<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                  FORM 10-QSB


[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
     For the quarterly period ended SEPTEMBER 30, 1997.
                                    -------------------

                                       or

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT.
     For the transition period from __________ to __________.

                        Commission file number: 33-34200
                                                --------


                            OMEGA DEVELOPMENT, INC.
                            ---------------------- 
                    (Exact name of small business issuer as
                           specified in its charter)


          Nevada                                         13-3476854
          ------                                         ----------
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

              9422 S. College Pl., Suite 222;    Tulsa, OK  74137
              ---------------------------------------------------
                    (Address of principal executive offices)

                                  918-299-3212
                                  ------------
                          (Issuer's telephone number)

                -----------------------------------------------
                (Former name, former address, and former fiscal
                      year, if changed since last report)



Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes       No   X   
                                                               -----    -----

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: Common Stock $0.001 Par Value.
15,000,000 shares as of November 10, 1997.

Transitional Small Business Disclosure Format  (check one):   Yes      No   X   
                                                                 -----    -----
                                                                            
<PAGE>
 
                            OMEGA DEVELOPMENT, INC.
                               SEPTEMBER 30, 1997
                               TABLE OF CONTENTS

PART I.   FINANCIAL INFORMATION                                         PAGE
-------   ---------------------                                         ----

     ITEM 1.  Financial Statements (Unaudited)
          Consolidated Balance Sheets--
          September 30,1997 and December 31, 1996......................... 3

          Consolidated Statements of Operations and Accumulated
          Deficit--Three Months Ended September 30, 1997 and 1996......... 4

          Consolidated Statements of Operations and Accumulated
          Deficit--Nine Months Ended September 30, 1997 and 1996.......... 5

          Consolidated Statements of Cash Flows--Nine Months
          Ended September 30, 1997 and 1996............................... 6

          Notes to Consolidated Financial Statements--September 30, 1997.. 7

 
     ITEM 2.  Management's Discussion and Analysis or Plan of Operation... 9
 
PART II.  OTHER INFORMATION
-------   -----------------
 
     ITEM 1.  Legal Proceedings...........................................11
 
     ITEM 2.  Changes in Securities.......................................11
 
     ITEM 3.  Defaults Upon Senior Securities.............................11
 
     ITEM 4.  Submission of Matters to a Vote of Security Holders.........11
 
     ITEM 5.  Other Information...........................................11
 
     ITEM 6.  Exhibits and Reports on Form 8-K............................11

SIGNATURES................................................................12

                                       2
<PAGE>
 
    PART I.  FINANCIAL INFORMATION

        ITEM 1.  FINANCIAL STATEMENTS



                             OMEGA DEVELOPMENT, INC.

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                  ASSETS                         SEPTEMBER 30,  DECEMBER 31,
                                                                    1997           1996
                                                                 -----------    -----------
                                                                 (UNAUDITED)
<S>                                                              <C>            <C>        
CURRENT ASSETS:
  Cash                                                                    $0           $120
  Prepaid expenses                                                     1,838          5,622
                                                                 -----------    -----------
      Total current assets                                             1,838          5,742

OFFICE  AND OTHER EQUIPMENT, net of accumulated
  depreciation of $17,143 and $12,710 in 1997 and 1996,
  respectively                                                        22,565         26,669
                                                                 -----------    -----------
TOTAL ASSETS                                                         $24,403        $32,411
                                                                 ===========    ===========




                       LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
   Accounts payable and accrued liabilities                          $56,530        $46,604

COMMITMENTS AND  CONTINGENCIES                                          --             --

STOCKHOLDERS' DEFICIT:
  Common stock, $.001 par value; 25,000,000 shares authorized;
    15,000,000 shares issued and outstanding at September 30,
    1997 and December 31, 1996                                        15,000         15,000
  Additional paid in capital                                       4,585,214      4,585,214
  Accumulated deficit                                             (4,632,341)    (4,614,407)
                                                                 -----------    -----------
    Total stockholders' deficit                                      (32,127)       (14,193)
                                                                 -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                          $24,403        $32,411
                                                                 ===========    ===========
</TABLE>








        The accompanying notes are an integral part of these statements.

                                        3
<PAGE>
 
                             OMEGA DEVELOPMENT, INC.

          CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED
                                                        SEPTEMBER 30,
                                                    1997            1996
                                                ------------    ------------
<S>                                             <C>             <C>         
REVENUES:
  Rental income                                           $0        $261,990
  Other income                                             0               0
                                                ------------    ------------
    Total revenues                                         0         261,990

EXPENSES:
  General and administrative                           4,311          61,817
  Depreciation and amortization                        1,368         237,980
  Interest                                                 0         266,720
  Write off excess of cost over book value of
      investment in subsidiary                             0       2,352,098
                                                ------------    ------------
    Total operating expenses                           5,679       2,918,615
                                                ------------    ------------
NET LOSS BEFORE EXTRAORDINARY ITEM                    (5,679)     (2,656,625)

EXTRAORDINARY ITEM:
  Gain on extinguishment of debt                           0       1,226,243
                                                ------------    ------------
NET LOSS                                              (5,679)     (1,430,382)

ACCUMULATED DEFICIT, beginning of period          (4,626,662)     (3,347,084)
                                                ------------    ------------

ACCUMULATED DEFICIT, end of period               $(4,632,341)    $(4,777,466)
                                                ============    ============


NET INCOME (LOSS) PER COMMON AND
  COMMON EQUIVALENT SHARE
      Before extraordinary item                        $0.00          $(0.24)
      Extraordinary item                                0.00            0.11
                                                ------------    ------------
      Net loss                                         $0.00          $(0.13)
                                                ============    ============

WEIGHTED AVERAGE SHARES OUTSTANDING               15,000,000      11,200,750
                                                ============    ============
</TABLE>











        The accompanying notes are an integral part of these statements.

                                        4
<PAGE>
 
                             OMEGA DEVELOPMENT, INC.

          CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                     NINE MONTHS ENDED
                                                        SEPTEMBER 30,
                                                    1997            1996
                                                ------------    ------------
<S>                                             <C>             <C>         
REVENUES:
  Rental income                                           $0        $785,970
  Other income                                             0           1,000
                                                ------------    ------------
    Total revenues                                         0         786,970

EXPENSES:
  General and administrative                          13,830         298,209
  Depreciation and amortization                        4,104         714,192
  Interest                                                 0         751,479
  Write off excess of cost over book value of
      investment in subsidiary                             0       2,352,098
                                                ------------    ------------
    Total operating expenses                          17,934       4,115,978
                                                ------------    ------------
NET LOSS BEFORE EXTRAORDINARY ITEM                   (17,934)     (3,329,008)

EXTRAORDINARY ITEM:
  Gain on extinguishment of debt                           0       1,226,243
                                                ------------    ------------
NET LOSS                                             (17,934)     (2,102,765)

ACCUMULATED DEFICIT, beginning of period          (4,614,407)     (2,674,701)
                                                ------------    ------------

ACCUMULATED DEFICIT, end of period               $(4,632,341)    $(4,777,466)
                                                ============    ============


NET INCOME (LOSS) PER COMMON AND
  COMMON EQUIVALENT SHARE
      Before extraordinary item                      $(0.001)         $(0.30)
      Extraordinary item                               0.000            0.11
                                                ------------    ------------
      Net loss                                       $(0.001)         $(0.19)
                                                ============    ============

WEIGHTED AVERAGE SHARES OUTSTANDING               15,000,000      11,170,969
                                                ============    ============
</TABLE>










        The accompanying notes are an integral part of these statements.

                                        5
<PAGE>
 
                             OMEGA DEVELOPMENT, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                               NINE MONTHS ENDED
                                                                 SEPTEMBER 30,
                                                              1997           1996
                                                          -----------    -----------
<S>                                                       <C>            <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                   $(17,934)   $(2,102,765)
  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
      Write off excess of cost over book value of
        investment in subsidiary                                    0      2,352,098
      Depreciation and amortization                             4,104        714,192
      Extraordinary gain on extinguishment of debt                  0     (1,226,243)
      Changes in assets and liabilities:
       Decrease in accounts receivable                              0        174,760
       Decrease (increase) in deposits and other assets         3,784          3,100
       Decrease in deferred costs                                   0         61,048
       Increase (decrease) in accounts payable
          and accrued liabilities                               9,926       (130,915)
       Increase in due to officers/stockholders                     0         14,744
                                                          -----------    -----------
        Total adjustments                                      17,814      1,962,784
                                                          -----------    -----------
        Net cash used in
          operating activities                                   (120)      (139,981)
                                                          -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Disposal of office equipment                                      0          4,029
                                                          -----------    -----------
    Net cash provided by investing activities                       0          4,029
                                                          -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of notes payable                           0         79,000
  Proceeds from sale of common shares                               0         58,000
                                                          -----------    -----------
    Net cash provided by financing
      activities                                                    0        137,000
                                                          -----------    -----------

NET INCREASE (DECREASE) IN CASH                                  (120)         1,048

CASH, beginning of period                                         120             88
                                                          -----------    -----------

CASH, end of period                                                $0         $1,136
                                                          ===========    ===========


Cash paid during the period for Interest                           $0       $740,995
                                                          ===========    ===========
</TABLE>


        The accompanying notes are an integral part of these statements.

