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      May 31, 2000
                                        ----------------------
                                       or

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

For the transition period from                to
                               ---------------  --------------

Commission File Number:       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 July 12, 2000
-----------------------------       ----------------------------
Common stock, $.20 par value                 3,751,668



<PAGE>



                              COLUMBUS ENERGY CORP.

                                      INDEX

                                                                          PAGE

PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Consolidated Balance Sheets -
                May 31, 2000 and
                November 30, 1999                                          3

              Consolidated Statements of Operations -
                Three Months and Six Months Ended
                May 31, 2000 and 1999                                      5

              Consolidated Statement of
                Stockholders' Equity -
                Six Months Ended May 31, 2000                              6

              Consolidated Statements of Cash Flows -
                Six Months Ended May 31, 2000
                and 1999                                                   7

              Notes to the Consolidated 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                                           27

     Item 2.  Not Applicable

     Item 3.  Quantitative and Qualitative Disclosure
                 About Market Risk                                        27

     Item 4.  Submission of Matters to a Vote of
                 Security Holders                                         27

     Item 5.  Not Applicable

     Item 6.  Exhibits and Reports
                 on Form 8-K                                              27

     Signatures                                                           28




                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                              COLUMBUS ENERGY CORP.

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                     May 31,             November 30,
                                                                      2000                   1999
                                                                   -----------           ------------
                                                                   (unaudited)
                                                                            (in thousands)
<S>                                                                  <C>                    <C>
Current assets:
  Cash and cash equivalents                                          $  1,892               $  1,850
  Accounts receivable:
    Joint interest partners                                             1,183                  1,780
    Oil and gas sales                                                   1,667                  1,501
    Allowance for doubtful accounts                                      (116)                  (116)
  Deferred income taxes (Note 3)                                          110                    200
  Inventory of oil field equipment,
    at lower of average cost or market                                     84                    106
  Other                                                                   108                     80
                                                                      -------                -------

        Total current assets                                            4,928                  5,401
                                                                      -------                -------

Deferred income taxes (Note 3)                                          1,025                    937

Property and equipment:
  Oil and gas assets, successful efforts
    method (Note 2)                                                    37,455                 36,862
  Other property and equipment                                          1,844                  1,836
                                                                      -------                -------

                                                                       39,299                 38,698
  Less:  Accumulated depreciation,
     depletion and amortization
     and valuation allowance                                          (23,963)               (22,506)
                                                                      -------                -------

        Net property and equipment                                     15,336                 16,192
                                                                      -------                -------

                                                                     $ 21,289               $ 22,530
                                                                     ========               ========
</TABLE>

                                   (continued)


                                       3
<PAGE>


                              COLUMBUS ENERGY CORP.

                    CONSOLIDATED BALANCE SHEETS - (continued)


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

<TABLE>
<CAPTION>
                                                                     May 31,             November 30,
                                                                      2000                   1999
                                                                   -----------           ------------
                                                                   (unaudited)
                                                                            (in thousands)
<S>                                                                  <C>                    <C>
Current liabilities:
  Accounts payable                                                   $   2,069              $   2,352
  Undistributed oil and gas
   production receipts                                                     417                    386
  Accrued production and property taxes                                    385                    738
  Prepayments from joint interest owners                                   199                    200
  Accrued expenses                                                         477                    494
  Income taxes payable (Note 3)                                              2                     30
  Other                                                                     36                     32
                                                                        ------                 ------

        Total current liabilities                                        3,585                  4,232
                                                                        ------                 ------

Long-term bank debt (Note 2)                                             5,200                  5,500

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
    4,650,748 in 2000, and 4,645,303 in 1999
    (outstanding 3,744,374 in 2000 and
    3,800,558 in 1999)                                                     930                    929
  Additional paid-in capital                                            20,097                 20,069
  Accumulated deficit                                                   (2,629)                (2,655)
                                                                        ------                 ------
                                                                        18,398                 18,343
  Less: Treasury stock at cost
          906,374 shares in 2000 and
          844,745 shares in 1999                                        (5,894)                (5,545)
                                                                        ------                 ------
        Total stockholders' equity                                      12,504                 12,798
                                                                        ------                 ------
                                                                     $  21,289              $  22,530
                                                                        ======                 ======
</TABLE>


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


                                       4
<PAGE>


                              COLUMBUS ENERGY CORP.

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

                                                               Six Months Ended                    Three Months Ended
                                                                   May 31,                                 May 31,
                                                           -----------------------                -------------------------
                                                           2000               1999                2000                 1999
                                                           ----               ----                ----                 ----
                                                                      (in thousands, except per share data)
<S>                                                      <C>                <C>                  <C>                  <C>
Revenues:
  Oil and gas sales                                      $ 6,071            $ 4,304              $ 3,331              $ 2,271
  Operating and management

    services                                                 693                672                  323                  336
  Interest and other income                                   69                 47                   36                   20
                                                         -------            --------             --------             -------
    Total revenues                                         6,833              5,023                3,690                2,627
                                                         -------            --------             --------             -------

Costs and expenses:
  Lease operating expenses                                 1,022                843                  477                  421
  Property and production taxes                              585                499                  301                  255
  Operating and management

    services                                                 434                473                  203                  222
  General and administrative                                 877                776                  549                  440
  Depreciation, depletion and
   amortization                                            1,482              1,724                  731                  834
  Impairments                                                  -                503                    -                  503
  Exploration expense                                      1,690                344                  278                  225
  Litigation expense (Note 4)                                367                 17                  209                   13
  Advisory fees                                              119                  -                  119                    -
                                                         --------           --------             --------             -------
    Total costs and expenses                               6,576              5,179                2,867                2,913
                                                         --------           --------             --------             -------

