SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K


[x]      ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
         EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2000 or
                                                        -----------------

[ ]      TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 for the transition period from         to
                                                             --------   --------

Commission file number 0-5704
                       ------

                                MAYNARD OIL COMPANY
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                        75-1362284
-------------------------------------------------     --------------------------

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


8080 N. Central Expressway, Suite 660, Dallas, TX            75206
-------------------------------------------------     --------------------------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code:    (214)891-8880
                                                   -----------------------------

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

Securities registered pursuant to Section 12(g) of the Act:

                            Common Stock - $.10 Par Value
--------------------------------------------------------------------------------
                                (Title of class)

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,  and (2) has been subject to such filing  requirements
for the past 90 days.
                                    Yes x    No
                                       ----    ----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ x ]

While it is difficult to determine the number of shares owned by  non-affiliates
(within  the  meaning  of the  term  under  the  applicable  regulations  of the
Securities and Exchange Commission), the Registrant estimates that the aggregate
market  value of its Common Stock held by  non-affiliates  on March 16, 2001 was
$37,067,520  (based  upon an  estimate  that 43.4% of the shares are so owned by
non-affiliates  and upon the closing  price for the Common  Stock as reported by
NASDAQ (NMS)).

The number of shares outstanding of the Registrant's $.10 par value common stock
as of March 16, 2001 was 4,880,516 shares.

The following  documents are incorporated into this Form 10-K by reference:
         Proxy  Statement for Annual Meeting of  Stockholders  to be held on May
         16, 2001 - Part III of Form 10K.


                                       -1-

<PAGE>





                                     PART I.
ITEM 1.           BUSINESS

The Company

         Maynard Oil Company is a Delaware  corporation  which was  organized in
1971 to continue the oil and gas operations  conducted on an individual basis by
its  founders,  including  Mr. James G.  Maynard,  its Chairman of the Board and
Chief Executive Officer.  The Company's principal executive office is located at
8080 N. Central,  Ste. 660,  Dallas,  Texas 75206,  and its telephone  number is
(214) 891-8880.  Unless the context requires otherwise, as used herein, the term
"Company" refers to Maynard Oil Company and its subsidiary.

         The Company's principal line of business is the production and sale of,
and exploration and development of, crude oil and natural gas. The Company's oil
and gas operations are conducted exclusively in the United States,  primarily in
the states of Texas, Oklahoma, Louisiana, New Mexico and Arkansas.

Recent Acquisition Activities

         Since  January 1, 2000,  the  Company  has  purchased  three  groups of
producing oil and gas properties for cash  consideration of  approximately  $7.8
million which came from the Company's existing cash resources.

         Effective April 1, 2000 the Company purchased  interests in 8 producing
wells in Garza, Dawson and Ector Counties,  Texas at auction for $3.8 million. A
second  purchase  became  effective  June 1,  2000  when  the  Company  acquired
additional working interests in various producing  properties located within the
Tex-Mex field of Gaines County,  Texas for $1.2 million.  The third  acquisition
was effective October 1, 2000. The Company  purchased  interests in 10 producing
properties  located in the Sho-Vel-Tum  field of Carter,  Stephens and Jefferson
Counties, Oklahoma for cash consideration of $2.8 million. The Company estimates
that  approximately  800,000 barrels of oil and 1.5 bcf of gas were added to its
hydrocarbon reserve base through these three transactions.

2001 Activities

         The Company spent  approximately  $8.8 million  increasing  its working
interest  position in certain  properties  acquired last year. In one such area,
the Company was also elected operator of the property.

Oil and Gas Operations

         The Company is an independent oil and gas company, engaged primarily in
the  production  and  exploration  phases of the oil and gas  business.  Company
operations include acquiring, exploring, developing, and operating crude oil and
natural gas properties.

                                       -2-

<PAGE>

         The  Company  seeks  to  accomplish  its  overall  goal  of  increasing
hydrocarbon  reserves  and cash flow by  selectively  acquiring  and  exploiting
producing oil and gas properties.  When possible, the Company acquires producing
properties on which it can act as operator,  and thus,  supervise production and
development activities.

         Prices  realized from the sale of oil and gas from the Company's  wells
depend on numerous  factors  beyond the control of the  Company,  including  the
amount of domestic  production,  the  importation  of oil, the  proximity of the
Company's  property to natural gas pipelines and the capacity of such pipelines,
the market for other  competitive  fuels,  fluctuations in seasonal demand,  and
governmental  regulations  relative to hydrocarbon  production and pricing.  The
production of oil and gas is also subject to the laws of supply and demand,  and
therefore,  is subject to purchaser cutbacks and price reductions during periods
of  oversupply.  At  December  31,  2000,  approximately  72% of  the  Company's
estimated proved reserves and 68% of the 2000 production,  were  attributable to
crude oil and condensate on a net equivalent barrel basis (net equivalent barrel
"NEB" uses a conversion ratio of six thousand cubic feet of gas (MCF) to one net
equivalent barrel of oil) and consequently, the Company is primarily impacted by
oil markets.

         As  described  above,  the  Company  was  successful  in  adding to its
hydrocarbon  reserves  through  current year  producing  property  acquisitions.
Additionally,  financial  results were aided by product pricing  increases which
averaged $27.36 per barrel and $3.90 per mcf during calendar 2000, compared with
prior year  average  prices of $17.64  per  barrel and $2.58 per mcf.  Quarterly
product volumes and prices were as follows:
                                            Oil                      Gas
                                    Bbl         Avg Bbl         MCF      Avg MCF
         Calendar 2000            Volumes     Prices         Volumes      Prices
         -------------            -------     ------         -------      ------
         First Quarter            346,998     $24.00         902,181      $2.73
         Second Quarter           337,630      24.45       1,065,474       3.06
         Third Quarter            346,468      29.90         968,320       4.57
         Fourth Quarter           338,360      31.12         979,350       5.23
                                ---------                  ---------
            Totals              1,369,456                  3,915,325
                                =========                  =========

         The Company does not believe it would be adversely affected by the loss
of any of its oil or gas purchasers since no single purchaser  accounted for 10%
of consolidated revenues.

         The market price for natural gas has also fluctuated significantly from
month to month and year to year for the past several years. Like the oil market,
the Company cannot predict gas price movements with any certainty.

         Except for curtailed  exploration and production activity  occasionally
experienced  in severe  weather and normal  curtailments  of gas sales in summer
months,  the Company  does not consider its business to be seasonal and does not
carry significant amounts of inventory.

         A total of twenty-three wells were drilled during 2000, one exploratory
and twenty-two  development wells. Six of the twenty-two  development wells were
drilled as producers on Company-operated properties, with Maynard retaining 100%
working  interest in five of

                                       -3-

<PAGE>

these  wells  and  95%  working  interest  in the  other  one.  Fourteen  of the
additional  sixteen  development  wells  were  drilled  by other  operators  and
successfully  completed as oil producers while the other two  development  wells
were gas completions. The one exploratory well was a productive gas well drilled
by the Company in which it retained a 40% working interest.

General

         The oil and gas business  involves  intense  competition  in all of its
phases and,  because of its size,  the Company is not a significant  competitive
factor in the industry.  In its efforts to acquire property rights,  the Company
competes with many companies  having access to substantially  greater  financial
resources and larger technical staffs.

         The Company's oil and gas exploration efforts often involve exploratory
drilling on unproven  acreage  involving high risks.  There is no assurance that
any  oil or gas  production  will  be  obtained,  or that  such  production,  if
obtained,  will be  profitable.  The cost of drilling,  completing and operating
wells is often  uncertain.  Drilling  may be curtailed or delayed as a result of
many factors,  including title problems,  weather  conditions,  and shortages of
pipe and equipment.

         The Company's operations are subject to potential hazards,  inherent in
the  exploration  for and  production of  hydrocarbons,  including  blowouts and
fires.  These and other  events can cause a suspension  of drilling  operations,
severe damage to equipment or surrounding property, personal injury, and perhaps
even a loss of life.  The Company may be subject to liability  for pollution and
other  damages  and  is  subject  to  statutes  and   regulations   relating  to
environmental and other matters.  While the Company maintains  insurance against
certain of these risks,  there are certain risks against which it cannot insure,
or which it may elect not to insure due to premium  costs or for other  reasons.
Substantial uninsured liabilities to third parties may arise.

         The oil and gas  operations of the Company are subject to local,  state
and  federal   environmental   regulations.   To  date,  compliance  with  these
regulations by the Company has had no material  effect on the Company's  capital
expenditures.  Although  the Company is unable to assess or predict at this time
the impact that compliance with such  environmental  regulations may have on its
future  capital  expenditures,  earnings  and  financial  position,  it does not
anticipate making any material capital  expenditures for  environmental  control
facilities during 2001.

         Many facets of the  Company's  operations  are subject to  governmental
regulations.  All of the Company's oil and gas  properties are located in states
in  which  oil  and  gas  production  is  regulated  by  state   production  and
conservation laws and regulations.  These laws and regulations in many instances
also require permits for the drilling of wells, the spacing of wells, prevention
of waste, conservation of oil and natural gas and various other requirements.

         The Company's  activities are subject to taxation at numerous levels of
government,  including taxes on income, severance of minerals, and payroll. Laws
governing  taxation,  protection of the  environment,  crude


                                       -4-

<PAGE>



oil and natural gas operations and  production,  and other crucial areas are all
subject to modification at any time.

         At March 16,  2001 the  Company  employed  43  persons,  including  one
geologist and six petroleum engineers.

ITEM 2.           PROPERTIES

         The Company's executive offices are presently located at 8080 N.
Central, Ste. 660 N. Central Expressway, Suite 660, Dallas, Texas
occupying approximately 13,101 square feet of space under a lease agreement
which expires in April, 2005.

         The  Company's   principal   property  holdings  consist  of  leasehold
interests  in oil  and gas  properties  located  solely  in the  United  States,
primarily in Oklahoma, Texas, New Mexico, Louisiana and Arkansas. The leaseholds
remain in force so long as production from lands under lease is maintained.  The
Company believes that it has  satisfactory  title to its oil and gas properties.
Such properties are subject to customary  royalty  interests,  liens incident to
operating  agreements,  liens for  current  taxes,  and other  burdens and minor
encumbrances,  easements, and restrictions. The Company believes such burdens do
not materially detract from the value of the properties or materially  interfere
with their use in the  operation  of the  Company's  business.  The  Company has
pledged certain of its oil and gas properties to secure its term loan.



