SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-KSB/A
                                 Amendment No. 1
(Mark One)

/x/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
                      For the fiscal year ended March 31, 1999

/ /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
        EXCHANGE ACT OF 1934
                       For the transition period from _________ to _________


                                    0-24493
                                    -------
                               Commission File No.


                          CAMBRIDGE ENERGY CORPORATION
                          ----------------------------
             (Exact name of registrant as specified in its charter)


          Nevada                                                  59-3380009
          ------                                                  ----------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


           215. South Riverside Drive, Suite 12, Cocoa, Florida 32922
           ----------------------------------------------------------
                    (Address of principal executive offices)


Registrant's telephone number, including area code:   (407) 636-6165

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

Securities registered pursuant to Section 12(g) of the Act:  Common Stock,
                                                             $.0001 par value

     Check whether the issuer (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes __x__ No _____

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained,  to the  best of  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. $562,026

     State The aggregate market value of the voting and non-voting common equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was sold, or the average bid and ask price of such common equity, as of a
specified date within the past 60 days:   $2,940,023

     As of March 31, 1999 there were outstanding  11,634,827 shares of Cambridge
Energy Corporation's common stock, par value $.0001 per share.


<PAGE>

                          CAMBRIDGE ENERGY CORPORATION
                     Form 10-KSB Report for the Fiscal Year
                              Ended March 31, 1999

                                TABLE OF CONTENTS


                                                                         Page



                                     PART I

Item 1. Business .......................................................  2

Item 2. Properties .....................................................  8

Item 3. Legal Proceedings ..............................................  11

Item 4. Submission of Matters to a Vote of Security Holders ............  12



                                     PART II

Item 5. Market for Registrant's Common Stock and
          Related Stockholder Matters ..................................  12

Item 6. Management's Discussion and Analysis of Financial
          Condition and Results of Operations ..........................  12

Item 7. Selected Financial Data ........................................  14

Item 8. Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure ..........................  34



                                    PART III

Item 9. Directors and Executive Officers of the Registrant ............   35

Item 10. Executive Compensation ........................................  36

Item 11. Security Ownership of Certain Beneficial
          Owners and Management ........................................  37

Item 12. Certain Relationships and Related Transactions ................  38



                                     PART IV

Item 13. Exhibits, Financial Statement Schedules and
          Reports on Form 8-K ..........................................  39

SIGNATURE ..............................................................  40







                                       1
<PAGE>
                                     PART I

Item 1.  Business

     (a) General Development of Business

     CAMBRIDGE ENERGY CORPORATION, (the Company) was incorporated under the laws
of the State of Nevada on April 9, 1996. At inception the Company's  Articles of
Incorporation Authorized 2,000,000 Common Shares at $.001 Par Value, and 100,000
Preferred  Shares at $.001  Par  Value.  In June  1997,  the Board of  Directors
approved an amendment to the Company's Articles of Incorporation  increasing the
authorized  Common  Shares of the Company  from  2,000,000  to  50,000,000,  and
increasing the number of authorized Preferred Shares from 100,000 to 25,000,000.
At that time the Board also changed the Par Value of each class of stock to from
$.001 to $.0001 per share.  The  amended  Articles  were filed with the State of
Nevada on July 7, 1997.  The  Company  then  undertook  a Private  Placement  of
1,935,000  of its  Common  Shares  to raise  capital  for the  execution  of its
business  plan. In November 1997, the Company began trading its Common Shares on
the OTC Bulletin Board under symbol CNGG.

     (b) Business of Issuer

The Company.

     Cambridge Energy  Corporation was formed for the purpose of development and
operation of oil and gas properties with proven reserves. The Company's strategy
is to focus in domestic  areas where major oil and gas producing  companies have
reduced their exploration efforts to move offshore and overseas in search of the
larger  reserves.  Considerable  oil  and  gas in  proven  fields  remain  to be
exploited by well-managed  independent oil companies capable of extracting these
reserves  at lower  risk and  lower  cost  than  unproved  prospects.  Cambridge
Energy's initial development strategy has been to acquire such proven fields and
increase  production  through the  application  of advanced  technology  and the
exploration of other proven formations in the same fields.

     Cambridge Energy's primary  operational  strategy includes the operation of
its own projects,  giving it  substantial  control over drilling and  production
costs. The Company has associated highly experienced exploration and development
engineering  and geology  personnel that strive to add production at lower costs
through development drilling, workovers, behind pipe recompletions and secondary
recovery operations.

 Operations

     The Company expects that it will continue to engage in both development and
exploratory  drilling  operations.  Such activities were limited in 1998 and are
expected to be limited in 1999, due to industry conditions. However, the Company
intends  to  pursue a  diversified  inventory  of  exploratory  and  development
prospects. The current portfolio includes lower-risk development and exploratory
prospects,  as well as higher risk exploratory prospects with greater potential.
The objective of the Company's  near-term  strategy is maximization of the value
of its existing prospect inventory while reducing its cost and risk exposure. In
the near term, the Company plans to retain a 10% to 50% direct working  interest
in each prospect,  plus any carried or reversionary interest retained as part of
sales to industry partners.  Direct participation may increase as corporate cash
flows and capital  resources  increase.  Drilling  prospects may result from the
evaluation  of  acquisitions.   Drilling  activities,   whether  exploratory  or
developmental,   are  subject  to  many  risks,   including  the  risk  that  no
commercially  productive  reservoirs  will  be  encountered.  There  can  be  no
assurance  that any new wells  drilled by the  Company  will  recover all or any
portion  of the  related  investment.  The  cost  of  drilling,  completing  and
operating  wells is often  uncertain and cost overruns can occur.  The Company's
drilling  operations  might be  curtailed,  delayed or  canceled  as a result of
numerous factors, many of which are beyond the Company's control.  These factors
include  financial  resources of the Company or its partners,  commodity prices,
land and title issues,  mechanical  problems,  weather conditions and compliance
with  governmental  requirements.  Unsuccessful  drilling  activities may have a
material adverse effect on the Company.

                                       2
<PAGE>

     The company has acquired an  Indonesian  subsidiary,  Intermega  Energy Pte
Ltd. The company  received  from F.K. Ho, 100% of the stock of Intermega  Energy
Pte Ltd. which includes three fields in eastern  Indonesia and executive offices
in Jakarta for liaison with  Pertamina,  the  government  owned oil company that
controls  all of  Indonesian  oil  and  gas.  We are  adding  approximately  100
employees by this. They include:

          Technical  Assistance  Contract/Contract  Area:   Salawati  A,  D  and
     Sabaku.    ownership   by    INTERMEGA   of   the   Technical    Assistance
     Contract/Contract  Area:  Salawati  A,  D and  Sabaku,  originally  between
     Perusahaan Pertambangan Dan Gas Bumi Negara (Pertamina) and PT. Siddhakarya
     Pilona Sabaku dated  January 9, 1995.  This contract area covers 5.97 sq Km
     for Salawati "A" and "D" and .50 sq Km for Sabaku.

          Technical Assistance  Contract/Contract Area:  Salawati C, E, F and N.
     ownership by INTERMEGA of  the Technical Assistance Contract/Contract Area:
     Salawati C, E, F and N, originally between Perusahaan  Pertambangan Dan Gas
     Bumi Negara  (Pertamina) and PT.  Siddhakarya Pilona Salawati dated January
     9, 1995. This contract area covers 23.05 sq. Km.

          Technical  Assistance  Contract/Contract   Area:  Linda A,  C/G  Sele.
     ownership by INTERMEGA of the Technical Assistance  Contract/Contract Area:
     Linda A, C/G Sele, originally between Perusahaan  Pertambangan Dan Gas Bumi
     Negara  (Pertamina)  and  Intermega  Linda Sele Pte Ltd. This contract area
     covers 12.35 sq. Km.

     The Company's  future  performance  depends upon its ability to acquire and
develop additional oil and gas reserves that are economically  recoverable.  The
Company   intends  to  continue  its   acquisition,   development  and  drilling
activities.  The Company expects to close  additional  acquisitions and drill or
participate  in sixteen wells in 1999 and 2000;  however,  no assurances  can be
given that the Company will be successful or will have  sufficient  cash flow or
sources of external capital to acquire,  develop or discover additional reserves
at  an  economical  cost.  Without  successful   acquisition,   development  and
exploration activities the Company's reserves will decline.

 Competitive Business Conditions

     The  Company  encounters  strong  competition  from  major and  independent
companies  in  acquiring  properties  and  leases  for  production   operations,
exploration  and  development.   The  principal   competitive   factors  in  the
acquisition of such oil and gas properties  include the staff and data necessary
to identify,  investigate and purchase such leases, and the financial  resources
necessary to acquire and develop such leases. Many of the Company's  competitors
have financial resources, staffs and facilities substantially greater than those
of the Company.

 Distribution

     The  Company's  oil  and  gas  production  is  marketed  to  third  parties
consistent with industry  practices.  Typically,  oil is sold at the wellhead at
field posted prices,  plus or minus adjustments for quality and  transportation.
Natural gas is usually  sold under a contract at a  negotiated  price based upon
factors normally considered in the industry, such as gas quality,  distance from
the well to the pipeline,  estimated  reserves,  liquid  hydrocarbon  content of
natural gas and prevailing supply/demand conditions.

 Joint Operations With Others; Non-Operator Status

     The Company owns less than 100% of the working  interest in some of its oil
and gas  properties.  Operations on such  properties  are likely to be conducted
jointly with other working  interest  owners.  Joint operating  arrangements are
customary in the oil and gas industry and are generally  conducted pursuant to a
joint operating agreement, whereby a single working interest owner is designated
the operator. At present, the Company is the operator of the majority of its oil
and gas properties.  The Company is also a non-operating  working interest owner
in other  wells.  For  properties  where the  Company  owns less than 50% of the
working  interest,  drilling and operating  decisions may not be entirely within
the


                                       3
<PAGE>

Company's  control.  If the Company disagrees with the decision of a majority of
working interest owners, it may be required, among other things, to postpone the
proposed   activity,   relinquish   or  farm-out  its  interest  or  decline  to
participate.  If the  Company  declines  to  participate,  it might be forced to
relinquish its interest or may be subject to certain non-consent  penalties,  as
provided in the applicable operating  agreement.  Such penalties typically allow
participating   working   interest  owners  to  recover  from  the  proceeds  of
production,  if any,  an  amount  equal to  200%-500%  of the  non-participating
working interest owner's share of the cost of such operations.

     Under most  operating  agreements,  the  operator is given  direct and full
control  over  all  operations  on the  property  and is  obligated  to  conduct
operations in a workman-like manner; however, the operator is usually not liable
to the working interest owners for losses sustained or for liabilities incurred,
except those resulting from its own gross negligence or willful misconduct. Each
working  interest  owner is  generally  liable  for its  share  of the  costs of
developing and operating jointly owned  properties.  The operator is required to
pay the  expenses of  developing  and  operating  the  property and will invoice
working  interest  owners  for  their  proportionate  share  of such  costs.  In
instances  where the Company is a non-operating  working  interest owner, it may
have a limited  ability to exercise  control over  operations and the associated
costs of such  operations.  The  success  of the  Company's  investment  in such
non-operated  activities may,  therefore,  be dependent upon a number of factors
that are outside of the Company's direct control.

     Under most operating  agreements and the laws of certain states,  operators
of oil and gas properties may be granted liens on the working interests of other
non-operating  owners in the well to  secure  the  payment  of  amounts  due the
operator.  The  bankruptcy or failure of the operator or other working  interest
owners to pay vendors who have  supplied  goods or services  applicable to wells
could  result  in filing of  mechanics'  and  materialmens'  liens  which  would
encumber the well and the interests of all joint owners.

Forward-Looking Information:

     All statements  other than statements of historical  fact contained  herein
are  forward-looking  statements.   Forward  looking  statements  are  generally
accompanied by words such as  "anticipate,"  "believe,"  "estimate,"  "project,"
"potential"  or "expect" or similar  statements.  Although the Company  believes
that  the  expectations   reflected  in  such  forward-looking   statements  are
reasonable, no assurance can be given that such expectations will prove correct.
Factors could cause the Company's  results to differ materially from the results
discussed in such forward-looking  statements.  Such factors include such things
as uncertainty of costs associated with exploratory  drilling,  drilling results
and  reserve  estimates,   operating  hazards,   need  for  additional  capital,
competition from other exploration,  development and production  companies,  the
fluctuations of prices received or demand for the Company's oil and gas, and the
effects  of  governmental  and  environmental  regulation.  All  forward-looking
statements  contained  herein are expressly  qualified in their  entirety by the
cautionary statements in this paragraph.

