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
                  September  30,  2000;  or __  Transition  report  pursuant  to
                  Section 13 or 15(d) of the Securities Exchange Act of 1934 for
                  the transition period from to .

                         Commission File Number 0-18754

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

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

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

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

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

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


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

<PAGE>

                          BLACK WARRIOR WIRELINE CORP.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX

PART I - FINANCIAL INFORMATION

                                                                       Page
                                                                       ----

Item 1.           Financial Statements

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

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

                  Condensed Statements of Operations -
                  Nine Months Ended September 30, 2000 and
                  September 30, 1999                                     5

                  Condensed Statements of Cash Flows -
                  Nine Months Ended September 30, 2000 and
                  September 30, 1999                                     6

                  Notes to Condensed Financial Statements -
                  Nine Months Ended September 30, 2000 and
                  September 30, 1999                                     7


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

PART II - OTHER INFORMATION

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

                                       2
<PAGE>


PART I - FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS

BLACK WARRIOR WIRELINE CORP.

CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                              SEPTEMBER 30, 2000   DECEMBER 31, 1999
                   ASSETS                                                                        (UNAUDITED)

<S>                                                                                        <C>                 <C>
Current assets:
    Cash and cash equivalents                                                                      $    932,892        $  2,425,808
    Short-term investments                                                                               50,000              50,000
    Accounts receivable, less allowance for doubtful
        accounts of $ 925,288  and $ 1,006,068, respectively                                          9,051,053           4,971,251
    Prepaid expenses                                                                                    748,180             175,268
    Other receivables                                                                                   147,059             146,392
    Other current assets                                                                                699,501             526,884
                                                                                                   ------------        ------------
                      Total current assets                                                           11,628,685           8,295,603
Land and building, held for sale                                                                        400,000             400,000
Inventories                                                                                           5,277,308           4,285,206
Property, plant, and equipment, less accumulated
    depreciation of $ 17,507,399 and $ 13,810,841                                                    19,049,569          19,457,361
Other assets                                                                                          1,118,108             604,649
Goodwill, less accumulated amortization of $ 433,413

  and $ 361,714, respectively                                                                         3,217,466           3,289,165
                                                                                                   ------------        ------------
                      Total assets                                                                 $ 40,691,136        $ 36,331,984
                                                                                                   ============        ============

                           LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
    Accounts payable                                                                               $  3,873,088        $  6,936,572
    Accrued salaries and vacation                                                                       603,630             249,296
    Accrued interest payable                                                                          4,775,733           3,027,901
    Other accrued expenses                                                                            1,174,726             777,598
    Deferred revenue                                                                                    100,000             100,000
    Notes payable to related parties                                                                 26,284,016           3,041,234
    Current maturities of long-term debt and capital
         lease obligations                                                                           22,926,390           8,391,346
                                                                                                   ------------        ------------
                      Total current liabilities                                                      59,737,583          22,523,947
Notes payable to related parties
                                                                                                                         21,412,356
Long-term debt and capital lease obligations, less
     Current maturities
                                                                                                                         10,542,555
                                                                                                   ------------        ------------
                      Total liabilities                                                              59,737,583          54,478,858
Stockholders' deficit:
     Preferred stock, $.0005 par value, 2,500,000 shares authorized
      none issued at September 30, 2000 and December 31, 1999,
      respectively

     Common stock, $.0005 par value, 12,500,000 shares authorized; 7,478,927 and
       4,812,260 shares issued and outstanding

      at September 30, 2000 and December 31, 1999, respectively                                           3,739               2,406
     Additional paid-in capital                                                                      15,828,958          13,316,081
     Accumulated deficit                                                                            (34,295,751)        (30,881,968)
    Treasury stock, at cost, 4,620 shares                                                              (583,393)           (583,393)
                                                                                                   ------------        ------------
    Total stockholders' (deficit)                                                                   (19,046,447)        (18,146,874)
                                                                                                   ------------        ------------
                      Total liabilities and stockholders' deficit                                  $ 40,691,136        $ 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 September 30, 2000 and September 30, 1999


<TABLE>
<CAPTION>

                                                          September 30, 2000        September 30, 1999
                                                              (Unaudited)              (Unaudited)

<S>                                                        <C>                        <C>
Revenues                                                   $ 12,947,142               $ 7,379,236

Operating costs                                               9,167,013                 5,600,718

