SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB
                                Amendment No. 1


(Mark One)

/x/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
                      For the fiscal year ended March 31, 2001


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


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


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


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


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


Registrant's telephone number, including area code:   (321) 636-6165

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

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

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

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

     State issuer's estimates revenues for its recent fiscal year. $2,976,931

     State The aggregate market value of the voting and non-voting common equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was sold, or the average bid and ask price of such common  equity,  as of
June 30, 2001: $4,172,748

     As of March 31, 2001 there were outstanding  18,142,382 shares of Cambridge
Energy Corporation's common stock, par value $.0001 per share.


<PAGE>

                          CAMBRIDGE ENERGY CORPORATION
                     Form 10-KSB Report for the Fiscal Year
                              Ended March 31, 2001

                                TABLE OF CONTENTS


                                                                         Page



                                     PART I

Item 1. Business .......................................................  3

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

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

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



                                     PART II

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

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

Item 7. Selected Financial Data ........................................  15

Item 8. Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure ..........................  36



                                    PART III

Item 9.  Directors and Executive Officers of the Registrant ............  36

Item 10. Executive Compensation ........................................  37

Item 11. Security Ownership of Certain Beneficial
          Owners and Management ........................................  38

Item 12. Certain Relationships and Related Transactions ................  39



                                     PART IV

Item 13. Exhibits, Financial Statement Schedules and
          Reports on Form 8-K ..........................................  40

SIGNATURE ..............................................................  41








<PAGE>
                                  DEFINITIONS


     The terms below are used in this document and have specific SEC definitions
as follows:

     Proved oil and gas reserves.  Proved oil and gas reserves are the estimated
quantities of crude oil and natural gas liquids which geological and engineering
data  demonstrate  with  reasonable  certainty to be recoverable in future years
from known reservoirs under existing  economic and operating  conditions,  i.e.,
prices  and  costs  as  of  the  date  the  estimate  is  made.  Prices  include
consideration  of  changes  in  existing  prices  provided  only by  contractual
arrangements, but not on escalations based upon future conditions.

     Proved  developed  oil  and  gas  reserves.  Proved  developed  oil and gas
reserves are  reserves  that can be expected to be  recovered  through  existing
wells with  existing  equipment and operating  methods.  Additional  oil and gas
expected to be obtained  through the  application  of fluid  injection  or other
improved recovery  techniques for implementing the natural forces and mechanisms
of primary  recovery  is  included  as "proved  developed  reserves"  only after
testing by a pilot  project or after the  operation of an installed  program has
confirmed through production response that increased recovery will be achieved.

     Proved  undeveloped  reserves.  Proved undeveloped oil and gas reserves are
reserves that are expected to be recovered from new wells on undrilled  acreage,
or from  existing  wells where a relatively  major  expenditure  is required for
recompletion.  Reserves on undrilled  acreage is limited to those drilling units
offsetting  productive  units that are  reasonably  certain of  production  when
drilled.  Proved reserves for other undrilled units is claimed only where it can
be  demonstrated  with certainty that there is continuity of production from the
existing productive  formation.  Under no circumstances are estimates for proved
undeveloped  reserves  attributable  to any acreage for which an  application of
fluid injection or other improved  recovery  technique is  contemplated,  unless
such  techniques  have been proved  effective by actual tests in the area and in
the same reservoir.

As used in this Form 10-K/A:

         "Mcf" means thousand cubic feet,
         "MMcf" means million cubic feet,
         "Bcf" means billion cubic feet,
         "Tcf" means trillion cubic feet,
         "Bbl" means barrel,
         "MBbls" means thousand barrels,
         "MMBbls" means million barrels,
         "BOE" means equivalent barrels of oil,
         "MBOE" means thousand equivalent barrels of oil and
         "MMBOE" means million equivalent barrels of oil.

     Unless otherwise  indicated in this Form 10-K/A,  gas volumes are stated at
the legal  pressure  base of the state or area in which the reserves are located
and at 60/o/  Fahrenheit.  Equivalent  barrels of oil are  determined  using the
ratio of 5.5 Mcf of gas to 1 Bbl of oil.

     The term  "gross"  refers to the total  acres or wells in which the Company
has a working  interest,  and "net" refers to gross acres or wells multiplied by
the percentage  working interest owned by the Company.  "Net  production"  means
production  that is owned by the  Company  less  royalties  and  production  due
others.



                                       1

<PAGE>

            CAUTIONARY INFORMATION ABOUT FORWARD-LOOKING STATEMENTS


This document contains forward-looking  statements within the meaning of Section
27A of the Securities  Act and Section 21E of the Exchange Act. All  statements,
other than  statements  of  historical  facts,  included in or  incorporated  by
reference into this Form 10-K/A which address activities, events or developments
which the  Company  expects,  believes or  anticipates  will or may occur in the
future  are  forward-looking   statements.   The  words  "believes,"  "intends,"
"expects,"  "anticipates,"   "projects,"  "estimates,"  "predicts"  and  similar
expressions are also intended to identify forward-looking statements.

These forward-looking  statements include, among others,  statements concerning:
expectations,   anticipations,  beliefs,  estimations,  projections,  and  other
similar matters that are not historical facts, including such matters as: future
capital,  development and exploration expenditures (including the timing, amount
and  nature  thereof),  drilling  and  reworking  of  wells,  reserve  estimates
(including  estimates of future net revenues  associated  with such reserves and
the present  value of such future net  revenues),  future  production of oil and
gas,  repayment  of debt,  business  strategies,  oil and gas prices and demand,
exploitation and exploration prospects,  and other development trends of the oil
and gas industry, and expansion and growth of business operations.

These  statements  are based on certain  assumptions  and  analyses  made by the
management  of  Cambridge  Energy  Corporation  ("Cambridge")  in  light  of its
experience  and its  perception of historical  trends,  current  conditions  and
expected  future   developments  as  well  as  other  factors  it  believes  are
appropriate in the circumstances.

Cambridge cautions the reader that these forward-looking  statements are subject
to risks and  uncertainties,  including  those  associated  with:  the financial
environment,  general economic,  market and business conditions,  the regulatory
environment,  business  opportunities  that may be  presented  to and pursued by
Cambridge,   changes  in  laws  or  regulations   exploitation  and  exploration
successes,  availability to obtain additional financing on favorable conditions,
trend  projections,  and other  factors,  many of which are  beyond  Cambridge's
control  that could cause  actual  events or results to differ  materially  from
those  expressed  or implied  by the  statements.  Such risks and  uncertainties
include  those risks and  uncertainties  identified  in the  Description  of the
Business and Management's  Discussion and Analysis sections of this document and
risk  factors  discussed  from time to time in the  Company's  filings  with the
Securities and Exchange Commission.

Significant factors that could prevent Cambridge from achieving its stated goals
include: the inability of Cambridge to obtain financing for capital expenditures
and  acquisitions,  declines in the market  prices for oil and gas,  and adverse
changes in the regulatory environment affecting Cambridge.

The cautionary  statements  contained or referred to in this document  should be
considered in connection  with any  subsequent  written or oral  forward-looking
statements  that may be issued by  Cambridge  or persons  acting on its or their
behalf.

Cambridge  undertakes  no  obligation  to release  publicly any revisions to any
forward-looking  statements to reflect  events or  circumstances  after the date
hereof or to reflect the occurrence of unanticipated events.


                                       2
<PAGE>
                                     PART I

Item 1.  Business

     (a) General Development of Business

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

     (b) Business of Issuer

The Company
-----------

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

     In order to provide for rapid growth, the Company has expanded its strategy
to include the exploration of offshore reserves,  both in the US and outside the
US. Although,  there is no assurance that the Company will be able to obtain the
capital  required to fully exploit this  opportunity for expanded growth or that
such growth will result in profits to the Company.

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

 Operations
-----------

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

                                       3
<PAGE>
     The Company's U.S. operations are focused on the Gulf Coast in Southern and
Central Louisiana.  The Company continues  engineering and geological reviews of
its existing  properties  and prospects as part of a balanced  program of low to
medium risk  exploitation  and development of existing  reserves and prospective
acquisitions.  The Company has a full schedule of drilling and rework operations
planned,  however,  the progress of these operations past the engineering  phase
has been  delayed due to delays in closing of various  funding  facilities  (see
Management's Discussion and Analysis).

     During the fiscal year,  the company  maintained an Indonesian  subsidiary,
Intermega  Energy Pte Ltd. which includes three fields in eastern  Indonesia and
executive  offices in Jakarta for liaison with Pertamina,  the government  owned
oil  company  that  controls  all of  Indonesian  oil  and  gas.

