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<SEC-DOCUMENT>0000887396-02-000002.txt : 20020416
<SEC-HEADER>0000887396-02-000002.hdr.sgml : 20020416
ACCESSION NUMBER:		0000887396-02-000002
CONFORMED SUBMISSION TYPE:	10KSB
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20011231
FILED AS OF DATE:		20020411

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			EMPIRE PETROLEUM CORP
		CENTRAL INDEX KEY:			0000887396
		STANDARD INDUSTRIAL CLASSIFICATION:	 [9995]
		IRS NUMBER:				731238709
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10KSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-16653
		FILM NUMBER:		02607671

	BUSINESS ADDRESS:	
		STREET 1:		610, 715 - 5TH AVENUE S.W.
		STREET 2:		SUITE 000
		CITY:			CALGARY, ALBERTA
		STATE:			A0
		ZIP:			T2P 2X6
		BUSINESS PHONE:		403-262-1118

	MAIL ADDRESS:	
		STREET 1:		610, 715 - 5TH AVENUE S.W.
		STREET 2:		SUITE 000
		CITY:			CALGARY, ALBERTA
		STATE:			A0
		ZIP:			T2P 2X6

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICOMM CORP
		DATE OF NAME CHANGE:	19930328

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICOMM RESOURCES CORP
		DATE OF NAME CHANGE:	19951115
</SEC-HEADER>
<DOCUMENT>
<TYPE>10KSB
<SEQUENCE>1
<FILENAME>empr0110ksb.htm
<TEXT>
<html>

<head>
<title>unsaved:///newpage3.htm</title>
</head>

<body LINK="#0000ff">
<font SIZE="3"><b>

<p ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</p>
</b>

<p ALIGN="CENTER">Washington, D.C. 20549</p>
<b>

<p ALIGN="CENTER">FORM 10-KSB</p>

<blockquote>
  <blockquote>
    <blockquote>
      <blockquote>
        <p align="center">[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIESEXCHANGE ACT OF 1934</p>
        </b>
      </blockquote>
    </blockquote>
  </blockquote>
</blockquote>
<b>

<p ALIGN="CENTER">For the fiscal year ended December 31, 2001</p>
</b>

<p ALIGN="center"><b>OR </p>

<p ALIGN="center">[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE</p>

<p ALIGN="center">SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)</p>
</b>

<p ALIGN="center">&nbsp;</p>

<p ALIGN="center"><b>For the transition period from to <u></p>
</u>

<p ALIGN="CENTER">Commission file number </font>0-20193</p>
<font SIZE="3">

<p ALIGN="center"></font>EMPIRE PETROLEUM CORPORATION</p>
</b><font SIZE="3">

<p ALIGN="center">(formerly Americomm Resources Corporation)</p>
<b>

<p ALIGN="center"></b>(Name of Small Business Issuer in Its Charter)</p>
</font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="758">
  <tr>
    <td WIDTH="140" VALIGN="TOP"></td>
    <td WIDTH="38" VALIGN="TOP"></td>
    <td WIDTH="291" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">Delaware</b></font></td>
    <td WIDTH="233" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">73-1238709</b></font></td>
  </tr>
  <tr>
    <td WIDTH="140" VALIGN="TOP"></td>
    <td WIDTH="38" VALIGN="TOP"></td>
    <td WIDTH="291" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(State or Other Jurisdiction
    of Incorporation or Organization)</font></td>
    <td WIDTH="233" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(I.R.S. Employer
    Identification No.)</font></td>
  </tr>
  <tr>
    <td WIDTH="140" VALIGN="BOTTOM"></td>
    <td WIDTH="38" VALIGN="BOTTOM"></td>
    <td WIDTH="291" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">610, 715 &#150; 5<sup>th</sup>
    Avenue, S.W., Calgary, Alberta, Canada</b></font></td>
    <td WIDTH="233" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">T2P 2X6</b></font></td>
  </tr>
  <tr>
    <td WIDTH="140" VALIGN="TOP"></td>
    <td WIDTH="38" VALIGN="TOP"></td>
    <td WIDTH="291" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(Address of Principal
    Executive Offices)</font></td>
    <td WIDTH="233" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(Zip Code)</font></td>
  </tr>
</table>
<font SIZE="3"><b>

<p ALIGN="CENTER">Issuer's Telephone Number: (403) 262-1118</p>

<p ALIGN="center"></b>Securities registered under Section 12(b) of the Exchange Act:</p>
<b>

<p ALIGN="CENTER">None</p>
</b>

<p ALIGN="center">Securities registered under Section 12(g) of the Exchange Act:</p>

<p ALIGN="center"><b>Common Stock, $0.001 Par Value</p>
</b>

<p ALIGN="center">(Title of class)</p>

<p ALIGN="JUSTIFY">Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 <u>X </u>No <u></p>
</u>

<p ALIGN="JUSTIFY">Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will 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-KSB or any amendment to this Form 10-KSB [ ]</p>

<p ALIGN="JUSTIFY">The issuer's revenues for the most recent fiscal year were $ 9,928.</p>

<p ALIGN="JUSTIFY">The aggregate market value of the voting and non-voting common equity
held by non-affiliates, based upon the average bid and asked prices of the Common Stock on
February 28, 2002 was $ 3,614,238. Shares of Common Stock held by each officer and
director and by each person who owns 5% or more of the outstanding Common Stock have been
excluded in that such persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily a conclusive determination for other purposes.</p>

<p ALIGN="JUSTIFY">The number of shares outstanding of the issuer's Common Stock, as of
March 15, 2002 was 23,495,259.</p>
<b>

<p ALIGN="CENTER">DOCUMENTS INCORPORATED BY REFERENCE</p>
</b>

<p ALIGN="CENTER">None</p>
<b><u>

<p ALIGN="CENTER">PART I</p>

<p ALIGN="JUSTIFY">ITEM 1.</u> <u>DESCRIPTION OF BUSINESS</p>
</u>

<p ALIGN="JUSTIFY">Background</p>
</b>

<p ALIGN="JUSTIFY">Empire Petroleum Corporation, a Delaware corporation
(&quot;Empire,&quot; or the &quot;Company&quot;), was incorporated in the state of Utah in
August 1983 under the name Chambers Energy Corporation and reincorporated in Delaware in
March 1985 under the name Americomm Corporation. The corporate name was changed to
Americomm Resources Corporation in July 1995 and a one-for-three reverse stock split of
the Company's Common Stock became effective June 1996. All per share numbers set forth in
this Form 10-KSB have been adjusted to reflect such reverse stock split. On May 29, 2001
Americomm issued 7,492,351 common shares in connection with the acquisition of Empire
Petroleum Corporation. On August 15, 2001 Americomm and Empire merged and the corporate
name was changed to Empire Petroleum Corporation. The Registrant has no subsidiaries. The
Registrant operates from leased office space at 610, 715 &#150; 5<sup>th</sup> Avenue,
S.W., Calgary, Alberta, Canada T2P 2X6. The telephone number is (403) 262-1118.</p>

<p ALIGN="JUSTIFY">Empire has no income producing oil and gas properties at December 31,
2001. However, an oil and gas test well was drilled in January 2001 on the Cheyenne River
Development Project described below. The test well encountered continual flows of oil and
natural gas during the drilling period and was subsequently completed as an oil well. See
&quot;Business-Oil and Gas Development Project&quot; below.</p>
<b>

<p ALIGN="JUSTIFY">Oil and Gas Development Project</p>
</b>

<p ALIGN="JUSTIFY">In March 1998, $234,500 was paid to cover the initial expenses of
acquiring leases in an oil and gas Development Project in the Eastern Powder River Basin
in the State of Wyoming (the &quot;Cheyenne River Development Project&quot;). The Company
also issued an aggregate of 566,000 shares of Common Stock and agreed to grant overriding
royalty interests to five individuals as consideration for services performed and to be
performed in connection with the acquisition and exploration of the Cheyenne River
Development Project. As of the date of this report the parties to the agreement have
obtained approximately 100,000 acres of oil and gas leases covering the Development
Project.</p>

<p ALIGN="JUSTIFY">In November 2000, a Farmout Agreement was entered into with Empire
Petroleum Corporation (&quot;Empire&quot;), a Delaware corporation and successor to Wells
Gray Resort and Resources Ltd., which previously had entered into a Letter of Intent to
test a portion of the Development Project. Participating with Empire (50%) in this test
were Maxy Resources, LLC (25%), Enterra Energy Corp. (formerly Big Horn Resources Ltd.)
(15%) and 74305 Alberta Ltd. (10%).</p>

<p ALIGN="JUSTIFY">Pursuant to the Farmout Agreement, drilling of the Timber Draw 1-AH
test well commenced during December 2000 within the 25,000 acre Timber Draw Federal
Drilling Unit included in the Cheyenne River Development Project. Drilling of the Timber
Draw 1-AH test well was completed at a total measured depth of 10,578 feet of which the
last 2,030 feet was drilled horizontally through the Newcastle &quot;B&quot; formation
(the &quot;Muddy&quot;). During horizontal drilling, flows of oil and gas were
encountered. During the period from February 13, to June 22, 2001, the Company conducted a
series of production methods on its Timber Draw Unit #1-AH oil and gas discovery. During
the test period, the well flowed 8,139 barrels of 44 degree light gravity sweet crude and
29,072,000 cubic feet of natural gas with a BTU content of 1,493 and rich in natural gas
liquids. Consulting engineers have calculated natural gas liquids of approximately 70
barrels per day based on estimated gas production of 500,000 cubic feet per day. Due to
the lack of a nearby pipeline connection the well was shut-in on June 22, 2001 to conserve
the natural gas, which was flared during the test period. </p>

<p ALIGN="JUSTIFY">The Company anticipated drilling additional wells in the fourth
quarter, however, due to poor financial market conditions it was unable to raise the funds
necessary to conduct the fourth quarter drilling program. The Company now has elected to
make an effort to sell/farmout up to a 37.5% working interest in the Timber Draw #1-AH
discovery well and the 100,000 acres under lease in the Cheyenne River Development
Project. Upon concluding a sale/farmout, steps will be taken to conduct a sixteen square
mile seismic survey surrounding the discovery well and consider</font><font SIZE="3"
COLOR="#ff0000"> </font><font SIZE="3">building a ten mile pipeline to a gas purchaser in
order to place the well on production. </p>

<p ALIGN="JUSTIFY">The Bureau of Land Management (&quot;BLM&quot;) has advised the Company
it will require additional test data before it can determine the economic status of the
well pursuant to the terms of the Timber Draw Unit. A continuous test of the well will be
carried out after its connection to a purchaser&#146;s pipeline and the Company
anticipates the BLM will require about six months of production history before it renders
its ruling on whether the Company has a paying or non-paying well based on its criteria
which is essentially based on whether or not the production from the well will payout the
cost of such well. Based on results of the production testing, 3-D seismic interpretation
and financing, the Company now plans additional drilling in the 2<sup>nd</sup> or 3<sup>rd</sup>
quarter of 2002.</p>

<p ALIGN="JUSTIFY">Empire now owns a fifty (50%) percent working interest in the Timer
Draw #1-AH discovery well which is convertible to a seventy-five (75%) percent working
interest after its partners recover their drilling and completion costs. Empire reserves
an overriding royalty interest of seven (7%) percent proportionally reduced until our
partners cost recovery. As a result of the Farmout Agreement, Empire now has a
seventy-five (75%) percent interest in 60,000 acres of the Development Project. The
Farmout Agreement also provides that the partners can obtain a 25% interest in the
remaining 24,256</font><font SIZE="3" COLOR="#007f00"> </font><font SIZE="3">acres,
providing that they participate proportionally in the drilling of a test well on the
property. </p>

<p ALIGN="JUSTIFY">It has been determined that approximately 16,000 acres of leases
located in the northwest portion of the Cheyenne River Development Project are surplus to
the Company&#146;s needs and that leases on these acres will be released through
non-payment of lease rentals. As of April 1, 2002, following the release of the surplus
property, the lease block for the Cheyenne River Development Project will constitute
approximately 84,256 acres.</p>

<p ALIGN="JUSTIFY">In connection with the Farmout Agreement, Empire purchased 375,000
restricted shares of Common Stock for $0.40 per share for a total purchase price of
$150,000 in November 2000.</p>
<b>

<p ALIGN="JUSTIFY">Risks Inherent in Oil and Gas Exploration</p>
</b>

<p ALIGN="JUSTIFY">Exploration for oil and gas is highly speculative and involves greater
risks than many other businesses. The odds against discovering commercially exploitable
hydrocarbons are substantial. The Company may be required to perform in some cases
expensive geological and/or seismic surveys with respect to its properties and even if the
results of such surveys are favorable, only subsequent drilling at substantial costs can
determine whether commercial development of the properties is feasible. Oil and gas
drilling is frequently marked by unprofitable efforts, not only from unproductive
prospects, but also from productive prospects that do not produce sufficient amounts to
return a profit on the investment. To further test its Cheyenne River Development Project,
the Company plans to conduct a 16 square mile 3-D seismic program immediately surrounding
the #1-AH discovery well and continue to utilize horizontal drilling, a technology which
can drill underbalanced wells horizontally thousands of feet into fractured reservoirs.
The Company believes horizontal drilling, while more costly than conventional drilling
methods, could yield substantial and economic reserves. However, there can be no assurance
that the Company will be able to discover, develop or produce sufficient reserves to
recover the expenses incurred in connection with the exploration of its Cheyenne River
Development Project and achieve profitability.</p>

<p ALIGN="JUSTIFY">The Company 's operations are subject to the substantial operating
hazards and risks normally incident to exploring for and developing oil and gas, such as
encountering unusual or unexpected formations, interruptions due to adverse weather
conditions, unforeseen technical difficulties and equipment breakdowns. Oil and gas
properties are subject to all the risks normally incident to drilling for and producing
oil and gas, including blowouts, cratering and fires. These risks could result in damage
to or loss of life and property. Prior to commencement of drilling of the Timber Draw
#1-AH test well, Empire obtained insurance coverage that is customary for companies
engaged in similar operations. However, the Company may not be fully insured against all
possible risks.</p>
<b>

<p ALIGN="JUSTIFY">Competition</p>
</b>

<p ALIGN="JUSTIFY">The oil and gas business is extremely competitive. The Company must
compete with many long-established companies with greater financial resources and
technical capabilities. The Company is not a significant participant in the oil and gas
industry.</p>
<b>

<p ALIGN="JUSTIFY">Markets; Price Volatility</p>
</b>

<p ALIGN="JUSTIFY">The market price of oil and gas is volatile, subject to speculative
movement and depends upon numerous factors beyond the control of the Company, including
expectations regarding inflation, global and regional demand, political and economic
conditions and production costs. Future profitability, if any, will depend substantially
upon the prevailing prices for oil and gas. The market price for oil and gas during the
early part of 2001 was significantly higher than the current price. If the market price
for oil and gas is significantly depressed in the future, it could have a material adverse
effect on the Company 's ability to raise additional capital necessary to finance
operations and to explore the Cheyenne River Development Project. Lower oil and gas prices
may also reduce the amount of oil and gas, if any, that can be produced economically from
the Company 's properties.</p>
<b>

<p ALIGN="JUSTIFY">Regulation</p>
</b>

<p ALIGN="JUSTIFY">The oil and gas industry is subject to extensive federal, state and
local laws and regulations governing the production, transportation and sale of
hydrocarbons as well as the taxation of income resulting therefrom.</p>

<p ALIGN="JUSTIFY">Legislation effecting the oil and gas industry is under constant review
for amendment or expansion, frequently increasing the regulatory burden. Numerous
departments and agencies, both federal and state, are authorized</p>

<p ALIGN="JUSTIFY">by statute to issue, and have issued, rules and regulations applicable
to the oil and gas industry that are often difficult and costly to comply with and that
may carry substantial penalties for failure to comply. The regulations also generally
specify, among other things, the extent to which acreage may be acquired or relinquished,
permits necessary for drilling of wells, spacing of wells, measures required for
preventing waste of oil and gas resources and, in some cases, rates of production. The
heavy and increasing regulatory burdens on the oil and gas industry increase the costs of
doing business and, consequently affect profitability.</p>

