SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)
         X  Quarterly Report pursuant to Section 13 or 15(d) of  the  Securities
        --- Exchange Act of 1934 for the quarterly period ended June  30,  2000;
            or
            Transition  report pursuant to Section 13 or 15(d) of the Securities
        --- Exchange Act of 1934 for the transition period from       to       .
                                                               -------  --------

                         Commission File Number 0-18754
                                                -------

                          BLACK WARRIOR WIRELINE CORP.
             -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

            DELAWARE                                      11-2904094
--------------------------------------------------------------------------------
(State or other jurisdiction of                        (I.R.S employer
incorporation of organization)                         identification no.)

               3748 HIGHWAY 45 NORTH, COLUMBUS, MISSISSIPPI 39701
               --------------------------------------------------
               (Address of principal executive offices, zip code)

                                 (662) 329-1047
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

         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 proceeding 12 months (or for such shorter period that the issuer
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                                    YES     X             NO
                                         --------           -------

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         As of August 10,  2000,  7,478,927  shares of the  Registrant's  Common
Stock, $.0005 par value, were outstanding.


<PAGE>


                          BLACK WARRIOR WIRELINE CORP.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX

PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>


                                                                                               Page
                                                                                               ----
<S>               <C>                                                                          <C>
Item 1.           Financial Statements

                  Condensed Balance Sheets - June 30, 2000
                  and  December 31, 1999                                                         3

                  Condensed Statements of Operations -
                  Three Months Ended June 30, 2000 and
                  June 30, 1999                                                                  4

                  Condensed Statements of Operations -
                  Six Months Ended June 30, 2000 and
                  June 30, 1999                                                                  5

                  Condensed Statements of Cash Flows -
                  Six Months Ended June 30, 2000 and
                  June 30, 1999                                                                  6

                  Notes to Condensed Financial Statements -
                  Six Months Ended June 30, 2000 and
                  June 30, 1999                                                                  7

Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                                 13

PART II - OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K                                              19

</TABLE>


                                       2

<PAGE>

PART I - FINANCIAL INFORMATION
         ITEM 1.  FINANCIAL STATEMENTS

BLACK WARRIOR WIRELINE CORP.
----------------------------
CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                   JUNE 30, 2000         DECEMBER 31, 1999
                           ASSETS                                                  (UNAUDITED)
<S>                                                                                <C>                     <C>
Current assets:
    Cash and cash equivalents                                                      $    509,457            $  2,425,808
    Short-term investments                                                               50,000                  50,000
    Accounts receivable, less allowance for doubtful
        accounts of $ 992,881  and $ 1,006,068, respectively                          7,299,000               4,971,251
    Prepaid expenses                                                                    440,994                 175,268
    Other receivables                                                                   150,967                 146,392
    Other current assets                                                                630,844                 526,884
                                                                                   ------------            ------------
                      Total current assets                                            9,081,262               8,295,603
Land and building, held for sale                                                        400,000                 400,000
Inventories                                                                           4,641,356               4,285,206
Property, plant, and equipment, less accumulated
    depreciation of $ 16,233,271 and $ 13,810,841                                    18,932,764              19,457,361
Other assets                                                                          1,276,951                 604,649
Goodwill, less accumulated amortization of $ 385,505
  and $361,714, respectively                                                          3,241,475               3,289,165
                                                                                   ------------            ------------
                      Total assets                                                 $ 37,573,808            $ 36,331,984
                                                                                   ============            ============

                           LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
    Accounts payable                                                               $  3,321,378            $  6,936,572
    Accrued salaries and vacation                                                       364,051                 249,296
    Accrued interest payable                                                          4,206,535               3,027,901
    Other accrued expenses                                                              942,632                 777,598
    Deferred revenue                                                                    100,000                 100,000
    Notes payable to related parties                                                 25,797,540               3,041,234
    Current maturities of long-term debt and capital
         lease obligations                                                           21,218,834               8,391,346
                                                                                   ------------            ------------
                      Total current liabilities                                      55,950,970              22,523,947

Notes Payable to related parties                                                                             21,412,356
Long-term debt and capital lease obligations, less
     Current maturities                                                                                      10,542,555
                                                                                   ------------            ------------
                       Total liabilities                                             55,950,970              54,478,858

Stockholders' deficit:
     Preferred stock, $.0005 par value, 2,500,000 shares authorized
         none issued at June 30, 2000 and December 31, 1999,
         respectively
     Common stock, $.0005 par value, 12,500,000 shares authorized;
       7,478,927 and 4,812,260 shares issued and outstanding
       at June 30, 2000 and December 31, 1999, respectively                               3,739                   2,406
     Additional paid-in capital                                                      15,828,958              13,316,081
     Accumulated deficit                                                            (33,626,466)            (30,881,968)
    Treasury stock, at cost, 4,620 shares                                              (583,393)               (583,393)
    Total stockholders' (deficit)                                                   (18,377,162)            (18,146,874)
                                                                                   ------------            ------------
                      Total liabilities and stockholders' deficit                  $ 37,573,808            $ 36,331,984
                                                                                   ============            ============

</TABLE>

          See accompanying notes to the condensed financial statements.

                                       3

<PAGE>


BLACK WARRIOR WIRELINE CORP.
----------------------------
CONDENSED STATEMENTS OF OPERATIONS
For the three months ended June 30, 2000 and June 30, 1999

<TABLE>
<CAPTION>

                                                                      June 30, 2000            June 30, 1999
                                                                       (Unaudited)              (Unaudited)
<S>                                                                    <C>                        <C>

Revenues                                                               $ 9,458,689               $ 7,261,416

Operating costs                                                          6,981,658                 5,409,635

Selling, general and administrative expenses                             1,479,282                 2,503,561

Depreciation and amortization                                            1,266,775                 1,138,553
                                                                       -----------               -----------

       Net Loss  from operations                                          (269,026)               (1,790,333)

Interest expense and amortization of debt discount                      (1,241,013)                 (842,987)

Net Loss on sale of fixed assets                                               -0-                     1,737

Other income                                                                37,295                     7,868
                                                                       -----------               -----------

       Loss before extraordinary gain                                   (1,472,744)               (2,623,715)

Extraordinary gain on extinguishments of debt,
   Net of income taxes of $0                                                68,639                       -0-
                                                                       -----------               -----------

       Net Loss                                                        $(1,404,105)              $(2,623,715)
                                                                       ===========               ===========

       EARNINGS PER COMMON SHARE
       Loss before extraordinary item                                  $     (0.20)              $     (0.62)
       Extraordinary item                                              $      0.01                        --
                                                                       -----------               -----------
       Net Loss                                                        $     (0.19)              $     (0.62)
                                                                       ===========               ===========

       EARNINGS PER COMMON SHARE - ASSUMING DILUTED
       Loss before extraordinary item                                  $     (0.20)              $     (0.62)
       Extraordinary item                                              $      0.01                        --
                                                                       -----------               -----------
       Net Loss                                                        $     (0.19)              $     (0.62)

Weighted average common shares outstanding                               7,474,307                 4,199,619
                                                                       ===========               ===========

Weighted average common shares outstanding
    with dilutive securities                                             7,474,307                 4,199,619
                                                                       ===========               ===========

</TABLE>


          See accompanying notes to the condensed financial statements.

