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, 1996 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
  18, 1997 was $28,181,000 (based upon an estimate that 43.5% 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 18, 1997 was 4,889,450 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 21,
       1997 - Part III of Form 10K.

                                      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 Expressway, Suite 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 subsidiaries.

       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 and Oklahoma.

  RECENT ACTIVITIES

       During 1996, the Company sold its interests in approximately 130
  producing wells in Texas and Oklahoma for cash totaling $8,865,731.  The
  wells selected for sale were considered non-strategic assets due to the
  following criteria:

       (1)  no significant economic upside,
       (2)  probable non-recurring operating cost exposure in the near future,
       (3)  above average environmental concerns,
       (4)  remote geographic location to the Company's major operating areas
            in Southern Oklahoma and West Texas.

  The properties sold represented proved reserves of approximately 269,000
  barrels of oil and 4.5 billion cubic feet of gas.

  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.

       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.  Although the Company was unsuccessful
  during 1996 in its quest for reserve acquisitions, the year did bring the
  opportunity to build cash reserves for additional acquisitions in future
  years.

       The availability of a ready market for the sale of oil and gas from the
  Company's wells depends 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, 1996 almost 79% of the Company's estimated proved reserves, as
  well as 72% of the Company's 1996 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.

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

       During the year ended December 31, 1996, two customers, Total Petroleum
  and Amoco Production Company, accounted for approximately 16%, and 10%,
  respectively, of consolidated revenues.  The Company does not believe it
  would be adversely affected by the loss of any of its oil or gas purchasers.

       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.

       During 1996, a total of twelve wells were drilled, three exploratory
  wells, and nine development wells. Below is a brief description of the work
  completed during the year and the results thereof.

       Fullerton Field, Andrews County, Texas - two productive development
  wells were drilled on this secondary recovery project which is owned 100% by
  the Company.  These wells tested oil at a cumulative rate of 98 barrels of
  oil per day (BOPD).

       Of the remaining seven development wells, two were lease line
  cooperative wells being drilled to extend a secondary recovery project at
  Shafter Lake in Andrews County, Texas.

       Five other successful development wells were drilled in Burleson, Duval,
  Garza and Fisher Counties, Texas.  Each tested in commercial quantities, one
  at the rate of 503 BOPD in which the Company owns a 2.5% working interest,
  the second at the rate of one thousand cubic feet of gas per day (MCFD) where
  the Company owns a 7.2% working interest and two infill drilling wells where
  the Company owns less than 1% working interest.  The fifth development well
  was horizontally drilled in Garza County, Texas.  Production rates have
  leveled off at 70 BOPD of which  the Company owns a 100% working interest.

       Three exploratory wells were drilled in 1996, two of which were
  successful oil wells, and the third a dry hole.  The first producer was
  drilled in Dawson County, Texas on a prospect the Company farmed out to
  another operator.  This well tested at 168 BOPD and the Company retained a
  6.25% working interest.  The second successful exploratory well was drilled
  in Wayne County, Mississippi.  The well tested at 183 BOPD and the Company
  owns a 15% 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 effort often involves 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, delivery
  delays, 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 be incurred.

       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.  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 competitive position.  The
  Company presently estimates that it will not make any material capital
  expenditures for environmental control facilities for its fiscal year ending
  December 31, 1997.

       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 all levels of
  government, including taxes on income, severance of minerals, and payroll.
  Laws governing taxation, protection of the environment, crude oil and natural
  gas operations and production, and other crucial areas are all subject to
  modification at any time.

       At March 18, 1997, the Company employed approximately 37 persons,
  including one geologist and five petroleum engineers.

  ITEM 2.   PROPERTIES

       The Company's executive offices are presently located at 8080 N. Central
  Expressway, Suite 660, Dallas, Texas occupying approximately 11,300 square
  feet of space under a lease agreement which expires in April, 2000.

       The Company's principal property holdings consist of leasehold interests
  in oil and gas properties located in the United States, primarily in Oklahoma
  and Texas.  The leaseholds are continued 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 that 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.

  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, 1996, 1995, and 1994.  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, 1996.

  <TABLE>
  <CAPTION>
                                              December 31
                              1996               1995               1994
  <S>                   <C>     <C>        <C>      <C>        <C>     <C>
                        Oil(MB) Gas(MMCF)  Oil(MB)  Gas(MMCF)  Oil(MB) Gas(MMCF)
  Proved Developed      8,650.0  13,442.2   8,712.8 18,214.8   5,485.9  14,355.6
  Proved Undeveloped      324.4   1,143.0     159.7    649.2     667.2     595.8
                       --------  --------   ------- --------   -------  --------
  Total Proved Reserves 8,974.4  14,585.2   8,872.5 18,864.0   6,153.1  14,951.4
  </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, 1996, 1995,
  and 1994.  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, 1996, 1995, and 1994
  respectively, used in the estimates were $24.66, $18.13, and $16.06 per
  barrel of oil and $3.59, $1.65, and $1.62 per mcf of natural gas.  Lease and
  well operating costs are based upon actual operating expense records.

   <TABLE>
   <CAPTION>
                                                                                 December 31
                                                        1996                         1995                         1994
                                              -----------------------     ----------------------      --------------------
                                                Future        Present       Future       Present       Future      Present
                                                 Net           Value         Net          Value          Net        Value
    Expressed in 000's                         Revenue         @ 10%       Revenue        @ 10%        Revenue      @ 10%
                                               --------       -------      --------      -------       -------     -------
    <S>                                        <S>             <S>          <S>          <S>           <S>          <S>
    Proved Developed                           $152,508        $98,184      $96,297      $65,235       $54,057      $36,798
    Proved Undeveloped                            8,101          4,026        2,478        1,075         5,673        3,159
                                               --------       --------      -------      -------       -------      -------
    Total Proved Reserves                      $160,609       $102,210      $98,775      $66,310       $59,730      $39,957

    Amounts presented in the tables above are before the effects of taxes.
    </TABLE>

    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, 1996.

  <TABLE>
  <CAPTION>
                                                      December 31
                                                1996      1995      1994
  <S>                                          <C>       <C>       <C>
  Production:
    Oil (MB)                                   1,212.4     957.9     558.3
    Gas (MMCF)                                 2,890.1   2,720.4   2,390.3

  Average Sales Prices:
    Oil (per BBL)                                $20.39    $16.98    $15.47
    Gas (per MCF)                                $ 2.03    $ 1.57    $ 1.94

  Average Production Costs:
    Per net equivalent barrel of oil (1)(2)      $ 5.95    $ 5.98    $ 5.20

  (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.

