SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB


                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 1999


                         Commission file number 0-19766

                          HOME-STAKE OIL & GAS COMPANY
                 (Name of small business issuer in its charter)

                Oklahoma                                   73-0288030
    (State or other jurisdiction of                     (I.R.S. Employer
     incorporation or organization)                    Identification No.)

     15 East 5th Street, Suite 2800
           Tulsa, Oklahoma                                    74103
 (Address of principal executive offices)                   (Zip Code)

                    Issuer's telephone number: (918) 583-0178

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

              Securities registered under Section 12(g) of the Act:

                     Common Stock, par value $0.01 per share
                         Preferred Share Purchase Rights

        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 registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days. Yes X No

        Check if  disclosure  of  delinquent  filers in  response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the best of the  Registrant's  knowledge,  in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|

        State issuer's revenues for its most recent fiscal year:     $11,944,239


        As of March 29, 2000,  4,353,827 shares of the Registrant's Common Stock
were outstanding. As of March 29, 2000, the aggregate market value of the voting
stock held by non-affiliates of the Registrant was $17,486,084 based on the last
reported  trading price reported on the Nasdaq  SmallCap  Market.  (Officers and
directors  of the  Registrant,  and holders of more than 10% of the  outstanding
common stock, are considered affiliates for purposes of this calculation.)


                       DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the  Registrant's  Proxy Statement for the Annual Meeting of
Stockholders  to be held May 22, 2000, are  incorporated  by reference into Part
III of this Form 10-KSB.

        Transitional Small Business Disclosure Format (Check one) Yes |_| No |X|




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                          HOME-STAKE OIL & GAS COMPANY

                                   FORM 10-KSB
                          YEAR ENDED DECEMBER 31, 1999

                                TABLE OF CONTENTS

                                                                          Page
                                     PART I
Item 1.  Description of Business.........................................    1

Item 2.  Description of Property.........................................    5

Item 3.  Legal Proceedings...............................................   10

Item 4.  Submission of Matters to a Vote of Security Holders.............   11


                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters........   11

Item 6.  Management's Discussion and Analysis............................   12

Item 7.  Financial Statements............................................   15

Item 8.  Changes in and Disagreements with Accountants
         on Accounting and Financial Disclosure..........................   15

                                    PART III

Item 9.  Directors, Executive Officers and Compliance with Section 16(a)
         of the Exchange Act.............................................   15

Item 10. Executive Compensation..........................................   15

Item 11. Security Ownership of Certain Beneficial Owners and Management..   15

Item 12. Certain Relationships and Related Transactions..................   15

Item 13. Exhibits and Reports on Form 8-K................................   16

Signatures       ........................................................   18

Index to Financial Statements............................................  F-1

                                      -ii-

<PAGE>



                                     PART I


Item 1. Description of Business,  Item 2.  Description of Property,  and Item 6.
Management's  Discussion and Analysis,  include certain statements which are not
historical  fact, but are "forward  looking  statements".  These forward looking
statements are based on current expectations, estimates, assumptions and beliefs
of  management;  and  words  such  as  "expects",   "believes",   "anticipates",
"intends", "plans" and similar expressions are intended to identify such forward
looking statements.  Home-Stake Oil & Gas Company (the "Company" or "HSOG") does
not undertake to update, revise or correct forward looking information.  Readers
are cautioned that such forward looking statements should be read in conjunction
with the Company's  disclosures under the heading "Forward Looking  Statements",
included on page 15 hereof.

ITEM 1. DESCRIPTION OF BUSINESS

General

The Company is actively engaged in the acquisition, exploration, development and
production of oil and gas properties.  Its principal  geographic operating areas
lie within the states of Oklahoma, Montana, New Mexico and Texas.

The Company was  incorporated  in the State of Oklahoma in 1917.  The  Company's
principal business activity from the date of its incorporation through the early
1950's  was the  acquisition  and  leasing  of oil and  gas  mineral  interests.
Accordingly, the Company's revenues were primarily from royalty interests in oil
and gas production from the mineral interests in properties leased to others. In
the 1950's the Company began  participating as a working interest partner in the
acquisition  and  drilling  of oil and gas  properties,  primarily  drilled  and
operated by industry  partners.  The Company also originated and participated in
the drilling of a few of its own prospects and  discovered  several  significant
oil fields in south  central  Kansas during the 1950's.  Beginning in 1985,  the
Company  developed  an  exploration  staff to  generate,  sell and drill its own
prospects. The Company now also serves as operator for 49 producing wells.

In the mid-1970's the Company revised its business  strategy to pursue a program
to increase its revenues  generated  from the ownership of working  interests in
oil and gas properties relative to its revenues generated from royalty interests
(resulting from the ownership and leasing of oil and gas mineral interests). The
Company  increased its relative  investment in drilling  ventures  developed and
sold by  other  industry  partners  and in the oil  and gas  properties  that it
acquired.  In 1977, the Company received  approximately 70% of its revenues from
royalty interests, whereas, in 1999, approximately 26% of its revenues were from
royalty interests.

At December 31, 1999,  the Company had estimated  proved  reserves of 42,840,578
Mcf  of  natural  gas  and  5,650,452  barrels  of  oil.  Natural  gas  reserves
constituted  approximately  56% of  the  Company's  reserves  based  on an  "oil
equivalent"  basis  (converting  each six Mcf of natural gas to a barrel of oil,
representing the estimated relative energy content of oil and natural gas).

Recent Developments

On February 29, 2000,  the Company  announced that it had engaged the investment
banking  firm of  Stephens  Inc.  to assist it in  exploring  various  strategic
alternatives to maximize shareholder value and improve shareholder liquidity.

Merger

Effective  December 31, 1997, The Home-Stake  Royalty  Corporation  ("HSRC") was
merged with and into the Company (the "Merger"). The Merger was accounted for as
a purchase, with HSOG deemed to be the purchased entity for accounting purposes.
Under the purchase method of accounting,  the cost of the assets and liabilities
acquired is  allocated  based on their fair value,  with the  operations  of the

                                       -1-

<PAGE>



acquired  entity  included with those of the  acquiring  entity from the date of
acquisition.  Accordingly,  the historical tables and other information included
in this report for activities  during 1997 reflect such information for HSRC and
do not include historical amounts for HSOG. However,  information as of December
31, 1999 and 1998 and for the years then ended,  includes the  combined  amounts
for HSRC and HSOG (i.e. the merged entity).

Partnership

The Company serves as general partner of H-S Royalty,  Ltd., an Oklahoma limited
partnership (the  "Partnership")  formed in 1982. The Partnership was formed for
the purpose of  distributing  to  stockholders a 3/16th royalty  interest,  on a
20-year  term  basis,  in  24,940  net  mineral  acres of  nonproducing  mineral
interests  owned by the Company  which are located in ten states.  Management of
the Company distributed the royalty interests to allow stockholders to realize a
portion  of the  direct  economic  benefits  that  result  from  the  commercial
production  and  sale of oil and gas,  as well as the  maximization  of  certain
income  tax  benefits  attributable  to oil and  gas  producing  activities.  In
connection with the  administration  of the Partnership,  the Company receives a
monthly administrative management fee of $500.

On February 18, 2000, the Board of Directors of the Company  voted,  pursuant to
the terms of the Agreement of Limited Partnership, to terminate the Partnership,
effective May 31, 2000. An independent  engineering  firm has been contracted to
determine the fair market value of the assets of the  Partnership.  Upon receipt
of the appraisal,  it is the intent of the Company to purchase the assets of the
Partnership at their appraised fair market value,  pay all of the  Partnership's
debts and all  expenses  incurred  in  connection  with the  termination  of the
Partnership,  and distribute the remaining funds to the Unit Holders and Limited
Partners,  as provided in the Agreement of Limited Partnership.  At December 31,
1999, the  Partnership  had estimated  proved  developed  producing  reserves of
79,724 Mcf of natural gas and 9,975 barrels of oil.

Competition

Competition  in the oil and gas  industry  is  intense.  In  seeking  to  obtain
desirable  producing  properties,  new leases  and  exploration  prospects,  the
Company faces competition from both major and independent oil and gas companies,
as well as from numerous  individuals and income and drilling programs.  Many of
these competitors have financial and other resources  substantially in excess of
those available to the Company.  Alternate fuel sources,  including  heating oil
and other fossil fuels, also present competition.

Marketing

The Company's gas production from properties in which it owns working  interests
is sold  primarily  on the spot market with a variety of  purchasers,  including
intrastate  and  interstate  pipeline  companies,  their  marketing  affiliates,
independent marketing companies and other companies who have the ability to move
gas under firm transportation  agreements. Gas produced from properties in which
the  Company  owns  royalty  interests  is  marketed  and sold by  owners of the
leasehold interests in such properties.

Substantially  all of the Company's crude oil and condensate  production is sold
at posted prices under short-term contracts, as is customary in the industry.

Seasonality

The results of operations of the Company are subject to seasonal fluctuations in
the price for natural gas.  Natural gas prices have been generally higher in the
fourth  and first  quarters.  Due to these  seasonal  fluctuations,  results  of
operations  for  individual  quarterly  periods may not be indicative of results
which may be realized on an annual basis.




                                       -2-

<PAGE>



Regulation

General

The oil and gas industry is  extensively  regulated by federal,  state and local
authorities.  Legislation  affecting the oil and gas industry is under  constant
review for  amendment or expansion.  Numerous  departments  and  agencies,  both
federal and state, have issued rules and regulations  binding on the oil and gas
industry and its individual members,  some of which carry substantial  penalties
for the failure to comply.  The  regulatory  burden on the oil and gas  industry
increases   its  cost  of  doing   business  and,   consequently,   affects  its
profitability.  Inasmuch as such laws and regulations are frequently  amended or
reinterpreted,  the  Company is unable to predict  the future  cost or impact of
complying with such regulations.

Exploration and Production

Exploration  and  production  operations  of the  Company are subject to various
types of  regulation  at the  Federal,  state,  Indian  and local  levels.  Such
regulation  includes  requiring  permits for the drilling of wells,  maintaining
bonding  requirements  in order to drill or operate  wells,  and  regulating the
location of wells,  the method of drilling and casing wells, the surface use and
restoration  of  properties  upon which wells are drilled and the  plugging  and
abandoning  of wells.  The  Company's  operations  are also  subject  to various
conservation  matters.  These include the regulation of the size of drilling and
spacing  units or proration  units and the density of wells which may be drilled
and the unitization or pooling of oil and gas properties.  In this regard,  some
states  allow  the  forced  pooling  or  integration  of  tracts  to  facilitate
exploration  while other states rely on  voluntary  pooling of lands and leases.
State  conservation  laws establish maximum rates of production from oil and gas
wells,  generally  prohibit  the  venting or  flaring of gas and impose  certain
requirements  regarding the ratability of production.  In addition,  some states
have adopted  limits on gas  production  that attempt to match  production  with
market  demand.  The effect of these  regulations is to limit the amounts of oil
and gas the  Company can produce  from their  wells,  and to limit the number of
wells or the locations at which the Company can drill.