<p ALIGN="JUSTIFY">A substantial portion of the leases which constitute the Cheyenne River
Development Project are granted by the federal government and administered by the Bureau
of Land Management (&quot;BLM&quot;) and the Minerals Management Service (&quot;MMS&quot;)
of the U.S. Department of the Interior, both of which are federal agencies. Such leases
are issued through competitive bidding, contain relatively standardized terms and require
compliance with detailed BLM and MMS regulations and orders (which are subject to change
by the BLM and the MMS). Leases are also accompanied by stipulations imposing restrictions
on surface use and operations. Operations to be conducted by the Company on federal oil
and gas leases must comply with numerous regulatory restrictions, including various
nondiscrimination statutes. Federal leases also generally require a complete environmental
impact assessment prior to the authorization of an exploration or development plan.</p>

<p ALIGN="JUSTIFY">The Company 's oil and gas properties and operations are subject to
numerous federal, state and local laws and regulations relating to environmental
protection. These laws govern, among other things, the amounts and types of substances and
materials that may be released into the environment, the issuance of permits in connection
with exploration, drilling and production activities, the release of emissions into the
atmosphere, the discharge and disposition of generated waste materials, the reclamation
and abandonment of wells and facility sites and the remediation of contaminated sites.
These laws and regulations may impose substantial liabilities for the Company's failure to
comply with them or for any contamination resulting from the Company's operations. In
addition, the Comprehensive Environmental Response, Compensation and Liability Act
(&quot;CERCLA&quot;), also known as the &quot;Superfund&quot; law, imposes liability on
certain classes of persons that are considered responsible for the release of a
&quot;hazardous substance&quot; into the environment, without regard to fault or to the
legality of the original conduct. The persons include the owner or operator of the
disposal site where the release occurred and companies that disposed or arranged for the
disposal of hazardous substances found at the site. Persons who are or were responsible
for releases of hazardous substances under CERCLA may be subject to joint and several
liability for the costs of cleaning up the damages to natural resources, and it is not
uncommon for neighboring landowners and other third parties to file claims for personal
injury, property damage and recovery of response costs allegedly caused by the hazardous
substances released into the environment. The Federal Resource Conservation and Recovery
Act and comparable state statues regulate the storage, treatment and disposal of wastes,
including hazardous wastes.</p>

<p ALIGN="JUSTIFY">Although the Company is not aware of any circumstances which would
cause it to be in violation of any regulation, if the Company engages in the exploration
of its oil and gas, substantial costs are expected to be required to comply with
applicable regulations and costs and delays associated with such compliance could
materially affect the economics of a given project, cause material changes or delays in
the intended activities or inhibit the development of an oil or gas property. The effect
of any future regulation on the Company's operations cannot be determined at this time,
although any increase in the cost of the Company 's operations as a result of future
regulations could have a material adverse impact on the Company.</p>
<b>

<p ALIGN="JUSTIFY">Employees</p>
</b>

<p ALIGN="JUSTIFY">The Company has three employees. Mr. John McGrain, Chairman and Chief
Executive Officer, devotes a minor amount of time to the affairs of the Company and
receives no compensation. Mr. Tom Jacobsen, President, devotes a substantial amount of
time to the affairs of the Company and also receives no compensation. The Company also
employs one full-time secretary.</p>

<p ALIGN="JUSTIFY">The Company may enter into consulting agreements with independent
geologists and other consultants until operations are sufficiently established to warrant
expanding its management team. In addition, any exploration work, such as drilling, would
be performed by independent contractors. The Company will be required to compete with
companies with greater financial resources for the qualified geologists, independent
contractors and other personnel necessary to operate its business. There can be no
assurance that the Company will be able to attract and retain the qualified personnel
required for the successful exploration and development of its properties.</p>

<p ALIGN="JUSTIFY">None of our employees are represented by a labor union or is subject to
a collective bargaining agreement. We have never experienced a work stoppage. We believe
that relations with our employees are good.</p>

<p ALIGN="JUSTIFY">&nbsp;</p>
<b><u>

<p ALIGN="JUSTIFY">ITEM 2.</u> <u>DESCRIPTION OF PROPERTY</p>
</u>

<p ALIGN="JUSTIFY">Cheyenne River Development Project - Powder River Basin, Wyoming</p>
</b>

<p ALIGN="JUSTIFY">The Cheyenne River Development Project consists of approximately 84,256
acres of federal, state and fee leases within Campbell, Converse, Niobrara and Weston
Counties in Wyoming. The Cheyenne River Development Project consists of gently rolling
ranch land with a substantial network of ranch roads that permit easy access. The
Development Project is located in a mature producing area with an established pipeline and
service network.</p>

<p ALIGN="JUSTIFY">Numerous wells were drilled within the project area in the 1950's
through the 1970's, with initial potential flowing rates in the range of 200 to 1,500
barrels of oil per day. Management believes that these wells may identify a fractured
reservoir with the potential for significant oil and gas production and seeks to employ
horizontal drilling technology to test the reservoir. Horizontal drilling technology has
been used successfully to develop fractured oil bearing formations worldwide.</p>

<p ALIGN="JUSTIFY">Pursuant to a Farmout Agreement, a test well has been drilled on the
Development Project using horizontal drilling technology, and the drilling participants
have earned interests in the project. See &quot;Business - Oil and Gas Development
Project.&quot;</p>

<p ALIGN="JUSTIFY">The Company&#146;s leases in the Cheyenne River Development Project are
predominately federal leases with 10-year terms having 6 to 7 years remaining. The federal
leases in the Timber Draw Federal Drilling Unit (relating to approximately 20,661 acres)
within the Cheyenne River Development Project have been extended by the Timber Draw #1-AH
oil well for so long as it produces oil or gas and the Company drills a development well
every six months which commitment has been extended to August 12, 2001. If a well has not
commenced drilling by August 12, 2002, the BLM has informed the Company the Timber Draw
Unit will be terminated. A termination of the Unit would require that a well be drilled on
each federal, state or fee lease in order to extend such lease for the life of its
producing capability. However, if a well is drilled by August 12, 2002 there is a
possibility of expanding the Timber Draw Federal Drilling Unit which would allow the
Company to include additional of its federal leases in the Unit, thereby extending their
terms for so long as oil and gas is produced from the Unit and the drilling requirement is
met. The balance of the leases in the Cheyenne River Development Project are federal,
state and fee leases. The state and fee leases have initial terms of five years, with two
to three remaining. Although drilling could protect some of these leases, it is unlikely
that all could be drilled during the remaining terms and some will expire. The Company
expects that leases critical to the Development Project will be renewed unless otherwise
protected by drilling and producing operations.<b> </p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">ITEM 3. <u>LEGAL PROCEEDINGS</p>
</u></b>

<p ALIGN="JUSTIFY">Baker Hughes, Inc. filed a lawsuit against Empire on December 4, 2001
for collection of $98,984.79 for labor, services and materials furnished by Baker Hughes.
There is no dispute as to the validity of their claim and the Company is presently
attempting to negotiate a payment schedule or collateral settlement.</p>
<b><u>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">ITEM 4.</u> <u>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</p>
</u></b>

<p ALIGN="JUSTIFY">There have been no matters submitted to a vote of security holders
during the quarter ended December 31, 2001.</p>
<u><b>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="CENTER">PART II</p>
</b></u>

<p ALIGN="JUSTIFY">&nbsp;</p>
<b><u>

<p ALIGN="JUSTIFY">ITEM 5</u>. <u>MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</p>
</u></b>

<p ALIGN="JUSTIFY">The Company's Common Stock was listed for trading effective December
21, 1992 by the OTC Bulletin Board and the National Quotation Bureau &quot;Pink
Sheets.&quot; The trading symbol for the OTC Bulletin Board was &quot;AREC.&quot;
Following the August 15, 2001 name change to Empire Petroleum Corporation, the trading
symbol for the OTC Bulletin Board was &quot;EMPR.&quot;</p>

<p ALIGN="JUSTIFY">The following table sets forth the high and low bid prices as reported
by the OTC Bulletin Board for the periods indicated below:</p>
</font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="409">
  <tr>
    <td WIDTH="55%" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><u><b>Year ending December
    31,2000:</b></u></font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">Quarter</b></font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">High</b></font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">Low</b></font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">03/31/00</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.8750</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.3750</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">06/30/00</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.4688</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.2188</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">09/30/00</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.8438</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.2813</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">12/31/00</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.8750</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.5313</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="55%" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><u><b>Year ending December
    31,2001:</b></u></font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">Quarter</b></font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">High</b></font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">Low</b></font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">03/31/01</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2.13</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.34</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">06/30/01</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.79</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.37</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">09/30/01</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.60</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.24</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">12/31/01</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.30</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">0.12</font></td>
  </tr>
</table>
<font SIZE="3">

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">Quotations reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not represent actual transactions.</p>

<p ALIGN="JUSTIFY">&nbsp;</p>
<b>

<p ALIGN="JUSTIFY">Number of Holders of Common Stock </p>
</b>

<p ALIGN="JUSTIFY">At December 31, 2001, there were approximately 376 stockholders of
record of the Company's Common Stock. </p>
<b>

<p ALIGN="JUSTIFY">Dividends </p>
</b></font><font FACE="Xerox Serif Wide">

<p ALIGN="JUSTIFY"></font><font SIZE="3">The Company has never paid cash dividends on its
Common Stock. The Company currently intends to retain earnings for use in its business
and, therefore, does not anticipate paying cash dividends on its Common Stock in the
foreseeable future. </p>
<b>

<p ALIGN="JUSTIFY">Recent Sales of Unregistered Securities</p>
</b>

<p ALIGN="JUSTIFY">None, other than as reported by the Company on Form 10QSB.</p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<blockquote>
  <blockquote>
    <b><u><p ALIGN="JUSTIFY">ITEM 6.</u> <u>MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
    OPERATION</p>
    </u></b>
  </blockquote>
</blockquote>
<b>

<p ALIGN="CENTER">Cautionary Note Regarding Forward-Looking Statements</p>
</b>

<p ALIGN="JUSTIFY">All statements, other than statements of historical fact contained in
this report are forward-looking statements. Forward-looking statements generally are
accompanied by words such as &quot;anticipate,&quot; &quot;believe,&quot;
&quot;estimate,&quot; &quot;expect,&quot; &quot;may,&quot; &quot;might,&quot;
&quot;potential,&quot; &quot;project&quot; or similar statements. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove correct. Factors
that could cause results to differ materially from the results discussed in such
forward-looking statements include:</p>

<blockquote>
  <blockquote>
    <blockquote>
      <ul>
        <li><p ALIGN="JUSTIFY">the need for additional capital, </p>
        </li>
        <li><p ALIGN="JUSTIFY">the costs expected to be incurred in exploration and development, </p>
        </li>
        <li><p ALIGN="JUSTIFY">unforeseen engineering, mechanical or technological difficulties in
          drilling wells, </p>
        </li>
        <li><p ALIGN="JUSTIFY">uncertainty of exploration results, </p>
        </li>
        <li><p ALIGN="JUSTIFY">operating hazards, </p>
        </li>
        <li><p ALIGN="JUSTIFY">competition from other natural resource companies, </p>
        </li>
        <li><p ALIGN="JUSTIFY">the fluctuations of prices for oil and gas, </p>
        </li>
        <li><p ALIGN="JUSTIFY">the effects of governmental and environmental regulation, </p>
        </li>
        <li><p ALIGN="JUSTIFY">general economic conditions and other risks described in the
          Company&#146;s filings with the Securities and Exchange Commission.</p>
        </li>
      </ul>
    </blockquote>
  </blockquote>
</blockquote>

<p ALIGN="JUSTIFY">Information on these and other risk factors are included in the risk
factors included in this filing under &quot;Factors That May Affect Future Results&quot;
and the risks discussed in the Company&#146;s other filings with the SEC. Accordingly, the
actual results of operations in the future may vary widely from the forward-looking
statements included herein, and all forward-looking statements in this Report are
expressly qualified in their entirety by the cautionary statements in this paragraph.</p>

<p ALIGN="JUSTIFY">Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management&#146;s analysis, judgement, belief
and expectations only as of the date hereof The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or circumstances that
arise after the date hereof.</p>
<b>

<p>Plan of Operation</p>
</b>

<p ALIGN="JUSTIFY">Empire has no income producing oil and gas properties at December 31,
2001. However, an oil and gas test well was drilled in January 2001 on the Cheyenne River
Development Project. The test well encountered flows of oil and natural gas during the
drilling period and was subsequently completed as an oil well as described below.</p>

<p ALIGN="JUSTIFY">As of December 31, 2001, Empire had $38,242 of cash on hand. Empire
expects that its cash on hand will be sufficient to fund its operations for the next 3
months. Empire&#146;s material commitments consist of annual lease payments on the
Cheyenne River Development Project of approximately $142,882, of which $102,942 were paid
in March 2001, with $40,424 of this amount paid by the Company and the balance of $62,518
paid by the parties to the Farmout Agreement in the Cheyenne River Development Project.
The Company leases office space under an operating lease agreement with an unrelated party
that will expire in 2006. The lease calls for monthly lease payments of $3,733.33
(Canadian) or approximately $2,333.33 (U.S.). Rent expense for the year ended December 31,
2001 was $29,866.64 (Canadian) or approximately $18,666.67 (U.S.). Mr. McGrain and Mr.
Jacobsen serve as executive officers of the Company without compensation. </p>

<p ALIGN="JUSTIFY">Pursuant to the Farmout Agreement, drilling of the Timber Draw 1-AH
test well commenced during December 2000 within the 25,000 acre Timber Draw Federal
Drilling Unit included in the Cheyenne River Development Project. Drilling of the Timber
Draw 1-AH test well was completed at a total measured depth of 10,578 feet of which the
last 2,030 feet was drilled horizontally through the Newcastle &quot;B&quot; formation
(the &quot;Muddy&quot;). During horizontal drilling, flows of oil and gas were
encountered. During the period from February 13, to June 22, 2001, the Company conducted a
series of production methods on its Timber Draw Unit #1-AH oil and gas discovery. During
the test period, the well flowed 8,139 barrels of 44 degree light gravity sweet crude and
29,072,000 cubic feet of natural gas with a BTU content of 1,493 and rich in natural gas
liquids. Consulting engineers have calculated natural gas liquids of approximately 70
barrels per day based on estimated gas production of 500,000 cubic feet per day. Due to
the lack of a nearby pipeline connection the well was shut-in on June 22, 2001 to conserve
the natural gas, which was flared during the test period. </p>

<p ALIGN="JUSTIFY">The Company anticipated drilling additional wells in the fourth
quarter, however, due to poor financial Market conditions it was unable to raise the funds
necessary to conduct the forth quarter drilling program. The Company now has elected to
make an effort to sell/farmout up to a 37.5%working interest in the Timber Draw #1-AH
discovery well and the 100,000 acres under lease in the Cheyenne River Development
Project. Upon concluding a sale/farmout, steps will be taken to conduct a sixteen square
mile seismic survey surrounding the discovery well and consider building a ten mile
pipeline to a gas purchaser in order to place the well on production. </p>

<p ALIGN="JUSTIFY">The Bureau of Land Management (&quot;BLM&quot;) has advised the Company
it will require additional test data before it can determine the economic status of the
well pursuant to the terms of the Timber Draw Unit. A continuous test of the well will be
carried out after its connection to a purchaser&#146;s pipeline and the Company
anticipates the BLM will require about six months of production history before it renders
its ruling on whether the Company has a paying or non-paying well based on its criteria
which is essentially based on whether or not the production from the well will payout the
cost of such well. Based on results of the production testing, 3D seismic interpretation
and financing, the Company now plans additional drilling in the 2<sup>nd</sup> or 3<sup>rd</sup>
quarter of 2002.</p>

<p ALIGN="JUSTIFY">Empire now owns a fifty (50%) percent working interest in the Timer
Draw #1-AH discovery well which is convertible to a seventy-five (75%) percent working
interest after its partners recover their drilling and completion costs. Empire reserves
an overriding royalty interest of seven (7%) percent proportionally reduced until our
partners cost recovery. As a result of the Farmout Agreement, Empire now has a
seventy-five (75%) percent interest in approximately 60,000 acres of the Development
Project. The Farmout Agreement also provides that the partners can obtain a 25% interest
in the remaining 24,256 acres, providing that they participate proportionally in the
drilling of a test well on the property. </p>