      Operating income (loss)                                257               (156)                 823                 (286)
                                                         --------           --------             --------             --------

Other expenses (income):
  Interest                                                   217                175                  110                   91
  Other                                                        -                  3                    -                    2
                                                         -------            ---------            -------              -------
                                                             217                178                  110                   93
                                                         -------            --------             --------             -------
    Earnings (loss) before

      income taxes                                            40               (334)                 713                 (379)

Provision (benefit) for income
  taxes (Note 3)                                              14               (127)                 243                 (144)
                                                         -------            --------             -------              --------
    Net earnings (loss)                                  $    26            $  (207)             $   470              $  (235)
                                                         =======            ========             =======              ========

Earnings (loss) per share (Note 7):

    Basic                                                $   .01            $  (.05)             $   .13              $  (.06)
                                                         =======            ========             =======              ========
    Diluted                                              $   .01            $  (.05)             $   .13              $  (.06)
                                                         =======            ========             =======              ========

Weighted  average  number  of  common  shares  and  common   equivalent   shares
  outstanding:

    Basic                                                  3,761              3,946                3,748                3,883
                                                         =======            ========             =======              =======
    Diluted                                                3,763              3,946                3,753                3,883
                                                         =======            ========             =======              =======
</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 Six Months Ended May 31, 2000
                                   (Unaudited)



<TABLE>
<CAPTION>

                                           Common Stock            Additional                    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, 1999                   4,645,303       $   929       $20,069      $(2,655)        844,745      $(5,545)

Purchase of shares                           -             -             -            -          63,000         (358)
Shares issued for Stock
  Purchase Plan                          5,445             1            28            -          (1,371)           9
Net earnings                                 -             -             -           26               -            -
                                     ---------       -------       -------      -------         -------       ------

Balances,
  May 31, 2000                       4,650,748       $   930       $20,097      $(2,629)        906,374      $(5,894)
                                     =========       =======       =======      =======         =======       ======
</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>

                                                                        Six Months Ended May 31,
                                                                        ------------------------
                                                                         2000              1999
                                                                        ------            -----
                                                                             (in thousands)

<S>                                                                    <C>               <C>
Net earnings (loss)                                                    $    26           $   (207)

Adjustments to reconcile  net earnings  (loss)
  to net cash  provided by operating
  activities:
    Depreciation, depletion, and
      amortization                                                       1,482              1,724
    Impairments                                                              -                503
    Deferred income tax provision (benefit)                                  2               (168)
    Exploration expense, noncash portion                                     -                 80
    Other                                                                   35                 84
Net change in operating assets and
  liabilities                                                             (369)              (726)
                                                                      --------            -------
        Net cash provided by
          operating activities                                           1,176              1,290
                                                                      --------            -------

Cash flows from investing activities:

  Proceeds from sale of assets                                              66                  -
  Additions to oil and gas properties                                     (563)            (1,641)
  Additions to other assets                                                 (9)               (11)
                                                                      --------            -------
        Net cash used in
          investing activities                                            (506)            (1,652)
                                                                      --------            -------

Cash flows from financing activities:
  Proceeds from long-term debt                                             300                900
  Reduction in long-term debt                                             (600)              (300)
  Proceeds from issuance of
    common stock                                                            29                128
  Purchase of treasury stock                                              (357)            (1,421)
                                                                      --------            -------
        Net cash used in financing
          activities                                                      (628)              (693)
                                                                      --------            -------

Net increase (decrease) in cash and
  cash equivalents                                                          42             (1,055)
Cash and cash equivalents at
  beginning of period                                                    1,850              2,003
                                                                        ------            -------
Cash and cash equivalents at
  end of period                                                        $ 1,892           $    948
                                                                        ======            =======
</TABLE>


                                   (continued)



                                       7
<PAGE>


                              COLUMBUS ENERGY CORP.

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


<TABLE>
<CAPTION>

                                                                        Six Months Ended May 31,
                                                                        ------------------------
                                                                         2000              1999
                                                                        ------            -----
                                                                             (in thousands)

<S>                                                                    <C>               <C>
Supplemental disclosure of cash flow information:

    Cash paid (received) during the period for:

      Interest                                                         $   218           $    174
                                                                        ======            =======
      Income taxes, net of refunds                                     $    40           $     21
                                                                        ======            =======

Supplemental disclosure of non-cash investing and financing activities:

    Non-cash compensation expense
      related to common stock                                          $    35           $     81
                                                                        ======            =======

</TABLE>













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


                                       8
<PAGE>



                              COLUMBUS ENERGY CORP.

                 NOTES TO THE CONSOLIDATED 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 May 31,  2000 and  November  30,  1999,  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, 1999.  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 1999 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%.

     The borrowing  base is limited to  $10,000,000  and subject to  semi-annual
redetermination  for any  increase  or  decrease.  At May 31,  2000  outstanding
borrowings  on the  revolving  line of credit  were  $5,200,000  and the  unused
borrowing base available was  $4,800,000.  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.


                                       9
<PAGE>


                              COLUMBUS ENERGY CORP.