Selling, general and administrative expenses                  1,791,142                 1,150,576

Depreciation and amortization                                 1,307,055                 1,244,405
                                                           ------------             -------------

       Net income (loss)  from operations                       681,932                  (616,463)

Interest expense and amortization of debt discount           (1,358,749)                 (844,596)

Net loss on sale of fixed assets                                     -0-                       -0-

Other income                                                      7,532                    49,383
                                                            ------------             -------------
       Net loss                                              $ (669,285)             $ (1,411,676)
                                                            ============             =============
       EARNINGS PER COMMON SHARE
       Net loss                                                 $ (0.09)                  $ (0.30)
                                                            ============             =============
       EARNINGS PER COMMON SHARE - ASSUMING DILUTED

       Net loss                                                 $ (0.09)                   $ (0.30)
                                                            ============             =============

Weighted average common shares outstanding                    7,474,307                  4,758,319
                                                            ============             =============
Weighted average common shares outstanding
    with dilutive securities                                  7,474,307                  4,758,319
                                                            ============             =============
</TABLE>


         See accompanying notes to the condensed financial statements.


                                       4
<PAGE>



BLACK WARRIOR WIRELINE CORP.
CONDENSED STATEMENTS OF OPERATIONS
For the nine months ended September 30, 2000 and September 30, 1999


<TABLE>
<CAPTION>

                                                         September 30, 2000       September 30, 1999
                                                              (Unaudited)              (Unaudited)

<S>                                                        <C>                       <C>
Revenues                                                   $ 30,682,197              $ 20,712,934

Operating costs                                              22,882,574                16,564,643

Selling, general and administrative expenses                  4,779,645                 4,484,139

Depreciation and amortization                                 3,873,167                 3,706,315
                                                           ------------              ------------

       Net Loss  from operations                               (853,189)               (4,042,163)

Interest expense and amortization of debt discount           (3,595,802)               (2,531,923)

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

Other income                                                     66,633                    78,012
                                                           ------------              ------------

       Loss before extraordinary gain                        (4,382,358)               (6,503,337)

Extraordinary gain on extinguishments of debt,
   Net of income taxes of $0                                    968,575                       -0-
                                                           ------------              -------------
       Net Loss                                            $ (3,413,783)             $ (6,503,337)
                                                           =============             =============
       EARNINGS PER COMMON SHARE

       Loss before extraordinary item                            $(0.60)                   $(1.52)
       Extraordinary item                                         $0.14                        --
                                                           ------------              -------------
       Net Loss                                                   $(0.46)                   $(1.52)
                                                           =============             =============

       EARNINGS PER COMMON SHARE -  DILUTED
       Loss before extraordinary item                           $(0.60)                    $(1.52)
       Extraordinary item                                        $0.14                         --
                                                           ------------              -------------
       Net Loss                                                 $(0.46)                     $(1.52)
                                                           =============             =============

Weighted average common shares outstanding                     7,357,519                 4,290,682
                                                           =============             =============
Weighted average common shares outstanding
    with dilutive securities                                   7,357,519                 4,290,682
                                                           =============             =============
</TABLE>

         See accompanying notes to the condensed financial statements.


                                       5
<PAGE>


BLACK WARRIOR WIRELINE CORP.
CONDENSED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2000 and September 30, 1999

<TABLE>
<CAPTION>

                                                                                             September 30, 1999   September 30, 2000
                                                                                                  (Unaudited)         (Unaudited)

<S>                                                                                               <C>                   <C>
Cash provided by (used in) operations:                                                            $ (4,982,909)         $   515,329

Cash flows from investing activities:

     Acquisitions of property, plant, and equipment                                                 (2,308,939)          (1,670,580)
     Proceeds from sale of property, plant and equipment                                                34,820
     Acquisition of business, net of cash acquired                                                    (511,827)                 -0-
                                                                                                  ------------          -----------
Cash used in investing activities:                                                                  (2,820,766)          (1,635,760)

Cash flows from financing activities:

     Debt issuance costs                                                                            (1,050,205)            (319,687)
     Proceeds from bank and other borrowings                                                        21,749,391            3,266,678
     Principal payments on long-term debt, notes payable
         and capital lease obligations                                                             (19,440,573)          (1,194,264)
     Net draws (payments) on working revolver                                                        5,052,146           (1,297,119)
                                                                                                  ------------          -----------