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

Competitive Business Conditions
-------------------------------

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

Distribution
-------------

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

Joint Operations With Others; Non-Operator Status
-------------------------------------------------

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


                                       4
<PAGE>

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

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

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

Environmental and Government Compliance and Costs
-------------------------------------------------

     Operations of the Company are subject to numerous Federal, state, and local
laws and  regulations  governing the discharge of materials into the environment
or otherwise  relating to environmental  protection.  These laws and regulations
may require the acquisition of a permit before drilling  commences;  restrict or
prohibit the types,  quantities  and  concentration  of  substances  that can be
released  into the  environment  in  connection  with  drilling  and  production
activities;  prohibit or limit drilling activities on certain lands lying within
wetlands  or other  protected  areas;  and impose  substantial  liabilities  for
pollution  resulting from past or present  drilling and  production  operations.
Moreover,  changes in Federal and state environmental laws and regulations could
occur and may result in more stringent and costly  requirements which could have
a  significant  impact  on  the  operating  costs  of  the  Company.  The  state
authorities  regulating oil and gas activities have primary regulatory authority
over environmental matters. In general,  under various applicable  environmental
programs,  the  Company  may be  subject  to  enforcement  action in the form of
injunctions,  cease and desist  orders and  administrative,  civil and  criminal
penalties for violations of environmental  laws. The Company may also be subject
to liability from third parties for civil claims by affected  neighbors  arising
out of a pollution event.  Laws and regulations  protecting the environment may,
in certain circumstances,  impose strict liability rendering a person liable for
environmental  damage  without regard to negligence or fault on the part of such
person.  Such laws and  regulations  may expose the Company to liability for the
conduct of or conditions caused by others, or for acts of the Company which were
in compliance  with all  applicable  laws at the time such acts were  performed.
Management  believes that the Company is in substantial  compliance with current
applicable environmental laws and regulations and that continued compliance with
existing  requirements  will not have a material  adverse impact on the Company.
Insofar as such laws and regulations are expanded, amended or reinterpreted, the
Company is unable to predict the future cost or impact of compliance.


                                       5
<PAGE>
     The primary  environmental,  statutory,  regulatory and safety  regulations
that affect the Company's operations include:

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

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

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

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

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

Safety Regulations
------------------

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

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

                                       6
<PAGE>
Oil and Gas Regulation
-----------------------

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

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

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

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

     The Company  realized from the sale of its  production  for the fiscal year
ended  March  31,  2001,  $28.68  per  barrel  of oil and  $5.82 per mcf of gas,
compared  to $21.87 per  barrel of oil and $2.15 per mcf of gas for fiscal  year
ended March 31, 2000.

                                                 Year Ended
                                                   March 31,
                                              2001           2000
                                              ----           ----
Gas Production (Mcf)                         21,703         111,869
Oil Production (bbls)                       101,210          73,131
Average Price of Gas (per mcf)                $5.82           $2.15
Average Price of Oil (per bbls)              $28.68          $21.87



Employees, Consultants and Contractors
--------------------------------------

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

                                       7
<PAGE>
     Intermega Energy Ltd. employs 12-15 people in the Jakarta office and in the
field there are approximately 60-70 people employed though a labor contract that
work in the company's Indonesian fields.

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

     In a continuing  effort to improve its technical  capabilities,  during the
fiscal year Cambridge modernized its analysis  capabilities by installing in its
engineering  offices,  new  Petroleum  Economics  and  Financial  Analysis  MICA
software by Molli Computer Services. This new software provides the Company with
improved  capability for analysis and display of economic and financial data for
its projects and  prospects.  In addition  the Company  initiated  its review of
available 3-d  seismic-visualization  analysis and display software anticipating
the further  improvement  of its technical  capabilities  during the next fiscal
year.


Item 2.  Description of Properties

     The  corporate  offices  of  Cambridge  Energy  Corporation  are in  Cocoa,
Florida,  and consist of approximately 1200 square feet of office space owned by
an officer and  director of the  Company.  The Company has  utilized  this space
since its  inception.  During the past year the Company has continued its search
for  larger  offices  in  anticipation  of  completion  of the next phase of its
capital funding activities

     The Company also maintains engineering offices in Lafayette,  Louisiana, as
part of its consulting  contract with G & A International,  Inc. for engineering
services.  The  Company  is  obligated  for a fee of  $24,000  per month for the
engineering  services  and  office  space and  support,  a  portion  of which is
reimbursed as  engineering  costs for each project as they are attributed to the
working interest partners.

     The Company owns a 14,000  square foot wellhead  manufacturing  facility in
Broussard,  Louisiana,  along with  machine  equipment,  raw stock and  finished
product inventory, and engineering drawings for its product catalog. The Company
currently maintains this property for its own use.

Oil and Gas Properties as of March 31, 2001
-------------------------------------------

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


                                       8
<PAGE>
     In addition,  the Company has a 4.70217%  working interest in the Calvert &
Todd #13. The well was  reworked  last year by Unocal and the  recompletion  was
successful. The well has produced more than 250,000 mcf of gas and 12000 barrels
of oil condensate since the recompletion. Unocal is the operator of this well.

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

     The  Formation  Test of 4,000 PSI taken in the  Krumbhaar 4 Sand during the
drilling of Calvert & Todd No.1 indicates that a partial water drive has allowed
this reservoir to re-pressure  since the last  production and a P/Z curve allows
the determination of the remaining  reserves in this sand. There was no pressure
data taken in the  Krumbhaar 3 Sand that logged 10' - 14' of net gas pay, nor in
the Krumbhaar 1A Sand that logged 8' of net gas pay. The new well logged 28 feet
of net gas pay with no known  water  level in the Big (3) No. 3 Sand at 11,536'.
The 8950' Sand was shaled out. The Big (3) No.1 Sand that  produced 15.3 billion
cubic  feet  (BCF) in the  Calvert  & Todd No.  14-1  logged as  productive  and
depleted  with a possible  low BHP. The Prentice and 1st Gaidry Sands as well as
the 9600 Foot Sand in the Tex W. interval also logged as productive.  There also
appears to be  production  in other  intervals  that may add to  reserves to the
above  mentioned  reservoirs for a second well to be drilled through the Big (3)
section at the optimum  structural  position  on this  feature.  Completions  in
similar pays in the Big (3) and Tex W. intervals  have had excellent  recoveries
in other wells in the Houma Field. The modern suite of logs that were run in the
Calvert & Todd No. 1 well for porosity and shaley sand resolution (FDC-CNL,  GR,
CAL) defined additional pay zones that have not been produced. A well drilled at
the  apex  of  this  structure  will  penetrate  several  potential   productive
reservoirs that appear anomalous on electric logs of existing wells in the areas
that were  drilled in the 1950s and 1960s.  Cambridge  Energy plans at least one
additional  wells for its farmout  properties at Houma to access proven reserves
identified and logged during the drilling of the Calvert & Todd No. 1 well.

     Big Island Field:  Cambridge Energy expects to continue development of this
property in Rapides Parish,  Louisiana.  Geologically,  the field is situated at
the net oil's edge of a Hudson Sand  channel and  produces  water along with the
oil from this  Wilcox  Sand.  As part of the  continued  development  of the Big
Island Field, this well will be enhanced by equipping it with a larger pump. The
Wilcox  formation  throughout  this  region  produces  water  along with the oil
shortly after being placed on production.  The amount of water  increases in the
later life of the wells.

     Big Island Field Continued Development. The Big Island and North Big Island
Oil  Fields of North  Central  Louisiana  are  located in  Rapides  and  LaSalle
Parishes,  Louisiana.  Production  from these two fields is  generated  from the
Wilcox formation of Eocene Age, and to a lesser degree from the lower Tuscaloosa
formation.  The Wilcox  formation will be the primary target of the  development
drilling program currently  planned by the Company.  Production in this area was
established  in 1950 by Union  Production  Company,  (now known as Pennzoil) who
along with Crow Drilling & Production  Company,  were instrumental in developing
these  two large  fields.  There  are 11  productive  sands in each of these two
fields that have  produced  nearly 30 million  barrels of oil to date.  The post
production history,  as well as the exploration  techniques employed in drilling
these fields by Union  Production  Company,  and the recent infield  drilling by
other  independent  companies,  suggest  only a  fraction  of the oil  has  been
discovered in or recovered  from these two fields.  The concept of  horizontally

                                       9
<PAGE>
infield  drilling  can be employed in this  program as well as the  targeting of
untapped reservoirs in this region of established production. These efforts will
concentrate  on  horizontally  drilling an up dip  direction  to wells that have
watered out and drilling a channel-sand  type reservoir  between wells that have
ceased to produce because of premature water encroachment.