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


(3)  INCOME TAXES

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

                                                     Six Months Ended May 31,
                                                     ------------------------
                                                       2000           1999
                                                       ----           ----
Current:
          Federal                                     $    2         $   17
          State                                           10             24
                                                       -----          -----
                                                          12             41
                                                       -----          -----

Deferred:
          Federal                                          2           (165)
          Use of loss carryforwards                        -              4
          State                                            -             (7)
                                                       -----          -----
                                                           2           (168)
                                                       -----          -----

  Total income tax (benefit) expense                  $   14         $ (127)
                                                       =====          ======

          During the six months of fiscal 2000, 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/     May 31,
                                             1999           Other         2000
                                           --------      -----------     ------

     Deferred tax assets:
       Pre-1987 loss carryforwards          $  440       $     -         $  440
       Post-1987 loss carryforward             617             -            617
       Percentage depletion
         carryforwards                       1,650             -          1,650
       State income tax loss
         carryforwards                         124             -            124
       Other                                   387             2            389
                                           -------        ------         ------
                 Total                       3,218             2          3,220
          Valuation allowance
            (long-term)                     (1,286)            -         (1,286)
                                           -------        ------         ------
          Deferred tax assets                1,932             2          1,934
                                           -------        ------         ------

     Deferred tax liabilities-
       Depreciation, depletion and
         amortization and other               (795)           (4)          (799)
                                          --------        ------         ------
         Net tax asset (liability)        $  1,137        $   (2)       $ 1,135
                                          ========        ======        =======


                                       10
<PAGE>


                              COLUMBUS ENERGY CORP.

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


(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 55th District Court of
Harris County, Texas. The plaintiffs were parties to a September 1994 settlement
agreement  that provided for the conveyance of overriding  royalty  interests in
leases  acquired by Columbus in certain  portions of Harris  County.  Plaintiffs
claimed Columbus was also obligated under the settlement agreement but failed to
acquire and develop all leases  available  within a described  portion of Harris
County as a reasonably  prudent operator.  Plaintiffs claimed damages based upon
their  alleged right to a 3% overriding  royalty  interest in leases  drilled by
third parties within that described area. Columbus denied those allegations.

        A  five-day  trial  which  began on May 22,  2000  resulted  in the jury
returning  a verdict  in favor of  Columbus.  Specifically,  the jury found that
Columbus  had  not  breached  its  obligations  to act as a  reasonably  prudent
operator in pursuing development of properties located within the area of mutual
interest.  The remaining  step toward closing the case is for the Court to enter
the verdict as a  judgment.  While the  Plaintiffs  have the right to appeal the
judgment  to the Court of Appeals in  Houston  it is not  anticipated  that will
occur.

        On May 4, 2000, Columbus was served with a complaint in a lawsuit styled
Fred E. Long and ENCO  Exploration  Company  v.  Columbus  Energy  Corp.,  Cause
B-00-1171-0-CV-B in the 156th Judicial District Court of Bee County, Texas. Fred
E. Long and his company,  ENCO Exploration Company, have sued Columbus regarding
the Long No. 4 well.  Long/ENCO  combined own a 25% working interest and contend
that  the  Long  No.  4  was  not  drilled  at  the  location  approved  by  the
participating  working interest owners.  They seek return of their proportionate
share  of the  drilling  costs  as  damages,  approximately  $300,000.  Columbus
contests the Long/ENCO allegations.

(5)     COMMITMENTS AND CONTINGENT LIABILITIES

        The Company's  natural gas and crude oil swaps 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


                                       11
<PAGE>

                              COLUMBUS ENERGY CORP.

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


price of crude oil and  natural  gas.  Those  instruments  involve,  to  varying
degrees,  elements of market and credit risk in excess of the amount  recognized
in the balance sheets.

        The  Company's  current  crude oil hedge  outstanding  is a twelve month
costless  "collar" for 7,500 barrels per month for the period  September 1, 1999
through August 31, 2000.  This "collar" 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 below or above which such monthly  average  Columbus  receives or
pays the  difference.  This  increases or reduces oil  revenues  monthly if such
occurs.  During the second quarter and six months of fiscal 2000, oil sales were
reduced by $131,000 and $249,000,  respec tively,  since oil prices exceeded the
$22.25 ceiling price each month during the periods.  Subsequently, for the month
of June 2000,  oil sales will be reduced  by  $70,000.  If during the  remaining
period of July and August 2000 NYMEX prices  equal the prices  quoted as of June
30, 2000 as an average for each of those months,  the settlement  value would be
$138,000 and would further reduce crude oil sales by such an amount.

        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  to  environmental  issues.  Management  cannot
predict  what  future   environmental   control   problems  may  arise  or  what
environmental  regulations and requirements  might be enacted by  jurisdictional
authorities in its various operational areas in future.

(6)     RELATED PARTY TRANSACTIONS

        CEC  Resources  Ltd.  ("Resources")  was a  wholly-owned  subsidiary  of
Columbus prior to its divestiture on February 24, 1995.  Reimbursement  was made
by Resources to Columbus for services provided by its officers and employees for
managing  Resources in the past which effectively  reduced Columbus' general and
administrative  expense.  Such  reimbursement  totaled $32,000 for the first six
months of 1999. On March 31, 1999, the agreement was terminated pursuant to a 90
day notice period.