  </TABLE>

  PRODUCTIVE WELLS AND ACREAGE

       As of December 31, 1996, the Company owned an interest in approximately
  1,207 gross (293.5 net) wells, of which 1,176 gross (287.5 net) are oil wells
  and 31 gross (6.0 net) are gas wells, located on approximately 31,293 gross
  (13,142 net) producing acres.

  UNDEVELOPED ACREAGE

       The following table sets forth the Company's gross and net undeveloped
  acreage as of December 31, 1996.

                                                Undeveloped Acreage
                                                   Gross      Net

  Colorado  . . . . . . . . . . . . . . . . .        80        10
  Louisiana . . . . . . . . . . . . . . . . .        80        40
  Mississippi . . . . . . . . . . . . . . . .       120        18
  North Dakota  . . . . . . . . . . . . . . .        62         4
  Oklahoma  . . . . . . . . . . . . . . . . .     5,492       869
  Texas . . . . . . . . . . . . . . . . . . .     5,342     2,118
  Wyoming . . . . . . . . . . . . . . . . . .     2,256       794
                                                 ------     -----
  Total                                          13,432     3,853
                                                 ======     =====
  DRILLING ACTIVITY

       The following table sets forth the results of the Company's drilling
  activity during the three years ended December 31, 1996.

  <TABLE>
  <CAPTION>
                          Exploratory      Development         Total
                         Gross    Net     Gross    Net     Gross    Net
  <S>                     <C>   <C>        <C>   <C>        <C>    <C>
  December 31, 1996
     Productive            1    .063        9    3.856      10    3.919
     Dry                   1    .333        0     .000       1     .333

   Total                   2    .396        9    3.856      11    4.252

  December 31, 1995
     Productive            3    .563       12    5.465       15    6.028
     Dry                   2    .250        0     .000        2     .250

   Total                   5    .813       12    5.465       17    6.278

  December 31, 1994
     Productive            3    .750       19   17.049       22   17.799
     Dry                   8   3.130        0     .000        8    3.130
   Total                  11   3.880       19   17.049       30   20.929

       At March 18, 1997 and December 31, 1996, the Company had one gross
  (.15 net) exploratory well in the process of being drilled.

  </TABLE>

  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 to
  have a material adverse effect on the Company's consolidated financial
  position.

  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 18, 1997, is set forth in the table below.

       Name                        Position              Age      Since

  James G. Maynard         Chairman of the Board,         70       1971
                             Chief Executive Officer
                             and Treasurer

  Glenn R. Moore           President and Chief            59       1982
                             Operating Officer

  L. Brent Carruth         Vice President of              63       1984
                             Operations

  Kenneth W. Hatcher       Vice President of              53       1983
                             Finance

  Linda K. Burgess         Corporate Secretary            48       1984
                             and Controller


       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 30 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 30 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 25 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 20 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.

       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.


                                      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, 1996, were as
  follows:

       1996           High      Low           1995         High     Low

  First Quarter     $ 8 1/2   $6 3/4     First Quarter    $5      $4 1/8
  Second Quarter      8 3/4    7 1/8     Second Quarter    6 1/2   4 1/2
  Third Quarter      11        8 3/8     Third Quarter     6 1/2   5 3/4
  Fourth Quarter     22        9 5/8     Fourth Quarter    7       5 3/4

       As of March 18, 1997, the Company had approximately 968 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.

  <TABLE>
  <CAPTION>
                                                December 31<F1>
                               1996     1995       1994     1993      1992
  <S>                        <C>       <C>       <C>       <C>      <C>
  Total revenue from
    oil and gas              $30,583   $20,540   $13,265   $14,861  $17,066
  Income before income
    taxes and discontinued
      operations              15,758     4,354     1,196     1,452    3,669
  Income (loss) from
    discontinued operations     --          --       --        --    (1,182)
  Income before accounting
    change                     9,954     3,023       943       867    1,569
  Net income                   9,954     3,023       943     2,254    1,569
  Per share income             2.04        .62       .19       .46      .32
  Total assets                81,257    72,838    48,071    43,798   43,846
  Long-term debt              16,250    21,250     5,250     2,000    4,000
  Shareholders' equity        49,054    39,104    36,137    35,203   33,025
     Per share                10.03       8.00      7.39      7.19     6.73
  Net working capital         12,942      (370)    4,079     9,510   10,630
  Net cash provided by
    operating activities      13,921    11,558     5,696     6,738    9,092

  <F1> The Company disposed of its contract drilling operations in August,
       1992.  Total revenues and income (loss) before income taxes have been
       restated to eliminate the effects of contract drilling operations.

   </TABLE>

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

  YEAR ENDED DECEMBER 31, 1996 COMPARED TO DECEMBER 31, 1995
  LIQUIDITY AND CAPITAL RESOURCES

          During 1996, the Company sold its interest in approximately 130
  producing oil and gas wells in Texas and Oklahoma for cash totaling
  $8,865,731 which resulted a pre-tax gain in excess of $6,000,000.  Company
  management considered this group of properties not to be a major contributor
  to the future earning capacity of the Company, and thus, opted to sell these
  properties while searching for additional  acquisitions which represent a
  better geographic and economic fit with the Company's core properties in
  southern Oklahoma and west Texas.

          Although the Company was not successful in 1996 in making an
  acquisition, it has positioned itself for future acquisition transactions by
  having over 26% of its year end assets in cash and additional borrowing
  capacity with its lender.

          Net cash provided by operating activities before changes in assets and
  liabilities rose approximately 19% to $11,741,897.  Higher crude oil sales
  more than offset the net revenues given up from the sale of property referred
  to above.

          Net working capital at December 31, 1996 was $12,942,000 compared with
  a negative $370,000 at the end of 1995.

  RESULTS OF OPERATIONS
  YEAR ENDED DECEMBER 31, 1996 COMPARED TO DECEMBER 31, 1995

          Net income for 1996 more than tripled 1995 levels, rising from
  $3,023,107 for 1995 to $9,953,783, primarily as a result of gains from the
  disposition of assets.  The gain from disposals in 1995 was $991,875 versus
  $6,202,473 during the current year.

