SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)

[X]  Quarterly  report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934 for the quarterly period ended March 31, 2000.

[    ] Transition  report under Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the transition period from to . ------------ to ----------.


         Commission file number:000-09419
                                ---------


                             POWER EXPLORATION, INC.
                             -----------------------

        (Exact name of small business issuer as specified in its charter)





              NEVADA                                     84-0811647
            --------                                     -----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


                   5416 Birchman Ave., Fort Worth, Texas 76107
                   -------------------------------------------
               (Address of principal executive office) (Zip Code)


                                 (817) 377-4464
                              ---------------------
                           (Issuer's telephone number)


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

                                    Yes XX No

         The number of outstanding  shares of the issuer's  common stock,  $0.02
par value (the only class of voting stock), as of March 31, 2000 was 11,564,121


<PAGE>




                                TABLE OF CONTENTS

                                     PART I

ITEM 1.  FINANCIAL STATEMENTS.................................................3

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS.................................4


                                     PART II

ITEM 1.  LEGAL PROCEEDINGS....................................................5

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                             6

ITEM 5.  OTHER INFORMATION....................................................7

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.....................................7


SIGNATURES....................................................................8

INDEX TO EXHIBITS.............................................................9




                                        2


<PAGE>



PART I-   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

As used herein,  the term "Power"  refers to Power  Exploration,  Inc., a Nevada
corporation,  and its subsidiaries and predecessors unless otherwise  indicated.
Consolidated,  unaudited,  condensed  interim financial  statements  including a
balance sheet for Power as of the quarter ended March 31, 2000 and statements of
operations,  and  statements of cash flows for the interim period up to the date
of such  balance  sheet  and the  comparable  period of the  preceding  year are
attached  hereto as Pages F-1 through F-13 and are  incorporated  herein by this
reference.





                      [This Space Intentionally Left Blank]




                                        3


<PAGE>
                         POWER EXPLORATION & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                           March 31, 2000                 Sept 30,1999
                                                                              Unaudited                      Audited
                                                                      --------------------------    --------------------------
                             ASSETS
<S>                                                                  <C>                           <C>
CURRENT ASSETS
Cash                                                                                     $9,688                        $1,083
Accounts Receivable                                                                      13,148                         8,563
Accounts Receivable - Related Party                                                      10,257                        84,570
Inventory                                                                               398,661                       323,486
Prepaid Expenses                                                                              -                           230
                                                                      --------------------------    --------------------------
Total Current Assets                                                                    431,754                       417,932
                                                                      --------------------------    --------------------------
OIL & GAS PROPERTIES, FULL COST METHOD
Properties being amortized                                                            8,134,423                     7,134,910
Properties not subject to amortization                                                        -                             -
                                                                      --------------------------    --------------------------
Less: Accumulated depreciation, depletion & amortization                                (26,049)                      (10,491)
                                                                      --------------------------    --------------------------
Net Oil and Gas Properties                                                            8,108,374                     7,124,419
                                                                      --------------------------    --------------------------
PROPERTY AND EQUIPMENT
Property and Equipment                                                                  229,842                       370,124
Accumulated Depreciation                                                               (118,707)                     (139,618)
                                                                      --------------------------    --------------------------
Total Property and Equipment                                                            111,135                       230,506
                                                                      --------------------------    --------------------------

OTHER ASSETS                                                                             11,028                         6,037
INVESTMENT IN LAND                                                                      300,000                             -
                                                                      --------------------------    --------------------------
TOTAL ASSETS                                                                         $8,962,291                    $7,778,894
                                                                      ==========================    ==========================

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts Payable-Trade                                                                 $314,111                      $825,466
Accounts Payable-Related Parties                                                         19,843                       389,154
Payroll and Sales Taxes Payable                                                          15,687                             -
Accrued Expenses                                                                         20,000                             -
Accrued Interest                                                                        (38,020)                            -
Accrued Wages and Payroll Taxes Payable                                                  37,016                             -
Customer Deposits                                                                        55,000                        30,000
Advances Payable                                                                              -                        25,000
Advances Payable-Related Parties                                                              -                       140,000
Debentures Payable                                                                            -                             -
Unamortized Discount on Debentures                                                            -                             -
Notes Payable                                                                           340,000                       500,000
Notes payable -- Related Parties                                                         11,160                       101,313
                                                                      --------------------------    --------------------------
Total Current Liabilities                                                               774,797                     2,010,933
                                                                      --------------------------    --------------------------
LONG TERM LIABILITIES                                                                         -                             -
                                                                      --------------------------    --------------------------
Total Liabilities                                                                       774,797                     2,010,933
                                                                      --------------------------    --------------------------

STOCKHOLDERS' EQUITY

Common Stock ($.02 par value; 50,000,000 shares
authorized, 11,564,121 & 177,650 shares issued & outstanding)                           231,282                         3,553
Additional Paid-In Capital                                                           28,681,414                    13,650,157
Accumulated Deficit                                                                 (20,725,202)                   (7,885,749)
                                                                      --------------------------    --------------------------
Total Stockholders' Equity                                                            8,187,494                     5,767,961
                                                                      --------------------------    --------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                           $8,962,291                    $7,778,894
                                                                      ==========================    ==========================
</TABLE>

                                      F-1

<PAGE>

                        POWER EXPLORATION & SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                                            3 Months Ending     3 Months Ending     6 Months Ending        6 Months Ending
                                             March 31, 2000      March 31, 1999      March 31, 2000        March 31, 1999
                                               Unaudited           Unaudited           Unaudited              Unaudited
                                           ----------------    ----------------     ------------------     -----------------
REVENUE
<S>                                       <C>                 <C>                  <C>                    <C>
Oil and Gas Sales                                  $47,110              $1,785                $62,254                $4,270
Rig Sales                                                -             189,398                  5,041               197,033
Drilling Revenue                                    18,050                   -                 24,377                     -
                                           ----------------    ----------------     ------------------     -----------------
Total Revenue                                       65,160             191,183                 91,672               201,303
                                           ----------------    ----------------     ------------------     -----------------