        The  Company  has  been a party  to an  arrangement  with  Mark  Butler,
geologist and 50% owner of Trumark  Production  Company  ("TPC"),  during fiscal
1999 and 2000 whereby Mr. Butler would provide  Columbus with 70 hours per month
of  geological  and  geophysical  consulting  services  (including  related work



                                       12
<PAGE>


                              COLUMBUS ENERGY CORP.

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


station usage) at a rate of $170 per hour. John B.  Trueblood,  son of Columbus'
CEO Harry A.  Trueblood,  Jr., owns the other 50% of TPC. The retainer fees paid
to TPC were $86,000 and $76,000 during first half 2000 and 1999, respectively.

(7)     EARNINGS PER SHARE

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

                                                Six Months      Three Months
                                               Ended May 31,    Ended May 31,
                                               -------------    -------------
                                               2000     1999    2000     1999
                                               ----     ----    ----     ----
                                                       (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)                   $   26   $ (207)  $  470  $ (235)
                                               =====    =====    =====   =====

Shares (denominator):
  Basic EPS                                    3,761    3,946    3,748   3,883
  Effect of dilutive option shares                 2        -        5       -
                                               -----    -----    -----   -----
  Diluted EPS                                  3,763    3,946    3,753   3,883
                                               =====    =====    =====   =====

Per share amount:
  Basic EPS                                   $  .01   $ (.05)  $  .13  $ (.06)
                                               =====    =====    =====   =====
  Diluted EPS                                 $  .01   $ (.05)  $  .13  $ (.06)
                                               =====    =====    =====   =====

Number of shares not included in dilutive
  EPS that would have been  antidilutive
  because exercise price of options was
  greater than the average market
  price of the common shares                     507      460      507     532
                                               =====    =====    =====   =====






                                       13
<PAGE>



                              COLUMBUS ENERGY CORP.

          NOTES TO THE CONSOLIDATED 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:

                                    Six Months      Three Months
                                   Ended May 31,    Ended May 31,
                                   -------------    -------------
                                   2000     1999    2000     1999
                                   ----     ----    ----     ----
                                           (in thousands)

Operating revenues from
  unaffiliated services:

    Oil and gas                   $6,076   $4,309   $3,333  $2,251
    Services                         757      714      357     376
                                  ------   ------   ------  ------
      Total                       $6,833   $5,023   $3,690  $2,627
                                   =====    =====    =====   =====

Depreciation, depletion
  and amortization:
    Oil and gas                   $1,451   $1,695   $  716  $  820
    Services                          31       29       15      14
                                   -----    -----    -----   -----
      Total                       $1,482   $1,724   $  731  $  834
                                   =====    =====    =====   =====

Operating income (loss):
  Oil and Gas                     $1,327   $  425   $1,561  $   27
  Services                           (74)     195      (70)    127
  General corporate
    expense                         (996)    (776)    (668)   (440)
                                  ------    -----    -----   -----
      Total operating income         257     (156)     823    (286)
Interest expense and other          (217)    (178)    (110)    (93)
                                  ------    -----    -----   -----

  Earnings (loss) before
    income taxes                  $   40   $ (334)  $  713  $ (379)
                                   =====    =====    =====   =====






                                       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

          As previously announced in February 2000, Arthur Andersen LLP's Global
Energy  Corporate  Finance  team was  selected  to assist  Directors  to explore
various   strategic   alternatives  that  could  maximize   shareholder   value.
Shareholders  had previously been informed that several major  shareholders  had
expressed a  preference  for a tax free swap versus a cash sale but the Board of
Directors  indicated it planned to consider those offers submitted  following an
appropriate  review by its  financial  advisors.  The advisory  team  prepared a
detailed  informational  report  about  Columbus'  assets as well as its  field,
administrative  and  technical  personnel  and this was made  available  for all
interested  parties who signed a  confidentiality  agreement.  Such parties were
requested to submit an  indication  of their  interest in an  acquisition  which
procedure  was designed to narrow  prospective  suitors to a manageable  number.
Following  discussions  and  screening of submitted  proposals by the  financial
advisors with the Board of Directors,  the more likely acquirors were invited to
visit a data room.  Completion of a transaction by early fall,  while desirable,
is certainly not set in concrete nor is there any assurance  that a satisfactory
agreement  will be  forthcoming  from  this  undertaking.  Based on the  current
activity  level of mergers and  acquisitions  in the domestic  energy  industry,
management  is  optimistic  that a deal might be  consummated  with one of those
potential acquirors.

          During second quarter of 2000, the liquidity  outlook  improved as oil
and gas sales increased almost 50% over 1999's period. The Company's natural gas
prices  averaged 57% higher than 1999's  second  quarter  while crude oil prices
were 59% higher along with increased crude oil production.  This improvement was
partially offset by declines in natural gas production and the crude oil hedge.

          Second quarter 2000 had higher exploration expenses of $278,000 which,
after being tax effected, reduced earnings by $183,000, or $.05 per share. Also,
net earnings were adversely affected by unusual,  non-recurring  charges such as
advisory fees and other expenses connected with exploring strategic alternatives
as well as the litigation  expenses connected with the successful defense of the
Mattalino,  et al lawsuit.  Net earnings for the second  quarter  2000,  despite
those charges,  still reached $470,000,  or $0.13 per share,  compared with last
year's quarter net loss of $235,000, or $0.06 per share.


