ---------
                Total            2,305,208
                                 =========


                                       34
<PAGE>
     Presented below is a comparison of the weighted average exercise prices and
     market  price of the Company's common stock on the measurement date for all
     warrants  and  stock  options  granted  during  fiscal years 2001 and 2000:

<TABLE>
<CAPTION>
                                      2001                          2000
                                   ---------                      ---------
                         Number    Exercise   Market    Number    Exercise   Market
                        Of Shares    Price     Price   Of Shares    Price     Price
                        ---------  ---------  -------  ---------  ---------  -------
<S>                     <C>        <C>        <C>      <C>        <C>        <C>

Fair value equal to
    exercise price         28,571  $    1.96  $  1.96  1,971,905  $    1.54  $  1.54
Fair value greater
   than exercise price          -  $       -  $     -          -  $       -  $     -
Exercise price
   greater than fair
   value                  795,161  $    1.36  $  1.34    538,830  $    1.54  $  1.26
</TABLE>

     Pro  Forma  Stock-Based  Compensation Disclosures - The Company applies APB
     -------------------------------------------------
     Opinion  25 and related interpretations in accounting for its stock options
     and warrants which are granted to employees. Accordingly, compensation cost
     has not been recognized for grants of options and warrants to employees and
     directors  unless  the exercise prices were less than the fair value of the
     Company's  common  stock  on  the  grant  dates. Had compensation cost been
     determined  based  on  the  fair  value at the grant dates for awards under
     those  plans  consistent  with  the  method  of FASB 123, the Company's net
     earnings  and  earnings  per share would have been changed to the pro forma
     amounts  indicated  below.  The  fair values generated by the Black-Scholes
     model  may  not  be  indicative  of the future benefit, if any, that may be
     received  by  the  option  or  warrant  holder.

                                                        Year Ended June 30,
                                                      ------------------------
                                                         2001         2000
                                                      ----------  ------------
     Net earnings applicable to common stockholders:
         As reported                                  $2,100,524  $    94,116
         Pro forma                                    $1,456,795  $(1,544,760)
     Net earnings  per common share:
         As reported                                  $      .11  $       .01
         Pro forma                                    $      .08  $      (.13)

     The  fair  value of each option granted in 2001 and each option and warrant
     granted  in 2000 was estimated on the date of grant using the Black-Scholes
     option-pricing  model  with  the  following  assumptions:

                                    Year Ended June 30,
                                    -------------------
                                      2001        2000
                                     -----       -----

          Expected volatility          83%        128%
          Risk-free interest rate     5.5%        5.5%
          Expected dividends            -           -
          Expected terms (in years)   3.0         5.0


                                       35
<PAGE>
     Stock  Based  Compensation
     --------------------------
     The  Company  has  two  stock-based  compensation  plans. At June 30, 2001,
     1,857,143  shares  were  reserved for issuance under these plans. Under the
     Non-Employee  Directors  Stock  Option Plan, options are granted to certain
     non-employee  directors at prices greater than or equal to the market price
     of the Company's stock on the date of grant. The maximum term of the option
     is 10 years, and they vest according to the terms of the individual options
     granted.  All  options must be granted prior to February 26, 2011, the date
     the  Plan  will  terminate. Options may be granted at any time prior to its
     termination.  Any  option  outstanding  under  the  plan at the time of its
     termination,  remains  in  effect until the option is exercised or expires.
     Under  the  2001  Stock  Compensation  Plan, options and stock appreciation
     rights  are  granted to certain officers, directors, employees and advisors
     at  prices greater than or equal to the market price of the Company's stock
     on  the date of grant. The maximum term of the option is 10 years, and they
     vest  according to the terms of the individual options granted. All options
     must  be  granted  prior  to  February  26,  2011,  the  date the Plan will
     terminate. Options may be granted at any time prior to its termination. Any
     option  outstanding  under the plan at the time of its termination, remains
     in  effect  until  the  option  is exercised or expires. Stock appreciation
     rights may be issued with stock options or separately, at the discretion of
     the  Compensation Committee. At June 30, 2001, no stock appreciation rights
     had  been  granted.

     Stock  Consolidation
     --------------------
     On  December  21,  2000,  the stockholders approved a 1-for-7 reverse stock
     split of the Company's common stock. All references to the number of common
     shares  and  per share amounts in the consolidated financial statements and
     related  footnotes  have been restated as appropriate to reflect the effect
     of  the  split  for  all  periods  presented.

8.   RELATED  PARTY  TRANSACTIONS
     ----------------------------

     The Company issued a note payable to a director, dated December 5, 2000, in
     the  amount  of  $200,000;  with  all unpaid interest and principal paid on
     April  13,  2001.  Interest  expense  on  this  note  payable  was $15,277.

     During  fiscal 2001, the Company acquired ownership interests in 17 oil and
     gas  producing  properties,  inventory,  and  equipment  from  a  company
     affiliated  with  an  officer  of  the Company for 571,429 shares of common
     stock.  The  stock  was  recorded  at  $1,800,000.