COST OF REVENUE
Lease Operating                                     68,162              28,055                137,173                72,933
Production Taxes                                     2,177                   -                  2,877                    32
Depreciation, Depletion & Amortization              12,842                 279                 25,684                   558
Exploration                                              -                   -                      -                     -
Cost of Rig Sales & Drilling Revenue                (1,637)            142,080                 (1,637)              143,590
                                           ----------------    ----------------     ------------------     -----------------
Total Cost of Revenue                               81,544             170,414                164,097               217,113
                                           ----------------    ----------------     ------------------     -----------------

GROSS PROFIT                                       (16,384)             20,769                (72,425)             (15,810)
                                           ----------------    ----------------     ------------------     -----------------

EXPENSES

General and Administrative                       9,099,386           2,018,547              9,579,479             2,422,757
Interest Expense                                     9,512               8,648                 19,726                25,763
Asset Impairment Expense                         3,168,000                   -              3,168,000                     -
                                           ----------------    ----------------     ------------------     -----------------
Total Expenses                                  12,276,898           2,027,195             12,767,205             2,448,520
                                           ----------------    ----------------     ------------------     -----------------

PROFIT (LOSS) BEFORE OTHER INCOME
AND PROVISION FOR INCOME TAXES                 (12,293,282)         (2,006,426)           (12,839,630)           (2,464,330)

RECOVERY OF BAD DEBT                                   178                   -                    178                     -
OTHER INCOME/(LOSS)                                      -                   -                      -                     -
                                           ----------------    ----------------     ------------------     -----------------

PROFIT (LOSS) BEFORE PROVISION
FOR INCOME TAXES                               (12,293,104)         (2,006,426)           (12,839,453)           (2,464,330)

PROVISION FOR INCOME TAXES                               -                   -                      -                     -
                                           ----------------    ----------------     ------------------     -----------------

NET PROFIT (LOSS)                              $(12,293,104)        $(2,006,426)          $(12,839,453)          $(2,464,330)
                                           ================    ================     ==================     =================

PROFIT (LOSS) PER SHARE                             $(1.06)           $(166.65)                $(1.81)             $(204.68)
                                           ================    ================     ==================     =================

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING                               11,564,121              12,040              7,091,699                12,040
                                           ================    ================     ==================     =================
</TABLE>


                                      F-2

<PAGE>


                       POWER EXPLORATION & SUBSIDIARIES
                         CONSOLIDATED STATEMENT OF CASH
                                     FLOWS
<TABLE>
<CAPTION>
                                                                  6 Months Ending              6 Months Ending
                                                                   March 31, 2000               March 31, 1999
                                                                     Unaudited                    Unaudited
                                                                  ----------------             ----------------
<S>                                                         <C>                           <C>
Profit (Loss) After Taxes                                            $(12,839,453)                 $(2,464,330)
Depreciation and Amortization                                              25,684                       22,865
Non-Cash Compensation                                                   9,168,157                            0
Impairment Expense                                                      3,184,045                            0
Accounts Receivable                  Decrease (Increase)                   69,728                      (76,592)

Inventory                            Decrease (Increase)                  (75,175)                      88,516

Other Current Assets                 Decrease (Increase)                   (4,991)                           0

Prepaid & Deferred Exp               Decrease (Increase)                      230                      (24,726)

Accounts Payable                     Increase (Decrease)                  661,162                      117,706

Other Current Liabilities            Increase (Decrease)                        0                     (110,000)
                                                              --------------------          -------------------
Cash Flow from Operating                                                  189,387                   (2,446,561)
Activities                                                    --------------------          -------------------

Fixed Assets                         Decrease (Increase)                        0                      (27,553)

Net Oil & Gas Prop                   Decrease (Increase)                        0                      197,761

Other Investments                    Decrease (Increase)                        0                       (5,707)
                                                              --------------------          -------------------
Cash Flow from Investing                                                        0                      164,501
Activities                                                    --------------------          -------------------

Notes Payable                        Increase (Decrease)                 (110,782)                     556,313

New Borrowings                       Increase (Decrease)                        0                      368,500

Repayments                           Decrease (Increase)                        0                     (105,500)

Short Term Debt                      Increase (Decrease)                 (160,000)                    (450,000)

Long Term Debt                       Increase (Decrease)                        0                            0

Common Stock                         Increase (Decrease)                      900                       53,001

Additional Paid In Capital           Increase (Decrease)                   89,100                    1,728,435
                                                              --------------------          -------------------
Cash Flow from Financing                                                 (180,782)                    2,150,749
Activities                                                    --------------------          -------------------

NET INCREASE (DECREASE) IN CASH                                             8,605                     (131,311)

BEGINNING CASH                                                              1,083                      149,382
                                                              --------------------          -------------------
ENDING CASH                                                                 9,688                       18,071
                                                              ====================          ===================
</TABLE>


                                      F-3

<PAGE>




                    POWER EXPLORATION, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  NOTES TO March 31, 2000 FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
The  interim  consolidated  financial  statements  at March 31, 2000 and for the
three month periods ended March 31, 2000 and 1999 are unaudited, but include all
adjustments which the management considers necessary for a fair presentation.  .
The  December  31, 1999 balance  sheet was derived  from the  Company's  audited
financial statements.

The accompanying unaudited consolidated financial statements are for the interim
periods and do not include all disclosures normally provided in annual financial
statements, and should be read in conjunction with the Company's Form 10-KSB for
the year ended December 31, 1999. The accompanying unaudited interi consolidated
financial  statements  for the three month periods ended March 31, 2000 and 1999
are not  necessarily  indicative  of the results  which can be expected  for the
entire year.

The preparation of financial  statements in conformity  with generally  accepted
accounting  principle requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  an  liabilities  at the  date of the
financial  statements and the reported  amounts of revenues and expenses  during
the reporting period. Actual results could differ from those estimates.

Nature of Operations
The  Company is engaged  primarily  in the fields of  acquisition,  development,
exploration  for and sale of oil and gas, and the  construction  and sale of oil
and gas extraction equipment.

Basis of Consolidation
The consolidated financial statements include the accounts of Power Exploration,
Inc.   ("Power",   formerly  Titan  Energy  Corp.,  Inc.)  and  its  100%  owned
subsidiaries, Oil Retrieval Systems, Inc. ("ORS"), acquired May 16, 1997 and Oil
Seeps, Inc. ("OSI") acquired June 17, 1997.  Accordingly,  all references herein
to Power or the "Company" include the consolidated  results of its subsidiaries.
All significant  inter-company accounts and transactions have been eliminated in
consolidation.

