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        February 28, 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:                 1-9872
                        --------------------------------------------------------

                              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 April 9, 1999
-----------------------------                     ----------------------------
Common stock, $.20 par value                                3,860,668



<PAGE>



                              COLUMBUS ENERGY CORP.

                                      INDEX


                                                                         PAGE

PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Consolidated Balance Sheets -
                February 28, 1999 and
                November 30, 1998                                          3

              Consolidated Statements of Operations -
                Three Months Ended February 28, 1999
                and 1998                                                   5

              Consolidated Statement of
                Stockholders' Equity -
                Three Months Ended February 28, 1999                       6

              Consolidated Statements of Cash Flows -
                Three Months Ended February 28, 1999
                and 1998                                                   7

              Notes to the Financial Statements                            9

     Item 2.  Management's Discussion and Analysis
                of Financial Condition and
                Results of Operations                                     14

PART II.  OTHER INFORMATION

     Item 1.     Legal Proceedings                                        24

     Items 2-5.  Not Applicable

     Item 6.     Exhibits and Reports
                   on Form 8-K                                            24

     Signatures                                                           25












                                       2
<PAGE>



                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                              COLUMBUS ENERGY CORP.

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

                                                   February 28,     November 30,
                                                      1999              1998
                                                   ------------     ------------
                                                   (unaudited)
                                                           (in thousands)

Current assets:
  Cash and cash equivalents                          $    916        $  2,003
  Accounts receivable:
    Joint interest partners                             1,225           1,570
    Oil and gas sales                                   1,069           1,239
    Allowance for doubtful accounts                      (116)           (116)
  Deferred income taxes (Note 3)                          272             327
  Inventory of oil field equipment,
    at lower of average cost or market                     87              95
  Other                                                   113             106
                                                      -------         -------

        Total current assets                            3,566           5,224
                                                      -------         -------

Property and equipment:
  Oil and gas assets, successful efforts
    method (Note 2)                                    36,969          36,039
  Other property and equipment                          1,812           1,804
                                                      -------         -------

                                                       38,781          37,843
  Less:  Accumulated depreciation,
     depletion and amortization
     and valuation allowance                          (20,006)        (19,118)
                                                      -------         -------

        Net property and equipment                     18,775          18,725
                                                      -------         -------

                                                     $ 22,341        $ 23,949
                                                     ========        ========

                                   (continued)





                                       3
<PAGE>



                              COLUMBUS ENERGY CORP.

                    CONSOLIDATED BALANCE SHEETS - (continued)


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                   February 28,     November 30,
                                                      1999              1998
                                                   ------------     ------------
                                                   (unaudited)
                                                           (in thousands)
Current liabilities:
  Accounts payable                                  $   1,553        $   1,846
  Undistributed oil and gas
   production receipts                                    154              317
  Accrued production and property taxes                   304              677
  Prepayments from joint interest owners                  225              374
  Accrued expenses                                        394              415
  Income taxes payable (Note 3)                            45                2
  Other                                                    14               37
                                                       ------           ------

        Total current liabilities                       2,689            3,668
                                                       ------           ------

Long-term bank debt (Note 2)                            5,000            4,900
Deferred income taxes (Note 3)                             59              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
    4,620,412 in 1999, and 4,611,001 in 1998
    (outstanding 3,940,665 in 1999 and
    4,046,552 in 1998)                                    924              922
  Additional paid-in capital                           19,711           19,656
  Retained earnings (accumulated deficit)              (1,412)          (1,440)
                                                       ------           ------
                                                       19,223           19,138
  Less: Treasury stock at cost
          679,747 shares in 1999 and
          564,449 shares in 1998                       (4,630)          (3,874)
                                                       ------           ------
        Total stockholders' equity                     14,593           15,264
                                                       ------           ------
                                                    $  22,341        $  23,949
                                                       ======           ======


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






                                       4
<PAGE>



                              COLUMBUS ENERGY CORP.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                             Three Months Ended February 28,
                                            --------------------------------
                                               1999                   1998
                                            ----------             ---------
                                          (in thousands, except per share data)
Revenues:
  Oil and gas sales                          $  2,033              $  2,837
  Operating and management
    services                                      336                   308
  Interest and other income                        27                    42
                                             --------              --------
       Total revenues                           2,396                 3,187
                                             --------              --------