     Effective April 1, 2000, the Company acquired ownership interests in 35 oil
     and  gas  producing  properties  and  239  net mineral acres from a company
     affiliated  with  an  officer  of  the Company for 134,286 shares of common
     stock.  The  stock  was  recorded  at  $323,172.

     During  fiscal  2000,  the Company issued 446,429 shares of common stock in
     settlement  of  $500,000  of  accrued  salaries  and  advances from related
     parties,  and  183,016  shares  of common stock in settlement of a $256,223
     note  payable  to  a  related  party.

     Legal  expenses of approximately $142,000 and $14,000 were paid to firms of
     which  an officer or director of the Company are stockholders during fiscal
     2001  and  2000,  respectively.

9.   INCOME  TAXES
     -------------

     The  Company's  deferred tax assets (liabilities) consist of the following:

<TABLE>
<CAPTION>
                                                                June 30,
                                                     ----------------------------
                                                          2001           2000
                                                     --------------  ------------
<S>                                                  <C>             <C>
Deferred tax liabilities:
   Accumulated depreciation                          $(     47,000)  $         -
   Costs capitalized for books and deducted for tax     (1,364,000)     (797,000)
                                                     --------------  ------------
           Total deferred tax liabilities               (1,411,000)     (797,000)
Deferred tax assets:
   Net operating loss carryforwards                      7,169,000     6,232,000
Less valuation allowance                                (5,758,000)   (5,435,000)
                                                     --------------  ------------
           Net deferred tax liability                $           -   $         -
                                                     ==============  ============
</TABLE>


                                       36
<PAGE>
     The  difference  from  the  expected income tax expense for the years ended
     June  30,  2001  and  2000 at the statutory federal tax rate of 34% and the
     actual  income  tax  expense  is primarily the result of net operating loss
     carryforwards.

     At  June  30,  2001,  the  Company  has  available  net  operating  loss
     carryforwards of approximately $21,086,000 to reduce future taxable income.
     These  carryforwards  expire  from  2002  to  2019.

10.  CONCENTRATION  OF  CREDIT  RISK AND  FAIR VALUE OF FINANCIAL INSTRUMENTS
     ------------------------------------------------------------------------

     Financial  instruments  that  potentially  subject  the  Company  to
     concentrations  of  credit  risk  consist  principally of cash and accounts
     receivable. The Company maintains its cash with banks primarily in Oklahoma
     City, Oklahoma. The terms of these deposits are on demand to minimize risk.
     The  Company  has not experienced any losses related to these cash deposits
     and  believes  it  is  not  exposed  to  any  significant  credit  risk.

     Accounts  receivable  consist of uncollateralized receivables from domestic
     and  international  customers  primarily  in  the  oil and gas industry. To
     minimize  risk  associated  with  international transactions, all sales are
     denominated  in U.S. currency. The Company routinely assesses the financial
     strength  of  it customers. The Company considers accounts receivable to be
     fully  collectible;  accordingly,  no  allowance  for  doubtful accounts is
     required.  If  amounts  become  uncollectible,  they  will  be  charged  to
     operations when that determination is made. The Company had three customers
     that accounted for approximately 54% of gas sales revenue and two customers
     that  accounted  for  approximately  92% of oil sales revenues for the year
     ended  June  30,  2001.  The  Company  had  one customer that accounted for
     approximately  18% of gas sales revenue and one customer that accounted for
     approximately  11%  of oil sales revenues for the year ended June 30, 2000.

     Fair  value  of  financial  instruments  are  estimated  to approximate the
     related book value, unless otherwise indicated, based on market information
     available  to  the  Company.

11.  EMPLOYEE  BENEFIT  PLAN
     -----------------------

     The  Company has established a salary deferral plan under Section 401(k) of
     the  Internal  Revenue  Code. The plan allows eligible employees to defer a
     portion  of their compensation. Such deferrals accumulate on a tax-deferred
     basis  until  the  employee  withdraws  the  funds.  The  plan provides for
     contributions  by the Company in such amounts as the Board of Directors may
     determine annually. There were no Company contributions to the plan for the
     years  ended  June  30,  2001  and  2000.

12.  COMMITMENTS  AND  CONTINGENCIES
     -------------------------------

     Letters  of  Credit
     -------------------
     At  June  30,  2001,  the  Company  had  $151,000 of outstanding letters of
     credit.

     Leases
     ------
     The  Company  conducts  its  operations  utilizing  leased facilities under
     long-term  lease  agreements,  classified  as operating leases. The Company
     also  leases certain equipment and vehicles under operating leases. Certain
     leases  provide  that  the  Company  pay  taxes, maintenance, insurance and
     certain  other  operating  expenses  and  contain  purchase  options.

     Future  minimum  lease payments in the aggregate required by noncancellable
     operating  leases with initial or remaining terms in excess of one year are
     as  follows:


                                       37
<PAGE>
     Year Ending
        June 30,   Related Party      Total
     ------------  --------------  ----------
     2002          $       14,000  $  353,606
     2003                  14,000     343,053
     2004                  14,000     224,782
     2005                  14,000      58,049
     2006                  14,000      14,636
     Thereafter            59,500      59,500
                   --------------  ----------

                          129,500  $1,053,626
                   ==============  ==========

     Total  rent  expense, all of which was minimum rentals, for fiscal 2001 and
     2000  was  approximately  $318,200 and $111,200, respectively and is net of
     sublease  rentals  of  $42,000  and $44,600 in 2001 and 2000, respectively.

