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, 1997 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 17, 1998 was $21,257,000 (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 17, 1998 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 20, 1998 - 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.

      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  1997  in its  quest  for  significant  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, 1997, approximately 77% of the Company's estimated proved
      reserves and 1997 production, were  attributable to crude (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, 1997,  three customers,  Total
      Petroleum, Koch Oil Company and  Amoco Production Company, accounted  for
      approximately 20%,  18% and 14%, 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  1997,   a  total  of  fourteen  wells   were  drilled,  five
      exploratory  wells,   and  nine  development  wells.  Below  is  a  brief
      description  of  the  work completed  during  the  year  and the  results
      thereof.

           Four  of the nine development  wells were drilled  on projects which
      are owned 100% by the Company.  The four fields involved are Shafter Lake
      and  Fullerton (both in Andrews  County, Texas), Block  31 (Crane County,
      Texas) and  Teas (Garza County,  Texas).   Two of these  four wells  were
      productive oil wells, which together tested at the rate of  79 barrels of
      oil per  day (BOPD), another was  a service well in  an active waterflood
      unit, and the fourth resulted in a non-commercial well.

           Of  the remaining  five  development wells,  one  was a  lease  line
      cooperative  well being drilled to extend a secondary recovery project at
      Shafter Lake in Andrews  County, Texas and  two others were infill  wells
      drilled on the Claytonville Unit in Fisher County, Texas.  Two additional
      development  wells were drilled and completed as  gas wells by Chevron in
      the Knox Field of Grady County, Oklahoma where the Company owns a working
      interest of 10.5%.

           Five exploratory wells were drilled in 1997, four  of which were dry
      holes, while  the fifth  is a test  drilled in Johnston  County, Oklahoma
      that is currently being evaluated for completion.

      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, 1998.

           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  17, 1998  the Company  employed approximately 35  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, 1997, 1996, and  1995.  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, 1997.

          <TABLE>
          <CAPTION>
                                                                  December 31
                                       -----------------------------------------------------------------------

                                             1997                      1996                      1995
                                      -------------------      -------------------        -------------------

                                      Oil(MB     Gas(MMCF)      Oil(MB)   Gas(MMCF)       Oil(MB)   Gas(MMCF)
          <S>                         <C>        <C>            <C>        <C>            <C>        <C>
          Proved Developed            6,761.9    12,001.6        8,650.0    13,442.2       8,712.8    18,214.8
          Proved Undeveloped            386.5       733.3          324.4     1,143.0         159.7       649.2

          Total Proved Reserves       7,148.4    12,734.9        8,974.4    14,585.2       8,872.5    18,864.0

          </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, 1997, 1996, and  1995.  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,  1997, 1996, and  1995 respectively, used  in the
      estimates were  $15.72, $24.66, and $18.13  per barrel of oil  and $2.05,
      $3.59, and $1.65 per mcf of natural gas.   Lease and well operating costs
      are based upon actual operating expense records.

          <TABLE>
          <CAPTION>
                                                                           December 31

                                               1997                            1996                          1995
                                         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               $59,789    $41,357             $152,508     $98,184          $96,297     $65,235
          Proved Undeveloped               2,848      1,203                8,101       4,026            2,478       1,075

          Total Proved Reserves          $62,637    $42,560             $160,609    $102,210          $98,775     $66,310
          </TABLE>

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

      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, 1997.

      <TABLE>
      <CAPTION>
                                                          December 31
                                                    1997      1996      1995
      Production:
        <S>                                       <C>        <C>       <C>
        Oil (MB)                                  1,106.0    1,212.4     957.9
        Gas (MMCF)                                1,957.1    2,890.1   2,720.4

      Average Sales Prices:
        Oil (per BBL)                              $19.38     $20.39    $16.98
        Gas (per MCF)                              $ 2.58     $ 2.03    $ 1.57

      Average Production Costs:
        Per net equivalent barrel of oil (1)(2)    $ 7.07     $ 5.95    $ 5.98

      (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, 1997, the Company owned an interest in
      approximately 1,131 gross (291.7 net) wells, of which 1,102 gross (285.8
      net) are oil wells and 29 gross (5.9 net) are gas wells, located on
      approximately 29,140 gross (12,786 net) producing acres.

      UNDEVELOPED ACREAGE

           The following table sets forth the Company's gross and net
      undeveloped acreage as of December 31, 1997.

