UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                  FORM 10-K/A
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
           For the fiscal year ended December 31, 1994

                                       OR

[    ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
    For the transition period from                     to                 .
                                   -------------------    ----------------

                 Commission File Number0-14096
                                       -----------------------


                      Foreland Corporation
- -----------------------------------------------------------------

             (Exact name of registrant as specified in its charter)

             Nevada                               87-0422812
- ---------------------------------            --------------------

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

  12596 West Bayaud, Suite 300
       Lakewood, Colorado                         80228-2019
- ---------------------------------            --------------------

(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code (303) 988-3122
                                                  ---------------


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

        Title of each class        Name of each exchange on which
     registered

               None                          None
     -------------------------     -------------------------


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

                         Common Stock, Par Value $0.001
                     Class L Common Stock Purchase Warrants
                     --------------------------------------

                                (Title of class)

     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  o

        The aggregate market value of the registrant's voting stock held by
nonaffiliates computed at the average closing bid and asked prices in the over-
the-counter market as quoted on the National Association of Securities Dealers
National Quotation system ("NASDAQ") on April 10, 1995, was approximately
$22,547,095.

     As of April 10, 1995, the Company had outstanding 13,822,322 shares of its
common stock, par value $0.001.

     Documents Incorporated by Reference.  List hereunder the following
documents if incorporated by reference and the part of the form 10-K (e.g., part
I, part II, etc.) into which the document is incorporated:  (1)  any annual
report to security holders;  (2)  any proxy or information statement; and (3)
any prospectus filed pursuant to rule 424(b) or (c) under the Securities Act of
1933:  None.

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.





                                     PART I
                              ITEM 1.  BUSINESS
General

     Foreland Corporation (the "Company") was organized in June 1985 to advance
an exploration project in the Great Basin and Range geologic province in Nevada
(the "Great Basin") that had been initiated by Gulf Oil Corporation ("Gulf").
Following its organization, the Company acquired rights to a geologic data base,
assembled a management team with supporting consultants, obtained funding from a
private placement and its initial public offering, and commenced the field
geology phase of its exploration project.

     The Company's field geology identified an oil source rock and porosity
fairway in north and central Nevada in which the Company has concentrated its
lease acquisition and exploration program.  The Company has funded its
exploratory drilling through arranging its own funding and obtaining funding
from industry participants that agree to complete specified drilling or other
exploration in order to earn an interest in an agreed area.  Since 1986, the
Company has identified a number of drilling targets in Pine Valley and other
areas of Nevada and arranged Company and third-party funding for drilling a
number of test wells.  To help fund future activities, in 1993 and 1994, the
Company acquired a total of 12 shut-in wells in the Eagle Springs Field in
Nevada.  Since then, the Company has returned nine of these acquired wells to
production and drilled a new water injection well.  In August 1994, the Company
entered into an agreement with Plains Petroleum Operating Company ("Plains") to
fund further activities in the Eagle Springs Field and since then has drilled
and placed into production three additional wells. The Company and Plains plan
to drill additional wells to test horizons productive in existing wells in a
further effort to increase production.

     The Company continues to increase and improve its geological and
geophysical expertise respecting the Great Basin of Nevada through its own
efforts and by obtaining data from third parties as part of joint exploration,
property acquisition, or data sharing arrangements and from drilling and other
field work in which the Company participates.  In addition, all information is
continuously reanalyzed as additional drilling data is gathered and as new
computer modeling and other analytical tools become available to the industry.
This has enabled the Company to increase substantially its understanding of the
geology, location, potential, and other characteristics of the exploration
process.

Nevada Exploration

     During the early 1980s, the Great Basin of Nevada emerged as a possible new
frontier area for oil exploration.  Conventional wisdom in the oil industry at
the time held that certain geological indicators pointed to north and central
Nevada as a possible repository of large (by continental United States
standards) petroleum deposits.  Several of the nation's largest exploration
companies, including Exxon USA, Inc. ("Exxon"), Texaco, Inc., Gulf, Chevron USA,
Inc. ("Chevron"), Mobil Exploration and Producing USA, Inc. ("Mobil"), and Amoco
Corp., acquired substantial lease holdings and initiated exploration programs in
eastern and central Nevada during the early years of the decade.

     Between 1980 and 1983, Gulf conducted a detailed study of the hydrocarbon
potential of north and central Nevada and other frontier exploration areas.  The
study, conducted by Gulf personnel and by outside consultants, generated a mass
of raw data pertaining to the age and depositional history of potential
oil-bearing formations.  In 1983, Gulf became the target of a takeover attempt
by Mesa Petroleum and subsequently was acquired by Chevron.  In connection with
that acquisition, a number of Gulf's exploration projects were terminated,
including the study of Nevada.

     The acquisition of Gulf by Chevron also led to the voluntary retirement of
a number of Gulf employees.  One such retiree was Dr. Grant Steele, who had been
manager of geology for Gulf's central exploration group and was intimately
involved with the study of the Great Basin of Nevada.

     Personal and professional interest in the potential of the Great Basin of
Nevada continued after his early retirement from Gulf in 1983.  In 1985 Dr.
Steele organized the Company and recruited Kenneth L. Ransom, who had served
under Dr. Steele as a senior geologist with Gulf's central exploration group and
who had also been deeply involved with Gulf's study of the Great Basin of
Nevada.

     The Company's goal is to secure a significant position in a potential new
oil province.  In order to implement this plan, the Company acquired rights to
Gulf's data base, conducted additional geological survey work, acquired oil and
gas lease holdings in north and central Nevada, and arranged for the exploration
and development of its acreage.  Virtually all of the Company's financial
resources were committed from the outset to this goal.

Business Strategy

     The Company has assembled a management and technical team of persons with
specialized technical training and experience concentrated on Nevada oil
exploration.  In all, the Company's technical team has over 65 years of combined
Nevada oil exploration experience with major oil companies such as Gulf, Mobil,
and Chevron.  The Company believes that the working experience of its executives
in Nevada is a significant factor in the Company's exploration progress to date
and in its ability to act as operator under exploration arrangements with other
exploration firms such as Enserch Exploration, Inc. ("Enserch"), Berry Petroleum
Company ("Berry"), Parker and Parsley Petroleum Company (successor-in-interest
to Santa Fe Energy Resources, Inc.) ("P&P"), and Yates Petroleum Corporation
("Yates").  This team employs the following strategies in guiding the Company's
Nevada exploration:

   * Take full advantage of the most advanced generally available scientific
     exploration tools and techniques such as 3-D and reprocessed seismic data
     to generate drilling prospects and select specific drilling locations.
   * Generate promising exploration prospects in areas in which the Company
     holds or believes that it can acquire a preemptive lease position and
     upgrade lease holdings based on further prospect evaluation.
   * Seek joint exploration agreements with other exploration firms active in
     Nevada to diversify the risk and to obtain additional scientific data and
     expertise, land, and funding.
   * To increase revenues by drilling in the Eagle Springs Field to develop
     proven reserves and to test horizons productive in existing wells.
   * Continually generate prospect concepts for the long-term exploration of the
     Great Basin.

     Science

          The Company seeks to utilize the most advanced generally available
scientific tools and techniques to evaluate the risk and exploration potential
of specific prospects.  The Company's oil exploration model for the Great Basin
of Nevada was developed from a large data base collected, originally by Gulf
and, since 1985, by the Company.  As a result of the Company's own work as well
as information sharing arrangements with others, the Company now has access to
over 1,400 line miles of 2-D seismic data, much of it reprocessed with new
analytical computer programs, newly acquired high resolution 3-D seismic
surveys, and gravity data gathered by the Company as well as by Exxon, P&P,
Mobil, Chevron, Enserch, and Berry.  Data from 3-D seismic, gravity, reprocessed
seismic surveys, and previous drilling are integrated as a guide to further
exploration.  The Company believes that it benefits from the long-term
involvement of the Company's personnel in Nevada oil exploration and operations,
which enhances the Company's ability to share data and expertise with industry
participants.


     Prospect Generation and Leasing

     The Company's leasing program is coordinated with prospect generation and
exploration results.  As areas of interest are identified, the Company attempts
to acquire leases or other exploration rights on what preliminarily  appears to
be the most promising prospect areas in order to establish a preemptive lease
position prior to generating a specific drilling prospect.  As specific prospect
evaluation advances, the Company may seek leases on additional areas or
relinquish leases on areas that appear less promising, thereby reducing lease
holding costs.  As a result, the Company has substantially increased the size of
its gross acreage while, in management's opinion, improving the exploration
potential of its holdings.

     Joint Exploration

     The Company regularly seeks joint exploration arrangements with other oil
exploration firms active in Nevada to obtain access to additional scientific
data and technical expertise, particularly relatively expensive geophysical
data, including 3-D seismic.  Joint exploration arrangements are sought with
firms that have significant lease positions in the prospect area and that can
bear a portion of the costs of specified further exploration.  The Company also
utilizes joint exploration arrangements to spread the risks of specific
exploration, attempting to retain a larger interest by bearing a greater
proportion of the related costs in those prospect areas in which management
believes that the risks and reserve potential warrant such action.  In
situations in which management perceives a higher degree of risk or a smaller
potential for the prospect, it seeks to retain a smaller interest and bear a
smaller share of related costs.

