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, 2002; 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.)

                 100 ROSECREST LANE, 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 preceding 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
                                  -----            -----

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes No X ----- -----

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

        As of November 10, 2002, 12,499,528 shares of the Registrant's Common
Stock, $.0005 par value, were outstanding.


<Page>

                          BLACK WARRIOR WIRELINE CORP.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX
<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION

                                                                                       Page
                                                                                       ----
<S>                                                                                   <C>
Item 1.           Financial Statements

                  Condensed Balance Sheets - September 30, 2002 (unaudited)
                  and December 31, 2001                                                 3

                  Condensed Statements of Operations -
                  Three Months Ended September 30, 2002 (unaudited) and
                  September 30, 2001 (unaudited)                                        4

                  Condensed Statements of Operations -
                  Nine Months Ended September 30, 2002 (unaudited) and                  5
                  September 30, 2001 (unaudited)

                  Condensed Statements of Cash Flows -
                  Nine Months Ended September 30, 2002 (unaudited) and
                  September 30, 2001 (unaudited)                                        6

                  Notes to Condensed Financial Statements -
                  Three and Nine Months Ended September 30, 2002 (unaudited)
                  and September 30, 2001 (unaudited)                                    7

Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                        17

Item 3.           Quantitative and Qualitative Disclosures about Market Risk           27

Item 4.           Controls and Procedures                                              28

PART II - OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K                                     28
</TABLE>


                                       2
<PAGE>

PART I - FINANCIAL INFORMATION

             ITEM 1.  FINANCIAL STATEMENTS

BLACK WARRIOR WIRELINE CORP.
----------------------------
CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 SEPTEMBER 30, 2002   DECEMBER 31, 2001
                                                                                 ------------------   -----------------
                                                                                     (UNAUDITED)
<S>                                                                                 <C>                  <C>
                                       ASSETS

Current assets:
     Cash and cash equivalents                                                      $   905,688          $ 2,819,236
     Accounts receivable, less allowance of $737,093 and $958,573, respectively      11,747,105           13,356,718
     Prepaid expenses                                                                   535,798               98,552
     Other receivables                                                                  246,497              450,808
     Other current assets                                                               657,144              641,177
                                                                                   ------------         ------------
           Total current assets                                                      14,092,232           17,366,491

Land and building, held for sale                                                        156,250              156,250
Property, plant & equipment, less accumulated depreciation                           25,085,647           24,634,846
Inventories of tool components and sub-assemblies, net                                4,303,725            4,279,133
Other assets                                                                          1,211,893            1,083,713
Goodwill                                                                              2,960,442            2,960,442
                                                                                   ------------         ------------
           Total assets                                                             $47,810,189          $50,480,875
                                                                                   ------------         ------------
                        LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
     Accounts payable                                                               $ 5,734,506           $6,310,029
     Accrued salaries and vacation                                                      715,602              790,225
     Accrued interest payable                                                           123,378              128,871
     Other accrued expenses                                                           1,274,536              980,588
     Current maturities of long-term debt and capital lease obligations               8,753,469            8,619,507
                                                                                   ------------         ------------
           Total current liabilities                                                 16,601,491           16,829,220

Notes payable to related parties, net of unamortized discount                        24,197,185           24,387,044
Non current accrued interest payable to related parties                               9,856,493            7,062,010
Long-term debt, less current maturities                                              13,224,709           12,750,000
Deferred revenue                                                                        100,000              100,000
                                                                                   ------------         ------------
           Total liabilities                                                         63,979,878           61,128,274
                                                                                   ------------         ------------
Stockholders' deficit:
     Preferred stock, $.0005 par value, 2,500,000 shares authorized,
        none issued at September 30, 2002 or December 31, 2001                               --                   --
     Loan to shareholder                                                               (138,187)                  --
     Common stock, $.0005 par value, 175,000,000 shares authorized,
         12,499,528 and 12,496,408 shares issued and outstanding at
         September 30, 2002 and December 31, 2001, respectively                           6,252                6,248
     Additional paid-in capital                                                      20,250,963           19,956,227
     Accumulated deficit                                                            (35,705,324)         (30,026,481)
     Treasury stock, at cost, 4,620 shares at September 30, 2002 and
         December 31, 2001                                                             (583,393)            (583,393)
                                                                                   ------------         ------------
           Total stockholders' deficit                                              (16,169,689)         (10,647,399)
                                                                                   ------------         ------------
           Total liabilities and stockholders' deficit                             $ 47,810,189         $ 50,480,875
                                                                                   ------------         ------------
</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, 2002 and September 30, 2001

<TABLE>
<CAPTION>
                                                           SEPTEMBER 30, 2002     SEPTEMBER 30, 2001
                                                           ------------------     ------------------
                                                              (UNAUDITED)             (UNAUDITED)
<S>                                                            <C>            <C>
Revenues                                                       $15,428,797           $21,414,345

Operating costs                                                 10,687,313            13,220,693

Selling, general and administrative expenses                     2,690,034             2,049,994

Depreciation and amortization                                    2,039,184             1,721,506

                                                               -----------           -----------
        Income from continuing operations                           12,266             4,422,152

Interest expense and amortization of debt discount              (1,397,976)           (1,722,378)

Net gain on sale of fixed assets                                     4,448                20,000

Other income                                                        39,207                12,305
                                                               -----------           -----------
        Income (loss) before provision for income taxes,
         discontinued operations and extraordinary items        (1,342,055)            2,732,079

Provision for income taxes                                              --                54,690
                                                               -----------           -----------
        Income (loss) before discontinued operations and
         extraordinary items                                    (1,342,055)            2,677,389

Discontinued Operations:

        Gain on disposal of Drilling and Completion segment,
           net of income taxes of $9,500                                --               466,672
                                                               -----------           -----------
           Income (loss) before extraordinary items             (1,342,055)            3,144,061

Extraordinary loss on early debt extinguishments, net of
        income tax benefit of $26,000                                   --            (1,296,481)

Extraordinary gain on extinguishments of debt, net of
        income taxes of $3,500                                          --               171,503
                                                               -----------           -----------
          Net income (loss)                                    $(1,342,055)          $ 2,019,083
                                                               ===========           ===========
Net income (loss) per share - basic and diluted:

        Income (loss) before discontinued operations and
           extraordinary items                                 $      (.11)          $       .21

        Discontinued operations                                         --                   .04
        Extraordinary items                                             --                  (.09)
                                                               -----------           -----------
Net income (loss) per share - basic and diluted                $      (.11)          $       .16
                                                               ===========           ===========
</TABLE>

          See accompanying notes to the condensed financialstatements.


                                       4
<PAGE>


BLACK WARRIOR WIRELINE CORP.
----------------------------
CONDENSED STATEMENTS OF OPERATIONS
For the nine months ended September 30, 2002 and September 30, 2001

<TABLE>
<CAPTION>
                                                             SEPTEMBER 30, 2002   SEPTEMBER 30, 2001
                                                             ------------------   ------------------
                                                                (UNAUDITED)          (UNAUDITED)

<S>                                                            <C>                   <C>
Revenues                                                       $41,530,214           $60,385,241

Operating costs                                                 29,334,383            36,669,794

Selling, general and administrative expenses                     8,035,205             5,963,470

Depreciation and amortization                                    6,011,151             4,792,278
                                                               -----------           -----------
        Income (loss) from continuing operations                (1,850,525)           12,959,699

Interest expense and amortization of debt discount              (4,059,123)           (4,374,240)

Net gain on sale of fixed assets                                   177,059                22,500

Other income                                                        53,746                55,308
                                                               -----------           -----------
        Income (loss) before provision for income taxes,
         discontinued operations and extraordinary items        (5,678,843)            8,663,267

Provision for income taxes                                              --               173,326
                                                               -----------           -----------
        Income (loss) before discontinued operations and
         extraordinary items                                    (5,678,843)            8,489,941

Discontinued Operations:

        Loss from operations of discontinued Drilling
          and Completion segment, net of income taxes
          of $1,800                                                     --               (87,607)

        Gain on disposal of Drilling and Completion segment,
           net of income taxes of $9,500                                --               466,672
                                                               -----------           -----------
           Income (loss) before extraordinary items             (5,678,843)            8,869,006

Extraordinary loss on early debt extinguishments, net of
        income tax benefit of $26,000                                   --            (1,296,481)

