UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended         August 31, 1999
                               ---------------------------
                                       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:               001-9872



                              COLUMBUS ENERGY CORP.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Colorado                                    84-0891713
-------------------------------                    -------------------
(State or other jurisdiction of                     (I.R.S. Employer
 incorporation or organization)                    Identification No.)

     1660 Lincoln St., Denver, CO                         80264
---------------------------------------                 ----------
(Address of principal executive offices)                (Zip Code)

                                 (303) 861-5252
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
             -------------------------------------------------------
             (Former name, former address and former fiscal year, if
                           changed since last report)

     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
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.   Yes  X       No
                                               -----       -----

  Indicate the number of shares  outstanding of each of the issuer's  classes of
common stock, as of the latest practicable date.

           Class                               Outstanding at October 8, 1999
---------------------------                    ------------------------------
Common stock, $.20 par value                              3,818,558




<PAGE>



                              COLUMBUS ENERGY CORP.

                                      INDEX


                                                                          PAGE

PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Consolidated Balance Sheets -
                August 31, 1999 and
                November 30, 1998                                          3

              Consolidated Statements of Operations -
                Three Months and Nine Months
                Ended August 31, 1999 and 1998                             5

              Consolidated Statement of
                Stockholders' Equity -
                Nine Months Ended August 31, 1999                          6

              Consolidated Statements of Cash Flows -
                Nine Months Ended August 31, 1999
                and 1998                                                   7

                         Notes to the Financial Statements                 9

     Item 2.  Management's Discussion and Analysis
                of Financial Condition and
                Results of Operations                                     15

PART II.  OTHER INFORMATION

     Item 1.     Legal Proceedings                                        25

     Items 2-5.  Not Applicable

     Item 6.     Exhibits and Reports
                   on Form 8-K                                            25

     Signatures                                                           26











                                       2

<PAGE>



                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                              COLUMBUS ENERGY CORP.

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

                                                August 31,          November 30,
                                                  1999                  1998
                                              ------------          ------------
                                              (unaudited)
                                                        (in thousands)

Current assets:
  Cash and cash equivalents                     $  1,403               $  2,003
  Accounts receivable:
    Joint interest partners                        1,228                  1,570
    Oil and gas sales                              1,462                  1,239
    Allowance for doubtful accounts                 (116)                  (116)
  Deferred income taxes (Note 3)                      36                    327
  Inventory of oil field equipment,
    at lower of average cost or market               102                     95
  Other                                              158                    106
                                                 -------                -------

        Total current assets                       4,273                  5,224
                                                 -------                -------

Deferred income taxes (Note 3)                       267                      -

Property and equipment:
  Oil and gas assets, successful efforts
    method (Note 2)                               37,766                 36,039
  Other property and equipment                     1,803                  1,804
                                                 -------                -------

                                                  39,569                 37,843
  Less:  Accumulated depreciation,
     depletion and amortization
     and valuation allowance                     (21,678)               (19,118)
                                                 -------                -------

        Net property and equipment                17,891                 18,725
                                                 -------                -------

                                                $ 22,431               $ 23,949
                                                ========               ========

                                   (continued)




                                       3

<PAGE>



                              COLUMBUS ENERGY CORP.

                    CONSOLIDATED BALANCE SHEETS - (continued)


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                August 31,          November 30,
                                                  1999                  1998
                                              ------------          ------------
                                              (unaudited)
                                                        (in thousands)
Current liabilities:
  Accounts payable                              $   1,427             $   1,846
  Undistributed oil and gas
   production receipts                                292                   317
  Accrued production and property taxes               322                   677
  Prepayments from joint interest owners              359                   374
  Accrued expenses                                    363                   415
  Income taxes payable (Note 3)                        28                     2
  Other                                                15                    37
                                                   ------                ------

        Total current liabilities                   2,806                 3,668
                                                   ------                ------

Long-term bank debt (Note 2)                        5,600                 4,900
Deferred income taxes (Note 3)                          -                   117

Commitments and contingent
  liabilities (Notes 4 and 5)

Stockholders' equity:
  Preferred stock authorized 5,000,000
    shares, no par value, none issued                   -                     -
  Common stock authorized 20,000,000
    shares of $.20 par value; shares issued
    4,645,303 in 1999, and 4,611,001 in 1998
    (outstanding 3,864,558 in 1999 and
    4,046,552 in 1998)                                929                   922
  Additional paid-in capital                       19,759                19,656
  Retained earnings (accumulated deficit)          (1,483)               (1,440)
                                                   ------                ------
                                                   19,205                19,138
  Less: Treasury stock at cost
          780,745 shares in 1999 and
          564,449 shares in 1998                   (5,180)               (3,874)
                                                   ------                ------
        Total stockholders' equity                 14,025                15,264
                                                   ------                ------
                                                $  22,431             $  23,949
                                                   ======                ======


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.





                                       4

<PAGE>



                              COLUMBUS ENERGY CORP.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                Nine Months Ended                       Three Months Ended
                                                     August 31,                              August 31,
                                            --------------------------              ----------------------------
                                              1999               1998                 1999                1998
                                            -------            -------              -------              -------
                                                         (in thousands, except per share data)
<S>                                         <C>                <C>                  <C>                  <C>
Revenues:
  Oil and gas sales                         $ 7,064            $ 8,113              $ 2,760              $ 2,495
  Operating and management
    services                                  1,025                988                  353                  362
  Interest and other income                      70                109                   23                   32
                                            -------            --------             --------             --------
       Total revenues                         8,159              9,210                3,136                2,889
                                            -------            --------             --------             --------

Costs and expenses:
  Lease operating expenses                    1,357              1,662                  514                  445
  Property and production taxes                 741                802                  242                  261
  Operating and management
    services                                    693                807                  220                  311
  General and administrative                  1,075              1,155                  299                  257
  Depreciation, depletion and
   amortization                               2,571              2,834                  847                  944
  Impairments                                   503              2,816                    -                    -
  Exploration expense                           971                477                  627                   49
  Litigation expense (Note 4)                    41                  -                   24                    -
                                            --------           --------             --------             --------
      Total costs and expenses                7,952             10,553                2,773                2,267
                                            --------           --------             --------             --------