Cash and Cash Equivalents
The Company considers all highly liquid investments  purchased with the original
maturity of three months or less to be cash equivalents.

Inventory
Inventory,  consisting of parts and materials  used in the  construction  of oil
extraction  equipment,  are  stated at the lower of cost or  market,  cost being
determined by the average cost method.

Oil and Gas Properties
The Company  follows the full cost method of accounting for oil and gas property
acquisition, exploration, development, and production.

Capitalization Policies: All oil and gas property acquisition,  exploration, and
development  costs are  capitalized  as incurred.  There were no internal  costs
directly  attributable to such  activities.  Net  capitalized  costs of unproved
property and exploration well costs are reclassified as proven property and well
costs when  related  proven  reserves  are found.  Costs to operate and maintain
wells and field equipment are expensed as incurred.


                                      F-4

<PAGE>



                    POWER EXPLORATION, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000




NOTE 1 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Amortization Policies:  Except for cost of (1) unevaluated,  unproved properties
and (2) major  development  projects in progress,  all  capitalized  oil and gas
property costs, net of prior accumulated amortization,  are amortized by country
using the  unit-of-production  method based on proved reserves. The amortization
base includes  estimated  future costs to develop proved  reserves and estimated
future  dismantlement,  reclamation,  and  abandonment  costs,  net of equipment
salvage values.

Impairment  Policies:  Costs not being amortized are  periodically  assessed for
impairment.  Any impairment is added to the  amortization  base. Net capitalized
costs of oil and gas properties, less related deferred income taxes are limited,
by country,  to the sum of (1) future net revenues  (using prices and cost rates
as of the balance sheet date) from proved reserves and discounted at ten percent
per  annum,  plus (2) costs not being  amortized,  less (3)  related  income tax
effects. Excess costs are charged to proved property impairment expense.

Sales and Retirements Policies: No gain or loss is recognized on the sale of oil
and  gas  properties  unless   non-recognition  would  significantly  alter  the
relationship  between  capitalized  costs and remaining  proved reserves for the
affected   amortization  base.  When  gain  or  loss  is  not  recognized,   the
amortization base is reduced by the amount of sales proceeds.

Revenue Recognition
Revenues  from the sale of oil and gas  production  are  recognized  when  title
passes,  net of royalties.  Natural gas revenues are generally  recognized under
the  entitlement  method of accounting for gas imbalances,  i.e.,  monthly sales
quantities that do not match the Company's  entitled share of joint  production.
Entitled  quantities in excess of sales  quantities are recorded as a receivable
from joint venture  partners.  The receivable is carried at the lower of current
market  price or the  market  price at the time the  imbalance  occurred.  Sales
quantities  in excess of entitled  quantities  are recorded as deferred  revenue
carried at the gas market price received at the time the imbalance occurred.

Hedging
The Company may enter into derivative  contracts to hedge the risk of future oil
and gas price fluctuations. Such contracts may either fix or support oil and gas
prices,  limit the impact of price  fluctuations  with respect to the  Company's
sales of oil and gas. Gains and losses on such hedging activities are recognized
in oil and gas revenues when the hedged  production is sold.  Hedged oil and gas
prices used in computing the year-end  standardized measure of discounted future
net cash flows  relating to proved oil and gas  reserves  reflect the  estimated
effects of hedging contracts existing at year end.


                                      F-5


<PAGE>



                    POWER EXPLORATION, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000



NOTE 1 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates
The  preparation  of the financial  statements is in conformity  with  generally
accepted accounting principles,  which requires management to make estimates and
assumptions   that  affect  the  reported  amount  of  assets  and  liabilities.
Disclosure of contingent  assets and  liabilities,  at the date of the financial
statements are included along with the reported amounts of revenues and expenses
during the reporting date. Actual results could differ from those estimates.

Depreciation and Amortization
Property  and  equipment  are  stated  at cost  and are  depreciated  using  the
straight-line method over their estimated useful lives.

The costs of maintenance and repairs are charged to expense when incurred; costs
of renewals and enhancements  are  capitalized.  Upon the sales or retirement of
property  and  equipment,  the cost and  related  accumulated  depreciation  are
eliminated  from  the  respective  accounts  and the  resulting  gain or loss is
included in operations.

                  Estimated useful lives are as follows:

                  Shop Equipment                              5 years
                  Furniture and Office Equipment              5 years
                  Machinery                                   5 - 7 years

Fair Value of Financial Instruments
The Company's financial  instruments consist of cash, accounts  receivable,  and
accounts  payable and short-term  debt. The carrying  amounts of cash,  accounts
receivable,  accounts  payable and short-term debt approximate fair value due to
the relatively short maturity of these instruments.

Long-Lived  Assets
Long-lived  assets  to be held and used are  reviewed  for  impairment  whenever
events or changes in circumstances indicate that the related carrying amount may
not be recoverable.  When required,  impairment  losses on assets to be held and
used are recognized based on the fair value of the assets and long-lived  assets
to be  disposed of are  reported  at the lower of carrying  amount of fair value
less cost to sell.



                                      F-6

<PAGE>



                    POWER EXPLORATION, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 1 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes
Provisions  for income taxes are based on taxes  payable or  refundable  for the
current year and deferred taxes on temporary  differences  between the amount of
taxable income and pretax  financial  income and between the tax bases of assets
and liabilities and their reported amounts in the financial statements. Deferred
tax assets and liabilities are included in the financial statements at currently
enacted  income tax rates  applicable  to the period in which the  deferred  tax
assets and  liabilities  are expected to be realized or settled as prescribed in
FASB Statement No. 109,  Accounting for Income Taxes.  As changes in tax laws or
rates are enacted,  deferred tax assets and liabilities are adjusted through the
provision for income taxes.

Concentration of Credit Risk
The Company  places its cash in what it believes to be  credit-worthy  financial
institutions.  However,  cash balances may exceed FDIC insured levels at various
times during the year.

Stock-Based  Compensation
The Company has adopted the intrinsic value method of accounting for stock-based
compensation in accordance with Accounting  Principles Board Opinion ("APB") No.
25, "Accounting for Stock Issued to Employees" and related interpretations.