                                       -5-

<PAGE>



Estimated Proved Reserves,
Future Net Revenues and Present Value

         Reflected  below are the estimated  quantities of proved  developed and
undeveloped  reserves  of crude oil and  natural  gas owned by the Company as of
December 31, 2000, 1999, and 1998. Such reserve information has been prepared by
the  Company's  staff of  petroleum  engineers  and  audited by the  independent
petroleum consulting firm of Netherland, Sewell, and Associates, Inc. No reserve
reports with respect to the Company's  proved net oil or gas reserves were filed
with any federal  authority or agency during the fiscal year ended  December 31,
2000.
<TABLE>

                                                            December 31
                           -----------------------------------------------------------------------------

                                      2000                      1999                      1998
                           ------------------------    -----------------------    ----------------------

                            Oil (MB)     Gas (MMCF)    Oil (MB)     Gas (MMCF)    Oil (MB)     Gas (MMCF)

<S>                         <C>           <C>          <C>          <C>            <C>          <C>
Proved Developed            11,085.4      29,362.1     10,072.7     28,917.2       4,947.1      12,262.1
Proved Undeveloped           2,524.9       2,715.6      1,447.3      3,009.7          72.4         642.0
                            --------      --------     --------     --------      --------      --------

Total Proved Reserves       13,610.3      32,077.7     11,520.0     31,926.9       5,019.5      12,904.1
                            ========      ========     ========     ========      ========      ========
</TABLE>

       The following  table  summarizes  the future net revenues,  using current
prices  and  costs as of the  dates  indicated,  as well as the  present  value,
discounted  at 10%, of such future net revenues  from  estimated  production  of
proved reserves of crude oil and natural gas as of December 31, 2000,  1999, and
1998.  Oil and gas prices used in the  tabulation of the amounts below are based
on the price received for each lease at December 31 of the appropriate year. The
weighted average prices at December 31, 2000, 1999, and 1998, respectively, used
in the estimates  were $25.27,  $23.69,  and $10.02 per barrel of oil and $9.72,
$2.04,  and $1.86 per mcf of natural  gas.  Lease and well  operating  costs are
based upon actual operating expense records.

<TABLE>

                                                          December 31
                             --------------------------------------------------------------------------

                                     2000                       1999                     1998
                             --------------------     ----------------------    -----------------------
                              Future      Present         Future     Present      Future       Present
                                Net        Value            Net       Value         Net         Value
Expressed in 000's           Revenue       @ 10%         Revenue      @ 10%      Revenue        @ 10%
                             -------      -------        -------     -------     -------       ------

<S>                         <C>          <C>            <C>         <C>         <C>           <C>
Proved Developed            $383,769     $245,567       $171,425    $112,842    $ 34,048      $ 23,374
Proved Undeveloped            53,015       24,945         20,593       9,851       1,302           783
                             -------      -------        -------     -------     -------       -------

Total Proved Reserves       $436,784     $270,512       $192,018    $122,693    $ 35,350      $ 24,157
                             =======      =======        =======     =======     =======       =======

</TABLE>

Amounts presented in the tables above are before the effects of income taxes.



                                       -6-

<PAGE>



Production, Sales Prices and Costs

     The following  table sets forth the  Company's net oil and gas  production,
average sales prices and production costs for the three years ended December 31,
2000.
                                                              December 31
                                                     ---------------------------
                                                      2000     1999       1998
                                                      ----     ----       ----
Production:
  Oil (MB)                                          1,369.5    990.9    1,025.5
  Gas (MMCF)                                        3,915.3  2,289.6    1,637.3

Average Sales Prices:
  Oil (per BBL)                                      $27.36   $17.64     $12.38
  Gas (per MCF)                                      $ 3.90   $ 2.58     $ 2.12

Average Production Costs:
  Per net equivalent barrel of oil (1)(2)            $ 7.01   $ 5.71     $ 5.91

(1)      Six MCF of gas equals one net equivalent barrel ("NEB").
(2)      Production costs are comprised of severance and advalorem taxes, if
         applicable, and lease operating expenses, which include workover
         costs.

Productive Wells and Acreage

         As of December 31, 2000, the Company owned an interest in approximately
1,274 gross  (478.5 net) wells,  of which 1,178 gross  (438.7 net) are oil wells
and 96 gross (39.8 net) are gas wells,  located on  approximately  54,140  gross
(24,842 net) producing acres.

Undeveloped Acreage

         The following  table sets forth the Company's gross and net undeveloped
acreage as of December 31, 2000.
                                                            Undeveloped Acreage
                                                            -------------------
                                                             Gross          Net
                                                             -----          ---

Arkansas......................................................420             88
Colorado.......................................................80             10
North Dakota.................................................. 62              4
Oklahoma......................................................425            185
Texas.......................................................6,510          2,546
Wyoming.................................................... 2,376            809
                                                           ------         ------

Total                                                       9,873          3,642
                                                           ======         ======



                                       -7-

<PAGE>



Drilling Activity

         The following  table sets forth the results of the  Company's  drilling
activity during the three years ended December 31, 2000.

<TABLE>

                                       Exploratory                   Development                     Total
                                       -----------                   -----------                     -----
                                Gross            Net          Gross           Net          Gross           Net
                                -----            ---          -----           ---          -----           ---

<S>                                 <C>         <C>              <C>        <C>               <C>        <C>
December 31, 2000
         Productive                 1           .400             22         8.096             23         8.496
         Dry                        0           .000              0          .000              0          .000
                                  ---          -----            ---        ------            ---        ------

  Total                             1           .400             22         8.096             23         8.496
                                  ===          =====            ===        ======            ===        ======

December 31, 1999
         Productive                 0           .000              5         1.888              5         1.888
         Dry                        2           .650              0          .000              2          .650
                                  ---          -----            ---        ------            ---        ------

  Total                             2           .650              5         1.888              7         2.538
                                  ===          =====            ===        ======            ===        ======

December 31, 1998
         Productive                 2           .438              7          .916              9         1.354
         Dry                        0           .000              0          .000              0          .000
                                  ---          -----            ---        ------            ---        ------

  Total                             2           .438              7          .916              9         1.354
                                  ===          =====            ===        ======            ===        ======

</TABLE>

         At December 31, 2000,  the Company had five wells being  drilled  which
have all been successfully completed at March 16, 2001.

ITEM 3.           LEGAL PROCEEDINGS

         The Company is a defendant  in minor  lawsuits  that have arisen in the
ordinary  course of business.  The Company does not expect any of these lawsuits
or other items to have a material  adverse effect on the Company's  consolidated
financial position or results of operations.

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

         None.

Executive Officers of the Registrant

         Information  with  respect to the  Company's  executive  officers as of
March 16, 2001, is set forth in the table below.

         Name                    Position                      Age         Since
         ----                    --------                      ---         -----

James G. Maynard         Chairman of the Board,                 74          1971
                           Chief Executive Officer
                           and Treasurer

Glenn R. Moore           President and Chief                    63          1982
                           Operating Officer

L. Brent Carruth         Executive Vice President               67          1984
                           of Operations

                                       -8-

<PAGE>



Kenneth W. Hatcher       Executive Vice President               57          1983
                           of Finance

Linda K. Burgess         Vice President of                      52          1984
                           Accounting and
                           Corporate Secretary

Cassondra Foster         Vice President of Land                 58          1999

Jerry G. Keen            Vice President of Engineering          52          1999

         Mr. Maynard has been a director since 1971 and engaged in oil and gas
exploration as an independent operator and private investor for the past
40 years.

         Mr. Moore has over 35 years experience in domestic and foreign oil
and gas exploration and production.  Prior to joining the Company in
November, 1982, Mr. Moore served as President of Shannon Oil and Gas, Inc.
and Hanover Petroleum Corporation.

         Mr.  Carruth  has over 35 years of  petroleum  engineering  experience.
Prior to joining the Company in  January,  1984,  he served for one year as Vice
President of Operations of Cordova Resources.  Preceding that, Mr. Carruth was a
petroleum  consultant  for three years and served as Manager of  Engineering  of
Texas Pacific Oil Company for eight years.

         Mr. Hatcher has over 35 years of finance and accounting experience
in the oil and gas industry and is a Certified Public Accountant.  Prior
to joining the Company in February, 1983, Mr. Hatcher served as Controller
and Vice President of Finance of Shannon Oil and Gas, Inc. for three years
and as Controller and Vice President of Hanover Petroleum Corporation for
four years.

         Ms. Burgess has in excess of 30 years of oil and gas accounting
experience.  Prior to joining the Company in May, 1984, Ms. Burgess served
as Controller for Trans-Western Exploration Inc. for four years and as
Controller for Energy Resources Oil and Gas for three years.

         Ms. Foster has over 30 years of petroleum land management experience,
joining Maynard Oil Company's Land Department in 1974.  Prior to that Ms.
Foster was a Title Analyst for Texas Oil & Gas.

         Mr. Keen has over 30 years of petroleum engineering experience and
has been employed by Maynard Oil Company since 1984.

         Each  officer's  term of office  expires on the date of the next annual
meeting of the Board of Directors,  or until his earlier resignation or removal.
There are no family relationships among the executive officers listed, and there
are no arrangements or understandings pursuant to which any of them were elected
or appointed as officers.



                                       -9-

<PAGE>



                                     PART II

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

         The Company's  Common Stock is traded in the  over-the-counter  market,
NASDAQ trading  symbol "MOIL".  The high and low sales prices for each quarterly
period during the two years ended December 31, 2000, were as follows:

         2000         High        Low          1999             High       Low
         ----         ----        ---          ----             ----       ---

First Quarter      $26.125     $ 9.875    First Quarter      $ 8.6875   $7.0000
Second Quarter      19.187      10.125    Second Quarter      10.3750    8.2500
Third Quarter       22.875      14.750    Third Quarter       10.8750    9.3750
Fourth Quarter      23.125      15.250    Fourth Quarter      12.0000    9.5000

         As of March 16, 2001, the Company had approximately 760 shareholders of
record.

         The Company has not paid any dividends on its Common Stock in the past,
nor does it plan to pay  dividends  in the  foreseeable  future.  The  Company's
ability to pay dividends is currently  restricted  under its Loan Agreement with
Bank One, Texas.

ITEM 6.           SELECTED FINANCIAL DATA.