                                        6
<PAGE>
 
                            OMEGA DEVELOPMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 1997

                                  (UNAUDITED)

NOTE A--BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Omega
Development, Inc. ("Omega" or "the Company") have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and nine month periods ended September 30, 1997
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1997.  For further information and a current discussion of
the Company's financial status, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-KSB for
the year ended December 31, 1996, previously filed.

NOTE B--ORGANIZATION AND DESCRIPTION OF BUSINESS

ORGANIZATION
------------

Omega was incorporated in the State of Nevada on July 15, 1988 under the name of
"Lewison Enterprises, Inc."  Since then the Company has experienced a series of
business consolidations and reorganizations, which are described in the
Company's annual report on Form 10-KSB for the year ended December 31, 1996,
previously filed.

DESCRIPTION OF BUSINESS
-----------------------

The Company's operations and overhead were significantly reduced after the
foreclosure of the ABB Building in September 1996 and the subsequent abandonment
of the HPA business plan.  During the current quarter, the Company had only one
employee, no office and the ongoing general and administrative expenses were
near zero.

The Company's business plan at September 30, 1997 is to seek to acquire or merge
with potential businesses that may, in the opinion of management, warrant the
Company's involvement.  The Company recognizes that as a result of its limited
financial, managerial or other resources, the number of suitable potential
businesses that may be available to it will be extremely limited.  The Company's
principal business objective will be to seek long-term growth potential in the
business in which it participates rather than immediate, short-term earnings.
(See Note C following.)

                                       7
<PAGE>
 
NOTE C--SUBSEQUENT EVENT

On December 2, 1997, the Company signed a Stock Exchange Agreement and Plan of
Reorganization (the "Agreement") with Heater Specialists, Inc. ("HSI") and
Primenergy, Inc. ("Prime").  The Agreement provides for a merger of HSI and
Prime with Omega.  The shareholders of HSI and Prime will exchange all of their
outstanding common shares for 8,000,000 newly issued shares of Omega.  After the
exchange, current shareholders of Omega will hold 1,000,000 shares of common
stock (following a reverse stock split of one (1) new share of the Company for
each fifteen (15) shares currently held, to be accomplished immediately prior to
closing) and 1,000,000 shares of common stock will be held by new investors who
will contribute approximately $3,000,000 of common equity through a private
equity offering.  The exchange will qualify under either Section 351 or Section
368(a)(1)(B), or both, of the Internal Revenue Code of 1986, as amended, as a
"tax-free" exchange or reorganization, subject to the terms and conditions as
more fully provided in the Agreement.  The closing is scheduled to take place on
or about January 30, 1998, unless closing is delayed by mutual agreement.  The
new equity of $3,000,000 will be used to pay down bank credit lines and to fund
the business plans of HSI and Prime.  The funding is a stipulated condition
precedent to closing, however management of Omega cannot assure that such equity
will be provided.

Primenergy, Inc. possesses a license which permits the integrated application of
several technologies to convert biomass into energy.  Prime's proprietary
process design incorporates a low temperature, air-starved gasification of
biomatter to produce an energy source for electricity generation, steam
production, process heat, or any combination of these useful forms of energy.
Prime has been working with government officials within the Republic of the
Philippines, and more specifically Metro Manila, for over a year on an
opportunity to build a $60 million plant that will convert municipal solid waste
to energy.  Prime has been working with the Philippine Presidential Task Force
on Waste Disposal which management believes will lead to multiple projects in
the Philippines for energy cogeneration over the next few years.  Although
management of Prime is confident that a contract will be executed with the
Republic of the Philippines, at the date of this writing a firm contract has not
yet been received and no assurance can be given that this objective will be
achieved.

Heater Specialists, Inc. is a fully integrated single source manufacturer of
refractory lined vessels and equipment for the oil refining, chemical process,
power generation and incineration industries. HSI offers a unique combination of
steel fabrication expertise and refractory technology and is the primary
contractor for gasifier units sold by Prime and performs the steel fabrication
and refractory work on the gasifiers.

                                       8
<PAGE>
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
-------   ---------------------------------------------------------

Plan of Operation
-----------------

The Company's business plan at September 30, 1997 is to seek to acquire or merge
with potential businesses that may, in the opinion of Management, warrant the
Company's involvement.  The Company recognizes that as a result of its limited
financial, managerial or other resources, the number of suitable potential
businesses that may be available to it will be extremely limited.  The Company's
principal business objective will be to seek long-term growth potential in the
business in which it participates rather than immediate, short-term earnings.
In seeking to attain its business objectives, the Company will not restrict its
search to any particular industry.  (See Note C to the unaudited financial
statements.)