Comprehensive Income
In June 1997, SFAS No. 130, "Reporting  Comprehensive  Income", was issued. This
statement  establishes  standards for the reporting and display of comprehensive
income and its components in the financial statements.  As of September 30, 1999
and 1998, the Company had no items that  represent  other  comprehensive  income
and,  therefore,  has not  included a schedule  of  comprehensive  income in the
financial statements.

Per Share of Common Stock
Per share  amounts  have been  computed  based on the  average  number of common
shares outstanding during the period. In February 1997, the Financial Accounting
Standards  Board issued a new  statement  titled  "Earnings Per Share" (SFAS No.
128).  This  statement is effective for both interim and annual  periods  ending
after  December  15,  1997 and  specifies  the  computation,  presentation,  and
disclosure  requirements  for earnings per share for entities with publicly held
common stock or potential  common stock. All prior-period EPS data presented has
been restated to conform with the provisions for SFAS No. 128.

Potential  common stock has been excluded from the  computation  of earnings per
share since the inclusion of options and warrants would be anti-dilutive.



                                      F-7

<PAGE>



                    POWER EXPLORATION, INC. AND SUBSIDIARIES
               POWER EXNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 1 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

All share and per share data have been adjusted to  retroactively  reflect the 1
for 100 reverse stock split effected on October 19, 1999.

NOTE 2 - INVENTORY

Inventory at 9-30-99 & 03-31-00 consists of th following:

                                        9-30-99                  03-31-00
                                        -------                  --------
                Raw Material          $ 220,069                 $  283,639
                Work in Process         103,417                    115,022
                                      ---------                  ---------
                                      $ 323,486                  $ 398,661

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment at 9-30-99 & 03-31-00 consist of the following:

                                         9-30-99                 03-31-00
                                         -------                  --------
      Shop Equipment                    $ 30,852                 $ 49,002
      Furniture and Office Equipment      24,068                   24,067
      Machinery                          269,167                  156,773
                                       ---------               ------------
                                        324,087                   229,842
                                       ---------               ------------
Less Accumulated Depreciation            93,581                   118,707
                                       ---------               ------------
      Property and Equipment - Net    $ 230,506                 $ 111,135
                                      ==========               ============
      Depreciation Expense Recorded in
       the Statement of Operations    $  47,544                 $ 25,684
                                      ==========               ============



                                      F-8

<PAGE>



                    POWER EXPLORATION, INC. AND SUBSIDIARIES
               POWER EXNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000





NOTE 4 - NOTES PAYABLE

    Notes payable at March 31, 2000 consist of the following: 09-30-99 03-31-00

            a) Note Payable - Trident III, LLC      $  250,000              -
            b) Note Payable - BEI, Inc.                250,000          250,000
            c) Note Payable - Related Party            101,313              -
            d) Note Payable - Landmark Bank             90,000
                                                        ------
                                                     $ 601,313      $   340,000
                                                     ==========      ===========

a)   The Company was indebted to Trident III, L.L.C. under terms of a promissory
     note dated  October 21, 1998 in the amount of  $250,000.  Terms of the note
     provide for interest at a rate of 10% per annum,  with an original maturity
     date of April 20, 1999. The Company issued 1,000 shares of its common stock
     to Trident III,  L.L.C.  in  connection  with this loan.  The loan has been
     extended at various times with a current maturity date of October 30, 1999.
     The  Company  issued  a total  of  2,600  shares  of its  common  stock  in
     consideration of these extensions.  When the note was extended to September
     30,  1999,  the  Company  agreed that if the note was not paid on or before
     September 30, 1999,  then it would issue 50,000 shares per day for each day
     that the note is outstanding  subsequent to September 30, 1999.  Concurrent
     with the  extension  to October  30, 1999 the  provision  was added that if
     payment of  outstanding  principal and interest were made by that date, the
     lender  would not seek to receive  the 50,000  shares per day due under the
     previous extension. The lender has waived this provision of the contract. A
     settlement  has been reached  with the lender that  consists of the company
     issuing  279,861 common stock shares to Trident III, L.L.C. in exchange for
     a full release from the debt and indemnity  against any and all current and
     future  claims.  The  issuance  of the  Company's  common  stock  shares on
     February 9, 2000, eliminated the debt and satisfied the agreement in full.

b)   The Company is indebted to Business Exchange  Investment,  Inc. under terms
     of a promissory  note dated  September 15, 1998.  Terms of the note provide
     for  interest  at a rate of 10% per annum with a maturity  date of June 30,
     2000. The note is  collateralized by 100% of the shares of OSI. The Company
     hopes to  satisfy  this debt by  issuing  shares of its  common  stock.  No
     agreement has been reached at this date, however,  the Company is active in
     its attempt to resolve this debt.

c)   The Company was  indebted  to the M.O.  Rife III,  Trust A under terms of a
     promissory  note date March 31, 1999 in the amount of  $101,313.  This note
     was eliminated  according to the terms of the December 7, 1999  Acquisition
     Agreement  of  certain  assets  of  Rife  Oil  Properties,   Inc.  and  the
     extinguishment of this debt.

d)   The Company is indebted to Landmark  Bank under terms of a promissory  note
     dated October 13. 1999. Terms of the note provide for interest at a rate of
     10%  per  annum  with a  maturity  date  of  June  15,  2000.  The  note is
     collateralized  by 100% of the assets of Oil  Retrieval  Systems,  Inc. The
     funds were used as working capital for Oil Retrieval Systems, Inc.

                                      F-9


<PAGE>



NOTE 5 - RELATED PARTY TRANSACTIONS
                During the quarter ending March 31, 2000:

a)   The Company  occupies  space in  facilities  leased by M.O.  Rife III.  The
     Company pays rent to the stockholder in the amount of $2,000 per month. The
     space is rented on a monthly basis.

b)   The Company was indebted to officers for wages  accrued in year 1999 in the
     amount of  $254,820,  which  incurred  payroll tax  accrual of  $19,869.  A
     settlement  has been reached with the  officers  consisting  of the Company
     issuing  90,000  shares  common  stock  to  extinguish  debt,  which  would
     eliminate  accrued payroll taxes.  These shares were issued on February 29,
     2000.

c)   On January 23rd,  2000, the Board of Directors o the Company voted to issue
     100,000 shares of its common stock to each of the directors as compensation
     for services  rendered.  On February  9th,  2000 the Company  issued 25,000
     shares of its  restricted  common  stock to the six members of the Board of
     Directors; James McGowan, Charles Barnhill, Reginald Davis, Richard Surber,
     M.O. Rife III and Joe B. Bennett.  The remaining shares owed will be issued
     on a  pro-rata  basis  during  the  remainder  of the year.  This  issuance
     resulted in a G&A charge to the  Company in the amount of $867,000  for the
     period ending March 31, 2000. f


NOTE 6 - ADVISORY & CONSULTING AGREEMENTS

For the period  ending  12-31-99,  the Company  entered into various  cancelable
advisory agreements with third parties. Compensation for services provided under
these  agreements  will be paid in either Common Shares or Common Share Purchase
options of the Company.  During the six months ended March 31, 2000, the Company
issued 610,000 shares of common stock under these advisory agreements, valued at
$3,156,850.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

     a)   The Company has entered into various non-  cancelable  operating lease
          agreements for office and warehouse space and equipment.

