PYR ENERGY CORP, SB-2/A, 1997-11-21

PYR ENERGY CORP
SB-2/A, 1997-11-21
CRUDE PETROLEUM & NATURAL GAS

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As filed with the Securities and Exchange Commission on November 21, 1997
Registration Number 333-38665
================================================================================

U.S. Securities And Exchange Commission
Washington, D.C. 20549

Form SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(Amendment No. 1)

PYR ENERGY CORPORATION
(Name of small business issuer in its charter)

Delaware 1330 95-4580642
-------- ---- ----------
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)

1675 Broadway, Suite 1150, Denver, CO 80202; (303) 825-3748
- -----------------------------------------------------------
(Address and telephone number of principal executive offices)

1675 Broadway, Suite 1150, Denver, CO 80202; (303) 825-3748
- -----------------------------------------------------------
(Address of principal place of business or intended principal place of business)

D. Scott Singdahlsen, 1675 Broadway, Suite 1150, Denver, CO 80202;
(303) 825-3748
- --------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)

Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this Registration Statement

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------
Title of each class Proposed maximum Proposed maximum
of securities to be Amount to be offering price per aggregate offering Amount of
registered registered unit price registration fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 4,095,000 $1.59375 (1) $ 6,526,406 $1,978

Common Stock ,
issuable upon
exercise of Class A
Common Stock
Purchase Warrants 2,047,500 $1.25 $ 2,559,375 $ 776

Common Stock,
issuable upon
exercise of Class B
Common Stock
Purchase Warrants 2,047,500 $1.75 $ 3,583,125 $1,086

TOTAL $12,029,062 $3,840
- ------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 based on the average of the bid and asked price of the
Company's Common Stock on the OTC Bulletin Board on October 21, 1997 which
is within five business days of the date of filing (October 23, 1997).

(2) Previously paid

The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

<PAGE>

PYR Energy Corporation

Cross-reference Sheet between Registration Statement (Form SB-2) and Form
of Prospectus.
<TABLE>
<CAPTION>

SB-2 Reg S-B
Item Item Caption Caption In Prospectus
- ----- -------- ------- ---------------------

<S> <C> <C> <C>
16 101 Description Of Business. Business And Properties.
18 102 Description Of Property. Business And Properties.
9 103 Legal Proceedings. Not applicable.
20 201 Market For Common Stock And Price Range Of Common Stock; Dividend
Related Stockholder Matters. Policy; Description Of Securities; Inactive Trading Of The
Common Stock.
12 202 Description Of Securities. Description Of Securities.
17 303 Management's Discussion And Management's Discussion And Analysis Of
Analysis Or Plan Of Operation. Financial Condition And Results Of
Operations.
23 304 Changes In And Disagreements Not applicable.
With Accountants On Accounting
And Financial Disclosure.
22 310 Financial Statements. Financial Information.
10 401 Directors, Executive Officers, Management.
Promoters And Control Persons.
21 402 Executive Compensation. Executive Compensation.
11 403 Security Ownership Of Certain Beneficial Owners Of Securities.
Beneficial Owners And
Management.
19 404 Certain Relationships And Related Transactions Between The Company And
Transactions. Related Parties.
15 404 Issuers Organized Within Five Transactions Between The Company And
Years. Related Parties.
1 501 Front Of Registration Statement Registration Statement Cover Page;
And Outside Front Cover Of Prospectus Cover Page; Prospectus Inside
Prospectus. Cover Page.
2 502 Inside Front And Outside Back Cover Page; Inside Cover Page; Back Cover
Cover Pages Of Prospectus. Page.
3 503 Summary Information And Risk Prospectus Summary; Risk Factors.
Factors.
4 504 Use Of Proceeds. Use Of Proceeds.
5 505 Determination Of Offering Price. Cover Page.
6 506 Dilution. Not applicable.
7 507 Selling Security Holders. Selling Security Holders.
8 508 Plan Of Distribution. Cover Page.
13 509 Interest Of Named Experts and Not applicable.
Counsel.
14 510 Disclosure Of Commission Position Securities And Exchange Commission
On Indemnification For Securities Position On Certain Indemnification.
Act Liabilities.

</TABLE>

<PAGE>

[Red Ink]

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities And Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

<PAGE>

PRELIMINARY PROSPECTUS DATED NOVEMBER 21, 1997
SUBJECT TO COMPLETION

PYR ENERGY CORPORATION

4,095,000 Shares Of Common Stock
4,095,000 Shares Of Common Stock Underlying Common Stock Purchase Warrants

This Prospectus relates to the transfer of 4,095,000 shares of common
stock, $.001 par value (the "Common Stock"), of PYR Energy Corporation (the
"Company") by the persons named herein (the "Selling Security Holders"). See
"SELLING SECURITY HOLDERS". Those shares of Common Stock were acquired by the
Selling Security Holders pursuant to private placements exempt from registration
under federal and state securities laws (the "Private Placements").

This Prospectus also relates to the registration of the exercise of Common
Stock purchase warrants (the "Warrants") acquired by the Selling Security
Holders in the Private Placements. One-half of the Warrants entitle the
registered holders thereof to purchase an aggregate 2,047,500 shares of Common
Stock on or before January 15, 1998 at an exercise price of $1.25 per share (the
"Class A Warrants"). One-half of the Warrants entitle the registered holders
thereof to purchase an aggregate 2,047,500 shares of Common Stock on or before
April 15, 1998 at an exercise price of $1.75 per share (the "Class B Warrants").
The expiration dates of the Class A Warrants and Class B Warrants when they were
initially issued were October 31, 1997 and January 31, 1998, respectively.
Subsequent to the issuance of the Warrants, the Company extended the expiration
dates. This Prospectus also relates to the transfer of the 4,095,000 shares of
Common Stock that may be acquired by the Selling Security Holders upon the
exercise of the Warrants.

The Company will receive net proceeds of $5,651,100 if all the Warrants are
exercised, which amount includes net proceeds of $2,354,625 after paying
commissions of eight percent if all the Class A Warrants are exercised and net
proceeds of $3,296,475 after paying commissions of eight percent if all the
Class B Warrants are exercised. The Company is also responsible for other
expenses related to this offering estimated at $35,000 for filing fees, printing
costs, legal and accounting fees and miscellaneous expenses. The Company will
not receive any proceeds from the transfer of the Common Stock by the Selling
Security Holders. The transfer of the Common Stock by the Selling Security
Holders covered by this Prospectus may occur from time to time. No underwriting
arrangements have been entered into by the Selling Security Holders. The
transfer of the Common Stock by the Selling Security Holders may occur in one or
more transactions that may take place on the over-the-counter market, including
ordinary broker's transactions, privately negotiated transactions, and sales to
one or more dealers for transfer of such Common Stock as principals, at market
prices prevailing at the time of transfer, at prices related to such prevailing
market prices, or at negotiated prices. Usual and customary or specifically
negotiated brokerage fees or commissions may be paid by the Selling Security
Holders in connection with transfers of the Common Stock by Selling Security
Holders. See "SELLING SECURITY HOLDERS".

The Company's Common Stock is quoted on the OTC Bulletin Board under the
symbol "PYRX". On November 28, 1997, the closing bid price of the Common Stock
was $.... per share and the closing asked price was $...... per share. That
price information is based on information obtained by the Company from brokers
who make a market in the Company's Common Stock. Certain rules of the Securities
And Exchange Commission (the "Commission") may have a negative affect on the
trading of the Common Stock. See "RISK FACTORS--Penny Stock Regulation".

