ITEM 1.  FINANCIAL STATEMENTS

BALANCE SHEETS
ASSETS

                                                              March 31,
                                      December 31,           (unaudited)
                                     1995       1994       1996       1995
Current assets
  Cash                              $3,198     $2,554     $3,811      $780
  Note receivable-Texoil                                               
    (Note 3)                        31,000         -      42,250         -
          Total current assets                                            
                                    34,198      2,554     46,061       780

Oil and gas properties, using                                             
full cost accounting (Note 3, 4, and 6)                                  
  Properties being amortized     3,601,294  3,244,543  3,601,294  3,244,543
  Properties not being                                                 
    amortized (Note 4)              65,000    260,802     85,146    373,885
                                 3,666,294  3,505,345  3,686,440  3,618,428
Less accumulated depreciation,                                            
  depletion, amortization and
  impairment                     1,081,871    984,086  1,107,192    992,873
   Net oil and gas properties    2,584,423  2,521,259  2,579,248  2,625,555

Other assets 
  Costs of public offering            -         -          -         42,061
  Other property and equipment, 
   at cost, less accumulated  
   depreciation                      8,267      9,921       7,234      8,267
  Other                              6,213     19,293       5,518     18,598
          Total other assets        14,480     29,214      12,751     68,926
               
Total Assets                    $2,633,101 $2,553,027  $2,638,061 $2,695,261

               
LIABILITIES AND STOCKHOLDERS' EQUITY
                    
                                                               March 31,
                                      December 31,           (unaudited)
                                   1995       1994       1996       1995
Current liabilities 
  Current portion of long-term
   debt (Note 5)                 $   -       $   -      $   -       $   -
  Accounts payable                 253,037     327,473    293,991     383,699
  Due to stockholders               22,628         -       29,178        -
  N/P Texas Central Bank
    (Note 7)                        75,000         -       75,000     100,000
  N/P Lyon Operating Co.
    (Note 3)                        35,000         -       35,000        -   
     Total current liabilities     385,664     327,473    433,169     483,699
                    
Long-term debt      
  Senior Secured N/P (Note 2
   and 6)                          267,520        -       267,520        -  

      Total liabilities            653,184     327,473    700,688    483,699
                    
Stockholders' equity
  Preferred stock, $0.05 par value;
   authorized 2,000,000 shares;
   none issued                        -          -            -         -
  Common stock, $0.01 par value;                                            
   authorized 20,000,000 shares;
   issued 4,055,500 shares
   (Note 11)                       40,555      38,105      40,555      38,105
  Additional paid-in capital    3,508,043   3,510,494   3,508,043   3,510,493
  Retained deficits            (1,568,681) (1,323,044) (1,611,225) (1,337,036)
   Total stockholders' equity   1,979,918   2,225,554   1,937,372   2,211,561
                    
    Total liabilities and 
     stockholders' equity       $2,633,101  $2,553,027  $2,638,061  $2,695,260


STATEMENT OF OPERATIONS

                                   Period Ended           Three Months Ended
                                   December 31,           March 31 (unaudited)
                                1995          1994         1996         1995
Revenues               
  Oil and gas sales            $ 85,282     $138,012     $ 20,567     $ 33,048
    Total revenues               85,282      138,012       20,567       33,048
                       
Expenses               
  Production                     58,472       80,583       14,544       16,456
  Depreciation, depletion,
   and amortization              97,785       49,733       25,321        8,787
  Full cost ceiling
   adjustment (Note 1)                -      830,969            -            -
  Interest (Note 1 and 6)             -       51,516        7,688            -
  General and administrative    212,412      124,140       26,808       21,796
     Total expenses             368,669    1,136,942       74,363       47,040
                      
Other Income           
  Dividend income                33,750            -       11,250            -
  Interest income                 4,000            -            -            -
     Total other income          37,750            -       11,250            -
                       
Loss before provision
   for income taxes           (245,636)    (998,929)     (42,545)     (13,991)
                       
Provision for income taxes
  (Note 8)                            -            -            -            -
                       
NET LOSS                     $(245,636)   $(998,929)    $(42,545)    $(13,991)

Primary earnings per
   share (Note 1)            $   (0.06)   $   (0.25)    $  (0.01)    $  (0.00)
                       

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
               
                                   Period Ended            Three Months Ended
                                   December 31,           March 31 (unaudited)
                                1995           1994        1996          1995

COMMON STOCK   
Balance at beginning 
  of year                     $ 38,105     $ 60,325     $ 40,555     $ 38,105
Par value of shares issued
  TexOil transaction             2,250            -            -            -
  Lyon Operating transaction       200            -            -            -
  Reverse stock split-1 for 2
     3,016,240 shares                -      (30,162)           -            -
  Conversion of Notes                -        7,942            -            -
    Balance at end of year      40,555       38,105       40,555       38,105
      
ADDITIONAL PAID-IN CAPITAL                                                
Balance at beginning
  of year                   3,510,494    1,554,684     3,508,044    3,510,494
Reverse stock split-1 for 2
  3,016,240 shares                  -       30,162             -            -
Issuance of stock for:  
  TexOil transaction           (2,250)           -             -            -
  Lyon Operating transaction     (200)           -             -            -
  Conversion of Notes               -    1,925,647             -            -
    Balance at end of year  3,508,044    3,510,494     3,508,044    3,510,495
               
RETAINED DEFICITS                                                         
Balance at beginning
  of year                  (1,323,044)    (324,115)   (1,568,680)  (1,323,044)
Loss for the year            (245,636)    (998,929)      (42,545)     (13,992)
    Balance at end of year (1,568,680)  (1,323,044)   (1,611,225)  (1,337,036)
                  
