SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

     (Mark One)
         X Quarterly  Report  pursuant to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934 for the quarterly period ended March 31, 2000; or
         __ Transition  report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the transition period from _______ to ______.

                         Commission File Number 0-18754


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


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

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

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


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the proceeding 12 months (or for such shorter period that the issuer
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

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


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         As of May 15, 2000,  7,478,927 shares of the Registrant's Common Stock,
$.0005 par value, were outstanding.

<PAGE>

                          BLACK WARRIOR WIRELINE COPR.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
                                                                                       Page
                                                                                       ----
<S>                                                                                    <C>
Item 1.           Financial Statements

                  Condensed Balance Sheets - March 31, 2000
                  and  December 31, 1999                                                3

                  Condensed Statements of Operations -
                  Three Months Ended March 31, 2000 and
                  March 31, 1999                                                        4

                  Condensed Statements of Cash Flows -
                  Three Months Ended March 31, 2000 and
                  March 31, 1999                                                        5

                  Notes to Condensed Financial Statements -
                  Three Months Ended March 31, 2000 and
                  March 31, 1999                                                        6


Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                        11

PART II - OTHER INFORMATION


Item 2.           Changes in Securities and Use of Proceeds                             15

Item 6.           Exhibits and Reports on Form 8-K                                      16
</TABLE>


                                       2
<PAGE>

PART I - FINANCIAL INFORMATION
         ITEM 1.  FINANCIAL STATEMENTS

BLACK WARRIOR WIRELINE CORP.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                    MARCH 31, 2000   DECEMBER 31, 1999
                              ASSETS                                  (UNAUDITED)
<S>                                                        <C>                    <C>
Current assets:
    Cash and cash equivalents                                      $        35,600    $     2,425,808
    Short-term investments                                                  50,000             50,000
    Accounts receivable, less allowance for doubtful
        accounts of $ 982,281  and $ 1,006,068, respectively             5,541,398          4,971,251
    Prepaid expenses                                                       339,373            175,268
    Other receivables                                                      148,392            146,392
    Other current assets                                                   571,814            526,884
                                                                   ---------------    ---------------
                      Total current assets                               6,686,577          8,295,603
Land and building, held for sale                                           400,000            400,000
Inventories                                                              4,544,407          4,285,206
Property, plant, and equipment, less accumulated
    depreciation of $ 14,999,294 and $ 13,810,841                       19,407,304         19,457,361
Other assets                                                             1,392,758            604,649
Goodwill, less accumulated amortization of $ 385,505
  and $ 361,714, respectively                                            3,265,374          3,289,165
                                                                   ---------------    ---------------
                      Total assets                                 $    35,696,420    $    36,331,984
                                                                   ===============    ===============

                 LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
    Accounts payable                                               $     2,700,408    $     6,936,572
    Accrued salaries and vacation                                          350,014            249,296
    Accrued interest payable                                               260,803          3,027,901
    Other accrued expenses                                               1,018,172            777,598
    Deferred revenue                                                       100,000            100,000
    Current maturities of notes payable to banks
    Notes payable to related parties                                     1,282,890          3,041,234
    Current maturities of long-term debt and capital
         lease obligations                                              13,189,776          8,391,346
                                                                   ---------------    ---------------
                      Total current liabilities                         18,902,063         22,523,947

Accrued interest payable                                                 3,395,727
Notes Payable to related parties                                        22,636,525         21,412,356
Long-term debt and capital lease obligations, less
     Current maturities                                                  7,805,872         10,542,555
                                                                   ---------------    ---------------
                      Total liabilities                                 52,740,187         54,478,858

Stockholders' deficit:
     Preferred stock, $.0005 par value, 2,500,000 shares
       authorized none issued at March 31, 2000 and
       December 31, 1999, respectively
     Common stock, $.0005 par value, 12,500,000 shares
       authorized; 7,478,927 and 4,812,260 shares issued
       and outstanding at March 31, 2000 and December 31,
       1999, respectively                                                    3,739              2,406
     Additional paid-in capital                                         15,758,248         13,316,081
     Accumulated deficit                                               (32,222,361)       (30,881,968)
    Treasury stock, at cost, 4,620 shares                                 (583,393)          (583,393)
                                                                   ---------------    ---------------
    Total stockholders' (deficit)                                      (17,043,767)       (18,146,874)
                                                                   ---------------    ---------------
                      Total liabilities and
                        stockholders' deficit                      $    35,696,420    $    36,331,984
                                                                   ===============    ===============
</TABLE>

          See accompanying notes to the condensed financial statements.