Sales and Transportation

Federal legislation and regulatory controls have historically affected the price
of the gas  produced by the Company and the manner in which such  production  is
marketed.  However, due to the deregulation provisions of the Natural Gas Policy
Act of 1978,  the Natural Gas  Wellhead  Decontrol  Act of 1989 and  regulations
promulgated  by  the  Federal  Regulatory  Commission  ("FERC"),  the  price  of
virtually all gas produced by producers not affiliated with interstate pipelines
has been  deregulated.  As a result,  most of the Company's gas production is no
longer  subject  to price  regulation.  Gas which has been  removed  from  price
regulation is subject only to that price  contractually  agreed upon between the
producer and purchaser.  Market  determined  prices for deregulated  natural gas
fluctuate in response to market pressures.

The FERC  regulates  interstate  natural  gas  transportation  rates and service
conditions,  which affects the marketing of gas produced by the Company, as well
as the revenues received from sales of such production. Since the mid-1980s, the
FERC has  issued a series of orders  culminating  in Order Nos.  636,  636-A and
636-B  ("Order  636"),  that  have  significantly   altered  the  marketing  and
transportation  of gas.  Order  636  mandated  a  fundamental  restructuring  of
interstate pipeline sales and transportation  service,  including the unbundling
by  interstate  pipelines  of  the  sales,  transportation,  storage  and  other
components of the city-gate sales services such pipelines previously  performed.
One of the FERC's  purposes  in issuing  the orders is to  increase  competition
within all phases of the gas industry.  Generally,  Order 636 has  eliminated or
substantially reduced the interstate pipelines'  traditional role as wholesalers
of natural gas and has  substantially  increased  competition  and volatility in
natural gas markets.  While some regulatory  uncertainty  remains due to pending
appeals of  individual  pipeline's  implementation  of Order 636,  Order 636 may
ultimately  enhance the ability of  producers  such as the Company to market and
transport  their gas directly to  end-users  and local  distribution  companies,
although  it may also  subject  producers  to greater  competition  and the more
restrictive  pipeline imbalance  tolerances and greater associated penalties for
violation of such tolerances.

                                       -3-

<PAGE>



As a result of Order 636,  many  interstate  gas pipelines  have spun-off  their
gathering  systems,  which  systems  for the most part are not  subject  to FERC
jurisdiction.  This action could affect the cost of  gathering  gas.  States are
reviewing whether to regulate such gathering  systems.  The Company is unable to
predict what impact, if any, such divesting and regulation may have.

Sales of oil and natural gas  liquids by the Company are not  regulated  and are
made at market  prices.  The price the Company  receives  from the sale of these
products  is  affected  by the cost of  transporting  the  products  to  market.
Effective as of January 1, 1995, the FERC implemented  regulations  establishing
an  indexing  system for  transportation  rates for most oil  pipelines,  which,
generally,  would index such rates to inflation,  subject to certain  conditions
and limitations.  These  regulations could increase the cost of transporting oil
and  natural  gas  liquids by  pipeline,  although  the most  recent  adjustment
generally  decreased  rates.  The Company is not able to predict with  certainty
what effect, if any, these regulations will have on its operations, however, the
regulations  may,  over time,  tend to increase  transportation  costs or reduce
wellhead prices for oil and natural gas liquids.

Operational Hazards and Insurance

The  operations  of the  Company  are  subject  to  all  risks  inherent  in the
exploration for, and development and production of, oil and gas,  including such
natural hazards as blowouts,  cratering and fires,  which could result in damage
or injury  to, or  destruction  of,  drilling  rigs and  equipment,  formations,
producing facilities or other property, or could result in personal injury, loss
of life or  pollution  of the  environment.  Any  such  event  could  result  in
substantial  cost to the  Company  which  could have an adverse  effect upon the
financial condition of the Company to the extent it is not fully insured against
such risk. The Company carries  insurance against certain of these risks but, in
accordance with standard industry practice,  is not fully insured for all risks,
either  because such insurance is unavailable or because it elects not to obtain
insurance coverage because of cost.  Although such operational risks and hazards
may to some extent be minimized,  no combination  of  experience,  knowledge and
scientific evaluation can eliminate the risk of investment or assure a profit to
any company engaged in oil and gas operations.

Environmental Matters

Operations  of the  Company  are subject to  numerous  and  constantly  changing
federal,  state  and local  laws and  regulations  governing  the  discharge  of
materials  into  the   environment  or  otherwise   relating  to   environmental
protection.  These laws and  regulations  may require the acquisition of certain
permits,  restrict or prohibit  certain types,  quantities and  concentration of
substances that can be released into the environment in connection with drilling
and  production,  restrict or prohibit  drilling  activities  that could  impact
wetlands,  endangered or threatened species or other protected natural resources
and impose  substantial  liabilities for pollution  resulting from the Company's
operations.  Such laws and  regulations may  substantially  increase the cost of
exploring for,  developing or producing oil and gas and may prevent or delay the
commencement or continuation of a given project. In the opinion of the Company's
management,  the Company is in substantial  compliance  with current  applicable
environmental  laws and regulations  and it is not anticipated  that the Company
will be required in the near future to expend  amounts  that are material in the
aggregate  to its  overall  operations  by  reason  of  environmental  laws  and
regulations.   Nevertheless,   changes  in  existing   environmental   laws  and
regulations or in the interpretations thereof could have a significant impact on
the  operating  costs of the  Company,  as well as the oil and gas  industry  in
general.  For instance,  legislation  has been proposed in Congress from time to
time that would reclassify  certain oil and gas production  wastes as "hazardous
wastes",  which  reclassification  would make exploration and production  wastes
subject  to much more  stringent  and costly  handling,  disposal  and  clean-up
requirements.  State initiatives to further regulate the disposal of oil and gas
wastes and naturally occurring radioactive materials are also pending in certain
states and these various initiatives could have a similar impact on the Company.

The  Comprehensive  Environmental  Response,  Compensation,  and  Liability  Act
("CERCLA"), also known as "Superfund" law, imposes liability,  without regard to
fault or the legality of the  original  conduct,  on certain  classes of persons
that  are  considered  to  have  contributed  to  the  release  of a  "hazardous
substance" into the environment.  These persons include the owner or operator of
the disposal  site where the release  occurred and  companies  that  disposed or

                                       -4-

<PAGE>



arranged for the disposal of the hazardous substances found at the site. Persons
who are or were  responsible for releases of hazardous  substances  under CERCLA
may be subject to joint and several  liability  for the costs of cleaning up the
hazardous  substances  that  have been  released  into the  environment  and for
damages to natural resources,  and it is not uncommon for neighboring landowners
and other third parties to file claims for personal  injury and property  damage
allegedly caused by the hazardous substances released into the environment.  The
Company is only able to  directly  control  the  operations  of those wells with
respect to which it acts as  operator.  Notwithstanding  the  Company's  lack of
control over wells  operated by others,  the failure of an operator of a well in
which  the  Company   owns  a  working   interest  to  comply  with   applicable
environmental  regulations may, in certain  circumstances,  be attributed to the
Company. As of the date of this report, the Company has no material  commitments
for capital expenditures to comply with existing environmental requirements.

Employees

At December  31,  1999,  the Company  employed 10 persons  whose  functions  are
associated  with  management,  operations and mineral  management,  engineering,
geology,  land  and  gas  contract  administration,   accounting  and  financial
planning,  and  administration  and data processing.  The Company  considers its
relations with its employees to be excellent.

ITEM 2.  DESCRIPTION OF PROPERTY

General

The Company owns interests in 1,516 producing properties, including both working
interests  and royalty  interests,  located in 15 states.  (For further  details
regarding these properties,  see "Producing Wells" included  elsewhere  herein.)
The Company is engaged in leasing of its  minerals  as well as the  exploration,
production  and  sale  of  natural  gas,  condensate  and  crude  oil  from  its
properties.

The  Company has an  extensive  ownership  of  nonproducing  perpetual  minerals
located in 16 states, including North Dakota, Oklahoma, Michigan, Texas, Montana
and Mississippi.  Such ownership  comprises 3,336 properties covering 93,651 net
acres. The Company may from time-to-time  participate in exploration  activities
on certain of these  properties,  but  generally  sell leases on them to others,
retaining a royalty  interest in whatever  production may be derived  therefrom,
thereby  eliminating  the risk in the  exploration  of such  properties.  At the
present time, there are  approximately  27 properties  leased to others for such
exploration comprising 955 net acres.

In  addition,  the  Company  owns  a  leasehold  interest  in  135  nonproducing
properties  comprising  9,022 net acres.  These  properties  have varying  lease
terms, with most expiring in the next five years. These leasehold  interests are
located in ten states, including Montana, Oklahoma and Texas.

Current Activities

In 1999, the majority of the Company's drilling and development  activities were
located in the Arkoma Basin of Oklahoma  and the Permian  Basin of Texas and New
Mexico.  Most drilling the last few years has been  developmental in nature (94%
in 1999 and 63% in 1998) on both oil and gas  properties.  In 1999,  there  were
nine oil wells and nine gas wells drilled; in 1998 there were nine oil wells and
15 gas wells drilled.

The primary focus of the Company's  drilling and development  activities  during
the next 12 to 18 months will continue to be in the Arkoma Basin of Oklahoma and
the Permian Basin of New Mexico and Texas.  During 2000, the Company's  drilling
activities will continue to be primarily developmental in nature. The Company is
presently  committed to participate in the drilling (or  completion) of 16 (3.63
net) wells in 2000.  The  Company  expects  to  operate  six (2.72 net) of these
wells.  In 2000, the Company has budgeted $5.5 million for drilling  activities,
of which approximately $3 million has been committed.


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The Company also continues to seek out attractive  property  acquisitions and in
1999 acquired two producing properties at auction.

