UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C. 20549

                                 FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                 For the fiscal year ended December 31, 1999

                                    Or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

              For the transition period from        to

                    Commission File Number 333-31375*


                        FORMAN PETROLEUM CORPORATION
          (Exact name of registrant as specified in its charter)

           LOUISIANA                                 72-0954774
 (State or other jurisdiction                    (I.R.S. Employer
     of incorporation or                         Identification No.)
        organization)

  650 POYDRAS STREET - SUITE 2200                  (504) 586-8888
New Orleans, Louisiana 70130-6101          (Registrant's telephone number
(Address of principal executive                 including area code)
      offices)(Zip Code)



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

     Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.  Yes [ X ]  No [  ].

Indicate by check mark whether the Registrant (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 [  ].

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any
amendment to this Form 10-K. [X]

As of March 30, 2000, there were 1,000,008 shares of the Registrant's
Voting Common Stock, no par value  outstanding.

* THE COMMISSION FILE NUMBER REFERS TO A FORM S-4 REGISTRATION STATEMENT
FILED BY THE REGISTRANT UNDER THE SECURITIES ACT OF 1933, WHICH BECAME
EFFECTIVE SEPTEMBER 26, 1997.

<PAGE>

                        FORMAN PETROLEUM CORPORATION

                FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999

                             TABLE OF CONTENTS

<TABLE>
<CAPTION>



<S>       <C>                                                                           <C>
PART I                                                                                  1

ITEM 1.   BUSINESS                                                                      1

ITEM 2.   PROPERTIES                                                                    15

ITEM 3.   LEGAL PROCEEDINGS                                                             17

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                           17


PART II                                                                                 17

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER                 17
MATTERS

ITEM 6.   SELECTED FINANCIAL AND OPERATING DATA                                         19

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS                                                                   20

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                    25

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                     25

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE                                                                    25


PART III                                                                                25

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                            25

ITEM 11. EXECUTIVE COMPENSATION                                                         27

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                 28

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                 30


PART IV.                                                                                31

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                31

<PAGE>
                                  PART I

     ITEM 1.   BUSINESS

OVERVIEW

     Forman  Petroleum Corporation (the "Company") is an independent energy
company engaged  in the acquisition, exploration, development, exploitation
and production of  crude  oil and natural gas in the Gulf Coast Basin.  The
Company emerged from Chapter  11 protection of the United States Bankruptcy
Code on December 29, 1999 after  operating  as a debtor-in-possession since
August 6, 1999.

     The Company currently has interests in five  fields  onshore  in south
Louisiana. The fields are Lake Enfermer, Boutte, Manila Village, Bayou  Fer
Blanc,  and  West Gueydan.  These five fields have cumulative production of
approximately  154  MMBoe  and contain complex geologic structures that are
well suited to 3-D seismic surveys and interpretation to identify potential
reserves. Since 1994, the Company has acquired and processed over 74 square
miles of 3-D seismic data over these fields.

     The Company currently operates  three  fields,  Lake Enfermer, Boutte,
and Manila Village, where it is actively exploring for  and  developing oil
and  natural  gas  reserves.   The Company owns a weighted average  working
interest of 91% in the three fields  it operates, which enables the Company
to  control  the  timing  and  implementation   of   all  exploitation  and
exploration activities in those fields.  The Company owns seismic data, but
no current lease rights, in the Bayou Fer Blanc Field.   In  the  remaining
field, West Gueydan, the Company assigned all of its leases comprising  the
West  Gueydan  Field to the West Gueydan Field Partnership, a Texas limited
partnership in which the Company is the sole limited partner.

     As of December  31, 1999, the Company had estimated proved reserves in
the Lake Enfermer, Boutte, and Manila Village fields of 19.0 Bcf of natural
gas and 1.6 MMBbls of oil, or an aggregate of approximately 4.8 MMBOE, with
a present value of estimated  pre-tax  future  net cash flows discounted at
10% of $36.4 million (based upon prices at December  31,  1999).  On  a BOE
basis,  75%  of  the  Company's reserves as of that date were classified as
proved developed and the  Company's  reserve  to  production ratio was five
years.  In  addition to proved undeveloped reserves,  the  Company  has  an
inventory  of   what  it  believes  are  significant  unproven  exploratory
prospects in the  Lake  Enfermer, Bayou Fer Blanc and Manila Village fields
that have been identified  by  the  Company  through the application of 3-D
seismic technology.

     The Company believes that it can identify  new  drilling opportunities
in its fields by combining 3-D seismic survey data with other technologies,
including  CAEX  technology,  as  well  as other available  geological  and
engineering data. The Company's advanced  visualization  and  data analysis
techniques  and  sophisticated computing resources enable its geoscientists
to view collectively  large volumes of information contained within the 3-D
seismic data. These techniques  and  resources  also  allow  the  Company's
geoscientists  to  more  easily identify features such as shallow and  deep
amplitude anomalies, complex  channel systems, sharp structural details and
fluid contacts, which might have  been  overlooked using less sophisticated
3-D  seismic  data  interpretation  techniques.  The  Company  has  made  a
significant investment in its 3-D seismic  data  visualization  technology,
which  is  closely  linked  with the Company's well-log database and  other
geoscience application software.  The Company uses a series of Microsoft NT
workstations, and has licensed Seismic  Micro-Technology's Kingdom software
for interpreting the geophysical data on  the  3-D workstations, as well as
for analysis, mapping and interpretation of geological data.

     The Company's technological success is dependent  in  part upon hiring
and retaining highly skilled technical personnel. The Company has assembled
a technical team that it believes has the capacity to adapt  to the rapidly
changing  technological  demands  in  the  field  of  oil  and natural  gas
exploration. This team consists of six geoscientists and engineers  with an
average of 25 years industry experience, primarily concentrated in the Gulf
Coast  region.  The  expertise  of  the Company's team of geoscientists and
engineers  reduces  its  dependence on outside  technical  consultants  and
enables  the  Company  to internally  generate  substantially  all  of  its
prospects.


<PAGE>



RECENT DEVELOPMENTS

     On August 6, 1999,  the  Company filed a voluntary petition for relief
under Chapter 11 of the United  States Bankruptcy Code in the United States
District  Court  for the Eastern District  of  Louisiana  (the  "Bankruptcy
Court") (Case No. 99-14319).  On November 22, 1999, the Company and certain
of its creditors filed  a  Second  Amended Joint Plan of Reorganization, as
amended on December 29, 1999 (collectively,  the  "Bankruptcy  Plan").  The
Bankruptcy Plan was confirmed by the Bankruptcy Court on December  29, 1999
and consummated effective January 14, 2000.

     In connection with the consummation of the Bankruptcy Plan, all of the
members  of  the Company's Board of Directors, other than McLain J. Forman,
resigned.  In  accordance with the Bankruptcy Plan, the Company's new Board
of Directors consists  of  Nicholas Tell, Jr., Chairman of the Board, Jerry
W. Box, Jeffrey Clark and McLain J. Forman.

     Pursuant to the Bankruptcy  Plan,  on  January  14,  2000,  all of the
Company's  issued and outstanding securities were canceled and the  Company
issued the following  equity  securities  in  approximately  the  following
amounts:

    _          925,000  shares of common stock, no  par  value (the "Common
          Stock" ), to the  former holders  of  the  Company's 13.5% Series
          B Senior Notes due 2004 (the "Senior Notes" );

    _          75,000 shares of Common Stock  to  the former holders of the
          Company's  Series A  Cumulative  Preferred Shares (the "Preferred
          Stock"); and

    _          warrants to purchase up to 500,000 shares of Common Stock to
          certain  former warrant holders of the Company and to  McLain  J.
          Forman, the former sole voting shareholder of the Company.

See "Item 5.  Market for Registrant's Common Equity and Related Stockholder
Matters."

     Pursuant to the Bankruptcy Plan, on January 14, 2000, the Company paid
in  full in cash approximately  $300,000  of  allowed  convenience  claims.
Furthermore,  the  Company has issued to the general unsecured creditors of
the Company an aggregate  of approximately $2.7 million of promissory notes
payable over three years and bearing interest at the rate of 8% per year.

     The Company is disputing  approximately  $3 million in additional pre-
petition  bankruptcy  claims.   These  claims  and certain  other  residual
bankruptcy-related  matters  are  still  within  the  jurisdiction  of  the
Bankruptcy Court.  There can be no assurance as to  the  amount the Company
will be required to pay with respect to these matters.

     On  the effective date of the Bankruptcy Plan, the Company's  articles
of incorporation and by-laws were amended and restated.

BUSINESS STRATEGY

     The Company's  business  strategy  is  to  expand its proven reserves,
production and cash flow through a disciplined technology-based  program of
exploitation and exploration for crude oil and natural gas, emphasizing the
following key competitive strengths:

     MONTE CARLO SIMULATIONS - The Company uses Monte Carlo simulations  to
analyze each exploration drilling prospect and identify the most attractive
wells on a risk/return basis.  As the Company obtains new drilling results,
it  will  update  its  simulations  and,  if necessary, revise its drilling
program.

<PAGE>

     RISK SHARING - The Company intends to reduce its current high  working
interests  in  its  drilling  prospects  to  50%  or  less by entering into
agreements  with  one  or  more oil companies who will share  the  drilling
risks.  These farmouts will  allow  the  Company  to  spread  its  drilling
expenditures  across a larger number of drilling prospects and realize  the
benefits from greater  drilling diversification. The Company will strive to
retain operating control but will actively pursue a program whereby it will
acquire farm-in or joint  venture  partners for its existing properties and
will  consider reciprocal participation  in  other  attractive  exploration
ventures.

     TECHNOLOGICAL  EXPERTISE  -  Many of the fields in south Louisiana are
ideally suited for the application of 3-D seismic data surveys to interpret
the large structures of the area, using  an exploitation technique in which
the Company has extensive experience. The  geological  complexities  in the
Lake Enfermer Field have in the past made conventional interpretation  very
difficult.  The  Company  uses 3-D seismic data in this field combined with
existing well control and production  information  for its interpretations.
In  addition  to enhancing the interpretations of structures,  the  Company
uses 3-D seismic data to optimize its well programs.

     INVENTORY  OF  EXPLORATORY  DRILLING PROSPECTS - In addition to proved
undeveloped reserves, the Company  has an inventory of what it believes are
significant  unproven exploratory prospects.  These  exploratory  prospects
have been identified  through  the application of 3-D seismic technology in
the Company's Lake Enfermer Field,  Bayou Fer Blanc Field, West Gueydan and
Manila  Village  Fields.  During  the  past  year,  third  party  petroleum
engineering firms completed an extensive review of the Company's geological
and  geophysical  interpretations  of  the Company's  unproved  exploratory
prospects.  The Company believes that additional exploratory prospects will
be identified as soon as a 3-D survey has  been  completed  at  the  Boutte
Field.

     GEOGRAPHIC SPECIALIZATION - The Company focuses its operations in  the
environmentally  sensitive  coastal  marshlands  of  south  Louisiana.  The
Company's  reputation  for preserving the integrity of these marshlands and
its years of experience  in  this  area have enabled the Company to acquire
fields  owned  by  landowners  who  restrict   and  carefully  monitor  all
operations on their property.  This same expertise  in  south Louisiana has
also  enabled the Company to successfully conclude joint ventures,  farmout
agreements  and  purchases of oil and gas properties with large independent
and major exploration  and  production  companies  operating  in  the south
Louisiana area.

SIGNIFICANT PROJECT AREAS

     Set  forth  below  are  descriptions  of the Company's south Louisiana
fields where it is actively exploring for and  developing  oil  and natural
gas  reserves  and in many cases currently has production. The 3-D  surveys
which the Company is using to analyze its project areas range from regional
non-proprietary group shoots to single field proprietary surveys.

     The Company  is continually evaluating its exploration and development
prospects and will  drill  those  considered to have the highest potential.
The final determination with respect  to  the  drilling of any scheduled or
budgeted  wells  will be dependent on a number of  factors,  including  (i)
results of the exploration efforts and the acquisition, review and analysis
of the seismic data,  (ii) the availability of sufficient capital resources
by  the  Company  and the  other  participants  for  the  drilling  of  the
prospects, (iii) the  approval  of  the prospects by the other participants
after  additional  data  has  been compiled,  (iv)  economic  and  industry
conditions at the time of drilling,  including  prevailing  and anticipated
prices  for oil and natural gas and the availability of drilling  rigs  and
crews, (v) the financial resources and operating results of the Company and
(vi)  the  availability  of  leases  on  reasonable  terms  and  regulatory
permitting  for  the  prospect.  There  can be no assurance that any of the
Company's projects can be successfully developed  or  that any scheduled or
budgeted  wells  will,  if  drilled,  encounter reservoirs of  commercially
productive oil and natural gas.

     LAKE ENFERMER FIELD - The Lake Enfermer  Field  is  located on a deep,
complexly  faulted, salt structure in Lafourche Parish in a  coastal  marsh
that is subsiding and grading into an open bay environment. The Company has
acquired leases on 3,650 acres in this field since 1992, has an average 89%
working interest  in, and is the operator of the field. The field was first
discovered in 1955  by  Olin  Gas  Production.   Through December 1999, the
field  has  produced  more than 31.8 MMBoe. The acquisition  of  the  field
included two production facilities and one satellite location. In 1997, the
Company built an additional  production  facility  that  cost approximately
$0.5 million. These three processing centers are located approximately  1.5
miles  apart  from  each  other  and  are  adequate  to  service all of the
Company's  anticipated  wells.   Upon  the  acquisition of the  field,  the
Company  used  its  extensive database of 2-D seismic  data  to  drill  and
complete  three wells  in  1993  and  1994  (two  of  which  are  currently
productive) for a cost of $5.3 million.

<PAGE>

     The Company  determined  that  an  extensive  3-D  survey  of the Lake
Enfermer Field area was necessary to optimally develop the field.  In April
1995,  the  Company  commenced  a  33  square  mile  proprietary 3-D survey
encompassing  the  entire  Lake  Enfermer Field for the purpose  of  better
identifying additional reserve potential  and  more  accurately determining
drilling  locations.  The  3-D  survey  resulted  in the identification  of
numerous drilling opportunities. The Company utilized  this seismic data to
drill  and  complete  three wells in 1996 at a cost of $12.3  million.  The
first post-3-D survey well,  spudded  in January 1996, logged over 200 feet
of productive sands and was successfully  completed  as  a dually producing
oil well in March 1996. The second and third post-3-D survey wells, spudded
in April and July 1996, together logged over 312 feet of productive  sands.
The  Company drilled and completed two additional wells in 1997 and drilled
and  temporarily   suspended   operations   on  one  well  pending  further
evaluation.

     MANILA  VILLAGE  FIELD   -  The Manila Village  Field  is  located  in
Jefferson  Parish  in  a  brackish water  marsh  environment.  The  Company
acquired leases on 825 acres  in  this  field  in  1991 from Manila Village
Production Company.  The Company has an average 65% working interest in and
is the operator of the field. The field was first discovered  by Whitestone
in  1949  and  through December 1999, the field had produced 35 MMBoe.  The
Company undertook  a  12  square mile 3-D survey over the area and the data
from that survey has been interpreted by the Company.

     BOUTTE FIELD - The Boutte  Field  is located in a fresh water marsh in
St. Charles Parish. All well locations are accessible by roads. The Company
acquired leases on 3,250 acres in 1992 from  Texaco  and  Apache  and has a
100%  working  interest  in  this  field, which it operates. Discovered  by
Texaco in 1953, through December 1999  the field had produced a total of 36
MMBoe with a production mix of 45% natural  gas  and  55% oil. In 1997, the
Company  recompleted five wells, and during 1998, the company  successfully
recompleted  one additional well.  During the first two months of 1999, the
Company drilled  and  successfully completed another gas well in the Boutte
Field.

     BAYOU FER BLANC FIELD-  The  Bayou  Fer  Blanc  Field  is  located  in
Lafourche Parish, adjacent to the Lake Enfermer Field. In 1997, the Company
purchased  a  100%  working interest in the Bayou Fer Blanc Field, which it
now operates. Although classified as two distinct fields, the Lake Enfermer
Field and the Bayou Fer  Blanc  Field  have produced from a single geologic
structure. Texaco discovered the Bayou Fer  Blanc Field in 1959 and through
December 1999, the field had produced 17 MMBoe.  The Company completed a 25
square mile proprietary 3-D seismic survey of the  Bayou Fer Blanc Field in
1996, which was integrated with the 33 square mile 3-D  seismic  survey  of
the  Lake  Enfermer Field for a total of 58 contiguous square miles for the
two fields.  The  Company's  initial  analysis  of  the 3-D survey suggests
numerous  undrilled  amplitude  anomalies with exploratory  potential.  The
Company drilled one unsuccessful exploratory well in this field in 1997.

     WEST GUEYDAN FIELD  - The West Gueydan Field is located in rice fields
in  Vermilion  Parish  on  a deep salt  structure.  In  1997,  the  Company
purchased a 100% working interest  in  1,180  acres in the field. The field
includes  a  wellbore  that  has been cleaned out to  total  depth  and  is
available for re-entry and sidetracking.  Magnolia  Oil  Company discovered
the field in 1938 and through December 1999, the field had produced over 36
MMBoe. The Company has an extensive 2-D seismic data grid  of the field and
recently acquired additional 3-D seismic data.

     In  December  1998, the Company assigned all of its leases  comprising
the West Gueydan Field  to the West Gueydan Field Partnership (the "Gueydan
Partnership"),  a Texas limited  partnership.   The  Company  is  the  sole
limited partner of  the  Gueydan  Partnership, with a 50.505% interest, and
Prime Natural Resources, Inc. ("Prime")  is the sole general partner of the
Gueydan  Partnership,  with the remaining 49.495%  interest.   The  initial
exploratory well was drilled  and  logged  non-commercial  by  the  Gueydan
Partnership  in  1999.  On October 4, 1999, the Gueydan Partnership entered
into an agreement with Cobra  Exploration  Company  ("Cobra").  The Gueydan
Partnership  retains  a  25%  working  interest  in all operations by Cobra
pursuant  to  the  agreement,  subject to the terms and  conditions  of  an
operating agreement between the  parties.  The  agreement requires Cobra to
spud a well on or before May 1, 2000 at a location and to designated depths
on  certain leases covering approximately 100 acres  in  the  West  Gueydan
Field.   Through  the  Gueydan Partnership, the Company will have a net 15%
carried working interest in the proposed well to casing point.

<PAGE>

ACQUISITION, PRODUCTION AND DRILLING ACTIVITY

     ACQUISITION AND DEVELOPMENT  COSTS  -  The  following table sets forth
certain  information regarding the costs incurred by  the  Company  in  its
acquisition and development activities during the periods indicated:


</TABLE>
<TABLE>
<CAPTION>
                                   YEAR END DECEMBER 31,
                           ----------------------------------
                             1999         1998         1997
                             ----         ----         ----
                                (In thousands)
<S>                         <C>          <C>          <C>
Acquisition costs           $    82      $     0      $  6,100
Development costs             1,746        2,119         4,105
Exploratory costs             3,346        2,414        18,464
                              -----        -----        ------
Total costs incurred        $ 5,174      $ 4,533      $ 28,669
                              =====        =====        ======
</TABLE>


     DRILLING  ACTIVITY  - The following table sets forth the wells drilled
and completed by the Company during the periods indicated:

<TABLE>
<CAPTION>
                                        YEARS ENDED DECEMBER 31,
                          ---------------------------------------------------
                                1999             1998              1997
                          --------------    --------------     --------------
                          GROSS      NET    GROSS      NET     GROSS      NET
<S>                        <C>       <C>    <C>        <C>     <C>        <C>
Development:
        Productive         1.0       1.0     0.0       0.0      0.0       0.0
        Non-productive     0.0       0.0     0.0       0.0      1.0       1.0
                           ---       ---     ---       ---      ---       ---
                Total      1.0       1.0     0.0       0.0      1.0       1.0
                           ---       ---     ---       ---      ---       ---
Exploratory:
        Productive         0.0       0.0     0.0       0.0      2.0       2.0
        Non-productive     1.0       0.5     0.0       0.0      1.0       1.0
                           ---       ---     ---       ---      ---       ---
                Total      1.0       0.5     0.0       0.0      3.0       3.0
                           ---       ---     ---       ---      ---       ---
Total:
        Productive         1.0       1.0     0.0       0.0      2.0       2.0
        Non-productive     1.0       0.5     0.0       0.0      2.0       2.0
                           ---       ---     ---       ---      ---       ---
                Total      2.0       1.5     0.0       0.0      4.0       4.0
                           ---       ---     ---       ---      ---       ---

</TABLE>

     PRODUCTIVE WELL SUMMARY - The following table sets forth the Company's
ownership in productive wells at December 31,1999.  Gross oil and gas wells
include   one   well   with  multiple  completions.   Wells  with  multiple
completions are counted only once for purposes of the following table:


<TABLE>
<CAPTION>
                  Productive Wells
              -------------------------
                 Gross         Net
              -----------  ------------
<S>             <C>           <C>
Gas               7.0            6.7
Oil              15.0           12.3
              -----------  ------------
      Total      22.0           19.0
</TABLE>

OIL AND GAS MARKETING

     All of the Company's  natural  gas  is  sold at current market prices,
either under monthly spot price contracts or under  longer  term  contracts
that  dedicate  the  natural  gas  from  a  property  or a well to a single
purchaser for an extended period of time at a fixed price  for  the period.
The Company's oil and natural gas condensate production is sold at  current
market  prices  under  short  term contracts providing for market sensitive
prices.  From time to time, the Company may enter into transactions hedging
the  price of oil.  See "Item 7.  Management  Discussion  and  Analysis  of
Financial  Condition and Results of Operations" and "Item 7A.  Quantitative
and Qualitative Disclosures About Market Risk."