     Environmental  Matters
     ----------------------
     The  Company  is  engaged in oil and gas exploration and production and may
     become  subject  to  certain  liabilities  as  they relate to environmental
     cleanup of well sites or other environmental restoration procedures as they
     relate  to  the  drilling  of  oil and gas wells and the operation thereof.
     Although  environmental  assessments  are  conducted  on  all  purchased
     properties,  in the Company's acquisition of existing or previously drilled
     well  bores,  the Company may not be aware of what environmental safeguards
     were  taken  at  the  time  such wells were drilled or during such time the
     wells  were  operated. Should it be determined that a liability exists with
     respect to any environmental clean up or restoration, the liability to cure
     such  a  violation could fall upon the Company. No claim has been made, nor
     is  the Company aware of any liability, which it may have, as it relates to
     any  environmental  clean  up, restoration or the violation of any rules or
     regulations  relating  thereto.

     Litigation
     ----------
     The  Company,  in  the normal course of business, is a party to a number of
     lawsuits  and  other  proceedings. The Company's management does not expect
     that  the  results  in  these lawsuits and proceedings will have a material
     adverse  effect  on  the financial position or results of operations of the
     Company.

     Guarantee  of  Debt
     -------------------
     The  Company  is  the  guarantor  of  certain  obligations  of  Hat  Creek
     Exploration  in  the  aggregate amount of $4,000,000 in connection with the
     purchase  of  certain oil and gas properties. The note payable is dated May
     4,  2000, bears interest at 8%, and is payable in monthly installments over
     nine  years. The debt is expected to be paid with proceeds from the revenue
     interest  in  the oil and gas properties. In the opinion of management, the
     ultimate  disposition  of  this  guarantee will not have a material adverse
     effect  on  the  Company's  consolidated  financial  condition,  results of
     operations  or  future  cash  flows.

     Employment  Contracts
     ---------------------
     The  Company  maintains employment contracts with two officers through 2006
     that  provide for a minimum annual salary, benefits and incentives based on
     the  Company's  earnings.  The  contracts  provide  for  lump sum severance
     payments,  certain  benefits  and  accelerated  vesting  of  options  upon
     termination  of  employment  under  certain  circumstances  or  a change of
     control,  as  defined.  At  June  30, 2001, the total commitment, excluding
     incentives,  was  $1,470,000.


                                       38
<PAGE>
13.  SUPPLEMENTAL  INFORMATION  (UNAUDITED)
     --------------------------------------

     Costs  incurred  by  the  Company with respect to its oil and gas producing
     activities  are  set  forth  below.

                                              Years Ended June 30,
                                                2001        2000
                                            ----------  -----------
          Exploration activities            $        -  $         -
          Proved property acquisition cost   6,478,006   29,954,437
          Development costs                  2,953,347      646,614
                                            ----------  -----------

                Total                       $9,431,353  $30,601,051
                                            ==========  ===========


14.  OIL  AND  GAS  RESERVE  INFORMATION  (UNAUDITED)
     ------------------------------------------------

     Proved  oil  and  gas  reserves  are the estimated quantities of crude oil,
     condensate  and  natural  gas  which  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 oil and gas reserves are reserves that can be expected to
     be  recovered  through existing wells with existing equipment and operating
     methods. The following estimated net interests in proved reserves are based
     upon  subjective  engineering  judgments  and  may  be  affected  by  the
     limitations inherent in such estimation. The process of estimating reserves
     is  subject  to  continual  revision  as  additional  information  becomes
     available  as  a  result  of  drilling,  testing,  reservoir  studies  and
     production  history. There can be no assurance that such estimates will not
     be  materially  revised  in  subsequent  periods.

     The  Company  emphasizes  that  reserve  estimates  of  new  discoveries or
     undeveloped  properties  are more imprecise than those of producing oil and
     gas  properties.  The Company's reserves are substantially from undeveloped
     properties.  Accordingly, these estimates are expected to change materially
     as  future  information  becomes  available.  The  Company's  reserves were
     estimated by independent petroleum engineers. All of the Company's reserves
     are located onshore in the continental United States. The recoverability of
     the  proved  undeveloped  reserves is dependent upon obtaining financing to
     exploit  the  reserves.