       Operating income (loss)                  207             (1,343)                 363                  622
                                            --------           --------             --------             --------

 Other expenses (income):
  Interest                                      273                179                   98                   65
  Other                                           4                 30                    1                   (4)
                                            -------            -------              --------             --------
                                                277                209                   99                   61
                                            -------            -------              --------             --------
     Earnings (loss) before
        income taxes                            (70)            (1,552)                 264                  561

Provision (benefit) for income
  taxes (Note 3)                                (27)              (590)                 100                  213
                                            -------            --------             -------              --------
     Net earnings (loss)                    $   (43)           $  (962)             $   164              $   348
                                            =======            ========             =======              ========

Earnings (loss) per share (Note 7):
  Basic                                     $  (.01)           $  (.23)             $   .04              $   .08
                                            =======            ========             ========             ========
  Diluted                                   $  (.01)           $  (.23)             $   .04              $   .08
                                            =======            ========             ========             ========

Average number of common shares
and common equivalent shares outstanding:
  Basic                                       3,920              4,232                3,870                4,209
                                            =======            ========             =======              ========
  Diluted                                     3,920              4,232                3,873                4,266
                                            =======            ========             =======              ========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                       5
<PAGE>
                              COLUMBUS ENERGY CORP.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                    For the Nine Months Ended August 31, 1999
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                Retained
                               Common Stock       Additional    Earnings        Treasury Stock
                           --------------------    Paid-in    (Accumulated   ---------------------
                            Shares      Amount     Capital      deficit)      Shares       Amount
                          ---------   ---------  -----------  ------------   --------    ---------
                                                (dollar amounts in thousands)

<S>                       <C>         <C>         <C>          <C>            <C>        <C>
Balances,
  December 1, 1998        4,611,001   $     922   $  19,656    $  (1,440)     564,449    $  (3,874)

Exercise of employee
  stock options              23,320           5          63         --            855           24
Purchase of shares             --          --          --           --        236,540       (1,471)
Shares issued for Stock
  Purchase Plan              10,982           2          66         --         (2,759)          19
Shares issued for
  Incentive Bonus Plan
  and directors' fees          --          --           (38)        --        (18,340)         122
Tax benefit of stock
  option exercises             --          --            12         --           --           --
Net loss                       --          --          --            (43)        --           --
                          ---------   ---------   ---------    ---------    ---------    ---------

Balances,
  August 31, 1999         4,645,303   $     929   $  19,759    $  (1,483)     780,745    $  (5,180)
                          =========   =========   =========    =========    =========    =========
</TABLE>



        The accompanying notes are an integral part of these consolidated
                             financial statements.










                                       6
<PAGE>



                              COLUMBUS ENERGY CORP.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                             Nine Months Ended August 31,
                                                                        --------------------------------------
                                                                          1999                          1998
                                                                        -------                       --------
                                                                                   (in thousands)

<S>                                                                   <C>                             <C>
Net earnings (loss)                                                   $    (43)                       $  (962)

Adjustments to reconcile net earnings
  (loss) to net cash provided by
  operating activities:
    Depreciation, depletion, and
      amortization                                                       2,571                          2,834
    Impairments                                                            503                          2,816
    Deferred income tax provision (benefit)                                (81)                          (653)
    Exploration expense, noncash portion                                    80                              -
    Other                                                                  108                            249
Net change in operating assets and
  liabilities                                                             (630)                         1,776
                                                                      --------                        -------
        Net cash provided by
          operating activities                                           2,508                          6,060
                                                                      --------                        -------

Cash flows from investing activities:
  Additions to oil and gas properties                                   (2,487)                        (6,149)
  Additions to other assets                                                (11)                          (101)
                                                                      --------                        -------
        Net cash used in
          investing activities                                          (2,498)                        (6,250)
                                                                      --------                        -------

Cash flows from financing activities:
  Proceeds from long-term debt                                           1,100                          1,800
  Reduction in long-term debt                                             (400)                          (700)
  Proceeds from issuance of
    common stock                                                           161                            457
  Purchase of treasury stock                                            (1,471)                        (1,831)
  Other                                                                      -                             (2)
                                                                        ------                        -------
      Net cash provided by (used in)
        financing activities                                              (610)                          (276)
                                                                        ------                        -------

Net decrease in cash and
  cash equivalents                                                        (600)                          (466)
Cash and cash equivalents at
  beginning of period                                                    2,003                          1,857
                                                                        ------                        -------
Cash and cash equivalents at
  end of period                                                        $ 1,403                       $  1,391
                                                                        ======                        =======
</TABLE>


                                   (continued)



                                       7
<PAGE>



                              COLUMBUS ENERGY CORP.

               CONSOLIDATED STATEMENTS OF CASH FLOWS - (continued)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                             Nine Months Ended August 31,
                                                                        --------------------------------------
                                                                          1999                          1998
                                                                        -------                       --------
                                                                                   (in thousands)

<S>                                                                     <C>                           <C>
Supplemental disclosure of cash flow information:
    Cash paid during the period for:
      Interest                                                          $   271                       $    177
                                                                         ======                        =======
      Income taxes, net of refunds                                      $    28                       $     46
                                                                         ======                        =======

Supplemental disclosure of non-cash investing and financing activities:
    Non-cash compensation expense
      related to common stock                                           $   103                       $    171
                                                                         ======                        =======

</TABLE>






























The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                       8
<PAGE>



                              COLUMBUS ENERGY CORP.

                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


(1)  BASIS OF PRESENTATION

          The  accompanying   consolidated   financial  statements  include  the
accounts  of  Columbus   Energy   Corp.   ("Columbus")   and  its   wholly-owned
subsidiaries,  Columbus Gas Services,  Inc.  ("CGSI") and Columbus  Texas,  Inc.
("Texas").  All  significant  intercompany  balances  have  been  eliminated  in
consolidation.  The term  "Company"  as used herein  includes  Columbus  and its
subsidiaries.