<PAGE>

COMPETITION AND MARKETS

     The Company  operates in a highly competitive environment. The Company
competes with major  and  independent oil and natural gas companies for the
acquisition of desirable oil and natural gas properties, as well as for the
equipment and labor required  to  develop  and operate such properties. The
Company  also  competes  with major and independent  oil  and  natural  gas
companies in the marketing and sale of oil and natural gas to marketers and
end-users. Many of these competitors  have  financial  and  other resources
substantially greater than those of the Company.

     The  marketability  of  the  Company's  production  depends  upon  the
availability   and   capacity  of  gas  gathering  systems,  pipelines  and
processing facilities,  and  the unavailability or lack of capacity thereof
could  result  in  the  shut-in  of   producing   wells  or  the  delay  or
discontinuance of development plans for properties.  In  addition,  federal
and  state regulation of oil and natural gas production and transportation,
general  economic  conditions  and  changes  in  supply  and  demand  could
adversely  affect  the  Company's ability to produce and market its oil and
natural gas on a profitable basis.

REGULATION

     GENERAL  - Various aspects  of  the  Company's  oil  and  natural  gas
operations are subject to extensive and continually changing regulation, as
legislation affecting  the  oil  and natural gas industry is under constant
review for amendment or expansion.  Numerous departments and agencies, both
federal and state, are authorized by  statute  to  issue,  and have issued,
rules and regulations binding upon the oil and natural gas industry and its
individual  members.  The  Federal Energy Regulatory Commission  (''FERC'')
regulates  the transportation  and  sale  for  resale  of  natural  gas  in
interstate commerce  pursuant  to the Natural Gas Act of 1938 (''NGA'') and
the Natural Gas Policy Act of 1978  (''NGPA'').  In  the  past, the Federal
government has regulated the prices at which oil and natural  gas  could be
sold.  While sales by producers of natural gas and all sales of crude  oil,
condensate  and  natural  gas liquids can currently be made at uncontrolled
market  prices,  Congress could  reenact  price  controls  in  the  future.
Deregulation of wellhead  sales  in the natural gas industry began with the
enactment of the NGPA in 1978. In  1989,  Congress  enacted the Natural Gas
Wellhead Decontrol Act (the ''Decontrol Act''). The Decontrol  Act  removed
all  remaining  NGA and NGPA price and nonprice controls affecting wellhead
sales of natural gas effective January 1, 1993.

     REGULATION OF  OIL  AND  NATURAL  GAS  EXPLORATION  AND  PRODUCTION  -
Exploration and production operations of the Company are subject to various
types   of  regulation  at  the  federal,  state  and  local  levels.  Such
regulations  include  requiring permits and drilling bonds for the drilling
of wells, regulating the  location  of  wells,  the  method of drilling and
casing wells, and the surface use and restoration of properties  upon which
wells are drilled. Many states also have statutes or regulations addressing
conservation  matters, including provisions for the utilization or  pooling
of oil and natural  gas  properties,  the establishment of maximum rates of
production from oil and natural gas wells  and  the  regulation of spacing,
plugging and abandonment of such wells. Some state statutes  limit the rate
at which oil and natural gas can be produced from the Company's properties.
See ''Cautionary Statements-Compliance with Governmental Regulations.''

     NATURAL  GAS  MARKETING,  GATHERING,  PROCESSING AND TRANSPORTATION  -
Federal  legislation and regulatory controls  in  the  United  States  have
historically affected the price of natural gas and the manner in which such
production  is  marketed.  Commencing  in April 1992, the FERC issued Order
Nos.  636,  636-A,  636-B  and 636-C (''Order  No.  636''),  which  require
interstate pipelines to provide  transportation separate, or ''unbundled,''
from the pipelines' sales of natural  gas.  Also,  Order  No.  636 requires
pipelines  to provide open-access transportation on a basis that  is  equal
for all natural  gas  supplies.  Although  Order  No. 636 does not directly
regulate the Company's activities, the FERC has stated  that it intends for
Order  No.  636 to foster increased competition within all  phases  of  the
natural  gas industry.  It  is  unclear  what  impact,  if  any,  increased
competition  within  the natural gas industry under Order No. 636 will have
on the Company's activities.  Although  Order  No.  636  could  provide the
Company   with   additional   market   access   and   more  fairly  applied
transportation service rates, Order No. 636 could also  subject the Company
to more restrictive pipeline imbalance tolerances and greater penalties for
violation of those tolerances.

<PAGE>

     In  many  instances,  the  results  of  Order  No.  636  and   related
initiatives have been to substantially reduce  or  eliminate the interstate
pipelines'  traditional  role  as  wholesalers of natural  gas  in favor of
providing only storage and transportation services. Order No. 636  has been
implemented  on  all  interstate pipelines. In July 1996, the United States
Court of Appeals for the District  of Columbia Circuit largely upheld Order
No.  636.  The Supreme Court  denied  certiorari  on  May 12, 1997. Certain
issues, however, were  remanded  to  the FERC by the District  of  Columbia
Circuit. On remand, the FERC in Order No. 636-C reaffirmed some elements of
Order No.  636  and  modified others. Order No. 636-C may be the subject of
further proceedings at the FERC and  is subject to appeal. Numerous parties
also have  filed petitions for review  of  orders  in  individual  pipeline
restructuring proceedings. Upon judicial review,  the  FERC's orders may be
remanded or reversed in whole or in part. Consequently, it is difficult  to
predict Order No. 636's ultimate effects.

     The FERC has announced several important transportation-related policy
statements  and proposed rule changes, including the appropriate manner  in
which interstate  pipelines  release capacity under Order No. 636 and, more
recently, the price that shippers  can  charge for their released capacity.
In  addition, in 1995, FERC issued a policy  statement  on  how  interstate
natural  gas pipelines can recover the costs of new pipeline facilities. In
January 1996, the FERC issued a policy statement and a request for comments
concerning  alternatives  to  its  traditional  cost-of-service  ratemaking
methodology.  A  number  of  pipelines have obtained FERC authorization  to
charge negotiated rates as one  such alternative. While any additional FERC
action on these matters would affect  the  Company  only  indirectly, these
policy statements and proposed rule changes are intended to further enhance
competition in natural gas markets. In February 1997, the FERC  announced a
broad  inquiry  into  issues facing the natural gas industry to assist  the
FERC in establishing regulatory  goals and priorities in the post-Order No.
636 environment. The Company cannot  predict what action the FERC will take
on  these  matters,  nor can it predict whether  the  FERC's  actions  will
achieve its stated goal  of  increasing competition in natural gas markets.
However, the Company does not  believe  that  it will be treated materially
differently than other natural gas producers and  marketers  with  which it
competes.

     Regulation of onshore natural gas gathering activities is primarily  a
matter  of  state  oversight.  Regulation  of  natural  gas  gathering  and
transportation  activities,  depending upon the state involved, may include
various transportation, safety,  rate, environmental and non-discriminatory
purchase and transport requirements.

     OIL SALES AND TRANSPORTATION  RATES  -  Sales  prices of crude oil and
natural gas liquids by the Company are not regulated. The price the Company
receives from the sale of these products may be affected  by  the  cost  of
transporting  the  products  to  market.  Effective  January 1995, the FERC
implemented  regulations establishing an indexing system  under  which  oil
pipelines will  be  able  to  change their transportation rates, subject to
prescribed ceiling levels. The indexing system generally indexes such rates
to inflation, subject to certain conditions and limitations. The Company is
not able at this time to predict  the effects of these regulations, if any,
on  the  transportation  costs associated  with  oil  production  from  the
Company's oil producing operations.

     Additional proposals  and  proceedings  that  might affect the oil and
natural  gas  industry  are  pending before the FERC and  the  courts.  The
Company  cannot predict when or  whether  any  such  proposals  may  become
effective.  In  the  past,  the  natural  gas  industry  has  been  heavily
regulated.  There  is  no  assurance that the regulatory approach currently
pursued by the FERC will continue indefinitely.

     OPERATING HAZARDS AND ENVIRONMENTAL  MATTERS - The oil and natural gas
business involves a variety of operating risks, including the risk of fire,
explosions, blow-outs, pipe failure, casing  collapse, abnormally pressured
formations and hazards such as oil spills, natural  gas leaks, ruptures and
discharges of toxic gases. The occurrence of any of these  operating  risks
could result in substantial losses to the Company due to injury or loss  of
life,  severe damage to or destruction of property and equipment, pollution
or other  environmental  damage,  including  damage  to  natural resources,
clean-up  responsibilities,  penalties  and suspension of operations.  Such
hazards may hinder or delay drilling, development and on-line operations.

<PAGE>

     Extensive federal, state and local laws regulating  the  discharge  of
materials into the environment or otherwise  relating  to the protection of
the  environment  affect  the  Company's  oil  and natural gas  operations.
Numerous governmental departments issue rules and  regulations to implement
and enforce such laws, which are often difficult and  costly to comply with
and  which  carry substantial penalties for failure to comply.  Some  laws,
rules and regulations  relating  to  protection  of the environment may, in
certain  circumstances,  impose  ''strict  liability''   for  environmental
contamination,  rendering  a  person liable for environmental  damages  and
cleanup costs without regard to  negligence  or  fault  on the part of such
person. Other laws, rules and regulations may restrict the  rate of oil and
natural  gas production below the rate that would otherwise exist  or  even
prohibit exploration  and  production  activities  in  sensitive  areas. In
addition,  state  laws  often  require various forms of remedial action  to
prevent  pollution,  such as closure  of  inactive  pits  and  plugging  of
abandoned wells. The regulatory  burden on the oil and natural gas industry
increases  its  cost  of  doing  business   and  consequently  affects  its
profitability. The Company believes that it 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's operations. However, environmental laws and
regulations have been subject  to  frequent changes over the years, and the
imposition of more stringent requirements  could  have  a  material adverse
effect upon the capital expenditures, earnings or competitive  position  of
the Company.

     The  Comprehensive  Environmental Response, Compensation and Liability
Act (''CERCLA''), also known  as  ''Superfund,'' imposes liability, without
regard to fault or the legality of the original conduct, on certain classes
of persons that are considered to be  responsible  for  the  release  of  a
''hazardous  substance''  into  the  environment. These persons include the
current or former owner or operator of the disposal site or sites where the
release occurred and companies that disposed  or  arranged for the disposal
of hazardous substances. Under CERCLA, such persons may be subject to joint
and  several  liability  for  the costs of investigating  and  cleaning  up
hazardous substances that have  been  released  into  the  environment, for
damages  to natural resources and for the costs of certain health  studies.
In addition,  companies  that  incur  Superfund  liability  frequently also
confront  third  party  claims  because  it is not uncommon for neighboring
landowners and other third parties to file  claims  for personal injury and
property  damage  allegedly  caused  by  hazardous  substances   or   other
pollutants released into the environment from a Superfund site.

     The  Federal  Solid  Waste  Disposal  Act,  as amended by the Resource
Conservation and Recovery Act of 1976 (''RCRA''), regulates the generation,
transportation, storage, treatment and disposal of hazardous wastes and can
require cleanup of hazardous waste disposal sites.  RCRA currently excludes
drilling  fluids,  produced  waters  and other wastes associated  with  the
exploration,  development  or  production  of  oil  and  natural  gas  from
regulation  as  ''hazardous  waste.''  However,  other  wastes  handled  at
exploration  and production sites  may  not  fall  within  this  exclusion.
Disposal of non-hazardous  oil and natural gas exploration, development and
production wastes usually is regulated by state law.

     Stricter standards for  waste  handling and disposal may be imposed on
the  oil  and  natural  gas  industry in the  future.  From  time  to  time
legislation has been proposed  in  Congress  that would revoke or alter the
current exclusion of exploration, development  and  production  wastes from
the RCRA definition of ''hazardous wastes,'' thereby potentially subjecting
such  wastes to more stringent handling, disposal and cleanup requirements.
If such legislation were enacted, it could have a significant impact on the
operating costs of the Company, as well as the oil and natural gas industry
in general.  Furthermore,  although  petroleum,  including  crude  oil  and
natural  gas,  is  exempt  from CERCLA, at least two courts have ruled that
certain  wastes  associated  with  the  production  of  crude  oil  may  be
classified as ''hazardous substances''  under  CERCLA. The impact of future
revisions to environmental laws and regulations cannot be predicted.

     The  Oil  Pollution  Act  of  1990  (''OPA'')  provides  that  persons
responsible for facilities and vessels (including the  owners and operators
of  onshore  facilities) are subject to strict joint and several  liability
for cleanup costs and certain other public and private damages arising from
a spill of oil  into  waters  of  the  United  States.  OPA  establishes  a
liability   limit  for  onshore  facilities  of  $350.0  million.  However,
facilities  located  in  coastal  waters  may  be  considered  ''offshore''
facilities subject to greater liability limits under OPA (all removal costs
plus $75.0 million).  In  addition,  a  party cannot take advantage of this
liability  limit if the spill was caused by  gross  negligence  or  willful
misconduct or  resulted  from a violation of a federal safety, construction
or operating regulation. If a party fails to report a spill or cooperate in
the cleanup, liability limits likewise do not apply. OPA also imposes other
requirements on facility owners  and  operators, such as the preparation of
an oil spill response plan. Failure to  comply with ongoing requirements or
inadequate cooperation in a spill event may  subject  the responsible party
to civil or criminal enforcement actions.

<PAGE>

     The OPA  also  imposes  financial  responsibility  requirements on the
person or persons statutorily responsible for certain facilities.  On March
25, 1997, the U.S.  Minerals  Management  Service  (''MMS'')  proposed  new
regulations to implement these financial responsibility requirements,   and
final regulations  were  issued by  the MMS, which became effective October
13, 1998. Under the final regulations issued by the MMS, oil production and
storage facilities that are located in wetlands adjacent  to coastal waters
could  be  required to demonstrate various levels of financial  ability  to
reimburse governmental  entities  and  private  parties for costs that they
could  incur  in  responding to an oil spill, if the  MMS  determines  that
spills  from  those  particular  facilities  could  reach  coastal  waters.
Although  the  Company  owns   and  operates  oil  production  and  storage
facilities  in  wetland  areas  in  southern  Louisiana,  the  Company  has
determined  that,  at  this  time, only one  of  the  Company's  facilities
(located in the Lake Enfermer  Field)  will  be  subject  to  the financial
responsibility  requirements  imposed by the MMS.  The amount of  financial
responsibility that the Company  will  have to demonstrate (under the MMS's
rules) will be $10.0 million, an amount  that  the  Company believes it can
satisfy utilizing insurance without any negative impact  on  its  financial
condition or cost of doing business.

     The   Federal   Water   Pollution   Control  Act  (''FWPCA'')  imposes
restrictions and strict controls regarding the discharge of produced waters
and other oil and natural gas wastes into navigable waters. Permits must be
obtained  to discharge pollutants to waters  and  to  conduct  construction
activities in waters and wetlands. The FWPCA and similar state laws provide
for civil,  criminal  and  administrative  penalties  for  any unauthorized
discharges   of   pollutants  and  unauthorized  discharges  of  reportable
quantities of oil and  other  hazardous  substances.  Many  state discharge
regulations and the Federal National Pollutant Discharge Elimination System
general permits prohibit the discharge of produced water and sand, drilling
fluids, drill cuttings and certain other substances related to  the oil and
natural  gas industry to coastal waters. Although the costs to comply  with
recently-enacted  zero discharge mandates under federal or state law may be
significant, the entire  industry  is  expected to experience similar costs
and the Company believes that these costs  will not have a material adverse
impact on the Company's financial conditions  and  operations.  In 1992 the
EPA  adopted  regulations requiring certain oil and natural gas exploration
and production  facilities  to  obtain  permits for storm water discharges.
Costs may be associated with the treatment  of wastewater or developing and
implementing storm water pollution prevention plans.

     The  Company's  operations  are also subject  to  the  Clean  Air  Act
(''CAA'') and comparable state and  local  requirements.  Amendments to the
CAA  were  adopted  in 1990 and contain provisions that may result  in  the
gradual imposition of  certain  pollution control requirements with respect
to  air emissions from operations  of  the  Company.  The  Company  may  be
required  to  incur  certain capital expenditures in the next several years
for  air pollution control  equipment  in  connection  with  obtaining  and
maintaining operating permits and approvals for air emissions. However, the
Company  does  not  believe  its  operations  will  be materially adversely
affected by any such requirements, and the requirements are not expected to
be  any  more  burdensome  to the Company than to other similarly  situated
companies  involved  in oil and  natural  gas  exploration  and  production
activities.

OPERATIONAL RISKS AND INSURANCE

     The oil and natural  gas  business  involves  a  variety  of operating
risks,  including  the  risk  of fire, explosions, blow-outs, pipe failure,
casing collapse, abnormally pressured  formations  and  hazards such as oil
spills,  natural  gas  leaks,  ruptures or discharges of toxic  gases.  The
occurrence of any of these operating  risks  could  result  in  substantial
losses  to the Company due to injury or loss of life, severe damage  to  or
destruction  of  property  and  equipment, pollution or other environmental
damage, including damage to natural  resources,  clean-up responsibilities,
penalties  and  suspension  of  operations.  In accordance  with  customary
industry practice, the Company maintains insurance  against  some,  but not
all,  of the risks described above, including insuring the cost of clean-up
operations, public liability and physical damage. There can be no assurance
that any  insurance  obtained  by the Company will be adequate to cover any
losses or liabilities or that such  insurance will continue to be available
in the future or that such insurance  will  be  available at premium levels
that justify its purchase. The occurrence of a significant  event not fully
insured or indemnified against could have a material adverse  effect on the
Company's financial condition and operations.

EMPLOYEES

     On  December  31,  1999, the Company employed 31 people, including  18
that work in the Company's  various  field offices.   None of the Company's
employees are covered by a collective bargaining agreement, and the Company
believes that its relationships with its  employees are satisfactory.  From
time to time the Company utilizes the services  of  independent contractors
to perform various field and other services.

<PAGE>

CAUTIONARY STATEMENTS

     Certain statements made in this Report that are  not  historical facts
are  "forward-looking  statements"  as  defined  in  Section  27A  of   the
Securities  Act  of  1933 and Section 21E of the Securities Exchange Act of
1934.  Such forward-looking  statements  may include statements that relate
to:

     *  our  objectives, business plans or  strategies,  and  projected  or
        anticipated  benefits  or  other  consequences  of  such  plans  or
        strategies;

     *  projected or anticipated benefits from future or past acquisitions;
        and

     *  projections involving anticipated capital expenditures or revenues,
        earnings or other aspects of capital projects or operating results.


     Also,  you  can  generally identify forward-looking statements by such
terminology as "may," "will," "expect," "believe," "anticipate," "project,"
"estimate" or similar expressions.  We caution you that such statements are
only predictions and not  guarantees  of  future performance or events.  In
evaluating  these  statements, you should consider  various  risk  factors,
including but not limited  to  the  risks listed below.  These risk factors
may  affect  the  accuracy  of  the  forward-looking   statements  and  the
projections on which the statements are based.

     All phases of our operations are subject to a number of uncertainties,
risks and other influences, many of which are beyond our  control.  Any one
of such influences, or a combination, could materially affect  the  results
of  our  operations and the accuracy of forward-looking statements made  by
us.  Some  important  factors  that  could  cause  actual results to differ
materially from the anticipated results or other expectations  expressed in
our forward-looking statements include the following:

     *  dependence on exploratory drilling activities, uncertainties  about
        the estimates of reserves and the need to replace reserves;

     *  the volatility of prices of oil and gas;

     *  drilling  and  operating  hazards,  including  the  significant
        possibility  of  accidents  resulting  in personal injury, property
        damage or environmental damage;

     *  the  effect  on  our  performance  of  regulatory  programs  and
        environmental matters;

     *  the continued active participation of our  executive officers and
        key operating personnel.

     Many  of these factors are beyond our ability to control  or  predict.
We  caution investors  not  to  place  undue  reliance  on  forward-looking
statements.   We  disclaim  any intent or obligation to update the forward-
looking statements contained  in  this  Report,  whether  as  a  result  of
receiving  new  information,  the occurrence of future events or otherwise.
All subsequent written and oral  forward-looking statements attributable to
the Company or persons acting on its  behalf  are  expressly  qualified  in
their entirety by the foregoing.