         The following  table  summarizes  certain  selected  financial  data to
highlight  significant trends in the Company's financial condition and operating
results for the periods indicated.  The selected financial information presented
should be read in conjunction  with the  consolidated  financial  statements and
related notes appearing elsewhere in this Report and the Management's Discussion
and Analysis of Financial  Condition and Results of  Operations  set forth under
Item 7  below.  All  amounts  are  expressed  in  thousands,  except  per  share
information.

                                                     December 31
                               -------------------------------------------------
                                  2000     1999        1998      1997       1996
                                  ----     ----        ----      ----       ----
Oil and gas sales
  and royalties                $52,739   $23,392    $16,166    $26,477   $30,583
Income (loss) before
  income taxes (1)              22,273     7,148    (11,897)     6,613    15,758
Net income (loss) (1)           14,103     4,355     (7,816)     4,455     9,954
Per share income
 (loss) (1)(2)                   2.89       .89      (1.60)       .91      2.04
Total assets                   107,858    94,708     60,363     78,286    81,257
Long-term debt                  24,863    32,513      6,250     11,250    16,250
Shareholders' equity            64,087    49,991     45,647     53,509    49,054
Net working capital             14,151     8,321     16,448     17,503    12,942
Net cash provided by
  operating activities          26,795     9,661      5,025     11,250    13,921

(1)      Includes effect of 1998 impairment of oil and gas properties amounting
         to $8,754,846.
(2)      Basic and diluted earnings (loss) per share were the same for all years
         presented.


                                      -10-

<PAGE>



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

Year Ended December 31, 2000 Compared to December 31, 1999
----------------------------------------------------------
Overview
--------

         Maynard Oil has  utilized  the year 2000 to  integrate  the  properties
acquired in the fourth quarter of 1999 from Questar into the Company's operating
structure.  It has been a  challenging  task to merge  Questar's 300 oil and gas
properties   into   Maynard's   existing   property  base  which   consisted  of
approximately 1,100 wells. Additionally,  the Company continued its strategy for
growth by  acquiring  three  separate  groups of producing  properties  and also
divested of 196 properties which were either marginally productive or which were
not considered part of the Company's core operating  properties.  Product prices
continued  to  improve  from  1999  levels,  and,  coupled  with  the  increased
production volumes,  formed the basis for current year earnings of $14.1 million
and operating  cash flows of $26.8  million,  which are both records for Maynard
Oil--the  best  annual  period in its  thirty  year  history  in the oil and gas
business from earnings and cash flow perspectives.

Liquidity and Capital Resources
-------------------------------

         Cash and cash  equivalents  totaled  $21.2 million and $12.9 million at
December 31, 2000 and December 31, 1999, respectively,  increasing approximately
$8.3 million over this one year period.

         Cash flow from operations  approximated  $26.8 million and was utilized
as follows:

                  Property acquisitions                         $ 7.8  million
                  Drilling of 23 wells                            3.5  million
                  Capitalized workover activities                 2.0  million
                  Repayment of debt                               5.7  million
                  Proceeds from sale of property,
                    net of miscellaneous expenditures             (.5) million
                  Cash increase                                   8.3  million
                                                                -----

                  Total                                         $26.8 million
                                                                =====

         Company  management  plans on utilizing cash generated from  operations
and additional bank debt, if necessary, to fund future oil and gas activities.

Results of Operations
---------------------
Year ended December 31, 2000 Compared to December 31, 1999
----------------------------------------------------------

         During  2000,  the  Company  earned  $2.89 per share  compared  to 1999
earnings of $.89 per share.



                                      -11-

<PAGE>



Revenues

         Oil and gas revenue more than doubled during the year 2000, rising from
$23.3  million a year ago to $52.7  million  during 2000.  Higher sales  volumes
accounted  for  57%  of the  revenue  increase  and  pricing  differentials  the
remaining 43%. The table below reflects these differences by product:
                                           Avg.                          Avg.
                             Oil          Price          Gas            Price
                             Bbls          Bbl           MCF             MCF
Twelve months 2000         1,369,456      $27.36       3,915,325        $3.90
Twelve months 1999           990,877       17.64       2,289,563         2.58

         Interest income rose  approximately  $347,000 between 1999 and 2000 due
to increased  average cash  balances.  Additionally,  the  disposition of assets
reflects a loss for the current year while the prior year dispositions yielded a
gain to the Company.

Costs and Expenses

         On a net  equivalent  barrel  (NEB)  basis,  lease  operating  expenses
increased $1.30 per NEB from $5.71 per NEB to $7.01 per NEB.  Approximately  46%
of  this  increase  was  due to  higher  severance  taxes,  which  are  directly
proportional to sales values;  18% of the lease operating expense increase was a
result of expense  workovers;  12% was attributable to greater  advalorem taxes,
which are also functions of pricing; and 25% was attributable to all other lease
operating items such as labor and salt water disposal.

         The exploration, dry holes, and abandonments category decreased $84,520
during 2000 because no unsuccessful  exploratory  wells were drilled,  while two
such dry holes were drilled and expensed in 1999. A substantial  portion of this
expense  category for 2000 is represented by the impairment of acreage for which
the Company has no future plans. The one successful  exploratory well drilled in
2000 was capitalized as oil and gas property.

         The general  and  administrative  (G&A)  expense  category  reflects an
increase of  $1,604,659  between 1999 and 2000,  primarily the result of phantom
stock  adjustments  which occur because of stock price  fluctuations.  Since the
phantom stock units were  originally  awarded in 1989, the Company's G&A expense
has  experienced  a great deal of  volatility  as the stock  price has risen and
fallen and the related charges and credits for phantom stock have been recorded.
At December 31, 1999, the closing stock price was $9.75,  and the Company had an
accrued  liability of $449,625 for this phantom stock  obligation on its balance
sheet with  $214,875 of this amount  recorded in 1999 G&A expense.  On September
28, 2000 the Company's Board of Directors  approved an amendment to the employee
incentive plan which originally awarded these phantom stock units (See Note 8 to
the 2000 Consolidated Financial  Statements).  On this date, the Company's stock
price had risen to $20.81  per  share,  so the  Company  accrued  an  additional
$934,773  to 2000 G&A  expense  for the  84,500  phantom  stock  units that were
exercised under the plan amendment. At December 31, 2000, the Company also has a
remaining  liability of  approximately  $136,000  attributable  to the remaining
11,000 stock participation units, $85,250 of which is also reflected in 2000 G&A
expense. The remainder of the year 2000 G&A expense increase represents


                                      -12-

<PAGE>


costs to manage the growth of the Company from  approximately  $60.3  million in
assets at September 30, 1999-prior to the Questar  acquisition-to $107.8 million
in assets at December 31, 2000.

         On  a  net  equivalent  barrel  basis,  the  current  depreciation  and
amortization rate increased  approximately 18% from $4.26 per NEB during 1999 to
$5.01 per NEB during 2000.  Under the  successful  efforts method of accounting,
costs of oil and gas  properties  are amortized on a unit of  production  method
based upon estimated  proved reserves.  The Company  calculates and applies this
rate  on  a  property  by  property  basis.  Fluctuations  in  depreciation  and
amortization  expense can be caused by variations in the  performance of the oil
and gas  property,  the amount  invested  in the  property  and the  hydrocarbon
reserves ultimately recoverable from the property. As the oil and gas properties
and their  associated  reserves  age within a company,  these rates  become more
predictable and have less variance.

         Interest expense increased over 200% due to a full annual period having
lapsed  under  the  term  loan  agreement  put in  place  in  November,  1999 in
connection with the Questar acquisition.

         Income tax expense for 2000  reflects  an  effective  tax rate of 36.7%
which  differs from the corporate  rate of 35% for Maynard Oil's pre-tax  income
level.  The primary reason for this difference  relates to income taxes assessed
at the state level.

Year ended December 31, 1999 Compared to December 31, 1998
----------------------------------------------------------
Results of Operations
---------------------

         For the year ended December 31, 1999,  the Company  earned  eighty-nine
cents per share  compared  to the prior year loss of one dollar and sixty  cents
per  share.  The  loss in  1998  was  primarily  related  to oil  and gas  price
reductions  which  resulted  in  lower  oil and  gas  revenues  and a non-  cash
impairment charge to oil and gas properties of $1.18 per share.

         Oil and gas  revenues  rose  $7,226,189,  or almost 45% between the two
years,  primarily due to price  increases and higher gas volumes  resulting from
the current year property acquisitions. Oil and gas prices were $5.26 per barrel
and  forty-six  cents per mcf  higher  than a year ago.  Gas  volumes  increased
approximately  40% while oil volumes declined  slightly more than 3% during this
one year period.

         On a net equivalent  barrel basis,  lease  operating  expense  declined
twenty  cents  per NEB  from  $5.91 in 1998 to  $5.71  in 1999  because  expense
workovers were less during the current period than the same period in 1998.



                                      -13-

<PAGE>



         Exploration  costs  increased  $141,890,  or 36%, during 1999 primarily
because the Company drilled two exploratory dry holes in the current year, which
were expensed since no commercial  hydrocarbon reserves were found. During 1998,
two exploratory wells were productive and capitalized as oil and gas property.

         General  and  administrative   expense  category  reflects  a  $513,470
increase  which is primarily  the result of phantom  stock  adjustments.  During
1999,  phantom stock expense was charged  $214,875,  while in 1998,  general and
administrative  expenses  included a phantom  stock credit of $262,625.  Phantom
stock charges and credits arise as a result of stock price fluctuations. Closing
stock prices at December 31, 1999, 1998, and 1997 were $9.75,  $7.50, and $10.25
respectively.

         Depreciation and amortization  expense was reduced almost 41% from 1998
levels. Under the successful efforts method of accounting,  costs of oil and gas
properties  are  amortized  on a  unit-of-production  method  based on estimated
proved  reserves.  During 1998,  the effects of lower oil and gas prices reduced
the estimated  quantities  of  recoverable  proved  reserves  which  resulted in
increased  expense.  Likewise,  higher  product  prices  increased the estimated
recoverable  reserves  and  decreased  the  average  depletion  rate.  On a  net
equivalent barrel basis, the 1999 rate was $4.26 per NEB compared with $7.58 per
NEB during 1998.  The impairment  charge  amounted to $6.74 per NEB. If the 1998
write  down  of oil and  gas  properties  had not  occurred,  thus  leaving  the
impairment amount  capitalized,  the 1999 depreciation and amortization  expense
would have increased $.46 per NEB.