 Cash provided  by financing activities:                                                             6,310,759              455,608

Net decrease in cash and cash equivalents                                                           (1,492,916)            (664,823)
Cash and cash equivalents, beginning of period                                                       2,425,808            1,041,242
                                                                                                  ------------          -----------

Cash and cash equivalents, end of period                                                          $    932,892          $   376,419
                                                                                                  ============          ===========
Supplemental disclosure of cash flow information:

       Interest paid                                                                              $  1,583,118          $ 1,099,446
       Income taxes paid                                                                          $          0          $         0

Supplemental disclosure of  noncash investing and financing activities:
     Stock issued to related party as consideration for
           Promissory note (Note 1)                                                               $  2,000,000
     Notes payable and capital lease obligations incurred
           to acquire property, plant & equipment                                                                      $    107,527
     Stock warrants issued in conjunction with notes payable
           to related party                                                                       $    143,500         $     20,750
     Stock issued as consideration for option to purchase
           Company                                                                                                     $    129,931

    Note Payable released by related party resulting in
          an increase to Additional paid-in capital                                               $    300,000
    Stock Issued as compensation                                                                                       $    914,807
    Capital lease obligations to acquire property, plant and equipment                            $    468,000
</TABLE>

         See accompanying notes to the condensed financial statements.

                                       6
<PAGE>


                          BLACK WARRIOR WIRELINE CORP.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

1.       GENERAL

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

         The  Company  is an oil and gas  service  company  currently  providing
various  services to oil and gas well  operators  primarily  in the  continental
United  States  and in the Gulf of  Mexico.  The  Company's  principal  lines of
business  include  (a)  wireline  services,  (b)  directional  oil and gas  well
drilling and downhole  surveying  services,  and (c)  workover  services.  Since
November  1996, the Company  completed  eight  acquisitions,  the most recent of
which was the  acquisition of the measurement  while drilling  ("MWD") assets of
Measurement Specialists, Inc. ("MSI") on March 1, 2000.

RECENT RECAPITALIZATION

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

                                       7
<PAGE>

         Under its Term Loan with Coast,  the Company is  obligated to repay the
loan over a period of seventy-two  months,  commencing  February 15, 2000,  plus
interest on the then outstanding  balance. In addition,  on the last day of each
month during the first year  following  the closing of the loan,  the Company is
obligated  to make  principal  payments  in the  amount of fifty  percent of its
Excess  Cash Flow (as  defined)  during the  immediately  preceding  month,  and
thereafter,  the Company is required to make principal payments in the amount of
forty percent of its Excess Cash Flow during the  immediately  preceding  month.
"Excess Cash Flow" during any month means the EBITDA of the Company  during such
month,  minus the sum of (1) principal and interest payments made by the Company
during such month, plus (2) taxes paid by the Company in cash during such month.
The actual amount of the Excess Cash Flow during the three (3) months ended July
31,  2000 was less  than the  projected  amount  of the  Company's  cash flow as
presented to Coast. Per the Loan Agreement,  on August 31, 2000, the Company was
required a principal  payment equal to fifty  percent of the  difference of such
projected  amount minus the actual amount.  The actual amount of such payment is
as yet  undetermined but is anticipated to be not less than  approximately  $1.5
million.  It is  anticipated  that such payment will be made from the  Company's
cash  resources,  additional  borrowings from St. James Capital  Partners,  L.P.
("SJCP")  or its  affiliates,  or from  certain  stockholders  of SJCP as  their
performance under personal guarantees on the Coast indebtedness (see Note 9.).

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

         On March 1, 2000 the Company  exercised  its option and  completed  the
purchase of MSI. The Company paid the  outstanding  notes payable related to the
acquired assets of approximately  $363,000 and previously issued  144,445 shares
of its common stock in connection with the acquisition.