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE, AND INVESTMENT THEREIN INVOLVES A
HIGH DEGREE OF RISK. FOR A DESCRIPTION OF CERTAIN RISKS REGARDING AN INVESTMENT
IN THE COMPANY, SEE "RISK FACTORS" PAGE 3.

<PAGE>

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Underwriting
Discount And Proceeds To
Price To Public Commissions Company (2)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock (1) (1) (1)
- -------------------------------------------------------------------------------------------------------------------
Common Stock Underlying Class A Warrants $1.25 $.10 (3) $1.15
- -------------------------------------------------------------------------------------------------------------------
Common Stock Underlying Class B Warrants $1.75 $.14 (3) $1.61
- -------------------------------------------------------------------------------------------------------------------
Total $6,142,500 $491,400 $5,651,100
- --------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) The Company will not receive any proceeds from the transfer of the Common
Stock by the Selling Security Holders. The transfer of the Common Stock by
the Selling Security Holders may occur at market prices prevailing at the
time of transfer, at prices related to such prevailing market prices, or at
negotiated prices. Usual and customary or specifically negotiated brokerage
fees or commissions may be paid by the Selling Security Holders.

(2) These amounts represent the proceeds to the Company after deduction of
sales commissions but before deduction of other offering expenses estimated
at $35,000 for filing fees, printing costs, legal and accounting fees, and
miscellaneous expenses.

(3) The Company has agreed to pay Stonington Partners Group, the placement
agent of the Warrants, an amount equal to eight percent of the exercise
price paid in connection with the exercise of any of the Class A Warrants
or Class B Warrants.

The date of this Prospectus is November __, 1997

(ii)

<PAGE>

ADDITIONAL INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, Room 1024 and at
the following Regional Offices of the Commission: 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, New York, New York
10048. Copies of such material also can be obtained at prescribed rates by
writing to the Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, materials filed electronically by the
Company with the Commission are available at the Commission's World Wide Web
site at http://www sec.gov.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS AND
CAUTIONARY STATEMENTS

This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act Of 1933, as amended (the "Securities Act"),
and section 21E of the Exchange Act. All statements other than statements of
historical fact included in this Prospectus, including without limitation the
statements under "PROSPECTUS SUMMARY", "RISK FACTORS", "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS", and "BUSINESS
AND PROPERTIES" regarding the Company's financial position, business strategy,
plans and objectives of management of the Company for future operations and
capital expenditures are forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct.

Additional statements concerning important factors that could cause actual
results to differ materially from the Company's expectations ("Cautionary
Statements") are disclosed in the "RISK FACTORS" section and elsewhere in this
Prospectus. All written and oral forward-looking statements attributable to the
Company or persons acting on its behalf subsequent to the date of this
Prospectus are expressly qualified in their entirety by the Cautionary
Statements.

(iii)

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the detailed
information and financial statements appearing elsewhere in this Prospectus. As
used herein, the "Company" means PYR Energy Corporation. Unless otherwise
indicated, all references to annual or quarterly periods refer to the Company's
fiscal year ending August 31.

THE COMPANY

General

The Company is an independent exploration company that applies advanced 3-D
seismic and computer aided exploration ("CAEX") technology to systematically
explore for and exploit onshore domestic natural gas and oil accumulations in
the western United States. With a primary technical focus, the Company has
ongoing exploration and exploitation activities in the San Joaquin basin of
California, the Denver basin of Colorado and Nebraska, the Big Horn basin of
Wyoming, and the central Montana trough of Montana. The Company has not yet
drilled any wells, and it owns no producing acreage. The Company plans to
commence drilling on its San Joaquin basin acreage in the second quarter of
1998.

Since its inception in 1996, the Company has developed a portfolio of
exploration and exploitation projects possessing a critical mix of
high-potential, high-risk exploration targets and moderate-potential,
moderate-risk exploitation plays. The Company generates most of its exploration
projects internally, and therefore has the ability to retain a sizeable working
interest in each project based on associated project risk and financial leverage
through industry joint ventures. The Company attempts to limit financial
exposure on a project by project basis by forming industry partnerships through
which the Company's technical expertise can be complemented with the financial
resources and operating expertise of established companies. The Company does not
intend to operate the drilling of project wells.

The Company has successfully assembled a highly motivated geoscience and
management team with extensive technical experience, as well as a proven track
record of resource exploitation and business development. The Company was
founded by Scott Singdahlsen, a geologist who previously was a founder of
Interactive Earth Sciences Corporation, a 3-D seismic consulting firm in the
Rocky Mountain region, and by Robert Suydam, a geologist employed by a number of
oil and gas exploration companies for an aggregate of over 30 years. The
Company's technical/management team of goephysicists and geologists brings
together more than 110 years of combined experience in exploration,
exploitation, and the application of advanced geological and geophysical
technology. Historically, the Company's technical team has had exposure to more
than 100 3-D seismic surveys. This experience has resulted in development of
expertise in the application of seismic technology for exploration and
exploitation.

The Company was incorporated in March 1996 in the State of Delaware under
the name of Mar Ventures Inc. Prior to August 6, 1997 the Company's business
consisted of the marketing of traditional television programming from the
Company's limited film library to television and cable television operators.
Effective as of August 6, 1997, the Company purchased all the ownership
interests of PYR Energy, LLC, an oil and gas exploration company formed in May
1996, and, in a separate transaction, it sold its former business to the prior
president of the Company. Also on that date, the Company issued units of its
common stock and common stock purchase warrants for an aggregate of $1,500,000.
As part of the acquisition of PYR Energy, LLC, the management of PYR Energy, LLC
and one of the new stockholders of the Company replaced all the Company's
directors and officers. Effective as of November 12, 1997, the Company changed
its name to PYR Energy Corporation.

The Company's offices are located at 1675 Broadway, Suite 1150, Denver,
Colorado 80202, telephone number (303) 825-3748.

Business Strategy

The Company holds the core belief that systematic application of advanced
3-D seismic imaging and visualization can significantly reduce drilling risk and
enhance financial results. The Company's business strategy is to enhance

1
<PAGE>

shareholder value by leveraging its technical experience and expertise with 3-D
seismic to identify exploration and exploitation projects with significant
potential reserves and economic results based on the application of appropriate
technology and suitable project risk management.

The Company's exploration and exploitation activities currently are
concentrated in two mature hydrocarbon provinces: the San Joaquin basin of
California and the Rocky Mountain region where the Company's management believes
that the historical under-utilization of 3-D seismic technology creates
tremendous opportunities. The Company's strategy is to focus on applying 3-D
seismic technology to explore properties that lie within these mature basins and
offer quantities of oil and gas reserves that are materially significant to the
size of the Company.

Competitive Advantage

The Company believes that the cumulative experience of its technical and
management team, with past exposure to more than 100 3-D seismic projects
covering approximately 1,500 square miles in diverse geologic trends throughout
the world results in a strong competitive advantage relative to current
competition in these focus areas. The Company currently has four full-time
geoscientists and a landman who are specialists in a variety of technical
aspects and have extensive experience and expertise in numerous geologic
regions.

The Company's expertise in the application of advanced seismic
interpretation methods includes many of the "cutting-edge" technologies
necessary in today's competitive exploration environment. These advanced
techniques include 3-D seismic visualization, attribute analysis, geostatistical
modeling, pre-stack depth migration, and the integration of geological and
engineering data in support of reservoir characterization. These advanced
seismic interpretation methods allow the Company to leverage its 3-D seismic
experience and expertise with significant exploration and exploitation
opportunities.