Extraordinary gain on extinguishments of debt, net of
        income taxes of $3,500                                          --               171,503
                                                               -----------           -----------
          Net income (loss)                                    $(5,678,843)         $  7,744,028
                                                               ===========           ===========
Net income (loss) per share - basic and diluted:

        Income (loss) before discontinued operations and
           extraordinary items                                 $      (.45)          $       .68

        Discontinued operations                                         --                   .03
        Extraordinary items                                             --                  (.09)
                                                               -----------           -----------
Net income (loss) per share - basic and diluted                $      (.45)          $       .62
                                                               ===========           ===========
</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, 2002 and September 30, 2001

<TABLE>
<CAPTION>
                                                                      SEPTEMBER 30, 2002      SEPTEMBER 30, 2001
                                                                      ------------------      ------------------
                                                                          (Unaudited)             (Unaudited)
<S>                                                                       <C>                 <C>
Cash provided by operations                                               $   4,271,06            $ 12,175,240
                                                                          ------------            ------------
Cash flows from investing activities:
         Acquisitions of property, plant and equipment                      (6,408,620)             (8,954,184)
         Proceeds from sale of property, plant and equipment                   218,851                 527,500
                                                                          ------------            ------------
Cash used in investing activities                                           (6,189,769)             (8,426,684)
                                                                          ------------            ------------
Cash flows from financing activities:
         Debt issuance costs                                                  (127,154)             (1,965,644)
         Proceeds from bank and other borrowings                             5,326,601              17,895,308
         Principal payments on long-term debt, notes payable and
         capital lease obligations                                          (4,630,070)            (18,701,809)
         Net payments on working revolver                                     (374,862)               (746,611)
         Loan to shareholder                                                  (190,000)                     --
                                                                          ------------            ------------
Cash provided by (used in) financing activities                                  4,515              (3,518,756)
                                                                          ------------            ------------
Net increase (decrease) in cash and cash equivalents                        (1,913,548)                229,800
Cash and cash equivalents, beginning of period                               2,819,236               1,373,699
                                                                          ------------            ------------
Cash and cash equivalents, end of period                                  $    905,688            $  1,603,499
                                                                          ============            ============
Supplemental disclosure of cash flow information:
         Interest paid                                                    $  1,270,134            $  2,104,959
         Income taxes paid                                                          --            $     60,000

Supplemental disclosure of non-cash investing and financing activities:
      Notes payable and capital lease obligations incurred to
      acquire property, plant and equipment                               $    281,733            $    894,309
      Stock warrants issued in conjunction with notes payable to
      related party                                                       $         --            $    182,000
</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 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-K for the fiscal year
ended December 31, 2001 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, and (b) directional oil and gas well
drilling and downhole surveying services. In July 2001, the Company sold its
workover and completion line of business. The Company has restated its
operations for the nine months ended September 30, 2001 for the discontinued
operations (see Note 8).

RECENT RECAPITALIZATION

         2001 Credit Agreement. On September 14, 2001, the Company entered into
a Credit Agreement with General Electric Capital Corporation, as agent and
lender, ("GECC") providing for the extension of revolving, term and capital
expenditure ("capex") credit facilities to the Company aggregating up to $40.0
million (referred to herein as the "Credit Facility"). The Company and GECC
entered into amendments to the Credit Facility in January 2002, June 2002 and
November 2002. As amended, the Credit Facility includes a revolving loan of up
to $15.0 million, but not exceeding 85% of eligible accounts receivable, as
defined, a term loan of $17.0 million, and a capex loan of up to $8.0 million,
but not exceeding the lesser of 70% of the hard costs of acquired eligible
equipment, 100% of its forced liquidation value and the Company's EBITDA for the
month then ended, less certain principal, interest and maintenance expenses.
Eligible accounts are defined to exclude, among other items, accounts
outstanding of debtors that are more than 60 days overdue or 90 days following
the original invoice date and of debtors that have suspended business or
commenced various insolvency proceedings and accounts with reserves established
against them to the extent of such reserves as GECC may set from time to time in
its reasonable credit judgment. The interest rate on borrowings under the
revolving loan is 1.75% above a base rate and on borrowings under the term loan
and capex loan is 2.5% above the base rate. The base rate is the higher of (i)
the rate publicly quoted from time to time by the Wall Street Journal as the
base rate on corporate loans posted by at least 75% of the nation's thirty
largest banks, or (ii) the average of the rates on overnight Federal funds
transactions by members of the Federal Reserve System, plus 0.5%. Subject to the
absence of an event of default and fulfillment of certain other conditions, the
Company can elect to borrow or convert any loan and pay interest at the LIBOR
rate plus applicable margins of 3.25% on the revolving


                                       7
<PAGE>

loan and 4.0% on the term loan and capex loan. Pursuant to the June 2002 loan
amendment discussed below, the LIBOR conversion and borrowing option was
suspended until the quarter ending March 31, 2003 or such earlier date as the
Company is in compliance with certain financial covenants. If an event of
default has occurred, the interest rate is increased by 2%. Advances under the
Credit Facility are collateralized by a senior lien against substantially all of
the Company's assets. The Credit Facility expires on September 14, 2004.

         Initial borrowings under the Credit Facility advanced on September 14,
2001 aggregated $21.6 million. The proceeds of the initial borrowings were used
primarily to repay outstanding indebtedness aggregating $21.4 million to Coast
Business Credit ("Coast"), Bendover Company ("Bendover") and certain other
indebtedness. At September 30, 2002, borrowings under the Credit Facility
aggregated $20.8 million of which $4.0 million was outstanding under the
revolving loan, $13.6 million was outstanding under the term loan and $3.2
million was outstanding under the capex loan. Borrowings under the revolving
loan may be repaid and re-borrowed from time to time for working capital and
general corporate needs, subject to the Company's continuing compliance with the
terms of the Credit Facility. The outstanding balance of the revolving loan is
to be paid in full at the expiration of the Credit Facility on September 14,
2004. The term loan is to be repaid in 35 equal monthly installments of $283,333
with a final installment of $7,083,333 due and payable on September 14, 2004.
The capex loan is available to be borrowed through September 14, 2003 and is to
be repaid in equal monthly installments of 1/60th of each of the amounts
borrowed from time to time with the remaining outstanding balance of the entire
capex loan due and payable on September 14, 2004.

         Before reflecting the June 2002 amendments to the Credit Facility, the
Company was in violation of the financial covenants relating to its fixed charge
coverage ratio, minimum interest coverage ratio, and ratio of senior funded debt
to EBITDA. By amendment to the Credit Facility entered into as of June 10, 2002,
GECC waived these defaults as well as violations relating to the Company's
failure to timely deliver its financial statements for the year ended December
31, 2001 as required by the Credit Facility and selling certain assets in
violation of the terms of the Credit Facility. The violations under the
subordinated debt agreements were waived by the debt holders.

         The Company agreed to pay GECC a fee of $100,000 in connection with
entering into the June 2002 amendment and $75,000 in connection with entering
into the November 2002 amendment to the Credit Facility.

         As amended through October 2002, the financial covenants the Company is
required to comply with include (a) limitations on capital expenditures to $7.7
million during the year 2002, to $8.0 million during the year 2003 and to $5.0
million during the six-months ended June 30, 2004, (b) having a fixed charge
coverage ratio at the end of each quarter, commencing with the quarter ended
March 31, 2003, of not less than 1.3:1.0 for the preceding twelve-month period,
(c) having an interest coverage ratio at the end of each quarter, commencing
with the quarter ended March 31, 2003, of not less than 3.0:1.0 for the
preceding twelve-month period, and (d) commencing with the quarter ending March
31, 2003, having a ratio of senior funded debt to


                                       8
<PAGE>

EBITDA, minus capital expenditures paid in cash, of not more than 2:0:1.0 for
the four fiscal quarters then ended. The Company is required to maintain a
cumulative operating cash flow at the end of each month, commencing with the
month ended July 31, 2002, increasing as follows:

                  Fiscal Month       Cumulative Operating Cash Flow
                  ------------       ------------------------------
                 July 31, 2002                 $  (275,000)
                 August 31, 2002               $   225,000
                 September 30, 2002            $   975,000
                 October 31, 2002              $ 1,000,000
                 November 30, 2002             $ 1,400,000
                 December 31, 2002             $ 1,700,000
                 January 31, 2003              $ 2,200,000
                 February 28, 2003             $ 2,600,000

For the period ended September 30, 2002, the Company is in compliance with all
financial covenants.