<p ALIGN="JUSTIFY">It has been determined that approximately 16,000 acres of property
located in the northwest portion of the Cheyenne River Development Project are surplus to
the Company&#146;s needs and that these acres will be released through non-payment of
lease rentals. As of April 1, 2002, following the release of the surplus property, the
lease block for the Cheyenne River Development Project will constitute approximately
84,256 acres.</p>

<p ALIGN="JUSTIFY">Empire does not at this time expect any significant change in the
number of its employees during the next twelve months. If Empire is successful in raising
additional capital, it will employ part-time or temporary persons and consultants in
situations where special expertise is required.</p>
<b>

<p ALIGN="JUSTIFY">Empire petroleum corporation acquisition</p>
</b>

<p ALIGN="JUSTIFY">On May 29, 2001 the Company acquired Empire Petroleum Corporation, a
private company that owned a 25% interest in the Cheyenne River Development Project,
increasing the Company&#146;s working interest in the Cheyenne River Wyoming Development
Project to 75%. The acquisition of Empire was accomplished by the issue of 7,492,351
common shares or 30.6% of the total 24,476,925 shares now outstanding on a fully diluted
basis. The Company&#146;s shares issued were valued at $0.55 each for this transaction.
The acquisition was accounted for as follows:</p>
</font><div align="center"><center>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="378">
  <tr>
    <td WIDTH="234" VALIGN="TOP"></td>
    <td WIDTH="112" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">USD$</b></font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Value of shares issued</font></td>
    <td WIDTH="112" VALIGN="TOP"><font SIZE="3"><u><b><p ALIGN="RIGHT">$ 4,120,793</b></u></font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Current assets </font></td>
    <td WIDTH="112" VALIGN="BOTTOM"><font SIZE="3"><p ALIGN="RIGHT">347,762</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Investments</font></td>
    <td WIDTH="112" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">206,250</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Current Liabilities</font></td>
    <td WIDTH="112" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">(607,182)</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Deferred Taxes</font></td>
    <td WIDTH="112" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">(1,250,000)</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Petroleum and natural gas properties</font></td>
    <td WIDTH="112" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">5,423,963</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"></td>
    <td WIDTH="112" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">$ 4,120,793</font></td>
  </tr>
</table>
</center></div><font SIZE="3">

<p ALIGN="JUSTIFY">Management changes concurrent with the Empire acquisition included the
appointment of John P. McGrain as Chairman and Chief Executive Officer, and Thomas J.
Jacobsen as President and Chief Operating Officer of the combined company. Mr. McGrain has
30 years experience as an investor with a focus on oil and gas companies and is currently
the Chairman of Enterra Energy Corp. (Nasdaq: EENC). Mr. Jacobsen, also acting Chief
Operating Officer and Director of Enterra, has more than 40 years experience in the oil
and gas industry within Canada, the United States and internationally.</p>

<p ALIGN="JUSTIFY">The Board of Directors is now comprised of John P. McGrain, Thomas J.
Jacobsen, Albert E. Whitehead, Thomas R. Bradley and John C. Kinnard. George H. Plewes has
resigned as a director. Al Whitehead and Tom Bradley, in addition to their board duties,
will continue to manage the company's land inventory of over 84,256 acres of leases in
return for the reimbursement of up to $7,819.79 per month for Tulsa office expenses.</p>

<p ALIGN="JUSTIFY">The Board of Directors subsequently approved the merger of the Company
with its now wholly owned subsidiary Empire Petroleum Corporation and the simultaneous
change in the name to Empire Petroleum Corporation. Both the merger and name change were
effective August 15, 2001.</p>
<u><b>

<p ALIGN="JUSTIFY">Factors That May Affect Future Results</p>
</b></u>

<p ALIGN="JUSTIFY">This report, including Management&#146;s Discussion and Analysis or
Plan of Operation, contains forward looking statements and other prospective information
relating to future events. These forward-looking statements and other information are
subject to certain risks and uncertainties that could cause results to differ materially
from historical or anticipated results, including the following:</p>
<b>

<p ALIGN="JUSTIFY">We have received a Going Concern opinion from our auditor&#146;s on our
financial statements for the year ended December 31, 2001. Those statements indicate that
we have reported losses for our last two years and if we do not become profitable our
business could be adversely affected.</p>
</b>

<p ALIGN="JUSTIFY">We reported losses of $ 244,168 and $161,033 for the years ending
December 31, 2001 and 2000. We also have an accumulated deficit of $ 2,059,422 as of
December 31, 2001. We can provide no assurance that we will be profitable in the future
and if we do not become profitable our business could be adversely affected.</p>
<b>

<p ALIGN="JUSTIFY">We have limited resources available to continue operations unless
additional funding can be obtained from outside sources.</p>

<p ALIGN="JUSTIFY"></b>At the present time we have limited resources available to continue
operations. If we are unable to</font><font FACE="Courier New" SIZE="3"> </font><font
SIZE="3">sell/farmout up to a 37.5% working interest in the Timber Draw #1-AH discovery
well and the 84,256 acres under lease in the Cheyenne River Development Project, we will
be unable to develop our properties and may be unable to retain the lease rights under
development unless another means of financing becomes available.</p>
<b>

<p ALIGN="JUSTIFY">Impairment of asset value.</p>
</b>

<p ALIGN="JUSTIFY">The Company follows the successful efforts method of accounting for its
oil and gas properties. Under this method of accounting, costs to acquire proved and
unproved properties and costs to drill development wells and successful exploratory wells
are capitalized. Costs of unsuccessful exploratory wells, geological and geophysical
activities and lease rentals are expensed. Individually significant unproved oil and gas
properties are assessed annually for impairment and a loss is recognized for properties
determined to be impaired. The remaining unproved oil and gas properties are aggregated
and an overall impairment allowance is provided based on company experience. Capitalized
costs of proved oil and gas properties are depreciated, depleted and amortized by the
unit-of-production method based upon proved reserves, before royalties, as determined by
independent petroleum engineers. For purposes of the calculation, natural gas reserves and
production are converted to equivalent volumes of petroleum based upon a 6 mcf to 1 barrel
of oil equivalent ratio. All property and equipment is periodically evaluated and if
conditions warrant, an impairment provision is provided.</p>

<p ALIGN="JUSTIFY"><b>Concentration of unevaluated leasehold in Wyoming</p>
</b>

<p ALIGN="JUSTIFY">The Company's future performance will be affected by the development
results of its inventory of unproved drilling locations in Wyoming. Failure of drilling
activities to achieve anticipated quantities of economically attractive reserves and
production would have a material adverse effect on the Company's liquidity, operations and
financial results and could result in future full-cost ceiling writedowns.</p>
<b>

<p ALIGN="JUSTIFY">Fluctuations in oil and gas prices</p>
</b>

<p ALIGN="JUSTIFY">Even if the Company's drilling activities achieve commercial quantities
of economically attractive reserves and production revenue, the Company will remain
subject to prevailing prices for oil, natural gas and natural gas liquids, which are
dependent upon numerous factors such as weather, economic, political and regulatory
developments and competition from other sources of energy. The volatile nature of the
energy markets makes it particularly difficult to estimate future prices of oil, natural
gas and natural gas liquids. Prices of oil, natural gas and natural gas liquids are
subject to wide fluctuations in response to relatively minor changes in circumstances, and
there can be no assurance that future prolonged decreases in such prices will not occur.
All of these factors are beyond the control of the Company. Any significant decline in oil
and gas prices could have a material adverse effect on the Company's operations, financial
condition and level of expenditures for the development of its oil and gas reserves, and
may result in additional writedowns of the Company's investments due to ceiling test
limitations.</p>

<p ALIGN="JUSTIFY">In accordance with customary industry practice, the Company relies on
independent third party service providers to provide most of the services necessary to
drill new wells, including drilling rigs and related equipment and services, horizontal
drilling equipment and services, trucking services, tubulars, fracing and completion
services and production equipment. The industry has experienced significant price
increases for these services during the last year and this trend is expected to continue
into the future. These cost increases could in the future significantly increase the
Company's development costs and decrease the return possible from drilling and development
activities, and possibly render the development of certain proved undeveloped reserves
uneconomical.</p>
<b>

<p ALIGN="JUSTIFY">Drilling and operating risks</p>
</b>

<p ALIGN="JUSTIFY">Oil and gas drilling activities are subject to numerous risks, many of
which are beyond the Company's control. The Company's operations may be curtailed, delayed
or canceled as a result of title problems, weather</p>

<p ALIGN="JUSTIFY">conditions, compliance with governmental requirements, mechanical
difficulties and shortages or delays in the delivery of equipment. In addition, the
Company's properties may be susceptible to hydrocarbon drainage from production by other
operators on adjacent properties. Industry operating risks include the risk of fire,
explosions, blow-outs, pipe failure, abnormally pressured formations and environmental
hazards such as oil spills, gas leaks, ruptures or discharges of toxic gases, the
occurrence of any of which could result in substantial losses to the Company due to injury
or loss of life, severe damage to or destruction of property, natural resources and
equipment, pollution or other environmental damage, clean-up responsibilities, regulatory
investigation and penalties and suspension of operations.</p>

<p ALIGN="JUSTIFY">The Company anticipates being active drillers of horizontal wells and
may drill a significant number of deep horizontal wells in the future. The horizontal
drilling activities involve greater risk of mechanical problems than conventional vertical
drilling operations.</p>

<p ALIGN="JUSTIFY">In accordance with customary industry practice, the Company maintains
insurance against some, but not all, of the risks described above. There can be no
assurance that any insurance will be adequate to cover losses or liabilities. The Company
cannot predict the continued availability of insurance, or its availability at premium
levels that justify its purchase.</p>
<b>

<p ALIGN="JUSTIFY">Governmental regulation</p>
</b>

<p ALIGN="JUSTIFY">Oil and gas operations are subject to various federal, state and local
governmental regulations that may be changed from time to time in response to economic or
political conditions. From time to time, regulatory agencies have imposed price controls
and limitations on production in order to conserve supplies of oil and gas. In addition,
the production, handling, storage, transportation and disposal of oil and gas, by-products
thereof and other substances and materials produced or used in connection with oil and gas
operations are subject to regulation under federal, state and local laws and regulations
primarily relating to protection of human health and the environment. To date,
expenditures related to complying with these laws and for remediation of existing
environmental contamination have not been significant in relation to the results of
operations of the Company. There can be no assurance that the trend of more expansive and
stricter environmental legislation and regulations will not continue.</p>
<b>

<p ALIGN="JUSTIFY">Environmental risks</p>
</b>

<p ALIGN="JUSTIFY">The Company is subject to a variety of federal, state and local
governmental laws and regulations related to the storage, use, discharge and disposal of
toxic, volatile or otherwise hazardous materials. These regulations subject the Company to
increased operating costs and potential liability associated with the use and disposal of
hazardous materials. Although these laws and regulations have not had a material adverse
effect on the Company's financial condition or results of operations, there can be no
assurance that the Company will not be required to make material expenditures in the
future. Moreover, the Company anticipates that such laws and regulations will become
increasingly stringent in the future, which could lead to material costs for environmental
compliance and remediation by the Company.</p>

<p ALIGN="JUSTIFY">Any failure by the Company to obtain required permits for, control the
use of, or adequately restrict the discharge of hazardous substances under present or
future regulations could subject the Company to substantial liability or could cause its
operations to be suspended. Such liability or suspension of operations could have a
material adverse effect on the Company's business, financial condition and results of
operations.</p>
<b>

<p ALIGN="JUSTIFY">Competition</p>
</b>

<p ALIGN="JUSTIFY">The Company operates in a highly competitive environment and competes
with major and independent oil and gas companies for the acquisition of desirable oil and
gas properties, as well as for the equipment and labor required to develop and operate
such properties. Many of these competitors have financial and other resources
substantially greater than those of the Company.</p>
<b>

<p ALIGN="JUSTIFY">Trading in our common stock may be limited and could negatively affect
the ability to sell your securities.</p>
</b>

<p ALIGN="JUSTIFY">We do not know how liquid the market for our stock will remain and if
the market becomes illiquid, it may negatively affect your ability to resell your
securities. </p>
<b><u>

<p ALIGN="JUSTIFY">ITEM 7.</u> <u>FINANCIAL STATEMENTS</p>
</u></b>

<p ALIGN="JUSTIFY">The Financial Statements of the Company are attached as follows:</p>
</font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="570">
  <tr>
    <td WIDTH="69%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Index to Financial
    Statements</font></td>
    <td WIDTH="31%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">F-1</font></td>
  </tr>
  <tr>
    <td WIDTH="69%" VALIGN="TOP"><font SIZE="3">Empire Petroleum Corporation Financial
    Statements as of and for the year ended December 31, 2001</font></td>
    <td WIDTH="31%" VALIGN="BOTTOM"><font SIZE="3"><p ALIGN="CENTER">F- through F-11</font></td>
  </tr>
  <tr>
    <td WIDTH="69%" VALIGN="TOP"><font SIZE="3">Americomm Resources Corporation Financial
    Statements as of and for the year ended December 31, 2000</font></td>
    <td WIDTH="31%" VALIGN="BOTTOM"><font SIZE="3"><p ALIGN="CENTER">F-13 through F-20</font></td>
  </tr>
</table>
<font SIZE="3">

<p ALIGN="JUSTIFY">&nbsp;</p>
<b><u>

<p ALIGN="left">ITEM 8.</u> <u>CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE</p>
</u></b>

<p ALIGN="JUSTIFY">On July 19, 2001, the Company, with the approval of the board of
directors, dismissed Magee Rausch &amp; Shelton, LLP (&quot;Magee Rausch &amp;
Shelton&quot;) as its independent accountants. As discussed below, the Company has engaged
the firm of KPMG, LLP (&quot;KPMG&quot;) as its Independent auditors for the 2001 Fiscal
Year.</p>

<p ALIGN="JUSTIFY">Magee Rausch &amp; Shelton's reports on the Company's financial
statements for the past two years have not contained any adverse opinion or disclaimer of
opinion and have not been qualified or modified as to uncertainty, audit scope or
accounting principles. However, the audit reports on the financial statements for the
above periods were modified because of a going concern uncertainty. In addition, during
the Company's two most recent fiscal years and the subsequent interim periods preceding
Magee Rausch &amp; Shelton's dismissal, there have not been any disagreements with Magee
Rausch &amp; Shelton on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which disagreements, if not resolved
to the satisfaction of Magee Rausch &amp; Shelton, would have caused them to make a
reference to the subject matter of the disagreement in connection with their reports.</p>

<p ALIGN="JUSTIFY">During the Company's two most recent fiscal years and subsequent
interim period preceding the dismissal of Magee Rausch &amp; Shelton:</p>

<blockquote>
  <blockquote>
    <ul>
      <li><p ALIGN="JUSTIFY">Magee Rausch &amp; Shelton did not advise the Company that the
        internal controls necessary for the Company to develop reliable financial statements did
        not exist;</p>
      </li>
      <li><p ALIGN="JUSTIFY">Magee Rausch &amp; Shelton did not advise the Company that
        information had come to Magee Rausch &amp; Shelton's attention that led them to no longer
        be able to rely on management's representations, or that made them unwilling to be
        associated with the financial statements prepared by management;</p>
      </li>
      <li><p ALIGN="JUSTIFY">Magee Rausch &amp; Shelton did not advise the Company of the need to
        expand significantly the scope of their audit, or that information had come to their
        attention during such period that, if further investigated, may (i) materially impact the
        fairness or reliability of previously issued Reports of Independent Auditors and the
        underlying financial statements, or the financial statements issued or to be issued
        covering the fiscal period(s) subsequent to the date of the most recent financial
        statements covered by an audit report, or (ii) cause Magee Rausch &amp; Shelton to be
        unwilling to rely on management's representations or be associated with the Company's
        financial statements; and</p>
      </li>
      <li><p ALIGN="JUSTIFY">Magee Rausch &amp; Shelton did not advise the Company that
        information had come to their attention that they had concluded materially impacted the
        fairness or reliability of previously issued Reports of Independent Auditors and the
        underlying financial statements, or the financial statements issued or to be issued
        covering the fiscal period(s) subsequent to the date of the most recent financial
        statements covered by an audit report.</p>
      </li>
    </ul>
  </blockquote>
</blockquote>