                                       15
<PAGE>



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


         Stockholders' equity as of the end of 2000's first six months decreased
to $12,504,000  from  $12,798,000 at November 30, 1999 primarily the result of a
repurchase of 63,000 treasury shares.

          Positive working capital combined with the Company's  anticipated cash
flow is  expected  to provide  more than  sufficient  funds for the fiscal  2000
capital expenditure  program.  The unused portion of the $10,000,000 bank credit
facility has previously been targeted by management for  acquisitions of oil and
gas properties,  but can be used for any legal corporate purpose. It is expected
that excess cash flow will be utilized to reduce bank debt.

          Generally accepted  accounting  principles ("GAAP") require cash flows
from  operating  activities  to be  determined  after  giving  effect to working
capital changes. Accordingly, GAAP's net cash provided from operating activities
can fluctuate widely.  Net cash provided by operating  activities was $1,176,000
for the first six months of 2000,  which  compares with  $1,290,000  provided by
operating  activities for the same period last year. GAAP defined operating cash
flow for the six months of 2000 was adversely  affected by the  unusually  large
first quarter expenses attributed to exploratory dry holes near Beeville, Texas.

          As  regularly  noted  in  prior  reports,  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 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
whereby  exploration  expenses are capitalized and do not immediately  adversely
affect either  operating cash flow or net earnings.  Columbus' DCF for the first
six months of fiscal 2000 was  $3,235,000 up 42% from 1999's  similar  period of
$2,280,000  when more shares were  outstanding.  DCF continued to improve during
second  quarter of 2000 to $1,729,000  from the $1,506,000  realized  during the
first quarter of 2000. As discussed below in "Results of Operations,"  cash flow
from  significant  production  from two new wells is expected  to  increase  DCF
during the third and fourth  quarters  of fiscal  2000 and might  exceed  record
levels set in 1997. DCF is calculated  without 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 deducted
before arriving at DCF.


                                       16
<PAGE>


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


          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 first six months of 2000 and 1999 GAAP cash
flow was lower than DCF.

          As previously  indicated,  the Company  partially hedged its crude oil
prices  while the  Company's  natural gas  revenues  are fully  exposed to price
fluctuations,  both positive and negative.  The non-hedged  portion of its crude
oil revenues are similarly exposed to price fluctuations.

          The Company's natural gas and crude oil swaps are considered financial
instruments  with  off-balance  sheet risk. These 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 and may involve  elements of market and credit risk
in excess of the amount recognized in the balance sheets.

          The only hedge in  existence  as of May 31,  2000  was a twelve  month
costless  "collar" for 7,500  barrels per month which  expires  August 31, 2000.
This  hedge is more  fully  described  in Note 5,  "Commitments  and  Contingent
Liabilities", in the Notes to the Consolidated Financial statements.

          As described in Note 2 "Long-Term Debt" at May 31, 2000, Columbus  had
outstanding bank borrowings of $5,200,000 against its $10,000,000 line of credit
with  Norwest  Bank  Denver,  N.A.  which is  collateralized  by its oil and gas
properties.  On that same  date,  the ratio of net  long-term  debt  (debt  less
working  capital) to total assets was 0.18.  The  outstanding  debt used a LIBOR
option  with an  average  interest  rate of 8.2%.  Subsequent  to the end of the
second  quarter and through July 14, 2000,  long-term  debt will be reduced by a
total of $300,000 to  $4,900,000.  The net increase  (or  decrease) in long-term
debt directly affects cash flows from financing activities as do the purchase of



                                       17
<PAGE>



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


treasury  shares.  For the Company's  floating rate debt,  interest rate changes
generally do not affect its fair market value but does impact future  results of
operations and cash flows, assuming other factors remain constant.  The carrying
amount of the Company's debt approximates its fair value.

          Working  capital at May 31,  2000 was a positive  $1,343,000,  up from
$1,169,000 at November 30, 1999, despite $684,000 spent for additions to oil and
gas properties, a significant amount of exploration expenditures, and a purchase
of 63,000 treasury shares for $357,000 during the first half of fiscal 2000.

          The Company's  Board of Directors has authorized over the last several
years the repurchase of common shares from the market at various "not to exceed"
price levels.  As of May 31, 2000 a total of 60,384 shares remained  unpurchased
from the most recent authorizations at a price not to exceed $6.00 per share.

          During  first  six  months  of  2000,  capital  expenditures  actually
incurred for oil and gas properties totaled $684,000 (which amount excludes $1.7
million for  exploratory dry holes and other  exploration  expenses) and differs
from the capital expenditure shown in the Consolidated  Statement of Cash Flows.
The latter also includes  cash  payments made during 2000 for 1999  expenditures
which had been incurred but not yet paid as of 1999's year end. Similarly,  some
expenditures  accrued  during  fiscal  2000's  first six months  period were not
actually paid until subsequent to the end of the period.


                                       18
<PAGE>


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


RESULTS OF OPERATIONS

          Gross  revenues  increased by 40% over last year's second  quarter and
operating income increased to $823,000 in the current quarter compared to a loss
of $286,000  last year.  Other  comparisons  for the 2000  quarter and six month
periods  versus 1999 related to prices,  production and oil and gas sales appear
in tabular form below.

          During  2000's  second  quarter  four gross  wells  (1.60 net WI) were
drilled.  These included two (.66 net WI) gas development  wells in Webb County,
Texas,  and one (.04 net WI) dry hole located in the same area. One (.90 net WI)
exploratory  oil  recompletion  attempt  in a new  zone in an  existing  well in
Montana was abandoned during the quarter.