Costs and expenses:
  Lease operating expenses                        422                   560
  Property and production taxes                   244                   260
  Operating and management
    services                                      251                   271
  General and administrative                      336                   287
  Depreciation, depletion and
    amortization                                  890                 1,005
  Impairments                                       -                 2,816
  Exploration expense                             119                   263
  Litigation expense (Note 4)                       4                     -
                                             --------              --------
      Total costs and expenses                  2,266                 5,462
                                             --------              --------

      Operating income (loss)                     130                (2,275)
                                             --------              --------

Other expenses (income):
  Interest                                         84                    43
  Other                                             1                    32
                                             --------              --------
                                                   85                    75
                                             --------              --------
      Earnings (loss) before
        income taxes                               45                (2,350)

Provision (benefit) for income
  taxes (Note 3)                                   17                  (893)
                                             --------              --------
      Net earnings (loss)                    $     28              $ (1,457)
                                             ========              ========

Earnings (loss) per share (Note 7):
  Basic                                      $    .01              $   (.34)
                                             ========              ========
  Diluted                                    $    .01              $   (.34)
                                             ========              ========

Average number of common shares and 
 common equivalent shares outstanding:
  Basic                                         4,009                 4,258
                                             ========              ========
  Diluted                                       4,039                 4,258
                                             ========              ========


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


                                       5
<PAGE>

                              COLUMBUS ENERGY CORP.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                  For the Three Months Ended February 28, 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>          <C>     
Balances,
  December 1, 1998               4,611,001       $   922      $19,656      $(1,440)   564,449      $(3,874)

Exercise of employee
  stock options                      4,107             1           21            -      3,492          (22)
Purchase of shares                       -             -            -            -    113,140         (743)
Shares issued for Stock
  Purchase Plan                      5,304             1           34            -     (1,334)           9
Net earnings                             -             -            -           28          -            -
                                 ---------       -------      -------      -------     ------      -------

Balances,
  February 28, 1999              4,620,412       $   924      $19,711      $(1,412)   679,747      $(4,630)
                                ==========       =======      =======      =======    =======       ======

</TABLE>


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







                                       6
<PAGE>


                              COLUMBUS ENERGY CORP.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                             Three Months Ended February 28,
                                            --------------------------------
                                                 1999            1998
                                              ----------       ---------
                                                    (in thousands)

Net earnings (loss)                             $    28       $(1,457)

Adjustments to reconcile net earnings
  (loss)to net cash provided by
  operating activities:
    Depreciation, depletion, and
      amortization                                  890         1,005
    Impairments                                      --         2,816
    Deferred income tax provision (benefit)          (3)         (914)
    Exploration expense, noncash portion             40          --
    Other                                            30            21
Net change in operating assets and
  liabilities                                      (369)          (98)
                                                -------       -------
        Net cash provided by
          operating activities                      616         1,373
                                                -------       -------

Cash flows from investing activities:
  Additions to oil and gas properties            (1,085)       (2,749)
  Additions to other assets                         (10)           32
                                                -------       -------
        Net cash used in
          investing activities                   (1,095)       (2,717)
                                                -------       -------

Cash flows from financing activities:
  Proceeds from long-term debt                      300         1,300
  Reduction in long-term debt                      (200)         (200)
  Proceeds from issuance of
    common stock                                     35           156
  Purchase of treasury stock                       (743)         (482)
  Other                                            --              (2)
                                                -------       -------
        Net cash provided by (used in)
          financing activities                     (608)          772
                                                -------       -------

Net decrease in cash and
  cash equivalents                               (1,087)         (572)
Cash and cash equivalents at
  beginning of period                             2,003         1,857
                                                -------       -------
Cash and cash equivalents at
  end of period                                 $   916       $ 1,285
                                                =======       =======


                                   (continued)





                                       7
<PAGE>



                              COLUMBUS ENERGY CORP.

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



                                             Three Months Ended February 28,
                                            --------------------------------
                                                 1999            1998
                                              ----------       ---------
                                                    (in thousands)

Supplemental disclosure of 
  cash flow information:
    Cash paid during the period for:
      Interest                                   $ 85            $ 40
                                                 ====            ====
      Income taxes, net of refunds               $(23)           $  4
                                                 ====            ====

Supplemental disclosure of non-cash
  investing and financing activities             None            None





























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 February 28, 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.  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 September 8, 1998 to extend the revolving  period to July 1,
2000 when it entirely  converts to an amortizing term loan which matures July 1,
2003. 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%.