STATEMENTS OF CASH FLOWS

                                   Period Ended            Three Months Ended
                                   December 31,           March 31 (unaudited)
                                1995         1994        1996          1995

Cash flows from operating activities
 Net loss                    $(245,637)   $(998,929)    $(42,545)   $ (13,992)
 Adjustments to reconcile net
  loss to net cash provided
  by operating activities
   DD&A                         97,785        38,317       25,321       8,787
   Depreciation and amorization
   (Increase) decrease in:
     Accounts receivable-trade       -       118,172            -           -
     Prepaid expenses                -             -            -           -
     Other assets               10,298        (9,602)           -     (43,453)
  Increase (decrease) in:
     Accounts payable and
     accrued expenses          (51,809)      (79,030)      40,954      56,226
Net cash provided by
  operating activities        (184,927)     (924,026)      25,458      14,614
  
Cash flows from investing activities
  Loan made                    (31,000)            -      (12,250)          -
  Capital expenditures        (410,949)      336,554      (20,146)   (116,389)
Net cash used by investing
  activities                  (441,949)      336,554      (32,396)   (116,389)

Cash flows from financing activities
  Short-term notes payable     110,000             -        7,551     100,000
  Proceeds from issuance of
   convertible senior notes    267,520    (1,384,991)           -           -
  Proceeds from issuance of
   common stock                      -     1,933,590            -           -
  Proceeds from sale of oil
   and gas properties          250,000             -            -           -
Net cash provided by investing
  activities                   627,520       548,599        7,551     100,000

Net increase in cash and
  cash equivalents                 644       (38,873)         613      (1,775)
Cash and cash equivalents,
  at beginning of period         2,554        41,428        3,198       2,554
Cash and cash equivalents,
  at end of period             $ 3,198       $ 2,555      $ 3,811     $   779

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NAME CHANGE

                    On January 22, 1993, the Board of Directors voted to
change the name of the Company from Emperic Energy, Inc. to Empiric Energy,
Inc. 

OIL AND GAS PROPERTIES

                    The Company follows the full cost method of accounting for
oil and gas properties.  Accordingly, all costs associated with acquisition and
development of oil and gas reserves, including directly related overhead
costs, are capitalized.

                    All capitalized costs of oil and gas properties, are 
amortized on the unit-of-production method using estimates of proved reserves.
Investments in unproved properties and major development projects are not 
amortized until proved reserves associated with the projects can be determined 
or until impairment occurs.  If the results of an assessment indicates that the
properties are impaired, the amount of the impairment is added to the
capitalized costs to be amortized.

                    In addition, the capitalized costs are subject to a "ceiling
test",  which basically limits such costs to the aggregate of the "estimated 
present value", discounted at a 10-percent interest rate of future net revenues
from proved reserves, based on current economic and operating conditions, plus
the lower of cost or fair market value of unproved properties.

                    Sales of proved and unproved properties are accounted for as
adjustments of capitalized costs with no gain or loss recognized, unless such
adjustments would significantly alter the relationship between capitalized
costs and proved reserves of oil and gas, in which case the gain or loss is
recognized in income.  Abandonments of properties are accounted for as
adjustments of capitalized costs with no loss recognized.

CAPITALIZED INTEREST

                    The Company capitalizes interest ($8,126 in 1995 and $29,577
in 1994, respectively) on expenditures made in connection with development
projects that are not subject to current amortization.  Interest is capitalized
only for the period that activities are in progress to bring these projects to
their intended use.

AMORTIZATION

                    Amortization of origination costs is calculated on the 
straight-line method over five years.

CASH FLOWS PRESENTATION

                    For purposes of the statement of cash flows management 
considers time deposits with original maturities of ninety days or less to be
cash.

PROPERTY AND EQUIPMENT

                    Property and equipment are stated at cost.  Maintenance and
repair expenses and renewals and betterments which do not enhance the value or
increase the basic productive capacity of the assets are charged to expense as
incurred.  Depreciation is being provided on the straight-line, declining
balance, and accelerated methods over the lives of the assets for tax reporting
purposes.

       Estimated useful lives are as follows:
           Office furniture and equipment             5-7 years

                    Depreciation expense for the year ended December 31, 1995,
totaled $1,653, and $6,614 for the year ended December 31, 1994.

EARNINGS PER SHARE

                    Primary earnings per share amounts are computed based on 
the weighted average number of shares actually outstanding.  The number of
shares used in the computations were 3,933,019 in 1995 and 3,734,186 in
1994.  Fully diluted earnings per share amounts are not presented because they
are not materially dilutive.

NOTE 2 - RELATED PARTY TRANSACTIONS

                    Hill Investors, Inc. ("Hill"), an affiliate of Mr. Ling, has
entered into a three year management consulting agreement with the Company
whereby Hill provides certain management consulting services, receiving
therefor a monthly fee of $7,500.  In the event of the death or disability of
Mr. Ling or a reorganization of the Company occurs during the term of the
agreement, the agreement shall automatically terminate (in the case of Mr.
Ling's death or disability) or, in the case of a reorganization, the agreement
may be terminated at Mr. Ling's option.  Upon any such termination for the
foregoing reasons such payments shall continue for a period of 36 months
from the date of such termination.  Mr. Ling presently devotes the majority
of his working time and efforts to the business and affairs of the Company
and expects to continue doing so for the foreseeable future.  Under the terms
of the agreement the Company is obligated to provide to Hill suitable office
facilities and to reimburse it for expenses incurred in connection with Hill's
or Mr. Ling's services to the Company including without limitation, the cost
of providing an automobile and health and life insurance for Mr. Ling. 
Pursuant to the agreement, Hill is obligated to certain covenants of
confidentiality and non-competition and is entitled to receive the benefits of
indemnification against damages and cost of defense of litigation or claims
resulting from certain acts in the course of performance of its or Mr. Ling's
management duties as provided for in the Company's by-laws.  Hill provided
consulting services at a cost of $60,000 in 1995, and $82,850 in 1994.