     The  following  table  sets  forth  proved oil and gas reserves at June 30,
     2001,  2000  and  1999  together  with  changes  therein:

                                                    Oil and      Natural
                                                  Condensate       Gas
                                                  -----------  -----------
                                                    (BBLS)        (MCF)
                                                  -----------  -----------
     Balance at June 30, 1999                      3,128,000            -
             Purchase of minerals in place         2,278,000   34,449,000
             Production                              (34,000)    (966,000)
             Sales/disposal of minerals in place           -            -
             Revision of prior estimates                   -            -
                                                  -----------  -----------
     Balance at June 30, 2000                      5,372,000   33,483,000

             Purchase of minerals in place           199,000      457,000
             Production                             (100,000)  (1,452,000)
             Sales/disposal of minerals in place           -            -
             Revision of prior estimates                   -            -
                                                  -----------  -----------
     Balance at June 30, 2001                      5,471,000   32,488,000
                                                  ===========  ===========

     Proved developed reserves at June 30:
             2000                                  1,293,000   16,376,000
                                                  ===========  ===========
             2001                                  1,345,000   14,666,000
                                                  ===========  ===========

     The  standardized  measure  of discounted future net cash flows at June 30,
     2001  and  2000 relating to proved oil and gas reserves is set forth below.
     The  assumptions  used  to  compute  the  standardized  measure  are  those
     prescribed  by the Financial Accounting Standards Board and as such, do not
     necessarily  reflect  the  Company's  expectations of actual revenues to be
     derived  from  those  reserves  nor  their  present  worth. The limitations


                                       39
<PAGE>
     inherent  in  the  reserve  quantity estimation process described above are
     equally  applicable  to  the  standardized measure computations since these
     estimates  are  the  basis  for  the  valuation  process.

     Standardized measure of discounted future net cash flows relating to proved
     reserves:

                                                        At June 30,
                                                        -----------
                                                    2001           2000
                                                -------------  -------------
     Future cash inflows                        $251,668,000   $324,553,000
     Future production costs                     (66,338,000)   (76,939,000)
     Future development costs                    (18,741,000)   (17,650,000)
                                                -------------  -------------
     Future net cash flows, before income tax    166,589,000    229,964,000
     Future income tax expenses                  (44,482,000)   (72,642,000)
                                                -------------  -------------
     Future net cash flows                       122,107,000    157,322,000
     10% discount to reflect timing of net
     cash flows                                  (62,247,000)   (82,801,000)
                                                -------------  -------------
     Standardized measure of discounted future
           net cash flows                       $ 59,860,000   $ 74,521,000
                                                =============  =============

     Changes  in  standardized  measure  of  discounted  future  net  cash flows
     relating  to  proved  reserves:

<TABLE>
<CAPTION>
                                                      Year Ended June 30,
                                                 ----------------------------
                                                     2001           2000
                                                 -------------  -------------
<S>                                              <C>            <C>
Standardized measure, beginning of period        $ 74,521,000   $ 11,322,000
Net change in prices and production costs         (62,315,000)    43,006,000
Accretion of discount                              20,554,000    (77,140,000)
Sales of oil and gas, net of production costs      (7,268,000)    (2,508,000)
Sales and disposition of reserves in place                  -              -
Purchase of reserves, net of future development
    Costs                                           3,255,000    152,455,000
Development costs which reduced future
    development costs                               2,953,000        647,000
Revisions of quantity estimates                             -     12,103,000
Change in timing of production and other                    -              -
Net changes in income taxes                        28,160,000    (65,364,000)
                                                 -------------  -------------
Standardized measure, end of period              $ 59,860,000   $ 74,521,000
                                                 =============  =============
</TABLE>

15.  EARNINGS  PER  SHARE
     --------------------

     The  following  data  show the amounts used in computing earnings per share
     and  the  effect  on  income  and  the weighted average number of shares of
     dilutive  potential  common  stock.


                                       40
<PAGE>
<TABLE>
<CAPTION>
                                                  Year Ended June 30,
                                               ------------------------
                                                  2001         2000
                                               -----------  -----------
<S>                                            <C>          <C>
Net earnings                                   $ 2,100,524  $    94,116
Effect of dilutive securities                            -            -
                                               -----------  -----------
Net earnings after effect of
   dilutive securities                         $ 2,100,524  $    94,116
                                               ===========  ===========

Weighted average number of common shares used
    in basic earnings per share                 18,783,941   11,953,798
   Special warrants                              1,230,000            -
   Stock options and warrants                       71,012      126,414
                                               -----------  -----------
Weighted average number of common shares and
    dilutive potential common stock used in
    diluted earnings per share                  20,084,953   12,080,212
                                               ===========  ===========
</TABLE>

     Options  and  warrants  to  purchase  approximately 1,553,000 shares of the
     Company's  common  stock,  with  exercise  prices  of ranging from $1.53 to
     $14.56,  were  excluded  from  the June 30, 2001 diluted earnings per share
     calculation  because  their effects were antidilutive. Options and warrants
     to  purchase  approximately 1,324,000 shares of the Company's common stock,
     with  exercise  prices  of ranging from $1.75 to $24.50, were excluded from
     the  June  30,  2000  diluted  earnings per share calculation because their
     effects  were  antidilutive.


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

     There  are  not and have not been any disagreements between the Company and
its accountants on any matter of accounting principles or practices or financial
statement  disclosure.