         Average oil prices for December,  1999 were $23.47 per barrel  compared
with an average of $10.02 during 1998. Consequently, there was no indication the
carrying amount of the Company's  assets should be assessed for  recoverability,
and thus there was no impairment charge during 1999.

         Interest expense decreased $117,644 due to scheduled bank note payments
and the resulting lower average outstanding principal.

         Income tax expense  reflected a charge of $2,793,000  during 1999 while
1998 included a tax benefit of $4,081,856  to reflect the  deductibility  of the
net loss.

Recent Accounting Pronouncements
--------------------------------

         In June 1998, the Financial  Accounting  Standards  Board (FASB) issued
Statement No. 133 ("SFAS  133"),  "Accounting  for  Derivative  Instruments  and
Hedging Activities." The FASB subsequently issued Statements No. 137 and No. 138
which  amend  SFAS  No.  133.  SFAS 133  establishes  accounting  and  reporting
standards for derivative  instruments  and for hedging  activities.  It requires
enterprises to recognize all  derivatives as either assets or liabilities in the
balance  sheet and  measure  those  instruments  at fair  value.  The  requisite
accounting  for  changes in the fair value of a  derivative  will  depend on the
intended  use of the  derivative  and the  resulting  designation.  The  Company
adopted SFAS 133 on January 1, 2001 and recorded a cumulative  effect adjustment
of  approximately  $84,000  to  earnings  to  recognize  the  fair  value of all
derivative instruments as a result of adopting SFAS 133.

Certain Factors that Could Affect Future Operations
---------------------------------------------------

                                      -14-

<PAGE>




         Certain  information  contained in this report,  as well as written and
oral  statements  made or  incorporated  by  reference  from time to time by the
Company and its  representatives  in other reports,  filings with the Securities
and  Exchange  Commission,  press  releases,  conferences,   teleconferences  or
otherwise,  may be deemed to be 'forward-looking  statements' within the meaning
of Section  21E of the  Securities  Exchange  Act of 1934 and are subject to the
'Safe Harbor'  provisions of that section.  Forward-looking  statements  include
statements concerning the Company's and management's plans,  objectives,  goals,
strategies and future operations and performance and the assumptions  underlying
such  forward-  looking  statements.  When  used in  this  document,  the  words
"anticipates,"   "estimates,"  "expects,"  "believes,"  "intends,"  "plans"  and
similar  expressions are intended to identify such  forward-looking  statements.
Actual results and developments  could differ materially from those expressed in
or implied by such statements due to these and other factors.

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

Commodity Risk
--------------

         The Company's  primary  commodity market risk exposure is to changes in
the pricing  applicable  to its oil  production,  which is normally  priced with
reference to a defined  benchmark,  such as light, sweet crude oil traded on the
New York  Mercantile  Exchange  (WTI).  Actual  prices  received  vary  from the
benchmark depending on quality and location differentials. The markets for crude
oil historically have been volatile and are likely to continue to be volatile in
the future.

         From  time  to  time,  the  Company   enters  into   financial   market
transactions, including collars, with creditworthy counterparties,  primarily to
reduce the risk  associated with the pricing of a portion of the oil and natural
gas that it sells.  The policy is structured  to underpin the Company's  planned
revenues and results of operations.

         During 1999, the Company entered into a derivative financial instrument
whereby the Company  hedged 2,500 barrels of daily  production  from November 1,
1999 through June 30, 2000 with a ceiling price of $23.90/bbl  and a floor price
of $14.00/bbl.  The contracts  called for a monthly  settlement such that if the
average WTI for the month was greater than  $23.90/bbl,  the Company remitted to
the  counterparty  the excess  multiplied by the number of barrels hedged during
the  month.  Conversely,  if the  average  WTI  for  the  month  was  less  than
$14.00/bbl,  the  counterparty  was  to  pay  the  Company  for  the  difference
multiplied  by the number of  barrels  hedged  during the month.  As long as the
average WTI for the month fell between $14.00/bbl and $23.90/bbl,  no settlement
was to be made.  As a result  of this  arrangement,  the  Company's  oil and gas
revenues were reduced by $2,173,225 during 2000 and $234,673 during 1999.

         A second derivative instrument was entered into effective March 1, 2000
through  June 30,  2000 which  mirrored  the first  except the ceiling and floor
amounts were $28.30 and $25.00 per barrel, respectively.  This second instrument
was  cancelled  by the  Company  effective  April 1,  2000.  As a result of this
arrangement, the Company's 2000 oil and gas revenues were reduced by $145,525.

                                      -15-

<PAGE>




         Effective  September 1, 2000,  the Company  entered into an  additional
derivative  financial  instrument  in which the Company  hedged 1,000 barrels of
daily  production  for a period of six months with a ceiling price of $36.50/bbl
and a floor  price of  $24.00/bbl.  This  agreement  calls  for a  monthly  cash
settlement  if the average WTI for the month is greater than the ceiling  price,
whereby  Maynard  would be obligated to pay the  counterparty  to the  contract;
likewise,  if the  average WTI for the month is less than the floor  price,  the
counterparty  to the contract  would be obligated to pay Maynard.  The amount of
any cash payment would be equal to the difference  between the average WTI price
and the ceiling or floor price  multiplied  by the number of hedged  barrels for
the month.  From September,  2000 through  February,  2001, the average WTI fell
between $24.00/bbl and $36.50/bbl and, consequently, no monies were exchanged.

         Additionally,  effective  October 1, 2000,  the  Company  entered  into
another derivative  financial instrument in which an additional 1,000 barrels of
daily  production  was hedged for a period of six months with a ceiling price of
$37.20/bbl  and a floor  price of  $25.00/bbl.  For the  life of this  contract,
average WTI fell between $25.00/bbl and $37.20/bbl, so no monies were exchanged.

Interest Rate Risk
------------------

         While the Company  does have  interest  rate risk  associated  with its
outstanding  borrowing as of December  31, 2000,  we do not consider the risk to
have a material  impact on the Company's  operations.  As such, the Company does
not hedge against interest rate risk exposure.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The  information  required by Item 8 is included on pages 20 through 39
of this Report.

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

         None
                                    PART III

         The information required by Part III (Items 10 through 13) is set forth
in the Company's  Proxy  Statement for the annual meeting of  stockholders to be
held on May 16, 2001, and is incorporated herein by reference.  Information with
respect to the Company's  executive  officers as of March 16, 2001, is set forth
commencing on pages 8 and 9 thereof under the caption "Executive Officers of the
Registrant".


                                      -16-

<PAGE>



                                     PART IV

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

Financial Statements and Schedules

         See Index to Consolidated  Financial Statements and Schedule on page 20
of this Report.

Reports on Form 8-K

         No  reports  on Form 8-K  were  filed by the  Company  during  the last
quarter of 2000.

Exhibits

         3.1               (a) Certificate of Incorporation,  as amended,  filed
                           as Exhibit 3.1 to the Company's Annual Report on Form
                           10-K for its fiscal year ended December 31, 1980 (the
                           "1980  Form  10-  K"),  and  incorporated  herein  by
                           reference.

                  (b)      Certificate    of   Amendment   of   Certificate   of
                           Incorporation  dated May 19,  1981,  filed as Exhibit
                           3.1(b) to the  Company's  Annual  Report on Form 10-K
                           for its fiscal  year  ended  December  31,  1981 (the
                           "1981  form  10-K"),   and  incorporated   herein  by
                           reference.

                  (c)      Certificate    of   Amendment   of   Certificate   of
                           Incorporation  dated May 22,  1987,  filed as Exhibit
                           3.1 to the  Company's  Quarterly  Report on Form 10-Q
                           for the period ended June 30, 1987, and  incorporated
                           herein by reference.

                  (d)      Certificate    of   Amendment   of   Certificate   of
                           Incorporation  dated June 3,  1993,  filed as Exhibit
                           3.1 to the  Company's  Quarterly  Report on Form 10-Q
                           for the period ended June 30, 1993, and  incorporated
                           herein by reference.

         3.2      (a)      By-Laws, as amended, filed  as Exhibit  3.2(b) to the
                           1981 Form 10-K and incorporated herein by reference.

                  (b)      Amendment  to the By-Laws, filed as Exhibit 3.2(b) to
                           the  1981  Form  10-K  and   incorporated  herein  by
                           reference.

                  (c)      Amendment to the By-Laws,  filed as Exhibit 3.2(c) to
                           the  Company's  Annual  Report  on Form  10-K for its
                           fiscal year ended December 31, 1984, and incorporated
                           herein by reference.

                  (d)      Amendment to the By-Laws, filed as Exhibit 3.2 to the
                           Company's  Quarterly  Report  on  Form  10-Q  for the
                           period ended June 30, 1987, and  incorporated  herein
                           by reference.

                  (e)      Amendment to the By-Laws, filed as Exhibit 3.2 to the
                           Company's  Annual  Report on Form 10-K for its fiscal
                           year ended December 31, 1993 and incorporated  herein
                           by reference.

                                      -17-

<PAGE>




                  (f)      By-Laws,  as  amended,  filed as  Exhibit  3.2 to the
                           Company's  Quarterly  Report  on  Form  10-Q  for the
                           period ended  September  30, 1999,  and  incorporated
                           herein by reference.

          4.1              (a) Second  Restated Loan  Agreement,  dated November
                           12,  1999  between  Maynard Oil Company and Bank One,
                           Texas,  N.A.,  filed as Exhibit 4.1 to the  Company's
                           Annual  Report on Form 10-K for its fiscal year ended
                           December   31,   1999  (the  "1999  Form  10-K")  and
                           incorporated herein by reference.

                  (b)      First  Amendment  to  Second  Restated Loan Agreement
                           dated May  15, 2000 between  Maynard Oil  Company and
                           Bank One, Texas, N.A., filed herewith.

         10.1              1989 Stock  Participation Plan, filed as Exhibit 10.1
                           to the  Company's  Annual Report on Form 10-K for its
                           fiscal year ended December 31, 1995 and  incorporated
                           herein by reference.

         21.1              List of subsidiaries of the Company as of December
                           31, 2000, filed herewith.



                                      -18-

<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.

                                                   MAYNARD OIL COMPANY


                                                   By \s\   James G. Maynard
                                                      --------------------------
                                                      James G. Maynard
                                                      Chairman of the Board


Date:  March 30, 2001

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this report has been signed below by the following persons in the capacities and
on the date indicated in multiple counterparts with the same force and effect as
if each person  executing a separate  counterpart has joined in execution of the
same counterpart.