Drilling Activity

During  the  periods  indicated,  the  Company  drilled or  participated  in the
drilling of the following exploratory and development wells:


                                           Years ended December 31,
                                     1999            1998           1997*
                                Gross     Net   Gross     Net   Gross    Net
                                -----    ----   -----    ----   -----   ----
Exploratory:
 Productive...................      1     .53       4     .50       0    .00
 Nonproductive................      0     .00       5     .59       5    .82
                                   --    ----      --    ----      --    ---
   Total......................      1     .53       9    1.09       5    .82
                                   ==    ====      ==    ====      ==    ===
Development:
 Productive...................     16    2.51      14    2.25      14    .50
 Nonproductive................      1     .12       1     .18       6    .75
                                   --    ----      --    ----     ---   ----
   Total......................     17    2.63      15    2.43      20   1.25
                                   ==    ====      ==    ====      ==   ====
Total:
 Productive...................     17    3.04      18    2.75      14    .50
 Nonproductive................      1     .12       6     .77      11   1.57
                                  ---    ----      --    ----      --   ----
    Total.....................     18    3.16      24    3.52      25   2.07
                                  ===    ====     ===    ====      ==   ====

     The above well  information  excludes wells in which the Company has only a
royalty  or  mineral  interest.

*    1997 information is that of The Home-Stake Royalty Corporation prior to the
     merger, as explained on Page 1 of this Annual Report on Form 10-KSB.

At December 31, 1999, the Company was  participating in the drilling of one (.25
net) well  which  was  completed  as a gas well  producing  375 Mcf per day.  In
addition,  the Company participated in six (.18 net) additional wells subsequent
to year-end,  two of which have been completed as producing oil wells and one as
a producing gas well. The other three wells are in various stages of completion.

Operating Activities

The Company  operates 49 producing  wells and seven  service wells located in 10
separate  fields,  which  includes one  waterflood  consisting of nine producing
wells and two service wells. In addition, the Company has a non-operator working
interest ownership in approximately 270 other producing properties.


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The  Company  operates  wells in two  fields  in  Dawson  County,  Montana.  The
operations  in the  Glendive  Field  consist  of 12  producing  wells  and  four
saltwater  disposal wells. The Gas City Field is unitized for secondary recovery
operations and consists of nine producing wells and two water  injection  wells.
Production is primarily  from the Red River  formation of Ordovician age in both
of these fields.

Operations  in the Golden Trend Field in Grady and McClain  counties in Oklahoma
consist of 17 producing wells completed in four formations of Pennsylvanian  and
Ordovician age rock.

The  Company's  operations in the Arkoma Basin of Eastern  Oklahoma  consists of
five  producing  gas wells located in the  Hartshorne  South and Kinta Fields in
Latimer County and the Ti North and Ashland Fields in Pittsburg County.

Another of the  Company's  producing  fields is the West  Cement  Field in Caddo
County,  Oklahoma.  At present,  there is one  producing  well  completed in the
Medrano formation of Pennsylvania age rock.

The Company  also  operates  one  producing  well and one  drilling  well in the
Champmon  Strawn Field in Gaines  County,  Texas and four wells and one drilling
well in the Eunice Dome Field in Lea County, New Mexico.

Producing Wells

The  following  table sets forth certain  information  relating to the Company's
producing properties. Because the Company owns the mineral interests in numerous
producing  wells,  it does not have current  information on the numbers of wells
drilled  by  the  owners  of  the  leasehold  interests  for  these  properties.
Accordingly,   the  Company   keeps  track  of  its  royalty   interests   on  a
property-by-property  rather than a well-by-well  basis, and the following table
sets forth the number of properties  upon which there are one or more  producing
wells. Net wells refers to the total number of wells in which the Company has an
interest, multiplied by the Company's working interest percentage in the wells.


                      Producing Properties as of December 31, 1999
-------------------------------------------------------------------------------
                                                               Gross     Net
                                                               -----     ---
Working interests -       Oil.............................      106          30
                          Gas.............................      215          22
Royalty interests -       Oil.............................      696         (1)
                          Gas.............................      499         (1)


(1)  The term "net  wells" is not  applicable  to a royalty  interest  since the
     Company has no working interest in the applicable well.



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<PAGE>



Acreage

As previously noted, the Company owns an interest in 1,516 producing properties,
including royalty interests in 1,195 properties (comprising approximately 28,160
net  acres) and  working  interests  in 321  properties  (comprising  15,100 net
acres).  The following  table sets forth the Company's gross and net oil and gas
leasehold acreage as of December 31, 1999.


                         Acreage as of December 31, 1999
-------------------------------------------------------------------------
                                                  Gross            Net
                                                  -----            ---
Developed Acreage:
  Leasehold..........................               73,203         13,460
  Mineral............................              300,482         29,778
Undeveloped Acreage:
  Leasehold..........................               20,708          9,022
  Mineral............................              637,374         93,651
                                                ----------     ----------
Total Acreage                                    1,031,767        145,911
                                                ==========     ==========


Proved Reserves

The following table reflects the proved reserves and proved developed  producing
reserves,  the future net revenues and the present  value of future net revenues
from such  reserves  of the Company at December  31,  1999 as  estimated  by the
Company.  The quantities of the Company's proved reserves of oil and natural gas
presented below,  representing developed and undeveloped reserves,  include only
those amounts which the Company reasonably expects to recover in the future from
known oil and gas reservoirs under existing  economic and operating  conditions.
Proved  developed  producing  reserves are limited to those quantities which are
recoverable  commercially from existing wells at current prices and costs, under
existing regulatory  practices and with existing  technology.  Accordingly,  any
changes in product  prices,  operating  and  developmental  costs,  regulations,
technology or other factors could  significantly  increase or decrease estimates
of the Company's  proved  developed  producing  reserves.  The Company's  proved
undeveloped  reserves include only those quantities which the Company reasonably
expects to recover from the drilling of new wells based on  geological  evidence
from  directly  offsetting  wells.  The risks of recovering  these  reserves are
higher  from  both  geological  and  mechanical  perspectives  than the risks of
recovering developed reserves. The estimates of the Company's proved reserves do
not include proved  undeveloped  reserves  attributable to the Company's royalty
interests.  Although the Company believes there are proved undeveloped  reserves
associated with these royalty interests, it lacks the geological and geophysical
data necessary to evaluate such reserves.  Furthermore, the reserve estimates do
not  include  reserves  whose  estimates  of  recoverability  are less  precise,
commonly  referred to as "probable" or "possible"  reserves.  The Company has no
reserves outside the continental United States.

                                       -8-

<PAGE>




                Proved Oil and Gas Reserves at December 31, 1999
--------------------------------------------------------------------------------
                                                                  Present Value
                                 Oil        Gas       Future Net    of Future
                                (Bbls)      (Mcf)      Revenues  Net Revenues(1)
                               --------    -------    ----------   ------------
Proved reserves.............  5,650,452  42,840,578  $165,212,998  $ 85,055,731
Proved developed producing
   reserves.................  3,845,810  25,446,938  $106,118,532  $ 59,251,409
============================ ==========  ==========  ============= ============

(1)  Present value of future net revenues before deducting the impact of federal
     and state income taxes (discounted at 10%).


The future net revenues are determined by using  estimated  quantities of proved
reserves and proved developed  producing  reserves and the periods in which they
are expected to be developed  and produced  based on December 31, 1999  economic
conditions. The estimated future production is priced based on the actual prices
in effect at December 31, 1999.  The resulting  estimated  future gross revenues
are reduced by estimated future costs to develop and produce the proved reserves
based on December 31, 1999 cost levels,  but not for debt  service,  general and
administrative  expense and income taxes. For additional  information concerning
the  discounted  future net revenues to be derived  from these  reserves and the
disclosure  of the  standardized  measure  information  in  accordance  with the
provisions  of  Statement  of  Financial   Accounting   Standards  No.  69,  see
"Supplementary  Information on Oil and Gas Producing Activities  (unaudited)" at
page F-13 herein.


The reserve data set forth in this report  represents  only  estimates.  Reserve
engineering is a subjective process of estimating  underground  accumulations of
crude oil and  natural  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  may vary.  In addition,  results of drilling,
testing  and  production  subsequent  to the  date of an  estimate  may  justify
revision of such estimate. Accordingly,  reserve estimates often differ from the
quantities  of crude oil and  natural  gas that are  ultimately  recovered.  The
meaningfulness  of such  estimates is highly  dependent upon the accuracy of the
assumptions  upon which  they were  based.  Estimates  of the  Company's  proved
reserves  have not been filed  with,  or  included  in  reports  to any  Federal
authority or agency, other than the Securities and Exchange Commission.




                                       -9-

<PAGE>



Oil and Gas Production, Sales Prices and Production Costs

The  following  table sets forth  information  with  respect to  production  and
average  product  prices  attributable  to the Company's  royalty  interests and
working  interests in producing  properties,  and, with respect to properties in
which the Company  owns a working  interest,  the  production  costs  (including
production  taxes  and  transportation  charges)  per  equivalent  barrel of oil
produced for the periods indicated.


                                Royalty Interests

                                   1999          1998          1997*
                               ------------  ------------  ------------

Production:
   Oil (Bbls).................       92,434       104,536        55,014
   Gas (Mcf)..................      627,088       642,773       376,703

Average Sales Prices:
   Oil (per Bbl)..............       $16.86        $12.14        $18.97
   Gas (per Mcf)..............         2.16          2.04          2.52
============================== ============  ============  ============


                                Working Interests

                                     1999          1998         1997*
                               ------------  ------------ -------------

Production:
   Oil (Bbls).................      257,988       273,340       155,983
   Gas (Mcf)..................    1,995,167     1,846,862       831,761

Average Sales Prices:
   Oil (per Bbl)..............       $16.95        $12.10        $18.74
   Gas (per Mcf)..............         2.05          1.94          2.33

Average direct operating costs
   per barrel of oil
   equivalent(1)..............        $5.13         $5.22         $6.51

(1)  This item relates only to working  interests  since royalty  owners are not
     liable for operating costs.  Barrels of oil equivalent are determined using
     the  ratio of six Mcf of gas to one  barrel  of crude  oil,  condensate  or
     natural gas liquids. See Item 6. Management's  Discussion and Analysis, for
     further discussion of these costs.

*   1997 information is that of The Home-Stake Royalty  Corporation prior to the
    merger, as explained on Page 1 of this Annual Report on Form 10-KSB.






ITEM 3. LEGAL PROCEEDINGS

The  Company is involved in various  minor legal  actions  arising in the normal
course of business. In the opinion of management, the Company's liabilities,  if
any, in these matters will not have a material effect on the Company's financial
position, results of operations or cash flows.