     Drilling Near Existing Production

     Further exploration drilling is required to delineate the extent of
productive horizons in individual fields and complete development where
warranted.  In the Eagle Springs Field, the Company's geophysical and geological
evaluation is ongoing to locate possible additional drilling locations to
develop the undeveloped reserves and to test the horizons that are productive in
the existing wells.  The Company has surface facilities capable of handling
additional production.  The Company also intends to continue to drill
exploration wells in the area of existing production in the Tomera Ranch and
North Willow Creek Fields to further evaluate reservoir extent and
characteristics, increase production, and obtain data that might benefit the
Company's overall exploration effort.  The Company intends to pursue these
drilling objectives in Pine Valley as well as specific prospects in Railroad
Valley as involving somewhat lower risk than exploration testing in areas with
relatively less drilling history or other exploration success to date.

     Long-Term Exploration

     Management anticipates that it will take several years to explore fully the
target areas selected by the Company in the Great Basin of Nevada, as is the
case in many frontier areas of exploration, and believes that it is important to
provide for an ongoing presence for the Company in Nevada exploration.  In such
a long term exploration effort, the results of early exploration serve as a
guide for identifying new prospects so it is important, in management's view, to
identify continually new prospect concepts and areas for possible future
exploration while advancing existing prospects to the drilling stage.

     Through 1995, the Company intends to focus its activities on drilling in
the Eagle Springs Field to develop proved undeveloped reserves and to evaluate
the horizons that are productive in existing wells, to drill six additional
exploratory tests in Pine, Little Smoky, Antelope, Huntington, and Newark
Valleys of Nevada, to review the exploration potential of the P&P acreage, and
to continue its acquisition of 3-D seismic data and reanalysis of existing 2-D
seismic data. The Company will also continue its evaluation of data to identify
additional exploration targets, expand its lease holdings where warranted, and
seek additional exploration arrangements with other industry participants.




Joint Exploration Agreements

     Enserch/Berry Operating Agreement

     In June 1993 the Company entered into an operating agreement with Enserch,
Dallas, Texas, and Berry, Taft, California, independent oil exploration and
production firms active in Nevada, to undertake a three year, six  well joint
exploration program on approximately 110,000 gross leased acres in Pine,
Diamond, Little Smoky, and Antelope Valleys of northeastern Nevada.  The Company
is designated as the operator for the proposed drilling as well as other
activities under the agreement.  The Company and Enserch/Berry each contributed
approximately 50% of the gross acreage and will share, on the basis of the
Company 50% and Enserch/Berry 50%, in the costs of additional lease acquisition,
geophysical exploration and drilling, and in the net revenues from oil produced.

     The parties have identified four areas of mutual interest covering an
aggregate of 500,000 acres, in which are located the 110,000 gross leased acres
held during 1994.   Through 1994, the parties have drilled three test wells, one
each in the Pine, Little Smoky, and Antelope Valleys, all three of which were
dry holes that were plugged and abandoned.  The parties to this joint
exploration arrangement intend to drill the remaining three wells during 1995
and 1996. The first of these, the Hot Creek Wash no. 15-1, was commenced during
the first quarter in 1995 in Antelope Valley.  (See "Exploration Status.")

     In addition to the six required wells, during the term of the agreement any
party has the right to propose additional wells to explore new prospects or
develop discoveries.  The joint exploration program continues to May 1, 1996, at
which time the acreage contributed by each party to the joint arrangement is
returned to it, except for designated acreage surrounding wells that have then
been drilled under the joint arrangement.  If the results of the initial
exploration warrant and the parties agree to proceed with additional joint
exploration, the proposed exploration of the area subject to this agreement may
take several years to complete.

     Willow Springs

     In June 1994 the Company obtained from Yates the right to earn a 25%
interest in the Willow Springs prospect in Railroad Valley on an approximately
640 gross acre lease.  In order to exercise its right and earn this interest,
the Company was required to pay 25% of the costs to drill the Willow Springs no.
34-31 test well, which was plugged and abandoned in September 1994.

     Frontier Exploration Agreement

     In 1993, the Company entered into an exploration agreement with Frontier
Oil Exploration Company ("Frontier") for certain joint exploration activities in
Newark Valley and the Toano Draw area of Nevada.  Under this agreement, as
amended, the Company joined with Frontier to explore up to six prospects
involving over 55,000 gross acres in Newark Valley, Nevada, that Frontier held
through an exploration agreement with Mobil.  By participating in two earning
wells drilled in 1993 and 1994, the Company earned a 30% working interest in
approximately 28,000 gross acres.  The Company and Frontier have elected not to
drill any of the option tests and will not, therefore, earn any interest in the
remainder of the Newark Valley project under this exploration agreement.
Frontier has relinquished its right  to pursue exploration of the Toano Draw
area under the exploration agreement, so Foreland will continue under an
agreement with Mobil with the Rustler Prospect in Newark Valley and will
continue exploration of the Toano Draw area without any participation by
Frontier.

     Rustler Prospect

     On September 28, 1994, the Company entered into an agreement with Mobil
under which the Company has the right to commence one test well on or before
September 1, 1995, on the Rustler Prospect located in White Pine County, Nevada.
Upon reaching casing point on the well, the Company will earn 75% of Mobil's
interest in the prospect area comprising approximately 10,000 acres.

     P&P Marketing and Exploration

     In December 1992, the Company entered into a three year exploration
agreement with P&P's predecessor-in-interest, appointing the Company the
exclusive marketing representative for P&P's fee mineral interest in northern
Nevada.  The Company delineates exploration areas, defines prospects, and
secures drilling partners utilizing the Company's and P&P's combined geological
and geophysical data base.  The Company has generated three drillable prospects
affecting the P&P lands in the North Humboldt and Dixie Flats prospects in
Huntington Valley and the Toano Draw prospect.  If drilling is undertaken, the
Company and P&P will each retain certain rights and interest in the drilling and
development of identified prospects within the lands covered by the exploration
agreement.

     Under the terms of the exploration agreement, the Company has access to
P&P's proprietary geological and geophysical data respecting the P&P properties
and adjacent lands, with the express right to reprocess seismic data, utilizing
improved analytical techniques and control data now available.  If the Company
elects to gather or to purchase additional geological or geophysical data for a
mutually agreed exploration area, P&P is precluded from granting third parties
exploration rights to such exploration area for one year.  P&P has certain
rights of access to the data developed by the Company on the P&P property.

     On any drilling of P&P lands arranged by the Company, P&P and the Company
will share in lease bonuses, the right to acquire a working interest by paying a
portion of drilling and completion costs on any successful well, and overriding
royalties, with the option to convert the overriding royalties to working
interests in certain circumstances.  The Company and P&P have a right of first
refusal to participate in any drilling prospects generated by the other during
the term of the exploration agreement.

     The Company is required to release the remaining 434,000 acres subject to
the P&P agreement by December 1996, when the agreement expires, subject to any
specific acreage subject to leases, farmouts, to other arrangements reached
under the agreement with the Company.  The Company will review the P&P acreage
with a view towards identifying the most promising prospects and reaching
drilling arrangements by December 1996.  Originally, the agreement required the
Company to release the acreage by December 1995, but P&P and the Company agreed
to extend the expiration date to permit further evaluation of the properties by
the Company.

     Other Exploration Arrangements

     The Company is continuing to negotiate with other interested parties to
fund further drilling on defined prospects in a number of locations in the Great
Basin of Nevada.  The ultimate goal of the Company is to arrange for the
exploration and, if oil reservoirs are discovered, development of its holdings
using the Company's own limited financing, to the extent available.  In some
instances, the Company may reach an agreement with other firms in which all
participants contribute acreage and available scientific data and bear a portion
of the costs of agreed drilling or other exploration, thereby earning a shared
ownership in the contributed acreage and production, if any.  The nature and
extent of the Company's participation, share of costs, and interest retained in
various arrangements are dependent on the acreage it has under lease in the
target area, the amount of scientific information it has available as compared
to the other participants, the relative financial strength of the participants,
and the risks and rewards perceived by the various participants.  These
arrangements are very project specific and will vary from drilling prospect to
drilling prospect.

Eagle Springs

     In July 1993, the Company acquired an approximately 2,800 gross acre lease
in Railroad Valley, Nevada, with nine oil wells, then shut in, and one water
injection well.  In connection with the acquisition, the Company implemented
certain in-field environmental remediation measures and resolved issues raised
by various regulatory agencies and the claims of entities which asserted an
ownership interest or had advanced funds or services to the field.  In September
1994, the Company acquired Kanowa's interest in a 240-acre lease on the
remainder of the Eagle Springs Field with three wells with limited intermittent
production and related equipment.

     Wells drilled during the 1960s on the Eagle Springs property produced until
late 1992 from depths of from 5,900 to 7,200 feet and had total cumulative
production, as reported to the Nevada Department of Minerals, of 2,825,000
barrels of oil.  The 14 wells drilled during development of the field between
1954 and 1965 reportedly had average per well daily production of approximately
150 barrels per day for the first year and approximately 100 barrels per day for
the first three years of production.  During the last 12 months that the wells
acquired by the Company were in production, they produced an aggregate of
approximately 120 barrels of oil per day.