Environmental and Government Compliance and Costs:

     Operations of the Company are subject to numerous 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 a permit before drilling  commences;  restrict or
prohibit the types,  quantities  and  concentration  of  substances  that can be
released  into the  environment  in  connection  with  drilling  and  production
activities;  prohibit or limit drilling activities on certain lands lying within
wetlands  or other  protected  areas;  and impose  substantial  liabilities  for
pollution  resulting from past or present  drilling and  production  operations.
Moreover,  changes in Federal and state environmental laws and regulations could
occur and may result in more stringent and costly  requirements which could have
a  significant  impact  on  the  operating  costs  of  the  Company.  The  state
authorities  regulating oil and gas activities have primary regulatory authority
over environmental matters. In general,  under various applicable  environmental
programs,  the  Company  may be  subject  to  enforcement  action in the form of
injunctions,  cease and desist  orders and  administrative,  civil and  criminal


                                       4
<PAGE>
penalties for violations of environmental  laws. The Company may also be subject
to liability from third parties for civil claims by affected  neighbors  arising
out of a pollution event.  Laws and regulations  protecting the environment may,
in certain circumstances,  impose strict liability rendering a person liable for
environmental  damage  without regard to negligence or fault on the part of such
person.  Such laws and  regulations  may expose the Company to liability for the
conduct of or conditions caused by others, or for acts of the Company which were
in compliance  with all  applicable  laws at the time such acts were  performed.
Management  believes that the Company is in substantial  compliance with current
applicable environmental laws and regulations and that continued compliance with
existing  requirements  will not have a material  adverse impact on the Company.
Insofar as such laws and regulations are expanded, amended or reinterpreted, the
Company is unable to predict the future cost or impact of compliance.

     The primary  environmental,  statutory,  regulatory and safety  regulations
that affect the Company's operations include:

     Oil  Pollution  Act and Clean  Water  Act.  The Oil  Pollution  Act of 1990
("OPA") amends certain  provisions of the Federal Water Pollution Control Act of
1972, commonly referred to as the Clean Water Act ("CWA"), and other statutes as
they  pertain to the  prevention  of and  response to oil spills into  navigable
waters. Under OPA, a person owning a facility or equipment from which there is a
discharge  or threat of a  discharge  of oil into or upon  navigable  waters and
adjoining  shorelines is liable as a  "responsible  party" for removal costs and
damages.  Federal law imposes strict,  joint and several liabilities on facility
owners for containment  and clean-up costs and certain other damages,  including
natural resource damages,  arising from a spill.  Responsible  parties under OPA
include  owners or operators of on-shore or offshore  drilling  facilities.  OPA
requires  responsible  parties to maintain proof of financial  responsibility to
cover some portion of the cost of a potential  spill and to prepare an oil spill
contingency  plan.  Failure to comply  with  these  requirements  or  inadequate
cooperation  in a spill  event  may  subject  a  responsible  party  to civil or
criminal  enforcement  action.  The CWA and  similar  state  laws  regulate  the
discharge of pollutants,  including dredged or fill materials,  to waters of the
United States, including wetlands. A permit is required for such discharges, and
permit  requirements  may result  either in operating  limitations  or treatment
requirements.

     Clean Air Act.  The  operations  of the Company may be subject to the Clean
Air Act ("CAA"),  as amended,  and comparable state statutes.  Amendments to the
CAA contain provisions that may result in the imposition of certain requirements
for air pollution control equipment,  obtaining operating permits and approvals,
and other  emission-related  requirements which may require capital expenditures
by the Company.

     Superfund  The  Comprehensive  Environmental  Response,   Compensation  and
Liability Act ("CERCLA"),  commonly  referred to as the "Superfund" law, imposes
strict,  joint and several  liability on certain classes of persons with respect
to  the  release  or  threatened  release  of  a  hazardous   substance  to  the
environment.  These  persons  include:  (i) the owner and operator of a facility
from which  hazardous  substances  are released;  (ii) owners and operators of a
facility at the time any hazardous substances were disposed; (iii) generators of
hazardous  substances that were released at such facility;  and (iv) parties who
arranged for the  transportation of hazardous  substances to such facility.  The
Company may be responsible under CERCLA for all or part of the costs to clean up
sites at which hazardous substances have been released. Some states have similar
provisions. In certain circumstances, neighbors and other third parties may file
claims  based on common law tort  liability  theories  for  personal  injury and
property  damage  allegedly  caused by the release of hazardous  substances at a
CERCLA site.

     Resource  Conservation  and Recovery  Act.  The  Company's  operations  may
generate  and  result in the  transportation,  treatment  and  disposal  of both
hazardous and nonhazardous  solid wastes that are subject to the requirements of
the Federal Resource Conservation and Recovery Act ("RCRA") and comparable state
and local  requirements.  Although  many of the  Company's  wastes are presently
exempt from requirements  applicable to hazardous  wastes,  legislation has been
proposed in Congress from time to time that would reclassify certain oil and gas
wastes as "hazardous wastes" under RCRA, which  reclassification would make such
solid wastes subject to much more stringent handling,  transportation,  storage,
disposal and cleanup  requirements.  State initiatives to increase regulation of
oil and gas wastes could have a similar impact.

                                       5
<PAGE>

     NORM.  Oil  and  gas  exploration  and  production   activities  have  been
identified as generators of naturally-occurring  radioactive materials ("NORM").
Some states currently regulate the generation, handling and disposal of NORM due
to oil and gas  exploration  and  production  activities.  The Company  does not
believe that its compliance with such regulations will have a material effect on
its  operations  or financial  condition,  but there can be no assurance in this
regard.

 Safety Regulations

     OSHA. The Occupational Safety and Health Act of 1970, as amended,  ("OSHA")
establishes employer responsibilities, including maintenance of a workplace free
of recognized  hazards likely to cause death or serious injury,  compliance with
standards promulgated by the Occupational Safety and Health

     Administration,  and various  record  keeping,  disclosure  and  procedural
requirements.  Various  standards,  including  standards for notices of hazards,
safety in excavation  and  demolition  work,  and the handling of asbestos,  may
apply to the Company's operations.

 Oil and Gas Regulation

     The  Federal  government  and  various  state  and local  governments  have
adopted, and the Company's operations are continuously affected by, numerous and
complex  laws and  regulations  related  to  exploration  and  drilling  for and
production, transportation and marketing of oil and natural gas. State and local
laws and  regulations  usually cover such matters as  permitting  and spacing of
wells, unitization and pooling of oil and gas properties,  maximum and allowable
production rates, environmental protection, pollution control, taxation, bonding
and insurance,  surface restoration,  plugging and abandonment of wells, flaring
of gas,  underground  injection of saltwater and oilfield wastes,  gathering and
transportation  of oil  and  gas and  other  related  matters.  State  laws  and
regulations regarding spacing, unitization and pooling often dictate whether and
how much of the Company's  leases will be entitled to  participate in production
from oil and gas wells in which the Company has invested.  Local governments are
becoming  increasingly  active in regulating oil and gas activities,  especially
activities such as the location, drilling and operation of oil and gas wells and
the construction and operation of pipelines in or near populated areas.

     In 1992, the Federal Energy Regulatory Commission ("FERC") issued Order No.
636, which  generally  required  interstate  pipelines to "unbundle" or separate
their  previously  combined  services  for  purchasing,  transporting,  selling,
gathering and storing natural gas. Currently, producers sell gas at uncontrolled
market prices. The Federal government and various state governments have adopted
laws and regulations  regarding the methods of calculating lease royalties,  the
time by which  proceeds of  production  attributable  to the interests of others
must be paid by producers  and the rights of  producers to suspend  payments for
the proceeds of  production  attributable  to others.  Federal,  state and local
governments and their agencies are constantly  revising the laws and regulations
affecting the oil and gas industry.  Such continuing revisions in Federal, state
and local regulation could affect the operations of the Company.

     The Company's  operations are subject to all of the risks normally incident
to the production of oil and gas, including blowouts, mechanical failure, casing
collapse,  oil spills and fires,  each of which could result in severe damage to
or destruction of oil and gas wells, production facilities or other property, or
injury to persons. The energy business also is subject to environmental hazards,
such as oil spills, gas leaks, and ruptures and discharge of toxic substances or
gases that could expose the Company to  substantial  liability  due to pollution
and  other  environmental  damage.  The  Company  maintains  insurance  coverage
considered  to be customary in the  industry,  either  directly or through third
party operators who are contractually  obligated to provide insurance  coverage.
The Company may not,  however,  be fully insured against certain of these risks,
either because such insurance is not available or because of high premium costs.
The  occurrence of a significant  event that is not fully insured  against could
have a material adverse effect on the Company's financial position.


                                       6
<PAGE>

Oil and Gas Operations: (see also Management Discussion and Analysis)

     The Company  realized from the sale of its  production  for the fiscal year
ended  March 31,  1999,  $11.93 per barrel of oil and $1.86 per mcf of gas.  The
Company's  average lifting cost was $.83 per BOE for the same period on the sale
of 35,528.99 BOE.


                                    Percent
                                   Increase       Year Ended      Year Ended
                                  (decrease)    March 31, 1999   March 31, 1998
                                 ------------   --------------   --------------
Gas Production (mcf)                 137%          200,985            84,460
Oil Production (bbls)                115%          4162.53              1927
Barrel of Oil Equivalent           95.72%        37660.057             19241
Average Price of Gas (per mcf)      (9.8%)           $1.86             $2.06
Average Price of Oil (per bbls)    (31.3%)          $11.93            $17.20



Well Services Business:

     At the end of Fiscal Year 1999,  the  Company  acquired  Triton  Wellhead &
Manufacturing,  Inc.,  a  manufacturer  of wellhead  and valve  devices  serving
primarily  the oil and gas industry. The  acquisition  includes a 14,000 square
foot  manufacturing  facility  in  Broussard,   Louisiana,  along  with  machine
equipment,  raw stock and finished product inventory,  and engineering  drawings
for its product catalog. This transaction added approximately $925,000 in assets
to the  Company,  and  $388,000  in long term  debt.  An added  benefit  of this
acquisition is the vertical  integration aspect,  whereby the Company can obtain
these products for use on its own properties from Triton,  ensuring availability
and lower  cost.  The  transaction  was closed  during the third  quarter of the
fiscal year end.

     The transfer of the ownership of Triton Wellhead & Manufacturing,  Inc. has
necessitated  the  recertification  of the  facility  under  American  Petroleum
Institute (API) guidelines in order to assure acceptance of its products in both
U.S. and  International  markets.  The facility has operated on a limited  basis
primarily  completing work for the Company.  The facilities have previously been
certified  and the  Company  expects to complete  the process  during the coming
fiscal year,  although  there is no  assurance  that the  certification  will be
issued for the facility.

Employees, Consultants and Contractors:

     The Company  currently has four full-time  employees mainly involved in the
management,  administration  and  investor  relations  aspects of the  Company's
business.  Most of the  engineering  and geology for the  Company's  projects is
performed by consulting  firms, and the actual drilling,  rework and other field
operations performed on a project basis by contractors who bid for the work, the
most cost-effective manner of operation,  as the range of expertise and services
required varies by project and time duration.

     Intermega Energy Ltd. employs 12-15 people in the Jakarta office and in the
field there are approximately 60-70 people employed though a labor contract that
work in the company's Indonesian fields.

     Cambridge Energy employs G & A International, Inc., a petroleum engineering
firm in  Lafayette,  Louisiana,  to  perform  all of the  Company's  engineering
analysis and project design, drilling and rework supervision. In addition, G & A
provide office space and support for the Company's office in Lafayette.  Much of
the  engineering  and geological  analyses are reimbursed on a project basis pro
rata by the working interest partners participating in each project. The Company
also employs an oil and gas accounting firm,  Investors  Petroleum  Consultants,
Inc. in Lafayette,  Louisiana, to provide accounting and disbursement reports on
all of the lease and other royalty and working  interest  percentages of each of
the  company's  projects  as well as to prepare oil and gas  production  revenue
disbursements.

                                       7
<PAGE>

Item 2.  Description of Properties

     The  corporate  offices  of  Cambridge  Energy  Corporation  are in  Cocoa,
Florida,  and consist of approximately 1200 square feet of office space owned by
an officer and  director of the  Company.  The Company has  utilized  this space
since its  inception.  It has paid no lease  payments on this space to date.  As
revenues  increase  the  Company  intends  to either  purchase  or lease  larger
facilities for its headquarters at another location.