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

     Donner Field: The Donner Field is located in Terrebone Parrish,  Louisiana,
south of the  Chacahoula  Salt Dome and north of Gibson  Field.  Humble  Oil and
Refining  Company  discovered the Donner Field in 1958 with their  completion of
the No. B-1 Lutcher Moore Lumber  Company  well.  Production of both oil and gas
has been established  from normally  pressured rocks at depths of 12,300 feet to
12,700 feet.  Cumulative production in the field has been in excess of 2,800,000
barrels of oil and 6,500,000,000 cubic feet of natural gas.  Cambridge's initial
development  in this field will  include the  sidetracking  of an orphan well to
recover  1,205,338  barrels of oil and 3,196,057 mcf of natural gas. The Company
purchased  the  remaining  leases  on  this  field  at the end of the  year  and
currently has it under review.

     Frenier  Field:  The  Frenier  Field is located  near  LaPlace,  Louisiana,
directly west of New Orleans,  in St. John the Babtist Parish.  The two wells, a
SWD well and a well to be worked over, were drilled by Smith  Producing  Company
and later purchased by Venture Minerals.  Cambridge Energy purchased the leases,
wells and equipment and will re-complete the No. 1 well in an upper zone that is
estimated to produce  130,000  barrels of oil. A lower zone was  producing at 90
BOPD when the well was re-completed in the present completed interval because of
salt-water production. The conversion of the No. 2 well to a SWD well now allows
for an  additional  re-completion  in the lower  sand  that  should  provide  an
additional  100,000  barrels  of  production.  The  lease  may  also  provide  a
development  drilling location that could be high on structure and away from the
drainage areas of the present wells that, according to the geologist's estimate,
could provide  another 200,000  barrels of oil.  Projectral  development of this
field is under review by the Company.

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

     Sele  Field:  This  field is  located on  Mainland,  Irian  Jaya  Province,
Indonesia. The field was originally discovered in 1954 with the drilling of well
S-41 to a  depth  of 769  meters.  Further  development  resulted  in two  other
successful wells, S-44 and S-48. Seismic surveys were conducted in 1973 and 1975
and SS-1 was  drilled.  Located  to the  southern  part of the Sele  reef,  SS-1
produced  oil. In 1978 a drilling  program was  initiated  and three  successful
wells were added  including:  SP-1,  SP-3 and SP-4.  Sele Field is pinnacle reef
development  built-up on the Kais  platform  limestone.  A total of 12 wells are
currently  producing.  The Sele reservoir of Cambridge's Sabaku Field is located

                                       10
<PAGE>
on Salawati  Island,  Irian Jaya Province,  Indonesia.  The field was originally
discovered by Phillips  Petroleum  Indonesia in 1974. Well TBN-1 was drilled and
tested at a rate  approaching  12,186 BOPD.  After an eight-day test in December
1975 the water cut increased from dry oil to 80% which could have been caused by
the high rate of production. The field has not been developed further.

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


Item 3.  Legal Proceedings

     At March 31,  2001,  The Company  was not a party to any  pending  material
legal  proceeding.  To the knowledge of management,  no federal,  state or local
governmental  agency is  presently  contemplating  any  proceeding  against  the
Company.  To the  knowledge of  management,  no director,  executive  officer or
affiliate of the Company, any owner of record or beneficially of more than 5% of
the  Company's  common stock is a party adverse to the Company or has a material
interest adverse to the Company in any proceeding.


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

     None




















                                       11
<PAGE>
                                     PART II


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

     (a) Market Information

     The Company's common stock is listed on the OTC Bulletin Board of the NASD,
and began  trading on November 24, 1997.  The high and low bid prices at quarter
ending through March 31, 2001, are as follows:

Quarter Ending:
                                              Bid
                                     High               Low
                                    -----              -----
June 30, 1999                         1/2               7/16
September 30, 1999                    1/2               7/16
December 31, 1999                     9/16               3/8
March 31, 2000                        5/16              5/16
June 30, 2000                        1 1/2             1 1/2
September 30, 2000                   $0.73             11/16
December 31, 2000                    $0.47             $0.42
March 31, 2001                       $0.23             $0.20



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

     (b) Holders

     As of March 31, 2001, the number of holders of the Company's  common shares
was 153.

     (c) Dividends

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


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

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


                                       12
<PAGE>

     Company  management  has  continued to expand on the elements of its growth
strategies including:

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

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

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

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


     While  management  believes  that  it  has  worked  toward  the  successful
completion  of this plan,  there can be no assurance  that the intended  results
will be achieved or that funds will be available to accomplish the plan.

Results of Operations
---------------------

Twelve months ended March 31,2001 compared to twelve months ended March 31,2000.

     The Company  recorded a net loss of $1,842,617 for the year ended March 31,
2001 up from $533,306 for the year ended March 31, 2000.  Revenues  increased to
$2,976,931  over  $1,693,003  the  previous  year  due  to the  increase  in the
Company's   international   production.   General  and  Administrative  expenses
increased to $1,732,328  over $912,510 for the previous  year.  This increase is
due to one time charges  associated with investment  banking and consulting,  as
well as the write off of certain prepaid drilling  expenses  associated with the
Company's properties.

     The Company  realized added gains during the year due to an increase in oil
and gas prices.  The  following  outlines the  production  and average price per
production during March 31, 2001 and 2000:

                                                  Year Ended
                                                   March 31,
                                              2001           2000
                                              ----           ----
Gas Production (Mcf)                         21,703         111,869
Oil Production (bbls)                       101,210          73,131
Average Price of Gas (per mcf)                $5.82           $2.15
Average Price of Oil (per bbls)              $27.00          $21.87


     The  Company's  drilling  program  proceeded at a slower pace than expected
through the engineering phase due to industry conditions and resulting delays in
partner contributions.  The Company expects to have drilling operations underway
during  this next  fiscal year and the  Company  also  expects to  increase  its
acquisition activity.






                                       13
<PAGE>
Liquidity
---------

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

     The Company  had  entered  into an  agreement  with Dirks & Co.  during the
previous  fiscal year to raise US $5 million to funds various  drilling,  rework
operations and certain acquisitions. Even with the price of the Company's common
stock at a price favorable to the  transaction,  Dirks & Co. failed to raise any
funds under that  Agreement  and the Company  allowed this  agreement to expire.
Subsequently  and in  furtherance  of the Company's  goal of economic  growth to
enhance  shareholder  value, the Company retained  HCFP/Brenner  Securities Inc.
half way through the fiscal year to raise US$5-10  million  dollars  funding for
its development  program.  The Company proceeded in support of this relationship
to obtain  significant  third party  engineering  reviews of its  properties and
prospects and provided other  support.  The contract with  HCFP/Brenner  expired
after the end of the fiscal year without them raising funds under the agreement.
The  Company  is  proceeding  with other  firms to put these  funds in place and
although it believes that its efforts will be successful,  there is no assurance
that sufficient  funds will be forthcoming to fund the Company's  business plans
or its operations.

     During Fiscal Year 2001 the Company raised additional capital in the amount
of $152,500  through  private sale of preferred  shares.  Based on  acquisitions
currently in  negotiation,  the Company  expects to undertake the placement of a
significant  financial  institution  credit  facility or other  structured  debt
facility  during the coming fiscal year. This would provide  additional  funding
for  expansion  to be  consistent  with the Company  growth  strategy.  Although
management  believes that this will be  accomplished  during the current  fiscal
year, there have been delays in the past and there can be no assurance that such
a facility will be  forthcoming  or that  sufficient  funds will be available to
meet the requirements of the Company's growth strategy.

Material Commitments for Capital Expenditures
---------------------------------------------

     The Company has made no additional  material  commitments during the fiscal
year ended March 31, 2001.  Each drilling  and/or rework  project is stand-alone
and  although the Company is in constant  discussion  with  prospective  working
interest partners on each potential project, commitments for the actual drilling
or  rework  and site  preparation  operations  are  generally  not made for each
project  until the Company  has  received  the funds from its  working  interest
partners and the funds for its portion of the working interest are in place. The
leases the Company holds are renewable annually unless "held by production".  If
the leased property has a producing well that is providing  royalty  payments to
the  leaseholders,  then annual lease  payments  and renewals are not  required.
Cambridge  Energy  strives to accomplish the drilling or rework planned for each
property  within the year  first  leased.  When that does not occur,  management
reviews the  potential  of each  property  as its leases  which have come up for
renewal and makes a decision  whether or not to renew each lease in light of the
Company's  business  planning at that time. During fiscal year 2001, the Company
had $10,394 in lease depreciation expenditures.

     The Company has  committed to provide  $500,000 in cash,  plus $250,000 for
the repurchase of certain shares  associated with the  transaction,  to finalize
the payment for the purchase of Indonesian production now under contract,  which
was due on or before  January  4, 1999.  The  transaction  was  closed  with the
exchange of stock  between the Company and the owners of the company  that owned
the  production.  Although  the  certain  monies have been paid on behalf of the
transaction,  the Company is obligated to pay additional  amounts to the sellers
as a part  of  the  transaction.  The  Company  has  under  negotiation  several
facilities  to provide  these funds  however,  it does not have a commitment  in
place and there is no assurance when a commitment will be forthcoming.



