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, 1998; 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 of 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.


           Class                                                 Outstanding at
                                                                August 18, 1998
  -----------------------                                       ----------------
  COMMON STOCK, PAR VALUE                                       3,897,451 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, 1998
                  and  December 31, 1997                                       3

                  Consolidated Statements of Operations -
                  Three Months Ended June 30, 1998 and
                  June 30, 1997                                                4

                  Consolidated Statements of Operations -
                  Six Months Ended June 30, 1998 and
                  June 30, 1997                                                5

                  Consolidated Statements of Cash Flows -
                  Six Months Ended June 30, 1998 and
                  June 30, 1997                                                6

                  Notes to Consolidated Financial Statements -
                  Six Months Ended June 30, 1998 and
                  June 30, 1997                                                7


Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Consolidated Results of Operations             6


PART II - OTHER INFORMATION

Item 1.           Legal Proceedings                                           19

Item 2.           Changes in Securities and Use of Proceeds                   20

Item 6.           Exhibits and Reports on Form 8-K                            20



<PAGE>



PART I - FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS

                  BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                     JUNE 30  1998     DECEMBER 31 1997
                                                                                     -------------     ----------------
                           ASSETS                                                     (UNAUDITED)
<S>                                                                                <C>                 <C>         
Current assets:
    Cash and cash equivalents                                                      $    714,511        $    435,845
    Short-term investments                                                               50,000              50,000
    Accounts receivable, less allowance for doubtful
        accounts of $146,884 and $143,559                                             8,180,400           5,459,689
    Prepaid expenses                                                                    266,333             390,144
    Deferred tax asset                                                                   80,815              80,815
    Other receivables                                                                   500,000             901,629
                                                                                   ------------        ------------
         Total current assets                                                         9,792,059           7,318,122
Land and building                                                                       245,000
Property, plant, and equipment, less accumulated
    depreciation of $6,465,338 and $4,791,052                                        26,288,221           9,347,685
Inventories                                                                           4,312,279                   0
Other assets                                                                            537,470             358,521
Goodwill, less accumulated amortization of $354,966
      and $134,421                                                                   11,430,903           9,061,655
                                                                                   ------------        ------------
         Total assets                                                              $ 52,605,932        $ 26,085,983
                                                                                   ============        ============

                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                                               $  4,634,577        $  3,619,466
    Accounts payable, related parties                                                     6,090               6,090
    Accrued salaries and vacation                                                       256,223             124,376
    Income tax payable                                                                        0             599,877
    Accrued interest payable                                                             51,590              69,041
    Other accrued expenses                                                              430,003             289,445
    Deferred revenue                                                                    100,000             100,000
    Current maturites of notes payable to banks                                               0               7,624
    Mortgage notes payable, related party                                               230,000             380,000
    Current maturities of long-term debt and capital
         lease obligations                                                           13,972,351             793,618
                                                                                   ------------        ------------
         Total current liabilities                                                   19,680,834           5,989,537
Deferred tax liability                                                                  405,935           1,132,513
Long-term accrued interest payable                                                      580,700             150,364
Notes payable to related parties                                                     18,080,890           8,070,549
Notes payable to banks, less current maturities                                                              22,212
Long-term debt and capital lease obligations, less
    current maturities                                                                5,325,369           5,123,535
                                                                                   ------------        ------------
         Total liabilities                                                           44,073,728          20,488,710
                                                                                   ------------        ------------
Stockholder's equity:
     Preferred stock, $.0005 par value,  2,500,000 shares authorized none issued
         at June 30, 1998
     Common stock, $.0005 par value, 12,500,000 shares authorized;
         3,897,451 and 2,990,254 shares issued                                            1,949               1,495
Additional paid-in capital                                                           12,065,166           7,744,953
Common stock to be issued in connection with acquisition
    (133,333 shares)                                                                                        280,000
Accumulated deficit                                                                  (2,951,518)         (1,845,782)
Treasury stock, at cost, 4,620 shares                                                  (583,393)           (583,393)
                                                                                   ------------        ------------
         Total stockholder's equity                                                   8,532,204           5,597,273
                                                                                   ------------        ------------
         Total liabilities and stockholder's                                       $ 52,605,932        $ 26,085,983
                                                                                   ============        ============
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                       3

<PAGE>



BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months ended June 30, 1998 and June 30, 1997

<TABLE>
<CAPTION>
                                                                 June 30, 1998          June 30, 1997
                                                                 -------------          -------------
                                                                  (Unaudited)            (Unaudited)
<S>                                                              <C>                    <C>         
Revenues                                                         $ 10,247,430           $  2,488,051

Operating costs                                                     8,493,603              1,651,157

Selling, general, and  administrative expenses                      1,918,014                479,317

Depreciation and amortization                                       1,246,109                268,487
                                                                 ------------           ------------

         Net income (loss) from operations                         (1,410,296)                89,090

Interest expense and amortization of debt discount                   (697,143)               (95,735)

Net (loss) gain on sale of fixed assets                                  (938)                 4,258

Other income                                                           18,950                 12,206
                                                                 ------------           ------------

         Net income (loss) before benefit for
             income taxes                                          (2,089,427)                 9,819

Benefit for income taxes                                              833,017                      0
                                                                 ------------           ------------

         Net income (loss)                                       $ (1,256,410)                 9,819
                                                                 ============           ============

         Net income(loss) per common share- basic                $      (0.32)          $       0.00
                                                                 ============           ============

         Net income(loss)per common share- diluted               $      (0.32)          $       0.00
                                                                 ============           ============

Weighted average common shares outstanding-
    basic                                                           3,873,235              2,241,340
                                                                 ============           ============