     The Company also maintains engineering offices in Lafayette,  Louisiana, as
part of its consulting  contract with G & A International,  Inc. for engineering
services.  The  Company  is  obligated  for a fee of  $14,000  per month for the
engineering  services  and office  space and  support,  a portion of which it is
reimbursed as  engineering  costs for each project are attributed to the working
interest partners.

Current Oil and Gas Properties:

     Houma Field - Calvert & Todd No. 1 Well: A 12,500' gas well that  Cambridge
Energy  drilled,  completed and brought on line in  Terrebonne  Parish at Houma,
Louisiana.  The  Company  drilled  this  well at the end of 1997 on an  assigned
farmout from UNOCAL.  The natural gas is being sold by contract to Eagle Natural
Gas Company,  and the  oil/condensate is being sold to UNOCAL in accordance with
their  assigned  farmout  agreement with  Cambridge  Energy.  The Company owns a
34.375% working  interest in the well.  Cambridge  Energy is the operator of the
well.

     During  the  last  month  of  the  fiscal  year,  Unocal  undertook  rework
operations  on the Calvert & Todd #13 well,  in which the Company has a 4.70217%
working interest. The recompletion was successful and the well has produced more
than  250,000  mcf  of  gas  and  12000  barrels  of oil  condensate  since  the
recompletion.  Unocal is the operator of this well. During the year, the Company
acquired  an  additional  117 acres under lease next to its Calvert & Todd No. 1
well in Houma.

     Houma  Field  Continued  Development:  The Houma  Field  project  initially
consisted  of  two  wells,  one  development  well  to be  drilled  to  gas  and
oil/condensate  that remain in  reservoirs  that produced in wells down dip from
the  Calvert & Todd No. 1  development  well  location or  reservoirs  that were
productive  by log  analysis but never  produced,  and one well to be drilled to
test the up-thrown  untested  fault block on the acreage.  The initial well, the
Calvert & Todd No.1,  described above, was a 12,500' normal pressured  Krumbhaar
Sand test drilled on the crest of a downthrown fault closure to produce bypassed
pay in the First Krumbhaar Sand as well as recoverable  reserves from as many as
five partially depleted  Krumbhaar gas sand reservoirs.  There were also several
Tex.  W. and Big (3) Sands that were  logged as pay in the new well.  The second
location  is a  proposal  to test an  upthrown  fault  closure  on north dip for
Krumbhaar Sands that lie between two proven  productive  fault blocks,  updip to
good sidewall core shows.

     The  Formation  Test of 4,000 PSI taken in the  Krumbhaar 4 Sand during the
drilling of Calvert & Todd No.1 indicates that a partial water drive has allowed
this reservoir to re-pressure  since the last  production and a P/Z curve allows
the determination of the remaining  reserves in this sand. There was no pressure
data taken in the  Krumbhaar 3 Sand that logged 10' - 14' of net gas pay, nor in
the Krumbhaar 1A Sand that logged 8' of net gas pay. The new well logged 28 feet
of net gas pay with no known  water  level in the Big (3) No. 3 Sand at 11,536'.
The 8950' Sand was shaled out. The Big (3) No.1 Sand that  produced 15.3 billion
cubic  feet  (BCF) in the  Calvert  & Todd No.  14-1  logged as  productive  and
depleted  with a possible  low BHP. The Prentice and 1st Gaidry Sands as well as
the 9600 Foot Sand in the Tex W. interval also logged as productive.  There also
appears to be  production  in other  intervals  that may add to  reserves to the
above  mentioned  reservoirs for a second well to be drilled through the Big (3)
section at the optimum  structural  position  on this  feature.  Completions  in
similar pays in the Big (3) and Tex W. intervals  have had excellent  recoveries
in other wells in the Houma Field. The modern suite of logs that were run in the
Calvert & Todd No. 1 well for porosity and shaley sand resolution (FDC-CNL,  GR,
CAL) defined additional pay zones that have not been produced. A well drilled at
the  apex  of  this  structure  will  penetrate  several  potential   productive


                                       8
<PAGE>

reservoirs that appear anomalous on electric logs of existing wells in the areas
that were  drilled in the 1950s and 1960s.  Cambridge  Energy plans at least one
additional  wells for its farmout  properties at Houma to access proven reserves
identified and logged during the drilling of the Calvert & Todd No. 1 well.

     Big Island Field:  This is a 140 acre property  Cambridge  Energy has under
lease in Rapides Parish, Louisiana, which includes an existing oil well known as
the Floyd  A-1 well.  Geologically,  the Floyd A-1 well is  situated  at the net
oil's edge of a Hudson Sand channel and  produces  water along with the oil from
this Wilcox Sand. As part of the continued  development of the Big Island Field,
this  well  will be  enhanced  by  equipping  it  with a  larger  pump.  Current
production of Floyd A-1 well is 8-12 BOPD after some rework was  accomplished in
December  1997,  which is sold to Scurlock  Permian  Corporation a subsidiary of
Ashland,  Inc. of Houston,  Texas.  Production  is expected to increase to 15-17
BOPD with the larger  equipment.  The Wilcox  formation  throughout  this region
produces water along with the oil shortly after being placed on production.  The
amount of water  increases  in the later life of the  wells.  The Floyd A-1 well
should  produce  for another  10-20  years.  The Company  purchased a salt water
disposal well as part of the Big Island acreage that services the Floyd A-1 well
and will service the two additional wells that the Company is preparing to drill
on these properties.

     Big Island Field Continued Development. The Big Island and North Big Island
Oil  Fields of North  Central  Louisiana  are  located in  Rapides  and  LaSalle
Parishes,  Louisiana.  Production  from these two fields is  generated  from the
Wilcox formation of Eocene Age, and to a lesser degree from the lower Tuscaloosa
formation.  The Wilcox  formation will be the primary target of the  development
drilling program currently  planned by the Company.  Production in this area was
established  in 1950 by Union  Production  Company,  (now known as Pennzoil) who
along with Crow Drilling & Production  Company,  were instrumental in developing
these  two large  fields.  There  are 11  productive  sands in each of these two
fields that have  produced  nearly 30 million  barrels of oil to date.  The post
production history,  as well as the exploration  techniques employed in drilling
these fields by Union  Production  Company,  and the recent infield  drilling by
other  independent  companies,  suggest  only a  fraction  of the oil  has  been
discovered in or recovered  from these two fields.  The concept of  horizontally
infield  drilling  can be employed in this  program as well as the  targeting of
untapped reservoirs in this region of established production. These efforts will
concentrate  on  horizontally  drilling an up dip  direction  to wells that have
watered out and drilling a channel-sand  type reservoir  between wells that have
ceased to produce because of premature water encroachment.

     The first well will be a 5,800'  straight  hole test  drilled to the Hudson
Sand  reservoir,  where the electric log and side wall cores will  determine the
net feet of oil pay in the drainage area of one or two  horizontal  wells.  This
evaluation  well is also  drilled to  complete  in the 5,200 Foot Sand that also
produced in offset,  down dip of this field. An additional well may be necessary
during the producing life of the first straight hole to  economically  drain the
entire  remaining  reserves in this sand.  The initial  straight  hole well will
evaluate  the net oil  thickness  and other data for the first  horizontal  well
project,  and  the  requirement  for a  second  horizontal  well  later  in  the
productive life of the first horizontal well drilled.

     West Lake Arthur  Field:  This is a 352 acre oil  producing  property  that
Cambridge  Energy has under  lease in  Jefferson  Davis  Parish,  Louisiana. It
includes an existing well bore that the Company intends to recomplete in new pay
zones shown on the logs, as well as one new "sidetrack" well the Company intends
to drill.  The first project will be the Edgewater (TGT) Morgan  Plantation No.1
well as a re-entry and re-completion  project of a previously produced well. The
well was originally  drilled by Tennessee Gas  Transmission in 1957. It is still
completed in the original perforated interval and no additional work was done to
alter this completion  since that date. The Company has purchased this well bore
and  equipment  from the land  owners and owns the rights to the  reservoirs  to
13,500' by virtue of the lease agreement. A re-completion in this well bore will
be only one of the revenue streams  possible from the reservoirs under the lease
block owned by the Company in this field.  These  evaluations will be made after
this first well has been put on  production.  The  Edgewater  well bore has four
zones that are productive by either down dip production  history,  core analysis
and/or  log  analysis.  The  re-entry  and  workover  will  provide  a five year
moratorium of severance taxes that amounts to 12.5% of gross sales.

                                       9
<PAGE>

     The second well is planned to be directionally drilled from the plugged and
abandoned  Miller,  Morgan  Plantation  No. 1 well.  The well is planned to be a
replacement  well  to the  Tenneco,  Morgan  Plantation  well  that  experienced
collapsed casing after producing  428,683 barrels of oil from the 2nd Marg howei
Sand.  This  directionally  drilled  well is  planned  so as to have  1,050'  of
horizontal displacement at the top of the 1st Marg howei Sand as seen at 12,775'
in the Tenneco,  Morgan  Plantation  No.1 well.  The new well should be slightly
high to the 2nd Marg howei completion in the Tenneco well.  Tenneco had proposed
a  recompletion  in the 1st Marg howei Sand but the collapsed  casing  prevented
this operation.  The fault block of interest has excellent productive sands from
the log analysis and production histories of down dip wells. The Company expects
to  confirm  four to five  productive  zones with this well.  The  re-entry  and
sidetrack   procedure,   as  compared  to  drilling  a  new  vertical  hole,  is
approximately  half the  price  and  will  provide  a five  year  moratorium  of
severence  taxes also which will pay for the cost of drilling and completing the
well. An additional development well will have to be considered if the sidetrack
hole confirms the presence of reserves as calculated from the study of the older
well logs in this fault block.

     Cambridge Bayou Blue Field: This is an 80 acre oil producing  property that
the Company has under lease in Iberville  Parish  Louisiana.  This  property has
three wells that are candidates for re-entry so as to workover and recomplete in
zones that were not  produced  to their  economic  limits  and were  prematurely
plugged  during low oil prices in the 1960s.  In addition to 7 productive  sands
that have  produced  oil and gas in the  past,  there  are also  other  possible
productive  zones that have never been  produced.  One of the wells on the lease
can be converted into a salt water disposal well.

     The Cambridge  Energy lease is located on the  southwest  flank of the salt
dome.  The  structural  oil and gas  trapping  mechanism  is  truncation  of the
sediments  against the  impermeable  salt plug in the deeper  sediments  and the
shallow  sediments are draped  across the top of the salt plug.  Salt domes have
historically  been the most  prolific oil fields in South  Louisiana.  The Bayou
Blue Field is not an exception. The Cambridge lease has previously produced over
1.2 million barrels of oil.

     Cambridge  Energy's  approach to  re-developing  this field is to drill one
well up dip to the well known as the Grief  Brothers  No. 3 well and putting the
Grief  Brothers No. 3 well and the Grief  Brothers No. 4 well back on production
by re-entry into these existing well bores.  The Grief Brothers No. 2 well could
then be re-completed at a later date, depending upon production results from the
other wells. This project is projected to produce up to 250 BOPD and access over
1 million barrels of proven reserves.

     Cambridge  Arnaudville  Field.  This is a 312 acre  gas and  oil/condensate
property  Cambridge  Energy has under  lease in St.  Martin  Parish,  Louisiana.
Initial project plans call for two  development  wells to be drilled to reserves
that remain in reservoirs that previously produced down dip from the prospective
development well location or shown productive by log analysis.  The initial well
is a 10,400' normal pressured  Tweedel Sand test updip from a well that produced
form the  Nodosaria  3 Sand as well as from the  Homeseekers  "B" and 9,400 Foot
Sand.  The main  objective is the Nodosaria 3 Sand that produced in the down dip
Slick Oil Company,  Singleton No. 1 well.  Cores from the down dip well indicate
an oil level in this  reservoir  that will  result in a low gas-oil  ratio.  The
production  from this down dip well was  probably  curtailed  as the bottom hole
location at this  Nodosaria 3 Sand depth was drilled  very near the fault.  This
project is projected to produce up to 4.6 BCF of gas and 172 thousand barrels of
oil.

     The initial  development  well is to be drilled so as to be 1,650 feet east
of the Singleton No. 1 well.  The up dip bottom hole location in the Nodosaria 3
Sand should  provide 20 feet of net gas/oil  condensate  pay with a possible oil
level.  There  should be no water level as the well should be 22-25 feet high as
mapped.  The Tweedel  Sand should log 15-40 feet of pay with a possible  oil and
water level. The second development well,  Arnaudville Field-West Prospect is to
the west in a  downthrown  fault  block.  This is a well to be drilled  updip to
reservoirs  that  produced in this separate  fault block.  These sands will also
produce gas condensate reserves.