1)   Warehouse  facilities located in Fort Worth,  Texas. The lease term expires
     on September 30, 2001.

2)   Various office equipment leases expiring through March 2004.

Future minimum lease  payments under the lease  agreements for each of the years
ended September 30 are as follows:

                2000          $   109,319
                2001               77,790
                2002               11,639

                2003                8,731
                2004                2,368
                            -------------
Total minimum lease payments    $ 209,847

                Rent  expense  included  in the  financial  statements  for  the
                quarter ended December 31, 1998 totaled $39,700.

f$   b) The Company has pledged 100% of the shares of Oil Seeps,  Inc., a wholly
     owned subsidiary,  as collateral for a $250,000 promissory note due on June
     30, 2000.

c)   A former  employee had filed a claim against ORS. The employee had demanded
     $75,000  in  exchange  for a full and  final  release.  The  claim had been
     settled as previously  disclosed,  however the terms of the settlement have
     changed from a cash payment to payment of the Company's  restricted  stock.
     The amount of shares to be granted under the terms of this  settlement  are
     15,000 shares, which have not been issued as of the date of this filing.


                                      F-10


<PAGE>




d)   A suit has been filed against the Company  alleging  breach of contract and
     seeking  damages  of  approximately  $120,000.  This  relates to an alleged
     agreement  to  repurchase  equipment  previously  sold  by the  Company.  A
     settlement  has been reached in this matter which calls for the issuance of
     125,000 shares of the Company's  restricted common stock. These shares have
     not been issued as of the date of this filing.

NOTE 8 - SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCIAL ACTIVITIES

During the six-months ended March 31, 2000:

a)   The Company  issued 90,000  shares in the quarter ended  December 31, 1999,
     under an advisory  agreements  dated December 14, 1999 (the  "Agreements").
     The  Agreements  are between  the  Company and Allen Z.  Wolfson and Ronald
     Welborn.  The 90,000  shares of the  Issuer's  common  stock were issued to
     Allen  Z.  Wolfson,  under  the  Agreements.   Under  the  Agreements,  the
     recipients  are entitled to receive a total of 750,000 each for  consulting
     services provided to the Issuer. This transaction is valued at $236,250 and
     charged to G & A for the quarter ending 12-31-99.

b)   The  Company  issued  420,000  shares  under the  agreements  in the second
     quarter  ended March 31,  2000.  The shares were issued to Allen Z. Wolfson
     (20,000 shares) and Ronald Welborn (400,000 shares),  under the Agreements,
     for consulting  services provided to the Issuer. This transaction is valued
     at $2.385 million and charged to G & A for the quarter ending 03-31-00.

c)   The Company  issued 300,000 shares of its common stock in order to secure a
     loan by Global  Universal,  Inc.  in the  amount of  $25,000.  The loan was
     subsequently  forgiven  and  the  shares  were  returned  to the  Company's
     treasury during the second quarter of its fiscal year.

d)   The Company cancelled 1,000,000 shares (10,000 post-split shares) issued to
     Mark S. Zouvas on October 21, 1999. These shares had been issued to satisfy
     accrued salaries incurred by the Company for his services.


e)   On January 23rd,  2000, the Board of Directors o the Company voted to issue
     100,000 shares of its common stock to each of the directors as compensation
     for services  rendered.  On February  9th,  2000 the Company  issued 25,000
     shares of its  restricted  common  stock to the six members of the Board of
     Directors; James McGowan, Charles Barnhill, Reginald Davis, Richard Surber,
     M.O. Rife III and Joe B. Bennett.  The remaining shares owed will be issued
     on a  pro-rata  basis  during  the  remainder  of the year.  This  issuance
     resulted in a G&A charge to the  Company in the amount of $867,000  for the
     period ending March 31, 2000.

f)   On January 23rd,  2000, the Board of Directors o the Company voted to issue
     600,000 shares of its common stock to Genesis  Capital  Corporation for the
     acquisition  of 100% of the issued and  outstanding  shares of the  Lincoln
     Health Fund,  Inc. a Delaware  Corporation,  a wholly owned  subsidiary  of
     Genesis Capital  Corporation.  The major asset of Lincoln Health Fund, Inc.
     is 10.687 acres of vacant land in Ft Worth,  Texas.  On February  9th, 2000
     the Company issued  600,000 shares of its restricted  common stock for said
     shares  and  recorded  the asset on its  balance  sheet at the price of its
     common stock  multiplied by the number of shares issued.  A discount of 30%
     was applied to the transaction to reflect the restriction of the securities
     issued. This resulted in an addition to Net Assets of the Company of $3.456
     million.  The Company is currently  negotiating  a contract for the sale of
     the  real  estate  to a  qualified  buyer in the  amount  of  $300,000.  In
     accordance with generally accepted accounting  principals,  the Company has
     recorded an asset  impairment  expense in the amount of $3.156  million for
     the  period  ending  March 31,  2000,  while  concurrently  establishing  a
     contra-asset  account  to  appropriately  reflect  the  value of the  asset
     recorded.



