SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

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


For the fiscal year ended January 31, 1998     Commission File Number  000-18081


                       RAMEX SYNFUELS INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)


         Nevada                                               87-0360039
(State of Incorporation)                              (IRS Employer Ident. No.)

            2204 W. Wellesley
       Spokane, Washington  99205                       (509)  328-9633
(Address of principal executive offices)        (Registrant's telephone number)

          Securities registered pursuant to Sections 12(b) of the Act:

         Title of Each Class          Name of Exchange on Which Registered
         -------------------          ------------------------------------
                  None                               None

          Securities registered pursuant to Sections 12(g) of the Act:

                                 Title of Class
                                 --------------
                              (Common Stock ($0.01)

Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the  Securities  and  Exchange  Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such  reports):  Yes _x_ No ___, and (2) has been subject to such filing
requirements for the past 90 days: Yes _x_ No ___.



State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant.

Approximately  $123,337 as of January 31, 1998  (determined  by reference to the
average bid and ask prices of such stock on January 31, 1998).

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

                             As of January 31, 1998,
                   Common Stock, $0.01 Par Value - 14,823,465

                                 Total pages: 37

Documents incorporated herein by reference:

                                      None.



<PAGE>


                                     Part I


Item 1. DESCRIPTION OF BUSINESS.

     Ramex is  inactive,  it was  organized  for the purpose of and  involved in
developing  and  extracting  oil, gas, and other energy sources from oil bearing
shale.  As of  January  31,  1998,  Ramex  was not  producing  oil or oil  shale
products.  Ramex  had  been  in the  development  stage  until  1992,  when  all
operations  closed.  Subsequently,  the  Registrant on December 13, 1993 entered
into a Contractual  Agreement with Southwest  Research Institute of San Antonio,
Texas,  for first  phase  testing  of the  patented  Ramex in situ  gasification
process.

     While the oil  shale  process  has been  tested  in the  laboratory  and in
several  field tests in Wyoming and Indiana,  the results  from the Process,  as
utilized on a commercial  basis, are unknown and no assurance can be given as to
the amount of gas the process will produce, if any, or the longevity of any such
production.

     Ramex  Synfuels  International,  Inc., a Nevada  corporation  ("Ramex") was
originally  incorporated  and commenced  operations as Cache Oil  Corporation in
March, 1980 under the laws of the State of Utah.

     In July,  1980, Cache Oil Corporation  purchased in a business  combination
all of the outstanding  common stock of Rams Horn, Inc. , a Wyoming  Corporation
which was subsequently dissolved. In December, 1980 Cache Oil Corporation merged
with the wholly owned  subsidiary  of Rams Horn,  Inc.,  Ramex  Synthetic  Fuels
International,  Inc., a Utah  Corporation,  with the name of the surviving  Utah
Corporation  being changed to Ramex Synfuels  International,  Inc. Ramex changed
its domicile to Nevada from Utah in December,  1988.  All of these entities were
in the development stage at the time of acquisition or merger.

The Process

     The oil shale  gasification  Process is an "in situ"  process,  which means
that the shale is not mined. Rather,  wells are drilled,  similar to natural gas
wells,  into the shale formation,  which is fired by propane or natural gas. The
heater  raises  the  temperature  of the shale to  approximately  1,200  degrees
Fahrenheit.  This  causes a  reaction  to take  place in the oil shale  somewhat
similar to the reaction in coal when it is turned into coke, or the process when
a  charcoal  briquette  is lit at one  point  and the  heat  moves  through  the
briquette and releases the hydrocarbons that are stored in the briquette.  There
is no  combustion  ,  however,  that  actually  takes  place in the shale.  This
reaction causes the molecules of hydrocarbon trapped in the shale to be released
in the  form of  kerogen  gas,  which is then  transported  to the  surface  and
processed.

Environmental Aspects of the Ramex Process

     Of  paramount  concern to Ramex is the effect the Process  will have on the
environment.  Particular  interest is directed toward its effect on ground water
quality.

     In order to obtain a further  understanding  of the  mobilization  of trace
elements and to indicate the  environmental  and health  effects of the Process,
Ramex has  conducted a survey of  literature  looking for similar  scenarios  on
equivalent  strata.  Ramex has also conducted actual field tests on ground water
in and  around a  production  well.  In order to  assure  reliability,  both the
Indiana Geological Survey and Environmental  Consultants of Clarkville,  Indiana
conducted  a series  of tests for Ramex as well.  The  tests  compared  leachate
composition  and the results showed that the Process did not  materially  affect
the water in the area near well sites.

Corporate Developments.

     On May 29, 1990 Ramex was issued the United States Patent for its oil shale
gasification process.

<PAGE>

     The patent gives Ramex  exclusive  rights to it's process whereby a hole is
drilled into oil shale and a heater is inserted therein and gas is produced back
through the same hole. This is an important development for Ramex since it gives
Ramex the exclusive right to the process in the United States.  The low cost and
efficient economic use of currently  uneconomic resources makes the Process very
important to the energy  industry in general and  specifically  important to the
future of Ramex. The Ramex patent will be valid until May 28, 2007.

     Ramex may apply for  foreign  patents  concerning  the  process  in several
countries that have  significant oil shale deposits.  Ramex considers the patent
important to the industry.

     Since 1980 , Ramex has been in the process of researching  and developing a
method to extract synthetic natural gas from oil shale.

     Work began in the  laboratory  and progressed to an initial field test near
Duchesne,  Utah,  followed by a second field test and two additional field tests
near Rock Springs,  Wyoming.  In April,  1988,  Ramex began  field-testing  near
Henryville,  Indiana. Eight wells were drilled in Indiana. From each well, Ramex
has  learned  more about the  Process  and has been able to further  develop its
technology.

     Based on  conclusions  derived from the above  mentioned  tests,  Ramex has
learned about the process and what is yet to be learned,  Ramex has  tentatively
arrived at the following conclusions:

1.   Ramex has proven  that it can produce  synthetic  natural gas by drilling a
     hole into the shale and inserting a heater and raising the  temperature  to
     over 1,000 degrees Fahrenheit.

2.   Ramex has  developed  a heater  which will allow  Ramex to put  substantial
     BTU's of heat into the shale and has  developed  the surface  equipment and
     controls to control the heater  temperature  and monitor the temperature of
     the shale as it is being heated.

3.   Ramex has a patent on the process and may, if it has the  necessary  funds,
     to monitor patent infringement on the process.  The Registrant is trying to
     obtain money from outside  sources to test the commercial  potential of the
     process.

     Questions yet to be answered from the research  obtained prior to using the
process on a commercial basis are:

1.   How fast does the heat reaction move through the shale?

2.   How far will the  reaction  go from the heat  source  and how much  heat is
     necessary on an incremental  basis to keep the reaction zone moving outward
     from the source heat?

3.   What is the exact chemical composition of the gas that is produced from the
     process over a period of time and does the composition  change with varying
     amounts of heat and if so, what is the ideal  amount of heat to produce the
     most desirable chemical composition of the gas?


<PAGE>

     In all of the field tests in Indiana,  Ramex was unable to answer the above
questions  because water  incursions  into the heating area after the burner was
installed. This problem occurred in every well that was drilled in that area.

     Management  has  determined  that it needs a lengthy  burn in a water  free
environment,  and could not be assured  that Ramex's  lease  holdings in Indiana
would provide us that kind of environment, nor the surrounding five state area.