                                    PART III

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

DIRECTORS  AND  EXECUTIVE  OFFICERS

     The  following  is  a  list  of the names and ages of each of the Company's
directors  and  executive  officers:

Name                    Age   Position
----                    ---   --------

Jack E. Wheeler(1)      52    Chairman of the Board, Chief Executive Officer and
                              Director
Ron  Mercer             53    President  and  Chief  Operating  Officer
Sam  Hammons            51    Vice-President
Peter  Lucas            47    Senior  Vice  President, Chief Financial Officer
Lenard  Briscoe         67    Director
Wayne T. Egan(1)(2)     39    Director
James E. Hogue(1)(2)    65    Director
Anne  L. Holland(2)     57    Director
Randall B. Kahn(1)      41    Director

___________________
(1)  Member  of  Audit  Committee
(2)  Member  of  Compensation  Committee


                                       41
<PAGE>
     JACK  E.  WHEELER has served as a Director, Chairman of the Board and Chief
Executive Officer of the Company since September 16, 1999.  Prior to that he has
been  the  Managing  Partner  of Crown Partners LLC Minerals Division (currently
East  Wood  Equity  Venture,  Inc.)  for more than the past five (5) years.  Mr.
Wheeler is an attorney who received his A.A. from Lon Morris University in 1969,
a B.A. from Texas A&M University in 1970, an M.A. in 1974 from the University of
Colorado,  and  his  J.D.  from  the  University  of  Houston  in  1975.

     RON  MERCER  was appointed President of the Company on December 1, 2000 and
is  the  Chief  Operating Officer of the Company.  Prior thereto, Mr. Mercer was
Executive  Vice-President  and  Chief  Operating  Officer  of  the Company since
September  16,  1999.  Prior  thereto,  Mr.  Mercer  has  acted  as  President
responsible for the daily operations of Mercer Oil and Gas Company and Armer LLC
for  the  past  5  years.  He  is  a  Professional  Engineer  with over 30 years
experience  in  oil  and  gas asset management.  He is a Registered Professional
Engineer  in  Texas  and  Oklahoma,  and a Member of the Society of Professional
Engineers  and Society of Petroleum Engineers.  Mr. Mercer received his B.Sc. in
Petroleum  Engineering  from  Texas  Tech  University.

     SAM HAMMONS was appointed effective September 16, 1999 as Vice-President of
the  Company.  He  is  an  attorney with over 25 years experience, and is former
President  of  the  Law  Firm  of Hammons & Vaught.  Mr. Hammons was formerly an
Assistant  for Energy Natural Resources to Governor David Boren in Oklahoma, and
an Administrative Assistant to Governor George Nigh in Oklahoma.  Mr. Hammons is
a  graduate  of  Oklahoma  Baptist  University and received a J.D. from Oklahoma
University  and  a  Masters in International Relations from Oklahoma University.

     PETER LUCAS was appointed Chief Financial Officer effective March 13, 2000.
Mr.  Lucas  served  as  Chief  Financial  Officer  of WesTower Corporation until
September  1999.  He  is  also  a  director of Ubiquitel, a public company.  Mr.
Lucas  is  a  Chartered  Accountant, and received his C.A. from the Institute of
Chartered  Accountants  of  British Columbia in 1980.  He also has a Bachelor of
Commerce  degree  from  the  University  of  Alberta.

     LENARD  BRISCOE  is  a  director of the Company elected at the December 20,
2000  shareholders  meetings.  Mr. Briscoe was formerly President of Briscoe Oil
Operating  Company,  Inc.  from 1980 to 2000.  Mr. Briscoe is a private investor
involved  with  real  estate,  banking  and  farming.

     WAYNE T. EGAN is a partner of the Law Firm of WeirFoulds LLP, and practices
in  the  Securities Law Section.  He received an LLB from Queen's University Law
School  in 1988 and a Bachelor of Commerce degree from the University of Toronto
in 1985.  He is a Member of the Canadian Bar Association.  WeirFoulds LLP serves
as  the  Corporation's  Corporate  Counsel  in  Ontario,  Canada.

     JAMES E. HOGUE was President, Chief Operating Officer and a Director of the
Company  from  July  1996  to  September  1999,  and  President  of  its primary
subsidiary,  Cotton  Valley  Energy Corporation, from February 1995 through July
1996.  Mr.  Hogue  has  also been a Director, President and major Shareholder of
Third  Coast  Capital,  Inc.,  a  Venture  Capital  Company  since  1988.

     ANNE  L. HOLLAND has been the President of MAYCO Petroleum Co., a Crude Oil
Trading  Company, since 1982.  Ms. Holland devotes her principal working time to
her  position  as President of MAYCO Petroleum Co. and acts as a Director of the
Company.

     RANDALL  B.  KAHN  currently  is  President of Triangle Industries, and was
formerly  President  of Dharma Capital, a Venture Capital Company located in St.
Louis,  Missouri.  From  1994 to 1999 Mr. Kahn served as Chief Executive Officer
of  Tiffany Industries, an office furniture manufacturer in St. Louis, Missouri.
Prior  thereto, Mr. Kahn was a litigation attorney from 1993 to 1994 with Paule,
Camazine and Blumenthal, a Law Firm in St. Louis, Missouri and prior thereto was
a  litigation attorney with Susman, Chermer, Rimmel & Shifrin, a Law Firm in St.
Louis, Missouri from 1989 to 1993.  Mr. Kahn received a BA in English Literature
from  Colorado College in 1982 and received a JD, Environmental Law Honours from
Northwestern  School  of  Law,  Portland,  Oregon.