                                       4

<PAGE>


BLACK WARRIOR WIRELINE CORP.
----------------------------
CONDENSED STATEMENTS OF OPERATIONS
For the six months ended June 30, 2000 and June 30, 1999

<TABLE>
<CAPTION>

                                                             June 30, 2000            June 30, 1999
                                                              (Unaudited)              (Unaudited)
<S>                                                          <C>                       <C>

Revenues                                                     $ 17,735,055              $ 13,333,698

Operating costs                                                13,715,561                10,963,925

Selling, general and administrative expenses                    2,988,503                 3,333,563

Depreciation and amortization                                   2,566,112                 2,461,910
                                                             ------------              ------------

       Net Loss  from operations                               (1,535,121)               (3,425,700)

Interest expense and amortization of debt discount             (2,237,053)               (1,687,327)

Net Loss on sale of fixed assets                                      -0-                    (7,263)

Other income                                                       59,101                    28,629
                                                             ------------              ------------

       Loss before extraordinary gain                          (3,713,073)               (5,091,661)

Extraordinary gain on extinguishments of debt,
   Net of income taxes of $0                                      968,575                       -0-
                                                             ------------              ------------

       Net Loss                                              $ (2,744,498)             $ (5,091,661)
                                                             ============              ============

       EARNINGS PER COMMON SHARE
       Loss before extraordinary item                        $      (0.51)             $      (1.26)
       Extraordinary item                                    $       0.13                        --
                                                             ------------              ------------
       Net Loss                                              $      (0.38)             $      (1.26)
                                                             ============              ============

       EARNINGS PER COMMON SHARE -  DILUTED
       Loss before extraordinary item                        $      (0.51)             $      (1.26)
       Extraordinary item                                    $       0.13                        --
                                                             ------------              ------------
       Net Loss                                              $      (0.38)             $      (1.26)
                                                             ============              ============

Weighted average common shares outstanding                      7,298,483                 4,056,864
                                                             ============              ============

Weighted average common shares outstanding
    with dilutive securities                                    7,298,483                 4,056,864
                                                             ============              ============

</TABLE>


          See accompanying notes to the condensed financial statements.

                                       5

<PAGE>




BLACK WARRIOR WIRELINE CORP.
----------------------------
CONDENSED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2000 and June 30, 1999

<TABLE>
<CAPTION>



                                                                               June 30, 2000         June 30, 1999
                                                                                (Unaudited)           (Unaudited)
<S>                                                                            <C>                   <C>
Cash used in operations:                                                       $ (4,603,246)         $   (663,514)

Cash flows from investing activities:
     Acquisitions of property, plant, and equipment                              (1,535,128)             (883,977)
     Proceeds from sale of property, plant and equipment                                                   30,400
     Acquisition of business, net of cash acquired                                 (362,705)                  -0-
                                                                               ------------          ------------
Cash used in investing activities:                                               (1,897,833)             (853,577)

Cash flows from financing activities:
     Debt issuance costs                                                         (1,050,205)             (152,086)
     Proceeds from bank and other borrowings                                     20,766,981             3,149,371
     Principal payments on long-term debt, notes payable
         and capital lease obligations                                          (18,137,262)             (694,984)
     Net draws (payments) on working revolver                                     3,005,214            (1,616,040)
                                                                               ------------          ------------

 Cash provided  by financing activities:                                          4,584,728               686,261

Net decrease in cash and cash equivalents                                        (1,916,351)             (830,830)
Cash and cash equivalents, beginning of period                                    2,425,808             1,041,242
                                                                               ------------          ------------

Cash and cash equivalents, end of period                                       $    509,457          $    210,412
                                                                               ============          ============

Supplemental disclosure of cash flow information:

       Interest paid                                                           $    876,642          $    778,020
       Income taxes paid                                                       $          0          $          0

Supplemental disclosure of  noncash investing and financing activities:
     Stock issued to related party as consideration for
           Promissory note (Note 1)                                            $  2,000,000
     Notes payable and capital lease obligations incurred
           to acquire property, plant & equipment                                                    $    107,527
     Stock warrants issued in conjunction with notes payable
           to related party                                                    $    143,500          $     20,750
     Stock issued as consideration for option to purchase
           Company
                                                                                                     $     65,000
    Note Payable released by related party resulting in
          an increase to Additional paid-in capital                            $    300,000
    Stock Issued as compensation                                                                     $    914,807

</TABLE>


          See accompanying notes to the condensed financial statements.

                                       6

<PAGE>

                               BLACK WARRIOR WIRELINE CORP.
                  NOTES TO CONDENSED FINANCIAL STATEMENTS

1.       GENERAL

         The accompanying condensed financial statements reflect all adjustments
that, in the opinion of management, are necessary for a fair presentation of the
financial  positions of Black  Warrior  Wireline  Corp.  (the  "Company").  Such
adjustments  are  of a  normal  recurring  nature.  The  accompanying  condensed
financial  statements have been prepared assuming that the Company will continue
as a going  concern.  The results of operations  for the interim  period are not
necessarily  indicative  of the  results to be expected  for the full year.  The
Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December 31,
1999 should be read in conjunction with this document.

         The  Company  is an oil and gas  service  company  currently  providing
various  services to oil and gas well  operators  primarily  in the  continental
United  States  and in the Gulf of  Mexico.  The  Company's  principal  lines of
business  include  (a)  wireline  services,  (b)  directional  oil and gas  well
drilling and downhole  surveying  services,  and (c)  workover  services.  Since
November  1996, the Company  completed  eight  acquisitions,  the most recent of
which was the  acquisition of the measurement  while drilling  ("MWD") assets of
Measurement Specialists, Inc. ("MSI") on March 1, 2001.