          The earnings increase was also aided by higher oil and gas revenues,
  which rose 49% to $30,583,133.  Higher revenues were the result of increased
  production volumes and prices.  Oil volumes rose almost 27% to 1,212,369
  barrels and gas volumes over 6% to 2,890,061 mcf, both a result of the late
  1995 producing property acquisition and prior year drilling.  Pricing also
  shot up with oil selling at $20.39 per barrel compared to $16.98 per barrel a
  year ago and gas selling at $2.03 per mcf compared with $1.57 per mcf in
  1995.  These price increases will probably not be sustained during the first
  half of 1997, but are definitely a welcome addition to the Company.

          Lease operating expenses increased $1,636,482 over 1995 levels.
  However, on a net equivalent barrel (NEB) basis lifting costs actually
  declined three cents per equivalent barrel.

          Exploration costs were 67% lower in 1996, totaling $201,509, versus
  $609,279 due to decreased exploratory activity.  Very little seismic activity
  was performed in 1996, and only 3 exploratory wells were drilled during the
  current year.

          General and administrative expenses rose $974,586 from $925,822 in
  1995 to $1,900,408 in 1996.  The majority of this increase, $888,884, is
  represented by charges for an employee benefit plan whose value appreciates
  as the Company's common stock price rises.  These charges represent a
  liability on the Company's books which will not be converted into cash until
  the various employees covered by this plan terminate their employment with
  the Company.

          Depreciation and amortization expense increased on a dollar basis from
  $6,879,672 in 1995 to $7,894,388.  However, when converted to a net
  equivalent barrel basis, this amount actually declined from $4.87 per net
  equivalent barrel (NEB) a year ago to $4.66 per NEB currently as a result of
  oil and gas reserve additions and revisions during the current period.

          Interest expense increased $692,542 due to the additional bank
  borrowings utilized to finance the properties acquired in 1995.

          Income tax expense rose to $5,804,370 in 1996 from $1,330,500 in 1995
  due to improved earnings and the additional gain generated from the sale of
  properties during the current year.  The Company had anticipated deferring
  tax expense on a substantial portion of the 1996 gain via the like-kind
  exchange rules.  Qualified escrow accounts amounting to over $6,200,000 were
  established and replacement property was identified.  However, the Company
  was unable to consummate the transaction, and subsequently, paid the tax due
  on the gain.

  YEAR ENDED DECEMBER 31, 1995 COMPARED TO DECEMBER 31, 1994
  LIQUIDITY AND CAPITAL RESOURCES

          Net cash provided by operating activities before changes in assets and
  liabilities increased 50% in 1995 to $9,870,251.  Higher crude oil sales was
  the principal reason for this sharp rise in operating cash flow.  In the
  fourth quarter of 1994 and in the second quarter of 1995, the Company was
  successful in consummating two significant property acquisitions, which were
  largely responsible for the substantial increases in oil production.  1995
  operating cash flow was also favorably impacted by higher crude oil prices,
  lower exploration costs (which include dry holes and abandonments and lease
  rentals and seismic) and general and administrative costs, which was
  partially offset by higher lease operating and interest expense.

          In March and December, 1995 the Company completed the acquisition of
  working interests in 200 and 250 producing properties, respectively, in the
  Permian Basin of West Texas.  These two acquisitions were financed with $6.75
  million of the Company's cash resources and $22.5 million in additional bank
  financing.  Thus, total bank debt at the end of 1995 was $26.1 million.  A
  restated loan agreement was put into place on December 20, 1995 in connection
  with the second property acquisition.  This new loan has a term of five years
  with principal and interest to be paid quarterly and with a maturity date of
  January 1, 2001.  The loan agreement allows the Company to choose between
  three interest rate options ranging from Bank One prime rate to its
  certificate of deposit rate to a LIBOR rate.  The loan is secured by certain
  producing properties, but the Company also has significant groups of
  properties remaining unmortgaged should the opportunity arise to make
  additional property acquisitions.

          Net working capital at December 31, 1995 was a negative $370,000
  compared to $4,079,000 at December 31, 1994.  Negative working capital is
  attributable to the second property acquisition, which closed on December 20,
  1995, and the current portion of long-term debt outstanding at that time.
  The Company's cash position grew over $300,000 during 1995 while significant
  amounts were spent on property acquisitions, development drilling, and debt
  repayment.  The year end cash position was $6.1 million, and the Company
  believes it will generate sufficient cash in 1996 to support its debt
  service, fund its capital expenditure program, and pursue other acquisition
  candidates.

          The Company's recent drilling and acquisition activities have
  increased its reserve base and its productive capacity and ultimately its
  potential cash flow.  Each outstanding share of common stock is supported by
  2.46 net equivalent barrels ("NEB") of oil compared with 1.8 and 1.3 NEB
  respectively, for the prior two years.  Management of the Company intends to
  continue to acquire and develop oil and gas properties in its areas of
  activity as allowed by market conditions and financial ability.

  RESULTS OF OPERATIONS
  YEAR ENDED DECEMBER 31, 1995 COMPARED TO DECEMBER 31, 1994

          Net income for 1995 more than tripled 1994 levels, rising from
  $943,216 to $3,023,107, representing sixty two cents per share for 1995
  versus nineteen cents per share in 1994.

          This earnings increase was fueled by higher oil and gas revenues,
  which rose 55% to $20,710,243.  Higher revenues were the result of a 72%
  increase in oil production and a 14% increase in natural gas production.
  These sharp increases reflect the late 1994 acquisition of waterflood
  properties in Carter and Stephens Counties, Oklahoma, and the March 1995
  acquisition of Permian Basin properties in West Texas, as well as results
  from 1995 drilling activities.

          In 1995, oil prices averaged $16.98 per barrel compared to $15.47
  during 1994, a $1.51 per barrel increase.  Natural gas prices experienced a
  19% decline in 1995, from an average price of $1.94 per thousand cubic feet
  of gas sold (MCF) in 1994 to $1.57 per MCF in 1995.  Natural gas prices
  reflect the country's mild weather conditions and excess domestic supply.

          A gain from the sale of property totaling $991,875 was generated
  during 1995 compared to only $66,367 in 1994.

          Lease operating expenses rose $3,472,960 in 1995.  On a net equivalent
  barrel (NEB) basis, lifting costs rose seventy-eight cents per barrel in 1995
  to $5.98 per barrel, reflecting higher costs associated with waterflood
  properties which were acquired in fourth quarter 1994 and first quarter 1995.

          Exploration costs were 48% lower in 1995, totaling $609,279, versus
  $1,169,680 primarily due to reduced activity in the three dimensional seismic
  program, which the Company had utilized to establish exploratory drilling
  projects for the last two years.