                                       42
<PAGE>
DIRECTOR  COMPENSATION

     Directors who are not Aspen employees receive $500 per meeting of the board
and  $500  per  committee  meeting not held on the same date as a board meeting.
Directors  are  permitted  to  accept  stock in lieu of cash. Employee directors
receive  no  extra  compensation  for  service  on  the  board.

FAMILY  RELATIONSHIPS

     There  are  no  family  relationships  among  the  Company's  directors  or
executive  officers.

COMPLIANCE  WITH  SECTION  16(A)  OF  THE  SECURITIES  EXCHANGE  ACT

     Section  16(a)  of the Securities Exchange Act of 1934 (the "Exchange Act")
requires  executive officers and Directors, and persons beneficially owning more
than 10% of the Company's stock to file initial reports of ownership and reports
of  changes  in  ownership  with  the  United  States  Securities  and  Exchange
Commission  ("SEC")  and  with the Company  Peter Lucas and James Hogue have not
filed  any  reports  under Section 16(a).  Other officers and Directors have not
filed reports disclosing the grant of stock options.  The officers and Directors
are  in  the  process  of  preparing  the  required  reports  for  filing.


ITEM  10.     EXECUTIVE  COMPENSATION
              -----------------------

     The  following  table  sets  forth  the  compensation paid or to be paid to
certain of Aspen's executive officers (the "Named Executive Officers"), directly
or  indirectly,  for  services rendered in all capacities for fiscal years 1999,
2000  and  2001.


                                       43
<PAGE>
                           SUMMARY COMPENSATION TABLE

                          Annual Compensation(1)    Long Term Compensation

Name and                                         Other Annual   Options/SARs
Principal                   Salary      Bonus    Compensation      Granted
Position            Year     (US$)     (US $)        (US$)           (#)
(a)                  (b)      (c)        (d)          (e)            (f)
-----------------------------------------------------------------------------

Jack E. Wheeler      2001  $ 188,002          0              0        357,143
Director,            2000  $ 112,500          -              -        428,572
Chairman of the      1999          -          -              -              -
Board and Chief
Executive
Officer

Ron Mercer           2001  $ 128,667  $ 100,000              -        107,143
President            2000  $  48,000          -              -        214,286
and Chief            1999          -          -              -              -
Operating
Officer

Sam Hammons          2001  $  10,250          -              -              -
Vice President       2000  $  16,000          -              -         71,429
                     1999          -          -              -              -

Peter Lucas          2001          -          -              -              -
Vice President       2000  $  45,000          -              -         71,429
and Chief            1999          -          -              -              -
Financial
Officer (2)
------------------
(1)  Certain  of  the  Company's executive officers receive personal benefits in
     addition  to  salary. The aggregate amount of these benefits, however, does
     not exceed the lesser of $50,000 or 10% of the total annual salary reported
     for  the  executives.
(2)  Mr.  Lucas  resigned  as an Officer of the Company effective April 15, 1997
     and  was  appointed  Chief  Financial  Officer  on  March  13,  2000.

OPTION/SAR  GRANTS  (PERIOD  ENDED  JUNE  30,  2001)

     The  following  options  were granted to Named Executive Officers under the
Company's  Stock  Option  Plan  in  the  fiscal  year  ended  June  30,  2001:


Name             Number of Options    Exercise Price    Expiration Date
                        (#)               ($US)

--------------------------------------------------------------------------------
Jack E. Wheeler      357,143             $1.33         December 20, 2003
Sam Hammons          -
Ron Mercer           107,143             $1.33         December 23, 2003
Peter Lucas          -


                                       44
<PAGE>
AGGREGATED  OPTION/SAR  EXERCISES  (PERIOD  ENDED  JUNE  30, 2001) AND FINANCIAL
YEAR-END  OPTION/SAR  VALUES

     The  following  table  sets  forth  information  regarding  stock  options
exercised  during  the  year  ended  June 30, 2001, and the value of unexercised
options  held  by  Named  Executive  Officers  as  of  June  30,  2001.

<TABLE>
<CAPTION>
                                                                         Value of Unexercised
                                                         Unexercised     in-the-Money
                                                         Options/SARs    Options/SARs
                                                         at FY-End       at FY-End
                 Securities Acquired   Aggregate Value   (#)             ($US)
                 on Exercise           Realized          Exercisable/    Exercisable/
Name             (#)                   ($)               Unexercisable   Unexercisable

<S>              <C>                   <C>               <C>             <C>
----------------------------------------------------------------------------------------------

Jack E. Wheeler  -                     -                      785,715/0      -
Sam Hammons      -                     -                       71,429/0      -
Ron Mercer       -                     -                      321,429/0      -
Peter Lucas      -                     -                       71,429/0      -
</TABLE>


EMPLOYMENT  AGREEMENTS

     The  Company  does  not have employment contracts with any of its executive
officers, other than with Jack Wheeler, its Chief Executive Officer and Chairman
and  Ron  Mercer,  its  President.  The  agreement with Mr. Wheeler is effective
until September 17, 2006 and he is paid a base salary of US$200,000 per year, to
be  reviewed  annually  by the board of directors of the Company.  The agreement
with Mr. Mercer is effective until January 1, 2005, and he is paid a base salary
of US$140,000 per year, to be reviewed annually by the board of directors of the
Company.  Under  the  terms  of  both  employment  agreements,  in  the event of
termination  without  cause  or  change of control, each is to receive 60 months
salary  and  bonus.  There  is  no  severance  compensation  otherwise  payable.