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 September 30, 2000                    Ended September 30, 1999
                                --------------------------------------------     --------------------------------------------
                                     Loss            Shares         Per Share      Loss          Shares        Per Share
                                   Numerator       Denominator       Amount      Numerator     Denominator      Amount
                                ---------------------------------------------------------------------------------------------
<S>                               <C>                <C>            <C>         <C>              <C>                 <C>
Net loss                          $ (669,285)                                   $ (1,411,676)
                                ---------------------------------------------------------------------------------------------
BASIC EPS
Loss available
  to common                       $ (669,285)        7,474,307      $ (0.09)    $ (1,411,676)    4,758,319           $ (0.30)
  shareholders                  ---------------------------------------------------------------------------------------------
EFFECT OF DILUTIVE SECURITIES
Stock warrants
Stock options
Convertible debt securities     ---------------------------------------------------------------------------------------------
DILUTED EPS
Loss available
  to common                      $ (669,285)        7,474,307      $ (0.09)    $ (1,411,676)    4,758,319           $ (0.30)
  shareholders                  ---------------------------------------------------------------------------------------------

</TABLE>

                                       8
<PAGE>
<TABLE>
<CAPTION>

                                                For the Nine Months                         For the Nine Months
                                              Ended September 30, 2000                    Ended September 30, 1999
                                  --------------------------------------------     ---------------------------------------
                                      Loss            Shares         Per Share      Loss          Shares        Per Share
                                     Numerator       Denominator       Amount      Numerator     Denominator      Amount
                               --------------------------------------------------------------------------------------------
<S>                           <C>                  <C>            <C>         <C>              <C>                 <C>
Loss before extraordinary item  $ (4,382,358)                                   $ (6,503,337)

BASIC EPS
Loss available
  to common                     $ (4,382,358)        7,357,519      $ (0.60)    $ (6,503,337)    4,290,682           $ (1.52)
  shareholders                 ---------------------------------------------------------------------------------------------
EFFECT OF DILUTIVE SECURITIES
Stock warrants
Stock options
Convertible debt securities    ----------------------------------------------------------------------------------------------
DILUTED EPS
Loss available
  to common                     $ (4,382,358)        7,357,519      $ (0.60)    $ (6,503,337)    4,290,682           $ (1.52)
  shareholders                 ---------------------------------------------------------------------------------------------

</TABLE>

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

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

3.       INVENTORIES

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

4.       COMMITMENTS AND CONTINGENCIES

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

                                       9
<PAGE>

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

5.     SEGMENT AND RELATED INFORMATION

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

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

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

       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
September 30, 2000 was Energen Corporation.

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

                                       10
<PAGE>
          Three months ended September 30, 2000
<TABLE>
<CAPTION>
                                                                                                   WORKOVER
                                                                              DIRECTIONAL             AND
                                                            WIRELINE            DRILLING           COMPLETION                TOTAL
                                                         --------------------------------------------------------------------------
<S>              <C>                                     <C>                  <C>                   <C>                 <C>
Segment revenues                                         $6,134,689            $6,515,607            $296,846            $12,947,142
Segment EBITDA                                           $1,114,409            $1,092,528            $  3,606            $ 2,210,543

</TABLE>

         Three months ended September 30,1999
<TABLE>
<CAPTION>
                                                                                                      WORKOVER
                                                                                DIRECTIONAL              AND
                                                            WIRELINE             DRILLING            COMPLETION               TOTAL
                                                         --------------------------------------------------------------------------
<S>                                                      <C>                   <C>                   <C>                 <C>
Segment revenues                                          $4,839,942            $2,228,014            $311,280            $7,379,236
Segment EBITDA                                            $1,095,349            $   59,547            $ 64,375            $1,219,271
</TABLE>

         Nine months ended September 30, 2000
<TABLE>
<CAPTION>

                                                                                                      WORKOVER
                                                                                DIRECTIONAL              AND
                                                            WIRELINE             DRILLING            COMPLETION               TOTAL
                                                         --------------------------------------------------------------------------
<S>                                                    <C>                    <C>                    <C>                 <C>
Segment revenues                                       $14,989,409            $14,810,050            $882,738            $30,682,197
Segment EBITDA                                         $ 1,735,482            $ 2,082,162            $ 65,379            $ 3,883,023
</TABLE>

         Nine months ended September 30, 1999
<TABLE>
<CAPTION>

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

Segment revenues                                           $13,100,512         $6,666,625           $   945,797         $20,712,934
Segment EBITDA                                             $ 2,128,286         $   36,855           $   140,655         $2,305,796

</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  September 30, 2000 and 1999 is presented
as follows:

Three months ended September 30:

                                                      2000              1999
Total segment EBITDA                              $ 2,210,543       $ 1,219,271
Depreciation and amortization                      (1,307,055)       (1,244,405)
Unallocated corporate expense                        (221,556)         (591,329)
                                                  -----------       -----------
     Income (Loss) from operations                $   681,932       $  (616,463)
                                                  ===========       ===========