                                       3
<PAGE>

BLACK WARRIOR WIRELINE CORP.
CONDENSED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2000 and March 31, 1999

<TABLE>
<CAPTION>
                                                           March 31, 2000            March 31, 1999
                                                            (Unaudited)                (Unaudited)
<S>                                                        <C>                       <C>
Revenues                                                    $ 8,276,366               $ 6,072,282

Operating costs                                               6,733,912                 5,554,290

Selling, general and administrative expenses                  1,509,212                   830,002

Depreciation and amortization                                 1,299,337                 1,323,357
                                                              ---------             -------------

       Net Loss  from operations                             (1,266,095)               (1,635,367)

Interest expense and amortization of debt discount             (996,040)                 (844,340)

Net Loss on sale of fixed assets                                     -0-                   (9,000)

Other income                                                     21,806                    20,761
                                                                -------                   -------

       Loss before extraordinary gain                        (2,240,329)               (2,467,946)

Extraordinary gain on extinguishments of debt,
   Net of income taxes of $0                                    899,936                        -0-
                                                                -------                        ---

       Net Loss                                            $ (1,340,393)             $ (2,467,946)
                                                           =============             =============

       Net Loss per common share- basic                          $(0.19)                   $(0.63)
                                                                 =======                   =======

       Net Loss per common share- diluted                        $(0.19)                   $(0.63)
                                                                 =======                   =======


Weighted average common shares outstanding                    7,151,963                 3,914,109
                                                              =========                 =========

Weighted average common shares outstanding
    with dilutive securities                                  7,151,963                 3,914,109
                                                              =========                 =========
</TABLE>

          See accompanying notes to the condensed financial statements.


                                       4
<PAGE>

BLACK WARRIOR WIRELINE CORP.
CONDENSED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2000 and March 31, 1999

<TABLE>
<CAPTION>
                                                             March 31, 2000           March 31, 1999
                                                               (Unaudited)              (Unaudited)
<S>                                                           <C>                       <C>
Cash used in operations:                                       $ (3,800,802)             $ (1,413,212)

Cash flows from investing activities:
     Acquisitions of property, plant, and equipment                (793,193)                 (223,605)
     Proceeds from sale of property, plant and equipment             26,000
     Acquisition of business, net of cash acquired                 (362,705)                      -0-
                                                               ------------              ------------
Cash used in investing activities:                               (1,155,898)                 (197,605)

Cash flows from financing activities:
     Debt issuance costs                                         (1,050,205)                  (37,868)
     Proceeds from bank and other borrowings                     20,733,733                 2,500,000
     Principal payments on long-term debt, notes payable
         and capital lease obligations                          (17,117,036)                 (394,209)
     Net payments on working revolver                                   -0-                (1,129,134)
                                                               ------------              ------------

Cash provided  by financing activities:                           2,566,492                   938,789

Net decrease in cash and cash equivalents                        (2,390,208)                 (672,028)
Cash and cash equivalents, beginning of period                    2,425,808                 1,041,242
                                                               ------------              ------------

Cash and cash equivalents, end of period                       $     35,600              $    369,214
                                                               ============              ============

Supplemental disclosure of cash flow information:

       Interest paid                                           $    313,036              $    498,862
       Income taxes paid                                       $          0              $          0

Supplemental disclosure of  noncash investing
  and financing activities:
     Stock issued to related party as consideration for
           Promissory note (Note 1)                            $  2,000,000
     Notes payable and capital lease obligations incurred
           to acquire property, plant & equipment              $     78,501
     Stock warrants issued in conjunction with notes payable
           to related party                                    $    143,500              $     20,750
     Stock issued as consideration for option to purchase
           Company                                             $     65,000
    Note Payable released by related party                     $    300,000
</TABLE>


          See accompanying notes to the condensed financial statements.