     The technology is available to dewater an area of shale.  It is done simply
analyzing  the water table in the area and drilling a number of wells around the
perimeter  of the area  intended to react with,  then process and pump the water
out creating a cone of  depression.  On a commercial  application of the process
that  would be the way to  handle  it.  The cost  per well  would be  relatively
minimal, but to do so for one well on a research basis is cost prohibitive.

     So, while  ultimately  the  commercial  production of gas from the shale in
Indiana and other  states  where high water  tables are present is very real and
possible, it isn't suitable for research purposes.

     Ramex  has  had  extensive  meetings  with a  recognized  leading  research
institution  in  dealing  with gas  technology.  Ramex has  asked  the  research
institution for a proposal to duplicate the down hole conditions in a laboratory
setting and to answer the questions  that Ramex has been unable to answer in the
field  experiments  so far. The  tremendous  advantage of laboratory  simulation
compared to continued  trial and error  research in the field is that  variables
can be  introduced,  such as higher  or lower  temperatures  and  their  effects
studied to determine  exactly the correct  temperature  necessary to achieve the
best  reaction  and to maintain the thermal  front  moving in the most  economic
manner.

     The  composition of the gas can also be tested using  variable  conditions.
What would require  tremendous  outlays of capital in the field can be done with
simple  inexpensive  changes  in a  laboratory  setting.  Also,  it can be  done
completely  free of incursion by outside  influences  such as ground water.  The
volume of gas  produced,  its  composition  and the  ultimate  economics  of the
process can be determined and perfected  much more quickly in a laboratory  than
in the  field.  The next step Ramex must take is the  completion  of  laboratory
experiments  designed  to  answer  the  above  questions.   Ramex  is  currently
evaluating the cost of conducting  additional  laboratory  testing.

     On September 30, 1993, the Registrant, as sponsor of a private placement of
limited  partnership  interests  in Ramex  Research  Partners,  Ltd.  closed its
offering at the  minimum  amount  intended  to be sold of $110,000  and issued a
press  release  regarding  same.  The  partnership  interests  were  offered  to
investors' meeting  suitability  standards in multiples of $5,000 with a minimum
purchase of one unit.  The  Registrant is the General  Partner of Ramex Research
Partners, Ltd. (the "Partnership").

     The  Partnership  was formed  for the  purpose  of  participating  with the
Registrant in further  enhancement and development of the oil shale gasification
process (the "Process") which patent is owned by the Registrant. The funds which
Ramex  receives  from the  Partnership,  as well as funds  received  from  other
sources, including funds received from the sale of shares of common stock in the
future,  if any,  will be  utilized  by the  Registrant  to  conduct  additional
research  of  the  process  which  will  have  as  its  goals  (i)  the  further
understanding of the process involved in the in-situ  gasification of shale oil;
(ii) the further  development  of the  technology  utilized in the design of the
down-hole heaters, which are an integral part of the application of the process,
in order to increase the  efficiency of such heaters;  (iii) the  development of
more  efficient  

<PAGE>

methods for handling the gases  produced as a result of the  application  of the
process; (iv) the development of more efficient drilling methods for penetrating
and  exploiting oil shale through the  application  of the process;  and (v) the
development of water  containment  methods to eliminate the problem of down-hole
water flowing in the heater;  and (vi) payment of outstanding  accounts  payable
and to fund current operating expenses, to the extent possible, of Registrant.

     In  consideration  of the capital which the Partnership  makes available to
the Registrant to fund its research and development  activities,  the Registrant
will  grant to the  Partnership  a  limited  term  royalty,  payable  out of the
proceeds of gas produced from the  application of the process.  The limited term
royalty shall  continue  until the  Partnership  has received the greater of (i)
payments  aggregating  1.10% of the net  profits  received  from the first 1,000
wells drilled and produced  using the Ramex process or (ii) payments the limited
partners receive aggregates ten times their original contribution.

     The  Registrant on December 13, 1993 entered into a  Contractual  Agreement
with Southwest Research Institute of San Antonio, Texas, for first phase testing
of the  patented  Ramex in situ  gasification  process.  The funds  obtained  as
described above were utilized to conduct this research.

Results of Operations

     During the  three-month  period ending January 31, 1998, the Company's only
activity was to evaluate the Ramex Oil Shale Gasification  Process and negotiate
with potential financing entities for the Process and possible other ventures.

     This first phase was intended to establish  the  recommended  scope of work
required to initiate the multi-phase project as hereafter  described,  which may
lead to a possible  pilot-scale  phased field  demonstration.  The scope of work
represents  a plan,  which  should  match  the  technical,  financial  and  time
scheduling objectives of Ramex for research and developing the Process.

     In a report dated August 25, 1995,  Southwest  Research  Institute reported
the following results concerning the first phase testing of the Ramex Process:

Phase I Studies

     The  technical  efforts  presented  in this report  represent  Phase I of a
multiple-stage  research program aimed at investigating  and  demonstrating  the
Ramex  Synfuels  International  oil  shale  gasification  process.  This  report
presents  the results of Phase I;  Preliminary  Laboratory  Demonstration  Tests
designed to: (1)  investigate  the  gasification  process on a small scale using
electric heaters in oil shale samples  approximately 0.25 cu. ft. in volume; and
(2) sample internal  temperatures to determine the effective thermal  properties
over the temperature  range in which the kerogen in the shale undergoes  changes
from  semisolid to liquid vapor or gas. The first of these  objectives  required
development and refinement of appropriate test apparatus to achieve a successful
testing methodology and procedure.  The second objective  successfully  provided
experimental data needed to understand the shale  gasification  process and heat
transfer  properties of the oil shale and to plan more  thorough  studies of the
high-temperature  heat  transfer  process for  follow-on  phases of the research
program.


<PAGE>

     The laboratory  demonstration  tests  performed in Phase I revealed a basis
for interpreting and characterizing the in situ oil shale gasification  process.
Interpretations  listed below,  as conclusions  and  recommendations  for future
work, are summary highlights for Phase I.

Phase I Conclusions

     (1)  The  experimental   investigations   of  Phase  I  have   successfully
demonstrated the basic shale  gasification  process  described in Ramex Synfuels
International  Patent No. 4,928,765 dated May 29, 1990. The small scale of these
experiments  did not  permit the shale gas energy  production  efficiency  to be
determined. Instead, Phase I provided valuable data and insight into the thermal
properties of the oil shale materials and the testing  procedures  necessary for
more  complete  gasification  similitude  evaluation  tests on larger  oil shale
samples.

     (2)  Heating  the  oil  shale  samples  in  a  manner  representative  of a
full-scale  field setup was successful in producing both liquid shale oil and in
liberating  shale gas.  Shale oil and gas  production  was  consistent  with the
kerogen  richness of the samples.  In  addition,  the  experimental  arrangement
permitting  cyclic  liquid-vapor  reflux  processing  yielded a  proportionately
greater amount of shale gas. As a result,  the origins of the shale gas must, at
present,  be considered to be twofold;  namely,  liberation of methane and other
hydrocarbon  gases  originally  trapped in the  semi-solid  kerogen  and thermal
cracking of the kerogen vapors in the heated production and gas delivery zone of
the sample. The reflux process observed in the laboratory experiments appears to
be adaptable as a full-scale field system feature to utilize downhole waste heat
to enhance gas production. The residual shale oil liquids and vapors potentially
can be used as fuel for the downhole  heater in the full-scale  system.  The net
shale gas product is then available for other external  energy  applications  or
for pipeline transport.

     (3) The heat  transfer  characteristics  derived  for the  tested oil shale
samples are comparable with those of other oil shales reported in the literature
and provide adequate data for designing future  laboratory  experiments with the
objective of truly simulating the complete shale gasification process.