                                       10
<PAGE>
     The SE Crescent  Field:  There is existing  well,  the A.  Wilbert's  Sons,
L.L.C.  No 1. well was drilled by Bishop  Petroleum,  Inc. in January 1982.  The
well logged pay in the Miogyp.  Sand and a Repeat  Formation Test confirmed this
zone to be gas  productive.  This horizon  produces oil in the  Sullivan's  Lake
Field to the west as well as in two established fields to the east of the Bishop
well. The low gas prices at this time may have been a determining  factor in the
well not being  completed in this gas sand.  The reservoir may very well have an
oil column  downdip.  The Anson,  S. Jones No. 1 well is 2,500' away and 70 feet
downdip to the Bishop  well.  A  mid-point  between  these two wells  provides a
reservoir area of  approximately  296 acres from the re-entry well. The drainage
acreage to the downdip well,  where the highest known water level is logged,  is
485 acres.  The log of the Bishop Petroleum well indicates 8-10 feet of gas. The
downdip  well  indicates  10-15 feet of sand that appears to be more porous than
the  well  to be  re-entered  which  could  provide  for  more  accumulation  of
hydrocarbons than indicated.  The Miogyp. Sand is the objective sand in the well
at 11,652 feet which a sand at 22 feet of thickness.

     Linda A, C/G Field: This field is located on Mainland, Irian Jaya Province,
Indonesia.  The field was  originally  discovered and operated by PERTAMINA Unit
EP-V in 1971. In 1977, the Linda-A  structure had been found and drilled and oil
was located at the LDA-2 well. Further exploration was carried out in 1979 and a
total of eleven  wells  have been  drilled  in the Linda A reef.  In 1982, more
extensive exploration activity resulted in the discovery of Textularis II in the
Linda-C structure.  Well LDC-2 was drilled in 1985 and oil was found in the Kais
formation.  A total of five wells have been  drilled.  The Linda-G reef was also
discovered in 1985 and a total of 4 wells have been drilled.

     Sele  Field:  This  field is  located on  Mainland,  Irian  Jaya  Province,
Indonesia. The field was originally discovered in 1954 with the drilling of well
S-41 to a  depth  of 769  meters.  Further  development  resulted  in two  other
successful wells, S-44 and S-48. Seismic surveys were conducted in 1973 and 1975
and SS-1 was  drilled.  Located  to the  southern  part of the Sele  reef,  SS-1
produced  oil. In 1978 a drilling  program was  initiated  and three  successful
wells were added  including:  SP-1,  SP-3 and SP-4.  Sele Field is pinnacle reef
development  built-up on the Kais  platform  limestone.  A total of 12 wells are
currently  producing.  The Sele reservoir of Cambridge's Sabaku Field is located
on Salawati  Island,  Irian Jaya Province,  Indonesia.  The field was originally
discovered by Phillips  Petroleum  Indonesia in 1974. Well TBN-1 was drilled and
tested at a rate  approaching  12,186 BOPD.  After an eight-day test in December
1975 the water cut increased from dry oil to 80% which could have been caused by
the high rate of production. The field has not been developed further.

     Salawati  Fields A, C, E, and F:  These  fields  are  located  on  Salawati
Island, Irian Jaya Province,  Indonesia.  The field was originally discovered by
Phillips  Petroleum  Indonesia in 1975.  The Salawati A structure  was the first
commercial oil field on the island. Oil production started in November 1977 from
wells A-1,  A-2, A-3 and A-4.  Currently  three wells A-2, A-7 and A-8 are still
producing.  A major  amount of the  field's  oil has been  produced by well A-2,
which still  dominates  present  production.  This field has no initial free gas
cap.  The area extent of the field is  approximately  182 feet.  Oil  production
commenced in Salawati C Field from well C-2 in November  1977. The well is still
producing with gas lift system at a rate of  approximately  225 bopd. This field
has no initial  free gas cap. The field area extent is  approximately  180 acres
with a range  net  oil  column  thickness  of 225  feet.  Salawati  E Field  was
discovered  when drilling E-1 and has been producing  since January 1972. Two of
the five wells are still producing with Reda pumps at a rate of approximately 30
to 40 BOPD and  fluid  production  of about  800-1200  Barrels  of Fluid Per Day
(BFPD) per well. The field area extent is  approximately  171 acres.  Salawati F
Field  commenced  production of well F-1 in December 1977. The well was the only
well  drilled  and is still  producing  with gas lift.  The field area extent is
approximately 33 acres with a range net oil pay thickness of 177 feet.

Item 3.  Legal Proceedings

     The Company is not a party to any pending material legal proceeding. To the
knowledge  of  management,  no federal,  state or local  governmental  agency is
presently  contemplating any proceeding against the Company. To the knowledge of
management,  no director,  executive  officer or  affiliate of the Company,  any
owner of record or beneficially of more than 5% of the Company's common stock is
a party adverse to the Company or has a material interest adverse to the Company
in any proceeding.

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

     None

                                     PART II

Item 5.   Market for Registrant's Common Stock and Related Stockholder Matters

     (a) Market Information

     The Company's common stock is listed on the OTC Bulletin Board of the NASD,
and began  trading on November 24,  1997.  The high and low bid prices since the
quarter then ending March 31, 1999, are as follows:

Quarter Ending:
                                             Bid

                                    High              Low

March 31, 1998                      1 1/8              1 1/8
June 30, 1998                       1 7/8              1
September 30, 1998                  1 1/2              3/4
December 31, 1998                   1 1/16             .81
March 31, 1999                        7/8              5/16


     These bid prices were obtained from Prophet Information Services,  Inc. and
do not necessarily reflect actual transactions,  retail mark-ups,  mark-downs or
commissions. The transactions include inter-dealer transactions.

     (b) Holders

     As of March 31, 1999, the number of holders of the Company's  common shares
was 123.

     (c) Dividends

     There are presently no material  restrictions that limit the ability of the
Company to pay dividends on common stock. The Company has not paid any dividends
with respect to its common  stock,  and does not intend to pay  dividends in the
foreseeable future.



Item 6.  Management's Discussion and Analysis of Financial Condition
         And Results of Operation

     The Company is engaged in the  exploration  and development oil and natural
gas reserves  through the acquisition  and  development of properties  primarily
with proven reserves.  The Company's  ability to grow shareholder  value through
growth of assets, earnings and cash flows is dependent on its ability to acquire
and develop  commercial  quantities  of oil and natural gas that can be produced
and  marketed  at  a  profit.  Product  prices,  primarily  crude  oil,  dropped
significantly during the Company's fiscal year. This drop has adversely affected
the  revenues  and cash flow of the  company  as well as most  companies  in the
industry.  An additional  effect of this significant drop in prices has been the
reduction of  exploration  and  development  budgets of major oil  companies and
independents,  causing  reduction or  elimination  of new  ventures,  work force
reductions  and  reorganizations.  Such  changes may result in a decrease in the
ability of the Company to solicit  industry  partners to participate in projects
undertaken  by  Cambridge  Energy  Corporation  on a promoted  basis.  They have
resulted  in some  delays by  partners  in making  partner  contributions,  thus
putting additional demands on the Company's cash flow.

     Although  product  prices  have  started to  recover,  company  budgets are
generally created on a fiscal year basis, so management  believes that a general
industry  wide recovery will take well into the first part of calendar year 2000
to achieve any meaningful levels.


                                       12
<PAGE>

     Company  management  has  used  this  period  to put in place  the  initial
elements of its growth  strategies so that it can maximize the positive  results
from the recovery of the industry including:

     1.   To actively  pursue  acquisition of significant  producing  properties
          with development  potential which can be exploited with lower cost and
          with lower risk than unproven prospects;

     2.   The selection,  engineering review and rework of workover prospects on
          existing properties to maximize production from existing assets;

     3.   To  continue  to  solicit  institutional  and  industry  partners  for
          promoted  transactions as well as increasing equity and long financing
          to support this expanded level of projects and operations;

     4.   To significantly add to the company's technical  capabilities  through
          the selective addition of technical  personnel and the development and
          acquisition of advanced reservoir and engineering software.


     Management  believes  that this  plan will  position  the  Company  to take
advantage of  opportunities  that it expects to occur as the  industry  recovers
from the recent  period of low prices.  While  management  believes  that it has
worked toward the successful  completion of this plan, there can be no assurance
that the  intended  results  will be achieved or that funds will be available to
accomplish the plan.

Results of Operations

Twelve months ended March 31,1999 compared to twelve months ended March 31,1998

     The Company  recorded a net loss of $1,270,322 for the year ended March 31,
1999 up from $1,016,531 for the year ended March 31, 1998. Revenues increased to
$562,026 over $127,188 the previous year due to the increase in U.S. production,
service income and  international  production added toward the end of the fiscal
year. General and Administrative  expenses increased to $1,494,120 over $237,528
for the  previous  year due to  increases  in current  depreciation  expenses to
$181,340 and consulting  fees to $421,600.  The increase in consulting  fees was
substantially  the result of increased  engineering  activities  associated with
acquisitions and proposed  acquisitions and to certain consulting fees paid to a
former director as part of a settlement package.

     The Company realized some added gains in production  during the year due to
an added production period resulting in the following:

                                       Percent              Year Ended
                                       Increase              March 31,
                                      (Decrease)       1998           1999
                                      ----------       ----           ----
Gas Production (Mcf)                     137%         84,460         200,985
Oil Production (bbls)                    115%          1,927           4,163
Barrel of Oil Equivalent               95.76%         19,241          37,660
Average Price of Gas (per mcf)          (9.8%)         $2.06           $1.86
Average Price of Oil (per bbls)        (31.3%)        $17.20          $11.93


     Based  upon  increases  in the  prices  of oil and gas since the end of the
fiscal  year,  management  expects  that  prices will  continue to increase  and
revenue  received  for the  Company's  products  will be higher  during the next
fiscal year.

     Due to industry  conditions and resulting delays in partner  contributions,
the Company's  drilling program proceeded at a slower pace than expected through
the  engineering  phase and the  Company  expects  to have  drilling  operations
underway during the third quarter of the current fiscal year. In addition to the
SE Crescent  Property  added  during the fiscal  year,  the  Company  expects to
increase its acquisition activity during the current fiscal year.

                                       13
<PAGE>

Liquidity:

     The Company  expects to finance  its future  acquisition,  development  and
exploration  activities  through cash flow from  operating  activities,  various
means of corporate  and project  finance and through the issuance of  additional
securities.  In addition,  the Company expects to continue to subsidize drilling
activities  through the sale of participation to industry partners on a promoted
basis,  whereby the Company's  working  interests in reserves and production are
greater than its proportionate share capital costs.

     During Fiscal Year 1999 the Company raised additional capital in the amount
of $335,000  through  private sale of preferred  shares.  Based on  acquisitions
currently in  negotiation,  the Company  expects to undertake the placement of a
significant  financial  institution  credit  facility or other  structured  debt
facility  during the coming fiscal year. This would provide  additional  funding
for  expansion  to be  consistent  with the Company  growth  strategy.  Although
management  believes that this will be  accomplished  during the current  fiscal
year, there can be no assurance that such a facility will be forthcoming or that
sufficient  funds will be available to meet the  requirements  of the  Company's
growth strategy.


Material Commitments for Capital Expenditures:

     The Company  has made no material  commitments  for these  future  projects
other than to acquire and pay for the respective  leases.  Each drilling  and/or
rework project is stand-alone and although the Company is in constant discussion
with  prospective   working  interest   partners  on  each  potential   project,
commitments  for the actual drilling or rework and site  preparation  operations
are generally not made for each project until the Company has received the funds
from its working interest  partners and the funds for its portion of the working
interest  are in place.  The leases the  Company  holds are  renewable  annually
unless "held by production". If the leased property has a producing well that is
providing royalty payments to the  leaseholders,  then annual lease payments and
renewals are not required.  Cambridge  Energy strives to accomplish the drilling
or rework planned for each property within the year first leased. When that does
not occur, management reviews the potential of each property as its leases which
have come up for renewal and makes a decision whether or not to renew each lease
in light of the  Company's  business  planning at that time.  During fiscal year
1999, the Company had $181,340 in lease depreciation expenditures.