Weighted average common shares outstanding
    with dilutive securities                                        3,873,235              2,518,353
                                                                 ============           ============
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                       4

<PAGE>



BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the six months ended June 30, 1998 and June 30, 1997

<TABLE>
<CAPTION>
                                                                June 30, 1998            June 30, 1997
                                                                -------------            -------------
                                                                 (Unaudited)              (Unaudited)
<S>                                                             <C>                       <C>         
Revenues                                                        $ 19,913,453              $  4,653,069

Operating costs                                                   15,759,491                 3,143,334

Selling, general, and  administrative expenses                     2,758,693                   915,506

Depreciation and amortization                                      2,055,799                   464,514
                                                                ------------              ------------

         Net income (loss) from operations                          (660,530)                  129,715

Interest expense and amortization of debt discount                (1,131,903)                 (136,070)

Net gain on sale of fixed assets                                       1,006                    16,318

Other income                                                          36,296                    33,798
                                                                ------------              ------------

         Net income (loss) before provision for
             income taxes                                         (1,755,131)                   43,761

Benefit for income taxes                                             649,398                         0
                                                                ------------              ------------

         Net income (loss)                                      $ (1,105,733)             $     43,761
                                                                ============              ============

         Net income (loss) per common share - basic             $      (0.32)             $       0.02
                                                                ============              ============

         Net income(loss) per common share - diluted            $      (0.32)             $       0.02
                                                                ============              ============

Weighted average common shares outstanding-
    basic                                                          3,466,634                 2,210,968
                                                                ============              ============

Weighted average common shares outstanding
    with dilutive securities                                       3,466,634                 2,423,880
                                                                ============              ============
</TABLE>


        See accompanying notes to the consolidated financial statements.

                                       5

<PAGE>



BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended:

<TABLE>
<CAPTION>
                                                                         June 30, 1998             June 30, 1997
                                                                         -------------             -------------
                                                                          (Unaudited)               (Unaudited)
<S>                                                                      <C>                   <C>         
Cash (used in) provided by operations:                                   $ (1,130,129)         $    121,827
                                                                         ------------          ------------

Cash flows from investing activities:

         Acquisitions of property, plant, and equipment                    (3,303,326)             (622,642)
         Proceeds from sale of property, plant & equipment                     71,000                46,093
         Acquisition of business, net of cash acquired                       (603,252)             (264,403)
                                                                         ------------          ------------
         Cash used in investing activities:                                (3,835,578)             (840,952)

Cash flows from financing activities:

         Debt issuance costs                                                 (467,521)             (190,000)
         Proceeds from bank and other borrowings                           16,816,400             2,322,500
         Principal payments on long-term debt, notes payable
             and capital lease obligations                                (14,822,861)             (225,601)
         Proceeds from issuance of common stock, net
             of offering costs                                              3,718,355

                           Cash provided  by financing
                               activities:                                  5,244,373             1,906,899
                                                                         ------------          ------------

                           Net increase in cash and
                               cash equivalents                               278,666             1,187,774
Cash and cash equivalents, beginning of period                                435,845               727,454
                                                                         ------------          ------------

Cash and cash equivalents, end of period                                      714,511             1,915,228
                                                                         ============          ============

Supplemental disclosure of  noncash investing and financing activities:
                  Notes payable incurred in connection
                    with business acquisition                            $ 19,000,000
                  Capital lease obligations incurred
                     to acquire property, plant & equipment                   111,562
</TABLE>


        See accompanying notes to the consolidated financial statements.


                                        6

<PAGE>



                  BLACK WARRIOR WIRELINE CORP. AND SUBSIDARIES
                          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  consolidated  results  of
operations  for  the  interim  period  are  not  necessarily  indicative  of the
consolidated  results to be expected  for the full year.  The  Company's  Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1997 should be read
inconjuction 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  Black  Warrior  and
Mississippi  Salt Dome Basins in Alabama and  Mississippi,  the Permian Basin in
West Texas and New Mexico, San Juan Basin in New Mexico, Colorado, and Utah, the
East  Texas  and  Austin  Chalk  Basins in East  Texas,  the  Anadarko  Basin in
Oklahoma,  the Powder River and Green River  Basins in Wyoming and Montana,  and
the Williston Basin in North Dakota.  The Company's  principal lines of business
include  (a)  wireline  services,  (b)  directional  oil and gas  well  drilling
activities, and (c) workover services.

     The Company's recent growth and increased revenues has been principally the
result of seven  acquisitions  completed  since  November  1996. On November 19,
1996, the Company  acquired the outstanding  stock of DynaJet,  Inc.,  which has
been engaged in the  wireline  business in the  Gillette,  Wyoming area for more
than  eighteen  years.  Its service area  includes the states of Wyoming,  South
Dakota,  and Montana.  On June 6, 1997, the Company completed the acquisition of
Production Well Services,  Inc. which has been engaged in the wireline  business
in  southern  Alabama and  southern  Mississippi.  On June 9, 1997,  the Company
completed  the  acquisition  of  Petro-Log,  Inc.  which has been engaged in the
wireline business in Wyoming,  Montana and South Dakota. On October 9, 1997, the
Company completed the acquisition,  effective  September 1, 1997, of Diamondback
Directional,   Inc.   ("Diamondback")   which  has  been  engaged  in  providing
directional  drilling and other oil and gas well drilling  services in the Texas
and Louisiana areas. On December 15, 1997, the Company completed the acquisition
of the assets of Cam Wireline  Services,  Inc., which provides wireline services
in the Permian Basin.