     (4) Important  technical  lessons  learned in Phase I will be of particular
benefit in the planning and design of follow-on laboratory  experiments in Phase
II. The sequence of  experiments  in Phase I have led to refined  sample testing
configurations  and now  provide a  database  of  heating  power and shale  heat
transfer  information on which to base new experimental  tests using larger size
shale  samples and  increased  heating  power.  Electrical  heating  methods are
preferred  for these tests  because of their  accurate  heat  control and heater
durability.  Shale  oil  vapor  and  gas  collection  techniques  are  now  well
understood from the Phase I tests and can be used for quantitative  analysis and
design of more advance laboratory experiments in Phase II.

     (5) Successful results from the preliminary  demonstration  tests performed
in Phase I indicate  that the Ramex Process shows good promise for further study
and  development.  More advanced  laboratory  experiments are now recommended to
study the net energy  recovery  efficiency  of the  method  and to  develop  the
necessary  downhole heaters and associated system  components  required to begin
pilot field evaluation tests.


<PAGE>

Recommendations for Future Work

     (1) Additional  laboratory tests are recommended to be performed on a wider
selection of oil shale samples to better  characterize  and  understand the heat
transfer process in the shale. These tests should encompass a range of oil shale
richness  and  different  types of shale rock  matrix  (Eastern  and Western oil
shales).  These tests will also be valuable in establishing a routine method for
evaluating future field sites for potential gasification.

     (2) Larger scale laboratory demonstration  experiments using larger heating
power are recommended to more  accurately  quantify the heat energy required for
gasification  and to better  evaluate the gas production  process.  Sample sizes
having a volume in the range of ten cubic feet or larger are  recommended.  Data
collected  on the  smaller  samples  tested  to date  can be used to  accurately
specify the sample sizes needed for future testing.

     (3) Field  site  geological  reconnaissance  and  sampling  is  needed  for
purposes of gathering appropriate oil shale samples for future laboratory tests.
These  efforts could be broadened to include  characterization  of various field
sites for future pilot-scale field testing of the shale gasification process.

     (4)  Prototype  downhole  heater  design and  development  is necessary for
testing  shale  gasification  on a pilot  scale in the  field.  Based on certain
downhole  operational  and design  constraints  emerging from the Phase I tests,
prototype  gas-fired  heater  system  designs are  recommended  to be developed,
including  the  specification  of any  special  materials  needed for  long-term
operational  life.  Prototype  heater  designs are  recommended  to be tested in
controlled and instrumented shallow limestone rock locations prior to testing in
oil shale settings.

     (5)  Numerical  modeling  of  the  oil  shale  gasification  process  is an
important  aspect of predicting the  performance of the method under the various
conditions  that  may  be  encountered  in  the  field.   The  laboratory  tests
recommended  above will yield the thermal  parameters  needed for developing and
applying  such models.  Certain  existing and  commercially  available  computer
models  for heat  transfer  applications  are  recommended  to be adapted to the
special  needs  of  this  project,  including  the  ability  to  handle  kerogen
phase-change  phenomena,  the problem of heat  transfer in a porous rock matrix,
and the  nonconservative  process of removing heated  hydrocarbon  mass from the
system.  Properly  developed,  a computer  simulation model will be particularly
valuable in  characterizing  and optimizing the full-scale field experiments and
in the selection of practical pilot-scale test sites.

     (6) A  pilot-scale  oil  shale  gasification  system is  recommended  to be
designed and specified  for  construction.  This design  should be  specifically
oriented  toward  initiating  operational  tests  at a  field  test  site  where
controlled  performance testing and measurements are possible. A follow-on phase
of this project is  recommended  to be dedicated to the  construction  and field
operational testing of the pilot-scale system.

     Ramex is  attempting to obtain  financing for the second,  third and fourth
phases,  while the first phase has been  completed  The  following is a proposed
summary of the additional three phases of this project:

     Phase II. Laboratory Studies and Analytical Modeling of Shale Gasification:
The  experimental  heat  transfer  testing  techniques  used in  Phase I will be
refined  and  applied to  additional  samples of oil shale and  samples of shale
boundary rock materials from several  representative  field sties. The effective
thermal   conductivity  and  thermal  diffusion  constant  of  these  materials,
incorporating   combined  rock  matrix  heat   conduction  and  pore-space  heat
radiation,  will be determined to accurately characterize the thermal properties

<PAGE>

of the oil shales and other  geological  boundary rock  materials  that are most
representative  of typical  oil shale  gasification  sites.  In addition to this
work, a mathematical  model of the in situ heat transfer  characteristics of the
gasification process will be formulated to predict the full-scale performance of
the  technique  in a layered oil shale  formation  using the  laboratory-derived
shale  and  boundary  rock  thermal  parameters.  Typical  model  cases  will be
evaluated to yield idealized  estimates of the heat transfer process.  Numerical
models will be  evaluated  to yield  idealized  estimates  of the heat  transfer
process.  Numerical  models  will  also be  computed  to allow  the  effects  of
inhomogeneities  in  kerogen  content  and  the  presence  of  fractures  to  be
evaluated.  The  results of this phase of work will be a  comprehensive  process
parameter  study  from  which  a  full-scale  field  test  can be  designed  and
implemented in Phase III.

     Phase III. Instrumented Field Experiment:  An appropriate shallow oil shale
test  site  will be  selected  at  which a  controlled  and  instrumented  field
evaluation  experiment  of the  shale  gasification  process  can be  performed.
Experimental  downhole heater equipment,  down hole temperature  monitor probes,
and a surface gas recovery  system will be designed and  constructed  for use in
this experiment.  The scope of this experiment will be sufficient to demonstrate
the  gasification  technique in situ and to allow the reliability of the various
experimental  equipment components to be determined.  This field experiment will
also provide important  information on the practical gas production  efficiency,
self-heating efficiency,  and safety of the process for the particular test site
selected.

     Phase IV.  Pilot-Scale  Shale  Gasification  Project:  A pilot-scale  field
demonstration  shale gasification  system will be constructed and installed in a
representative  oil shale  field for the  purpose  of  operational  testing  and
performance  evaluation.  The goals of this phase of work are to  produce  shale
gas, convert it to commercially  assessable  energy,  and evaluate the operating
performance   and  endurance   /maintenance   characteristics   of  the  overall
installation.

     Therefore,  based on the  above-described  program,  Ramex  will  prepare a
proposed overall plan/program,  that may ultimately reach commercial production.
Ramex  will  continue  to seek  funding  to allow the Ramex  process  to proceed
through  phases 2, 3 and 4 of the  research  and  development  stage to possible
production.

     The financing discussed herein is crucial to the ongoing development of the
process as well as the corporate existence. Management is considering a possible
restructure of the  corporation as a means of further  financing  possibilities,
although this is in  preliminary  discussions  only and is  predicated  upon the
proposed  plan.  Any changes in corporate  structure are subject to  shareholder
approval and at the present no proposed changes have been formulated.


Affiliates

     Ramex had issued an exclusive  license to use the Tar Sands Process for the
Tar Sands of Canada and a non-exclusive license to use the Process anywhere else
in the world to a private corporation named Terr Sant International, Inc. ("Terr
Sant") a Nevada  corporation.  Donald L. Walker,  the former  President of Ramex
bought out the primary  stockholder  in Terr Sant and  renamed  the  corporation
Tri-Gas  Technology,  Inc.  Tri-Gas  will  utilize  the  Process  under  Ramex's
supervision in the exploration  and development of oil and gas.  Ramex's license
agreement  with  Tri-Gas  is  to  develop  the  Process  in  Indiana,  Kentucky,
Tennessee,  Ohio and West  Virginia;  however,  they have  reached  the end of a
performance clause of their contract with Ramex.

