SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

X        Quarterly  Report  pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934 for the quarterly period ended June 30, 1997; or

         Transition  report  pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934 for the transition period from ___________________
         to _______________________.

                         Commission File Number 0-18754

                          BLACK WARRIOR WIRELINE CORP.
--------------------------------------------------------------------------------

        (Exact Name of Small Business Issuer as Specified in its Charter)

           DELAWARE                                         11-2904094
------------------------------------                 ------------------------
  (State or Other Jurisdiction of                        (I.R.S. Employer
  Incorporation or Organization)                         Identification No.)

               3748 HIGHWAY 45 NORTH, COLUMBUS, MISSISSIPPI 39701
--------------------------------------------------------------------------------

                    (Address of Principal Executive Offices)
                                   (Zip Code)
                                 (601) 329-1047
              -----------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

         Check whether the Issuer (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

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.

                                                     Outstanding at
             Class                                  August 14, 1997
----------------------------       ---------------------------------------------
COMMON STOCK, PAR VALUE                           2,250,216 SHARES
     $.0005 PER SHARE

                  Transitional Small Business Disclosure Format
                           YES               NO    X



<PAGE>

                          BLACK WARRIOR WIRELINE CORP.

                         QUARTERLY REPORT ON FORM 10-QSB

                                      INDEX

PART I -- FINANCIAL INFORMATION
                                                                      Page
                                                                      ----


Item 1.    Financial Statements

           Consolidated Balance Sheets -- June 30, 1997
           and December 31, 1996                                       3

           Condensed Consolidated Statements of Operations --
           Three Months Ended June 30, 1997 and
           June 30,1996                                                4

           Condensed Consolidated Statements of Operations--
           Six Months Ended June 30, 1997 and
           June 30, 1996                                               5

           Condensed Consolidated Statements of Cash Flows --
           Six Months Ended June 30, 1997 and
           Period Ended June 30, 1996                                  6

           Notes to Financial Statements --
           Six Months Ended June 30, 1997 and
           June 30, 1996                                               7

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                         8

PART II -- OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K                            14




                                        2

<PAGE>
PART I -- FINANCIAL INFORMATION
   
      ITEM 1.  FINANCIAL STATEMENTS

                  BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                JUNE 30        DECEMBER 31
                                                                                  1997           1996
                                                                              ------------    ------------
                                    ASSETS
<S>                                                                           <C>             <C>         
Current Assets:
Cash and cash equivalents                                                     $  1,915,228    $    727,454
Accounts receivable, less allowance for
   doubtful accounts of $136,959
   at June 30, 1997 and December 31, 1996,
                                                                                 1,865,317       1,369,306
Inventories                                                                        246,945         183,467
Prepaid expenses                                                                   172,547          53,424
Deferred tax asset                                                                 138,071         138,071
Federal income tax receivable                                                            0          14,636
                                                                              ------------    ------------
                  Total current assets                                           4,338,108       2,486,358

Land and building, held for sale                                                   400,000         400,000
Property, plant & equipment, less accumulated
   depreciation of $4,026,078 and $3,729,370 at
   June 30, 1997 and December 31, 1996,
   respectively                                                                  5,881,968       2,194,591
Goodwill, less amortization of $14,061 and $0 at June 30, 1997                     820,934         224,305
    and December 31, 1996, respectfully
Other assets                                                                       223,395           5,420
                                                                              ------------    ------------
                  Total assets                                                $ 11,664,405    $  5,310,674
                                                                              ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
         Accounts payable                                                     $  1,055,671    $    808,832
         Accounts payable, related party                                           180,269          89,733
         Accrued salaries and vacation pay                                          60,788          25,085
         Income tax payable                                                         18,191          52,548
         Accrued interest payable                                                   34,194          29,530
         Other accrued expenses                                                    309,771         381,396
         Mortgage note payable, related party                                       150,00         150,000
         Notes payable to bank                                                     121,606          18,272
         Current maturities of long-term debt and
            Capital lease obligations                                            3,371,900         307,806
                                                                              ------------    ------------
                  Total current liabilities                                      5,302,390       1,863,202