The Company generates the majority of its exploration and exploitation
projects internally, and therefore is not dependent on third parties for project
flow. This results in full control of all pre-drill exploration phases including
the acreage position and application of seismic technology.

THE OFFERING

This Prospectus relates to (A) the transfer of 4,095,000 shares of the
Common Stock by the Selling Security Holders received in the Private Placements;
(B) the registration of the exercise of Class A Warrants to purchase an
aggregate 2,047,500 shares of Common Stock and the exercise of Class B Warrants
to purchase an aggregate 2,047,500 shares of Common Stock by the Selling
Security Holders; and (C) the transfer of the 4,095,000 shares of Common Stock
that may be acquired by the Selling Security Holders upon the exercise of the
Warrants. The Company has agreed to pay Stonington Partners Group, the placement
agent of the Warrants, an amount equal to eight percent of the exercise price
paid in connection with the exercise of any of the Class A Warrants or Class B
Warrants. The transfer of the Common Stock by the Selling Security Holders
covered by this Prospectus will be completed, if at all, by the Selling Security
Holders, and not by the Company. If any of these shares is transferred by a
Selling Security Holder, they will be transferred on behalf of that person and
it is anticipated that the shares may be offered pursuant to direct sales to
private persons and in open market transactions. The Selling Security Holders
may offer the shares to or through registered broker-dealers who will be paid
standard commissions or discounts by the Selling Security Holders. The Company
has no agreements with brokers to transfer any or all of the shares which may be
offered hereby.

2
<PAGE>

RISK FACTORS

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK. BEFORE MAKING AN INVESTMENT IN THE COMPANY, PROSPECTIVE INVESTORS SHOULD
GIVE CAREFUL CONSIDERATION TO THE FOLLOWING RISK FACTORS AFFECTING THE BUSINESS
OF THE COMPANY AND ITS SECURITIES, TOGETHER WITH OTHER INFORMATION IN THIS
PROSPECTUS.

Start-Up Nature Of The Company's Oil And Gas Business; Absence Of Profits

The Company was formed in 1996 and does not have a history of sustained
profit from operations. The development of the Company's business will require
substantial expenditures. The Company's future financial results will depend
primarily on its ability to locate hydrocarbons economically in commercial
quantities, to provide drilling site and target depth recommendations resulting
in profitable productive wells and on the market prices for oil and natural gas.
There can be no assurance that the Company will achieve or sustain profitability
or positive cash flows from operating activities in the near future.

Oil And Gas Prices; Marketability Of Production

Even if the Company is able to discover or acquire oil and gas production,
of which there is no assurance, the Company's revenues, profitability and
liquidity will be highly dependent upon prevailing prices for oil and natural
gas. Oil and gas prices can be extremely volatile and in recent years have been
depressed by excess total domestic and imported supplies. There can be no
assurance that current price levels can be sustained. Prices also are affected
by actions of state and local agencies, the United States and foreign
governments, and international cartels. These external factors and the volatile
nature of the energy markets make it difficult to estimate future prices of oil
and natural gas. Any substantial or extended decline in the price of oil and/or
natural gas would have a material adverse effect on the Company's financial
condition and results of operations, including reduced cash flow and borrowing
capacity. All of these factors are beyond the control of the Company. Sales of
oil and natural gas are seasonal in nature, leading to substantial differences
in cash flow at various times throughout the year. The marketability of the
Company' s gas production, if any, will depend in part upon the availability,
proximity and capacity of gas gathering systems, pipelines and processing
facilities. Federal and state regulation of oil and gas production and
transportation, general economic conditions, changes in supply and changes in
demand all could adversely affect the Company's ability to produce and market
oil and natural gas. If market factors were to change dramatically, the
financial impact on the Company could be substantial. The availability of
markets and the volatility of product prices are beyond the control of the
Company and thus represent a significant risk.

Reliance On Significant Partners

The Company attempts to limit financial exposure on a project by project
basis by forming industry partnerships where the Company's technical expertise
can be complemented with the financial resources and operating expertise of
established companies. If the Company were not able to form these industry
partnerships, this could limit the Company's ability to fully implement its
business plan and could have a material adverse effect on the Company's
business, financial condition and results of operations.

Non-Operator Status

The Company focuses primarily on providing 3-D imaging and analysis and
relies upon other project partners to provide and complete all other project
operations and responsibilities including land acquisition, operating, drilling,

<PAGE>

marketing and project administration. As a result, the Company has only a
limited ability to exercise control over a significant number of a project's
operations or the associated costs of such operations. The success of a project
is dependent upon a number of factors which are outside of the Company's area of
expertise and project responsibilities. Such factors include: (i) the
availability of favorable term leases and required permitting for projects, (ii)
the availability of future capital resources by the Company and the other
participants to the purchasing of leases and the drilling of wells, (iii) the
approval of other participants to the purchasing of leases and the drilling of
wells on the projects and (iv) the economic conditions at the time of drilling,
including the prevailing and anticipated prices for oil and gas. The Company's
reliance on other project partners and its limited ability to directly control
certain project costs could have a material adverse effect on the realization of
expected rates of return on the Company's investment in certain projects.

Ability To Discover Additional Reserves

The Company's future success is dependent upon its ability to economically
locate additional oil and gas reserves in commercial quantities. Except to the
extent that the Company acquires properties containing proved reserves or
conducts successful exploration and development activities, or both, the proved
reserves of the Company, if any, will decline as reserves are produced. The
Company's ability to do so is dependent upon a number of factors, including its
participation in multiple exploration projects and its technological capability
to locate oil and gas in commercial quantities. Because the Company may rely
upon other industry participants to develop the Company's exploration projects,
no assurances can be given that the Company will have the opportunity to
participate in projects which economically produce commercial quantities of
hydrocarbons in amounts necessary to meet its business plan or that the projects
in which it elects to participate will be successful. There can be no assurance
that the Company's planned projects will result in significant reserves or that
the Company will have future success in drilling productive wells at low reserve
replacement costs. The Company has not yet established any oil and gas
production, nor has it booked any proved reserves.

Substantial Capital Requirements And Liquidity

In order to pursue its oil and gas exploration plans fully, the Company
will need additional capital funding. The Company anticipates having adequate
short term capital funding through the exercise of its Class A and Class B
Warrants. However, there is no assurance that these Warrants will be exercised
at all or to the extend necessary to fund the Company's short term capital
requirements. At the present time, there are no additional commitments or
alternative sources for any such funding. The Company does not have a steady
source of revenue to provide funding to sustain operations. There is no
assurance that the Company will be able to obtain a reliable source of revenue
to sustain its operations.

Risk Of Exploratory Drilling Activities

Exploration for oil and natural gas is a speculative business involving a
high degree of risk, including the risk that no commercially productive oil and
gas reservoirs will be encountered. The cost of drilling, completing and
operating wells is often uncertain and drilling operations may be curtailed,
delayed or canceled as a result of a variety of factors including unexpected
formation and drilling conditions, pressure or other irregularities in
formations, equipment failures or accidents, as well as weather conditions,
compliance with governmental requirement and shortages or delays in the delivery
of equipment. There is no assurance that the expenditures made by the Company on
its oil and natural gas properties will result in discoveries of oil or natural
gas in commercial quantities. Some test wells, as a consequence, may not
ultimately be developed into producing wells and may be abandoned.