<PAGE>

Competitive Conditions

     Oil shale  gasification  is a  relatively  new process  for the  commercial
production of synthetic  natural gas, and there are  comparatively few companies
involved in this  activity.  At least  initially,  Ramex does not anticipate any
significant  competition  for geological  prospects  suitable for conducting its
operations from other entities in the oil shale gasification industry.  However,
Ramex may encounter  competition  in obtaining  future  prospects and in selling
natural  gas  by  other  companies  and   individuals   engaged  in  traditional
exploration  for oil and gas;  as well as in the  organization  and  conduct  of
drilling programs,  many of whom have greater financial  resources and technical
capabilities than the Registrant.

Government Regulations

     The  following  discussion  of  regulation  of the oil and gas  industry is
necessarily  brief,  and is not intended to constitute a complete  discussion of
the  various  statutes,  rules,  regulations  or  governmental  orders  to which
operations of registrant may be subject.

Regulation of Production Operation

     The  production  of oil and gas is subject to  extensive  federal and state
laws,  rules,  orders,  and  regulations  governing  a wide  variety of matters,
including  the drilling  and spacing of wells,  allowable  rates of  production,
prevention of waste, and pollution and protection of the  environment.  Although
the  particular  regulations  applicable in each state in which  operations  are
conducted vary, such  regulations are generally  designed to ensure that oil and
gas operations are carried out in a safe and efficient manner and to ensure that
similarly-situated  operators  are provided  with  reasonable  opportunities  to
produce  their  respective  fair shares of available  oil and gas  reserves.  In
addition  to  the  direct  costs  borne  in  complying  with  such  regulations,
operations  and revenues may be impacted to the extent that certain  regulations
limit oil and gas production to below economic levels.

Regulation of Sales and Transportation of Natural Gas

     The federal  government and various state governments have adopted laws and
regulations  regarding the control and  contamination of the environment,  which
may affect the operations of the  Registrant.  Moreover,  in the areas where the
Registrant  would  conduct  its  activities,   there  are  statutory  provisions
regulating  the  production  of  natural  gas and  administrative  agencies  may
promulgate  rules in connection with the operation and production of natural gas
wells,  determine  the  reasonable  market demand for natural gas, and establish
allowable rates for production.  Such regulatory orders may restrict the rate at
which the  Registrant's  wells,  if any,  produce  natural gas below the rate at
which such wells would be produced in the absence of such regulatory orders.

     It is anticipated that the  Registrant's  natural gas may be sold in either
intrastate commerce or interstate commerce.  In either case, the sale of natural
gas may be subject to regulation  by the Federal  Energy  Regulatory  Commission
("FERC") under the Natural Gas Policy Act of 1978 (the "NGPA") enacted  November
9, 1978,  which became  effective with respect to certain first sales of natural
gas delivered on or after  December 1, 1978. On January 1, 1985,  Section 121 of
the NGPA  deregulated  the prices for

<PAGE>

substantial  amounts of  interstate  and  intrastate  natural  gas, and FERC has
amended its regulations to take account-said deregulation. Additional volumes of
natural gas were deregulated July 1, 1987. The NGPA and regulations  promulgated
thereunder  by FERC  provide  for  maximum  lawful  ceiling  prices for  certain
categories of natural gas and do not supersede or nullify the  effectiveness  of
any contractual  agreement to pay a lower price. Although the Registrant intends
to negotiate  purchase  contracts  there is a virtual  certainty  under  current
market  conditions  that the  Registrant  will not receive  the maximum  ceiling
prices which might be otherwise permitted under the NGPA. It is anticipated that
the registrant will receive current market value for its production.

     The NGPA provides  that, in addition to the ceiling  prices,  producers may
collect  reimbursement  of state  severance  taxes and, to the extent allowed by
order  or  rule  of  FERC  may be  reimbursed  for  compressing,  gathering  and
transporting natural gas, and other similar costs.

     All  FERC  regulatory  rates  are  ceiling  rates,  and to the  extent  the
Registrant's natural gas sales contracts do not permit it to sell natural gas at
such rates, natural gas will be sold at such lower contract rates.

     If the  Registrant  sells for resale  natural  gas which was  committed  or
dedicated to interstate  commerce prior to or on November 6, 1978, to the extent
such  natural gas does  qualify as new natural  gas,  high cost  natural gas, or
natural gas produced from a new, on shore  production  well,  such sales will be
subject to the NGPA and the regulations  issued thereunder which require,  among
other  things,  that  producers  selling  natural  gas for resale in  interstate
commerce  obtain a  certificate  of  public  convenience  and  necessity  before
commencing  most sales and that they secure  approval for increase in prices and
authorization for abandonment of service once commenced.

     The FERC has been pursuing a policy of  encouraging  the  development  of a
natural gas market driven by  competitive  forces and has, over the last several
years, implemented a number of regulations to enhance competition in the natural
gas market. The domestic natural gas industry remains under federal  regulation,
pursuant to the Natural Gas Act and the Natural Gas Policy Act. In 1989 Congress
passed the Natural Gas Decontrol Act and by 1993 all wellhead  regulation of gas
prices will end.

Regulation of the Environment

     The exploration, development, production, and processing of oil and gas are
subject to various  federal and state laws and  regulations  designed to protect
the environment.  Various states and governmental agencies are considering,  and
some have adopted,  other laws and regulations  regarding  environmental control
which could  adversely  affect the business of the  registrant.  Compliance with
such  legislation and  regulations,  together with all penalties  resulting from
noncompliance  therewith,  may  increase  the  cost of oil and gas  development,
production,  and  processing  operations  or  may  affect  the  ability  of  the
registrant  to complete,  in a timely  fashion,  existing or future  activities.
Certain of these costs may ultimately be borne by the Registrant.


Employees

     At January 31, 1998, the Registrant had no salaried employees.

<PAGE>

ITEM 2. PROPERTIES.

     PATENT.  In November,  1989,  Ramex received  approval from the U.S. Patent
Office for it's  patent  application  for oil shale  gasification  process.  The
actual patent was issued on May 29, 1990.  Ramex's patent covers the drilling of
a hole into hydrocarbon  bearing shale,  inserting a heater and applying heat to
the shale formation to cause a reaction which will produce synthetic natural gas
and to  extract  that gas  through  the same bore  hole.  It also  includes  the
description of the equipment  itself.  The  Registrant's  executive  offices are
located at 2204 W. Wellesley, Spokane, Washington 99205.

ITEM 3. LEGAL PROCEEDINGS.

     A judgment  was  granted in 1990 to Jack  Guthrie and  Associates,  Inc. of
Louisville,  Kentucky to recover  $12,076.70.  Nothing has occurred  during this
period on the  judgment.  A lawsuit was filed by Paul A.  Petzrick of Annapolis,
Maryland to recover $11,524.00 for consulting  services.  As of the date of this
Form 10-K,  no activity  occurred  during  this  period on this  lawsuit and the
Registrant  intends  to  settle  both of these  obligations.

     The officers and  directors of the  Registrant  certify that to the best of
their knowledge, neither the Registrant nor any of its officers or directors are
parties  to any  material  legal  proceedings  or  litigation  other  than  that
referenced  herein.  The officers and directors of the registrant do not know of
any  other  litigation  being  threatened  or  contemplated.  To the best of the
knowledge  of the  officers  and  directors  of  the  Registrant,  there  are no
investigations of any felonies, misfeasance or securities investigations nor are
there any other pending or threatening litigation at the present time other than
that referenced herein.