                                                   Undeveloped Acreage
                                                     Gross      Net
                                                     -----     -----
      Colorado  . . . . . . . . . . . . . . . .         80        10
      Louisiana . . . . . . . . . . . . . . . .         80        40
      North Dakota  . . . . . . . . . . . . . .         62         4
      Oklahoma  . . . . . . . . . . . . . . . .        135        70
      Texas . . . . . . . . . . . . . . . . . .     12,118     3,380
      Wyoming . . . . . . . . . . . . . . . . .      2,376       809

      Total . . . . . . . . . . . . . . . . . .     14,851     4,313

      DRILLING ACTIVITY

           The following table sets forth the results of the Company's drilling
      activity during the three years ended December 31, 1997.

      <TABLE>
      <CAPTION>
                              Exploratory      Development         Total
                                Gross  Net     Gross   Net      Gross   Net
      <S>                        <C>  <C>       <C>  <C>         <C>  <C>
      December 31, 1997
           Productive            0    .000       8   3.469        8   3.469
           Dry                   4    .663       1   1.000        5   1.663

        Total                    4    .663       9   4.469       13   5.132

      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
      </TABLE>

           At March 17, 1998, and December 31, 1997, the Company had one gross
      (.125 net) exploratory well in the process of being drilled.

      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 17, 1998, is set forth in the table below.

           Name                      Position             Age      Since

      James G. Maynard       Chairman of the Board,        71       1971
                               Chief Executive Officer
                               and Treasurer

      Glenn R. Moore         President and Chief           60       1982
                               Operating Officer

      L. Brent Carruth       Vice President of             64       1984
                               Operations

      Kenneth W. Hatcher     Vice President of             54       1983
                               Finance

      Linda K. Burgess       Corporate Secretary           49       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, 1997, were as
      follows:

      <TABLE>
      <CAPTION>

           1997           High      Low          1996           High     Low

      <S>               <C>       <C>         <C>             <C>       <C>
      First Quarter     $21 1/2   $12 1/2     First Quarter   $ 8 1/2   $6 3/4
      Second Quarter     16 1/2    10         Second Quarter    8 3/4    7 1/8
      Third Quarter      16        10         Third Quarter    11        8 3/8
      Fourth Quarter     14 1/2    10 1/4     Fourth Quarter   22        9 5/8

           As of March 17, 1998, the Company had approximately 918 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>
<TABLE>
          <CAPTION>
                                                                           December 31
                                                   1997         1996          1995            1994           1993
          <S>                                    <C>            <C>           <C>           <C>            <C>
          Total revenue from
            oil and gas                          $26,477        $30,583       $20,540        $13,265       $14,861
          Income before income
            taxes                                  6,613         15,758         4,354          1,196         1,452
          Income before
            accounting change                      4,455          9,954         3,023            943           867
          Net income                               4,455          9,954         3,023            943         2,254
          Per share income (1)                       .91           2.04           .62            .19           .46
          Total assets                            78,286         81,257        72,838         48,071        43,798
          Long-term debt                          11,250         16,250        21,250          5,250         2,000
          Shareholders' equity                    53,509         49,054        39,104         36,137        35,203
          Net working capital                     17,503         12,942          (370)         4,079         9,510
          Net cash provided by
            operating activities                  11,250         13,921        11,558          5,696         6,738

          (1)  Basic and diluted earnings per share were the same for the years
           presented.
      </TABLE>


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

      YEAR ENDED DECEMBER 31, 1997 COMPARED TO DECEMBER 31, 1996
      OVERVIEW

           After ending the 1996 year with almost $10 million in net income,
      which included a $6.2 million gain from the sale of non-strategic oil and
      gas properties, management knew it was going to have a difficult time
      matching financial results in future years without consummating a
      significant acquisition of property.  Management was aware that volumes
      lost from the sale would result in lower revenues and operating results,
      but the strategy included banking the proceeds from these sales to help
      finance future acquisitions.  The Company was not successful in acquiring
      a significant group of properties in 1997, and its financial results were
      not as good as the prior year.