RECENT RECAPITALIZATION

         On January 24,  2000,  the  Company  entered  into a Loan and  Security
Agreement  (the "Loan  Agreement")  with Coast  Business  Credit,  a division of
Southern Pacific Bank ("Coast")  pursuant to which it is enabled to make secured
borrowings in the aggregate  amount of up to the lesser of $25.0 million or such
maximum aggregate amount as is available to be borrowed under a receivables loan
and two term loans described below. Of such amount, $14.5 million,  based on the
lesser of 75% of the  appraised  net eligible  forced  liquidation  value of the
Company's equipment or $14.5 million, is a term loan, an additional $2.0 million
is a term loan,  and the  balance is  available  to be borrowed in an amount not
exceeding 80% of the Company's eligible  receivables.  On February 15, 2000, the
Company  borrowed an aggregate of $15.6 million  pursuant to the Loan Agreement.
The proceeds were used to repay the Company's  former senior  secured  lender in
the  amount of $13.5  million,  to repay  other  indebtedness  aggregating  $1.5
million, and the balance was used for general corporate purposes,  including the
payment of outstanding accounts payable. In addition, commencing on December 17,
1999 and during the first quarter of 2000, the Company sold to private investors
$7.0 million principal amount of convertible promissory notes due on January 15,
2001 and warrants to purchase 28.7 million  shares of Common  Stock.  All of the
Company's  remaining  indebtedness is subordinated to the indebtedness  owing to
Coast.

                                       7

<PAGE>


         Under its Term Loan with Coast,  the Company is  obligated to repay the
loan over a period of seventy-two  months,  commencing  February 15, 2000,  plus
interest on the then outstanding  balance. In addition,  on the last day of each
month during the first year  following  the closing of the loan,  the Company is
obligated  to make  principal  payments  in the  amount of fifty  percent of its
Excess  Cash Flow (as  defined)  during the  immediately  preceding  month,  and
thereafter,  the Company is required to make principal payments in the amount of
forty percent of its Excess Cash Flow during the immediately preceding month. In
the event the actual  amount of the Excess Cash Flow during the three (3) months
ended July 31, 2000 was less than the  projected  amount of the  Company's  cash
flow as presented to Coast,  then on August 31, 2000, the Company is required to
make a  principal  payment  equal to fifty  percent  of the  difference  of such
projected  amount minus the actual  amount.  "Excess Cash Flow" during any month
means  the  EBITDA  of the  Company  during  such  month,  minus  the sum of (1)
principal and interest  payments made by the Company during such month, plus (2)
taxes paid by the Company in cash during  such  month.  The Company  anticipates
that by virtue of such  provision,  and on the basis of operations  through July
31, 2000, a payment to Coast will be required. The actual amount of such payment
is as yet  undetermined  but is  anticipated  to be not less than  approximately
$500,000.  It is  anticipated  that such payment will be made from the Company's
cash resources or additional borrowings from St. James Capital Partners, L.P. or
its affiliates (see Note 9.).

         During the first  quarter of 2000,  the Company  executed a  Compromise
Agreement  With Release with  Bendover  Company  ("Bendover")  whereby  Bendover
agreed  to  return  to  the  Company  promissory  notes  aggregating  $2,000,000
principal  amount and  receive in  exchange  2,666,666  shares of the  Company's
common stock and a promissory note in the principal  amount of $1,182,890 due on
January 15, 2001, bearing interest at 10% per annum.

         On March 1, 2000 the Company  exercised  its option and  purchased  the
assets of MSI. The Company paid the  outstanding  notes  payable  related to the
acquired assets of approximately $363,000.

2.       EARNINGS PER SHARE

The calculation of basic and diluted earning per share ("EPS") is as follows:

<TABLE>
<CAPTION>

                                              For the Three Months                            For the Three Months
                                               Ended June 30, 2000                             Ended June 30, 1999
                                ---------------------------------------------    -----------------------------------------------

                                     Loss            Shares         Per Share      Loss              Shares         Per Share
                                   Numerator       Denominator       Amount      Numerator         Denominator       Amount
                                -----------------------------------------------------------------------------------------------
<S>                             <C>                <C>            <C>             <C>                 <C>             <C>


Loss before extraordinary item  $ (1,472,744)                                     $ (2,623,715)
                                =============                                     =============
BASIC EPS

Loss available
    to common                   $ (1,472,744)      7,474,307      $ (0.20)        $ (2,623,715)      4,199,619       $ (0.62)
    shareholders                -----------------------------------------------------------------------------------------------
EFFECT OF DILUTIVE SECURITIES
Stock warrants
Stock options
Convertible debt securities

DILUTED EPS
Loss available
    to common                   $ (1,472,744)      7,474,307      $ (0.20)        $ (2,623,715)      4,199,619       $ (0.62)
    shareholders                -----------------------------------------------------------------------------------------------

</TABLE>

                                       8

<PAGE>

<TABLE>
<CAPTION>


                                               For the Six Months                             For the Six Months
                                               Ended June 30, 2000                             Ended June 30, 1999
                                ---------------------------------------------    ----------------------------------------------
                                     Loss            Shares         Per Share      Loss              Shares         Per Share
                                   Numerator       Denominator       Amount      Numerator         Denominator       Amount
                                -----------------------------------------------------------------------------------------------
<S>                             <C>                <C>            <C>             <C>                 <C>             <C>
Loss before extraordinary item  $ (3,713,073)                                     $ (5,091,661)
                                =============                                     =============
BASIC EPS
Loss available
    to common                   $ (3,713,073)      7,298,483      $ (0.51)        $ (5,091,661)      4,056,864       $ (1.26)
    shareholders                -----------------------------------------------------------------------------------------------
EFFECT OF DILUTIVE SECURITIES
Stock warrants
Stock options
Convertible debt securities
DILUTED EPS
Loss available
    to common                   $ (3,713,073)      7,298,483      $ (0.51)        $ (5,091,661)      4,056,864       $ (1.26)
    shareholders                -----------------------------------------------------------------------------------------------

</TABLE>


         Options and warrants to purchase  63,531,394 and  19,559,474  shares of
common stock at prices ranging from $0.75 to $8.01 in 2000 and $1.31 to $8.01 in
1999 were  outstanding  during the three and six months  ended June 30, 2000 and
1999,  respectively,  but were not  included in the  computation  of diluted EPS
because the effect would be anti-dilutive (see Note 7.).