<PAGE>

Competition

The Company competes in the areas of oil and gas exploration with other
companies, many of which may have substantially larger financial and other
resources. From time to time, there may be competition for, and shortage of,
exploration, drilling and production equipment and these shortages could lead to
an increase in costs and to delays in operations that could have a material
adverse effect on the Company. The Company may therefore not be able to acquire
desirable properties or equipment required to develop its properties. Problems
of this nature also could prevent the Company from producing any oil and natural
gas it discovers at the rate it desires to do so.

General Risks Of Oil And Gas Operations

The nature of the oil and gas business involves a variety of risks,
including the risks of operating hazards such as fires, explosions, cratering,
blow-outs, and encountering formations with abnormal pressures, the occurrence
of any of which could result in losses to the Company. The Company will maintain
insurance against some, but not all, of these risks in amounts that management
believes to be reasonable in accordance with customary industry practices. The
occurrence of a significant event, however, that is not fully insured could have
a material adverse effect on the Company's financial position.

Technology Changes

The oil and gas industry is characterized by rapid and significant
technological advancements and introductions of new products and services
utilizing new technologies. As new technologies develop, the Company may be
placed at a competitive disadvantage, and competitive pressures may force the
Company to implement such new technologies at substantial cost. In addition,
other oil and gas finding companies may implement new technologies before the
Company, and consequently such companies may be able to provide enhanced
capabilities and superior quality compared with that which the Company is able
to provide. There can be no assurance that the Company will be able to respond
to such competitive pressures and implement such technologies on a timely basis
or at an acceptable cost. One or more of the technologies currently utilized by
the Company or implemented in the future may become obsolete. In such case, the
Company's business, financial condition and results of operations could be
materially adversely affected. If the Company is unable to utilize the most
advanced commercially available technology, the Company's business, financial
condition and results of operations could be materially and adversely affected.

Government Regulations And Environmental Risks

The production and sale of oil and gas are subject to a variety of federal,
state and local government regulations including regulation concerning the
prevention of waste, the discharge of materials into the environment, the
conservation of oil and natural gas, pollution, permits for drilling operations,
drilling bonds, reports concerning operations, the spacing of wells, the
unitization and pooling of properties, and various other matters including
taxes. Many jurisdictions have at various times imposed limitations on the
production of oil and gas by restricting the rate of flow for oil and gas wells
below their actual capacity to produce. During the past few years there has been
a significant amount of discussion by legislators and the presidential
administration concerning a variety of energy tax proposals. There can be no
certainty that any such measure will be passed or what its effect will be on oil
and natural gas prices if it is passed. In addition, many states have raised
state taxes on energy sources and additional increases may occur, although there
can be no certainty of the effect that increases in state energy taxes would
have on oil and natural gas prices. Although the Company intends to be in
substantial compliance with applicable environmental and other government laws
and regulations, there can be no assurance that significant costs for compliance
will not be incurred in the future.

<PAGE>

Variability Of Operating Results

The Company's operating results, as a start up company in the oil and gas
industry, may vary significantly during any financial period. These variations
may be caused by significant periods of time between each of the Company's
discoveries and developments, if any, of oil or natural gas properties in
commercial quantities. These variations may also be caused by the volatility
associated with oil and gas prices. See "Oil And Gas Prices; Marketability Of
Production".

Risks Associated With Management Of Growth

Because of its small size, the Company desires to grow extremely rapidly in
order to achieve certain economies of scale. Although there is no assurance that
this rapid growth will occur, to the extend that it does occur it will place a
significant strain on the Company's financial, technical, operational and
administrative resources. As the Company increases its services and enlarges the
number of projects it is evaluating or in which it is participating, there will
be additional demands on the Company's financial, technical and administrative
resources. The failure to continue to upgrade the Company's technical,
administrative, operating and financial control systems or the occurrence of
unexpected expansion difficulties, including the recruitment and retention of
geoscientists and engineers, could have a material adverse effect on the
Company's business, financial condition and results of operations

Dependence On Key Personnel

The Company will be highly dependent on the services of D. Scott
Singdahlsen and its other geological and geophysical staff members. The loss of
the services of any of them could have a material adverse effect on the Company.
The Company does not have an employment contract with Mr. Singdahlsen or any
other employee.

Broad Discretion Over Use Of Proceeds

The Company has broad discretion over the proceeds that the Company may
receive upon the exercise of the Warrants. The specific use of those funds, if
any, will depend upon the business judgment of management, upon which the
investors must rely, with only limited information about management's specific
intentions.

Immediate And Substantial Dilution

Significant dilution of the stockholders of the Company may occur for any
exercise of Warrants. This, however, cannot be certain because the amount of any
such dilution will depend on the future business operations and other activities
of the Company.

Concentration Of Risks; Lack Of Diverse Business Operations

The Company is currently pursuing only the oil and gas exploration
business. Although the Company is involved in other oil and gas projects, it is
concentrating the majority of its initial oil and gas exploration efforts on
approximately 22,000 exploratory net acres in the Maricopa sub- basin at the
southern end of the San Joaquin. Although the Company is involved in three

<PAGE>

separate and distinct projects in the San Joaquin basin, the Company's
exploration efforts are concentrated in this same general area and this lack of
diverse business operations subjects the Company to a certain degree of
concentration of risks. The future success of the Company may be dependent upon
its success in discovering and developing oil and gas in commercial quantities
on its San Joaquin properties and upon the general economic success of the oil
and gas industry.

Inactive Trading Of The Common Stock; Possible Volatility Of Stock Price

There will be no ready market for the Common Stock and an investor cannot
expect to liquidate his investment regardless of the necessity of doing so.
Investors should recognize the illiquidity of an investment in this Offering.
There is an extremely limited public market for the Common Stock, and there is
no assurance that this market will be sustained or will expand. See "INACTIVE
TRADING OF THE COMMON STOCK". The prices of the Company's securities are highly
volatile. In any event, due to the low price of the securities, many brokerage
firms may not effect transactions and may not deal with low priced securities as
it may not be economical for them to do so. This could have an adverse effect on
developing and sustaining the market for the Company's securities. Further,
there is no assurance that any investor will be in a position to borrow funds
using the Company's securities as collateral.

For the foreseeable future, trading in the Company's securities, if any,
will occur in the over-the-counter market and the securities will be quoted on
the OTC Bulletin Board. The closing quotes for the Common Stock on November 28,
1997 were $..... bid and $..... asked. The Company does not anticipate that its
Common Stock will qualify for listing on the NASDAQ Stock market in the near
future. In addition, there is no market for the Warrants and there can be no
assurance that any trading market will develop. Accordingly, a holder of the
Company's securities may be unable to sell its securities when it wishes to do
so, if at all. In addition, the free transferability of these securities will be
dependent on the securities laws of the various states in which it is proposed
these securities be traded.

Penny Stock Regulation

The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in "penny stocks". Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system). If the
Company's securities are traded for less than $5 per security, then unless (i)
the Company's net tangible assets exceed $5,000,000 during the Company's first
three years of continuous operations or $2,000,000 after the Company's first
three years of continuous operations; or (ii) the Company has had average
revenue of at least $6,000,000 for the last three years, the respective security
will be subject to the SEC's penny stock rules unless otherwise exempt from
those rules. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prescribed by the SEC that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction and monthly account statements showing
the market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing before or with
the customer's confirmation. In addition, the penny stock rules require that
prior to a transaction in a penny stock not otherwise exempt from such rules,
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect

<PAGE>

of reducing the level of trading activity in the secondary market for a stock
that becomes subject to the penny stock rules. As long as the Company's Common
Stock is subject to the penny stock rules, the holders of the Company's Common
Stock may find it difficult to sell the Common Stock of the Company.