                    Contemporaneously with the formation of the Company in
October, 1992, Hill was issued 1,750,000 shares of the Company's common stock
(the "Shares") in consideration for Hill's: (i) assignment to the Company of its
working interest in the Smith Well in Holmes County, Mississippi; (ii)
causing other unaffiliated persons who owned substantially all of the
remaining working interest in the Smith Well to assign their interests in the
well to the Company in consideration for Hill's transfer to them of a total of
236,422 of the Shares; and (iii) making available to the Company the
opportunity to enter into the farmout agreement which had been negotiated
by Hill with Richmond Petroleum, under which the Company subsequently
earned its interest in the Richmond acreage.  Of the Shares assigned by Hill
to owners of interests in the Smith Well, 29,400 shares were transferred to
Clyde Skeen Business Consultants, Inc., the majority of the stock of which
is owned by Clyde E. Skeen, Secretary, Treasurer and a Director of the
Company.  Additionally, for services rendered in the formation of the
Company, Hill assigned to three persons a total of 87,500 of the Shares,
including 50,000 shares to Clyde Skeen Business Consultants, Inc.  Clyde
Skeen Business  Consultants, Inc. provided consulting services at a cost of
$21,000 in 1995, and $36,000 in 1994.

                    As a result of the Texoil transaction described in Note 3
below the Company now owns approximately 23 percent of Texoil Energy Limited's
common stock and 100 percent of the 6% preferred stock.  If the 6%
preferred stock were converted into Texoil Energy Limited's common stock,
Empiric would own approximately 34 percent of Texoil's outstanding
common stock.  The Company has no plans to convert the preferred stock
into common stock.  In addition, the President of the Company is now a
director of Texoil Energy Limited.

                    As explained in Note 6 below, on December 31, 1995, senior
secured notes totaling $267,520, were issued to two stockholders. 

NOTE 3 - ACQUISITION AND SALE OF OIL AND GAS PROPERTIES

                    In 1992 the Company acquired undivided interests in a
producing well located in Mississippi.  Current production from this well is
being retained by the operator of the well to offset costs it incurred in a
major reworking program.  Upon receipt of full payment and satisfaction of this
obligation, future revenue will revert to Empiric Energy, Inc.  This property
has been recorded at its fair market value of $1.6 million.  This value was 
based on the discounted value of estimated reserves of the property less a 
provision for all claims and encumbrances which may be assessed against the 
property as estimated by management.  The estimated reserves were determined 
in an independent appraisal by outside professional engineers.  In exchange for
this property and other valuable assets, including the opportunity to acquire
the working interests in the Panhandle properties and for obtaining the initial
financing to form the company, 1.75 million shares of stock and $125,000
in convertible senior notes were issued.

                    In 1993 the Company acquired an additional 28.5% undivided
interest in property in the Texas Panhandle.  This additional interest was 
acquired for the assumption of the debts of the former operator (balances still
owed to these vendors are included in vendors payable on the balance sheet) and
included a substantial amount of supplies.  The amount of the debts assumed
plus other expenditures related to the transaction totaled approximately
$450,000.  Part of this additional interest in the property was sold shortly
thereafter for $450,000. The supplies were used on the Company's projects
in the Panhandle.

                    Also in 1993 the Company acquired a lease on the property
known as the "Brent Ranch" for $100,000.  This transaction is discussed further
in Note 9.

                    Pursuant to an agreement dated March 23, 1995, between the
Company and Texoil Energy, Ltd. (Texoil), a Canadian corporation, Texoil
acquired one-half of the Company's interest in approximately 9,300 acres of
oil and casinghead gas leases in Moore and Potter Counties, Texas, including
the 7,000 acres on the Brent Ranch, and 225,000 shares of the Company's
Common Stock.  In consideration, the Company received $128,750 cash and
a $121,250 note due in August, 1995, 1,000,000 shares of Texoil Common
stock and $750,000 principal amount of 6% preferred stock, convertible
into 750,000 shares of Texoil Common Stock (offsetting for this transaction
went to work in process).  Under the terms of the agreement, Texoil is
required to drill nine wells on the Brent Ranch and four wells on the
Richmond acreage at a total estimated cost of approximately $2,000,000. 
The proceeds of the $121,250 note and the proceeds of the private placement
will be used to fund the Company's obligations under the Texoil Agreement. 
Texoil will pay two-thirds of the drilling and testing costs and will share the
completion costs equally with the Company. No work is presently being
conducted under this agreement due to pending litigation which is discussed
in Note 9.

                    On December 21, 1995, the Company entered into an agreement
with Lyon Operating Co., Inc. for the purchase of an undivided 72% of the
leasehold or working interest in approximately 1,223 acres of land situated
in Clay and Jack Counties, Texas.  For this interest the Company paid
$30,000 cash, a promissory note for $35,000 with interest at eight percent
(8%) payable on or before March 21, 1996, and 20,000 shares of the
Company's stock.