         Deferred tax liability                                                    214,355         214,355
         Note payable to bank, less current maturities                              95,397          31,486
         Mortgage payable, related party                                           230,000         230,000
         Long-term debt and capital lease obligations,
         less current maturities                                                 2,704,652         713,873
                                                                              ------------    ------------
                  Total liabilities                                              8,546,794       3,052,916

Common stock, par value $.0005 per share,
         50,000,000 shares authorized, 2,250,216 and 2,185,216
         shares issued at June 30, 1997 and December 31, 1996, respectfully          1,126           1,093
Additional paid-in capital                                                       5,052,458       5,133,087
Additional paid-in capital- warrants                                               616,696
Common stock to be issued in connection with acquisition(133,333 shares            279,999
Accumulated deficit                                                             (2,249,275)     (2,293,029)
Treasury stock, at cost, 814,626 shares                                           (583,393)       (583,393)
                                                                              ------------    ------------
         Total stockholders' equity                                              3,117,611       2,257,758
                                                                              ------------    ------------
         Total liabilities and stockholders' equity                           $ 11,664,405    $  5,310,674
                                                                              ============    ============

                                        3
</TABLE>

<PAGE>


                  BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                          THREE MONTHS ENDED
                                                       JUNE 30,      JUNE 30,
                                                        1997          1996
                                                    -----------     ------------

Net revenues                                        $ 2,488,051     $ 1,612,448

Operating costs and expenses                         (2,130,474)     (1,494,921)

Depreciation and amortization expense                  (268,487)       (131,761)
                                                    -----------     ------------

         Operating income (loss)                         89,090         (14,234)

Interest expense and amortization
         of debt discount                               (95,735)       (103,808)

Other income                                             16,464          67,762
                                                    -----------     ------------

         Net income (loss) before provision
         for income taxes                                 9,819         (50,280)


Provision for income taxes                                    0               0
                                                    -----------     ------------

         Net income (loss)                          $     9,819     $   (50,280)
                                                    ===========     ===========


Net income (loss) per common share                  $       .01     $      (.07)

Weighted average common
         shares outstanding                           2,306,269         759,052



                                        4

<PAGE>



                  BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                           SIX  MONTHS ENDED
                                                       JUNE 30,       JUNE 30,
                                                        1997            1996
                                                    -----------     ------------

Net revenues                                        $ 4,653,069     $ 3,146,748

Operating costs and expenses                         (4,058,840)     (2,979,193)

Depreciation and amortization expense                  (464,514)       (275,272)
                                                    -----------     ------------

         Operating income (loss)                        129,715        (107,717)

Interest expense and amortization
         of debt discount                              (136,070)       (205,115)

Other income                                             50,116          77,581
                                                    -----------     ------------

         Net income (loss) before provision
         for income taxes                                43,761        (235,251)

Provision for income taxes                                    0               0
                                                    -----------     ------------

         Net income (loss)                          $    43,761     $  (235,251)
                                                    ===========     ===========



Net income (loss) per common share                  $       .02     $      (.31)

Weighted average common
         shares outstanding                           2,245,742         759,052