Shares Available For Future Sale Could Adversely Affect Share Price

The Company has a total of 4,386,654 shares of Common Stock issued and
outstanding that are "restricted securities". Of the outstanding shares of
restricted securities, 28,000 were issued in August 1996, 358,654 were issued in
December 1996, and 4,000,000 were issued in August 1997. Restricted securities
may be sold in a registered public offering under the Securities Act, or in
open-market transactions in compliance with Rule 144 adopted under the
Securities Act if the conditions of Rule 144 are satisfied. Generally, Rule 144
provides that, subject to current information concerning the Company being
publicly available, after a person has held the restricted securities for a
period of one year, that person may sell, in any three-month period, an amount
of up to 1% of the Company's outstanding Common Stock. Persons who have not been
affiliates of the Company for at least three months and who have held their
shares for more than two years are not subject to any limitations on the sale of
their restricted securities. Under Rule 144, the 28,000 shares of Common Stock
that were issued in August 1996 became eligible for resale in August 1997, the
358,654 shares issued in December 1996 will become eligible for resale in
December 1997, and the 4,000,000 shares that were issued in August 1997 will
become eligible for resale in August 1998. Sales under Rule 144, whenever they
are made, may have a depressive effect on the price of the Common Stock. See "
SHARES AVAILABLE FOR FUTURE SALE".

USE OF PROCEEDS

The only net proceeds that may be received by the Company pursuant to this
Prospectus are from exercise of the Warrants, if any. If all the Warrants are
exercised, of which there is no assurance, after deducting estimated expenses of
the offering, the net proceeds to the Company would be approximately $5,616,100
which amount includes (i) net proceeds of $2,354,625 after paying commissions of
eight percent if all the Class A Warrants are exercised, (ii) net proceeds of
$3,296,475 after paying commissions of eight percent if all the Class B Warrants
are exercised, and (iii) expenses related to this offering estimated at $35,000
for filing fees, printing costs, legal and accounting fees and miscellaneous
expenses.

During the fiscal year ending August 31, 1998, the Company intends to use
up to $4,500,000 to fund the Company's exploration and development program and
use approximately $750,000 for general corporate purposes, including expenses
associated with hiring additional personnel. The Company intends to use the
remainder of funds to finance similar activities during the Company's fiscal
year ending August 31, 1999. To the extent that the Company is not able to
utilize at least $750,000 of the Warrant exercise proceeds for the Company's
general and administrative expenses during the next year, the Company will need
to obtain these funds from other sources, including its current cash, because
this amount is needed for the Company to operate at its current level.

Because of the number and variability of factors that determine the
Company's use of the net proceeds of the Offering, management will retain a
significant amount of discretion over their application. There can be no
assurance that such application will not vary substantially from the Company's
plans described above. In addition, there can be no assurance that the Company
will be able to generate or raise sufficient capital to enable it to realize
fully all of its strategic objectives. See "Risk Factors - Substantial Capital
Requirements and Liquidity" and "Risk Factors Broad Discretion Over Use of
Proceeds"

Pending application of the net proceeds of the Offering, the Company
expects that it will invest such funds in interest-bearing accounts or
short-term investment grade securities.

<PAGE>

CAPITALIZATION

During the eight months ended August 31, 1997, the Company sold 2,095,000
units at $0.25 per unit ("$0.25 Unit") for gross proceeds of $523,750. The
2,095,000 $0.25 Units sold consisted in the aggregate of 2,095,000 shares of the
Company's common stock, warrants to purchase 1,047,500 shares of common stock at
$1.25 per share and warrants to purchase 1,047,500 shares of common stock at
$1.75 per share.

Also during the eight months ended August 31, 1997, the Company sold
2,000,000 units at $0.75 per unit ("$0.75 Unit") for gross proceeds of
$1,500,000. The 2,000,000 $.075 Units consist in the aggregate of 2,000,000
shares of the Company's common stock, warrants to purchase 1,000,000 shares of
common stock at $1.25 per share and warrants to purchase 1,000,000 shares of
common stock at $1.75 per share.

The warrants to purchase common stock at $1.25 per share are collectively
referred to as the "Class A Warrants" in the table below, and the warrants to
purchase common stock at $1.75 per share are collectively referred to as the
"Class B Warrants" in the table below.

The following table sets forth (i) the historical capitalization of the
Company as of August 31, 1997, (ii) the adjusted capitalization of the Company
after giving effect to the issuance of common stock from the exercise of the
Class A Warrants, and (iii) the adjusted capitalization of the Company at August
31, 1997 after giving effect to the issuance of common stock from the exercise
of both the Class A Warrants and the Class B Warrants. This table should be read
in conjunction with the Financial Statements of the Company, the notes thereto
and the other financial data.

At August 31, 1997
------------------ As Adjusted
For Exercise of
The Class A
As Adjusted For Warrants And
Exercise Of The The Class B
Actual Class A Warrants (1) Warrants (2)
------ -------------------- ----------------

<S> <C> <C> <C>
Cash $1,432,281 $3,751,906 $7,048,381

STOCKHOLDERS' EQUITY:

Common Stock, $.001 par value; 30,000,000
shares authorized, 9,154,804 issued
and outstanding, historical; 11,202,304
issued and outstanding, as adjusted
for exercise of the Class A warrants and
13,249,804 issued and outstanding, as
adjusted for exercise of
the Class A and the Class B warrants 9,155 11,203 13,250

Capital in excess of par value 1,768,088 4,085,665 7,380,093

Accumulated Deficit (57,825) (57,825) (57,825)
-------- -------- --------

Total Stockholders' Equity 1,719,418 $4,039,043 $7,335,518
========= ========= =========
- ----------

(1) The amounts indicated in this column include (i) net proceeds of $2,354,625
after paying commissions of eight percent if all the Class A Warrants are
exercised, and (ii) expenses related to this offering estimated at $35,000
for filing fees, printing costs, legal and accounting fees and
miscellaneous expenses.

(2) The amounts indicated in this column include (i) $2,354,625 after paying
commissions of eight percent if all the Class A Warrants are exercised,
(ii) net proceeds of $3,296,475 after paying commissions of eight percent
if all the Class B Warrants are exercised, and (iii) expenses related to
this offering estimated at $35,000 for filing fees, printing costs, legal
and accounting fees and miscellaneous expenses.

</TABLE>

<PAGE>

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is traded in the over-the-counter market and has
been quoted on the OTC Bulletin Board since November 1996. Effective as of
November 12, 1997, the Company's trading symbol was changed from "MRVI" to
"PYRX".

The table below presents the range of high and low bid prices for the
Company's Common Stock during each of the quarters indicated. These quotations
were obtained from brokers who make a market in the Company's Common Stock and
reflect interdealer prices, without retail mark up, mark down or commission, and
may not represent actual transactions.

Bid Prices
----------
Quarter Ended High Low
------------- ---- ---

November 30, 1996 .125 .12
February 28, 1997 .0625 .0625
May 30, 1997 .1875 .125
August 31, 1997 1.6875 .25

On November 28, 1997, the closing bid price for the Company's Common Stock
was $..... per share.

Number Of Stockholders Of Record

On October 6, 1997, the number of stockholders of record of the Company was
approximately 710.

DIVIDEND POLICY

The Company has not declared or paid any cash dividends on its Common Stock
since its formation and does not presently anticipate paying any cash dividends
on its Common Stock in the foreseeable future. The Company currently intends to
retain any future earnings to finance the expansion and continued development of
its business.