     On March 16, 1998,  the Company  acquired from Phoenix  Drilling  Services,
Inc.,  ("Phoenix")  its  domestic  oil and gas  well  directional  drilling  and
downhole survey service  business  including the related  operating assets (such
acquisition  is herein  referred to as the  "Phoenix  Acquisition").  On June 1,
1998, the Company acquired Petro Wireline which has been engaged in the wireline
business in the four corners region of New Mexico, Colorado, Utah and Arizona.

     The following table presents  unaudited pro forma  consolidated  results of
operations for the six months ended June 30, 1998 and 1997 as if the acquisition
above


                                       7

<PAGE>



had occurred at the  beginning of the period  presented.  The pro forma  summary
information does not necessarily reflect the consolidated  results of operations
as  they  actually  would  have  been if the  acquisition  had  occurred  at the
beginning of the periods presented.

                                             Six Months Ended  Six Months Ended
                                               June 30, 1998     June 30, 1997
                                               -------------     -------------
                                                (Unaudited)       (Unaudited)

Revenues                                       $ 23,893,839      $ 27,543,462
Loss before income tax                         $ (1,914,211)     $    (33,918)
Net income                                     $ (1,336,948)     $    (21,368)

Net loss per common share - basic              $      (0.35)     $      (0.01)

Net loss per common share - diluted            $      (0.35)     $      (0.01)
                                               ============      ============ 



     The unaudited pro forma consolidated results include historical accounts of
the  Company and  historical  accounts of the  acquired  business  and pro forma
adjustments,  including the  amortization of the excess purchase price over fair
value of net assets  acquired,  applicable tax effects,  an increase in interest
expense,  and the increase in depreciation expense as a result of purchase price
adjustments.


                                       8

<PAGE>



2.   EARNINGS PER SHARE

The Calculation of Basic and Diluted EPS is as follows:

<TABLE>
<CAPTION>
                                               For the Three Months                        For the Three Months
                                               Ended June 30, 1998                         Ended June 30, 1997
                                               -------------------                         -------------------
                          
                             Income (loss)      Shares        Per Share     Income (loss)      Shares        Per Share
                               Numerator      Denominator       Amount        Numerator      Denominator        Amount
                             --------------- -------------- --------------- --------------- --------------- ---------------
<S>                          <C>               <C>             <C>              <C>           <C>               <C>  
       Net income(loss)       $(1,256,410)                                      $9,819
                              ============                                      ======
                          
       BASIC EPS          
                          
  Income (loss) available to   
  common shareholders         $(1,256,410)     3,874,735       $(0.32)          $9,819        $2,241,340        $0.00
                          
   EFFECT OF DILUTIVE     
       SECURITIES         
                          
     Stock warrants                                                                            233,249
                          
     Stock Options                                                                              43,764
                          
    Convertible debt      
       securities         
                          
      DILUTED EPS         
                          
  Income (loss) available to
  common shareholders     
      plus assumed           --------------- -------------- --------------- --------------- --------------- ---------------
       conversion            $(1,256,410)      3,874,735       $(0.32)          $9,819        2,518,353         $0.00
                             =============== ============== =============== =============== =============== ===============
</TABLE>               


                                       9

<PAGE>



<TABLE>
<CAPTION>
                               The Six Months                                  The Six Months
                               --------------                                  --------------
                               Ended June 30, 1998                             Ended June 30, 1997
                            
                               Income (loss)     Shares         Per Share     Income (loss)      Shares        Per Share
                                 Numerator     Denominator        Amount        Numerator      Denominator       Amount
                               -------------- --------------- --------------- --------------- --------------- --------------
<S>                            <C>              <C>              <C>             <C>            <C>               <C>  
        Net income (loss)      $(1,105,733)                                      $43,761
                               ============                                      =======
                            
        BASIC EPS           
                            
   Income (loss) available to      
   common shareholders         $(1,105,733)     3,466,634        $(0.32)         $43,761        $2,277,468        $0.02
                            
    EFFECT OF DILUTIVE      
        SECURITIES          
                            
      Stock warrants                                                                             166,820
                            
      Stock Options                                                                               46,092
                            
     Convertible debt       
        securities          
                            
       DILUTED EPS          
                            
   Income (loss) available to      
 common shareholders plus   
         assumed               -------------- --------------- --------------- --------------- --------------- --------------
        conversion             $(1,105,733)     3,466,634        $(0.32)         $43,761        2,490,380         $0.02
                               ============== =============== =============== =============== =============== ==============
</TABLE>



     Options and warrants to purchase  4,711,000 and 1,049,750  shares of common
stock at prices  ranging from $1.50 to $8.01 were  outstanding  during the three
and six months ended June 30, 1998 and 1997  respectively  but were not included
in the computation of diluted EPS because the effect would be anti-dilutive.

     Convertible debt instruments which would result in the issuance of 615,385,
625,985,  and 1,818,182 shares of common stock, if the conversion  features were
exercised,  were  outstanding  during the three months and six months ended June
30, 1998 but were not included in the computation of the diluted EPS because the
effect would be anti-dilutive. The instruments can be converted at $3.25, $4.63,
and $7.00 per share, respectively and remained outstanding at June 30, 1998.


                                       10

<PAGE>



3.   INVENTORY

     Inventory consists of tool components, subassemblies, and expendable parts.
Tools  manufactured  and  assembled  are  transferred  to  property,  plant  and
equipment  as  completed  at the total cost of  components,  subassemblies,  and
expendable parts of each tool. Components,  subassemblies,  and expendable parts
are  capitalized as inventory and expensed as tools are repaired and maintained.
At June 30,  1998  inventories  were  classified  as a  long-term  rather than a
current asset.