                                       11
<PAGE>

Nine months ended September 30:

                                                     2000               1999
Total segment EBITDA                             $ 3,883,023        $ 2,305,796
Depreciation and amortization                     (3,873,167)        (3,706,315)
Unallocated corporate expense                       (863,045)        (2,641,644)
                                                 -----------        -----------
     Loss from operations                        $  (853,189)       $(4,042,163)
                                                 ===========        ===========


6.       RELATED PARTY TRANSACTIONS

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

         In the third  quarter of 2000,  the Company  entered into capital lease
agreements for approximately  $468,000 with MWD Technology,  Inc. which is owned
by an employee of the Company.

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 September 30, 2000, the Company's  certificate  of  incorporation
permits it to issue up to 12,500,000  shares of common stock of which  7,478,927
shares were issued and outstanding. The Company has outstanding at September 30,
2000 common stock purchase  warrants,  options and  convertible  debt securities
entitled to purchase or to be converted into an aggregate  98,731,393  shares of
the Company's common stock at exercise and conversion  prices ranging from $0.75
to $8.01.  Accordingly,  the  Company  has an  insufficient  number of shares of
common stock  authorized for issuance in the event all its outstanding  warrants
and options were  exercised  and  convertible  securities  were  converted.  The
Company  intends to present a resolution  to increase  the number of  authorized
shares to 150,000,000 at a shareholders meeting in January 2001.

         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


                                       12
<PAGE>

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 $28.7
million. Under such circumstances,  the holders of such indebtedness,  including
Coast which holds $20.6 million of indebtedness  collaterilized by a senior lien
on the Company's  assets,  could foreclose on substantially all of the Company's
assets.

8.       EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT

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

9.       DEFAULTS UPON SENIOR SECURITIES

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

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

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

                                       13
<PAGE>

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

RESULTS OF OPERATIONS - THREE MONTHS ENDED  SEPTEMBER 30, 2000 COMPARED TO THREE
MONTHS  ENDED  SEPTEMBER  30,  1999 AND NINE  MONTHS  ENDED  SEPTEMBER  30, 2000
COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1999

         The following  table sets forth the  Company's  revenues from its three
principal  lines of business for the three and nine months ended  September  30,
2000 and 1999 respectively:
<TABLE>
<CAPTION>

                                                                         Three Months Ended                   Nine Months Ended
                                                            ------------------------------------------------------------------------
                                                                          9/30/00       9/30/99          9/30/00          9/30/99
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>              <C>              <C>              <C>
Wireline                                                              $ 6,134,689      $ 4,839,942      $14,989,409      $13,100,512
Directional Drilling                                                    6,515,607        2,228,014       14,810,050        6,666,625
Workover and Completion                                                   296,846          311,280          882,738          945,797
                                                            ------------------------------------------------------------------------
                                                                      $12,947,142      $ 7,379,236      $30,682,197      $20,712,934
</TABLE>


         Total revenues increased by approximately $5.6 million to approximately
$12.9 million for the three months ended September 30, 2000 as compared to total
revenues of approximately  $7.3 million for the three months ended September 30,
1999. Total revenues  increased by  approximately  $9.9 million to approximately
$30.7  million  for the nine  months  ended  September  30,  2000 as compared to
revenues of  approximately  $20.8  million the nine months ended  September  30,
1999. The increase in directional  drilling revenues was the result of increased
demand for the Company's  services and upward  pressure on pricing that began in
the latter half of 1999. The Company's  wireline  revenues also were affected by
increases in demand and commodity pricing.

                                       14
<PAGE>

         Operating costs increased by  approximately  $3.6 million for the three
months  ended  September  30,  2000,  as  compared  to the same  period of 1999.
Operating  costs were 70.8% of revenues for the three months ended September 30,
2000 as compared  with 75.9% of  revenues in the same period in 1999.  Operating
costs increased by approximately $6.3 million for the nine month ended September
30, 2000, as compared to the same period in 1999.  Operating costs were 74.6% of
revenues for the nine months ended  September 30, 2000 as compared with 79.9% of
revenues  in the same  period  in 1999.  The  increase  in  operating  costs was
primarily the result of the higher  overall level of activities in the three and
nine  months  ended  September  30, 2000  compared  with 1999.  The  decrease in
operating costs as a percentage of revenues was primarily  because of increasing
billing rates and equipment utilization. Salaries and benefits increased by $1.5
million for the three months ended  September  30, 2000, as compared to the same
period in 1999,  while  the total  number  of  employees  increased  from 226 at
September  30, 1999 to 300 at September  30, 2000.  The increase in salaries and
benefits is primarily due to the increase in the number of  employees,  which is
reflective of the overall level of activities.