         Future advances are subject to the continuing accuracy of the Company's
representations and warranties as of such date (other than those relating
expressly to an earlier date), the absence of any event or circumstance
constituting a "material adverse effect," as defined, the absence of any default
or event of default under the Credit Facility, and the borrowings not exceeding
the applicable borrowing availability under the Credit Facility, after giving
effect to such advance. A "material adverse effect" is defined to include an
event having a material adverse effect on the Company's business, assets,
operations, prospects or financial or other condition, on the Company's ability
to pay the loans, or on the collateral and also includes a decline in the
"Average Rig Count" (excluding Canada and international rigs) published by Baker
Hughes, Inc. falling below 675 for 12 consecutive weeks. The Company's liquidity
is dependent upon the availability of funds borrowed under the Credit Facility.

         The agreement provides that if the outstanding balance of the term loan
exceeds 70% of the Forced Liquidation Value of the eligible term equipment an
immediate repayment is required to eliminate the excess. Likewise, if the
outstanding balance of the Capex Loan exceeds the lesser of (i) the Maximum
Capex Amount and (ii) 100% of the Forced Liquidation Value of eligible Capex
equipment, an immediate repayment of the excess is required. The June 10, 2002
amendment limits the borrowing base on the Capex loan to the lesser of (i) 70%
of the arms-length hard cost of the eligible Capex equipment, (ii) 100% of the
Forced Liquidation Value of all eligible Capex equipment and (iii) consolidated
EBITDA for the fiscal month then ended less interest expense paid in cash during
such month plus scheduled payments of indebtedness during such month plus
$250,000 for routine capital expenditures. This limitation provides for any
unused borrowings under this provision to be carried over to the next month. The
amendment further requires an immediate repayment if the combined aggregate
outstanding balance on the Term Loan and Capex Loan exceed 50% of the Forced
Liquidation Value of eligible Capex equipment and eligible term equipment. This
amendment currently limits the Company's combined maximum borrowings pursuant to
its Term Loan and Capex Loan to approximately $21.7 million. The Company agreed
in the November 2002 amendment to the Credit Facility to


                                       9
<PAGE>

have GECC establish an accreting reserve under the Credit Facility for the
principal and interest payments due on December 1, 2002 and January 1, 2003 and
the outstanding fees due under amendments to the Credit Facility aggregating
$125,000.

         Note Extensions. In connection with the GECC refinancing, the Company
agreed with the holders of $6.9 million of the $7.0 million principal amount of
promissory notes due on June 30, 2001 to extend the maturity date to December
31, 2004. The remainder of the outstanding principal was repaid. The notes bear
interest at 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 an
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 the
shares were issued. SJMB, L.P. and its affiliates (a related party) purchased
$1.6 million from noteholders who chose not to extend the maturity dates. St.
James Capital Partners, L.P. ("SJCP"), SJMB, L.P. ("SJMB") and certain of its
affiliated entities and partners are hereafter collectively referred to as "St.
James". As a condition to extend the maturity date, holders of the notes are to
receive additional five-year common stock purchase warrants exercisable at $0.75
per share if the Company has not entered into a purchase or merger agreement on
or before certain dates. Because such an agreement was not entered into by
December 31, 2001, the Company became obligated to issue approximately 2.4
million additional warrants. In the event such an agreement is not entered into
by December 31, 2002 with a closing by March 31, 2003, the Company will be
obligated to issue approximately 5.2 million additional warrants and if such
agreement is not entered into by December 31, 2003 with a closing by March 31,
2004, the Company will be obligated to issue approximately 10.4 million
additional warrants. Under the terms of the note extensions, in the event that
the Company has not entered into a purchase or merger agreement by December 31,
2003 with a closing date no later than March 31, 2004, an aggregate of 18.0
million additional warrants will have been issued. The exercise price of the
warrants that are to be issued are subject to anti-dilution adjustments 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.

         The Company also extended until December 31, 2004 the promissory notes
totaling $17.7 million owing to St. James which matured in March, 2001. The
notes bear interest at 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 an
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 the
shares were issued. The Company also extended the expiration date of 28.7
million warrants until December 31, 2004 in connection with the extension of the
St. James promissory notes.

         The Company continues to be highly leveraged and has an accumulated
deficit of $35.7 million. The Company is subject to certain debt covenants
requiring minimum operational and cash flow levels. Failure to comply with these
debt covenants and or generate sufficient cash


                                       10
<PAGE>

flow from operations could significantly impair the Company's liquidity position
and could result in the lender exercising prepayment options under the Company's
Credit Facility. While the Company believes that it will have adequate borrowing
base and cash flows, it can make no assurances that it will comply with its debt
covenants or generate sufficient cash flows to service its debt and fund
operations. Should the Company be unable to borrow funds under its current
Credit Facility or if prepayment of those borrowings were required, it can make
no assurances that alternative funding could be obtained.

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, 2002                   ENDED SEPTEMBER 30, 2001
                          ----------------------------------------     --------------------------------------
                                                             Per
                              Loss           Shares         Share     Gain (Loss)       Shares      Per Share
                           Numerator      Denominator      Amount     Numerator      Denominator     Amount
                         -------------   --------------  ----------  -------------   -------------  ----------
<S>                       <C>               <C>          <C>          <C>               <C>          <C>
BASIC AND DILUTED
EPS
Income (loss) before
discontinued operations
and extraordinary items   $ (1,342,055)     12,499,528   $  (0.11)    $  2,677,389      12,491,788   $   0.21

Discontinued operations   $         --   $  12,499,528   $     --     $    466,672      12,491,788   $   0.04

Extraordinary items       $         --      12,499,528   $     --     $ (1,124,978)     12,491,788   $  (0.09)

Income (loss) available
to common shareholders    $ (1,342,055)     12,499,528   $  (0.11)    $  2,019,083      12,491,788   $   0.16

BASIC AND DILUTED
EPS

Income (loss) before
discontinued operations
and extraordinary items   $ (5,678,843)     12,499,528   $  (0.45)    $  8,489,941      12,491,788   $   0.68

Discontinued operations   $         --      12,499,528   $     --     $    379,065      12,491,788   $   0.03

Extraordinary items       $         --      12,499,528   $     --     $ (1,124,978)     12,491,788   $  (0.09)

Income (loss) available
to common shareholders    $ (5,678,843)     12,499,528   $  (0.45)    $  7,744,028      12,491,788   $   0.62

</TABLE>

         Options and warrants to purchase 83,980,519 and 81,654,578 shares of
common stock at prices ranging from $0.75 to $8.01 were outstanding during the
three and nine months ended September 30, 2002 and 2001, respectively, but were
not included in the computation of diluted EPS because the effect would be
anti-dilutive (see Note 7.).

          Convertible debt instruments, including convertible interest, which
would result in the issuance of 45,524,439 and 40,799,014 shares of common
stock, if the conversion features were exercised, were outstanding during the
three and nine months ended September 30, 2002 and 2001, respectively, but were
not included in the computation of diluted EPS because the effect would be
anti-dilutive. The conversion price of these instruments is $0.75 per share as
of September 30, 2002 (see Note 7).

3.       INVENTORIES OF TOOL COMPONENTS AND SUBASSEMBLIES, NET

         Inventories consist of tool components, sub-assemblies and expendable
parts used in directional oil and gas well drilling activities. Tools
manufactured and assembled into electric motors from tool components are
expensed based on usage of the motors. Until utilized, components,
sub-assemblies and expendable parts are capitalized as inventory. Inventories
are classified as a long-term asset rather than a current asset as is consistent
with industry practice.


                                       11
<PAGE>

4.       COMMITMENTS AND CONTINGENCIES

         The Company is a defendant in various other legal actions arising 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, 2002, the Company is organized into, and manages its
business based on the performance of two 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 two reportable
segments: wireline and directional drilling, 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, 2002 included Chevron, Apache Corporation, and Unocal.

       DIRECTIONAL DRILLING - This segment  performs procedures to
enter hydrocarbon  producing zones directionally, using specialized
drilling equipment, and expand the area of interface of hydrocarbons and thereby
greatly enhancing recoverability. It also 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, 2002 included Encore Operating,
Lewis Petroleum and Ergon Exploration.