          The  consolidated  financial  statements  of  the  Company  have  been
prepared in accordance with generally accepted accounting principles and require
the  use  of  management's  estimates.  The  financial  statements  contain  all
adjustments (consisting only of normal recurring accruals) which, in the opinion
of  management,  are necessary to present  fairly the financial  position of the
Company as of August 31,  1999 and  November  30,  1998,  and the results of its
operations and cash flows for the periods  presented.  The results of operations
for such  interim  periods  are not  necessarily  indicative  of  results  to be
expected for the full year.

          The accounting  policies followed by the Company are set forth in Note
2 to the  Company's  consolidated  financial  statements in the Annual Report on
Form 10-K for the year ended November 30, 1998.  These  accounting  policies and
other footnote  disclosures  previously made have been omitted in this report so
long as the interim information  presented is not misleading.  In June 1999, the
Statement of Financial  Accounting Standards No. 137 deferred the effective date
for the Statement of Financial  Accounting  Standards No. 133,  "Accounting  for
Derivative  Instruments and Hedging Activities," to fiscal years beginning after
June 15, 2000.  The Company must apply this  standard no later than  December 1,
2000. These quarterly  financial  statements  should be read in conjunction with
the consolidated financial statements and notes included in the 1998 Form 10-K.

(2)  LONG-TERM DEBT

     The Company has a credit agreement with Norwest Bank Denver,  N.A. ("Bank")
that was amended on May 12, 1999 to extend the revolving  period to July 1, 2001
when it entirely converts to an amortizing term loan which matures July 1, 2005.
The  credit is  collateralized  by a first lien on oil and gas  properties.  The
interest rate options are the Bank's prime rate or LIBOR plus 1.50%.





                                       9
<PAGE>



                              COLUMBUS ENERGY CORP.

                 NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)


     The borrowing  base is limited to  $10,000,000  and subject to  semi-annual
redetermination  for any  increase or decrease.  At August 31, 1999  outstanding
borrowings  on the  revolving  line of credit  were  $5,600,000  and the  unused
borrowing base available was  $4,400,000.  A commitment fee of 1/4 of 1% for any
unused portion of the amount which is the difference  between the borrowing base
and the outstanding borrowings is payable quarterly.

(3)  INCOME TAXES

          The provision (benefit) for income taxes consists of the following (in
thousands):

                                             Nine Months Ended August 31,
                                            -----------------------------
                                               1999                1998
                                            --------             --------
Current:
          Federal                            $   25               $    6
          State                                  29                   57
                                              -----                -----
                                                 54                   63
                                              -----                -----

Deferred:
          Federal                               (84)                (632)
          Use of loss carryforwards               6                    5
          State                                  (3)                 (26)
                                              -----                -----
                                                (81)                (653)
                                              -----                -----

  Total income tax (benefit) expense         $  (27)              $ (590)
                                             ======               ======




















                                       10
<PAGE>



                              COLUMBUS ENERGY CORP.

                 NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)


          During the nine months of fiscal  1999,  certain tax assets  (shown in
the  table  below)  were  utilized.  The tax  effect  of  significant  temporary
differences  representing  deferred tax assets and  liabilities and changes were
estimated as follows (in thousands):
<TABLE>
<CAPTION>
                                                                    Current Year
                                               --------------------------------------------------
                                                               Stock-
                                                Dec. 1,       holders'   Operations/   August 31,
                                                 1998         Equity       Other          1999
                                               --------      ---------   ----------    ----------
<S>                                             <C>           <C>         <C>            <C>
     Deferred tax assets:
       Pre-1987 loss carryforwards              $1,124        $    -      $     -        $1,124
       Post-1987 loss carryforwards                540             -            2           542
       Percentage depletion
         carryforwards                           1,478             -            -         1,478
       State income tax loss
         carryforwards                             118             -           (6)          112
       Other                                       329             -          (17)          312
                                               -------        ------       ------        ------
                 Total                           3,589             -          (21)        3,568
          Valuation allowance
            (long-term)                         (1,408)            -            -        (1,408)
                                              --------        ------       ------        ------
          Deferred tax assets                    2,181             -          (21)        2,160
                                              --------        ------       ------        ------

     Tax benefit of stock option
       exercises                                     -            12(a)       (12)            -
                                              --------        ------       ------        ------

     Deferred tax liabilities-
       Depreciation, depletion and
         amortization and other                 (1,971)            -          114        (1,857)
                                              --------        ------       ------        ------
         Net tax asset (liability)            $    210        $   12      $    81       $   303
                                              ========        ======      =======       =======
</TABLE>

(a)Credited to additional paid-in capital.


(4)   LITIGATION

          On October 7, 1998,  Columbus was served with a complaint in a lawsuit
styled Maris E. Penn,  Michael  Mattalino,  Bruce Davis, and Benjamin T. Willey,
Jr. vs.  Columbus  Energy  Corp.,  Cause No. 98- 44940 in the District  Court of
Harris County, Texas. The plaintiffs claim that Columbus breached the settlement
agreement of their  previous  lawsuit  reached in  September  1994 by failing to
develop  properties  located within the area of mutual interests and to act as a
reasonably  prudent  operator in the  development  of the  property.  Plaintiffs
allege  damages under the contract but no amount is specified.  Columbus  denied
claims and has responded with a First Set of Interrogatories,  First Request for
Production of Documents and Request for Disclosure to Plaintiffs. Columbus filed
Special Exceptions to Plaintiffs'  Original Petition which were sustained by the
Judge who concurred  that those portions of the complaint were not in accordance
with Texas law. The Plaintiffs were given a limited time frame in which to amend






                                       11
<PAGE>



                              COLUMBUS ENERGY CORP.

                 NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)


their  petition  with  respect  to those  key  paragraphs  for  which  Columbus'
exceptions were sustained or the case would be dismissed.  Plaintiffs did refile
their petition but included those same  paragraphs and added a section  entitled
"Breach  of  Implied  Covenant  to Develop  the Area of Mutual  Interest"  as an
alternative to their original Pleadings.  Columbus subsequently filed its Motion
for Summary Judgment which the Court did not grant.  Trial date has been set for
January 24, 2000.  Management  believes the Plaintiffs' claims are without merit
and an  implausible  construction  of what was agreed upon in  settlement of the
previous lawsuit.