                    
NOTE 4 - OIL AND GAS PROPERTIES NOT SUBJECT TO
                    AMORTIZATION

                    The Company is currently participating in oil and gas 
development activities in the Texas Panhandle.  A determination will not be 
made about the extent of additional reserves that should be classified as 
proved reserves as a result of this project until its completion.  Consequently,
the associated property and development costs have been excluded in computing
amortization of the full cost pool.  The company will begin to amortize these
costs when the project is completed.  Costs excluded from amortization
consists of the following:

  Year       Acquisition     Property     Development    Capitalized
Incurred        Costs          Sale         Costs         Interest       Total

  1995          $65,000      $  -           $  -          $  -         $65,000


NOTE 5 - CURRENT PORTION OF LONG-TERM DEBT

                    This item consisted of 8% convertible senior notes payable
which were converted to common stock in 1994. 

NOTE 6 - LONG TERM DEBT

                    On December 31, 1995, the Company issued $267,520, in 
senior secured notes bearing interest at 8%, payable each six (6) months.  The
full amount of the principal is due thirty-six (36) months from that date.  The
notes were issued to two stockholders of the Company.

                    At December 31, 1993, the Company had issued $1,384,991 in
convertible senior notes payable.  However, since the principal of these notes
was payable in three equal quarterly payments beginning April 15, 1994 and
ending October 15, 1994 they were carried in "current portion of long-term
debt" on the December 31, 1993, statements (see Note 5).  Interest on the
unpaid principal balance was accrued at the rate of 8% per annum and was
paid quarterly.  These notes were secured by a Deed of Trust covering all
rights, titles, and interests of the Company in the Mississippi and certain
Texas properties.  These notes were convertible, at the holder's option, into
common shares of the Company at the Conversion Price of $2.00 in principal
amount for each share of stock.  These notes were converted into common
stock in 1994.

                    No interest was paid on these notes in 1995.  Interest 
expense for the period ended December 31, 1994, totaled $81,093, of which 
$29,577 was capitalized.

NOTE 7 - SHORT-TERM NOTES PAYABLE

                    This note bears interest at 12%, matures on April 30, 1996,
and is secured by all of the assets of the company.

NOTE 8 - INCOME TAXES

                    The Company has a deferred tax asset of $2,176,145 which
they have elected to offset with a valuation reserve of the same amount.  
Therefore, there is no effect on the Company's books.  The net operating loss
carry forward available to reduce future taxable income will expire for 
financial and tax purposes as follows:

                                            Financial            Tax

     December 31, 2007                      $   37,661        $  505,161
     December 31, 2008                         286,454           823,485
     December 31, 2009                         998,929           627,142
     December 31, 2010                         245,636           220,357
                                            $1,568,680        $2,176,145

NOTE 9 - LEGAL PROCEEDINGS

              The lessors of the Brent Ranch filed a lawsuit in the District
Court of Moore County, Texas, on July 19, 1995, against Empiric Energy, Inc.
for damages and termination of the Oil and Casinghead Gas Lease between the
parties dated October 7, 1993, as amended.  Plaintiffs allege that the
Company breached the terms of the lease by: (i) failing to plug and abandon
six wells on the lease drilled by others; (ii) failing to pay liquidated damage
payments by July 15, 1995, for four wells that were required to be drilled by
June 22, 1995, but were not drilled; (iii) breach of implied covenants and
expressed covenants in the lease to reasonably develop the lease; and, (iv)
failing to  make minimum royalty payments due under the lease.  Plaintiffs
seek damages, termination of the lease, court costs, attorney's fees, and
interest.

                    The Company received service of process on July 25, 1995,
and, based on initial discussions with counsel, believes that the activities
undertaken by it, or on its behalf by the operator, with respect to the four
wells, including staking the drillsite, signing a drilling contract, obtaining
permits from the Texas Railroad Commission, contracting for surface
preparation, completion of geological studies and other activities intended in
good faith to result in completion of drilling these wells constitutes
commencement of drilling as required by the lease.  Management intends to
vigorously defend the lawsuit.  With respect to the claim for damages for
failure to plug and abandon the six wells, Management believes that any
damages would be minimal.  The contractor who has agreed to plug the wells
has been paid and is scheduled to complete the work by August 30, 1995. 
As a safeguard, the Company has a bid from a second contractor to plug the
wells at a cost of $21,000.  In either case, the Company is entitled to the
usable equipment recovered from the wells.

                    On September 8, 1995, the Plaintiffs filed a motion seeking
partial summary judgment on only the alleged breach of contract issues, i.e.,
liability and damages resulting from the Company's alleged failure to
commence the four required wells, to plug the six inactive wells drilled by
others, and to remove surface equipment and debris from portions of the
property by certain specified agreed dates.  The Company responded to such
motion alleging that its activities prior to the agreed deadline date were
sufficient to constitute commencement of the wells.  Additionally, the
Company challenged the amount of damages asserted by the Plaintiffs for
alleged failure to plug the inactive wells and the alleged extent of, and
asserted damages resulting from, failure to perform the clean-up work.

                    On October 31, 1995, the Court determined that the Company
failed to commence the four required wells by the stated deadline, and, as a 
result, the Company is liable to the lessors in the amount of $200,000.   The 
Court further determined that the Company failed to plug the six inactive 
wells, although the amount of damages resulting from such failure ($66,000 
asserted by the Plaintiffs, and inconsequential as asserted by the Company) are
to be determined on trial of the case on its merits.  The Court further decided
that Plaintiffs are entitled to reasonable attorneys' fees from the suit, the 
amount of which will be determined at trial.  Finally, the Court refused to 
find the Company liable for any clean-up work other than with regard to the 
six inactive wells.