         Selling, general and administrative expenses increased by approximately
$640,000 from $1.2 million in the three months ended  September 30, 1999 to $1.8
million in the three  months  ended  September  30,  2000.  As a  percentage  of
revenues,  selling,  general and administrative expenses decreased from 15.6% in
the three  months  ended  September  30, 1999 to 13.8% in 2000,  primarily  as a
result of increased revenue levels. Selling, general and administrative expenses
increased by  approximately  $300,000 from $4.5 million in the nine months ended
September 30, 1999 to $4.8 million in the nine months ended  September 30, 2000.
As a  percentage  of  revenues,  selling  general  and  administrative  expenses
decreased from 21.6% of revenues in the nine months ended  September 30, 1999 to
15.6% in 2000, primarily as a result of the increase in revenues for the period.

         Depreciation and amortization increased from $1.24 million in the three
months ended September 30, 1999, or 16.9% of revenues,  to  approximately  $1.31
million  in  2000  or  10.1%  of  revenues,  primarily  because  of the  capital
expenditures  made in the second and third  quarters of 2000.  Depreciation  and
amortization  increased  slightly to $3.87  million  for the nine  months  ended
September 30, 2000 from $3.71 million for the same period in 1999.  Depreciation
and  amortization as a percentage of revenues  decreased to 12.5% from 17.9% due
to the increased demand for the Company's services.

         Interest  expense  and  amortization  of  debt  discount  increased  by
approximately  $514,000  and $1.1  million for the three and nine  months  ended
September 30, 2000, respectively,  as compared to the same periods in 1999. This
was directly  related to the increased  amounts of  indebtedness  outstanding in
2000.  See  "Note  6 of  Notes  to  Consolidated  Financial  Statements"  in the
Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December 31,
1999.

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

                                       15
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         Cash used by the Company's operating  activities was approximately $4.9
million  for the nine  months  ended  September  30,  2000 as  compared  to cash
provided of $664,000 for the same period in 1999. Investing activities used cash
of $3.3  million  during  the  nine  months  ended  September  30,  2000 for the
acquisition  of  property,  plant  and  equipment  and  businesses,  net of cash
acquired.  During the nine months ended September 30, 1999, investing activities
used cash of approximately $1.67 million for the acquisition of property,  plant
and  equipment  and  businesses,  net of cash  acquired,  offset by  proceeds of
$34,820 from the sale of fixed assets. Financing activities provided net cash of
$6.8 million from the proceeds  from bank and other  borrowings of $21.8 million
and net draws on working capital  revolving loan of  approximately  $5.1 million
during the nine months ended September 30, 2000 offset by principal  payments on
bank and other  borrowings  and capital leases of $18.9 million and $1.1 million
of costs  related  to debt  issuance.  For the  same  period  in 1999  financing
activities  provided  net cash of  approximately  $3.3 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 the working capital
revolving loan of $1.3 million and $319,687 of costs related to debt issuances.

         Cash at  September  30,  2000 was  $932,892  as  compared  with cash at
September 30, 1999 of approximately $210,000.

         The  Company's  outstanding   indebtedness  includes  primarily  senior
indebtedness aggregating approximately $20.6 million at September 30, 2000, owed
to Coast, other  indebtedness of approximately  $7.7 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 September 30, 2000, the Company
failed to meet certain debt covenants  under the Loan Agreement with Coast.  The
Company is in the process of negotiating  revised  covenants with Coast based on
current operating trends.  The Company expects to have ongoing  discussions with
Coast  regarding  the default and intends to seek to amend the terms of the debt
service ratio test, among other  provisions,  and continue to obtain a waiver of
the  default  from  Coast.  There  can be no  assurance  that a  waiver  will be
forthcoming.  As a  consequence  of this  default  and under  the cross  default
provisions of the Company's other  indebtedness,  the Company's  indebtedness to
Coast as well as SJCP and others has been shown as currently due and payable.