(5)  COMMITMENTS AND CONTINGENT LIABILITIES

          When the  Company  uses  natural  gas and  crude  oil  swaps  they are
considered  financial  instruments with off-balance sheet risk which are entered
into in the normal  course of  business  to  partially  reduce its  exposure  to
fluctuations  in the price of crude oil and natural gas.  Those  instruments  do
involve, to varying degrees, elements of market and credit risk in excess of the
amount recognized in the balance sheets.

          The  Company  had no natural  gas swaps  outstanding  as of August 31,
1999. Columbus has hedged  approximately 50% of its current crude oil production
with a  costless  "collar"  on 7,500  barrels  per month for the 12 months  from
September 1, 1999 through August 31, 2000. The price is settled  monthly against
the calendar  monthly  average price on the NYMEX with a $17.50 per barrel floor
and  $22.25  per  barrel  ceiling.  For any price  below or above  those  prices
Columbus receives or pays the difference. The month of September was settled for
$11,543  paid by  Columbus.  For the  remaining  period of October  1999 through
August 2000 for prices as of October 11, 1999 there was no  settlement  value to
either party.

          The  Company  is not  aware  of any  events  of  noncompliance  in its
operations  with  environmental  laws  and  regulations  nor of any  potentially
material  contingencies related thereto.  There is no way management can predict
what future  environmental  control problems may arise. The continually changing
character of environmental regulations and requirements that might be enacted in
future  by  jurisdictional  authorities  in  various  operational  areas  defies
forecasting.

(6)   RELATED PARTY TRANSACTIONS

          CEC Resources  Ltd.  ("Resources")  was a  wholly-owned  subsidiary of
Columbus prior to its divestiture on February 24, 1995.  Reimbursement  has been
made by Resources  to Columbus  for services provided  by Columbus  officers and




                                       12
<PAGE>



                              COLUMBUS ENERGY CORP.

                 NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)


employees  for  managing  Resources  in  the  past  which  reduced  general  and
administrative  expense. This reimbursement totaled $33,000 and $185,000 for the
nine months of 1999 and 1998,  respectively.  Effective on March 31,  1999,  the
agreement  to continue  furnishing  those  services was  terminated  by Columbus
following the 90 day prior notice period as provided.

(7)    EARNINGS PER SHARE

          The following  table  provides a  reconciliation  of basic and diluted
earnings per share (EPS):

                                               Nine Months      Three Months
                                            Ended August 31,  Ended August 31,
                                             1999      1998    1999    1998
                                             ----      ----    ----    ----
                                                     (in thousands,
                                                 except per share data)

Reconciliation of basic and diluted
  EPS share computations:
  Income (loss) available to common
    shareholders - basic and
    diluted EPS (numerator)                 $   (43) $  (962) $  164  $  348
                                             ======    =====   =====   =====

Shares (denominator):
  Basic EPS                                   3,920    4,232   3,870   4,209
  Effect of dilutive option
    shares                                        -        -       3      57
                                             ------    -----   -----   -----
  Diluted EPS                                 3,920    4,232   3,873   4,266
                                             ======    =====   =====   =====

Per share amount:
  Basic EPS                                 $  (.01)  $ (.23) $  .04  $  .08
                                             ======    =====   =====   =====
  Diluted EPS                               $  (.01)  $ (.23) $  .04  $  .08
                                             ======    =====   =====   =====

Number of shares (in  thousands)
  not included in basic EPS that
  would have been antidilutive
  because  exercise  price of options
  was greater than the average
  market price of the common shares             612      170     626     170
                                             ======    =====   =====   =====

          Historical average number of shares outstanding and earnings per share
have been  adjusted  for the 10%  stock  dividend  distributed  March 9, 1998 to
shareholders of record as of February 23, 1998.



                                       13
<PAGE>



                              COLUMBUS ENERGY CORP.

                 NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)


(8)              INDUSTRY SEGMENTS

          The Company operates primarily in two business segments of (1) oil and
gas  exploration  and  development,  and (2) providing  services as an operator,
manager and gas marketing advisor.

          Summarized financial  information  concerning the business segments is
as follows:
<TABLE>
<CAPTION>
                                                           Nine Months                  Three Months
                                                         Ended August 31,             Ended August 31,
                                                     ----------------------        ---------------------
                                                      1999            1998           1999          1998
                                                      ----            ----           ----          ----
                                                                        (in thousands)

<S>                                                  <C>            <C>            <C>           <C>
Operating revenues from unaffiliated services:
    Oil and gas                                      $ 7,071        $ 8,124        $ 2,762       $ 2,500
    Services                                           1,088          1,086            374           389
                                                     -------        -------        -------       -------
           Total                                     $ 8,159        $ 9,210        $ 3,136       $ 2,889
                                                     =======        =======        =======       =======

Depreciation, depletion
  and amortization:
    Oil and gas                                      $ 2,528        $ 2,792        $   833       $   930
    Services                                              43             42             14            14
                                                     -------        -------        -------       -------
           Total                                     $ 2,571        $ 2,834        $   847       $   944
                                                     =======        =======        =======       =======

Operating income (loss):
    Oil and gas                                      $   930        $  (425)       $   523       $   815
    Services                                             351            237            138            64
    General corporate
           expenses                                   (1,074)        (1,155)          (298)         (257)
                                                     -------        -------        -------       -------
      Total operating income                             207         (1,343)           363           622
Interest expense and other                              (277)          (209)           (99)          (61)
                                                     -------        -------        -------       -------

  Earnings (loss) before
    income taxes                                     $   (70)        $(1,552)      $   264       $   561
                                                     =======         =======       =======       =======
</TABLE>













                                       14
<PAGE>



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

          The following summarizes the Company's financial condition and results
of operations and should be read in conjunction with the consolidated  financial
statements and related notes.

Liquidity and Capital Resources

          Third quarter 1999 oil and gas sales  continued to improve over recent
prior periods when dismal crude oil prices prevailed along with weak natural gas
prices  although  production of each product was higher.  The current  quarter's
cash flow  increased  12% above last year's  similar  period and was the highest
quarter since fourth quarter in fiscal 1997. Net earnings for third quarter 1999
were $164,000, or $0.04 per share because of higher revenues but were reduced by
exploration expense of $627,000 ($389,000 net of income tax effect) as explained
below.  This  compares  with 1998's third  quarter net earnings of $348,000,  or
$0.08 per share.