           Besides the change in the physical make-up of the Company's
      properties, 1997 brought a year of declining product prices.  An oil and
      gas company's ultimate worth is measured by the value of its hydrocarbon
      reserves in the ground and available for sale in the marketplace.  Since
      77% of Maynard Oil Company's hydrocarbon reserves are oil reserves (on a
      net equivalent barrel basis "NEB" which uses a conversion ratio of six
      thousand cubic feet of gas (MCF) to one equivalent barrel of oil), it is
      primarily impacted by oil markets.  The Company manages its exposure to
      price fluctuations in the oil market through the use of short term
      forward sales contracts, generally for a term of thirty days.

           During the early part of 1996, the Company's management was pleased
      as oil prices rose from approximately $17.25 per barrel to an end of the
      year price amounting to $24.66 per barrel.  During the first quarter of
      1997, the Company received revenue payments in which oil prices peaked at
      $25.37 per barrel and averaged $22.72 per barrel for the first quarter.
      However, the oil markets continued to fluctuate for the balance of 1997,
      and the Company averaged $18.31 per barrel for the last nine months of
      the year.  End of the year oil pricing was $15.72 per barrel, and the
      Company recognized a drop in the value of its oil in the ground amounting
      to almost $9 per barrel.  Subsequent to year end, the price of crude oil
      recorded by the Company declined below $13.00 per barrel, which will have
      a negative effect on earnings and cash flow in the first quarter of 1998.

      LIQUIDITY AND CAPITAL RESOURCES

           The Company acquired one minor group of oil properties during 1997
      for approximately $700,000, but was unsuccessful in other producing
      property bids.  The Company made its scheduled debt payments, continued
      its exploitation work and maintenance activities on existing properties
      and ended the year with an additional $2.7 million in cash.  Thus, 31.4%
      of the Company's current balance sheet is represented by cash, and net
      working capital at year end 1997 was $17,503,000.  Future acquisitions
      would be financed through the utilization of Company cash and bank debt.

      RESULTS OF OPERATIONS
      YEAR ENDED DECEMBER 31, 1997 COMPARED TO DECEMBER 31, 1996

           Net income for 1997 was $4,455,355 compared to $9,953,783 for 1996.
      The current year included a gain from the sale of oil and gas properties
      amounting to $191,873 compared to a gain of $6,202,473 in the prior year.
      Oil and gas revenues declined 13% between the two years due primarily to
      the loss of volumes resulting from last year's property dispositions.
      Oil volumes dropped approximately 9% and gas volumes almost 32%.  Oil and
      gas revenues were also negatively affected by a $1.01 per barrel
      reduction in oil prices, which was partially offset by a fifty-five cent
      per mcf increase in gas prices.

           Lease operating expenses increased $44,264 over 1996 levels.
      However, on a net equivalent barrel (NEB) basis, this relatively low
      amount equates to a rise in lifting costs of $1.12 per NEB.  During 1997,
      approximately $835,000, or fifty-eight cents per NEB, was spent on
      maintenance costs compared with $486,000, or twenty-nine cents per NEB, a
      year ago.  Additionally, advalorem taxes in the state of Texas grew from
      $582,000 (thirty-four cents per NEB) to $673,000 in 1997 (forty-seven
      cents per NEB).  The balance of the operating expense increase related to
      higher lifting costs for recurring activities on certain identifiable
      properties.

           Exploration costs totaled $838,580 currently versus $201,509 last
      year.  Seismic work in 1997 totaled $315,000 compared to only $11,000 in
      1996 as the Company initiated two new seismic projects.  Dry hole and
      abandonment costs were approximately $512,000 for four wells in 1997
      compared with $180,000 in 1996 relating to one well and the cancellation
      of leaseholds acquired in prior years.

           General and administrative expenses were $1,337,484 less this year
      than in 1996, and the reduction represents the effect of an employee
      benefit plan whose impact on earnings is directly related to the
      Company's common stock price.  In 1996, earnings were charged in excess
      of $888,000 to reflect a closing stock price of $18.75 per share.
      However, by the end of 1997, Maynard's stock price had retreated to
      $10.25 per share.  Generally accepted accounting principles dictate the
      treatment of this item of administrative expense and require current year
      credits to the account.  Thus, the Company ended 1997 with a liability of
      $497,375 which represents cash payments to which various employees
      covered by this plan are entitled whenever their employment by the
      Company is ended.

           Depreciation and amortization expense increased on a dollar basis
      from $7,894,388 in 1996 to $8,291,128.  When converted to a net equivalent
      barrel basis, this amount grew from $4.66 per net equivalent barrel (NEB)
      a year ago to $5.79 per NEB currently.  This resulted from oil and gas
      reserve revisions attributable to current pricing trends and also led to
      the impairment charges of $227,879 discussed in Note 1 to the
      Consolidated Financial Statements.