<PAGE>

     A  more  detailed  discussion  of  certain  of  the  foregoing factors
     follows:

     DEPENDENCE  ON  EXPLORATORY DRILLING ACTIVITIES - The success  of  the
Company will be materially  dependent  upon  the success of its exploratory
drilling program.  Exploratory drilling involves  numerous risks, including
the  risk  that no commercially productive oil or gas  reservoirs  will  be
encountered.  The cost of drilling, completing and operating wells is often
uncertain, and drilling operations may be curtailed, delayed or canceled as
a result of a variety of factors, including unexpected drilling conditions,
pressure or  irregularities in formations, equipment failures or accidents,
adverse weather  conditions,  compliance with governmental requirements and
shortages or delays in the availability  of  drilling rigs and the delivery
of equipment.  The use of 3-D seismic data and  other advanced technologies
does not enable the interpreter to determine whether  hydrocarbons  are  in
fact present in subsurface structures that may be identified.  In addition,
the  use  of  3-D  seismic  data  and  other advanced technologies requires
greater pre-drilling expenditures than traditional drilling strategies, and
the Company could incur losses as a result of such expenditures.  Moreover,
the Company may identify prospects through  a number of methods that do not
include interpretation of 3-D seismic data or  the  use  of  other advanced
technologies.   The  Company's  future  drilling  activities  may  not   be
successful,  and if unsuccessful, such failure will have a material adverse
effect on the  Company's  results  of  operations  and financial condition.
There can be no assurance that the Company's overall  drilling success rate
or its drilling success rate for activity within a particular  project area
will not decline.  The Company may choose not to acquire option  and  lease
rights  prior  to  acquiring  seismic  data  and may identify a prospect or
drilling location before seeking option or lease  rights in the prospect or
location.   Although  the Company has identified or budgeted  for  numerous
drilling prospects, there can be no assurance that such prospects will ever
be drilled (or drilled  within  the  scheduled  time  frame) or that oil or
natural  gas  will  be  produced  from  any  such  prospects or  any  other
prospects.

     VOLATILITY OF OIL AND NATURAL GAS PRICES - Revenues generated from the
Company's  operations are highly dependent upon the price  of,  and  demand
for, oil and  natural  gas.   Historically, the markets for oil and natural
gas have been volatile and are  likely  to  continue  to be volatile in the
future.  Prices for oil and natural gas are subject to wide fluctuations in
response to relatively minor changes in the supply of and  demand  for  oil
and  natural  gas,  market  uncertainty and a variety of additional factors
that are beyond the control of  the  Company.   These  factors  include the
level of consumer product demand, weather conditions, domestic and  foreign
governmental  regulations, the price and availability of alternative fuels,
local and international  political  conditions,  including Middle East, the
foreign  supply of oil and natural gas, the price of  foreign  imports  and
overall economic  conditions.   It  is impossible to predict future oil and
natural  gas  price movements with any  certainty.   Declines  in  oil  and
natural gas prices  may materially adversely affect the Company's financial
condition, liquidity  and results of operations.  Lower oil and natural gas
prices also may reduce the amount of the Company's oil and natural gas that
can be produced economically.   In  order  to  reduce its exposure to price
risks  in  the  sale of its oil and natural gas, the  Company  enters  into
hedging arrangements  from  time  to  time;  however, the Company's hedging
arrangements  apply to only a portion of its production  and  provide  only
limited price protection  against  fluctuations  in the oil and natural gas
markets.

     FULL  COST  ACCOUNTING  -  The Company uses the full  cost  method  of
accounting for its investment in oil and natural gas properties.  Under the
full cost method of accounting, all  costs  of acquisition, exploration and
development of oil and natural gas reserves are  capitalized  into  a "full
cost pool" as incurred, and properties in the pool are depleted and charged
to operations using the future gross revenues method based on the ratio  of
current gross revenue to total proved future gross revenues, computed based
on  current  prices.   To  the  extent  that such capitalized costs (net of
accumulated depreciation, depletion and amortization)  less  deferred taxes
exceed  the  present value (using a 10% discount rate) of estimated  future
net cash flow  from  proved  oil and natural gas reserves, and the lower of
cost and fair value of unproved properties after income tax effects, excess
costs are charged to operations.   Once  incurred,  a  writedown of oil and
natural gas properties is not reversible at a later date  even  if  oil  or
natural  gas  prices  increase.   The  Company  wrote  down its oil and gas
properties at December 31, 1997 by $10 million, and further  wrote down its
oil  and gas properties at June 30, 1998 by an additional $12 million.   As
of December  31,  1998  the  Company  again  wrote  down  its  oil  and gas
properties  by  $7.6  million.   Significant downward revisions of quantity
estimates or declines in oil and natural  gas prices that are not offset by
other factors could result in a further write  down  of oil and natural gas
properties.

<PAGE>

     REPLACEMENT  OF  RESERVES - In general, the volume of  production from
oil and natural gas properties declines as  reserves are depleted.   Except
to the extent the Company acquires properties containing proved reserves or
conducts  successful  development and exploration activities, or both,  the
proved reserves of the  Company  will decline as reserves are produced. The
Company's  future  oil and natural gas  production  is,  therefore,  highly
dependent upon its level  of  success  in  finding  or acquiring additional
reserves. The business of exploring for, developing or  acquiring  reserves
is capital intensive. The Company's ability to maintain or expand its asset
base in the future is largely dependent upon the ability of the Company  to
make  the necessary capital investment.  There can be no assurance that the
Company's  future  development, acquisition and exploration activities will
result in additional  proved  reserves  or that the Company will be able to
drill productive wells at acceptable costs.

     UNCERTAINTY OF RESERVE INFORMATION AND  FUTURE NET REVENUE ESTIMATES -
There are numerous uncertainties inherent in estimating oil and natural gas
reserves  and their estimated values, including  many  factors  beyond  the
control of  the  producer.   The  reserve  data  set  forth  in this Report
represents  only estimates.  Reservoir engineering is a subjective  process
of estimating  underground accumulations of oil and natural gas that cannot
be measured in an  exact manner.  Estimates of economically recoverable oil
and natural gas reserves  and  of  future net cash flows necessarily depend
upon  a  number of variable factors and  assumptions,  such  as  historical
production  from  the  area  compared  with production from other producing
areas,  the assumed effects of regulations  by  governmental  agencies  and
assumptions  concerning future oil and natural gas prices, future operating
costs, severance  and  excise  taxes,  development  costs  and workover and
remedial  costs,  all  of  which may in fact vary considerably from  actual
results.  For these reasons,  estimates  of  the  economically  recoverable
quantities of oil and natural gas attributable to any particular  group  of
properties,  classifications  of  such  reserves based on risk recovery and
estimates  of  the  future net cash flows expected  therefrom  prepared  by
different engineers or  by  the  same engineers at different times may vary
substantially and such reserve estimates  may  be  subject  to  downward or
upward adjustment based upon such factors. Actual production, revenues  and
expenditures  with  respect to the Company's reserves will likely vary from
estimates, and such variances may be material.

     The present values  of  estimated future net cash flows referred to in
this Report should not be construed  as  the  current  market  value of the
estimated  oil  and  natural  gas  reserves  attributable  to the Company's
properties.   In  accordance  with  applicable  requirements of the  United
States Securities and Exchange Commission (the "Commission")  the estimated
discounted  future net cash flows from proved reserves are generally  based
on prices and  costs  as of the date of the estimate, whereas actual future
prices and costs may be materially higher or lower.  Actual future net cash
flows also will be affected  by  factors  such  as the amount and timing of
actual production, supply and demand for oil and  natural gas, curtailments
or increases in consumption by gas purchasers and changes  in  governmental
regulations  or taxation.  The timing of actual future net cash flows  from
proved reserves,  and  their  actual present value, will be affected by the
timing of both the production and  the incurrence of expenses in connection
with development and production of oil  and  natural  gas  properties.   In
addition,  the  calculation of the present value of the future net revenues
using a 10% discount, as required by the Commission, is not necessarily the
most appropriate  discount  factor  based  on interest rates in effect from
time to time and risks associated with the Company's  reserves  or  the oil
and natural gas industry in general.

     SUBSTANTIAL CAPITAL REQUIREMENTS - The Company makes, and will need to
continue  to  make,  substantial  capital expenditures for the development,
exploration, acquisition and production  of  oil  and natural gas reserves.
The Company has planned capital expenditures of approximately $6 million in
2000, none of which had been expended as of March 30, 2000.

<PAGE>

     TECHNOLOGICAL CHANGES - The oil and gas industry  is  characterized by
rapid and significant technological advancements and introductions  of  new
products and services utilizing new technologies.  As others use or develop
new  technologies, the Company may be placed at a competitive disadvantage,
and competitive  pressures  may  force  the  Company  to implement such new
technologies  at  substantial  costs.   In  addition,  other  oil  and  gas
companies  may  have  greater financial, technical and personnel  resources
that allow them to enjoy  technological  advantages  and  may in the future
allow them to implement new technologies before the Company.   There can be
no  assurance  that the Company will be able to respond to such competitive
pressures and implement  such  technologies  on  a  timely  basis  or at an
acceptable cost.  One or more of the technologies currently utilized by the
Company  or  implemented in the future may become obsolete.  In such cases,
the Company's business, financial condition and results of operations could
be materially  adversely affected.  If the Company is unable to utilize the
most advanced commercially  available  technology,  the Company's business,
financial  condition  and  results  of operations could be  materially  and
adversely affected.

    RISKS OF HEDGING TRANSACTIONS - In  order  to  manage  its  exposure to
price risks in the marketing of its oil and natural gas, the Company has in
the past and expects to continue  to  enter  into oil and natural gas price
hedging arrangements with respect to a portion  of its expected production.
These arrangements may include futures contracts on the New York Mercantile
Exchange  (NYMEX),  fixed  price delivery contracts  and  financial  swaps.
While intended to reduce the  effects of volatility of the price of oil and
natural gas, such transactions  may limit potential gains by the Company if
oil  and  natural gas prices were to  rise  substantially  over  the  price
established  by  the  hedge.  In addition, such transactions may expose the
Company to the risk of  financial  loss in certain circumstances, including
instances in which (i) production is  less  than  expected, (ii) there is a
widening of price differentials between delivery points  for  the Company's
production  and the delivery point assumed in the hedge arrangement,  (iii)
the counterparties  to  the  Company's future contracts fail to perform the
contract  or (iv) a sudden, unexpected  event  materially  impacts  oil  or
natural gas prices.

     DEPENDENCE ON KEY PERSONNEL - The Company depends to a large extent on
the services  of  its  founder,  McLain J. Forman, and certain other senior
management personnel.  The loss of  the  services  of  Mr. Forman and other
senior  management personnel could have a material adverse  effect  on  the
Company's  operations.   The  Company  believes  that  its  success is also
dependent  upon  its  ability  to  continue  to  employ  and retain skilled
technical  personnel.   The  Company  does not currently have  any  key-man
insurance coverage on McLain J. Forman,  other senior management or any key
personnel.   The  inability  of the Company to  employ  or  retain  skilled
technical personnel could have  a  material adverse effect on the Company's
operations.

     COMPLIANCE  WITH  GOVERNMENTAL  REGULATIONS  -  Oil  and  natural  gas
operations  are  subject to various federal,  state  and  local  government
regulations that may  be  changed from time to time in response to economic
or political conditions.  Matters  subject  to regulation include discharge
permits for drilling operations, drilling and  abandonment  bonds  or other
financial  responsibility requirements, reports concerning operations,  the
spacing of wells, utilization and pooling of properties and taxation.  From
time  to  time,   regulatory  agencies  have  imposed  price  controls  and
limitations on production  by  restricting  the  rate  of  flow  of oil and
natural gas wells below actual production capacity to conserve supplies  of
oil  and  natural  gas.   In  addition,  the production, handling, storage,
transportation and disposal of oil and natural gas, by-products thereof and
other substances and materials produced or  used in connection with oil and
natural gas operations are subject to regulation  under  federal, state and
local laws and regulations primarily relating to protection of human health
and  the environment. These laws and regulations have continuously  imposed
increasingly  strict  requirements  for water and air pollution control and
solid waste management.

     ENVIRONMENTAL RISKS - The Company  is subject to a variety of federal,
state and local governmental laws and regulations  related  to the storage,
use,  discharge  and  disposal  of  toxic,  volatile or otherwise hazardous
materials.  These regulations subject the Company  to  increased  operating
costs  and  potential  liability  associated  with the use and disposal  of
hazardous materials.  Although these laws and regulations  have  not  had a
material adverse effect on the Company's financial condition or results  of
operations, there can be no assurance that the Company will not be required
to  make  material  expenditures  in  the  future.   Moreover,  the Company
anticipates  that  such  laws  and  regulations  will  become  increasingly
stringent   in   the  future,  which  could  lead  to  material  costs  for
environmental compliance and remediation by the Company.

     Any failure by the Company to obtain required permits for, control the
use of, or adequately  restrict the discharge of hazardous substances under
present or future regulations  could  subject  the  Company  to substantial
liability or could cause its operations to be suspended.  Such liability or
suspension  of  operations  could  have  a material adverse effect  on  the
Company's financial condition and results of operations.

     MARKETABILITY  OF  PRODUCTION  - The marketability  of  the  Company's
production depends upon the availability  and  capacity  of  gas  gathering
systems,  pipelines  and  processing facilities, and the unavailability  or
lack of capacity thereof could  result in the shut-in of producing wells or
the  delay  or  discontinuance of development  plans  for  properties.   In
addition, federal  and  state  regulation of oil and natural gas production
and transportation, general economic  conditions  and changes in supply and
demand could adversely affect the Company's ability  to  produce and market
its oil and natural gas on a profitable basis.

<PAGE>

     SUBSTANTIAL COMPETITION - The Company operates in a highly competitive
environment.  The Company competes  with  major  and  independent  oil  and
natural  gas companies for the acquisition of desirable oil and natural gas
properties,  as well as for the equipment and labor required to develop and
operate  such  properties.   The  Company  also  competes  with  major  and
independent oil  and natural gas companies in the marketing and sale of oil
and natural gas to marketers and end-users.  Many of these competitors have
financial and other  resources  substantially  greater  than  those  of the
Company.

     OPERATING  RISKS  OF  OIL  AND  NATURAL  GAS  OPERATIONS - The oil and
natural gas business involves a variety of operating  risks,  including the
risk  of  fire,  explosions,  blow-outs,  pipe  failure,  casing  collapse,
abnormally pressured formations and hazards such as oil spills, natural gas
leaks,  ruptures  or  discharges of toxic gases.  The occurrence of any  of
these operating risks could result in substantial losses to the Company due
to injury or loss of life,  severe damage to or destruction of property and
equipment, pollution or other  environmental  damage,  including  damage to
natural  resources, clean-up responsibilities, penalties and suspension  of
operations.   In  accordance  with customary industry practice, the Company
maintains insurance against some,  but  not  all,  of  the  risks described
above.   There  can  be  no  assurance that any insurance obtained  by  the
Company will be adequate to cover  any  losses or liabilities.  The Company
cannot predict the continued availability  of insurance or the availability
of insurance at premium levels that justify its purchase.

     LACK OF ESTABLISHED TRADING MARKET - The  Company's outstanding common
stock and warrants are subject to transfer restrictions  set  forth  in the
Stockholders'  Agreement  dated  as of January 14, 2000 between the Company
and the other parties listed on the signature pages thereto and the Warrant
Agreement dated as of January 14,  2000  between  the Company and the other
parties  listed  on  the signature pages thereto.  Moreover,  there  is  no
existing trading market  for the common stock or the warrants and it is not
expected that any active market will develop.

     TCW CONTROL - The TCW Funds and its affiliates own approximately 43.8%
of the Company's outstanding  common  stock.   By virtue of such ownership,
the  TCW  Funds  will have the power to determine the  outcome  of  various
corporate actions requiring shareholder approval.

     NO INTENTION  TO  PAY  DIVIDENDS  -  The  Company currently intends to
retain  any  earnings  for  the  future operation and  development  of  its
business and does not currently intend  to  declare or pay any dividends on
its Common Stock in the foreseeable future.

<PAGE>

     ITEM 2.   PROPERTIES

     The  Company  has  grown  principally  through   the  acquisition  and
subsequent development and exploitation of properties purchased since 1991.
The  Company's  proved  oil  and  gas  reserves at December 31,  1999  were
attributable  to  three  properties, all of  which  are  located  in  south
Louisiana. The Company currently operates three of the five fields where it
is actively exploring for and developing oil and natural gas reserves.  The
Company owns a weighted average working interest of 91% in the three fields
it operates, Lake Enfermer,  Manila  Village  and Boutte, which enables the
Company to control the timing and implementation  of  all  exploitation and
exploration activities in those fields. The Company owns seismic  data, but
no  current  lease  rights, in the Bayou Fer Blanc field.  In the remaining
field, West Gueydan,  the Company assigned all of its leases comprising the
West Gueydan Field to the  West  Gueydan Field Partnership, a Texas limited
partnership in which the Company is the sole limited partner.

OIL AND NATURAL GAS RESERVES

     The following table summarizes  the  estimates of the Company's proved
producing,  proved  non-producing and proved  undeveloped  reserves  as  of
December 31, 1999, and  the  related  present value of estimated future net
revenues  before income taxes at such date,  as  estimated  by  independent
petroleum engineers, Netherland, Sewell & Associates, Inc.:



<TABLE>
<CAPTION>
                                                      NON-
                                PRODUCING           PRODUCING              UNDEVELOPED           TOTAL
<S>                             <C>                  <C>                       <C>               <C>
Natural gas (MMcf)               3,352                10,247                    5,397             18,996
Oil and NGLs (MBbls)               455                   875                      281              1,612
Natural gas equivalents          6,084                15,499                    7,085             28,669
Oil equivalents (Mboe)           1,014                 2,583                    1,181              4,778
Present value of estimated
future net revenues before
income taxes, discounted
at 10% (000's )                $10,975               $17,407                   $8,058            $36,440
</TABLE>

     Oil prices have continued to rise and natural gas prices have remained
relatively  stable  subsequent  to  December  31,  1999.   Accordingly, the
discounted  future  net  cash  flows would be increased if the standardized
measure was calculated at a later  date.   These estimates of the Company's
proved reserves have not been filed with or  included  in  reports  to  any
federal agency.

     In   accordance   with  applicable  requirements  of  the  Commission,
estimates of the Company's proved reserves and future net revenues are made
using oil and natural gas  sales prices estimated to be in effect as of the
date of such reserve estimates and are held constant throughout the life of
the properties (except to the  extent  a contract specifically provides for
escalation).  Estimated  quantities  of  proved  reserves  and  future  net
revenues therefrom are affected by oil and  natural  gas prices, which have
fluctuated  widely  in  recent  years.  There  are  numerous  uncertainties
inherent  in  estimating oil and natural gas reserves and  their  estimated
values, including  many  factors  beyond  the  control of the producer. The
reserve  data  set  forth  herein  represents  only  estimates.   Reservoir
engineering is a subjective process of estimating underground accumulations
of  oil  and  natural  gas that cannot be measured in an exact manner.  The
accuracy of any reserve  estimate is a function of the quality of available
data  and engineering and geological  interpretation  and  judgment.  As  a
result,  estimates  of different engineers may vary. In addition, estimates
of reserves are subject  to  revision based upon actual production, results
of  future  development  and exploration  activities,  prevailing  oil  and
natural gas prices, operating  costs and other factors, which revisions may
be material. Accordingly, reserve  estimates  are  often different from the
quantities  of  oil  and  natural  gas that are ultimately  recovered.  The
meaningfulness of such estimates is  highly  dependent upon the accuracy of
the assumptions upon which they are based.

<PAGE>

     In  general,  the  volume  of  production  from oil  and  natural  gas
properties declines as reserves are  depleted.  Except  to  the  extent the
Company  acquires  properties   containing   proved   reserves  or conducts
successful  exploration  and  development  activities,  or both, the proved
reserves  of  the  Company  will  decline  as  reserves  are  produced. The
Company's  future  oil  and  natural  gas  production is, therefore, highly
dependent  upon  its  level of  success  in finding or acquiring additional
reserves.

     As operator of domestic oil and gas properties, the Company has  filed
Department  of Energy Form EIA-23, "Annual Survey of Oil and Gas Reserves,"
as required by  Public  Law  93-275.   There  are  differences  between the
reserves   as  reported  on  Form  EIA-23  and  as  reported  herein.   The
differences  are attributable to the fact that Form EIA-23 requires that an
operator report  on  the  total  reserves  attributable  to wells which are
operated by it, without regard to ownership (i.e. reserves  are reported on
a gross operated basis, rather than on a net interest basis).