          Stockholders'  equity as of the end of 1999's third quarter  decreased
to $14,025,000  from  $15,264,000 at November 30, 1998 while working capital was
down to  $1,467,000  from  $1,556,000.  Contributing  factors were  purchases of
treasury shares and cash expended for additions to properties which approximated
the cash provided by operating activities.  There was a net $700,000 increase in
long term bank debt since fiscal year end.

          Management expects that cash flow for the whole year will provide more
than sufficient funds for fiscal 1999's originally  planned capital  expenditure
program of approximately  $4,000,000 which has concentrated on developing proved
undeveloped natural gas reserves. An onshore exploratory drilling program in the
lower Texas Gulf Coast area on EGY's existing El Squared prospect leaseholds has
been the  principal  expenditure.  The unused  portion of the  $10,000,000  bank
credit facility has primarily in the past been earmarked for acquisitions of oil
and gas  properties,  but could be used for any corporate  purpose.  This unused
portion  of  the  bank  line  is  available  if  unforeseen  additional  capital
expenditure   requirements  arise  during  the  remainder  of  1999  because  of
accelerated drilling activities.

          Net cash provided by operating  activities was $3,039,000 for the nine
months of 1999,  which  compares with  $6,060,000 for the same period last year.
This  cash  flow,  coupled  with  added  $700,000  use of the  Company's  credit
facility,  has provided liquidity to fund both capital expenditures and treasury
share repurchases through August 31, 1999.







                                       15
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


          As regularly reported in the past,  management places greater reliance
upon an important  alternative  method of computing cash flow which is generally
known  as  Discretionary  Cash  Flow  ("DCF").  DCF is not  in  accordance  with
generally accepted  accounting  principles  ("GAAP") but is commonly used in the
industry as this method  calculates  cash flow before working capital changes or
deduction of exploration expenses since the latter can be increased or decreased
at management's discretion. DCF is often used by successful efforts companies to
compare their cash flow results with those independent  energy companies who use
the full cost accounting method where  exploration  expenses are capitalized and
do not immediately  adversely affect either operating cash flow or net earnings.
Columbus'  DCF for the nine months of 1999 was  $4,029,000  down 15% from 1998's
similar  period which was  $4,761,000.  Third  quarter DCF of $1,749,000 in 1999
surpassed by 12% 1998's  $1,561,000  and if DCF for the month of August  becomes
the average for each month  during the fourth  quarter,  then fiscal  1999's DCF
will surpass that of fiscal 1998. This will be accomplished despite 1999's first
quarter DCF being the lowest for any quarter  since fiscal 1995.  As  previously
indicated,  this third  quarter  increase was primarily  attributable  to higher
natural  gas and  crude  oil  prices  because  daily  production  stated  in Mcf
equivalent  was down 14% from last  year's  similar  period.  DCF is  calculated
without any debt retirement being considered but in Columbus' case this does not
matter as current bank debt  requires no  principal  payments  before  August 1,
2001. Interest expense is always dedu cted before arriving at DCF.

          Management  notes in each of its public filings and reports its strong
exception  to the  Statement  of  Financial  Accounting  Standards  No. 95 as it
applies  to  Columbus  which  directs  that  operating  cash  flow  must only be
determined after  consideration of working capital changes.  Management believes
such a  requirement  by GAAP ignores  entirely the  significant  impact that the
timing of income  received for, and expenses  incurred on behalf of, third party
owners  in  properties  may  have  on  working  capital.  This  is  particularly
significant  where  Columbus  owns  only a  small  working  interest  but is the
operator.

          Neither DCF nor operating cash flow before working  capital changes is
allowed to be substituted  for net income or for cash available from  operations
as defined by GAAP. Furthermore, currently reported cash flows, however defined,
are not  necessarily  indicative  that  there will be  sufficient  funds for all
future cash requirements.  For the nine months of 1999, GAAP cash flow was lower
than DCF but just the  opposite  has been  true on  several  occasions  in prior
periods.




                                       16
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


          The Company had no natural gas price  hedges in place as of August 31,
1999 however it has hedged approximately 50% of its current crude oil production
with a costless  "collar" on 7,500 barrels per month for the 12 months beginning
on  September  1, 1999 through  August 31,  2000.  The price is settled  monthly
against the calendar monthly average price on the NYMEX with a $17.50 per barrel
floor and $22.25 per barrel  ceiling.  For any price below or above those prices
Columbus receives or pays the difference.  Therefore, the Company's oil revenues
will no longer be fully exposed to the risk of declining prices such as occurred
during most of fiscal 1998 and first four months of fiscal  1999.  However,  the
Company  was able to  realize  the full  benefit  of all  price  increases  that
appeared late in the second  quarter 1999 and throughout the third quarter since
it was not  limited  on a portion  of its oil  production  to the  upside by the
$22.25 price which began as of September 1st.

          Columbus had  outstanding  bank  borrowings of $5,600,000 as of August
31, 1999 against its $10,000,000  line of credit with Norwest Bank Denver,  N.A.
which is collateralized  by oil and gas properties.  On that same date the ratio
of net long-term debt (debt less working  capital) to  shareholders'  equity was
0.29 and to total assets was 0.18.  Outstanding  long term debt utilized a LIBOR
option with an average interest rate of 6.8%. Subsequent to the end of the third
quarter,  Columbus  has reduced  bank debt by  $100,000.  The net  increase  (or
decrease)  of  long-term  debt  directly   affects  cash  flows  from  financing
activities  as do the  purchase  of  treasury  shares or the  proceeds  from the
exercise of stock options.

          Working  capital  at August  31,  1999  declined  to  $1,467,000  from
$1,556,000  at  November  30, 1998 for reasons  discussed  earlier.  Actual nine
months capital expenditures related to 1999 were $2,309,000 for additions to oil
and gas properties and  $1,471,000 for the purchase of 236,540  treasury  shares
($6.20/share)   both  of  which  did  affect  working  capital.   However,   the
aforementioned 1999 actual capital  expenditures differ from the amount shown in
the consolidated Statement of Cash Flows because the latter capital expenditures
include costs which had been  incurred  during 1999 but had not yet been paid by
the end of the third quarter which amount was less than the unpaid  expenditures
accrued at the beginning of the year.