     The borrowing  base is limited to  $10,000,000  and subject to  semi-annual
redetermination for any increase or decrease.  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 outstan ding borrowings is payable quarterly.





                                       9
<PAGE>



                              COLUMBUS ENERGY CORP.

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


(3)  INCOME TAXES

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

                                           Three Months Ended February 28,
                                           -------------------------------
                                                1999             1998
                                             ---------         --------
Current:
          Federal                              $    8           $    1
          State                                    12               20
                                                -----            -----
                                                   20               21
                                                -----            -----

Deferred:
          Federal                                  (9)            (878)
          Use of loss carryforwards                 6                1
          State                                     -              (37)
                                                -----            -----
                                                   (3)            (914)
                                                -----            -----

  Total income tax (benefit) expense           $   17           $ (893)
                                               ======           ======


          Total tax  provision  has resulted in effective tax rates which differ
from the statutory  Federal income tax rates. The reasons for these  differences
are:

                                              Percent of Pretax Earnings
                                            -------------------------------
                                            Three Months Ended February 28,
                                            -------------------------------
                                                1999             1998
                                                ----             ----

U.S. Statutory rate                               34 %                 (34)%
State income taxes                                 4                    (1)
Other                                              -                    (3)
                                                 ----                 ----
                                                  38 %                 (38)%
                                                 ====                 ====















                                       10
<PAGE>

                              COLUMBUS ENERGY CORP.

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


          During the three 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):

                                                         Current Year
                                         ---------------------------------------
                                         December 1,  Operations/   February 28,
                                            1998         Other          1999
                                         -----------  -----------   ------------

Deferred tax assets:
  Pre-1987 loss carryforwards             $ 1,124       $  --         $ 1,124
  Post-1987 loss carryforward                 540          --             540
  Percentage depletion
    carryforwards                           1,478          --           1,478
  State income tax loss
    carryforwards                             118            (6)          112
  Other                                       329             8           337
                                          -------       -------       -------
            Total                           3,589             2         3,591
     Valuation allowance
       (long-term)                         (1,408)         --          (1,408)
                                          -------       -------       -------
     Deferred tax assets                    2,181             2         2,183
                                          -------       -------       -------

Deferred tax liabilities-
  Depreciation, depletion and
    amortization and other                 (1,971)            1        (1,970)
                                          -------       -------       -------
    Net tax asset (liability)             $   210       $     3       $   213
                                          =======       =======       =======


(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  reached in  September  1994 of their  previous  lawsuit 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 has
responded with a First Set of Interrogatories to plaintiffs. Columbus has denied
the plaintiffs' allegations.








                                       11
<PAGE>



                              COLUMBUS ENERGY CORP.

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


(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
involved,  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 or
crude oil swaps outstanding as of February 28, 1999.

          The  Company  is not  aware  of any  events  of  noncompliance  in its
operations  with any  environmental  laws and  regulations  nor of any  material
potential  contingencies  related to environmental  issues.  The exact nature of
environmental  control problems,  if any, which the Company may encounter in the
future  cannot be  predicted,  primarily  because of the  changing  character of
environmental requirements that may be enacted with applicable jurisdictions.

(6)  RELATED PARTY TRANSACTIONS

          CEC Resources  Ltd.  ("Resources")  was a  wholly-owned  subsidiary of
Columbus prior to its divestiture on February 24, 1995. Reimbursement is made by
Resources to Columbus for services  provided by Columbus  officers and employees
for managing  Resources and reduces  general and  administrative  expense.  This
reimbursement totaled $22,000 and $60,000 for the three months of 1999 and 1998,
respectively.  Effective  on March 31,  1999,  the  agreement  for  Columbus  to
continue furnishing  services was terminated  following the 90 day notice period
as provided.



















                                       12
<PAGE>



                              COLUMBUS ENERGY CORP.

