SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 1999

                         Commission file number 0-29670

                            DRUCKER INDUSTRIES, INC.
                            ------------------------
             (Exact name of registrant as specified in its charter)

              Delaware                                            N/A
             ----------                                          -----
         (State or other jurisdiction                        (I.R.S. Employer
         of incorporation or organization)                   Identification No.)

#1-1035 Richards Street, Vancouver, B.C. Canada               V6B 3E4
------------------------------------------------              -------
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code:  (604) 681-4421
                                                     --------------

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                      Yes  X         No

Indicate by check mark if disclosure  of  delinquent  filers in Response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained  to  the  best  of  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.

                      Yes           No   X


<PAGE>




Registrants  gross  revenues for its most recent  fiscal year were $134,930 from
interest income only and operations  expenses totaled $708,114 for a net loss of
$(573,184).

State the aggregate market value of the voting stock held by  non-affiliates  of
the Registrant:  $8,868,112 as of December 31, 1999 (a $.39/share  closing price
at December 23, 1999).

Indicate the number of shares outstanding of each of the Registrant's classes of
common stock: 32,476,250 common shares as of December 31, 1999.



<PAGE>



                                TABLE OF CONTENTS

                                     PART I
                                                                            Page

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

Item 2.   Properties .........................................................11

Item 3.   Legal Proceedings...................................................12

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

                                     PART II

Item 5.   Market for Registrant's Common Stock and
          Security Holder Matters ............................................12

Item 6.   Management's Discussion and Analysis of
          Financial Condition and Results of
          Operations .........................................................14

Item 7.   Financial Statements and Supplementary Data.........................20

Item 8.   Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure..............................20

                                    PART III

Item 9.   Directors and Executive Officers of the
          Registrant .........................................................21

Item 10.  Executive Compensation..............................................23

Item 11.  Security Ownership of Certain Beneficial
          Owners and Management...............................................25

Item 12.  Certain Relationships and Related
          Transactions........................................................27

                                     PART IV

Item 13.  Exhibits, Financial Statement Schedule
          and Reports on Form 8-K.............................................28


<PAGE>



                                     PART I


ITEM 1.           BUSINESS

         (a)  General Description and Development of Business.

                               HISTORY OF COMPANY
                           (Through December 31, 1997)

         On February 4, 1971, the Registrant was incorporated  under the laws of
the State of Idaho, under the name of Monetary Metals Corporation.

         On December 16, 1988, Drucker Sound Design Corporation was incorporated
under the laws of the State of California.

     On October 18, 1989, Gul Industries Corp. was  incorporated  under the laws
of the State of Delaware.

         On December 14, 1989, the Registrant entered into an Agreement and Plan
of  Reorganization,  whereby the issuer  acquired 100% of the assets  subject to
liabilities of Drucker Sound Design Corporation,  a California corporation.  The
Registrant  began  engaging  in the  manufacturing  and  distribution  of audio,
cellular,   C.B.,   radar,  and  other  electronic   installation   systems  for
automobiles.  The Company  decided to  redomicile in Delaware and entered into a
merger agreement with Gul Industries, Inc., a Delaware corporation. On April 16,
1990, the Registrant  filed Articles of Amendment in the State of Idaho changing
its name from Monetary Metals  Corporation to Drucker Sound Design  Corporation.
On June 6, 1990,  Gul Industries  Corp.  filed a Certificate of Amendment to the
State of Delaware changing its name to Drucker Sound Design Corporation. On June
19, 1990, a Certificate of Merger was filed in the State of Delaware.  On August
7,  1990,  a  Certificate  of Merger  was filed in the State of Idaho.  Prior to
September  1991,  the  Registrant  discontinued  engaging  in  the  business  of
manufacturing  and  distributing  of audio,  cellular,  C.B.,  radar,  and other
electronic  installation  systems for  automobiles.  On September  4, 1991,  the
Registrant filed  Certificate of Amendment in the State of Delaware changing its
name to Drucker Industries, Inc.

         In September  1991,  the Company  purchased  the license to the "N-Viro
Process" in Japan from N-Viro Energy  Systems,  Ltd. for  $466,063.  The Company
made a $100,000 down payment and paid the balance by quarterly installments. The
Company  was  delinquent  on  minimum  royalty  payments  due June 30,  1994 and
September  30,  1994,   totalling  $50,000,  and  consequently  all  rights  and
privileges  granted to the Company under the license agreement were cancelled by
the licensor. The license agreement costs, net of accumulated amortization, were
written-off during the year ended December 31, 1994. The Company at December 31,
1995, terminated any attempts in the N-Viro business.

1

<PAGE>



         No activities  were  conducted in 1995 or 1996. In 1997, new management
was  engaged  and a  business  plan to  engage  in oil and gas  exploration  was
adopted.

                              THE COMPANY BUSINESS

1.       General Operations

         The  Company  has had very  limited  operations  within  the last three
years,   and  such  operations  have  been   restricted  to   investigation   of
opportunities,  evaluation  and  negotiations  of the joint  venture  agreements
described  hereafter,  and  joint  venture  participations  in  oil  exploration
projects in China in fall 1997 and in Egypt in 1999.

         Current Business

         The  Company  was  inactive  from 1994 until late 1996.  The  Company's
primary  business  focus is the  acquisition,  exploration  and  development  of
mineral  properties  and oil and natural  gas  properties.  In early  1997,  the
Company negotiated joint venture farm-in agreements with two Vancouver based oil
companies with whom the  companies'  officers and directors are affiliates for a
50%  interest in certain oil  projects in the  People's  Republic of China.  The
projects were  unsuccessful  and were  abandoned in 1998,  although  the Company
retains an investment in China in the Shaanxi  exploration  project which is not
under active exploration. The Registrant has a participation in the Gulf of Suez
joint venture in Egypt,  which has in 1999 made one oil  discovery,  has drilled
one dry hole, and has a third well being drilled.

         The Company  anticipates  that its  business  will  continue to require
capital to make required  financial  investments under exploration joint venture
agreements. The Company intends to use the capital Markets of the United States,
Canada, and Europe to secure the capital funding required by the Company and its
operations. It has no commitments for funding as of the date of this Report, nor
anticipated sources of debt or equity funding, except its cash on hand.

         The  Company  has not  established,  and does not  intend  to  formally
establish, criteria for the selection or evaluation of oil and gas properties or
participations. When a property is located which the management, in its opinion,
believes holds the potential for profit for the Company, an attempt will be made
to secure an option, or lease, in the property. Shareholder approval will not be
sought for property acquisitions. Therefore, shareholders will be dependent upon
the judgment of management in selecting  properties (see "Management").  If such
an interest is  acquired,  the Company  will then expend  funds for  preliminary
exploration  and  testing  of the  property  to  determine  the  feasibility  of
production of such property.  Based on the results of such preliminary  testing,
the Company will decide,  without  shareholder  approval,  whether to acquire or
abandon the  property.  A property  may be acquired  by  outright  purchase;  by
purchasing  or leasing the oil,  gas or mineral  rights of the  property;  or by
exchange of the shares for leases or interests in properties.

2

<PAGE>




         The Company may expend funds to rework, explore or test any oil and gas
prospects it acquires to determine the economic  production  feasibility of such
properties. The Company will rely on outside consultants (none of whom have been
designated) to provide management with competent  evaluation and recommendations
concerning property or interests in properties to be considered for acquisition.
The Company has no  agreement  or  understanding,  express or implied,  with any
outside  professional;  and there is no assurance that it will be able to retain
the  services of  competent  experts or as to the fees which such  experts  will
charge the Company.  Based upon the results of such  exploration  and tests,  as
interpreted  by  management,  the  Company  will  then  determine  whether  such
properties  should  be  acquired,  explored  further,  sold or leased to a third
party, held for possible later development or abandoned;  or whether development
to  production  should be attempted  by the Company  either by itself or through
joint venture or other business arrangements with other companies or entities.

                  The Company currently  maintains its offices #1- 1035 Richards
Street, Vancouver, B.C. Canada V6B 3E4. Its telephone number is 604-681-4421.

    (b)  Parents and Subsidiaries

                  Parent

                           DRUCKER INDUSTRIES, INC., a Delaware corporation

                  Subsidiaries

                           DRUCKER PETROLEUM, INC., a British Virgin Islands
                           corporation

                           DRUCKER PETROLEUM, (Algeria) INC., a British Virgin
                           Islands corporation


         (c)      Oil and Gas Activities.

         Registrants  oil  and  gas  exploration,   development  and  production
activities  have been  limited  due to lack of capital and lack of focus in such
area prior to 1997. The Company, in 1997 received stock sale proceeds to finance
its oil & gas joint  ventures.  The  Company  terminated  its China  exploration
ventures 1998 after drilling a dry hole.

         The Company's  proposed  principal  areas of  activities  are described
below.

         Exploration  and  Production  Activity.  The  Company's  strategy  with
respect to its oil  exploration  related  activities  is to identify  geological
areas in which  the  Company  may  invest or  participate  in  non-producing  or
producing oil and gas prospects or joint ventures for  development and where the
company may lease  prospects  for oil and gas  exploration.  In 1997,  it joined
joint  ventures to explore for oil and gas in China.  In 1998, it terminated and
abandoned its joint venture in China after drilling one dry hole and finding its


3

<PAGE>



other China  prospects  to bear slim  chances of success.  In 1998,  the Company
began a participation  in the West Gharib,  Egypt  concession and two successful
wells were drilled there in 1999. (Hana 1 and Hana 2.) Drucker Petroleum, Inc. a
wholly owned subsidiary holds a 20% working interest in the Hana wells in Egypt.

         During  the  last  five  (5)  fiscal  years,   the  Company   conducted
exploration activities on oil and gas properties for joint venture participation
in China and Egypt. If the Company acquires oil and gas prospects in the future,
the Company may agree to assign  rights in certain  properties  to be drilled to
the general or managing  partner of a partnership or joint venture which thereby
becomes the owner of a working  interest in the  property  and the Company  will
retain an interest in the property.  The Company actively reviews  prospects for
participatioon  in  exploration  or development  drilling  joint  ventures,  but
currently has no proposal being  negotiated on any specific  property,  lease or
asset, not otherwise discussed herein.

         The Company does not own any drilling rigs, nor does it employ drilling
or  operating  crews.  The Company  will not be the actual  contract  driller of
wells.  If and when the  Company  decides  to drill to explore a  prospect,  the
Company will  contract with  third-party  non-affiliated  drilling  companies to
drill oil and gas wells on a fixed-cost (turnkey) basis. Once a well has reached
its desired  depth,  the  Company,  in  consultations  with  experts,  will then
determine  whether to complete  such wells  and/or to plug and abandon the well.
All well completion  activities are conducted  under  supervision of the Company
and its  consultants,  by third party service  contractors.  When the Company is
merely a participant in a venture on a minority basis,  all decisions  regarding
drillers,  operations, and consultants will be made by third party management of
the venture and not by the registrant.

         The Company is not carrying any reserve values of any properties due to
the lack of any production or found reserves.

         Exploration Results         1999        1998              Prior Years
         -------------------         ----        ----              -----------

         Gas Wells                      0           0                 0
         Dry Holes                      1           1                 0
         Oil Wells                      2           0                 0

         Financing of Oil and Gas Activities.  The Company's  future oil and gas
financing activities will be conducted primarily pursuant to ventures with other
Independent companies and through Joint Ventures in which the Company may act as
co-venturer ("Company-Joint Ventures") or as a working interest participant. The
Company has contacted some independent  companies who have indicated an interest
in  participating  in financing if the project  interests them. The Company is a
participant in the West Gharib,  Gulf of Suez,  Egypt  exploration  venture (see
"Registrant's  Joint  Venture  Interests"  hereafter).   In  1997,  the  Company
participated  in  exploration  participation  in China in which it paid  100% of
costs for a 50% interest in the concession and any  production  found.  The 1997
results were one dry hole in the China venture.

4

<PAGE>




         The  following  table sets forth,  for the years  indicated,  the funds
invested by the Company pursuant to contracts under Participation Agreements and
Joint  Ventures.  The  Company  may  record  revenues  from  operations  on  the
percentage  of  completion  method as the oil and gas  projects  are  drilled or
constructed, rather than when funds are received.



                              Year Ended December 31,

                              1995   1996       1997         1998        1999

Participation Payments        $0     $50,802    $1,275,217  $1,262,106  $352,000
Under Agreements
Deferred Exploration                                                    $629,290
                                                                        --------
                  Total       $0     $50,802    $1,275,217  $1,262,106  $981,290


         In 1997, the Company offered and sold 5,179,500 units at $1.00 per unit
pursuant to an Offering Memorandum. The cash proceeds of this offering have been
used to fund the Company operations. Each unit is to consist of one common share
and one share purchase  warrant which will entitle the holder thereof to acquire
an  additional  unit at $1.50 per unit.  This  warrant  would  have  expired  in
eighteen months from the closing of the Offering Memorandum, but the warrant was
extended  to March 31,  2000.  The  additional  unit is to consist of one common
share and one additional  share purchase  warrant to acquire one common share at
$2.00 per share. This warrant has been extended to March 31, 2001.