     In the year following acquisition of the Eagle Springs properties in July
1993, the Company completed substantial work and returned eight of the acquired
wells in the Eagle Springs Field to production and drilled a water injection
well.  Under the agreement with Plains discussed below, the Company also drilled
and placed into production three additional wells in the Eagle Springs Field.
The Company estimates that there are approximately 27 additional possible
drilling locations within the estimated perimeter of the field under 10 acre
spacing, as now approved by Nevada regulatory authorities.  A 3-D seismic survey
has been completed on the field, and the 3-D seismic information continues to be
evaluated and integrated with additional available drilling results as an
ongoing guide for drilling.  Initial evaluation of the 3-D seismic information
provided the basis of the Company's decision to purchase Kanowa's interest in
the 240-acre lease in the Eagle Springs field in September 1994.  Up to 11 more
wells are scheduled for 1995 and 1996, with up to 7 planned during 1995, to the
extent warranted by results as drilling progresses and the availability of
required funding, and subject to unexpected delays, downtime, and similar
unforeseen circumstances.

     When reworking the nine wells to return them to production, the Company
also substantially renovated and upgraded surface facilities such as tank
batteries, piping, separators, and other equipment in order to create
substantial excess capacity of field production facilities available to service
new wells and to reduce production costs.  Increased production resulting from
additional drilling would be sold under the Company's existing sales agreement
and trucking arrangement.

     The Company intends to evaluate engineering data from existing wells
together with any additional wells that may be productive to determine whether a
reduced well spacing from 20 acres to 10 acres, which is the spacing approved by
regulatory authorities, may be economically beneficial.  If the Company
concludes that reduced well spacing would increase the financial return from the
field, the total number of available well locations would be increased, which
would correspondingly extend beyond 1996, the period during which the Eagle
Springs Field could be developed.

     Further activities in the Eagle Springs Field are being conducted jointly
with Plains as discussed below.

Plains Agreement

     On August 9, 1994, the Company entered into an agreement with Plains under
which Plains agreed to spend up to $1,920,000 (80% of the first $2,400,000) for
drilling additional wells in Eagle Springs to test horizons that are productive
in existing wells to earn it a 40% interest in the Eagle Springs Field,
including existing producing wells and reserves, effective August 1, 1994.
After the initial $2,400,000 expenditure, costs are shared 60% by the Company
and 40% by Plains.  As provided in the agreement, after the third Eagle Springs
well was drilled and placed into production, Plains elected to continue to
participate in Eagle Springs drilling.  Plains shared with the Company the costs
of acquiring a 240 acre Eagle Springs lease from unaffiliated parties in
September 1994.

     Plains also has the right to earn an interest in the Company's acreage in
an area of mutual interest in the North Humboldt prospect, developed by the
Company on P&P mineral interests under the Company's agreement with P&P.  (See
"Joint Exploration Arrangements" above.)  The Company and Plains are undertaking
a joint technical evaluation of existing seismic data to determine whether
additional seismic work is warranted in this prospect area before selecting a
drill site.  Upon the completion of any geophysical studies that the parties
deem necessary and review of the data obtained, the parties will select a drill
site and proceed to drill, with Plains bearing two-thirds of the cost of the
initial well in each area to earn a one-half interest in the Company's acreage
within the prospect area.

     In January 1995, after the first three new Eagle Springs wells were placed
into production, Plains elected to continue to participate in the development
drilling at Eagle Springs.  Plains also elected to continue with the North
Humboldt prospect but declined further participation in the Dixie Flats
prospect, both in Huntington Valley.  In January 1995, Plains elected not to
participate in the Pine Valley 3-D survey, indicating that the full study was
too large for Plains' revised exploration budget.  The Company has continued
discussions with Plains regarding a smaller survey or a reduction in Plains'
participation in the larger survey area, with the possibility of adding other
industry participants to undertake a study of the scope originally envisioned.

     Activities under the joint exploration arrangement with Plains are
conducted by the Company as operator, under the overall direction of a technical
committee made up of representatives of both parties.  In addition to joint
exploration in each of the exploration areas under this agreement through 1998,
the Company has granted to Plains the right to participate in any other
exploration prospects that the Company elects to offer to third parties.

North Willow Creek and Tomera Ranch Discoveries

     North Willow Creek

     The initial discovery well in this field, the North Willow Creek SPLC no.
1-27 well, drilled in 1987, discovered an oil bearing structure at a depth of
from 5,818 to 6,358 feet.  Two additional wells, the North Willow Creek no. 6-27
and no. 5-27 have been drilled, extending the productive area of the field.  The
Company continues to experience production difficulties and management has
concluded that the wells are not producing to the potential indicated by initial
tests and engineering and geologic evaluations  In an effort to address these
production difficulties, the Company initiated additional work on the Willow
Creek no. 6-27 well during the third quarter of 1994 and is continuing to test
pump the well to analyze the treatment results.  If the initial results from
reworking the no. 6-27 well warrant, the Company also intends to rework the SPLC
no. 1-27R to increase production and to complete the North Willow Creek no. 5-27
well to attempt to place it into production.  Since it appeared that the North
Willow Creek no. 5-27 well could not be placed into production by August 1994,
capitalized costs of approximately $704,000 were charged to expense during the
quarter ended June 30, 1994.  Additionally, since no reserves were attributed to
the North Willow Creek no. 1-27 well on December 31, 1994, capitalized costs of
$564,000 were charged to expense in the fourth quarter of 1994.  The Company
continues to receive limited production from two wells in this field.

     Tomera Ranch

     In August 1987, the Tomera Ranch discovery well, the SPLC no. 1-5, drilled
by another operator under a joint exploration arrangement with the Company, was
completed for production in the Indian Wells formation at between 1,864 and
1,950 feet.  This well subsequently produced intermittently in limited amounts.
When this well was placed into production, the Company could not obtain access
to a water disposal well necessary to continue production and was forced to shut
in the well.  In 1992, the Company converted the SPLC no. 1-5 well to a water
disposal well and drilled an adjacent well, the SPLC no. 1-5R, as a replacement
production well.  In 1990, the no. 33-1 well was completed for production in the
Tomera Ranch Field, but was not placed into production until the Company
completed the water injection well at Tomera Ranch in 1992.  Since then, the
SPLC no. 1-5R and no. 33-1 Tomera Ranch wells have had limited sustained
production.  In December 1993, the Company acquired the working interest of the
previous operator in the Tomera Ranch field, and since then has continued to
evaluate the productive potential of the area.  The Company does not assign any
proved reserves in the Tomera Ranch Field,  and therefore, capitalized costs of
$114,000 were charged to expense in the fourth quarter of 1994.

     Both the North Willow Creek and Tomera Ranch wells hold acreage over
productive zones that the Company believes can be produced at higher rates with
additional evaluation and reworking, including chemical treatments, heat
treatments, hydraulic fracturing treatments, and other alternative measures.  In
July 1994, the Company initiated a hydraulic fracturing treatment of the
productive horizons in North Willow Creek well.  There can be no assurance that
such efforts will be successful or that the wells will produce in paying
quantities.  If such efforts are successful, the Company plans additional
evaluation drilling as warranted.  In late 1994 the Company hired a petroleum
engineer whose duties include evaluating the North Willow Creek Field and making
recommendations for improvement of production.

Exploration Status

     Pine Valley

     The Company has participated in two wells in the Hay Ranch area.  The
first, the West Hay Ranch no. 12-1, was drilled by another operator and was
subsequently plugged and abandoned.  In 1993, after evaluating the results of
the West Hay Ranch no. 12-1, the Company drilled the Hay Ranch no. 1-17.  Oil
shows were encountered over a 1,000 foot thick interval, and a drillstem test
was performed on one of the lower zones.  This test well has been temporarily
abandoned, and additional testing, directional drilling, and deepening
operations are all being considered for 1995.  The rock section with oil shows
in the no. 1-17 well is not present in the no. 12-1 well, indicating a
"pinchout" of those prospective horizons, a common geological phenomenon which
is often associated with oil traps.

     Three exploratory test wells in which the Company participated were drilled
in the northern part of Pine Valley within five miles of the Tomera Ranch Field.
Each had varying degrees of oil shows.  The most encouraging was the Tomera
Ranch South no. 9-1, drilled by another operator in 1993.  Promising oil shows
were encountered in this test well, but attempts to log and test this hole were
prevented by unstable hole conditions shallow in the well.

     The drilling results are being integrated with the geophysical data to
guide further testing of this prospect.  In December 1993, the Company increased
its acreage position in this area by acquiring all of the previous operator's
acreage in the Tomera Ranch area, including the previous operator's interest in
the Tomera Ranch no. 33-1 well.  The Company will now proceed with additional
seismic exploration for use in positioning potential drilling sites.

     The Company also has exploration efforts in this area with Enserch/Berry
pursuant to the operating agreement entered into by the parties.  With funding
provided jointly by the Company and Enserch/Berry, the Company acquired
additional seismic data and defined two drilling prospects to be drilled in Pine
Valley.  In December 1994, the Trout Creek No. 26-1 exploratory well, the first
well to be drilled in Pine Valley by the parties, was plugged and abandoned.

     Little Smoky and Antelope Valley

     The Company continues active exploration of these two valleys under the
agreement with Enserch/Berry.  Substantial seismic surveys were completed late
in 1993, leading to the drilling of two test wells.  Although these tests were
plugged and abandoned, these wells both added significantly to the Company's
information in these two sparsely drilled yet promising prospect valleys.  The
Company and Enserch/Berry plan to drill an additional test well in each of these
valleys during 1995.  The first of these, the Hot Creek Wash no. 15-1, was
commenced during the first quarter of 1995 in Antelope Valley.