                    The Company intends to appeal the Court's granting of 
$200,000 damages for alleged failure to timely commence the four wells.

                    On February 1, 1996, the Company executed a Compromise and
Settlement Agreement which is being circulated for signature by the
numerous Plaintiffs.  It is scheduled for closing on February 29, 1996, but
it cannot be determined whether it will be closed on that time, or under the
terms in the agreement.  The major terms of the agreement are:  the
Company will release all interests in the Brent Ranch; the Company will pay
$25,000 cash at Closing; the Company will complete plugging and site clean-
up of the six "Inactive Wells" drilled by others; and the suit will be
dismissed and mutual global releases will be signed.

NOTE 10 - OIL AND GAS DATA

                    The following tables provide additional information about 
the Company's oil and gas development and production activities.

CAPITALIZED COSTS

                    Following is a summary of costs incurred in oil and gas 
property acquisition and development activities:

                                                       1995         1994
     Unproved Properties
       Acquisitions - Texas                         $130,000     $ 62,500
       Development                                   144,823       96,302
     Proved Properties
       Acquisitions                                      -            -
       Development Costs-Texas                           -        348,683

             Total capitalized costs                $274,823     $507,485

RESULTS OF OPERATIONS

                    Following is a summary of oil and gas producing activities 
for the year ended December 31, 1995:


                                       Mississippi       Texas         Total
Oil and gas sales                    $        -      $  85,282     $   85,282  
Production costs                              -        (58,472)       (58,472)
Depreciation, depletion, and
  amortization                                -        (97,785)       (97,785)
                                              -        (70,975)       (70,975)
Income tax expense                            -              -              -

Results of operations for oil
 and gas producing activities        $        -      $ (70,975)     $ (70,975)
  (excluding corporate overhead and
     financing costs)

                    Following is a summary of oil and gas producing activities
for the year ended December 31, 1994:

                                        Mississippi       Texas         Total
Oil and gas sales                    $        -      $ 138,012     $  138,012
Production costs                              -        (80,583)       (80,583)
Depreciation, depletion, and
  amortization                                -        (49,733)       (49,733)
                                              -          7,696          7,696
Income tax expense                            -              -              -
Results of operations for oil and
 gas producing activities            $        -      $   7,696      $   7,696
  (excluding corporate overhead and
     financing costs)

NOTE: There was no production on the Mississippi property in 1994, or
1995, and no production is expected until 1997.

RESERVE INFORMATION (UNAUDITED)

                    The following estimates of proved and proved developed
 reserve quantities and related standardized measure of discounted net cash
flow are estimates only, and do not purport to reflect realizable values or 
fair market values of the Company's reserves.  The Company emphasizes
that reserve estimates are inherently imprecise and that estimates of new
discoveries are more imprecise than those of producing oil and gas
properties.  Accordingly, these estimates are expected to change as future
information becomes available.  All of the Company's reserves are located
in the United States.

                    Proved reserves are estimated reserves of crude oil 
(including condensate and natural gas liquids) and natural gas that geological
and engineering data demonstrate with reasonable certainty to be recoverable
in future years from known reservoirs under existing economic and operating
conditions.  Proved developed reserves are those expected to be recovered
through existing wells, equipment, and operating methods.

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

RESERVE QUANTITY INFORMATION (UNAUDITED)

                    The following table is a summary of the reserve quantity 
information (oil reserves are stated in barrels and gas reserves are stated in
thousand cubic feet):

                                             1995         1994       Change
Proved reserves - Oil (Barrels)
  Texas - Developed                          7,014       25,960      (18,946)
          Undeveloped                      141,806      160,993      (19,187) 
       Texas total                         148,820      186,953      (38,133)
  Mississippi - Developed                   91,722       91,722          -
Total proved reserves - Oil (Barrels)      240,542      278,675      (38,133) 

Proved reserves - Gas (MCF)
  Texas - Developed                         15,448       58,211      (42,763)
          Undeveloped                      356,363      403,219      (46,856)
          Texas total                      371,811      461,430      (89,619)
  Mississippi - Developed                2,620,649    2,620,649          -  
Total proved reserves - Gas (Mcf)        2,992,460    3,082,079      (89,619)

                    The decrease in the oil reserves in Texas during 1995 
consists of production of 16,257 (Barrels) and a revision of previous estimate
of (21,876) (Barrels) for a net decrease in oil reserves of 38,133 (Barrels). 
The decrease in the gas reserves in Texas during 1995 consists of production
of 49,260 (MCF) and a revision of previous estimates of (40,359) (MCF) for
a net decrease in gas reserves of 89,619 (MCF).

                    There was no change in the oil or gas reserves in 
Mississippi for 1995.


STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET
  CASH FLOWS (UNAUDITED)

<PAGE>
                                                                Discounted
                                              Amount              at 10%

Texas - Developed
   Future cash inflows - Oil              $    113,974
                         Gas                    21,164
                                               135,137
     Less future cash outflows                 105,240
         Net future cash inflows                29,897         $    28,206

Texas - Undeveloped
    Future cash inflows - Oil                2,304,350
                          Gas                  488,217           
                                             2,792,568
      Less future cash outflows              1,943,430
          Net future net cash inflows          849,138             477,376

Mississippi - Developed                                      
    Future cash inflows - Oil                1,513,414
                          Gas                2,358,585
                                             3,871,999
       Less future cash outflows               419,274
           Net future cash inflows           3,452,725            2,233,415
                                             4,331,760            2,738,997
*Less estimated income taxes                       -                    -     
Total net future cash inflows               $4,331,760           $2,738,997

*No income tax is anticipated because of offsetting net operating losses.