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


(7)  EARNINGS PER SHARE

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

                                                 Three Months Ended February 28,
                                                 -------------------------------
                                                     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)                        $    28        $(1,457)
                                                   =======        =======

Shares (denominator):
  Basic EPS                                          4,009          4,258
  Effect of dilutive option shares                      30           --
                                                   -------        -------
  Diluted EPS                                        4,039          4,258
                                                   =======        =======

Per share amount:
  Basic EPS                                        $   .01        $  (.34)
                                                   =======        =======
  Diluted EPS                                      $   .01        $  (.34)
                                                   =======        =======

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                                        325             75
                                                    ======         ======

          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>



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

          First  quarter  1999 sales and  financial  results were dismal for the
fifth consecutive quarter.  Average worldwide and domestic crude oil prices were
lower than in any  quarter in more than ten years and on an  inflation  adjusted
basis dipped to a lower  average  price than in any year since the 1930's during
the Depression years.  Also, these low prices led to the shut-in of numerous oil
wells which  significantly  reduced crude oil  production  for the 1999 quarter.
Furthermore,  the  Company's  average  natural  gas prices  were much lower than
1998's  first  quarter  which was  partially  offset  by  improved  natural  gas
production.  As a consequence,  capital  available was adversely  affected since
cash flow for the present quarter was materially lower than in last year's first
quarter.  Despite net earnings of only $28,000,  this was  substantially  better
than last year's net loss of  $1,457,000,  or $0.34 per share,  which included a
$2,816,000 impairment loss ($1,746,000 after income taxes or $.41 per share).

          Shareholders' equity as of the end of the first quarter 1999 decreased
to $14,593,000  from  $15,264,000  at November 30, 1998 and working  capital was
down to $877,000  from  $1,556,000.  This was primarily the result of additional
purchases of treasury shares and the fact that additions to properties  exceeded
cash provided by operating  activities by an amount greater than the increase of
$100,000 in long term bank debt.

          The Company's cash flow for the year should provide  sufficient  funds
for fiscal 1999's revised  capital  expenditure  program of less than $4,000,000
which primarily includes developing undeveloped natural gas reserves and funding
the  continued  exploratory  drilling  in the lower  Gulf  Coast  area at its El
Squared  discovery.  In the past,  the unused  portion of the  $10,000,000  bank
credit  facility has been primarily  targeted by management for  acquisitions of
oil and gas  properties,  but can be used for any corporate  purpose.  This bank
line is  available  should there be  unforeseen  capital  expenditures  required
during  1999 as a result  of  accelerating  drilling  activities  as a result of
improved prices or outstanding successes from its exploratory program.

          Net cash provided from operating activities was $616,000 for the first
three months of 1999,  which compares with  $1,373,000 last year. This cash flow
coupled  with  limited  use  of  the  Company's  credit  facility  has  provided
sufficient liquidity to fund all drilling capital expenditures  incurred as well
as treasury share repurchases to date in 1999.


                                       14
<PAGE>



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


         As previously  reported,  management  places  greater  reliance upon an
important   alternative  method  of  computing  cash  flow  generally  known  as
Discretionary  Cash Flow ("DCF")  (which is not  generally  accepted  accounting
principles  ("GAAP")  but  is  commonly  used  in  the  industry).  This  method
calculates  cash flow  before  considering  either  working  capital  changes or
deduction of exploration expenses as the latter can be increased or decreased at
management's discretion.  DCF is often used by successful efforts companies when
making  comparisons  with the cash flow results of independent  energy companies
which  use the full  cost  accounting  method  where  exploration  expenses  are
capitalized and therefore do not adversely  affect either operating cash flow or
net  earnings  immediately.  Columbus'  DCF for the  first  quarter  of 1999 was
$1,064,000  down 39% from 1998's  quarter  which was  $1,734,000.  As previously
indicated,  this  decrease was attribut  able to lower crude oil and natural gas
prices since daily  production  stated in either  barrels or Mcf  equivalent was
essentially  flat  compared  with  last  year's  similar  period.  DCF  is  also
calculated without any debt retirement being considered.  However,  in Columbus'
case this does not matter  since  outstanding  bank debt  requires no  principal
payments before August 1, 2000 and interest  expense,  which has been relatively
insignificant, is dedu cted before arriving at DCF.

          Management  continues  to note in all public  filings  and reports its
strong exception to the Statement of Financial Accounting Standards No. 95 as it
applies to  Columbus  since it  directs  that  operating  cash flow must only be
determined after consideration of working capital changes. It is our belief 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  has on working  capital  where  Columbus  owns only a small  working
interest but is the operator.

          Neither DCF nor operating cash flow before working capital changes may
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 first quarter of 1999,  GAAP cash flow was lower than DCF
but has been the opposite in some prior quarters.