          Depreciation and amortization expense grew almost 46% in 1995 to
  $6,879,672.  This significant increase was principally attributable to the
  addition of properties in late 1994 and first quarter 1995, which added
  approximately $20 million to the Company's depletable costs.

          The Company accounts for overhead charges billed to working interest
  owners, including the Company, as a reduction to general and administrative
  expenses.  The Company's proportionate share of the amounts billed are
  included in lease operating expenses.  Since the number of operated
  properties increased due to the recent acquisitions, the amounts billed out
  in 1995 resulted in a 45% reduction in general and administrative expenses
  from $1,676,228 to $925,822.

          Interest expense grew $844,702 in 1995 due to bank borrowings to
  finance the properties acquired.

          Income tax expense rose to $1,330,500 in 1995 from $252,482 in 1994,
  due primarily to improved earnings and additional state taxes arising from an
  audit assessment.

  ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

          The information required by Item 8 is included on pages 19 through 36
  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 21, 1997, and is incorporated herein by reference.
  Information with respect to the Company's executive officers as of March 18,
  1997, is set forth commencing on pages 8 and 9 hereof under the caption
  "Executive Officers of the Registrant".

                                      PART IV

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

  FINANCIAL STATEMENTS AND SCHEDULES

          See Index to Consolidated Financial Statements and Schedules on page
  18 of this Report.

  REPORTS ON FORM 8-K

          On October 15, 1996, the Company filed a Form 8-K with the Securities
  and Exchange Commission, to report the sale of producing oil and gas
  properties.  Pro forma financial information was included in the report.

  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  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.

        4.1      Credit agreement ($10,000,000 Term Facility) dated October 1,
                 1990 between Maynard Oil Company and First City, Texas -
                 Dallas, filed as Exhibit 4.2 to the Company's Annual Report on
                 Form 10-K for its fiscal year ended December 31, 1990, and
                 incorporated herein by reference.

        4.2      First Amendment to Loan Agreement dated November 19, 1991
                 between Maynard Oil Company and First City, Texas - Dallas,
                 filed as Exhibit 4.2 to the Company's Annual Report on Form
                 10-K for its fiscal year ended December 31, 1992, and
                 incorporated herein by reference.

        4.3      Second Amendment to Loan Agreement, dated February 1, 1993
                 between Maynard Oil Company and Bank One, Texas, N.A. filed as
                 Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for
                 the period ended June 30, 1993, and incorporated herein by
                 reference.

        4.4      Third Amendment to Loan Agreement, dated December 22, 1994
                 between Maynard Oil Company and Bank One, Texas, N.A., filed
                 as Exhibit 4.4 to the Company's Annual Report on Form 10-K for
                 its fiscal year ended December 31, 1994, and incorporated
                 herein by reference.

        4.5      Fourth Amendment to Loan Agreement, dated March 29, 1995
                 between Maynard Oil Company and Bank One, Texas, N.A., filed
                 as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q
                 for the period ended March 31, 1995, and incorporated herein
                 by reference.

        4.6      Restated Loan Agreement, dated December 20, 1995 between
                 Maynard Oil Company and Bank One, Texas, N.A., filed as
                 Exhibit 4.6 to the Company's Annual Report on Form 10-K for
                 its fiscal year ended December 31, 1995, and incorporated
                 herein by references.

       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.

       11.1      Computation of per share earnings, filed herewith.

       21.1      List of subsidiaries of the Company as of December 31, 1996,
                 filed herewith.


                                    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 31, 1997

       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 31, 1997
       --------------------   Chief Executive Officer
       James G. Maynard       & Treasurer

  /s/  Glenn R. Moore         President and Chief        March 31, 1997
       --------------------     Operating Officer
       Glenn R. Moore

  /s/  Kenneth W. Hatcher     Vice President of Finance  March 31, 1997
       --------------------   (Principal Financial
       Kenneth W. Hatcher     and Accounting Officer)

  /s/  Robert B. McDermott    Director                   March 31, 1997
       --------------------
       Robert B. McDermott

  /s/  Ralph E. Graham        Director                   March 31, 1997
       --------------------
       Ralph E. Graham


                       MAYNARD OIL COMPANY AND SUBSIDIARIES

             Index to Consolidated Financial Statements and Schedules

                                                                            Page


  Financial Statements:

       Report of Independent Accountants

       Consolidated Balance Sheets - December 31, 1996 and 1995

       Consolidated Statements of Income - Three years ended
          December 31, 1996

       Consolidated Statements of Shareholders' Equity - Three
          years ended December 31, 1996

       Consolidated Statements of Cash Flows - Three years
          ended December 31, 1996

       Notes to Consolidated Financial Statements

       Financial Statement Schedules for the Three years
           ended December 31, 1996

              II - Valuation and Qualifying Accounts

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


                         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 subsidiaries at December 31, 1996 and
  1995, and the results of their operations and their cash flows for each of
  the three years in the period ended December 31, 1996, in conformity with
  generally accepted accounting principles.  These financial statements are the
  responsibility of the Company's management; our responsibility is to express
  an opinion on these financial statements based on our audits.  We conducted
  our audits of these statements in accordance with generally accepted auditing
  standards 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 the opinion expressed
  above.


  Price Waterhouse LLP
  March 25, 1997
  Dallas, Texas



  <TABLE>
  <CAPTION>
                       MAYNARD OIL COMPANY AND SUBSIDIARIES
                            Consolidated Balance Sheets

                                                       December 31,
                                                   1996            1995
  <S>                                          <C>             <C>
  ASSETS
  Current assets:
     Cash and cash equivalents                 $ 21,817,447    $ 6,138,903
     Accounts receivable, trade                   4,274,439      3,297,933
     Other current assets                           585,021        465,426
         Total current assets                    26,676,907      9,902,262

  Property and equipment, at cost:
     Oil and gas properties, successful
       efforts method                           103,223,604    111,473,388
     Other property and equipment                   540,736        507,953
                                                103,764,340    111,981,341
     Less accumulated depreciation and
      amortization                              (49,183,946)  ( 49,045,024)
        Net property and equipment               54,580,394     62,936,317

                                               $ 81,257,301   $ 72,838,579
  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
     Current installments of long-term debt     $ 5,000,000   $  4,812,500
     Accounts payable                             3,592,404      4,126,013
     Accrued expenses                             1,710,681        920,653
     Income taxes payable                         3,431,476        412,695
          Total current liabilities              13,734,561     10,271,861

  Deferred income taxes                           2,219,000      2,212,510

  Long-term debt                                 16,250,000     21,250,000

  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;
       4,889,450 and 4,889,970 shares
       issued and outstanding                       488,945        488,997
     Additional paid-in capital                  18,831,138     18,831,138
     Retained earnings                           29,733,657     19,784,073
          Total shareholders' equity             49,053,740     39,104,208

  Contingencies and commitments (note 9)
                                               $ 81,257,301   $ 72,838,579

  See accompanying Notes to Consolidated Financial Statements.