                                      -10-

<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to the Company's  stockholders during the fourth
quarter of the fiscal year ended December 31, 1999.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

As of December  31, 1999,  the Company had  approximately  465 known  holders of
record of its common stock . Prior to February 12, 1998,  the  Company's  common
stock was  listed in the  "pink  sheets"  published  by the  National  Quotation
Bureau.  Trades were limited and,  accordingly,  there was no established public
trading market for the stock as defined in Item 201(a)(1) of SEC Regulation S-B.
On  February  12,  1998  the  Company's   common  stock  began  trading  on  the
Over-the-Counter Bulletin Board and on May 11, 1998, began trading on the Nasdaq
SmallCap  Market under the symbol "HSOG".  The table below reflects the high and
low sales prices per share for the Company's  common stock as reported on either
the Over-the-Counter Bulletin Board or the Nasdaq SmallCap Market for the period
indicated.


                                                  1998
                                                  ----
              Quarter                      Low            High
              -------                      ---            ----
First...............................     $ 4.500        $ 6.250
Second..............................     $ 5.250        $ 8.000
Third...............................     $ 5.375        $ 6.750
Fourth..............................     $ 4.625        $ 5.750

                                                  1999
                                                  ----
First...............................     $ 4.000        $ 5.000
Second..............................     $ 3.250        $ 4.500
Third...............................     $ 4.125        $ 4.625
Fourth..............................     $ 4.625        $ 7.000

                                      -11-
<PAGE>

The following  table sets forth the per share amount of cash dividends  declared
and paid by the Company on its common stock during the periods indicated.


                                             Cash Dividends
                                            Declared and Paid
                                              Per Share of
                                              Common Stock

      Years ended December 31,             1999           1998

First Quarter........................      $ .02         $  .02
Second Quarter.......................        .02            .02
Third Quarter........................        .02            .02
Fourth Quarter.......................        .03            .02

On  February  18,  2000 the  Company's  Board of  Directors  increased  the cash
dividend  for the first  quarter of 2000 to $ .035 per share.  The  Company  has
historically  paid quarterly cash dividends to its  stockholders.  The Company's
Board of Directors  has adopted a dividend  policy that provides for the payment
of  quarterly  dividends,   dependent  on  numerous  factors,  including  future
earnings,   anticipated  capital  requirements,   the  financial  condition  and
prospects of the Company, and such other factors as the Board may deem relevant.
In addition,  future  dividends may be  restricted  pursuant to the terms of the
loan agreement between the Company and Bank of Oklahoma,  N.A. See "Management's
Discussion and Analysis" below for a description of these restrictions.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

The  following  discussion  should  be read in  conjunction  with the  Company's
financial statements and notes thereto included elsewhere herein.

Results of Operations

Net income for 1999  increased to $2,374,632  from a loss of $4,732,213 in 1998.
The factors contributing to this increase in earnings are as follows:

Crude oil sales  increased  $1,355,750  (30%),  primarily due to the increase in
crude oil prices.  The average sales price per barrel  increased 40% from $12.11
in 1998 to $16.93 in 1999.  Production  decreased  7% to 350,422  barrels due to
natural  depletion of existing reserves and the loss of production on properties
sold, partially offset by production from new discoveries late in the year.

Natural gas sales  increased 11% ($550,009)  primarily due to the combination of
increased  sales  volumes and average  sales  prices.  Natural gas sales volumes
increased  132,625 Mcf due primarily to higher  production from  discoveries and
acquisitions  during 1999 and the last half of 1998.  The average sales price of
the  Company's  natural gas increased 6% from $1.96 per Mcf in 1998 to $2.08 per
Mcf in 1999.


                                      -12-

<PAGE>




Gains on sales of assets  increased  $201,786  in 1999.  The Company had several
property sales in 1999, including its interest in the outside operated Pine Unit
on which it recorded a gain of $142,000. The Company had no significant property
sales in 1998.

Production  expenses remained  essentially  unchanged.  Lease operating expenses
deceased  $226,483 (9%) due primarily to lower  maintenance  costs on several of
the Company's  properties.  This decrease was offset by higher  production taxes
which  increased  $227,610  as a result of the higher  crude oil and natural gas
sales described above.

Exploration  expenses decreased  $1,276,978.  Dry hole costs decreased $706,438;
the Company  participated in only one dry hole in 1999.  Condemned and abandoned
property expenses were $570,540 lower in 1999. Prior year's expense included the
abandonment of certain  nonproducing  leasehold costs on acreage the Company was
unable to drill due to lower product prices.

General and  administrative  expense  decreased  18%  ($404,314)  in 1999.  This
decrease is primarily  attributable to lower  personnel  related costs resulting
from personnel lay-offs in late 1998. In addition, 1998 expense included $62,771
in costs related to the merger of The Home-Stake  Royalty  Corporation  with and
into the Company on December 31, 1997. There were no comparable costs in 1999.

Depreciation,  depletion and  amortization  expense  decreased  $2,547,763.  The
carrying  values  of  the  Company's   properties  (original  costs  reduced  by
accumulated  depreciation,  depletion and  amortization)  are amortized over the
estimated property lives. In 1998, the Company recorded a significant impairment
adjustment  in the  carrying  value  of its  producing  oil and  gas  properties
recorded (described below).  Accordingly,  the future rates of amortization were
decreased, resulting in lower depreciation, depletion and amortization expense.

Impairment of producing oil and gas properties decreased $4,296,695 in 1999. The
carrying value of the Company's  properties are assessed for possible impairment
whenever facts and  circumstances  indicate such amounts may not be recoverable,
based on estimated future net cash flows.  During 1998, prices for crude oil and
natural gas decreased  significantly.  Accordingly,  the  estimated  future cash
flows from producing properties decreased significantly in 1998. As a result, in
1998 the Company recorded an impairment  adjustment in the carrying value of its
producing oil and gas properties in the amount of $4,775,867.

Financial Condition and Liquidity

The Company's operating activities have traditionally been self-financed through
internally  generated cash flows.  The principal uses of cash flows have been to
fund the Company's  exploration and production activities and for the payment of
dividends to stockholders.  The use of borrowed funds has generally been limited
to the  acquisition  of producing oil and gas properties  where future  revenues
from such purchases are expected to fund the debt.

In 1999,  the  Company  spent  $1.7  million  for  exploration  and  development
activities and $875,000 on  acquisitions.  The Company has budgeted $5.5 million
for exploration and development  activities in 2000, of which  approximately  $3
million has been committed.

The working  capital  deficit at December 31, 1999 was  approximately  $700,000.
Despite this deficit,  the Company's  working  capital and internally  generated
cash flows  from  operations  are  expected  to be  sufficient  to  finance  the
Company's  note  payments  and  budgeted  2000   exploration   and   development
activities.  In  addition,  the  Company's  line of  credit  described  below is
expected to be extended into 2001.

During  1999,  the  Company  made note  payments  of  $4,470,000,  reducing  its
outstanding  bank debt to $2.5  million at  year-end.  On November 8, 1999,  the
Company  entered into a new credit  facility with a different  bank. The Company
borrowed  $3.4 million  (reduced to $2.5 million at December 31, 1999) under the
long-term  loan  provisions of that facility which  requires  monthly  principal
payments of $100,000,  plus  interest at prime less 3/4% (7 3/4% at December 31,
1999).  This credit  facility also provides for a revolving term  line-of-credit
until November 30, 2000, in the amount of $5 million, requiring monthly payments
of interest at prime less 1%. There are no amounts borrowed under this revolving
term  line-of-credit.  This credit  facility  includes  certain  covenants which
require,  among other things,  that the Company  maintain a minimum net worth of
not less than $14 million. In addition,  the Company's annual cash dividends are
limited  to 15% of cash  from  operations,  less  scheduled  note  payments.  In

                                      -13-

<PAGE>



connection  with  the line of  credit,  the  Company  pays a  commitment  fee of
three-eights of one percent (3/8%) per annum on the unused portion of the line.

Average direct  operating  costs per barrel of oil equivalent are dependent upon
several factors, including principally the nature of a company's operations. For
example,  gas  properties  are  generally  more  economical  to operate than oil
properties.  Likewise,  oil  wells in a form of  primary  recovery  (flowing  or
pumping)  are more  economical  to operate than oil wells in a form of secondary
recovery,  such  as  waterfloods.   The  Company  has  large  interests  in  two
waterfloods  and  one  water-drive   operation.   These  properties  contributed
approximately  32% of the  total  working  interest  barrels  of oil  equivalent
production  in 1999 but were  responsible  for  approximately  59% of the direct
operating  costs.  Excluding these waterflood  properties,  the Company's direct
operating costs per barrel of oil equivalent in 1999 was $3.10.

The Company  projects  future  earnings and  believes it will fully  realize its
deferred  tax  assets  and,  accordingly,  no  valuation  allowances  have  been
provided.  In management's  opinion, the deferred tax assets will be realized as
reductions in future income taxes payable or by utilizing available tax planning
strategies.  Uncertainties  that may affect the  ultimate  realization  of these
assets  include  future  product  prices,  costs and tax rates.  Therefore,  the
Company will periodically review these factors and determine whether a valuation
allowance has become necessary.

Year 2000 Readiness

The Company began  addressing the impact of Year 2000 (Y2K) on its operations in
mid 1997. This problem existed for certain  computer systems due to the use of a
two digit  year in most  computer  software.  If left  unchanged,  beginning  on
January 1, 2000, those computers would have interpreted the year as 1900 instead
of 2000.  Although the primary  affects of this problem were related to computer
systems,  the problem had the potential of affecting other office equipment such
as copiers, facsimile machines, telephone system, postage metering equipment and
any other  equipment  or devices  which might  contain  date-dependent  embedded
computer processor chips.

All Y2K compliance modifications and confirmations were done by existing Company
personnel in the ordinary  performance  of their duties,  without  incurring the
expense of outside consultants or additional employees. The Company is unable to
estimate its internal costs associated with its Y2K readiness efforts.

The Company did not experience any significant  adverse Year 2000 effects on its
systems and operations and does not expect any in the future.

The above information is designated as "Year 2000 Readiness Disclosure" pursuant
to the Year 2000  Information  and  Readiness  Disclosure  Act,  Public  Law No.
105-271,  1998.  The Year 2000  Readiness  Disclosure  Act does not insulate the
Company  from  liability  under the  Federal  securities  laws with  respect  to
disclosures relating to Y2K information.