(d)  Narrative Description of Business.

         The  primary  initial  focus  of  business  operations  was to  make an
investment in oil and gas exploration joint ventures in China. The Chinese joint
venture has been terminated,  although the Company retains a project  investment
interest which gives the Company the right to  participate in exploratory  wells
by paying 100% of the drilling cost for a 50% interest. The Company, trhough its
wholly owned subsidiary,  Drucker Petroleum, Inc., has participated in two wells
in Egypt in the Gulf of Suez,  which has been  completed as an oil  discovery in
July 1999 (Hana 1) and Hana 2 was  completed  as a producer  in  December  1999.
Further  wells are planned in Egypt.  In 1998,  the Company did not complete any
successful oil or gas wells.

Algerian Concession

     As of October 27, 1999,  the Company,  through its wholly owned  subsidiary
Drucker  Petroleum  (Algeria),  Inc.  (DPA),  acquired 10% of the issued capital
stock of Santa Catalina  (Algeria) Ltd.  ("Algeria  Concession SLM Algeria"),  a
company which,  through its wholly-owned  subsidiary,  Santa Catalina L.H. Ludin
(Algeria)  Ltd.  ("SLM  Ludin"),  entered  into an  agreement  to  acquire a 25%
participating  interest in an oil and gas concession in Algeria.  Subject to SLM
Ludin earning its 25% participating interest, DPA may earn up to a 2.5% indirect
interest in the property by paying SLM Algeria $625,000 (paid) to acquire 10% of
its capital stock, and by funding  its pro-rata share of SLM Lundin's portion of


5

<PAGE>



the drilling and general and administrative costs in excess of US $5,000,000 for
testing and drilling of the first well.

     In  order to  participate  in the  second  well,  DPA must pay SLM  Algeria
$600,000.  DPA will then be responsible for their pro-rata share of SLM Lundin's
portion of the drilling costs and general and administrative  costs in excess of
$5,000,000  associated  with the drilling  and testing of the second well.  This
agreement is in effect for one year.

         All  costs  associated  with this  concession  are shown as oil and gas
project costs.

         See  also  (c)  "Oil  and Gas  Activities,"  "Properties,"  and  "Joint
Ventures" hereafter for more complete discussion.

Governmental Regulation for Oil Exploration  Operations

                  General - The Registrant's  oil and gas production  activities
are  subject to  extensive  regulation  by  numerous  national,  state and local
governmental  authorities  in  the  countries  where  project  participation  is
commenced.   Taxation   and   regulation   of   the   Registrant's   production,
transportation and sale of oil or gas, and federal price and allocation controls
in  particular,  have a significant  effect on the  Registrant and its operating
results.

                  State Regulation - The production operations of the Registrant
are subject to regulation by national bureaus or ministries which have authority
to issue permits prior to the  commencement  of drilling  activities,  establish
allowable  rates of production,  control spacing of wells,  establish  prices or
taxes, prevent waste and protect correlative rights, and aid in the conservation
of oil and gas. Typical state  regulations  require permits to drill and produce
oil or gas, protection of fresh water horizons, and confirmation that wells have
been properly plugged and abandoned.

                  Environmental Matters - Various national and state authorities
have  authority to regulate the  production  and  development of oil and gas and
mineral  properties  with  respect  to  environmental  matters.  Such  laws  and
regulations,  presently in effect or as hereafter promulgated, may significantly
affect the cost of the workover and development  activities  contemplated by the
Registrant  and could result in loss or liability to the Registrant in the event
that its operations are subsequently  deemed inadequate for purposes of any such
law or  regulation.  New  regulations,  if adopted,  could result in significant
capital expenditures by the Registrant, resulting in unprofitable operations.

Uncertainties Related to the Oil and Gas Business in General

                  The  Registrant's  operations  will be  subject  to all of the
risks normally  incident to the production of oil and gas,  including  blowouts,
pollution  and  fires.  Each of these  incidents  could  result  in damage to or
destruction of oil and gas wells or formations or

6

<PAGE>



production  facilities or damage to persons or property. As is common in the oil
and gas industry, the Registrant is not fully insured against these risks either
because  insurance is not available or because the Registrant has elected not to
insure due to prohibitive premium costs.

                  The  Registrant's  future oil and gas activities may involve a
significant  risk that  commercial oil or gas production will not be maintained.
The  costs  of  drilling,  completing  reworking  or  operating  wells  is often
uncertain.  Further, operations, may be curtailed or delayed as a result of many
factors,  weather conditions,  delivery delays, shortages of pipe and equipment,
and the availability of workover equipment.

                  The oil and gas  business  is  further  subject  to many other
contingencies which are beyond the control of the Registrant.  Wells may have to
be shut-in  because they have become  uneconomical  to operate due to changes in
the price of oil, depletion of reserves, or deterioration of equipment.  Changes
in the price of imported  oil,  the  discovery of new oil and gas fields and the
development of alternative  energy sources have had and will continue to have an
important effect on the Registrant's business.

Registrant's Joint Venture Interests

West Gharib Concession

         On April 27, 1998,  the Company,  through its wholly owned  subsidiary,
Drucker  Petroleum,  Inc. (DPI),  entered into a farm-in agreement to acquire an
undivided  20%  participating  interest  in the right to explore for and exploit
petroleum  in a  concession  located in West Gharib,  Gulf of Suez,  Egypt.  The
Agreement was amended on March 24, 1999.  The Agreement  provided that DPI shall
pay:

         1.  $352,000 within seven days of the execution of the agreement (paid)
         2.  pay 20%  of all  costs and  expenses  incurred  subsequent  to  the
execution of the agreement related to this concession
         3.  40% of the  costs  and  expenses associated  with the  drilling  of
first two exploratory wells exploratory well to a maximum cost to the Company of
$500,000;  thereafter,  DPI shall pay 20% of all costs and  expenses  associated
with any further  activity associated with the concession.
         4. In addition,  DPI provided a bank  guarantee  of  $2,000,000  within
seven  days  of the  execution  of the  agreement,  being  40%  of a  letter  of
guarantee.

         DPI has the right but not the  obligation to  participate in additional
wells in the West Gharib, Egypt  concession.  The Company has paid and performed
upon all its obligations under the Farm In Agreement.

         DPI's  interest  in this oil and gas  concession  is  subject to 7% net
profit interest  payable to a related  company,  after DPI has recovered all its
exploration and development  expenditures.  This company is related by virtue of
common directors.


7

<PAGE>



         Drucker   Petroleum,   Inc.,  a  wholly  owned  subsidiary  of  Drucker
Industries, Inc., holds the 20% interest.  Tanganyika Oil Company, Ltd., through
its wholly owned subsidiary,  Dublin International Petroleum (Egypt) Limited, is
the operator of the West Gharib block holding a 50% interest and GHP Exploration
(West Gharib) Ltd., a wholly owned subsidiary of  TransAtlantic  Petroleum (USA)
Corp. holds the remaining 30% interest.

         The  Hana-1  well  was  drilled  to a total  depth  of  7,415  feet and
production  casing was landed at 5,475 feet in order to evaluate the prospective
Middle Miocene Kareem  formation.  Logs run through casing indicate a gross sand
section  of 116  feet  with 60 feet of net  sand pay  which  is  believed  to be
hydrocarbon  bearing. The uppermost 20 feet of sand interval was perforated from
4,868 to 4,888 feet and the well  flowed oil to surface.  Typical  wells in this
region require  pumping  equipment to maximize  production  When assisted with a
nitrogen string set at 2,500 feet, the Hana-1 well flowed at rates averaging 500
barrels of oil per day at 25.8 degrees API gravity oil with zero water  content.
The Hana 2 stepout well was drilled in late 1999 and began production at 750 b/d
in late December 1999.

Algeria Minority Participation

Products,  Services,  Markets,  Methods of Distribution,  and Revenues.  Oil and
natural gas are presently the  principal  products  sought to be produced by the
Company.

     Oil productioon commenced in first quarter 2000.

         Working Capital Needs. The working capital needs of the company consist
primarily of:  investigation  activities,  acquisition  of prospect  acreage and
costs of  participation  in joint  ventures.  These  requirements  may be met by
private  placement of stock or loans or sale of working  interests.  The Company
may need to develop additional working capital for future operations.

Industry Segments

The  company's  industry  segment  is the oil and gas  industry.  The  company's
geographic segments are Canada, China, Algeria, and Egypt.

Algerian Concession

     By a letter of intent dated October 27, 1999,  the Company  acquired 10% of
the issued capital stock of Santa Catalina (Algeria) Ltd. ("Algeria  Concessions
SLM Algeria"),  a company which,  through its  wholly-owned  subsidiary,  Santa
Catalina L.H. Ludin (Algeria) Ltd. ("SLM Lundin"),  entered into an agreement to
acquire a 25%  participating  interest in an oil and gas  concession in Algeria.
Subject to SLM Ludin  earning its 25%  participating  interest,  the Company may
earn up to a 2.5%  indirect  interest  in the  property  by paying  SLM  Algeria
$625,000  (paid) to acquire 10% of its capital stock and by funding its pro-rata
share of SLM Ludin's  portion of the  drilling  and  general and  administrative
costs in excess of US$5,000,000 for testing and drilling of the first well.

     In order to  particpiate  in the  second  well,  the  Company  must pay SLM
Algeria $600,000.  The Company will then be responsible for their pro-rata share
of SLM  Lundin's  portion of the drilling  costs and general and  administrative
costs in excess of  $5,000,000  associated  with the drilling and testing of the
second well. This agreement is in effect for one year.


8

<PAGE>


<TABLE>
<CAPTION>



                                                                   December 31, 1999
                                     Canada             China       Egypt            Total
<S>                            <C>                 <C>           <C>             <C>
Identifiable Assets
Current                        $    1,887,666          $      -   $      -       $  1,887,666
                               --------------          --------   --------       ------------
Oil and gas projects                        -                 -    981,290          1,606,290
                               --------------          --------   --------       ------------
                               $    1,877,666          $      -   $981,290       $  3,493,956
                               ==============          ========   ========       ============

                                                                    December 31, 1998
                                     Canada             China         Egypt           Total


Identifiable Assets
Current                        $    2,771,380          $      -   $      -       $ 2,771,380
                               --------------          --------   --------       ------------
Oil and gas projects                        -           895,306    366,800         1,262,106
                               --------------          --------   --------       ------------
                               $    2,771,380           895,306   $366,800       $ 4,033,486
                               ==============          ========   ========       ============


                                                                 Year ended December 31,
                                                        1999               1998       1997
                                                        ====               ====       ====
Operations

Canada                                                 $(83,511)  $(24,867)        (116,019)
                                                       ---------  ---------        ---------
China                                                  ( 70,135)  (368,290)        (433,795)
Egypt                                                 ( 419,538)  (247,973)               -
                                                      ==========  =========        =========

                                                   $ (  573,184) $(641,130)        (549,814)
                                                   ============  ==========        =========


</TABLE>


         (3) Dependence on a Single Customer or a Few Customers.

                  a)       Revenues - None in 1999. The Company has no customers
                           at this time.
                  b)       Client Services revenues - none

                  During  the  five (5)  years  ending  December  31,  1999,  no
revenues were generated from client services.

         (4) Backlog of Orders. None at this time.

         (5)  Government Contracts.  None.

         (6)  Competitive  Conditions.  The  oil  and  gas  industry  is  highly
competitive.  The Company  faces  competition  from large numbers of oil and gas
companies,  public and private drilling programs and major oil companies engaged
in the acquisition,  exploration,  development and production of hydrocarbons in
all areas in which it may attempt to operate in the future. Many of the programs
and companies so engaged possess greater financial and personnel  resources than
the Company and therefore have greater  leverage to use in acquiring  prospects,
hiring  personnel  and  marketing  oil and gas.  Accordingly,  a high  degree of
competition  in these areas is expected to  continue.  The markets for crude oil
and natural gas production  have increased  substantially  in recent years.  Oil
prices have stabilized generally,

9

<PAGE>



but the world  market  for  crude  oil  should  be  considered  unstable  due to
uncertainty  in the  Mideast.  There is  considerable  uncertainty  as to future
production  levels of major oil producing  countries.  Significant  increases in
production  could  create  additional  downward  pressure on the price of oil. A
precipitous  drop in oil & natural gas prices in the futures market  occurred in
January 1986, and the Company could be adversely affected if further drops occur
in the future.