          Convertible  debt  instruments  which would  result in the issuance of
35,200,000 and  12,933,333  shares of common stock,  if the conversion  features
were exercised,  were outstanding during the three and six months ended June 30,
2000 and 1999,  respectively,  but were not included in the  computation  of the
diluted EPS because the effect would be  anti-dilutive.  The conversion price of
these  instruments is $0.75 per share and remained  outstanding at June 30, 2000
(see note 7.).

3.       INVENTORIES

         Inventories consist of tool components,  subassemblies,  and expendable
parts and supplies used in all segments of the Company's operations. Inventories
are classified as a long-term asset rather than a current asset as is consistent
with industry practice.

4.       COMMITMENTS AND CONTINGENCIES

         The Company and certain of its officers and directors  are  respondents
in an arbitration  proceeding commenced by Monetary Advancements  International,
Inc.  before the American  Arbitration  Association  in New York,  New York. The
claimant seeks to recompense against the Company and other named respondents for
the alleged  failure to pay  compensation  in the form of shares of stock of the
Company for services  allegedly  rendered.  The  respondents  have  submitted an
answer and counterclaims  and have initiated a Court proceeding  seeking partial
stay of the arbitration proceeding.  Management believes the ultimate outcome of
these  actions  will not  have a  materially  adverse  effect  on the  financial
position, results of operations or cash flows of the Company.

                                       9

<PAGE>

       The Company is also a defendant in various  legal actions in the ordinary
course of business.  Management  does not believe the ultimate  outcome of these
actions will have a materially adverse effect on the financial position, results
of operations or cash flows of the Company.

5.     SEGMENT AND RELATED INFORMATION

       At June 30, 2000, the Company is organized into, and manages its business
based on the  performance  of, five  business  units.  The  business  units have
separate management teams and  infrastructures  that offer different oil and gas
well services.  The business units have been  aggregated  into three  reportable
segments: wireline,  directional drilling, and workover and completion since the
long-term  financial  performance  of these  reportable  segments is affected by
similar economic conditions.

       WIRELINE - This  segment  consists  of two  business  units that  perform
various  procedures  to evaluate  and modify  downhole  conditions  at different
stages of the process of drilling  and  completing  oil and gas wells as well as
various times thereafter until the well is depleted and abandoned.  This segment
engages in onshore  and  offshore  servicing,  as well as other oil and gas well
service  activities  including  renting and repairing  equipment.  The principal
markets for this segment include all major oil and gas producing  regions of the
United  States.  Major  customers of this segment for the quarter ended June 30,
2000 included Burlington Resources, Denbury Management and Chevron USA.

       DIRECTIONAL  DRILLING - This segment  consists of two business units. One
unit performs  procedures to enter  hydrocarbon  producing  zone  directionally,
using  specialized  drilling  equipment,  and  expand the area of  interface  of
hydrocarbons and thereby greatly enhancing  recoverability . The second business
unit engages in oil and gas well downhole  surveying  activities.  The principal
markets for this segment include all major oil and gas producing  regions of the
United  States.  Major  customers of this segment for the quarter ended June 30,
2000  included  Swift Energy,  Clayton  Williams,  Collins & Ware,  Inc. and Tom
Brown, Inc.

       WORKOVER AND COMPLETION - This segment  consists of a business unit which
provides  services  performed  on wells when  originally  completed  or on wells
previously  placed in  production  and requiring  additional  work to restore or
increase production.  The principal market for this segment is the Black Warrior
Basin of Alabama.  The major customer of this segment for the quarter ended June
30, 2000 was Energen Corporation.

       The accounting  policies of the reportable segments are the same as those
described in Note 2 of the Company's Annual Report of Form 10-KSB for the fiscal
year ended  December 31, 1999.  The Company  evaluates  the  performance  of its
operating segments based on earnings before interest, taxes,  depreciation,  and
amortization  (EBITDA),  which is derived from revenues less operating  expenses
and selling,  general, and administrative expenses.  Segment information for the
three and six months ended June 30, 2000 and 1999 is as follows:

                                       10

<PAGE>

          Three months ended June 30, 2000

<TABLE>
<CAPTION>

                                                                           WORKOVER
                                                      DIRECTIONAL            AND
                                       WIRELINE        DRILLING           COMPLETION         TOTAL
                                    -----------------------------------------------------------------
          <S>                       <C>               <C>                  <C>             <C>

          Segment revenues          $ 4,501,234       $ 4,668,297          $ 289,158       $ 9,458,689
          Segment EBITDA            $   181,423       $   802,719          $  35,897       $ 1,020,039

</TABLE>


          Three months ended June 30,1999
<TABLE>
<CAPTION>

                                                                           WORKOVER
                                                      DIRECTIONAL            AND
                                       WIRELINE        DRILLING           COMPLETION         TOTAL
                                    -----------------------------------------------------------------
          <S>                       <C>               <C>                  <C>             <C>


          Segment revenues          $ 4,706,198       $ 2,246,731         $ 308,487       $ 7,261,416
          Segment EBITDA            $   949,154       $    12,360         $  24,983       $   986,497

</TABLE>

          Six months ended June 30, 2000

<TABLE>
<CAPTION>

                                                                           WORKOVER
                                                      DIRECTIONAL            AND
                                       WIRELINE        DRILLING           COMPLETION         TOTAL
                                    -----------------------------------------------------------------
          <S>                       <C>               <C>                  <C>             <C>

          Segment revenues          $ 8,854,720       $ 8,294,443         $ 585,892       $17,735,055
          Segment EBITDA            $   621,073       $   989,634         $  61,773       $ 1,672,480

</TABLE>

          Six months ended June 30, 1999

<TABLE>
<CAPTION>

                                                                           WORKOVER
                                                      DIRECTIONAL            AND
                                       WIRELINE        DRILLING           COMPLETION         TOTAL
                                    -----------------------------------------------------------------
          <S>                       <C>               <C>                  <C>             <C>


          Segment revenues          $ 8,260,572       $ 4,438,609         $ 634,517       $13,333,698
          Segment EBITDA            $ 1,032,937       $   (22,692)        $  76,280       $ 1,086,525