       The accounting policies of the reportable segments are the same as those
described in Note 3 of the Company's Annual Report of Form 10-K for the fiscal
year ended December 31, 2001. 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, 2002 and 2001 is as follows:

         Three months ended September 30, 2002

                                               DIRECTIONAL
                               WIRELINE          DRILLING          TOTAL
                               --------          --------          -----
         Segment revenues      $9,029,478      $6,399,319      $15,428,797
         Segment EBITDA        $1,987,309      $   887,899     $ 2,875,208


                                       12
<PAGE>

         Three months ended September 30, 2001

                                                DIRECTIONAL
                                 WIRELINE        DRILLING         TOTAL
                                 --------        --------         -----
         Segment revenues      $10,790,239     $10,624,106     $21,414,345
         Segment EBITDA        $ 3,686,555     $ 2,802,894     $ 6,489,449


         Nine months ended September 30, 2002

                                                DIRECTIONAL
                                 WIRELINE        DRILLING         TOTAL
                                 --------        --------         -----
         Segment revenues      $24,758,852     $16,771,362    $41,530,214
         Segment EBITDA        $ 4,627,046     $ 1,998,871    $ 6,625,917


         Nine months ended September 30, 2001

                                                DIRECTIONAL
                                 WIRELINE        DRILLING         TOTAL
                                 --------        --------         -----
           Segment revenues    $ 31,867,881    $28,517,360    $60,385,241
           Segment EBITDA      $ 11,452,805    $ 7,403,323    $18,856,128


The Company has certain expenses that are not allocated to the individual
operating segments. A reconciliation of total segment EBITDA to income (loss)
from operations for the three and nine months ended September 30, 2002 and 2001
is presented as follows:

Three months ended September 30:
                                                   2002          2001
                                                   ----          ----
         Total segment EBITDA                 $ 2,875,208    $ 6,489,449
         Depreciation and amortization         (2,039,184)    (1,721,506)
         Unallocated corporate expense           (823,758)      (345,791)
                                              -----------    -----------
              Income from operations          $    12,266    $ 4,422,152
                                              ===========    ===========

Nine months ended September 30:
                                                   2002          2001
                                                   ----          ----
        Total segment EBITDA                 $  6,625,917    $ 18,856,128
        Depreciation and amortization          (6,011,151)     (4,792,278)
        Unallocated corporate expense          (2,465,291)     (1,104,151)
                                             ------------    ------------
             Income (loss) from operations   $ (1,850,525)   $ 12,959,699
                                             ============    ============
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, 2002, the Company has
collected $100,000 of the sale price and the remaining $100,000 is included in
deferred revenue.

         During 2000, the Company entered into three capital leases totalling
$918,000 with MWD Technology Company ("MWD"). The principal owners of MWD
include employees of the Company. The outstanding balance of $136,000 of the
leases was paid in full in connection with the GECC refinancing in September
2001.

         On November 20, 2000, the Company entered into a capital lease
agreement for approximately $539,000 with Big Foot Tool Rental Service, LLC,
which is partially owned by an officer and an employee of the Company. The
outstanding balance of $393,000 of the lease was paid in full in connection with
the GECC refinancing.

         During the first quarter of 2000, Hub, Inc. purchased a note payable to
Fleet Capital Corporation ("Fleet") of approximately $800,000 for $500,000. In
connection with this transaction, Fleet released the Company from all
indebtedness to Fleet. Hub, Inc. agreed to cancel the note in exchange for a
payment of $500,000. A board member of the Company is a principal in Hub, Inc.
This note was paid in full with the refinancing plan with Coast Business Credit
in 2000.

         In February 2001, the Company issued to a Director of the Company and
SJCP five-year warrants to purchase 700,000 and 400,000 shares, respectively, of
the Company's Common Stock at exercise prices of $0.75 per share. The warrants
were issued in consideration of guarantees extended to Coast Business Credit by
the Director and SJCP in connection with the Company's borrowings from Coast
Business Credit in 2000.


                                       13
<PAGE>

         The Company has executed notes payable to SJMB and SJCP in connection
with acquisitions and to provide funding for operations. The chairman and the
chief executive officer of the general partners of SJCP and SJMB both serve on
the Company's Board of Directors. At September 30, 2002 and 2001, notes due to
SJMB, SJCP, their principal partners and affiliates totalled $23,566,882 and
$23,650,000, respectively. The notes bear interest at 15%. Accrued interest
payable at September 30, 2002 and 2001 totalled $9,856,493 and $5,949,261,
respectively. As more fully described in Note 1, the notes payable and accrued
interest are convertible to equity under certain conditions, which would result
in substantial dilutions to existing shareholders.

         In connection with the five year employment agreement effective January
1, 2002 entered into with Mr. Jenkins to remain as the Company's President and
Chief Executive Officer, the Company agreed to loan Mr. Jenkins $190,000,
bearing interest at the applicable federal rate, to be repaid at the rate of
one-third of the principal, plus accrued interest on October 1 of each of the
years 2002, 2003 and 2004. If Mr. Jenkins remains employed by the Company on
September 30 preceding the date annual principal and interest is due on the
loan, the sum due and owing the following day is forgiven. In the event of a
Change of Control, as defined, the death or permanent disability of Mr. Jenkins
or in the event his employment is terminated without cause, the entire amount
owing by Mr. Jenkins is forgiven. The Company is amortizing the loan balance
into compensation cost over the life of the loan. Compensation expense for the
nine months ended September 30, 2002 was approximately $52,000. The unamortized
balance at September 30, 2002 was $138,187.

7.       ISSUANCE OF COMMON STOCK

         During the first quarter of 2000, the Company executed a Compromise
Agreement With Release with Bendover whereby Bendover agreed to return to the
Company promissory notes aggregating $2,000,000 principal amount and receive in
exchange 2,666,667 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. The maturity of the promissory note was subsequently extended to
June 15, 2001 at an interest rate of 20% per annum with 10% per annum paid
monthly and the balance deferred until maturity. In September 2001, the Company
paid $1.1 million to Bendover out of the proceeds of the GECC financing in full
payment of all outstanding principal and interest obligations owing to Bendover.

         The Company has outstanding at September 30, 2002 common stock purchase
warrants, options and convertible debt securities entitled to purchase or to be
converted into an aggregate 129,504,959 shares of the Company's common stock at
exercise and conversion prices ranging from $0.75 to $8.01. Accordingly, if all
such securities were exercised or converted, the 12,499,528 shares of Common
Stock issued and outstanding on September 30, 2002, would represent 8.8% of the
shares outstanding on a fully diluted basis.

NOTE 8 - DISCONTINUED OPERATIONS

         In July 2001, the Company sold all physical assets associated with its
workover and completion business unit for $525,000. The Company recorded a gain
of $466,672, net of income taxes of $9,500. This business unit had revenues of
approximately $526,000 and a loss of approximately $88,000 for the nine months
ended September 30, 2001.


                                       14
<PAGE>

NOTE 9 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations." SFAS No. 141 requires that the purchase method of accounting be
used for all business combinations initiated after June 30, 2001. Goodwill and
certain intangible assets will remain on the balance sheet and was amortized
through December 31, 2001, and accounted for under SFAS No. 142. On an annual
basis, and when there is reason to suspect that their values have been
diminished or impaired, these assets must be tested for impairment, and
write-downs may be necessary. The Company implemented SFAS No. 141 on July 1,
2001.

         In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 changes the accounting for goodwill and other
indefinite-lived intangible assets from an amortization method to an
impairment-only approach. Amortization of goodwill and other indefinite-lived
intangible assets will cease upon adoption of this statement. The Company
implemented SFAS No. 142 on January 1, 2002 and ceased amortization of goodwill
and indefinite-lived intangible assets. SFAS No. 142 requires an assessment of
potential impairment upon adoption and annually thereafter in the month the
Company elects to perform its analysis or more frequently if events or
circumstances indicate that an impairment may have occurred. The Company has
completed the step one valuation analysis as of the implementation date. The
step one analysis did not indicate any impairment of goodwill. The Company has
no material indefinite lived intangible assets.