  </TABLE>



  <TABLE>
  <CAPTION>
                       MAYNARD OIL COMPANY AND SUBSIDIARIES
                         Consolidated Statements of Income

                                              Years ended December 31,
                                          1996          1995          1994
  <S>                                 <C>           <C>           <C>
  Revenues:
     Oil and gas sales and royalties  $30,583,133   $20,539,738   $13,265,075
     Interest and other                   732,660       671,551       554,012
     Gain on disposition of assets      6,202,473       991,875        66,367
                                       37,518,266    22,203,164    13,885,454

  Costs and expenses:
     Operating expenses                10,079,948     8,443,466     4,970,506
     Exploration, dry holes and
       abandonments                       201,509       609,279     1,169,680
     General and administrative         1,900,408       925,822     1,676,228
     Depreciation and amortization      7,894,388     6,879,672     4,726,726
     Interest and other                 1,683,860       991,318       146,616
                                       21,760,113    17,849,557    12,689,756

     Income before income taxes        15,758,153     4,353,607     1,195,698

  Income tax expense                    5,804,370     1,330,500       252,482

       Net income                     $ 9,953,783   $ 3,023,107   $   943,216

  Weighted average number of common
     shares outstanding                 4,889,690     4,890,708     4,891,592

  Net income per common share               $2.04         $ .62         $ .19

  See accompanying Notes to Consolidated Financial Statements.

  </TABLE>

  <TABLE>
  <CAPTION>

                       MAYNARD OIL COMPANY AND SUBSIDIARIES
                  Consolidated Statements of Shareholders' Equity

                                             Common Stock           Additional
                                                                      Paid-in        Retained
                                          Shares       Amount         Capital         Earnings            Total
    <S>                                  <C>           <C>          <C>             <C>                <C>
    Balance at December 31, 1993         4,891,744     $489,174     $18,672,753     $16,041,810        $35,203,737
        Net income                              --           --              --         943,216           943,216
        Exercise of common stock
          options                           11,500        1,150          52,785              --            53,935
        Purchase and retirement of
          common stock                     (11,865)      (1,186)             --         (62,465)           (63,651)

    Balance at December 31, 1994         4,891,379      489,138       18,725,538     16,922,561         36,137,237
        Net income                              --           --                --     3,023,107          3,023,107
        Exercise of common stock
          options                           24,000        2,400          105,600             --            108,000
        Purchase and retirement of
         of common stock                   (25,409)      (2,541)            --          (161,595)         (164,136)

    Balance at December 31, 1995         4,889,970      488,997       18,831,138      19,784,073        39,104,208
        Net income                              --           --              --        9,953,783         9,953,783
        Purchase and retirement
          of common stock                     (520)         (52)             --            (4,199)          (4,251)

    Balance at December 31, 1996         4,889,450     $488,945      $18,831,138      $29,733,657      $49,053,740

    See accompanying Notes to Consolidated Financial Statements.

    </TABLE>


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

                                                             Years ended December 31,
                                                        1996           1995           1994
    <S>                                               <C>                 <C>       <C>
    Cash flows from operating activities:
        Net income                                    $9,953,783     $3,023,107     $ 943,216
    Adjustments to reconcile net income to net
          cash provided by operating activities:

          Depreciation and amortization                7,894,388      6,879,672     4,726,726
          Deferred income taxes                            6,490        480,000       867,510
          Dry holes and abandonments                     180,230        573,737       837,360
          Current year costs of dry holes and
            abandonments                                 (90,521)       (94,390)     (725,836)
          Gain on disposition of assets               (6,202,473)      (991,875)      (66,367)
        (Increase) decrease in current assets:
          Accounts receivable                           (976,506)      (886,482)     (316,855)
          Other current assets                          (119,595)       316,661      (41,974)
        Increase (decrease) in current liabilities:
         Accounts payable                               (533,609)     1,514,804        64,471
         Accrued expenses                                790,028        330,515       (59,587)
    Income taxes payable                               3,018,781        412,695      (532,385)

          Net cash provided by operating
            activities                                13,920,996     11,558,444     5,696,279

    Cash flows from investing activities:
        Proceeds from disposition of assets            8,884,691      3,426,499       119,405
        Purchase price adjustment                        874,245           --            --
        Additions to property and equipment           (3,184,637)   (33,688,793)  (15,373,776)

          Net cash provided (used) by
            investing activities                       6,574,299    (30,262,294)  (15,254,371)

    Cash flows from financing activities:
        Proceeds from issuance of
         long-term debt                                       --     22,500,000     5,000,000
        Principal payments on long-term debt          (4,812,500)    (3,437,500)   (2,000,000)
        Purchase of common stock                          (4,251)      (164,136)      (63,651)
        Exercise of stock options                             --        108,000        53,935

          Net cash provided (used) by
            financing activities                       (4,816,751)    19,006,364     2,990,284

    Net increase (decrease) in cash and
      cash equivalents                                 15,678,544        302,514    (6,567,808)
    Cash and cash equivalents at beginning
      of year                                           6,138,903      5,836,389    12,404,197
    Cash and cash equivalents at end of year          $21,817,447    $ 6,138,903   $ 5,836,389

    See accompanying Notes to Consolidated Financial Statements.

    </TABLE>


                       MAYNARD OIL COMPANY AND SUBSIDIARIES
                    Notes to Consolidated Financial Statements


  (1)  Summary of Significant Accounting Policies

       Business Activity

       The Company is engaged in the production and sale of and the
       acquisition, exploration and development of crude oil and natural gas in
       the Continental United States.

       Principles of Consolidation

       The consolidated financial statements include the accounts of Maynard
       Oil Company (Company) and its subsidiaries, all of which are wholly-
       owned.  All significant intercompany balances and transactions have been
       eliminated in consolidation.