     Newark Valley

     The Company is utilizing the extensive seismic information available to it
through its agreement with Mobil for ongoing geological evaluation of this area.
The two test wells in which the Company participated in this valley, the Buck
Station and the Indian Springs prospects, encountered encouraging oil shows
which were subsequently tested, but both tests were plugged and abandoned.  The
well information is being integrated with the seismic data to identify a
potential "up dip" location to the Buck Station test for future drilling. On
September 28, 1994, the Company entered into an agreement with Mobil under which
the Company must drill one test well on or before September 1, 1995, on the
Rustler Prospect located in White Pine County, Nevada.  Upon reaching casing
point on the well, the Company will earn 75% of Mobil's interest in the prospect
area comprising approximately 10,000 acres.

     Railroad Valley

     In September 1994, the Company drilled an exploratory well in the Willow
Springs prospect in Railroad Valley that was plugged and abandoned.  The Company
does not expect any further activities on the prospect.

     Deadman Creek

          The Company has completed lease acquisition over its Deadman Creek
prospect in the Toano Draw area of Elko County with the purchase of leases on
approximately 10,000 acres, which supplement the approximately 12,300 acres
previously acquired.  This prospect, generated by the Company over the past two
years, will be evaluated further during 1995.

Competition and Markets

     The Company competes with numerous other firms and individuals in its
activities.  The Company's competitors include major oil companies and other
independent operators, many of which have financial resources, staffs, and
facilities substantially larger than those of the Company.  Competition in the
oil and gas industry is intense.

     The Company faces intense competition in obtaining risk capital for test
drilling within the Great Basin province.  Management believes that competition
for drilling funds from such sources is principally dependent on an analysis by
the potential industry participant of the costs of drilling and related
activities, the likelihood of discovering oil or other hydrocarbons in
commercial quantities, and the potential size of oil reserves which geologic and
engineering analyses indicate may eventually be established.

     The Company believes that an important consideration in obtaining risk
capital for drilling, new exploration rights, and joint exploration and
development arrangements with other industry participants is the amount and
quality of the Company's scientific data and exploration experience in Nevada.
The Company also believes that it benefits from its use of reprocessed 2-D
seismic and 3-D seismic data and its experience in correlating that data with
the results of actual drilling.

     In its efforts to obtain oil leases within the Great Basin, the Company
encounters competition from lease speculators, independent oil firms, and major
oil companies.  The ability to acquire leases is generally determined by the
amount of cash paid to acquire the lease, the royalty or other interest retained
by the transferor, and the nature of any commitment to drill on the lease
acreage.  The Company seeks to acquire leases in those areas that have been
identified through geological and geophysical data as having potential to
produce oil in sufficient quantities to be economic.

     The availability of a ready market for production and the prices obtained
for production of oil depend on a number of factors beyond the Company's
control, the effects of which cannot be predicted accurately.  Such factors
include the extent of domestic production and imports of oil; the competitive
position of oil as a source of energy as compared to gas, coal, nuclear energy,
hydroelectric power, and other energy forms; the refining capacity of
prospective purchasers; transportation costs; the availability and capacity of
pipelines and other means of transportation; and the effect of federal and state
regulation on production, transportation, and sale of oil.

Government Regulation

     The exploration for and production of oil in the United States are subject
to extensive regulation by both federal and state authorities.  The following
discussion concerning 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, and governmental orders to which operations of the
Company may be subject.

     Environmental Regulations

     Operations of the Company are subject to numerous laws and regulations
governing the discharge of materials into the environment, the remediation of
environmental impacts, and other matters relating to environmental protection,
which affect the Company's operations and costs.  It is probable that state and
federal environmental laws and regulations will become more stringent in the
future.  Proposed legislation to reauthorize the Federal Resource Conservation
and Recovery Act would have reclassified a significantly greater portion of oil
and gas production waste as "hazardous waste."  If this proposed legislation had
been enacted, the stricter disposal requirements for hazardous wastes would have
had a significant impact on the operating costs of the Company and the oil and
gas industry in general, resulting in a significant number of wells becoming
uneconomic.  There can be no assurance that measures to further regulate the
disposal of oil waste may not be adopted.  Environmental laws and regulations
are frequently changed so the Company is unable to predict the ultimate cost of
compliance.
   
     In connection with the acquisition of the Eagle Springs property, the
Company performed limited environmental inquiries and agreed to undertake
certain work to remediate a contaminated drilling pit at a former water
injection well site.  That work was completed in coordination with federal and
state supervising agencies in early 1994 at a cost of $110,604.  As a negotiated
term of the acquisition of the Eagle Springs lease, the Company agreed to
indemnify the secured creditor from which the Company acquired a portion of its
property interests against claims for environmental liability.  The Company does
not believe that it has any material continuing financial obligation respecting
remediation of environmental matters involving the Eagle Springs property.
However, there can be no assurance that new remediation issues will not arise in
the future.
    

     State and Local Regulation of Drilling and Production

     State regulatory authorities have established rules and regulations
requiring permits for drilling, drilling bonds, and reports concerning
operations.  Such regulations also cover the location of wells, the method of
drilling and casing wells, the surface use and restoration of well locations,
and the plugging and abandoning of wells.  Nevada also has statutes and
regulations governing a number of environmental and conservation matters,
including the unitization and pooling of oil properties and establishment of
maximum rates of production from oil wells.

     Federal Leases

     The Company conducts significant portions of its activities under federal
oil and gas leases.  These operations must be conducted in accordance with
detailed federal regulations and orders which regulate, among other matters,
drilling and operations on these leases and calculation and disbursement of
royalty payments to the federal government.

Title to Properties

     Substantially all of the Company's working interests are held pursuant to
leases from third parties.  The Company performs only a minimal title
investigation before acquiring undeveloped properties, and a title opinion is
typically obtained only prior to the commencement of drilling operations.  The
Company has obtained other documentary confirmation of title on its principal
producing properties and believes that it has satisfactory title to such
properties.  The Company's properties are subject to customary royalty
interests, liens for current taxes, and other common burdens which the Company
believes do not materially interfere with the use of such properties and whose
economic effect has been appropriately reflected in the Company's acquisition
costs of such properties.

Operational Hazards and Insurance

     The Company's operations are subject to the usual hazards incident to the
drilling for and the production of oil, such as blowouts, cratering, explosions,
uncontrollable flows of oil or well fluids, fires, pollution, releases of toxic
gas, and other environmental hazards and risks.  These hazards can cause
personal injury and loss of life, severe damage to and destruction of property
and equipment, pollution or environmental damage, and suspension of operations.

   
     The Company maintains insurance of various types to cover its operations.
The Company has general liability insurance of $1 million per occurrence, with a
$2 million aggregate limitation, including coverage for certain oil industry
activities.  Management believes that the Company's current insurance coverage
is adequate;  however, the Company's insurance does not cover every potential
risk associated with the drilling and production of oil.  In particular,
coverage is not available for certain types of environmental hazards.  The
occurrence of a significant adverse event, the risks of which are not fully
covered by insurance, could have a materially adverse effect on the Company.
Moreover, no assurance can be given that adequate insurance will be available at
reasonable rates or that the Company or the operators of wells in which the
Company owns an interest will elect to maintain certain types or amounts of
insurance.
    

Employees


     The Company has 14 employees, including five executive officers (all of
whom are also directors), four technical employees in addition to the executive
officers, two field operations employees, and three administrative employees.
(See "ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.")

                              ITEM 2.  PROPERTIES
     The Company's principal oil and gas properties are located in Nevada.

     In the oil and gas industry and as used herein, the word "gross" well or
acre is a well or acre in which a working interest is owned; the number of gross
wells is the total number of wells in which a working interest is owned.  A
"net" well or acre is deemed to exist when the sum of fractional ownership
working interests in gross wells or acres equals one.  The number of net wells
or acres is the sum of the fractional working interests owned in gross wells or
acres.

     Proved Reserves

     The following table sets forth the Company's estimate of oil reserves, net
to the Company's interest, of oil and gas properties as of December 31, 1994,
giving effect to Plains' election on January 25, 1995, to continue to
participate in the Eagle Springs Field and to receive a 40% working interest in
the field effective August 1, 1994, calculated in accordance with the rules and
regulations of the Securities and Exchange Commission. (See "ITEM 1. BUSINESS.")
   


                                                      Estimated
                               Estimated             Future Net
  Reserve Category             Oil (bbls)             Revenues
                                                     Discounted
                                                     at 10% (1)

                                            
Proved Developed
Producing
  Eagle Springs                965,000            $3,448,000
  North Willow Creek            20,000               $54,000

Proved Undeveloped
  Eagle Springs                863,000            $1,609,000


        Total Proved         1,848,000            $5,111,000

- --------

    
====
(1)Neither prices nor costs have been escalated.  (See "ITEM 8. FINANCIAL
   STATEMENTS AND SUPPLEMENTARY DATA.")  The discounted figures have been
   reduced by the Company's share of estimated development costs in the amount
   of $2,352,000.

     Wells and Acreage

     Shown below is a tabulation of the productive wells owned by the Company in
Nevada as of December 31, 1994, which gives effect to the completion of the
third Eagle Springs well drilled with Plains and its 40% working interest in
that field.

  Productive Oil
      Wells*

 Gross      Net

   18        12
  *       Includes one well in the Tomera Ranch field without material reserves.

     Set forth below is information respecting the developed and undeveloped
acreage owned by the Company in Nevada as of January 25, 1995, which gives
effect to the completion of the third Eagle Springs well drilled with Plains and
its 40% working interest in that field.