Inflation

In recent years  inflation  has not had a  significant  impact on the  Company's
operations or financial  condition.  The general economic pressures limiting oil
and gas prices in recent years have generally been  accompanied by corresponding
downward pressure on costs to develop and operate oil and gas properties as well
as the costs of drilling and  completing  wells.  The impact of inflation on the
Company in the future  will  depend on the  relative  increases,  if any, in the
selling price of oil and gas and in the  Company's  operating,  development  and
drilling costs.

Forward Looking Statements

Certain  statements  included in this report which are not historical  facts are
"forward looking  statements",  including statements with respect to oil and gas
reserves,  the  number  and  location  of wells to be  drilled,  future  capital
expenditures  (including  the amount and nature  thereof),  anticipated  date of
repayment of bank debt,  extension of existing line of credit, Y2K readiness and
other  such  matters.  These  forward  looking  statements  are based on current

                                      -14-

<PAGE>



expectations,  estimates,  assumptions and beliefs of management; and words such
as  "expects",  "believes",   "anticipates",   "intends",  "plans"  and  similar
expressions  are intended to identify  such forward  looking  statements.  These
forward looking statements involve risks and uncertainties,  including,  but not
limited to:  dependence upon the prices for oil and natural gas which prices are
subject to significant  fluctuations in response to relatively  minor changes in
supply and demand for such products, market uncertainty, political conditions in
oil producing regions,  domestic and foreign government  regulations,  the price
and  availability  of  alternative   fuels  and  a  variety  of  other  factors;
competition in the  acquisition  of oil and gas properties and the  development,
production  and marketing of oil and natural gas;  operating  hazards  typically
associated with the exploration,  development,  production and transportation of
oil and natural gas; federal,  state and local laws relating to the exploration,
development,  production  and  marketing  of  oil  and  natural  gas,  including
environmental  and safety matters;  changes in laws and  regulations;  and other
factors,  most of which are beyond  the  control  of the  Company.  Accordingly,
actual results and  developments  may differ  materially from those expressed in
the forward  looking  statements.  The Company  assumes no  obligation to update
publicly any forward looking statements, whether as a result of new information,
future events or otherwise.

ITEM 7. FINANCIAL STATEMENTS


The  annual  financial  statements  required  by this  Item  begin  at page  F-1
following page 18 hereof.



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

There has been no change in accountants and no  disagreements  on any matters of
accounting principles or practices, financial statement disclosures, or auditing
scope or procedures.

                                    PART III

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

The information required by this Item is incorporated by reference from sections
of the  Company's  definitive  Proxy  Statement  for its 2000 Annual  Meeting of
Stockholders  (the  "Proxy   Statement")   entitled   "Election  of  Directors",
"Executive  Officers of the  Company" and "Section  16(a)  Beneficial  Ownership
Reporting Compliance".

ITEM 10. EXECUTIVE COMPENSATION

The  information  required by this Item is  incorporated  by reference  from the
section of the Proxy Statement entitled "Executive Compensation".

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required by this Item is  incorporated  by reference  from the
section of the Proxy Statement  entitled  "Principal  Stockholders  and Security
Ownership of Management".

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required by this Item is  incorporated  by reference  from the
section of the Proxy  Statement  entitled  "Certain  Relationships  and  Related
Transactions".





                                      -15-

<PAGE>



ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits:

The  following  documents  are included as exhibits to this Form  10-KSB.  Those
exhibits  below  incorporated  by reference  herein are indicated as such by the
information  supplied  in  the  parenthetical  thereafter.  If no  parenthetical
appears after an exhibit, such exhibit is filed herewith.

   Exhibit
   Number    Description
   ------    -----------
     3.1  Amended  and  Restated  Certificate  of  Incorporation  of the Company
          (filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-QSB
          for the quarter ended June 30, 1998).

     3.2  Bylaws  of the  Company,  as  amended  (filed  as  Exhibit  3.2 to the
          Company's  Annual  Report on Form 10- KSB for the year ended  December
          31, 1997).

     4.1  Rights  Agreement  dated as of  January 3, 2000,  by and  between  the
          Company and UMB Bank, N.A., as Rights Agent,  (filed as Exhibit 4.1 to
          the  Company's  Registration  Statement  on Form 8-A  dated  March 22,
          2000).

     4.2  Certificate of Designations of Series A Junior Participating Preferred
          Stock of the Company.

   *10.1  Amended  and  Restated  Home-Stake  Oil &  Gas  Company  Key  Employee
          Incentive  Bonus Plan (filed as Exhibit 10.1 to the  Company's  Annual
          Report on Form 10-KSB for the year ended December 31, 1997).

   *10.2  Amended and Restated  Employment  Agreement  by and between  Robert C.
          Simpson and the Company dated November 4, 1999.

   *10.3  Employment  Agreement by and between Chris K. Corcoran and the Company
          dated November 4, 1999.

   *10.4  Amended and Restated  Home-Stake  Oil & Gas Company  Change in Control
          Severance Pay Plan, dated November 4, 1999.

   *10.5  Home-Stake  Oil & Gas  Company  1997  Incentive  Stock Plan  (filed as
          Exhibit  10.4 to the  Company's  Annual  Report on Form 10-KSB for the
          year ended December 31, 1997).

   *10.6  Amendment  dated  November 4, 1999 to the Home-Stake Oil & Gas Company
          1997 Incentive Stock Plan.

   *10.7  Form of  Indemnity  Agreement  between the Company and each  Director,
          dated May 14, 1996 (filed as Exhibit 10.1 to the  Company's  Quarterly
          Report on Form 10-QSB for the quarter ended June 30, 1996).

    10.8  Special Loan Agreement  dated November 8, 1999 between the Company and
          Bank of  Oklahoma,  N.A.  (filed  as  Exhibit  10.1  to the  Company's
          Quarterly  Report on Form 10-QSB,  for the quarter ended September 30,
          1999).

    10.9  First  Amendment  to Special  Loan  Agreement  dated  February 9, 2000
          between the Company and Bank of Oklahoma, N.A.

    23    Consent of Independent Auditors

    27    Financial Data Schedule.


         * Management contract or compensatory plan or arrangement.


                                      -16-

<PAGE>



    (b)  Reports on Form 8-K:

       A report on Form 8-K dated December 22, 1999, was filed during the fourth
       quarter of the fiscal year ended December 31, 1999,  reporting under Item
       5 the Company's  adoption of a new shareholder rights plan to replace the
       Company's prior plan that expired on January 3, 2000.

                                      -16-

<PAGE>


                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this Form 10-KSB to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                     HOME-STAKE OIL & GAS COMPANY



Date:    March 29, 2000              By:  /s/ Robert C. Simpson
                                         ----------------------
                                          Robert C. Simpson
                                          Chairman of the Board, Chief Executive
                                          Officer and President

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

        Signature                       Title                         Date
----------------------------   --------------------------------  --------------


 /s/ Robert C. Simpson         Director, Chairman of the Board,  March 29, 2000
----------------------------   Chief Executive Officer and
Robert C. Simpson              President
                               (Principal Executive Officer)

 /s/ Chris K. Corcoran         Director, Executive Vice          March 29, 2000
----------------------------   President, and Chief Financial
Chris K. Corcoran              Officer
                               (Principal Financial and
                               Accounting Officer)

 /s/ L.W. Allegood             Director                          March 29, 2000
----------------------------
L.W. Allegood

 /s/ Larry F. Grindstaff       Director                          March 29, 2000
----------------------------
Larry F. Grindstaff

 /s/ Ronald O. Gutman          Director                          March 29, 2000
----------------------------
Ronald O. Gutman

 /s/ James L. Houghton         Director                          March 29, 2000
----------------------------
James L. Houghton

 /s/ Joseph J. McCain, Jr.     Director                          March 29, 2000
----------------------------
Joseph J. McCain, Jr.

 /s/ I. Wistar Morris, III     Director                          March 29, 2000
----------------------------
I. Wistar Morris, III


                                      -17-

<PAGE>
                          HOME-STAKE OIL & GAS COMPANY

                          INDEX TO FINANCIAL STATEMENTS



Covered by Report of Independent Auditors

Report of Independent Auditors....................................        F-2
Balance Sheets as of December 31, 1999 and 1998...................        F-3
Statements of Operations and Retained Earnings for the years
  ended December 31, 1999 and 1998................................        F-4
Statements of Cash Flows for the years ended December 31,
  1999 and 1998...................................................        F-5
Notes to Financial Statements.....................................        F-6


Not Covered by Report of Independent Auditors

Supplemental Information on Oil and Gas Producing Activities for
  the years ended December 31, 1999 and 1998 (unaudited)..........        F-12


                                       F-1

<PAGE>



                         REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and Stockholders
Home-Stake Oil & Gas Company

We have audited the  accompanying  financial  statements of Home-Stake Oil & Gas
Company listed in the accompanying index to financial statements (Item 7). 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. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  listed in the accompanying  index to
financial  statements  (Item 7) present fairly,  in all material  respects,  the
financial  position of  Home-Stake  Oil & Gas  Company at December  31, 1999 and
1998,  and the results of its  operations  and its cash flows for the years then
ended in conformity with accounting  principles generally accepted in the United
States.


                                                         /s/ ERNST & YOUNG LLP

Tulsa, Oklahoma
March 24, 2000


                                       F-2

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                                 BALANCE SHEETS
                           December 31, 1999 and 1998


                                     ASSETS

                                                          1999         1998
                                                          ----         ----
Current assets:
  Cash and cash equivalents......................... $     84,458  $    212,031
  Accounts receivable...............................    1,746,062     1,476,995
  Prepaid expenses..................................      140,810       238,253
                                                     ------------  ------------
         Total current assets.......................    1,971,330     1,927,279

Property and equipment, at cost:
  Producing oil and gas leases (working interests)..   38,575,791    37,054,044
  Producing oil and gas royalties...................    8,976,185     9,006,126
  Nonproducing oil and gas properties...............    1,749,102     1,494,000
  Office equipment and other........................      520,160       526,176
                                                     ------------  ------------
                                                       49,821,238    48,080,346
  Less accumulated depreciation,
     depletion and amortization.....................   26,856,930    24,727,189
                                                     ------------  ------------
         Net property and equipment.................   22,964,308    23,353,157

Other assets........................................      247,382       237,781
                                                     ------------  ------------
                                                     $ 25,183,020  $ 25,518,217

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued liabilities.......... $  1,097,442  $    897,720
  Income taxes payable..............................      368,353             -
  Current notes payable (Note 2)....................    1,200,000     1,945,000
                                                    -------------  ------------
         Total current liabilities..................    2,665,795     2,842,720
Long-term notes payable (Note 2)....................    1,300,000     4,290,000
Deferred income taxes (Note 3)......................    3,362,953     2,914,813

Stockholders' equity (Note 6):
  Preferred  stock,  $1 par value -  2,000,000
     shares  authorized;  none issued
  Common stock, $ .01 par value - 12,000,000
     shares authorized, 4,597,363 shares
     issued - 1999, 4,517,363 shares
     issued - 1998............................             45,974        45,174
  Additional paid-in capital.........................  15,855,821    15,460,621
  Retained earnings..................................   3,260,533     1,272,945
                                                     ------------  ------------
                                                       19,162,328    16,778,740
  Less treasury stock, at cost - 243,536 shares......  (1,308,056)   (1,308,056)
                                                     ------------  ------------
         Total stockholders' equity..................  17,854,272    15,470,684
                                                     ------------  ------------
                                                     $ 25,183,020  $ 25,518,217

                             See accompanying notes.