       Property and Equipment

       The Company follows the "successful efforts" method of accounting for
       its costs of acquisition, exploration and development of 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 find proved reserves
       are expensed.  Costs of acquiring unproved leases are evaluated for
       impairment until such time as the leases are proved or abandoned.  All
       geological and geophysical costs not reimbursed are expensed as
       incurred.

       Depreciation and amortization of producing properties is computed using
       the unit-of-production method based upon estimated proved recoverable
       reserves.  Depreciation of other property and equipment is calculated by
       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.

       Overhead Reimbursement Fees

       Overhead charges billed to working interest owners including the Company
       of $1,870,752, $1,892,370, and $805,982, for the three years ended
       December 31, 1996, respectively, have been classified as a reduction of
       general and administrative expenses in the accompanying Consolidated
       Statements of Income.  The Company's working interest portion of the
       amounts billed are included in lease operating expenses.

       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.
       Income per Common Share

       Income per common share is computed using the weighted average number of
       common shares outstanding during each year.  The difference between
       primary and fully diluted earnings per share, which assumes the exercise
       of stock options in 1994, was not significant.  During 1995, all
       outstanding stock options were exercised, and consequently, primary and
       fully diluted earnings per share are the same for 1996 and 1995.

       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.

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

       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,
       revenues, expenses, disclosure 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 that,
       in the near term, a change in an estimate may occur or that actual
       amounts may differ from estimated amounts.

       Impairment of Long-Lived Assets

       In March 1995, the Financial Accounting Standards Board ( FASB ) issued
       Statement of Financial Accounting Standards ( SFAS ) No. 121,
        Accounting for the Impairment of Long-Lived Assets and Long-Lived
       Assets to be Disposed of.   This statement requires that long-lived
       assets be reviewed for impairment whenever events or changes in
       circumstances indicate that the carrying amount of an asset may not be
       recoverable.  The Company adopted the provisions of SFAS 121 on January
       1, 1996, and such adoption did not have a material effect on the
       Company's consolidated financial position or results of operations.

       Reclassifications

       Certain reclassifications of prior period statements have been made to
       conform with the 1996 presentation.

  (2)  Acquisitions and Dispositions (Reserve information is unaudited)

       During 1996, the Company sold its interest in approximately 130
       producing wells in Texas and Oklahoma for cash totaling $8,865,731.  The
       Company considered these properties to be non strategic assets. Proved
       reserves sold were estimated to be approximately 269,000 barrels of oil
       and 4.9 billion cubic feet of gas (BCF).

       During 1995, the Company consummated two separate producing property
       acquisitions for an aggregate price of $29,250,000.  On March 29, 1995,
       the Company acquired working interests in 200 producing wells in the
       Permian Basin of West Texas.  Estimated proved reserves associated with
       this transaction approximated .99 million barrels of oil and 7.2 BCF of
       gas.  Total consideration paid was $10,500,000.  At December 31, 1996,
       the Company maintains ownership in approximately 1 million barrels of
       oil and 3.4 BCF of gas acquired in this transaction.

       On December 20, 1995, the Company purchased working interests in 250
       producing wells located in Garza County, Texas.  Total consideration
       paid was $18,750,000, $13,000,000 of which was borrowed under a new term
       loan arrangement with Bank One, Texas.  Proved reserves were estimated
       to be 2.46 million barrels of oil and .3 BCF of gas.  In 1996, the
       Company received cash proceeds of $874,245, which represented a purchase
       price adjustment on this acquisition.

       The following table presents unaudited pro forma operating results as if
       the acquisitions and dispositions had occurred on January 1, 1995.

                                             Years ended December 31,
                                                 1996        1995
       Amounts in thousands, except per
         share amounts
           Revenues                            $28,706      $31,676
           Net income                            5,234        7,461
           Net income per common share            1.07         1.53

  (3)  Cash Flow Data

       Cash in excess of daily requirements is invested in marketable
       securities, consisting of repurchase agreements, certificates of
       deposit, money market funds, and commercial paper, with maturities of
       three months or less.  At December 31, 1996 and 1995, such investments
       totaled $22,246,554 and $6,300,000, respectively, and are considered to
       be cash equivalents, which approximate their fair value.

       Supplemental cash flow information for the three years ended December
       31, 1996 is summarized as follows:

                                  1996          1995       1994
       Cash paid (received):
         Interest expense      $1,735,416    $ 853,247   $ 175,319

         Income taxes paid      $2,779,099   $ 121,674   $  28,016

         Income taxes refunded   $    --     $   --      $(369,528)

  (4)  Long-term Debt

       Long-term debt at December 31, 1996 and 1995 is summarized as follows:

                                                     1996         1995
       Term note due in 20 equal quarterly
         installments of $1,250,000 commencing
         April 1, 1996 plus one payment of
         $1,062,500 made January 1, 1996.
         Interest paid quarterly at varying
         rates.  Secured by certain oil and
         gas properties with a net book value
         of $30,345,000.                          $21,250,000   26,062,500
       Less current installments                    5,000,000    4,812,500
         Long-term debt                           $16,250,000  $21,250,000

       Effective December 21, 1995, the Company executed a new loan agreement
       with Bank One, Texas, increasing its outstanding loan from $13,062,500
       to $26,062,500 in connection with the acquisition of producing
       properties discussed in Note 2.

       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)

       At December 31, 1996, interest on the bank term loan was at a rate of
       approximately 7.22%.

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

  (5)  Employee Incentive Plans

       In August 1989, an employee incentive plan was adopted, whereby stock
       participation units might be granted to officers and key employees.
       Such stock participation units will entitle a participant to a cash
       payment following termination of employment in an amount equal to the
       excess, if any, of the fair market value of one share of the Company's
       common stock over a share price specified on the date of grant,
       multiplied by the number of vested units.  The units vest over a five
       year period with 25% vesting after two years and the remainder in three
       equal annual installments.  For the year ended December 31, 1989, 73,000
       units were awarded to certain employees at a price of $4.50 per share of
       which 49,500 units remain outstanding at December 31, 1996, all of which
       are 100% vested.  During August 1993, 52,000 additional units were
       awarded at $5.625 per share of which 26,000 units are vested.  Earnings
       are charged over the life of the units for increases in stock prices (if
       any) over $4.50 per share and $5.625 per share.  During the years ended
       December 31, 1996 and 1995, operations were charged $594,000 and
       $76,183, respectively, in regard to the stock participation units
       granted in 1989.  During 1996 and 1995, operations were also charged
       $294,887 and $15,676, respectively for the units awarded in 1993.  There
       were no such charges in 1994.