LEASEHOLD ACREAGE

     The  table  below  describes  the  Company's developed and undeveloped
leasehold acreage as of December 31, 1999:
<TABLE>
<CAPTION>
                                           Developed      Undeveloped
                                            Acreage         Acreage         TOTAL
                                        --------------    -----------    ------------
FIELD                                   GROSS      NET    GROSS   NET    GROSS   NET
                                        -----      ---    -----   ---    -----   ---
<S>                                     <C>       <C>      <C>   <C>    <C>     <C>
Lake Enfermer                           1,939     1,785    420    414    2,359  2,199
Manila Village                            742       530      0      0      742    530
Boutte                                  3,090     3,090      0      0    3,090  3,090
Bayou Fer Blanc                             0         0    320    320      320    320
West Gueydan (Note 1)                       0         0    195    129      195    129
                                        -----     -----    ---    ---      ---    ---
                                        5,771     5,405    935    863    6,706   6,268
                                        =====     =====    ===    ===    =====   =====
</TABLE>

     Note 1:  In  December  1998,  the  Company  assigned all of its leases
comprising  the  West Gueydan  Field  to the West Gueydan Field Partnership
(the "Gueydan Partnership"), a Texas limited partnership.  The  Company  is
the  sole  limited  partner  of  the  Gueydan  Partnership, with  a 50.505%
interest, and Prime  Natural Resources, Inc. ("Prime")  is the sole general
partner of the  Gueydan  Partnership, with the remaining 49.495%  interest.
On  October 4, 1999,  the  Gueydan Partnership entered  into  an  agreement
with  Cobra Exploration Company ("Cobra").  The agreement requires Cobra to
spud a well on or before  March  31,  2000  at a location and to designated
depths on certain  leases  covering  approximately  100 acres  in  the West
Gueydan Field.  The  Gueydan  Partnership retains a 25% working interest in
all operations by Cobra pursuant to the agreement, subject to the terms and
conditions  of  an  operating agreement between the parties. The  agreement
requires Cobra to spud a well on or before May 1, 2000 at a location and to
designated depths on  certain leases  covering  approximately  100 acres in
the West Gueydan Field.  Through the Gueydan Partnership, the Company  will
have  a net 15% carried working interest  in  the  proposed  well to casing
point.

     No  possible  or probable reserves have been assigned to the Company's
undeveloped acreage.  As  is customary in the oil and natural gas industry,
the Company can retain its  interests  in  undeveloped  acreage by drilling
activity that establishes commercial production sufficient  to maintain the
leases, or by payment of delay rentals during the remaining primary term of
such a lease. Delay rentals paid in 1999 and those projected  for  2000 are
insignificant.  The oil and natural gas leases in which the Company  has an
interest are for varying primary terms.

<PAGE>

TITLE TO PROPERTIES

     As is customary in the oil and natural gas industry, the Company makes
only  a  cursory  review of title to farmout acreage and to undeveloped oil
and natural gas leases  upon  execution  of  any  contracts.  Prior  to the
commencement  of  drilling  operations,  a  thorough  title  examination is
conducted  and  curative  work  is  performed  with  respect to significant
defects. To the extent title opinions or other investigations reflect title
defects,  the Company, rather than the seller of the undeveloped  property,
is typically  responsible to cure any such title defects at its expense. If
the Company were unable to remedy or cure any title defect of a nature such
that it would not  be  prudent  to  commence  drilling  operations  on  the
property,  the  Company could suffer a loss of its entire investment in the
property. The Company  has  obtained title opinions on substantially all of
its producing properties and  believes  that  it  has satisfactory title to
such properties in accordance with standards generally  accepted in the oil
and natural gas industry. Prior to completing an acquisition  of  producing
oil  and  natural  gas  leases,  the  Company obtains title opinions on all
leases.  The  Company's  oil  and natural gas  properties  are  subject  to
customary royalty interests, liens for current taxes and other burdens that
the Company believes do not materially  interfere with the use of or affect
the value of such properties.


     ITEM 3.   LEGAL PROCEEDINGS

     As indicated above, the Company is disputing  approximately $3 million
in pre-petition bankruptcy claims, which claims and  certain other residual
bankruptcy-related  matters  are  still  within  the  jurisdiction  of  the
Bankruptcy Court.  The Company is not a party to any other material pending
legal proceedings, other than ordinary routine litigation incidental to its
business that management believes would not have a material  adverse effect
on its financial condition or results of operations.


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

     None.

                                  PART II

     ITEM   5.     MARKET   FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED
STOCKHOLDER   MATTERS

     In  connection  with the consummation  of  the  Bankruptcy  Plan,  the
Company is in the process of issuing approximately 925,000 shares of Common
Stock to the former holders of the Company's Senior Notes and approximately
75,000 shares of Common  Stock  to  the  former  holders  of  the Company's
Preferred Stock.  Pursuant to the Bankruptcy Plan, the Company  is  issuing
the  new  shares  of  Common  Stock  upon the surrender of the certificates
representing the Senior Notes and the Preferred Stock.  The Common Stock is
being allocated as follows:  (i) 13.2143  shares  of Common Stock are being
issued  for each $1,000 of principal amount of canceled  Senior  Notes  and
(ii) 0.3120 shares of Common Stock are being issued for each canceled share
of Preferred Stock.

     In order  to  participate  in the Company's reorganization pursuant to
the Bankruptcy Plan, the new stockholders  of  the  Company are required to
enter into a Stockholders' Agreement and a Registration  Rights  Agreement,
each  dated  as of January 14, 2000.  The Stockholders' Agreement provides,
among other things,  certain  restrictions on voting, sale and transfers of
the Common Stock.  The Stockholders Agreement also provides that if holders
of 75% or more of the Common Stock approve a sale of the Company to a third
party, the minority stockholders  would be required to sell their shares to
the third party if certain conditions are satisfied.

<PAGE>

     The Registration Rights Agreement entitles the Controlling Holders (as
defined  in the agreement) to have effected up to four demand registrations
as  well  as  the  right  to  "piggyback"  on  certain  other  registration
statements  filed  by  the  Company on its own behalf or on behalf of other
security holders.  Each holder of Registrable Securities (as defined in the
agreement) is entitled to participate  in  any  such  demand  or  piggyback
registration.   The  Registration  Rights  Agreement  also  entitles McLain
Forman  to  have  effected  up  to  two demand registrations provided  that
certain conditions are satisfied.

     In  connection  with the consummation  of  the  Bankruptcy  Plan,  the
Company is also in the  process  of  issuing  warrants  to  purchase  up to
approximately  500,000  shares  of Common Stock.  These warrants consist of
50,000 Series A Warrants (exercise price $34.74), 150,000 Series B Warrants
(exercise  price  $92.80),  150,000   Series  C  Warrants  (exercise  price
$117.80), and 150,000 Series D Warrants  (exercise price $137.80).  Each of
these warrants is currently exercisable and  will  automatically  expire on
January 14, 2007.

     Pursuant  to  the  Bankruptcy  Plan, holders of the Company's warrants
that were issued in June 1997 in connection with the Company's offering and
sale of the Senior Notes (the "Senior  Note  Warrants") will receive in the
aggregate approximately 10,850 Series A Warrants  and  approximately 32,550
of each of the Series B, Series C, and Series D Warrants.  Each holder of a
Senior Note Warrant will receive 0.1637 Series A Warrants and 0.4910 Series
B,  Series C, and Series D Warrants for each Senior Note  Warrant  canceled
pursuant  to  the  Bankruptcy Plan.  Holders of the Company's warrants that
were issued in June 1997 in connection with the Company's offering and sale
of  the  Preferred Stock  (the  "Equity  Warrants")  will  receive  in  the
aggregate approximately 5,450 Series A Warrants and approximately 16,350 of
each of the  Series  B, Series C, and Series D Warrants.  Each holder of an
Equity Warrant will receive  0.0273  Series A Warrants and 0.0818 Series B,
Series C, and Series D Warrants for each  Equity  Warrant canceled pursuant
to the Bankruptcy Plan.  McLain Forman received 33,780  Series  A  Warrants
and  101,100  of  each of the Series B, Series C, and Series D Warrants  in
connection with the consummation of the Bankruptcy Plan and pursuant to his
employment agreement.

     The Company does  not anticipate paying cash dividends with respect to
the Common Stock in the  foreseeable  future.   Any future determination to
pay cash dividends will be made by the Board of Directors  in  light of the
Company's   earnings,  financial  position,  capital  requirements,  credit
agreements and  such other factors as the Board of Directors deems relevant
at that time.

     The issuance  of  the  Common  Stock  and the warrants pursuant to the
Bankruptcy Plan was exempt from registration  under  the  Securities Act of
1933, as amended, pursuant to Section 1145 of the United States  Bankruptcy
Code.

<PAGE>

     ITEM 6.   SELECTED FINANCIAL AND OPERATING DATA

     The  following  table  sets  forth  a  summary  of selected historical
financial information of the Company for the periods set forth below.  This
information is derived from the financial statements of the Company and the
notes  thereto.   See  "Item  7.   Management  Discussion and  Analysis  of
Financial  Condition  and Results of Operations" and  "Item  8.   Financial
Statements and Supplementary Data."

                 SELECTED HISTORICAL FINANCIAL INFORMATION
                 (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                        1999       1998            1997              1996            1995
                                        ----       ----            ----              ----            ----
<S>                                   <C>        <C>            <C>               <C>             <C>
STATEMENT OF OPERATIONS DATA:
 Oil and natural gas revenue          $ 12,993   $ 15,950       $ 14,235          $ 10,892        $  6,919
 Operating expenses                     12,494     36,691         24,814             8,909           7,336
                                      --------   --------       --------          --------        --------
 Operating income (loss)                   499    (20,741)       (10,579)            1,983            (417)
  Interest expense                       6,244     10,122          7,724             3,983           3,522
  Other income                             123        325            474               225             386
                                      --------   --------       --------          --------        --------
   Net (loss) from operations
   before reorganization
   items, income taxes and
   extraordinary items                  (5,622)   (30,538)       (17,829)           (1,775)         (3,553)
 Reorganization items:
  Reorganization costs                  (1,184)       -               -                -                -
  Adjust accounts to fair value          6,628        -               -                -                -
                                      --------   --------       --------          --------        --------
  Net loss before income
   taxes and extraordinary item           (537)   (30,538)       (17,829)           (1,775)         (3,553)
  Provision (benefit) for income taxes    (188)       -               -                -                -
                                      --------   --------       --------          --------        --------
 Net (loss) before extraordinary items    (349)   (30,538)       (17,829)           (1,775)         (3,553)
  Extraordinary gain on extinguisment
  of debt, net of taxes of $10,089      46,724         -              -                -                -
                                      --------   --------       --------          --------        --------
 Net Income (loss)                      46,375    (30,538)       (17,829)           (1,775)         (3,553)
  Preferred stock dividends             (1,153)    (1,729)          (923)              -                -
                                      --------   --------       --------          --------        --------
 Net income (loss) attributed to
 common shares                        $ 45,222   $(32,267)      $(18,752)          $(1,775)        $(3,553)
 Net income (loss) per share
 attributable to common shares
 before extraordinary item            $ (16.69)  $(358.52)      $(208.36)          $(19.72)        $(39.48)
 Extraordinary item per share           519.15        -               -                -               -
                                      --------   --------       --------          --------        --------
 Net income (loss) per share          $ 502.46   $(358.52)      $(208.36)          $(19.72)        $(39.48)
                                      ========   ========       ========          ========        ========



UNAUDITED PRO FORMA DATA:
 Operating income (loss) before income
 taxes                                                          $(17,829)          $(1,775)        $(3,553)
 Pro forma benefit (expense) for income
   taxes related to operations as an S Corp(1)                     6,106               657           1,314
 Preferred stock dividend                                           (923)               -               -
                                                                --------          --------        --------

 Pro forma net (loss) attributed to common
   shares                                                       $(12,646)          $(1,118)        $(2,239)
 Pro forma net (loss) per common
 share                                                          $(140.52)          $(12.42)        $(24.88)
                                                                ========           =======         =======
</TABLE>

<PAGE>

     ITEM 7. MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

GENERAL

     The following discussion is intended to  assist in an understanding of
the Company's historical financial position and  the  results of operations
for  each  year  of  the  three-year period ended December 31,  1999.   The
Company's  financial  statements   and   notes   thereto  contain  detailed
information that should be referred to in conjunction  with  the  following
discussion.  See "Item 8. Financial Statements and Supplementary Data."

     PLAN  OF  REORGANIZATION - The Company's Bankruptcy Plan was confirmed
by the Bankruptcy  Court  on  December  29,  1999 and consummated effective
January  14,  2000.  As of the confirmation date,  the  Company  had  total
assets of $33.9  million and liabilities of $96.0 million.  As indicated in
"Item 1.  Business  -  Recent Developments" above, with the exception of an
aggregate of approximately $2.7 million of promissory notes issued pursuant
to the Bankruptcy Plan, approximately $3 million in additional pre-petition
bankruptcy claims that are disputed by the Company and still pending before
the Bankruptcy Court, undistributed  oil  and gas revenues of $895,000, and
approximately $300,000 in convenience claims  which  were  paid  in full in
2000,  all  of  the Company's liabilities as of the confirmation date  were
extinguished pursuant to the Bankruptcy Plan.

     FRESH  START   REPORTING   -   The   Company  has  accounted  for  the
reorganization by using the principles of fresh  start  accounting required
by AICPA Statement of Position 90-7, "Financial Reporting  by  Entities  in
Reorganization  Under  the  Bankruptcy Code."  For accounting purposes, the
Company   assumed   that   the   Bankruptcy    Plan   was   consumated   on
December  31, 1999.  Under the principles of fresh  start  accounting,  the
Company's total assets were recorded at their assumed reorganization value,
with the reorganization  value allocated to identifiable tangible assets at
their estimated fair value.   Accordingly,  the  Company's oil and gas full
cost pool was reduced by approximately $60 million, its unevaluated oil and
gas  properties  were  increased  by approximately $3  million,  its  other
property and equipment was reduced  by  approximately $1.6 million, and the
accumulated  DD&A  of  $64.1 million was written  off.   In  addition,  the
Company's Senior Notes payable  of  $70  million,  the  interest payable of
$11.1 million on the Senior Notes, its Preferred Stock of $13.5 million and
the related deferred financing costs of $4.4 million were all written off.

     The  total reorganization value assigned to the Company's  proved  oil
and gas properties  was  estimated by adjusting the net pre-tax future cash
flows discounted at a 10%  annual  rate  (PV-10)  of  the  Company's proved
reserves  ($36.4  million)  as  set  forth in the Estimate of Reserves  and
Future Revenue report on the Company's  proved oil and gas properties as of
December  31,  1999, prepared by Netherland,  Sewell  &  Associates.   This
report was prepared  in  accordance with SEC guidelines, utilizing constant
prices existing as of December 31, 1999.  The Company adjusted these prices
to reflect the product prices  used  in  valuing  producing properties, and
then  the  Company  applied  risking factors to the various  categories  of
proved properties, discounting the properties as indicated:

<TABLE>
<CAPTION>
PROVED CATEGORY      RISK FACTOR
<S>                  <C>
Proved Producing         95%
Proved Non-producing     75%
Proved Undeveloped       25%
</TABLE>

     Applying these risk factors and adjusting the product pricing resulted
in  an estimated net realizable value of the PV-10 of the proved properties
of $25.5 million.  The Company's other assets, including other property and
equipment, were valued at $4.9 million.

     As  a  result  of  the  implementation  of fresh start accounting, the
financial statements of the Company after consummation  of  the  Bankruptcy
Plan  are  not  comparable  to  the Company's financial statements of prior
periods.

     The effect of the Bankruptcy  Plan  and  the  implementation  of fresh
start accounting on the Company's balance sheet as of December 31, 1999 are
discussed  in  detail  in  "Item  8. Financial Statements and Supplementary
Data."

<PAGE>

OPERATING ENVIRONMENT

     The  Company's  revenues, profitability  and  future  growth  and  the
carrying value of its  oil  and  natural  gas  properties are substantially
dependent  on  prevailing  prices of oil and natural  gas.   The  Company's
ability to increase its borrowing capacity and to obtain additional capital
on attractive terms is also  influenced  by  oil  and  natural  gas prices.
Prices for oil and natural gas are subject to large fluctuation in response
to relatively minor changes in the supply of or demand for oil and  natural
gas,  market  uncertainty  and  a  variety of additional factors beyond the
control of the Company.  While natural  gas  prices  seem most dependent on
weather  in  North  America and corresponding usage, oil  prices  are  more
subject to global economic forces and supply.  Because all of these factors
are beyond the control  of  the  Company,  its  marketing efforts have been
devoted  to achieving the best price available with  a  limited  amount  of
fixed price  sales and hedging transactions to take advantage of short-term
prices it believes to be attractive.

     Any substantial  and  extended  decline in the price of oil or natural
gas would have an adverse effect on the  Company's  carrying  value  of its
proved reserves, borrowing capacity, revenues, profitability and cash flows
from  operations.   Price  volatility also makes it difficult to budget for
and  project  the  return  on  either   acquisitions   or  development  and
exploitation projects.

     The Company uses the full cost method of accounting for its investment
in  oil  and  natural  gas  properties.  Under  the  full  cost  method  of
accounting,  all costs of acquisition, exploration and development  of  oil
and natural gas  reserves  are  capitalized  into  a  ''full cost pool'' as
incurred, and properties in the pool are depleted and charged to operations
using the future gross revenue method based on the ratio  of  current gross
revenue  to  total proved future gross revenues, computed based on  current
prices. To the  extent  that  such  capitalized  costs  (net of accumulated
depreciation,  depletion and amortization) less deferred taxes  exceed  the
present value (using a 10% discount rate) of estimated future net cash flow
from proved oil  and  natural  gas reserves, and the lower of cost and fair
value of unproved properties after  income  tax  effects,  excess costs are
charged to operations. Once incurred, a write-down of  oil  and natural gas
properties is not reversible at a later  date  even  if oil  or natural gas
prices increase. The Company was required to write down its asset  base  at
the  end  of  1997  due  to  a  downward  revision  of  quantity  estimates
attributable  to a single fault block in the Lake  Enfermer Field, combined
with significant  declines  in  oil and natural gas prices from the  end of
1996.  During the second quarter of 1998, the Company was required to write
down its asset base, again due primarily  to  the continuing decline in oil
and natural gas prices.  The Company had  an  additional full  cost ceiling
writedown of its asset  base  at  the  end of 1998.  This writedown was the
result  of a significant revision to the reserves assigned to a single well
in the Lake Enfermer Field, combined with further declines in  both oil and
natural gas prices during the final quarter of 1998.

     On June 3,  1997,  the  Company  issued  preferred  stock  as  further
described  under  ''Long  Term  Financing.''  Prior to the issuance of this
preferred stock, the Company was taxed as an S  Corporation.  See Note 1 to
the financial statements of the Company. The issuance  of  preferred  stock
terminated  the  S Corporation status effective June 3, 1997. For the short
year beginning June 4, 1997 and subsequent years, the Company is subject to
Federal and state income tax.

RESULTS OF OPERATIONS

     The following  table  sets  forth  certain  operating information with
respect to the oil and natural gas operations of the  Company  and  summary
information  with respect to the Company's estimated proved oil and natural
gas reserves.  See "Item 2. Properties-Oil and Natural Gas Reserves."

<PAGE>

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                                       1999            1998            1997
                                                       ----            ----            ----
<S>                                                 <C>            <C>             <C>
Production:
        Oil (MBbls)                                     337             393             335
        Gas (MMcf)                                    2,930           4,944           2,613
        Oil and gas (MBOE)                              826           1,217             770

Sales data (in thousands):
        Total oil sales                             $ 6,086         $ 4,752           6,600
        Total gas sales                             $ 7,038         $11,198           7,636

Average sales prices:
        Oil (per Bbl)                               $ 18.04         $ 12.09         $ 19.72
        Gas (per Mcf)                                  2.40            2.27            2.92
        Per BOE                                     $ 15.90         $ 13.11         $ 18.48

Average costs (per BOE):
        Lease operating expenses                    $  3.81         $  2.76         $  3.52
        General and administrative                  $  3.19         $  2.28         $  2.61
        Depreciation, depletion and
        amortization                                $  6.76         $  8.58         $ 12.20

Reserves at December 31:
        Oil (MBbls)                                   1,612           1,531           2,260
        Gas (MMcf)                                   18,996          14,558          22,105
        Oil and gas (MBOE)                            4,778           3,957           5,944
        Present value of estimated pre-tax future
               Net cash flows (in thousands)        $36,440         $19,169         $52,256
</TABLE>


     YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

     The Company's  oil  and  gas  revenues  decreased  approximately  $2.9
million,  or  18% during 1999 to $13.1 million compared to $16.0 million in
1998.  Production  levels for 1999 decreased 32% to 826 thousand barrels of
oil equivalent (''MBOE'')  from  1217 MBOE for 1998. Gas production volumes
decreased 41%, while oil volumes decreased  14%. The Company's average sale
prices (including hedging activities) for oil and natural gas for 1999 were
$18.04 per Bbl and $2.40 per Mcf versus $12.09 per Bbl and $2.27 per Mcf in
1998. Revenues decreased $5.2 million due to  the aforementioned production
decreases, offset by a $2.3 million increase in  revenues due to higher oil
and gas prices during 1999.

     On a BOE basis, lease operating expenses increased  38%,  to $3.81 per
BOE for 1999 from $2.76 per BOE in 1998. For 1999, lease operating expenses
were  down  6.3%,  from $3.4 million in 1998 to $3.1 million in 1999.  This
decrease was due to  a  decrease  in  1999  in  the  volumes of oil and gas
produced.

     For 1999, depreciation, depletion and amortization  (''DD&A'') expense
decreased 47% from 1998. The decrease for the year is attributable  to  (i)
the  Company's  decreased  production  and  related future capital costs in
1999, and  (ii) the upward revision of reserves.   On  a  BOE  basis, which
reflects the decreases in production, the DD&A rate for 1999 was  $6.76 per
BOE compared to $8.58 per BOE for 1998, a decrease of 21%.