          Management has for several years been  authorized from time to time by
the Board of Directors to repurchase its common shares from the market in blocks
subject to price  limitations.  In February,  May and July 1999,  authorizations
were approved to purchase 100,000, 50,000 and 50,000 shares, respectively,  with
the latter two restricted to purchase  prices not to exceed $6.00 per share were



                                       17
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


added to previous  authorizations.  The 100,000 share and a portion of the first
50,000 share  authorization  had been utilized by the end of the third  quarter.
Subsequently,  in September and thus far during October 1999,  46,000 additional
shares have been  acquired at an average  price of $5.66 per share.  This leaves
approximately  41,000 shares of the July 1999  authorization yet to be purchased
at prices of $6.00 or less. Total treasury shares on hand as of October 11, 1999
amounted to 826,745 shares.

RESULTS OF OPERATIONS

          During  1999's  third  quarter,  gross  revenues  increased by 11% and
operating  income  increased to $894,000 from $622,000 in 1998.  Higher  product
prices were responsible for these increases since lower oil and gas volumes were
realized.  Other  comparisons for the 1999 quarter and nine month periods versus
1998 related to prices,  production and oil and gas sales appear in tabular form
below.

          During  1999's  third  quarter  five  gross  wells  (2.23 net WI) were
drilled. These included three (.89 net WI) gas development wells in Webb County,
Texas, and two (1.34 net WI) recompletions in new zones of existing oil wells in
Montana.  In progress wells at quarter's end included one wildcat well, Long #3,
which was being directionally  deepened to the middle Wilcox Massive Sand and is
located in the El Squared prospect in Bee County,  Texas and one development gas
well in the Laredo, Texas operational area.

     Oil and Gas Revenues and Operating Costs

          The  following  table  shows  comparative  crude oil and  natural  gas
revenues,  sales  volumes,  average prices and  percentage  changes  between the
periods presented as follows:
<TABLE>
<CAPTION>


                                           Third Quarter                            Nine Months
                                 ---------------------------------       -------------------------------
                                  1999         1998         Change           1999        1998     Change
                                 ------       ------        ------           ----        ----     ------

<S>                              <C>          <C>           <C>            <C>         <C>        <C>
Natural gas revenues M$          $1,943       $1,914          2 %          $ 5,261     $ 5,847    (10)%
Oil revenue M$                   $  817       $  581         41 %          $ 1,803     $ 2,266    (20)%
Natural gas sales volumes:
  Millions of cubic feet (MMCF)     765          892        (14)%            2,451       2,609     (6)%
  MCF/day                         8,310        9,696                         8,945       9,523

Oil sales volumes:
  Barrels                        44,434       50,944        (13)%          121,781     168,183    (28)%
  Barrels/day                       483          554                           444         614

Average price received:
  Natural gas - $/MCF            $ 2.54       $ 2.15         18 %           $ 2.15      $ 2.24     (4)%
  Oil - $/BBL                    $18.38       $11.41         61 %           $14.80      $13.48     10 %

</TABLE>





                                       18
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


          Natural gas revenues  increased 2% in the third quarter of 1999 versus
1998 because 18% higher prices were significantly offset by lower sales volumes.
Average gas prices have recovered  from  depressed  prices which resulted from a
warm  winter and a high level  inventory  of storage  gas.  Comparable  quarters
showed 14% lower  sales  volumes in 1999 due to  production  declines  not fully
offset by Slick Sand gas currently  being produced at the El Squared  prospect's
Long #1 and Long #2 wells or by recently drilled gas wells in the Laredo,  Texas
area.  For the 1999 nine month  period,  natural gas revenues  declined 10% from
1998 which was the result of a 6%  decrease  in average  sales  volumes and a 4%
decrease in average prices.

          Oil revenues for 1999's third quarter were higher by 41% than the 1998
quarter  because  prices  rose by 61% but  sales  volumes  were 13%  lower.  Oil
production has declined  steadily with no development  drilling activity because
of depressed oil prices for the past two years. However, an exploratory oil well
in Harris  County,  Texas,  drilled  during  1998,  was  finally  hooked-up  and
commenced  producing 200 barrels per day in mid-June 1999. Columbus owns a 19.5%
working  interest.  Crude oil  prices  began a move  upwards  late in the second
quarter  and  accelerated  during the third  quarter.  Similar  reasons  for the
quarter apply to comparative  nine month's results because both oil revenues and
volumes  were lower by 20% and 28%,  respectively,  while  crude oil prices were
only 10% higher.

          Columbus'  1999 third  quarter  sales  volumes of natural gas averaged
8,310 Mcfd while oil and liquids  production  were 489  barrels  per day.  These
equate to an  average  daily  sales  volumes  of 11,245  MCF  equivalent  (Mcfe)
compared to 1998's third quarter rate of 13,073 Mcfe, a 14%  decrease.  This was
attributable  to  declines  of both gas and oil  production  which have not been
totally  replaced  with  production  from newly  completed  wells.  For the nine
month's  periods,  average  daily sales  volumes were 11,646 Mcfe in 1999 versus
13,254 Mcfe in 1998 which were  affected  downward in 1999 and upward in 1998 by
retroactive  reversion  adjustments in the first quarters of each of those years
in addition to those same reasons outlined for the third quarter.












                                       19
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


          Lease operating expenses for the third quarter of 1999 were 16% higher
than in 1998.  A good  portion of the  increase  was in the Sralla Road field in
Texas where one well had significant  workover costs.  Also, there was a general
increase  in  operating  costs  following  the  start up of old  wells and a few
repairs and  replacements to equipment.  Lease  operating  expenses for the nine
months in 1999 were 18% lower than 1998's comparable period. Expensive workovers
and  replacements of downhole and surface  equipment on older wells had occurred
during  that  period in 1998 while  several of those  older  wells were  shut-in
earlier in 1999.  Lease  operating costs on a Mcfe basis were $0.50 in the third
quarter of 1999 compared to $0.37 in 1998 while  operating costs as a percentage
of revenues were 19% in 1999 versus 18% in 1998 with its lower prices but higher
production.  For the nine months  periods lease  operating  costs were $0.43 per
Mcfe in 1999 and  $0.46 in 1998 and lease  operating  costs as a  percentage  of
revenues were 19% in 1999 and 20% in 1998.