                                       14
<PAGE>
Item 7.  Selected Financial Data.


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


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

We have audited the accompanying consolidated balance sheets of Cambridge Energy
Corporation  and  subsidiaries  as of March 31,  2001 and 2000,  and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
the years then ended.  These financial  statements are the responsibility of the
company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Cambridge  Energy  Corporation and  subsidiaries at March 31, 2001 and 2000, and
the  consolidated  results of their operations and cash flows for the years then
ended in conformity with accounting  principles generally accepted in the United
States of America.

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


/s/ Turner, Stone & Company
----------------------------
Certified Public Accountants
August 22, 2001

                                       15
<PAGE>

<TABLE>
<CAPTION>
                                          CAMBRIDGE ENERGY CORPORATION
                                                 AND SUBSIDIARIES

                                           CONSOLIDATED BALANCE SHEETS
                                             MARCH 31, 2001 AND 2000


                                                      Assets
                                                      ------
                                                                               2001                  2000
                                                                               ----                  ----
<S>                                                                   <C>                    <C>
Current assets:

         Cash                                                            $     437,747         $     123,289
         Accounts receivable, trade                                            513,210               930,677
         Inventory, materials and supplies                                     191,631               216,617
         Prepaid expenses                                                      174,610               980,580
                                                                         -------------         -------------
                  Total current assets                                       1,317,198             2,251,163
                                                                         -------------         -------------
Property and equipment, net of $290,336 and
     $117,598 of accumulated deprecation                                       995,022             1,059,172
                                                                         -------------         -------------
Oil and gas properties, accounted for
     using the successful efforts method:

         Oil and gas interests, proved properties, net
             of $64,702 and $37,483 of accumulated
             depletion                                                       8,390,144             4,452,109

         Support equipment, at cost, net of
             $88,186 and $19,710 of accumulated
             depreciation                                                       61,086                13,545
                                                                         -------------         -------------
                                                                             8,451,230             4,465,654
                                                                         -------------         -------------
                                                                         $  10,763,450         $   7,775,989
                                                                         =============         =============
















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

                                                             16

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                             CAMBRIDGE ENERGY CORPORATION
                                                   AND SUBSIDIARIES

                                              CONSOLIDATED BALANCE SHEETS
                                                MARCH 31, 2001 AND 2000


                                         Liabilities and Stockholders' Equity
                                         ------------------------------------


                                                                                2001                 2000
                                                                                ----                 ----

                                                                     <c>                   <c>
Current liabilities:

         Accounts payable, trade                                          $  1,554,222          $  2,337,730
         Accrued expenses                                                      421,806               346,661
         Drilling advances                                                   2,007,259             2,301,209
         Royalty interests payable                                             191,908                98,918
         Loans from stockholders                                               853,650               800,531
         Notes payable                                                       1,185,367               737,867
                                                                          ------------          ------------
                  Total current liabilities                                  6,214,212             6,622,916
                                                                          ------------          ------------
Commitments and contingencies                                                        -                     -

Stockholders' equity:

         Preferred stock, $ .0001 par value,
             25,000,000 shares authorized, 159,500
             shares issued and outstanding of
             various series of convertible redeemable,
             $479,906 and $470,461 aggregate
             liquidation value, respectively                                        16                    16
         Common stock, $ .0001 par value,
             50,000,000 shares authorized,
             18,142,382 and 11,790,827 shares
             issued and outstanding, respectively                                1,814                 1,179
         Paid in capital in excess of par                                    9,334,120             4,055,473
         Accumulated deficit                                              (  4,750,879)         (  2,867,762)
         Treasury stock, at cost, 89,582 shares                           (     35,833)         (     35,833)
                                                                         -------------          ------------
                                                                             4,549,238             1,153,073
                                                                         -------------          ------------
                                                                         $  10,763,450         $   7,775,989
                                                                         =============          ============








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

                                                            17
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                               CAMBRIDGE ENERGY CORPORATION
                                                     AND SUBSIDIARIES

                                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                                  AND COMPREHENSIVE INCOME
                                   FOR THE YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000


                                                                               2001                  2000
                                                                               ----                  ----

                                                                    <c>                    <c>
Revenues:
         Oil and gas sales, net of royalties                             $   2,860,646         $   1,614,780
         Lease operating and other income                                      116,285                78,223
                                                                         -------------         -------------
                                                                             2,976,931             1,693,003
                                                                         -------------         -------------
Operating expenses:
         Production costs                                                    2,713,112             1,142,717
         Exploration costs                                                           -                 8,459
         Marketing expenses                                                          -                     -
         General and administrative                                          1,732,328               912,510
         Depletion                                                              27,219                22,615
         Depreciation                                                          214,214                80,307
                                                                         -------------         -------------
                                                                             4,713,873             2,166,608
                                                                         -------------         -------------
Operating loss                                                            (  1,736,942)         (    473,605)

Interest expense                                                          (    105,675)         (     59,701)
                                                                         -------------         -------------
Net loss before taxes                                                     (  1,842,617)         (    533,306)

Provision for income taxes                                                           -                     -
                                                                         -------------         -------------
Net loss                                                                 $(  1,842,617)        $(    533,306)

Preferred stock dividends                                                $      40,500         $      38,073

Net loss available to common stockholders                                $(  1,883,117)        $(    571,379)

Net loss per share:
         Basic                                                           $(        .12)        $(        .05)
         Diluted                                                         $(        .12)        $(        .05)








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


                                                        18
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                       CAMBRIDGE ENERGY CORPORATION
                                                             AND SUBSIDIARIES
                                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                           FOR THE YEARS ENDED MARCH 31, 2000 AND MARCH 31, 1999




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

Balance at March 31,1999  134,000    $ 13  11,634,827  $ 1,164  $3,877,960  $(2,301,834)     $( 23,341)     $ 1,553,962

Issuance of preferred
  stock for cash           35,500    $  4                         116,559                                       116,563
Repurchase of preferred
  stock for cash          (10,000)   (  1)                        (24,999)                                     ( 25,000)
Issuance of common stock
   for cash                                   156,000       15     85,953                                        85,968
Reacquired shares held
   in treasury                                                                                ( 12,492)        ( 12,492)
Dividends on preferred
   stock                                                                     (   32,622)                       ( 32,622)
Net loss                                                                     (  533,306)                       (533,306)
                         --------  ------- ----------  ------- ----------   ------------     ----------     ------------
Balance at March 31,2000  159,500    $ 16  11,790,827  $ 1,179 $4,055,473   $(2,867,762)     $( 35,833)      $ 1,153,073

Issuance of common stock
   in payment of accounts
   payable                                    153,750       15    125,335                                        125,350
Issuance of common stock
   for cash                                   460,000       46    214,954                                        215,000
Issuance of common stock
   for services                             2,088,428      209    893,723                                        893,932
Issuance of common stock
   for purchase of oil and
   gas properties                           3,649,377      365  4,044,635                                      4,045,000
Dividends on preferred
   stock                                                                     (   40,500)                        ( 40,500)

Net loss                                                                     (1,842,617)                      (1,842,617)
                         --------  ------- ----------  ------- ----------   ------------     ----------      ------------
Balance at March 31,2001  159,500    $ 16  18,142,382  $ 1,814 $9,334,120   $(4,750,879)     $( 35,833)      $ 4,549,238
                         ========  ======= ==========  ======= ==========   ============     ==========      ============









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

                                                                19
</TABLE>
<PAGE>
 <table>
<caption>
                                            CAMBRIDGE ENERGY CORPORATION
                                                   AND SUBSIDIARIES

                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000


                                                                             2001                  2000
                                                                             ----                  ----

                                                                   <c>                    <c>
Cash flows from operating activities:
         Oil and gas sales received                                     $  3,394,398           $   1,118,519
         Interest received                                                         -                   1,429
         Cash paid to employees                                          (    31,003)            (    57,481)
         Cash paid to suppliers                                          ( 3,383,697)            ( 1,388,600)
         Interest paid                                                   (    24,465)            (    59,701)
         Income taxes paid                                                         -                       -
                                                                        -------------          -------------
         Net cash used in operating activities                           (    44,767)            (   385,834)
                                                                        -------------          -------------
Cash flows from investing activities:
         Cash paid in IEP acquisition,
             less cash acquired                                          (   178,618)                      -
         Purchase of property and equipment                              (   146,721)            (    34,994)
         Purchase of oil interests                                                 -                       -
                                                                        -------------          -------------
         Net cash used in investing activities                           (   325,339)            (    34,994)
                                                                        -------------          -------------
Cash flows from financing activities:
         Advances from stockholders                                          144,300                  43,948
         Repayment of advances from stockholders                         (    91,181)                      -
         Issuance of common and preferred stock                              215,000                 116,563
         Proceeds from notes payable                                         477,500                 403,000
         Repayments of notes payable                                     (    30,000)                      -
         Repurchase of preferred stock                                             -             (    25,000)
         Treasury stock purchased                                                  -             (    12,492)
         Dividends paid                                                  (    31,055)            (    15,113)
                                                                        -------------          -------------
         Net cash provided by financing activities                           684,564                 510,906
                                                                        -------------          -------------
Net increase in cash                                                         314,458                  90,078