                                       15
<PAGE>



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


          At the present time,  the Company has no hedges of either crude oil or
natural  gas  prices  similar  to those  swaps  it  negotiated  in prior  years.
Therefore,  the Company's  current oil and gas revenues are fully exposed to the
risk of declining  prices such as have  occurred  during most of fiscal 1998 and
first  quarter  1999.  Thus,  it will be able to fully  benefit  from any  price
increases  should these occur during  fiscal 1999.  Subsequent to the end of the
quarter,  there has been a significant  price  improvement of crude oil of about
50%.

          Columbus had  outstanding  borrowings of $5,000,000 as of February 28,
1999 against its $10,000,000 line of credit with Norwest Bank Denver, N.A. which
is  collateralized  by oil and gas  properties.  At the end of the first quarter
1999,  the  ratio  of  net  long  term  debt  (debt  less  working  capital)  to
shareholders'  equity was 0.28 and to total  assets was 0.18.  Outstanding  long
term  debt  utilized  a LIBOR  option  with an  average  interest  rate of 6.4%.
Subsequent  to the  end  of the  first  quarter,  Columbus  has  drawn  down  an
additional  $400,000 to pay for its 1999 capital  expenditure program as well as
to  purchase  treasury  shares in March and April as  discussed  below.  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 February 28, 1999 had declined to $877,000  from a
positive  $1,566,000 at November 30, 1998 for reasons  discussed  above.  Actual
three month's capital  expenditures for 1999 only were $929,000 for additions to
oil and gas properties and $743,000 for the purchase of 113,140  treasury shares
which affected  working  capital.  However,  the  aforementioned  actual capital
expenditures differ from the amount shown in the consolidated  Statement of Cash
Flows  because the latter also  includes cash payments made during 1999 for 1998
expenditures which had been incurred but not yet paid as of 1998's year end.

          The  Company  has  been  authorized  by  its  Board  of  Directors  to
repurchase  its common shares from the market at various  prices during the last
several years. During February 1999 an additional 100,000 shares were authorized
for repurchase at prices not to exceed $6.00 per share,  which was  considerably
lower  than  the  purchase  price  permitted  for  previously  authorized  share
purchases,  some of which had not yet been acquired but subsequently  have been.
During the first quarter of fiscal 1999,  113,140 shares were  repurchased at an
average  price of $6.52 per share.  During March and April 1999,  an  additional
87,900  shares have been acquired at an average price of $5.82 per share leaving
approximately  23,000  shares  yet  to be  purchased  under  the  February  1999
authorization.



                                       16
<PAGE>



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


RESULTS OF OPERATIONS

          During 1999's first quarter,  lower oil and gas sales were responsible
for  gross  revenues  decreasing  by 25% while  operating  income  increased  to
$130,000  compared with a loss of $2,275,000 in 1998 which included  impairments
of  $2,816,000.  Other  comparisons  for the 1999 quarter versus 1998 related to
prices, production and oil and gas sales are covered below.

          During  1999's  first  quarter  three  gross  wells (1.23 net WI) were
drilled and/or completed. These included one (.07 net WI) successful development
gas well in the  Laredo  area and one  (.615  net WI)  development  gas well was
drilled in Jim Wells County.  Also, a second discovery gas well (.55 net WI) was
completed at its El Squared  prospect in Bee County  where most of  management's
attention has been devoted toward selection of the exact surface locations where
vertical well bores will test various potentially productive sands in the Wilcox
formation by  penetrating  those  horizons at apex of the structure  immediately
underneath  the sealing fault.  This effort has also included a reprocessing  of
all 3-D seismic using  velocities from logs obtained from drilling and a special
program to obtain actual  velocities by lowering an instrument  into a well bore
below 10,000 feet and recording  direct seismic traces of shock waves created on
the surface.

     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 periods
for the first quarters of 1999 and 1998 and the first quarter of 1999 versus the
fourth quarter of 1998.
<TABLE>
<CAPTION>

                                              First Quarter
                                           ---------------------         %         Fourth Qtr.       %
                                            1999           1998       Change          1998        Change
                                           ------         ------      ------       -----------    ------

<S>                                        <C>            <C>         <C>            <C>           <C>  
          Natural gas revenues M$          $1,640*        $1,916*     (14)%          $ 1,885       (13)%
          Oil revenue M$                   $  393         $  921      (57)%          $   619       (37)%
          Natural gas sales volumes:
            Millions of cubic feet (MMCF)     876*           861*       2 %              932        (6)%
            MCF/day                         9,738          9,572                      10,245

          Oil sales volumes:
            Barrels                        37,945         59,669      (36)%           50,114       (24)%
            Barrels/day                       422            663                         551

          Average price received:
            Natural gas - $/MCF            $ 1.87         $ 2.22      (16)%           $ 2.02        (7)%
            Oil - $/BBL                    $10.35         $15.44      (33)%           $12.36       (16)%
</TABLE>

          *These sales volumes should not be confused with actual production for
          the period. First quarter sales volumes and revenues for 1999 and 1998
          include  adjustments  consisting of a reduction of 15 Mmcf and $33,000
          and an increase of 38 Mmcf and $68,000, respectively.