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

     There were no submissions  to a vote of security  holders during the fourth
fiscal quarter ended January 31, 1998.


                                     Part II

ITEM  5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS 
          MATTERS.

     The  Registrant's  common stock is listed on the OTC Bulletin  Board of the
NASD under the symbol "RAMX".  No assurance can be given that the present market
for the Registrant's common stock will continue.

     The  following  table sets forth the  high-ask and low-bid  quotations  per
share as  published  by the  National  Quotation  Bureau,  Inc.  for the  fiscal
quarterly periods indicated are set forth below:

<PAGE>

                                      Market price:

                               1996                      1997
                      -----------------------   ------------------------
         Period           High         Low          High         Low
         ------           ----         ---          ----         ---
First Quarter         $    0.015   $    0.001   $    0.015   $    0.001
Second Quarter        $    0.015   $    0.001   $    0.017   $    0.001
Third Quarter         $    0.015   $    0.001   $    0.017   $    0.003
Fourth Quarter        $    0.015   $    0.001   $    0.017   $    0.003

     Such  over-the-counter   market  quotations  reflect  inter-dealer  prices,
without retail mark-up, markdown or commission and may not necessarily represent
actual transactions.

Holders

     As of January 31, 1998 there were approximately  3,979 holders of record of
the Common Stock of the Company 

Dividends

     The Company has paid no cash  dividends to date,  and it does not intend to
pay any cash  dividends in the  foreseeable  future.  At the present  time,  the
Company  intends to use any  earnings (if any) which may be generated to finance
the growth of the Company's business.


Item 6. SELECTED FINANCIAL DATA.

               (Not covered by report of independent accountants)

                                                     Years
                                                Ended January 31,
                                   --------------------------------------------
                                     1995        1996       1997        1998
                                   --------    --------    --------    -------- 
Revenues                                -0-         -0-         -0-         -0-

Net Income (loss)                   (15,622)    (21,081)    (19,168)    (19,091)
   from Operations
Income from Forgiveness
of Debt                                 -0-      17,692         -0-         -0-
Income from Interest                    -0-         -0-          18          27

   Net Income (loss)                (15,622)    (21,081)    (19,168)    (19,901)

Net Income (loss)
   per common share:               (0.00122)   (0.00152)   (0.00139)   (0.00139)

Current Assets                          251       9,408       2,209       1,281

Current Liabilities                 142,507     144,052     156,003     169,949

Total Assets                            251       9,408       2,209       1,281

Stockholder's equity
   (deficit)                       (142,256)   (134,644)   (153,794)   (168,668)


<PAGE>

Item 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
       OF OPERATION.

     Ramex has been a research and  development  company  from its  inception in
1980.  Its sole activity  prior to the current fiscal period has been to conduct
research and development of the Process.  This Process for extracting  synthetic
natural gas from oil shale is described in detail elsewhere in this report.  The
funds used to complete this research and  development  have been provided by the
sale of common  restricted  stock from the authorized,  but unissued,  shares of
common  stock of Ramex,  loans made by  shareholders  and by the sale of limited
partnership  interests in Ramex Research  Partners,  Ltd. This private placement
offering has generated  $110,000 in revenues as of September 30, 1993. No actual
field research  activity was conducted during the fiscal year ending January 31,
1998.  It was  determined  after the  completion  of the last  field  project in
Indiana  that  it  would  be  necessary  to  next  go to a  laboratory  research
arrangement to answer some of the basic  questions  developed as a result of the
field  work  done by  Ramex.  

     Efforts  during the past fiscal year have been  primarily  directed  toward
developing funding arrangements for the cost of the laboratory and fieldwork yet
to be performed.

Liquidity and Capital Resources:

     As of January 31, 1998 Ramex's  current assets were $1,281.  Since there is
no certainty of the success in negotiations for financing the continued research
and development of the Ramex Process,  nor is there any certainty of the success
of such  research,  uncertainties  do exist with respect to the future levels of
Liquidity and Capital,  which will be necessary to fund the Company's operations
and its ability to maintain adequate levels thereof.

     The Company has a net  operating  loss  carryover of $4,889,139 to the year
ended January 31, 1999.  These loss  carryovers will commence to expire in 1999.
The Company has not recorded a deferred  tax asset for the  possible  benefit of
these net operating loss carryovers  because it is uncertain if the Company will
have future taxable income.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     Financial  statements  appear on  sequential  pages 29 to 38 of this Annual
Report on Form 10-K.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
        FINANCIAL DISCLOSURE.

     There were no disagreements in connection with the audits of the three most
recent fiscal years and any  subsequent  interim  period with Terrence J. Dunne,
CPA.

     The Auditor states, in his report to the Board of Directors, that there are
serious  doubts as to the  ability  of the  Registrant  to  continue  as a going
concern  because  of  recurring   losses  from  operations  and  a  net  capital
deficiency.   The  Company  has  very  limited   capital  and  has   substantial
liabilities. Therefore, Mr. Dunne states in his report to the Board of Directors
that these conditions  raise  substantial  doubt about the Company's  ability to
continue in business.



<PAGE>



                                    Part III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. 

Members  of  the  Board  of  the  Directors  and/or  Executive  Officers  of the
Registrant, and further information concerning them are as follows:

Name                             Age                         Position
----                             ---                         --------

Maynard M. Moe                    56                President, Chief Executive
                                                    Officer and Director

Kerry L. Weger                    51                Secretary-Treasurer
                                                    Director

George Shutt                      77                Director

John F. Mayer                     56                Director

Sigurd "Morris" Mathisen          65                Vice-President

     There are no family  relationships among the current Directors and Officers
of the Company.

Maynard M. Moe, age 56, President,  Chief Executive  Officer and a Director,  he
was elected to these  positions by the Board of Directors on October 8, 1993. He
was a Vice-President from January 20, 1993 to October 8, 1993. Mr. Moe was first
hired as a consultant by the Registrant to handle day-to-day operations of Ramex
as well as shareholder  relations.  He attended  Eastern  Washington  College of
Education in 1959 and 1960.  He attended the Spokane  Community  College for Oil
Advance  Burner  Technology  courses  in 1965  and he  received  his oil  burner
mechanics  license in 1965. Prior to his consulting work with Ramex, Mr. Moe was
a stockbroker with Dillon  Securities in Spokane,  Washington from 1978 to 1992.
Mr. Moe  obtained a  Washington  State  Series 63, NASD  Series 7 and  Principle
Series 23 Licenses.  Mr. Moe served as a committee  chairman and vice  president
and director of the Spokane Stock  Exchange for eighteen  months.  On August 31,
1992, Mr. Moe's chapter 11 plan of reorganization was confirmed, in order to pay
all personal/business debts in full over three years. On March 13, 1996, Mr. Moe
received a conformed  copy of the Final Decree from the Court closing this case.
During the past ten years Mr.  Moe has  worked  with  different  companies  as a
consultant for shareholder relations.

Kerry L. Weger, age 51, a Director and Secretary-Treasurer  since June 22, 1992.
Mr. Weger attended  Indiana  University and received a B.A. in Business and a JD
from the Indiana University School of Law in 1971. He is a member of the Indiana
and  Michigan  State Bar  Associations.  Mr. 