/s/  James G. Maynard             Chairman of the Board,          March 30, 2001
------------------------          Chief Executive Officer
     James G. Maynard             & Treasurer

/s/  Glenn R. Moore               President and Chief             March 30, 2001
------------------------            Operating Officer
     Glenn R. Moore

/s/  Kenneth W. Hatcher           Executive Vice President        March 30, 2001
------------------------            of Finance(Principal
     Kenneth W. Hatcher             Financial and
                                    Accounting Officer)

/s/  Robert B. McDermott          Director                        March 30, 2001
------------------------
     Robert B. McDermott


/s/  Ralph E. Graham              Director                        March 30, 2001
------------------------
     Ralph E. Graham






                                      -19-

<PAGE>



                       MAYNARD OIL COMPANY AND SUBSIDIARY

             Index to Consolidated Financial Statements and Schedule


                                                                            Page
                                                                            ----

Financial Statements:

         Report of Independent Accountants                                   21

         Consolidated Balance Sheets - December 31, 2000 and 1999            22

         Consolidated Statements of Operations - Three years ended
            December 31, 2000                                                23

         Consolidated Statements of Shareholders' Equity - Three
            years ended December 31, 2000                                    24

         Consolidated Statements of Cash Flows - Three years
            ended December 31, 2000                                          25

         Notes to Consolidated Financial Statements                          26

         Financial Statement Schedule for the Three years
             ended December 31, 1999

                    II - Valuation and Qualifying Accounts                   39

         All  other  schedules  are  omitted  as  the  required  information  is
inapplicable  or the  information  is  presented in the  Consolidated  Financial
Statements or Notes thereto.


                                      -20-

<PAGE>



                        REPORT OF INDEPENDENT ACCOUNTANTS
                        ---------------------------------




To the Board of Directors and Shareholders of
 Maynard Oil Company

In our opinion, the consolidated financial statements listed in the accompanying
index  present  fairly,  in all material  respects,  the  financial  position of
Maynard Oil Company and its  subsidiary  at December 31, 2000 and 1999,  and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 2000 in  conformity  with  accounting  principles
generally accepted in the United States of America. In addition, in our opinion,
the financial  statement  schedule  listed in the  accompanying  index  presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related Consolidated Financial Statements.  These financial
statements and the financial  statement  schedule are the  responsibility of the
Company's  management;  our  responsibility  is to  express  an opinion on these
financial  statements and the financial  statement schedule based on our audits.
We  conducted  our  audits  of these  statements  in  accordance  with  auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.






PricewaterhouseCoopers LLP
Dallas, Texas
March 26, 2001



                                      -21-

<PAGE>



                       MAYNARD OIL COMPANY AND SUBSIDIARY
                           Consolidated Balance Sheets


                                                           December 31,
                                                   -----------------------------
                                                     2000               1999
                                                     ----               ----
ASSETS
Current assets:
   Cash and cash equivalents                      $ 21,228,040     $ 12,910,321
   Accounts receivable, trade                        8,773,669        6,029,188
     Income taxes receivable                         1,437,587          750,000
     Other current assets                              441,027          836,554
                                                   -----------      -----------
         Total current assets                       31,880,323       20,526,063
                                                   -----------      -----------

Property and equipment, at cost:
   Oil and gas properties, successful
     efforts method                                162,572,339      151,655,045
   Other property and equipment                        450,885          337,546
                                                   -----------      -----------
                                                   163,023,224      151,992,591
   Less accumulated depreciation and
    amortization                                   (87,045,360)     (78,158,395)
                                                   -----------      -----------
      Net property and equipment                    75,977,864       73,834,196
                                                   -----------      -----------

Deferred income taxes                                   --              348,000
                                                   -----------      -----------

                                                  $107,858,187     $ 94,708,259
                                                   ===========      ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current installments of long-term debt          $ 7,650,000     $  5,737,500
   Accounts payable                                  8,350,643        4,249,724
   Accrued expenses                                    927,828        1,257,618
   Income taxes payable                                800,799          960,212
                                                   -----------      -----------
              Total current liabilities             17,729,270       12,205,054
                                                   -----------      -----------

Deferred income taxes                                1,179,000            --

Long-term debt                                      24,862,500       32,512,500

Shareholders' equity:
   Preferred stock of $.50 par value.
     Authorized 1,000,000 shares; none
        issued                                             --               --
   Common stock of $.10 par value.
     Authorized 20,000,000 shares;
     4,880,516 and 4,880,887 shares
     issued and outstanding                            488,051          488,089
   Additional paid-in capital                       18,831,138       18,831,138
   Retained earnings                                44,768,228       30,671,478
                                                   -----------      -----------
              Total shareholders' equity            64,087,417       49,990,705
                                                   -----------      -----------

Contingencies and commitments (note 11)
                                                  $107,858,187     $ 94,708,259
                                                   ===========      ===========

See accompanying Notes to Consolidated Financial Statements.


                                      -22-

<PAGE>



<TABLE>

                       MAYNARD OIL COMPANY AND SUBSIDIARY
                      Consolidated Statements of Operations
<CAPTION>

                                                     Years ended December 31,
                                                     ------------------------
                                              2000            1999           1998
                                              ----            ----           ----
<S>                                       <C>             <C>            <C>
Revenues:
   Oil and gas sales and royalties        $ 52,738,994    $ 23,392,231   $ 16,166,042
   Interest and other                        1,141,333         794,478      1,329,606
   Gain (loss) on disposition of assets        (38,070)        312,746          6,275
                                          ------------    ------------   ------------
                                            53,842,257      24,499,455     17,501,923
                                          ------------    ------------   ------------

Costs and expenses:
   Operating expenses                       14,168,808       7,839,205      7,672,710
   Exploration, dry holes and
         abandonments                          449,088         533,608        391,718
   General and administrative                3,841,919       2,237,260      1,723,790
   Depreciation and amortization            10,120,721       5,848,272      9,845,105
   Impairment of oil and gas properties           --              --        8,754,846
   Interest and other                        2,988,628         893,475      1,011,119
                                          ------------    ------------   ------------
                                            31,569,164      17,351,820     29,399,288
                                          ------------    ------------   ------------

   Income (loss) before income taxes        22,273,093       7,147,635    (11,897,365)

Income tax expense (benefit)                 8,170,000       2,793,000     (4,081,856)
                                          ------------    ------------   ------------

     Net income (loss)                    $ 14,103,093    $  4,354,635   $ (7,815,509)
                                          ============    ============   ============

Weighted average number of common
   shares outstanding                        4,880,749       4,883,536      4,887,882
                                          ============    ============   ============

Net income (loss) per common share
   (basic and diluted)                            $2.89         $ .89        $(1.60)
                                                   ====          ====         =====

See accompanying Notes to Consolidated Financial Statements.

</TABLE>

                                      -23-

<PAGE>




<TABLE>

                       MAYNARD OIL COMPANY AND SUBSIDIARY
                 Consolidated Statements of Shareholders' Equity
<CAPTION>


                                             Common Stock
                                             ------------        Additional
                                                                   Paid-in      Retained
                                      Shares         Amount        Capital      Earnings            Total
                                      ------         ------        -------      --------            -----

<S>                                <C>          <C>             <C>            <C>             <C>
Balance at December 31, 1997       4,889,450    $    488,945    $ 18,831,138   $ 34,189,012    $ 53,509,095
     Net loss                           --              --              --       (7,815,509)     (7,815,509)
     Purchase and retirement
       of common stock                (4,853)           (485)           --          (46,158)        (46,643)
                                ------------    ------------    ------------   ------------    ------------

Balance at December 31, 1998       4,884,597         488,460      18,831,138     26,327,345      45,646,943
     Net income                         --              --              --        4,354,635       4,354,635
     Purchase and retirement
       of common stock                (3,710)           (371)           --          (10,502)        (10,873)
                                ------------    ------------    ------------   ------------    ------------

Balance at December 31, 1999       4,880,887         488,089      18,831,138     30,671,478      49,990,705
     Net income                         --              --              --       14,103,093      14,103,093
     Purchase of common stock           (371)            (38)           --           (6,343)         (6,381)
                                ------------    ------------    ------------   ------------    ------------

Balance at December 31, 2000       4,880,516    $    488,051    $ 18,831,138   $ 44,768,228    $ 64,087,417
                                ============    ============    ============   ============    ============




See accompanying Notes to Consolidated Financial Statements.

</TABLE>



                                      -24-

<PAGE>



<TABLE>

                       MAYNARD OIL COMPANY AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
<CAPTION>

                                                                 Years ended December 31,
                                                                 ------------------------
                                                         2000            1999             1998
                                                         ----            ----             ----
<S>                                                 <C>             <C>             <C>
Cash flows from operating activities:
     Net income (loss)                              $ 14,103,093    $  4,354,635    $ (7,815,509)
     Adjustments to reconcile net income (loss)to
       net cash provided by operating activities:

       Depreciation and amortization                  10,120,721       5,848,272       9,845,105
       Impairment of oil and gas properties                 --              --         8,754,846
       Deferred income tax expense (benefit)           1,527,000         333,000      (3,313,000)
       Exploration, dry holes and
         abandonments                                    429,424         451,688         345,284
       Current year costs of dry holes and
         abandonments                                      1,031        (424,077)       (145,868)
       (Gain) loss on disposition of assets               38,070        (312,746)         (6,275)
     (Increase) decrease in current assets:
       Accounts receivable                            (2,744,481)     (3,460,381)        605,828
       Income taxes receivable                          (687,587)        227,587        (884,967)
       Other current assets                              395,527        (357,874)         67,558
     Increase (decrease) in current liabilities:
     Accounts payable                                  4,100,919       1,666,367      (1,688,305)
     Accrued expenses                                   (329,790)        415,250        (559,653)
       Income taxes payable                             (159,413)        919,413        (179,999)
                                                    ------------    ------------    ------------

       Net cash provided by operating
         activities                                   26,794,514       9,661,134       5,025,045
                                                    ------------    ------------    ------------

Cash flows from investing activities:
     Proceeds from disposition of assets                 780,447         555,022          38,880
     Additions to property and equipment             (13,513,361)    (45,184,704)     (3,711,828)
                                                    ------------    ------------    ------------

       Net cash used by
         investing activities                        (12,732,914)    (44,629,682)     (3,672,948)
                                                    ------------    ------------    ------------

Cash flows from financing activities:
     Proceeds from issuance of long-term debt               --        32,000,000            --
     Principal payments on long-term debt             (5,737,500)     (5,000,000)     (5,000,000)
     Purchase of common stock                             (6,381)        (10,873)        (46,643)
                                                    ------------    ------------    ------------

       Net cash provided (used) by
         financing activities                         (5,743,881)     26,989,127      (5,046,643)
                                                    ------------    ------------    ------------

Net increase (decrease) in cash
 and cash equivalents                                  8,317,719      (7,979,421)     (3,694,546)
Cash and cash equivalents at beginning
  of year                                             12,910,321      20,889,742      24,584,288
                                                    ------------    ------------    ------------
Cash and cash equivalents at end of year            $ 21,228,040    $ 12,910,321    $ 20,889,742
                                                    ============    ============    ============


See accompanying Notes to Consolidated Financial Statements.