          Production  and property  taxes  approximated  10% of revenues in both
1999 and 1998 nine month periods. These vary based on Texas' percentage share of
the total  production  where oil tax rates  are lower  than gas tax  rates.  The
relationship of taxes and revenue is not always directly proportional since most
of the local  jurisdiction's  property  taxes in Texas are  based  upon  reserve
evaluations as opposed to revenues  received or production rates for a given tax
period.

     Operating and Management Services

     This  segment of the  Company's  business is  comprised  of opera tions and
services  conducted  on  behalf  of  third  parties  which  includes  compressor
operations and salt water disposal facilities.

          Operating and management services gross profit was as follows:

                                         1999              1998
                                         ----              ----

                 Third quarter         $133,000         $ 51,000
                 Nine months           $332,000         $181,000

In 1998,  operations included unusually high workover expenses required to clean
out sand from the well bore of a salt water  disposal well in Texas while 1999's
costs included sizable compressor repairs.  Revenues improved during 1999 as the
number of operated wells increased  supplemented by an increase from 50% to 100%
ownership interest in four compressors operating in South Texas.




                                       20
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


Interest Income

          Interest income is earned primarily from short-term invest ments whose
rates  fluctuate with changes in the commercial  paper rates and the prime rate.
Interest  income  decreased in the third quarter of 1999 to $23,000 from $32,000
in 1998's third quarter  primarily as a result of a lower amount of  investments
and lower short-term interest rates.

General and Administrative Expenses

          General and  administrative  expenses are considered to be those which
relate to the direct costs of the Company which do not originate  from operation
of properties  or providing of services.  Corporate  expense  represents a major
part of this category.

          The Company's general and administrative expenses were as follows:
                                              1999              1998
                                              ----              ----

                 Third quarter              $  299,000        $  257,000
                 Nine months                $1,075,000        $1,155,000

Third quarter of 1999's  expenses were more than last year due to the previously
disclosed  total  phase  out of  reimbursement  for  services  provided  for the
management of Resources  which occurred  during the second quarter of 1999 which
effectively  increased costs by that prior credit.  Reimbursement  of $1,000 for
1999 from that source  compares  with $62,000  during 1998's third quarter while
nine month's  comparisons  were  $33,000 for 1999 and $185,000 for 1998.  During
third quarter salary expenses were comparable in 1999 and 1998. Salary increases
had been granted  effective  December 1, 1998 for  non-officer  employees  while
officer salaries remained  unchanged but incentive  compensation and bonus costs
were reduced in 1999 which also  affected the nine month's  comparisons.  Higher
medical  claims under the  Company's  self-insured  plan raised costs for 1999's
third quarter and nine months periods.

Depreciation, Depletion and Amortization

     Depreciation,  depletion  and  amortization  of  oil  and  gas  assets  are
calculated  based upon the units of production for the period compared to proved
reserves of each  successful  efforts  property  pool.  This expense is not only
directly  related to the level of  production,  but is also  dependent upon past
costs to find,  develop,  and recover related reserves in each of the cost pools
or fields.  Depreciation  and  amortization  of office  equipment  and  computer
software is also included in the total charge.



                                       21
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


          Charges for this expense item decreased from 1998's third quarter as a
result of decreased production and despite additional  development  expenditures
in the intervening period.  Reduction in proved reserves  contributed to a small
increase in the  depletion  rate per Mcfe to $.78 per Mcfe for the nine  months.
The 1999 third  quarter  depletion  rate of $.79 per Mcfe compares with $.77 per
Mcfe for the like period of fiscal 1998 and $.77 per Mcfe for all of 1998.

Exploration Expense

          In general,  the  exploration  expense  category  includes the cost of
Company-wide   efforts  to  acquire  and  explore  new  prospective  areas.  The
successful  efforts  method of accounting  for oil and gas  properties  requires
expensing  the costs of  unsuccessful  exploratory  wells  including  associated
leaseholds.  Other  exploratory  charges such as seismic and geologic costs must
also be  immediately  expensed  regardless  of whether a prospect is  ultimately
proved to be  successful.  Exploration  charges of  $627,000  for  1999's  third
quarter were up from 1998's  $49,000.  Third quarter 1999  included  $531,000 of
costs through August 31, 1999 to deepen the Long #3  exploratory  well in the El
Squared  prospect which did not find any proved  reserves.  Additional  costs of
$150-200,000  incurred subsequent to quarter end may be expensed fourth quarter.
The  remaining  $382,000  costs  to  drill  the  well to a  shallower  zone  are
classified as "in progress" pending a possible attempt to locate proved reserves
in a shallower formation.  Also, seismic  interpretation costs of $30,000 in the
El Squared  prospect  in Texas were  expensed.  In 1999's nine months a total of
$233,000 was expensed for participation in three  exploratory dry holes.  During
1998's quarter and nine month periods, expenses of $49,000 and $477,000 included
charges for 3-D seismic and an exploratory dry hole drilled in Montana.

          Whenever a company which reports using the  successful  efforts method
of  accounting  is  involved  in  an  exploratory   program  that  represents  a
significant part of its budget, it subjects itself to the probable risk that net
earnings for a given quarter or a year will be severely  impacted  negatively by
such  exploratory  costs.  With the numerous  exploratory well bores involved at
Columbus'  El Squared  Prospect  that will be required to properly  evaluate the
various fault blocks  and/or  potential  producing  horizons,  shareholders  are
forewarned  that net earnings and GAAP cash flow may not be truly  indicative of
the  success  of  the  Company's  operational   activity.   Management  believes
shareholders  should continue to place more emphasis on Discretionary Cash Flows
for the year as we do and not  compare  our  results  with other  company's  net
earnings or cash flows who use the full cost  accounting  method and  capitalize
their exploratory costs.