     For  1999,  on  a  BOE  basis,  general  and  administrative (''G&A'')
expenses  increased  40%,  from  $2.28 per BOE in 1998 to  $3.19  in  1999.
Actual G&A expenses decreased 5%, from $2.8 million in 1998 to $2.6 million
in 1999.  This decrease was due primarily  to  the  reduced activity during
1999.   The  recapitalization  costs  incurred  in  conjunction   with  the
reorganization  of  the  Company,  equaling $969,000, were not included  in
recurring G&A for comparison purposes.

<PAGE>

     The discounted present value of the  Company  reserves  increased 90%,
from $19.2 million at the end of 1998 to $36.4 million at the end of  1999,
primarily as a result  of the new reserves attributable specifically to the
Simoneaux  26  well  in the  Company's  Boutte  Field,  combined  with  the
significant increases in both oil and gas prices between December, 1998 and
December, 1999.  The Company's  realized  oil prices increased 135% between
December 31, 1998 and December 31, 1999, from  an  average price per barrel
of $10.44  on December 31, 1998 to an average price  of  $24.58 on December
31, 1999.  The Company's realized gas prices on December 31, 1999 increased
19% over the December 31, 1998 price, from $2.15 per Mcf in  1998  to $2.56
in  1999.   The  Company  experienced a $19.6 million writedown of its full
cost pool during  1998 due  to  ceiling  test limitations.  The Company did
not experience any such ceiling test writedown  of  its  full  cost pool in
1999.

     Interest expense for 1999 decreased from $10.1 million in 1998 to $6.2
million for 1999. This decrease of $3.9 million in interest expense  is due
to  the  cessation  of  interest payable on the Company's Senior Notes from
August 6, 1999, the date  the Company filed for protection under the United
States Bankruptcy Code.

     Due to the factors described  above,  the  net  loss  from  operations
decreased from $30.5 million for 1998 to a loss of $6.0 million for 1999.

     YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

     The  Company's  oil  and  gas  revenues  increased  approximately $1.8
million, or 12% during 1998 to $16.0 million compared to $14.2  million  in
1997.  Production levels for 1998 increased 58% to 1,217 MBOE from 770 MBOE
for 1997. Gas production volumes increased 89%, while oil volumes increased
17%.  The  Company's average sale prices (including hedging activities) for
oil and natural  gas  for 1998 were $12.09 per Bbl and $2.27 per Mcf versus
$19.72 per Bbl and $2.92  per  Mcf in 1997. Revenues increased $7.9 million
due to the aforementioned production  increases,  offset  by a $6.1 million
decrease in revenues due to lower oil and gas prices during 1998.

     On a BOE basis, lease operating expenses decreased 22%,  to  $2.76 per
BOE for 1998 from $3.52 per BOE in 1997. For 1998, lease operating expenses
were  up  26%,  from  $2.7  million  in  1997 to $3.4 million in 1998. This
increase was due to an increase in 1998 in the volume of saltwater produced
and handled, as well as the higher production rates in 1998.

     For 1998, DD&A expense increased 11%  over  1997. The increase for the
year is attributable to (i) the Company's increased  production and related
future capital costs in 1999, and  (ii) the downward revision  of  reserves
attributable primarily to a specific well in the Lake Enfermer Field.  On a
BOE  basis,  which  reflects the increases in production, the DD&A rate for
1998 was $8.58 per BOE  compared  to $12.20 per BOE for 1997, a decrease of
30%.

     For 1998, on a BOE basis, G&A  expenses  declined  13%, from $2.61 per
BOE in 1997 to $2.28 in 1998.  Actual G&A expenses increased 40%, from $2.0
million in 1997 to $2.8 million in 1998.  This increase was  due  primarily
to  (i)  salary  increases  resulting  from  the  addition  of  a CFO and a
financial  planning  staff  position,  (ii)  increased  costs incurred  for
independent  reservoir  engineering  services,  (iii)  increased  corporate
franchise  taxes due to the increased debt, (iv) increased  legal  expenses
related to the pending litigation, and (v) increased insurance cost related
to the addition of D&O insurance for the Company.

     The discounted  present  value  of the Company reserves decreased 63%,
from $52.3 million at the end of 1997  to $19.2 million at the end of 1998,
primarily as a result of the negative revisions  to  reserves  attributable
specifically to the A-2 well in the Company's Lake Enfermer Field, combined
with  the significant decline in both oil and gas prices between  December,
1997 and  December,  1998.   Oil prices declined 39%, from an average price
per barrel of $19.72  for the  calendar  year  1997  to an average price of
$12.09  for the calendar year 1998.  Average gas prices  between  the  same
periods declined  22%,  from  $2.92 per Mcf in 1997 to $2.27 in 1998. Based
upon its ceiling test using the  year-end  1998 discounted present value of
the Company reserves, which were priced at the  average  year-end prices of
$10.45 per barrel and $1.90 per Mcf, the Company experienced  an impairment
of  its  full  cost  pool  in the amount of $19.6 million during 1998.  The
write-down of the full cost  pool  in  1998 to recognize this impairment is
reflected as a separate expense item on the Company's financial statements.
See "Item 8. Financial Statements and Supplementary Data".

     Interest  expense  for  1998  increased  to  $10.1   million from $7.7
million for  1997. This increase of $2.4 million in interest expense is due
primarily to the full year of interest due in 1998 versus only seven months
of interest due  in 1997 relating to the issuance of $70 million  principal
amount of 13.5%  Senior  Secured  Notes  due  2004,  Series  A  on  June 3,
1997 (see "Liquidity and Capital Resources").

<PAGE>

     Due  to  the  factors  described  above, the net loss from  operations
increased to $30.5 million for 1998, from a loss of $17.8 million for 1997.

LIQUIDITY AND CAPITAL RESOURCES

     WORKING CAPITAL AND CASH FLOW - As a result of the reorganization, the
Company's working capital position has improved significantly.  At December
31,  1999  the  Company  had $1.6 million of  working  capital.   This  was
primarily due to the elimination  of  interest  payable on the Senior Notes
and  the conversion of approximately $2.1 million  of  current  liabilities
into long term notes pursuant to the Bankruptcy Plan.  The Company projects
that oil  prices  will  likely decline but will remain at historically high
levels, while it expects  natural  gas  prices to remain near their current
levels during 2000.

     The Company believes that its cash on  hand  plus expected normal cash
flow from operations will be sufficient to fund its  working  capital needs
for the remainder of 2000.  This includes funding of its obligations on the
long term notes payable issued pursuant to the Bankruptcy Plan.

     The  foregoing  discussion  includes  many  forward looking statements
which are subject to the risks and uncertainties noted  above  in "Item 1 -
Cautionary  Statements"  which  could  cause  the  actual results to differ
materially from the Company's expectations.

     HEDGING ACTIVITIES - With the objective of achieving  more predictable
revenues  and cash flows and reducing the exposure to fluctuations  in  oil
and natural  gas  prices, the Company has entered into hedging transactions
of various kinds with  respect  to both oil and natural gas.  While the use
of these hedging arrangements limits  the  downside  risk  of reverse price
movements,  it  may  also  limit  future  revenues  from  favorable   price
movements.   During  1998  and 1999, the Company entered into forward sales
arrangements with respect to  a  portion  (between 30-50%) of its estimated
natural gas sales. As of March 2000, the Company  has no open forward sales
arrangements for natural gas for 2000.  The Company  did  hedge 200 barrels
per day of its oil production in October, 1999 for the twelve months ending
November 30, 2000, at a price of $22.05 per barrel.  As of  March, 2000 the
Company has no other open forward sales arrangements.

     The Company continuously reevaluates its hedging program  in  light of
market  conditions,  commodity  price  forecasts, capital spending and debt
service requirements.  The Company may hedge  additional  volumes into 2000
or  it  may  determine  from  time  to time to terminate its then  existing
hedging positions.

     IMPACT OF YEAR 2000 COMPLIANCE -  The  Year  2000 ("Y2K") issue is the
result of computerized systems being written to store  and process the year
portion of dates using two digits rather than four.  To  date,  all  of our
systems  have  continued to operate without any disruptions related to Y2K.
We will continue  to closely monitor areas of particular risk including our
business partners' ability to continue to meet their commitments throughout
the year.  The incremental  cost  associated  with  our Y2K efforts totaled
less  than  $10,000  through  1999  and  we  do  not  expect to  incur  any
significant additional costs related to this matter.

     RECENT ACCOUNTING PRONOUNCEMENTS -  In June 1998, the FASB issued SFAS
No.  133,  "Accounting for Derivative Instruments and Hedging  Activities."
The Statement  establishes  accounting and reporting standards that require
every  derivative  instrument  (including  certain  derivative  instruments
embedded in other contracts) to  be recorded in the balance sheet as either
an asset or a liability measured at  its fair value and that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met.  The  Company will to adopt SFAS No. 133
during the first quarter of 2000.  Because  of  the nature of the Company's
only derivative instrument, the Company does not  expect  that the adoption
of  SFAS  No. 133 will have a material impact on the Company's  results  of
operations.   However, the adoption may create volatility in equity through
changes in other comprehensive income.

<PAGE>


     ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     PRICE RISK  -The  Company's  revenues are derived from the sale of oil
and natural gas production.  From time  to  time,  the  Company enters into
hedging transactions which fix, for specific periods and  specific  volumes
of  production,  the  prices  the  Company will receive for its production.
These  agreements  reduce  the  Company's  exposure  to  decreases  in  the
commodity prices on the hedged volumes, while also limiting the benefit the
Company might otherwise have received from increases in commodity prices of
the hedged production.  See "Item  1.  Cautionary  Statements  -   Risks of
Hedging Transactions".

     The Company uses hedging transactions for price protection purposes on
a limited amount of its future production and does not use these agreements
for speculative or trading purposes.  The impact of hedges is recognized in
oil  and  gas  sales  in  the  period  the  related production revenues are
accrued.

     Based on projected annual production volumes for 2000, a 10% decline
in the prices the Company receives for its oil and natural gas production
would have an approximate $3.9 million negative impact on the Company's
discounted future net revenues.  This impact of a hypothetical 10% decline
in prices is net of the incremental gain that would be realized on hedge
agreements in place as of March 25, 2000.


     ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Information concerning this Item begins on Page F-1

     ITEM 9. CHANGES IN AND DISAGREEMENTS WITH  ACCOUNTANTS  ON  ACCOUNTING
AND FINANCIAL DISCLOSURE

     None.
                                 PART III

     ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table provides information concerning the directors  and
executive officers of the Company. All directors hold office until the next
annual  meeting  of  stockholders of the Company and until their successors
have been duly elected  and qualified. All officers serve at the discretion
of the Board of Directors.

<TABLE>
<CAPTION>
NAME                            AGE     POSITION                                                SINCE
<S>                             <C>     <C>                                                     <C>
Nicholas Tell, Jr.              38      Chairman of the Board                                    2000
Jerry W. Box                    61      Director                                                 2000
Jeffrey Clarke                  54      Director                                                 2000
McLain J. Forman, Ph.D.         71      Director, Chief Executive Officer & President            1982
Harold C. Block                 68      Vice President of Land and Acquisition                   1997
Marvin J. Gay                   57      Vice President of Finance and Administration             1997
Michael A. Habetz               51      Vice President, Manager of Operations                    1997
Michael H. Price                51      Chief Financial Officer                                  1998

</TABLE>

The Stockholders' Agreement provides that, subject to certain restrictions,
Trust  Company of the West ("TCW"), Jefferies & Company, Inc. ("Jefferies")
and McLain  Forman  shall  each  be entitled to designate one member of the
Board of Directors.  The fourth member shall be elected by the stockholders
of the Company in accordance with  the  Company's  bylaws.   The  agreement
further  provides that neither the TCW designee nor the Jefferies designee,
nor the fourth  director to be elected by the stockholders may be a current
director, officer, or employee of Jefferies or any affiliate of Jefferies.

     A brief biography of each director and executive officer follows:

<PAGE>

     Nicholas Tell,  Jr.,  is  the  Managing  Director, Capital Markets and
Special Situations, of TCW.  Mr. Tell joined TCW when TCW acquired Crescent
in 1995.  Previously, Mr. Tell was Vice President  and  Counsel of Crescent
where he structured and negotiated many of the firm's private  investments.
Prior  to  joining  Crescent,  Mr. Tell was a Senior Associate at Latham  &
Watkins.  From 1987 through 1992,  Mr.  Tell was involved in a wide variety
of corporate transactions, including mergers and acquisitions and corporate
financings for below-investment-grade companies.   Mr.  Tell  received  his
Juris  Doctor  from  the  University  of Chicago and his B.A. from Carleton
College.

     Jerry W. Box served as the President  and  Chief  Operating Officer of
Oryx Energy Company from 1998 until shortly after the merger of Oryx Energy
Company with Kerr-McGee Corporation in early 1999.  From 1988 through 1998,
Mr. Box served in various other capacities with Oryx Energy  Company.   Mr.
Box  holds  a BS and an MS, in Geology, from Louisiana Tech University.  He
is also a graduate  of  the  Program  for Management Development at Harvard
Business School.

     Jeffrey Clarke has been since 1994  the  President, Chairman and Chief
Executive  Officer  of  Coho  Energy, Inc., an independent  energy  company
engaged, through its wholly owned  subsidiaries,  in  the  development  and
production  of,  and exploration for, crude oil and natural gas principally
in Mississippi and  Oklahoma.   Prior  to  that  time, Mr. Clarke served in
various  capacities  with  Coho Resources, Ltd. and Coho  Resources,  Inc.,
affiliates of Coho Energy, Inc.   Coho  Energy,  Inc.  and  certain  of its
affiliates  filed  for  protection  under  Chapter  11 of the United States
Bankruptcy Code on August 23, 1999.  Mr. Clarke holds  a  BS,  in  Physics,
from  University of Wales, 1967, and conducted postgraduate work in Physics
at the University of East Anglia, 1967-1968.

     McLain  J. Forman, Ph.D. founded the Company in 1982 and has served as
President and  Chief  Executive Officer of the Company since inception. Dr.
Forman served as Chairman  of the Board from 1982 through 1999.  Dr. Forman
began his career in 1955 as  a  consulting  geologist  as  a  member of the
predecessor  firm  of  Atwater Consultants Ltd. Since 1960, Dr. Forman  has
directed and supervised  exploration  and production activities for clients
and for his own account in the Gulf Coast  Region.  From  1972 to 1982, Dr.
Forman  concentrated  his  efforts  on  originating and developing  wildcat
exploration prospects with various industry  and  financial  partners. With
the formation of the Company in 1982, his focus shifted to exploratory  and
development prospects, and in 1991 the Company began to selectively acquire
and  exploit  producing  properties.  Dr.  Forman  earned  a B.S. degree in
Geology  from Tulane University and an M.A. degree and a Ph.D.  in  geology
from Harvard University.

     Harold  C.  Block is the Vice President of Land and Acquisitions.  Mr.
Block joined Forman Exploration Company, the predecessor of the Company, in
1973 as Manager of the Land Department, and in 1982 he moved to his current
position with the  Company.  Mr.  Block began his career with F.A. Callery,
Inc. in 1957, where he became Land Manager in 1959. Upon leaving Callery in
1971 until he joined the Company, Mr.  Block was a consultant and organized
and conducted an oil and gas exploration  program.  Mr.  Block has a B.B.A.
degree in Management from the University of Houston.

     Michael  A.  Habetz  is  Vice  President, Manager of Operations.   Mr.
Habetz has been a Vice President and  the  Manager  of  Operations since he
joined the Company in 1993. From 1970 to 1987, he held various  supervisory
and  management  positions  with  Texaco  and  Edwin  L.  Cox, where he was
responsible for all phases of drilling, completion, workover and production
operations.   From   1987   until  1991,  Mr.  Habetz  provided  consulting
engineering services through  Energy  Research and Development Corporation,
and in 1991, he began to provide those  services  on a consulting basis for
the Company. Mr. Habetz holds a B.S. degree in Mechanical  Engineering from
Louisiana State University.

     Michael  H.  Price  is  the  Chief  Financial Officer of the  Company.
Before joining the Company in December, 1997,  Mr. Price was Vice President
of the Chase Manhattan Bank for twelve years, and  was  earlier employed by
Atwater Consultants and Amoco International Oil Company.   Mr.  Price holds
an  MBA from the University of Chicago and earned an M.Sc. from the  London
School of Economics and Political Science.

     Marvin J.  Gay  is  the  Vice President of Finance and Administration.
Mr. Gay  has  been  a  Vice  President  of  the Company since he joined the
Company at its inception in 1982.  Mr. Gay was the Controller and Treasurer
of Forman Exploration Company, the predecessor of  the  Company, from  1974
to 1982.  Before joining  the Company, Mr. Gay was a consultant with Arthur
Andersen & Co.  Mr. Gay holds a B.B.A. in Accounting from the University of
Mississippi.  He  is  a  Certified  Public  Accountant  and a member of the
American Institute of Certified Public Accountants.

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

     The  following table sets forth certain information for  each  of  the
fiscal years  ended December 31, 1999, 1998,  and  1997 with respect to the
compensation paid to Mr. Forman, the President and Chief Executive Officer,
and the four other  most  highly  compensated  executive  officers  of  the
Company   (collectively,   the  ''Named  Executive  Officers'').  No  other
executive officers of the Company  received  annual compensation (including
salary  and bonuses earned) that exceeded $100,000  for  the  fiscal  years
ended December 31, 1999, 1998 and 1997.

<TABLE>
<CAPTION>
                                                                      LONG-TERM COMPENSATION
     NAME AND                                 ANNUAL COMPENSATION     SECURITIES UNDERLYING        ALL OTHER
PRINCIPAL POSITION                   YEAR      SALARY    BONUS            OPTIONS AWARDED         COMPENSATION
------------------                   ----      ------    -----            ---------------         ------------
<S>                                  <C>       <C>       <C>              <C>                     <C>
McLain J. Forman, PhD., Chief        1999      $225,000  $  -0-            $-0-                     $-0-
Executive Officer and President      1998       225,000     -0-             -0-                      -0-
                                     1997       214,500    16,875           12,614                   -0-

Harold C. Block,                     1999       131,000     -0-             -0-                      -0-
Vice President of Land and           1998       131,000     -0-             -0-                      -0-
Acquisitions                         1997       125,000    9,825             4,890                   -0-

Michael A. Habetz,                   1999       130,000     -0-             -0-                      -0-
Vice President, Manager of           1998       130,000     -0-             -0-                      -0-
Operations                           1997       119,500    9,750             4,075                   -0-

Mike H. Price,                       1999       129,333     -0-             -0-                      -0-
Chief Financial Officer              1998        36,000     -0-             -0-                      81,000(1)
                                     1997         -0-       -0-             -0-                      -0-

Marvin J. Gay                        1999       114,833     -0-             -0-                      -0-
Treasurer, Vice President of Finance 1998       104,500     -0-             -0-                      -0-
and Administration                   1997        99,750    7,838             4,075                   -0-
</TABLE>

(1):  The "Other Compensation" paid to Mr. Price was paid to him during the
time in which  he  was working for the Company on a contractual basis prior
to his employment by the Company.

401(K) PLAN

     The Company has  adopted  a  defined contribution retirement plan that
complies with Section 401(k) of the Code (the ''401(k) Plan''). Pursuant to
the terms of the 401(k) Plan, all employees  with  at  least  one  year  of
continuous service are eligible to participate and may contribute up to 15%
of  their annual compensation (subject to certain limitations imposed under
the Code).  The 401(k) Plan provides that a discretionary match of employee
contributions  may  be  made  by  the  Company  in cash. The Company made a
$58,398 matching contribution to the 401(k) Plan  in  1998  based upon each
individual employee's plan contributions during 1998.  In December 1999 the
Company made another matching contribution, in the amount of $72,012, again
based upon each individual employee's plan contributions for  1999.   These
matching employer contributions to the 401(k) Plan are fully vested to  the
individuals  over  a  three-year  period.  Employee contributions under the
401(k) Plan are 100% vested and participants  are  entitled  to  payment of
vested benefits upon termination of employment. The amounts held under  the
401(k)  Plan  are  invested among various investment funds maintained under
the 401(k) Plan in accordance with the directions of each participant.

<PAGE>

COMPENSATION OF DIRECTORS

      Directors of the  Company will receive compensation for their service
as directors in the amount  of  $5,000  per month for up to 18 meetings per
year and an additional $3,000 per meeting for each additional meeting above
18 per year.  Directors of the Company are  also  entitled to reimbursement
of their reasonable out-of-pocket expenses in connection  with their travel
to  and  attendance  at  meetings  of the Board of Directors or  committees
thereof.

EMPLOYMENT AGREEMENTS

     Effective  January  14,  2000, the  Company  entered  into  employment
agreements with Messrs. Forman,  Price,  Block,  Habetz and Gay (the "Named
Executive Officers"), among others.  The agreements  provide for employment
of the Named Executive Officers in his current position  through  April 30,
2001,  subject  to  earlier  termination,  at a fixed annual salary and  an
annual bonus based upon the attainment of certain  quantitative goals.  The
agreements provide for a salary of $225,000, $140,000,  $131,000,  $130,000
and  $120,000  per  calendar  year, respectively for Messrs. Forman, Price,
Block,  Habetz and Gay.  The agreement  with  Mr.  Forman  provides  for  a
maximum bonus  of  90%  of  his base salary and the agreements with Messrs.
Price, Block, Habetz and Gay  provide,  for  a maximum bonus of 30% of such
individual's base salary.