</TABLE>

                                      -25-

<PAGE>



                       MAYNARD OIL COMPANY AND SUBSIDIARY
                   Notes to Consolidated Financial Statements


(1)       Summary of Significant Accounting Policies
          ------------------------------------------

          Business Activity
          -----------------

          Maynard  Oil  Company  (the  Company)  is engaged in the  acquisition,
          exploration, development, production and sale of crude oil and natural
          gas in the  Continental  United  States,  primarily  in the  states of
          Texas, Oklahoma Louisiana, New Mexico and Arkansas.

          Principles of Consolidation
          ---------------------------

          The consolidated  financial statements include the accounts of Maynard
          Oil  Company  and  its   wholly-owned   subsidiary.   All  significant
          intercompany   balances  and  transactions  have  been  eliminated  in
          consolidation.

          Cash Equivalents
          ----------------

          Cash  equivalents  are highly  liquid  investments  purchased  with an
          original maturity of three months or less.

          Property and Equipment
          ----------------------

          The Company  follows the  successful  efforts method of accounting for
          its oil and gas properties.  Intangible drilling and development costs
          related to  development  wells and  successful  exploratory  wells are
          capitalized, whereas the costs of exploratory wells which do not yield
          economic proved reserves are expensed.  All geological and geophysical
          costs not  reimbursed  are  expensed as  incurred.  Costs of acquiring
          unproved  leases are evaluated for  impairment  until such time as the
          leases are proved or abandoned.  In addition,  unamortized  costs at a
          field level are reduced to discounted fair value if the net book value
          exceeds the sum of expected undiscounted future cash flows.

          Depreciation  and  amortization  of producing  properties  is computed
          using  the  unit-of-production  method  based  upon  estimated  proved
          reserves.  Depreciation  of other property and equipment is calculated
          using the  straight-line  method  based upon  estimated  useful  lives
          ranging from two to ten years.

          Maintenance  and repairs are charged to expense as incurred.  Renewals
          and  betterments  are  capitalized.  When assets are sold,  retired or
          otherwise   disposed  of,  the   applicable   costs  and   accumulated
          depreciation and  amortization are removed from the accounts,  and the
          resulting gain or loss is recognized.



                                      -26-

<PAGE>



          Revenue Recognition
          -------------------

          The  Company  accounts  for oil and gas sales  from its  interests  in
          producing  wells under the sales method.  Under the sales method,  the
          Company recognizes revenues based on the amount of natural gas sold to
          purchasers,  which  may  be  different  from  the  Company's  entitled
          production  based  on its  interest  in the  properties.  Gas  balance
          obligations  as  of  December  31,  2000,   1999  and  1998  were  not
          significant.

          Overhead Reimbursement Fees
          ---------------------------

          The Company  reduces general and  administrative  expenses by only the
          amounts actually due from outside working interest owners for overhead
          charges

          Deferred Income Taxes
          ---------------------

          The Company  recognizes  deferred tax  liabilities  and assets for the
          expected future tax consequences of temporary  differences between the
          tax  and  financial  reporting  bases  of  the  Company's  assets  and
          liabilities by applying  enacted tax rates.  A valuation  allowance is
          established  to reduce  deferred  tax assets if it is more likely than
          not that the related tax benefits will not be realized.

          Derivative Financial Instruments
          --------------------------------

          The  Company  periodically  enters  into  commodity  hedge  contracts,
          including  caps and floors which may require  payments to (or receipts
          from)  counterparties  based on the differential between a fixed price
          and a variable  price for a fixed quantity of crude oil or natural gas
          without the exchange of underlying  volumes.  The notional  amounts of
          these   derivative   financial   instruments  are  based  on  expected
          production  from  existing  wells.  The Company uses these  derivative
          financial  instruments  to  manage  cash  flow  risks  resulting  from
          fluctuations in commodity prices. The derivative financial instruments
          held by the Company are not leveraged and are held for purposes  other
          than trading.

          Correlation of the hedge contracts is determined by evaluating whether
          hedge contract gains and losses will substantially  offset the effects
          of price  changes on the  underlying  crude oil and  natural gas sales
          volumes.  To the extent  that  correlation  exists  between  the hedge
          contracts and the underlying  crude oil and natural gas sales volumes,
          realized gains or losses and related cash flows arising from the hedge
          contracts  are  recognized as a component of oil and natural gas sales
          in the same  period  as the  sale of the  underlying  volumes.  To the
          extent that correlation does not exist between the hedge contracts and
          the underlying  crude oil and the natural gas sales volumes,  realized
          gains or  losses  and  related  cash  flows  arising  from  the  hedge
          contracts are recognized in the period as a component of other income.
          The fair  market  value of any hedge  contract  that does not meet the
          correlation test outlined above is recorded as a deferred gain or loss
          on the  balance sheet  and is adjusted to current market value at each
          balance  sheet date with any  deferred gains or losses recognized as a
          component of other income.

                                      -27-

<PAGE>




          In the event that  management  decides to terminate a hedge  contract,
          generally  accepted  accounting  principles  require that any gains or
          losses  upon  termination  be  carried  forward  and  recognized  as a
          component  of oil and  natural  gas  sales in the  period in which the
          underlying volumes are sold.

          Income per Common Share
          -----------------------

          The  Company  does  not  have  a  complex   capital   structure,   and
          consequently,  net  income  per  common  share is  computed  using the
          weighted average number of common shares outstanding during each year.
          Basic and diluted  earnings per share were the same for 2000, 1999 and
          1998.

          Segment Information
          -------------------

          All of the Company's oil and gas properties and related operations are
          located in the United States and management  has  determined  that the
          Company has one reportable segment.

          The Use of Estimates in Preparing Financial Statements
          ------------------------------------------------------

          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and   assumptions   that  affect  the  reported   amounts  of  assets,
          liabilities, disclosures of gain and loss contingencies at the date of
          the financial statements and reported amounts of revenues and expenses
          during the  reporting  period.  Since  estimates are made based on all
          information  available at the time, it is  reasonably  possible in the
          near term a change in an  estimate  may  occur or actual  amounts  may
          differ from estimated amounts.

          Reclassifications
          -----------------

          Certain reclassifications of prior period statements have been made to
          conform with the 2000 presentation.

(2)       Fair Value of Financial Instruments, Risk Management, and
          ---------------------------------------------------------
          Concentrations of Credit Risk
          -----------------------------

          Fair Value of Financial Instruments
          -----------------------------------

          The  carrying   amounts  of  cash  and  cash   equivalents,   accounts
          receivable, and accounts payable approximate fair value because of the
          short maturity of these instruments.  The carrying amount of long-term
          debt,  including the current portion,  approximates fair value because
          the interest  rate on this  instrument  changes  with market  interest
          rates.

          Risk Management
          ---------------

          During  1999,  the  Company   entered  into  a  derivative   financial
          instrument   whereby  the  Company   hedged  2,500  barrels  of  daily
          production  from November 1, 1999 through June 30, 2000 with a ceiling
          price of  $23.90/bbl  and a floor price of  $14.00/bbl.  The contracts
          call for a monthly  settlement  such that if the  average  WTI for the
          month is greater than  $23.90/bbl,  Maynard remits to the




                                      -28-

<PAGE>


          counterparty  the excess  multiplied  by the number of barrels  hedged
          during the month. Conversely, if the average WTI for the month is less
          than  $14.00/bbl,  the  counterparty  pays Maynard for the  difference
          multiplied by the number of barrels  hedged  during the month.  If the
          average WTI for the month falls between $14.00/bbl and $23.90/bbl,  no
          settlement is made. As a result of this arrangement, the Company's oil
          and gas revenues were reduced by $234,673  during 1999 and  $2,173,225
          during 2000.

          A second  derivative  instrument was entered into  effective  March 1,
          2000 through June 30, 2000 which mirrored the first except the ceiling
          and floor  amounts  were $28.30 and $25.00 per  barrel,  respectively.
          This second instrument was cancelled by the Company effective April 1,
          2000. As a result of this  arrangement,  the  Company's  first quarter
          2000 oil and gas revenues were reduced by $145,525.

          Effective  September 1, 2000,  the Company  entered into an additional
          derivative  financial  instrument  in which the Company  hedged  1,000
          barrels of daily  production for a period of six months with a ceiling
          price of $36.50/bbl  and a floor price of  $24.00/bbl.  This agreement
          calls for a monthly cash  settlement  if the average WTI for the month
          is greater than the ceiling price,  whereby Maynard would be obligated
          to pay the counterparty to the contract;  likewise, if the average WTI
          for the month is less than the floor price,  the  counterparty  to the
          contract  would be obligated  to pay  Maynard.  The amount of any cash
          payment would be equal to the difference between the average WTI price
          and the  ceiling  or floor  price  multiplied  by the number of hedged
          barrels for the month. From September, 2000 through February, 2001 the
          average WTI fell between $24.00/bbl and $36.50/bbl,  and consequently,
          no monies were exchanged.

          Additionally,  effective  October 1, 2000,  the Company  entered  into
          another derivative  financial  instrument in which an additional 1,000
          barrels of daily production was hedged for a period of six months with
          a ceiling price of $37.20/bbl and a floor price of $25.00/bbl. For the
          life of this  contract,  average  WTI,  fell  between  $25.00/bbl  and
          $37.20/bbl, so no monies were exchanged.

          The Company adopted Statement of Financial Accounting Standard No. 133
          (SFAS  133),   "Accounting  for  Derivative  Instruments  and  Hedging
          Activities",  on January  1, 2001 and  recorded  a  cumulative  effect
          adjustment of approximately  $84,000 to earnings to recognize the fair
          market  value of all  derivative  instruments  as a result of adopting
          SFAS 133.