Developed Acreage      Undeveloped
                         Acreage

 Gross      Net      Gross      Net

 4,120     2,728    215,053   153,012

     The Company's leases in Eagle Springs (3,040 gross and 1,648 net acres),
Tomera Ranch (680 gross and 680 net acres), and North Willow Creek (400 gross
and 400 net acres) are held by production.  The Company's undeveloped leases
have various primary terms ranging from one to ten years.  Management believes
that the expiration of any individual or group of related undeveloped leasehold
interests would not have a material adverse effect on the Company.  Annual
rentals on all undeveloped leases aggregate approximately $160,000.  In addition
to the above acreage, the Company has certain marketing and exploration rights
to approximately 434,000 gross acres of P&P mineral interest in northern Nevada
until December 1995.

     Drilling Activities

     Set forth below is a tabulation of wells completed in the period indicated
in which the Company has participated and the results thereof for each of the
periods indicated.





                                            Year Ended December 31,

                                    1992             1993            1994

                                Gross    Net    Gross    Net    Gross     Net

                                                      
Exploratory:
 Dry................              1       1       6      3.5      3      1.05
 Oil................              1       1      --      --       --      --
 Gas................             --      --      --      --       --      --

     Totals.........              2       2       6      3.5      3      1.05

Development:
 Dry................             --      --      --      --       --      --
 Oil................             --      --       1       1       3       1.8
 Gas................             --      --      --      --       --      --

     Totals.........             --      --       1       1       3       1.8


     Production and Sale of Oil

     The following table summarizes certain information relating to the
Company's net oil produced and sold from the Company's Nevada properties, after
royalties, during the periods indicated.
                                              Year Ended December 31,


                                          1992(1)     1993(1)     1994(2)

Average net daily production of oil             13          16         121
(Bbls)

Average sales price of oil ($ per           $11.82      $11.45      $10.80
Bbl)(3)

Average production cost ($ per Bbl)(3)     $  5.56     $  7.95      $ 8.09

(1)Represents production from the Company's North Willow Creek and Tomera
   Ranch properties only.
(2)Represents production from North Willow Creek, Tomera Ranch and Eagle
   Springs.
(3)Includes lifting costs (electricity, fuel, water, disposal, repairs,
   maintenance, pumper, and similar items), and production taxes.  The amount
   excludes costs related to completion of remediation of a contaminated
   drilling pit at a former water injection drillsite..

     Production from Eagle Springs started in January 1994, and currently
accounts for about 90% of the Company's oil production.  This consists of oil
produced and sold net to the Company's interest from the nine wells the Company
acquired, reworked, and returned to production commencing in early January 1994
plus the three new wells subsequently drilled and placed into production, net of
production royalties.  However, certain of the wells have been shut-in from time
to time, sometimes for several months.  Other wells have been shut-in for
shorter periods during particular months because of mechanical problems. Three
wells, which are not currently producing, need certain remedial work, the cost
of which is estimated at $100,000.  The Company intends to undertake such work
when its schedule permits, when appropriate rig and equipment are available in
the area, and when funds are available.

     The oil from the Eagle Springs and Pine Valley, Nevada, wells is sold to
Crysen Refining, Inc., Salt Lake City, Utah, an unrelated purchaser, under
agreements continuing through August 1996, and from month-to-month thereafter,
unless terminated by either party, at a price equal to Amoco Oil Company's
Wyoming per barrel sour crude oil posted price, adjusted for gravity and oil
quality, less transportation of $3.05 or $2.90 per barrel, depending on the
producing field, but in no case less than $9.50 per barrel after deduction of
all charges.  For example, during the month of January 1995, the Company
received a net price of $11.54 per barrel, after deducting transportation
charges.  The sale of oil is subject to price adjustments, production
curtailments, and similar provisions common in oil purchase contracts.

     Production costs relating to Nevada production for 1992 and 1993 include
costs associated with various production testing measures on the Tomera Ranch
and North Willow Creek wells and fixed costs allocable to a limited number of
wells.  The substantial increase in average daily production in 1994 is
attributable to returning the Eagle Springs wells to production during that
period.  Production costs in 1994 were inordinately high per barrel of oil being
produced due to start up costs associated with the revamped production facility
and repairs to equipment that had been shut down without maintenance for over a
year.  In early 1994, the Company incurred additional costs of operating in
winter due to energy costs for heating the oil and operating the wells using
propane as its main fuel to generate power for the pumping units.  Overall
operating costs are a combination of costs associated with each well and costs
associated with operation of the entire field.  As additional wells are added to
the production system, the field operating costs will be spread among additional
wells, lowering the impact of such costs on each well and per barrel produced.
In addition, the Company has been changing to more cost effective energy sources
for continuing production in a further effort to control costs.  This consists
principally of a large capacity boiler fueled by natural gas from the wells,
which requires no propane fuel and, because its large capacity heats the oil to
higher temperatures, reduces costs for well treatment chemicals and increases
production efficiencies. Because of the

foregoing, the Company expects that production costs per barrel will continue to
decrease as production increases sufficiently to obtain economics of scale and
dilute the impact of high fixed operating costs.  In addition, operating costs
may continue to vary materially due to the costs of ongoing treatment or
reworking of existing wells and the impact of the other factors discussed above.

    The Company has only minor gas production which is used in operations to
reduce energy costs.

     Texas Interests

     The Company's wholly owned subsidiary, Krutex Energy Corporation
("Krutex"), previously held an interest in approximately 125 producing shallow
oil and gas wells in the West Salt Flat Field encompassing approximately 495
gross acres in Caldwell County, Texas.  Pursuant to an April 1993 agreement with
an unrelated third party operator (the "Operator"), the Operator received all
revenues from production from the properties and bore all operating expenses
through November 1, 1994.  Prior to that date, the Operator had the right to
earn 75% of Krutex's interest in the properties upon completing specified
reworking of 16 wells located in the field.  If the Operator timely completed
the well reworking or established continuous production at a rate of at least
300 barrels per day by November 1, 1994, the Operator had the right to purchase
Krutex's remaining interest at a price equivalent to Krutex's share of the
proved developed oil and gas reserves estimated to be recoverable in 10 years,
multiplied by 10 % of the price for west Texas crude oil for November 1994.  On
signing the agreement, the Operator agreed to pay Krutex $150,000 in monthly
installments of $5,555. In October 1994, Krutex entered into a new agreement
with the Operator under which it agreed to a cash payment of $50,000 to Krutex
in lieu of the well reworking obligation referred to above to earn 75% of
Krutex's working interest in the field. In addition, the Operator waived a
payment of $12,500 by Krutex respecting the previous acquisition of certain
third-party interests affecting the leases, and the Company waived the last two
payments on the $150,000 note.  Pursuant to the agreement, the Operator
purchased Krutex's remaining 25% working interest for $25,000 in January 1995,
so Krutex no longer has any interest in such Texas properties.  The foregoing
Texas properties are not included in the Company's principal oil and gas
properties described in the tables above.

Offices

     The Company's principal executive offices located at 12596 West Bayaud,
Suite 300, Lakewood, Colorado 80228-2019, are rented from an unrelated party
under a lease expiring September 1, 1998, and requiring monthly payments of
$3,553 plus certain common area charges.  The Company also maintains a field
operations office at 2561 South 560 West, Suite 200, Woods Cross, Utah 84087.


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

     Since its organization in June 1985, the Company has been engaged
principally in oil exploration in the Great Basin of Nevada, leading to the
selection of drilling targets and the drilling of initial test wells on several
prospects.  Until 1994, the Company had only limited revenue, consisting of
modest amounts of interest income earned on net proceeds from the sale of
securities and revenue from producing properties, including properties held in
Texas, from which the Company received no material operating income after April
1993.  In 1993 and 1994, the Company acquired and has since returned to
production nine wells and drilled a new water injection well in the Eagle
Springs Field, supplementing the Company's other limited production from its
Tomera Ranch and North Willow Creek oil discoveries.  In August 1994, the
Company entered into an agreement with Plains to fund further activities in the
Eagle Springs Field and, pursuant to such agreement, has drilled and placed into
production three new wells, with plans to continue additional drilling in this
field to place into production undeveloped reserves and to drill in additional
locations to test horizons that are productive in existing wells.

     To date, the Company has funded its exploration program principally from
the sale of its equity securities.  The Company also benefits from capital
provided by oil industry participants for drilling and other exploration of
certain oil prospects through joint arrangements typical in the oil industry.

Plan of Operation

     Eagle Springs Drilling

     The Company's strategy in acquiring the Eagle Springs property was to
increase revenue by returning existing wells to production and to identify
additional drilling locations to evaluate the horizons that are productive in
existing wells.  Management believes that drilling in the Eagle Springs Field
involves substantially lower risk as compared to the Company's exploration
drilling in prospect areas with less drilling history and less available
exploration data.  Management anticipates that if the planned Eagle Springs
drilling program is successful in additional wells, the increased revenue will
be sufficient to meet ongoing cash requirements for general, administrative, and
property maintenance costs and, in the long term, may contribute funds to
exploration.

     The Company completed substantial work at Eagle Springs since its
acquisition in July 1993, reworking nine wells to return them to production,
subject to production interruptions from time to time until further well
treatment can be completed, and drilling a water injection well.  Such work
included substantially renovating and upgrading surface facilities such as tank
batteries, piping, separators, and other equipment so that field production
facilities currently have substantial excess capacity available to service new
wells.  Under the agreement with Plains,  the Company has subsequently drilled
and placed into production three additional wells.   Production from the Eagle
Springs Field is sold under the Company's existing sales agreement and trucking
arrangement to a refinery in Salt Lake City, Utah.  (See "ITEM 2. PROPERTIES:
Production and Sale of Oil.")