     If  the  Company terminates the Named Executive  Officer's  employment
without Cause (as  defined in the agreement) or the Named Executive Officer
terminates his employment  for  Good  Reason (as defined in the agreement),
the Company must (i) pay the executive  his  accrued  base salary as of the
date of termination plus his annual base salary for the  remainder  of  his
employment  term  and  (ii)  provide  the  executive  with continuing group
medical, dental, disability and life insurance benefits  until the later of
18 months from the date of termination or the original expiration  date  of
the  employment  term.   If  the  executive  terminates  his employment for
reasons other than Good Reason or the Company terminates the  executive for
Cause, the Company must pay to the executive his accrued base salary  as of
the  date  of  termination.   If  the  executive  is  terminated  for Cause
following  a Change of Control (as defined in the agreement), the executive
will also be  paid his base salary for the remainder of his employment term
and will be provided  continuing group medical, dental, disability and life
insurance  benefits  until  the  later  of  18  months  from  the  date  of
termination or the original expiration date of the employment term.

     ITEM  12.  SECURITY   OWNERSHIP   OF  CERTAIN  BENEFICIAL  OWNERS  AND
MANAGEMENT

     The following table and notes thereto  set forth information regarding
ownership of shares of the Company's Common Stock  as  of  March  30, 2000.
The  number of shares beneficially owned and the percentages of outstanding
Common  Stock  have  been  estimated  based  on information provided by the
Company's exchange agent, U.S. Trust of Texas,  N.A.   The  Company emerged
from Chapter 11 protection of the United States Bankruptcy Code on December
29,  1999  and  is  in  the  process  of exchanging new securities for  the
securities canceled pursuant to the Bankruptcy  Plan.  See "Item 5.  Market
for  Registrant's  Common  Equity  and Related Stockholder  Matters."   The
following information is subject to  change  as additional security holders
tender  their  outstanding  securities  in  connection  with  the  exchange
process.
<PAGE>

<TABLE>
<CAPTION>
                                         NUMBER OF       PERCENT OF
                                         SHARES OF      OUTSTANDING
                                       COMMON STOCK       COMMON
PRINCIPAL SHAREHOLDERS                   OWNED(1)         STOCK(2)
----------------------                   --------         --------
<S>                                   <C>                 <C>
 Trust Company of the West               438,102(3)        43.8%
 11100 Santa Monica Boulevard
 Suite 2000
 Los Angeles, California  90025

 Jefferies & Company, Inc.               265,573           26.6%
 11100 Santa Monica Boulevard
 12th  Floor
 Los Angeles, California  90025

 Bank of America Investments, Inc.        88,376            8.8%
 233 South Wacker Drive
 Suite 2800
 Chicago, Illinois  60606-6306

 Alliance Capital                         79,336            7.9%
 1345 Avenue of the Americas
 37th Floor
 New York, New York  10105

 Koch Investment Group, Ltd.              63,209            6.3%
 4111 East 37{th} Street North
 Witchita, Kansas  67201
</TABLE>
____________________

  (1) Excludes shares that may be acquired within  60 days upon exercise of
  Class A, Class B, Class C or Class D Warrants.  The  exercise  prices for
  the  warrants  are  as follows:  $34.74 for Class A Warrants, $92.80  for
  Class B Warrants, $117.80  for  Class C Warrants, and $137.80 for Class D
  Warrants.  The following table sets forth information regarding ownership
  of shares of the Company's Common  Stock,  calculated  in accordance with
  Rule 13d-3 under the Securities Exchange Act of 1934.

<TABLE>
<CAPTION>

                                                                                                                       Percent of
                                                                                                                      Outstanding
                                   Common      Class A          Class B         Class C         Class D                 Common
Principal Shareholders             Shares      Warrants         Warrants        Warrants        Warrants       Total    Stock(a)
----------------------             ------      --------         --------        --------        --------       -----     -----
<S>                                <C>         <C>              <C>              <C>             <C>          <C>         <C>
  Trust Company of the West        438,102      8,629           25,872          25,872           25,872       524,347(b)  33.3%
  Jefferies & Company, Inc.        265,573      2,984            8,948           8,948            8,948       295,401     19.7%
  Bank of America Investment, Inc.  88,376      1,064            3,192           3,192            3,192        99,016      6.6%
  Alliance Capital                  79,336        982            2,946           2,946            2,946        89,156      5.9%
  Koch Investment Group, Ltd.       63,209      1,010            3,028           3,028            3,028        73,303      4.9%

MANAGEMENT
----------
 McLain J. Forman                       0      33,700          101,100         101,100          101,100       337,000     22.5%
 All Directors and Executive            0      33,700          101,100         101,100          101,100       337,000     22.5%
 Officers as a group (8 persons)
</TABLE>
    _________________________
    (a) Based on 1,500,071 shares of outstanding Common Stock.
    (b) Includes 14,851 shares  held  on  behalf of Brown University, 4,910
      shares held on behalf of Allstate Insurance  Co., and 653 shares held
      on behalf of Raytheon Co.

  (2) Based on 1,000,008 shares of outstanding Common Stock.
  (3) Includes 13,214 shares held on behalf of Brown University.

<PAGE>


     ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In August 1996, the Company sold all of its interests in the Bayou Fer
Blanc Field and the West Gueydan Field to a company  (the "Purchaser") that
is owned by the sole stockholder.  The purchase price  was  $950,000, which
was paid at the closing.  The Company did not recognize any gain or loss on
the  sale of these properties.  In connection with the sale, the  Purchaser
also agreed  to  assume  certain liabilities of the Company relating to the
completion of the 3-D seismic  survey  and  other  related  matters.  As of
December  31,  1996,  the Company had incurred aggregate costs of  $327,828
subsequent to the closing on behalf of the Purchaser, which are recorded as
due from affiliate.  On June 3, 1997, the Company repurchased its interests
in these fields for $5,000,000  with  the  proceeds  from  the offerings of
Senior  Notes  and  Preferred Stock made by the Company in 1997.   At  that
time, the Purchaser's  cost basis in these fields was $3,500,000, which the
Company has recorded as  unevaluated  properties at December 31, 1997.  The
balance of the purchase price of $1,500,000  was recorded as a distribution
to the sole stockholder.

     During 1996, the sole stockholder loaned  the  Company  $1,000,000, of
which  $500,000  had  been  repaid  as of December 31, 1996.  The remaining
$500,000  was repaid in 1997.  The Company  recorded  interest  expense  of
$27,361 during 1996 and $14,301 during 1997 related to this loan.

<PAGE>

                                 PART IV.

        ITEM  14.  EXHIBITS,  FINANCIAL  STATEMENT SCHEDULES AND REPORTS ON
        FORM 8-K

(a)  1.   Financial Statements

     The following financial statements of the Company and the Report of
the Company's Independent Public Accountants thereon are included on pages
F-1 through F-18 of this Form 10-K.

     Report of Independent Public Accountants

     Balance Sheet as of the years ended December 31, 1999 and 1998

     Statement of Operations for the three years in the period ended
     December 31, 1999

     Statement of Stockholders' Equity (Deficit) for the three years in the
     period ended December 31, 1999

     Statement of Cash Flows for the three years in the period ended
     December 31, 1999

     Notes to the Financial Statements


      2.    Financial Statement Schedules

      All schedules are omitted because the required information is
inapplicable or the information is presented in the Financial Statements or
the notes thereto.

      3.  Exhibits

      The  following  instruments  and  documents  are  included  as
      Exhibits to this Form 10-K:

<TABLE>
<CAPTION>
      _______  __________________________________________________________________
      Exhibit                           Exhibit
        No.
<S>             <C>
        3.1     Amended and Restated Articles of Incorporation dated January 14,
                2000.

        3.2     Amended and Restated Bylaws.

        4.1     Stockholders' Agreement dated as of January 14, 2000 by and
                among Forman Petroleum Corporation and each of the other Persons
                listed on the signature pages thereto.

        4.2     Registration Rights Agreement dated as of January 14, 2000 by and
                between Forman Petroleum Corporation and each of the other Persons
                listed on the signature pages thereto.

        4.3     Warrant Agreement dated as of January 14, 2000 by and between Forman
                Petroleum Corporation and each of the other Persons listed on the
                signature pages thereto.

        10.1    Employment Agreement, dated as of January 14, 2000, between Forman
                Petroleum Corporation and McLain J. Forman.

        10.2    Form of Employment Agreement, dated as of January 14, 2000, between
                Forman Petroleum Corporation and each of the other executive officers.

        27.1    Financial Data Schedule.

</TABLE>

(b) Reports on Form 8-K

    None
<PAGE>


                                SIGNATURES

     Pursuant to the requirements  of  the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused  this  Form 10-K to be signed on
its behalf by the undersigned, thereunto duly authorized.


                              FORMAN PETROLEUM CORPORATION



                              By: /S/ MCLAIN J. FORMAN
                                  -------------------------
                                          McLain J. Forman
                                            Chief Executive Officer
                                            and President

Date: April 10, 2000

     Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Form 10-K has been signed by  the  following  persons in
the capacities and on the dates indicates.


NAME                            TITLE                           DATE

/s/ Nicholas Tell, Jr.          Chairman of the Board           April 10, 2000
-----------------------
Nicholas Tell, Jr.

/s/ McLain J. Forman            Chief Executive Officer and     April 10, 2000
-----------------------         President
McLain J. Forman                (Principal Executive Officer)

/s/ Michael H. Price            Chief Financial Officer         April 10, 2000
-----------------------         (Principal Financial Officer)

/s/ Marvin J. Gay               Vice President of Finance and   April 10, 2000
-----------------------         Administration (Controller and
                                Principal Accounting Officer)

/s/ Jerry W. Box                Director                        April 10, 2000
-----------------------
Jerry W. Box

/s/ Jeffrey Clarke              Director                        April 10, 2000
-----------------------
Jeffrey Clarke




                       INDEX TO FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                        PAGE
<S>                                                                     <C>
Report of Independent Public Accountants .............................  F-2

Balance Sheets as of the Years Ended
  December 31, 1999 and 1998 .........................................  F-3

Statements of Operations for the Three Years
  in the Period Ended December 31, 1999 ..............................  F-4

Statements of Stockholders' Equity (Deficit) for the
  Three Years in the Period Ended December 31, 1999 ..................  F-5

Statements of Cash Flows for the Three Years
  In the Period Ended December 31, 1999 ..............................  F-6

Notes to Financial Statement .........................................  F-7

</TABLE>


<PAGE>


                 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Stockholder of Forman Petroleum Corporation:

We have audited the accompanying balance sheets of Forman Petroleum
Corporation (a Louisiana corporation) as of December 31, 1999 and 1998, and
the related statements of operations and stockholders' equity (deficit) and
cash flows for each of the three years in the period ended December 31,
1999.  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.

As discussed in Note 1, effective December 29, 1999, the Company was
reorganized under a plan confirmed by the United States Bankruptcy Court in
the United States District Court for the Eastern District of Louisiana and
adopted a new basis of accounting whereby all remaining assets and
liabilities were adjusted to their estimated fair values.  Accordingly,
financial statements for periods subsequent to the reorganization are not
comparable to the financial statements presented for prior periods.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Forman Petroleum
Corporation as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for each of the three years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States.








New Orleans, Louisiana,
March 25, 2000

<PAGE>


                         FORMAN PETROLEUM CORPORATION
                         ----------------------------

                                BALANCE SHEETS
                                --------------
<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                                                ------------------------
                                                                    1999        1998
                                                                -----------  -----------
<S>                                                             <C>          <C>
                        ASSETS
                        ------
CURRENT ASSETS:
 Cash and cash equivalents                                      $ 3,180,925  $ 1,474,488
 Accounts receivable                                                236,663       47,830
 Oil and gas revenue receivable                                   1,359,393      656,433
 Unbilled well costs                                                    257       11,324
 Prepaid expenses                                                    43,845      297,154
 Advance to operator                                                   -       1,200,000
                                                                -----------  -----------

   Total current assets                                           4,821,083    3,687,229
                                                                -----------  -----------

PROPERTY AND EQUIPMENT:
 Oil and gas properties, full cost method                        25,515,529   77,067,569
 Unevaluated oil and gas properties                               4,732,139    4,485,359
 Other property and equipment                                       200,000    1,718,757

                                                                 30,447,668   83,271,685
 Less- accumulated depreciation, depletion and
   amortization                                                        -     (59,511,084)
                                                                -----------  -----------

   Net property and equipment                                    30,447,668   23,760,601
                                                                -----------  -----------

OTHER ASSETS:
 Recapitalization costs                                                -         384,313
 Escrowed and restricted funds                                      490,044      493,481
 Deferred financing costs, net                                         -       5,360,234
                                                                -----------  -----------

   Total assets                                                 $35,758,795  $33,685,858
                                                                ===========  ===========


    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
    ----------------------------------------------

CURRENT LIABILITIES:
 Accounts payable and accrued liabilities                       $ 1,571,710  $ 2,378,512
 Undistributed oil and gas revenues                                 895,064    1,590,223
    Current portion of notes payable                                640,608   68,309,653
    Interest payable                                                   -       5,512,640
                                                                -----------  -----------

   Total current liabilities                                      3,107,382   77,791,028

Notes payable                                                     2,066,173       17,121
Deferred tax liability                                            9,900,580         -
Mandatorily redeemable preferred stock                                 -      12,360,322
                                                                -----------  -----------
    Total  liabilities                                           15,074,135   90,168,471

STOCKHOLDERS' EQUITY (DEFICIT):
 Old common stock, net of treasury stock at cost of $10                -             990
 New common stock, no par value, 10,000,000 shares authorized,
      1,000,008 shares issued and outstanding                    20,684,660         -
 Accumulated deficit                                                   -     (56,483,603)
                                                                -----------  -----------

   Total stockholder's equity (deficit)                          20,684,660  (56,482,613)
                                                                -----------  -----------
                                                                $35,758,795  $33,685,858
                                                                ===========  ===========
</TABLE>

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


<PAGE>

                         FORMAN PETROLEUM CORPORATION
                         ----------------------------

                           STATEMENTS OF OPERATIONS
                           ------------------------
<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                                                     --------------------------------------------
                                                         1999            1998            1997
                                                     ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>
Revenues:
 Oil and gas sales                                   $ 12,992,714    $ 15,950,329    $ 14,235,272
 Interest income                                             -            239,581         370,569
    Overhead reimbursements                                64,980          71,325          60,838
 Other income                                              58,292          14,608          42,178
                                                     ------------    ------------    ------------
         Total revenues                                13,115,986      16,275,843      14,708,857
                                                     ------------    ------------    ------------
Costs and expenses:
 Production taxes                                         731,542         540,837         699,638
 Lease operating expenses                               3,146,581       3,359,200       2,708,570
 General and administrative expenses                    3,013,809       2,774,498       2,006,768
 Interest expense                                       6,243,778      10,122,131       7,723,717
 Full cost ceiling writedown                                 -         19,575,047      10,008,121
 Depreciation, depletion and amortization               5,601,733      10,442,032       9,391,640
                                                     ------------    ------------    ------------
         Total expenses                                18,737,443      46,813,745      32,538,454
                                                     ------------    ------------    ------------
Net loss from operations before
reorganization items,
         income taxes and extraordinary item           (5,621,457)   (30,537,902)     (17,829,597)

Reorganization items:
        Reorganization costs                           (1,184,111)          -                -
        Adjust accounts to fair value (Note 1)          6,268,022           -                -
                                                     ------------    ------------    ------------

Net loss before income taxes and
extraordinary item                                       (537,546)    (30,537,902)    (17,829,597)

Provision (benefit) for income taxes                     (188,141)           -               -
                                                     ------------    ------------    ------------
Net loss before extraordinary item                       (349,405)    (30,537,902)    (17,829,597)
Extraordinary gain on extinguishment of
debt, net of  taxes of $10,088,721                     46,724,052            -               -
                                                     ------------    ------------    ------------

Net income (loss)                                      46,374,647     (30,537,902)    (17,829,597)
Preferred stock dividends                              (1,152,991)     (1,729,068)       (922,912)
                                                     ------------    ------------    ------------
Net income (loss) attributable to common shares      $ 45,221,656    $(32,266,970)   $(18,752,509)
                                                     ============    ============    ============
Per common share amounts:
Net income (loss) per share attributable
to common shares before extraordinary item           $     (16.69)   $    (358.52)   $    (208.36)

Extraordinary item per share                               519.15             -               -
                                                     ------------    ------------    ------------
Net income (loss)  per share                         $     502.46    $    (358.52)   $    (208.36)
                                                     ============    ============    ============
Weighted average shares outstanding                        90,000          90,000          90,000

UNAUDITED PRO FORMA DATA:
 Net income (loss) from operations reported above                                    $(17,829,597)

 Pro forma benefit for income taxes related to
   operations as an S Corp                                                              6,105,850
 Preferred stock dividends                                                               (922,912)
                                                                                     ------------
    Pro forma net income (loss)                                                      $(12,646,659)
                                                                                     ============
    Pro forma net income (loss) per share                                            $    (140.52)
                                                                                     ============
 Weighted average shares outstanding                                                       90,000
                                                                                     ============
</TABLE>

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


<PAGE>


                         FORMAN PETROLEUM CORPORATION
                         ----------------------------

                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                 --------------------------------------------

<TABLE>
<CAPTION>

                                                                 Additional
                                        Common       Treasury     Paid-in       Accumulated
                                        Stock         Stock       Capital         Deficit          Total
                                        -----         -----       -------         -------          -----
<S>                                  <C>            <C>         <C>           <C>             <C>
BALANCE, December 31, 1996           $      1,000   $    (10)   $   785,823   $  (5,819,381)  $  (5,032,568)
                                     ============   ========    ===========   =============   =============
        Net loss                             -          -              -        (17,829,597     (17,829,597)
ISSUANCE OF WARRANTS
  TO PURCHASE COMMON
  STOCK (Note 4)                             -          -         1,111,100            -          1,111,100

RECLASS ACCUMULATED
  DEFICIT TO ADDITIONAL
  PAID IN CAPITAL                            -          -        (1,896,923)      1,896,923            -

DISTRIBUTION TO SOLE
  STOCKHOLDER (Note 8)                       -          -              -         (1,500,000)     (1,500,000)

ACCRUE DIVIDENDS ON
  MANDATORILY
  REDEEMABLE PREFERRED
  STOCK                                      -          -              -      $    (898,605)  $    (898,605)

ACCRETION OF DISCOUNT
  ON MANDATORILY
  REDEEMABLE PREFERRED
  STOCK                                      -          -              -            (24,307)        (24,307)
                                     ------------   --------    -----------   -------------   -------------

BALANCE, December 31, 1997           $      1,000   $    (10)   $      -      $ (24,174,967)  $ (24,173,977)
                                     ============   ========    ===========   =============   =============

        Net loss                             -          -              -        (30,537,902)    (30,537,902)
ACCRETION OF DISCOUNT
  ON MANDATORILY
  REDEEMABLE PREFERRED
  STOCK                                      -          -              -            (41,666)        (41,666)
ACCRUE DIVIDENDS ON
  MANDATORILY REDEEMABLE
  PREFERRED STOCK                            -          -              -         (1,729,068)     (1,729,069)
                                     ------------   --------    -----------   -------------   -------------

BALANCE, December 31, 1998           $      1,000   $    (10)   $      -      $ (56,438,603)  $ (56,482,613)
                                     ============   ========    ===========   =============   =============

        Net income                           -          -              -         46,374,647      46,374,647
ACCRETION OF DISCOUNT
  ON MANDITORILY
  REDEEMABLE PREFERRED
  STOCK                                      -          -              -            (27,778)        (27,778)

ACCRUE DIVIDENDS ON
  MANDATORILY REDEEMABLE
  PREFERRED STOCK                            -          -              -         (1,152,991)     (1,152,991)

OLD COMMON STOCK
  SURRENDERED                              (1,000)        10           -               -               (990)

NEW COMMON STOCK ISSUED IN
  REORGANIZATION                       20,684,660       -              -               -         20,684,660

DISCHARGE OF PREFERRED STOCK
  IN REORGANIZATION                          -          -              -         13,555,971      13,555,971

FRESH START ACCOUNTING
  ADJUSTMENTS (Note 1)                       -          -              -         (2,266,246)     (2,266,246)
                                     ------------   --------    -----------   -------------   -------------

BALANCE, December 31, 1999           $ 20,684,660   $   -      $       -      $        -      $  20,684,660
                                     ============   ========   ============   =============   =============