     The  Company has  committed  to provide  $750,000 in final  payment for the
purchase of Indonesian production now under contract, which was due on or before
January 4, 1999. The  transaction  was closed with the exchange of stock between
the Company and the owners of the company  that owned the  production.  Although
the certain monies have been paid on behalf of the  transaction,  the Company is
obligated to pay additional amounts to the sellers as a part of the transaction.
The Company has under  negotiation  several  facilities  to provide  these funds
however, it does not have a commitment in place and there is no assurance when a
commitment will be forthcoming.





                                       14
<PAGE>

Item 7.  Selected Financial Data.




                            Turner, Stone & Company
                      12700 Park Central Drive, Suite 1610
                              Dallas, Texas 75251



                          Independent Auditor's Report


Board of Directors and Stockholders
Cambridge Energy Corporation
    and subsidiaries
Cocoa, Florida


We have audited the accompanying consolidated balance sheets of Cambridge Energy
Corporation  and  subsidiaries  as of March 31,  1999 and 1998,  and the related
consolidated  statements of operations and comprehensive  income,  stockholders'
equity, and cash flows for the years then ended. These financial  statements are
the responsibility of the company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Cambridge  Energy  Corporation and  subsidiaries at March 31, 1999 and 1998, and
the  consolidated  results of their operations and cash flows for the years then
ended in conformity with generally accepted accounting principles.

The  Supplementary  Information  Regarding Oil and Gas  Producing  Activities on
pages 19 through 22 is not a required part of the basic  consolidated  financial
statements but is supplementary information required by the Financial Accounting
Standards  Board. We have applied certain  limited  procedures,  which consisted
principally of inquiries of management  regarding the methods of measurement and
presentation of the  supplementary  information.  However,  we did not audit the
information and express no opinion on it.



/s/ Edward L. Turner
--------------------
Certified Public Accountants
October 11, 1999


                                       15
<PAGE>

                          CAMBRIDGE ENERGY CORPORATION
                                AND SUBSIDIARIES
                       CONSOLIDATED FINANCIAL INFORMATION
                                 FOR THE PERIOD
                             MARCH 31, 1999 AND 1998



                                 C O N T E N T S



AUDITOR' REPORT ........................................................  14

CONSOLIDATED BALANCE SHEETS ............................................  17-18

CONSOLIDATED STATEMENTS OF OPERATIONS
      AND COMPREHENSIVE INCOME .........................................  19

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY ........................  20

CONSOLIDATED STATEMENTS OF CASH FLOWS ..................................  21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS .............................  23-30

SUPPLEMENTARY INFORMATION REGARDING
  OIL AND GAS PRODUCING ACTIVITIES .....................................  31-33







                                       16
<PAGE>

                         CAMBRIDGE ENERGY CORPORATION
                               AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                           MARCH 31, 1999 AND 1998



                                    Assets

                                                     1999           1998
                                                ------------   ------------
Current assets:

      Cash                                      $    33,211    $    12,139
      Accounts receivable, trade                    357,622        114,039
      Joint interest billings receivable                  -        173,402
      Inventory, materials and supplies             216,617              -
      Prepaid expenses                              395,808         27,987
      Marketable equity securities,
          at fair value                              18,750         24,525
                                                ------------   ------------
            Total current assets                  1,022,008        352,092
                                                ------------   ------------
Property and equipment, net of $43,488 and
   $1,265 of accumulated deprecation              1,132,885         45,259
                                                ------------   ------------
Oil and gas properties, accounted for
     using the successful efforts method:

      Oil and gas interests, proved properties,
         net of $14,868 and $3,392 accumulated
         depletion                                4,441,416        194,806

      Support equipment, at cost, net of
         $13,513 and $5,657 of accumulated
         depreciation                                18,453         19,939
                                                ------------   ------------
                                                  4,459,869        214,745
                                                ------------   ------------

                                                $ 6,614,762    $   612,096
                                                ============   ============






   The accompanying notes are an integral part of the financial statements.



                                       17

<PAGE>
                         CAMBRIDGE ENERGY CORPORATION
                               AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                           MARCH 31, 1999 AND 1998


                     Liabilities and Stockholders' Equity


                                                     1999           1998
                                                ------------   ------------
Current liabilities:

      Accounts payable, trade                   $ 1,934,868    $   471,536
      Accrued expenses                              214,140              -
      Drilling advances                           1,733,204        242,500
      Royalty interests payable                     136,849              -
      Loans from stockholders                       775,334         36,734
      Notes payable                                 266,405              -
                                                ------------   ------------
            Total current liabilities             5,060,800        750,770
                                                ------------   ------------

Commitments and contingencies                             -              -

Stockholders' equity (deficit):

      Preferred stock, $ .0001 par value,
         25,000,000 shares authorized,
         134,000 shares issued and outstanding
         of Series A and B convertible redeemable,
         $335,000 aggregate liquidation value            13              -
      Common stock, $ .0001 par value,
         50,000,000 shares authorized,
         11,634,827 and 8,340,786 shares
         issued and outstanding, respectively         1,164            834
      Paid in capital in excess of par            3,877,960        886,552
      Accumulated deficit                        (2,255,559)    (  985,560)
      Accumulated other comprehensive loss       (   46,275)    (   40,500)
      Treasury stock, at cost, 58,352 shares     (   23,341)             -
                                                ------------   ------------

                                                  1,553,962     (  138,674)
                                                ------------   ------------

                                                $ 6,614,762    $   612,096
                                                ============   ============





   The accompanying notes are an integral part of the financial statements.




                                       18

<PAGE>
                         CAMBRIDGE ENERGY CORPORATION
                               AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                           AND COMPREHENSIVE INCOME
            FOR THE YEARS ENDED MARCH 31, 1999 AND MARCH 31, 1998



                                                     1999           1998
                                                ------------   ------------
Revenues:
      Oil and gas sales, net of royalties       $   529,305    $    73,899
      Lease operating and other income               32,721         53,289
                                                ------------   ------------
                                                    562,026        127,188
                                                ------------   ------------
Operating expenses:
      Production costs                              102,794         15,997
      Exploration costs                             140,771        840,450
      Marketing expenses                              9,305            620
      General and administrative                  1,494,120        237,868
      Depletion                                      11,476          2,925
      Depreciation                                   50,079          5,359
                                                ------------   ------------
                                                  1,808,545      1,103,219
                                                ------------   ------------
Operating loss                                  ( 1,246,519)   (   976,031)

Interest expense                                     18,028              -
                                                ------------   ------------
Net loss                                         (1,264,547)    (  976,031)

Other comprehensive income, net of tax:
      Unrealized loss in value of
         marketable securities                   (    5,775)    (   40,500)
                                                ------------   ------------
Comprehensive loss                              $(1,270,322)   $(1,016,531)
                                                ============   ============


Net loss per share:
      Basic                                     $(      .13)   $(      .14)
      Diluted                                   $(      .13)   $(      .14)







   The accompanying notes are an integral part of the financial statements.



                                       19
<PAGE>
<TABLE>
<CAPTION>
                                                       CAMBRIDGE ENERGY CORPORATION
                                                             AND SUBSIDIARIES
                                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                           FOR THE YEARS ENDED MARCH 31, 1999 AND MARCH 31, 1998



                                                                                         Accumulated Other
                           Preferred Stock      Common Stock     Add'l Paid  Accumulated   Comprehensive   Treasury Stock
                           Shares   Amount   Shares     Amount   In Capital    Deficit         Loss            Amount        Total
                          -------   ------ ----------  -------  ----------   ---------     -------------   --------------  ---------
<S>                      <C>       <C>     <C>        <C>      <C>           <C>           <C>             <C>            <C>

Balance at March 31,1997      -       -     1,200,000   $ 120    $ 114,875   $(  9,529)     $    -             $   -      $ 105,466

Issuance of common stock
  to repay stockholder
  advances                    -       -     5,184,786   $ 518    $  25,406                                                $  25,924
Issuance of common stock
  for cash,net of $47,858
  of offering costs           -       -     1,941,000   $ 194    $ 728,773                                                $ 728,967
Issuance of common stock
  for services                -       -        15,000   $   2    $  17,498                                                $  17,500
Unrealized loss in
  marketable securities                                                                     ( 40,500)                     $( 40,500)
Net loss                                                                     (976,031)                                     (976,031)
                         --------  -------  ---------  -------  ----------  ----------     ----------     ------------   -----------
Balance at March 31,1998      -     $  -    8,340,746   $ 834    $ 886,552  $(985,560)     $( 40,500)      $       -      $(138,674)

Issuance of preferred
  stock for cash          134,000   $ 13                           334,987                                                  335,000
Issuance of common stock
   for cash                                   406,223      41      314,959                                                  315,000
Issuance of common stock
   for services                               252,000      25      214,525                                                  214,550
Issuance of common stock
   for purchase of
   subsidiaries                             2,635,768     264    2,126,937                                                2,127,201
Reacquired shares held
   in treasury                                                                                              (  23,341)     ( 23,341)
Unrealized loss in
   marketable securities                                                                    (  5,775)                      (  5,775)
Dividends on preferred
   stock                                                                     (  5,452)                                      ( 5,452)
Net loss                                                                   (1,264,547)                                  ( 1,264,547)
                         --------  -------  ---------  -------  ----------  ----------     ----------     ------------   -----------
Balance at March 31,1999  134,000    $ 13  11,634,827  $ 1,164  $3,877,960$(2,255,559)     $( 46,275)       $( 23,341)  $ 1,553,962


                                       The accompanying notes are an integral part of the financial statements.
</TABLE>

                                                                         20
<PAGE>

                         CAMBRIDGE ENERGY CORPORATION
                               AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE YEARS ENDED MARCH 31, 1999 AND MARCH 31, 1998


                                                     1999           1998
                                                ------------   ------------
Cash flows from operating activities:

      Oil and gas sales received                $   900,356    $    91,714
      Interest received                               2,930            775
      Cash paid to employees                     (  186,640)    (   81,536)
      Cash paid to suppliers                     (  718,702)    (  576,894)
      Interest paid                              (   18,028)             -
      Income taxes paid                                   -              -
                                                ------------   ------------
      Net cash used in operating activities      (   20,084)    (  565,941)
                                                ------------   ------------
Cash flows from investing activities:

      Cash paid in IEP acquisition,
         less cash acquired                      (   35,585)             -
      Purchase of property and equipment         (   37,204)    (   53,361)
      Purchase of oil interests                  (   44,521)    (  134,257)
                                                ------------   ------------
      Net cash used in investing activities      (  117,310)    (  187,618)
                                                ------------   ------------
Cash flows from financing activities:

      Advances from stockholders                     85,400         31,905
      Repayment of advances from stockholders    (   80,000)             -
      Issuance of common and preferred stock        650,002        728,967
      Proceeds from notes payable                    30,000              -
      Repayments of notes payable                (  503,595)             -
      Treasury stock purchased                   (   23,341)             -
                                                ------------   ------------
      Net cash provided by financing activities     158,466        760,872
                                                ------------   ------------
Net increase in cash                                 21,072          7,313

Cash at beginning of period                          12,139          4,826
                                                ------------   ------------
Cash at end of period                           $    33,211    $    12,139
                                                ============   ============





 The accompanying notes are an integral part of the financial statements.


                                       21


<PAGE>
                          CAMBRIDGE ENERGY CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED MARCH 31, 1999 AND MARCH 31, 1998


                    Reconciliation of Net Loss to Net Cash
                         Used in Operating Activities


                                                    1999            1998
                                                ------------   ------------

Net loss                                        $(1,264,547)   $(  976,031)

Adjustment to reconcile net loss to net
   cash used in operating activities
   (changes in assets and liabilities,
   net of effect from purchase of subsidiaries):

      Depreciation and depletion                     61,555          8,284
      Common stock issued for services              214,550         17,500
      Loss on abandoned oil interest                      -          1,135
      (Increase) decrease in accounts
          receivable, trade                         341,260     (  277,199)
      (Increase) decrease in inventory           (   18,935)             -
      (Increase) decrease in prepaid expenses    (  251,168)    (   25,482)
      Increase (decrease) in accounts
          payable, trade                         (  944,492)       443,352
      Increase (decrease) in accrued expenses       214,140              -
      Increase (decrease) in drilling advances    1,490,704        242,500
      Increase (decrease) in royalty
          interests payable                         136,849              -
                                                ------------   ------------
   Total adjustments                              1,244,463        410,090
                                                ------------   ------------

Net cash used in operating activities           $(   20,084)   $(  565,941)
                                                ============   ============

                 Supplemental Schedule of Non-Cash Investing
                           and Financing Activities

Issuance of common stock in exchange for
   net assets of corporations accounted
   for as purchases                             $ 2,127,201    $         -

Issuance of common stock for repayment
   of advances from stockholders                $         -    $    25,924

Purchase of property and equipment through
   advances from stockholders                   $         -    $    30,753






   The accompanying notes are an integral part of the financial statements.