                                      F-11
<PAGE>



g)   On January 23rd,  2000, the Board of Directors o the Company voted to issue
     20,000  shares of its common stock to Fauniel D. Rowland and 50,000  shares
     of its  common  stock to  Simon,  Warner & Doby as  compensation  for legal
     services  rendered.  On February 9th, 2000 the Company issued 70,000 shares
     of its restricted  common stock as described above.  This issuance resulted
     in a G&A charge to the  Company in the  amount of  $404,600  for the period
     ending March 31, 2000.

h)   The Company was indebted to officers for wages  accrued in year 1999 in the
     amount of  $254,820,  which  incurred  payroll tax  accrual of  $19,869.  A
     settlement  has been reached with the  officers  consisting  of the Company
     issuing  90,000  shares  common  stock to  extinguish  this  debt,  thereby
     eliminating  accrued  payroll taxes.  The issuance of the Company's  common
     stock shares occurred on February 29,2000.  This settlement was ratified at
     a meeting of the Company's Board of Director's on January 23, 2000.

i)   A settlement has been reached with Trident III, L.L.C. that consists of the
     company  issuing  279,188  common stock shares to Trident  III,  L.L.C.  in
     exchange for a full release from the debt and indemnity against any and all
     current and future  claims.  The  issuance of the  Company's  common  stock
     shares for this  matter  will occur in the 2nd of this  fiscal  year.  This
     settlement  was ratified at a meeting of the Company's  Board of Director's
     on January 23, 2000. This issuance  resulted in a G&A charge to the Company
     in the amount of  $2,890,000  for the period  ending March 31,  2000.  This
     amount was based on seventy  percent (70%) of the value of the stock issued
     on that day less the amount of the liability on the Company's books

j)   On January 23rd,  2000, the Board of Directors o the Company voted to issue
     500,000   shares  of  its  common  stock  to  Benchmark   Equity  Group  as
     compensation  for  current  and future  consulting  services  rendered.  On
     February  9th, 2000 the Company  issued  500,000  shares of its  restricted
     common stock as described above.  This issuance resulted in a G&A charge to
     the Company in the amount of  $2,890,000  for the period  ending  March 31,
     2000.

k)   The Company issued  9,000,000 shares to Rife Oil Properties for certain oil
     leases and the  relinquishment  of certain  debt owed by the issuer to Rife
     Oil Properties, Inc.

l)   The  Company was  indebted to Steve  Wooten,  Sr. for  consulting  services
     rendered in the amount of $85,000.  An agreement  has been reached with Mr.
     Wooten consisting of the Company issuing 10,000 shares of common stock. The
     issuance of the Company's common stock shares occurred on February 29,2000.
     This  transaction is valued at $85,000 and charged to G & A for the quarter
     ending 03-31-00.

m)   The Company issued shares of its common stock t Henry Simon for current and
     future  legal  services.  An  agreement  has been reached with Mr. Simon to
     provide legal and advisory services,  which resulted in the Company issuing
     30,000 shares of common stock.  The issuance of the Company's  common stock
     shares occurred on February 29,2000. This transaction is valued at $172,500
     and charged to G & A for the quarter ending 03-31-00.

n)   The Company  issued 45,000 shares of its common stock to Hudson  Consulting
     Group,  Inc. for cash at $2.00 per share.  This may be considered a related
     party transaction  because Richard D. Surber, a director of the Company, is
     the president of and a director of Hudson Consulting Group, Inc.


                                      F-12


<PAGE>


NOTE 9 -        SUBSEQUENT EVENTS

Subsequent to March 31, 2000, the Company

a)   The Company is seeking to resolve debt payable burdens with the issuance of
     shares in its common stock. Under this scenario,  the Company is seeking to
     negotiate  a  settlement  with  Business  Exchange,  Inc.  for its  debt of
     $250,000.  The  Company is also  seeking to  eliminate  the claim made by a
     former employee of Oil Retrieval Systems, Inc.

b)   The Company  entered into two advisory  agreement  covering  financial  and
     investment  services to be provided to the Company on a best efforts basis.
     The  agreements  provide for the Company to issue an aggregate of 1,500,000
     shares of post  reverse  split  common  stock plus  options to  purchase an
     aggregate  of  1,500,000  shares of post  reverse  split common stock at an
     exercise  price of $0.66667 per share for a period of one year, the term of
     the agreements.  As of the end of the fiscal quarter ending  03-31-00,  the
     Company  has  issued   610,000   shares  of  its  common  stock  under  the
     aforementioned agreements.

c)   The Company entered into an agreement to acquire 100% Pepin Oil Company, an
     Oklahoma oil and gas exploration company in exchange for 2.5 million shares
     of its restricted common stock.  Pepin has a working interest in a 500 well
     developmental  drilling  program located in Oklahoma.  This transaction has
     not been consummated as of the date of this filing,  however  management of
     the Company  believes it will close during the third  quarter of its fiscal
     year.

NOTE 10 -  GOING CONCERN

     The  accompanying  consolidated  financial  statements  have been  prepared
     assuming  the Company  will  continue as a going  concern.  As of March 31,
     2000,  the  Company  has a  working  capital  deficit  of  $343,043  and an
     accumulated  deficit  of  $20,725,202.  Based  on  the  Company's  plan  of
     operation,  the Company  estimates that existing  resources,  together with
     funds  generated  from  operations  will  not be  sufficient  to  fund  the
     Company's  working  capital.  The  Company is actively  seeking  additional
     equity financing. There can be no assurances that sufficient financing will
     be available on terms  acceptable  to the Company or at all. If the Company
     is unable to obtain such  financing,  the  Company  will be forced to scale
     back  operations,  which  would  have an  adverse  effect on the  Company's
     financial condition and results of operations

NOTE 11 -

     Additional  footnotes  included by  reference  Except as indicated in Notes
     above,  there  have  been no  other  material  changes  in the  information
     disclosed  in  the  notes  to  the  financial  statements  included  in the
     Company's  Annual  Report on Form 10-KSB for the year ended  September  30,
     1999. Therefore, those footnotes are included herein by reference.


                                      F-13


<PAGE>



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

Forward Looking Statements

The information  herein contains certain forward looking  statements  within the
meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E
of the  Securities  Exchange Act of 1934,  as amended,  which are intended to be
covered by the safe harbors  created  thereby.  Investors are cautioned that all
forward looking  statements  involve risks and uncertainty,  including,  without
limitation,  the ability of Power  Exploration,  Inc.  ("Power") to continue its
expansion  strategy,  changes in the real  estate  markets,  labor and  employee
benefits,  as well as  general  market  conditions,  competition,  and  pricing.
Although Power  believes that the  assumptions  underlying  the forward  looking
statements  contained  herein are reasonable,  any of the  assumptions  could be
inaccurate,  and therefore,  there can be no assurance that the forward  looking
statements included in the Form 10QSB will prove to be accurate.  In view of the
significant  uncertainties  inherent in the forward looking statements  included
herein,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation  by Power or any other  person that the  objectives  and plans of
Power will be achieved.