INDEBTEDNESS  OF  DIRECTORS  AND  OFFICERS

     None  of  the  Directors  or  Officers  of  the Company or their respective
associates  or  affiliates  is  indebted  to  the  Company.


ITEM  11.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT
              ------------------------------------------------------------------

     As  of  September  11,  2001,  the  only  persons  or companies who, to the
knowledge  of  the Directors and executive officers of the Company, beneficially
own,  directly  or  indirectly,  5% or more of the issued and outstanding voting
common  stock of the Company are listed below.  In addition, this table includes
the  outstanding  voting  securities beneficially owned by each of the Company's
Directors, and Named Executive Officers as well as the number of shares owned by
Directors  and  Executive  Officers  as  a  group.


                                       45
<PAGE>
<TABLE>
<CAPTION>
                                        Number of Common Shares and
Name                                    Nature of Beneficial Ownership(3)  Total % of Common Shares
----------------------------------------------------------------------------------------------------
<S>                                     <C>                                <C>
Jack E. Wheeler(1)                                           3,642,858(4)                      18.1%
Custer County Drillers Inc.                                    2,021,990                       10.5%
Farrell Kahn                                                 1,567,814(4)                       8.1%
Ron Mercer(1)                                                  464,286(4)                       2.2%
James E. Hogue(2)                                                314,286                        1.6%
Sam Hammons(1)                                                 214,286(4)                       1.1%
Randall B. Kahn                                                213,352(4)                       1.1%
Peter Lucas(1)                                                   157,143                          *
Wayne T. Egan(2)                                                 129,716                          *
Anne Holland(2)                                                  121,429                          *
Lenard Briscoe(2)                                                614,286                        3.2%
All Directors, and Executive Officers                          5,871,642                       27.9%
as a group (9 persons, including Jack
E. Wheeler)
____________________
<FN>
*    Less  than  one  percent.
(1)  Mr.  Wheeler  is  Chairman  of  the  Board,  Chief  Executive Officer and a
     Director  of  the  Company. Mr. Mercer is President of the Company. Messrs.
     Hammons  and  Lucas  are  Vice  Presidents  of  the Company. The address of
     Messrs.  Wheeler,  Mercer,  Hammons  and Lucas is 3300 Bank One Center, 100
     North  Broadway,  Oklahoma  City,  Oklahoma  73102.
(2)  Mr. Hogue, Ms. Holland, Mr. Kahn, Mr. Egan and Mr. Briscoe are Directors of
     the  Company. The address of Mr. Hogue and Ms. Holland is 6510 Abrams Road,
     Suite  300,  Dallas, Texas 75231. The address of Mr. Kahn is 20 North Gore,
     Suite  200,  St.  Louis,  Missouri 63119. The address of Mr. Egan is 1600 -
     Exchange Tower, 130 King Street West, Toronto, Ontario, Canada M5X 1J5. The
     address  of  Mr.  Briscoe  is  406  N.  Main,  Kingfisher,  OK  73750.
(3)  Includes  presently  exercisable stock options in the following amounts: J.
     Wheeler  -  785,715  shares; R. Mercer - 321,429 shares; J. Hogue - 114,286
     shares;  S.  Hammons  - 71,429 shares; R. Kahn - 114,286 shares; P. Lucas -
     71,429  shares;  W.  Egan - 121,430 shares; A. Holland - 114,286 shares; L.
     Briscoe  -  42,857  shares.
(4)  Shares  other  than  optioned  shares  are held in the name of Aspen Energy
     Group,  Inc.
</TABLE>

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

     During  the fiscal years ended June 30, 2000 and June 30, 2001, the Company
entered  into  the  following  transactions with parties who could be considered
insiders  of  the  Company:

1.   EAST  WOOD  FIRST  PURCHASE  AGREEMENT

     The Company is party to an agreement made on September 16, 1999 (the "First
Purchase  Agreement"),  with  an  effective  date from July 1, 1999, pursuant to
which the Company acquired 50% of the issued and outstanding shares of East Wood
Equity  Ventures,  Inc.  ("East Wood") from four (4) vendor shareholders of East
Wood.  Under  the  terms  of the First Purchase Agreement, the Company agreed to
issue  to  the shareholders of East Wood 6,604,414 Common Shares.  The principal
vendor was Jack Wheeler, the Chairman, Chief Executive Officer and a Director of
the  Company and also included Custer County Drillers, Inc.  The estimated value
of  the  East  Wood  shares  acquired  under  the  First  Purchase Agreement was
$7,464,505.