BUSINESS AND PROPERTIES

Overview

The Company believes that its exploration focus can result in rapid growth
in reserve capture by the careful selection and participation in projects as a
non-operating working interest owner. The Company is currently focusing its 3-D
seismic activity in a limited number of proven hydrocarbon provinces where it is
convinced that the application of advanced seismic technology can dramatically
impact the finding cost of significant oil and gas reserves. By reducing
drilling risk through 3-D seismic imaging and analysis, the Company expects to
improve the expected return on investment in its oil and gas projects.

<PAGE>

The Company has not yet participated in drilling any wells, and it owns no
producing acreage. The Company intends to participate in drilling its first well
in early calendar1998.

Strategy

The Company's business strategy is to continue to enhance shareholder value
by leveraging its technical experience and expertise with 3-D seismic technology
to identify exploration and exploitation projects with significant potential
reserves and economic results based on the application of appropriate technology
and suitable project risk management. The Company's ongoing goal is to increase
its reserve base through a focus on mature hydrocarbon basins where it believes
that the historical under-utilization of seismic technology creates tremendous
opportunities. It is the Company' s view point that the systematic application
of advanced seismic imaging and visualization to exploration can significantly
reduce drilling risk and enhance financial results. The Company's strategy is to
focus on applying 3-D seismic technology to explore properties that lie within
these mature basins and that offer oil and gas reserves that would be materially
significant to the Company.

The Company has a three-pronged corporate approach for the application of
exploration technology in these mature basins. The three components of this
strategy are set forth below:

o Internal generation of exploration and exploitation prospects with
special emphasis on 3-D seismic application to stratigraphic play
concepts.

o Identification and exploitation of non-performing and under-utilized
existing 3-D seismic surveys and acreage positions in which the
application of technical expertise and advanced interpretation and
visualization methodologies could significantly impact drilling
results.

o Development of partnerships with exploration and production companies
that lack advanced technical resources and expertise.

Exploration and Operating Approach

The Company focuses its technical resources on obtaining the highest
quality subsurface image through advanced geological and geophysical methods,
which it believes are more likely to result in the cost effective identification
of oil and gas reserves that are materially significant. The Company is
committed to providing its technical team with access to the required tools and
support necessary to retain a competitive advantage in today's exploration
environment. The Company strives to provide its geoscientists with the most
advanced imaging and analytical technology available and provides employee
incentives to utilize for the recruitment and motivation of these technical
experts.

The Company adheres to a disciplined approach to selective project
participation. The Company participates only in those projects that it believes
are likely to maximize the return on its capital investment, have significant
reserve growth potential, and benefit from the application of advanced seismic
technology. The Company believes that these factors result in a positive impact
to the finding-cost and production economics. The Company actively and
continually manages its portfolio of exploration and exploitation projects. The
aggressive portfolio management enables the Company to maximize the investment
of available capital in a limited number of high impact geologic plays and
projects.

<PAGE>

The Company generates many of its exploration and exploitation projects
internally, and therefore is not dependent on outside parties for project flow.
The Company strives to control all the pre-drill exploration phases, including
the acreage position and the application of seismic technology. With the
resulting project control, the Company is in the position to fully manage the
exploration process and determine subject to its financial resources, the
appropriate level of working interest that it retains in the drilling of any
associated wells. The Company aggressively leverages its project control and
technical expertise to potential industry partners thereby maximizing return on
investment while controlling capital exposure. The Company does not intend to
operate the drilling of project wells, but intends to retain the flexibility to
maintain a sufficient working interest in projects to enhance leverage of its
technical resources and influence operator actions.

Significant Projects

The Company's exploration activities are currently focused on the southern
San Joaquin basin of California and in selective Rocky Mountain basins. Advanced
seismic imaging of the structural and stratigraphic complexities, common to
these regions, provides the Company with the ability to identify significant
hydrocarbon potential that could not be previously detected with conventional
2-D seismic technology. These projects offer multiple drilling opportunities
with individual wells having the potential capability of encountering multiple
reservoirs.

The following provides a summary of the Company's exploration areas and
significant projects. While aggressively pursuing specific exploration
activities in each of the following areas, the Company is also pursuing
additional opportunities in these and other core areas that meet certain
exploration and exploitation criteria. There is no assurance that drilling
opportunities will be identified in the current project portfolio or will be
successful if drilled.

Southern San Joaquin Basin, California

The San Joaquin basin of California has proven to be one of the most
productive hydrocarbon producing basins in the continental United States. To
date, the approximately 14,000 square mile basin has produced in excess of 12.7
billion barrels of oil equivalent, and contains 25 fields classified as giant,
with cumulative production of more than 100 MMBoe.

The San Joaquin contains six of the 25 largest oil fields in the U.S. All
six of these fields were discovered between 1890 and 1911, a full decade prior
to the discovery of the first giant Texas oil field. The basin accounts for 34
percent of California's actively producing fields, yet produces more than 75
percent of the state's total oil and gas production. Most of the production
within the basin is located along the western and southern end of Kern County.
Production figures for 1995 reported by the California Department of Oil and Gas
indicate aggregate total production of 230.9 MMBoe. Of this figure, Kern County
accounts for over 95 percent of the oil production from the San Joaquin Basin.

Exploration Opportunity. For the 100 plus years of its productive life, the
San Joaquin Basin has been dominated by major oil companies and large fee
acreage holdings. As a result of these conditions, the basin has generally been
under-explored by independent exploration and production companies, groups that
usually bring advanced technologies to their exploration efforts. The large
fields in the basin were all discovered on surface anticlines and produce mostly
heavy oil from depths of less than 5,000 feet. As a consequence, basin operators
have employed only those advanced engineering technologies related to enhanced
production practices including steam floods and most recently, horizontal
drilling.

<PAGE>

The basin as a whole has suffered from a lack of applied exploration
technology and deep drilling. Approximately one percent of the total basin wells
have been drilled to a depth greater than 12,000 feet, with only four out of the
1,500 wells drilled during 1995 being to a depth greater than 12,000 feet.
Additional 1995 statistics indicate that the average well depth drilled during
the year was just slightly more than 2,000 feet. Three-dimensional seismic has
been employed only in limited quantity and in certain areas of the basin.

Tenneco and ARCO shot a limited number of 3-D surveys in the mid- to
late-1980s on the Bakersfield Arch and to the south in the Yowlumne area. With
the ongoing retrenchment of majors in the basin, independents such as Torch,
Nuevo Energy, Vintage Petroleum, HarCor Energy and Enron Oil & Gas have moved
into prominent positions within the basin and are bringing applied geoscience
technologies with them. More 3-D surveys have been acquired in the last two
years than in all the previous years combined. This trend is expected to
accelerate in the upcoming years as a renewed emphasis is placed on 3-D seismic
exploitation and exploration.

With limited exploration in the San Joaquin basin since the "boom" days of
the early 1980s, the Company believes that multiple exploration opportunities
available. Deep basin targets, both structural and stratigraphic in nature,
remain largely untested with modern seismic technology and the drill bit. In
addition, retrenchment of the majors in the basin has caused many of them to
rethink their policies regarding their large fee acreage positions. For the
first time in history, many of these companies are opening up these fee acreage
positions to outside exploration by aggressive independent companies. The
Company has identified and negotiated exclusive access to three high-potential
exploration plays in the southern San Joaquin basin.