General

During the second quarter of 2000,Power  Exploration,  Inc. and its subsidiaries
(hereinafter "Power" unless the context indicates otherwise) continued to pursue
capital  financing  alternatives  and possible  acquisition  targets in order to
generate greater revenue and increase shareholder value.

The following discussion of the consolidated  financial condition and results of
operations  of  Power  should  be  read in  conjunction  with  the  consolidated
financial statements of Power and the notes thereto included in Item 1 of Part I
of this Report.

Results of Operations

Revenues

Gross  revenues for the three and six months ended March 31, 2000,  were $65,160
and $91,672  compared to $191,183  and  $201,303 for the same periods in 1999, a
66% and 54% decrease in revenues for the  respective  periods in 1999. The gross
revenues for three months ended March 31, 2000,  were lower than the  comparable
quarter in 1999 due to a significant decrease in equipment sales.

Costs and Expenses

Costs of  revenues  for the three and six  months  ended  March 31,  2000,  were
$81,544 and  $164,097  compared to $170,414 and $217,113 for the same periods in
1999.  The  decrease in the costs of revenues is  primarily  due to decreases in
lease operating expenses.

Interest and general,  and  administrative  and asset  reduction  expenses  were
$9,108,898  and  $12,767,205  for the three and six months  ended March 31, 2000
compared to $2,027,195,  and $2,448,520 for the same period in 1999. The primary
reason for the increases was a significant

                                        4


<PAGE>



increase  in  consulting  fees paid by the Company  through the  issuance of its
common stock,  which were valued and recorded at prevailing market share prices.
During the six months ended March 31, 1999 the company  issued 100,000 shares of
common stock valued at $538,000 for consulting fees. During the six months ended
March 31,  2000,  the Company  issued  510,000  shares of common stock valued at
$2,621,250 for consulting fees.

Gross Loss

Gross losses for the three and six months ended March 31, 2000, were $16,384 and
$72,425  compared  to a gross  profit of $20,769 and a gross loss of $15,810 for
the same periods in 1999. Gross profit/loss as a percentage of revenues was -25%
and -36% for the three and six months ended March 31, 2000,  compared to 10% and
-8% for the same periods in 1999.

Net losses for the three and six months  ended March 31, 2000,  were  $9,125,282
and $12,839,453 compared to net losses of $2,006,426 and $2,464,330 for the same
periods in 1999.  Net loss as a percentage of revenues was 140% and 140% for the
three  and six  months  ended  March  31,  2000,  compared  to net  losses  as a
percentage of revenues of 12.2% and 10.5% for the same periods in 1999.

Liquidity and Capital Resources

At March 31, 2000,  the Company had current  assets of $431,755 and total assets
of $8,962,291 as compared to $417,932 and $7,778,894,  respectively at September
30, 1999. The Company's  working  capital  deficit of $343,022 at March 31, 2000
compared to a working  capital deficit of $1,593,061 at September 30, 1999 shows
an  improvement  of $1,250,039 for the year to date from the figure for the year
ended September 30, 1999.

Net  stockholders'  equity in the Company was  $8,187,494  as of March 31, 2000,
compared to  $5,767,961  at year-end on  September  30, 1999.  This  significant
increase is due to the increase in consulting  fees paid by the Company  through
the issuance of its common  stock,  which were valued and recorded at prevailing
market share prices.

Year 2000 Compliance

As of May 10, 2000, Power has experienced no significant year 2000 problems.

Power  currently uses Year 2000 compliant  engineering  evaluation  software for
acquisition  analysis,  as well as internal  engineering  applications.  Power's
spreadsheet and word processing software is also Year 2000 compliant.

Power  currently has limited  information  concerning  the Year 2000  compliance
status of its clients and associates.  However,  even if Power's clients are not
Year 2000 complaint Power does not anticipate that such  noncompliance will have
a material adverse effect on Power's business,  financial condition,  results of
operations or cash flows.

PART II. OTHER INFORMATION

ITEM 1.           Legal Proceedings

                                        5


<PAGE>



During the second  quarter  ending  March 31,  2000,  no  material  developments
occurred  regarding Power's legal  proceedings.  For more information please see
Power's Form 10KSB for the year ended  September 30, 1999 which is  incorporated
herein by reference.

ITEM 2. Changes in Securities and Use of Proceeds

Recent sales of Unregistered Securities

The  following  is a list of all  securities  sold by Power  within  the  period
covered by this report, including,  where applicable, the identity of the person
who purchased the securities, title of the securities, and the date sold.

On February 9, 2000,  the Company  issued a total of 220,000 shares of $0.02 par
value  common  stock at $5.78  per  share to the  following  named  persons  and
entities  for  services  rendered  as  directors  and legal  consultants  of the
Company.

Name                              Number of Shares                 Price
Joe Bill Bennett                  25,000                           $144,500
Charles Barnhill                  25,000                           $144,500
James McGowan                     25,000                           $144,500
Reginald Davis                    25,000                           $144,500
Richard D. Surber                 25,000                           $144,500
M. O. Rife III                    25,000                           $144,500
Fauniel D. Rowland                20,000                           115,600
Simon, Warner & Doby              50,000                           $289,000


These shares were issued pursuant to the exemption from registration provided by
Section 4(2) of the  Securities Act of 1933.The  shares were issued  pursuant to
section 4(2) of the Securities Act of 1933 in an isolated private transaction by
the Company  which did not  involve a public  offering.  The  Company  made this
offering  based on the  following  factors:  (1) The  issuance  was an  isolated
private transaction by the Company which did not involve a public offering;  (2)
there were only eight  offerrees who were issued stock for services as Officers,
Directors  and  Employees  of the  Company;  (3) the offerees did not resell the
stock but have  continued  to hold it since it was  acquired;  (4) there were no
subsequent or  contemporaneous  public offerings of the stock; (5) the stock was
not broken down into smaller  denominations;  and (6) the  negotiations  for the
sale of the stock took place directly between the offerees and the Company.