</TABLE>


The  Company has  certain  expenses  that are not  allocated  to the  individual
operating  segments.  A  reconciliation  of total  segment  EBITDA  to loss from
operations  for the three  months  ended June 30, 2000 and 1999 is  presented as
follows:

Three months ended June 30:

                                                      2000             1999
Total segment EBITDA                            $ 1,020,039        $   986,497
Depreciation and amortization                    (1,200,710)        (1,138,553)
Unallocated corporate expense                       (88,355)        (1,638,277)
                                                -----------        -----------

     Loss from operations                       $  (269,026)       $(1,790,333)
                                                ===========        ===========

Six months ended June 30:

                                       11

<PAGE>

                                          2000         1999
Total segment EBITDA                  $ 1,672,480   $ 1,086,525
Depreciation and amortization          (2,500,029)   (2,461,910)
Unallocated corporate expense            (707,572)   (2,050,315)
                                      -----------   -----------

     Loss from operations             $(1,535,121)  $ (3,425,700)
                                      ===========   ============


6.     RELATED PARTY TRANSACTIONS

       The Company  opened a wireline  facility  in South Texas in January  1999
primarily to service a customer who has some common  ownership with the Company.
During the three and six months ended June 30, 2000, this customer accounted for
approximately 0.61% and 4.41% of total revenues, respectively.

       On June 17,  1999,  the  Company  sold  approximately  $329,000  of trade
accounts  receivable,  which was fully  reserved due to the  customer  declaring
bankruptcy,  to RJ Air, LLC, an entity affiliated with a member of the Company's
Board of Directors, for $200,000. As of June 30, 2000, the Company has collected
$100,000  of the sale price and the  remaining  $100,000 is included in deferred
revenue on the balance sheet.

7.     ISSUANCE OF COMMON STOCK

       During  the first  quarter of 2000,  the  Company  executed a  Compromise
Agreement With Release with Bendover  Company whereby  Bendover agreed to return
to the Company  promissory  notes  aggregating  $2,000,000  principal amount and
receive  in  exchange  2,666,666  shares  of the  Company's  common  stock and a
promissory  note in the principal  amount of $1,182,890 due on January 15, 2001,
bearing interest at 10% per annum.

       As of June 30, 2000, the Company's  certificate of incorporation  permits
it to issue up to 12,500,000  shares of common stock of which  7,478,927  shares
were issued and outstanding. The Company has outstanding at June 30, 2000 common
stock purchase  warrants,  options and convertible  debt securities  entitled to
purchase or to be converted into an aggregate 98,731,393 shares of the Company's
common  stock at exercise  and  conversion  prices  ranging from $0.75 to $8.01.
Accordingly,  the Company has an  insufficient  number of shares of common stock
authorized  for issuance in the event all its  outstanding  warrants and options
were exercised and convertible securities were converted.

       The note purchase  agreements entered into in connection with the private
sale of $7.0  million of the  Company's  notes during the period  December  1999
through  February 2000 contain a covenant whereby the Company has agreed that at
or before the Company's  next annual meeting of  stockholders  it will secure an
amendment to its Certificate of  Incorporation  to increase the number of shares
that it is authorized to issue to a number  sufficient to authorize the issuance
of its  currently  outstanding  shares and all shares that are issuable upon the
conversion of all its outstanding  convertible notes and securities and upon the
exercise of any  warrants or options to purchase  the  Company's  Common  Stock.
Accordingly,  the  failure of the  stockholders  of the  Company to approve  the
proposal  to  increase  the  number of shares of  Common  Stock the  Company  is
authorized

                                       12

<PAGE>

to issue will be a breach of a covenant under the note purchase agreements and a
default under the notes. The default under the notes could result, at the option
of the holders, in the notes becoming immediately due and payable and would also
lead,  under the cross default  provisions of the  instruments  under which such
indebtedness  was  incurred,   to  a  default  under  all  the  Company's  other
outstanding  indebtedness  aggregating $37.9 million.  Under such circumstances,
the holders of such  indebtedness,  including Coast which holds $19.4 million of
indebtedness  collaterilized  by a senior lien on the  Company's  assets,  could
foreclose on substantially all of the Company's assets.

8.       EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT

         During the first and second  quarters  of 2000,  the  Company  executed
agreements with certain of its vendors to discount the  outstanding  obligations
due to these vendors.  The agreements provided for a decrease in the outstanding
obligations  of $68,639 and $968,575 for the three and six months ended June 30,
2000.  Accordingly,   the  Company  has  recognized  an  extraordinary  gain  on
extinguishments of debt of $68,639 and $968,575,  net of income taxes of $0, for
the three and six months ended June 30,2000.  An additional  $300,000 of related
party debt was waived and recorded as an increase in additional paid-in capital.

9.       DEFAULTS UPON SENIOR SECURITIES

         For the quarter  ended June 30,  2000,  the Company  failed to meet the
debt service ratio test under the Loan Agreement  with Coast.  The Company is in
the  process  of  negotiating  revised  covenants  with  Coast  based on current
operating  trends.  The Company expects to have ongoing  discussions  with Coast
regarding the default and intends to seek to amend the terms of the debt service
ratio test, among other  provisions,  and continue to seek to obtain a waiver of
the  default  from  Coast.  There  can be no  assurance  that a  waiver  will be
forthcoming.  As a  consequence  of this  default  and under  the cross  default
provisions of the Company's other  indebtedness,  the Company's  indebtedness to
Coast  as well as SJCP  and  others  has  been  shown  as  currently  due on the
Company's condensed balance sheet at June 30, 2000.

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

         On January 24,  2000,  the  Company  entered  into a Loan and  Security
Agreement  (the "Loan  Agreement")  with Coast  Business  Credit,  a division of
Southern Pacific Bank ("Coast")  pursuant to which it is enabled to make secured
borrowings in the aggregate  amount of up to the lesser of $25.0 million or such
maximum aggregate amount as is available to be borrowed under a receivables loan
and two term loans described below. Of such amount, $14.5 million,  based on the
lesser of 75% of the  appraised  net eligible  forced  liquidation  value of the
Company's equipment or $14.5 million, is a term loan, an additional $2.0 million
is a term loan,  and the  balance is  available  to be borrowed in an amount not
exceeding 80% of the Company's eligible  receivables.  On February 15, 2000, the
Company  borrowed an aggregate of $15.6 million  pursuant to the Loan Agreement.
The proceeds were used to repay the Company's  former senior  secured  lender in
the  amount of $13.5  million,  to repay  other  indebtedness  aggregating  $1.5
million, and the balance was used for general corporate

                                       13

<PAGE>

purposes,  including the payment of outstanding  accounts payable.  In addition,
commencing  on  December  17,  1999 and  during the first  quarter of 2000,  the
Company sold to private  investors $7.0 million  principal amount of convertible
promissory  notes due on January 15, 2001 and warrants to purchase  28.7 million
shares  of  Common  Stock.  All  of  the  Company's  remaining  indebtedness  is
subordinated to the indebtedness owing to Coast.