<p ALIGN="JUSTIFY">The Company provided Magee Rausch &amp; Shelton with a copy of the
foregoing disclosure, and requested that Magee Rausch &amp; Shelton furnish it with a
letter addressed to the Securities and Exchange Commission stating whether or not it
agrees with such disclosure. The Company filed as an Exhibit to a Form 8-K a copy of the
letter from Magee Rausch &amp; Shelton required by Item 304 of Regulation S-K.</p>

<p ALIGN="JUSTIFY">On July 19, 2001, the Company engaged KPMG LLP of Canada as its
independent auditors. Prior to its engagement, the Company had not consulted with KPMG
with respect to:</p>

<blockquote>
  <blockquote>
    <ul>
      <li>the application of accounting principles to a specified transaction, either completed or
        proposed; or the type of audit opinion that might be rendered on the Company's financial
        statements; or</li>
      <li>any matter that was either the subject of a disagreement (as defined in Item
        304(a)(1)(iv) of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v)
        of Regulation S-K).<br>
      </li>
    </ul>
  </blockquote>
</blockquote>
<u><b>

<p ALIGN="CENTER">PART III</p>

<p ALIGN="JUSTIFY">ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS</b></u>;
<b><u>COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT</p>
</u></b>

<p ALIGN="CENTER"><b>EXECUTIVE OFFICERS AND DIRECTORS</p>
</b></font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="676">
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><u><b><p ALIGN="JUSTIFY">Name</b></u></font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="3"><u><b><p ALIGN="CENTER">Age</b></u></font></td>
    <td WIDTH="49%" VALIGN="TOP"><font SIZE="3"><u><b><p ALIGN="JUSTIFY">Position </b></u></font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">John P. McGrain </font><font
    SIZE="1">(1)</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">55</font></td>
    <td WIDTH="49%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Chairman and Chief
    Executive Officer</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Thomas J. Jacobsen </font><font
    SIZE="1">(1)</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">67</font></td>
    <td WIDTH="49%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">President and Director </font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Albert E. Whitehead</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">72</font></td>
    <td WIDTH="49%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Director </font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Thomas R. Bradley</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">78</font></td>
    <td WIDTH="49%" VALIGN="TOP"><font SIZE="3">Director</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">John C. Kinard</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">68</font></td>
    <td WIDTH="49%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Director</font></td>
  </tr>
</table>
<font SIZE="3">

<blockquote>
  <p ALIGN="JUSTIFY">Mr. McGrain and Mr. Jacobsen were elected officers and directors
  effective May 29, 2001. </p>
  <p ALIGN="JUSTIFY">&nbsp;</p>
</blockquote>

<p ALIGN="JUSTIFY"><b>John P. McGrain.</b> Mr. McGrain has been Chairman and Chief
Executive Officer of Empire Petroleum Corporation since May 2001. He has also been the
Chairman of Enterra Energy Corporation (NASDAQ:ENTR) since April 2001 and served as
Chairman and Chief Executive Officer of International Colin Energy from 1991 to 1994, and
Chairman and Chief Executive Officer of Conversion Industries from 1984 to 1994. In 1997
Mr. McGrain filed for protection under personal bankruptcy Chapter 11 and was discharged
in 1998. Since 1998 he has been a private investor. Mr. McGrain graduated from UCLA with a
Bachelor of Arts degree in 1967.</p>
<b>

<p ALIGN="JUSTIFY">Thomas J. Jacobsen.</b> Mr. Jacobsen has been President of Empire
Petroleum Corporation since May 2001. He is the acting Chief Operating Officer and a
member of the Board of Directors of Enterra Energy Corporation (NASDAQ:ENTR) October 2000.
Through his company, Wells Gray Resort &amp; Resources Ltd., Empire has also granted him a
consulting contract pursuant to which Mr. Jacobsen was in charge of Empire&#146;s
drilling, completion and equipping projects. His more than 40 years of experience in the
oil and gas industry in Alberta and Saskatchewan, Canada includes serving President and
Chief Executive Officer of Niaski Environmental Inc. from November, 1996 to February,
1999; President and Chief Executive Officer of International Pedco Energy Corporation from
September, 1993 to February, 1996, and President of International Colin Energy Corporation
from October, 1987 to June, 1993. Mr. Jacobsen also currently serves as a director of
Niaski Environmental Inc., a company listed on the Canadian Venture Exchange. Niaski has
made a proposal to its creditors under the <i>Bankruptcy and Insolvency Act </i>(Canada).
The proposal has been approved by the creditors but has not yet been funded and completed.</p>

<p ALIGN="JUSTIFY"><b>Albert E. Whitehead. </b>Mr. Whitehead served as Chairman of the
Board from March 1998 to May 2001 and as a Director since May 2001. Mr. Whitehead is an
investor and formerly served as the Chairman and Chief Executive Officer of Seven Seas
Petroleum Inc., a publicly held company engaged in international oil and gas exploration
from February 1995 to May 1997. From April 1987 through January 1995, Mr. Whitehead served
as Chairman and Chief Executive Officer of Garnet Resources Corporation, a publicly held
oil and gas exploration and development company.</p>

<p ALIGN="JUSTIFY"><b>Thomas R. Bradley. </b>Mr. Bradley served as President of from
December 1991 to May 2001,as Executive Vice President from March 1985 to December 1991 and
as a Director since March 1985. Mr. Bradley is also the owner of Bradley &amp; Associates
Marketing, a sole proprietorship consulting firm providing domestic and foreign sales and
marketing management services to small manufacturers. From January 1987 to March 1990, Mr.
Bradley was also a partner in Capstone Communications, an industrial advertising agency.</p>

<p ALIGN="JUSTIFY"><b>John C. Kinard. </b>Mr. Kinard has served as a Director since June
1998. He has also served as President of the Remuda Corporation, a private oil and gas
exploration company, since 1967. From 1990 through December 1995, Mr. Kinard also served
as President of Glen Petroleum, Inc., a private oil and gas exploration company. Mr.
Kinard has also served as the Chairman of Envirosolutions UK Ltd., a private industrial
wastewater treatment company since 1990.</p>
<b>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="CENTER">SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</p>
</b></font><font FACE="Courier New">

<p ALIGN="JUSTIFY"></font><font SIZE="3">Section 16(a) of the Exchange Act requires the
Company's directors and executive officers, and persons who own more than 10 percent of a
registered class of the Company's equity securities, to file with the Securities and
Exchange Commission (the &quot;SEC&quot;) initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten percent stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.</p>

<p ALIGN="JUSTIFY">To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no other reports
were required, during the year ended December 31, 2001 Mr. McGrain and Mr. Jacobsen failed
to comply with the following Section 16(a) filing requirements: failure to file a Form 3
reflecting their initial statements of beneficial ownership of equity securities. As of
February 28, 2002 all delinquent forms had been filed by all parties.</p>
<b><u>

<p ALIGN="JUSTIFY">ITEM 10.</u> <u>EXECUTIVE COMPENSATION</p>
</u></b>

<p ALIGN="CENTER"><b>EXECUTIVE COMPENSATION AND OTHER MATTERS</p>
</b>

<p ALIGN="JUSTIFY">The following table sets forth the compensation earned for services
rendered to Empire in all capacities for the three most recently completed years by our
Chief Executive Officer and our other most highly compensated executive officers whose
salary and bonus during the year ended December 31, 2001 exceeded $100,000.</p>
<u><b>

<p>Summary Compensation Table</p>
</b></u></font><div align="center"><center>

<table BORDER="0" CELLSPACING="1" CELLPADDING="8" WIDTH="642">
  <tr>
    <td WIDTH="35%" VALIGN="BOTTOM"><font SIZE="3"><u><b>&nbsp;<p>&nbsp;</p>
    <p>&nbsp;</p>
    <p>&nbsp;</p>
    <p>&nbsp;</p>
    <p>Name and principal position</b></u></font></td>
    <td WIDTH="9%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">&nbsp;</p>
    <p ALIGN="CENTER">&nbsp;</p>
    <p ALIGN="CENTER">&nbsp;</p>
    <p ALIGN="CENTER">Year <u>ended</u></b></font></td>
    <td WIDTH="23%" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b><p ALIGN="CENTER">&nbsp;</p>
    <p ALIGN="CENTER">Annual compensation</p>
    <u><p ALIGN="CENTER">Salary</u> <u>Bonus</u></b></font></td>
    <td WIDTH="16%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Long-term compensation
    <u>awards</p>
    </u><p ALIGN="CENTER">Securities underlying <u>options</u> </b></font></td>
    <td WIDTH="16%" VALIGN="BOTTOM"><font SIZE="3"><b>&nbsp;<p>&nbsp;</p>
    <p>&nbsp;</p>
    <p ALIGN="CENTER">All other <u>compensation</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"><font SIZE="3">John P. McGrain <sup>(1) </sup></font></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">2001</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"><font SIZE="3">Chairman, Chief Executive Officer</font></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">1999</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"><font SIZE="3">Thomas J. Jacobsen <sup>(1)</sup> </font></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">2001</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"><font SIZE="3">President</font></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">1999</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"><font SIZE="3">Albert E. Whitehead <sup>(2)</sup></font></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">2001</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"><font SIZE="3">Chairman, Chief Executive Officer</font></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">70,000</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">1999</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"><font SIZE="3">Thomas R. Bradley <sup>(2)</sup></font></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">2001 </font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">$ 51,458</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"><font SIZE="3">President</font></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">70,000</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" VALIGN="TOP" HEIGHT="26"></td>
    <td WIDTH="9%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">1999</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">$ 13,542</font></td>
    <td WIDTH="10%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">-</font></td>
  </tr>
  <tr>
    <td VALIGN="BOTTOM" COLSPAN="6" HEIGHT="26"><blockquote>
      <font SIZE="3"><p ALIGN="JUSTIFY">(1) Mr. McGrain and Mr. Jacobsen we appointed to their
      positions in May 2001.</p>
      <p ALIGN="JUSTIFY">(2) Mr. Whitehead and Mr. Bradley terminated their employment with
      Empire in May 2001.</font></p>
    </blockquote>
    </td>
  </tr>
</table>
</center></div><font SIZE="3">

<p ALIGN="CENTER">&nbsp;</p>
<b>

<p>Option Grants in Last Fiscal Year</p>
</b>

<p ALIGN="JUSTIFY">No stock options were granted to Executive Officers in 2001. </p>
<b>

<p>Aggregate Option Exercises in Last Fiscal Year</p>
</b>

<p ALIGN="JUSTIFY">Our Executive Officers hold no options as of December 31, 2001. </p>
<b>

<p>Director's Fees</p>
</b>

<p>No director's fees were paid during the fiscal year ended December 31, 2001. </p>

<p ALIGN="JUSTIFY">&nbsp;</p>
<b><u>

<p ALIGN="JUSTIFY">ITEM 11.</u> <u>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT</p>
</u></b>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p>The following table sets forth information regarding the beneficial ownership of our
common stock as of December 31, 2001 for:</p>

<blockquote>
  <ul>
    <li><p ALIGN="JUSTIFY">each person who is known to own beneficially more than 5% of our
      outstanding common stock,</p>
    </li>
    <li><p ALIGN="JUSTIFY">each of our executive officers and directors and</p>
    </li>
    <li><p ALIGN="JUSTIFY">all executive officers and directors as a group.</p>
    </li>
  </ul>
</blockquote>

<p ALIGN="JUSTIFY">The percentage of beneficial ownership for the following table is based
on 23,495,259 shares of common stock outstanding on December 31, 2001. </p>

<p ALIGN="JUSTIFY">Unless otherwise indicated below, to our knowledge, all persons and
entities listed below have sole voting and investment power over their shares of common
stock, except to the extent that individuals share authority with spouses under applicable
law. </p>

<p ALIGN="JUSTIFY">Shares of common stock not outstanding but deemed beneficially owned
because an individual has the right to acquire the shares of common stock within 60 days
are treated as outstanding when determining the amount and percentage of common stock
owned by that individual and by all directors and executive officers as a group, but are
not treated as outstanding for the purpose of computing the percentage ownership of any
other person. Except as set forth below, each person has sole voting and investment power
with respect to the shares of common stock shown. </p>
</font><div align="center"><center>

<table BORDER="0" CELLSPACING="1" CELLPADDING="8" WIDTH="631">
  <tr>
    <td WIDTH="65%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><u><p ALIGN="left">&nbsp;</p>
    <b><p>Name and address of beneficial owner</b></u></font></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><b><p ALIGN="CENTER">Amount and nature of
    beneficial ownership</b></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><b><p ALIGN="CENTER">Percent of class</b></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3">John P. McGrain </font><font
    SIZE="1">(3)<p>1363 N. Country Ranch Road</p>
    <p>Westlake Village, CA 91361</font></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="RIGHT">2,178,647</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">9.27%</font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="JUSTIFY">Thomas J.
    Jacobsen </font><font SIZE="1">(4)</p>
    <p ALIGN="JUSTIFY">Box 176</p>
    <p ALIGN="JUSTIFY">Didsbury, Alberta T0M 0W0</font></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="RIGHT">1,266,421</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">5.39%</font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="JUSTIFY">Albert E.
    Whitehead </font><font SIZE="1">(2)</p>
    <p ALIGN="JUSTIFY">2440 S. Terwilleger Blvd.</p>
    <p ALIGN="JUSTIFY">Tulsa, OK 74114-2707</font></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="RIGHT">3,539,537</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">15.06%</font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="BOTTOM" HEIGHT="26"><font FACE="CG Times" SIZE="3">Thomas R.
    Bradley </font><font SIZE="1">(5)<p>6617 South New Haven</p>
    <p>Tulsa, OK 74136</font></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="RIGHT">970,000</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">4.12%</font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="BOTTOM" HEIGHT="26"><font FACE="CG Times" SIZE="3">John C. Kinard </font><font
    SIZE="1">(6)<p>240 Cook Street</p>
    <p>Denver, CO 80206-0590</font></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="RIGHT">481,331</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">2.04%</font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3">825804 Alberta Ltd.<p>5638-49<sup>th</sup>
    Avenue</p>
    <p>Lacombe, Alberta T4L 1M8</p>
    <p>Canada</font></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="RIGHT">1,532,065</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">6.52%</font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3">Southwestern Resources
    Corporation <p>P. O. Box 10102</p>
    <p>#1650-701 West Georgia Street</p>
    <p>Vancouver, B.C. V7Y 1C6 Canada</font></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="RIGHT">1,333,333</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">5.60%</font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="BOTTOM" HEIGHT="26"><blockquote>
      <font SIZE="3"><p ALIGN="JUSTIFY">All directors and executive officers as a group (5
      persons) </font><font SIZE="1">(7)</font></p>
    </blockquote>
    </td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="RIGHT">8,435,936</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="26"></td>
    <td WIDTH="16%" VALIGN="BOTTOM" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER">35.88%</font></td>
  </tr>
</table>
</center></div><font SIZE="3">

<p ALIGN="JUSTIFY">&nbsp;</p>
</font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="643">
  <tr>
    <td WIDTH="6%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">(1)</font></td>
    <td WIDTH="94%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Except as set forth below,
    to the best of the Registrant&#146;s knowledge, each beneficial owner has sole voting
    power and sole investment power. For each individual, the beneficial ownership information
    set forth above includes shares currently issuable upon exercise of outstanding stock
    options granted to such individuals. Percentage ownership is based on 23,495,259 shares
    outstanding as of March 15, 2002. Shares of common stock issuable within 60 days of March
    15, 2002 upon exercise of stock options or conversion of convertible securities are deemed
    to be outstanding and to be beneficially owned by the person holding the option or
    convertible security for the purpose of computing the percentage ownership of such person
    but are not treated as outstanding for the purpose of computing the percentage ownership
    of any other person.</font></td>
  </tr>
  <tr>
    <td WIDTH="6%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">(2)</font></td>
    <td WIDTH="94%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Includes 876,111 shares
    owned by Mr. Whitehead&#146;s spouse in which he disclaims any interest, and 170,000
    shares issuable upon exercise of a vested stock options.</font></td>
  </tr>
  <tr>
    <td WIDTH="6%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">(3)</font></td>
    <td WIDTH="94%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Includes 211,809 shares
    owned by Patrick Williams Advisors Ltd. which is controlled by Mr. McGrain.</font></td>
  </tr>
  <tr>
    <td WIDTH="6%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">(4)</font></td>
    <td WIDTH="94%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Includes 617,789 shares
    owned by Six Pack Investments, Inc. a company owned by Mr. Jacobsen&#146;s six children,
    but managed by Mr. Jacobsen.</font></td>
  </tr>
  <tr>
    <td WIDTH="6%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">(5)</font></td>
    <td WIDTH="94%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Includes 436,666 shares
    issuable upon exercise of a vested stock options.</font></td>
  </tr>
  <tr>
    <td WIDTH="6%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">(6)</font></td>
    <td WIDTH="94%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Includes 150,000 shares
    owned by Mr. Kinard&#146;s spouse in which he disclaims interest and 170,000 shares
    issuable upon exercise of a vested stock options.</font></td>
  </tr>
  <tr>
    <td WIDTH="6%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">(7)</font></td>
    <td WIDTH="94%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Includes shares issuable
    upon exercise of a vested stock option.</font></td>
  </tr>
</table>
<font SIZE="3"><b><u>