         The following table presents the impact on net income and earnings per
share in prior periods had SFAS No. 142 been effective for those periods:

                                                       Three Months Ended
                                                 ------------------------------
                                                 September 30,     September 30,
                                                      2002            2001
                                                 -------------    -------------
Reported net income (loss)                       $  (1,342,055)   $   2,019,083
       Add:  Goodwill amortization,
               net of tax of $0                             --           39,497
                                                 -------------    -------------
Adjusted net income (loss)                       $  (1,342,055)   $   2,058,580
                                                 =============    =============
Basic and diluted earnings per share:
       Reported net income (loss)                $       (0.11)   $        0.16
       Goodwill amortization, net of tax of $0              --               --
                                                 -------------    -------------
Adjusted net income (loss)                       $       (0.11)   $        0.16
                                                 =============    =============


                                       15
<PAGE>

                                                       Nine Months Ended
                                                 ------------------------------
                                                 September 30,     September 30,
                                                      2002            2001
                                                 -------------    -------------
Reported net income (loss)                      $(5,678,843)      $  7,744,028
       Add:  Goodwill amortization,
                 net of tax of $0                        --            118,164
                                                -----------       ------------
Adjusted net income (loss)                      $(5,678,843)      $  7,862,192
                                                ===========       ============
Basic and diluted earnings per share:
       Reported net income (loss)               $     (0.45)      $       0.63
       Goodwill amortization, net of tax of $0           --                 --
                                                 ----------       ------------
Adjusted net income (loss)                      $     (0.45)      $       0.63
                                                 ==========       ============


         In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 requires entities to record the fair value
of a liability for legal obligations associated with the retirement obligations
of tangible long-lived assets in the period in which it is incurred and the
corresponding cost capitalized by increasing the carrying amount of the related
asset. The liability is accreted to the fair value at the time of settlement
over the useful life of the asset, and the capitalized cost is depreciated over
the useful life of the related asset. If the liability is settled for an amount
other than the recorded amount, a gain or loss is recognized. The Company is
required to adopt this standard on January 1, 2003.

         In October 2001, the FASB issued SFAS 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," effective for years beginning
after December 15, 2001. This Statement supersedes SFAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" but
retains the fundamental provisions of SFAS 121 for recognition and measurement
of the impairment of long-lived assets to be held and used and measurement of
long-lived assets to be held for sale. The statement requires that whenever
events or changes in circumstances indicate that a long-lived asset's carrying
value may not be recoverable, the asset should be tested for recoverability. The
statement also requires that a long-lived asset classified as held for sale
should be carried at the lower of its carrying value or fair value, less cost to
sell. The Company adopted SFAS 144 January 1, 2002 and it did not have a
material effect on the financial statements upon adoption.

         In May 2002, the FASB issued SFAS 145, "Rescission of FASB Statements
No. 4,44, and 64, Amendment of FASB Statement No. 13 and Technical Corrections
as of April 2002", rescinds FASB Statement No. 4, "Reporting Gains and Losses
from Extinguishment of Debt", FASB Statement No. 64, "Extinguishments of Debt
Made to Satisfy Sinking-Fund Requirements." This Statement also rescinds FASB
Statement No. 44, "Accounting for Intangible Assets of Motor Carriers" and
amends FASB Statement No. 13, "Accounting for Leases", to eliminate an
inconsistency between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. This Statement also
amends other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions. This statement eliminates the treatment of early extinguishments of
debt as extraordinary items. The provisions of this Statement related to the
rescission of Statement 4 shall be applied in fiscal years beginning after May
15, 2002. The provisions Statement related to Statement 13 shall be effective
for transactions occurring after May 15, 2002. All other provisions of this
Statement shall be effective for financial statements issued on or after May 15,
2002. The Company does not believe that adoption of this statement will have a
material affect on its financial statements.


                                       16
<PAGE>

         In July 2002, the FASB issued SFAS 146 "Accounting for Costs Associated
with Exit or Disposal Activities." This Statement addresses financial accounting
and reporting for costs associated with exit or disposal activities and
nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)." This Statement
requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred rather than at the date of
an entity's commitment as provided under Issue 94-3. This Statement also
establishes that fair value is the objective for initial measurement of the
liability.

The provisions of this Statement are effective for exit or disposal activities
that are initiated after December 31, 2002. The Company does not believe
adoption of the provisions of this statement will have a material impact on its
financial statements.

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

GENERAL

         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. A recovery in the energy
industry began in the latter half of 1999 and continued throughout 2000 and into
early 2001 due mainly to strong oil and natural gas prices. These prices
declined throughout most of 2001. As a consequence, North American drilling
activity declined as well. The Company's strong revenues and income from
operations, experienced in the first three quarters of 2001, did not continue
into the fourth quarter of 2001 and the first three quarters of 2002. While oil
and natural gas commodity prices have given evidence of improving throughout
2002 with a concurrent improvement in the Company's operations, the Company has
not experienced the strong revenues and income from operations in 2002 that were
realized in the first three quarters of 2001. There can be no assurance that the
Company will continue to experience any material improvement in its operations
and increase in the demand for and utilization of its services throughout the
balance of 2002 and into 2003.

         Management may in the future seek to raise additional capital, which
may be either debt or equity capital or a combination thereof or enter into
another material transaction involving the Company, including a possible sale of
the Company. As of November 1, 2002, no specific plans or proposals have been
made with regard to any additional financing or any other transaction. The
Company may engage in other material corporate transactions. The Company may
seek to


                                       17
<PAGE>

pursue a transaction leading to the possible acquisition of the Company or a
sale of some or all of its assets. Any such transaction would be dependent upon
the ability of the Company to realize an acceptable price. In November 2001, the
Company retained Simmons & Company International as its financial advisor in
connection with examining various alternative means to maximize shareholder
value including a possible merger, sale of assets or other business combination
involving the Company. The Company is not engaged in any negotiations at
November 1, 2002 that its management believes may lead to its acquisition or
other material transaction. There can be no assurance that the Company will seek
to enter into such a transaction and no representation is made as to the terms
on which any such transaction may be entered into or that such a transaction
will occur. In the event the Company should seek or be required to raise
additional equity capital, there can be no assurance that such a transaction
would be available to the Company or would not dilute the interests of the
Company's existing security holders. Fluctuations in interest rates and
commodity prices would adversely affect the Company's ability to raise capital.

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE
MONTHS ENDED SEPTEMBER 30, 2001 AND NINE MONTHS ENDED SEPTEMBER 30, 2002
COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2001

         The following table sets forth the Company's revenues from its two
principal lines of business for the three and nine months ended September 30,
2002 and 2001, respectively:

                           THREE MONTHS ENDED          NINE MONTHS ENDED
                       ------------------------    -------------------------
                          9/30/02      9/30/01       9/30/02       9/30/01
                       -----------   -----------   -----------   -----------
Wireline               $ 9,029,478   $10,790,239   $24,758,852   $31,867,881
Directional Drilling     6,399,319    10,624,106    16,771,362    28,517,360
                       -----------   -----------   -----------   -----------
                       $15,428,797   $21,414,345   $41,530,214   $60,385,241


         Total revenues decreased by approximately $5.9 million to approximately
$15.4 million for the three months ended September 30, 2002 and decreased
approximately $18.9 million to $41.5 million for the nine months ended September
30, 2002 as compared to total revenues of approximately $21.4 million and $60.4
million, respectively, for the three months and nine months ended September 30,
2001. Wireline services revenues decreased by approximately $1.8 million and
$7.1 million, respectively, for the three and nine months ended September 30,
2002 primarily due to the decreased demand for the Company's services.
Directional drilling revenues decreased by approximately $4.2 million and $11.7
million, respectively, for the three and nine months ended September 30, 2002 as
a consequence of the general decreased level of oil and natural gas well
drilling activity.