                                       22
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


Impairments

          At the end of 1999's second quarter,  a pre-tax,  non-cash  impairment
loss of $503,000 was recorded.  The  improvement in crude oil prices  previously
discussed was insufficient to justify restoration of proved undeveloped reserves
in one of the  Williston  Basin's  cost pools  because the return on  investment
would be  unsatisfactory.  When crude oil  prices in that area  might  reach and
maintain  $20  per  barrel  could  not  be  forecasted,  so  it  was  determined
restoration  of  undeveloped  reserves  would be deferred  and the  shortfall of
$253,000  between  remaining  book value of the pool and the current fair market
value of its reserves  was  recognized  as a charge.  Elsewhere,  an  unexpected
influx of water in natural gas wells in the shallow Heidi  property in Jim Wells
County, Texas brought on premature abandonment of producing zones and associated
natural gas reserves which generated a pre-tax, non-cash impairment of $250,000.

          A non-cash  impairment  loss of $2,816,000 in 1998's first quarter was
primarily  generated  by low crude oil  prices  and to a  Louisiana  exploratory
well's poor performance.  Those low prices caused a write down in both developed
and undeveloped oil reserve  quantities  along with a reduction in the remaining
carrying value of several of the successful  efforts pools when the  unamortized
costs suddenly exceeded a newly calculated  undiscounted  future net cash flows.
Certain of these  property  pools were written  down to an estimated  fair value
using the assumption that the average future crude oil price would be $18.75 per
barrel  over the  remaining  life of those  pools.  An  additional  $400,000  of
impairments were also provided for probable loss in value of undeveloped acreage
holdings (unproved  properties)  located primarily in Louisiana plus $56,000 was
expensed for an expired lease.

Interest Expense

     Interest expense varies in direct proportion to the amount of bank debt and
the level of bank interest  rates.  The average amount of bank debt  outstanding
has been higher during 1999's  quarters than in 1998.  The average bank interest
rate paid this latest  quarter was 6.6% which  compares to 7.1% in 1998. For the
nine month periods average interest rates were 6.6% in 1999 and 7.2% in 1998.

Income Taxes

          During the nine months of 1999,  the net deferred tax asset  increased
to $303,000.  The asset is comprised of a $36,000  current  asset and a $267,000
long-term  asset.  A tax  deduction  of $12,000 from the benefit of stock option


                                       23
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


exercises  has  been  added to  additional  paid-in  capital  during  1999.  The
estimated  increase in deferred  tax assets was $93,000  during the nine months.
The valuation  allowance has remained  unchanged thus far in 1999. The effective
tax rate for 1999 is 38%. See Note 3 to the con solidated  financial  statements
for further explanation of income taxes.

          Impact of the Year 2000  issue.  The Year 2000  issue is the result of
computer  programs  being  written  using two digits  rather than four, or other
methods,   to  define  the  applicable   year.   Computer   programs  that  have
date-sensitive  software may recognize a date using "00" as the year 1900 rather
than the year  2000 and  could  result in a system  failure  or  miscalculations
causing  disruptions  of  operations  such as a temporary  inability  to process
transactions, transmit invoices or engage in similar normal business activities.

          The Company  upgraded its major system computer  software in 1997 to a
new release of a major software  vendor that the vendor  represents is compliant
with the year 2000.  Columbus has reviewed its other less  important  systems as
well as its significant suppliers,  purchasers,  and transporters of oil and gas
to determine  the extent to which the Company might still be vulnerable to other
failures and what the impact might be on its operations.

          The  Company's  interest in wells  operated by other  companies is not
considered to be as important but management is attempting to determine if those
companies  are ready for the year 2000.  The Company uses  outside  services for
payroll  and medical  benefits  processing  and those  companies  have  provided
updates  to their  software  that they  represent  is year 2000  compliant.  The
Company is also somewhat  dependent  upon personal  computers as well as certain
spreadsheet  and word  processing  software  programs which may not be year 2000
compliant.  Evaluations  have been made to establish  which of those systems are
critical and a few personal computers and software programs were replaced.

          The Company also relies on non-information technology systems, such as
office telephones,  facsimile machines, air conditioning,  heating and elevators
in its leased office space,  which may have  embedded  technology  such as micro
controllers and are generally outside of its control to assess or remedy.  These
might adversely impact the Company's business but in management's  opinion would
not create a material disruption.

          As previously  disclosed,  the major system computer  software upgrade
performed  in 1997 cost  $16,000.  This  represents  the  majority of the costs,
including  replacement  of  any  non-compliant  information  technology  system,
required to meet its goal of being year 2000 ready for mission-critical systems.


                                       24
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (Continued)


The Company  does not believe that any loss of revenue will occur as a result of
the year 2000  problem but  regardless  of efforts to  identify  and remedy such
problems,  there could be year 2000 related  failures that cause some disruption
to the Company's  operations or temporary delays in processing certain data. The
Company has not  established  a  contingency  plan  because we believe all major
issues have been resolved.  Should year 2000 failures occur we will address them
at that time.

Statement Pursuant to Safe Harbor Provision of the Private Securities Litigation
Reform Act of 1995

          This report may contain certain "forward-looking statements" that have
been based on imprecise  assumptions  with regard to  production  levels,  price
realizations,  and  expenditures for exploration and development and anticipated
results  therefrom.  Such statements are subject to risks and uncertainties that
could cause actual results to differ  materially from those expressed  herein or
implied by such statements.


                           PART II - OTHER INFORMATION


Item 1.  LEGAL PROCEEDINGS

          Management  is  unaware  of  any  asserted  or  unasserted  claims  or
assessments  against the Company  which would  materially  affect the  Company's
future financial position or results of operations.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

              (a)  Exhibits

                   27   -  Financial data schedule - August 31, 1999.

             (b)   Reports on Form 8-K

                   None.












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<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.



                                                   COLUMBUS ENERGY CORP.
                                                   ---------------------
                                                       (Registrant)



DATE:    October 18, 1999         /s/ Harry A. Trueblood, Jr.
         ----------------         -----------------------------
                                  Harry A. Trueblood, Jr.
                                  Chairman, President and
                                  Chief Executive Officer
                                  (a duly authorized officer)



DATE:    October 18, 1999         /s/ Ronald H. Beck
         ----------------         -----------------------------
                                  Ronald H. Beck
                                  Vice President
                                  (Chief Accounting Officer)




























                                       26