                                        5

<PAGE>



BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIODS ENDED:
<TABLE>
<CAPTION>
                                                                                      June 30, 1997   June 30, 1996
                                                                                      -------------   -------------
<S>                                                                                    <C>            <C>         
Cash flows from operating activities:
         Net income(loss)                                                              $    43,754    $  (235,251)
         Adjustments to reconcile net income(loss) to
         cash provided by operations:
                  Depreciation                                                             450,453        275,272
                  Amortization                                                              14,061
                  Allowance for doubtful accounts
                  Net gain on disposal of  plant, property
                    and equipment                                                          (20,460)       (71,600)
                  Amortization of discount on bonds payable                                 28,688
                  Change in:
                    Accounts receivable                                                   (322,227)      (216,934)
                    Inventories                                                            (20,925)         1,099
                    Prepaid expenses                                                        17,377         39,734
                    Income/other  receivable                                                14,636           (128)
                    Other assets                                                           (27,975)
                    Accounts payable
                    and other liabilities                                                  (55,555)       196,850
                                                                                        -----------    -----------
                           Cash provided
                           by operations                                                   121,827        (10,958)
                                                                                        -----------    -----------
Cash flow from investing activities:
         Acquisitions of plant,
           property, and equipment                                                        (622,642)       (75,955)
         Proceeds from sale of  plant, property
           and equipment                                                                    46,093         71,600
         Acquisition of business, net of cash acquired                                    (264,403)
                                                                                        -----------    -----------
                  Cash used in
                   investing activities                                                   (840,952)        (4,355)
                                                                                        -----------    -----------
Cash flow from financing activities:
         Debt issuance costs                                                              (190,000)
         Proceeds from debt                                                              2,322,500
         Principal payments on debt and
           lease obligations                                                              (225,601)      (159,284)
                                                                                        -----------    -----------
                  Cash(used in) provided by
                  financing activities                                                   1,906,899       (159,284)
                                                                                        -----------    -----------

                           Net decrease(increase)     
                             in cash and cash equivalents                                1,187,774       (174,597)

Cash and cash equivalents, beginning of period                                             727,454        284,825
                                                                                        -----------    -----------
Cash and cash equivalents, end of period                                          $      1,915,228   $    110,228
                                                                                        -----------    -----------
Supplemental disclosure of cash
         flow information:
                  Interest paid                                                   $         56,066    $    43,331
                  Taxes paid                                                                51,750
Supplemental schedule of noncash investing and financing:
  Acquisition of plant, property and equipment financed under
   capital leases and notes payable                                                        818,632        280,740
   Common stock issued for consulting fees                                                 136,500
   Issuance of warrants in connection with debt                                           (399,600) 
Business  acquisition, net of cash acquired:
   Current assets                                                                          216,337
   Current liabilities                                                                    (327,315)
   Property, plant, and equipment                                                        2,722,189
   Assets, noncurrent                                                                      610,691
   Long term liabilities                                                                (2,677,500)
   Equity                                                                                 (279,999)
                                                                                        -----------   
   Net cash used to acquire Petro-Log and PWS                                              264,403
</TABLE>

                                                         6

<PAGE>

                  BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS

1.       GENERAL

         The accompanying financial statements reflect all adjustments which, in
         the opinion of management, are necessary for a fair presentation of the
         financial  position of Black Warrior  Wireline Corp.  and  subsidiaries
         (the "Company"). Such adjustments are of a normal recurring nature. The
         results of  operations  for the  interim  periods  are not  necessarily
         indicative  of the  results  to be  expected  for the  full  year.  The
         consolidated  financial  statements and notes thereto should be read in
         conjunction with the financial statements and notes for the years ended
         December 31, 1996,  1995,  and 1994 in the Company's 1996 Annual Report
         on 10-KSB.