<PAGE>

Weger  has  been in the  continuous  practice  of law for  twenty  years  and is
currently  practicing  law in  the  State  of  Indiana.  His  area  of  practice
encompasses oil and gas and corporate law. Mr. Weger has represented several oil
and gas drilling and  development  companies  and is familiar with all phases of
drilling and development.  Mr. Weger is active in his community,  is a member of
the Bloomington Planning Commission, the Chamber of Commerce Erosion Development
Committee and a past member of the Bloomington  Little League Board of Directors
and Monroe County Economic Development Council.

George Shutt, age 77, a Director since June 22, 1992. Mr. Shutt is presently the
owner and sole  proprietor  of GESCO  Consultants.  GESCO  Consultants  provides
consulting and manufacturing representative services to selected segments of the
aerospace  industry.  Prior to forming GESCO  Consultants in 1981, Mr. Shutt was
employed  by Hughes  Aircraft  Company for thirty  years in various  capacities,
including subcontract's administrator,  project engineer, manufacturing planning
for complex  electronic  systems and  manufacturing  supervisor.  Mr. Shutt also
worked for Ford Motor Company for five years in commercial sales and development
of specialized  vehicles.  Mr. Shutt has worked variously for Lockheed  Aircraft
Co. in Research and Development Department. He was with the U.S. Air Force as an
instructor on instrument flying techniques.

John F. Mayer,  age 56, a Director  since  October,  1988.  President  and Chief
Executive  Officer from June 22, 1992 until his resignation from these positions
effective  October 1, 1993.  Mr. Mayer attended  Southwest  Texas Junior College
(Associate  of Arts  degree),  Colorado  State  University  (Bachelor of Science
degree) and the  University  of Kansas (two years of post  service  where he was
employed as a civilian  scientist  and weapons  graduate  work in physics).  Mr.
Mayer retired in 1992 from civil system  analyst with the  Department of Defense
for 20 years, 13 years of which were in management positions.

Sigurd "Morris" Mathisen,  age 65, a Vice-President  since October 29, 1993. Mr.
Mathisen  attended  the  Virginia  Polytechnical  Institute,  majoring  in Civil
Engineering/Building  Construction.  Mr. Mathisen's work experience has included
management,   administration,   planning,  budgeting,  scheduling,  contracting,
inspecting,   directing  all  phases  of  construction,  with  profit  and  loss
responsibility on all types of commercial,  industrial, fossil and nuclear power
generation, and hazardous waste facilities.

Mr.  Mathisen  was  instrumental  in the  Installation  baghouses,  wet scrubber
systems,  and or  electrostatic  precipitators  on four  separate  500 mega watt
fossil fuel power generation units.  Four plus years assistant  Resident Manager
for  J.A.  Jones  Construction  Co.  at  Hanford,  Washington.  Responsible  for
direction  of  1,500  employees  plus  subcontractors,  on new  and  maintenance
construction  of  nuclear  and  nuclear  waste  facilities.  Involved  with  the
construction  of many  other  multi-million  dollar  projects,  with a total  of
twenty-six.

     The terms of such  Directors  and  Officers are for a period of one year or
until their successors are duly elected and qualified.

<PAGE>

Item 11. REMUNERATION OF DIRECTORS AND OFFICERS.

     Officers:

     For the fiscal year ended  January 31,  1998,  none of the  Officers of the
Registrant had cash compensation, which exceeded $40,000.00

     Directors:

     The Directors of the Company received no compensation for services rendered
the  Registrant  during the  fiscal  year ended  January  31,  1998 in excess of
$40,000.00. 

                   Stock Option and Compensation Bonus Plan:

     Ramex's Stock Option and  Compensation  Bonus Plan (the "Plan")  authorizes
3,000,000   shares  of  Common  Stock  for  issuance  to  directors,   officers,
key-employees, consultants and advisors who contribute materially to the success
and profitability of Ramex and who provide key services,  consultation or advice
to Ramex.  As of January 31, 1991,  there were 666,666 shares issued pursuant to
the Plan.  The Plan is intended to advance the interests of Ramex by encouraging
and enabling the directors, officers, key employees, consultants and advisors to
acquire and retain a  proprietary  interest in Ramex by  ownership of its stock.
The Plan is administered  by the Board of Directors.  The exercise price of each
option is to be not less than 76% of the fair market  value of the Common  Stock
on the date of grant or issuance.  An option may be exercised  for the following
maximum  amounts:  33% of the  amount  granted  any  time at  least  six  months
subsequent  to the date of grant,  an additional  33% of the amount  granted any
time at least 15 months subsequent to the date of grant an additional 34% of the
amount  granted  any time at least 27  months  subsequent  to the date of grant.
Options  under  the  Plan  may  not  be  sold,  pledged,  signed,  hypothecated,
transferred  or otherwise  disposed of and are exercised only by the Optionee or
upon his death by his legal representative.

     In the event of  termination  for cause of an  Optionee's  employment  with
Ramex,  the options  shall  expire  immediately  upon such  termination.  If the
Optionee dies during his employment with Ramex, his options shall be exercisable
by his  personal  representative  to the  extent  the  Optionee  would have been
entitled to  exercise  such  option if he had  continued  to live and be in such
employment, for the lesser of one year after his death or for the remaining term
of the Option.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following table sets forth  information,  as of January 31, 1998, as to
each person who is known to the Company to be the beneficial  owner of more than
5% of the Common Stock of the Company,  and as to the security ownership of each
Director of the  Company  and all  Officers  and  Directors  of the Company as a
group. Except where specifically noted, each person listed in the table has sole
voting and investment power to the shares listed.

                                        Security Ownership
Name and Address                         Amount and Nature         Percent
of Beneficial Owner                   of Beneficial Ownership    of Class (2)
-------------------                   ------------------------   ------------

Donald L. Walker (1)                           4,339                0.030%
1501 Azure Hills                                                  
Van Buren, Arkansas 72956              
Gail Sue Walker (2)                              -0-                  -0-
1501 Azure Hills                                                  
Van Buren, Arkansas                            72956              
                                                                  
Lucros International Corp. (2)               570,000                3.979%
P. O. Box 647                                                     
Van Buren, Arkansas 72956              
                                                                  
Greenway Corporation (2)                     551,500                3.850%
P. O. Box 647                                                     
Van Buren, Arkansas 72956              
                                                                  
Maynard M. Moe                               710,001                4.957%
President, Chief Executive                                        
Officer, Director                                                 
2204 W. Wellesley                                                 
Spokane, WA 99205              
                                                                  
John F. Mayer                                575,000                4.014%
Director                                                          
534 Valley Drive                                                  
Kerrville, Texas 78028              
                                                                  
George Shutt                                  27,450                0.192%
Director                                                          
17582 Meredith Dr.                                                
Santa Ana, CA 92705              
                                                                  
Kerry L. Weger                               341,000                2.381%
Secretary-Treasurer, Director                                     
635 N. College Avenue                                             
Bloomington, IN 47404              
                                                                  
Sigurd "Morris" Mathisen                      81,750                0.571%
Vice-President                                                    
6415 N. Fleming                                                   
Spokane, WA 99208              
                                                                  
All Directors and                                                  12.115%
Executive Officers                                                
as a Group (5 persons)                                            
as of the date of this                                            
Form 10-K                                                         
                                                                  
(1)  Mr. Walker is the husband of Gail Sue Walker.

(2)  Mrs. Walker is the sole shareholder of Lucros International Corporation and
     Greenway  Corporation,  therefore  this reflects that  ownership/beneficial
     interest as of January 31, 1998.

<PAGE>

Item 13. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

     There were no  transactions  between  management and Registrant  during the
period covered by this report.