                                       5
<PAGE>

                          BLACK WARRIOR WIRELINE CORP.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

1.       GENERAL

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

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

RECENT RECAPITALIZATION

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


                                       6
<PAGE>

purchase  28.7 million  shares of Common Stock.  All of the Company's  remaining
indebtedness is subordinated to the indebtedness owing to Coast.

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

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


2.       EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                                              For the Three Months                          For the Three Months
                                              Ended March 31, 2000                          Ended March 31, 1999
                                --------------------------------------------     ---------------------------------------------
<S>                             <C>                  <C>            <C>          <C>              <C>           <C>
                                     Loss            Shares         Per Share       Income         Shares        Per Share
                                   Numerator       Denominator       Amount        Numerator     Denominator      Amount
                                ----------------------------------------------------------------------------------------------
Net income (loss)               $ (1,340,393)                                     $(2,467,946)
                                =============                                     ============
BASIC EPS
Income (loss) available
    to common
    shareholders                $(1,340,393)         7,151,963       $(0.19)      $(2,467,946)         3,914,109       $(0.63)
                                ----------------------------------------------------------------------------------------------
EFFECT OF DILUTIVE SECURITIES
Stock warrants
Stock options
Convertible debt securities

DILUTED EPS
Income (loss) available
    to common
    shareholders                $(1,340,393)         7,151,963       $(0.19)      $(2,467,946)         3,914,109       $(0.63)
                               -----------------------------------------------------------------------------------------------
</TABLE>

         Options and warrants to purchase  63,531,394 and  19,539,747  shares of
common stock at prices ranging from $0.75 to $8.01 in 2000 and $1.50 to $8.01 in
1999 were  outstanding  during the three  months  ended March 31, 2000 and 1999,
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
35,200,000 and  12,933,333  shares of common stock,  if the conversion  features
were exercised,  were  outstanding  during the three months ended March 31, 2000
and 1999, respectively,  but were not included in the computation of the diluted
EPS because the effect would be  anti-dilutive.  The  conversion  price of these
instruments is $0.75 per share and remained outstanding at March 31, 2000.



                                       7
<PAGE>

3.       INVENTORIES

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

4.       COMMITMENTS AND CONTINGENCIES

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

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


5.     SEGMENT AND RELATED INFORMATION

         At March 31,  2000,  the  Company is  organized  into,  and manages its
business based on the performance  of, five business  units.  The business units
have separate management teams and infrastructures  that offer different oil and
gas well services. The business units have been aggregated into three reportable
segments: wireline,  directional drilling, and workover and completion since the
long-term  financial  performance  of these  reportable  segments is affected by
similar economic conditions.

       WIRELINE - This  segment  consists  of two  business  units that  perform
various  procedures  to evaluate  and modify  downhole  conditions  at different
stages of the process of drilling  and  completing  oil and gas wells as well as
various times thereafter until the well is depleted and abandoned.  This segment
engages in onshore  and  offshore  servicing,  as well as other oil and gas well
service  activities  including  renting and repairing  equipment.  The principal
markets for this segment include all major oil and gas producing  regions of the
United States.  Major customers of this segment for the quarter ending March 31,
2000 included Burlington Resources, Collins & Ware, Inc., Denbury Management and
Chevron USA.

       DIRECTIONAL  DRILLING - This segment  consists of two business units. One
unit performs  procedures to enter  hydrocarbon  producing  zone  directionally,
using  specialized  drilling  equipment,  and  expand the area of  interface  of
hydrocarbons and thereby greatly enhancing  recoverability . The second business
unit engages in oil and gas well downhole  surveying  activities.  The principal
markets for this segment include all major oil and gas producing  regions of the
United States.  Major


                                       8
<PAGE>

customers of this segment for the quarter  ending March 31, 2000 included  Swift
Energy, Clayton Williams, Collins & Ware, Inc. and Tom Brown, Inc.

       WORKOVER AND COMPLETION - This segment  consists of a business unit which
provides  services  performed  on wells when  originally  completed  or on wells
previously  placed in  production  and requiring  additional  work to restore or
increase production.  The principal market for this segment is the Black Warrior
Basin of Alabama. The major customer of this segment for the quarter ended March
31, 2000 was Energen Corporation.