Cash at beginning of period                                                  123,289                  33,211
                                                                        -------------          -------------
Cash at end of period                                                  $     437,747           $     123,289
                                                                        =============          =============





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

                                                          20
</table>


<PAGE>
<table>
<caption>
                                           CAMBRIDGE ENERGY CORPORATION
                                                 AND SUBSIDIARIES

                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000


                                      Reconciliation of Net Loss to Net Cash
                                           Used in Operating Activities


                                                                              2001                   2000
                                                                              ----                   ----


                                                                   <c>                     <c>
Net loss                                                               $ (1,842,617)            $(   533,306)
                                                                        -------------          -------------
Adjustment to reconcile net loss to net
     cash used in operating activities
     (changes in assets and liabilities):

         Depreciation and depletion                                         268,433                  102,922
         Impairment loss                                                    180,480                        -
         Common stock issued for services                                   893,932                   85,967
         Note payable issued for services and accrued
             interest                                                             -                   68,462
         (Increase) decrease in accounts receivable, trade                  417,467              (   573,055)
         (Increase) decrease in inventory                                    24,986                        -
         (Increase) decrease in prepaid expenses                            805,970              (   584,772)
         Increase (decrease) in accounts payable, trade                    (658,158)                 402,862
         Increase (decrease) in accrued expenses                             65,700                  115,012
         Increase (decrease) in drilling advances                          (293,950)                 568,005
         Increase (decrease) in royalty interests payable                    92,990              (    37,931)
                                                                        -------------           -------------
     Total adjustments                                                    1,797,850                  147,472
                                                                        -------------           -------------
Net cash used in operating activities                                  $ (   44,767)            $(   385,834)
                                                                        =============           =============


                                    Supplemental Schedule of Non-Cash Investing
                                             and Financing Activities

Issuance of common stock in exchange for net
     assets of corporations accounted for as purchases                 $  4,045,000             $          -









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

                                                        21


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


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

     Cambridge Energy Corporation (the Company) was incorporated in the state of
Nevada on April 9, 1996.  The  Company  is an  independent  oil and gas  company
engaged in the  exploration  and development of domestic and foreign oil and gas
properties.  It presently owns oil well properties  located in Louisiana and oil
and  gas  properties  in  Indonesia.   Through  March  2000,  the  Company  also
manufactured  certain wellhead control devices (Note 9). Oil produced is sold to
various  crude oil  purchaser  in the  Louisiana  market  and to the  Indonesian
government in the Indonesian market.

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

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

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

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

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

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

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



                                       22

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


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

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

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

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

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

     Through  April 1999,  the Company  owned  75,000  common  stock shares of a
corporation  publicly  traded on NASDAQ Small Cap market  (Note 5).  Pursuant to
Financial  Accounting  Standards  No. 115 these  securities  were  classified as
available-for-sale and were recorded in the accompanying financial statements at
their fair  value  based on the quoted  market  price of the stock.  On April 2,
1999,  these securities were disposed of resulting in a realized loss of $46,275
(Note 5).

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

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

Cash flows
----------

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

Impairment of long-lived assets
-------------------------------

     The  Company  has  adopted  Statement  of  Financial  Accounting  Standards
("SFAS") No. 121,  "Accounting  for the Impairment of Long-Lived  Assets and for
Long-Lived  Assets to Be Disposed  Of." This  Statement  establishes  accounting
standards  for  the  impairment  of  long-lived  assets,   certain  identifiable
intangibles  and  goodwill  related  to those  assets to be held and  used,  and
long-lived  assets and certain  identifiable  intangibles to be disposed of. The
Company  periodically  evaluates,  using  independent  appraisals  and projected
undiscounted cash flows, the carrying value of its long-lived assets and certain
identifiable  intangibles  to be held and used  whenever  events or  changes  in


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


circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.  In addition,  long-lived assets and identifiable intangibles to be
disposed of are reported at the lower of carrying  value or fair value less cost
to sell.  During  the year ended  March 31,  2001,  the  Company  recognized  an
impairment  loss of $180,480,  which is included  with  production  costs on the
accompanying consolidated statement of operations

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

     Basic loss per share  amounts are  computed  by dividing  the net loss plus
preferred stock dividends by the weighted  average number of common stock shares
outstanding.  Diluted loss per share amounts  reflect the maximum  dilution that
would have resulted from the conversion of the preferred  stock shares (Note 2).
At March 31,  2001 and 2000,  diluted  loss per share  amounts  are  computed by
dividing  the net loss by the  weighted  average  number of common  stock shares
outstanding  plus the  assumed  conversion  of  preferred  stock  shares into an
equivalent of 140,203 and 140,203, respectively,  common stock shares. No effect
has been given to the assumed  exercise of stock options or warrants because the
effect would be antidilutive.

     For the years ended March 31, 2001 and 2000,  basic loss per share  amounts
are based on 14,845,156 and 11,722,426  weighted  average shares of common stock
outstanding,   respectively.  Diluted  loss  per  share  amounts  are  based  on
14,985,359 and 11,862,629  weighted average shares of common stock  outstanding,
respectively.

2.   PREFERRED STOCK

     For the years ended March 31, 2001 and 2000,  the Company issued 20,000 and
124,000, respectively and 0 and 10,000 shares, respectively, of its Series A and
Series B, respectively,  preferred stock for $2.50 cash per share. Other than in
liquidation and redemption at the holders' option,  the preferences  attached to
these  series are  identical.  The shares  have a par value of $.0001 and pay an
8.0% per  annum  non-cumulative  dividend  payable  quarterly.  The  shares  are
convertible  into common stock at the holders  options  anytime within 18 months
from the date of issue at a  conversion  price of $1.50 per  common  share.  The
shares are  redeemable by the Company within 12 months from the date of issue at
a per share  redemption  price of $2.50.  The holders of the Series A shares can
require redemption at the same price anytime during a period beginning 12 months
from the date of issue and ending 14 months  from such date.  The holders of the
Series B shares can also require  redemption at the same price anytime  during a
period  beginning  six months  from the date of issue and ending 12 months  from
such date.  In  September  1999,  10,000  Series A shares  were  redeemed by the
Company.



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


     In August 1999, the Company issued 15,000 shares of its class B convertible
preferred stock for $1.00 cash per share.  The shares have a par value of $.0001
and pay an 8.0% per annum  non-cumulative  dividend.  The shares are convertible
into common stock at the  holder's  option  anytime  prior to April 1, 2000 at a
conversion  price of $2.50 per common  share.  The shares are  redeemable by the
Company  after  April 1,  2000 at a per  share  redemption  price of $2.50  plus
accrued dividends.

     In November  1999, the Company issued 500 shares of its Class B Convertible
Redeemable  preferred shares.  The shares have a value of $.0001 and pay 10% per
annum  payable  semiannually.  Each share is  convertible  into 100 common stock
shares at the holder's option anytime after the completion of the offering.  The
shares are  redeemable by the Company 12 months after the date of issue but only
after the  common  stock  market  price is  greater  than $2.00 per share for 20
consecutive days at a conversion price of 105% of the issue price.

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

     At March 31,  2001 and 2000,  accrued  dividends  payable  related to these
shares totaled $32,406 and $38,074, respectively.

3.   COMMITMENTS AND CONTINGENCIES

Leases
------

     The Company's home office  facilities are currently being provided  without
charge by a corporation owned by the Company's president.  The fair rental value
of this space  provided is not  material.  The Company's  Singapore  offices are
currently  leased on a month to month basis from a corporation  owned by another
of the Company's stockholders. For the years ended March 31, 2001 and 2000, rent
expense   under  these  rental   arrangements   totaled   $86,400  and  $86,400,
respectively.

     At March 31, 2001,  the Company was not obligated  under any  noncancelable
operating or capital lease agreements.

Litigation
----------

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


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


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

     In January 1998, the Company  entered into an employment  agreement with an
executive  officer which provides for the payment of $150,000 in annual salaries
and additional  compensation  based on annualized gross revenues.  The agreement
expires in December  2002 and,  in certain  instances,  can be extended  through
December 2007.  Through March 31, 2001, no  compensation  had been accrued under
this employment  agreement  pursuant to an agreement between the Company and the
executive officer. However,  beginning April 1, 2001, compensation will begin to
accrue.