East Lost Hills. The Company has identified and is currently undertaking
technical analysis of a deep, large untested structure in the footwall of the
Lost Hills thrust. This structure represents the largest remaining untested
structural play in the San Joaquin Valley, and may contain ' world-class'
reserves in multiple horizons. This prospect lies directly east of and
structurally below the existing Lost Hills field, which has produced in excess
of 440 MMBoe from shallow pay zones in a large thrusted anticlinal feature. The
Company has entered into a joint venture with Armstrong Oil and Gas, Inc.
("Armstrong"), a private Denver-based independent exploration company that
specializes in high-potential structural plays, to develop and market the East
Lost Hills prospect to the industry. The Company holds a 30 percent working
interest in the prospect, and jointly with Armstrong, owns or controls leases on
approximately 12,500 gross acres in the play.

This unconventional deep prospect has significant structural and reservoir
risk, but the potential for large reserves makes it an attractive play. The
Company and Armstrong have analyzed and interpreted over 350 miles of
high-resolution 2-D seismic data to help refine the structural mapping of the
prospect. Advanced pre-stack depth migration and interpretation clearly defines
the deep, sub-thrust structure. Two wells drilled to the east of the prospect,
in the mid-1970s, proved the productivity potential of free oil (42 degree API)
and gas at depths below 17,000 feet. Ongoing source rock and maturation modeling
suggests that the oil generation window exists at depths between 15,000 and
17,000 feet, and that early migration of hydrocarbons should preserve reservoir
quality at East Lost Hills. It is anticipated that the prospect will be marketed
to potential industry partners during the fourth quarter of calendar 1997, with
a deep test well drilled in the first half of calendar of 1998.

School Road/Southeast Maricopa. The Company has signed a lease and seismic
option with Chevron Production, USA covering exclusive exploration rights on
approximately 22,000 acres of fee land in the Maricopa sub-basin at the southern

<PAGE>

end of the San Joaquin valley. The Maricopa sub-basin represents a rapidly
subsiding fore-arc basin containing more than 30,000 feet of post-Jurassic
sediments. The Maricopa area is the location of the major depo-center for
deep-water turbidite deposition in the San Joaquin. The majority of oil produced
in the Maricopa sub-basin and on the Bakersfield arch to the north has come from
the Upper Miocene Stevens and older (Eocene) turbidite sands.

Basin wide, the Stevens sands have produced in excess of 1,350 MMBbl, with
mean field size being in excess of 70 MMBbl. Stevens fields produced more than
20 MMBbl in 1995. Stevens sand production is primarily from stratigraphic traps,
and ranges in depth from 7,500 feet to over 14,000 feet. Reservoir quality is
good with porosities ranging up to the mid 20 percent range. Oil gravities range
from 28 to 55 degree API with the lighter oil occurring in deeper production to
the south. With the superior reservoir quality and light hydrocarbons, the
Stevens' reservoirs make an attractive exploration target with significant
potential reserves.

Directly surrounding the Chevron acreage position, five fields produce from
Stevens equivalent sands. These fields include Landslide (14.9 MMBoe), Paloma
(132.9 MMBoe), Rio Viejo (7.9 MMBoe), San Emido Nose (21.1 MMBoe), and Yowlumne
(117.2 MMBoe). These fields all show stratigraphic trapping mechanisms including
updip sand pinch-outs, lateral facies variation, and differential compaction.
These five fields produced over 2 MMBbls of light oil and associated natural gas
in 1995 (1995 Production Statistics, California Department of Oil and Gas), and
have cumulative aggregate historical production in excess of 294 MMBoe. Per well
cumulative production ranges from a low of 690 MBbl to 2.1 MMBbl, with a mean
value of 1.3 MMBbl.

The objective of the School Road/Southeast Maricopa exploration program
will be to apply advanced 3-D seismic technology and advanced interpretation
methods, within a detailed sequence stratigraphic framework, to identify
stratigraphic relationships and potential traps. Exploration for Stevens
stratigraphic traps with 2-D seismic data has proven to be largely unsuccessful
due to the lack of sufficient line density to resolve the stratigraphic
complexity necessary to delineate trapping mechanisms. The discovery of the
Landslide field in 1985 resulted from the application of 3-D seismic
exploration. By today's standard, that data suffered from low fold, low
frequency, short offset, and generally poor imaging of detailed stratigraphic
relationships. Advances in field acquisition, data processing, and visualization
methods since the mid-1980s should allow much more detailed seismic analysis of
complex stratigraphic geometries and trapping mechanisms.

The School Road/Southeast Maricopa exploration agreement with Chevron
involves a drill-to-earn option on more than 22,000 fee acres, a seismic license
to an existing (1992) 42-square-mile 3-D seismic survey (School Road), more than
200 miles of proprietary 2-D seismic data, a proprietary regional sequence
stratigraphic framework based on extensive, detailed palynology analysis, and
all available well file data. This unique database is anticipated to allow the
complete integration of geology and modern 3-D seismic data to identify
potential trapping opportunities within the stratigraphically complex turbidite
systems present in the sub-basin. The drill-to-earn option entitles the Company,
for each well it drills, to earn a 100 percent working interest and a 75 percent
net revenue interest in 1,280 acres in the vicinity of the well drilled. The
wells are anticipated to range in depth from 9,000 to 16,000 feet.

Preliminary regional mapping within this sequence stratigraphic framework
suggests the presence of multiple, single- and stacked-turbidite leads within
the School Road/Southeast Maricopa area. The School Road 3-D seismic survey is
currently being re-processed to enhance the frequency content and seismic image.
It is anticipated that the first test well will be drilled at School Road in the
second quarter of calendar 1998. The Company holds 100 percent working interest
(with net revenue interests ranging from 75 to 87.5 percent) in the School Road
project. At Southeast Maricopa, the Company anticipates acquiring 40 to 60
square miles of 3-D seismic data beginning in the fourth quarter of calendar
1997, with the first test well to be drilled before the end of calendar 1998.
The Company holds 100 percent working interest with net revenue interests
ranging from 75 to 87.5 percent at Southeast Maricopa, but will look for
industry support in the shooting of the seismic data and drilling.

<PAGE>

Denver Basin, Colorado and Nebraska

The Denver Basin covers approximately 60,000 square miles in parts of
Colorado, Nebraska and Wyoming. The basin was the second area in the United
States to produce oil from drilled wells, and has produced more than one billion
barrels of oil equivalent to date. Published statistical studies indicate that
an additional 150 MMBoe to 200 MMBoe of reserves remain to be discovered in this
mature basin from Cretaceous reservoirs in stratigraphic traps.

During the past 10 years, the Denver basin has been one of the most
actively drilled areas in the U.S. due to low drilling costs and low reserve
base risk. Most of the activity has centered on down-spaced drilling for
Codell/Niobrara and Sussex/Shannon/ Parkman targets in the Wattenburg area, a
basin-center gas accumulation.

As continued drilling activity has resulted in decreasing availability of
additional well locations, major Wattenburg operators (HS Resources, Patina Oil
& Gas, Prima, NARCO) are experiencing significant retreat, retrenchment and
consolidation of their operations. Decreased activity drilling for shallow gas
offers the Company an opportunity to acquire land and/or seismic options to
explore and exploit the deeper oil prone 'D' and 'J' sandstone reservoirs.
Production from these Cretaceous reservoirs results from stratigraphic trapping
in an incised valley-fill depositional system. Cretaceous D-Sand and J-Sand
reservoirs have been the traditional exploration targets within the Denver
basin. These reservoirs account for the majority of production to date in the
basin, with cumulative production from the D-Sand totaling 386.6 MMBoe and
J-Sand production totaling 743.4 MMBoe. Modern sequence stratigraphic models and
strong structural control on deposition indicate that these traps are
predictable both in geometry and orientation.