     The Company estimates that there are about 27 additional possible drilling
locations within the estimated perimeter of the field under 10 acre well
spacing.  The Company plans up to 11 additional wells during 1995 and 1996 to
place undeveloped reserves into production and to evaluate horizons productive
in existing wells in the Eagle Springs Field.  Data from a 3-D seismic survey of
the field has been used in selecting the locations for drilling the first three
wells, which began in the third quarter of 1994, and will be integrated with
additional available drilling results and further evaluated as an ongoing guide
to drilling.  The Company estimates that the Eagle Springs drilling will cost
approximately $325,000 gross per well for a dry hole or $560,000 for a completed
gross well, including related geophysical and geological evaluation, for a total
of up to $6,160,000 for the 11 wells planned for 1995 and 1996.  The Company
will schedule the remainder of the 11 wells to be drilled as funds are
available.

     Under the Company's agreement with Plains, it provided approximately
$1,497,000 for drilling the three new wells in the Eagle Springs Field and is
required to provide 80% of the next $528,750 required for additional wells.
Therefore, the Company estimates that it will require approximately $130,000 in
additional funds for the planned fourth Eagle Springs well. The remaining 10
wells are planned for 1995 and 1996 at an estimated additional cost of
approximately $3,250,000 to $5,600,000, to be shared 60% ($1,950,000 to
$3,360,000) by the Company and 40% ($1,300,000 to $2,240,000) by Plains.
Proceeds from the sale of securities in early 1995 have been allocated to
initiate this 1995 drilling phase.   Under the Plains Agreement, if either party
proposes a well and the other party non-consents, the proposing party may
provide all funding to complete the well and, if production results, the non-
consenting party will relinquish its working interest in the 10-acre drillsite
spacing unit.  If Plains elects to proceed with a specific drilling at a
location on which the Company does not desire to drill or at a time when the
Company is unable to provide its share of related costs, the Company's share of
resulting production revenue, if any, from such well would be eliminated.  (See
"ITEM 1. BUSINESS:  Plains Agreement.")

     The Company is also investigating a possible loan, secured by a lien on the
Company's interest in the Eagle Springs Field, to fund the initial requirements
of the Company's share of development drilling on the Eagle Springs Field.  Such
loan, if completed, would enable the Company to reallocate funds now intended
for Eagle Springs drilling to other exploration.  (See below.)

     The initial 14 well phase of the drilling program is being undertaken on 20
acre spacing.  The Company intends to evaluate engineering data from existing
wells and any additional wells that may be productive to determine whether a
reduced well spacing from 20 to 10 acres, as previously approved by Nevada
regulatory authorities, may be warranted.  If the Company concludes that reduced
well spacing would increase the financial return from the field, the total
number of available well locations would increase to approximately 30, which
would extend the period during which the Eagle Springs Field could be developed
beyond 1996.

     General, Administrative, and Property Maintenance

     The Company requires cash for general and administrative expenses, for
maintaining its properties, and for other items that are required in order for
the Company to continue, as distinguished from costs to advance its ongoing
exploration program in Nevada.  Under current production rates and operating
conditions, management estimates that quarterly the Company requires cash from
external sources of approximately $80,000 to $100,000 for ongoing general and
administrative expenses and approximately $40,000 to meet annual lease rental
and other costs on its properties, which exceed the Company's current net
revenue from oil production.  Based on current production, after giving effect
to the third new Eagle Springs well placed into production in January 1995, the
Company estimates its current quarterly oil revenue to be approximately
$300,000, with average daily production net to the Company's interest of
approximately 275 barrels of oil, giving effect to the fact that at any time
some wells may not be in production.  Related production costs are estimated at
approximately $75,000, yielding net production revenue of approximately $225,000
per quarter.  (See "ITEM 2. PROPERTIES:  Production and Sale of Oil.")
Therefore, the Company estimates that it will need to increase average daily
production to approximately 400 net barrels of oil in order to be able to meet
ongoing general and administrative expenses and property maintenance costs,
based on current production rates and operating conditions.  The Company is
dependent on the sale of substantially all of the $1,500,000 in equity
securities offered commencing in March 1995 to meet anticipated general and
administrative and property maintenance costs and to provide limited funds for
exploration and development through approximately the third quarter of 1995
without any increase in net production revenues.  To the extent that less than
all offered securities are sold, the Company will need to obtain alternative
funding immediately.  Management estimates that if initial development drilling
in the Eagle Springs Field is successful, the Company will have sufficient
increased revenue from Eagle Springs development drilling for general and
administrative expenses and property maintenance costs thereafter.  Any improved
operating margins resulting from increased production and reduced operating
expenses as weather improves or price increases would benefit the Company.
There can be no assurance that Eagle Springs development will result in material
additional production or that the Company will be able to obtain funds from
other sources, in which case the Company would be required to implement cost-
cutting measures and curtail drilling and most other exploration activity in
order to continue.

     Exploration Program

     The Company requires substantial amounts of capital to advance its oil
exploration program, relying on funding provided through joint exploration
arrangements with other firms and utilizing its own capital provided principally
through the sale of securities and existing and anticipated revenues from the
development of Eagle Springs. The Company anticipates that it will continue its
exploration program with six exploration tests in 1995, depending on the
availability of required funds.  The Company plans three additional tests under
the Enserch/Berry Agreement, one each in Little Smoky Valley, Antelope Valley,
and Pine Valley. The Company's working interest share of dry hole costs for this
drilling program is estimated at $600,000.  In addition, in conjunction with
Plains, the Company will undertake an evaluation of scientific data and possible
additional data gathering over the North Humboldt prospect in Huntington Valley,
which would require Company expenditures of from $10,000 to $40,000 by December
1995.  The Company and Plains may also drill one exploration test at North
Humboldt at an estimated dry hole cost of approximately $400,000 for a net cost
to the Company of $133,000 under their joint exploration agreement.  If joint
exploration arrangements can be reached with other industry participants and the
Company's share of required funds are available, during 1995 it will also
attempt to drill a Dixie Flats test in Huntington Valley at an estimated cost of
$400,000 and an additional test in Newark Valley on Mobil acreage at an
estimated dry hole cost of $350,000. (See "ITEM 1. BUSINESS.")

     The Company also plans to continue its geophysical and geological data
gathering and evaluation, property acquisition, and prospect evaluation,
depending on the availability of funds.  This includes continuing to reprocess
seismic data available to the Company, completing 3-D seismic studies of
specific drilling prospects, and integrating of seismic, gravity, and drilling
data.  In addition, the Company may undertake joint geophysical data acquisition
with others in which each participant bears a share of the costs for specific
surveys.  The Company will continue its lease acquisition efforts in specific
prospect areas and, as it generates drilling proposals, seek funding for
drilling.  Typically, new prospects that are generated are not drilled for
several months or until the next drilling season or later.  (See "ITEM 1.
BUSINESS.")

     The Company is initiating the foregoing 1995 exploration program with the
initial net proceeds received from the $1,500,000 securities offering undertaken
in early 1995.  If the Company is successful in borrowing funds for a portion of
its 1995 Eagle Springs development drilling program, a limited amount of funds
now intended for Eagle Springs drilling would be allocated toward exploration.


     In seeking financing for proposed data gathering, land acquisition, or
drilling or other exploration of specific prospect areas, the Company typically
investigates both oil industry funding sources and the availability of capital
through the sale of securities.  In considering participation from industry
sources, the Company assesses whether the potential industry participant can
provide scientific data and lease or other exploration rights in the prospect
area as well as required funding as compared to the dilution that may result to
the Company by sharing in any reserves that may be discovered.  In analyzing the
availability of capital from the sale of securities, the Company considers
conditions in the capital markets generally, the anticipated marketability of
Company securities, and the dilution that may result to existing shareholders.
In selecting between available financing alternatives, management seeks the
source that management believes will result in lesser dilution in economic
return to its current shareholders.

Liquidity and Capital Resources

     Previous Periods

   
     Historically the Company has obtained cash required for its other
requirements from the sale of its equity securities. The Company's operations
used cash of $2,501,600 in 1994 when the Company reported a net loss of
$4,453,700, which included $1,847,200 in expenses due to abandonments and
impairments, $434,500 for the loss on the sale of its Texas oil and gas
properties, and $329,500 for depreciation, depletion, and amortization.  As of
December 31, 1994, the Company's accumulated deficit was $16,936,777.
Operations used a similar amount of cash in 1993, although the net loss was
$875,500 less in 1993 when the Company did not incur large expenses related to
abandonments and impairments and loss on the sale of properties, although it did
have a non-cash expense of $320,000 related to the issuance of below market
options.
    

     During 1994 investing activities used net cash of $1,182,500, principally
due to additions to oil and gas properties resulting from the acquisition of
additional lease rights from Kanowa in the Eagle Springs Field and additional
Eagle Springs drilling, including the completion of a water injection well.  The
substantially larger, $3,019,700 requirement for cash for investing activities
in 1993 was attributable to the acquisition of the Eagle Springs Field, two
water disposal wells, the North Willow Creek no. 6-27 well, and lease
acquisition costs.

     As noted above, cash required for both operating and investing activities
was provided from financing activities during each of the past two fiscal years.
In 1994, financing activities provided $2,819,400, consisting primarily of a net
of $2,537,600 from the issuance of equity securities and $400,000 in proceeds
from new borrowing.  The $6,285,900 received from financing activities in 1993
resulted almost entirely from the issuance of equity securities.