4.   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.  The Company deems the  allegations of the
claimant  to be  without  merit and  intends  to  vigorously  contest  the case.
Management  does not believe the ultimate  outcome of these  actions will have a
materially  adverse effect on the  consolidated financial  position,  results of
operations or cash flows of the company.

     The  Company is a  defendant  in a number of 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  consolidated
financial position, results of operations or cash flows of the Company.

     On July 9, 1998,  Southwick  Investments  Inc.  ("Southwick")  commenced  a
lawsuit  against the Company in the Superior  Court of Fulton  County,  Georgia,
based on a Professional  Services  Agreement dated March 26, 1997,  entered into
between Southwick and the Company pursuant to which Southwick was to develop and
implement a plan for raising  additional  capital and provide certain  financial
advisory services.  Southwick is seeking to be awarded damages in an unspecified
amount for breach of contract and the loss in value to Southwick of an option to
purchase  50,000 shares of the common stock of the Company at an exercise  price
of $4.00 per share,  together with court costs and attorney's  fees. The Company
intends to defend  this  action and  believes  that it has good and  meritorious
defenses. Management does not believe the ultimate outcome of these actions will
have a materially adverse effect on the consolidated financial position, results
of operations or cash flows of the company.

     At June 30, 1998, the Company was not in compliance with certain  financial
covenants  of its Loan and  Security  Agreement  dated March 16, 1998 with Fleet
Capital Corporation ("Fleet").  These covenants,  as in effect at June 30, 1998,
require  the Company to  maintain a fixed  charge  ratio of 1.6 to 1.0, a senior
interest coverage ratio of at least 2.5 to 1.0,  consolidated  adjusted tangible
net worth of not less than $15.6 million,  and a ratio of total indebtedness for
money  borrowed to tangible net worth of 2.6 to 1.0. Under the terms of the Loan
and Security Agreement,  the foregoing constitute events of default, as defined,
and at the option of Fleet,  the  obligations of the Company to Fleet may become
immediately  due and payable.  The Company has been orally advised by Fleet that
it will enter into a forbearance  agreement with respect to making the Company's
obligations  to Fleet  immediately  due and  payable,  however,  at present,  no
definitive agreement has been entered into. In the event a forbearance agreement
is not entered into and Fleet exercises its option to demand  immediate  payment
of the Company's  obligations  owing to it, an aggregate of approximately  $12.9
million as of June 30, 1998 would be  immediately  due and payable to Fleet.  If
Fleet  should seek  immediate  payment of the  obligations,  Fleet could seek to
foreclose against substantially all of the Company's assets which are collateral
for the Company's obligations to Fleet.


                                       11

<PAGE>



       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

     The  Company  intends  to  continue  to expand  its  wireline,  directional
drilling  and other  oil and gas  service  business  through  further  strategic
acquisitions  of other  companies  engaged  in such  activities.  Currently  the
Company is primarily  seeking to  consolidate  its  management of the operations
acquired  throughout 1997 and early 1998;  however,  it continues to explore and
evaluate additional  acquisitions and may seek to pursue additional  acquisition
opportunities if it believes the terms are favorable.  The Company currently has
no  definitive  agreements  to acquire any  additional  wireline or  directional
drilling companies.  There can be no assurance that the Company will acquire any
additional  wireline  or  directional   drilling  companies  or  that  any  such
acquisitions  will be  beneficial  to the  Company.  The process of  integrating
acquired  properties  into  the  Company's   operations  can  create  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 arising from the activities
of the  acquired  companies  to the extent the Company  assumes,  or an acquired
entity  becomes  liable for,  unknown or contingent  liabilities or in the event
that such  liabilities  are imposed on the Company  under  theories of successor
liability.

     To date,  the  Company  has funded  its  acquisition  activities  using the
proceeds from secured lending from banks and other  institutional  lenders,  the
private or public sale of debt and equity  securities and the cash flow from its
current  operations.  Financing obtained to date has included borrowings secured
by substantially all of the Company's assets. The Company intends to continue to
use these sources to finance any future  acquisitions.  Any such capital that is
raised will be on terms yet to be negotiated and may be on terms that dilute the
interests of current stockholders of the Company. There can be no assurance that
the Company  will raise  additional  capital when it is required to complete any
proposed  acquisitions  or that  the  Company  will  have  or be  able to  raise
sufficient capital to fund its acquisition strategy.

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 or Plan 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,  pricing in the oil and gas  services  industry  and the ability of the
Company to compete in the premium services market, the ability of the Company to
expand  through  acquisitions  and to  redeploy  its  equipment  among  regional
operations,  the  ability of the Company to  upgrade,  modernize  and expand its
equipment,  including its wireline


                                       12

<PAGE>



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,  and the  ability  of the  Company to raise
additional capital to meet its requirements and to obtain additional  financing,
its ability to successfully  implement its business strategy, and its ability to
maintain  compliance  with the covenants of its various loan documents and other
agreements  pursuant to which securities have been issued.  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 cautions readers that various risk factors described in the
Company's  Annual  Report on Form  10-KSB for the year ended  December  31, 1997
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.

RESULTS OF CONSOLIDATED OPERATIONS. THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO
THREE MONTHS ENDED JUNE 30, 1997 AND SIX MONTHS ENDED JUNE 30, 1998  COMPARED TO
SIX MONTHS ENDED JUNE 30, 1997

     The Company's  consolidated results of operations are affected primarily by
the  extent  of  utilization  and rates  paid for its  services  and  equipment.
Revenues are also affected by the success of the  Company's  efforts to increase
its  penetration of the market for its services both through the  acquisition of
other oil and natural gas well service companies and by intensified marketing of
its services.  Incremental  demand for the Company's services is affected by the
level of oil and natural gas well  drilling  activity and efforts by oil and gas
producers to improve well production and operating efficiencies. Both short-term
and long-term trends in oil and natural gas prices affect the utilization of the
Company's  services.  This effect has been offset in recent years by a number of
industry trends,  including  advances in technology that have increased drilling
success rates and efficiency and an general  upgrading in technology used on the
Company's equipment.