          Concentration of Credit Risks
          -----------------------------

          Financial  instruments,  which  potentially  subject  the  Company  to
          concentrations  of credit risk,  consist  principally of cash and cash
          equivalents and accounts  receivable.  The Company places its cash and
          cash equivalents with high credit quality  institutions.  With respect
          to accounts receivable,  these financial instruments primarily pertain
          to oil and gas sales  and  joint  interest  billings.  These  accounts
          receivable   are  due  from  small  to  mid-size   companies   engaged
          principally in oil and gas activities.  The Company  performs  ongoing
          credit  evaluations  of  its  customers'   financial   condition  and,
          generally,  requires no collateral  from its customers.  Payment


                                      -29-

<PAGE>


          terms  are on a  short-term  basis  and in  accordance  with  industry
          standards.

          During the year ended  December 31,  1999,  oil and gas sales to three
          customers,  amounting to  approximately  $4,143,000,  $2,868,000,  and
          $2,457,000  respectively,  each  accounted  for more than 10% of total
          consolidated  revenues.  For the year ended December 31, 1998, oil and
          gas sales to four customers,  amounting to  approximately  $2,449,000,
          $2,277,000,  $2,183,000, and $2,144,000,  respectively, each accounted
          for more  than 10% of total  consolidated  revenues.  During  the year
          ended  December 31, 2000,  no single  purchaser  accounted  for 10% of
          consolidated revenues.

(3)       Subsequent Event
          ----------------

          The Company spent  approximately  $8.8 million  increasing its working
          interest position in certain properties acquired last year.

(4)       Acquisitions (Reserve information is unaudited)
          -----------------------------------------------

          During 1999, the Company  consummated two separate  producing property
          acquisitions  for a gross purchase price of  $42,900,000.  In July and
          August  of 1999,  the  Company  purchased  interests  in  twenty-three
          producing  oil  and  gas  wells  located  in four  counties  in  Texas
          (Fayette,  Hardeman,  Webb,  and Duval) at auction.  Estimated  proved
          reserves associated with this transaction approximated 400,000 barrels
          of oil and 4.9 billion  cubic feet of gas (BCF).  Total  consideration
          paid was $10,900,000.

          On November  12,  1999,  Maynard Oil bought an interest in 170 oil and
          gas  properties  in the Permian Basin of  Southeastern  New Mexico and
          West  Texas  from  Questar  Exploration  and  Production  Company  for
          $32,000,000.  Total  proved  reserves  were  estimated to be 4 million
          barrels  of oil  and  11.6  bcf  of  gas.  In  conjunction  with  this
          transaction, the Company entered into a new term loan arrangement with
          Bank One, Texas.

          The above  acquisitions  were  accounted for as  purchases,  and their
          results of operations are included in the  Consolidated  Statements of
          Operations  from the closing  dates.  In  connection  with the Questar
          purchase,  results of operations  from the effective  date through the
          closing date were recorded as purchase price adjustments.

(5)       Impairment of Long-Lived Assets
          -------------------------------

          Oil and gas prices fell from an average of $15.72 per barrel and $2.05
          per mcf at the end of 1997 to  averages of $10.02 per barrel and $1.86
          per mcf, at the end of 1998.  Consequently,  the Company  performed an
          impairment  evaluation of its oil and gas  properties and recognized a
          non-cash  impairment of $8,754,846 in December 1998.  Because no event
          occurred in 2000 or 1999 which would trigger an impairment evaluation,
          no such evaluation was performed for those years.

(6)       Cash Flow Data
          --------------

                                      -30-

<PAGE>




          Supplemental  cash flow information for the three years ended December
          31, 2000 is summarized as follows:

                                            2000           1999           1998
                                            ----           ----           ----
          Cash paid:
            Interest expense             $3,015,276      $  758,695     $982,258
                                          =========       =========      =======

            Income taxes                 $7,490,000      $1,279,111     $330,000
                                          =========       =========      =======

(7)       Long-term Debt

          Long-term debt at December 31, 2000 and 1999 is summarized as follows:

                                                          2000           1999
                                                          ----           ----
          Term note due in 20 equal quarterly
            installments of $1,912,500 commencing
            April 1, 2000. Interest paid quarterly
            at varying rates.  Certain oil and gas
            properties are pledged as collateral.     $32,512,500    $38,250,000
          Less current installments                     7,650,500      5,737,500
                                                       ----------     ----------

            Long-term debt                            $24,862,500    $32,512,500
                                                       ==========     ==========

          Effective November 12, 1999, the Company executed a new loan agreement
          with Bank One, Texas,  increasing its outstanding loan from $6,250,000
          to  $38,250,000  in  connection  with  the  acquisition  of  producing
          properties discussed in Note 4.



                                      -31-

<PAGE>



          The term note  permits the Company to choose  between  three  interest
          rate  options and to specify  what portion of the loan is covered by a
          specific  interest rate option and the  applicable  funding  period to
          which the interest rate option is to apply.  The interest rate options
          are as follows:

                  (1)      Bank's prime lending rate
                  (2)      Bank's certificate of deposit rate
                  (3)      London interbank eurodollar rate (Eurodollar)

          Effective  April 1, 2000,  the Bank amended the terms of the Company's
          credit  agreement  which lowered the amounts charged under the various
          rate options.

          At December  31,  2000,  interest  on the bank term loan  approximated
          8.05%.

          The credit agreement  contains various financial  covenants related to
          working  capital,  net  worth,  and  cash  flow,  and  places  certain
          limitations  on the  incurrence of  additional  debt and prohibits the
          payment of dividends.

(8)       Employee Incentive Plans
          ------------------------

          The Company's Board of Directors  approved an amendment to an employee
          incentive  plan in which  officers and key  employees had been awarded
          stock  participation  units in 1989 and 1993 that  entitled  them to a
          cash payment equal to the excess of the fair market value of one share
          of the  Company's  common  stock over a  specified  share price at the
          grant date times the number of vested shares. Under the original terms
          of  this  plan,  no  units  could  be  exercised  until  the  employee
          terminated his employment  with the Company.  Pursuant to terms of the
          amended plan,  each employee  holding  stock  participation  units was
          given the  opportunity  to cash out all,  or a  portion,  of the units
          held. At the time of the plan amendment,  there were a total of 95,500
          stock  participation units outstanding with option prices of $4.50 and
          $5.625 per share.  For the year ended  December 31, 2000,  general and
          administrative  expenses were charged  $1,020,023 for the 95,500 stock
          participation  units. A total of 84,500 units were exercised under the
          amended plan at $20.81 per share. As a result of the exercise of these
          units, the Company made a cash payment of $1,332,835 to those electing
          employees.  Additionally,  at  December  31,  2000,  the Company has a
          liability of  approximately  $136,000  attributable  to the  remaining
          11,000 stock participation units.



                                      -32-

<PAGE>



(9)       Income Taxes
          ------------

          Income tax expense (benefit) consists of the following:

                                           Years ended December 31,
                                           ------------------------
                                     2000           1999            1998
                                     ----           ----            ----
            Federal
              Current            $5,898,000     $2,227,000      $  (734,967)
              Deferred            1,527,000        333,000       (3,313,000)
            State                   745,000        233,000          (33,889)
                                  ---------      ---------        ---------
                                 $8,170,000     $2,793,000      $(4,081,856)
                                  =========      =========        =========

          Income tax  expense(benefit)  for the three years ended  December  31,
          2000 differs from the amount  computed by applying the applicable U.S.
          corporate  income  tax rate of 35% in 2000 and 34% in 1999 and 1998 to
          income (loss) before income taxes. The reasons for this difference are
          as follows:

                                                   Years ended December 31,
                                                   ------------------------
                                               2000         1999       1998
                                               ----         ----       ----
          Income tax expense (benefit)
            at U.S. statutory rate         $7,795,583   $2,430,196  $(4,045,104)
          State income taxes (benefit),
            net of Federal income
            tax effects                       484,250      153,780      (22,366)
          Allowable depletion in
            excess of cost depletion            (8,750)    (135,215)     --
          Items not related to current
            year earnings                     (109,484)    305,751       --
          All other items                       8,401       38,488      (14,386)
                                            ---------    ---------    ---------

            Income tax expense
                  (benefit)                $8,170,000   $2,793,000  $(4,081,856)
                                            =========    =========    =========

          The  components of the net deferred tax (asset) and liability  were as
          follows:
                                                          December 31,
                                                          ------------
                                                      2000              1999
                                                      ----              ----

          Oil and gas property assets             $1,227,000         $(178,000)
          Employee incentive plan                    (48,000)         (170,000)
                                                    ---------        ---------

          Net deferred tax (asset) liability      $1,179,000        $ (348,000)
                                                   =========         =========

(10)      Employee Benefit Plans
          ----------------------

          The Company adopted a noncontributory  defined contribution retirement
          plan for all full-time  employees  age 21 or older who have  completed
          one  year  of  service.   The  plan  provides  for  a  minimum  annual
          contribution  by the Company equal to 3% of an employee's  base salary
          plus overtime  compensation.  At its discretion,  the Company may also
          make  supplemental  contributions to the plan. For calendar 1998, 1999
          and 2000, the Company elected to contribute 5% for each

                                      -33-

<PAGE>



          employee  covered by this plan.  Under  this  plan,  amounts  equal to
          retirement  plan  expense  are  funded  annually,  which  amounted  to
          $108,406,  $106,462,  and $103,458,  respectively,  for 2000, 1999 and
          1998.

          The Company also has a profit  sharing plan pursuant to Section 401 of
          the Internal  Revenue  Code,  whereby  participants  may  contribute a
          percentage  of their  compensation  up to 15%. The Plan provides for a
          matching  contribution  by  the  Company  equal  to  one-half  of  the
          employee's  percentage  contribution  up  to  10%  of  the  employee's
          compensation.  During 2000,  1999,  and 1998,  the Company's  matching
          portion amounted to $97,228, $93,823 and $91,911, respectively.

(11)      Contingencies and Commitments
          -----------------------------

          The Company is a  defendant  in certain  non-environmental  litigation
          arising from operations in the normal course of business.  While it is
          not  feasible to  determine  the outcome of these  actions,  it is the
          Company's opinion that the ultimate outcome of the litigation will not
          have a material adverse effect on the financial position or results of
          operations of the Company.

          All of the  Company's  operations  are  generally  subject to Federal,
          state and local environmental regulations. To the best of management's
          knowledge, the Company is in substantial compliance with such laws and
          regulations.