NOTE 11 - REVERSE STOCK SPLIT

                    On March 24, 1994, the Board of Directors authorized a 
1-for-2 reverse stock split of common stock to stockholders of record on 
March 24, 1994.  Per-share amounts in the accompanying financial statements 
have been adjusted for the split.

NOTE 12 - EVENT SUBSEQUENT TO THE DATE OF THE REPORT
            OF INDEPENDENT AUDITOR (unaudited)

Taureaux Agreement

                    The Company has signed an agreement with Taureaux 
Corporation to purchase a 20 percent net revenue interest in 198.5 acres in 
Jack County, Texas, for $70,000.  The transaction will be recorded on the 
Company's books by decreasing cash and increasing oil and gas properties.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


OVERVIEW - HISTORY
THE COMPANY

                    The Company is an independent oil and gas exploration and
production company operating primarily in the Panhandle Field, which
extends from West Texas through Central Oklahoma into Western Kansas. 
During 1992 and 1993, the Company participated in a 20 well drilling
program on leases in Moore and Potter Counties, north of Amarillo, Texas
resulting in wells producing from the Red Cave Sandstone Formation.  As
a result, the Company earned a 41.5 percent working interest in
approximately 26,755 gross acres covered by oil and casinghead gas leases
(the "Richmond acreage").

                    In December 1995, the Company acquired 72 percent working 
interest in a 1240 acre tract in Clay and Jack Counties, Texas, on which
there is one producing oil well and eleven non-producing wells.  The
Company intends to enhance production of the producing well by rework or
repair and to re-establish production on the shut-in wells.  In February 1996,
the Company also acquired from the same operator 20 percent net revenue
interest in 198.5 acres in Jack County, Texas, which contains two wells, one
of which has been drilled to 8700 feet and is awaiting completion and one
which produces minimal gas at a shallower level.  The Company intends to
complete the 8700 foot well awaiting completion and to drill to a lower level
the producing well to search for oil.    

                    In October 1993, the Company acquired a 100 percent working
interest in approximately 7,000 gross acres on leases on the Brent Ranch,
adjacent to the Richmond acreage.  In October 1994 and June 1995, the
Company drilled three wells on the Brent Ranch which were determined to
be non-commercial.   Under the terms of the lease, the Company was
required to drill four additional wells by June 22, 1995 and five additional
wells by October 1995 and to plug and abandon six inactive wells on the
leases which had been drilled by other parties.  The lessors of the Brent
Ranch filed a lawsuit in July 1995 against the Company for damages,
termination of the lease, costs and attorneys' fees, alleging, among other
things, failure to timely drill the four wells required to be drilled by June 
22, 1995.  Pursuant to a partial summary judgment proceeding in October
1995, the Court determined that the Company was liable to the lessors for
$200,000 for liquidated damages, costs and attorneys' fees.  The Company
and the lessors settled the matter in February 1996 upon the following terms: 
The Company released all of its interest in the Brent Ranch leases, paid
$25,000 in cash and agreed to complete plugging and clean-up of the six
inactive wells drilled by others.  The Company was released from its
obligation to drill eight additional wells on the Brent Ranch lease and has the
right for 60 days to sell the last well drilled to a third-party who has the 
gas rights and keep the sale proceeds.  

                    The Company plans to develop its existing acreage as funds 
become available or through farmout arrangements with other oil and gas
operators.

                    The Company is actively seeking the acquisition of 
producing  oil and gas leases directly or through the acquisition of and/or 
business combinations with other energy companies.  The Company has completed 
or is in the process of completing the transactions described below.

TEXOIL AGREEMENT

                    Pursuant to an agreement dated March 23, 1995 between the
Company and Texoil Energy, Ltd. ("Texoil"), a Canadian corporation,
Texoil acquired one-half of the Company's interest in approximately 9,300
acres of oil and casinghead gas leases in Moore and Potter Counties, Texas,
including the 7,000 acres on the Brent Ranch and 225,000 shares of the
Company's Common Stock.  In consideration therefor, the Company received
$128,750 cash and a $121,250 note due in July 1995, 1,000,000 shares of
Texoil Common Stock and $750,000 principal amount of 6% preferred stock
(the "6% Preferred Stock"), convertible into 750,000 shares of Texoil
Common Stock.  Under the terms of the agreement, Texoil was required to
fulfill the Company's obligation to drill nine wells on the Brent Ranch and
four wells on the Richmond acreage.  The proceeds of the $121,250 note
were used to partially fund the Company's obligations under the Texoil
Agreement.  Texoil paid two-thirds of the drilling and testing costs and
shared the completion costs equally with Empiric on the two wells drilled on
the Brent Ranch in 1995.  Empiric retained 50 percent of its working interest
in the leases and any production therefrom.  These leases have been canceled
as a part of the overall settlement with the Brent Ranch Lessors.  

                    The Company and Texoil jointly plan to develop the 9100 
acres of the Richmond acreage.  Under the Texoil Agreement, Texoil is
required to pay 66 2/3 percent of the drilling and testing costs of eleven new
wells at locations to be mutually agreed upon.  Texoil and the Company will
share equally the completion costs of, and revenues from, such wells.  Texoil
may also participate with the Company in the enhancement and development
of the Taureaux/Lyon properties described below on mutually agreeable
terms.