     In October 1998, the Company entered into a consulting and share repurchase
agreement with a former officer.  The agreement  provides for an initial $50,000
payment  and monthly  payments of $5,000  until such time as a total of $400,000
has been paid under the agreement. The former officer will return to the Company
250,000  common  stock  shares for each  $100,000  of fees paid to him under the
agreement.  At March 31, 2001 and 2000, 89,582 and 89,582 shares,  respectively,
had been returned to the Company and are being held in the treasury.

4.   INCOME TAXES

     The  Company  uses the  accrual  method  of  accounting  for tax  reporting
purposes.  At March 31, 2001, the Company had a net operating loss carryforwards
for financial  and tax  reporting  purposes of  approximately  $4,720,000  which
expire through the year 2015.

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




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


     For the years  ended  March 31, 2001 and 2000,  pursuant  to  Statement  of
Financial  Accounting Standards No. 109, the Company has recognized deferred tax
assets and  liabilities  which have been offset by valuation  allowances  in the
same amount.  Significant  components of the  Company's  deferred tax assets and
liabilities are summarized below.

                                                    2001              2000
                                                    ----              ----
Deferred tax assets:

 Net operating loss carryforward              $  1,604,800       $   958,263
                                              ------------      ------------
     Deferred tax liability:

         Intangible drilling costs                       -            47,646
         Depletion                                       -       (    12,585)
                                              ------------      ------------
                                                         -            35,061
                                              ------------      ------------

                                                 1,604,800           923,202

     Valuation allowance                       ( 1,604,800)       (  923,202)
                                              ------------      ------------
     Net deferred tax asset (liability)       $          -       $         -
                                              ============      ============

     A reconciliation of income tax expense at the statutory federal rate of 34%
to income tax expense at the  Company's  effective  tax rate for the years ended
March 31, 2001 and 2000 is as follows.

                                                    2001              2000
                                                    ----              ----

      Tax computed at statutory rate          $    626,490           181,324
      Benefit of operating loss carryforward   (   626,490)       (  181,324)
                                              ------------       -----------
      Income tax expense                      $          -       $         -
                                              ============       ===========

5.   RELATED PARTY TRANSACTIONS

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

     During  the years  ended  March 31,  2001 and 2000,  the  Company  (and its
subsidiaries)  received cash advances from several of its stockholders  totaling
$144,300 and $43,948,  respectively  and repaid $91,181 and $0,  respectively of
these  advances.  The  Company  also  owes a  stockholder  $500,000  as  partial
consideration  for the  acquisition  of IEP (Note  1).  These  advances  are non
interest bearing, unsecured and payable upon demand.


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


     On April 2, 1999, the Company's  marketable equity securities,  with a fair
value of $18,750,  were  transferred  to a stockholder  as partial  repayment of
these advances.

6.   FINANCIAL INSTRUMENTS

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

Cash
----

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

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

     The Company accounts  receivable are unsecured and represent oil production
sales  and  lease  operating  income  not  collected  at the  end  of the  year.
Management  believes it is not exposed to any significant credit risks affecting
accounts  receivable  and that  these  accounts  receivable  (Note 9) are fairly
stated at estimated net realizable amounts.

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

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

7.   STOCK OPTIONS AND WARRANTS

     During the years ended March 31, 2001 and 2000,  the Company issued various
stock  options  and  warrants to  employees  and  others.  The Company  uses the
intrinsic  value method of accounting for stock options.  Compensation  cost for
options granted has not been recognized in the accompanying financial statements
because the exercise  prices exceeded the current market prices of the Company's
common  stock on the dates of grant.  The options and  warrants  expire  between
April 2003 and June 2009 and are  exercisable  at prices  from $.50 to $2.50 per
option or warrant.


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



     The following is a schedule of the activity relating to the Company's stock
options and  warrants.  At March 31, 2001 and 2000, no warrants have been issued
by the Company.

<table>
                                         Year Ended                              Year Ended
                                        March 31, 2001                         March 31, 2000
                                        --------------                         --------------
                                                   Weighted Avg.                          Weighted Avg.
                                    Shares           Exercise             Shares            Exercise
                                  (x 1,000)            Price             (x 1,000)            Price
                                  ---------        ------------          ---------        -------------

                              <c>               <c>                  <c>              <c>
Options and warrants
    outstanding at
    beginning of year               7,100            $    1.12              4,000            $   1.14

Granted:
    Options                           350            $     .59              3,100            $   1.00
    Warrants                            -            $       -                  -            $      -

Exercised                               -            $       -                  -            $      -

Expired:
    Options                             -            $       -                  -            $      -
    Warrants                            -            $       -                  -            $      -
                                  ---------        ------------          ---------        -------------
Options and warrants
    outstanding and
    exercisable at end
    of year                         7,450            $    1.09              7,100            $   1.12
                                  =========                              =========
Weighted average fair
    value of options and
    warrants granted during
    the year                            -            $     .57                  -            $    .46


</table>

     The  following  table  summarizes  information  about the  Company's  stock
options  and  warrants   outstanding  at  March  31,  2001,  all  of  which  are
exercisable.

                                          Weighted Average
            Range of           Number         Remaining        Weighted Average
         Exercise Prices    Outstanding    Contractual Life     Exercise Price
         ---------------    -----------   -----------------    ----------------
         $   .50-1.00          4,850           4.7 years           $    .74
         $  1.50-2.50          2,600           4.4 years           $   1.62


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


     The  following  table  summarizes  information  about the  Company's  stock
options  and  warrants   outstanding  at  March  31,  2001,  all  of  which  are
exercisable.

                                          Weighted Average
            Range of           Number         Remaining        Weighted Average
         Exercise Prices    Outstanding    Contractual Life     Exercise Price
         ---------------    -----------   -----------------    ----------------
         $   .50-1.00          4,850           4.7 years           $    .74
         $  1.50-2.50          2,600           4.4 years           $   1.62


     The  following  pro forma  disclosures  reflect the  Company's net loss per
share amounts assuming the Company accounted for stock options granted using the
fair value method  pursuant to Statement of Financial  Accounting  Standards No.
123.  The fair value of each option  granted was  estimated on the date of grant
using the  Black-Scholes  option  pricing model with the following  assumptions:
risk-free  interest rate of 5.98%;  no expected  dividends;  expected lives of 5
years; and expected volatility of 185.8%.

                                       Year Ended           Year Ended
                                     March 31, 2001       March 31, 2000
                                     --------------       --------------

         Net loss                     $(2,225,450)         $(  735,806)

         Net loss per share:
              Basic                   $(      .15)         $(      .06)
              Diluted                 $(      .15)         $(      .06)


     During the years  ended May 31,  2001 and 2000,  the  Company  also  issued
2,088,428  and 156,000  common  stock  shares in exchange  for  services.  These
services   were   recorded  at  their  fair  value  of  $893,932   and  $85,968,
respectively, and were charged to expense. Also, during the year ended March 31,
2001,  the Company  issued  153,750  common stock shares for payment of accounts
payable and it issued  3,649,377 common stock shares for the purchase of oil and
gas properties. These transactions were recorded at their fair value of $125,350
and $4,045,000, respectively.

8.   NOTES PAYABLE

     During  the years  ended  March 31,  2001 and 2000,  the  Company  borrowed
$477,500 and $403,000,  respectively,  through the issuance of notes.  The notes
are due at various dates through  December 2000,  bear interest at 8.5% to 10.0%
and all but one  note are  unsecured.  This  note is  secured  by the  Company's
Louisiana  property and equipment.  Also,  during the years ended March 31, 2001
and 2000, $30,000 and $0, respectively, of principal was repaid on these notes.

                                       30
<PAGE>
                           CAMBRIDGE ENERGY CORPORATON
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9.   SEGMENT INFORMATION

     The Company conducts its operations through three reportable segments, each
of which is conducted through separate subsidiary corporations. Those reportable
segments are its Louisiana oil properties, its Indonesian oil and gas properties
and its wellhead control device manufacturing operations.  During the year ended
March 31, 2000, the Company ceased operations of its  manufacturing  segment due
to lack of operating  capital.  The  remaining  property  and  equipment of this
operating segment will be used by the Company's Louisiana oil and gas segment.

     The  following  table  reflects  certain  information  about the  Company's
reportable operating segments for the years ended March 31, 2001 and 2000. There
are no intercompany revenue or expense transactions.