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


<TABLE>
<CAPTION>
                                                                           WORKOVER
                                                      DIRECTIONAL             AND
       2000                         WIRELINE            DRILLING           COMPLETION                TOTAL
                                 --------------------------------------------------------------------------
<S>                              <C>                 <C>                   <C>              <C>
Segment revenues                 $   4,353,486       $   3,626,146         $ 296,734        $   8,276,366
Segment EBITDA                   $     439,650       $     186,915         $  25,876        $     652,441

<CAPTION>
                                                                           WORKOVER
                                                      DIRECTIONAL             AND
       1999                         WIRELINE            DRILLING           COMPLETION                TOTAL
                                 --------------------------------------------------------------------------
<S>                              <C>                 <C>                   <C>              <C>
Segment revenues                 $  3,554,374        $  2,191,878          $ 326,030        $  6,072,282
Segment EBITDA                         83,783             (35,052)            51,297             100,028
</TABLE>


The  Company has  certain  expenses  that are not  allocated  to the  individual
operating  segments.  A  reconciliation  of total  segment  EBITDA  to loss from
operations  for the three  months  ended March 31, 2000 and 1999 is presented as
follows:


<TABLE>
<CAPTION>
EBITDA                                           2000                 1999
<S>                                       <C>                   <C>
Total segment EBITDA                       $      652,441        $     100,028
Depreciation and amortization                  (1,299,337)          (1,323,357)
Unallocated corporate expense                    (619,199)            (412,038)
                                          ----------------    -----------------

     Income (loss) from operations          $  (1,266,095)        $ (1,635,367)
                                           ===============      ==============
</TABLE>


6.             RELATED PARTY TRANSACTIONS

         The Company  opened a wireline  facility in South Texas in January 1999
primarily to service a customer who has some common  ownership with the Company.
During the three  months  ended March 31,  2000,  this  customer  accounted  for
approximately 6.25% of total revenues.

         On June 17,  1999,  the Company  sold  approximately  $329,000 of trade
accounts  receivable,  which was fully  reserved due to the  customer  declaring
bankruptcy,  to RJ Air, LLC, an entity


                                       9
<PAGE>

affiliated with a member of the Company's Board of Directors,  for $200,000.  As
of March 31, 2000, the Company has collected  $100,000 of the sale price and the
remaining $100,000 is included in deferred revenue on the balance sheet.

7.       ISSUANCE OF COMMON STOCK

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

         As of March  31,  2000,  the  Company's  certificate  of  incorporation
permits it to issue up to 12,500,000  shares of common stock of which  7,478,927
shares were issued and  outstanding.  The Company has  outstanding  at March 31,
2000 common stock purchase  warrants,  options and  convertible  debt securities
entitled to purchase or to be converted into an aggregate  98,731,393  shares of
the Company's common stock at exercise and conversion  prices ranging from $0.75
to $8.01.  Accordingly,  the  Company  has an  insufficient  number of shares of
common stock  authorized for issuance in the event all its outstanding  warrants
and options were exercised and convertible securities were converted.

         The  note  purchase  agreements  entered  into in  connection  with the
private sale of $7.0 million of the Company's  notes during the period  December
1999 through  February  2000  contain a covenant  whereby the Company has agreed
that at or before the  Company's  next annual  meeting of  stockholders  it will
secure an amendment to its Certificate of  Incorporation  to increase the number
of shares that it is authorized to issue to a number sufficient to authorize the
issuance of its  currently  outstanding  shares and all shares that are issuable
upon the conversion of all its outstanding  convertible notes and securities and
upon the exercise of any warrants or options to purchase  the  Company's  Common
Stock.  Accordingly,  the failure of the  stockholders of the Company to approve
the  proposal  to increase  the number of shares of Common  Stock the Company is
authorized  to issue  will be a breach of a  covenant  under  the note  purchase
agreements  and a default  under the notes.  The  default  under the notes could
result, at the option of the holders, in the notes becoming  immediately due and
payable  and  would  also  lead,  under  the  cross  default  provisions  of the
instruments under which such  indebtedness was incurred,  to a default under all
the Company's other outstanding  indebtedness  aggregating $37.9 million.  Under
such  circumstances,  the holders of such  indebtedness,  including  Coast which
holds $17.2 of  indebtedness  secured by a senior lien on the Company's  assets,
could foreclose on substantially all of the Company's assets.