                                       17
<PAGE>



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


          Natural gas revenues  decreased  14% in the first quarter of 1999 when
compared to 1998's quarter which was solely the result of decreased prices since
volumes  improved  by 2%.  Average gas prices  were down 16%  commensurate  with
reduced  demand due to a warm winter and  available  record  level  inventory of
storage gas. The latest quarter compared to the fourth quarter of 1998 showed 6%
lower sales volumes due to normal  production  declines which were not offset by
new  wells  and  down  time  from  workover  of the  Long #1  discovery  well to
temporarily  shut off the lower zone to test for source of water  production.  A
reversionary  interest  settlement  which reduced sales and production  from the
1999  first  quarter's  reported  amounts  by 15,000  MCF of gas and  $33,000 of
revenues  had been  previously  reported  throughout  1998.  The 7%  decrease in
average  prices for the quarter  versus the fourth  quarter was  affected by the
same weather and storage fill influence.  Gas revenues decreased 13% from 1998's
fourth quarter for the same reasons of sales volumes, lower prices and reversion
accounting.

          Oil revenues for 1999's first quarter were down  significantly  by 57%
when  compared to the similar 1998 quarter which was the result of a substantial
33% decrease in the average price and a lower sales volume of 36%. Also,  during
1999's  first  quarter,  several  wells became  unprofitable  and were shut down
pending  improved crude oil prices.  Any wells which had pump or tubing problems
were not repaired nor were any workovers  performed or oil wells drilled.  A few
of these wells have recently been returned to production with improved crude oil
prices.

          Likewise,  when  compared  to 1998's  fourth  quarter  results,  first
quarter oil revenues were down 37%. This was a 16% decrease in the average price
while  production  declined  24% due to the  aforementioned  lack of  workovers,
postponed downhole  equipment repairs or replacements,  and the election to shut
down wells that had become temporarily uneconomic.

          Columbus'  1999 first quarter  average sales volumes of natural gas of
9,738 Mcfd (as adjusted for  reversion)  and oil and liquids  production  of 427
barrels per day equates to an average  daily  production of 2,050 barrels of oil
equivalent  (BOE)  compared  to 2,265  BOE of  production  during  1998's  first
quarter.  The  curtailment  and  decline  of oil  production  coupled  with  the
reversionary interest accounts for most of the difference.  Incre ases generated
by new gas wells which were connected  between those  comparative  periods could
not overcome those negative reductions.

          Lease operating expenses for the first quarter were lower than 1998's.
Expensive  workovers and replacements of downhole and surface equipment on older
wells had occurred during the first quarter of fiscal 1998.  These type of costs
were deferred  during first quarter 1999.  Lease  operating costs on a BOE basis
were

                                       18
<PAGE>



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


$2.29 in 1999 compared to $2.75 in 1998 which had higher  production.  Operating
costs as a percentage of revenues were up to 21% as a result of lower sales, and
despite  lower costs versus 20% reported in 1998's first  quarter when  somewhat
better prices and higher oil production  helped to generate  higher revenues for
that period.

          Production and property taxes approximated 12% of revenues in 1999 and
9% in 1998. 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 $85,000  during first
quarter 1999 compared to a $37,000 profit during the  equivalent  period in 1998
which included  unusually high workover expenses required to clean out sand from
the well bore of a salt  water  disposal  well in Texas.  Revenues  did  improve
during 1999's first quarter as the number of operated wells increased along with
an increase from 50% to 100% ownership interest in four compressors operating in
South Texas.

     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 1999 to $27,000  from  $42,000  in 1998's  first
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.