2.       DEBT RESTRUCTURING

         In November 1995, the Company executed  Reorganization  Agreements with
         the  holders  of  an  aggregate  of  $1,922,130   principal  amount  of
         outstanding   debentures  and   indebtedness   pursuant  to  which  the
         debentures  and  indebtedness  were  agreed  to  be  exchanged  for  an
         aggregate of 961,065 shares of the Company's Common Stock. In addition,
         pursuant to such  agreements,  Common  Stock  Purchase  Warrants of the
         Company were to be  exchanged  with the  debenture  holders for two new
         classes of Common Stock Purchase  Warrants.  Each class of new warrants
         was to represent  the right to purchase an aggregate of 183,750  shares
         of Common Stock.  The Class A warrants were to be  exercisable at $3.00
         per share for a period of four (4) years and the Class B warrants  were
         to be exercisable at prices  increasing in annual  increments  over the
         first three (3) years after  issuance from $3.00 per share to $5.00 per
         share and were to expire five (5) years after  issuance.  Through March
         31, 1996, an aggregate of $1,353,380 principal amount of debentures and
         indebtedness  was exchanged for 648,151  shares of Common Stock and the
         remaining  $568,750  of  debentures  to be  exchanged  pursuant  to the
         agreements  executed in November 1995 was subject to the fulfillment of
         certain closing conditions.  Issuance of the warrants was not completed
         in 1995.  In September  and October,  1996 the holders of an additional
         $800,000  principal  amount  of  Debentures   executed   Reorganization
         Agreements and the  Reorganization  Agreements entered into in November
         1995 were  amended so as to provide that in lieu of the issuance of the
         Class A warrants,  an aggregate of 101,250 shares of Common Stock would
         be  issued  and the  exercise  price of the Class B  warrants  would be
         reduced  to $2.00  per  share  throughout  the  five-year  term of such
         warrants.  During 1996, $1,368,750 principal amount of indebtedness was
         exchanged  for an  aggregate  of 712,914  shares of Common Stock and an
         aggregate  of 303,750  Class B warrants  were issued.  In addition,  an
         aggregate of 101,250 shares of Common Stock were issued in exchange for
         the Company's obligation to issue the Class A warrants. Pursuant to all
         such  agreements,  an aggregate of $2,071,357  of accrued  interest and
         penalties were waived by the debenture holders.

         In connection with the foregoing restructuring,  the Company effected a
         1-for-200 reverse stock split on October 30,1995.

                                        7

<PAGE>






3.        BUSINESS COMBINATIONS

         Effective  June 6, 1997,  the  Company  completed  the  acquisition  of
         Production Well Services,  Inc.  (PWS).  PWS is engaged in the wireline
         and oil and gas well services  business in the south  Mississippi area.
         For financial statement purposes,  the acquisition was accounted for as
         a  purchase  and  accordingly,   PWS's  results  are  included  in  the
         consolidated  financial  statements since the date of acquisition.  The
         acquisition  resulted in excess of cost over fair  market  value of net
         assets acquired of approximately $610,000, which will be amortized over
         ten years. The following is a summary of assets  acquired,  liabilities
         assumed, and consideration paid in connection with the acquisition:

             Fair value of assets acquired, including goodwill     $ 1,146,478
             Cash paid for assets acquire, net of cash received            836
             Common stock issued in connection with acquisition       (279,999)
                                                                   ------------
             Liabilities assumed or incurred                           867,315

         Effective  June 9, 1997,  the  company  completed  the  acquisition  of
         Petro-Log,  Inc. (Petro- Log). Petro-Log is engaged in the wireline and
         oil and gas well  services  business  in  Wyoming,  Montana,  and South
         Dakota. For financial statement purposes, the acquisition was accounted
         for as a purchase and accordingly,  Petro-Log's results are included in
         the  consolidated  financial  statements since the date of acquisition.
         The following is a summary of assets acquired, liabilities assumed, and
         consideration paid in connection with the acquisition:

                  Fair value of assets acquired                $ 2,402,739
                  Cash paid for assets acquired                   (265,239)
                                                              -------------
                  Liabilities assumed or incurred                2,137,500

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

INDUSTRY OVERVIEW AND ECONOMIC FACTORS IMPACTING COMPANY OPERATIONS


         The level of activity and  profitability  experienced by the Company is
         directly  related  to the  demand  for the  Company's  services  by the
         domestic oil and gas industry.  The market price of oil and natural gas
         is the principal  factor  driving this demand.  In recent years,  there
         have been some periods of relative  price  stability  but only isolated
         areas  of  real  growth.  In  1996,  however,   most  of  the  industry
         experienced  some  growth  in demand  and  pricing.  Management  of the
         Company  believes that the continuing  stability of domestic oil prices
         and relatively high gas prices should help continue this trend in 1997.