8.       EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT

         During the first quarter of 2000, the Company executed  agreements with
certain of its  vendors to discount  the  outstanding  obligations  due to these
vendors.  The agreements provided for a decrease in the outstanding  obligations
of $899,936.  Accordingly,  the Company has recognized an extraordinary  gain on
extinguishments  of debt of $899,936,  net of income taxes of $0. An  additional
$300,000  of  related  party  debt was waived and  recorded  as an  increase  in
additional paid in capital.


                                       10
<PAGE>

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

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

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


RESULTS OF  OPERATIONS.  THREE  MONTHS  ENDED MARCH 31,  2000  COMPARED TO THREE
MONTHS ENDED MARCH 31, 1999

         The following  table sets forth the  Company's  revenues from its three
principal  lines of business  for the three months ended March 31, 2000 and 1999
respectively:

<TABLE>
<CAPTION>
                                                                         Three Months Ended
                                                          ------------------------------------------
                                                                    3/31/00              03/31/99
-----------------------------------------------------------------------------------------------------
<S>                                                              <C>                   <C>
Wireline                                                         $ 4,353,486           $ 3,554,374
Directional Drilling                                               3,626,146             2,191,878
Workover and Completion                                              296,734               326,030
                                                          ------------------------------------------
                                                                 $ 8,276,366           $ 6,072,282
</TABLE>


                                       11
<PAGE>

         Total revenues increased by approximately $2.2 million to approximately
$8.3  million  for the three  months  ended  March 31, 2000 as compared to total
revenues of  approximately  $6.1  million for the three  months  ended March 31,
1999. The increase in directional  drilling revenues was the result of increased
demand for the Company's  services and upward  pressure on pricing that began in
the latter half of 1999. The Company's  wireline  revenues also were affected by
increases in demand and commodity pricing.

         Operating costs increased by  approximately  $1.2 million for the three
months ended March 31, 2000,  as compared to the same period of 1999.  Operating
costs  were 81.4% of  revenues  for the three  months  ended  March 31,  2000 as
compared  with 91.5% of revenues in the same period in 1999.  The  increase  was
primarily  the result of the higher  overall  level of  activities  in the first
quarter of 2000  compared  with  1999.  The  decrease  in  operating  costs as a
percentage  of revenues was primarily  because of  increasing  billing rates and
equipment utilization. Salaries and benefits increased by $483,000 for the three
months ended March 31, 2000,  as compared to the same period in 1999,  while the
total number of employees  increased  from 221 at March 31, 1999 to 266 at March
31, 2000. The increase in salaries and benefits is primarily due to the increase
in the  number  of  employees,  which  is  reflective  of the  overall  level of
activities.

         Selling, general and administrative expenses increased by $679,000 from
$830,002 in the three  months  ended March 31, 1999 to $1.5 million in the three
months ended March 31, 2000. As a percentage of revenues,  selling,  general and
administrative expenses increased from 13.7% in the three months ended March 31,
1999 to 18.2% in 2000,  primarily as a result of bad debt  recoveries in 1999 as
well as increases in loan administrative costs, bad debts and insurance expenses
during 2000.

         Depreciation  and  amortization  decreased from $1,323,357 in the three
months ended March 31, 1999, or 21.8% of revenues, to approximately $1.3 million
in 2000 or 15.7% of revenues,  primarily  because of the lower net asset base of
depreciable  properties  in the three month period ended March 31, 2000 over the
same period in 1999.

         Interest  expense  and  amortization  of  debt  discount  increased  by
$152,000  for the three  months  ended  March 31,  2000 as  compared to the same
period  in  1999.  This  was  directly  related  to  the  increased  amounts  of
indebtedness outstanding in 2000. See "Note 6 of Notes to Consolidated Financial
Statements"  in the  Company's  Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1999.