                                       46
<PAGE>
2.   EAST  WOOD  SECOND  PURCHASE  AGREEMENT

     The  Company  entered  into  an agreement made as of February 28, 2000 (the
"Second  Purchase  Agreement")  pursuant  to  which  the  Company  acquired  the
remaining  50%  of  the  issued and outstanding shares of East Wood from six (6)
vendor shareholders of East Wood including Farrell Kahn and Randall Kahn.  Under
the  terms  of the Second Purchase Agreement, the Company agreed to issue to the
six  (6)  Vendor  Shareholders  of East Wood an aggregate of 3,747,271 shares of
Common  Stock  and  a  promissory  note  in  the  amount  of  $3,000,000.

3.   ACQUISITION  OF  MERCER  OIL  AND  GAS

     Effective April 1, 2000, the Company acquired all of the outstanding common
stock of Mercer Oil and Gas Company from Ron Mercer, an Executive Officer of the
Company,  in  exchange  for  142,857  Common  Shares.  The value of the acquired
property  was  estimated  at  the time of acquisition as $343,800.  Prior to the
closing  of the acquisition of Mercer Oil, the Company purchased certain oil and
gas  properties  from  Mercer  Oil  for  $300,000  in  cash.

4.   ACQUISITIONS  OF  BRISCOE  OIL  AND  L.C.B.  RESOURCES

     Effective  May  1,  2000,  Aspen acquired through a merger with Briscoe Oil
Operating,  Inc.  a  55%  undivided  interest  in  171  properties located in 21
counties  in Oklahoma, Texas, and Kansas for $3,000,000.  Effective May 1, 2000,
Aspen also acquired 17 producing oil and gas properties, equipment, vehicles and
a  10-year  equipment facility yard lease from L.C.B. Resources, Inc., which was
paid  by the issuance of 571,429 restricted shares of Common Stock.  Briscoe Oil
Operating,  Inc.  and  L.C.B.  Resources,  Inc.  were  both controlled by Lenard
Briscoe,  a  current  Director  of  the  Company.

5.   SALE  OF  UNITED  CEMENTING  STOCK

     Contemporaneously with the Company's acquisition of United Cementing & Acid
Co., Inc. for an aggregate purchase price of $1,290,000, the Company sold 25% of
United  Cementing  to  Lenard Briscoe, a Director of the Company, for a purchase
price  (composed  of  cash  and  debt  cancellation)  of  $312,500.  Mr. Briscoe
presently  is  indebted  to  United  Cementing  in  the  amount of approximately
$125,000  under  a  non-interest  bearing  promissory  note.

6.   LEGAL  FEES

     The  Company  paid  aggregate  legal fees of $92,292 in fiscal year 2001 to
WeirFoulds,  LLP  a  Toronto law firm in which Director Wayne Egan is a partner.

     The  transactions  described in this Section were ratified by a majority of
the  Company's  Independent  Directors  who  did  not  have  an  interest in the
transactions and who had access, at the Company's expense, to available material
information  and  to  the  Company's  Independent  Counsel.

     Any  future  transactions  between  the  Company and its affiliates will be
approved  by  a majority of disinterested Directors and will be on terms no less
favourable  to  the  Company  than  those which could be obtained from unrelated
third  parties.  Any  forgiveness of loans must be approved by a majority of the
Company's  Independent Directors who do not have an interest in the transactions
and  who have access, at the Company's expense, to either the Company's or their
own  independent  legal  counsel.


                                     PART IV

ITEM 13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)       Exhibits:  See  Exhibit  Index  on  the page immediately following the
          signature  page.

(b)       The  Company  filed  no Reports on Form 8-K during the last quarter of
          the  fiscal  year  ending  June  30,  2001.


                                       47
<PAGE>
SIGNATURES

     Pursuant  to  the  requirements  of  Section  13  or  Section  15(d) of the
Securities  Exchange  Act of 1934, the Registrant has duly caused this report to
be  signed  on  its  behalf  by  the  undersigned, thereunto duly authorized, on
September  25,  2001.

                                   ASPEN GROUP RESOURCES CORPORATION(Registrant)

                                   By:  /s/ Jack  E. Wheeler
                                            Jack  E. Wheeler
                                   Chairman of the Board and
                                   Chief Executive Officer
                                   (Principal Executive Officer)

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


Signature             Title                                 Date

/s/  Jack E. Wheeler  Chief Executive Officer and Director  September 25, 2001
     Jack E. Wheeler

/s/  Peter Lucas      Chief Financial Officer and Senior    September 25, 2001
     Peter Lucas      Vice President

/s/  Lenard Briscoe   Director                              September 25, 2001
     Lenard Briscoe

/s/  Wayne T. Egan    Director                              September 25, 2001
     Wayne T. Egan

/s/  James E. Hogue   Director                              September 25, 2001
     James E. Hogue

/s/  Anne Holland     Director                              September 25, 2001
     Anne Holland

/s/  Randall B. Kahn  Director                              September 25, 2001
     Randall B. Kahn


                                       48
<PAGE>
ASPEN GROUP RESOURCES CORPORATION

EXHIBITS  INDEX
---------------

     Exhibit       Description
     Number
     ------        -------------------------------------
     3(a)(1)*      Articles of Amalgamation
     3(a)(2)*      Amendment to Articles of Amalgamation
     3(b)*         Bylaws
     4*            Description of the Common Stock
     21            Subsidiaries

* Previously filed and incorporated by reference herein.


                                       49
<PAGE>