<table>


                                                <c>              <c>           <c>             <c>
2001                                                                                               Consolidated
----                                                  Louisiana        Indonesia   Manufacturing      Totals
                                                      ----------       ---------   -------------   ------------
    Revenues from external customers                 $    47,111     $ 2,929,820   $         -     $ 2,976,931
    Operating income (loss)                           (2,275,221)        683,449    (  145,170)     (1,736,942)
    Interest expense                                     105,675               -             -         105,675
    Depreciation and depletion                           103,444         137,989             -         241,433
    Impairment loss                                       65,350         115,130             -         180,480
    Consulting services, non cash                        893,932               -             -         893,932
    Expenditures to acquire long-lived assets          4,287,621          82,718             -       4,370,339
    Total long-lived assets, net of depreciation
       and depletion                                   5,214,941       4,231,311             -       9,446,252


2000                                                                                               Consolidated
----                                                  Louisiana        Indonesia   Manufacturing      Totals
                                                      ---------        ---------   -------------   ------------
    Revenues from external customers                 $   138,696     $ 1,553,342   $       965     $ 1,693,003
    Operating loss                                    (  690,843)        322,519    (  105,281)     (  473,605)
    Interest expense                                      59,701               -             -          59,701
    Depreciation and depletion                            41,421          21,275        40,226         102,922
    Consulting services, non cash                         85,968               -             -          85,968
    Expenditures to acquire long-lived assets             34,994               -             -          34,994
    Total long-lived assets, net of depreciation
       and depletion                                     991,222       4,310,488       223,116       5,524,826

</table>

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

10.  INTERIM FINANCIAL REPORTING

     During the fourth  quarter of the fiscal  year ended  March 31,  2001,  the
Company charged to production costs  approximately  $928,000 of prepaid drilling
costs that should have been expensed in prior fiscal quarters.

     In addition, the Company recorded the purchase of a significant oil and gas
property through the issuance of common stock, with a cost totaling  $3,950,000,
that should have been recorded in the second fiscal quarter.  Because production
has not  commenced,  this  acquisition  did not  have a  significant  effect  on
previously reported operating results.


                                       31

<PAGE>
                         CAMBRIDGE ENERGY CORPORATION
                       SUPPLEMENTARY INFORMATION REGARDING
                        OIL AND GAS PRODUCING ACTIVITIES
              FOR THE YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000
                                    UNAUDITED


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


1.   CAPITALIZED COSTS RELATING TO OIL AND GAS PRODUCING ACTIVITIES

                                                       2001             2000
                                                       ----             ----
     Proved oil and gas properties                $  8,454,846      $ 4,443,605
     Unproved oil and gas properties                         -                -
     Support equipment, proved properties              149,272           79,242
                                                  ------------      -----------
                                                     8,604,118        4,522,847
     Accumulated depreciation and
        depletion                                      152,888           57,193
                                                  ------------      -----------
     Net capitalized costs                        $  8,451,230      $ 4,465,654
                                                  ============      ===========


2.   COSTS INCURRED IN OIL AND GAS PRODUCING ACTIVITIES FOR ABOVE REFERENCED
     PERIODS

                                                        2001            2000
                                                        ----            ----

     Acquisition of proven properties              $  4,105,000     $    28,474

     Exploration costs                             $          -     $     8,459

     Development costs                             $          -     $         -


3.   RESULTS OF OPERATIONS  FOR OIL AND GAS PRODUCING  ACTIVITIES  FOR THE ABOVE
     REFERENCED PERIODS

                                                        2001            2000
                                                        ----            ----
         Oil and gas sales                         $  2,976,931     $ 1,614,780
         Lease operating income                               -          23,534
         Production costs                             2,713,112       1,142,717
         Exploration expenses                                 -           8,459
         Depreciation and depletion                     241,433         102,922
         Income tax expense                                   -               -
                                                   ------------     -----------
         Results of operations for oil
           and gas producing activities
           (excluding corporate overhead
           and financing costs)                     $    22,386     $   384,216
                                                   ============     ===========


                                       32
<PAGE>
                          CAMBRIDGE ENERGY CORPORATION
                       SUPPLEMENTARY INFORMATION REGARDING
                        OIL AND GAS PRODUCING ACTIVITIES
              FOR THE YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000
                                    UNAUDITED




4.   RESERVE QUANTITY INFORMATION

     The  following   estimates  of  proved  developed  reserve  quantities  are
estimates only, and do not purport to reflect  realizable  values or fair market
value of the  Company's  reserves.  They are  presented in  accordance  with the
guidelines established by the S.E.C. and disclosure requirements  promulgated by
SFAS 69. The Company  emphasizes the reserve estimates are inherently  imprecise
and that estimates of new discoveries are more imprecise than those of currently
producing oil and gas properties.  Accordingly,  these estimates are expected to
change as future information becomes available.

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

 <table>
                                                                                       Gas Reserves
                                                  Oil Reserves (BBLS)                      (MCF)
                                                  -------------------                   -----------
                                               Domestic           Foreign                Domestic
                                             (Louisiana)        (Indonesia)       Total             Total
                                             -----------        ----------        -----             -----

                                      <c>                 <c>              <c>             <c>
     Balance at March 31, 1999                 3,897,940        10,199,850      14,097,790        76,812,750

     Current year production              (        2,880)      (    59,928)    (    62,808)    (      31,231)
     Revisions of previous
        estimates                                      -         5,650,078       5,650,078         1,521,611
     Abandonment of minerals
        in place                          (      603,760)                -     (   603,760)                -
                                          --------------       -----------     -----------      ------------
     Balance at March 31, 2000                 3,291,300        15,790,000      19,081,300        78,303,130

     Current year production              (          126)     (    110,055)    (   110,181)    (      13,819)
     Purchases of minerals in
        place                                  1,533,153                 -       1,533,153         2,186,367
     Abandonment of minerals
        in place                          (    2,727,108)                -     ( 2,727,108)    (  77,615,554)
                                          ---------------      -----------     -----------     --------------
     Balance at March 31, 2001                 2,097,219        15,679,945      17,777,164         2,860,124
                                          ===============      ===========     ===========     ==============

</table>
                                                        33

<PAGE>
                         CAMBRIDGE ENERGY CORPORATION
                       SUPPLEMENTARY INFORMATION REGARDING
                        OIL AND GAS PRODUCING ACTIVITIES
              FOR THE YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000
                                    UNAUDITED

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

     The standardized measure of discounted future net cash flows is computed by
applying  year-end  prices of oil and gas,  estimated  at $24.93 U.S. and $24.74
Indonesia  per  barrel  and  $3.34  U.S.  only per  MMBTU,  respectively,  (with
consideration  of price  changes  only to the  extent  provided  by  contractual
arrangements) to the estimated future production of proved oil and gas reserves,
less estimated future  expenditures  (based on year-end costs) to be incurred in
developing and producing the proved  reserves,  less estimated future income tax
expenses (based on year-end  statutory tax rates,  with  consideration of future
tax rates already legislated) to be incurred on pretax net cash flows less basis
of the properties and available credits,  and assuming  continuation of existing
economic  conditions.  The estimated  future net cash flows are then  discounted
using a rate of 10 percent a year to reflect the estimated  timing of the future
cash flows.

                                     STANDARDIZED MEASURE OF DISCOUNTED FUTURE
                                     NET CASH FLOW AT MARCH 31, 2000 AND 1999

 <table>
                                                       2001                                    2000
                                            Foreign            Domestic               Foreign           Domestic

                                   <c>                 <c>                 <c>               <c>
Future cash inflows                   $    286,351,650    $     54,824,430   $     292,115,000  $    240,986,249
Future production costs                (    76,902,400)    (     3,527,655)   (     76,902,400)  (    28,918,350)
Future development costs               (    17,326,200)    (     5,851,611)   (     17,326,200)  (    14,459,175)
Future income tax expenses             (    78,871,050)    (     3,759,137)   (     78,871,050)  (    65,066,287)
                                      ----------------    ----------------    ----------------   ---------------
Future net cash flows                      113,252,000          41,686,027         119,015,350       132,542,437

10% annual discount for
     estimated timing of
     cash flows                        (    56,727,000)    (    10,972,756)   (     59,614,789)  (    64,945,794)
                                      ----------------    ----------------    ----------------    --------------
Standardized measure of
     discounted future net cash
     flows relating to proved
     oil and gas reserves             $     56,525,000    $     30,713,271   $      59,614,561  $     67,596,643
                                      ================    ================    ================   ===============




                                                        34


</table>
<page>
                         CAMBRIDGE ENERGY CORPORATION
                       SUPPLEMENTARY INFORMATION REGARDING
                        OIL AND GAS PRODUCING ACTIVITIES
              FOR THE YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000
                                    UNAUDITED


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



                                                     2001           2000
                                                     ----           ----
Beginning of period                            $ 126,997,204   $  99,160,040

Sales of oil and gas produced                    ( 2,860,646)   (  1,614,780)
Net changes in prices and production costs                 -    (  1,142,717)
Development costs incurred                                 -    (      8,489)
Revisions of previous quantity estimates                   -      30,603,150
Purchase of minerals in place                      22,681,991              -
Abandonment of minerals in place                 ( 59,580,278)             -
                                                -------------   -------------
End of period                                   $  87,238,271   $126,997,204
                                                =============   =============
















                                       35

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

          None

                                    PART III


Item 9.  Directors and Executive Officers of the Registrant

     (a) Identification of Directors and Executive Officers.