           Interest expense decreased $227,880 due to the scheduled note
      payments for 1997 and the resulting lower principal balance outstanding.

           Income tax expense was $3,646,870 less than the prior year due to
      the non-recurring nature of last year's property sales and the lower
      effective tax rate in 1997 compared to 1996.

      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.

           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
      equilvalent 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.

           In March and December, 1995, the Company acquired certain oil and
      gas properties and utilized additional bank borrowings to finance the
      transaction.  Interest expense increased $692,542 due to this additional
      debt.

           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.

      OTHER

           Company management has attempted to assess whether its internal
      computer systems, as well as  its vendors, purchasers, and bankers
      systems  will be Year 2000 compliant without causing disruptions in the
      conduct of the Company's business.  Based upon the investigative process
      employed by the Company to date and assurances from the Company's
      software vendor, the Company's computer systems are compatible with the
      year 2000.  The Company will continue to review compatibility issues of
      those with whom it does business.  The Company does not anticipate any
      major expenditures associated with the Year 2000 consequences.

      ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

           The information required by Item 8 is included on pages 18 through
      35 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 20, 1998, and is incorporated herein by
      reference.  Information with respect to the Company's executive officers
      as of March 17, 1998, 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

              No reports on Form 8-K were filed by the Company during the last
      quarter of 1997.

      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.

            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.

           21.1    List of subsidiaries of the Company as of December 31, 1997,
                   filed herewith.

           27      Financial Data Schedule.


                                      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, 1998

           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, 1998
           James G. Maynard       Chief Executive Officer
                                    & Treasurer

      /s/  Glenn R. Moore         President and Chief        March 31, 1998
           Glenn R. Moore           Operating Officer

      /s/  Kenneth W. Hatcher     Vice President of Finance  March 31, 1998
           Kenneth W. Hatcher       (Principal Financial
                                    and Accounting Officer)

      /s/  Robert B. McDermott    Director                   March 31, 1998
           Robert B. McDermott


      /s/  Ralph E. Graham        Director                   March 31, 1998
           Ralph E. Graham


                          MAYNARD OIL COMPANY AND SUBSIDIARY

               Index to Consolidated Financial Statements and Schedules

                                                                           Page
      Financial Statements:

           Report of Independent Accountants

           Consolidated Balance Sheets - December 31, 1997 and 1996

           Consolidated Statements of Income - Three years ended
              December 31, 1997

           Consolidated Statements of Shareholders' Equity - Three
              years ended December 31, 1997

           Consolidated Statements of Cash Flows - Three years
              ended December 31, 1997

           Notes to Consolidated Financial Statements

           Financial Statement Schedules for the Three years
               ended December 31, 1997

                  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 subsidiary at
      December 31, 1997 and 1996, and the results of their operations and their
      cash flows for each of the three years in the period ended December 31,
      1997, 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
      Dallas, Texas
      March 26, 1998


      <TABLE>
                          MAYNARD OIL COMPANY AND SUBSIDIARY
                             Consolidated Balance Sheets

      <CAPTION>
                                                           December 31,
                                                      1997            1996
      <S>                                        <C>              <C>
      ASSETS
      Current assets:
         Cash and cash equivalents               $ 24,584,288     $21,817,447
         Accounts receivable, trade                 3,267,255       4,274,439
         Other current assets                         546,238         585,021
             Total current assets                  28,397,781      26,676,907

      Property and equipment, at cost:
         Oil and gas properties, successful
           efforts method                         104,031,352     103,223,604
         Other property and equipment                 548,668         540,736
                                                  104,580,020     103,764,340
         Less accumulated depreciation and
          amortization                           ( 54,692,225)   ( 49,183,946)
            Net property and equipment             49,887,795      54,580,394

                                                 $ 78,285,576    $ 81,257,301
      LIABILITIES AND SHAREHOLDERS' EQUITY
      Current liabilities:
         Current installments of long-term debt   $ 5,000,000     $ 5,000,000
         Accounts payable                           4,271,662       3,592,404
         Accrued expenses                           1,402,021       1,710,681
         Income taxes payable                         220,798       3,431,476
              Total current liabilities            10,894,481      13,734,561