On February 9, 2000, the Company issued 600,000 shares of $0.02 par value common
stock at $5.78 per share to Genesis Capital  Corporation in exchange for 100% of
the issued and  outstanding  shares of the Lincoln Health Fund,  Inc. a Delaware
Corporation,  a wholly owned  subsidiary  of Genesis  Capital  Corporation,  for
600,000 shares of Power's common stock. The major asset of Lincoln is 10.687

                                        6


<PAGE>



acres of vacant land in Ft Worth,  Texas.  These shares were issued  pursuant to
the exemption from  registration  provided by Section 4(2) of the Securities Act
of 1933.  The shares were issued  pursuant to section 4(2) of the Securities Act
of 1933 in an isolated private  transaction by the Company which did not involve
a public  offering.  The  Company  made  this  offering  based on the  following
factors:  (1) The issuance was an isolated  private  transaction  by the Company
which did not involve a public offering;  (2) there was only one offeree who was
issued stock in exchange for a 100% interest in Lincoln, (3) the offeree did not
resell the stock but has continued to hold it since it was acquired, a period of
three months; (4) there were no subsequent or  contemporaneous  public offerings
of the stock; (5) the stock was not broken down into smaller denominations;  and
(6) the  negotiations  for the sale of the stock took place directly between the
offeree and the Company.

On February 9, 2000, the Company issued 500,000 shares of $0.02 par value common
stock to Benchmark  Equity  Group,  Inc.  and 279,881  shares of $0.02 par value
common stock to Trident III, LLC pursuant to Settlement  Agreements entered into
by the Company on December 20, 1999 (See Form 10-QSB filed  February 22,  2000).
These shares were issued pursuant to the exemption from registration provided by
Section 4(2) of the Securities  Act of 1933. The shares were issued  pursuant to
section 4(2) of the Securities Act of 1933 in an isolated private transaction by
the Company  which did not  involve a public  offering.  The  Company  made this
offering  based on the  following  factors:  (1) The  issuance  was an  isolated
private transaction by the Company which did not involve a public offering;  (2)
there were only two offerees who were issued stock in exchange for debt; (3) the
offerees  did not  resell the stock but have  continued  to hold it since it was
acquired,   a  period  of  three  months;   (4)  there  were  no  subsequent  or
contemporaneous public offerings of the stock; (5) the stock was not broken down
into smaller  denominations;  and (6) the negotiations for the sale of the stock
took place directly between the offerees and the Company.

On March 16, 2000,  the Company  issued  45,000 shares of $0.02 par value common
stock for $2.00 per share in cash to Hudson  Consulting Group, Inc. These shares
were issued pursuant to the exemption from registration provided by Section 4(2)
of the Securities  Act of 1933. The shares were issued  pursuant to section 4(2)
of the Securities Act of 1933 in an isolated private  transaction by the Company
which did not involve a public offering. The Company made this offering based on
the following factors:  (1) The issuance was an isolated private  transaction by
the  Company  which did not  involve a public  offering;  (2) there was only one
offeree  who was issued  stock in  exchange  for cash;  (3) the  offeree did not
resell the stock but has continued to hold it since it was acquired, a period of
three months; (4) there were no subsequent or  contemporaneous  public offerings
of the stock; (5) the stock was not broken down into smaller denominations;  and
(6) the  negotiations  for the sale of the stock took place directly between the
offeree and the Company.

ITEM 5.           Other Information

On May 2, 2000, the Board of Directors of Power  approved  signing of a contract
dated March 20, 2000, which contract provides for the acquisition,  by Power, of
100% of the  issued  and  outstanding  shares of Pepin  Oil  Company,  Inc.,  an
Oklahoma  corporation,  from J. Paul Pepin, Art Pepin,  Jill Pepin, Pam Bass and
Tom Pepin( the "Sellers"), in exchange for 2,500,000 shares of restricted common
shares of Power. The closing of the contract has not yet occurred and is subject
to the delivery of certain due diligence  materials to Power by the Sellers.  It
is expected  that the closing on the contract will occur during the third fiscal
quarter.

ITEM 6.           Exhibits and Reports on Form 8-K

(a) Exhibits  Exhibits required to be attached by Item 601 of Regulation S-B are
listed  in the  Index  to  Exhibits  on  page _ of  this  Form  10-QSB,  and are
incorporated herein by this reference.

(b)      Reports on Form 8-K.  None.
         -------------------

                                        7


<PAGE>



                                    SIGNATURE

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.




                                              Power Exploration, Inc.
                                                            (Registrant)

Date      May 22, 2000                  /s/ Joe B. Bennett
                                       ---------------------------------------
                                       Joe B. Bennett, Chief Executive Officer



Date      May 22, 2000                  /s/ Mark Zouvax
                                       ---------------------------------------
                                       Mark Zouvas, Chief Financial Officer








                                        8


<PAGE>


                                                 INDEX TO EXHIBITS

EXHIBIT         PAGE

NO.                   NO.             DESCRIPTION

2.1    *            Plan of  Reorganization  and Change of Situs by which  Titan
                    Energy Corp., and Power Exploration,  Inc. Changes Its Place
                    of Incorporation.

2.2    *            Agreement and Plan of Merger Between Power Exploration, Inc.
                    (Nevada) and Power Exploration,  Inc. (Colorado).  August 1,
                    1998

2.3    *            Articles of Merger Between Power Exploration,  Inc. (Nevada)
                    and Power Exploration, Inc. (Colorado). August 1, 1998

3.1    *            Articles of  Incorporation  of Imperial Energy dated October
                    31, 1979.

3.2    *            Amendment to Articles of Incorporation dated June 26, 1984

3.3    *            Amendment to Articles of  Incorporation  dated September 25,
                    1996

3.4    *            Amendment to Articles of Incorporation  dated June 15, 1997,
                    Changing Name to Oil Retrieval Systems, Inc.

3.5    *            By Laws of the Corporation

3.6    *            Articles  of  Incorporation  of  Power   Exploration,   Inc.
                    (Nevada) dated May 14, 1998

3.7    *            By Laws of Power  Exploration,  Inc.  (Nevada) Dated June 1,
                    1998


27      --          Financial Data Schedule

* Previously  filed and  incorporated  herein by reference  from the Form 10-KSB
filed January 14, 2000 by Power.



                                        9