                                       22


<PAGE>

                           CAMBRIDGE ENERGY CORPORATON
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and business
-------------------------

     Cambridge Energy Corporation (the Company) was incorporated in the state of
Nevada on April 9, 1996.  The  Company  is an  independent  oil and gas  company
engaged in the  exploration  and development of domestic and foreign oil and gas
properties.  It presently owns oil well properties  located in Louisiana and oil
and gas properties in Indonesia.  The Company also manufactures certain wellhead
control devices (Note 9). Oil produced is sold to various crude oil purchaser in
the Louisiana market and to the Indonesian government in the Indonesian market.

Business combinations
---------------------

     During  the year  ended  March  31,  1999,  the  Company  acquired  its two
subsidiary  corporations  in  transactions  accounted for as purchases.  In both
transactions,  the purchase price was allocated to the fair values of the assets
acquired with no portion of the purchase price allocated to goodwill.

     The  Company  acquired  100% of the  outstanding  common  stock  of  Triton
Wellhead & Manufacturing,  Inc. (TWM), a U.S. corporation, on September 30, 1998
in exchange for 762,354  common stock  shares  valued at $.64 per share,  $5,000
cash,  the issuance of a $75,000 note payable and the  assumption of $366,944 of
liabilities (Note 8). TWM manufactures values and other wellhead control devices
(Note  9).  The   accompanying   consolidated   statement  of   operations   and
comprehensive income include TWM's results of operations subsequent to September
30, 1998.

     The Company  acquired  100% of the  outstanding  common  stock of Intermega
Energy Pte, Ltd. (IEP), a Singapore corporation,  on January 4, 1999 in exchange
for 1,873,414  common stock shares valued at $.875 per share and $500,000  cash,
which has not yet been paid (Note 5). IEP owns oil properties in Indonesia.  The
accompanying  consolidated  financial  statement of operations and comprehensive
income include IEP's results of operations subsequent to January 4, 1999.

     The  following  pro  forma   information  is  presented  as  if  the  above
acquisitions  had  occurred as of April 1, 1997,  the  beginning of the earliest
period presented in the accompanying consolidated financial statements.

                                               Years Ended
                                                 March 31,
                                           --------------------
                                           1999            1998
                                           ----            ----
      Revenues                       $  3,138,753      $  1,538,435
      Net loss                       $( 1,444,277)     $( 1,146,405)
      Net loss per share             $(      .015)     $(       .17)


Principles of consolidation
---------------------------

     The  accompanying  consolidated  financial  statements  include the general
accounts of the Company and its wholly owned  subsidiaries,  Triton Wellhead and
Manufacturing, Inc. (TWM) and Intermega Energy PTE, Ltd. (IEP). All intercompany
transactions  and accounts have been  eliminated in the  consolidation  and each
subsidiary corporation has a fiscal year end of March 31.


                                       23
<PAGE>
                          CAMBRIDGE ENERGY CORPORATON
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Method of accounting for oil and gas properties
-----------------------------------------------

     The Company uses the  successful  efforts  method of accounting for oil and
gas producing activities,  as set forth in the Statement of Financial Accounting
Standards No. 19, as amended.  Costs to acquire mineral interests in oil and gas
properties,  to drill and equip exploratory wells that find proved reserves, and
to drill and equip development wells are capitalized. Costs to drill exploratory
wells that do not find proved  reserves,  geological and  geophysical  costs and
costs of carrying and retaining unproved properties are expensed as incurred.

     Unproved  oil and gas  properties  that are  individually  significant  are
periodically  assessed for impairment of value,  and a loss is recognized at the
time of impairment by providing a valuation allowance. Other unproved properties
are  amortized  based on the Company's  experience  of  successful  drilling and
average holding period.  Capitalized  costs of producing oil and gas properties,
after  considering  estimated  dismantlement and abandonment costs and estimated
salvage values, are depreciated and depleted by the  unit-of-production  method.
Support  equipment  and other  property  and  equipment  are carried at cost and
depreciated over their estimated useful lives.

     On sale or retirement of a complete unit of a proved property, the cost and
related  accumulated  depreciation,  depletion,  and amortization are eliminated
from the property  accounts,  and the resultant gain or loss is  recognized.  On
retirement or sale of a partial unit of proved property,  the cost is charged to
accumulated  depreciation,  depletion, and amortization with a resulting gain or
loss recognized in income.

     On sale of an entire  interest  in an  unproved  property  for cash or cash
equivalent,  gain or loss on the sale is recognized,  taking into  consideration
the  amount  of any  recorded  impairment  if the  property  has  been  assessed
individually.  If a partial interest in an unproved property is sold, the amount
received is treated as a reduction of the cost of the interest retained.

Inventories
-----------

     Inventories are carried at the lower of cost (specific  identification)  or
net realizable value and include materials and supplies related to the Company's
oil and gas support equipment.

Property and equipment
----------------------

     Property and  equipment are stated at cost less  accumulated  depreciation.
Depreciation of property and equipment are being provided by accelerated methods
for financial and tax reporting  purposes over estimated useful lives of five to
seven years.

Marketable equity securities
----------------------------

     The Company  owns 75,000  common  stock  shares of a  corporation  publicly
traded on NASDAQ  Small Cap market (Note 4).  Pursuant to  Financial  Accounting
Standards No. 115 these securities are classified as available-for-sale  and are
recorded in the accompanying  financial  statements at their fair value based on
the quoted  market  price of the stock.  At March 31, 1999 and 1998,  unrealized
losses on these  securities  totaled $46,275 and $40,500,  respectively and have
been charged to comprehensive earnings.


                                       24
<PAGE>
                          CAMBRIDGE ENERGY CORPORATON
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Management estimates
--------------------

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

Cash Flow
---------

     For purposes of the statement of cash flows,  cash includes demand deposits
and time  deposits  with  maturities  of less  than  three  months.  None of the
Company's cash is restricted.

Net loss per share
------------------

     Basic loss per share  amounts are  computed  by dividing  the net loss plus
preferred stock dividends by the weighted  average number of common stock shares
outstanding.  Diluted loss per share amounts  reflect the maximum  dilution that
would have resulted from the conversion of the preferred  stock shares (Note 2).
Diluted  loss per share  amounts are  computed  by dividing  the net loss by the
weighted  average  number of common  stock shares  outstanding  plus the assumed
conversion  of preferred  stock shares into an equivalent of 50,283 common stock
shares.  No effect has been given to the assumed  exercise  of stock  options or
warrants because the effect would be antidilutive.

     For the years ended March 31, 1999 and 1998,  basic loss per share  amounts
are based on 9,575,117 and  6,853,389  weighted  average  shares of common stock
outstanding, respectively. Diluted loss per share amounts are based on 9,625,400
and 6,853,389 weighted average shares of common stock outstanding, respectively.


2.   PREFERRED STOCK

     From October 1998 through March 1999, the Company issued 124,000 and 10,000
shares of its Series A and Series B, respectively, preferred stock for 2.50 cash
per share.  Other than in liquidation and redemption at the holders' option, the
preferences attached to these series are identical.  The shares have a par value
of $.0001 and pay an 8.0% per annum  non-cumulative  dividend payable quarterly.
The shares are  convertible  into common  stock at the holders  options  anytime
within  18  months  from the date of issue at a  conversion  price of $1.50  per
common share. The shares are redeemable by the Company within 12 months from the
date of issue at a per share  redemption  price of  $2.50.  The  holders  of the
Series A shares can require redemption at the same price anytime during a period
beginning  12 months from the date of issue and ending 14 months from such date.
The holders of the Series B shares can also require redemption at the same price
anytime  during a period  beginning six months from the date of issue and ending
12 months from such date.

     In  liquidation,  the  Series A and B holders  are  entitled  to receive an
amount  equal to their  purchase  price of the shares plus  declared  but unpaid
dividends.  Series A  holders  have  liquidation  preference  over the  Series B
holders  and the holders of both series  have  liquidation  preference  over the
common stockholders.

     At March 31,  1999,  accrued  dividends  payable  related  to these  shares
totaled $5,452.



                                       25
<PAGE>
                           CAMBRIDGE ENERGY CORPORATON
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.   COMMITMENTS AND CONTINGENCIES


Leases
------

     The Company's home office  facilities are currently being provided  without
charge by a corporation owned by the Company's president.  The fair rental value
of this space  provided is not  material.  The Company's  Singapore  offices are
currently  leased on a month to month basis from a corporation  owned by another
of the Company's stockholders. For the years ended March 31, 1999 and 1998, rent
expense under these rental arrangements totaled $21,824 and $0, respectively.

     At March 31, 1999,  the Company was not obligated  under any  noncancelable
operating or capital lease agreements.

Year 2000 computer compliance
-----------------------------

     Management  believes the  Company's  computer  hardware and the software is
currently  in  compliance  with  the  year  2000  dating  issues.   Furthermore,
management does not believe any additional significant costs will be incurred in
dealing with this issue and the accompanying  consolidated  financial statements
do not  contain any  reserve  for this  contingency.  The Company has charged to
expense  when  incurred  approximately  $2,000  related  to  becoming  year 2000
compliant.

     Because of the unprecedented nature of the year 2000 issue, its effects and
the success of related  remediation efforts will not be fully determinable until
the year 2000 and  thereafter.  Management  cannot assure that the Company is or
will  be year  2000  ready,  that  the  Company's  remediation  efforts  will be
successful  in whole or in part,  or that  parties  with whom the  Company  does
business will be year 2000 ready.

Litigation
----------

     The Company is subject to legal  proceedings  and claims which arise in the
ordinary course of its business. Management does not believe that the outcome of
any of those  matters  will have a  material  adverse  effect  on the  Company's
consolidated financial position, operating results or cash flows.

Employment and related agreements
---------------------------------

     In January 1998, the Company  entered into an employment  agreement with an
executive  officer which provides for the payment of $150,000 in annual salaries
and additional  compensation  based on annualized gross revenues.  The agreement
expires in December  2002 and,  in certain  instances,  can be extended  through
December 2007.

     In October 1998, the Company entered into a consulting and share repurchase
agreement with a former officer.  The agreement  provides for an initial $50,000
payment  and monthly  payments of $5,000  until such time as a total of $400,000
has been paid under the agreement. The former officer will return to the Company
250,000  common  stock  shares for each  $100,000  of fees paid to him under the
agreement. At March 31, 1999, 58,352 shares had been returned to the Company and
are being held in the treasury.


4.   INCOME TAXES

     The  Company  uses the  accrual  method  of  accounting  for tax  reporting
purposes.  At March 31,  1999 and  1998,  the  Company  had net  operating  loss
carryforwards  for  financial  and  tax  reporting   purposes  of  approximately
$2,340,000 and $1,060,000, respectively which expire through the year 2014.


                                       26
<PAGE>
                          CAMBRIDGE ENERGY CORPORATON
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4. INCOME TAXES cont'd

     Deferred  income taxes are  recognized for the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting  purposes and the tax bases of those assets and liabilities  that will
result in taxable or deductible amounts in future years.

     For the years  ended  March 31, 1999 and 1998,  pursuant  to  Statement  of
Financial  Accounting Standards No. 109, the Company has recognized deferred tax
assets and  liabilities  which have been offset by valuation  allowances  in the
same amount.  Significant  components of the  Company's  deferred tax assets and
liabilities are summarized below.

                                                      1999          1998
       Deferred tax assets:

           Net operating loss carryforward        $  785,970     $  352,101
                                                  -----------    -----------

       Deferred tax liability:

                  Intangible drilling costs           32,268         24,464
                  Depletion                        (   4,896)     (     994)
                                                  ------------   ------------
                                                      27,372         23,470
                                                  ------------   ------------

                                                     758,598        328,631

         Valuation allowance                       ( 758,598)     ( 328,631)
                                                  ------------   ------------

         Net deferred tax asset (liability)       $        -     $        -
                                                  ============   ============

     A reconciliation of income tax expense at the statutory federal rate of 34%
to income tax expense at the  Company's  effective  tax rate for the years ended
March 31, 1999 and 1998 is as follows. 1999 1998

         Tax computed at statutory rate           $   429,946       331,850
         Benefit of operating loss carryforward    (  429,946)    ( 331,850)
                                                  ------------   ------------

         Income tax expense                       $         -    $        -
                                                  ============   ============


5.   RELATED PARTY TRANSACTIONS


Stockholders
------------

     During  the years  ended  March 31,  1999 and 1998,  the  Company  (and its
subsidiaries)  received cash advances from several of its stockholders  totaling
$238,600 and $31,905, respectively. The Company also owes a stockholder $500,000
as partial  consideration  for the  acquisition of IEP (Note 1). During the year
ended March 31, 1998,  the Company also received  property and equipment  with a
fair value of $30,753 accounted for as additional  advances.  These advances are
non interest  bearing,  unsecured  and payable upon  demand.  In June 1998,  the
Company issued  5,184,786 common stock shares at a fair value of $.005 per share
to repay $25,924 of these advances.