          The Company  leases office space and certain  equipment  under various
          operating  leases  which  expire over the next five years.  All leases
          require  the  payment of taxes and  insurance,  and the  office  lease
          requires  the  Company  to pay its pro  rata  share  of  increases  in
          maintenance  expense above that  prevailing in base years.  Management
          expects that, in the normal course of business, leases will be renewed
          or replaced by other  leases.  Rent  expense for the three years ended
          December 31, 2000 was $453,440, $362,443, and $341,443, respectively.

          Minimum payments for operating leases having initial or noncancellable
          terms in excess of one year are as follows:

                                            2001        $   381,789
                                            2002            358,209
                                            2003            336,012
                                            2004            305,658
                                            2005             99,672
                                                          ---------

                  Total minimum payments                 $1,481,340
                                                          =========


                                      -34-

<PAGE>



(12)  Quarterly Financial Data (Unaudited)
      -----------------------------------

         Summarized  quarterly  financial  data for the years ended December 31,
         2000 and 1999 as follows:

<TABLE>

                                                        First           Second            Third           Fourth
                                                       Quarter          Quarter          Quarter          Quarter
                                                       -------          -------          -------          -------
         <S>                                         <C>              <C>              <C>              <C>
         Year Ended December 31, 2000
               Revenues                              $11,020,146      $11,566,965      $15,205,773      $16,049,373
               Operating Income                        4,224,089        4,347,088        7,413,165        8,136,046
               Net Income                              2,475,864        2,601,185        4,623,290        4,402,754
               Net Income per common share                   .51              .53              .95              .90

         Year Ended December 31, 1999
               Revenues                               $3,682,116       $5,209,939       $6,591,475       $9,015,925
               Operating Income                         (193,250)       1,155,119        1,905,340        4,379,423
               Net Income                                (77,562)         909,909        1,400,159        2,122,129
               Net Income per common share                  (.02)             .19              .29              .43

</TABLE>


(13)     Supplemental Oil and Gas Disclosures (Unaudited)
         ------------------------------------------------

         Capitalized Costs
         -----------------

         A summary of the Company's aggregate capitalized property and equipment
         costs relating to oil and gas exploration  and  development  activities
         follows:
                                                             December 31,
                                                         ----------------
                                                        2000            1999
                                                        ----            ----
               Proved undeveloped leaseholds       $  1,945,518    $  2,691,308
               Producing properties                 160,626,821     148,963,737
                                                    -----------     -----------
                                                    162,572,339     151,655,045
               Accumulated depreciation and
                 amortization                        86,828,540      77,974,895
                                                    -----------     -----------

               Net capitalized costs               $ 75,743,799    $ 73,680,150
                                                    ===========     ===========

         Costs Incurred
         --------------

         A summary of costs incurred in oil and gas acquisition, exploration and
         development activities follows:

                                                     Years ended December 31,
                                                     ------------------------
                                               2000          1999         1998
                                               ----          ----         ----
              Acquisition of properties
                Proved undeveloped         $   243,885   $ 2,691,308  $    2,946
                Proved                       7,531,915    40,589,276   2,683,526
              Exploration costs                531,192     1,091,521     472,001
              Development costs              5,058,262     1,010,969     693,363
                                             ----------   ----------   ---------

                                           $13,365,254   $45,383,074  $3,851,836
                                            ==========    ==========   =========



                                      -35-

<PAGE>



13)      Supplemental Oil and Gas Disclosures (Unaudited) continued
         ----------------------------------------------------------

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

              The results of operations  from oil and gas  producing  activities
              are as follows:
                                                  Years ended December 31,
                                                  ------------------------
                                            2000         1999            1998
                                            ----         ----            ----

              Sales                    $52,738,994   $23,392,231   $16,166,042
              Production costs (a)     (14,168,808)   (7,839,205)   (7,672,710)
              Exploration expenses      (2,228,067)   (1,668,191)     (421,977)
              Depreciation and
                amortization           (10,053,256)   (5,780,413)   (9,776,334)
              Impairment of oil and
              gas properties                --           --         (8,754,846)
                                       ----------    ----------     ----------
                                        26,288,863     8,104,422   (10,459,825)
              Income tax (expense)
                benefit                 (9,201,101)   (2,744,385)    3,541,991
                                        ----------    ----------   -----------

              Results of operations
                from oil and gas
                producing activities   $17,087,762   $ 5,360,037   $(6,917,834)
                                        ==========    ==========    ==========

              (a)   Includes lifting costs, severance taxes and advalorem taxes.



                                      -36-

<PAGE>



(13)     Supplemental Oil and Gas Disclosures (Unaudited) continued
         ----------------------------------------------------------

         Oil and Gas Reserve Quantities
         ------------------------------

         The following unaudited tables represent the Company's estimates of its
         proved  oil and gas  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, the estimates are expected to change as future
         information  becomes  available.  The estimates  were  evaluated by the
         Company's  staff of  petroleum  engineers  and  audited by  independent
         petroleum engineers. It is their opinions that the reserve quantity and
         present value  information  in the following  tables  complies with the
         applicable  rules  and  regulations  of the SEC.  All of the  Company's
         reserves are located within the United States.

Proved Developed and                                 Oil              Gas
Undeveloped Reserves                              (Barrels)          (MCF)
--------------------                              ---------          -----
Total as of December 31, 1997                     7,148,467        12,734,920
         Revisions of previous estimates         (1,372,452)         (252,807)
         Purchases of reserves                      244,810         1,971,319
         Extensions and discoveries                  24,624            94,318
         Production                              (1,025,524)       (1,637,254)
         Sales of reserves in place                    (473)           (6,396)
                                                  ----------        ----------

Total as of December 31, 1998                     5,019,452        12,904,100
         Revisions of previous estimates          1,874,514           559,013
         Purchases of reserves                    4,706,560        18,008,548
         Extensions and discoveries                 930,732         2,928,373
         Production                                (990,877)       (2,289,564)
         Sales of reserves in place                 (20,351)         (183,610)
                                                  ----------        ----------

Total as of December 31, 1999                    11,520,030        31,926,860
         Revisions of previous estimates          1,549,760         1,146,955
         Purchases of reserves                      760,874         1,498,830
         Extensions and discoveries               1,230,077         2,196,522
         Production                              (1,369,456)       (3,915,325)
         Sales of reserves in place                 (80,935)         (776,122)
                                                  ----------        ----------

Total as of December 31, 2000                    13,610,350        32,077,720
                                                 ==========        ==========

Proved Developed Reserves
-------------------------
December 31, 1998                                 4,947,039        12,262,069
December 31, 1999                                10,072,772        28,917,190
December 31, 2000                                11,085,442        29,362,127


                                      -37-

<PAGE>



(13)     Supplemental Oil and Gas Disclosures (Unaudited) continued

Standardized Measure

     The  standardized  measure of discounted  future cash flows from proved oil
and gas reserves determined in accordance with rules prescribed by the Financial
Accounting Standards Board is summarized as follows:

                                                 Years ended December 31,
                                                 ------------------------
                                            2000          1999           1998
                                           (000's)       (000's)       (000's)
                                           -------       -------       -------

Future cash inflows                       $655,640      $338,098      $ 74,282
Future production costs                   (201,244)     (134,474)      (38,158)
Future development costs                   (17,611)      (11,605)         (773)
                                           -------       -------        ------
                                           436,785       192,019        35,351
Future income tax (expenses)
  benefits                                (127,452)      (39,884)         487
                                            -------       -------       ------
Future net cash flows                      309,333       152,135        35,838
10% annual discount for estimated
  timing of cash flows                    (117,755)      (54,926)      (11,348)
                                           -------       -------       -------
Standardized measure of discounted
  future net cash flows                   $191,578      $ 97,209      $ 24,490
                                           =======       =======       =======

The average  prices for oil and gas used to  calculate  future  cash  inflows at
December 31, 2000 were $25.27 per barrel and $9.72 per mcf, respectively.


The following are the principal  sources of changes in the standardized  measure
of discounted future net cash flows.
                                                    Years ended December 31,
                                                    ------------------------
                                                2000        1999         1998
                                               (000's)     (000's)     (000's)
                                               -------     -------     -------

Standardized measure - beginning of year       $97,209     $24,490     $37,879
Sales of oil and gas produced,
  net of production costs                      (38,570)    (15,553)     (7,443)
Net changes in prices and production
  costs                                        115,134      35,657     (10,714)
Extensions, discoveries, and improved
  recovery, less related costs                  20,979       9,151         277
Changes in future development costs             (3,336)       (228)      1,094
Development costs incurred                       2,137          60         193
Revisions of previous quantity estimates        26,108      15,202      (7,361)
Accretion of discount                            9,721       2,416       3,788
Purchase of proved reserves                     16,399      52,739       1,800
Sale of proved reserves                           (799)       (394)         (2)
Net change in income taxes                     (53,449)    (25,817)      5,015
Other                                               45        (514)        (36)
                                               -------       ------      ------

Standardized measure - end of year            $191,578     $97,209     $24,490
                                               =======      ======      ======


                                      -38-

<PAGE>



                                   Schedule II

<TABLE>

                       MAYNARD OIL COMPANY AND SUBSIDIARY
                        Valuation and Qualifying Accounts
                       Three Years Ended December 31, 2000
<CAPTION>





                                                        Charged to
                                          Beginning      Cost and                    Ending
Description                                Balance       Expenses     Deductions    Balance
-----------                               ---------     ----------    ----------    -------

Allowance for Doubtful Accounts - (a)
-------------------------------------



<S>                                        <C>             <C>          <C>          <C>
December 31, 1998                          $ 70,000        $ 3,600      $(20,600)    $53,000
                                           ========        =======      ========     =======

December 31, 1999                          $ 53,000           --          --         $53,000
                                           ========        =======     ========      =======

December 31, 2000                          $ 53,000           --          --         $53,000
                                           ========        =======     ========      =======


(a)  Valuation account deducted in the balance sheet from trade accounts receivable.

</TABLE>

                                      -39-

<PAGE>




                      MAYNARD OIL COMPANY AND SUBSIDIARIES

                                Index to Exhibits


                                                                    Sequentially
Exhibit                                                               Numbered
Number                                                                  Page
------                                                                  ----

 4.1              First Amendment to Second Restated
                  Loan Agreement                                            41

21.1              List of subsidiaries of the Company as
                  of December 31, 2000                                      44


                                      -40-