                                        8

<PAGE>



         Increased  demand for the  services  provided  by the  Company  and its
         competitors coupled with a general  consolidation in the service sector
         has reduced downward  pressure on pricing.  This has led to a reduction
         in "predatory"  pricing used by some companies to increase market share
         and helped improve overall margins. The Company believes that continued
         improvements  will  be  seen in the  remainder  of  1997 as this  trend
         continues.

CORPORATE OPERATIONAL AND EXPANSION STRATEGY


         To date, the Company has acquired the following companies.  On November
         19, 1996,  the  acquisition  of Dyna-Jet,  a Wyoming  corporation,  was
         finalized.  Dyna-Jet  is engaged in the  wireline  and oil and gas well
         services  business in the Gillette,  Wyoming area. On June 6, 1997, the
         Company  acquired   Production  Well  Services,   Inc.,  a  Mississippi
         corporation  ("PWS").  PWS is engaged in the  wireline  and oil and gas
         services  business  in the  south  Mississippi  area.  The most  recent
         acquisition  transpired  on June 9,  1997.  The  acquired  company  was
         Petro-Log,  Incorporated,  a Wyoming corporation ("Petro-Log").  Petro-
         Log is engaged in the wireline and oil and gas well  services  business
         in Wyoming, Montana and South Dakota.

         The Company plans to continue its marketing  policy which  stresses the
         safety, reliability, technological advantage and overall quality of its
         services.  Management  believes that an increasing  number of customers
         consider these factors foremost in their selection  criteria for an oil
         service company.

         The Company  intends,  as and if  opportunities  arise, to aggressively
         expand its wireline,  well service activities,  and other service areas
         through the  acquisition  of other oil and gas service  companies  that
         meet its  strategic  goals.  The Company will continue to re-deploy its
         assets to areas that are most beneficial to the long-term growth of the
         Company.

         The  Company is  actively  seeking to expand its  directional  drilling
         services by providing  downhole  steering tools in addition to hoisting
         services.  Directional  drilling  entails  entering a  production  zone
         horizontally,  using specialized drilling equipment,  which expands the
         area  of  interface  of  hydrocarbons  and  thereby  greatly  enhancing
         recoverability.  The Company  expects to enlarge its  customer  base by
         providing steering services to other drilling  contractors which do not
         have "in house" steering tools.  Delivery of the Company's first set of
         gamma/steering tools is scheduled for the end of August with the second
         set to follow at the end of September.

         Another  service  the  Company  intends  to expand  is tubing  conveyed
         perforating.  The  Company is  providing  this  service in Alabama  and
         Mississippi  and  plans  to  introduce  this  service   throughout  its
         operational areas.

         The Company has  purchased  state of the art downhole  tools  including
         segmented bond tools,  and magnetic and 40-arm casing  inspection tools
         for the Permian Basin region. These tools were placed into service late
         in the  second  quarter  and their  impact  should be felt  during  the
         remainder  of the year.  Similar  tools have been ordered for the south
         Mississippi  and Alabama and Rocky Mountain  regions.  These tools will
         enable the

                                        9

<PAGE>



         Company  to  provide   services   unavailable   from  smaller  wireline
         competitors  and thereby  enable the  Company to provide  services in a
         less price competitive environment.

         The ongoing modernization and expansion of the Company's wireline fleet
         continued in the second quarter with new and  refurbished  trucks being
         delivered to all regions.  The Company believes that this strategy is a
         key to its long term growth.

RESULTS OF OPERATIONS


         The Company had net income of $9,819 for the second  quarter of 1997 as
         compared  with a net loss of $50,280 for the same  period of 1996.  The
         net income of $9,819 can be attributed to improved  margins on wireline
         services  as well  as the  increase  in  sales  from  the  Wyoming  and
         Mississippi area due to the increased  customer base resulting from the
         two acquisitions that occurred during June. There was a slight decrease
         in net income  from three  months  ended June 30,  1997 as  compared to
         three months ended March 31, 1997.  This decline is a direct  result of
         acquisition  cost incurred during June related to the St. James Capital
         financing,  the Petro-Log  and PWS  acquisitions.  The PWS  acquisition
         increased  sales by $72,665  and the  Petro-Log  acquisition  increased
         sales by $163,430 in the month of June.


THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1996


          Net  revenues  increased  by  $875,603  to  $2,488,051  for the second
          quarter of 1997  compared  with net revenues of $1,612,448 in the same
          period in 1996.  While  completion  services  and sales and rentals of
          tools and  packers  declined,  there  was a  substantial  increase  in
          wireline service revenues. A large portion of this increase stems from
          revenues in the Permian Basin and the increase of $236,095 is directly
          related to the  acquisitions  of  Petro-Log  and PWS. A major  project
          initiated by a large  customer  began in the third  quarter of 1996 is
          expected to continue  through 1997. The Company  supplies all wireline
          services for this project.  The Company  expects an increase in demand
          from most of the Company's customers in the Permian Basin during 1997.
          Revenues by division for the quarters ended June 30, 1997 and June 30,
          1996 are summarized below:




                                       10

<PAGE>




                                   SIX MONTHS ENDED         THREE MONTHS ENDED
                               -----------------------    ----------------------
                                 JUNE 30,     JUNE 30,      JUNE 30,    JUNE 30,
                                  1997          1996          1997       1996
                                  ----          ----          ----       ----
Wireline services
(logging, directional
services, perforating)         $3,733,679    2,137,106    2,058,158    1,074,658

Completion (workover
services)                      $  774,758      845,716      378,883      463,137
Tools and Packers         
(sales and rentals of
bridge plugs)                  $  144,632      163,926       51,010       74,653
                               ----------   ----------   ----------   ----------

                  Total        $4,653,069    3,146,748    2,488,051    1,612,448
                               ==========   ==========   ==========   ==========

         Operating  costs and  expenses  increased  by  $635,553  in the  second
         quarter of 1997 as compared with the same period in 1996.  This was due
         to  increased  costs for supplies  and  materials  from vendors and the
         Company's  expanding  volume  of  business.  In  conjunction  with  the
         financing of the  acquisitions,  the Company  entered into an agreement
         with  Southwick  Investments  and incurred fees totaling  $190,000 that
         will be expensed over the life of the 9%  Convertible  Promissory  Note
         and the 10% Bridge Loan.  The fee was paid from the proceeds of the two
         notes.  A total of 65,000  shares  of the  Company's  common  stock was
         issued to Swartwood, Hesse Inc., Pangaea Investment Consultants, LTD in
         consideration of a two year consulting  agreement between the foregoing
         mentioned and the Company.  The total cost of $136,500 will be expensed
         over the term of the consulting  agreements.  Interest expense relating
         to the  issuance  of the St.  James  Capital  debt and  stock  purchase
         warrants for the second quarter  totaled  $62,881.  Salaries  increased
         $351,835  for the  first six  months  of 1997 with the total  number of
         employees  increasing to 146 at June 30, 1997 from 96 at June 30, 1996.
         PWS and  Petro-Log  increased  the number of employees by 24 during the
         second  quarter.  The  salary  increase  was due to salary  raises  for
         existing  employees and the addition of new personnel added to meet the
         increased work load.

         Interest  expense  decreased by $8,073 in the second quarter of 1997 as
         compared with the same period in 1996. Interest expense relating to the
         issuance  of the St.  James  Capital  debt and stock  warrants  for the
         second quarter totaled  $62,881.  Three to five year notes were used to
         purchase  new  vehicles  and  equipment  during the first six months of
         1997.  An aggregate  of $225,601 of  principal  amount at June 30, 1997
         went to reduce notes payable.  New note payables acquired the first six
         months totaled  $818,632 and $5,000,000  from the St. James  financing.
         Interest on the debt ranged from prime to 12.00%.