         In the past  surpluses in natural gas  supplies and other  factors have
combined to have a negative impact on the natural gas business.  Purchasers have
canceled  contracts or might propose to cancel contracts.  Other purchasers have
lowered the price they will pay for  unregulated  natural gas, which  previously
commanded premium prices. There is no assurance that the Company's revenues,  if
any ever develop, will not be adversely affected by these factors.

         Oil  concessions  in foreign  countries  are usually  controlled by the
Government,  which  subsequently  could impose taxes or restrictions at any time
which would make  operations,  if any,  unprofitable  and infeasible and cause a
write off of capital investment in oil and gas opportunities.

          The oil exploration situation is highly competitive. The Company faces
competition from large numbers of companies in any areas in which it may attempt
to operate in the future.  Many of the companies so engaged possess much greater
financial and personnel  resources  than the Company and therefore  have greater
leverage to use in  acquiring  participation  interests,  hiring  personnel  and
marketing.  Accordingly, a high degree of competition in these areas is expected
to continue.

         A number of factors,  beyond the Registrant's control and the effect of
which cannot be accurately predicted, affect the production and marketing of oil
and gas.  These  factors  include  crude oil  imports,  actions of  foreign  oil
producing   nations,   the   availability   of  adequate   pipeline   and  other
transportation  facilities, the marketing of competitive fuels and other matters
affecting the  availability  of a ready market,  such as fluctuating  supply and
demand.

         (7)  Registrant Sponsored Research and Development.  None.

         (8) Compliance with Environmental Laws and Regulations. The exploration
operations of the Company are subject to local, provincial and national laws and
regulations  in the  country  of Egypt  where the  Company is a  participant  in
drilling and production and in Algeria if any exploration is commenced there. To
date,  compliance  with these  regulations  by the  Company  has had no material
effect on the Company's operations,  capital, earnings, or competitive position,
and the cost of such compliance has not been material.  The Company is unable to
assess or predict at this time what effect such regulations or legislation could
have on its activities in the future.


10

<PAGE>



                  (a)  Local Regulation -

                  The Company cannot determine to what extent future  operations
and earnings of the Company may be affected by new legislation,  new regulations
or changes in existing regulations.

                  (b)  National Regulation -None.

                  The Company cannot determine to what extent future  operations
and earnings of the Company may be affected by new legislation,  new regulations
or changes in existing regulations.

                  The value of the Company's  investments  in the joint ventures
may  be  adversely  affected  by  significant  political,  economic  and  social
uncertainties  in the area of  interest.  Any  changes  in the  policies  by the
Government of the area of interest  could  adversely  affect the company area of
interest  by,  among  other  factors,   changes  in  laws,  regulations  or  the
interpretation   thereof,   confiscatory  taxation,   restrictions  on  currency
conversion,   imports   and   sources  of   supplies,   the   expropriation   or
nationalization of private  enterprises,  wars, or political  relationships with
other countries.

                  (c)  Environmental   Matters  -  None  at  the  date  of  this
registration statement.

                  (d) Other Industry  Factors - Oil and gas drilling  operations
are subject to hazards  such as fire,  explosion,  blowouts,  cratering  and oil
spills,  each of which could result in substantial  damage to oil and gas wells,
producing facilities, other property and the environment or in personal injury.

         (9) Number of Persons  Employed.  As of December 31, 1999,  the Company
had one full-time  consultant,  A. Ken Kow, Manager of Petroleum Operations at a
salary of 45,000  Candian  per month and a  part-time  employee  the  President,
Gerald William Funolfson, at no salary based in Vancouver, B.C.


11

<PAGE>



ITEM 2.  PROPERTIES

         (a)  Real Estate.          None

         (b)  Title to properties.          See item (1) below.

         (c)  Oil and Gas Drilling Activities.  The Company participated in two
         successful oil wells in West Gharib, Egypt in 1999.  (See "Business")

         (d)  Oil and Gas Production. None at year end.

         (e)  Oil and Gas Reserves.  None computed at year end.

         (f)  Present value of Estimated future Net Reserves From Proved
         Developed Oil and Gas Reserves.  None.

         (g)  Reserves Reported to Other Agencies. None.

         (h)  Natural Gas Gathering/Processing Facilities. None.

         (i)  Present Activities and Subsequent Events:

         Material Agreements

         (1)      West Gharib Concession

                  On April 27, 1998,  DPI entered  into a farm-out  agreement to
acquire an undivided 20% participating  interest in the right to explore for and
exploit petroleum in a concession  located in West Gharib,  Gulf of Suez, Egypt.
The Agreement was amended on March 24, 1999. The terms of the Agreement are that
DPI agreed to pay for a 20% interest:

         a.  $352,000 within seven days of the execution of the agreement (paid)
         b.  pay  20% of  all costs  and expenses  incurred  subsequent  to  the
execution of the agreement related to this concession
     c. 40% of the costs and expenses  associated with the drilling of first two
exploratory wells to a maximum cost to the Company of $500,000;  thereafter, DPI
shall pay 20% of all costs and  expenses  associated  with any further  activity
associated with the concession.
         d. In addition,  DPI provided a bank  guarantee  of  $2,000,000  within
seven days of the execution of the agreement.

                  DPI's interest in this oil and gas concession is subject to 7%
net profit interest payable to a related company, Richco Investors,  Inc., after
DPI has recovered all its exploration and development expenditures. This company
is related by virtue of common directors.


12

<PAGE>

     The Company has fully completed all its obligations under this Agreement.

         (2)     Algerian Concession

     By a letter of intent  dated  October 27,  1999,  DPA  acquired  10% of the
issued capital stock of Santa Catalina (Algeria) Ltd.  ("Algeria  Concession SLM
Algeria"), a company which, through its wholly-owned subsidiary,  Santa Catalina
L.H. Ludin (Algeria) Ltd. ("SLM Ludin"),  entered into an agreement to acquire a
25% participating  interest in an oil and gas concession in Algeria.  Subject to
SLM Ludin  earning  its 25%  participating  interest,  DPA may earn up to a 2.5%
indirect  interest  in the  property by paying SLM  Algeria  $625,000  (paid) to
acquire  10% of its capital  stock,  and by funding  its  pro-rata  share of SLM
Ludin's portion of the drilling and general and  administrative  costs in excess
of US $5,000,000 for testing and drilling of the first well.

     In  order to  participate  in the  second  well,  DPA must pay SLM  Algeria
$600,000.  DPA will then be responsible for their pro-rata share of SLM Lundin's
portion of the drilling costs and general and administrative  costs in excess of
$5,000,000  associated  with the drilling  and testing of the second well.  This
agreement is in effect for one year.

         (j)  Criteria:

         The Company  will  consider  the  following  criteria  when  evaluating
whether to participate in an oil and gas prospect in any area of interest:

                  1)       Geological and Seismic (when available) Data
                  2)       Market demand for products;
                  3)       Efficient transportation availability;
                  4)       Location;
                  5)       Weather;
                  6)       Management;
                  7)       Cost of participation;
                  8)       Terms;
                  9)       Risk vs. rewards;
                  10)      Feasibility study;
                  11)      Whether capital is available to fund participation.

ITEM 3.           LEGAL PROCEEDINGS

                  None at date of Registration Statement.

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

                  None in Fiscal Year ended December 31, 1999.


13

<PAGE>



                                     PART II

ITEM 5. MARKET FOR THE  REGISTRANT'S  COMMON STOCK AND RELATED  SECURITY  HOLDER
MATTERS

         The  Company's  common  stock is now  traded on the  "Over-the-Counter"
market on the National  Quotation Bureau or the NASD Electronic  Bulletin Board.
The following  table sets forth high and low bid prices of the Company's  common
stock for the three  (3)  years  ended  December  31,  1999,  1998,  and 1997 as
follows:

                                              Bid
                                     High             Low
1999
         First Quarter               .27               .17
         Second Quarter              .35               .175
         Third Quarter               .65               .135
         Fourth Quarter              5/8               .365

                                              Bid
                                     High             Low
1998
         First Quarter               .53               .24
         Second Quarter              .62               .18
         Third Quarter               .50               .14
         Fourth Quarter              .29               .17

                                              Bid
                                     High              Low
1997
         First Quarter               2 1/8             1 1/8
         Second Quarter              1 13/16           1
         Third Quarter               1.09              .65
         Fourth Quarter              .84               .31

         Such over the counter market  quotations  reflect  interdealer  prices,
without  retail  mark  up,  mark  down or  commission  and  may not  necessarily
represent actual transactions.

         (b)  As of December 31, 1999  the Company had 69 shareholders of record
of the common stock.

         (c) No dividends on outstanding  common stock have been paid within the
last two fiscal years, and interim  periods.  The Company does not anticipate or
intend upon paying dividends for the foreseeable future.

14

<PAGE>



ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         The information  presented  herein,  should be read in conjunction with
the Company's  consolidated  financial  statements  and related notes  appearing
elsewhere herein.

Selected Financial Information

<TABLE>
<CAPTION>

                                                    (A DEVELOPMENT STAGE COMPANY)
                                                   Fiscal Year Ended December 31,
                                            1999             1998              1997             1996              1995
                                            ----             ----              ----             ----              ----
<S>                                         <C>               <C>               <C>              <C>               <C>
         Income Statement Data:

         Revenues                           0                 0                 0                0                 0
         Cost of
          Revenues                          0                 0                 0                0                 0

         Gross Profit                       0                 0                 0                0                 0

         Exploration Expenses               489,673           616,263           433,795          0                 0

         General and
         Administrative
         Expenses                           218,441           182,405           247,566          3,118             46,004

         Income (loss)
         from
         operations                        (708,114)         (798,668)         (681,361)         0                 0

         Other income
         (expense)                          134,930           157,538           135,266          0                (33,451)

         Amortization of
         License Agreement                  0                 0                 0                0                 0
         (write off -1994)

         Income (loss)
         before income
         taxes                             (573,184)         (641,130)         (549,814)        (3,118)           (79,455)

         Provisions for
         income taxes                       0                 0                 0                0                 0

         Net income
         (loss) per       Greater
         common share     than             (.02)             (.02)             (.02)            (.00)             (.004)

         Average shares
         outstanding                       32,476,250        32,476,250        30,167,056      26,554,183        21,575,697


</TABLE>


15

<PAGE>

<TABLE>
<CAPTION>


                                    FY               FY                FY
                                    1999             1998              1997             1996              1995
                                    ----             ----              ----             ----              ----
<S>                                <C>               <C>              <C>               <C>               <C>
Balance Sheet Data:

Current Assets                     1,887,666         2,771,380        3,489,288         0                 0

Total                              3,493,956         0                4,033,486         50,802            0
Assets

Current                            81,109            47,455           137,341           53,327            37,407
Liabilities

Long-term debt,
net of current
Portion                            0                 0                0                 0                 0

Deficit Accum-
ulated during
Exploration
Stage                              (2,926,071)       (2,352,887)      (1,711,757)       (1,161,943)       (1,158,825)

Stockholders'
equity   (deficiency)              3,412,847         3,986,031        4,627,161         (2,525)           (37,407)


</TABLE>


MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND CHANGES IN
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The Company has no primary income source from oil producted  (commencing in
2000), as well as interest on deposits, other than interest on deposits, at this
time.  Capital  from  private  placements  or  borrowing  against  assets may be
required to fund future operations.  The company completed a private offering of
Units at $1.00 per share for $5,179,500, in May 1997.

     The Company had no operating  revenues  for the twelve month period  ending
December 31, 1999, but had interest income of $157,538.  The Company recommenced
limited  business  operations in late 1996,  and has incurred a significant  net
loss from operations in 1997 through 1999, resulting from costs of participation
in its joint oil exploration  venture in Peoples  Republic of China which it has
now  terminated  and its West Gharib,  Egypt joint  venture  participation.  The
Company may continue to show losses  resulting from joint venture  participation
for an indeterminate time. In 1997, the Company commenced regular operations and
has incurred significantly greater expenses which continued through 1999.

                  The Company incurred the following expenses in the past fiscal
year compared to the 1998 fiscal year.

16

<PAGE>

<TABLE>
<CAPTION>





                                                                      December 31,                       December 31,
                                                                              1998                               1999
<S>                                                                       <C>                                <C>
         OPERATING EXPENSES

         Accounting                                                        $44,651                            $40,011

         Consulting                                                         38,288                             54,436

         Foreign exchange (gain) loss                                        1,111                              1,866

         Interest and bank charges                                             619                              2,421

         Investor relations                                                  9,834                             28,118

         Legal                                                              12,104                             27,852

         Office and general                                                 29,957                             31,153

         Printing                                                                0                                  0

         Promotion                                                               0                                  0

         Rent                                                                8,020                              9,217

         Telephone                                                           2,718                                  0

         Transfer Agent                                                     11,042                              1,632

         Travel                                                                  0                             21,732

         Write-off of advances                                              24,061                                  0

         TOTAL OPERATING COSTS                                            $182,405                           $218,441
                                                                        =============                      ===========

</TABLE>


     It is expected that expenses may continue at a significantly increased rate
due  to  costs  of  development  of  its  oil   opportunities  and  implementing
exploration  pursuant  to joint  ventures.  In the event oil  exploration  joint
ventures  continue to be unsuccessful,  continued  significant  losses should be
anticipated.