                                       18
<PAGE>

         Operating costs decreased by approximately $2.5 million and $7.3
million for the three and nine months ended September 30, 2002, respectively, as
compared to the same period of 2001. Operating costs were 69.3% and 70.6% of
revenues for the three month and nine months ended September 30, 2002 as
compared with 61.7% and 60.7% of revenues in the same periods in 2001. The
decrease in operating costs was primarily the result of the lower overall level
of activities in the three and nine months ended September 30, 2002 compared
with 2001. The increase in operating costs as a percentage of revenues was
primarily because of the decreased level of activity in the industry. Salaries
and benefits decreased by approximately $81,000 for the three months ended
September 30, 2002 and increased by approximately $175,000 for the nine months
ended September 30, 2002, as compared to the same period in 2001, while the
total number of employees decreased from 352 at September 30, 2001 to 342 at
September 30, 2002. The decrease for the three months ended September 30, 2002
is due mainly to the decrease in contract driller wages in the directional
drilling segment. The increase in salaries and benefits for the nine months
ended September 30, 2002 is primarily due to the increase in employee benefits
costs as well as the costs associated with the start up of the Company's tubing
conveyed perforating ("TCP") operations and plugging and abandoning ("P&A")
services in 2002. The results of TCP and P&A are included in wireline services
for segment reporting.

         Selling, general and administrative expenses increased by approximately
$640,000 and $2.1 million for the three and nine months ended September 30,
2002. As a percentage of revenues, selling, general and administrative expenses
increased to 17.4% and 19.3% in the three and nine months ended September 30,
2002 from 9.6% and 9.9% in 2001, primarily as a result of decreased revenue
levels as well as higher insurance costs in 2002.

         Depreciation and amortization increased from approximately $1.7 million
and $4.8 million in the three and nine months ended September 30, 2001, or 8.0%
and 7.9% of revenues, respectively, to approximately $2.0 million and $6.0
million, respectively, in 2002 or 13.2% and 14.5% of revenues, primarily because
of the capital expenditures made in the second half of 2001 and throughout the
first nine months of 2002.

         Interest expense and amortization of debt discount decreased by
approximately $324,000 for the three months ended September 30, 2002 as compared
to the same period of 2001 and decreased by approximately $315,000 for the nine
months ended September 30, 2002 as compared to the same period in 2001. Both the
decreases in the three and nine months ended September 30, 2002 are due mainly
to the reduced interest rates in effect on outstanding senior debt for the
period. See "Note 6 of Notes to Financial Statements" in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2001.

         The Company's net loss for the three and nine months ended September
30, 2002 was $1.3 million and $5.7 million, respectively, compared with net
income of $2.0 million and $7.7 million, respectively, for the three and nine
months ended September 30, 2001. The decline in operating results for the three
and nine months ended September 30, 2002 was the result of the general decline
in demand for the Company's services that commenced in the last quarter of 2001.


                                       19
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         Cash provided by the Company's operating activities was approximately
$4.3 million for the nine months ended September 30, 2002 as compared to $12.2
million for the same period in 2001. Investing activities used cash of
approximately $6.4 million during the nine months ended September 30, 2002 for
the acquisition of property, plant and equipment. During the nine months ended
September 30, 2001, investing activities used cash of approximately $8.9 million
for the acquisition of property, plant and equipment. Financing activities
provided cash of approximately $5.3 million from proceeds from bank and other
borrowings offset by principal payments on debt and capital lease obligations
and net payments on working revolver of approximately $5.0 million and a loan to
the President of the Company in March, 2002 of $190,000. For the same period in
2001, financing activities used cash of approximately $19.4 million for
principal payments on debt and capital lease obligations and net payments on
working revolver offset by proceeds from bank and other borrowings of
approximately $17.9 million.

         Cash at September 30, 2002 was approximately $906,000 as compared with
cash at September 30, 2001 of approximately $1.6 million.

         The Company's outstanding indebtedness includes primarily senior
secured indebtedness aggregating approximately $20.8 million at September 30,
2002, owed to GECC, other indebtedness of approximately $1.2 million, and $24.6
million owed to St. James and or its affiliates.

GECC LOAN DESCRIPTION

         On September 14, 2001, the Company entered into the Credit Facility
with GECC providing for the extension of revolving, term and capex credit
facilities to the Company aggregating up to $40.0 million. The Company and GECC
entered into amendments to the Credit Facility in January 2002, June 2002 and
November 2002. As amended, the Credit Facility includes a revolving loan of up
to $15.0 million, but not exceeding 85% of eligible accounts receivable, a term
loan of $17.0 million, and a capex loan of up to $8.0 million, but not exceeding
the lesser of 70% of the hard costs of acquired eligible equipment, 100% of its
forced liquidation value and the Company's EBITDA for the month then ended, less
certain principal, interest and maintenance payments. Eligible accounts are
defined to exclude, among other items, accounts outstanding of debtors that are
more than 60 days overdue or 90 days following the original invoice date and of
debtors that have suspended business or commenced various insolvency proceedings
and accounts with reserves established against them to the extent of such
reserves as GECC may set from time to time in its reasonable credit judgment.
The interest rate on borrowings under the revolving loan is 1.75% above a base
rate and on borrowings under the term loan and capex loan is 2.5% above the base
rate. The base rate is the higher of (i) the rate publicly quoted from time to
time by the Wall Street Journal as the base rate on corporate loans posted by at
least 75% of the nation's thirty largest banks, or (ii) the average of the rates
on overnight Federal funds transactions by members of the Federal Reserve
System, plus 0.5%.


                                       20
<PAGE>

Subject to the absence of an event of default and fulfillment of certain other
conditions, commencing March 31, 2003 or such earlier date as the Company is in
compliance with certain financial covenants, the Company can elect to borrow or
convert any loan and pay interest at the LIBOR rate plus applicable margins of
3.25% on the revolving loan and 4.0% on the term loan and capex loan. Pursuant
to the June 2002 loan amendment, the LIBOR conversion and borrowing option was
suspended until the quarter ending March 31, 2003 or such earlier date as the
Company is in compliance with certain financial covenants. If an event of
default has occurred, the interest rate is increased by 2%. Advances under the
Credit Facility are collateralized by a senior lien against substantially all of
the Company's assets. The Credit Facility expires on September 14, 2004.

         Initial borrowings under the Credit Facility advanced on September 14,
2001 aggregated $21.6 million. Proceeds of the initial borrowings were used to
repay outstanding indebtedness aggregating $21.4 million to Coast Business
Credit ("Coast"), Bendover Company ("Bendover") and certain other indebtedness.
At September 30, 2002, borrowings outstanding under the Credit Facility
aggregated $20.8 million, of which $4.0 million was outstanding under the
revolving loan, $13.6 million was outstanding under the term loan and $3.2
million was outstanding under the capex loan. Borrowings under the revolving
loan may be repaid and re-borrowed from time to time for working capital and
general corporate needs, subject to the Company's continuing compliance with the
terms of the Credit Facility. The outstanding balance of the revolving loan is
to be paid in full at the expiration of the Credit Facility on September 14,
2004. The term loan is to be repaid in 35 equal monthly installments of $283,333
with a final installment of $7,083,333 due and payable on September 14, 2004.
The capex loan is available to be borrowed through September 14, 2003 and is to
be repaid in equal monthly installments of 1/60th of each of the amounts
borrowed from time to time with the remaining outstanding balance of the entire
capex loan due and payable on September 14, 2004

         Borrowings under the Credit Facility may be prepaid or the facility
terminated or reduced by the Company at any time subject to the payment of an
amount equal to 3% of the prepayment or reduction occurring before September 14,
2002, 2% of the prepayment or reduction occurring thereafter but before
September 14, 2003, and 1% of the prepayment or reduction occurring thereafter
but before September 14, 2004. In the event all the stock or substantially all
the assets of the Company are sold prior to September 14, 2003 and, in
connection therewith, the Company prepays the Credit Facility, the amount of
such payment is reduced to 1%. The Company is required to prepay borrowings out
of the net proceeds from the sale of any assets, subject to certain exceptions,
or the stock of any subsidiary, the net proceeds from the sale of any stock or
debt securities by the Company, and any borrowings in excess of the applicable
borrowing availability, including borrowings under the term loan and capex loan
in excess of 50% of the forced liquidation value of the eligible capex and term
loan equipment and borrowings under the term loan in excess of 70% of the forced
liquidation value of eligible term loan equipment. The value of the term loan
equipment is established by appraisal and the creditor can require the Company
to obtain up to two appraisals per year.