                                       F-3

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                 STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                     Years ended December 31, 1999 and 1998




                                                         1999          1998
                                                         ----          ----
Revenues:
     Oil and gas sales.............................. $ 11,498,813  $  9,565,933
     Gain on sales of assets........................      211,733         9,947
     Other income...................................      233,693       413,728
                                                     ------------  ------------
                                                       11,944,239     9,989,608
Costs and expenses:
     Production.....................................    3,236,123     3,234,996
     Exploration....................................       85,562     1,362,540
   General and administrative.......................    1,832,871     2,237,185
     Depreciation, depletion and amortization.......    2,343,931     4,891,694
   Impairment of producing oil and gas properties...      479,172     4,775,867
     Interest.......................................      378,751       375,800
     Property and other taxes.......................      172,616       262,438
                                                     ------------  ------------
                                                        8,529,026    17,140,520
Income (loss) before provision for income taxes.....    3,415,213    (7,150,912)

Provision for (benefit from) income taxes (Note 3):
     Current........................................      592,441      (125,964)
     Deferred.......................................      448,140    (2,292,735)
                                                     ------------  ------------
                                                        1,040,581    (2,418,699)
                                                     ------------  ------------
Net income (loss)...................................    2,374,632    (4,732,213)

Retained earnings at beginning of year..............    1,272,945     6,359,862

Cash dividends ($ .09 per share - 1999,
   $ .08 per share - 1998)..........................     (387,044)     (354,704)
                                                     ------------  ------------

Retained earnings at end of year.................... $  3,260,533  $  1,272,945
                                                     ============  ============

Weighted average number of shares outstanding
     Basic..........................................    4,280,622     4,460,891
                                                        =========     =========
     Diluted........................................    4,287,064     4,460,891
                                                        =========     =========

Net income (loss) per common share -
     basic and diluted..............................        $ .55        $(1.06)
                                                            =====        ======

                             See accompanying notes.



                                       F-4

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                            STATEMENTS OF CASH FLOWS
                     Years ended December 31, 1999 and 1998


                                                         1999          1998
                                                         ----          ----
Operating activities:
  Oil and gas sales, net of production taxes........ $ 10,020,323  $  9,562,002
  Other.............................................      233,693       413,728
                                                     ------------  ------------
                                                       10,254,016     9,975,730

  Cash paid to suppliers and employees..............    3,981,238     5,504,398
  Interest paid.....................................      378,751       375,800
  Property and other taxes..........................      172,616       262,438
  Income taxes paid (refunded)......................      (74,999)      265,945
                                                     ------------  ------------
                                                        4,457,606     6,408,581
    Net cash provided by operating activities.......    5,796,410     3,567,149

Investing activities:
  Proceeds from sales of property and equipment.....      586,484       100,002
  Acquisition of property and equipment.............   (2,784,856)   (9,540,604)
                                                     ------------  ------------
    Net cash used in investing activities...........   (2,198,372)   (9,440,602)

Financing activities:
  Proceeds from notes payable.......................      735,000     7,225,000
  Note payments.....................................   (4,470,000)     (990,000)
  Proceeds from exercise of stock options...........      396,000             -
  Purchase of treasury stock........................            -    (1,308,056)
  Cash dividends paid...............................     (386,611)     (349,242)
                                                     ------------  ------------
    Net cash provided by (used in)
     financing activities...........................   (3,725,611)    4,577,702
                                                     ------------  ------------
Net decrease in cash................................     (127,573)   (1,295,751)
Cash and cash equivalents at beginning of year......      212,031     1,507,782
                                                     ------------  ------------
Cash and cash equivalents at end of year............ $     84,458  $    212,031
                                                     ============  ============

Reconciliation of net income (loss) to net cash
    provided by operating activities:
Net income (loss)................................... $  2,374,632  $ (4,732,213)
Reconciling adjustments:
  Depreciation, depletion and amortization and
     impairment.....................................    2,823,103     9,667,561
  Gain on sales of assets...........................     (211,733)       (9,947)
  Dry hole costs and condemned and
     abandoned properties...........................       85,562     1,362,540
  Deferred income taxes.............................      448,140    (2,292,735)
  Changes in other assets and liabilities:
    Accounts receivable.............................      (39,420)      (96,273)
    Prepaid expenses and other assets...............       87,842       (40,655)
    Accounts payable................................     (140,088)     (198,288)
    Other liabilities...............................      368,372       (92,841)
                                                     ------------  ------------
Net cash provided by operating activities...........   $5,796,410  $  3,567,149
                                                     ============  ============

                             See accompanying notes.




                                       F-5

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                          NOTES TO FINANCIAL STATEMENTS

Description of business

Home-Stake Oil & Gas Company  ("HSOG" or the "Company") is an  "independent  oil
and gas producer" actively engaged in the acquisition,  exploration, development
and production of oil and gas properties. Oil and gas exploration and production
activities are subject to numerous risks inherent in the business. These include
the volatility of oil and gas prices,  environmental  concerns and  governmental
regulations,  general  business risks and hazards  involving the acquisition and
operation  of oil and gas  properties,  the  ability  to  continue  to find  new
reserves to replace those being  depleted and the highly  competitive  nature of
the business.  Its principal geographic operating areas lie within the states of
Oklahoma, Montana, New Mexico and Texas.

Note 1 - Summary of significant accounting policies

Use of Estimates in the Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principals requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial  statements  and revenues and expenses  during the  reporting  period.
Actual results could differ from those estimates.

One of the most  significant  estimates made by the Company involves its oil and
gas reserves.  The Company  amortizes  its costs of producing  properties on the
unit-of-production  method over the estimated remaining reserves of the Company.
Since  estimates of remaining  oil and gas  reserves are highly  subjective  and
subject to constantly changing conditions,  most of which are beyond the control
of the Company,  it is reasonably  possible that the  Company's  estimates  will
change over time, affecting the rates of amortization. In addition, in assessing
whether any  impairment  to the  carrying  values of  producing  properties  has
occurred,  similar  estimates  of oil and gas  reserves  are used.  Consequently
impairment adjustments to the carrying values are reasonably possible.

Fair Value of Financial Instruments

The carrying amounts for cash and cash equivalents and notes payable reported in
the balance sheets approximate fair value.

Cash and cash equivalents

The Company includes  certificates of deposit and money market funds in cash and
cash equivalents  since such amounts are readily  convertible into known amounts
of cash.

Credit risks

The Company sells its oil and gas production  directly or indirectly to numerous
oil refiners and pipeline companies without collateral. In addition, the Company
has numerous  working interest owners to whom it grants credit on wells in which
it serves as operator.  Substantially  all of these owners are industry partners
or individuals who invest in oil and gas drilling ventures. The Company believes
its credit  risks are limited due to the nature of its business and partner base
and has not incurred any significant losses in connection therewith.

Environmental costs

Environmental  liabilities,  which  historically  have  not been  material,  are
recognized  when it is probable  that a loss has been incurred and the amount of
that loss is reasonably estimable.  Environmental liabilities, when accrued, are
based upon estimates of expected future costs without  discounting.  At December
31, 1999 there are no such costs accrued.





                                       F-6

<PAGE>


                          HOME-STAKE OIL & GAS COMPANY
                   NOTES TO FINANCIAL STATEMENTS - (Continued)

Note 1 - Summary of significant accounting policies (continued)

Property and equipment

The Company follows the successful  efforts method of accounting for its oil and
gas  operations.  Costs  of  productive  oil or gas  wells,  as well as costs of
acquiring  producing and nonproducing  oil and gas properties,  are capitalized.
Exploratory costs, annual delay rentals and exploratory dry holes are expensed.

Depreciation, depletion and amortization of producing properties are provided on
the   unit-of-production   method  based  on   estimates  of  proved   reserves.
Depreciation  of other  property and equipment is provided on  straight-line  or
accelerated methods over estimated useful lives.

Impairment  of  producing  properties  is  measured  based on  their  discounted
estimated future net cash flows. As a result of the significant decreases in the
average prices of crude oil and natural gas during 1998, the Company's estimated
future  net cash  flows at  December  31,  1998 were  reduced,  resulting  in an
impairment charge of $4,775,867 in 1998.

Nonproducing  oil and gas properties  include both perpetual  mineral rights and
term leasehold  interests.  The perpetual  mineral rights are  written-off  when
unsuccessful  exploration information is obtained. The Company does not maintain
an  extensive  inventory  of  nonproducing  leasehold  interests,   rather  such
interests are acquired in connection  with specific  drilling  objectives.  Such
nonproducing  leasehold  interests are  written-off  or reserved as warranted by
drilling results.

Renewals and betterments are capitalized; maintenance and repairs are charged to
expense.  Replacement of individual  items of lease  equipment are  capitalized.
When  leases  or  other  assets  are  sold or  retired,  the  cost  and  related
accumulated  depreciation,  depletion and  amortization  are eliminated from the
accounts and the resulting  gain or loss is recognized in income.  The Company's
historical  experience  has been that the salvage value of equipment on property
abandonments  is  sufficient  to  cover  the  costs  of  dismantlement  and site
restoration. Therefore, the Company does not accrue such costs and salvage value
is not considered in calculating property amortization.