<p ALIGN="JUSTIFY">ITEM 12.</u> <u>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</p>
</u>

<p ALIGN="JUSTIFY">Tulsa Office Overhead</p>

<p ALIGN="JUSTIFY"></b>Pursuant to the Share Exchange Agreement dated May 29, 2001 between
Empire Petroleum Corporation and Americomm Resources Corporation it was agreed that
Directors A. E. Whitehead and Thomas R. Bradley would, in addition to their
director&#146;s duties, manage the Company&#146;s land (lease) inventory for a period of
one (1) year. The Company agreed to pay Tulsa office related expenses up to $7,819.79 per
month for this service which includes office rent. As of December 31, 2001, the Company
owed A. E. Whitehead the sum of $45,981.30 for advancing such fees on the Company&#146;s
behalf.</p>
<b>

<p ALIGN="JUSTIFY">Related Party Debt</p>
</b>

<p ALIGN="JUSTIFY">In March 1999, the Company borrowed $105,000 from the Albert E.
Whitehead Living Trust (&quot;AEW Trust&quot;) pursuant to a promissory note due March 15,
2000 earning interest at the rate of 10% per annum (the &quot;AEW Note&quot;). The AEW
Trust is a revocable trust for the benefit of Mr. Whitehead's spouse. Mr. Whitehead, a
director and significant shareholder of the Company, is the settlor and trustee of the AEW
Trust. The proceeds of this loan were used to pay lease rentals on the Cheyenne River
Development Project. The AEW Trust also paid the Company day-to-day operating expenses
from April through September 1999 including, without limitation, the monthly office lease
payments and the salary of the Company&#146;s secretary. Amounts paid by Mr. Whitehead
were added to the principal of the AEW Note that was $172,754.00 as of December 31, 1999
and $185,508 as of March 15, 2000. </p>

<p ALIGN="JUSTIFY">On March 15, 2000, the Company issued a convertible promissory note due
March 15, 2001 in the principal amount of $295,508 to the AEW Trust, bearing interest at
the rate of 10% per annum and convertible into shares of the Company 's common stock at a
price of $0.4370 per share, which represented the market price of the Company 's common
stock on such date. The convertible note was issued to the AEW Trust in consideration of
the surrender of the original AEW Note and the advancement of an additional $110,000 to
the Company by the AEW Trust. The proceeds of this additional loan were used to pay lease
rentals on the Cheyenne River Development Project. On March 1, 2001 Albert E. Whitehead,
as trustee of the AEW Trust, exercised the right to convert this note to shares of the
Company's common stock and received 748,319 shares covering the principal and interest due
on this note at March 1, 2001. Mr. Whitehead requested that this new share issue be
divided equally between the AEW Trust and the Lacy E. Whitehead Living Trust (Lacy E.
Whitehead is Mr. Whitehead's spouse and Mr. Whitehead disclaims any interest in her shares
in the Company).</p>
<b><u>

<p ALIGN="JUSTIFY">ITEM 13.</u> <u>EXHIBITS AND REPORTS ON FORM 8-K</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">Exhibits</p>
</blockquote>
</u></font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="681">
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><u><p ALIGN="CENTER">Exhibit No.</u></font></td>
    <td WIDTH="84%" VALIGN="BOTTOM"><font SIZE="3"><u><p ALIGN="JUSTIFY">Description</u></font></td>
    <td WIDTH="7%" VALIGN="BOTTOM"><font SIZE="3"><u><p ALIGN="JUSTIFY">Page</u></font></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="JUSTIFY">Articles of
    Incorporation, as amended, and Bylaws</b></font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">3.1</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Articles of Incorporation
    of the Company, as amended to date (1)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">3.2</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Bylaws of the Company (2)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="JUSTIFY">Instruments defining the
    rights of security holders including debentures</b></font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">4.1</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Excerpts from Articles of
    Incorporation, as amended (1)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">4.2</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Excerpts from Bylaws, as
    amended (2)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="JUSTIFY">Material Contracts</b></font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">10.1</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">1995 Stock Option Plan (3)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">10.2</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Form of Stock Option
    Agreement (4)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">10.3</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Americomm Cheyenne River
    Development Project Agreement by and among the Company, Fred S. Jensen, Richard A. Bate,
    A. R. Briggs and Thomas L. Thompson (5)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">10.4</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Promissory Note date March
    15, 2000 issued to Albert E. Whitehead Living Trust (6)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">10.5</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Farmout Agreement dated
    November 15, 2000 among the Company and the other parties named therein (7)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">10.6</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Share Exchange Agreement by
    and among Americomm Resources Corporation, Empire Petroleum Corporation and each of the
    shareholders of Empire Petroleum Corporation (8)</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"></td>
    <td WIDTH="84%" VALIGN="TOP"></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="top"></td>
    <td WIDTH="84%" VALIGN="TOP"></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(1)</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">As filed on Form 10-QSB for
    quarter ended September 30, 1995, effective November 6, 1995</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(2)</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">As filed on Form 10-QSB for
    quarter ended March 31, 1998, effective May 15, 1998</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(3)</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">As filed on Proxy Statement
    dated June 13, 1995, filed June 14, 1995</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(4)</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">As filed on Form 10-KSB for
    the year ended December 31, 1995 as filed March 29, 1996</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(5)</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">As filed on Form 10-QSB for
    quarter ended June 30, 1998, effective August 12, 1998</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(6)</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">As filed on Form 10-QSB/A
    for quarter ended March 31, 2000, effective November 14, 2000 </font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(7)</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">As filed on Form 10-KSB for
    the year ended December 31, 2000 as filed March 29, 2001</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">(8)</font></td>
    <td WIDTH="84%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">As filed on Form 8K June 5,
    2001</font></td>
    <td WIDTH="7%" VALIGN="TOP"></td>
  </tr>
</table>
<font SIZE="3">

<p ALIGN="JUSTIFY">(b) <u>Reports on Form 8-K</p>
</u>

<p ALIGN="JUSTIFY">None</p>
</font>

<p ALIGN="center"><font SIZE="3"><b>SIGNATURES</p>
</b>

<p ALIGN="JUSTIFY">In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.</p>
<u>

<p ALIGN="center">Empire Petroleum Corporation</p>
</u>

<p ALIGN="center">(Registrant)</p>

<p ALIGN="left">Date: April 10, 2002
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
By: <u>/s/John P. McGrain </p>

<blockquote>
  </u><p ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  John P. McGrain </p>
  <p ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Chief Executive Officer</p>
</blockquote>

<p ALIGN="JUSTIFY">In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and on the
dates indicated.</p>
</font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="613">
  <tr>
    <td WIDTH="26%" VALIGN="TOP"><font SIZE="3"><u><b><p ALIGN="CENTER">Signature</b></u></font></td>
    <td WIDTH="13%" VALIGN="TOP"></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="3"><u><b><p ALIGN="CENTER">Title</b></u></font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><u><b><p ALIGN="CENTER">Date</b></u></font></td>
  </tr>
  <tr>
    <td WIDTH="26%" VALIGN="TOP"><font SIZE="3"><u><p ALIGN="JUSTIFY">/s/John P. McGrain</p>
    </u><p ALIGN="JUSTIFY">John P. McGrain</font></td>
    <td WIDTH="13%" VALIGN="TOP"></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Chairman, Chief Executive
    Officer</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">April 10, 2002</font></td>
  </tr>
  <tr>
    <td WIDTH="26%" VALIGN="TOP"><font SIZE="3"><u><p ALIGN="JUSTIFY">/s/Thomas J. Jacobsen</p>
    </u><p ALIGN="JUSTIFY">Thomas J. Jacobsen</font></td>
    <td WIDTH="13%" VALIGN="TOP"></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">President</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">April 10, 2002</font></td>
  </tr>
  <tr>
    <td WIDTH="26%" VALIGN="TOP"><font SIZE="3"><u><p ALIGN="JUSTIFY">/s/Albert E. Whitehead</p>
    </u><p ALIGN="JUSTIFY">Albert E. Whitehead</font></td>
    <td WIDTH="13%" VALIGN="TOP"></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Director</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">April 10, 2002</font></td>
  </tr>
  <tr>
    <td WIDTH="26%" VALIGN="TOP"><font SIZE="3"><u><p ALIGN="JUSTIFY">/s/Thomas R. Bradley</p>
    </u><p ALIGN="JUSTIFY">Thomas R. Bradley</font></td>
    <td WIDTH="13%" VALIGN="TOP"></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Director</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">April 10, 2002</font></td>
  </tr>
  <tr>
    <td WIDTH="26%" VALIGN="TOP"><font SIZE="3"><u><p ALIGN="JUSTIFY">/s/John C. Kinard</p>
    </u><p ALIGN="JUSTIFY">John C. Kinard</font></td>
    <td WIDTH="13%" VALIGN="TOP"></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Director</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">April 10, 2002</font></td>
  </tr>
</table>
<font SIZE="3">

<p ALIGN="JUSTIFY">&nbsp;</p>
</font>

<blockquote>
  <blockquote>
    <blockquote>
      <blockquote>
        <blockquote>
          <blockquote>
            <blockquote>
              <blockquote>
                <blockquote>
                  <blockquote>
                    <p ALIGN="JUSTIFY">&nbsp;</p>
                    <p ALIGN="JUSTIFY">&nbsp;</p>
                    <p ALIGN="JUSTIFY">&nbsp;</p>
                  </blockquote>
                </blockquote>
              </blockquote>
            </blockquote>
          </blockquote>
        </blockquote>
      </blockquote>
    </blockquote>
  </blockquote>
</blockquote>

<p><b>&nbsp;</p>

<p ALIGN="CENTER">EMPIRE PETROLEUM CORPORATION</p>

<p ALIGN="CENTER">&nbsp;</p>

<p ALIGN="CENTER">FINANCIAL STATEMENTS</p>

<p ALIGN="CENTER"></b>&nbsp;</p>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="619">
  <tr>
    <td WIDTH="8%" VALIGN="TOP" COLSPAN="3" HEIGHT="40"></td>
    <td WIDTH="81%" VALIGN="BOTTOM" HEIGHT="40"><b>&nbsp;<p ALIGN="CENTER">CONTENTS</b></td>
    <td WIDTH="11%" VALIGN="TOP" HEIGHT="40"><font SIZE="3"><b><p ALIGN="CENTER">Page No</b>.</font></td>
  </tr>
  <tr>
    <td WIDTH="89%" VALIGN="TOP" COLSPAN="4"><font SIZE="3"><b>December 31, 2001:</b></font></td>
    <td WIDTH="11%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="85%" VALIGN="TOP" COLSPAN="3"><font SIZE="3">Independent Auditors&#146; Report</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-1</b></font></td>
  </tr>
  <tr>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="85%" VALIGN="TOP" COLSPAN="3"><font SIZE="3">Balance Sheet at December 31, 2001</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-2</b></font></td>
  </tr>
  <tr>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="85%" VALIGN="TOP" COLSPAN="3"><font SIZE="3">Statement of Operations for the
    year ended December 31, 2001 </font></td>
    <td WIDTH="11%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">F-3</b></font></td>
  </tr>
  <tr>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="85%" VALIGN="TOP" COLSPAN="3"><font SIZE="3">Statement of Changes in
    Stockholders&#146; Equity for the year ended December 31, 2001</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-4</b></font></td>
  </tr>
  <tr>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="85%" VALIGN="TOP" COLSPAN="3"><font SIZE="3">Statement of Cash Flows for the
    year ended December 31, 2001</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-5</b></font></td>
  </tr>
  <tr>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="85%" VALIGN="TOP" COLSPAN="3"><font SIZE="3">Notes to Financial Statements</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-6</b></font></td>
  </tr>
  <tr>
    <td WIDTH="89%" VALIGN="TOP" COLSPAN="4"><font SIZE="3"><b>December 31, 2000</b>:</font></td>
    <td WIDTH="11%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"></td>
    <td WIDTH="84%" VALIGN="TOP" COLSPAN="2"><font SIZE="3">Independent Auditors&#146; Report</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-13</b></font></td>
  </tr>
  <tr>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"></td>
    <td WIDTH="84%" VALIGN="TOP" COLSPAN="2"><font SIZE="3">Balance Sheet at December 31, 2000</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-14</b></font></td>
  </tr>
  <tr>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"></td>
    <td WIDTH="84%" VALIGN="TOP" COLSPAN="2"><font SIZE="3">Statement of Operations for the
    year ended December 31, 2000 </font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-15</b></font></td>
  </tr>
  <tr>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"></td>
    <td WIDTH="84%" VALIGN="TOP" COLSPAN="2"><font SIZE="3">Statement of Changes in
    Stockholders&#146; Equity for the year ended December 31, 2000</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-16</b></font></td>
  </tr>
  <tr>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"></td>
    <td WIDTH="84%" VALIGN="TOP" COLSPAN="2"><font SIZE="3">Statement of Cash Flows for the
    year ended December 31, 2000</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-17</b></font></td>
  </tr>
  <tr>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"></td>
    <td WIDTH="84%" VALIGN="TOP" COLSPAN="2"><font SIZE="3">Notes to Financial Statements</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">F-18</b></font></td>
  </tr>
</table>

<p><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER"></font><b>&nbsp;</p>

<p ALIGN="CENTER">EMPIRE PETROLEUM CORPORATION</p>

<p ALIGN="CENTER">&nbsp;</p>

<p ALIGN="CENTER">FINANCIAL STATEMENTS</b><font SIZE="2"></p>

<p ALIGN="CENTER"></font><b>&nbsp;</p>

<p ALIGN="CENTER">DECEMBER 31, 2001</b><font SIZE="2"></p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="CENTER">&nbsp;</p>

<p ALIGN="CENTER">INDEPENDENT AUDITORS' REPORT</p>

<p ALIGN="CENTER"></font><font FACE="Arial" SIZE="2">&nbsp;</p>

<p ALIGN="JUSTIFY">To the Directors of</p>

<p ALIGN="JUSTIFY">Empire Petroleum Corporation (formerly known as Americomm Resources
Corporation):</p>

<p ALIGN="JUSTIFY">We have audited the balance sheet of Empire Petroleum Corporation
(formerly known as Americomm Resources Corporation) as at December 31, 2001 and the
statements of income, stockholders equity and cash flows for the year then ended. These
financial statements are the responsibility of the Company&#146;s management. Our
responsibility is to express an opinion on these financial statements based on our audit. </p>

<p ALIGN="JUSTIFY">We conducted our audit in accordance with United States generally
accepted auditing standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.</p>

<p ALIGN="JUSTIFY">In our opinion, these financial statements referred to above present
fairly, in all material respects, the financial position of the Company as at December 31,
2001 and the results of its operations and cash flows for the year then ended in
conformity with United States generally accepted accounting principles.</p>

<p ALIGN="JUSTIFY">The accompanying financial statements have been prepared assuming that
the company will continue as a going concern. As discussed in a note to the financial
statements, the company has suffered recurring losses from operations that raise
substantial doubt about its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of this
uncertainty.</p>
<b><font color="#000080" face="Times New Roman" size="1">

<p></font></b>KPMG LLP Chartered Accountants</p>

<p>Chartered Accountants</p>

<p>Calgary, Canada</p>

<p>March 18, 2002</font><font SIZE="2"></p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="CENTER">F-1</p>