                                       11

<PAGE>
LIQUIDITY AND CAPITAL RESOURCES



         Cash provided by the Company's  operating  activities  was $121,827 for
         the six  months  ended  June 30,  1997 as  compared  with  cash used of
         $10,958 for the period ended June 30, 1996. Investing activities of the
         Company used cash of $840,952 during the period ended June 30, 1997 for
         the acquisitions of property,  plant, and equipment, and acquisition of
         new  business  offset  by  proceeds  from the sale of fixed  assets  of
         $46,093.  Financing  activities  provided  cash  of  $1,906,899  to pay
         principal  payments of long-term  notes and capital lease  obligations.
         Other uses of cash  consisted of purchasing  tools and supplies  rather
         than purchasing them on credit.

         The  acquisitions  of PWS and Petro-Log were financed with the proceeds
         of borrowing  from St. James  Capital  Partners,  L.P.  ("ST.  James").
         Pursuant to an Agreement  for Purchase and Sale dated June 6, 1997 (the
         "Agreement")  between the Company and St. James,  the Company agreed to
         issue  and  sell  and  St.  James  agreed  to  purchase  the  Company's
         promissory notes aggregating $5,000,000.  Of such amount, $2,000,000 is
         represented by the Company's 9% Convertible Promissory Note due June 6,
         2002,  and  $3,000,000 is  represented by the Company's 10% Bridge Loan
         Note due  September 4, 1997,  subject to extension of the maturity date
         to October 4, 1997. The $2,000,000  note is convertible  into shares of
         the Company's Common Stock at an initial  conversion price of $2.75 per
         share,  increasing  one year  after  issuance  to $3.25  per  share and
         further increasing two years after issuance to $3.75 per share, subject
         to anti-dilution  adjustment for certain issuances of securities by the
         Company  at prices per share of Common  Stock less than the  conversion
         price then in effect.  Payment of principal and interest on both of the
         notes is collateralized by substantially all the assets of the Company.
         The Company is seeking to  refinance  the bridge note with the proceeds
         of a senior  secured  loan not yet  obtained.  St.  James has agreed to
         subordinate  the  indebtedness  owing  to it to  up  to  $4,000,000  of
         indebtedness  of the  Company  to a  senior  lender  out of  which,  if
         borrowed  prior to its maturity date, the Bridge Note must be paid, and
         up to  $2,000,000  of working  capital  financing.  St.  James was also
         issued  warrants to purchase an aggregate  of 666,000  shares of Common
         Stock at an initial  exercise  price of $2.75 per share,  increasing on
         year after issuance to $3.25 per share and further increasing two years
         after issuance to $3.75 per share, subject to anti-dilution  adjustment
         for certain  issuances of securities by the Company at prices per share
         of Common  Stock  less than the  exercise  price  then in  effect.  The
         maturity  of the Bridge  Note can be  extended  to October 4, 1997 upon
         issuance  of  warrants   containing  the  same  terms  to  purchase  an
         additional  20,000  shares of Common  Stock.  The  shares  issuable  on
         conversion  of the note and  exercise of the  warrants  have demand and
         piggy-back registration rights under the Securities Act of 1933. Of the
         $5,000,000 proceeds from the sale of the notes, $2,000,000 was advanced
         concurrently  with the  acquisition  of PWS and $3,000,000 was advanced
         concurrently  with  the  acquisition  of  Petro-Log.   In  addition  to
         providing the funds to complete the PWS and Petro-Log acquisitions, the
         proceeds will be used to purchase and improve equipment,  including the
         purchase of four additional wireline trucks, and for working capital.


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         The Company is currently engaged in efforts to raise additional capital
         to refinance the 10% Bridge Loan Note due September 4, 1997.