     Demand and  prices  for the  Company's  services  depend  upon the level of
activity in the oil and gas exploration  and production  industry in those areas
of the United  States  where the  Company  offers its  services.  This  activity
depends upon numerous  factors over which the Company has no control,  including
the level of oil and gas prices,  expectations  about future oil and gas prices,
the ability of the Organization of Petroleum Exporting Countries ("OPEC") to set
and maintain  production levels and prices, the cost of exploring for, producing
and delivering oil and gas, the price of foreign imports of oil and natural gas,
the discovery rate of new oil and gas reserves, available pipeline and other oil
and gas transportation  capacity,  worldwide weather  conditions,  international
political,  military,  regulatory and economic conditions and the ability of oil
and gas companies to raise capital.  Recently, oil and gas prices have decreased
primarily as a


                                       13

<PAGE>



result of decreased  international  demand and economic  uncertainty  in the Far
East.  These lower oil and gas prices have impacted the  Company's  revenues for
the six months  ended  June 30,  1998.  The level of  drilling  activity  in the
onshore oil and gas exploration and production industry in the United States has
been volatile and no assurance  can be given that current  levels of oil and gas
exploration  activities in the areas where the Company  offers its services will
continue or the demand for the Company's  services will  correspond to the level
of activity in the industry.  Further, any material changes in the demand for or
supply of natural  gas could  materially  impact  the  demand for the  Company's
services.  Prices for oil and gas are expected to continue to be volatile and to
affect the demand for and pricing of the Company's services.  A material decline
in oil or gas prices or  industry  activity  in the United  States  could have a
material  adverse  effect on the Company's  results of operations  and financial
condition.

     The oil and gas well service industry has been recently  characterized by a
decreased level of demand for wireline,  directional drilling,  recompletion and
other  oil and gas  well  services.  The  industry  has  been  characterized  by
substantial  fluctuations  in the  demand  for such  services  and the supply of
equipment. Recent declines in prices for oil and gas can be expected to continue
to impact the Company's revenues.  The Company's revenues in the future also can
be  expected  to be  impacted  to a  material  extent  not  only  by the  demand
throughout  the industry  but the supply of oil and gas well  service  equipment
available to perform these services.  The Company's  revenues could be adversely
affected by a substantial increase in the equipment available to other providers
of oil and gas well services to perform these services.

     The  following  table  sets  forth the  Company's  revenues  from its three
principal  lines of  business  and other  revenues  for the six months and three
months ended June 30, 1998 and 1997 respectively:

<TABLE>
<CAPTION>
                                    SIX MONTHS ENDED:                       THREE MONTHS ENDED:
                          ------------------------------------    ------------------------------------
                          JUNE 30, 1998          JUNE 30, 1997    JUNE 30, 1998          JUNE 30, 1997
                          -------------          -------------    -------------          -------------
<S>                        <C>                   <C>               <C>                   <C>         

Wireline Services          $ 5,245,920           $ 3,733,679       $ 2,372,089           $ 2,058,158

Directional Drilling        13,747,121                   -0-         7,426,524                   -0-

Workover
and Completion                 781,970               774,758           353,739               378,883

Other                          138,442               144,632            95,078                51,010

                           -----------           -----------       -----------           -----------
                           $19,913,453           $ 4,653,069       $10,247,430           $ 2,488,051
                           ===========           ===========       ===========           ===========
</TABLE>


                                       14

<PAGE>



     The Company had a net loss of $1.3  million for the three months ended June
30,  1998,  as  compared  to net income of  approximately  $10,000 in 1997.  The
Company had a net loss of $1.1  million for the six months  ended June 30, 1998,
as compared to income of approximately $44,000 in 1997.

     Revenues  increased by $7.7  million to $10.2  million for the three months
ended June 30, 1998 as compared to revenues of $2.5 million for the three months
ended June 30, 1997. Of such increase, approximately $8.8 million was the result
of acquisitions  completed during 1997 and the first and second quarters of 1998
with  an   approximately   $1.1  million  decrease  in  revenues  from  existing
operations.  Revenues from existing  operations declined due to a reduced demand
for the  Company's  services.  This decline was  primarily  caused by the recent
decline in oil and gas  prices.  Of the overall  increase  in wireline  services
revenues,  $1.4 million was the result of the  acquisition  of Petro-Log,  Inc.,
Production Well Services,  and CAM Wireline Services,  Inc., with a $1.1 million
decrease in the  Company's  other  operations.  The  remaining  increase of $7.4
million was attributable to directional  drilling revenues  resulting  primarily
from the  Diamondback  and Phoenix  acquisitions.  Revenues  from  workover  and
completion  activities decreased  approximately  $25,000 during the three months
ended June 30, 1998 as compared to the same period in 1997.  This is a result of
decreased activity in workover services in the Alabama and Mississippi area.