          The most  significant  development was a new gas well, the Hachar #36,
in which Columbus owns a 200% cost recovery 53.7% net revenue interest. This was
the  result of  numerous  non-consent  interests  so this net  revenue  interest
reduces  to 3.8% after  that 200%  recovery.  This  outstanding  well  commenced
production on May 10, 2000 and is producing in excess of 5,000,000 cubic feet of
natural  gas and 100 barrels of  condensate  per day.  Although  the revenue and
production from the Hachar #36 benefited Columbus for less than one month during
second  quarter,  it will have a very large  impact  during  the third  quarter.
Payout  of 200% of  costs  is  expected  to  come  from  about  four  months  of
production, or less, depending on price.

          Subsequent   to  the  end  of  the  quarter   during  June,   Columbus
successfully  recompleted an additional  exploratory well in a "behind-the-pipe"
Duperow zone in the Lien #2 located in Richland County, Montana. This added zone
initially raised production to in excess of 100 barrels of crude oil per day but
since has declined to approximately  75 barrels per day in early July.  Columbus
owns 100% WI in this well.



                                       19
<PAGE>


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


     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>
                                           Second Quarter                           Six Months
                                 ---------------------------------       -------------------------------
                                  2000         1999         Change           2000        1999     Change
                                 ------       ------        ------           ----        ----     ------

<S>                              <C>          <C>            <C>           <C>         <C>         <C>
Natural gas revenues M$          $2,356       $1,678         40 %          $ 4,131     $ 3,318     25 %
Oil revenue M$                   $  975       $  593         64 %          $ 1,940     $   986     97 %

Natural gas sales volumes:
  Millions of cubic feet (MMCF)     723          810        (11)%            1,429       1,686    (15)%
  MCF/day                         7,853        8,803                         7,809       9,266

Oil sales volumes:
  Barrels                        40,600       39,402          3 %           81,863      77,347      6 %
  Barrels/day                       441          428                           447         425

Average price received:
  Natural gas - $/MCF            $ 3.26       $ 2.07         57 %           $ 2.89     $  1.97     47 %
  Oil - $/BBL                    $23.99       $15.05         59 %           $23.69     $ 12.75     86 %
</TABLE>

          Natural  gas  revenues  for the quarter  increased  by 40% over 1999's
second quarter due to 57% higher prices which were partially offset by 11% lower
sales volumes.  Similarly,  the six month period for 2000 had 25% higher natural
gas revenues due to 47% higher prices offset by 15% lower sales volumes. Average
gas prices  improved  steadily from depressed price levels during the early part
of 1999 that were a result of a very warm  winter and  relatively  high  storage
inventory  replaced  by  summer's  strong  demand for  cooling  load and storage
refill.  Supply  shortfalls  due to little or no excess gas capacity have caused
prices to exceed $4.00 per Mcf subsequent to quarter's end.  Comparable  periods
showed lower sales volumes in 2000 versus 1999 as a result of normal  production
declines in older wells which were not offset by a  development  well program in
late 1999 and early  2000.  However,  second  quarter  successes  in Webb County
already  placed  on  production  and  a  potentially   successful  Upper  Wilcox
completion  at the Long #5 has improved  the outlook for a material  increase in
gas production in fiscal 2000's last half.

Oil revenues for 2000's second quarter rose by 64% over the 1999 quarter because
average  prices rose by 59% and sales  volumes were 3% higher.  Comparative  six
month's results show 97% greater oil revenues because average prices were up 86%
and sales  volumes up 6%. Oil revenues and average  prices for 2000 were reduced
due to the crude oil hedge. Oil production had previously  declined steadily for
the past few years commensurate with a lack of development drilling activity due
to low crude oil prices and lack of  certainty  of  improvement.  During  1999's
first half several oil wells were temporarily shut-in due to those low crude oil
prices  and did not resume  production  until  later  that  year.  There was one
exploratory gas well that found  oil in Harris County, Texas,  which was drilled



                                       20
<PAGE>


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


during fiscal 1998.  This was connected to a gas line and commenced  flowing 200
barrels of oil per day with  associated  gas during June 1999.  Columbus'  19.5%
working interest in that well helped provide the slight improvement in crude oil
production  reported for last half of 1999 and first half of 2000 versus earlier
periods.  Prices  for crude oil have  continued  to move  upwards  due to strong
demand and a restrictive production program instigated by OPEC. This program was
recently loosened by that group with their announced  objective being a "basket"
of oil prices to average about $25 per barrel.

          Columbus'  second  quarter sales volumes of natural gas averaged 7,853
Mcfd while oil and liquids  sales volumes were 447 barrels per day which equates
to a daily sales volume of 10,536 MCF  equivalent  (Mcfe).  This  compares  with
1999's  second  quarter rate of 11,407 Mcfe, an 8% decrease.  As stated  before,
this  reduction  was  attributable  to the lack of new  development  wells being
drilled  along  with a lack of  exploratory  success  at  Columbus'  El  Squared
prospect.  Production from the previously mentioned Hachar #36 and Lien #2 wells
has already  reversed  this  decline thus far in Columbus'  third  quarter.  For
comparative six month's periods, average daily sales volumes were 10,532 Mcfe in
2000  versus  11,849  Mcfe  in  1999  which  were  adversely   affected  by  the
aforementioned reasons.

