CONSOLIDATED STATEMENTS OF CASH FLOWS


CASH FLOWS FROM OPERATING ACTIVITIES

1998

1997

Net Loss

$(863,829)

$(413,816)

Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization

106,548

95,612

Change in operating assets and liabilities, net of effects of the purchase of MSP Technologies, Inc.

(11,137)

-

Accounts receivable

20,359

(11,747)

Accounts receivable, related parties 277,832 (262,454)
Accounts payable 64,976

-

Drilling advances 37,976 4,584
Accrued expenses 89 -
Other 495,834 (174,005)
Total Adjustments (367,995) (587,821)
NET CASH USED IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired in acquisition of MSP Technologies, Inc.
Purchases of property and equipment
(182,687) 39,561
NET CASH USED IN INVESTING ACTIVITIES (182,687) (22,648)
CASH FLOWS FROM FINANCING ACTIVITIES 270 1,003,483
Proceeds from sale of common stock and option exercise
Payments on long-term debt
(3573) -
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (3,303) 1,003,483
NET (DECREASE) INCREASE IN CASH AND CASH EQUIV. (553,985) 393,016
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 598,889 205,853
CASH AND CASH EQUIVALENTS, END OF YEAR $  44,884 $  598,869
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION $6,549 $871
Cash paid during period for Interest
Non-cash investing and financing activities
Acquisition of MSP Technologies, Inc. in exchange for 300,000 shares of common stock
$ - $1,500,000

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