     Revenues  increased  by $15.2  million to $19.9  million for the six months
ended June 30, 1998 as  compared to revenues of $4.7  million for the six months
ended June 30,  1997.  Of such  increase,  approximately  $15.8  million was the
result of acquisitions  completed  during 1997 and the first and second quarters
of 1998 with an  approximately  $0.5 million  decrease in revenues from existing
operations.  Revenues from existing  operations declined due to a reduced demand
for the  Company's  services.  This decline was  primarily  caused by the recent
decline in oil and gas  prices.  Of the overall  increase  in wireline  services
revenues,  $2.0 million was the result of the  acquisition  of Petro-Log,  Inc.,
Production Well Services,  and CAM Wireline Services,  Inc., with a $0.5 million
decrease in the Company's  other  operations.  The  remaining  increase of $13.7
million was attributable to directional  drilling revenues  resulting  primarily
from the  Diamondback  and Phoenix  acquisitions.  Revenues  from  workover  and
completion activities increased approximately $7,000 during the six months ended
June 30, 1998 as compared to the same period in 1997.

     Operating  costs  increased by $6.8 million for the three months ended June
30,  1998,  as compared to 1997.  Operating  costs were  approximately  82.9% of
revenues in 1998 as compared  with 66.4% of  revenues in 1997.  Operating  costs
increased by $12.6  million for the six months ended June 30, 1998,  as compared
to  1997.  Operating  costs  were  approximately  79.1% of  revenues  in 1998 as
compared with 67.6% of revenues in 1997.  This increase was due primarily to the
increase  in  the  level  of  activities  primarily  as  a  consequence  of  the
acquisitions  completed in 1997 and the first  quarter in 1998.  The increase in
operating costs as a percentage of revenues is a result of competitive pressures
on the prices the Company  charges for its  services and costs  associated  with
integrating


                                       15

<PAGE>



its various  acquisitions.  Salaries and benefits  increased by $4.3 million for
the three  months  ended June 30,  1998,  as compared  to 1997,  while the total
number of employees increased from 146 at June 30, 1997 to 323 at June 30, 1998.
Salaries  and  benefits  increased by $6.6 million for the six months ended June
30,  1998,  as compared  to 1997.  This was due to salary  increases,  hiring of
additional  personnel,  and  employees  hired in  conjunction  with the  Phoenix
Acquisition.

     Selling,  general and  administrative  expenses  increased by approximately
$1.4  million  from $0.5 million in the three months ended June 30, 1997 to $1.9
in the three months ended June 30, 1998. As a percentage  of revenues,  selling,
general and  administrative  expenses  declined  from 19.2% in the three  months
ended  June  30,  1997 to  18.7% in 1998,  primarily  as a result  of  increased
revenues  due to  acquisitions  completed  without  a  significant  increase  in
executive and  administrative  personnel.  Selling,  general and  administrative
expenses increased by approximately  $1.9 million from $.9 million,  or 19.7% of
revenues in the six months ended June 30,  1997,  to $2.8  million,  or 13.9% of
revenues, in the six months ended June 30, 1998.

     Depreciation  and  amortization  increased  from $0.3  million in the three
months ended June 30, 1997, or 10.7% of revenues, to $1.2 million in 1998, 12.1%
of  revenues,  primarily  because  of  the  higher  asset  base  of  depreciable
properties  in the three months ended June 30, 1998 over the same period in 1997
and higher goodwill  amortization.  Depreciation and amortization increased from
$0.5 million in the six months ended June 30, 1997, or 9.9% of revenues, to $2.1
million in 1998, or 10.3% of revenues.

     Interest  expense and  amortization of debt discount  increased by $0.6 for
the three  months ended June 30, 1998 as compared to the same period in 1997 and
increased  by $1.0 million for the six months ended June 30, 1998 as compared to
the same period in 1997. This was directly  related to the increased  amounts of
indebtedness  outstanding in 1998 incurred to finance acquisitions.  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, 1997.

     Net loss on sale of fixed  assets  was  approximately  $1,000 for the three
months  ended  June 30,  1998 as  compared  to a net gain of  $4,000 in the same
period in 1997,  net gain of  approximately  $4,000.  Other income  increased by
approximately $7,000 in three months ended June 30, 1998 as compared to the same
period in 1997.

     Income tax benefit totaled  approximately $0.8 million for the three months
ended June 30,  1998 and $0.6  million for the six months  ended June 30,  1998.
These  totals  contain  Federal  and  State  deferred  taxes as well as  current
amounts.


                                       16

<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

     At June 30, 1998, the Company was not in compliance with certain  financial
covenants  of its Loan and  Security  Agreement  dated March 16, 1998 with Fleet
Capital Corporation ("Fleet").  These covenants,  as in effect at June 30, 1998,
require  the Company to  maintain a fixed  charge  ratio of 1.6 to 1.0, a senior
interest coverage ratio of at least 2.5 to 1.0,  consolidated  adjusted tangible
net worth of not less than $15.6 million,  and a ratio of total indebtedness for
money  borrowed to tangible net worth of 2.6 to 1.0. Under the terms of the Loan
and Security Agreement,  the foregoing constitute events of default, as defined,
and at the option of Fleet,  the  obligations of the Company to Fleet may become
immediately  due and payable.  The Company has been orally advised by Fleet that
it will enter into a forbearance  agreement with respect to making the Company's
obligations  to Fleet  immediately  due and  payable,  however,  at present,  no
definitive agreement has been entered into. In the event a forbearance agreement
is not entered into and Fleet exercises its option to demand  immediate  payment
of the Company's  obligations  owing to it, an aggregate of approximately  $12.9
million as of June 30, 1998 would be  immediately  due and payable to Fleet.  If
Fleet  should seek  immediate  payment of the  obligations,  Fleet could seek to
foreclose against substantially all of the Company's assets which are collateral
for the Company's obligations to Fleet.