<p ALIGN="CENTER">&nbsp;</p>

<p ALIGN="CENTER"></font><b>&nbsp;</p>

<p ALIGN="CENTER">EMPIRE PETROLEUM CORPORATION</b><font SIZE="2"></p>

<p ALIGN="CENTER">(formerly known as Americomm Resources Corporation)</font><b></p>

<p ALIGN="CENTER">BALANCE SHEET</b></p>

<p ALIGN="CENTER">&nbsp;</p>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="535">
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><b><p ALIGN="CENTER">ASSETS</b></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><b><p ALIGN="CENTER">December 31,</p>
    <p ALIGN="CENTER">2001</b></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Current assets:</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Cash and cash equivalents</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">$ 38,242</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Accounts receivable<p>Prepaid expenses</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">127,710</p>
    <p ALIGN="RIGHT">5,323</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Total current assets</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid"><p ALIGN="RIGHT">171,275</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Property &amp; equipment net of accumulated<p>depreciation
    and depletion</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="BOTTOM"><p ALIGN="RIGHT">7,185,046</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin double"><p
    ALIGN="RIGHT">$ 7,356,321</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><b>LIABILITIES AND STOCKHOLDERS' EQUITY</b></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Current liabilities:</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Accounts payable and accrued liabilities</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">$ 489,149 </td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Debenture payable</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">182,000</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Total current liabilities</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><p
    ALIGN="RIGHT">671,149</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Long-term debenture payable </td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">30,000</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Deferred taxes</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">1,250,000</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Total liabilities</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><p
    ALIGN="RIGHT">1,951,149</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Stockholders' equity:</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Common stock at par value</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">23,495</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Additional paid in capital<p>Accumulated deficit</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">7,441,099</p>
    <p ALIGN="RIGHT">(2,059,422)</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP">Total stockholders' equity</td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><p
    ALIGN="RIGHT">5,405,172</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-bottom: thin double"><p ALIGN="RIGHT">$
    7,356,321</td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
</table>

<p>See accompanying notes to financial statements.</p>

<p>&nbsp;</p>

<p><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-2</font></p>

<p><b>&nbsp;</p>

<p ALIGN="CENTER">EMPIRE PETROLEUM CORPORATION</b><font SIZE="2"></p>

<p ALIGN="CENTER">(formerly known as Americomm Resources Corporation)</font><b></p>

<p ALIGN="CENTER">STATEMENT OF OPERATIONS</b></p>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="523">
  <tr>
    <td WIDTH="76%" VALIGN="TOP"></td>
    <td WIDTH="24%" VALIGN="TOP"><b><p ALIGN="CENTER">Year ended</p>
    <p ALIGN="CENTER">December 31,</b></td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP"></td>
    <td WIDTH="24%" VALIGN="TOP"><b><p ALIGN="CENTER">2001</b></td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP" HEIGHT="38">Revenue:<p>Petroleum and natural gas sales</td>
    <td WIDTH="24%" VALIGN="bottom" HEIGHT="38"><p ALIGN="RIGHT">$ 12,410 </td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="BOTTOM">Royalty expense</td>
    <td WIDTH="24%" VALIGN="TOP"><p ALIGN="RIGHT">(2,482)</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="BOTTOM"></td>
    <td WIDTH="24%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><p
    ALIGN="RIGHT">9,928</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="BOTTOM">Costs and expenses:</td>
    <td WIDTH="24%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP"><blockquote>
      <p>Operating expenses</p>
    </blockquote>
    </td>
    <td WIDTH="24%" VALIGN="BOTTOM"><p ALIGN="RIGHT">30,913</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP"><blockquote>
      <p>General and administrative</p>
    </blockquote>
    </td>
    <td WIDTH="24%" VALIGN="BOTTOM"><p ALIGN="RIGHT">217,366</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP"><blockquote>
      <p>Depletion and amortization</p>
    </blockquote>
    </td>
    <td WIDTH="24%" VALIGN="BOTTOM"><p ALIGN="RIGHT">5,262</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP"></td>
    <td WIDTH="24%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><p
    ALIGN="RIGHT">253,543</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP">Operating loss</td>
    <td WIDTH="24%" VALIGN="top" style="border-bottom: thin solid"><p ALIGN="RIGHT">243,613</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP"></td>
    <td WIDTH="24%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP">Other income and expense:</td>
    <td WIDTH="24%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP">Interest income</td>
    <td WIDTH="24%" VALIGN="TOP"><p ALIGN="RIGHT">6,918</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP">Interest expense</td>
    <td WIDTH="24%" VALIGN="TOP"><p ALIGN="RIGHT">(7,473)</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP">Total other income and expense</td>
    <td WIDTH="24%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><p
    ALIGN="RIGHT">(555)</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP"></td>
    <td WIDTH="24%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP">Net loss</td>
    <td WIDTH="24%" VALIGN="top" style="border-bottom: thin double"><p ALIGN="RIGHT">$
    (244,168) </td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP"></td>
    <td WIDTH="24%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP">Net loss per common share</td>
    <td WIDTH="24%" VALIGN="TOP" style="border-bottom: thin double"><p ALIGN="RIGHT">$ (0.01)</td>
  </tr>
  <tr>
    <td WIDTH="76%" VALIGN="TOP">Weighted average number of<p>common shares outstanding - <font
    SIZE="3">Basic and diluted</font></td>
    <td WIDTH="24%" VALIGN="BOTTOM" style="border-bottom: thin double"><p ALIGN="RIGHT">20,405,078</td>
  </tr>
</table>

<p>See accompanying notes to financial statements</p>

<p>&nbsp;</p>

<p align="center">&nbsp;<font SIZE="2">F-3</font></p>
<b>

<p ALIGN="CENTER">EMPIRE PETROLEUM CORPORATION</b><font SIZE="2"></p>

<p ALIGN="CENTER">(formerly known as Americomm Resources Corporation)</font><font SIZE="3"><b></p>

<p ALIGN="CENTER">STATEMENT OF CHANGES IN STOCKHOLDERS&#146; EQUITY</p>
</b></font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="666">
  <tr>
    <td WIDTH="28%" VALIGN="BOTTOM"></td>
    <td WIDTH="13%" VALIGN="BOTTOM"><font SIZE="2"><b><p ALIGN="CENTER">Shares</b></font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="10%" VALIGN="BOTTOM"><font SIZE="2"><b><p ALIGN="CENTER">Amount</b></font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="14%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Capital in excess of
    par value</b></font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="13%" VALIGN="BOTTOM"><font SIZE="2"><b><p ALIGN="CENTER">Retained earnings</p>
    <p ALIGN="CENTER">(deficit)</b></font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="12%" VALIGN="BOTTOM"><font SIZE="2"><b><p ALIGN="CENTER">Total</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="2"><b>Balances January 1, 2000</b></font></td>
    <td WIDTH="13%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">14,879,721</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">$ 14,880</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="14%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">$ 2,365,528</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="13%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">$(1,815,254)</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">$ 565,154</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="2"><b>Net loss</b></font></td>
    <td WIDTH="13%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">-</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">-</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="14%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">-</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="13%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">(244,168)</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">(244,168)</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="2"><b>Issuance of Common stock</b></font></td>
    <td WIDTH="13%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">8,615,670</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">8,615</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="14%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">5,075,571</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="13%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">-</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">5,084,186</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="2"><b>Balances December 31, 2001</b></font></td>
    <td WIDTH="13%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">23,495,391</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="10%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">$ 23,495</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="14%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">$ 7,441,099</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="13%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">$(2,059,422)</font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="12%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">$ 5,405,172</font></td>
  </tr>
</table>
<font SIZE="3">

<p>See accompanying notes to financial statements</font></p>

<p align="center">&nbsp;<font SIZE="2">F-4</font></p>
<b>

<p ALIGN="CENTER">EMPIRE PETROLEUM CORPORATION</b><font SIZE="2"></p>

<p ALIGN="CENTER">(formerly known as Americomm Resources Corporation)</font><b></p>

<p ALIGN="CENTER">STATEMENT OF CASH FLOWS</b></p>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="571">
  <tr>
    <td WIDTH="79%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><b><p ALIGN="CENTER">Year ended</p>
    <p ALIGN="CENTER">December 31,</b></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><b><p ALIGN="CENTER">2001</b></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Cash flows from operating activities:</td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Net loss</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">$ (244,168)</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Adjustments to reconcile net loss to net cash used in
    operating activities:</td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Depreciation</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">5,262</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Change in non-cash operating working capital</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">242,194</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Net cash used in operating activities </td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><p
    ALIGN="RIGHT">(3,288)</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Cash flows from investing activities:</td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Cash payments for investments in prospects</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">(384,631)</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Acquisition of Empire, net of cash acquired</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">136,691</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Change in non-cash investing working capital</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">(92,106)</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Net cash used in investing activities</td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><p
    ALIGN="RIGHT">(340,046)</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Cash flows from financing activities:</td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Issuance of common stock</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">150,000</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Proceeds of note payable &#150; affiliate</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">212,000</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Net cash provided by financing activities</td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><p
    ALIGN="RIGHT">362,000</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Net increase in cash</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">25,242</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Cash and cash equivalents &#150; Beginning</td>
    <td WIDTH="21%" VALIGN="TOP"><p ALIGN="RIGHT">13,000</td>
  </tr>
  <tr>
    <td WIDTH="79%" VALIGN="TOP">Cash and cash equivalents &#150; Ending</td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin double"><p
    ALIGN="RIGHT">$ 38,242</td>
  </tr>
</table>

<p>See accompanying notes to financial statements</p>

<p align="center">&nbsp;<font SIZE="2">F-5</font></p>
<font SIZE="3"><b>

<p ALIGN="CENTER">EMPIRE PETROLEUM CORPORATION </b></font><font SIZE="2"></p>

<p ALIGN="CENTER">(formerly known as Americomm Resources Corporation)</font><font SIZE="3"><b></p>

<p ALIGN="CENTER">NOTES TO CONSOLDIATED FINANCIAL STATEMENTS</b></p>

<p>&nbsp;<b>General:</b></p>
<b>

<blockquote>
  </b><p ALIGN="JUSTIFY">On July 20, 2001 Americomm Resources Corporation merged with its
  wholly-owned subsidiary, Empire Petroleum Corporation, and simultaneously changed the name
  of the Corporation to Empire Petroleum Corporation. Both the merger and name change were
  effective August 15, 2001. Americomm Resources Corporation (the &quot;Company&quot;) was
  originally incorporated in the State of Utah on the 22nd day of August 1983, as Chambers
  Energy Corporation. On the 7th day of March 1985, the state of incorporation was changed
  to Delaware by means of a merger with Americomm Corporation, a Delaware corporation formed
  for the purpose of effecting the said change. In July 1995, the Company changed its name
  to Americomm Resources Corporation. The Company is involved in oil and gas exploration.</p>
  <p>&nbsp;</p>
</blockquote>

<p><b>&nbsp;</p>

<p>1. Continuing operations:</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">The continuation of the Company is dependent upon the ability of
  the Company to attain future profitable operations. These financial statements have been
  prepared on the basis of United States accounting principles applicable to a company with
  continuing operations, which assume that the Company will continue in operation for the
  foreseeable future and will be able to realize its assets and discharge its obligations in
  the normal course of operations. Management believes the going concern assumption to be
  appropriate for these financial statements. If the going concern assumption were not
  appropriate for these financial statements, then adjustments might be necessary to the
  carrying value of assets and liabilities, reported expenses and the balance sheet
  classifications used.</p>
  <p ALIGN="JUSTIFY">The Company continues to explore and develop its oil and gas interests.
  The ultimate recoverability of the Company&#146;s investment in its oil and gas interests
  is dependent upon the existence and discovery of economically recoverable oil and gas
  reserves, confirmation of the Company&#146;s interest in the oil and gas interests, the
  ability of the Company to obtain necessary financing to further develop the interests, and
  upon the ability to attain future profitable production. The Company has been incurring
  significant losses in recent years and has a significant working capital deficiency as at
  December 31, 2001.</p>
  <p ALIGN="JUSTIFY">The accompanying financial statements have been prepared on the basis
  of United States accounting principles applicable to a company with continuing operations.
  Should the Company not be able to meet the objectives described above and have continued
  operations, certain assets and liability accounts would require adjustment and
  reclassification.</p>
  </font>
</blockquote>

<p><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-6</font><font SIZE="3"><b></p>

<p>2. Significant accounting policies:</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">The financial statements of the Company have been prepared by
  management in accordance with generally accepted accounting principles in the United
  States. The preparation of financial statements in conformity with generally accepted
  accounting principles requires management to make estimates and assumptions that affect
  the amounts reported in the financial statements and accompanying notes. Actual results
  could differ from those estimates. The financial statements have, in management&#146; s
  opinion, been properly prepared using careful judgment with reasonable limits of
  materiality and within the framework of the significant policies summarized below:</p>
  <p ALIGN="JUSTIFY">(a) Capital assets:</p>
  <blockquote>
    <p ALIGN="JUSTIFY">The Company uses the successful efforts method of accounting for its
    oil and gas activities. Costs incurred are deferred until exploration and completion
    results are evaluated. At such time, costs of activities with economically recoverable
    reserves are capitalized as proven properties, and costs of unsuccessful or uneconomical
    development work are expensed. </p>
  </blockquote>
  <p ALIGN="JUSTIFY">(b) Future site restoration and abandonment costs:</p>
  <blockquote>
    <p ALIGN="JUSTIFY">Site restoration and abandonment costs are provided for over the life
    of the estimated proven reserves on a unit-of-production basis. Costs are estimated each
    year by management in consultation with the Company's engineers based on current
    regulations, costs, technology and industry standards. The period charge is expensed and
    actual site restoration and abandonment expenditures are charged to the accumulated
    provision account as incurred.</p>
  </blockquote>
  <p ALIGN="JUSTIFY">(c) Per share amounts:</p>
  <blockquote>
    <b><p ALIGN="JUSTIFY"></b>SFAS No. 128, &quot;Earnings Per Share&quot; requires
    presentation of basic earnings per share (&quot;Basic EPS&quot;) and diluted earnings per
    share (&quot;Diluted EPS&quot;). The computation of basic earnings per share is computed
    by dividing earnings available to common stockholders by the weighted average number of
    outstanding common shares during the period. Diluted EPS gives effect to all dilutive
    potential common shares outstanding during the period. The computation of diluted EPS does
    not assume conversion, exercise or contingent exercise of securities that would have an
    anti-dilutive effect on losses.</p>
  </blockquote>
  <p ALIGN="JUSTIFY">(d) Income taxes:</p>
  <blockquote>
    <p ALIGN="JUSTIFY">The Company accounts for income taxes in accordance with the asset and
    liability method of accounting for income taxes set forth in Statement of Financial
    Accounting Standards No. 109, Accounting for Income Taxes. Under the asset and liability
    method of Statement 109, deferred tax assets and liabilities are recognized for the future
    tax consequences attributable to differences between the financial statement carrying
    amounts of existing assets and liabilities and their respective tax bases and operating
    loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using
    enacted tax rates expected to apply to the taxable income in the years in which those
    temporary differences are expected to be recovered or settled. Under Statement 109, the
    effect on deferred tax assets and liabilities of a change in tax rates is recognized in
    income in the period that includes the enactment date.</font></p>
  </blockquote>
</blockquote>

<p><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-7</font><font SIZE="3"></p>
<b>