                    The Company owns approximately 23 percent of Texoil's 
outstanding common stock and 100 percent of the 6% Series A Preferred
Stock.  If the 6% Series A Preferred Stock were converted into Texoil
common stock, the Company would own approximately 34 percent of
Texoil's outstanding common stock.  The Company has no plans to convert
the Series A Preferred Stock into the common stock of Texoil.

TAUREAUX/LYON AGREEMENTS

                    Pursuant to an agreement dated December 21, 1995 with Lyon
Operating Co., Inc. ("Lyon"), the Company acquired from Lyon 72 percent
working interest in 1223.2 acres in Clay and Jack Counties, Texas, which
includes one producing oil well and eleven non-producing oil wells.  As
consideration for the Lyon acquisition, the Company paid $30,000 cash,
issued its $35,000 8% Note due March 21, 1996 and 20,000 shares of its
Common Stock.

                    In February 1996, the Company agreed to acquire from 
Taureaux Corporation ("Taureaux"), an affiliate of Lyon, for $75,000 cash
20 percent net revenue interest in 198.5 acres in Jack County, Texas, which
contains two wells, one of which has been drilled to the lower Ellenberger
level at 8700 feet and is awaiting completion and one of which produces
minimal gas at a shallower level.

                    The Company plans to enhance production on the producing 
well on the Lyon acreage by rework and repair at an estimated cost of
approximately $20,000 and to re-establish production on the shut-in wells. 
The cost to re-establish production is not known and depends on the
condition of and ability to use the downhole equipment.

                    On the Taureaux acreage, the Company plans to complete the 
well which has already been drilled to the 8700 foot Lower Ellenberger depth
and is awaiting completion and to also drill the producing gas well to the
Lower Ellenberger formation to search for oil.  The $75,000 original cost of
this transaction includes an acquisition of 20 percent working interest in the
wells and will also pre-pay the Company's portion of the completion costs
on such well.

WESTAR JOINT VENTURE

                    Pursuant to a Definitive Agreement dated April 15, 1996, 
the Company and Westar Energy, Inc. ("Westar") agreed to jointly
participate in the drilling, completion, equipping and operating of
approximately 100 oil and/or gas wells in Indiana and Westmoreland
Counties, Pennsylvania (the Agreement).  Westar currently owns and
operates approximately 500 oil and gas wells in Western Pennsylvania and
Northern West Virginia.  The Agreement provides for the drilling and
completion of a minimum of twenty and a maximum of 100 "infill" wells on
the subject acreage, to a depth sufficient to test and obtain production from
the Lower Bradford Kane Sands at approximately 4,000 feet.  The First
Phase will consist of four segments of five wells, beginning on or about May
15, 1996.  The remaining four wells of the First Phase will be commenced
at the rate of one well each 21 calendar days with the objective of completing
all 20 wells by December 31, 1996.  The Company shall have the right,
based upon information provided by Westar, at least 30 days prior to
completion of the last of the five wells in each segment, to evaluate and
determine whether it elects to participate in the drilling of the five wells in
the next segment.  If, within 20 days after receiving the Westar information
as to the next segment, the Company elects not to participate in the drilling
of any wells in the Westar proposal, the Agreement will terminate, except as
to the wells in which the Company has theretofore participated.

                    For the consideration set forth below, the Company will 
acquire a 75 percent working interest in the leases, wells, equipment and all
contractual rights of Westar pertaining to each well, including contracts for
the sale of production from the wells.  Westar agreed to drill, complete,
fracture and equip each well for a fixed cost price of $180,000 to 100 percent
of the working interest or $135,000 per well to the 75 percent working
interest of the Company.  If a well is determined to be not capable of
commercial production, Westar will repay or credit the Company against the
cost of the next well the amount of the Company's portion of the unexpended
cost in the non-commercial well.  As each well is completed as capable of
commercial production, Westar shall execute an assignment to the Company
of 50 percent of the working interest in the well and deliver to an escrow
agent an additional assignment for 25 percent working interest.  The 25
percent working interest will be held by an escrow agent subject to a Value
Guaranty, described below.  Proceeds from the sale of oil and gas
attributable to the 25 percent working interest held in escrow shall be held
in suspense by the oil and/or gas purchaser or by the escrow agent until the
Company's interest in the 25 percent working interest is finally determined
under the Value Guaranty.  Westar will reserve a reversionary interest in
each well equal to 15 percent of the working interest conveyed to the
Company (or 11.25 percent of the Company's 75 percent working interest)
which shall become effective as to each well in a five well segment only
when the Company has received proceeds from production from all five wells
in a segment equal to 110 percent of the Company's cost of drilling,
completing, equipping, reworking and operating all five wells in the segment,
plus all taxes attributable to production (except income taxes).

                    Following completion of the First Phase, subject to 
Westar's ability to identify additional mutually agreeable drilling locations,
the parties intend to drill up to an additional 80 wells, in 20 well phases, in
1997 and 1998.  Provided the Company has participated in the drilling of all
20 wells in the First Phase, the Company will have the right to participate in
subsequent phases on substantially the same terms and conditions as in the
First Phase.