                                       27
<PAGE>
                          CAMBRIDGE ENERGY CORPORATON
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Stockholders, cont'd
--------------------
     During the year ended March 31, 1998, a  stockholder  and officer  provided
legal services to the Company totaling $45,000. The services were valued at fair
value for the services rendered.


6.   FINANCIAL INSTRUMENTS

     The Company's financial instruments,  which potentially subject the Company
to credit risks, consist of its cash, accounts receivable and notes payable.

Cash
----

     The Company maintains its cash in bank deposit and other accounts which, at
times, may exceed federally insured limits.  The Company has not experienced any
losses in such accounts,  and does not believe it is subject to any credit risks
involving its cash.

Accounts receivable
-------------------

     The Company accounts  receivable are unsecured and represent oil production
sales  and  lease  operating  income  not  collected  at the  end  of the  year.
Management  believes it is not exposed to any significant credit risks affecting
accounts  receivable  and that these  accounts  receivable  are fairly stated at
estimated net realizable amounts.

Notes payable
-------------

     Management  believes the carrying  value of these notes  represent the fair
value of these financial instruments because their terms are similar to those in
the lending market for comparable loans with comparable risks.


7.   STOCK OPTIONS AND WARRANTS

     During the years ended March 31, 1999 and 1998,  the Company issued various
stock  options  and  warrants to  employees  and  others.  The Company  uses the
intrinsic  value method of accounting for stock options.  Compensation  cost for
options granted has not been recognized in the accompanying financial statements
because the exercise  prices exceeded the current market prices of the Company's
common  stock on the dates of grant.  The options and  warrants  expire  between
April 1998 and June 2002 and are  exercisable  at prices  from $.50 to $5.00 per
option or warrant.




                                       28
<PAGE>
                          CAMBRIDGE ENERGY CORPORATON
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The following is a schedule of the activity relating to the Company's stock
options and warrants.  Other than the  1,098,000  warrants  identified  below as
granted  during the year ended March 31, 1998, all other amounts relate to stock
options the Company has issued.

                                 Year Ended                  Year Ended
                               March 31, 1999               March 31, 1998
                          -------------------------    -------------------------
                                      Weighted Avg.                Weighted Avg.
                            Shares      Exercise         Shares       Exercise
                          (x 1,000)      Price         (x 1,000)        Price
                          ---------   -------------    ---------   -------------
Options and warrants
    outstanding at
    beginning of year       6,666      $    1.30             -       $      -

Granted:
    Options                 1,000      $    1.55         6,000       $   1.00
    Warrants                    -      $       -         1,098       $   4.00

Exercised                       -      $       -             -       $      -

Expired:
    Options              (  3,000)     $    1.00             -              -
    Warrants             (    666)     $    4.00       (   432)      $   4.00
                         ---------                     --------

Options and warrants
    outstanding and
    exercisable at end
    of year                 4,000      $    1.14         6,666       $   1.30
                         =========                     ========

Weighted average fair
    value of options and
    warrants granted during
    the year                    -      $    1.15             -            .32

         The following table  summarizes  information  about the Company's stock
options  and  warrants   outstanding  at  March  31,  1999,  all  of  which  are
exercisable.
                                     Weighted Average
     Range of          Number           Remaining            Weighted Average
 Exercise Prices     Outstanding     Contractual Life         Exercise Price
 ---------------     -----------     ----------------        ----------------
  $   .50-1.50         3,600            2.4 years                $   1.00
  $  2.00-2.50           400            4.1 years                $   2.25

     The  following  pro forma  disclosures  reflect the  Company's net loss per
share amounts assuming the Company accounted for stock options granted using the
fair value method  pursuant to Statement of Financial  Accounting  Standards No.
123.  The fair value of each option  granted was  estimated on the date of grant
using the  Black-Scholes  option  pricing model with the following  assumptions:
risk-free  interest rate of 5.98%;  no expected  dividends;  expected lives of 3
years; and expected volatility of 153.3%.

                                    Year Ended            Year Ended
                                  March 31, 1999        March 31, 1998
                                  --------------        --------------
         Net loss                 $(  1,447,880)        $(  1,138,531)

         Net loss per share:
              Basic               $(        .15)        $(        .17)
              Diluted             $(        .15)        $(        .17)




                                       29
<PAGE>
                          CAMBRIDGE ENERGY CORPORATON
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     During the years  ended May 31,  1999 and 1998,  the  Company  also  issued
252,000 and 15,000 common stock shares in exchange for services.  These services
were  recorded at their fair value of $214,550  and $17,500,  respectively,  and
were charged to expense.


8.   NOTES PAYABLE

     During the year ended March 31, 1999, the Company borrowed  $300,000 on two
notes payable.  The notes are due in October 1999 and April 2000,  bear interest
at 10.0% and are unsecured.  Also, during the year ended March 31, 1999, $33,595
of principal was repaid on these notes.


9.   SEGMENT INFORMATION

     The Company conducts its operations through three reportable segments, each
of which is conducted through separate  corporations.  Those reportable segments
are its Louisiana oil properties,  its Indonesian oil and gas properties and its
wellhead control device manufacturing operations.

     The  following  table  reflects  certain  information  about the  Company's
reportable  operating  segments for the year ended March 31, 1999.  For the year
ended March 31, 1998,  the Company's only  reportable  segment was its Louisiana
oil  properties  and,  accordingly,  the accompany  March 31, 1998  consolidated
financial  statements  contain the required  segment  information for that year.
There are no intercompany revenue or expense transactions.
<TABLE>
<CAPTION>

Consolidated
------------                                         Louisiana     Indonesia     Manufacturing        Totals
                                                    ------------  -------------  --------------    -------------
<S>                                               <C>            <C>            <C>               <C>

   Revenues from external customers                $   288,830   $    222,131   $    51,065       $    562,026
    Operating loss                                   (  805,000)   (   286,478)   (  155,041)       ( 1,246,519)
    Interest expense                                     18,029              -             -             18,029
    Depreciation and depletion                           41,400          4,929        15,226             61,555
    Consulting services, non cash                       214,550              -             -            214,550
    Expenditures to acquire long-lived assets           925,068      4,331,763       263,342          5,520,173
    Total long-lived assets, net of depreciation
       and depletion                                    997,649      4,331,763       263,342          5,592,754

</TABLE>

         The  Company's  Indonesian  operating  segment  generates  100%  of its
revenues from sales to Pertamina, PTE, Inc., the Indonesian government owned oil
company although it has the right to sell to third parties.  Management does not
believe  that  selling  all or a  significant  portion  of its  products  to the
Indonesian government represents a significant credit risk.









                                       30
<PAGE>
                          CAMBRIDGE ENERGY CORPORATION
                       SUPPLEMENTARY INFORMATION REGARDING
                        OIL AND GAS PRODUCING ACTIVITIES
              FOR THE YEARS ENDED MARCH 31, 1999 AND MARCH 31, 1998
                                    UNAUDITED



     The  following  supplementary  oil  and  gas  information  is  provided  in
accordance with Statement of Financial  Accounting Standards No. 69, Disclosures
about Oil and Gas Producing  Activities (SFAS 69). The Company has properties in
two reportable  geographic  areas, oil and gas properties in southern  Louisiana
and oil properties in Indonesia.

1.   CAPITALIZED COSTS RELATING TO OIL AND GAS PRODUCING ACTIVITIES
<TABLE>
<CAPTION>

                                                             1999                 1998
                                                             ----                 ----
<S>                                                    <C>                 <C>

        Proved oil and gas properties                    $4,456,284          $   198,198
         Unproved oil and gas properties                          -                    -
         Support equipment, proved properties                31,966               25,586
                                                         -----------         -----------
                                                          4,488,250              223,784
         Accumulated depreciation and
           depletion                                         28,381                9,039
                                                         -----------         -----------

         Net capitalized costs                           $4,459,869          $   214,745
                                                         ===========         ===========

</TABLE>

2.   COSTS  INCURRED IN OIL AND GAS PRODUCING  ACTIVITIES  FOR ABOVE  REFERENCED
     PERIODS
<TABLE>
<CAPTION>

                                                                 1999             1998
                                                                 ----             ----
<S>                                                        <C>               <C>

         Acquisition of proven properties, including        $ 4,264,456       $   170,712
              $4,213,565 for properties in Indonesia

         Exploration costs                                  $   140,771       $   840,450

         Development costs                                  $         -       $         -
</TABLE>


3.   RESULTS OF OPERATIONS  FOR OIL AND GAS PRODUCING  ACTIVITIES  FOR THE ABOVE
     REFERENCED PERIODS
<TABLE>
<CAPTION>

                                                                  1999              1998
                                                                  ----              ----
<S>                                                       <C>                <C>
         Oil and gas sales                                  $    529,305      $     73,899
         Lease operating income                                   32,721            52,514
         Production costs                                        102,794            15,997
         Exploration expenses                                    140,771           840,450
         Depreciation and depletion                               19,332             7,009
         Income tax expense                                            -                 -
                                                            ------------      ------------
         Results of operations for oil
           and gas producing activities
           (excluding corporate overhead
           and financing costs)                             $    299,129      $(   737,043)
                                                            ============      ============
</TABLE>

                                       31
<PAGE>
                          CAMBRIDGE ENERGY CORPORATION
                       SUPPLEMENTARY INFORMATION REGARDING
                        OIL AND GAS PRODUCING ACTIVITIES
              FOR THE YEARS ENDED MARCH 31, 1999 AND MARCH 31, 1998
                                    UNAUDITED


4.   RESERVE QUANTITY INFORMATION

     The  following   estimates  of  proved  developed  reserve  quantities  are
estimates only, and do not purport to reflect  realizable  values or fair market
value of the  Company's  reserves.  They are  presented in  accordance  with the
guidelines established by the S.E.C. and disclosure requirements  promulgated by
SFAS 69. The Company  emphasizes the reserve estimates are inherently  imprecise
and that estimates of new discoveries are more imprecise than those of currently
producing oil and gas properties.  Accordingly,  these estimates are expected to
change as future  information  becomes  available.  All of the following reserve
information  relates to the  Company's  reserves  located in southern  Louisiana
except for the 10,215,867 barrels of Indonesian oil reserves acquired during the
year ended March 31, 1999 (Note 1).

     Proved reserves are estimated  reserves of crude oil (including  condensate
and natural gas liquids) and natural gas that  geological and  engineering  data
demonstrate  with  reasonable  certainty to be  recoverable in future years from
known  reservoirs  under  existing  economic and  operating  conditions.  Proved
developed  reserves are those expected to be recovered  through  existing wells,
equipment,  and operating method. The Company's proved developed and undeveloped
reserves and changes in them during the periods are as follows.

                                                       Oil            Gas
                                                      (BBLS)         (MCF)
                                                   -----------    -----------

         Reserves at March 31, 1997                   662,700               -

         Revisions of previous estimates               99,143               -
         Purchase of minerals in place              2,386,370      29,228,756
         Production                               (     3,763)    (    92,866)
                                                  ------------    ------------

         Reserves at March 31, 1998                 3,144,450      29,135,890

         Purchase of minerals in place             10,215,867               -
         Revision of previous estimates               765,800      47,758,910
         Production                               (    28,327)    (    82,300)
                                                  ------------    ------------

         Reserves at March 31, 1999                14,097,790      76,812,750
                                                  ============    ============


5.   STANDARDIZED  MEASURES  OF  DISCOUNTED  FUTURE NET CASH  FLOWS AND  CHANGES
     THEREIN  RELATING TO PROVED OIL AND GAS  RESERVES  AT THE ABOVE  REFERENCED
     DATE

     The standardized measure of discounted future net cash flows is computed by
applying  year-end  prices of oil and gas,  estimated  at $14.00  per barrel and
$2.18 per MMBTU, respectively,  (with consideration of price changes only to the
extent provided by contractual  arrangements) to the estimated future production
of proved oil and gas reserves,  less estimated  future  expenditures  (based on
year-end costs) to be incurred in developing and producing the proved  reserves,
less  estimated  future  income tax expenses  (based on year-end  statutory  tax
rates, with consideration of future tax rates already legislated) to be incurred
on pretax net cash flows less basis of the properties and available credits, and
assuming continuation of existing economic conditions.  The estimated future net
cash flows are then discounted  using a rate of 10 percent a year to reflect the
estimated timing of the future cash flows.