                  Cash Flows:

                  The Company  has  achieved  no  revenues  from any  operations
during the year, ending December 31, 1999.

                  At this time, the Company is dependent upon its cash reserves,
interest income, private placements, or loans for future operations and funding.
When its cash  reserves are depleted,  it may have to either  borrow  money,  if
possible, or raise funds through subsequent

17

<PAGE>



public or private  offerings to continue  operations  until when, or if, it ever
develops sufficient revenue from its assets to maintain operations. If operating
losses continue at the same rates in the future as in 1998 and 1999, the Company
will  deplete  its cash  within the 2001  fiscal  year  absent  income  from oil
production or new investment capital. If revenues are not generated, the Company
will be forced to develop another line of business, or to finance its operations
through  borrowed  funds,  the sale of assets it has,  or enter into the sale of
stock for  additional  capital none of which may be feasible  when  needed.  The
Company has no specific management ability,  and no financial resources or plans
to enter any other business as of this date although the Company will be open to
suggestion and opportunity. Revenues from oil production have commenced in early
2000.

         CHANGES IN FINANCIAL CONDITION

         At year end 1999 the  Company's  assets  were  $3,493,956  compared  to
$4,033,486 at end of 1998.  The decrease was a result of continuing expenditures
for the exploration for drilling participations in Egypt.

     The  liabilities,   all  of  which  are  current   liabilities,   increased
significantly  as a result of accounts  payable  related to expenses for the oil
exploration  participation in Egypt. At year end 1999, current  liabilities were
$81,109 an increase of 85% over the 1998 year end liabilities of $47,455.

     Stockholders'  equity at year end 1999 was $3,412,847,  a decrease over the
1998 stockholder's equity of $3,986,031, resulting from losses on operations.

         From the aspect of whether the Company can continue toward its business
goal of  exploring  for oil,  the Company may use all of its  available  capital
without  generating  revenues.  Without revenues from oil production and without
continued  capital infusions or loans or a combination  thereof,  it is doubtful
that the Company can carry out its business goals  regarding any oil exploration
operations or  participations  for any extended  period beyond 2000. The Company
expects  significant  revenues  in  2000  from  the  participation  in  the  two
successful  oil wells in West Gharib,  Egypt.  First  revenues  were received in
first quarter 2000.

Results of Operations  for Year Ended  December 31, 1999 Compared to Same Period
in 1998

         The Company had no revenues from  Operations in 1999 or 1998.  However,
it had interest income of $134,930 in 1999 and $157,538 in 1998.

         The Company  participated  in two oil wells in the West  Gharib,  Egypt
area in 1999, both of which were completed as producers. Revenue from production
did not begin until year 2000 due to restricted  transportation from the locale.
The Company has a 20% working  interest in the two wells in West Gharib,  Egypt.
The  exploration  expenses  in 1999 on the wells were  $489,673  as  compared to
expenditures of $616,263 in 1998.

         The Company had general and administrative expenses of $218,441 in 1999
and $182,405 in such  expenses in 1998.  The largest  items of expenses for 1999
and 1998 are shown below.


18

<PAGE>



                                        1999                            1998
                                        ----                            ----
Accounting & Audit                     $40,011                           $44,651
Consulting                              54,436                            38,288
Investor Communications                 28,118                             9,834
Legal                                   27,852                            12,104
Office & General                        31,153                            29,957
Travel                                  21,735                            11,042

         The  increased  expenses for  consulting,  legal,  office/general,  and
travel are due to the  increased  activity  level of the Company in dealing with
its investment in the West Gharib, Egypt venture. The increased cost of investor
communications  results  from the  efforts of the  Company  to more  effectively
inform its shareholders of its business activities.

         The Company had a net loss on operations of ($708,114) in 1999 compared
to the net loss on operations in 1998 of ($798,668). The net loss after interest
income was  ($573,184) in 1999 and ($641,130) in 1998. The net loss per share in
1999 was ($.02) compared to ($.02) 1998.

<TABLE>
<CAPTION>

                              EXPLORATION EXPENSES

                                                                                  January 1,
                                                                                  1997 (date of
                                                                                  Inception of
                                                                                  Exploration
                                                                                  Stage) to
Nixgxia                                                                           December
Concession       West Gharib      1999 Total     1998 Total      1997 Total       31, 1999
-------------    -------------    ------------   -----------    -------------    ---------------
<S>              <C>             <C>            <C>             <C>             <C>
$70,135          $419,538        $489,673       $616,263        $433,793        $1,539,731

</TABLE>

Results of Operations for Year Ended December 31, 1998 as Compared to Year Ended
December 31, 1997

         The Company had no revenues from  operations in 1998;  however,  it had
interest  income  of  $157,538.  The  Company  had no  revenues  in 1997 but had
interest income of $135,266.

         In 1998,  the Company incurred  $182,405 in general and  administrative
expenses, a decrease from $247,566 in 1997. The Company had dry hole expenses of
$40,403 in 1998 compared to $147,281 in 1997. The Company  incurred  $575,860 in
exploration expenses in

19

<PAGE>



1998 as  compared  to $286,514  in  exploration  expenses  in 1997.  The Company
incurred a loss on  operations  of ($798,668) in 1998 as compared to the loss on
operations of $ ($685,080) in 1997.

         The Company incurred a net loss in 1998 of ($641,130) and in 1997 had a
net loss of ($549,814).  The net loss per share was ($.02) in 1998 and ($.02) in
1997.

LIQUIDITY

         The Company  expects that its need for liquidity  will increase for the
coming year due to its drilling expense  obligations on its Egyptian oil venture
participation

         Short Term.

         On a short term basis,  the Company  does not  generate  any revenue to
cover  operations.  Based on prior  experience,  the  Company  believes  it will
continue  to  have  insufficient   revenue  to  satisfy  current  and  recurring
liabilities. For short term needs the Company will be dependent on cash reserves
and revenues from oil production which commenced in 2000.

         The Company had current  assets of  $1,887,666 at December 31, 1999 and
had current liabilities of $81,109.

         Long Term.

         On a long-term basis,  the Company has no fixed assets and no long term
debt.  It did have at year end 1999 $1,867,417 in cash.

         The  Company  has no  business  at this  time from  which it  generates
income. Its operations have no net cash flow at this time. However, oil revenues
have begun from the two successful well participations in West Gharib, Egypt. It
is reliant  upon  success in its oil  exploration  ventures,  at this time,  for
possibility of future income, none of which are assured.

CAPITAL RESOURCES

         The primary capital  resources of the Company are its stock and cash on
deposit  only.  Stock may be illiquid  because it is  restricted  in an unproved
company with no income.

         As of the date of this report, the Company has material commitments for
capital  expenditures  within  the next year,  pursuant  to the  Egyptian  joint
ventures, which amounts may exceed its available capital of $1,887,666.

ITEM 7.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  The response to this Item is included as a separate Exhibit to
this report. Please see pages F-1 through F-11.

20

<PAGE>




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

                  a)  None

                  b)  In connection  with audits of two most recent fiscal years
and any interim period preceding  resignation,  no disagreements  exist with any
former  accountant  on any matter of accounting  principles or procedure,  which
disagreements if not resolved to the satisfaction of the former accountant would
have caused him to make  reference in connection  with his report to the subject
matter of the disagreement(s).

                  c)  The  principal   accountant's   report  on  the  financial
statements  for any of the past two years  contained  no  adverse  opinion  or a
disclaimer  of opinion nor was  qualified as to  uncertainty,  audit  scope,  or
accounting principles except for the "going concern" qualification.

                  d) The  decision  to change  accountants  was  approved by the
Board of Directors as the registrant has no audit committee.



21

<PAGE>



                                    PART III

ITEM 9.           DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         (a) The  following  table  furnishes  the  information  concerning  the
directors of the Company as of December 31, 1999.  The  directors of the Company
are elected every year and serve until their successors are elected and qualify.

Name                          Age      Title                               Term
----                          ---      -----                               ----
Gerald William Runolfson      59       President and Director             Annual

Ernest Cheung                 49       Secretary and Director             Annual

Patrick Pak Ling Chan         45       Director and Chairman              Annual

Joseph S. Tong                49       Director                           Annual

         The term of office for each  director is one (1) year, or until his/her
successor is elected at the Company's annual meeting and qualified.  The term of
office  for each  officer  of the  Company  is at the  pleasure  of the board of
directors.

         The board of directors has no  nominating,  auditing  committee but has
set up a compensation committee.  Therefore, the selection of person or election
to the board of directors was neither independently made nor negotiated at arm's
length.

         The term of office for each  director is one (1) year, or until his/her
successor is elected at the Company's annual meeting and qualified.  The term of
office  for each  officer  of the  Company  is at the  pleasure  of the board of
directors.

         (c)  Identification of Certain Significant Employees.

         There are no  employees  other than the  executive  officers  disclosed
above  who make,  or are  expected  to make,  significant  contributions  to the
business of the Company, the disclosure of which would be material.

         (d)  Family Relationships. None.

         (e)  Business Experience.

         The following is a brief account of the business  experience during the
past five years of each director and executive officer of the Company, including
principal  occupations  and  employment  during  that  period  and the  name and
principal  business  of any  corporation  or other  organization  in which  such
occupation and employment were carried on.

22

<PAGE>



                              MANAGEMENT EXPERIENCE

         Gerald  William  Runolfson,  President and  Director,  age 59, has been
President  and  Director  of the Company  since 1991.  He received a Bachelor of
Science in Civil Engineering in 1963 from University of Saskatchewan  Canada. He
studied Business  Administration  1970 - 1971 at University of Alberta,  Canada.
From 1988 to date,  he has been  President  of  International  Butec  Industries
Corp.,  Vancouver,  B.C. From 1991 to 1994 he was President of N-Viro  Recovery,
Inc.  From 1994 to present he has been  President  of Elkon  Products,  Inc.  of
Vancouver, B.C. He has been a Director of Horseshoe Gold Mines since 1991.

     Ernest Cheung,  Secretary and Director,  age 49, received an MBA in Finance
and  Marketing  from  Queen's  University,  in  Kingston,  Ontario in 1975,  and
obtained  a  Bachelors  Degree  in Math in 1973  from  University  of  Waterloo,
Ontario.  From 1984 to 1991 he was vice  President and  Director,  Capital Group
Securities,  Ltd. in Toronto, Canada. From 1991 to 1993 he was Vice President of
Midland Walwyn Capital,  Inc. of Toronto,  Canada. From 1993 to 1994 he was Vice
Chairman,  Tele Pacific  International  Communications Corp. of Vancouver,  B.C.
From 1994 - 1996 he was Vice President of Finance of BIT Integration Technology,
Inc. of Toronto,  Canada. From May 1995 to present he has served as President of
Richco Investors,  Inc. of Vancouver,  BC.

     From  1992-1995,  he served as a  Director  of Tele  Pacific  International
Communications  Corp.  (VSE).  He  has  also  served  as a  Director  of  Richco
Investors,  Inc.  (CDN) since  1995.  From  1995-1996,  he was a Director of BIT
Integration  Technology,  Inc.  (ASE).  Since  1997,  he has served and is still
serving as Director of the following  companies:  Agro  International  Holdings,
Inc. (VSE); Spur Ventures,  Inc. (VSE); Drucker Industries,  Inc. (NASD Bulletin
Board);  Xin Net Corp. (NASD Bulletin Board);  Speechlink  Communications  Corp.
(NASD);  Global-Pacific  Minerals,  Inc. (TSE); and Pacific E-Link Corp.  (VSE);
NetNation Communications, Inc. (Nasdaq small cap.).

         He has held a Canadian Securities license but is currently inactive. He
has been a Director of Registrant since January 1997.

         Patrick Pak Ling Chan, age 45, has been a Director of Registrant  since
January  1997 and is now  Chairman.  He  graduated  from  McGill  University  in
Montreal,  Quebec with a Bachelor of Commerce  in  Accounting  in 1977.  He is a
Chartered  Accountant in British Columbia (since 1980). From 1992 to 1993 he was
executive  assistance to the  Chairman,  Solid  Pacific  Enterprises,  a company
engaged in manufacturing and distribution of confectionery products in Hong Kong
and China.  From 1985 to 1992 he was  employed  at  Coopers & Lybrand,  Toronto,
Canada,  and  focused on mergers  and  acquisitions.  From 1993 to 1995 he was a
registered Securities Representative with Bache Securities.