</TABLE>

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

<PAGE>



                         FORMAN PETROLEUM CORPORATION
                         ----------------------------

                           STATEMENTS OF CASH FLOWS
                           ------------------------

<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER 31,
                                                                     --------------------------------------------
                                                                         1999            1998            1997
                                                                     ------------    ------------    ------------
<S>                                                                  <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)                                                   $ 46,374,647    $(30,537,902)   $(17,829,597)
 Adjustments to reconcile net loss to net cash provided
  by operating activities-
    Extraordinary item                                                (46,724,052)           -               -
    Depreciation and amortization                                       5,601,733      30,316,309      19,399,761
    Income tax benefit                                                   (188,141)           -               -
    Adjust accounts to fair value                                      (6,268,022)           -               -
    Interest on obligations discharged in bankruptcy                    6,144,915            -               -
    Withdrawal from interest escrow account                                  -          3,978,148       5,471,852

 Change in assets and liabilities-
   Decrease (Increase) in oil and gas revenue receivable                 (702,960)      1,750,882          96,163
   Decrease (Increase) in accounts receivable                            (188,833)        550,161         (97,389)
   (Increase) Decrease in unbilled well costs                              11,067          (3,166)         52,030
   Decrease (Increase) in prepaid expenses                                253,309        (297,154)           -
   (Decrease) Increase in accounts payable and accrued liabilities      1,500,735      (4,059,766)        197,209
   (Decrease) Increase in undistributed oil and gas revenues             (473,127)       (258,274)        222,980
   Increase in interest payable                                              -          5,512,640            -
   Decrease (Increase) in advance to operator                           1,200,000      (1,200,000)           -
   Decrease in capitalized recapitalization costs                         384,313            -               -
   Increase (Decrease) in due from related parties                           -               -             12,457
   Decrease in due to stockholder                                            -               -            327,828
                                                                     ------------    ------------    ------------

        Net cash provided by operating activities                       6,925,284       5,751,878       7,853,294
                                                                     ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Additions to oil and gas properties                                   (5,173,645)     (4,523,589)    (28,669,449)
 Reduction of escrow account                                                3,437          21,615         366,874
 Purchase of other property and equipment                                 (48,639)        (67,964)       (224,868)
                                                                     ------------    ------------    ------------

        Net cash used in investing activities                          (5,218,847)     (4,569,938)    (28,527,443)
                                                                     ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from notes payable                                                 -               -         71,800,333
 Repayment of notes payable                                                  -               -        (43,542,096)
 Deposit into interest escrow account                                        -               -         (9,450,000)
 Proceeds from preferred stock                                               -               -          9,666,667
 Proceeds from issuance of warrants                                          -               -          1,000,000
 Distribution to stockholder                                                 -               -         (1,500,000)
 Deferred financing costs                                                    -           (165,321)     (6,973,437)
                                                                     ------------    ------------    ------------

        Net cash (used) provided by financing activities                     -           (165,321)     21,001,467
                                                                     ------------    ------------    ------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                               1,706,437       1,016,619         327,318

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                         1,474,488         457,869         130,551
                                                                     ------------    ------------    ------------

CASH AND CASH EQUIVALENTS - END OF PERIOD                            $  3,180,925    $  1,474,488    $    457,869
                                                                     ============    ============    ============

SUPPLEMENTAL DISCLOSURES:
 Cash paid for-
  Interest                                                           $     82,451    $  4,609,491    $  7,723,717
                                                                     ============    ============    ============
  Income taxes                                                       $       -       $       -       $       -
                                                                     ============    ============    ============

</TABLE>

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

<PAGE>

                       FORMAN PETROLEUM CORPORATION
                       ----------------------------

                       NOTES TO FINANCIAL STATEMENTS
                       -----------------------------

                        DECEMBER 31, 1999 AND 1998
                        --------------------------

1.     REORGANIZATION AND FRESH START REPORTING:
       ----------------------------------------

Forman  Petroleum  Corporation  ("Forman"  or  the  "Company"), a Louisiana
corporation, is an independent energy company engaged  in  the exploration,
development, acquisition and production of crude oil and natural  gas, with
operations  primarily in the onshore Gulf Coast area of Louisiana.   Forman
was incorporated in Louisiana in 1982 and began operations in that year.

REORGANIZATION
--------------

On August 6,  1999, the Company filed a voluntary petition for relief under
Chapter 11 of the  United  States  Bankruptcy  Code  in  the  United States
District Court for the Eastern District of Louisiana (the Bankruptcy Court)
(Case No. 99-14319).  On November 22, 1999, the Company and certain  of its
creditors  filed  a Second Amended Joint Plan of Reorganization, as amended
on December 29, 1999  (the  Bankruptcy  Plan). The Company's reorganization
plan  was  confirmed  by the Bankruptcy Court  on  December  29,  1999  and
consummated January 14, 2000.

Pursuant  to  the  Bankruptcy   Plan,  all  of  the  Company's  issued  and
outstanding securities were canceled  and  the Company issued the following
equity securities:

*  925,000 shares of new common stock, no par value, to the former holders
   of the Company's 13.5% Series B Senior Notes due 2004;

*  75,000 shares of new common stock to the former holders of the
   Company's Series A Cumulative Preferred Shares; and

*  warrants to purchase up to 500,000 shares of new common stock to certain
   of the  Company's  former  warrant holders and to McLain J. Forman, the
   former sole voting shareholder of the Company.

As of the confirmation date,  the Company had total assets of $33.9 million
and liabilities of $96.0 million.   With  the  exception of an aggregate of
approximately  $2.7  million  of promissory notes issued  pursuant  to  the
Bankruptcy Plan, approximately  $300,000  in  convenience claims which were
paid in full in 2000, undistributed oil and gas  revenues of $895,000,  and
approximately $3 million in additional pre-petition  bankruptcy claims that
are disputed by the Company and still pending before the  Bankruptcy  Court
(Note 6), all of the Company's liabilities as of the confirmation date were
extinguished pursuant to the Bankruptcy Plan.

Costs   incurred   during   1999   directly   related   to   the  Company's
reorganization,  consisting  primarily  of legal, accounting and  financial
consulting fees, were recorded to reorganization  costs in the accompanying
statement of operations.  These costs are net of interest  income earned on
cash  and cash equivalents because the maintenance of cash balances  during
1999 was directly related to the Company's bankruptcy filing.

The Company  ceased  accruing interest on  its Senior Debt and dividends on
its preferred stock on  August  6,  1999,  when  it  filed for relief under
Chapter 11.

<PAGE>

FRESH START REPORTING
---------------------

The Company has accounted for the reorganization using  the  principles  of
fresh  start  accounting  required  by  AICPA  Statement  of Position 90-7,
"Financial  Reporting  by  Entities in Reorganization Under the  Bankruptcy
Code"  (SOP 90-7).  For accounting  purposes,  the  accompanying  financial
statements  reflect  the  confirmed  plan  as  if  it  was  consummated  on
December  31,  1999.   Under  the principles of fresh start accounting, the
Company's total assets and liabilities  were  recorded  at  their estimated
fair  market  values.   Accordingly, the Company's net proved oil  and  gas
properties were increased  by  approximately  $3.0 million, its unevaluated
oil  and gas properties were increased by approximately  $3.1  million  and
other  net  property  and  equipment  was  increased  by approximately $0.2
million.  Obligations arising from the Bankruptcy Plan  are recorded at the
amounts  expected  to  be  paid  in  settlements  of such obligations.   In
addition,  the  Company's  Senior  Notes  with a net book  value  of  $68.6
million,  related interest payable of $11.1  million,  preferred  stock  of
$13.6 million  and deferred financing costs related to the Senior Notes and
preferred stock of $4.4 million were all written off.

Since  the former  holders  of  the  Company's  Senior  Notes  (the  former
noteholders) received 92.5% of the shares of the common stock (Note 5), the
gain on  discharge  of  indebtedness  was  computed  using 92.5% of the net
assets received by the former noteholders.  The remaining  7.5%  of the net
assets allocable to the former holders of the Company's preferred stock was
recorded to equity and is included in fresh start accounting adjustments in
the accompanying statement of stockholders' equity.  Also included  in such
amount  is  the write-off of the remaining deferred costs allocable to  the
preferred stock.


<PAGE>

The effect of  the  Bankruptcy  Plan  on  the Company's balance sheet as of
December 31, 1999, is as follows (in thousands):


<TABLE>
<CAPTION>
                                                                     Adjustments to Record
                                                                     Confirmation of Plan
                                                                     --------------------
                                                                      Discharge
                                                                     of Debt and
                                                                      Preferred                             Reorganized
                                             Preconfirmation            Stock           Fresh Start        Balance Sheet
                                             ---------------         -----------        -----------        -------------
<S>                                          <C>                     <C>                <C>                <C>
           ASSETS
           ------
CURRENT ASSETS                               $      4,821            $     -            $      -           $     4,821
PROPERTY AND EQUIPMENT:
 Oil and gas properties, net                       24,158                  -                  6,090             30,248
 Other property and equipment                          22                  -                    178                200
DEFERRED FINANCING COSTS, net                       4,398                (4,398)               -
ESCROWED AND RESTRICTED FUNDS                         490                  -                   -                   490
                                             ------------            ----------         -----------        -----------
                                             $     33,889            $   (4,398)        $     6,268        $    35,759
                                             ============            ==========         ===========        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
           (DEFICIT)
           ---------

LIABILITIES NOT SUBJECT TO
 COMPROMISE:
 Accounts payable and accrued liabilities    $      2,467            $     -            $      -           $     2,467

 Current portion of promissory notes                   26                   614                -                   640
 Other noncurrent liabilities                          19                  -                   -                    19
 Deferred taxes                                    (2,382)               10,089               2,194              9,901
                                             ------------            ----------         -----------        -----------
                                                      130                10,703               2,194             13,027
LIABILITIES SUBJECT TO COMPROMISE:
 Prepetition liabilities                            2,521                (2,521)               -                  -
 Promissory notes                                    -                    2,047                -                 2,047
 Notes payable - secured (including interest
        of $11,155)                                79,767               (79,767)               -                  -
 Mandatorily redeemable preferred stock            13,555               (13,555)               -                  -

STOCKHOLDERS' DEFICIT:
 Common stock - old                                     1                    (1)               -                  -
 Common stock - new                                  -                   14,417               6,268             20,685
 Accumulated deficit                              (62,085)               64,279              (2,194)              -
                                             ------------            ----------         -----------        -----------
                                                   33,759               (15,101)              4,074             22,732
                                             ------------            ----------         -----------        -----------
                                             $     33,889            $   (4,398)        $     6,268        $    35,759
                                             ============            ==========         ===========        ===========
</TABLE>

<PAGE>

The  fair  market  value  assigned  to  the  Company's  proved  oil and gas
properties  was  estimated  by adjusting the net pre-tax future cash  flows
discounted at a 10% annual rate  (PV10)  of  the  Company's proved reserves
($36.4  million  at  December  31, 1999) as set forth in  the  Estimate  of
Reserves and Future Revenue report  on  the  Company's  proved  oil and gas
properties  as  of  December  31,  1999,  prepared by Netherland, Sewell  &
Associates, independent reservoir engineers.   This  report was prepared in
accordance with SEC guidelines, utilizing constant prices  existing  as  of
December  31,  1999.   The  Company  adjusted  these  prices to reflect the
product prices used in valuing producing properties, ($21 per barrel of oil
and  $2.75  per  mcf  of  gas)  then  applied risk factors to  the  various
categories of proved reserves as follows:

<TABLE>
<CAPTION>
                PROVED CATEGORY      RISK FACTOR
                ---------------      -----------
<S>                                  <C>
                Proved Producing         95%
                Proved Non-producing     75%
                Proved Undeveloped       25%
</TABLE>

Applying  these  risk factors and adjusting the product pricing resulted in
an estimated fair  market  value of the proved properties of $25.5 million.
The Company's other assets,  including  other  property and equipment, were
valued at $4.9 million.

As a result of the implementation of fresh start  accounting, the financial
statements as of and for the year ended December 31,  1999  reflecting  the
fresh start accounting principles discussed above are not comparable to the
financial statements of prior periods.

2. SIGNIFICANT ACCOUNTING POLICIES:
   --------------------------------

OIL AND GAS PROPERTIES
----------------------

Forman uses the full-cost method of accounting, which involves capitalizing
all  exploration  and development costs incurred for the purpose of finding
oil  and gas reserves,  including  the  costs  of  drilling  and  equipping
productive  wells,  dry  hole  costs,  lease  acquisition  costs  and delay
rentals.   The Company also capitalizes certain related employee costs  and
general and  administrative  costs  which  can  be directly identified with
significant acquisition, exploration and development  projects  undertaken.
Such  costs  are  amortized  on  the  future  gross  revenue method whereby
amortization is computed using the ratio of gross revenues generated during
the period to total estimated future gross revenues from proved oil and gas
reserves.  Additionally, the capitalized costs of oil  and  gas  properties
cannot  exceed  the  present value of the estimated net cash flow from  its
proved reserves, together with the lower of cost or estimated fair value of
its undeveloped properties (the full cost ceiling).  Transactions involving
sales  of  reserves in place,  unless  extraordinarily  large  portions  of
reserves  are   involved,   are  recorded  as  adjustments  to  accumulated
depreciation, depletion and amortization.

CASH AND CASH EQUIVALENTS
-------------------------

The Company considers all highly  liquid  investments  with  an original
maturity of three months or less to be cash and cash equivalents.

DEPRECIATION OF OTHER PROPERTY AND EQUIPMENT
--------------------------------------------

Depreciation of property and equipment other than oil and gas properties
is provided on the straight-line method over the estimated useful  lives
of the assets.

DEFERRED FINANCING COSTS
------------------------

For  oil and gas property acquisitions which were burdened by an overriding
royalty  interest  assigned to its lenders, the Company allocated a portion
of the purchase price  of  such  acquisitions  to deferred financing costs.
The  amount  allocated  is  proportional  to  the  discounted  future   net
cash   flows  associated  with   the  interest  assigned   as  compared  to

<PAGE>

the total  discounted  future net  cash flows for  the acquisition  (before
carve-out  of  the  overriding  royalty  interest)  as of  the date of  the
acquisition.  These allocated costs, along with other  costs  of  obtaining
financing, were deferred and amortized using the effective interest  method
over the original term of the related debt.  All such costs were reduced to
zero in the reorganization discussed in Note 1.

FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------

Cash,   cash   equivalents,   accounts  receivable,  accounts  payable  and
promissory notes are reflected  at their fair market values at December 31,
1999, in accordance with SOP 90-7  as discussed in Note 1.  The fair market
value of the forward oil sales agreement  was  immaterial  at  December 31,
1999.

INCOME TAXES
------------

The  income  tax  effects  of  the  Company's reorganization had a material
impact on the tax basis of the Company's  oil and gas interests and its net
operating loss carryforwards (Note 4).

The Company issued a second class of stock  on  June  3,  1997, effectively
terminating  its  S  Corporation  election.   As  a result, the Company  is
subject  to  federal  and state taxes.  The Company was  also  required  to
establish a net deferred tax liability calculated at the applicable federal
and state tax rates resulting primarily from financial reporting and income
tax reporting basis differences  in  oil and gas properties and other basis
differences between cash and accrual basis  accounting.   During 1997, as a
result  of the termination of its S Corporation election, the  Company  was
required  to  provide a net deferred tax liability of $6,105,850, which was
charged to income  tax  expense,  and  was  offset in its entirety by a tax
benefit recognized on the loss incurred.

For purposes of the unaudited pro forma income tax benefit and net loss per
share,  the  accompanying  statement  of  operations  for  the  year  ended
December 31, 1997, includes an income tax benefit  for  the  portion of the
losses  which  would  have  been  offset against the deferred tax liability
created as a result of the termination of the S Corporation election.

PERVASIVENESS OF 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.

RECAPITALIZATION COSTS - 1998
-----------------------------

Costs  incurred   during  1998,  consisting  primarily  of  consulting  and
financial advisory  fees,  were capitalized in anticipation of the possible
debt restructuring or recapitalization  of  the  Company.  These costs were
written off in 1999 when the Company filed for bankruptcy.

DEFERRED CHARGES
----------------

The  Company  capitalized $170,429 of legal and professional  costs  as  of
December 31, 1997,  related  to the preparation of documents for an initial
public offering.  These costs were charged to expense in 1998.

DERIVATIVES
-----------

The Company uses derivative financial  instruments  such as swap agreements
and  forward  sales contracts for price protection purposes  on  a  limited
amount of its future production and does not use them for trading purposes.
Such  derivatives  are  accounted  for on an accrual basis and amounts paid
or  received  under  the  agreements  are  recognized  as oil and gas sales
in the period in which they accrue.   For  the  years  ended  December  31,
1999, 1998  and 1997, the  Company   recorded   additions  to  oil  and gas
sales  of  $109,800, $-0-  and    $189,300,   respectively,   under   these

<PAGE>

agreements. The Company  did enter into a forward sales  agreement  to sell
200 barrels per day of its oil production in October, 1999  for the  twelve
months ending November 30, 2000, at a  price of  $22.05 per  barrel.  As of
December  31, 1999  and  through  March 25, 2000, the Company  had no  open
forward gas sales positions.

CERTAIN CONCENTRATIONS
----------------------

During 1999,  100% of the Company's oil and gas production was sold to four
customers.  Based  on  the current demand for oil and gas, the Company does
not believe the loss of  any  of  these  customers would have a significant
financially disruptive effect on its business or financial condition.

PER SHARE AMOUNTS
-----------------

Net loss per share and pro forma net loss  per  share  of common stock were
calculated by dividing net loss applicable to common stock by the weighted-
average number of common shares outstanding during the year.   Due  to  the
net  losses  reported  in  1999,  1998  and  1997, all options and warrants
outstanding were excluded from the computation because they would have been
antidilutive.

RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------

In  June  1998,  the FASB issued SFAS No. 133, "Accounting  for  Derivative
Instruments and Hedging  Activities."  The Statement establishes accounting
and reporting standards that require every derivative instrument (including
certain derivative instruments  embedded in other contracts) to be recorded
in the balance sheet as either an asset or a liability measured at its fair
value  and  that  changes  in the derivative's  fair  value  be  recognized
currently in earnings unless  specific  hedge  accounting criteria are met.
The Company will adopt SFAS No. 133 on January 1,  2001.   Because  of  the
nature  of  the  Company's  hedging activities, the Company does not expect
that the adoption of SFAS No.  133  will  have  a  material  impact  on the
Company's  results  of  operations.   However, management believes that its
hedging contracts will meet the criteria  for  hedge  accounting  treatment
under SFAS No. 133; this treatment will create volatility in items of other
comprehensive income due to the marking-to-market of the instruments.

RECLASSIFICATION
----------------

Certain  prior  year  amounts  have  been  reclassified  to  conform to the
presentation of such items in the current year.

3. NOTES PAYABLE AND PREFERRED STOCK:
   ---------------------------------

As  discussed  in  Note  1,  all  of  the Company's debt, including accrued
interest, and preferred stock were discharged  in  the reorganization.  The
Company  has issued to certain general unsecured creditors  six  promissory
notes aggregating  to approximately $2.7 million payable beginning April 1,
2000, in equal monthly  installments  of  principal and interest over three
years and bearing interest at the rate of 8%  per  year.  Additionally, the
Company  has  notes  outstanding  of  $46,000  related  to   purchases   of
automobiles   and   trucks.    Aggregate   minimum  principal  payments  at
December 31, 1999, required on these notes for  the  next five years are as
follows  (in thousands):  2000 - $640; 2001 - $884; 2002  -  $936;  2003  -
$246; 2004 - $0.

4. INCOME TAXES:
   ------------

The Company  follows  the  asset  and  liability  method  of accounting for
deferred  income  taxes  prescribed  by the Financial Accounting  Standards
Board Statement No. 109 (FAS 109) "Accounting for Income Taxes".  Under the
applicable income tax rules and regulations, the Company is not required to
recognize taxable income, or pay taxes on the gain resulting from discharge
of indebtedness (DOI) as a result of the  Bankruptcy  Plan..   Rather,  the
gain  (represented  for  tax  purposes  as  the  face value of the debt and
accrued  interest  discharged in excess of the fair  market  value  of  the
reorganized company) reduces the Company's net operating loss carryforwards
(NOLs).  Any remaining  gain  (after offsetting the Company's NOLs) reduces
the Company's tax basis in its  net  assets.   The  magnitude  of  the  DOI
resulted  in  the   elimination  of   $20.9  million  of  NOLs   from  1998
and   $9.6  million  of   net   operating  losses  generated  during  1999.
Additionally,   it   substantially   eliminated   the  tax  basis  in   the
net  assets  of  the  reorganized   Company.   The  significant  excess  of
book basis  over  tax  basis  in  the  net assets  of  the Company resulted

<PAGE>

in  the  recording  of  a  $9.9  million  deferred  tax  liability  in  the
reorganized  balance  sheet  (See Note 1).   Realization  of the NOLs  used
to offset the gain on DOI also resulted in the reversal  of  the  valuation
allowance,  the impact of which is  included  in  the  tax  effect  of  the
extraordinary  item  of  $10.1  million  in  the accompanying statement  of
operations.