                                       21
<PAGE>

         Initial borrowings under the Credit Facility were subject to the
fulfillment at or before the closing of a number of closing conditions,
including among others, the accuracy of the representations and warranties made
by the Company in the loan agreement, delivery of executed loan documents,
officers' certificates, an opinion of counsel, repayment of the Coast senior
secured loan, the extension of the maturity date of $24.6 million principal
amount of the Company's outstanding subordinated notes to December 31, 2004 with
no payments of principal or interest to be made prior to that date, and the
completion of due diligence. Future advances are subject to the continuing
accuracy of the Company's representations and warranties as of such date (other
than those relating expressly to an earlier date), the absence of any event or
circumstance constituting a "material adverse effect," as defined, the absence
of any default or event of default under the Credit Facility, and the borrowings
not exceeding the applicable borrowing availability under the Credit Facility,
after giving effect to such advance. A "material adverse effect" is defined to
include an event having a material adverse effect on the Company's business,
assets, operations, prospects or financial or other condition, on the Company's
ability to pay the loans, or on the collateral and also includes a decline in
the "Average Rig Count" (excluding Canada and international rigs) published by
Baker Hughes, Inc. falling below 675 for 12 consecutive weeks. The Company's
liquidity is dependent upon the availability of funds borrowed under the Credit
Facility.

         Under the Credit Facility, the Company is obligated to maintain
compliance with a number of affirmative and negative covenants. Affirmative
covenants the Company must comply with include requirements to maintain its
corporate existence and continue the conduct of its business substantially as
now conducted, promptly pay all taxes and governmental assessments and levies,
maintain its corporate records, maintain insurance, comply with applicable laws
and regulations, provide supplemental disclosure to the lenders, conduct its
affairs without violating the intellectual property of others, conduct its
operations in compliance with environmental laws and provide a mortgage or deed
of trust to the lenders granting a first lien on the Company's real estate upon
the request of the lenders, and provide certificates of title on newly acquired
equipment with the lender's lien noted.

         Negative covenants the Company may not violate include, among others,
(i) forming or acquiring a subsidiary, merging with, acquiring all or
substantially all the assets or stock of another person, (ii) making an
investment in or loan to another person, (iii) incurring any indebtedness other
than permitted indebtedness, (iv) entering into any transaction with an
affiliate except on fair and reasonable terms no less favorable than would be
obtained from a non-affiliated person, (v) making loans to employees in amounts
exceeding $50,000 to any employee and a maximum of $250,000 in the aggregate,
(vi) making any change in its business objectives or operations that would
adversely affect repayment of the loans or in its capital structure, including
the issuance of any stock, warrants or convertible securities other than (A) on
exercise of outstanding securities or rights, (B) the grant of stock in exchange
for extensions of subordinated debt, (C) options granted under an existing or
future incentive option plan, or (D) in its charter or by-laws that would
adversely affect the ability of the Company to repay the indebtedness, (vii)
creating or permitting to exist any liens on its properties or assets, with the
exception of those granted to the lenders or in existence on the date of making
the loan, (viii)


                                       22
<PAGE>

selling any of its properties or other assets, including the stock of any
subsidiary, except inventory in the ordinary course of business and equipment or
fixtures with a value not exceeding $100,000 per transaction and $250,000 per
year, (ix) failing to comply with the various financial covenants in the loan
agreement, (x) making any restricted payment, including payment of dividends,
stock or warrant redemptions, repaying subordinated debt, rescission of the sale
of outstanding stock, (xi) making any payments to stockholders of the Company
other than compensation to employees and payments of management fees to any
stockholder or affiliate of the Company, or (xii) amending or changing the terms
of the Company's subordinated debt.

         As amended through October 2002, the financial covenants the Company is
required to comply with include (a) limitations on capital expenditures to $7.7
million during the year 2002, to $8.0 million during the year 2003 and to $5.0
million during the six-months ended June 30, 2004, (b) having a fixed charge
coverage ratio at the end of each quarter, commencing with the quarter ended
March 31, 2003, of not less than 1.3:1.0 for the preceding twelve-month period,
(c) having an interest coverage ratio at the end of each quarter, commencing
with the quarter ended March 31, 2003, of not less than 3.0:1.0 for the
preceding twelve-month period, and (d) commencing with the quarter ending March
31, 2003, having a ratio of senior funded debt to EBITDA, minus capital
expenditures paid in cash, of not more than 2:0:1.0 for the four fiscal quarters
then ended. The Company is required to maintain a cumulative operating cash flow
at the end of each month, commencing with the month ended July 31, 2002,
increasing as follows:

                   Fiscal Month            Cumulative Operating Cash Flow
                   ------------            ------------------------------
                   July 31, 2002                  $  (275,000)
                   August 31, 2002                $   225,000
                   September 30, 2002             $   975,000
                   October 31, 2002               $ 1,000,000
                   November 30, 2002              $ 1,400,000
                   December 31, 2002              $ 1,700,000
                   January 31, 2003               $ 2,200,000
                   February 28, 2003              $ 2,600,000

For the period ended September 30, 2002, the Company is in compliance with all
financial covenants.

         Events of default under the Credit Facility include (a) the failure to
pay when due principal or interest or fees owing under the Credit Facility, (b)
the failure to perform the covenants under the Credit Facility relating to use
of proceeds, maintenance of a cash management system, maintenance of insurance,
delivery of certificates of title, delivery of required consents of holders of
outstanding subordinated notes, maintenance of compliance with the financial
covenants in the loan agreement and compliance with any of the loan agreement's
negative covenants, (c) the failure, within specified periods of 3 or 5 days of
when due, to deliver monthly unaudited and annual audited financial statements,
annual operating plans, and other reports, notices and information, (d) the
failure to perform any other provision of the loan agreement which remains
un-remedied for 20 days or more, (e) a default or breach under any


                                       23
<PAGE>

other agreement to which the Company is a party beyond any grace period that
involves the failure to pay in excess of $250,000 or causes or permits to cause
in excess of $250,000 of indebtedness to become due prior to its stated
maturity, (f) any representation or warranty or certificate delivered to the
lenders being untrue or incorrect in any material respect, (g) a change of
control of the Company, (h) the occurrence of an event having a material adverse
effect, and (i) the attachment, seizure or levy upon of assets of the Company
which continues for 30 days or more and various other bankruptcy and other
events. Upon the occurrence of a default or event of default, the lenders may
discontinue making loans to the Company. Upon the occurrence of an event of
default, the lenders may terminate the Credit Facility, declare all indebtedness
outstanding under the Credit Facility due and payable, and exercise any of their
rights under the Credit Facility which includes the ability to foreclose on the
Company's assets.

         Before reflecting the June 2002 amendment to the Credit Facility, the
Company was in violation of the financial covenants relating to its fixed charge
coverage ratio, minimum interest coverage ratio, and ratio of senior funded debt
to EBITDA at December 31, 2001 and March 31, 2002. By amendment to the Credit
Facility entered into as of June 10, 2002, GECC waived these defaults as well as
violations relating to the Company's failure to timely deliver its financial
statements for the year ended December 31, 2001 as required by the Credit
Facility and selling certain assets in violation of the terms of the Credit
Facility.

         The Company agreed in the November 2002 amendment to the Credit
Facility to have GECC establish an accreting reserve under the Credit Facility
for the principal and interest payments due on December 1, 2002 and January 1,
2003 and the outstanding fees due under amendments to the Credit Facility
aggregating $125,000.

         The Company agreed to pay GECC a fee of $100,000 in connection with
entering into the June amendment and $75,000 in connection with entering into
the November amendment to the Credit Facility.

         Reference is made to the Credit Agreement, filed as an exhibit to the
Company's Current Report on Form 8-K for September 14, 2001, and the First and
Second Amendments thereto, filed as exhibits to the Company's Annual Report on
Form 10-K for the year ended December 31, 2001, for a complete statement of the
terms and conditions.

         The Company continues to be highly leveraged and has an accumulated
deficit of $35.7 million. The Company is subject to certain debt covenants
requiring minimum operational and cash flow levels. Failure to comply with these
debt covenants and or generate sufficient cash flow from operations could
significantly impair the Company's liquidity position and could result in the
lender exercising prepayment options under the Company's Credit Facility. While
the Company believes that it will have adequate borrowing base and cash flows,
it can make no assurances that it will comply with its debt covenants or
generate sufficient cash flows to service its debt and fund operations. Should
the Company be unable to borrow funds under its current credit facility or if
prepayment of those borrowings were required, it can make no assurances that
alternative funding could be obtained.