          Lease operating expenses for the second quarter and first half of 2000
were 21% and 13% higher, respectively, than similar periods in 1999. Most of the
increase  was in the  Williston  Basin in Montana  and the Sralla  Road field in
Texas where several wells had workover costs including  repairs and replacements
of  equipment.  Periodic  expensive  workovers and  replacement  of downhole and
surface equipment on older wells is a normal occurrence.  However, several older
Williston  Basin wells were shut-in  during 1999's first half which accounts for
lower  operating  costs last year.  Lease  operating costs on an Mcfe basis were
$0.49 in the second  quarter of 2000  compared to $0.40 in 1999 while  operating
costs as a percentage  of revenues  were 14% in 2000 versus 19% in 1999 with its
lower prices but reduced  costs.  For  comparative  six month's  periods,  lease
operating  costs  were  $0.53 per Mcfe in 2000 and $0.39 in 1999 but first  half
lease  operating  costs as a percentage  of revenues were 17% in 2000 and 20% in
1999.

          Production and property taxes approximated 10% of revenues in 2000 and
12% in 1999.  These  taxes  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.


                                       21
<PAGE>



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


     Operating and Management Services

     This  segment of the  Company's  business is comprised  of  operations  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:

                                                     2000                 1999
                                                     ----                 ----
                 Second quarter                    $120,000            $114,000
                 Six Months                        $259,000            $199,000

          Effective  March 1, 2000, the Company no longer is serving as contract
operator  for wells in the Berry R. Cox field in South  Texas,  which  generated
$23,000 of profit  during  2000's  first  quarter.  During first  quarter  1999,
sizable compressor repairs reduced profits for that period.

          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  increased in the second quarter of 2000 to $36,000 from $19,000
in 1999's second  quarter  because of a larger amount of  investments  resulting
from higher natural gas and crude oil prices and 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:

                                                  2000              1999
                                                  ----              ----
                 Second quarter                $549,000           $440,000
                 Six months                    $877,000           $776,000




                                       22
<PAGE>


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


          Second  quarter  expenses  exceeded last year's due to cash bonuses of
$178,000 in May with no stock option grants  compared to 1999 incentive  bonuses
of $80,000  ($58,000  non-cash)  plus grants of stock  options to all  officers.
Also,  there was a previously  disclosed  total phase-out of  reimbursement  for
management  services  provided  Resources  during 1999.  Salary  increases  were
granted  effective  December  1,  1999 for  non-officer  employees  and  officer
salaries  were  increased  May 1, 2000 after  being  frozen at prior year levels
during 1999.  However,  total officer and directors' expense was reduced because
there was one less officer and one less  director  during 2000.  Medical  claims
under the Company's self- insured plan were higher for 2000's second quarter and
first  half.  Office  rent was  slightly  lower  during  second  quarter in 2000
compared to 1999 as a result of a sublease of a portion of the leased  space but
for the six months period,  rent expense and office parking was higher due to an
increase in the monthly  rent.  Both the second  quarter and six month  periods'
outside  contract and  professional  services were reduced in fiscal 2000 versus
1999.

         Unusual  expenses were incurred  during second  quarter which relate to
exploring  various  strategic  alternatives  for the Company by use of financial
advisors. These totaled $119,000 and appear under expenses as "Advisory fees".

         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  field.  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 fields.
Depreciation and amortization of office equipment and computer  software is also
included in the total charge.

          Charges for this expense item  decreased  from 1999's  second  quarter
commensurate  with decreased  production  even though there were some additional
development  expenditures  incurred in the  intervening  period.  Reduced proved
reserves last year which  resulted from lower crude oil prices were  responsible
for a higher  depletion rate in 1999's second quarter for some  properties,  but
since production was curtailed in several wells,  the rise in overall  depletion
expense for 1999  lessened.  Despite  the  depreciation  expense  being lower in
2000's  first  quarter,  the  depletion  rate of $.76 per Mcfe was  identical to
1999's like period rate. The depletion rate for second quarter 2000 was $.73 per
Mcfe  compared to $.77 per Mcfe for that like period of 1999.  The  decrease was
attributable  to  decreased  production  from  fields  having  higher  rates and
increased production from the Laredo area where there is a lower depletion rate.


                                       23
<PAGE>


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


         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.  All such  exploration  charges not only  decrease net
earnings but also reduce  reported  GAAP cash flow from  operations  even though
they are  discretionary  expenses;  however,  such  charges  are added  back for
purposes  of  determining  DCF  which is why it more  nearly  tracks  cash  flow
reported by full cost accounting companies which capitalize such costs.

          Exploration charges of $278,000 for 2000's second quarter were up from
1999's $225,000 and included  $196,000  recompletion and abandonment costs for a
90%-owned  exploratory  well in Montana.  A total of $160,000  was  expensed for
participation in two shallow exploratory dry holes last year.

          First half of fiscal 2000  exploration  charges of $1,690,000  were up
significantly over 1999's.  Most of these charges were incurred during the first
quarter during the sidetrack and testing phase of the Long #4 ($805,000) and the
initiation of a sidetrack of the Long #3 ($476,000)  over the  expiration of the
primary term of the lease.  The latter  operation was halted when it was learned
that the  Massive  Sand in the Long #4 failed to yield  commercial  rates of gas
production.  Also,  an accrual of $60,000  for  abandonments  of those wells was
made. An additional  $28,000 was expensed  during the second quarter to plug the
two wells.  During 1999's first  quarter,  $47,000 was expensed for  undeveloped
leases as a result of an offset dry hole being drilled.