     Joseph S. Tong,  age 49, has been a director of  Registrant  since  January
1997. Mr. Tong matriculated from La Salle College,  Kowloon,  Hong Kong in 1968.
From  1986  to  1990 he was a  Branch  Manager  for  Canadian  Imperial  Bank of
Commerce. From 1990 to 1994 he

23

<PAGE>



was Regional Manager,  Asian Banking,  Canadian Imperial Bank of Commerce.  From
1994 to 1995 he was President of China Growth Enterprises Corporation. From 1995
to present he has been a Director, Corporate Finance, of Corporate Capital Group
in Ontario,  Canada. He is currently a director of Agro International  Holdings,
Inc. of Vancouver,  B.C. since January 1997 and Global Pacific Minerals, Inc. of
Vancouver, B.C. since January 1997.

Directors Compensation

         Each member of the Board of Directors of the Company receives $1,000.00
plus  reasonable  outside travel  expenses for each Board meeting he attends and
for each Committee meeting he attends during the fiscal year.  Directors who are
also officers of the Company receive no compensation for services as a director.

ITEM 10.          EXECUTIVE COMPENSATION

         (a)  Cash Compensation.

         Compensation  paid by the Company for all services  provided during the
fiscal year ended  December 31,  1999,  (1) to each of the  Company's  five most
highly compensated  executive officers whose cash compensation  exceeded $60,000
and (2) to all officers as a group is set forth below under directors.


24

<PAGE>

<TABLE>
<CAPTION>


                                     SUMMARY COMPENSATION TABLE OF EXECUTIVES
                                            Annual Compensation                                  Awards

<S>                      <C>           <C>              <C>           <C>                       <C>                  <C>
Name and                 Year          Salary ($)       Bonus         Other Annual              Restricted           Securities
Principal                                               ($)           Compensation ($)          Stock                Underlying
Position                                                                                        Award(s)($)          Options/SARs(#)

Gerald                   1999          0                0             0                         0                    0
Runolfson,
President and
Director
                         1998          0                0             0                         0                    0

                         1997          0                0             0                         0                    0

Ernest Cheung,           1999          0                0             0                         0                    0
Secretary and
Director
                         1998          0                0             0                         0                    0

                         1997          0                0             0                         0                    0

Patrick Chan,            1999          0                0             0                         0                    0
Director

                         1998          0                0             0                         0                    0

                         1997          0                0             0                         0                    0

Joseph Tong,             1999          0                0             0                         0                    0
Director


                         1998          0                0             0                         0                    0

                         1997          0                0             0                         0                    0

</TABLE>


         (b)  Compensation Pursuant to Plans.  None.

         (c)  Other Compensation. None. No stock appreciation rights or warrants
exist to management

         (d) Compensation of Directors.

         Compensation  paid by the Company for all services  provided during the
fiscal year ended December 31, 1999 (1) to each of the Company's directors whose
cash  compensation  exceeded  $60,000 and (2) to all directors as a group is set
forth below:

                   DIRECTOR COMPENSATION FOR LAST FISCAL YEAR

(Except for  compensation of Officers who are also Directors which  Compensation
is listed in Summary Compensation Table of Executives)


25

<PAGE>

<TABLE>
<CAPTION>


                                    Cash Compensation                           Security Grants


Name                              Annual             Meeting          Consulting              Number          Number of Securities
                                  Retainer           Fees ($)         Fees/Other              of              Underlying
                                  Fees ($)                            Fees ($)                Shares(#)       Options/SARs(#)
<S>                               <C>                <C>              <C>                     <C>             <C>
A. Director                       0                  0                0                       0               0
Gerald Runolfson

B. Director                       0                  0                0                       0               0
Ernest Cheung

C. Director                       0                  0                0                       0               0
Patrick Chan

D. Director                       0                  0                0                       0               0
Joseph Tong

</TABLE>


         (e)  Termination of Employment and Change of Control Arrangements.
                  None

         (f)   EMPLOYEES' STOCK OPTIONS

Share Purchase Options

     Patrick Chan                                 550,000 shares (1)
     FKT Exploration Consultants, Ltd.            325,000 shares
     Ken K Consulting, Ltd.                       325,000 shares (2)
     Cobilco Inc.                                 550,000 shares (3)
     Lancaster Pacific Investment Ltd.            550,000 shares
     Gerry Runolfson                              300,000 shares (4)
     Yonderiche Int'l Consultants                 150,000 shares
     808719 Ont. Ltd.                             100,000 shares (5)
     Gemscor Management Ltd.                      100,000 shares (6)

The above  options  shall be 5 years in  length  to  expire on May 31,  2004 and
exercisable in whole or in part at US$0.40 per share.

(1)  Mr. Chan is Chariman of the Board of the Company.
(2)  Ken Kow is a paid consultant of the company.
(3)  Cobilco is owned by Raoul Tsakok, a director,  of Richco Investors, Inc., a
     major shareholder in the company.
(4)  Mr. Runolfson is President and director of the company.
(5)  808719 Ont., Ltd. is owned and controlled by Joe Tong, a director.
(6)  Gemscor Management, Ltd. is owned and controlled by Maurice Tsakok, a
     director of Richco Investors, Inc. a major shareholder of the Company.

         Section 16(a) of the  Securities  Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors,  and persons who
own more than 10% of a registered class of the Company's equity  securities,  to
file reports of ownership  and changes in ownership of equity  securities of the
Company  with the  Securities  and  Exchange  Commission  and NASDAQ.  Officers,
directors and  greater-than  10% shareholders are required by the Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) that they file. No officers,  directors or 10% shareholders have filed any
Reports pursuant to Section 16(a) at year end.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         (a)  Beneficial  owners  of  five  percent  (5)  or  greater,   of  the
Registrant's Common Stock and Warrants: No Preferred Stock is outstanding at the
date of this  offering.  The following  sets forth  information  with respect to
ownership  by holders of more than five  percent  (5%) of the  Company's  Common
Stock known by the Company based upon 32,476,250 shares  outstanding at December
31, 1999.


26

<PAGE>

<TABLE>
<CAPTION>


Title                      Name and                           Amount and                Percent
 of                        Address of                         Nature of                 of
Class                      Beneficial Owner                   Beneficial Interest       Class
-----                      ----------------                   -------------------       -------
<S>                        <C>                                <C>                       <C>
Common Stock               Richco Investors, Inc.             9,225,000(1)(2)           28.4%
                           789 West Pender St. #830
                           Vancouver, B.C. Canada V6C 1H2

         b) The following sets forth  information  with respect to the Company's
Common  Stock  beneficially  owned  by each  Officer  and  Director,  and by all
Directors and Officers as a group.  (Table does not include  options  granted to
officers and directors. See Item 10(f) Employee Stock Options.)

         Title             Name of                            Amount and                Percent
         of                Beneficial                         Nature of                 of
         Class             Owner                              Beneficial Ownership      Class
         -----             -----                              --------------------      -----
         Common            Gerald Runolfson                   512,501 (a)(b)            1.5%
                           President and Director
                           4151 Rose Crescent
                           West Vancouver, B.C. Canada

                  (a)      Porta-Pave Industries, Inc. (company owned
                           by Runolfson family)                                         380,002
                  (b)      Gerald Runolfson, individually                               132,499
                                                                                        512,501

         Title             Name of                            Amount and                Percent
         of                Beneficial                         Nature of                 of
         Class             Owner                              Beneficial                Class
         -----             -----                              Ownership                 -----
                                                              ---------
         Common            Ernest Cheung                      9,225,000(1)(2)           28.4%
                           Secretary and Director
                           6091 Richards Drive
                           Richmond, B.C. Canada
                           V7C 5R2

         Common            Patrick Chan                       0                         0%
                           Director and Chairman
                           #7 Conduit Road, Flat 6E
                           Hong Kong

         Common            Joseph Tong, Director              0                         0%
                           33 Allview Crescent
                           North York, Ont., Canada
                           M2J 2R4


27

<PAGE>



         Officers and Directors as a Group                    9,737,501                 29.98%

</TABLE>

     (1) 9,225,000  shares are owned by Richco  Investors,  Inc. of which Ernest
Cheung is a director, officer and shareholder.

         (2)  Richco  Investors,  Inc.  is  beneficially  owned by Raoul  Tsakok
through ownership of 50%+ shares of common stock of Richco Investors, Inc.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Certain Transactions

         The  Company's  interest  in the  West  Gharib  Egyptian  oil  and  gas
concession is subject to a 7% net profit interest  payable to a related company,
Richco  Investors,  Inc.,  beneficially  owned by Ernest  Cheung,  director  and
secretary,  after  DPI has  recovered  all of its  exploration  and  development
expenditures. This company is related by virtue of common directors.

         Oil and gas project costs - advances to (due from) project are advanced
to companies with a common director. These advances are unsecured,  non-interest
bearing and have no specific terms for repayment.

         The Company was charged the following expenses by a related company:


                                1999                   1998               1997
                                ----                   ----               ----
Consulting                 $                          $     -          $       -
Office & general                     13,785                 -
Rent                                  8,020                 -
                         -------------------------------------------------------
                                                      $21,805                  -
                         =======================================================

         This company was related by virtue of common directors.

     Certain employees, officers, directors, and affiliates were granted options
in November 1999. The options are exercisable at $.40 per share and extend until
May 31, 2004.

     1. Mr. Chan,  who is Chairman of the Board of the  Company,  was granted an
option for 550,000 shares.

     2. Ken Kow is a paid consultant of the Company and received a 325,000 share
option.

     3. Cobilco is owned by Raoul Tsakok, a director, of Richco Investors, Inc.,
a majority  shareholder  in the  company.  Cabilco  was  granted a 550,00  share
option.

     4. Mr.  Runolfson is President  and director of the Company.  He received a
300,000 share option.

     5. 808719 Omt.,  Ltd. is owned and  controlled by Joe Tong, a director.  It
received a 100,000 share option.

     6. Gemscor  Managment,  Ltd. is onwed and controlled by Maurice  Tsakok,  a
director of Richco Investors,  Inc. a major  shareholder of the Company.  It was
awarded a 100,000 share option.



28

<PAGE>



ITEM 13.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
                  ON FORM 8-K

                  (a)  Financial   Statements  and   Schedules.   The  following
financial statements and schedules for Drucker Industries,  Inc., as of December
31, 1999 and 1998 are filed as part of this report.

<TABLE>
<CAPTION>

                                                                                                 Page
<S>      <C>                                                                                     <C>
         (1)      Financial statements of Drucker Industries, Inc:

                  Reports of Independent Accountants, Amisano & Hanson
                  for years ended December 31, 1999 and December 31, 1998                        F-1
                  Balance Sheets                                                                 F-2
                  Statements of Operations                                                       F-3
                  Statements of Shareholders' Equity                                             F-4 - F-6
                  Statements of Cash Flow                                                        F-7
                  Schedule of General and Administrative expenses                                Schedule #1
                  Schedule of Dry Hole expenses                                                  Schedule #2
                  Schedule of Exploration expenses                                               Schedule #3
                  Notes to Financial Statements                                                  F-8 - F-11

         (2)      Financial Statement Schedules:
                  (a)      None
                  (b)      Reports on Form 8-K: None
                  (c)      Exhibits


</TABLE>

Item No.
(under 601)
4.1               Articles of Incorporation and By-Laws: Incorporated by
                  Reference as filed with Form 10 with the Securities and
                  Exchange Commission

10.1              West Gharib Egypt Joint Operating Agreement: Incorporated by
                  Reference to 10KSB for period ended 12/31/98

                  West Gharib Block Operating/Technical Committee meeting March
                  1999 Resolution: Incorporated by Reference to 10KSB for period
                  ended 12/31/98

10.2              West Gharib Block Operating/Technical Committee meting March
                  1999 Resolution: Incorporated by Reference to 10KSB for period
                  ended 12/31/98

10.3              Farmout Agreement:  Incorporated by Reference to 10KSB for
                  period ended 12/31/98


29

<PAGE>



10.4              Concession Agreement - West Gharib:  Incorporated by Reference
                  to 10KSB for period ended 12/31/98

10.5              Algeria Farm In Agreement


30

<PAGE>



                                   SIGNATURES

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

DATE     April 18, 2000                    DRUCKER INDUSTRIES, INC.


                                                 /s/ Gerald Runolfson
                                            By: --------------------------------
                                                     Gerald Runolfson, President

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Gerald Runolfson
----------------------           President                  April 18, 2000
Gerald Runolfson                 and Director

/s/ Ernest Cheung
----------------------           Secretary                  April 18, 2000
Ernest Cheung                    and Director

/s/ Patrick Pak Ling Chan
----------------------           Director                   April 18, 2000
Patrick Pak Ling Chan

/s/ Joseph S. Tong
----------------------           Director                   April 18, 2000
Joseph S. Tong


31


<PAGE>


                            DRUCKER INDUSTRIES, INC.