      Deferred income taxes                         2,632,000       2,219,000

      Long-term debt                               11,250,000      16,250,000

      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 shares issued
           and outstanding                            488,945         488,945
         Additional paid-in capital                18,831,138      18,831,138
         Retained earnings                         34,189,012      29,733,657
              Total shareholders' equity           53,509,095      49,053,740

      Contingencies and commitments (note 9)
                                                 $ 78,285,576    $ 81,257,301


      See accompanying Notes to Consolidated Financial Statements.
      </TABLE>

      <TABLE>
                          MAYNARD OIL COMPANY AND SUBSIDIARY
                          Consolidated Statements of Income
      <CAPTION>
                                                 Years ended December 31,
                                              1997         1996         1995
      <S>                                  <C>         <C>          <C>
      Revenues:
        Oil and gas sales and royalties   $26,477,238  $30,583,133  $20,539,738
        Interest and other                  1,229,556      732,660      671,551
        Gain on disposition of assets         191,873    6,202,473      991,875
                                           27,898,667   37,518,266   22,203,164

      Costs and expenses:
        Operating expenses                 10,124,212   10,079,948    8,443,466
        Exploration, dry holes and
           abandonments                       838,580      201,509      609,279
        General and administrative            562,924    1,900,408      925,822
        Depreciation and amortization       8,291,128    7,894,388    6,879,672
        Interest and other                  1,468,968    1,683,860      991,318
                                           21,285,812   21,760,113   17,849,557

        Income before income taxes          6,612,855   15,758,153    4,353,607

      Income tax expense                    2,157,500    5,804,370    1,330,500

          Net income                      $ 4,455,355  $ 9,953,783  $ 3,023,107

      Weighted average number of common
         shares outstanding                 4,889,450    4,889,690    4,890,708

      Net income per common share               $ .91        $2.04        $ .62

      See accompanying Notes to Consolidated Financial Statements.
      </TABLE>

      <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, 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
              Net income                              --              --               --         4,455,355        4,455,355

          Balance at December 31, 1997          4,889,450        $488,945       $18,831,138     $34,189,012      $53,509,095

          See accompanying Notes to Consolidated Financial Statements.
          </TABLE>

          <TABLE>
                                                       MAYNARD OIL COMPANY AND SUBSIDIARY
                                                      Consolidated Statements of Cash Flows
          <CAPTION>
                                                                        Years ended December 31,
                                                                    1997          1996           1995
          <S>                                                   <C>           <C>             <C>
          Cash flows from operating activities:
              Net income                                        $4,455,355    $9,953,783      $3,023,107
              Adjustments to reconcile net income to net
                cash provided by operating activities:

                Depreciation and amortization                    8,291,128      7,894,388      6,879,672
              Deferred income taxes                                413,000          6,490        480,000
              Exploration, dry holes and
                  abandonments                                     512,317        180,230        573,737
                Current year costs of dry holes and
                  abandonments                                    (436,058)       (90,521)       (94,390)
                Gain on disposition of assets                     (191,873)    (6,202,473)      (991,875)
              (Increase) decrease in current assets:
                Accounts receivable                              1,007,184       (976,506)      (886,482)
                Other current assets                                38,783       (119,595)       316,661
              Increase (decrease) in current liabilities:
                Accounts payable                                   679,258       (533,609)     1,514,804
                Accrued expenses                                  (308,660)       790,028        330,515
                Income taxes payable                            (3,210,678)     3,018,781        412,695

                Net cash provided by operating
                  activities                                    11,249,756     13,920,996     11,558,444

          Cash flows from investing activities:
              Proceeds from disposition of assets                  263,613      8,884,691      3,426,499
              Purchase price adjustment                               --          874,245           --
              Additions to property and equipment               (3,746,528)    (3,184,637)   (33,688,793)

                Net cash provided (used) by
                  investing activities                          (3,482,915)     6,574,299    (30,262,294)

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

                Net cash provided (used) by
                  financing activities                          (5,000,000)    (4,816,751)    19,006,364

          Net increase in cash and
            cash equivalents                                     2,766,841     15,678,544        302,514
          Cash and cash equivalents at beginning
            of year                                             21,817,447      6,138,903      5,836,389
          Cash and cash equivalents at end of year             $24,584,288    $21,817,447    $ 6,138,903

          See accompanying Notes to Consolidated Financial Statements.
      </TABLE>


                          MAYNARD OIL COMPANY AND SUBSIDIARY
                      Notes to Consolidated Financial Statements


      (1)  Summary of Significant Accounting Policies

           Business Activity

           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 and
           Oklahoma.