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

                                       16
<PAGE>

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

         Under its Term Loan with Coast,  the Company is  obligated to repay the
loan over a period of seventy-two  months,  commencing  February 15, 2000,  plus
interest on the then outstanding  balance. In addition,  on the last day of each
month during the first year  following  the closing of the loan,  the Company is
obligated  to make  principal  payments  in the  amount of fifty  percent of its
Excess  Cash Flow (as  defined)  during the  immediately  preceding  month,  and
thereafter,  the Company is required to make principal payments in the amount of
forty percent of its Excess Cash Flow during the  immediately  preceding  month.
"Excess Cash Flow" during any month means the EBITDA of the Company  during such
month,  minus the sum of (1) principal and interest payments made by the Company
during such month, plus (2) taxes paid by the Company in cash during such month.
The actual amount of the Excess Cash Flow during the three (3) months ended July
31,  2000 was less  than the  projected  amount  of the  Company's  cash flow as
presented to Coast. Per the Loan Agreement,  on August 31, 2000, the Company was
required to make a principal payment equal to fifty percent of the difference of
such projected amount minus the actual amount. The actual amount of such payment
is as yet undetermined but is anticipated to be not less than approximately $1.5
million.  It is  anticipated  that such payment will be made from the  Company's
cash  resources,  additional  borrowings from St. James Capital  Partners,  L.P.
("SJCP")  or its  affiliates,  or from  certain  stockholders  of SJCP as  their
performance under personal guarantees on the Coast indebtedness.

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

         Management  believes  that,  provided oil and natural gas prices remain
relatively  stable  with  prices  that  existed in late 1999 and the first three
quarters of 2000, the  implementation  of its plan as discussed in the Company's
Annual  Report  on  Form  10-KSB,   together   with   pursuing  cost   reduction
opportunities,   should  enable  the  Company  to  operate   without  a  further
deterioration  of its  liquidity  condition  and enable it to  benefit  from the
improved market for its services.

         The  Company  has no  agreements  or plans to  acquire  any  additional
companies.  However, there can be no assurance that the Company will not acquire
additional companies or assets in the future, or that any such acquisitions,  if
made,  will be beneficial to the Company.  The process of  integrating  acquired
properties into the Company's  operations may result in unforeseen  difficulties
and may require a  disproportionate  amount of  management's  attention  and the
Company's

                                       17
<PAGE>

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 $28.7 million.  Under
such  circumstances,  the holders of such  indebtedness,  including  Coast which
holds  $20.6  million of  indebtedness  collateralized  by a senior  lien on the
Company's assets,  could foreclose on substantially all of the Company's assets.
As mentioned,  the Company's  current default  position with Coast has triggered
the  cross-default  provisions  of the $7.0 million  notes sold in the period of
December 1999 through February 2000 as well as the St. James  indebtedness.  All
of this  indebtedness  is shown as  currently  due and payable on the  Company's
condensed balance sheet for September 30, 2000.

INFLATION

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

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

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


                                       18
<PAGE>

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  and to  obtain on  reasonable  terms  waivers  of
defaults  thereunder when and as required.  The inability of the Company to meet
these objectives or the consequences on the Company from adverse developments in
general economic  conditions,  adverse  developments in the oil and gas industry
and other  factors  could have a material  adverse  effect on the  Company.  The
Company is  substantially  dependent  upon its ability to implement its plan for
addressing  its  financial  situation,  as described  above,  for its ability to
continue its operations as presently  constituted.  The Company cautions readers
that various  risk factors  described  in the  Company's  Annual  Report on Form
10-KSB for the year ended December 31, 1999 could cause the Company's  operating
results  to  differ  materially  from  those  expressed  in any  forward-looking
statements  made  by the  Company  and  could  adversely  affect  the  Company's
financial  condition  and its ability to pursue its business  strategy . Readers
should refer to the Annual Report on Form 10-KSB and the risk factors  discussed
therein.

PART II - OTHER INFORMATION

 .



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

27.      Financial Data Schedule

(b)      Reports on Form 8-K

                           None


                                       19
<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

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


Date:  November 14,  2000                      /S/  William L. Jenkins
                                      -----------------------------------------
                                           William L. Jenkins
                                      President and Chief Executive  Officer

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


                                       20