                         (An Exploration Stage Company)

                  REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 1999 and 1998

                            (Stated in U.S. dollars)




<PAGE>



TERRY AMISANO LTD.                                               AMISANO  HANSON

KEVIN HANSON, C.A.                                         CHARTERED ACCOUNTANTS

                                AUDITORS' REPORT
To the Stockholders,
Drucker Industries, Inc.


We have audited the consolidated  balance sheets of Drucker Industries,  Inc. as
at December 31, 1999 and 1998 and the  statements of  operations,  stockholders'
equity  and cash  flows  for each of the years in the three  year  period  ended
December 31, 1999 and for the period from  inception of the  exploration  stage,
January  1, 1997 to  December  31,  1999.  These  financial  statements  are the
responsibility of the company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards  require that we plan and perform an audit to obtain
reasonable  assurance  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.

In our opinion,  these consolidated  financial statements present fairly, in all
material respects, the financial position of the company as at December 31, 1999
and 1998 and the results of its  operations and cash flows for each of the years
in the three  year  period  ended  December  31,  1999 and for the  period  from
inception of the  exploration  stage,  January 1, 1997 to December 31, 1999,  in
accordance with generally accepted accounting principles in the United States.


Vancouver, Canada                                               "AMISANO HANSON"
March 10, 2000                                             Chartered Accountants

       Suite 604 - 750 West Pender Street, Vancouver, BC, Canada, V6C 2T7

                                                  Telephone:    (604) 689-0188
                                                  Facsimile:    (604) 689-9773
                                                  E-MAIL:       amishan@istar.ca





<PAGE>
<TABLE>
<CAPTION>


                                              SEE ACCOMPANYING NOTES
                                             DRUCKER INDUSTRIES, INC.
                                          (An Exploration Stage Company)
                                            CONSOLIDATED BALANCE SHEETS
                                            December 31, 1999 and 1998
                                             (Stated in U.S. dollars)


                                                     ASSETS                        1999                 1998
                                                     ------                        ----                 ----
<S>                                                                          <C>                  <C>
Current
   Cash and cash equivalents - Note 3                                        $      1,867,417     $      2,763,628
   Accrued interest receivable                                                         10,958                5,483
   Prepaid expenses                                                                     1,089                2,269
   Advances receivable                                                                  8,202                    -

                                                                                    1,887,666            2,771,380
Oil and gas projects - Notes 4 and 6                                                1,606,290            1,262,106

                                                                             $      3,493,956     $      4,033,486

                                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current
   Accounts payable and accrued expenses                                     $         81,109     $         47,455

Stockholders' Equity - Notes 5 and 10
   Common stock $.001 par value, authorized 50,000,000 shares:
    32,476,250 shares issued and outstanding                                           32,115               32,115
Additional paid-in capital                                                          6,306,803            6,306,803
Deficit accumulated during the exploration stages                               (   2,926,071)       (   2,352,887)

Total stockholders' equity                                                          3,412,847            3,986,031

                                                                             $      3,493,956     $      4,033,486

Nature of Operations - Note 1
Commitment - Note 5
Subsequent Event - Note 10


</TABLE>







APPROVED BY THE BOARD:




 "Gerry Runolfson"                                "Ernest Cheung"
-------------------------, Director         --------------------------, Director


                             SEE ACCOMPANYING NOTES

<PAGE>
<TABLE>
<CAPTION>


                                             DRUCKER INDUSTRIES, INC.
                                          (An Exploration Stage Company)
                                       CONSOLIDATED STATEMENTS OF OPERATIONS
                               for the years ended December 31, 1999, 1998 and 1997
                           and January 1, 1997 (Date of Inception of Exploration Stage)
                                               to December 31, 1999
                                             (Stated in U.S. dollars)


                                                                                                   January 1, 1997
                                                                                                      (Date of
                                                                                                    Inception of
                                                                                                     Exploration
                                                                                                      Stage) to
                                                           Year ended December 31,                  December 31,
                                                   1999              1998              1997             1999
                                                   ----              ----              ----             ----
<S>                                          <C>               <C>               <C>              <C>
Interest income                              $  (    134,930)  $  (    157,538)  $  (    135,266) $  (    427,734)

General and administrative expenses
 - Schedule 1                                        218,441           182,405           247,566          648,412

Fiscal agent fees                                          -                 -             3,719            3,719

Exploration expenses - Schedule 2                    489,673           616,263           433,795        1,539,731

Net loss                                     $  (    573,184)  $  (    641,130)  $  (    549,814) $  (  1,764,128)

Net loss per share                           $  (      0.02)   $  (      0.02)   $  (      0.02)

Weighted average shares outstanding               32,476,250        32,476,250        30,167,056

</TABLE>


                             SEE ACOMPANYING NOTES



<PAGE>
<TABLE>
<CAPTION>



                                                DRUCKER INDUSTRIES, INC.
                                             (An Exploration Stage Company)
                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                  for the years ended December 31, 1989 to December 31,
                           1999 and February 4, 1971 (Date of Inception) to December 31, 1999
                                                (Stated in U.S. dollars)

                                                                                                              Deficit
                                                                                            Additional      Accumulated
                                                                    Common Stock             Paid-in          During
                                                             Shares           Amount         Capital     Exploration Stages   Total
<S>                                                               <C>          <C>         <C>           <C>             <C>
Shares issued to acquire Monetary Metals, Inc.                       675,000   $   675     $ (   675)    $       -       $         -
Shares  issued to  acquire  net  assets of  Drucker  Sound
 Design Corporation                                                2,700,000     2,700        65,046             -           67,746
Net loss from inception to December 31, 1989                               -         -             -     $ ( 8,115)       (   8,115)
Net loss for year ended December  31, 1990                                 -         -             -      (144,333)        (144,333)
Five for one forward split of outstanding shares                  13,500,000    13,500       (13,500)            -                -
Funds contributed by stockholder                                           -         -       124,196             -          124,196
Sale of units for cash, September 1991                             1,050,000     1,050       103,950             -          105,000
Sale of units for cash, December 1991                                750,000       750        74,250             -           75,000
Shares issued to settle debts                                         52,500        53         5,197       ( 5,250)               -
Shares issued to directors as compensation                           450,000       450        44,550       (45,000)               -
Correct funds contributed to stockholders                                  -         -       (24,990)            -         ( 24,990)
Interest on note payable                                                   -         -             -       ( 7,370)        (  7,370)
Net loss for year ended December 31, 1991                                  -         -             -       (38,417)        ( 38,417)

Balance, December 31, 1991, as previously reported                19,177,500    19,178       378,024      (248,485)         148,717
Adjustments to previously reported amounts:
   Fiscal agent fees                                                       -         -       (18,000)      ( 7,300)        ( 25,300)

Balance, December 31, 1991, as restated                           19,177,500    19,178       360,024      (255,785)         123,417

Sale of common stock, March 1992                                     700,000       700        69,300             -           70,000
Sale of common stock, September 1992                                 500,000       500        54,500             -           55,000
Net loss for year ended December 31, 1992                                  -         -             -       (78,078)         (78,078)

Balance, December 31, 1992, as previously reported                20,377,500    20,378       483,824      (333,863)         170,339
Adjustments to previously reported amounts:
   Fiscal agent fees                                                       -         -       (12,500)      (20,600)        ( 33,100)

Balance, December 31, 1992, as restated                           20,377,500    20,378       471,324      (354,463)         137,239

                                                                                                          .../cont'd.

</TABLE>


                             SEE ACCOMPANYING NOTES

<PAGE>
<TABLE>
<CAPTION>


                                                DRUCKER INDUSTRIES, INC.
                                             (An Exploration Stage Company)
                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                  for the years ended December 31, 1989 to December 31,
                           1999 and February 4, 1971 (Date of Inception) to December 31, 1999
                                                (Stated in U.S. dollars)


                                                                                                           Deficit
                                                                                        Additional        Accumulated
                                                                  Common Stock           Paid-in            During
                                                           Shares            Amount      Capital      Exploration Stages     Total
<S>                                                       <C>                <C>        <C>            <C>                 <C>
Balance forward, December 31, 1992, as restated           20,377,500         20,378       471,324      (   354,463)         137,239

Net loss for the year ended December 31, 1993                      -              -             -      (   134,081)        (134,081)

Balance, December 31, 1993                                20,377,500         20,378       471,324      (   488,544)           3,158

Adjustment to previously reported amounts:
   Fiscal agent fees                                               -              -             -      (    27,280)        ( 27,280)

Balance, December 31, 1993, as restated                   20,377,500         20,378       471,324      (   515,824)        ( 24,122)

Sale of common stock, July, 1994                             200,000            200        29,800                -           30,000

Fiscal agent fees                                                  -              -       ( 3,000)               -         (  3,000)

Net loss for the year ended December 31, 1994                      -              -             -      (   563,546)        (563,546)

Balance, December 31, 1994                                20,577,500         20,578       498,124      ( 1,079,370)        (560,668)

Shares issued to settle debts                              5,976,683          5,977       596,739                -          602,716

Net loss for the year ended December 31, 1995                      -              -             -      (    79,455)        ( 79,455)

Balance, December 31, 1995                                26,554,183         26,555     1,094,863      (1,158,825)         ( 37,407)

Shares issued to settle debts                                380,002            380        37,620                -           38,000

Net loss for the year ended December 31, 1996                      -              -             -     (      3,118)        (  3,118)

Balance, December 31, 1996                                26,934,185         26,935     1,132,483     (  1,161,943)        (  2,525)


</TABLE>

                                                                   .../cont'd.


<PAGE>
<TABLE>
<CAPTION>


                                                DRUCKER INDUSTRIES, INC.
                                             (An Exploration Stage Company)
                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                  for the years ended December 31, 1989 to December 31,
                           1999 and February 4, 1971 (Date of Inception) to December 31, 1999
                                                (Stated in U.S. dollars)

                                                                                                  Deficit
                                                                               Additional       Accumulated
                                                        Common Stock           Paid-in            During
                                                    Shares          Amount     Capital      Exploration Stages         Total
<S>                                                 <C>             <C>        <C>          <C>              <C>
Balance forward, December 31, 1996                  26,934,185       26,935     1,132,483    (1,161,943)        (      2,525)

Sale of common stock, May, 1997                      5,179,500        5,180     5,174,320             -            5,179,500

Shares issued for finder's fee                         362,565            -             -             -                    -

Net loss for the year ended December 31, 1997                -            -             -    (  549,814)        (    549,814)

Balance, December 31, 1997                          32,476,250       32,115     6,306,803    (1,711,757)           4,627,161

Net loss for the year ended December 31, 1998                -            -             -    (  641,130)        (    641,130)

Balance, December 31, 1998                          32,476,250       32,115     6,306,803    (2,352,887)           3,986,031

Net loss for the year ended December 31, 1999                -            -             -    (  573,184)        (    573,184)

Balance, December 31, 1999                          32,476,250      $32,115    $6,306,803   $( 2,926,071)    $     3,412,847


</TABLE>


                             SEE ACCOMPANYING NOTES

<PAGE>
<TABLE>
<CAPTION>






                                                DRUCKER INDUSTRIES, INC.
                                             (An Exploration Stage Company)
                                          CONSOLIDATED STATEMENTS OF CASH FLOW
                                  for the years ended December 31, 1999, 1998 and 1997
                              and January 1, 1997 (Date of Inception of Exploration Stage)
                                                  to December 31, 1999
                                                (Stated in U.S. dollars)

                                                                                                    January 1, 1997
                                                                                                   (Date of Inception
                                                                                                     of Exploration
                                                                                                       Stage) to
                                                               Year ended December 31                 December 31,
                                                        1999           1998            1997               1999
                                                        ----           ----            ----               ----
<S>                                                <C>            <C>             <C>             <C>
Cash flow from operating activities:
   Net loss                                        $ (   573,184) $ (   641,130)  $ (   549,814)  $ (   1,764,128)
   Add items not affecting cash:
     Capital assets written-off                                -         40,288               -            40,288
     Write-off of advances                                     -         31,285               -            31,285
     Project advances written-off                         35,427              -               -            35,427

                                                     (   537,757)   (   569,557)    (   549,814)    (   1,657,128)
   Net changes in non-cash working
    capital items related to operations:
    Accrued interest receivable                      (     5,475)   (     5,483)              -     (      10,958)
    Prepaid expenses                                       1,180    (     2,269)              -     (       1,089)
    Advances receivable                              (     8,202)       250,709     (   250,709)    (       8,202)
    Accounts payable and accrued expenses                 33,654    (    39,084)         84,014            78,584

Net cash used in operating activities                (   516,600)   (   365,684)    (   716,509)    (   1,598,793)


Cash flow used in investing activity
   Oil and gas project costs                         (   379,611)   (    58,462)    ( 1,224,415)    (   1,662,488)

Net cash provided by (used in) investing
 activity                                            (   379,611)   (    58,462)    ( 1,224,415)    (   1,662,488)