<p>2. Significant accounting policies (continued):</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">(e) Comprehensive income:</p>
  <blockquote>
    <p ALIGN="JUSTIFY">SFAS 130 requires the reporting of comprehensive income in addition to
    net earnings. Comprehensive income includes net income plus other comprehensive income;
    specifically, all changes in equity of a company during a period arising from non-owner
    sources.</p>
  </blockquote>
  <p ALIGN="JUSTIFY">(f) Financial instruments:</p>
  <blockquote>
    <p ALIGN="JUSTIFY">The carrying value of current assets and current liabilities
    approximate their fair value due to the relatively short period to maturity of the
    instruments.</p>
  </blockquote>
  <p ALIGN="JUSTIFY">(g) Cash and cash equivalents:</p>
  <blockquote>
    <p ALIGN="JUSTIFY">The Company defines cash and cash equivalents to be cash on hand, cash
    in chequing accounts, certificates of deposit, cash in money market accounts and certain
    investments with maturities of three months or less from the date of purchase. </p>
  </blockquote>
  </font><p ALIGN="JUSTIFY"><font SIZE="3">(h) Stock option plan:</font></p>
  <blockquote>
    <font SIZE="2"><p ALIGN="JUSTIFY"></font><font SIZE="3">The Company has a stock option
    plan that is described in note 5(c) and uses the intrinsic value method of accounting for
    stock-based compensation in accordance with Accounting Principles Board Opinion
    (&quot;APB&quot;) No. 25. When stock options are granted, no compensation expense is
    recorded. Consideration received on the exercise of the stock option is credited to share
    capital.</p>
  </blockquote>
  <p ALIGN="JUSTIFY">(i) Concentration of credit risk:</p>
  <blockquote>
    <p ALIGN="JUSTIFY">The Company's financial instruments exposed to concentrations of credit
    risk consist primarily of cash equivalents. The Company maintains its cash balances at
    several financial institutions. The balance is insured by the Canada Deposit Insurance
    Corporation up to Cdn.$60,000. At December 31, 2001 the Company's deposits were not in
    excess of the amount insured by the Federal Deposit Insurance Corporation.</font><font
    FACE="Arial" SIZE="2" COLOR="#0000ff"> </p>
    </font><font SIZE="3"><p ALIGN="JUSTIFY">Translation of foreign currency:</p>
    <p ALIGN="JUSTIFY">The Company translates the foreign currency components of its financial
    statements in accordance with the requirements of SFAS 52, &quot;Foreign Currency
    Translation.&quot; Assets and liabilities are translated at current exchange rates and
    related revenues and expenses are translated at average exchange rates in effect during
    the period. Resulting translation adjustments are recorded as a separate component in
    stockholders&#146; equity. Foreign currency transaction gains and losses are included in
    determining net income.</font></p>
  </blockquote>
</blockquote>
<font SIZE="3"><b>

<p>3. Empire Petroleum Corporation acquisition:</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">On May 29, 2001 the Company acquired Empire Petroleum Corporation,
  a private company that owns a 25% interest in the Cheyenne River Prospect, increasing the
  Company&#146;s working </p>
  </font><font SIZE="2">
</blockquote>

<p ALIGN="CENTER">F-8</p>

<blockquote>
  </font><font SIZE="3"><p ALIGN="JUSTIFY">interest in the Cheyenne River Wyoming Prospect
  to 75%. The acquisition of Empire was accomplished by the issue of 7,492,351 common shares
  or 30.6% of the total 24,476,925 shares outstanding on a fully diluted basis. The
  Company&#146;s shares issued were valued at $0.55 each for this transaction. The results
  of operations of Empire were included in the Company&#146;s financial statements effective
  May 29, 2001. The acquisition was accounted for as follows:</p>
  </font>
</blockquote>

<p ALIGN="center">&nbsp;</p>
<div align="center"><center>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="375">
  <tr>
    <td WIDTH="234" VALIGN="TOP"></td>
    <td WIDTH="109" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Value of shares issued</font></td>
    <td WIDTH="109" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">$ 4,120,793</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Current assets </font></td>
    <td WIDTH="109" VALIGN="BOTTOM"><font SIZE="3"><p ALIGN="RIGHT">347,762</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Investments</font></td>
    <td WIDTH="109" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">206,250</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Current liabilities</font></td>
    <td WIDTH="109" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">(607,182)</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Deferred taxes</font></td>
    <td WIDTH="109" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">(1,250,000)</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"><font SIZE="3">Petroleum and natural gas properties</font></td>
    <td WIDTH="109" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">5,423,963</font></td>
  </tr>
  <tr>
    <td WIDTH="234" VALIGN="TOP"></td>
    <td WIDTH="109" VALIGN="top" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="3"><p ALIGN="RIGHT">$ 4,120,793</font></td>
  </tr>
</table>
</center></div>

<p><font FACE="Arial" SIZE="2">&nbsp;</p>
</font><font SIZE="3"><b>

<p>4. Note payable/debenture payable:</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">On June 4, 2001 the Company received proceeds from two notes
  payable in the amount of $116,000 and further signed a debenture note payable from an
  affiliated person for a further $66,000. These notes are unsecured and bear interest at
  12% per year, with interest payable monthly. They are due and payable by the corporation
  on June 4, 2002 including a 3% premium on the principal amounts due. In no event shall
  interest to be paid exceed an amount equal to simple interest on the unpaid principal
  balances of the notes at the maximum rate permitted by applicable law.</p>
  <p ALIGN="JUSTIFY">On August 23, 2001 the Company received proceeds of a long-term note
  payable in the amount of $30,000. The note is unsecured and bears interest at 1% per month
  and is convertible, at the note holder&#146;s option, into a .5% working interest in the
  Timber Draw project. </p>
  <p ALIGN="JUSTIFY">As of December 31, 2000, the Company had a note payable of $282,754 to
  a director/shareholder, including the original amount of the note of $110,000, and
  additional amounts of $67,752 of accrued operating expenses paid by the director/
  shareholder. Interest is accrued at 10 percent per annum and will be paid upon maturity of
  the note on March 15, 2001. The director/shareholder as of December 31, 2000 has the
  option to convert the debt to common stock at any time before to March 15, 2001 at $.4370
  per share. On March 7, 2001, the note was converted and 748,319 shares were issued. </p>
  </font><font FACE="Arial" SIZE="2"><p ALIGN="JUSTIFY">&nbsp;</p>
  </font>
</blockquote>

<p><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-9</font><font FACE="Arial" SIZE="2"><b></p>

<p>5. Stock options:</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">The Company has a stock option plan. Under the plan adopted in
  1995, the Company may grant options for up to 1,600,000 shares of common stock. The
  compensation committee of the Board of Directors has sole discretion for the granting of
  these options. The exercise price of these options is the fair market value on the date of
  grant. The following stock options are outstanding at December 31, 2001:</p>
  </font><font SIZE="3">
</blockquote>
</font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="445">
  <tr>
    <td WIDTH="37%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Year granted</b></font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Shares under option</b></font></td>
    <td WIDTH="4%" VALIGN="BOTTOM"></td>
    <td WIDTH="19%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Expiration</b></font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Officer/Employee</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1995</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">66,666</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">06/14/05</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Officer/Employee</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1996</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">200,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">10/11/06</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Others</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1996</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">10,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">11/28/06</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Officer/Employee</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1998</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">100,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">07/09/08</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Directors</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1998</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">300,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">07/09/08</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Others</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">03/15/10</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Officer/Employee</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">70,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">03/15/10</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Directors</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">210,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">03/15/10</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="top" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="3"><p ALIGN="RIGHT">981,666</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
</table>

<p><font SIZE="3">&nbsp;</p>
<b>

<p>6. Income taxes:</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">The provision for income taxes differs from the amount obtained by
  applying the combined Federal and State income tax rate of 34% to income before income
  taxes. The difference relates to the following items:</font></p>
</blockquote>
<div align="center"><center>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="390">
  <tr>
    <td WIDTH="77%" VALIGN="TOP" HEIGHT="14"><font FACE="Arial" SIZE="2"><p ALIGN="JUSTIFY">Statutory
    tax rate</font></td>
    <td WIDTH="23%" VALIGN="top" HEIGHT="14" style="border-bottom: thin double"><font SIZE="3"><p
    ALIGN="CENTER">34%</font></td>
  </tr>
  <tr>
    <td WIDTH="77%" VALIGN="TOP" HEIGHT="14"><font FACE="Arial" SIZE="2"><p ALIGN="JUSTIFY">&nbsp;</p>
    <p ALIGN="JUSTIFY">Expected recovery</font></td>
    <td WIDTH="23%" VALIGN="BOTTOM" HEIGHT="14"><font SIZE="3"><p ALIGN="RIGHT">$ (83,017)</font></td>
  </tr>
  <tr>
    <td WIDTH="77%" VALIGN="TOP" HEIGHT="14"><font FACE="Arial" SIZE="2"><p ALIGN="JUSTIFY">Benefit
    of losses not recognized</font></td>
    <td WIDTH="23%" VALIGN="BOTTOM" HEIGHT="14"><font SIZE="3"><p ALIGN="RIGHT">83,017</font></td>
  </tr>
  <tr>
    <td WIDTH="77%" VALIGN="TOP" HEIGHT="14"></td>
    <td WIDTH="23%" VALIGN="bottom" HEIGHT="14"
    style="border-top: thin solid; border-bottom: thin double"><p ALIGN="RIGHT"><font SIZE="3">$
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></td>
  </tr>
</table>
</center></div>

<blockquote>
  <font FACE="Arial" SIZE="2"><p ALIGN="CENTER">The components of the net deferred income
  tax liability at December 31, 2001 is as follows:</font></p>
</blockquote>

<p ALIGN="center">&nbsp;</p>
<div align="center"><center>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="384">
  <tr>
    <td WIDTH="77%" VALIGN="TOP"><font FACE="Arial" SIZE="2"><p ALIGN="JUSTIFY">Deferred tax
    assets:</font></td>
    <td WIDTH="23%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="77%" VALIGN="TOP"><font FACE="Arial" SIZE="2"><p ALIGN="JUSTIFY">Loss carry
    forwards</font></td>
    <td WIDTH="23%" VALIGN="TOP"><font FACE="Arial" SIZE="2"><p ALIGN="RIGHT">$ 576,000</font></td>
  </tr>
  <tr>
    <td WIDTH="77%" VALIGN="BOTTOM"><font FACE="Arial" SIZE="2">Deferred tax liabilities:</font></td>
    <td WIDTH="23%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="77%" VALIGN="BOTTOM"><font FACE="Arial" SIZE="2"><p ALIGN="JUSTIFY">Property,
    plant and equipment</font></td>
    <td WIDTH="23%" VALIGN="TOP"><font FACE="Arial" SIZE="2"><p ALIGN="RIGHT">1,826,000</font></td>
  </tr>
  <tr>
    <td WIDTH="77%" VALIGN="BOTTOM"><font FACE="Arial" SIZE="2"><p ALIGN="JUSTIFY">Net
    deferred tax liability</font></td>
    <td WIDTH="23%" VALIGN="top" style="border-top: thin solid; border-bottom: thin double"><font
    FACE="Arial" SIZE="2"><p ALIGN="RIGHT">$ 1,250,000</font></td>
  </tr>
</table>
</center></div>

<p><font FACE="Arial" SIZE="2">&nbsp;</p>

<p ALIGN="JUSTIFY"></font><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-10</font><font FACE="Arial" SIZE="2"></p>

<p ALIGN="CENTER"></font><font SIZE="3"><b>&nbsp;</p>

<p>7. Related party transactions:</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">During 2001, the Company incurred $11,120 in travel expenses for a
  director as well as $54,063 in servicing for drilling and completion of a well by a
  company owned by a director.</p>
  <p ALIGN="JUSTIFY">As well, a director paid $45,981 of operating expenses on behalf of the
  Company which the Company has recorded as payable.</p>
</blockquote>

<p><b>&nbsp;</p>

<p>8. Operating lease:</p>

<blockquote>
  </b><p ALIGN="JUSTIFY">The Company leases office space under operating lease agreements
  with unrelated parties, which will expire in 2003 and 2005. </p>
  <p ALIGN="JUSTIFY">The future minimum lease payments under the operating lease are as
  follows:</p>
  <p ALIGN="JUSTIFY"></font>&nbsp;</p>
</blockquote>

<p ALIGN="LEFT">&nbsp;</p>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="492">
  <tr>
    <td WIDTH="381" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2002</font></td>
    <td WIDTH="79" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">$ 75,645</font></td>
  </tr>
  <tr>
    <td WIDTH="381" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2003</font></td>
    <td WIDTH="79" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">52,287</font></td>
  </tr>
  <tr>
    <td WIDTH="381" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2004</font></td>
    <td WIDTH="79" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">28,929</font></td>
  </tr>
  <tr>
    <td WIDTH="381" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2005</font></td>
    <td WIDTH="79" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">9,643</font></td>
  </tr>
  <tr>
    <td WIDTH="381" VALIGN="TOP"></td>
    <td WIDTH="79" VALIGN="top" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="3"><p ALIGN="RIGHT">$ 166,504</font></td>
  </tr>
</table>
<font SIZE="3">

<p ALIGN="JUSTIFY">Rent expense for the year ended December 31, 2001 was $59,184</p>

<p ALIGN="JUSTIFY"></font><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-11</font><font SIZE="3"></p>
<b>

<p ALIGN="CENTER">EMPIRE PETROLEUM CORPORATION</p>

<p ALIGN="CENTER">FINANCIAL STATEMENTS</b></p>
<b>

<p ALIGN="CENTER">DECEMBER 31, 2000</b></p>

<p ALIGN="CENTER"></font><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-12</font><font SIZE="3"></p>
<b>

<p ALIGN="CENTER">MAGEE RAUSCH &amp; SHELTON, LLP</p>

<p ALIGN="CENTER">Certified Public Accountants</p>

<p ALIGN="CENTER">1856 East 15th Street</p>

<p ALIGN="CENTER">Tulsa, Oklahoma 74159</p>

<p ALIGN="CENTER">PH: 918-744-0191</p>

<p ALIGN="CENTER">FAX: 918-744-5810</b></p>

<p>&nbsp;</p>

<p>To the Board of Directors and Stockholders</p>

<p>Americomm Resources Corporation</p>

<p>Tulsa, Oklahoma</p>

<p ALIGN="CENTER">Independent Auditor's Report</p>

<p ALIGN="JUSTIFY">We have audited the accompanying balance sheet of Americomm Resources
Corporation as of December 31, 2000 and the related statements of income, changes in
stockholders' equity (deficiency) and cash flows for the year ended December 31, 2000.
These financial statements are the responsibility of Americomm Resources Corporation's
management. Our responsibility is to express an opinion on these financial statements
based on our audit.</p>

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

<p ALIGN="JUSTIFY">In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Americomm Resources
Corporation at December 31, 2000, and the results of its operations and its cash flows for
the year ended December 31, 2000 in conformity with generally accepted accounting
principles.</p>

<p ALIGN="JUSTIFY">The accompanying financial statements have been prepared assuming that
the company will continue as a going concern. As discussed in a note to the financial
statements, the company has suffered recurring losses from operations that raise
substantial doubt about its ability to continue as a going concern. Management's plans in
regard to those matters are also described in the notes. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.</p>

<p ALIGN="JUSTIFY">Magee Raush &amp; Shelton LLP</p>

<p ALIGN="JUSTIFY">Tulsa, Oklahoma</p>

<p ALIGN="JUSTIFY">February 9, 2001</p>
</font>

<p ALIGN="CENTER">F-13</p>

<p><font SIZE="3"><b>&nbsp;</p>

<p ALIGN="CENTER">AMERICOMM RESOURCES CORPORATION</p>

<p ALIGN="CENTER">BALANCE SHEET</b></p>

<p ALIGN="CENTER"></font>&nbsp;</p>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="535">
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">&nbsp;</p>
    <p ALIGN="CENTER">ASSETS</b></font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">December 31,</p>
    <p ALIGN="CENTER">2000</b></font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Current assets:</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Cash and cash equivalents</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">$ 13,000</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Accounts receivable<p>Prepaid expenses</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">35,604</p>
    <p ALIGN="RIGHT">3,569</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Total current assets</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">52,173</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Investment in prospects</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="BOTTOM"><font SIZE="3"><p ALIGN="RIGHT">881,407</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Property &amp; equipment net of accumulated<p>Depreciation
    of $5,197</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="BOTTOM"><font SIZE="3"><p ALIGN="RIGHT">9,358</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">890,765</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><p
    ALIGN="RIGHT">$ 942,938</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3"><b>LIABILITIES AND STOCKHOLDERS' EQUITY</b></font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Current liabilities:</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Accrued payroll and payroll taxes<p>Accrued
    interest &#150; related party</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">$ 55,339 </p>
    <p ALIGN="RIGHT">39,691</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Notes payable &#150; related party</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">282,754</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Total current liabilities</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">377,784</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Stockholders' equity:</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Common stock, $0.001 par value;<p>Authorized
    50,000,000 shares,</p>
    <p>14,879,721 shares outstanding,</p>
    <p>with 132 shares held in treasury</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="BOTTOM"><font SIZE="3"><p ALIGN="RIGHT">14,880</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Capital in excess of par value<p>Retained
    earnings (deficit)</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">2,365,528</p>
    <p ALIGN="RIGHT">(1,815,254)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"><font SIZE="3">Total stockholders' equity</font></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">565,154</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" VALIGN="TOP"></td>
    <td WIDTH="9%" VALIGN="TOP"></td>
    <td WIDTH="21%" VALIGN="top" style="border-bottom: thin double"><font SIZE="3"><p
    ALIGN="RIGHT">$ 942,938</font></td>
  </tr>
</table>
<font SIZE="3">

