For the Quarter Ended June 30, 2002

Commission File Number 0-23431

Delaware (State or Other Jurisdiction of Incorporation or Organization)   3104 Logan Valley Road Traverse City, Michigan (Address of Principal Executive Offices)

38-3379776 (I.R.S. Employer Identification No.)   49685-0348 (Zip Code)

Class Common stock, $.01 par value

Outstanding at August 12, 2002 19,801,522 shares

				Page No.
PART I.    FINANCIAL INFORMATION
Item 1.		Financial Statements		3
		Consolidated Statements of Operations—Three Months and Six Months Ended June 30, 2002 and 2001		3
		Consolidated Balance Sheets—June 30, 2002 and December 31, 2001		4
		Consolidated Statement of Equity—Six Months Ended June 30, 2002		5
		Consolidated Statements of Cash Flows—Six Months Ended June 30, 2002 and 2001		6
		Notes to Consolidated Financial Statements		7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		24
PART II.    OTHER INFORMATION
Item 1.		Legal Proceedings		25
Item 2.		Changes in Securities and Use of Proceeds		26
Item 3.		Defaults Upon Senior Securities		26
Item 4.		Submission of Matters to a Vote of Security Holders		26
Item 5.		Other Information		27
Item 6.		Exhibits and Reports on Form 8-K		27

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2002				2001				2002				2001
REVENUES:
Natural gas		$	1,963			$	3,800			$	3,798			$	9,377
Crude oil and condensate			931				910				1,782				1,825
Other operating revenues			47				72				105				169
Total operating revenues			2,941				4,782				5,685				11,371
OPERATING EXPENSES:
Lease operating expenses and production taxes			488				824				929				1,763
Depreciation, depletion and amortization			2,422				3,525				4,514				7,712
General and administrative			504				514				1,164				1,076
Cost ceiling writedown			7,000				7,500				7,000				7,500
Total operating expenses			10,414				12,363				13,607				18,051
OPERATING INCOME (LOSS)			(7,473	)			(7,581	)			(7,922	)			(6,680	)
INTEREST EXPENSE			(206	)			(331	)			(402	)			(588	)
INCOME (LOSS) BEFORE INCOME TAXES			(7,679	)			(7,912	)			(8,324	)			(7,268	)
INCOME TAX PROVISION (CREDIT) (Note 2)			(5,523	)			(169	)			(5,743	)			79
NET INCOME (LOSS)		$	(2,156	)		$	(7,743	)		$	(2,581	)		$	(7,347	)
EARNINGS (LOSS) PER SHARE (Note 3)
Basic		$	(0.11	)		$	(0.40	)		$	(0.13	)		$	(0.38	)
Diluted		$	(0.11	)		$	(0.40	)		$	(0.13	)		$	(0.38	)

		As of June 30, 2002				As of December 31, 2001
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	3			$	201
Accounts receivable			2,419				3,076
Inventories, prepaids and advances to other operators			599				523
Total current assets			3,021				3,800
OIL AND GAS PROPERTIES—at cost (full cost method):
Proved oil and gas properties			154,678				146,649
Unproved oil and gas properties			5,090				11,244
Less-Accumulated depreciation, depletion and amortization			(136,018	)			(124,618	)
Net oil and gas properties			23,750				33,275
OTHER ASSETS			402				512
Total assets		$	27,173			$	37,587
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Notes payable		$	3,202			$	—
Accounts payable			774				2,767
Accrued expenses and other current liabilities			3,826				4,974
Total current liabilities			12,402				7,741
LONG-TERM DEBT			4,600				6,696
DEFERRED INCOME TAXES (Note 2)			—				5,743
COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Common stock warrants, 13,350,498 outstanding at June 30, 2002 and December 31, 2001			860				860
Preferred stock, $0.01 par value; 2,000,000 shares authorized; none outstanding			—				—
Common stock, $0.01 par value; 40,000,000 shares authorized; 19,801,522 shares and 19,478,853 shares outstanding at June 30, 2002 and December 31, 2001, respectively			198				195
Accumulated other comprehensive income (loss)			(131	)			89
Additional paid in capital			77,413				77,251
Retained deficit			(63,596	)			(60,988	)
Total equity			14,771				17,407
Total liabilities and equity		$	27,173			$	37,587

		Common Stock Warrants			Preferred Stock			Common Stock			Accumulated Other Comprehensive Income (Loss)				Additional Paid In Capital			Retained Deficit
BALANCE—December 31, 2001		$	860		$	—		$	195		$	89			$	77,251		$	(60,988	)
Issuance of benefit plan shares			—			—			1			—				40			—
Issuance of non-employee directors’ shares			—			—			2			—				122			—
Change in unrealized (losses)			—			—			—			(220	)			—			—
Net (loss)			—			—			—			—				—			(2,581	)
BALANCE—June 30, 2002		$	860		$	—		$	198		$	(131	)		$	77,413		$	(63,569	)

		For the six months ended June 30,
		2001				2002
Net income (loss)		$	(2,581	)		$	(7,347	)
Other comprehensive income (loss)			(220	)