<PAGE>

                                     Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a) (1) The financial statements listed in the following index are filed as part
        of this Annual Report on Form 10-K:

                                                                      Sequential
                                                                        Page
                                                                        ----

Consent of Auditor                                                       28
Report of Independent Auditor                                            31
Statement of Financial Position at                                       32
January 31, 1998, 1997 and 1996.
Statement of Operations for the Years ended                              33
January 31, 1998, 1997 and 1996.
Statement of Changes in Stockholders' Equity                             34
for the years ended January 31, 1998, 1997 and 1996.
Statement of Cash Flows for the Years Ended January 31,  1998,  1997
and 1996.                                                                35
Notes to Financial Statements at January 31, 1998, 1997
and 1996.                                                             36-38

(a) (2) Financial  Statement  Schedules are not filed with this Annual Report on
Form  10-K  because  the  Schedules  are  either  inapplicable  or the  required
information is presented in the Financial Statements or Notes hereto.

(a) (3) Exhibits*.

(b)  There were no reports  filed on Form 8-K during the fiscal  fourth  quarter
     ended January 31, 1998.

<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 of 15(d) 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.

                                        Ramex Synfuels International, Inc.
                                        Registrant


Dated:   April 17, 1998                 By: sgd. Maynard M. Moe
                                            --------------------
                                            Maynard M. Moe
                                            President, CEO and Director

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and on the dates indicated.


Dated:   April 17, 1998                 By: sgd. Maynard M. Moe
                                            --------------------
                                            Maynard M. Moe
                                            President, Director and
                                            Chief Executive Officer


Dated:   April 17, 1998                 By: sgd. Kerry L. Weger
                                            --------------------
                                            Kerry L. Weger, Secretary-Treasurer
                                            and Director


Dated:   April 17, 1998                 By: sgd. George E. Shutt
                                            --------------------
                                            George E. Shutt
                                            Director


Dated:   April 17, 1998                 By: sgd. John F. Mayer
                                            --------------------
                                            John F. Mayer
                                            Director

<PAGE>



To The Board of Directors of
Ramex Synfuels International, Inc.


I consent to the use of my name in regard to the audited financial statements of
Ramex Synfuels International, Inc. in the 10-K report for the year ended January
31, 1998.


sgd. Terrence J. Dunne
Terrence J. Dunne
Certified Public Accountant

April 8, 1998






<PAGE>



                                 RAMEX SYNFUELS
                               INTERNATIONAL, INC.


                              FINANCIAL STATEMENTS






<PAGE>


                                    Contents

                                                                           PAGE
                                                                           ----

Independent Auditor's Report                                                   1

Statement of Financial Position as of January 31, 1998 and 1997                2

Statement of Operations For the Years Ended January 31, 1998, 1997 and 1996    3

Statement of Changes in Stockholders' Equity For the Years Ended January 31,
1998,1997 and 1996                                                             4

Statement of Cash Flows For the Years Ended January 31, 1998, 1997 and 1996    5

Notes to Financial Statements                                                6-8






<PAGE>





 To The Board of Directors of
 Ramex Synfuels International, Inc.


                          INDEPENDENT AUDITOR'S REPORT


I  have  audited  the  statement  of  financial   position  of  Ramex   Synfuels
International,  Inc. as of January 31, 1998 and January 31, 1997 and the related
statements of operations,  changes in stockholders'  equity,  and cash flows for
the years ended January 31, 1998,  January 31, 1997 and January 31, 1996.  These
financial  statements are the  responsibility  of the Company's  management.  My
responsibility  is to express an opinion on these financial  statements based on
my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management, as well as evaluating the overall financial statement presentations.
I believe that my audit provides a reasonable basis for my opinion.

 In my opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Ramex Synfuels  international,
Inc. as of January 31, 1998 and January 31, 1997 and the results of  operations,
changes in  stockholders'  equity and cash flows for the years ended January 31,
1998,  January  31,  1997 and January  31,  1996 in  conformity  with  generally
accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As shown in the financial  statements,
the Company has no working capital and substantial liabilities. These conditions
raise substantial doubt about the Company's ability to continue in business. The
financial  statements do not include any adjustments  that might result from the
inability to continue in business.


sgd. Terrence J. Dunne
Terrence J. Dunne
Certified Public Accountant

Spokane, Washington
April 8, 1998

<PAGE>


RAMEX SYNFUELS INTERNATIONAL, INC.         Statement of Financial Position as of
                                           January 31, 1998 and January 31, 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                      ASSETS


                                                                                   January 31,     January 31,
                                                                                      1998            1997
                                                                                   -----------    -----------
<S>                                                                                <C>            <C>        
CURRENT ASSETS
    Cash                                                                           $     1,281    $     2,209
                                                                                   -----------    -----------

TOTAL ASSETS                                                                       $     1,281    $     2,209
                                                                                   ===========    ===========


                                       LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
    Accounts Payable (Note 2)                                                      $    64,295    $    62,782
    Due to Officers and Directors (Note 4)                                             105,654         93,221
                                                                                   -----------    -----------

         Total Current Liabilities                                                     169,949        156,003
                                                                                   -----------    -----------


STOCKHOLDERS' EQUITY
    Common Stock $.01 Par Value; 125,000,000 Shares Authorized, 13,823,465
         Shares Issued and outstanding as of January 31, 1997; 14,323,465 shares
         issued and outstanding
         as of January 31, 1998                                                        143,234        138,234
Additional Paid-In Capital                                                           4,577,237      4,577,237
Accumulated Deficit                                                                 (4,889,139)    (4,869,265)
                                                                                   -----------    -----------
         Total Stockholders' Equity                                                   (168,668)      (153,794)
                                                                                   -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $     1,281    $     2,209
                                                                                   ===========    ===========
</TABLE>


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

<PAGE>

RAMEX SYNFUELS INTERNATIONAL, INC.   Statement of Operations for the Years Ended
                                                 January 31, 1998, 1997 and 1996
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                              January 31,     January 31,    January 31,
                                                 1998           1997           1996
                                               --------       --------       --------
<S>                                               <C>            <C>            <C>  
REVENUE                                           $ -0-          $ -0-          $ -0-
                                               --------       --------       --------
                                                                            
GENERAL AND ADMINISTRATIVE EXPENSES              19,901         19,168         21,080
                                               --------       --------       --------
                                                                            
(Loss) From Operations                          (19,901)       (19,168)       (21,080)
                                                                            
OTHER INCOME                                                                
         Interest                                    27             18            --
         Forgiveness of debt (Note 3)                --             --         17,692
                                                --------       --------       -------
                                                                            
             Total other income                      27             18         17,692
                                               --------       --------       --------
                                                                            
                                                                            
NET (LOSS)                                     $(19,874)      $(19,150)      $ (3,388)
                                               ========       ========       ========
                                                                            
NET (LOSS) PER SHARE                            $ (NIL)        $ (NIL)        $ (NIL)
                                               ========       ========       ========
</TABLE>


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

<PAGE>

RAMEX SYNFUELS INTERNATIONAL, INC.  Statement of Changes in Stockholders' Equity
                             For the Years Ended January 31, 1998, 1997 and 1996
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                   Common Stock            Additional
                            --------------------------      Paid-In     Accumulated
                               Shares         Amount        Capital      (Deficit)        Total
                            -----------    -----------    -----------   -----------    -----------
<S>                          <C>           <C>            <C>           <C>            <C>         
Balances as of
January 31, 1995             12,753,465    $   127,534    $ 4,576,937   $(4,846,727)   $  (142,256)

Common stock issued for
   cash at $.01 per share     1,100,000         11,000                                      11,000