     In addition to the above, the Company's oil and gas exploration activities
were also advanced by approximately $1,000,000 and $2,233,000 provided during
1993 and 1994, respectively, by others under industry sharing arrangements
related to specific drilling or other exploration.

     1995 Requirements

     Management believes that it has sufficient working capital to meet current
general and administrative expenses and property maintenance costs and to
initiate 1995 planned Eagle Springs development drilling and exploration in
other areas in Nevada.  However, the Company is dependent on the sale of the
balance of its current $1,500,000 equity securities offering its meet is
requirements for such items through approximately the third quarter of 1995.  To
the extent that less than all offered equity securities are sold, the Company
would be required to seek additional funding from alternative sources.

     On April 30, 1994, the Company borrowed $400,000 from an unrelated third
party, secured by the Company's personal property, equipment, and production, to
provide interim financing to advance the Company's Eagle Springs drilling
program and to pay ongoing general and administrative expenses.  The loan bears
interest at 8.4% per annum, payable quarterly, and is due on April 30, 1995,
unless extended for up to one year at the election of the Company.  In
connection with the loan, the Company granted the lender options to purchase
200,000 shares of Common Stock at $2.00 per share at any time prior to the
earlier of April 30, 1996, or 60 days subsequent to the repayment of the loan.
The Company intends to extend this note for payment in 1996, unless earlier
canceled in consideration of the exercise of the related options.  The
completion of a secured loan to fund a portion of the Company's 1995 planned
drilling in Eagle Springs would likely require the waiver or modification of
certain provisions of the $400,000 loan or, in the absence of such waiver or
consent, repayment of all or a portion of the loan.

     During the third quarter of 1994, the Company received net proceeds of
approximately $2,537,600 from the sale of 1,316,210 shares of Preferred Stock
and 658,105 C Warrants to purchase one share of Common Stock at $3.00 per share
between October 1, 1994, and July 1, 1995.

     The Company will continue to seek cash proceeds from the exercise of
outstanding Options and Warrants and from the sale of additional Common Stock,
Preferred Stock, Warrants, or other securities.

     The auditor's report on the financial statements of the Company as of
December 31, 1994, contains an explanatory paragraph about the ability of the
Company to continue as a going concern because of its limited working capital
and revenue and continuing losses from operations.  As of December 31, 1994, the
Company had working capital of approximately $47,600 and had ongoing cash
requirements for general, administrative, and property maintenance expenditures
of from approximately $120,000 to $140,000 per quarter.  The Company initiated a
$1,500,000 equity securities offering in March 1995 that to date has provided
funds to initiate the fourth Eagle Springs well with Plains, to apply toward
general and administrative expenses and property maintenance costs, and to begin
other exploration.  In addition, the Company is exploring other sources of
financing for ongoing costs as well as expanded activities and the possible
purchase of additional production to increase the Company's financial security
and stability as it continues its exploration.  The purchase of producing
properties would require substantial amounts of additional debt and equity
financing.  There can be no assurance that the Company can negotiate the
acquisition of any properties or obtain any financing that may be required for
such purchase.  As in the past, the Company will rely largely on the sale of
additional securities to meet its capital requirements.

Results of Operations

     1993 and 1994

     For the year ended December 31, 1994, oil sales increased $401,200 to
$477,000 as compared to 1993, with the Eagle Springs Field contributing
approximately $418,200 of 1994 revenues as production from the Company's other
fields declined.  Well service revenue decreased $4,000 due primarily to reduced
water disposal fees.  Other income was approximately $35,600 higher in 1994 as
compared to 1993 as a result of increased drilling and lease overhead fees
charged to participants in Company drilling programs and lease operations.

     The Company's oil and gas production expenses for 1994 increased $387,800
to $457,800 when compared to 1993, attributable principally to $346,500 in
operating costs at Eagle Springs, which was placed into production in early 1994
and included one-time repair, maintenance and clean-up costs of $110,600.
During 1994, oil and gas exploration costs increased $46,200, reflecting the
Company's continuing active exploration program.  Major components of 1994
exploration costs were an Eagle Spring 3-D seismic program expense of $207,500
and gravity and other seismic surveys of $16,000 for Dixie Flats, $16,300 for
North Humboldt, and $57,600 for Toano Draw areas in Nevada contributed to the
increase in exploration costs for 1994.  Dry hole and abandonment cost increased
by $468,200 due to the Company's exploration activities as well as specific
abandonment expenses relating to wells initially drilled in previous years.  Dry
hole, abandonment, and impairment costs included charges to expense of $75,600
for the Indian Springs no, 22-A test that was plugged and abandoned, $31,800 for
the Cedar Creek no. 2-1 dry hole, $87,900 for the Willow Springs no. 34-31 dry
hole, and $268,800 for the Trout Creek no. 26-1 dry hole.  Impairment expense
increased due to the charge to expense of $703,900 for the North Willow Creek
no. 1-27 test drilled in August 1993 that management concluded could not be
placed into production.  Additionally, during the fourth quarter of 1994 when it
was determined that no reserves could be attributed to the North Willow Creek
no. 1-27 or the Tomera Ranch wells, their undepleted capitalized costs of
$564,400 and $103,900, respectively, were charged to impairment expense. General
and administrative expenses for 1994 increased approximately $337,900 as
compared to 1993.  The major contributors to this increase were $222,600
associated with expenses written off for a canceled securities offering and the
$84,200 cost on the guarantee of the selling price of N. Thomas Steele's
residence.  The Company recognized a $434,500 loss during 1994 related to the
disposal of its remaining interest in certain Texas producing properties.  In
1993, the Company reported a noncash compensation expense of $320,000

related to the grant of below market options.  The Eagle Springs Field added
approximately $154,000 of depletion expense in 1994, while depletion
attributable to the North Willow Creek and the Tomera Ranch wells decreased
$41,500 and $188,600, respectively, as compared to 1993.  Interest expense
declined $27,900, primarily due to the conversion of promissory notes to stock
in September 1993 as compared to interest expense on the long term debt incurred
in 1994.

     1992 and 1993

     For the year ended December 31, 1993, total revenues increased $13,200 to
$187,900.  The increase was due to increased oil sales resulting from the North
Willow Creek no. 6-27 well being placed into production during the last quarter
of 1993.  Also contributing to increased oil revenue were sales during the
fourth quarter of 1993 from wells returned to production in Eagle Springs.

     The Company's operating expenses increased $1,915,400, or 103%, for the
year ended December 31, 1993, when compared to the year ended December 31, 1992,
due to increases in drilling activities that resulted in dry hole and
abandonment costs of $1,389,700.  As a result of significant increases in
seismic activity and prospect development costs in 1993, oil and gas exploration
expenses increased from $416,300 to $860,200.  A reduction in the estimated
recoverable quantities of oil from the Company's producing fields increased
depreciation and depletion costs from $60,200 to $356,700.  During 1993 the
Company reported a non-cash compensation expense of $320,000 related to the
grant of below market options.

     The Company's interest expense for the year ended December 31, 1993, was
$113,600 compared to $54,800 for the year ended December 31, 1992.  This $58,800
increase resulted primarily from interest accruing on the convertible promissory
notes, the maturity date of which was extended to September 30,1993.

     Accounting Treatment of Certain Capitalized Costs

     Included in oil and gas properties on the Company's balance sheets are
costs of wells in progress.  Such costs are capitalized until a decision is made
to plug and abandon or, if the well is still being evaluated, until one year
after reaching total depth, at which time such costs are charged to expense,
even though the well may subsequently be placed into production.  The Company
also charges to expense the amount by which the total capitalized cost of proved
oil and gas properties exceeds the total undiscounted net present value of
related reserves.  As a result of the foregoing policies, the Company expects
that from time to time capitalized costs will be charged to expense based on
management's evaluation of specific wells or properties or the disposition,
through sales or conveyances of fractional interests in connection with industry
sharing arrangements, of property interests for consideration in amounts that
have the effect of reducing the Company's total undiscounted net present value
of oil and gas reserves below the total capitalized cost of proved oil and gas
properties. As part of the Company's evaluation of its oil and gas reserves in
connection with the preparation of the Company's annual financial statements,
the Company completes an engineering evaluation of its properties based on
current engineering information, oil and gas prices, and production costs, which
may result in material changes in the total undiscounted net present value of
the Company's oil and gas reserves.  The Company would be required to charge to
expense the amount by which the total capitalized cost of proved oil and gas
properties exceeds the amount of such undiscounted net present value of the
Company's oil and gas reserves.  (See "ITEM 1. BUSINESS:  Oil Properties.")

Inflation

     The Company's activities have not been, and in the near-term are not
expected to be, materially affected by inflation or changing prices in general.
The Company's oil exploration and production activities are generally affected
by prevailing sales prices for oil, however, and material price declines may
make wells with low rates of production uneconomical to operate.  Because of the
size of potential discoveries in Nevada, the Company does not expect that short
term declines in oil prices would materially affect its exploration activities.

Accounting Policy Changes

     The Company's accounting policy is to compute depreciation and depletion
expense for its proved oil and gas properties on a well-by-well basis, and to
assess impairment on a Company-wide basis by comparing aggregate net capitalized
costs related to proved properties to the aggregate undiscounted future cash
flows related to such properties.  At December 31, 1994, no impairment was
recorded since the aggregate net capitalized costs of proved properties amounted
to $2,900,000 and the related undiscounted future cash flows amounted to
approximately $11,400,000.