                    With regard to the Company's 75 percent share of the 
turnkey cost of drilling, completing and equipping each of the 20 wells in the
First Phase, the Company shall pay Westar $135,000 per well, $90,000 of which
shall be paid in cash prior to commencement of the well, which shall
represent payment for 50 percent of the working interest in such well.  The
remaining $45,000 cost per well for the 20 wells in the First Phase shall be
paid by delivery to an escrow agent of 300,000 shares of the Company's
Common Stock (15,000 shares per well) (the "Shares") which shall constitute
payment for the remaining 25 percent of the working  interest in the wells. 
The Company will agree to register the Shares under the Securities Act of
1933 to enable Westar to sell such Shares in an underwritten offering or from
time to time in the open market.  Pursuant to a Value Guaranty in the
Agreement, Westar will receive $900,000 from the sale of its 300,000
shares.  In the event the sale of the 300,000 Shares is not completed by
December 31, 1996 or Westar does not receive $900,000 from the sale of the
Shares, the Company must compensate Westar for the difference between the
Value Guaranty and the net consideration, if any, received by Westar (the
"Shortfall"):  (i) by purchasing from Westar all or any part of the Shares not
sold by Westar or arranging for the purchase by others, or (ii) by issuing to
Westar additional shares to make up the Shortfall, or (iii) by reconveying to
Westar a portion of the 25 percent working interest in the wells in the First
Phase based on the amount of the Shortfall or (iv) if the Shortfall is satisfied
by any means other than the issuance of additional shares of Common Stock,
all of the unsold Shares held by the escrow agent shall be retransferred to the
Company.  In the event that the Company elects not to participate in all 20
wells in the First Phase, the Value Guaranty shall be proportionately reduced
by $45,000 or 15,000 shares per well.

                    Under the Agreement, the Company has the right until 
December 31, 1996, to request Westar to sell any part of the Shares in
escrow, but not less than 100,000 shares, to any party designated by the
Company.  In such event, the total sales price will be credited against the
Value Guaranty, whether or not Westar elects to sell such Shares.

                    For its assistance in identifying and participating in the 
negotiations of the Westar transaction, the Company has agreed to assign to
an unaffiliated third party 6.25 percent working interest from its 50 percent
working interest in each of the wells acquired by the Company, but not from
the 25 percent working interest, which was acquired subject to the value
guaranty described above.

FINANCIAL RESULTS FOR FISCAL YEAR 1995 - FIRST QUARTER
ENDED MARCH 31, 1996

                    Revenues of $85,282 for fiscal year ended December 31, 1995
resulted in a loss from operations of $245,636 as compared with revenues of
$138,012 and an operating loss of $998,929 for the preceding fiscal year
ended December 31, 1994.  The loss of $998,929 for the fiscal year ended
December 31, 1994 included a special "non-cash" charge of $830,969 of
depletion/amortization to adjust the value of oil and gas properties to the
discounted value of oil and gas reserves at December 31, 1994, as
determined by independent engineering reserve evaluations.

                    Revenues of $20,567 for the three month period ended March 
31, 1996 produced an operating loss of $42,545 as compared with revenues
of $33,048 and a corresponding loss of $13,991 for the similar three month
period ended March 31, 1995.  The general trend of declining revenues and
increasing operating losses as described for the periods set forth above has
been caused in substantial part by the fact that the decline in production from
the producing wells has not been offset by the discovery of additional
production.  This downward trend will continue until expanded drilling
programs and/or acquisition of production and reserves can be successfully
achieved.  Such programs will require additional financing, as will be
discussed later.

FINANCIAL CONDITION DISCUSSION

                    As of March 31, 1995, the Company had a net worth of 
$2,211,561 and a working capital deficit of $482,919.

                    As of March 31, 1996, the Company had a net worth of 
$1,937,372 and a working capital deficit of $385,099.  The decrease in net
worth at March 31, 1996 as compared to March 31, 1995 was caused by the
operating losses sustained during the period.  The reduction of the working
capital deficit for the same comparitive periods was caused primarily by the
Texoil Transaction in which the Company received cash and a note
receivable.

STRATEGY AND BUSINESS PLANS

                    The Company's business strategy is to increase its cash
flow and oil and gas reserves through exploratory and development drilling and
the acquisition of all or a portion of producing properties or energy-related
companies.  In implementing this strategy the Company plans to do the
following:

-    Initiate the infill drilling and completion program in the
     Westar Joint Venture;

-    Develop the Richmond acreage by drilling development wells
     and infill location wells.  Certain of the Richmond acreage
     will be developed in conjunction with Texoil;

-    Continue the development and enhancement of the
     Taureaux/Lyon properties; and,

-    Actively pursue business combinations with or the acquisition
     of producing properties or other energy companies with
     producing properties.  Although the Company is continually
     seeking business combinations and producing properties for
     acquisition, no such transactions have been finalized as of the
     date of this Prospectus.

NEED FOR THE INFUSION OF CAPITAL

                    Each of the Company's business strategy objectives 
delineated above will require investments in excess of capital funds now
available to the Company.  These funds must be generated from financial
institutions through the placement or sale of Empiric's equity or
indebtedness.  In this regard, the Company made a revised filing of a
Registration Statement on April 12, 1996 with the Securities and Exchange
Commission seeking to register 1,500,000 shares of the Company's Common
Stock for ultimate sale and the infusion of up to $4.5 million, less offering
expenses of new equity funds.  This Registration Statement has not been
approved by the Securities and Exchange Commission which has responded
with comments concerning the proposed financing and the Company is
currently engaged in the preparation of responses to these comments.  The
Company has not secured an underwriting firm for this proposed financing
and is in the process of obtaining an underwriter under terms favorable to the
Company.


PART II.  OTHER INFORMATION
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

   There were no reports filed.

                In accordance with the requirements of the Exchange Act, 
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                    EMPIRIC ENERGY, INC.




Date: September 17, 1996            By:__Signed by Clyde E. Skeen____
                                        Clyde E. Skeen
                                        Chief Financial Officer