Oil and gas sales

The  Company  sells  most of its  crude  oil and  natural  gas  concurrent  with
production and does not store significant  volumes for future sales.  Revenue is
recognized on the "sales  method" when oil and gas are sold.  Under this method,
the  Company  may  "sell"  more or less  than  its  proportionate  share  of gas
production in a given period, creating an imbalance position.  However, an asset
or  liability  is  recorded  only to the  extent  that the  Company's  imbalance
position in a property cannot be recouped from remaining reserves. The Company's
net imbalance positions at December 31, 1999 and 1998 were not material.

Derivatives

The Company does not utilize  financial or commodity  derivative  instruments to
hedge its market risks.

Income taxes

Certain  income and  expense  items are  recorded  in one year in the  financial
statements and are reported in a different  year in the income tax return.  Such
items  generally  include  tax credit  carryforwards,  intangible  drilling  and
development costs,  depreciation and depletion.  The tax effects associated with
these  differences are recorded in these  financial  statements and described as
"deferred income taxes".

Net income (loss) per share

Basic net  income  (loss) per share is based on the  weighted-average  number of
common shares outstanding during the period. Diluted net income (loss) per share
includes the dilutive effect of stock options.


                                       F-7

<PAGE>
                          HOME-STAKE OIL & GAS COMPANY
                  NOTES TO FINANCIAL STATEMENTS - (Continued)

Note 2 - Notes payable

Notes payable at December 31, 1999 and 1998 consisted of the following balances:

                                                1999            1998
                                                ----            ----
Bank notes..............................    $ 2,500,000     $ 6,235,000
  Less current portion..................      1,200,000      1,945,000
                                            -----------     ----------
                                            $ 1,300,000     $ 4,290,000
                                            ===========     ===========

During  1998,  the Company  entered  into a credit  facility  with its bank that
provided long-term  financing for the acquisition of properties and an operating
line-of-credit.  The Company borrowed $6.6 million under the long-term loan that
required  monthly  principal  payments of $110,000,  plus interest at prime less
1/2% (7 1/4 % at December 31,  1998).  This credit  facility also provided for a
revolving  term  line-of-credit  until May 1, 1999, in the amount of $5 million,
requiring monthly payments of interest at prime less 1% (6 3/4 % at December 31,
1998).  The Company had $625,000  borrowed under this line of credit at December
31, 1998. In connection with this line-of-credit,  the Company paid a commitment
fee of  one-half of one  percent  (1/2%) per annum on the unused  portion of the
line.

During 1999, the Company  executed a new credit  facility.  The Company borrowed
$3.4  million  under the  long-term  portion  of the new  credit  facility  that
requires  monthly  principal  payments of $100,000,  plus interest at prime less
3/4% (7 3/4 % at December 31, 1999). Proceeds from the new facility were used to
retire the previous bank loan. Under this new credit facility,  the Company also
has a revolving term  line-of-credit in the amount of $5 million available until
November  30,  2000,  which  provides  for  monthly  payments of interest on the
outstanding  borrowings at bank prime less 1%. At December 31, 1999, the Company
had no borrowings under this line. In connection with this  line-of-credit,  the
Company pays a commitment fee of three-eights of one percent (3/8%) per annum on
the unused portion of the line.

The Company's new credit facility,  which is secured by certain of the Company's
producing properties, includes certain loan covenants which require, among other
things,  that the  Company  maintain  a  minimum  net worth of not less than $14
million. This facility also provides that annual cash dividends shall not exceed
15% of cash from operations, less scheduled note payments.

Note 3 - Income taxes

Deferred  income taxes  represent the net tax effects  associated with temporary
differences  in the net book  values  of  certain  assets  and  liabilities  for
financial  reporting  and income tax  purposes.  Significant  components  of the
Company's  deferred  income tax  liabilities  and assets at December  31, are as
follows:

                                                        1999            1998
                                                        ----            ----
Deferred tax liabilities:
  Intangible drilling costs........................ $ 1,543,249     $ 1,520,505
  Excess of tax over book depreciation.............     333,508         297,864
  Leasehold costs..................................   1,511,829       1,558,630
                                                    -----------     -----------
                                                      3,388,586       3,376,999
Deferred tax assets:
  Alternative minimum tax credit carryforwards.....           -         281,756
  Statutory depletion carryforwards................           -         138,610
  Deferred compensation accrual....................           -           9,778
  Other (net)......................................      25,633          32,042
                                                    -----------     -----------
                                                         25,633         462,186
                                                    -----------     -----------
Net deferred tax liability......................... $ 3,362,953     $ 2,914,813
                                                    ===========     ===========
                                      F-8
<PAGE>

Note 3 - Income taxes (continued)

The  reconciliation  of the income tax  provision  to the  "expected"  provision
computed at the statutory federal income tax rate is as follows:

                                                       1999            1998
                                                       ----            ----

Computed "expected" provision (benefit).........    $ 1,161,172     $(2,431,310)
Excess statutory depletion......................       (105,381)       (149,363)
Other...........................................        (15,210)        161,974
                                                    -----------     -----------
Provision for (benefit from) income taxes.......    $ 1,040,581     $(2,418,699)
                                                    ===========     ===========

Note 4 - Benefit plans

The Company has a 401(k)  Profit  Sharing Plan  covering  substantially  all the
Company's  employees  that have completed one year of service and provides for a
mandatory Company contribution equal to 3% of the employee's compensation and an
additional matching Company  contribution of up to 3%. Company  contributions to
the Plan were $44,570 and $51,496 in 1999 and 1998, respectively.

Note 5 - Commitments and contingencies

The Company has a  non-cancelable  operating  lease  covering  its office  space
through  December 31, 2003.  This lease  provides for annual rental  payments of
$125,592, subject to an annual expense adjustment.

The Company is involved in various legal actions arising in the normal course of
business.  In the  opinion  of  management  and  legal  counsel,  the  Company's
liabilities,  if any, in these  matters  will not have a material  effect on the
Company's financial position, results of operations or cash flows.

Note 6 - Stockholders' Equity

Common Stock

The Company's  Certificate  of  Incorporation  authorizes  the issuance of up to
12,000,000 shares of common stock, $.01 per share.

Preferred Stock

The Company is authorized to issue up to 2,000,000  shares of Preferred Stock at
the discretion of the Board of Directors.  This stock is commonly referred to as
"blank  check"  stock,  with the Board of  Directors  having  the  authority  to
determine voting rights, dividend rights, preferences, etc.

                                      F-9


<PAGE>



Note 6 - Stockholders' Equity (continued)

Shareholder Rights Plan

The  Company  has  a  Shareholder   Rights  Plan  and  has  distributed  to  its
shareholders one "Right" for each outstanding  share of common stock. The Rights
expire  January 3, 2010 and are  exercisable  only if a person or group acquires
15% or more of the Company's common stock or commences a tender offer that would
result in a person or group acquiring 15% or more of the Company's common stock.
Each Right will entitle the holder to purchase one  one-thousandth of a share of
a new series of junior  participating  preferred  stock at an exercise  price of
$22.  If the  Company  is  acquired  in a merger or other  business  combination
transaction  after a person has  acquired  15% or more of the  Company's  common
stock, each Right will entitle its holder to purchase,  at the exercise price, a
number of the  acquiring  company's  common stock having a market value of twice
such  price.  In  addition,  if a person  or group  acquires  15% or more of the
Company's  common  stock,  each Right will  entitle its holder  (other than such
person or group) to purchase,  at the exercise  price, a number of the Company's
common stock having a market value of twice such price. Prior to the acquisition
by a person or group of 15% or more of the Company's  common  stock,  the Rights
are  redeemable  in whole,  but not in part, at a price of $.01 per Right at the
option of the Company's Board of Directors.

Incentive Stock Plan

On December 11, 1997, the  stockholders  approved the adoption of the Home-Stake
Oil & Gas Company  1997  Incentive  Stock Plan (the "Stock  Plan")  which became
effective on December 31,  1997.  There are a total of 451,736  shares of common
stock  authorized  and  reserved  under the  Stock  Plan.  The  number of shares
reserved for issuance under the Stock Plan automatically  increases as necessary
so that,  when added to the number of shares subject to stock options granted or
awarded under the Stock Plan, the total number of shares reserved will equal 10%
of the issued and outstanding shares of the Company.

During 1999 and 1998,  the Board of Directors  granted  stock options in varying
amounts to all  employees  at exercise  prices  ranging  from $4.50 per share to
$5.00 per share,  representing  the market price of the common stock on the date
of grant.  Certain  of these  options  vested  immediately,  with the  remainder
vesting over a 5-year  period.  These options all expire 10 years after the date
of grant. In addition,  there were  non-qualified  options issued to all outside
directors  in the  aggregate  amount  of  120,000  shares  that are  exercisable
immediately,  at an option  price of $4.50 per  share,  representing  the market
price of the  common  stock on the date of grant.  Directors'  options  expire 5
years after the date of grant.

The  following   summary   reflects  the  stock  option   activity  and  related
information:


                                       1999                    1998
                                --------------------   --------------------
                                           Weighted-              Weighted-
                                            average                average
                                           Exercise               Exercise
                                Options     Price       Options     Price
                                -------    ---------    -------   ---------
Outstanding at January 1,...... 231,250    $ 4.50             -     $ 0.00

Granted........................ 222,686      4.90       255,250       4.50

Exercised...................... (80,000)     4.95             -       0.00

Forfeited......................  (2,200)     4.50       (24,000       4.50
                                -------

Outstanding at December 31,....  371,736   $ 4.64       231,250     $ 4.50
                                ========   ======      ========     ======

Exercisable at December 31,....  246,136   $ 4.71       105,250     $ 4.50
                                ========   ======      ========     ======

Shares available for
     future grants.............        -                220,486
                                ========               ========

                                      F-10
<PAGE>

Note 6 - Stockholders' Equity (continued)

Incentive Stock Plan (continued)

The following table summarizes information about options outstanding at December
31, 1999:

                                        Outstanding Options          Exercisable
                                    ----------------------------     -----------
       Exercise Price               Remaining Life       Options       Options
--------------------------------------------------------------------------------
$4.50 ..........................        6.23             266,050        140,450
$5.00 ..........................        9.83             105,686        105,686
                                       -----            --------
Total ..........................        7.16             371,736        246,136
                                                        ========       ========

The Company follows the provisions of APB Opinion No. 25,  "Accounting for Stock
Issued to Employees",  in accounting for the Stock Plan. Accordingly,  since the
exercise  price of stock  options  are equal to the  market  price of the common
stock at the date of grant, no compensation  expense is recorded.  The following
table reflects the Company's pro forma operating  results and earnings per share
in 1999 and 1998  had the  fair  value  provisions  of  Statement  of  Financial
Accounting  Standards No. 123, "Accounting for Stock-Based  Compensation",  been
applied:


                                               1999        1998
                                              -----        ----
Net income (loss):

    As reported........................   $  2,374,632  $ (4,732,213)

    Pro forma..........................      2,136,039    (4,876,818)


Net income (loss) per share - basic & diluted:

    As reported........................   $       0.55  $      (1.06)

    Pro forma..........................           0.50         (1.09)

The pro forma amounts shown above may not be  representative  of future  results
since the  estimated  fair  value of options is  amortized  to expense  over the
vesting period.