After the 1994 Reorganization and the 1996 foreclosure of the ABB Building and
the abandonment of the HPA plans, discussed above, the Company has only one
employee, no office and the ongoing general and administrative expenses are near
zero.

Three Months Ended September 30, 1997 Compared to Three Months Ended September
------------------------------------------------------------------------------
30, 1996
--------

The net loss for the three months ended September 30, 1997 was $5,679 compared
to a net loss of $1,430,382 for the three months ended September 30, 1996.
Generally, the decreased net loss for the current quarter is attributable to the
overall decrease in the Company's operations, described above.  The large net
loss for the third quarter of 1996 was attributable to the loss recognized in
the third quarter of 1996 from writing off the Excess of Cost Over Book Value of
Investment in Subsidiary ($2,352,098), offset by the extraordinary item of gain
($1,226,243) recognized from the extinguishment of debt on the ABB Building.

Rental income decreased to zero in the three months ended September 30, 1997 as
compared to approximately $262,000 in the three months ended September 30, 1996.
The reduction in rental income was primarily due to the bank foreclosure in
September 1996 on the Company's ABB Building.

General and administrative expenses decreased approximately $57,500 (93%) in the
third quarter of 1997 as compared to the third quarter of 1996.  The reduction
is primarily due to an overall reduction in the Company's operations, as
previously discussed.

Depreciation and amortization expenses decreased approximately $236,600 (99%) in
the third quarter of 1997 as compared to the third quarter of 1996.  The
reduction is attributable to the bank foreclosure in September 1996 on the
Company's ABB Building.

Interest expense declined to zero in the three months ended September 30, 1997
as compared to approximately $266,700 in the three months ended September 30,
1996.  This decline is also a result of the bank foreclosure in September 1996
on the Company's ABB Building.

                                       9
<PAGE>
 
Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30,
--------------------------------------------------------------------------------
1996
----

The net loss for the nine months ended September 30, 1997 was $17,934 compared
to a net loss of $2,102,765 for the nine months ended September 30, 1996.
Generally, the decreased net loss for the first nine months of the year is
attributable to the overall decrease in the Company's operations, described
above.  The large net loss for the nine months ended September 30, 1996 was
attributable to the loss recognized in the third quarter of 1996 from writing
off the Excess of Cost Over Book Value of Investment in Subsidiary ($2,352,098),
offset by the extraordinary item of gain ($1,226,243) recognized from the
extinguishment of debt on the ABB Building in the third quarter.

Rental income decreased to zero in the nine months ended September 30, 1997 as
compared to approximately $786,000 in the nine months ended September 30, 1996.
The reduction in rental income was primarily due to the bank foreclosure in
September 1996 on the Company's ABB Building.

General and administrative expenses decreased approximately $284,400 (95%) in
the first nine months of 1997 as compared to the first nine months of 1996.  The
reduction is primarily due to an overall  reduction in the Company's operations,
as previously discussed.

Depreciation and amortization expenses decreased approximately $710,100 (99%) in
the first nine months of 1997 as compared to the first nine months of 1996.  The
reduction is attributable to the bank foreclosure in September 1996 on the
Company's ABB Building.

Interest expense declined to zero in the nine months ended September 30, 1997 as
compared to approximately $751,500 in the nine months ended September 30, 1996.
This decline is also a result of the bank foreclosure in September 1996 on the
Company's ABB Building.



No income tax expense or benefit has been recorded for 1997, as a valuation
allowance has been provided for the tax effects of the entire net operating loss
carry forwards and other net deductible temporary differences.

                                       10
<PAGE>
 
PART II.  OTHER INFORMATION

     ITEM 1.   LEGAL PROCEEDINGS.

               None.

     ITEM 2.   CHANGES IN SECURITIES.

               None.

     ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

               None

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

               None.

     ITEM 5.   OTHER INFORMATION.

               None.

     ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

               (a)  Exhibits.
                    ---------

                    None.

               (b)  Reports on Form 8-K.
                    --------------------

                    No reports on Form 8-K were filed during the quarter ended
                    September 30, 1997.

                                       11
<PAGE>
 
                                   SIGNATURES



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


                                    OMEGA DEVELOPMENT, INC.
                                    (Registrant)



Date:      January 30, 1998         By:  /s/ A. Paul Shapansky
     ----------------------            --------------------------------------
                                    A. Paul Shapansky, President and Chief
                                    Executive Officer, and Principal Financial
                                    Officer

                                       12