                  The Company's results of operations are affected  primarily by
the extent of  utilization  and rates paid for its services and  equipment.  The
energy services sector is completely dependent upon the upstream spending of the
exploration and production side of the industry.  Much of the activity  increase
from the  exploration and production side of the industry during the latter half
of 1999 was in the area of infield recovery of properties shut-in as a result of
depressed commodity prices. These infield recovery efforts were those that would
provide the least capital expenditure, least risk of capital and would result in
a more rapid  improvement of cash flow streams due to higher commodity  pricing.
With the continued  increase of commodity prices and anticipated price stability
along with the Company's debt refinancing, the Company believes it is positioned
to experience a continued  increase in demand for its services due in large part
to the broad base of  services  offered.  While the  aforementioned  factors are
expected  to  continue  to  increase  the  Company's  revenues,  there can be no
assurance that the Company will  experience any material  increase in the demand
for and  utilization  of its services.  The Company's plan for an improvement in
its  financial  condition is subject to its ability to  participate  in improved
revenues for the oil and gas service segment of the industry  resulting from the
improvement in oil and natural gas commodity  prices.  There can be no assurance
that the Company will experience a sufficient  increase in its revenues so as to
materially benefit its current financial condition.

RESULTS OF  OPERATIONS.  THREE   MONTHS  ENDED  JUNE 30, 2000  COMPARED TO THREE
MONTHS ENDED JUNE 30, 1999 AND SIX MONTHS ENDED JUNE 30, 2000  COMPARED  TO  SIX
MONTHS ENDED JUNE 30, 1999

         The following  table sets forth the  Company's  revenues from its three
principal lines of business for the three and six months ended June 30, 2000 and
1999 respectively:

<TABLE>
<CAPTION>


                                        Three Months Ended                  Six Months Ended
                                    6/30/00           6/30/99         6/30/00           6/30/99
-------------------------------------------------------------------------------------------------
<S>                              <C>               <C>             <C>               <C>
Wireline                         $ 4,501,234       $ 4,706,198     $ 8,854,720       $ 8,260,572
Directional Drilling               4,668,297         2,246,731       8,294,443         4,438,609
Workover and Completion              289,158           308,487         585,892           634,517
                                 ----------------------------------------------------------------
                                 $ 9,458,689       $ 7,261,416     $17,735,055       $13,333,698

</TABLE>


         Total revenues increased by approximately $2.2 million to approximately
$9.5  million  for the three  months  ended June 30,  2000 as  compared to total
revenues of approximately $7.3 million for the three months ended June 30, 1999.
Total revenues  increased by approximately  $4.4 million to approximately  $17.7
million  for the six months  ended June 30,  2000 as  compared  to  revenues  of
approximately  $13.3 million the six months ended June 30, 1999. The increase in
directional  drilling  revenues  was the  result  of  increased  demand  for the
Company's  services and upward pressure on pricing that began in the latter half
of 1999.  The  Company's  wireline  revenues  also were affected by increases in
demand and commodity pricing.

                                     14

<PAGE>

         Operating costs increased by  approximately  $1.6 million for the three
months  ended June 30, 2000,  as compared to the same period of 1999.  Operating
costs  were  73.8% of  revenues  for the three  months  ended  June 30,  2000 as
compared  with 74.5% of  revenues in the same  period in 1999.  Operating  costs
increased by  approximately  $2.8 million for the six month ended June 30, 2000,
as compared to the same period in 1999.  Operating  costs were 77.3% of revenues
for the six months ended June 30, 2000 as compared with 82.2% of revenues in the
same period in 1999. The increase in operating costs was primarily the result of
the higher  overall  level of  activities in the three and six months ended June
30, 2000 compared with 1999. The decrease in operating  costs as a percentage of
revenues  was  primarily  because  of  increasing  billing  rates and  equipment
utilization.  Salaries and  benefits  increased by $573,000 for the three months
ended June 30,  2000,  as compared  to the same period in 1999,  while the total
number of employees increased from 226 at June 30, 1999 to 281 at June 30, 2000.
The increase in salaries  and  benefits is primarily  due to the increase in the
number of employees, which is reflective of the overall level of activities.

         Selling,    general   and   administrative    expenses   decreased   by
approximately$1,024,000  from $2.5  million in the three  months  ended June 30,
1999 to $1.5 million in the three months ended June 30, 2000. As a percentage of
revenues,  selling,  general and administrative expenses decreased from 34.5% in
the three months ended June 30, 1999 to 15.6% in 2000,  primarily as a result of
an expense of  approximately  $915,000  recognized in the second quarter of 1999
related to 770,364 common shares issued to certain persons who purchased  shares
of the Company's common stock.  These shares were issued in consideration of the
release of certain claims asserted by these persons  regarding alleged excessive
delays in effecting the registration of their shares under the Securities Act of
1933,  as amended,  which  allegedly  prevented  such persons from being able to
liquidate  their  securities.   Selling,  general  and  administrative  expenses
decreased by  approximately  $345,000 from $3.33 million in the six months ended
June 30,  1999 to $3.05  million in the six months  ended  June 30,  2000.  As a
percentage of revenues,  selling general and  administrative  expenses decreased
from 25.0% of revenues  in the six months  ended June 30, 1999 to 16.8% in 2000,
primarily as a result of the $915,000  settlement  cost recognized in the second
quarter of 1999 offset by higher bad debt recoveries in the same period in 1999.

         Depreciation  and  amortization  increased from $1,138,553 in the three
months ended June 30, 1999, or 15.7% of revenues, to approximately $1.27 million
in 2000 or 13.4% of revenues, primarily because of the capital expenditures made
in the second quarter of 2000. Depreciation and amortization remained relatively
flat at  approximately  $2.56  million  for the six months  ended June 30,  2000
compared  to  $2.46  million  for the same  period  in  1999.  Depreciation  and
amortization  as a percentage  of revenues  decreased to 14.5% from 18.5% due to
the increased demand for the Company's services.