          Whenever a company using the  successful  efforts method of accounting
is involved in an exploratory program which represents a significant part of its
budget,  that  company  is  automatically  subjected  to the  risk  that its net
earnings for any given  quarter or year will be impacted  negatively  by wildcat
dry holes.  Shareholders  have been previously  forewarned that net earnings and
GAAP cash flow for a given period may not be truly  indicative  of the Company's
operational activity. This is why management has suggested that shareholders may
wish to follow management's  program of placing more emphasis on DCF from period
to period while essentially  ignoring net earnings results.  Comparing Columbus'
results  with net  earnings  or cash  flows of  companies  who use the full cost
accounting method is unrealistic since they capitalize exploratory costs.



                                       24
<PAGE>


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


          Impairments

          No  impairment  loss was required for fiscal  2000's first half as the
higher prices of both natural gas and crude oil also  contributed to an increase
in the fair market  value of reserves  above  remaining  book value of each cost
pool.

          Last  year at the end of the  second  quarter,  there  was a pre- tax,
non-cash  impairment  loss of $503,000  recorded.  The  improvement in crude oil
prices  up to that  time was  insufficient  to  justify  restoration  of  proved
undeveloped  reserves in one of the  Williston  Basin's  cost pools  because the
return on new investments  would be  unsatisfactory.  Therefore,  restoration of
undeveloped  reserves  was  deferred  and  the  shortfall  of  $253,000  between
remaining  book value of the pool and the current  fair market value of reserves
was recognized as a charge.  Elsewhere, an unexpected influx of water in natural
gas wells in a shallow gas property in Jim Wells  County,  Texas  brought  about
premature  abandonment  of  producing  zones and  natural gas  reserves  thereby
generating a pre- tax, non-cash impairment of $250,000.

          Litigation Expense

          The  litigation  expense  relates to the Maris E. Penn,  et al lawsuit
described in Note 4 of the Notes to the Financial Statements.  Second quarter of
2000 also  includes a small  amount of legal  expenses  related to the  recently
filed Fred E. Long, et al lawsuit.

         Interest Expense

         Interest expense varies in direct proportion to the amount of bank debt
and the level of bank interest rates. The average level of bank debt outstanding
has been higher during the 2000's first and second  quarters  than in 1999.  The
average bank interest rate paid this latest  quarter was 7.6% which  compares to
6.4% in 1999. For the six month periods average interest rates were 7.6% in 2000
and 6.6% in 1999.

         Income Taxes

         During the first half of 2000,  the net  deferred  tax asset  decreased
slightly to $1,135,000. The asset is comprised of a $110,000 current portion and
$1,025,000  long-term asset.  The estimated  decrease in deferred tax assets was
only $2,000 during that period.  Thus far in 2000,  the valuation  allowance has
remained  unchanged  and  the  effective  tax  rate is  36%.  See  Note 3 to the
consolidated financial statements for further explanation of income taxes.


                                       25
<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.











                                       26
<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. See Note (4) of the Notes to
the Financial  Statements  regarding the Maris E. Penn, et al lawsuit jury trial
and verdict in favor of Columbus and a new lawsuit  styled Fred E. Long and ENCO
Exploration  Company  v.  Columbus  Energy  Corp.  filed in the  156th  Judicial
District Court of Bee County, Texas, Cause No. B-00-1171-0-CV-B.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABUT MARKET RISK

          The Company's  exposure to interest rate risk and commodity price risk
is  discussed  in Item 2.  Management's  Discussion  and  Analysis of  Financial
Condition and Results of  Operations  under the heading  "Liquidity  and Capital
Resources".  The Company has no exposure to foreign currency exchange rate risks
or to any other market risks.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          Annual meeting held May 4, 2000 in Denver, Colorado for the purpose of
electing  members  of the  board of  directors.  Proxies  for the  meeting  were
solicited  pursuant to Section 14(a) of the Securities  Exchange Act of 1934 and
there was no solicitation in opposition to management's solicitations.

          All of management's nominees for three Class II directors as listed in
the proxy statement were elected with the following vote:

                                                  Shares      Shares Abstaining
          Nominee               Shares For      Against         or Withheld
          -------               ----------      -------         -----------

Harry A. Trueblood, Jr.          3,387,604        2,628            37,060
William H. Blount                3,388,654        1,578            37,060

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

              (a)             Exhibits

                              27 - Financial data schedule - May 31, 2000.

             (b)              Reports on Form 8-K

                              Report   filed  on  May  31,   2000   related   to
                              Management's  Report to Shareholders for the First
                              Quarter Ended  February 29, 2000 and the status of
                              a previously announced a program wherein the Board
                              of Directors hired financial  advisors to aid them
                              in exploring  strategic  alternatives  which would
                              maximize shareholder value.


                                       27
<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:     July 12, 2000                              /s/ Harry A. Trueblood, Jr.
     -----------------------------                   ---------------------------
                                                     Harry A. Trueblood, Jr.
                                                     Chairman, President and
                                                     Chief Executive Officer
                                                     (a duly authorized officer)



DATE:     July 12, 2000                              /s/ Ronald H. Beck
     -----------------------------                   ------------------
                                                     Ronald H. Beck
                                                     Vice President
                                                     (Chief Accounting Officer)




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