Net (loss)                                                                   (3,388)        (3,388)
                            -----------    -----------    -----------   -----------    -----------

Balances as of
January 31, 1996             13,853,465        138,534      4,576,937    (4,850,115)      (134,644)

Cancellation of 30,000
   shares of common stock       (30,000)          (300)           300

Net (loss) for the year
                                                                            (19,150)       (19,150)
                            -----------    -----------    -----------   -----------    -----------

Balances as of
January 31, 1997             13,823,465        138,234      4,577,237    (4,869,265)      (153,794)

Common stock issued for
   cash at $.01 per share       500,000          5,000                                       5,000

Net (loss)                                                                  (19,874)       (19,874)
                            -----------    -----------    -----------   -----------    -----------

Balances as of
   January 31, 1998          14,323,465    $   143,234    $ 4,577,237   $(4,889,139)   $  (168,668)
                            ===========    ===========    ===========   ===========    ===========
</TABLE>


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


<PAGE>



RAMEX SYNFUELS INTERNATIONAL, INC.         Statement of Cash Flows For the Years
                                           Ended January 31, 1998, 1997 and 1996
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                     January 31,    January 31,   January 31,
                                                        1998          1997          1996
                                                      --------      --------      --------
<S>                                                   <C>           <C>           <C>     
CASH FLOWS FROM                                                                   
OPERATING ACTIVITIES                                                              
    Net (Loss)                                        $(19,874)     $(19,150)     $ (3,388)
Increase (decrease) in accounts payable                                           
          amounts due officer and directors             13,946        11,951        (1,545)
                                                      --------      --------      --------
                                                                                  
    Net cash used from operating activities             (5,928)       (7,199)       (1,843)
                                                      --------      --------      --------
                                                                                  
CASH FLOWS FROM                                                                   
FINANCING ACTIVITIES                                                              
    Proceeds from sale of common stock                   5,000        11,000      
                                                      --------      --------      --------
                                                                                  
NET INCREASE (DECREASE) IN CASH                           (928)       (7,199)        9,157
                                                                                  
CASH AT BEGINNING OF YEAR                                2,209         9,408           251
                                                      --------      --------      --------
                                                                                  
CASH AT END OF YEAR                                   $  1,281      $  2,209      $  9,408
                                                      ========      ========      ========
 </TABLE>




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


<PAGE>


NOTES TO FINANCIAL STATEMENTS                      Notes to Financial Statements
--------------------------------------------------------------------------------

NOTE I - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The history of the Company began when Cache Oil Corporation was  incorporated in
March,  1980,  under the laws of the  State of Utah.  In July,  198O,  Cache Oil
Corporation purchased, in a business combination,  all of the outstanding common
stock  of Ramex  Horn,  Inc.,  a  Wyoming  corporation  which  was  subsequently
dissolved. In December, 1980, Cache Oil merged with a wholly owned subsidiary of
Ramex Horn, Inc., Ramex Synthetic Fuels International, Inc., a Utah corporation,
with the name of the surviving Utah corporation  being changed to Ramex Synfuels
International,  Inc. The Company had been in the  development  stage until 1992,
when all operations closed.

In  September,  1993,  the Company as the general  partner in newly formed Ramex
Research  Partners,  Ltd.,  a Texas  limited  partnership,  raised  $110,000 for
further  development  of an oil shale  gasification  process.  This  process  is
protected by a patent  (issued on May 29, 1990) owned by the Company.  In return
for this funding, the Company has granted to the limited partners a limited term
royalty  payable  from the future  proceeds,  if any, of gas  produced  from the
application  of this process.  This limited term royalty will continue until the
limited partners have received the greater of (1) payments  aggregating 1.10% of
the net  profits  derived  from the first  1,000  productive  wells  using  this
process,  or (2) payments  aggregating ten times the limited partners'  original
investment.  On December  13,  1993,  the  Company  entered  into a  contractual
agreement with Southwest Research Institute of San Antonio, Texas, for the first
phase testing of this patented  gasification  process.  Ramex Research Partners,
Ltd., has provided the funding for this testing.

Equipment is recorded at cost and depreciated  over the estimated useful life on
straight-line basis.

Common  stock  issued for  expenses,  services,  and payment of  liabilities  is
accounted for at the  estimated  fair market value as determined by the board of
directors at the date of issue.

Intangible oil and gas drilling costs (extraction  processes) are amortized on a
straight-line basis over ten years

Earnings  (losses) per share are  computed on the basis of the weighted  average
number of common outstanding shares during the year.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect certain  reported amounts and  disclosures.  Accordingly,  actual results
could differ from those estimates.

<PAGE>


NOTES TO FINANCIAL STATEMENTS                      Notes to Financial Statements
--------------------------------------------------------------------------------

NOTE 2 - ACCOUNTS PAYABLE

For the years ended  January 31, 1998 and January 31, 1997,  two  creditors  had
outstanding judgments against the Company totaling $23,525. Other trade payables
comprised the remaining balances as follows:

        January 31,                                                   Amount
        -----------                                                   ------

            1997                                                     $39,257
                                                                     -------
            1998                                                     $40,770
                                                                     -------

NOTE 3 - FORGIVENESS OF DEBT

A former president of the Company paid a liability of $17,692, during the fiscal
year ended January 31, 1996, and he is not expecting repayment from the Company;
therefore, this results in forgiveness of debt to the Company.

NOTE 4 - DUE TO OFFICERS AND DIRECTORS AND RELATED PARTY TRANSACTIONS

As of January 31, 1998,  the Company owed the current  president  (Maynard  Moe)
$69,832  for  accrued   consulting   fees,  and  owed  $10,000  to  the  current
secretary-treasurer (Kerry Weger), and $25,821 to another former president (John
Mayer) for advances and  expenses  paid on behalf of the Company.  As of January
31,  1997,  the Company  owed the current  president  (Maynard  Moe) $57,400 for
consulting  fees,  and owed  $10,000 to the current  secretary-treasurer  (Kerry
Weger),  and $25,821 to another former  president  (John Mayer) for advances and
expenses paid on behalf of the Company.

NOTE 5 - STOCK OPTION AND COMPENSATION BONUS PLAN

The  Company  originally  set aside  3,O00,000  shares of common  stock which is
available for issuance to directors,  officers,  key employees,  consultants and
advisors who contribute to the success of the Company. This stock option plan is
administered  by the hoard of directors and the exercise price of each option is
not to be less than 76% of the fair market value of the common stock on the date
of grant or  issuance.  Upon the  issuance of a stock  option,  an option may be
exercised for the following maximum amounts:  33% of the amount granted any time
at least six months  subsequent to the date of grant,  an additional  33% of the
amount granted any time at least 15 months  subsequent to the date of grant, and
an additional 34% of the amount  granted any time at least 27 months  subsequent
to the  date  of  grant.  Options  under  the  plan  may not be  sold,  pledged,
hypothecated,  transferred or otherwise  disposed of and are exercisable only by
the optionee or, upon his death, by his legal representative.  As of January 31,
1998,  there were 2,333,334  shares of common stock available to be issued under
this plan.

<PAGE>

 
NOTES TO FINANCIAL STATEMENTS                      Notes to Financial Statements
--------------------------------------------------------------------------------

NOTE 6 - INCOME TAXES

The Company has a net operating  loss  carryover of $4,889,139 to the year ended
January 31, 1999.  These loss  carryovers  will commence to expire in 1999.  The
Company has not recorded a deferred tax asset for the possible  benefit of these
net operating loss  carryovers  because it is uncertain if the Company will have
future taxable income.