         Interest  expense  and  amortization  of  debt  discount  increased  by
$398,000  and  $550,000  for the three and six  months  ended  June 30,  2000 as
compared to the same periods in 1999. This was directly related to the increased
amounts  of  indebtedness   outstanding  in  2000.  See  "Note  6  of  Notes  to
Consolidated Financial Statements" in the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1999.

         During the first and second  quarters  of 2000,  the  Company  executed
agreements with certain of its vendors to discount the  outstanding  obligations
due to these vendors.  The agreements provided for a decrease in the outstanding
obligations   of  $968,575.   Accordingly,   the  Company  has   recognized   an
extraordinary gain on  extinguishments of debt of $968,575,  net of income taxes
of $0.

                                       15

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         Cash used by the Company's operating  activities was approximately $4.6
million  for the six months  ended  June 30,  2000 as  compared  to cash used of
$664,000  for the same period in 1999.  Investing  activities  used cash of $1.9
million  during the three  months  ended June 30,  2000 for the  acquisition  of
property, plant and equipment and businesses,  net of cash acquired.  During the
three  months  ended  June  30,  1999,   investing   activities   used  cash  of
approximately $884,000 for the acquisition of property,  plant and equipment and
businesses, net of cash acquired, offset by proceeds of $30,400 from the sale of
fixed assets.  Financing  activities  provided net cash of $4.6million  from the
proceeds from bank and other  borrowings of  approximately  $23.8 million during
the six months  ended June 30,  2000  offset by  principal  payments on bank and
other  borrowings  and capital leases of $18.1 million and $1.1 million of costs
related  to debt  issuance.  For the same  period in 1999  financing  activities
provided net cash of approximately  $3.1 million from the proceeds from bank and
other borrowings  offset by principal  payments on bank and other borrowings and
capital lease  obligations and net payments on working capital revolving loan of
$2.3 million and $152,086 of costs related to debt issuances.

         Cash at June 30, 2000 was  $509,457  as compared  with cash at June 30,
1999 of approximately $210,000.

         The  Company's  outstanding   indebtedness  includes  primarily  senior
indebtedness  aggregating  approximately $19.3 million at June 30, 2000, owed to
Coast, other indebtedness of approximately $7.0 million,  and $20.9 million owed
to St. James Capital  Partners,  L.P. ("SJCP") and its affiliates and certain of
its limited partners. For the quarter ended June 30, 2000, the Company failed to
meet the debt  service  ratio  test under the Loan  Agreement  with  Coast.  The
Company is in the process of negotiating  revised  covenants with Coast based on
current operating trends.  The Company expects to have ongoing  discussions with
Coast  regarding  the default and intends to seek to amend the terms of the debt
service ratio test, among other  provisions,  and continue to obtain a waiver of
the  default  from  Coast.  There  can be no  assurance  that a  waiver  will be
forthcoming.  As a  consequence  of this  default  and under  the cross  default
provisions of the Company's other  indebtedness,  the Company's  indebtedness to
Coast as well as SJCP and others has been shown as currently due and payable.

         The  Company's  obligations  under the Loan  Agreement  with  Coast are
collateralized  by a senior lien and security  interest in substantially  all of
the Company's  assets.  Principal and interest under the Loan Agreement has been
guaranteed, subject to certain limitations, by St. James, principal stockholders
of the Company, and Charles Underbrink, a partner of St. James and a Director of
the  Company.  In  addition,  St.  James  has  guaranteed  all of the  Company's
obligations  under the Loan  Agreement,  subject  to  certain  limitations.  The
guaranty of St. James is backed by a pledge of certain  securities  owned by it,
subject to certain  limitations.  Loans under the Loan Agreement were subject to
the  fulfillment  of a number of  closing  conditions  and the  accuracy  of the
Company's representations and warranties in the Loan Agreement.

         By virtue  of such  guarantees,  in the  event of a  default  under the
Company's  Loan  Agreement  with Coast,  Coast may seek to collect from SJCP and
SJMB, L.L.C. ("SJMB"), as well as Mr. Underbrink,  the outstanding principal and
interest on the Company's  obligations  to Coast,

                                       16

<PAGE>


and such persons have  advised the Company of their  willingness  and ability to
meet such  obligations.  Mr.  Underbrink's  liability is limited to no more than
$5.0 million. Such persons have further advised the Company of their willingness
and ability to support the  Company's  operations  at least  through  January 2,
2001.

         Under its Term Loan with Coast,  the Company is  obligated to repay the
loan over a period of seventy-two  months,  commencing  February 15, 2000,  plus
interest on the then outstanding  balance. In addition,  on the last day of each
month during the first year  following  the closing of the loan,  the Company is
obligated  to make  principal  payments  in the  amount of fifty  percent of its
Excess  Cash Flow (as  defined)  during the  immediately  preceding  month,  and
thereafter,  the Company is required to make principal payments in the amount of
forty percent of its Excess Cash Flow during the immediately preceding month. In
the event the actual  amount of the Excess Cash Flow during the three (3) months
ended July 31, 2000 was less than the  projected  amount of the  Company's  cash
flow as presented to Coast,  then on August 31, 2000, the Company is required to
make a  principal  payment  equal to fifty  percent  of the  difference  of such
projected  amount minus the actual  amount.  "Excess Cash Flow" during any month
means  the  EBITDA  of the  Company  during  such  month,  minus  the sum of (1)
principal and interest  payments made by the Company during such month, plus (2)
taxes paid by the Company in cash during  such  month.  The Company  anticipates
that by virtue of such  provision,  and on the basis of operations  through July
31, 2000, a payment to Coast will be required. The actual amount of such payment
is as yet  undetermined  but is  anticipated  to be not less than  approximately
$500,000.  It is  anticipated  that such payment will be made from the Company's
cash resources or additional borrowings from St. James or its affiliates.

         Management may also raise  additional  capital in conjunction  with the
Company's recent recapitalization, which may be either debt or equity capital or
a combination  thereof.  The Company has signed an agreement with Growth Capital
Partners, L.P. ("GCP") whereby GCP will act as financial advisors to the Company
in connection with a possible private placement of equity and/or  equity-related
securities or to assist in the sale of the Company, assets of the Company or one
or more operating segments of the Company.  The foregoing does not constitute an
offer of any securities for sale. Such securities have not been registered under
the  Securities  Act of 1933 and may not be offered or sold in the United States
absent   registration   or  an  applicable   exemption  from  the   registration
requirements.  Management  expects  that,  upon  conclusion  of  such a  capital
infusion,  its indebtedness  owing to St. James Capital  Partners,  L.P. and its
affiliates  and certain of its limited  partners  will be long-term or converted
into equity securities.