At December 31, the Company  has  the  following  deferred  tax  assets and
liabilities recorded (in thousands):

<TABLE>
<CAPTION>
                                                        1999               1998
                                                   -------------      -----------
<S>                                                <C>                <C>
        Federal net operating loss carryforward    $     -            $   7,726
        Temporary differences:
            Oil and gas properties                      9,901               829
            Section 481(a) adjustment                    -                1,857
            Valuation allowance                          -              (10,412)
                                                   ----------         ---------
        Net deferred tax liability                 $    9,901         $    -
                                                   ==========         =========
</TABLE>

The  provision  for income taxes (on net loss before extraordinary item) at
the Company's effective  tax  rate  differed  from the provision for income
taxes at the statutory rate as follows (in thousands):

<TABLE>
<CAPTION>
                                                           DECEMBER      DECEMBER
                                                             31,           31,
                                                            1999          1998
<S>                                                      <C>           <C>
        Computed provision (benefit) at the expected
          Statutory rate ..............................  $  (188)      $  (11,310)

        Change in valuation allowance .................      -             10,399

        Other .........................................      -                911
                                                         -------       ----------
        Income tax provision (benefit)                      (188)             -
                                                         =======       ==========
</TABLE>

 5.  COMMON STOCK AND WARRANTS:
     -------------------------

In  connection with the consummation of the Bankruptcy Plan, the Company is
in the  process  of issuing approximately 925,000 shares of common stock to
the former holders  of  the Company's Senior Notes and approximately 75,000
shares of common stock to  the  former  holders  of the Company's preferred
stock.  Pursuant to the Bankruptcy Plan, the Company  is  issuing  the  new
shares  of common stock upon the surrender of the certificates representing
the senior  notes  and  the  preferred  stock.   The  common stock is being
allocated as follows:  (i) 13.2143 shares of common stock  are being issued
for  each  $1,000  of  principal amount of canceled Senior Notes  and  (ii)
0.3120 shares of common  stock  are being issued for each canceled share of
preferred  stock.   The new common  stock  is  subject  to  a  stockholders
agreement which contains restrictions on voting, sale, transfer and ledger,
among other restrictions,  of  the common stock.  Additionally, controlling
stockholders  (as  defined)  are  entitled   under  a  registration  rights
agreement to effect up to four registrations of  the  common  stock  to  be
filed  on  their  behalf by the Company.  McLain Forman is also entitled to
effect up to two registrations  under certain conditions (as defined in the
agreement).

The  Company  is also issuing warrants  to  purchase  up  to  approximately
500,000 shares  of common stock.  These warrants consist of 50,000 Series A
Warrants (exercise price $34.74), 150,000 Series B Warrants (exercise price
$92.80), 150,000  Series  C  Warrants (exercise price $117.80), and 150,000
Series D Warrants (exercise price  $137.80).   Each  of  these  warrants is
currently  exercisable  and will automatically expire on January 14,  2007.
Of these warrants, 67.4%  of  each  series  was  issued  to the former sole
shareholder  with  the  remaining  warrants  being  issued  to  the  former
preferred stock and noteholders as described below.

In  connection  with  the  1997 offerings of Senior  Notes   and  preferred
stock,  the  Company  had  issued  warrants  to   purchase  43,600   shares
of  common  stock  at  an  initial  exercise  price  of  $1.00  per  share,
subject  to  adjustment  in   certain  defined  cases.    The  Company  had
allocated   $666,667   and   $333,333   of   the   proceeds  received  from
the   sale   of  the  note  units  and  equity    units,  respectively , to
the  warrants  issued, which  had  been  recorded  as  additional  paid  in

<PAGE>

capital at December 31, 1997.   In addition, the Company  had  also  issued
warrants to purchase 4,844 shares of common stock under the same conditions
as discussed above.  The Company recorded $111,100  of  additional  paid-in
capital for these warrants, which was being amortized as deferred financing
costs over the term of the note units.

Pursuant to the Bankruptcy Plan, holders of the  Company's old common stock
warrants  that were issued in June 1997 in connection  with  the  Company's
offering and  sale  of  the  Senior  Notes  will  receive  in the aggregate
approximately 10,850 Series A Warrants and approximately 32,550  of each of
the  Series  B,  Series  C, and Series D Warrants.  Each holder of a Senior
Note warrant will receive  0.1637  Series  A  Warrants and 0.4910 Series B,
Series  C,  and Series D Warrants for each Senior  Note  warrants  canceled
pursuant to the  Bankruptcy  Plan.   Holders of the Company's warrants that
were issued in June 1997 in connection with the Company's offering and sale
of the preferred stock (the Equity Warrants)  will receive in the aggregate
approximately 5,450 Series A Warrants and approximately  16,350  of each of
the  Series  B, Series C, and Series D Warrants.  Each holder of an  Equity
Warrant will receive  0.0273  Series A Warrants and 0.0818 Series B, Series
C, and Series D Warrants for each  Equity  Warrant canceled pursuant to the
Bankruptcy  Plan.   McLain Forman received 33,780  Series  A  Warrants  and
101,100 of each of the  Series  B,  Series  C,  and  Series  D  Warrants in
connection with the consummation of the Bankruptcy Plan and pursuant to his
employment agreement.

The  issuance  of  the  common  stock  and  the  warrants  pursuant  to the
Bankruptcy  Plan  was exempt from registration under the Securities Act  of
1933, as amended, pursuant  to Section 1145 of the United States Bankruptcy
Code.

The warrants had no measurable value upon issuance based on the calculation
of their fair value using the Black -Scholes option pricing model.

6. COMMITMENTS AND CONTINGENCIES:
   ------------------------------

DISPUTED CLAIMS
---------------

The  Company  is disputing approximately  $3  million  in  additional  pre-
petition bankruptcy  claims.   These  claims  and  certain  other  residual
bankruptcy-related  matters  are  still  within  the  jurisdiction  of  the
Bankruptcy  Court.  The Company has recorded an accrual for its estimate of
the amounts expected  to  be  paid  in  settlement of these claims.  Actual
settlement  amounts  in excess of or less than  amounts  recorded  will  be
recorded as adjustments  to  the Company's fresh start net assets (Note 1),
if resolved by December 31, 2000,  in accordance with the provisions of SOP
90-7.  Claims resolved subsequent to December 31, 2000, will be recorded to
earnings to the extent actual settlement  amounts  are  less than or exceed
amounts  accrued.  There can be no assurance as to the amount  the  Company
will be required to pay with respect to these matters.

EMPLOYMENT AGREEMENTS
---------------------

Effective  January 14, 2000, the Company entered into employment agreements
with certain  members  of executive management.  The agreements provide for
employment of certain members  of  executive  management  in  their current
positions  through  April  30, 2001, subject to earlier termination,  at  a
fixed  annual salary and an annual  bonus  based  upon  the  attainment  of
certain  quantitative goals.  The agreements provide for aggregate salaries
of $961,000  per calendar year to the executives and a maximum bonus of 30%
of base salary  to  each  executive, except for the former sole shareholder
for whom the maximum bonus is 90% of base salary.

If  the  Company  terminates  an  executive  without  cause  (as defined in
the   agreement)   or   the   executive   terminates  employment  for  good
reason  (as  defined  in  the  agreement),  the  Company  must  (i) pay the
executive his accrued  based  salary as of the date of termination plus his
annual  base salary for the remainder  of  his  employment  term  and  (ii)
provide the executive  with continuing  group  medical, dental,  disability
and  life insurance  benefits  until  the  later  of  18  months  from  the
date  of  termination or  the original  expiration date  of the  employment
term.  If the executive  terminates  his employment for reasons other  than
good  reason  or  the  Company  terminates  the  executive  for  cause, the
Company  must pay  to the executive  his  accrued  base  salary  as of  the
date   of  termination.    If  the  executive  is  terminated   for   cause
following  a  change  of  control  (as  defined  in  the  agreement),   the
executive will  also  be  paid  his  base  salary for  the remainder of his
employment term  and will  be provided continuing  group  medical,  dental,

<PAGE>

disability  and  life  insurance benefits until the later of 18 months from
the  date  of termination or the original expiration date of the employment
term.

OPERATING LEASES
----------------

Forman has two noncancellable  operating  leases  for  the rental of office
space,  which  expire on September 14, 2004 and January 14,  2005.   Future
commitments under these leases are as follows:

<TABLE>
<CAPTION>
                DECEMBER 31,
                ------------
<S>                                     <C>
                   2000                 $  196,730
                   2001                 $  235,544
                   2002                 $  251,886
                   2003                 $  257,333
                   2004                 $  237,260
</TABLE>

Rental  expense  under  operating  leases  during  1999,  1998 and 1997 was
$240,980, $200,841, and $204,046, respectively.

7. ESCROWED AND RESTRICTED FUNDS:
   ------------------------------

Cash restricted for payment of abandonment costs for the Boutte  and  Bayou
Dularge  Fields  is  classified  as  a  long-term  asset.  Such amounts are
invested in short-term interest-bearing investments.   The cash is escrowed
under  an  agreement  which  required  Forman to make additional  specified
monthly contributions through November 1995.   As of December 31, 1999, the
escrow accounts are fully funded.

8. EMPLOYEE BENEFITS:
   ------------------

As part of the reorganization discussed in Note  1,  the  1997 Stock Option
Plan was dissolved and all outstanding options were cancelled.   There  was
no other activity with respect to the Plan during 1999.

401(K) PLAN
-----------

The  Company  has  adopted  a  defined  contribution  retirement  plan that
complies with Section 401(k) of the Code (the 401(k) Plan). Pursuant to the
terms  of  the  401(k)  Plan,  all  employees  with  at  least  one year of
continuous service are eligible to participate and may contribute up to 15%
of their annual compensation (subject to certain limitations imposed  under
the  Code). The 401(k) Plan provides that a discretionary match of employee
contributions  may  be  made by the Company in cash.  In December 1998, the
Company made a matching contribution,  in the amount of $58,398, based upon
each individual employee's plan contributions  for  1998. In December, 1999
the Company made another matching contribution, in the  amount  of $70,012,
based  upon  each individual employee's plan contributions for 1999.  These
matching employer  contributions to the 401(k) Plan are fully vested to the
individual employees  after  three years of service. The amounts held under
the  401(k) Plan are invested among  various  investment  funds  maintained
under   the   401(k)  Plan  in  accordance  with  the  directions  of  each
participant. Employee  contributions  under the 401(k) Plan are 100% vested
and  participants  are  entitled  to  payment   of   vested  benefits  upon
termination of employment.

9. RELATED PARTY TRANSACTIONS:
   ---------------------------

In  August 1996, the Company sold all of its interests  in  the  Bayou  Fer
Blanc  Field and the West Gueydan Field to a company (the "Purchaser") that
is owned  by  the sole stockholder.  The purchase price was $950,000, which
was paid at the closing.   The  Company  did not recognize any gain or loss
on  the sale of  these  properties.   In  connection  with  the  sale,  the
Purchaser  also  agreed  to  assume  certain  liabilities  of  the  Company
relating to the  completion  of  the 3-D seismic survey and  other  related
matters.   As  of  December 31, 1996,  the  Company had  incurred aggregate
costs of $327,828 subsequent to the  closing on behalf  of  the  Purchaser,
which  are  recorded  as  due from affiliate.  On June 3, 1997, the Company
repurchased its  interests in these fields for $5,000,000 with the proceeds
from  the  offerings  discussed in  Note 5.  At  that time, the Purchaser's
cost  basis  in  these  fields  was  $3,500,000,  which  the  Company   has

<PAGE>

recorded  as  unevaluated properties at December 31, 1997.   The balance of
the purchase price of $1,500,000 was recorded as a distribution to the sole
stockholder.

During 1996, the sole stockholder loaned the Company $1,000,000,  of  which
$500,000  had  been repaid as of December 31, 1996.  The remaining $500,000
was repaid in 1997.   The  Company  recorded  interest  expense  of $27,361
during 1996 and $14,301 during 1997 related to this loan.

10. WRITEDOWN OF OIL AND GAS PROPERTIES:
    ------------------------------------

During  1998,  the  Company  wrote  down  its  oil  and  gas  properties by
$19,575,047.  The amount of the writedown represents the excess capitalized
costs  over  estimated  future  net  revenues  attributable to oil and  gas
reserves  discounted  at  10%,  less  estimated future  income  taxes.  The
estimated future net revenues used in the  calculation  were based on year-
end  reserve volumes (as determined by an independent petroleum  engineer),
using  1998  year end oil prices of $10.44 per barrel and 1998 year end gas
prices of $1.87  per  thousand  cubic  feet,  with  no provision for future
escalation.  The  Company  also  wrote  down  its  oil  and  gas   property
investments  during 1997 by $10,008,121.  The estimated future net revenues
used in the ceiling  test  calculation  for  1997  were  based  on year-end
reserve  volumes  (as  determined  by  an  independent petroleum engineer),
utilizing March, 1998 oil prices of $14.47 per  barrel  and March, 1998 gas
prices  of  $2.40  per  thousand cubic feet, with no provision  for  future
escalation.  The utilization of these prices resulted in an increase in the
amount charged to operations during 1997 of $8,167,879 over the amount that
would have been recorded using year-end prices.

11.  OIL AND GAS ACTIVITIES:
     -----------------------

The  following  tables  provide   information   required   by  FAS  No.  69
"Disclosures About Oil and Gas Producing Activities."

CAPITALIZED COSTS
-----------------

Capitalized costs and accumulated depreciation, depletion and  amortization
relating  to the Company's oil and gas producing activities, all  of  which
are conducted within the continental United States, are summarized below:

<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,
                                             --------------------------------------------
                                                 1999            1998            1997
                                             ------------    ------------    ------------
<S>                                          <C>             <C>             <C>
 Proved producing oil and gas properties     $ 25,515,529    $ 77,067,569    $ 73,172,144
 Unevaluated properties                         4,732,139       4,485,359       3,857,195
 Accumulated depreciation, depletion and
 amortization (Note 1)                               -        (57,938,060)    (29,083,935)
                                             ------------    ------------    ------------
 Net capitalized costs                       $ 30,247,668    $ 23,614,868    $ 47,945,404
                                             ============    ============    ============
</TABLE>

COSTS INCURRED
--------------

Costs incurred  in  oil  and  gas  property  acquisition,  exploration  and
development activities are summarized below:

<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,
                                             --------------------------------------------
                                                 1999            1998            1997
                                             ------------    ------------    ------------
<S>                                          <C>             <C>             <C>
 Acquisition costs                           $    81,840     $       -       $  6,100,000
 Exploration costs                             1,745,862        2,413,719      18,463,989
 Development costs                             3,345,943        2,118,810       4,105,460
                                             ------------    ------------    ------------
     Costs incurred                          $ 5,173,645     $  4,532,529    $ 28,669,449
                                             ===========     ============    ============
</TABLE>

<PAGE>

Gross  cost incurred excludes sales of proved and unproved properties which
are accounted  for as adjustments of capitalized costs with no gain or loss
recognized,  unless   such   adjustments   would  significantly  alter  the
relationship between capitalized costs and proved reserves.

RESERVES - (UNAUDITED)
----------------------

Proved  reserves are estimated quantities of  oil  and  natural  gas  which
geological  and engineering data demonstrate, with reasonable certainty, to
be recoverable  in  future  years  from  known  reservoirs  under  existing
economic  and  operating  conditions.  Proved developed reserves are proved
reserves that can reasonably  be  expected to be recovered through existing
wells with existing equipment and operating methods.

Proved oil and natural gas reserve  quantities  and  the related discounted
future  net  cash flows before income taxes for the periods  presented  are
based on estimates prepared by Ryder Scott Company for 1997 and 1998 and by
Netherland, Sewell  & Associates for 1999.  Both Ryder Scott and Netherland
Sewell are independent  petroleum  engineers.   Such  estimates  have  been
prepared  in  accordance  with guidelines established by the Securities and
Exchange Commission.

The Company's net ownership interests in estimated quantities of proved oil
and natural gas reserves and  changes  in net proved reserves, all of which
are located in the continental United States, are summarized below:

<TABLE>
<CAPTION>
                                                OIL, CONDENSATE AND NATURAL GAS LIQUIDS
                                                                 (Bbls)
                                             --------------------------------------------
                                                       YEAR ENDED DECEMBER 31,
                                             --------------------------------------------
                                                 1999            1998            1997
                                             ------------    ------------    ------------
<S>                                          <C>             <C>             <C>
Proved developed and undeveloped reserves:
 Beginning of year                              1,530,724       2,259,567       2,511,562
 Revisions of previous estimates                  273,709        (335,803)       (254,540)
 Purchases of oil and gas properties                 -               -            188,739
 Extensions and discoveries                       151,085            -            148,468
 Production                                      (343,394)       (393,040)       (334,662)
                                             ------------    ------------    ------------
 End of year                                    1,612,124       1,530,724       2,259,567
                                             ============    ============    ============

Proved developed reserves at end of year        1,330,675       1,310,274       1,842,849
                                             ============    ============    ============

</TABLE>

<TABLE>
<CAPTION>
                                                          NATURAL GAS (Mcf)
                                             --------------------------------------------
                                                       YEAR ENDED DECEMBER 31,
                                             --------------------------------------------
                                                 1999            1998            1997
                                             ------------    ------------    ------------
<S>                                          <C>             <C>             <C>

Proved    developed   and   undeveloped
reserves:
 Beginning of year                             14,558,000      22,105,000      23,223,000
 Revisions of previous estimates                3,405,862      (2,602,860)     (8,071,398)
 Purchases of oil and gas properties                 -               -          1,867,721
 Extensions and discoveries                     4,123,150            -          7,699,000
 Production                                    (3,091,174)     (4,944,140)     (2,613,323)
                                             ------------    ------------    ------------
 End of year                                   18,995,838      14,558,000      22,105,000
                                             ============    ============    ============
Proved developed reserves at end of year       13,599,050       9,865,000      16,237,000
                                             ============    ============    ============

</TABLE>

<PAGE>

STANDARDIZED MEASURE (UNAUDITED)
--------------------------------

The  table  of the Standardized Measure of Discounted Future Net Cash Flows
related to the Company's ownership interests in proved oil and gas reserves
as of period end is shown below:

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                               --------------------------------------------
                                                   1999            1998            1997
                                               ------------    ------------    ------------
                                                             (In Thousands)
<S>                                            <C>             <C>             <C>
 Future cash inflows                           $     88,182    $     43,256    $     96,925
 Future oil and natural gas operating expenses      (29,045)        (14,598)        (21,116)
 Future development costs                            (7,371)         (5,821)        (10,372)
                                               ------------    ------------    ------------
 Future net cash flows before income taxes           51,766          22,837          65,437
 Future income taxes                                (17,401)           -             (9,328)
                                               ------------    ------------    ------------
 Future net cash flows                               34,365          22,837          56,109
 10% annual discount for estimating timing of
  cash flows                                         (9,962)         (3,668)         (8,567)
                                               ------------    ------------    ------------
 Standardized measure of discounted future net
  cash flows                                   $     24,403    $     19,169    $     47,542
                                               ============    ============    ============

</TABLE>


Future  cash  flows  are  computed  by  applying year-end prices of oil and
natural gas to year-end quantities of proved  oil and natural gas reserves.
Future operating expenses and development costs  are  computed primarily by
the  Company's  petroleum  engineers by estimating the expenditures  to  be
incurred in developing and producing  the  Company's proved oil and natural
gas reserves at the end of the year, based on  year  end costs and assuming
the continuation of existing economic conditions.  Future  income taxes are
computed using the Company's tax basis in evaluated oil and  gas properties
and other related tax carryforwards.  In 1998, the present value  of future
net cash flows before income taxes was exceeded by the Company's tax  basis
in  the  oil and gas properties and other tax attributes; therefore, future
income taxes  have  not  been  reflected  in  that  year.  The standardized
measure of discounted future net cash flows does not purport, nor should it
be interpreted, to present the fair value of the Company's  oil and natural
gas  reserves.   An  estimate  of fair value would also take into  account,
among other things, the recovery  of  reserves  not presently classified as
proved, anticipated future changes in prices and  costs,  a discount factor
more  representative of the time value of money and the risks  inherent  in
reserve estimates.


<PAGE>

CHANGES IN STANDARDIZED MEASURE (UNAUDITED)
-------------------------------------------

Changes in standardized measure of future net cash flows relating to proved
oil and gas reserves are summarized below:

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                               --------------------------------------------
                                                   1999            1998            1997
                                               ------------    ------------    ------------
                                                           (In Thousands)
<S>                                            <C>             <C>             <C>
 Changes due to current year operations:
   Sales  of  oil  and natural gas, net of oil
   and natural gas operating expenses          $     (9,246)   $    (12,050)   $    (10,827)

   Extensions and discoveries                         8,604            -             16,915
   Purchases of oil and gas properties                 -               -              4,691
 Changes due to revisions in standardized
   variables:
    Prices and operating expenses                    10,747         (24,336)        (33,229)
    Revisions of previous quantity estimates          6,897          (4,675)        (16,109)
    Estimated future development costs                3,055          (2,192)          5,835
    Accretion of discount                             1,917           5,226           8,738
    Net change in income taxes                      (12,037)          4,715          (4,715)
    Production rates, timing and other               (4,703)          4,939         (11,138)
                                               ------------    ------------    ------------
 Net Change                                           5,234         (28,373)        (39,839)
 Beginning of year                                   19,169          47,542          87,381
                                               ------------    ------------    ------------
 End of year                                   $     24,403    $     19,169    $     47,542
                                               ============    ============    ============
</TABLE>