           Principles of Consolidation

           The consolidated financial statements include the accounts of
           Maynard Oil Company (Company) and its wholly-owned subsidiary.  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 $1,796,113, $1,870,752, and $1,892,370, for the three
           years ended December 31, 1997, 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

           In February 1997, the Financial Accounting Standards Board ("FASB")
           issued Statement of Financial Accounting Standards ("SFAS") No.
           128, "Earnings per Share", which requires disclosure of two
           earnings per share ("EPS") measures, basic EPS and diluted EPS, on
           the face of its Consolidated Statements of Income if the Company
           has a complex capital structure.  Net income per common share is
           computed using the weighted average number of common shares
           outstanding during each year.  During 1995, all outstanding stock
           options were exercised, and consequently, basic and diluted
           earnings per share were the same for 1997, 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 in the near term a
           change in an estimate may occur or actual amounts may differ from
           estimated amounts.

           Impairment of Long-Lived Assets

           The carrying value of property and equipment is periodically
           evaluated using undiscounted cash flows as the basis for
           determining if impairment exists under the provisions of Financial
           Accounting Standards No. 121, Accounting for the Impairment of
           Long-Lived Assets and for Long-Lived  Assets to be Disposed Of
           ("SFAS 121").  To the extent impairment is indicated to exist, an
           impairment loss would be recognized under SFAS 121 based on fair
           value.

           During 1997, oil prices fell from an average of $24.66 per barrel
           to an average of $15.72 per barrel and gas prices ranged from $3.59
           per thousand cubic feet of gas (mcf) in 1996 to $2.05 per mcf.
           Consequently, the Company recognized an impairment loss of $227,879
           in December 1997 to account for those properties whose investment
           would not be recoverable under current pricing trends.  This
           impairment is included in depreciation and amortization expense on
           the Company's Consolidated Statement of Income for 1997.

           Reclassifications

           Certain reclassifications of prior period statements have been made
           to conform with the 1997 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, 1997 and 1996, such
           investments totaled $24,700,000 and $22,246,554, respectively, and
           are considered to be cash equivalents, which approximate their fair
           value.

           Supplemental cash flow information for the three years ended
           December 31, 1997 is summarized as follows:

                                     1997         1996          1995
           Cash paid:
             Interest expense    $1,462,269    $1,735,416    $ 853,247
             Income taxes         $5,047,847   $2,779,099    $ 121,674


      (4)  Long-term Debt

           Long-term debt at December 31, 1997 and 1996 is summarized as
           follows:

                                                       1997         1996
           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 $27,501,887.                       $16,250,000  $21,250,000
           Less current installments                 5,000,000    5,000,000

             Long-term debt                        $11,250,000  $16,250,000

           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, 1997, interest on the bank term loan was at a rate
           of approximately 7.49%.

           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, 1997, all of which are 100% vested.
           During August 1993, 52,000 additional units were awarded at $5.625
           per share of which 34,500 units are vested.  Earnings are charged
           and credited over the life of the units for fluctuations in stock
           prices from $4.50 per share and $5.625 per share.  During the
           current year, operations were credited $420,750 and $97,813 in
           regard to the stock participation units granted in 1989 and 1993,
           respectively.  These credits reflect the reduction in closing stock
           prices from $18.75 per share at December 31, 1996 to $10.25 per
           share at December 31, 1997.  During 1996 and 1995, operations were
           charged $594,000 and $76,183 for the units awarded in 1989 and
           $294,887 and $15,676 for the units awarded in 1993, respectively.

           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 1995 is as
           follows:
                                               Number
                                                 of     Option Price
                                               Shares     per Share

           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 consists of the following:

                                      Years ended December 31,
                                1997          1996            1995
             Federal
               Current       $1,212,500    $5,397,880     $  620,500
               Deferred         413,000         6,490        480,000
             State              532,000       400,000        230,000

                             $2,157,500    $5,804,370     $1,330,500

           Income tax expense for the three years ended December 31, 1997
           differs from the amount computed by applying the applicable U.S.
           corporate income tax rate (34% in 1997 and 1995 and 35% in 1996) to
           income before income taxes.  The reasons for this difference are as
           follows:

      <TABLE>
      <CAPTION>
                                               Years ended December 31,
                                           1997         1996          1995
           <S>                          <C>          <C>          <C>
           Income tax expense at
             U.S. statutory rate        $2,248,371   $5,515,354   $1,480,226
           State income taxes, net
             of Federal income tax
             benefit                       351,120      260,000      151,800
           Allowable depletion in
             excess of cost depletion     (223,261)    (223,197)    (281,526)
           Items not related to current
             year earnings                (136,000)        --        (89,198)
           All other items                 (82,730)     252,213       69,198

             Income tax expense         $2,157,500   $5,804,370   $1,330,500
      </TABLE>

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

      <TABLE>
      <CAPTION>
                                                    December 31,
                                            1997         1996         1995

           <S>                          <C>          <C>          <C>
           Depreciable assets           $   86,500   $   48,500   $   61,510
           Depletable assets                36,500      111,500       14,400
           Intangible drilling
             and development costs       2,678,000    2,572,000    2,542,600
           Employee benefit
             obligations                  (169,000)    (346,000)
           Tax credit
             carryforwards                    --       (167,000)    (406,000)

           Net deferred tax
             liability                  $2,632,000   $2,219,000   $2,212,510
      </TABLE>

      (7)  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 1997, the Company elected to contribute 5%
           for each employee covered by this plan.  Under this plan, amounts
           equal to retirement plan expense are funded annually, which
           amounted to $99,313, $53,965 and $40,777, respectively, for the
           years ended December 31, 1997, 1996 and 1995.  The contributions
           for the same three year period have been reduced by $0, $648, and
           $1,818, respectively, for forfeitures attributable to employees
           terminated in prior years.

           The Company also has 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
           1997, 1996, and 1995.  During this same three year period, the
           Company's matching portion amounted to $91,302, $79,879, and
           $59,579, respectively.

      (8)  Major Customers

           During the years ended December 31, 1997 and 1995, oil and gas
           sales to three customers, amounting to approximately $5,698,000,
           $5,067,000 and $3,783,000, and $4,377,000, $3,746,000, and
           $2,946,000, respectively, each accounted for more than 10% of total
           consolidated revenues.  During the year ended December 31, 1996,
           oil and gas sales to two customers, amounting to approximately
           $6,059,000 and $3,898,000 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 not have a material adverse effect on 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.  Rent expense for the
           three years ended December 31, 1997 was $321,001, $314,743, and
           $298,371, respectively.

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

                                  1998   $ 248,624
                                  1999     236,454
                                  2000      81,985
                                  2001         718

           Total minimum payments        $ 567,781

      (10) Quarterly Financial Data (Unaudited)

           Summarized quarterly financial data for the years ended December 31,
           1997 and 1996 is as follows:
      <TABLE>
          <CAPTION>
                                                       First         Second           Third          Fourth
                                                      Quarter       Quarter          Quarter        Quarter
                   <S>                               <C>            <C>             <C>            <C>
                   Year Ended December 31, 1997
                     Revenues                        $8,043,876     $6,577,076      $6,447,486     $6,830,229
                     Net Income                       2,113,827        856,383       1,430,864         54,281
                     Net Income Per Common Share            .43            .18             .29            .01

                   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
          </TABLE>

               During the fourth quarter of 1997, the Company recorded an
           adjustment to depreciation and amortization expense arising from
           downward revisions to its oil and gas reserves.  These revisions
           related primarily to pricing changes.  The effect of this
           adjustment, coupled with the impairment charge (Note 1 to the
           Consolidated Financial Statements), was to increase fourth quarter
           depreciation and amortization expense $396,740.  Offsetting this
           expense increase was a $518,563 credit to an employee benefit plan
           which decreases in value if the price of the Company's stock
           declines.

           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.