                                       24
<PAGE>


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 and
nine months ended September 30, 2002.

SIGNIFICANT ACCOUNTING POLICIES

         The Company's discussion and analysis of its financial condition and
results of operations are based upon its financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires the
Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosures of
contingent assets and liabilities. On an on-going basis, the Company evaluates
its estimates, including those related to the allowance for bad debts,
inventory, long-lived assets, intangibles and goodwill. The Company bases its
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

         The Company maintains allowances for doubtful accounts for estimated
losses resulting from the inability of its customers to make required payments.
If the financial condition of the Company's customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required.

         Inventories consist of tool components, sub-assemblies and expendable
parts used in directional oil and gas well drilling activities. The Company
carries its inventory at historical cost less an allowance based on motor hour
usage. Tools manufactured and assembled into electric motors from tool
components are expensed based on usage of the motors. Actual results could
differ from these estimates and could result in adjustments to inventory
balances. Until utilized, components, sub-assemblies and expendable parts are
capitalized as inventory. Inventory is written down for estimated obsolescence
or unmarketable inventory with such write down being equal to the difference
between the cost of inventory and the estimated market value based upon
assumptions about future demand and market conditions. If actual market
conditions are less favorable than those projected by management, additional
inventory write-downs may be required. Inventories are classified as a long-term
asset rather than a current asset as is consistent with industry practice.

         The Company assesses the impairment of goodwill annually or more
frequently whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. The first step of the goodwill impairment
test used to identify potential impairment

                                       25
<PAGE>


compares the fair value of the Reporting Unit with its carrying amount,
including goodwill. If the carrying amount of the Reporting Unit exceeds the
fair value, the second step of the goodwill impairment test shall be performed
to measure the amount of impairment loss, if any. The second step of the
goodwill impairment test compares the implied fair value of the Reporting Unit
goodwill with the carrying amount of that goodwill. If the carrying amount of
the Reporting Unit goodwill exceeds the fair value of that goodwill, an
impairment loss should be recognized in an amount equal to such excess.

         The Company assesses the impairment of long-lived assets whenever
events or changes in circumstances indicate that the carrying value may not be
recoverable. If events or changes in circumstances that indicate a possible
impairment may have occurred, the carrying value of the asset is compared to the
undiscounted future cash flows generated from the assets. If the undiscounted
future cash flows exceed the carrying value of the assets, an impairment loss is
measured as the excess carrying value over the fair value of the asset. The
Company utilizes a discounted future cash flows model to determine fair value.

         The Company considers external factors in making its assessment of
potential impairment of goodwill and long-lived assets. Specifically, changes in
oil and natural gas prices and other economic conditions surrounding the
industry, consolidation within the industry, competition from other oil and gas
well service providers, the ability to employ and maintain a skilled workforce
and other pertinent factors are among the items that could lead management to
reassess the realizability of its goodwill.

         Property, plant and equipment are carried at original cost less
applicable depreciation. Depreciation is recognized on the straight-line basis
over lives ranging from two to ten years. Major renewals and improvements are
capitalized and depreciated over each asset's estimated remaining useful life.
Maintenance and repair costs are charged to expense as incurred. When assets are
sold or retired, the remaining costs and related accumulated depreciation are
removed from the accounts and any resulting gain or loss is included in income.

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. The Company
intends that the forward-looking statements herein be covered by the safe-harbor
provisions for forward-looking statements contained in the Securities Exchange
Act of 1934, as amended, and this statement is included for the purpose of
complying with these safe-harbor provisions. 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 generate and
increase revenues and attain and maintain profitability and cash flow, the
improvement in, stability and level of prices for oil and natural gas, pricing
in the oil and gas services industry, demand for those services, and the


                                       26
<PAGE>

willingness of customers to commit for oil and natural gas well services, the
ability of the Company to implement any of the possible alternative means to
maximize shareholder value in conjunction with its agreement retaining Simmons &
Company International, including any possible merger, sale of assets or other
business combination transaction involving the Company or raising additional
debt or equity capital, to maintain, implement and, if appropriate, expand its
cost-cutting program instituted in 1998, the ability of the Company to compete
in the premium oil and gas well services market, the ability of the Company to
meet or refinance its debt obligations as they come due or to obtain extensions
of the maturity dates for the payment of principal, the ability of the Company
to re-deploy its equipment among regional operations as required, the ability of
the Company to provide services using state of the art tooling, the ability of
the Company to raise additional capital to meet its requirements and to obtain
additional financing when required, and its ability to maintain compliance with
the covenants of its various loan documents and other agreements pursuant to
which securities have been issued and waivers of covenant breaches when
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, declines and
fluctuations in the prices for oil and natural gas and the absence of any
material decline in those prices, and other factors could have a material
adverse effect on the Company. The Company cautions readers that the various
risk factors referred to above could cause the Company's operating results, and
financial condition 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
and plans. The Company cautions readers that various risk factors described in
the Company's Annual Report on Form 10-K for the year ended December 31, 2001
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-K and
the risk factors discussed therein.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         From time to time, the Company holds financial instruments comprised of
debt securities and time deposits. All such instruments are classified as
securities available-for-sale. The Company does not invest in portfolio equity
securities, or commodities, or use financial derivatives for trading or hedging
purposes. The Company's debt security portfolio represents funds held
temporarily pending use in its business and operations. The Company manages
these funds accordingly. The Company seeks reasonable assuredness of the safety
of principal and market liquidity by investing in rated fixed income securities
while, at the same time, seeking to achieve a favorable rate of return. The
Company's market risk exposure consists of exposure to changes in interest rates
and to the risks of changes in the credit quality of issuers. The Company
typically invests in investment grade securities with a term of three years or
less. The Company believes that any exposure to interest rate risk is not
material.

         Under the Credit Facility with GECC, the Company is subject to market
risk exposure related to changes in the prime interest rate. Assuming the
Company's level of borrowings from


                                       27
<PAGE>

GECC at December 31, 2001 remained unchanged throughout 2002, if a 100 basis
point increase in interest rates under the Credit Facility prevailed throughout
the year, it would increase the Company's 2002 interest expense by approximately
$205,000.

ITEM 4. CONTROLS AND PROCEDURES

         Under the supervision and with the participation of the Company's
management, including William Jenkins, its President and Chief Executive
Officer, and Ronald Whitter, its Chief Financial Officer, the Company has
evaluated the effectiveness of the design and operation of its disclosure
controls and procedures within 90 days of the filing date of this quarterly
report, and, based on their evaluation, Mr. Jenkins and Mr. Whitter have
concluded that these controls and procedures are effective. There were no
significant changes in the Company's internal controls or in other factors that
could significantly affect these controls subsequent to the date of their
evaluation.

         Disclosure controls and procedures are the Company's controls and other
procedures that are designed to ensure that information required to be disclosed
by it in the reports that it files or submits under the Exchange Act are
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the Company's management, including Mr. Jenkins and Mr. Whitter, as
appropriate to allow timely decisions regarding required disclosure.

PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

              10.37.10    Third Amendment to Credit Agreement with General
                          Electric Capital Corporation entered into as of
                          October 31, 2002.
              99.1        President and Chief Executive Officer's Certification
              99.2        Chief Financial Officer's Certification

(b)      Reports on Form 8-K

                           The Registrant filed a Current Report on Form 8-K in
                           response to Item 4 and an amendment thereto in
                           response to Item 7 of Form 8-K for an event occurring
                           on September 18, 2002. Such Reports were filed on
                           September 25 and September 30, 2002, respectively.


                                       28
<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,  2002                     /S/  William L. Jenkins
                                     -------------------------------------------
                                                   William L. Jenkins
                                          President and Chief Executive Officer

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


                                       29
<PAGE>


                                 CERTIFICATIONS

             CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER
             ------------------------------------------------------

I, William L. Jenkins, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Black Warrior Wireline
Corp.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

         a) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  November 14, 2002                  /s/William L. Jenkins
                                          ---------------------
                                          William L. Jenkins
                                          President and Chief Executive Officer


                                       30
<PAGE>

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                    ----------------------------------------

I, Ronald Whitter, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Black Warrior Wireline
Corp.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

         a) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  November 14, 2002                             /s/ Ronald Whitter
                                                    ----------------------------
                                                     Ronald Whitter
                                                     Chief Financial Officer


                                       31