         Management  believes  that,  provided oil and natural gas prices remain
relatively  stable with prices  that  existed in late1999  and the first half of
2000,  the  implementation  of its plan together  with  pursuing cost  reduction
opportunities,   should  enable  the  Company  to  operate   without  a  further
deterioration  of its  liquidity  condition  and enable it to  benefit  from the
improved market for its services.

         The  Company  has no  agreements  or plans to  acquire  any  additional
companies.  However, there can be no assurance that the Company will not acquire
additional companies or assets in the future, or that any such acquisitions,  if
made,  will be beneficial to the Company.  The process of  integrating  acquired
properties into the Company's  operations may result in unforeseen  difficulties
and may require a  disproportionate  amount of  management's  attention  and the
Company's resources.  In connection with acquisitions,  the Company could become
subject  to  significant  contingent  liabilities  the  Company  assumes,  or an
acquired entity becomes liable for, unknown or contingent  liabilities or in the
event such  liabilities  are imposed on the Company under  theories of successor
liability.

                                       17

<PAGE>

         The  Company's  recent  recapitalization  and  its  Loan  and  Security
Agreement  with Coast are described in Item 1 and Item 6,  respectively,  of its
Annual Report on Form 10-KSB for the year ended December 31, 1999.

         The  note  purchase  agreements  entered  into in  connection  with the
private sale of $7.0 million of the Company's  notes during the period  December
1999 through  February  2000  contain a covenant  whereby the Company has agreed
that at or before the  Company's  next annual  meeting of  stockholders  it will
secure an amendment to its Certificate of  Incorporation  to increase the number
of shares that it is authorized to issue to a number sufficient to authorize the
issuance of its  currently  outstanding  shares and all shares that are issuable
upon the conversion of all its outstanding  convertible notes and securities and
upon the exercise of any warrants or options to purchase  the  Company's  Common
Stock.  Accordingly,  the failure of the  stockholders of the Company to approve
the  proposal  to increase  the number of shares of Common  Stock the Company is
authorized  to issue  will be a breach of a  covenant  under  the note  purchase
agreements  and a default  under the notes.  The  default  under the notes could
result, at the option of the holders, in the notes becoming  immediately due and
payable  and  would  also  lead,  under  the  cross  default  provisions  of the
instruments under which such  indebtedness was incurred,  to a default under all
the Company's other outstanding  indebtedness  aggregating $27.9 million.  Under
such  circumstances,  the holders of such  indebtedness,  including  Coast which
holds  $19.3  million of  indebtedness  collateralized  by a senior  lien on the
Company's assets,  could foreclose on substantially all of the Company's assets.
As mentioned,  the Company's  current default  position with Coast has triggered
the  cross-default  provisions  of the $7.0 million  notes sold in the period of
December 1999 through February 2000 as well as the St. James  indebtedness.  All
of this  indebtedness  is shown as  currently  due and payable on the  Company's
condensed balance sheet for June 30, 2000.

INFLATION

         The  Company's  revenues  have been and are  expected to continue to be
affected by fluctuations in the prices for oil and gas.  Inflationary  pressures
did not have a  significant  effect  on the  Company's  operations  in the three
months and six months ended June 30, 2000.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

         With the exception of historical matters, the matters discussed in this
Report are "forward-looking statements" as defined under the Securities Exchange
Act of 1934, as amended,  that involve risks and uncertainties.  Forward-looking
statements  include,  but are not  limited  to, the  matters  described  herein,
including  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations.  Such forward-looking  statements relate to the Company's
ability to attain and maintain profitability and cash flow, the stability of and
future prices for oil and gas, the  maintenance  of current price levels for oil
and gas,  pricing  in the oil and gas  services  industry,  the  ability  of the
Company to compete in the premium services market,  the decisions by oil and gas
producers  to  make   commitments   to  engage  in  oil  and  natural  gas  well
enhancements,  the ability of the Company to expand through  acquisitions and to
redeploy its equipment among regional

                                       18

<PAGE>

operations,  the  ability of the Company to  upgrade,  modernize  and expand its
equipment,  including its wireline  fleet,  the ability of the Company to expand
its tubing conveyed perforating services,  the ability of the Company to provide
services using the newly  acquired state of the art tooling,  the ability of the
Company  to raise  additional  capital  to meet its  requirement  and to  obtain
additional financing,  the ability of the Company to successfully  implement its
business  strategy,  the ability of the Company to maintain  compliance with the
covenants of its various loan documents and other  agreements  pursuant to which
securities  have been  issued  and to  obtain on  reasonable  terms  waivers  of
defaults  thereunder when and as required.  The inability of the Company to meet
these objectives or the consequences on the Company from adverse developments in
general economic  conditions,  adverse  developments in the oil and gas industry
and other  factors  could have a material  adverse  effect on the  Company.  The
Company is  substantially  dependent  upon its ability to implement its plan for
addressing  its  financial  situation,  as described  above,  for its ability to
continue its operations as presently  constituted.  The Company cautions readers
that various  risk factors  described  in the  Company's  Annual  Report on Form
10-KSB for the year ended December 31, 1999 could cause the Company's  operating
results  to  differ  materially  from  those  expressed  in any  forward-looking
statements  made  by the  Company  and  could  adversely  affect  the  Company's
financial  condition  and its ability to pursue its business  strategy . Readers
should refer to the Annual Report on Form 10-KSB and the risk factors  discussed
therein.

PART II - OTHER INFORMATION

Item 2 is not required this quarter.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       (a)   Exhibits

                27. Financial Data Schedule

       (b)   Reports on Form 8-K

                 None


                                       19

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements 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.

                                      BLACK WARRIOR WIRELINE CORP.
                                      ----------------------------
                                             (Registrant)


Date:  August 21,  2000               /S/  William L. Jenkins
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                                           William L. Jenkins
                                      President and Chief Executive Officer

                                      /S/  Ronald Whitter
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                                           Ronald Whitter
                                      Principal Financial and Accounting Officer