       In March 1982, an employee incentive plan was adopted whereby stock
       options and stock appreciation rights might be granted to officers and
       key employees.  A total of 281,517 shares were initially reserved for
       issuance.  This plan terminated in March 1992 and no further grants may
       be made under this plan.  The options became exercisable cumulatively in
       five equal installments, beginning on the first anniversary of the date
       of grant.  The option price for shares granted pursuant to the plan was
       not less than the fair market value of the shares at the date of grant.

       A summary of stock option activity for the 1982 plan for 1994 and 1995
       is as follows:

                                               Number
                                                 of          Option Price
                                               Shares          per Share
                                              -------       --------------
       Outstanding at December 31, 1993        40,600       $4.50 to $6.50
         Granted                                  -0-             --
         Exercised                            (11,500)           $4.69
         Cancelled                             (5,100)      $4.50 to $6.50

       Outstanding at December 31, 1994        24,000            $4.50
         Exercised                            (24,000)           $4.50

       Outstanding at December 31, 1995            -0-


       During September 1995, options for 24,000 shares were exercised.  Common
       stock was credited for $2,400 and additional paid-in capital was
       credited for $105,600.  The Company simultaneously repurchased and
       cancelled 23,500 of the shares exercised for $6.50 per share.  Common
       stock was debited for $2,350 and retained earnings charged $150,400 in
       regard to the repurchased shares.

  (6)  Income Taxes

       Income tax expense (benefit) consists of the following:

                                         Years ended December 31,
                                      1996          1995       1994
         Federal
           Current                 $5,397,880    $ 620,500  $(615,028)
           Deferred                     6,490      480,000    867,510
         State                        400,000      230,000       --

                                   $5,804,370   $1,330,500  $ 252,482


       Income tax expense for the three years ended December 31, 1996 differs
       from the amount computed by applying the applicable U.S. corporate
       income tax rate (35% in 1996 and 34% in 1995 and 1994) to income before
       income taxes.  The reasons for this difference are as follows:

                                          Year ended December 31,
                                       1996         1995        1994

       Income tax expense at
         U.S. statutory rate       $5,515,354   $1,480,226  $ 406,537
       State income taxes             400,000      230,000       --
       Allowable depletion in
         excess of cost depletion    (223,197)    (281,526)      --
       Rate differential               33,996         --         --
       Items not related to current
         year earnings                   --        (89,198)  (294,528)
       Net operating loss
         not utilized                    --           --       88,000
       All other items                 78,217       (9,002)    52,473

         Income tax expense        $5,804,370   $1,330,500  $ 252,482


       The components of the net deferred tax liability were as follows:

                                                 December 31,
                                       1996           1995          1994

       Depreciable assets          $   48,500     $   61,510       29,210
       Depletable assets              111,500         14,400       (6,100)
       Intangible drilling
         and development costs      2,572,000      2,542,600    2,115,400
       Employee benefit
         obligations                 (346,000)          --           --
       Tax credit
         carryforwards               (167,000)      (406,000)    (406,000)

       Net deferred tax
         liability                 $2,219,000     $2,212,510    $1,732,510

       In November 1995 the Oklahoma State Tax Commission completed an
       examination of the 1990 through 1993 state income tax returns for
       Maynard Oil Company.  Taxes on the adjustments amounted to $149,690.
       The Company  had followed a three factor apportionment formula (sales,
       property, and payroll) as allowed and utilized by the majority of
       taxpayers in calculating their Oklahoma tax liability.  However, the
       Oklahoma Tax Commission requires a separate accounting theory to
       calculate the state tax liability.

       As of December 31, 1996, the Company has alternative minimum tax credit
       carryforwards of approximately $167,000 available for Federal income tax
       purposes.  No valuation allowance has been provided for this deferred
       tax asset.

  (7)  Employee Benefit Plans

       Effective January 1, 1985 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.  Under this plan,
       amounts equal to retirement plan expense are funded annually, which
       amounted to $53,965, $40,777, and $28,298, respectively, for the years
       ended December 31, 1996, 1995, and 1994.  The contributions for the same
       three year period have been reduced by $648, $1,818, and $10,407,
       respectively, for forfeitures attributable to employees terminated in
       prior years.

       Effective February 1, 1991, the Company adopted a profit sharing plan
       pursuant to Section 401 of the Internal Revenue Code, whereby
       participants may contribute a percentage of compensation.  The Plan
       provides for a matching contribution by the Company equal to one-half of
       the employee's percentage contribution up to the first 10% of
       compensation for 1996, 1995, and 1994.  During this same three year
       period, the Company's matching portion amounted to $79,879, $59,579, and
       $52,710, respectively.

  (8)  Major Customers

       During the years ended December 31, 1996 and 1994, oil and gas sales to
       two customers, amounting to approximately $6,059,000 and $3,898,000 and
       $5,166,000 and $1,500,000, respectively, each accounted for more than
       10% of total consolidated revenues.  During the year ended December 31,
       1995, oil and gas sales to three  customers, amounting to approximately
       $4,377,000, $3,746,000, and $2,946,000, each accounted for more than 10%
       of total consolidated revenues.

  (9)  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 have
       no material adverse effect in the financial position or results of
       operations of the Company.

       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.  The Company extended its office space lease,
       which was scheduled to terminate April 30, 1996, for an additional four
       years, such that the expiration date is now April 30, 2000.  Rent
       expense for the three years ended December 31, 1996 was $314,743,
       $298,371, and $266,967, respectively.

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

                                    1997        $   243,059
                                    1998            231,828
                                    1999            217,301
                                    2000             74,269

            Total minimum payments                $ 766,457


  (10) Quarterly Financial Data (Unaudited)

       Summarized quarterly financial data for the years ended December 31,
       1996 and 1995 is as follows:

  <TABLE>
  <CAPTION>
                                             FIRST         SECOND          THIRD         FOURTH
                                            QUARTER        QUARTER        QUARTER        QUARTER
          <S>                              <C>            <C>           <C>             <C>
          Year Ended December 31, 1996
            Revenues                       $7,331,742     $8,257,476    $13,920,810     $8,008,238
            Net Income                      1,143,454      1,819,180      6,883,228        107,921
            Net Income Per Common Share           .23            .37           1.41            .02

          Year Ended December 31, 1995
            Revenues                       $4,491,487     $5,991,160     $6,149,316     $5,571,201
            Net Income                        583,589      1,113,360      1,214,186        111,972
            Net Income Per Common Share           .12            .23            .25            .02

    </TABLE>

       During the fourth quarter of 1996, the Company recorded an additional
       $3,104,370 in income tax expense related to the third quarter gain on
       the disposition of assets.  The Company had anticipated deferring tax
       expense on a substantial portion of this gain via the like-kind exchange
       rules, but was unable to consummate the transaction.  Additionally,
       fourth quarter results included approximately $650,000 additional
       compensation expense  in connection with an employee benefit plan which
       appreciates in value as the price of the Company's common stock rises.