RECENTLY ISSUED ACCOUNTING STANDARDS


         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement of Financial Accounting Standards No. 128, Earnings Per Share
         (SFAS 128). SFAS 128 supersedes  existing generally accepted accounting
         principles  relative  to the  calculation  of  earnings  per share,  is
         effective  for  years  ending  after  December  15,  1997 and  requires
         restatement  of all prior period  earnings per share  information  upon
         adoption.  Generally, SFAS 128 requires a calculation of basic earnings
         per share,  which takes into  consideration  income (loss) available to
         common   shareholders   and  the  weighted  average  of  common  shares
         outstanding.  SFAS 128  also  requires  the  calculation  of a  diluted
         earnings  per  share,  which  takes  into  effect  the  impact  of  all
         additional  common  shares  that  would  have been  outstanding  if all
         dilutive  potential  common shares relating to options , warrants,  and
         convertible  securities  had been  issued,  as long as their  effect is
         dilutive,  with a  related  adjustment  of income  available  to common
         shareholders,  as appropriate.  SFAS 128 requires dual  presentation of
         basic and diluted  earnings  per share on the face of the  statement of
         operation   and  requires  a   reconciliation   of  the  numerator  and
         denominator  of the basic earnings per share  computation.  The Company
         does not expect the effect of its adoption of SFAS 128 to be material.

         The Board has issued SFAS No.  130,  "Reporting  Comprehensive  Income"
         which establishes  standards for reporting and display of comprehensive
         income and its components  (revenues,  expenses,  gains, and losses) in
         the financial statements. Comprehensive income is defined as the change
         in equity of a business  enterprise  during a period from  transactions
         and other events and circumstances  from nonowner sources.  It includes
         all  changes in equity  during a period  except  those  resulting  from
         investments by owners and distributions to owners.  This Statement does
         not require a specific  format for the  presentation  of  comprehensive
         income but requires an amount representing total  comprehensive  income
         for the period.  This Statement is effective for fiscal years beginning
         after  December  15,  1997 with  reclassification  of  earlier  periods
         required.  Other than the additional presentation  requirements of this
         Statement,  the Company does not  anticipate  a material  impact on the
         financial position,  results of operations,  earnings per share or cash
         flows.

         The Board has issued SFAS No. 131,  "Disclosures  about  Segments of an
         Enterprise and Related  Information",  which establishes  standards for
         the way that  public  business  enterprises  report  information  about
         operating segments in annual financial statements and requires selected
         information about operating segments in interim financial reports.

         This  Statement  requires  that a  public  business  enterprise  report
         financial and descriptive  information  about its reportable  operating
         segments.  Operating  segments are  components of an  enterprise  about
         which  separate  financial  information  is available that is evaluated
         regularly  by the chief  operating  decision  maker in deciding  how to
         allocate resources and in assessing performance.  Generally,  financial
         information is required to be reported on

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<PAGE>



         the basis that it is used internally for evaluating segment performance
         and deciding how to allocate resources to segments.

         The financial information required includes a measure of segment profit
         or loss, certain specific revenue and expense items, segment assets and
         reconciliation  of each category to the general  financial  statements.
         The  descriptive   information  required  includes  the  way  that  the
         operating segments were determined,  the products and services provided
         by the operating segments, differences between the measurements used in
         reporting  segment  information  and those used in the general  purpose
         financial statements, and changes in the measurement of segment amounts
         from period to period.

         This  Statement  is  effective  for  financial  statements  for periods
         beginning  after December 15, 1997 with  restatement of earlier periods
         required in the initial year of application. This Statement need not be
         applied to interim  financial  statements  in the  initial  year of its
         application,  but  comparative  information  for interim periods in the
         initial year of application  is to be reported in financial  statements
         for interim periods in the second year of  application.  The Company is
         currently  determining  if these  disclosures  will be applicable  and,
         therefore, required in future periods.

PART II -- OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


         (a)      Exhibits

                           27.  Financial Data Schedule

         (b)      Reports on Form 8-K

                           The  Company  filed a  Current  Report on Form 8-K on
                           June 20, 1997, in conjunction with the acquisition of
                           Petro-Log.

         No other  Items of Part II are  applicable  to the  Registrant  for the
         period covered by this Quarterly Report on Form 10-QSB.



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<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)


                                           /s/  William L. Jenkins
Date: August 14, 1997                      -------------------------------------
                                           William L. Jenkins
                                           President and Chief Operating Officer
                                           (Principal Executive, Financial and
                                           Accounting Officer)




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