                                       32
<PAGE>
                          CAMBRIDGE ENERGY CORPORATION
                       SUPPLEMENTARY INFORMATION REGARDING
                        OIL AND GAS PRODUCING ACTIVITIES
              FOR THE YEARS ENDED MARCH 31, 1999 AND MARCH 31, 1998
                                    UNAUDITED


                    STANDARDIZED MEASURE OF DISCOUNTED FUTURE
                    NET CASH FLOW AT MARCH 31, 1999 AND 1998

<TABLE>
<CAPTION>

                                                     1999                           1998
                                                     ----                           ----
                                            Foreign             Domestic
<S>                                  <C>                <C>                   <C>

Future cash inflows                    $  172,200,000    $    181,311,731      $  32,039,330
Future production costs                 (  20,664,000)    (    21,757,408)      (  9,131,220)
Future development costs                (  10,332,000)    (    10,878,704)      (  2,000,750)
Future income tax expenses              (  46,494,000)    (    48,954,167)      (  9,625,168)
                                       ---------------      --------------     --------------

Future net cash flows                      94,710,000          99,721,452         11,282,192

10% annual discount for
     estimated timing of cash flows     (  46,407,900)    (    48,863,512)      (  4,120,252)
                                       ---------------      --------------     ----------------

Standardized measure of
     discounted future net cash
     flows relating to proved
     oil and gas reserves              $   48,302,100     $    50,857,940      $   7,161,940
                                       ===============    ================     ================



</TABLE>
                  RECONCILIATION OF CHANGES IN THE STANDARDIZED
                   MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
                       DURING THE ABOVE REFERENCED PERIOD



Beginning of period                             $  7,161,940      $     752,190

Sales of oil and gas produced                    (   529,305)      (     73,899)
Net changes in prices and production costs       (   102,794)      (    105,394)
Development costs incurred                       (   140,771)      (    840,450)
Revisions of previous quantity estimates          44,468,670            347,972
Net changes from purchase of minerals
    in place                                      48,302,300          7,081,521
                                                -------------     --------------

End of period                                   $ 99,160,040      $   7,161,940
                                                =============     ==============







                                       33
<PAGE>



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

     None.

























                                       34
<PAGE>
                                    PART III

Item 9.  Directors and Executive Officers of the Registrant

     (a) Identification of Directors and Executive Officers.

     (1)                  (1)                (2)                (3)
     Name                 Age               Term*              Served

Perry Douglas West                         Elected             Since
Chairman and CEO           52              Annually          Inception



     *All   directors   hold  office  until  the  next  annual  meeting  of  the
stockholders and the election and  qualification of their  successors.  Officers
are elected  annually by the Board of Directors  and serve at the  discretion of
the Board.

     The  following is a brief  description  of the business  background  of the
directors and executive officers of the Company:

     Perry Douglas West  co-founded the Company in April 1996, and has served as
Chairman  of  the  Board,  President  and  Chief  Executive  Officer  since  its
inception.   He  was  Chairman  and  Chief  Executive   Officer  of  Interactive
Technologies  Corporation (ITC) from 1995 until January 1998. ITC is a developer
and producer of television, interactive television and interactive digital media
programming.  Mr. West  co-founded  American  Financial  Network in 1985,  which
operated a national computerized mortgage loan origination network. He served as
Executive Vice  President/Director  and General  Counsel of this publicly traded
company from 1985 to 1991.  He was also  previously a partner in the  consulting
firm of  Cambridge  Equity,  Inc.,  which  structured  oil and gas  projects  in
Indonesia.  Mr.  West has  practiced  law in Florida  since  1974,  representing
various business institutions in the financial,  computer, natural resources and
general business  industries and  international  transactions.  He was graduated
with a Bachelor of Arts degree from The  Florida  State  University  in 1968 and
with a Juris Doctorate degree from The Florida State  University  College of Law
in 1974.

     There are no other significant employees of the business,  and there are no
family  relationships  among  the  directors,   executive  officers  or  persons
nominated or chosen by the Company to become  directors  or executive  officers.
None of the Company's directors,  executive officers or nominees for such office
have been involved in any legal  proceedings  related to bankruptcy of an entity
where  they held such  positions;  nor  charged  or  convicted  in any  criminal
proceedings;  nor  subject  to any order,  judgment,  or decree  permanently  or
temporarily  enjoining,   barring,  suspending  or  other  wise  limiting  their
involvement in any type of business, securities or banking activities; nor found
in any manner  whatsoever  to have  violated a federal  or state  securities  or
commodities law.


                                       35
<PAGE>
Item 10.  Executive Compensation

     Cash Compensation:

     The following table sets forth the aggregate cash  compensation paid by the
Company for services  rendered during the periods indicated to its directors and
executive officers:


                           SUMMARY COMPENSATION TABLE


Name & Position         Fiscal Year      Salary      Bonus    Other Compensation

Perry D. West               1997(1)        -0-        -0-               -0-
Chairman/CEO                1998(2)     $40,615       -0-             $45,000
                            1999(3)     $55,385       -0-               -0-


1)April 9, 1996 (Inception) - March 31, 1997

2)April 1, 1997 - March 31, 1998

3)April 1, 1998 - March 31, 1999

     Mr.  West  has an  Executive  Compensation  Agreement  in  effect  with the
Company,  approved by the Board of Directors.  This Agreement is for a five year
term,  and is  incentive  based over and above the basic  salary of $150,000 per
annum for Mr. West.  Salary  increases are based on gross revenue  achievements.
The first two full fiscal years' gross  revenue  goals for salary  increases are
$4,000,000,  and  $8,000,000  respectively.  Third,  Fourth and Fifth year gross
revenue  goals will be set by the Board of Directors  prior to the  beginning of
those years.  Additional  benefits  include  medical and dental coverage for Mr.
West and family;  disability  coverage;  vacation;  automobile  or allowance for
automobile; and a death benefit. Mr. West is also entitled to participate in the
Company's Key Employee Stock Option Plan which has been  authorized by the Board
of Directors but not implemented as of the fiscal year ended March 31, 1999. Mr.
West will also be entitled to  participate  in the Company's  401(K)  retirement
plan,  which the  Company  intends to offer to its  employees.  This  employment
contract  may be  terminated  for cause,  and it  provides  for  payments to the
executive  in the  event  there is a change  of  control  of the  Company  which
adversely affects their employment.  Mr. West has agreed to defer all or partial
salary and other benefits from his compensation  agreements  during fiscal years
ended March 31, 1998 and 1999.

     The following  table sets forth the options  granted  during the last three
fiscal years to each of the directors and executive officers:

 Option/SAR Grants in Last Fiscal Year   (Individual Grants):

                       Number of       Percent of total
                       Securities        Options/SARs
                       Underlying          granted to                Exercise or
                      Options/SARS       employees in    base price   Expiration
        Name            Granted           fiscal year    ($/Share)       date
       -----          ------------     ----------------  ----------  -----------

Perry D. West          1,000,000             16.7           $ .50      6/9/02
                       1,000,000             16.7           $1.00      6/9/02
                       1,000,000             16.7           $1.50      6/9/02

Lee M. Payne(*)        1,000,000             16.7           $ .50      6/9/02
                       1,000,000             16.7           $1.00      6/9/02
                       1,000,000             16.7           $1.50      6/9/02

     *Mr. Payne has released these rights. (See Item 12 below)

     No options  granted to the directors and executive  officers were exercised
during the fiscal year ended March 31, 1998 and 1999.

                                       36
<PAGE>
Item 11.   Security Ownership of Certain Beneficial Owners and Management

     (a) Security Ownership of Certain Beneficial Owners

--------------------------------------------------------------------------------
(1)            (2)                      (3)                      (4)
Title of       Name and Address         Amount and Nature        Percent of
Class          of Beneficial Owner      of Beneficial Owner      Class
--------------------------------------------------------------------------------

Common       Lee M. Payne               Former Executive Vice
             1295 Rockledge Drive       President/Director
             Rockledge, Florida 32955   3,192,393 Shares*        38.3


     (b) Security Ownership of Management

     The  following  table  sets  forth  the  share  holdings  of the  Company's
directors and executive  officers as of March 31, 1998, with these  computations
based upon 8,334,786  shares of common stock being  outstanding,  and no options
granted being exercised.

--------------------------------------------------------------------------------
(1)            (2)                      (3)                      (4)
Title of       Name and Address         Amount and Nature        Percent of
Class          of Beneficial Owner      of Beneficial Owner      Class
--------------------------------------------------------------------------------

Common       Perry Douglas West         Chairman and CEO         38.3
             P.O. Box 1656              3,192,393 Shares*
             Cocoa, Florida 32923

Common       Lee M. Payne
             1295 Rockledge Drive
             Rockledge, Florida 32955   3,192,393 Shares**       38.3

Common       Officers and Directors
             as a Group                 6,384,786 Shares         76.6

* Mr. West has  options to purchase  1,000,000  shares of the  Company's  Common
Stock at $.50; 1,000,000 shares at $1.00; and 1,000,000 shares at $1.50 any time
within sixty months of June 9, 1997 when the options were granted.

**After  Mr.  Payne,  a former  officer and  director  of the company  resigned,
several  agreements  were entered  into  between the Company,  Mr. Payne and Mr.
West. The Company  entered into a share purchase  agreement with Mr. Payne dated
October 15, 1998,  for the  purchase of 1,000,000  shares of common stock over a
five year period for a total purchase price of $400,000. On October 7, 1998, the
Company  entered into a  Consulting  Agreement  with Mr. Payne  agreeing for the
payment  of  $5,000.00  per  month  for  consulting  services  up to a total  of
$400,000. It was agreed that all payments made to Mr. Payne under the Consulting
Agreement  referenced above would be considered payment of stock under the share
purchase  agreement.  In  addition,  Mr. Payne and Mr. West entered into a share
purchase  agreement  dated  October 15, 1998 for the  purchase by Mr. West of an
additional  2,000,000  shares of Mr.  Payne's  stock over a period of five years
with 500,000 shares to be purchased at $0.50 per share, 500,000 shares purchased
at $0.75 per share,  500,000  shares  purchased  at $1.00 per share and  500,000
shares purchased at $1.25 per share.

     Management has no knowledge of the existence of any arrangements or pledges
of the  Company's  securities  which may  result in a change in  control  of the
Company.

     (c) Beneficial  Ownership  Reporting  Compliance  reported in Form 3 by Mr.
West was filed, but was filed late.  There were no transactions  reported by Mr.
West











                                       37

<PAGE>

Item 12.  Certain Relationship and Related Transactions

     Shareholder  Loans.  During the fiscal  year  ending  March 31,  1999,  the
executive officer and director of the Company,  Mr. West, made shareholder loans
to the Company for operating expenses totaling $55,400,  for a total outstanding
shareholder  loans  of  $92,134.  These  amounts  were  initially  loaned  at no
interest, and will be reimbursed at such time as cash flow permits.

     Other   Material   Transactions.   With  the  exception  of  the  Executive
Compensation  Agreements and the Executive  Stock Option  Agreements of Mr. West
and Mr.  Payne,  there  have been no  material  transactions,  series of similar
transactions  or  currently  proposed  transactions  to which the Company or any
officer, director, their immediate families or other beneficial owner is a party
or has a material interest in which the amount exceeds $60,000.















                                       38
<PAGE>

                                     PART IV

Item 13.  Exhibits, Financial Statement Schedules  and Reports on Form 8-K



                               EXHIBIT INDEX

(a.)     Exhibit                                                          Page
                                                                          ----

3.1      Articles of Incorporation, Charter and By-Laws                    (1)

10.1     Agreement bewteen Cambridge Energy Corporation and
          Intermega Energy PTE. and F.K.Ho                                 (2)

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

(1) This exhibit was previously filed as an exhibit to the Registrant's  Form 10
    filed October 9, 1998 and is herein incorporated by reference.

(2) Filed herewith


























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                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for filing and has duly caused this  registration  statement to be
signed on its behalf by the undersigned,  thereunto duly authorized, in the City
of Cocoa, State of Florida, on October 21, 1999.



                                    CAMBRIDGE ENERGY CORPORATION


                                     By:  /s/ Perry Douglas West
                                       -------------------------
                                         Perry Douglas West
                                         Chairman and Chief Executive Officer













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