       During the fourth quarter of 1995, the Company recorded an impairment of
       $491,051 to unproved leasehold costs relating to the Company's three-
       dimensional seismic program.  The effect of this impairment is included
       in Dry holes and abandonments on the Consolidated Statements of Income.

  (11) 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,
                                                  1996             1995
            Undeveloped leaseholds and
              royalties                      $    105,385     $    124,924
            Producing properties              103,118,219      111,348,464

                                              103,223,604      111,473,388
            Accumulated depreciation and
              amortization                     48,906,086       48,807,308

            Net capitalized costs            $ 54,317,518     $ 62,666,080

       Costs Incurred

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

                                             Years ended December 31,
                                         1996          1995          1994
       Acquisition of properties
         Undeveloped                $   104,846   $    59,010    $ 293,472
         Proved                              --    29,234,607    9,679,619
       Exploration costs                125,963       413,632    1,473,571
       Development costs              2,980,849     3,949,882    4,972,784

                                     $3,211,658   $33,657,131  $16,419,446

       Results of Operations

          The results of operations from oil and gas producing activities are
          as follows:
                                         Years ended December 31,
                                       1996          1995         1994

          Sales                    $30,583,133   $20,539,738   $13,265,075
          Production costs (b)    (10,079,948)    (8,443,466)   (4,970,506)
          Exploration expenses       (340,913)      (661,319)   (2,093,756)
          Depreciation and
            amortization           (7,816,674)    (6,801,115)   (4,671,569)
                                    12,345,598     4,633,838     1,529,244
          Income tax expense       (4,408,531)    (1,478,000)     (408,000)

          Results of operations
            from oil and gas
            producing activities   $7,937,067     $3,155,838   $ 1,121,244

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

       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.

  <TABLE>
  <CAPTION>

  Proved Developed and                            Oil          Gas
  Undeveloped Reserves                         (Barrels)      (MCF)
  --------------------                         ---------   ----------
  <S>                                          <C>         <C>
  Total as of December 31, 1993                4,014,025    15,858,640
       Revisions of previous estimates           310,471       290,761
       Purchases of reserves                   1,618,491       806,119
       Extensions and discoveries                778,924       395,184
       Production                               (558,295)   (2,390,298)
       Sales of reserves in place                (10,554)       (8,946)

  Total as of December 31, 1994                6,153,062    14,951,460
       Revisions of previous estimates          (113,124)     (291,417)
       Purchases of reserves                   3,399,040     7,951,973
       Extensions and discoveries                455,693       969,038
       Production                               (957,873)   (2,720,441)
       Sales of reserves in place                (64,283)   (1,996,593)

  Total as of December 31, 1995                8,872,515    18,864,020
       Revisions of previous estimates         1,150,114     3,100,882
       Purchases of reserves                       --            --
       Extensions and discoveries                432,789       463,296
       Production                             (1,212,369)   (2,890,061)
       Sales of reserves in place               (268,663)   (4,952,957)

  Total as of December 31, 1996                8,974,386    14,585,180

  Proved Developed Reserves
  December 31, 1994                            5,485,909    14,355,633
  December 31, 1995                            8,712,835    18,214,860
  December 31, 1996                            8,649,996    13,442,204

  </TABLE>

  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:

  <TABLE>
  <CAPTION>

                                              Years ended December 31,
                                           1996        1995         1994
                                          (000's)     (000's)     (000's)
  <S>                                    <C>         <C>         <C>
  Future cash inflows                    $273,644    $192,794    $123,865
  Future production costs                (110,123)    (92,873)    (61,969)
  Future development costs                 (2,912)     (1,146)     (2,166)
                                          160,609      98,775      59,730
  Future income tax expenses              (38,610)    (14,464)     (8,590)
  Future net cash flows                   121,999      84,311      51,140
  10% annual discount for estimated
    timing of cash flows                  (44,361)    (27,710)    (16,929)
  Standardized measure of discounted
    future net cash flows                $ 77,638    $ 56,601    $ 34,211

  </TABLE>

  The following are the principal sources of changes in the standardized
  measure of discounted future net cash flows.

  <TABLE>
  <CAPTION>
                                                  Years ended December 31,
                                                 1996      1995       1994
                                                (000's)   (000's)   (000's)
  <S>                                           <C>       <C>       <C>
  Standardized measure - beginning of year      $56,601   $34,211   $22,936
  Sales of oil and gas produced,
    net of production costs                     (20,503)  (12,267)   (8,388)
  Net changes in prices and production costs     36,421     5,396     3,065
  Extensions, discoveries, and improved
    recovery, less related costs                  3,876     3,514     5,317
  Changes in future development costs              (617)      135       (57)
  Development costs incurred                        182       850     2,809
  Revisions of previous quantity estimates       14,503      (867)    1,694
  Accretion of discount                           6,631     3,996     2,578
  Purchase of proved reserves                      --      27,801     6,517
  Sale of proved reserves                        (4,669)   (2,065)        7
  Net change in income taxes                    (14,861)   (3,964)   (2,901)
  Other                                              74      (139)      634

  Standardized measure - end of year            $77,638   $56,601   $34,211

  </TABLE>

                                                                 Schedule II

  <TABLE>
  <CAPTION>
                       MAYNARD OIL COMPANY AND SUBSIDIARIES
                         Valuation and Qualifying Accounts
                        Three Years Ended December 31, 1996

                                                        Charged to
                                             Beginning   Cost and     Ending
  Description                      Balance   Expenses   Deductions   Balance
  <S>                              <C>           <C>      <C>         <C>
  Allowance for Doubtful Accounts - (a)

  December 31, 1994                $ 43,000       --        --        $43,000

  December 31, 1995                $ 43,000       --        --        $43,000

  December 31, 1996                $ 43,000       --     $  7,000     $50,000


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

  </TABLE>