                                       19
<PAGE>



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


     The Company's general and administrative  expenses for the first quarter of
1999  were 17% more than last year  primarily  due to the  previously  discussed
phase out of  reimbursement  for  services  provided  by Columbus  officers  and
employees  for managing  Resources.  Reimbursement  of $22,000 for 1999 compares
with  $60,000  during  the  first  quarter  of 1998 for  providing  services  to
Resources.  Also,  expenses increased in 1999 due to salary increases which were
granted effective December 1, 1998 for non-officer employees and May 1, 1998 for
officers, higher medical claims under the Company's self-insured plan and higher
office rent.

     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.

          Charges for this  expense  item  decreased  from  1998's  quarter as a
result of  decreased  production  and despite  development  expenditures  in the
intervening period as well as reduced oil reserves in several cost pools brought
about by lower crude oil prices. Impairment writedowns in 1998 did contribute to
a reduction in the depletion rate per BOE so that 1999's first quarter depletion
rate was $4.57 per BOE  compared  with the $4.91 per BOE for the like  period of
fiscal 1998 and $4.64 per BOE 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  $119,000  for  1999's  first
quarter were down from 1998's $263,000.  In 1999 a total of $47,000 was expensed
for  undeveloped  leases in Texas as the result of an offset  dry hole.  In 1998
$199,000 was expensed due to a dry exploratory oil well in Montana.


                                       20
<PAGE>



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


     Any time a  company  reporting  under  the  successful  efforts  method  of
accounting  gets  involved  in a  significant  exploratory  program,  it becomes
subject to the risks that net  earnings  for a quarter or a year may be severely
impacted  by  significant  expenses.  With the  numerous  exploratory  locations
involved  at  Columbus'  El Squared  Prospect  that will be required to properly
evaluate the various fault blocks and potential producing horizons, shareholders
should take note that net earnings and GAAP cash flow may not be  indicative  of
the Company's  operational  potential.  Management believes  shareholders should
place the most emphasis on comparative  Discretionary Cash Flows between periods
or with other company's cash flows who use the full cost  accounting  method and
capitalize their exploratory costs.

          Impairments

          No  impairment  loss was  necessary  for the 1999 first  quarter  even
though  crude oil and natural gas prices  declined  further  from the end of the
fiscal 1998.

          A non-cash  impairment  loss of  $2,816,000  in first quarter 1998 was
recognized.  The extremely low crude oil prices were a major  contributor  along
with a Louisiana  well's  performance.  These resulted in a reduction in reserve
quantities as well as the remaining carrying value of several successful efforts
pools when unamortized costs suddenly exceeded the newly calculated undiscounted
future net cash flows.  Certain property pools were written down to a fair value
based on an 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  first  quarter  than in 1998.  The average bank
interest rate paid this latest quarter was 6.7% which compares to 7.3% in 1998.

          Income Taxes

          During the first quarter of 1999, the net deferred tax asset increased
slightly to $213,000.  The asset is comprised of a $272,000  current asset and a
$59,000 long-term  liability.  The estimated increase in deferred tax assets was
$3,000  during the first  quarter.  The  effective tax rate for 1999 is 38%. See
Note 3 to the  consolidated  financial  statements  for further  explanation  of
income taxes.


                                       21
<PAGE>



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


     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 is  compliant  with the year 2000.
Columbus has started its review of 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. Outside services are used for payroll and
medical  benefits  processing  and those  companies  provided  updates  to their
software  that is year 2000  compliant  by  year-end  1998.  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 ready at present.
Evaluations  will be made to establish  which of those  systems are critical and
need to be remedied.

          The Company also relies on non-information technology systems, such as
office telephones,  facsimile machines, air conditioning,  heating and elevators
in its leased office building,  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.  Management  expects that 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. 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.  The Company has not yet  established a contingency
plan should year 2000 failures  occur and has not  determined if it will in fact
create a contingency plan.

                                       22
<PAGE>



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


          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.









































                                       23
<PAGE>



                           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 - February 28, 1999

             (b)     Reports on Form 8-K

                              None





































                                       24
<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:      April 12, 1999                         /s/ Harry A. Trueblood, Jr.
     -----------------------------                ---------------------------
                                                  Harry A. Trueblood, Jr.
                                                  Chairman, President and
                                                  Chief Executive Officer
                                                  (a duly authorized officer)



DATE:      April 12, 1999                         /s/ Ronald H. Beck
     -----------------------------                ------------------
                                                  Ronald H. Beck
                                                  Vice President
                                                  (Chief Accounting Officer)















                                       25