The  weighted  average fair values of options at their date of grant during 1999
and 1998 were $1.73 and $1.62,  respectively.  The fair value of each  option is
estimated as of the date of grant using the  Black-Sholes  option-pricing  model
with the following weighted-average assumption used:


                                               1999     1998
                                              -----     ----

  Expected lives of options in years.....        5         5

  Expected stock volatility..............       39%       40%

  Risk-free interest rate................      6.0%      4.9%

  Dividend yield.........................      2.1%      1.8%

                                      F-11

<PAGE>


                          HOME-STAKE OIL & GAS COMPANY
           SUPPLEMENTAL INFORMATION ON OIL & GAS PRODUCING ACTIVITIES
                                   (unaudited)


Estimated quantities of proved oil and gas reserves

Changes in estimated  proved oil and gas reserve  quantities  are  summarized as
follows:


                                       1999                     1998
                                      ------                   ------
                                 Oil           Gas         Oil          Gas
                               (Bbls)         (Mcf)       (Bbls)       (Mcf)
                               ------         -----       ------       -----
Proved developed and
     undeveloped:
   Beginning of year..........  2,994,928   21,412,481   4,470,192  18,540,196
   Revisions of previous
     estimates................    918,629    6,782,415  (1,231,355)   (228,628)
   Purchases of reserves
     in-place.................     41,972    1,081,196     122,765   4,718,680
   Extensions, discoveries
     and other additions......  1,438,144    9,045,430      11,202     872,003
   Proved undeveloped
     reserves added*..........    703,523    7,483,003           -           -
   Sales of reserves in-place.    (96,322)    (341,692)          -           -
   Production.................   (350,422)  (2,622,255)   (377,876) (2,489,770)
                               ----------   ----------  ----------  ----------
   End of year................  5,650,452   42,840,578   2,994,928  21,412,481
                               ==========   ==========  ==========  ==========
Proved developed producing:
  Beginning of year...........   2,912,403  18,372,372   4,386,132  15,902,988
                               ===========  ==========  ==========  ==========
  End of year.................   3,845,810  25,446,938   2,912,403  18,372,372
                               ===========  ==========  ==========  ==========

*    During 1999 the Company  reviewed  all of its working  interest  properties
     completed  prior  to 1999  and  identified  additional  proved  undeveloped
     reserves not previously  associated  with those  properties.  Such reserves
     were not previously thought to be significant and accordingly, had not been
     extensively evaluated and quantified.

The estimates of oil and gas reserves were prepared by Company  employees and do
not include  proved  undeveloped  reserves  attributable  to royalty  interests.
Although the Company believes there are proved undeveloped  reserves  associated
with its  royalty  interests,  it lacks  the  geological  and  geophysical  data
necessary to evaluate such reserves. Furthermore, these estimates do not include
reserves whose estimates or recoverability  are less precise,  commonly referred
to as "probable" or "possible" reserves. The Company has no reserves outside the
continental United States.

Standardized measure of discounted future net cash flows

In  accordance  with the  requirements  of  Statement  of  Financial  Accounting
Standards No. 69 ("SFAS No. 69") presented  below are  projections of future net
oil and gas cash flows (sales less production taxes, operating expenses, certain
development  costs and  estimated  income taxes) and related  present  values of
proved oil and gas reserves.  As required by SFAS No. 69, these  projections are
based on end of period prices and costs,  held constant for all future  periods.
The reserve estimates and related  standardized  measure disclosures at December
31,  1999 are based on average  oil  prices of $21.47  per  barrel  and  average
natural  gas prices of $2.53 per Mcf.  Present  values of the future net oil and
gas cash flows were calculated  using a 10% discount  factor as required.  While
this information was developed with reasonable care and disclosed in good faith,
it is emphasized that some of the data are  necessarily  imprecise and represent
only  approximate  amounts  because  of the  subjective  judgments  involved  in
developing such information. Accordingly, this information may not represent the
present financial condition of the Company or its expected future results.  This
information does not include any amounts  applicable to "probable" or "possible"
reserves which may become proved in the future.  Although these disclosures have
been prepared in accordance with

                                      F-12

<PAGE>


                          HOME-STAKE OIL & GAS COMPANY
           SUPPLEMENTAL INFORMATION ON OIL & GAS PRODUCING ACTIVITIES
                                   (unaudited)


SFAS No. 69, this  information does not purport to present the fair market value
of the Company's oil and gas  properties or a fair estimate of the present value
of future cash flows expected to be obtained from their production.  The reserve
estimates,  while carefully made, may be  significantly  revised based on future
events.  In  addition,  estimates  of the timing of  production,  actual  prices
realized and related production costs and taxes may also vary significantly from
those used in these calculations.


                                                         1999          1998
                                                         ----          ----
Future net cash flows:
  Oil and gas sales................................  $229,558,260  $ 70,149,666
  Lease operating expenses.........................   (37,194,408)  (19,006,610)
  Production taxes.................................   (17,080,759)   (5,629,857)
  Development costs................................   (10,070,095)     (616,777)
  Income taxes.....................................   (47,502,448)  (11,486,053)
                                                     ------------  ------------
                                                      117,710,550    33,410,369
     Less discount to present value at 10% rate....   (55,220,753)  (11,673,440)
                                                     ------------  ------------
Standardized measure of discounted future net
     cash flows....................................  $ 62,489,797  $ 21,736,929
                                                     ============  ============

The following  information  summarizes the principal changes in the standardized
measure of discounted future net cash flows.


                                                         1999          1998
                                                         ----          ----
Beginning of year................................... $ 21,736,929  $ 33,191,435
Sales of oil and gas, net of production costs.......   (8,145,525)   (6,233,288)
Net changes in prices and production costs..........   17,671,956   (12,766,121)
Extensions and discoveries..........................   21,794,814       705,777
Proved undeveloped reserves added...................   13,798,291             -
Purchases of reserves-in-place......................      459,889     4,301,677
Sales of reserves-in-place..........................   (1,188,827)            -
Revisions of previous quantity estimates............   14,951,980    (5,733,382)
Net change in income taxes..........................  (17,478,913)    4,082,167
Other (net).........................................   (3,284,490)      869,520
Accretion of discount...............................    2,173,693     3,319,144
                                                     ------------  ------------
End of year......................................... $ 62,489,797  $ 21,736,929
                                                     ============  ============



                                      F-13

<PAGE>


                          HOME-STAKE OIL & GAS COMPANY
           SUPPLEMENTAL INFORMATION ON OIL & GAS PRODUCING ACTIVITIES
                                   (unaudited)

Costs incurred

Costs incurred in oil and gas producing activities include:


                                                        1999           1998
                                                        ----           ----
Acquisition costs - proved properties............... $    875,005  $  6,442,989
Acquisition costs - unproved properties.............      332,215       360,186
Exploration costs...................................      423,899       604,095
Development costs...................................    1,248,018     2,016,424
                                                     ------------  ------------
                                                     $  2,879,137  $  9,423,694
                                                     ============  ============



                                      F-14

<PAGE>



                                INDEX TO EXHIBITS

The  following  documents  are included as exhibits to this Form  10-KSB.  Those
exhibits  below  incorporated  by reference  herein are indicated as such by the
information  supplied  in  the  parenthetical  thereafter.  If no  parenthetical
appears after an exhibit, such exhibit is filed herewith.


    Number     Description
    ------     -----------

     3.1  Amended  and  Restated  Certificate  of  Incorporation  of the Company
          (filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-QSB
          for the quarter ended June 30, 1998).

     3.2  Bylaws  of the  Company,  as  amended  (filed  as  Exhibit  3.2 to the
          Company's  Annual  Report on Form 10- KSB for the year ended  December
          31, 1997).

     4.1  Rights  Agreement  dated as of  January 3, 2000,  by and  between  the
          Company and UMB Bank, N.A., as Rights Agent,  (filed as Exhibit 4.1 to
          the  Company's  Registration  Statement  on Form 8-A  dated  March 22,
          2000).

     4.2  Certificate of Designations of Series A Junior Participating Preferred
          Stock of the Company.

    10.1  Amended  and  Restated  Home-Stake  Oil &  Gas  Company  Key  Employee
          Incentive  Bonus Plan (filed as Exhibit 10.1 to the  Company's  Annual
          Report on Form 10-KSB for the year ended December 31, 1997).

    10.2  Amended and Restated  Employment  Agreement  by and between  Robert C.
          Simpson and the Company dated November 4, 1999.

    10.3  Amended and  Restated  Employment  Agreement  by and between  Chris K.
          Corcoran and the Company dated November 4, 1999.

    10.4  Amended and Restated  Home-Stake  Oil & Gas Company  Change in Control
          Severance Pay Plan, dated November 4, 1999.

    10.5  Home-Stake  Oil & Gas  Company  1997  Incentive  Stock Plan  (filed as
          Exhibit  10.4 to the  Company's  Annual  Report on Form 10-KSB for the
          year ended December 31, 1997).

    10.6  Amendment  dated  November 4, 1999 to the Home-Stake Oil & Gas Company
          1997 Incentive Stock Plan.

    10.7  Form of  Indemnity  Agreement  between the Company and each  Director,
          dated May 14, 1996 (filed as Exhibit 10.1 to the  Company's  Quarterly
          Report on Form 10-QSB for the quarter ended June 30, 1996).

    10.8  Special Loan Agreement  dated November 8, 1999 between the Company and
          Bank of  Oklahoma,  N.A.  (filed  as  Exhibit  10.1  to the  Company's
          Quarterly  Report on Form 10-QSB,  for the quarter ended September 30,
          1999).

    10.9  First  Amendment  to Special  Loan  Agreement  dated  February 9, 2000
          between the Company and Bank of Oklahoma, N.A.

     23   Consent of Independent Auditors.

     27   Financial Data Schedule.



<PAGE>