     (1)                  (1)                (2)                (3)
     Name                 Age               Term*              Served
---------------           ---               ----               ------
Perry Douglas West                         Elected             Since
Chairman and CEO           54              Annually          Inception

Jonathan E. Bates          42              Elected              1997
Executive Vice President                   Annually


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

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

     Perry Douglas West, co-founded the Company in April 1996, and has served as
Chairman  of  the  Board,  President  and  Chief  Executive  Officer  since  its
inception.   He  was  Chairman  and  Chief  Executive   Officer  of  Interactive
Technologies Corporation (ITC) from 1995 until January 1998. Mr. West co-founded
American   Financial   Network   in  1985.   He   served   as   Executive   Vice
President/Director and General Counsel of this publicly traded company from 1985
to 1991. He was also  previously a partner in the  consulting  firm of Cambridge
Equity,  Inc.,  which  structured  oil and gas  projects  in  Indonesia.  He was
graduated  with a Bachelor of Arts degree from The Florida  State  University in
1968 and with a Juris Doctorate degree from The Florida State University College
of Law in 1974.

     Jonathan E. Bates,  has been the Company's  Executive Vice President  since
1997  and is  responsible  for  corporate  relations.  Mr.  Bates,  founder  and
president of HB Financial  Services,  Inc.  since 1995.  As the  President of HB
Financial,  Mr. Bates  consulted  with  companies on a broad range of activities
including:   financial  and  organizational  planning,  capital  structures  and
formations,  and negotiating equity and bridge financing  agreements.  Mr. Bates
was a Financial Consultant with Smith Barney, Inc. from 1993-95. Before entering
the  financial  field,  Mr. Bates  consulted  for Wang  Laboratories,  Mead Data
Central,  Information  Builders,  Inc., and Syncsort Inc., marketing application
and system  information  software as well as hardware to corporations  utilizing
medium to large  mainframe  computer  systems.  Mr. Bates graduated in 1984 from
Florida  Atlantic  University  with a  Bachelor  of Science  degree in  Business
Finance and Marketing.

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


                                       36
<PAGE>
Item 10.  Executive Compensation

     Cash Compensation:

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


                           SUMMARY COMPENSATION TABLE
                           --------------------------

Name & Position         Fiscal Year      Salary      Bonus    Other Compensation
---------------         -----------      ------      -----    ------------------

Perry D. West               1997(1)        -0-        -0-               -0-
Chairman/CEO                1998(2)     $40,615       -0-             $45,000
                            1999(3)     $55,385       -0-               -0-
                            2000(4)     $ 3,692       -0-               -0-
                            2001(5)        -0-        -0-               -0-



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

2)April 1, 1997 - March 31, 1998

3)April 1, 1998 - March 31, 1999

     Mr.  West  has an  Executive  Compensation  Agreement  in  effect  with the
Company,  approved by the Board of Directors.  This Agreement is for a five year
term,  and is  incentive  based over and above the basic  salary of $150,000 per
annum for Mr. West.  Salary  increases are based on gross revenue  achievements.
The first two full fiscal years' gross  revenue  goals for salary  increases are
$4,000,000,  and  $8,000,000  respectively.  Third,  Fourth and Fifth year gross
revenue  goals will be set by the Board of Directors  prior to the  beginning of
those years.  Additional  benefits  include  medical and dental coverage for Mr.
West and family;  disability  coverage;  vacation;  automobile  or allowance for
automobile; and a death benefit. Mr. West is also entitled to participate in the
Company's Key Employee Stock Option Plan which has been  authorized by the Board
of Directors but not implemented as of the fiscal year ended March 31, 2001. Mr.
West will also be entitled to  participate  in the Company's  401(K)  retirement
plan,  which the  Company  intends to offer to its  employees.  This  employment
contract  may be  terminated  for cause,  and it  provides  for  payments to the
executive  in the  event  there is a change  of  control  of the  Company  which
adversely affects their employment.  Mr. West has agreed to defer all or partial
salary and other benefits from his compensation  agreements  during fiscal years
ended March 31, 1998, 1999, 2000 and 2001.

3)April 1, 1999 - March 31, 2000

4)April 1, 2000 - March 31, 2001

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

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

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

Perry D. West          1,000,000            13.60           $ .50     6/09/09
                       1,000,000            13.60           $1.00     6/09/09
                       1,000,000            13.60           $1.50     6/09/09
                         350,000                            $0.59     7/20/05
Jonathan Bates         1,000,000            13.60           $1.50     4/01/03
                       1,000,000            13.60           $1.00     4/01/03
                       1,000,000            13.60           $0.50     4/01/03
                         200,000              2.7           $0.75     4/15/03
                         200,000              2.7           $1.00     4/15/03
                         200,000              2.7           $1.50     4/15/03
                         200,000              2.7           $2.00     4/15/03
                         200,000              2.7           $2.50     4/15/03



     No options  granted to the directors and executive  officers were exercised
during the fiscal year ended March 31, 1998,  1999,  2000 or 2001.


                                       37
<PAGE>
Item 11.   Security Ownership of Certain Beneficial Owners and
           Management as of March 31, 2001

     (a) Security Ownership of Certain Beneficial Owners

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

Common       Lee M. Payne               Former Executive Vice
             1295 Rockledge Drive       President/Director
             Rockledge, Florida 32955   3,192,393 Shares*        16.97

     (b) Security Ownership of Management

     The  following  table  sets  forth  the  share  holdings  of the  Company's
directors and executive  officers as of March 31, 2001, with these  computations
based upon 18,802,382 shares of common stock being  outstanding,  and no options
granted being exercised.

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

Common       Perry Douglas West         Chairman and CEO         16.97
             P.O. Box 1656              3,192,393 Shares*
             Cocoa, Florida 32923

Common       Lee M. Payne
             1295 Rockledge Drive
             Rockledge, Florida 32955   3,192,393 Shares**       16.97

Common       Officers and Directors
             as a Group                 6,384,786 Shares         33.95

* Mr. West has  options to purchase  1,000,000  shares of the  Company's  Common
Stock at $.50; 1,000,000 shares at $1.00; and 1,000,000 shares at $1.50 any time
within sixty months prior to June 9, 2009.

**After  Mr.  Payne,  a former  officer and  director  of the company  resigned,
several  agreements  were entered  into  between the Company,  Mr. Payne and Mr.
West. The Company  entered into a share purchase  agreement with Mr. Payne dated
October 15, 1998,  for the  purchase of 1,000,000  shares of common stock over a
five year period for a total purchase price of $400,000. On October 7, 1998, the
Company  entered into a  Consulting  Agreement  with Mr. Payne  agreeing for the
payment  of  $5,000.00  per  month  for  consulting  services  up to a total  of
$400,000. It was agreed that all payments made to Mr. Payne under the Consulting
Agreement  referenced above would be considered payment of stock under the share
purchase  agreement.  In  addition,  Mr. Payne and Mr. West entered into a share
purchase  agreement  dated  October 15, 1998 for the  purchase by Mr. West of an
additional  2,000,000  shares of Mr.  Payne's  stock over a period of five years
with 500,000 shares to be purchased at $0.50 per share, 500,000 shares purchased
at $0.75 per share,  500,000  shares  purchased  at $1.00 per share and  500,000
shares purchased at $1.25 per share.  This agreement has not been implemented.

     Management has no knowledge of the existence of any arrangements or pledges
of the  Company's  securities  which may  result in a change in  control  of the
Company  except  that  subsequent  to the  end  of the  fiscal  year  Mr.  Payne
transferred 3,000,000 of his shares to Jonathan Bates (I), Vice President of the
Company.

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



                                       38

<PAGE>

Item 12.  Certain Relationship and Related Transactions

     Shareholder  Loans.  During the fiscal  year  ending  March 31,  2001,  the
executive  officer and director of the Company,  Mr. West, had shareholder loans
repaid by the Company for totaling $11,181, for a total outstanding  shareholder
loans of $88,425.  These amounts were initially loaned at no interest,  and will
be reimbursed at such time as cash flow permits.

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




















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<PAGE>
                                     PART IV

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



                               EXHIBIT INDEX

(a.)     Exhibit                                                          Page
                                                                          ----

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

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

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

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

     (2) This  exhibit was  previously  filed as an exhibit to the  Registrant's
     Form 10K-SB filed August 20, 1999 and is herein incorporated by reference.



(b.)     Reports on Form 8-K.

         None.


























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<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for filing and has duly caused this  registration  statement to be
signed on its behalf by the undersigned,  thereunto duly authorized, in the City
of Cocoa, State of Florida, on August 22, 2001.



                                    CAMBRIDGE ENERGY CORPORATION


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













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