     In March 1995, the Financial Accounting Standards Board issued a new
Statement titled "Accounting for Impairment of Long-Lived Assets."  This new
standard is effective for years beginning after December 15, 1995, and would
change the Company's method of determining impairment of proved oil and gas
properties by requiring that the impairment evaluation be made on an individual
well basis as opposed to on a Company-wide basis.  Although the Company has not
performed a detailed analysis of the impact of the new standard on the Company's
financial statements, management estimates the application of the new standard
would have increased the provision for impairment of oil and gas properties by
approximately $700,000, as of December 31, 1994.  The Company has not yet
determined when it will adopt the new standard.

     The Company does not anticipate that any other currently adopted changes in
accounting policies will have a material positive or negative effect on the
Company.



                                    PART III

                        ITEM 11.  EXECUTIVE COMPENSATION
     Summary Compensation

     The following table sets forth the annual and long term compensation earned
by, awarded to, or paid to the chief executive officer of the Company during the
last fiscal year.  None of the Company's other executive officers as of the end
of the last fiscal year received total annual salary and bonuses in excess of
$100,000 for all services rendered in all capacities to the Company and its
subsidiaries.  The Company provides to all of its full time employees, including
executive officers and directors, health insurance and miscellaneous other
benefits.



                                                                    Long Term Compensation

                                   Annual Compensation                 Awards            Payouts

       (a)           (b)          (c)        (d)      (e)       (f)          (g)           (h)          (i)
                                                     Other
                                                     Annual   Restrict    Securities                 All Other
                     Year                           Compen-   ed Stock    Underlying      LTIP        Compen-
Name and            Ended       Salary      Bonus    sation   Award(s)  Options/ SARs    Payouts      sation
Principal          Dec. 31        ($)        ($)      ($)       ($)          (#)           ($)          ($)
Position

                                                                           
N. Thomas Steele     1994    $99,046            --        --        --    200,000/--           --    $84,200 (1)
President (CEO)
                     1993    $74,700            --        --        --    72,000/              --    $27,313 (2)
                                                                          45,000(2)
                     1992    $69,000            --        --        --          --             --    $7,847  (3)


(1) During 1994, the Company incurred a loss of $84,200 on its guarantee
    of a minimum sales price of $375,000 on Mr. Steele's former residence in
    connection with his move to Denver, Colorado, to become president and chief
    executive officer of the Company.  (See "ITEM 13. CERTAIN RELATIONSHIPS AND
    RELATED TRANSACTIONS:  Relocation Agreement.")
(2) Consists of options to purchase 72,000 shares at $1.50 through May
    1998 and stock appreciation rights with respect to appreciation on 45,000
    shares of the Company's Common Stock above $4.56, the trading price of the
    Company's Common Stock on the date of grant on May 19, 1993.  Such stock
    appreciation rights vest as to 15,000 shares on May 19, 1993, as to an
    additional 15,000 shares on May 19, 1994, and as to the remaining 15,000
    shares on May 19, 1995.  The terms of these stock appreciation rights were
    not determined in arm's length negotiations.
   
(3) Represents the amounts paid by the Company for medical insurance for
    N. Thomas Steele and his family
    
     Option/SAR Grants in Last Fiscal Year`

     The following table sets forth information respecting all individual grants
of options and stock appreciation rights ("SARs") made during the fiscal year
ended December 31, 1994, to the named executive officers of the Company.

        (a)              (b)               (c)           (d)          (e)
                      Number of        % of Total
                     Securities       Options/SARs
                     Underlying        Granted to      Exercise
                     Options/SA         Employees      or Base     Expiration
       Name          Rs Granted       During Fiscal     Price         Date
                         (#)              Year        ($/share)

N. Thomas Steele     200,000(1)           30.8%         $2.125    Sept. 16, 1999

(1) Options to purchase 200,000 shares of Common Stock at any time through
    September 16, 1999, at an exercise price of $2.125 per share, payable in
    cash, pursuant to a promissory note, by delivery of shares of the Company
    stock, or by the cancellation of options.  These options were granted
    pursuant to reload provisions of options exercised, as discussed below.  The
    terms of these options were not determined in arm's length negotiations.

     Aggregate Option/SAR Exercises in Last Fiscal Year and Year End Option/SAR
Values

     The following table sets forth information respecting the exercise of
options and SARs during the fiscal year ended December 31, 1994, by the named
executive officer of the Company and the fiscal year end values of unexercised
options and SARs.
      (a)             (b)           (c)            (d)              (e)
                                                Number of        Value of
                                                Securities      Unexercise
                                                Underlying           d
                                               Unexercised        In-the-
                                               Options/SARs        Money
                                                  at FY         Options/SA
                                                 End (#)           Rs at
                    Shares                                      FY End ($)
                   Acquired        Value       Exercisable/     Exercisable/
                  on Exercise    Realized     Unexercisable     Unexercisable


N. Thomas Steele    200,000      $125,000    452,000/15,000      $117,333
Steele                                             (1)            (2)/--
(1) Includes stock appreciation rights with respect to appreciation on
    45,000 shares (30,000 exercisable/15,000 unexercisable) of the Company's
    Common Stock above $4.56, the trading price of the Company's Common Stock on
    the date of grant on May 19, 1993.  Such stock appreciation rights vest as 
    to 15,000 shares on May 19, 1993, as to an additional 15,000 shares on May 
    19,1994, and as to the remaining 15,000 shares on May 19, 1995.  The 
    foregoing table gives effect to SARs on 30,000 shares vesting in May 1993 
    and 1994 for the named executive.  The terms of these stock appreciation 
    rights were not determined in arm's length negotiations.
(2) Based on the closing bid price for the Company's common stock of $2.00
    on December 31, 1994.

     Director Compensation

     As all of the Company's directors are also employees, the Company has not
compensated and does not intend to compensate such individuals for their service
as directors of the Company.

     Employment Agreements

     The Company entered into employment agreements dated May 19, 1993, with N.
Thomas Steele, Kenneth L. Ransom, Bruce C. Decker, and Dennis J. Gustafson at
annual salaries of $125,000, $119,000, $119,000, and $72,000 respectively,
subject to reduction to $85,000, $77,760, $75,600, and $60,000 respectively,
until the Company obtains net oil production levels of 500 barrels per day.
Each such employment agreement is for a three-year term and is automatically
extended on each anniversary date of the agreement for an additional three-year
term.  The employment agreements contain covenants not to compete for two years
after termination of employment, restrictions on the disclosure of confidential
information, provisions for reimbursement of expenses and payment of major
medical insurance coverage, and an agreement of the Company to register
securities of the Company held by such persons at the request of the employees.
In addition, under the employment agreements, the Company agreed to award to
each such officer stock appreciation rights to 45,000 shares of Common Stock,
vesting 15,000 shares at the date of grant and 15,000 on each of the next two
succeeding anniversary dates.

     1994 Officer, Director, and Employee Options

     On September 16, 1994, outstanding options were exercised to purchase an
aggregate of 650,000 shares of Common Stock as follows:  Grant Steele, 200,000
shares at $1.50; N. Thomas Steele, 200,000 shares at $1.50; Kenneth L. Ransom,
200,000 shares at $1.50; Bruce C. Decker, 25,000 shares at $2.25; and Dennis J.
Gustafson, 25,000 shares at $2.25.  Pursuant to the terms of the options
exercised, each optionee paid the purchase price of the options by the delivery
of a promissory note payable in three equal, consecutive installments of
principal plus interest on the unpaid balance at 7% per annum, payable annually
commencing on the first anniversary of the exercise.  The note installments are
payable in cash or the delivery of Common Stock or other options valued at the
trading price at the time of payment.  In connection with the issuance of shares
on the exercise of such options, Grant Steele, N. Thomas Steele, and Kenneth L.
Ransom each returned 24,118 shares, for an aggregate of 72,354 shares, of Common
Stock to satisfy withholding obligations of the Company, as provided for in the
terms of the options exercised.  Also pursuant to the terms of the options
exercised, the Company automatically granted new five year options to purchase
an aggregate of 650,000 shares of Common Stock at $2.125, the market price for
the Common Stock at the time of exercise, as follows:  Grant Steele, 200,000
shares; N. Thomas Steele, 200,000 shares; Kenneth L. Ransom, 200,000 shares;
Bruce C Decker, 25,000 shares; and Dennis J. Gustafson 25,000 shares.  These
transactions were not the result of arm's length negotiations.

     On October 6, 1994, the Company granted to certain employees five year
options to purchase an aggregate of 105,000 shares at $3.00 per share, of which
10,000 options are currently exercisable, 31,000 vest and become exercisable on
October 6, 1995, 32,000 vest and become exercisable after two years, and 32,000
vest and become exercisable on October 6, 1996, provided that the employee in
each case is, or has been within the preceding 30 days, an employee of the
Company.

Limitation of Liability and Indemnification

     The articles of incorporation of the Company limit or eliminate the
personal liability of directors for damages for breaches of their fiduciary
duty, unless the director has engaged in intentional misconduct, fraud, or a
knowing violation of law, or paid a dividend in violation of the Nevada Revised
Statutes.

     The Company's articles of incorporation and bylaws further provide for the
indemnification of officers and directors for certain civil liabilities,
including liabilities arising under the Securities Act.  In the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.



                                   SIGNATURES


     Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange of 1934, as amended, the Registrant has duly caused this amendment to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                   FORELAND CORPORATION


Dated:  January 23, 1996           By  /s/ N. Thomas Steele
                                     ----------------------------

                                        N. Thomas Steele, President