         During the first quarter of 2000, the Company executed  agreements with
certain of its  vendors to discount  the  outstanding  obligations  due to these
vendors.  The agreements provided for a decrease in the outstanding  obligations
of $899,936.  Accordingly,  the Company has recognized an extraordinary  gain on
extinguishments of debt of $899,936, net of income taxes of $0.


LIQUIDITY AND CAPITAL RESOURCES


         Cash used by the Company's operating  activities was approximately $3.8
million  for the three  months  ended March 31, 2000 as compared to cash used of
$1.4 million for the same period in 1999. Investing activities used cash of $1.2
million  during the three  months  ended March 31, 2000 for the  acquisition  of
property, plant and equipment and businesses, net of cash acquired. During



                                       12
<PAGE>

the  three  months  ended  March 31,  1999,  investing  activities  used cash of
approximately $224,000 for the acquisition of property,  plant and equipment and
businesses, net of cash acquired, offset by proceeds of $26,000 from the sale of
fixed assets.  Financing  activities  provided net cash of $2.8 million from the
proceeds from bank and other  borrowings of  approximately  $20.8 million during
the three months  ended March 31, 2000 offset by principal  payments on bank and
other  borrowings  and capital leases of $17.1 million and $1.1 million of costs
related  to debt  issuance.  For the same  period in 1999  financing  activities
provided net cash of approximately  $2.5 million from the proceeds from bank and
other borrowings  offset by principal  payments on bank and other borrowings and
capital lease  obligations and net payments on working capital revolving loan of
$1.5 million and $37,868 of costs related to debt issuances.

         Cash at March 31, 2000 was  $35,600 as compared  with cash at March 31,
1999 of approximately $369,000.

         The  Company's  outstanding   indebtedness  includes  primarily  senior
indebtedness aggregating  approximately $17.2 million at March 31, 2000, owed to
Coast, other indebtedness of approximately $7.1 million,  and $20.9 million owed
to St. James Capital  Partners,  L.P. ("SJCP") and its affiliates and certain of
its limited  partners.  For the quarter ended March 31, 2000, the Company failed
to meet the debt service  ratio test under the Loan  Agreement  with Coast.  The
Company has requested  and received a waiver of compliance  with the covenant at
March 31, 2000.

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

         By virtue  of such  guarantees,  in the  event of a  default  under the
Company's  Loan  Agreement  with Coast,  Coast may seek to collect from SJCP and
SJMB, L.L.C. ("SJMB"), as well as Mr. Underbrink,  the outstanding principal and
interest on the Company's obligations to Coast, and such person have advised the
Company  of  their  willingness  and  ability  to  meet  such  obligations.  Mr.
Underbrink's  liability  is limited to no more than $5.0  million.  Such persons
have further advised the Company of their willingness and ability to support the
Company's  operations  at least through  January 2, 2001 and in that  connection
have waived any default  that may occur on  indebtedness  owing to them  through
April 12, 2000.

         Management  may also seek to raise  additional  capital in  conjunction
with the Company's recent  recapitalization,  which may be either debt or equity
capital or a combination  thereof.  Management  expects that, upon conclusion of
such a capital infusion,  its indebtedness  owing to St. James Capital Partners,
L.P. and its affiliates and certain of its limited partners will be long-term or
converted into equity securities.

         Management  believes  that,  provided oil and natural gas prices remain
relatively  stable with prices that existed in late1999 and the first quarter of
2000, the  implementation of the foregoing plan together with the cost reduction
program implemented in 1998, should enable the Company to


                                       13
<PAGE>

operate without a further deterioration of its liquidity condition and enable it
to benefit from the improved market for its services.

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

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

         The  note  purchase  agreements  entered  into in  connection  with the
private sale of $7.0 million of the Company's  notes during the period  December
1999 through  February  2000  contain a covenant  whereby the Company has agreed
that at or before the  Company's  next annual  meeting of  stockholders  it will
secure an amendment to its Certificate of  Incorporation  to increase the number
of shares that it is authorized to issue to a number sufficient to authorize the
issuance of its  currently  outstanding  shares and all shares that are issuable
upon the conversion of all its outstanding  convertible notes and securities and
upon the exercise of any warrants or options to purchase  the  Company's  Common
Stock.  Accordingly,  the failure of the  stockholders of the Company to approve
the  proposal  to increase  the number of shares of Common  Stock the Company is
authorized  to issue  will be a breach of a  covenant  under  the note  purchase
agreements  and a default  under the notes.  The  default  under the notes could
result, at the option of the holders, in the notes becoming  immediately due and
payable  and  would  also  lead,  under  the  cross  default  provisions  of the
instruments under which such  indebtedness was incurred,  to a default under all
the Company's other outstanding  indebtedness  aggregating $37.9 million.  Under
such  circumstances,  the holders of such  indebtedness,  including  Coast which
holds $17.2  million of  indebtedness  secured by a senior lien on the Company's
assets, could foreclose on substantially all of the Company's assets.