Cash flow from financing activities:
   Proceeds from sale of common stock                          -              -       5,179,500         5,179,500
   Advance payable                                             -    (    50,802)              -     (      50,802)

Net cash provided by (used in )
 financing activities                                          -    (    50,802)      5,179,500         5,128,698

Net increase (decrease) in cash                      (   896,211)   (   474,948)      3,238,576         1,867,417
Cash and cash equivalents, beginning of period         2,763,628      3,238,576               -                 -

Cash and cash equivalents, end of period           $   1,867,417  $   2,763,628   $   3,238,576   $     1,867,417

Cash and cash equivalents consist of:
   Cash                                            $     186,417  $      63,628   $      39,948   $       186,417
   Term deposit                                        1,681,000      2,700,000       3,198,628         1,681,000

                                                   $   1,867,417  $   2,763,628   $   3,238,576   $     1,867,417


</TABLE>

Supplemental disclosures of cash flows:
Stock issued for payment of accounts payable in 1996 - $38,000 (1995:  $243,716)
Stock issued for payment of promissory note in 1995 - $359,000


                             SEE ACCOMPANYING NOTES

<PAGE>
<TABLE>
<CAPTION>


                                                                                                        Schedule 1
                                                DRUCKER INDUSTRIES, INC.
                                             (An Exploration Stage Company)
                              CONSOLIDATED SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
                                for the years ended December 31, 1999, 1998 and 1997 and
                                January 1, 1997 (Date of Inception of Exploration Stage)
                                                  to December 31, 1999
                                                 (Stated in US Dollars)


                                                                                                   January 1, 1997
                                                                                                      (Date of
                                                                                                    Inception of
                                                                                                     Exploration
                                                                                                      Stage) to
                                                                                                    December 31,
                                                   1999              1998              1997             1999
                                                   ----              ----              ----             ----
<S>                                          <C>               <C>               <C>              <C>
Accounting and audit fees                    $        40,011   $        44,651   $         9,539  $        94,201
Advances written-off - Note 6                              -            24,061                 -           24,061
Consulting - Note 6                                   54,436            38,288            32,185          124,909
Foreign exchange                                       1,866             1,111      (        778)           2,199
Investor communication costs                          28,118             9,834            46,689           84,641
Interest and bank charges                              2,421               619               406            3,446
Legal                                                 27,852            12,104            59,795           99,751
Office and general                                    31,153            29,957            46,576          107,686
Rent                                                   9,217             8,020             7,376           24,613
Transfer agent fees                                    1,632             2,718                 -            4,350
Travel                                                21,735            11,042            45,778           78,555

                                             $       218,441   $       182,405   $       247,566  $       648,412

</TABLE>


                             SEE ACCOMPANYING NOTES

<PAGE>
<TABLE>
<CAPTION>


                                                                                                        Schedule 2
                                                DRUCKER INDUSTRIES, INC.
                                             (An Exploration Stage Company)
                                      CONSOLIDATED SCHEDULE OF EXPLORATION EXPENSES
 for the years ended December 31, 1999, 1998 and 1997 and January 1, 1997 (Date of Inception of Exploration Stage)
                                                  to December 31, 1999
                                                 (Stated in US Dollars)
                                                                                                      January 1, 1997
                                                                                                          (Date of
                                                                                                        Inception of
                                                                                                        Exploration
                                                                                                         Stage) to
                                  Ningxia        West          1999           1998          1997        December 31,
                                Concession      Gharib         Total         Total          Total           1999
                                ----------      ------         -----         -----          -----           ----
<S>                            <C>           <C>           <C>           <C>            <C>           <C>
Administration                 $          -  $     76,266  $     76,266  $     40,529   $      9,657  $       126,452
Amortization                              -             -             -         7,901         12,968           20,869
Audit                                     -             -             -         4,246          5,000            9,246
Consulting                                -             -             -             -         10,875           10,875
Consumables                               -        77,924        77,924        30,072              -          107,996
Development costs                         -         4,139         4,139             -              -            4,139
Drilling                                  -       167,965       167,965           420              -          168,385
Entertainment                             -             -             -         4,752          9,816           14,568
Geological/geophysical                    -        70,157        70,157       164,940              -          235,097
Insurance (rebate)                        -             -             -     (   2,611)         5,256            2,645
Office Supplies                           -             -             -            64          6,272            6,336
Other                                     -             -             -         3,237          7,526           10,763
Project advances written-off         65,406             -        65,406        31,285              -           96,691
Rent                                      -             -             -         7,908            918            8,826
Repairs and maintenance                   -             -             -           629          1,983            2,612
Surveying and testing                     -             -             -       242,600        262,982          505,582
Telephone                                 -             -             -         2,567          3,375            5,942
Travel                                4,729             -         4,729         4,668         62,718           72,115
Wages and benefits                        -        23,087        23,087        43,948         34,449          101,484
Capital assets written-off                -             -             -        40,288              -           40,288
Interest income                           -             -             -     (   7,614)             -     (      7,614)
Other income                              -             -             -     (   3,566)             -     (      3,566)

                               $     70,135  $    419,538  $    489,673  $    616,263    $   433,795  $     1,539,731


</TABLE>


                             SEE ACCOMPANYING NOTES


<PAGE>


                            DRUCKER INDUSTRIES, INC.
                         (An Exploration Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998
                            (Stated in U.S. dollars)


Note 1        Nature of Operations

              The  company  currently  is in the  business  of  exploration  and
              development of oil and gas properties in Egypt and Algeria.

              The company  was  incorporated  in Idaho on  February 4, 1971,  as
              Monetary  Metals,  Inc. On December 14, 1989, the company acquired
              all the net assets of Drucker Sound  Design,  Inc. in exchange for
              2,700,000 shares  (13,500,000 shares after split) of common stock.
              On December  30,  1989,  the  company  changed its name to Drucker
              Sound Design,  Inc., and on June 19, 1990, the company changed its
              domicile to Delaware.  On September 5, 1991,  the company  changed
              its name to  Drucker  Industries,  Inc.,  and  forward  split  the
              outstanding shares of common stock on the basis of five for one.

              The company is in the  exploration  stage and is in the process of
              exploring  its  resource  properties  and has  not yet  determined
              whether these  properties  contain  reserves that are economically
              recoverable.  The  recoverability  of amounts  shown for  resource
              properties  is  dependent  upon  the  discovery  of   economically
              recoverable reserves and confirmation of the company's interest in
              the  underlying  properties,  the ability of the company to obtain
              necessary financing to satisfy the expenditure  requirements under
              resource  property  agreements and to complete the  development of
              the properties,  and upon future profitable production or from the
              sale thereof.

Note 2        Summary of Significant Accounting Policies

              The  consolidated  financial  statements  of the company have been
              prepared  in  accordance   with  generally   accepted   accounting
              principles in the United States.  Because a precise  determination
              of many assets and  liabilities  is dependent  upon future events,
              the preparation of financial  statements for a period  necessarily
              involves the use of estimates  which have been made using  careful
              judgement. Actual results may vary from these estimates.

              The  consolidated   financial  statements  have,  in  management's
              opinion  been  properly   prepared  within  reasonable  limits  of
              materiality and within the framework of the significant accounting
              policies summarized below:

              Principles of Consolidation

              These  consolidated  financial  statements include the accounts of
              Drucker  Industries,  Inc.  and  its  wholly-owned   subsidiaries,
              Drucker  Petroleum Inc. ("DPI") and  Drucker  Petroleum  (Algeria)
              Inc. ("DPA").  DPI and DPA were incorporated by the company in the
              British  Virgin  Islands on April 16, 1998 and September 22, 1999,
              respectively. All inter-company transactions have been eliminated.

              Exploration Stage Company

              The  company  is  an  exploration  stage  company  as  defined  in
              Statement  of  Financial   Accounting  Standards  No.  7  and  the
              Securities  and  Exchange  Commission's  Exchange Act Guide 7. The
              company is devoting  substantially  all of its present  efforts to
              the  business  of  exploration  and  development  of oil  and  gas
              properties  in Egypt and  Algeria.  For the  purposes of providing
              cumulative amounts for the statements of operations and cash flow,
              these  amounts  consider  only those  losses  for the period  from
              January  1, 1997 to  December  31,  1999,  the period in which the
              company has undertaken a new exploration stage activity.


<PAGE>

DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in U.S. dollars)

Note 2        Summary of Significant Accounting Policies - (cont'd)

              Oil and Gas Project Costs

              The company  follows the  successful  efforts method of accounting
              for its oil and gas  properties.  Under this  method,  the initial
              acquisition   costs  and  the  costs  of  drilling  and  equipping
              development   wells,  are  capitalized.   The  costs  of  drilling
              exploratory  wells are initially  capitalized and, if subsequently
              determined  to be  unsuccessful,  are charged to operations as dry
              hole expenses.  Costs and reserves of properties are aggregated by
              country. All other exploration expenditures,  including geological
              and geophysical  costs and annual rentals on exploration  acreage,
              are charged to operations as incurred.  Lease  acquisition  costs,
              subsequently  determined  to be impaired in value,  are charged to
              operations.

              No gains or losses are  recognized on the sale or  disposition  of
              oil and gas properties except when there is a material disposition
              of reserves of a country.  All other proceeds are credited against
              the cost of the related properties.

              Depletion  of the net  capitalized  costs of  producing  wells and
              leases is charged to operations on the unit-of-production  method,
              by country, based upon estimated proved reserves.

              Investments in a company that is organized for the sole purpose of
              holding an indirect  interest in oil and gas  concessions and such
              investment  is less than a 20%  investment  is accounted for under
              the above noted oil and gas project costs policy.

              Environmental Costs

              Environmental  expenditures that relate to current  operations are
              expensed or capitalized as appropriate.  Expenditures  that relate
              to an existing  condition caused by past operations,  and which do
              not  contribute  to  current  or future  revenue  generation,  are
              expensed.  Liabilities are recorded when environmental assessments
              and/or  remedial  efforts  re  probable,   and  the  cost  can  be
              reasonably  estimated.  Generally,  the  timing of these  accruals
              coincides with the earlier of:

              i)  completion of a feasibility study;  or

              ii) the company's commitment to a plan of action based on the then
                  known facts.

              Income Taxes

              The company  uses the  liability method of  accounting  for income
              taxes pursuant to Statement of Financial Accounting Standards, No.
              109 "Accounting for Income Taxes".

              Net Loss Per Share

              Net loss per  share is based on the  weighted  average  number  of
              common shares outstanding during each year.

              Values

              The amounts shown for oil and gas project costs represent costs to
              date and do not necessarily reflect present or future values.


<PAGE>


DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in U.S. dollars)


Note 3        Cash Equivalents

              At December 31, 1999,  included in cash and cash  equivalents is a
              financing   deposit  of  $1,681,000  as  required  by  a  farm-out
              agreement  (Note 4).  This  deposit  is held as  collateral  for a
              letter of  guarantee.  The deposit will be used as payment for the
              costs incurred in exploring the concession located in West Gharib,
              Gulf of Suez, Egypt (Note 4).

Note 4        Oil and Gas Projects - Note 6

<TABLE>
<CAPTION>

                                                                                          1999          1998
                                                             Ningxia       Shaanxi        Total         Total
<S>                                                       <C>           <C>           <C>           <C>
             China Concessions
                  Project advance                         $          -  $          -  $          -  $    893,670
                  Capital assets                                     -             -             -         1,636
                                                          ------------  ------------  ------------  ------------
                                                          $          -  $          -             -       895,306
                                                          ------------  ------------  ------------  ------------
             West Gharib, Egypt Concession
               Acquisition costs
                  Cash                                                                     352,000       352,000
                  Project advance                                                                -        14,800
                                                                                      ------------  ------------
                                                                                           352,000       366,800
               Deferred exploration costs                                                  629,290             -
                                                                                      ------------  ------------
                                                                                           981,290       366,800
                                                                                      ------------  ------------
             Algerian Concession
                  Acquisition costs                                                        625,000             -
                                                                                      ------------  ------------
                                                                                      $  1,606,290  $  1,262,106
                                                                                      ============  ============

</TABLE>

              Project advances are advances to companies with a common director.
              These  advances are  unsecured,  non-interest  bearing and have no
              specific terms for repayment.

              China Concessions

              By a  participation  agreement dated January 21, 1997, the company
              agreed to pay 100% of all the costs of  exploring  and  developing
              the  Ningxia oil and gas  concessions  in Yanchi  County,  Ningxia
              Province and WuQi county,  Shaanxi  Province,  Peoples Republic of
              China as consideration for an undivided 50% interest in all of the
              profits generated from the concession.

              By a  participation  agreement dated January 21, 1997, the company
              agreed to pay 100% of all the costs of  exploring  and  developing
              the Shaanxi oil and gas  concessions  in North  Shaanxi  Province,
              Peoples  Republic of China as  consideration  for an undivided 50%
              interest in all of the profits generated from the concessions.