      (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,
                                                1997           1996

           Undeveloped leaseholds and
             royalties                     $    199,416   $    105,385
           Producing properties             103,831,936    103,118,219
                                            104,031,352    103,223,604
           Accumulated depreciation and
             amortization                    54,351,135     48,906,086

           Net capitalized costs           $ 49,680,217   $ 54,317,518


           Costs Incurred

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

      <TABLE>
      <CAPTION>
                                               Years ended December 31,
                                           1997          1996         1995
           <S>                        <C>           <C>          <C>
           Acquisition of properties
             Undeveloped              $   195,434   $   104,846  $    59,010
             Proved                       700,055            --   29,234,607
           Exploration costs            1,006,253       125,963      413,632
           Development costs            2,539,005     2,980,849    3,949,882

                                       $4,440,747    $3,211,658  $33,657,131
      </TABLE>

           Results of Operations

              The results of operations from oil and gas producing activities
              are as follows:
      <TABLE>
      <CAPTION>
                                                Years ended December 31,
                                          1997          1996          1995

              <S>                     <C>           <C>           <C>
              Sales                   $26,477,238   $30,583,133   $20,539,738
              Production costs (a)    (10,124,212)  (10,079,948)   (8,443,466)
              Exploration expenses     (1,060,616)     (340,913)     (661,319)
              Depreciation and
                amortization           (8,178,538)   (7,816,674)   (6,801,115)
                                        7,113,872    12,345,598     4,633,838
              Income tax expense       (2,267,708)   (4,408,531)   (1,478,000)

              Results of operations
                from oil and gas
                producing activities $  4,846,164   $ 7,937,067   $ 3,155,838
      </TABLE>

              (a)  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, 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
           Revisions of previous estimates          (733,337)    (763,172)
           Purchases of reserves                      55,867       98,228
           Extensions and discoveries                 10,402      782,797
           Production                             (1,106,042)  (1,957,147)
           Sales of reserves in place                (52,809)     (10,966)

      Total as of December 31, 1997                7,148,467   12,734,920

      Proved Developed Reserves
      December 31, 1995                            8,712,835   18,214,860
      December 31, 1996                            8,649,996   13,442,204
      December 31, 1997                            6,761,920   12,001,602

      </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,
                                                 1997      1996      1995
                                                (000's)   (000's)  (000's)

      <S>                                      <C>       <C>      <C>
      Future cash inflows                      $138,471  $273,644 $192,794
      Future production costs                   (73,641) (110,123) (92,873)
      Future development costs                   (2,193)   (2,912)  (1,146)
                                                 62,637   160,609   98,775
      Future income tax expenses                 (6,891)  (38,610) (14,464)
      Future net cash flows                      55,746   121,999   84,311
      10% annual discount for estimated
        timing of cash flows                    (17,867)  (44,361) (27,710)
      Standardized measure of discounted
        future net cash flows                  $ 37,879  $ 77,638 $ 56,601
      </TABLE>

      The average prices for oil and gas used to calculate future cash inflows
      at December 31, 1997 were $15.72 per barrel and $2.05 per mcf,
      respectively.  Subsequent to year end, the price of crude oil recorded by
      the Company declined below $13.00 per barrel.

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

      <TABLE>
      <CAPTION>
                                                     Years ended December 31,
                                                   1997      1996        1995
                                                  (000's)   (000's)    (000's)

      <S>                                         <C>       <C>       <C>
      Standardized measure - beginning of year    $77,638   $56,601   $34,211
      Sales of oil and gas produced,
        net of production costs                   (16,353)  (20,503)  (12,267)
      Net changes in prices and production costs  (46,696)   36,421     5,396
      Extensions, discoveries, and improved
        recovery, less related costs                1,593     3,876     3,514
      Changes in future development costs             128      (617)      135
      Development costs incurred                      994       182       850
      Revisions of previous quantity estimates     (3,741)   14,503      (867)
      Accretion of discount                         4,256     6,631     3,996
      Purchase of proved reserves                     348      --      27,801
      Sale of proved reserves                        (255)   (4,669)   (2,065)
      Net change in income taxes                   19,889   (14,861)   (3,964)
      Other                                            78        74      (139)

      Standardized measure - end of year          $37,879   $77,638   $56,601
      </TABLE>


                                                                    Schedule II
      <TABLE>
                          MAYNARD OIL COMPANY AND SUBSIDIARY
                          Valuation and Qualifying Accounts
                         Three Years Ended December 31, 1997

      <CAPTION>
                                        Charged to
                             Beginning   Cost and                Ending
      Description            Balance     Expenses   Deductions   Balance

      Allowance for
        Doubtful Accounts - (a)

      <S>                    <C>         <C>           <C>       <C>
      December 31, 1995      $43,000        --          --       $43,000

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

      December 31, 1997      $50,000      20,000        --       $70,000


      (a)  Valuation account deducted in the balance sheet from trade accounts
           receivable.
      </TABLE>