     Management  expectd to be able to enter into a forebearance  agreement with
Fleet.  It also expects that it will  restructure or refinance its  indebtedness
with Fleet.  However,  there are no agreements or understandings with respect to
any such  restructuring  or refinancing , and the Company is unable to state the
terms on which such  restructuring or refinancing  would be undertaken and there
can be no assurance that it will be successful with respect thereto.

     Cash used by Company  operating  activities  was $1.1  million  for the six
months ended June 30, 1998 as compared to cash  provided of $0.1 million for the
sames period in 1997.  Investing activities used cash of $3.8 million during the
six months  ended  June 30,  1998 for the  acquisition  of  property,  plant and
equipment and other  businesses,  net of cash acquired,  offset by proceeds from
the sale of fixed assets of $71  thousand.  During the six months ended June 30,
1997,  investing  activities  used cash of $0.8 million for the  acquisition  of
property, plant and equipment and other businesses, net of cash acquired, offset
by proceeds of  approximately  $46,000 from the sale of fixed assets.  Financing
activities provided cash of $5.2 million from the net proceeds from the issuance
of common  stock of $3.7 million and $16.8  million from the proceeds  from bank
and other  borrowings  during  the six  months  ended  June 30,  1998  offset by
principal payments on bank and other borrowings and capital lease obligations of
$14.8  million and $0.5 million of costs related to debt  issuances.  During the
six months ended June 30, 1997 principal  payments on bank and other  borrowings
and capital lease obligations totaled $0.3 million

     Cash at June 30, 1998 was $0.7  million as  compared  with cash at June 30,
1997 of $1.9 million.

     The Company's recent growth and increased revenues has been principally the
result of the completion of seven  acquisitions  since November 1996. See Note 1
to Notes to Financial Statements.

     Under the terms of its  agreement to acquire  Diamondback,  the Company has
satisfied  its capital  expenditures  obligations  by  expending  $4 million for
capital  improvements  during the last  quarter of 1997 and the six months ended
June 30, 1998.

     During the twelve  months ending June 30, 1999 and the twelve months ending
June 30,  2000,  the Company is  obligated  to make  repayments  of principal on
outstanding  indebtedness  of $2.5  million and $21  million,  respectively.  In
addition,  interest  payments  during  those  periods  on all  of the  Company's
outstanding  indebtedness  will amount to  approximately  $2.9  million and $1.7
million,  respectively.  The Company intends to make these payments of principal
and interest and to satisfy the excess of its current  liabilities  over current
assets out of its cash flow from  operations,  the  proceeds  from the  possible
private  or  public  sale of debt or  equity  securities,  other  borrowings  or
refinancings  of  borrowings.  The  foregoing  does  not  include  repayment  of
principal under the Company's  revolving loan facility with Fleet.  The forgoing
also assumes Fleet will continue to enter into such  forebearance  agreements as
the Company may require,  if any, in  connection  with any breaches of the Fleet
loan  agreements  that may  occur in the  future  and that the  Company  will be
successful in restructuring or refinancing such indebtedness.  On March 15, 2001
the revolving loan expires and the outstanding principal is due. The Company has
made no arrangements  to raise  additional  capital  facility for the purpose of
making these payments of principal and interest and is unable to state the terms
on which such capital could be raised.  However,  there can be no assurance that
such  capital  may be raised on terms that do not dilute  the  interests  of the
Company's present stockholders.  At June 30, 1998, inventories were reclassified
on the Company's balance sheet as a long-term rather than a current asset.

     On  June 1,  1998,  the  Company  completed  the  Petro  Wireline  Services
Acquisition.  The purchase price for the Petro Wireline Services Acquisition was


                                       17

<PAGE>



approximately  $943,632.  Financing  for  the  transaction,  in  the  amount  of
$525,000,  was obtained  under the Company's  Loan and Security  Agreement  with
Fleet Capital Corp.  The balance of the purchase  price was paid by the issuance
of a three-year  promissory note, in the amount of $350,000,  with interest at a
rate of one and one/half  percent above the prime rate of Fleet  Capital  Corp.,
payable in three equal annual  installments  with all accrued interest  thereon.
The Note is secured by a second lien on all the assets acquired,  other than the
inventory  and other  expendables.  The Note and  security for the note shall be
subordinated  to the first lien of Fleet  Capital  Corp.  The  Company  has also
agreed  to pay the  sellers  $68,632  to be paid in six  equal  installments  of
$11,438.68  bearing  interest  on the  outstanding  balance  at a rate of 9% per
annum.  Petro Wireline  Services provides wireline and other services to oil and
gas  operators  in the four  corners  region of New Mexico,  Colorado,  Utah and
Arizona.

     On March 16,  1998,  the Company  completed  the  acquisition  from Phoenix
Drilling Services, Inc. ("Phoenix") of its domestic oil and gas well directional
drilling  and  domestic  survey  business.  The  purchase  price for the Phoenix
Acquisition was approximately  $19.0 million.  Financing for the transaction was
obtained through the sale of convertible notes and warrants to St. James Capital
Partners,  L.P. ("St. James") for $10.0 million.  An additional $9.0 million was
borrowed  under the  Company's  Loan and Security  Agreement  with Fleet Capital
Corp.,  and $3.3 million raised from the sale in a private  placement of 596,000
shares of Common  Stock at a price of $5.50 per  share.  See "Item 11.  Security
Ownership of Certain  Beneficial  Owners and  Management"  and "Item 12. Certain
Relationships  and Related  Transactions" in the Company's Annual Report of Form
10-KSB for the fiscal year ended  December 31, 1997.  See the Company's  Current
Report filed March 16, 1998 for a description of the Company's Loan and Security
Agreement with Fleet Capital Corp.