<p ALIGN="JUSTIFY">See accompanying notes to financial statements.</p>
</font>

<p ALIGN="CENTER">F-14</p>
<font SIZE="3"><b>

<p ALIGN="CENTER">AMERICOMM RESOURCES CORPORATION</p>

<p ALIGN="CENTER">STATEMENT OF OPERATIONS</b></p>
</font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="529">
  <tr>
    <td WIDTH="398" VALIGN="TOP"></td>
    <td WIDTH="99" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">Year ended</p>
    <p ALIGN="CENTER">December 31,</b></font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"></td>
    <td WIDTH="99" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">2000</b></font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP" HEIGHT="38"><font SIZE="3">Revenue:<p>Revenues, net </font></td>
    <td WIDTH="99" VALIGN="bottom" HEIGHT="38"><font SIZE="3"><p ALIGN="RIGHT">$
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    - </font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="BOTTOM"><font SIZE="3">Less royalty expense</font></td>
    <td WIDTH="99" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">-</font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="BOTTOM"></td>
    <td WIDTH="99" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">-</font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="BOTTOM"><font SIZE="3">Costs and expenses:</font></td>
    <td WIDTH="99" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"><blockquote>
      <font SIZE="3"><p>General and administrative</font></p>
    </blockquote>
    </td>
    <td WIDTH="99" VALIGN="BOTTOM"><font SIZE="3"><p ALIGN="RIGHT">138,098</font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"><font SIZE="3">Operating loss</font></td>
    <td WIDTH="99" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">(138,098)</font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"></td>
    <td WIDTH="99" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"><font SIZE="3">Other income and (expense):</font></td>
    <td WIDTH="99" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"><font SIZE="3">Interest income</font></td>
    <td WIDTH="99" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">3,080</font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"><font SIZE="3">Interest expense</font></td>
    <td WIDTH="99" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">(26,015)</font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"><font SIZE="3">Total other income and expense</font></td>
    <td WIDTH="99" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">(22,935)</font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"></td>
    <td WIDTH="99" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"><font SIZE="3">Net loss</font></td>
    <td WIDTH="99" VALIGN="top" style="border-bottom: thin double"><font SIZE="3"><p
    ALIGN="RIGHT">$ (161,033) </font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"></td>
    <td WIDTH="99" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"><font SIZE="3">Net loss per common share</font></td>
    <td WIDTH="99" VALIGN="TOP" style="border-bottom: thin double"><font SIZE="3"><p
    ALIGN="RIGHT">$ (0.01)</font></td>
  </tr>
  <tr>
    <td WIDTH="398" VALIGN="TOP"><font SIZE="3">Weighted average number of<p>common shares
    outstanding</font></td>
    <td WIDTH="99" VALIGN="BOTTOM" style="border-bottom: thin double"><font SIZE="3"><p
    ALIGN="RIGHT">14,712,921</font></td>
  </tr>
</table>
<font SIZE="3">

<p>See accompanying notes to financial statements</p>

<p ALIGN="CENTER">&nbsp;</p>

<p ALIGN="CENTER">&nbsp;&nbsp;<font SIZE="2">F-15</font></p>
<b>

<p ALIGN="CENTER">AMERICOMM RESOURCES CORPORATION</p>

<p ALIGN="CENTER">STATEMENT OF CHANGES IN STOCKHOLDERS&#146; EQUITY</p>
</b></font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="648">
  <tr>
    <td WIDTH="28%" VALIGN="BOTTOM"></td>
    <td WIDTH="12%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Shares</b></font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="10%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Amount</b></font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="13%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Capital in excess of
    par value</b></font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="14%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Retained earnings</p>
    <p ALIGN="CENTER">(deficit)</b></font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="12%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Total</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="3"><b>Balances January 1, 2000</b></font></td>
    <td WIDTH="12%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">14,213,055</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="10%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">$ 14,212</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="13%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">$ 2,166,196</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="14%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">$(1,654,221)</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="12%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">$ 526,187</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="3"><b>Net loss</b></font></td>
    <td WIDTH="12%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">-</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="10%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">-</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="13%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">-</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="14%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">(161,033)</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="12%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">(161,033)</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="3"><b>Issuance of Common stock</b></font></td>
    <td WIDTH="12%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">666,666</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="10%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">668</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="13%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">199,332</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="14%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">-</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="12%" VALIGN="BOTTOM"><font SIZE="2"><p ALIGN="RIGHT">200,000</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="3"><b>Balances December 31, 2000</b></font></td>
    <td WIDTH="12%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">14,879,721</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="10%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">$ 14,880</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="13%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">$ 2,365,528</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="14%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">$(1,815,254)</font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="12%" VALIGN="bottom" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="2"><p ALIGN="RIGHT">$ 565,154</font></td>
  </tr>
</table>
<font SIZE="3">

<p>See accompanying notes to financial statements</p>

<p ALIGN="CENTER">F-16</p>

<p><b>&nbsp;</p>

<p ALIGN="CENTER">AMERICOMM RESOURCES CORPORATION</p>

<p ALIGN="CENTER">STATEMENT OF CASH FLOWS</b></p>
</font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="571">
  <tr>
    <td WIDTH="81%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">Year ended</p>
    <p ALIGN="CENTER">December 31,</b></font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">2000</b></font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3"><b>Cash flows from operating activities:</b></font></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Net loss</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">$ (161,033)</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Adjustments to reconcile net loss to net <p>cash
    used by operating activities:</font></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Depreciation expense</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">2,079</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Changes in operating assets and liabilities:<p>Accounts
    receivable </font></td>
    <td WIDTH="19%" VALIGN="BOTTOM"><font SIZE="3"><p ALIGN="RIGHT">(35,604)</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Prepaid expenses</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">(325)</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Deposits</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">3,244</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Accruals</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">25,329</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Total adjustments</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">5,277</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Net cash used by operating activities </font></td>
    <td WIDTH="19%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">(166,310)</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3"><b>Cash flows from investing activities:</b></font></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Cash payments for investments in prospects</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">(153,843)</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Net cash used in investing activities</font></td>
    <td WIDTH="19%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">(153,843)</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3"><b>Cash flows from financing activities:</b></font></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Issuance of common stock</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">200,000</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Proceeds from note payable &#150; related
    party</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">110,000</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Net cash provided by financing activities</font></td>
    <td WIDTH="19%" VALIGN="top" style="border-top: thin solid; border-bottom: thin solid"><font
    SIZE="3"><p ALIGN="RIGHT">310,000</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Net decrease in cash and cash equivalents</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">(10,153)</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Cash and cash equivalents, beginning of year</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">23,153</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Cash and cash equivalents, ending of year</font></td>
    <td WIDTH="19%" VALIGN="top" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="3"><p ALIGN="RIGHT">$ 13,000</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3"><b>Supplemental Disclosures:</b></font></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Interest expense paid</font></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin double"><font SIZE="3"><p
    ALIGN="RIGHT">0</font></td>
  </tr>
  <tr>
    <td WIDTH="81%" VALIGN="TOP"><font SIZE="3">Income taxed paid</font></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin double"><font SIZE="3"><p
    ALIGN="RIGHT">0</font></td>
  </tr>
</table>
<font SIZE="3">

<p>See accompanying notes to financial statements</p>

<p ALIGN="JUSTIFY"></font><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-17</font><font SIZE="3"></p>
<b>

<p ALIGN="CENTER">AMERICOMM RESOURCES CORPORATION</p>

<p ALIGN="CENTER">NOTES TO FINANCIAL STATEMENTS</p>

<p ALIGN="CENTER">DECEMBER 31, 2000</b></p>
<b>

<p ALIGN="JUSTIFY">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p>
<b>

<p ALIGN="JUSTIFY">General</b> - Americomm Resources Corporation (&quot;Company&quot;) was
originally incorporated in the State of Utah on the 22nd day of August 1983, as Chambers
Energy Corporation. On the 7th day of March 1985, the state of incorporation was changed
to Delaware by means of a merger with Americomm Corporation, a Delaware corporation formed
for the purpose of effecting the said change. In July 1995, the Company changed its name
to Americomm Resources Corporation. The Company is involved in oil and gas exploration.</p>
<b>

<p ALIGN="JUSTIFY">Basis of Accounting</b> - Assets, liabilities, revenues and expenses
are recognized on the accrual method of accounting for financial statement presentation.</p>
<b>

<p ALIGN="JUSTIFY">Use of Estimates</b> - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.</p>
<b>

<p ALIGN="JUSTIFY">Property and Equipment</b> - Property and equipment are carried at
cost. Depreciation is computed using the straight-line method over the estimated useful
lives of the property and equipment. When assets are retired or otherwise disposed of, the
cost and related accumulated depreciation are removed from the accounts, and any resulting
gain or loss is reflected in income for the period. The cost of maintenance and repairs is
charged to income as incurred, whereas significant renewals and betterments are
capitalized and deduction is made for retirements resulting from the renewals or
betterments. Depreciation expense was $2,079 for the year ended December 31, 2000.</p>
<b>

<p ALIGN="JUSTIFY">Income Taxes</b> - The Company accounts for income taxes in accordance
with the asset and liability method of accounting for income taxes set forth in Statement
of Financial Accounting Standards No. 109, Accounting for Income Taxes. Under the asset
and liability method of Statement 109, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to the taxable income
in the years in which those temporary differences are expected to be recovered or settled.
Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.</p>
<b>

<p ALIGN="JUSTIFY">Cash and Cash equivalents</b> - For purposes of the statement of cash
flows, the Company considers all cash in checking or savings accounts to be cash
equivalents.</p>

<p ALIGN="JUSTIFY"></font><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-18</font><font SIZE="3"></p>
<b>

<p>NOTE PAYABLE - RELATED PARTY:</b></p>

<p ALIGN="JUSTIFY">As of December 31, 2000, the Company had a note payable of $282,754 to
a director/shareholder, including the original amount of the note of $110,000 and
additional amounts of $67,752 of accrued operating expenses paid by the director/
shareholder. Interest is accrued at 10 percent per annum and will be paid upon maturity of
the note on March 15, 2001. The director/shareholder as of December 31, 2000 has the
option to convert the debt to common stock at any time before March 15, 2001 at $.4370 per
share. At December 31, 2000, the shareholder has not opted to convert the debt. Accrued
interest as of December 31, 2000 was $39,691.</p>
<b>

<p ALIGN="JUSTIFY">INCOME TAXES:</b></p>

<p ALIGN="JUSTIFY">The Company has net operating loss carryovers of approximately $856,000
that expire from the years 2005 to 2020.</p>

<p ALIGN="JUSTIFY">The deferred tax assets related to these items are as follows:</p>
</font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="343">
  <tr>
    <td WIDTH="219" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Net operating loss
    carryover</font></td>
    <td WIDTH="92" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">$ 342,000</font></td>
  </tr>
  <tr>
    <td WIDTH="219" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Less valuation allowance</font></td>
    <td WIDTH="92" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">342,000</font></td>
  </tr>
  <tr>
    <td WIDTH="219" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Net deferred tax asset</font></td>
    <td WIDTH="92" VALIGN="top" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="3"><p ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0</font></td>
  </tr>
</table>
<font SIZE="3"><b>

<p ALIGN="JUSTIFY">CAPITAL STOCK:</b></p>

<p ALIGN="JUSTIFY">As outlined in these footnotes, the Company has outstanding options
with various parties to purchase its common stock. Due to the stock's market price, these
shares have not been included in the weighted average shares computation.</p>
<b>

<p ALIGN="JUSTIFY">OPERATING LEASE:</b></p>

<p ALIGN="JUSTIFY">The Company leases office space under an operating lease agreement with
an unrelated party which will expire in 2003. The lease calls for monthly lease payments
of $3,244 for years one and two and then monthly lease payments of $3,569 for year three,
and $3,893 for years four and five. The future minimum lease payments under the operating
lease are as follows:</p>
</font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="210">
  <tr>
    <td WIDTH="37%" VALIGN="TOP"></td>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2001</font></td>
    <td WIDTH="63%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">$ 44,769</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"></td>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2002</font></td>
    <td WIDTH="63%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">46,716</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" VALIGN="TOP"></td>
    <td WIDTH="37%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2003</font></td>
    <td WIDTH="63%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">23,358</font></td>
  </tr>
</table>
<font SIZE="3">

<p ALIGN="JUSTIFY">The Company currently sublets part of its office space on a
month-to-month basis for approximately $1,000 per month.</p>

<p ALIGN="JUSTIFY">Rent expense for the year ended December 31, 2000 was $29,877.</p>
</font><font SIZE="2">

<p ALIGN="CENTER">F-19</font><font SIZE="3"></p>

<p ALIGN="JUSTIFY">&nbsp;</p>
<b>

<p>STOCK OPTION PLAN</b>:</p>

<p ALIGN="JUSTIFY">The Company has a stock option plan. Under the plan adopted in 1995,
the Company may grant options for up to 1,600,000 shares of common stock. The compensation
committee of the Board of Directors has sole discretion for the granting of these options.
The exercise price of these options is the fair market value on the date of grant. The
following stock options are outstanding at December 31, 2000:</p>
</font>

<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="451">
  <tr>
    <td WIDTH="36%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Year granted</b></font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Shares under option</b></font></td>
    <td WIDTH="4%" VALIGN="BOTTOM"></td>
    <td WIDTH="20%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Expiration</b></font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Officer/Employee</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1995</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">66,666</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">06/14/05</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Officer/Employee</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1996</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">200,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">10/11/06</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Others</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1996</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">10,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">11/28/06</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Officer/Employee</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1998</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">100,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">07/09/08</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Directors</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">1998</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">300,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">07/09/08</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Others</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">03/15/10</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Officer/Employee</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">70,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">03/15/10</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"><font SIZE="3"><p ALIGN="JUSTIFY">Directors</font></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">2000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="3"><p ALIGN="RIGHT">210,000</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="3"><p ALIGN="CENTER">03/15/10</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="17%" VALIGN="top" style="border-top: thin solid; border-bottom: thin double"><font
    SIZE="3"><p ALIGN="RIGHT">981,666</font></td>
    <td WIDTH="4%" VALIGN="TOP"></td>
    <td WIDTH="20%" VALIGN="TOP"></td>
  </tr>
</table>
<font SIZE="3">

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">The effect of the exercising of these options has not been included in
the calculation of earnings per share.</p>
<b>

<p ALIGN="JUSTIFY">CONCENTRATION OF CREDIT RISK:</b></p>

<p ALIGN="JUSTIFY">The Company's financial instruments exposed to concentrations of credit
risk consist primarily of cash equivalents. The Company maintains its cash balances at one
financial institution. The balance is insured by the Federal Deposit Insurance Corporation
up to $100,000. At December 31, 2000 the Company's deposits were not in excess of the
amount insured by the Federal Deposit Insurance Corporation.</p>
<b>

<p ALIGN="JUSTIFY">GOING CONCERN:</b></p>

<p ALIGN="JUSTIFY">The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The Company has suffered recurring losses from
operations and has limited liquid assets that raise substantial doubt about its ability to
continue as a going concern. Recurring net losses have resulted in the reported deficit of
retained earnings of $1,815,254 on the balance sheet at December 31, 2000.</p>

<p ALIGN="JUSTIFY">As of February 2001, the Company raised an additional $150,000 through
the sale of 375,000 shares of common stock to one investor at $0.40 per share. The Company
expects the proceeds of this private placement to finance its operational expenses for
approximately twelve months. The Company will be required to raise additional capital, or
enter into arrangements with third parties, to finance the exploration of its properties.
During December 2000, the Company discovered oil and gas on its Cheyenne River Development
Prospect. This property has the potential to improve the Company's operating activity. The
Company's continued existence is also dependent upon the cooperation and support of its
officers and directors.</p>

<p ALIGN="JUSTIFY"></font><font SIZE="2">&nbsp;</p>

<p ALIGN="CENTER">F-20</font></p>
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