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 ended March 31, 2000.

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

         With the exception of historical matters, the matters discussed in this
Report are "forward-looking statements" as defined under the Securities Exchange
Act of 1934, as amended,  that involve risks and uncertainties.  Forward-looking
statements  include,  but are not  limited  to, the  matters  described  herein,
including  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations.  Such forward-looking  statements relate to the Company's
ability to attain and maintain profitability and cash flow, the stability of and
future prices for oil and gas, the


                                       14
<PAGE>

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



PART II - OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         During the period  through  February  14,  2000,  the Company sold $7.0
million  principal  amount of convertible  promissory notes (the "Notes") due on
January 15, 2001 and warrants  ("Warrants")  to purchase 28.7 million  shares of
Common  Stock.   The  Notes  and  Warrants  were  purchased  by  47  "accredited
investors,"  (the  "Purchasers") as defined in Regulation D under the Securities
Act of 1933,  as  amended.  Payment of  principal  and  interest on the Notes is
collateralized by substantially all the assets of the Company, subject, however,
to the  terms  of a  subordination  agreement  between  the  Purchasers  and the
Company's  senior secured lender,  Coast Business Credit, a division of Southern
Pacific Bank.  The Notes bear  interest at 10% per annum  through  September 30,
2000 and thereafter at the rate of 15% per annum and are convertible into shares
of the Company's Common Stock at a conversion price of $0.75 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,  in which  event the  conversion  price is reduced to the lower price at
which such shares were issued.  The Warrants are exercisable at a price of $0.75
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,  in which event the exercise price is reduced to
the lower  price at which  such  shares  were  issued  and the  number of shares
issuable is adjusted upward.  The shares issuable on conversion of the Notes and
exercise of the Warrants have demand and  piggy-back  registration  rights under
the Securities Act of 1933. The Notes contain  various  affirmative and negative
covenants,   including,   among  others,  a  prohibition   against  the  Company
consolidating,  merging or entering into a share  exchange with another  person,
with  certain  exceptions,  without  the  consent of the  Purchasers.  Events of
default  under the Notes


                                       15
<PAGE>

include,  among  other  events,  (i) a default in the  payment of  principal  or
interest on the Notes;  (ii) a default in the performance of any covenant of the
Note Purchase Agreement or other agreement entered into in connection  therewith
and the failure to cure such default;  (iii) any  representation  or warranty of
the Company in the Note Purchase  Agreement or other  agreement  entered into in
connection  therewith  being  untrue in any  material  respect and such  default
remains  uncured;  (iv)  the  Company  defaults  in the  payment  when due or by
acceleration  of any other  indebtedness  having an aggregate  principal  amount
outstanding  in excess of  $100,000  and such  default  remains  uncured;  (v) a
judgment  for the payment of money in excess of $100,000 is entered  against the
Company;   and  (vi)  the  commencement  of  certain  bankruptcy  or  insolvency
proceedings. If an event of default occurs, the Notes may become immediately due
and payable.  The  securities  were sold in reliance upon the exemption from the
registration requirements of the Securities Act of 1933 afforded by Section 4(2)
thereof and Regulation D there under.






ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

                  27.      Financial Data Schedule

(b)      Reports on Form 8-K

                  None

                                   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:  May 15,  2000                         /S/  William L. Jenkins
                                         --------------------------------
                                                 William L. Jenkins
                                        President and Chief Executive Officer


                                                /S/ Ronald Whitter
                                         --------------------------------
                                                   Ronald Whitter
                                             Principal Financial Officer


                                       16