     The Company has no definitive agreements to acquire any additional wireline
companies.  However, there can be no assurance that the Company will not acquire
additional  wireline companies 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 arising from the activities of the
acquired  companies  to the extent the Company  assumes,  or an acquired  entity
becomes liable for, unknown or contingent  liabilities or in the event that such
liabilities are imposed on the Company under theories of successor liability.

     The  Company  intends  to fund it's  acquisitions  using cash flow from its
current  operations as well as the possible  proceeds from secured  lending from
banks or other institutional  lenders and the private or public sale of debt and
equity  securities.  Any such  capital that is raised will be on terms yet to be
negotiated and may be on terms that dilute the interests of current stockholders
of the Company.  Subject to the restrictions contained in the Company's existing
loan agreement with Fleet Capital Corp., loans may


                                       18

<PAGE>



be collateralized by all or a substantial portion of the Company's assets. There
can be no assurance  that the Company will raise  additional  capital when it is
required or that the Company will have or be able to raise sufficient capital to
fund its acquisition strategy.

YEAR 2000 COMPUTER ISSUES

     The Company  has  reviewed  its  computer  systems  and  hardware to locate
potential  operational  problems  associated with the year 2000.  These computer
systems include those utilized for financial recordkeeping and on certain of its
oil and gas service  equipment.  Such review will  continue  until all potential
problems are located and resolved. However, on the basis of its review conducted
to the present  time,  the Company  believes  that all year 2000 problems in its
computer  systems have been or will be resolved in a timely  manner and have not
caused  and will not  cause  disruption  of its  operations  or have a  material
adverse  effect on its  financial  condition  or  results of  operations.  It is
possible that the Company's financial position,  results of operations,  or cash
flows could be disrupted by year 2000 problems experienced by its suppliers, the
oil  and  gas  production   companies  that  utilize  its  services,   financial
institutions or other persons.  The Company is unable to quantify the effect, if
any,  of year 2000  computer  problems  that may be  experienced  by these third
parties.

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, 1998.

RECENTLY ISSUED ACCOUNTING STANDARDS

     In February 1998, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial Accounting Standards No.132,  "Employers Disclosure about
Pension  and Other Post  Retirement  Benefits".  SFAS No. 132  provided  for new
disclosure   requirements  about  pension  and  other   postretirement   benefit
obligations.  This  standard  will be  implemented  in fiscal year 1998. In June
1998, the FASB issued No.133, "Accounting for Derivative Instruments and Hedging
Activities".  SFAS No. 133  specifies  accounting  foe  derivative  and  hedging
activities  and will be effective for fiscal year 2000.  The  implementation  of
there  standards is not  anticipated to have a material  impact on the Company's
financial position, results of operations or cash flows.


                                       19

<PAGE>



PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     On July 9, 1998,  Southwick  Investments  Inc.  ("Southwick")  commenced  a
lawsuit  against the Company in the Superior  Court of Fulton  County,  Georgia,
based on a Professional  Services  Agreement dated March 26, 1997,  entered into
between Southwick and the Company pursuant to which Southwick was to develop and
implement a plan for raising  additional  capital and provide certain  financial
advisory services.  Southwick is seeking to be awarded damages in an unspecified
amount for breach of contract and the loss in value to Southwick of an option to
purchase  50,000 shares of the common stock of the Company at an exercise  price
of $4.00 per share,  together with court costs and attorney's  fees. The Company
intends to defend  this  action and  believes  that it has good and  meritorious
defenses.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     In April  1998,  the  Company  sold  176,364  shares of  Common  Stock at a
purchase  price of $5.50 per share.  The  securities  were sold in a transaction
exempt from the  registration  requirements  of the  Securities  Act of 1933, as
amended,  in reliance on Regulation D,  thereunder.  All of the purchasers  were
accredited  investors as defined under Regulation D. Balis,  Lewittes & Coleman,
Inc., a registered broker dealer,  acted as agent for the Company and received a
commission  of $67,900.  The net proceeds of $902,100 were used to fund expenses
and related fees of the Phoenix Acquisition.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     At June 30, 1998, the Company was not in compliance with certain  financial
covenants  of its Loan and  Security  Agreement  dated March 16, 1998 with Fleet
Capital Corporation ("Fleet").  These covenants,  as in effect at June 30, 1998,
require  the Company to  maintain a fixed  charge  ratio of 1.6 to 1.0, a senior
interest coverage ratio of at least 2.5 to 1.0,  consolidated  adjusted tangible
net worth of not less than $15.6 million,  and a ratio of total indebtedness for
money  borrowed to tangible net worth of 2.6 to 1.0. Under the terms of the Loan
and Security Agreement,  the foregoing constitute events of default, as defined,
and at the option of Fleet,  the  obligations of the Company to Fleet may become
immediately  due and payable.  The Company has been orally advised by Fleet that
it will enter into a forbearance  agreement with respect to making the Company's
obligations  to Fleet  immediately  due and  payable,  however,  at present,  no
definitive agreement has been entered into. In the event a forbearance agreement
is not entered into and Fleet exercises its option to demand  immediate  payment
of the Company's  obligations  owing to it, an aggregate of approximately  $12.9
million as of June 30, 1998 would be  immediately  due and payable to Fleet.  If
Fleet  should seek  immediate  payment of the  obligations,  Fleet could seek to
foreclose against substantially all of the Company's assets which are collateral
for the Company's obligations to Fleet.


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/A on May 29, 1998.



<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 18,  1998                     /s/  William L. Jenkins
                                           -------------------------------------
                                                      William L. Jenkins
                                           President and Chief Operating Officer
                                           (Principal Executive, Financial and
                                           Accounting Officer)





                                       21