<PAGE>

DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in U.S. dollars)



Note 4        Oil and Gas Project Costs - Note 6 - (cont'd)
              -------------------------

              China Concessions - (cont'd)

              By a participation  agreement dated September 9, 1997, the company
              agreed to pay 100% of all the costs of  exploring  and  developing
              the  Fuxian  oil  and  gas  property  in  Fuxian  County,  Shaanxi
              Province,  Peoples  Republic  of  China  as  consideration  for an
              undivided  50% interest in all of the profits  generated  from the
              properties.

              During the year ended December 31, 1998, the Fuxian concession was
              abandoned.  During the year ended  December 31, 1999,  the Ningxia
              and Shaanxi oil and gas concessions were abandoned and all related
              costs were included with exploration expenses.

              The parties to the above  agreements are related to the company by
              virtue of common directors.

              West Gharib Concession

              On April 27,  1998,  DPI  entered  into a  farm-out  agreement  to
              acquire an undivided  20%  participating  interest in the right to
              explore for and exploit petroleum in a concession  located in West
              Gharib, Gulf of Suez, Egypt.

              DPI shall pay:

              -   $352,000 within  seven days of the  execution of the agreement
                  (paid)

              -   pay 20% of all costs and expenses  incurred  subsequent to the
                  execution of the agreement related to this concession.

              -   40% of the costs and expenses  associated with the drilling of
                  an  exploratory  well  to a  maximum  cost to the  company  of
                  $500,000;  thereafter,  DPI  shall  pay 20% of all  costs  and
                  expenses  associated with any further activity associated with
                  the concession.

              In addition,  DPI provided a bank  guarantee of $2,000,000  within
              seven  days of the  execution  of the  agreement,  being  40% of a
              letter of guarantee  (Note 3). As at December 31, 1999,  this bank
              guarantee has been reduced to $1,681,000

              DPI's  interest in this oil and gas  concession is subject to a 7%
              net profit  interest  payable to a related company,  after DPI has
              recovered all  of its  exploration  and development  expenditures.
              This company is related by virtue of common directors.

              During the year ended  December  31,  1999,  the company  included
              drilling  costs of  $167,965  related  to an  abandoned  well with
              exploration expenses.

              At December 31, 1999,  $629,290 incurred in respect to drilling an
              exploration  well and drilling and  equipping a  development  well
              have been capitalized.


<PAGE>


DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in U.S. dollars)


Note 4        Oil and Gas Project Costs - Note 6 - (cont'd)
              -------------------------

              Algerian Concession

              By a letter of intent dated October 27, 1999, the company acquired
              10% of the issued capital stock of Santa  Catalina  (Algeria) Ltd.
              (Algeria  Concession SLM Algeria"),  a company which,  through its
              wholly-owned subsidiary, Santa Catalina L.H. Lundin (Algeria) Ltd.
              ("SLM  Lundin"),  entered  into  an  agreement  to  acquire  a 25%
              participating  interest in an oil and gas  concession  in Algeria.
              Subject to SLM Lundin earning its 25% participating  interest, the
              company may earn up to a 2.5% indirect interest in the property by
              paying SLM Algeria  $625,000  (paid) to acquire 10% of its capital
              stock,  and by funding its pro-rata share of SLM Lundin's  portion
              of the drilling and general and administrative  costs in excess of
              US$5,000,000 for testing and drilling of the first well.

              In order to  participate  in the second well, the company must pay
              SLM Algeria  $600,000.  The company will then be  responsible  for
              their pro-rata share of SLM Lundin's portion of the drilling costs
              and  general  and  administrative  costs in excess  of  $5,000,000
              associated  with the drilling and testing of the second well. This
              agreement is in effect for one year.

              All costs associated with this concession are shown as oil and gas
              project costs.

Note 5        Common Stock - Note 10

              During the  year  ended  December  31,  1997,  the company  issued
              5,179,500  shares of common stock at $1.00  per share for proceeds
              of $5,179,500.

              The  company  also  issued  362,565  shares of  common  stock as a
              finder's fee.

              Commitment

              Share Purchase Warrants

              At December  31,  1999,  5,179,500  share  purchase  warrants  are
              outstanding.  Each  warrant  entitles  the holder to purchase  one
              additional unit of the company at $0.40 per unit until the earlier
              of March  31,  2000 and the 90th day  after  the day on which  the
              weighted  average  trading  price of the  company's  shares exceed
              $0.90  per  share  for 10  consecutive  trading  days.  Each  unit
              consists of one common  share of the  company  and one  additional
              warrant.  Each additional  warrant entitles the holder to purchase
              one additional common share of the company at $0.60 per share. The
              additional  warrants will expire one year after the  occurrence of
              the exercise of the original warrant.

              Share Purchase Options

              During the year ended  December  31,  1999,  the  company  granted
              2,950,000 share purchase options entitling the holders thereof the
              right to  acquire  2,950,000  common  shares at $0.40 per share to
              June 30, 2004.


<PAGE>


DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in U.S. dollars)


Note 6        Related Party Transactions - Note 4

              During the year ended  December  31, 1998,  the company  wrote-off
              advances  to a related  company in the amount of $24,061  advanced
              with respect to  administration  relating to the China oil and gas
              exploration  projects.  This  company  is  related  by virtue of a
              common director.

              The  company  was  charged  the  following  by a  director  of the
              company:

<TABLE>
<CAPTION>

                                                                                                 January 1, 1997
                                                                                                 (Date of Incep-
                                                                                                 tion of Explora-
                                                                                                  tion Stage) to
                                                                                                   December 31
                                                  1999             1998              1997              1999
                                                  ----             ----              ----              ----
<S>                                         <C>              <C>               <C>               <C>
             Consulting                     $            -   $            -    $            -    $       36,000
                                            ==============   ==============    ==============    ==============

</TABLE>

Note 7        Deferred Tax Assets

              The Financial  Accounting  Standards board issued Statement Number
              109 in Accounting  for Income Taxes ("FAS 109") which is effective
              for fiscal  years  beginning  after  December  15,  1992.  FAS 109
              requires the use of the asset and  liability  method of accounting
              of income taxes. Under the assets and liability method of FAS 109,
              deferred tax assets and  liabilities are recognized for the future
              tax consequences attributable to temporary differences between the
              financial  statements  carrying  amounts  of  existing  assets and
              liabilities and loss carryforwards and their respective tax bases.
              Deferred tax assets and liabilities are measured using enacted tax
              rates  expected  to apply to  taxable  income in the year in which
              those  temporary  differences  are  expected  to be  recovered  or
              settled.

              The following table  summarized the significant  components of the
              company's deferred tax assets:

                                                                         Total
             Deferred Tax Assets
             Net operating loss carryforward                     $    3,500,000
                                                                 ===============
             Deferred tax assets                                 $    1,750,000
             Valuation allowance for deferred tax assets             (1,750,000)
                                                                 ---------------
                                                                 $            -
                                                                 ===============

              The amount  taken into income as deferred  tax assets must reflect
              that portion of the income tax loss carryforwards  which is likely
              to be realized from future  operations.  The company has chosen to
              provide an allowance of 100% against all available income tax loss
              carryforwards, regardless of their time of expiry.


<PAGE>


DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in U.S. dollars)


Note 8        Income Taxes

              No provision for income taxes has been provided in 1999,  1998 and
              1997 due to the net loss. The company has net operating loss carry
              forwards,  which  expire  commencing  in the year  2004  totalling
              approximately  $3,500,000,  the  benefits  of which  have not been
              recorded.

              Under the provisions of the Tax Reform Act of 1986, when there has
              been a  change  in an  entity's  ownership  of  fifty  percent  or
              greater,  utilization  of net operating loss carry forwards may be
              limited.  As a result of  equity  transactions  occurring  through
              December 31, 1999, the company will be subject to such limitation.
              The annual limitations have not been determined.

Note 9        Prior Period Change

              The company  determined that accounts payable at December 31, 1993
              was  understated  by $85,680 due to accrued  fiscal agent fees not
              recorded.  Of  these  fees,  $27,280  related  to the  year  ended
              December  31, 1993 and $58,400  related to years prior to the year
              ended  December 31,  1993.  Consequently  the deficit  accumulated
              during the exploration  stage at December 31, 1993 and at December
              31, 1992 and additional  paid-in capital at December 31, 1992 were
              restated to reflect this adjustment.

Note 10       Subsequent Event

              Subsequent to December 31, 1999, the company extended the terms of
              the share purchase warrants to read as follows:

              Each warrant  entitles the holder to purchase one additional  unit
              of the  company at $0.40 per unit  until the  earlier of March 31,
              2001 and the 90th day after the day on which the weighted  average
              trading price of the  company's  shares exceed $2.50 per share for
              10  consecutive  trading  days.  Each unit  consists of one common
              share of the company and one additional  warrant.  Each additional
              warrant  entitles  the holder to purchase  one  additional  common
              share of the company at $0.60 per share.  The additional  warrants
              will expire one year after the  occurrence  of the exercise of the
              original warrant.


<PAGE>


DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in U.S. dollars)


Note 11       Segmented Information

              The company's industry's segment is the oil and gas industry.  The
              company's  geographic  segments  are  Canada,   China,  Egypt  and
              Algeria.

<TABLE>
<CAPTION>

                                                                                          December 31, 1999
                                                Canada          China           Egypt          Algeria          Total
<S>                                          <C>             <C>            <C>             <C>             <C>
             Identifiable Assets
               Current                       $   1,887,666   $           -  $           -   $           -   $   1,887,666
               Oil and gas projects                      -               -        981,290         625,000       1,606,290
                                             -------------   -------------  -------------   -------------   -------------
                                             $   1,877,666   $           -  $     981,290   $     625,000   $   3,493,956
                                             =============   =============  =============   =============   =============

                                                                                          December 31, 1998
                                                Canada          China           Egypt          Algeria          Total
             Identifiable Assets
               Current                       $   2,771,380   $           -  $           -   $           -   $   2,771,380
               Oil and gas projects                      -         895,306        366,800               -       1,262,106
                                             -------------   -------------  -------------   -------------   -------------
                                             $   2,771,380   $     895,306  $     366,800   $           -   $   4,033,486
                                             =============   =============  =============   =============   =============

                                                                                       Year ended December 31,
                                                                                1999            1998            1997
             Operations
               Canada                                                       $ (   83,511)   $ (   24,867)   $ (    116,019)
               China                                                         (    70,135)    (   368,290)     (    433,795)
               Egypt                                                         (   419,538)    (   247,973)                -
                                                                            -------------   -------------   ---------------
                                                                            $(   573,184)   $ (  641,130)   $ (    549,814)
                                                                            =============   =============   ===============

</TABLE>

Note 12       New Accounting Standards

              In December 1997, the Accounting  Standards Board Issued statement
              3465,  "Income  Taxes",   which  establishes   standards  for  the
              recognition,  measurement,  presentation  and disclosure of income
              and refundable taxes. This statement is effective for fiscal years
              beginning on or after January 1, 2000. Adopting this standard will
              not  have  a  significant  impact  on the  company's  consolidated
              financial position, results of operations or cash flows.

              In April 1998, the Accounting Standards Executive Committee issued
              SOP 98-5,  "Reporting on the costs of start-up  activities".  This
              statement is effective for fiscal years  beginning  after December
              15,  1998.  Adopting  this  standard  does not have a  significant
              impact on the company's consolidated  financial position,  results
              of operations or cash flows.


<PAGE>


DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in U.S. dollars)


Note 12       New Accounting Standards - (cont'd)

              In June 1998, the Financial Accounting Standards board issued SFAS
              No.  133,  "Accounting  for  Derivative  Instruments  and  Hedging
              Activities,"  which  standardized  the  accounting  for derivative
              instruments.  SFAS is  effective  for all fiscal  quarters  of all
              fiscal years beginning after June 15, 1999. Adopting this standard
              will not have a significant  impact on the company's  consolidated
              financial positions, results of operations or cash flows.

Note 13       Uncertainty Due to the Year 2000 Issue

              The Year 2000 Issue arises because many  computerized  systems use
              two digits  rather  than four to  identify a year.  Date-sensitive
              systems  may  recognize  the year 2000 as 1900 or some other date,
              resulting in errors when  information  using the year 2000 date is
              processed. In addition, similar problems may arise in some systems
              which use certain dates in 1999 to represent  something other than
              a date.  Although  the  change  in date  has  occurred,  it is not
              possible to conclude  that all aspects of the Year 2000 Issue that
              may affect  the  entity,  including  those  related to  customers,
              suppliers or other third parties, have been fully resolved.

Note 14       Comparative Figures

              Certain prior year's comparative figures have been reclassified to
              conform with the presentation used in the current year.