While seismic data has been employed in the basin since the mid-1950s, the
success of 2-D seismic exploration has been limited by stratigraphic trapping
and the complex nature of the reservoir systems. The emergence of 3-D seismic
technology has created exciting new exploration opportunities in the basin.
While the handful of 3-D surveys acquired to date in the basin have proven to be
economic successes, the downturn in basin-wide activity has resulted in
significant underutilization of this exploration application. The Company
proposes to capitalize on 3-D seismic exploration opportunities generated
internally, and through opportunities arising from the recent, ongoing
consolidation and retrenchment of major basin operators.

Exploration Opportunity. Historically, exploration in the Denver basin has
been dominated by small, low-cost operators employing subsurface and
"trend-ology" geological mapping methods. The lack of applied technology and the
stratigraphic reservoir complexity in the basin has resulted in low drilling
success rates and overall poor economic results. Expanded use of 3-D seismic
technology to image D-Sand and J-Sand reservoir should enhance the economic
results and expedite the discovery process. To date, less than 203-D seismic
surveys have been acquired within the Denver basin. Geoscientists employed by
the Company have been directly involved in eight of these projects. These
projects have proven the economic viability of 3-D seismic in unraveling the
stratigraphic complexity and productivity of Cretaceous incised valley-fill
reservoirs and have resulted in the identification and production of significant
incremental reserves.

<PAGE>

Geological and geophysical methodologies developed internally by the
Company allow for the identification and differentiation of significant economic
reserves from the background of marginal producers common in the Denver basin.
The application of these methodologies result in the potential for discovery of
significant reserves with high success rates and low finding costs. The Company
proposes to undertake a systematic exploration/exploitation effort in the Denver
basin. A regional stratigraphic framework for Cretaceous reservoirs has been
constructed leading to the identification of numerous D-Sand and J-Sand leads
and prospects. Detailed geologic work is underway to refine these leads and
prospects with regard to prospectivity, reserve potential and applicability of
3-D seismic imaging. The centerpiece of the proposed exploration/exploitation
effort will be the application of 3-D seismic to delineate and resolve
stratigraphic traps. Previous experience with 3-D seismic technology in the
Denver basin has provided a competitive advantage in risk reduction and
identification of prospective drilling locations. The Company has one
exploitation project underway in the basin, and is continuing efforts to develop
and define additional opportunities.

Peoria Unit. The Company, in partnership with Tyler-Rockies Exploration
Ltd., has developed an opportunity to redevelop the 7,000-acre Peoria (J-Sand)
Unit employing applied technology, including 3-D seismic reservoir
characterization, geostatistical analysis and modeling and possible short-radius
lateral drilling. Peoria, discovered in mid-1970, has produced 15.4 MMBoe (12.8
MMBbl and 15.86 Bcf) from a series of laterally discontinuous fluvial deposits
within an incised valley-fill sequence. The field has been developed on standard
80-acre spacing, and exhibits strong indications of significant stratigraphic
and structural compartmentalization as evidenced by reservoir correlation across
the field, multiple fluid contacts, reservoir performance, lack of response to
waterflooding and production history.

Previous experience with reservoir characterization in the basin with
valley-fill sequences suggests that stratigraphic compartmentalization occurs on
a scale of less than 40 acres. The result of this stratigraphic reservoir
compartmentalization is the potential identification of isolated, untapped or
incompletely swept reservoir pods that are inadequately sampled and produced at
standard 80-acre spacing. The Company has developed a plan to apply advanced 3-D
seismic reservoir characterization to identify and map prospective reservoir
compartments to be produced by selective infill and step-out drilling. Compared
to the production performance of surrounding fields with similar reservoir
properties, Peoria has significantly underperformed. Cumulative field production
has accounted for a 22 percent recovery of calculated original oil in place
(OOIP) of 57 MMBbl, leaving an estimated 10 percent of OOIP remaining to be
produced from selective infill and stepout drilling.

The Company and Tyler-Rockies Exploration have completed detailed
geological and engineering reservoir characterization, and have leased or
optioned approximately 2000 additional prospective acres in addition to the 7000
acres held by production within the Peoria Unit. The Company is currently
marketing the Peoria re-development project to the industry, and expects to
acquire 24.5 square miles of 3D seismic data in early 1998. After acquisition of
seismic data, the Company retains a 10 percent working interest in all wells
drilled within the project area.

Big Horn Basin, Wyoming and Montana

The Big Horn basin of Wyoming and Montana is an asymmetric intermontaine
basin of the Rocky Mountain foreland. Initial production was established in the
basin in 1906 with the discovery of Garland field. Cumulative production from

<PAGE>

the basin is in excess of 2.4 BBO and 1.8 TCF of gas. The vast majority of this
production has come from Paleozoic reservoirs trapped in basin-margin anticlinal
structures. The majority of major field discoveries (greater than 90 percent of
field total and cumulative production) were made prior to 1950.

Exploration Opportunity. While most of the early exploration in the basin
was the result of mapping of surface structures, recent exploration efforts have
focused on the application of detailed subsurface mapping to delineate
structural complexities not previously observed. Because most of the producing
anticlines are structurally uncomplicated at their surface expression, little
exploration effort has historically been applied to defining structural
compartmentalization and secondary culminations at depth. The advent of modern
geophysical technology, including the application of 3-D seismic, has increased
the ability to resolve the structural complexity of producing intervals. Recent
exploration and exploitation success at fields such as Gooseberry, Manderson,
Golden Eagle, and Enigma have resulted from this increased effort to understand
and delineate smaller-scaled secondary structural features.

The Company sees multiple exploration and exploitation opportunities in the
basin to identify unrecognized and untested structural culminations along
producing trends. Multiple potentially productive horizons exist on many of
these structural features creating attractive project economics and exploration
finding costs. The Company has identified a number of individual project focus
areas, and has secured a lease position, covering approximately 2,080 gross and
2,080 net acres, on its first exploration project in the basin. There are no
immediate plans to commence drilling on this prospect.

North Zimmerman Butte. The Company has developed an exploration lead, based
on subsurface geological analysis, north and west of the Zimmerman Butte field.
Zimmerman Butte field was discovered in 1945 and has produced over 1.3 MMBO from
several reservoirs. The productive area of the field covers less than 350 acres
on a surface structural feature that extends along trend for approximately five
miles. Subsurface analysis has indicated the possible presence of multiple
subsidiary structural features along this structural trend. Based on the
production potential of these structural leads, the Company acquired a lease
covering 2080 acres in the August 1997 BLM lease sale. The leasehold position
covers some but not all of the prospective acreage along trend. The Company is
currently negotiating an exploration joint venture with another independent oil
and gas company that controls the remaining prospective acreage, and there is no
assurance that this will occur. The Company will undertake additional geological
and geophysical analysis before drilling a test well.

Geological and Geophysical Expertise

The Company's oil and gas finding capabilities are dependent upon the
effective application of 3-D seismic imaging technologies. The Company has
assembled a technically experienced staff of in-house geologists and
geophysicists with extensive experience involving the utilization of advanced
seismic data imaging and analysis, and have collectively participated in more
than 100 3-D seismic projects in diverse geological trends.

The Company also has access, both in-house and through consultants, to
state-of-the-art exploration hardware and software applications. The Company
owns one computer aided exploration workstation running the full suite of
GeoGraphix geologic mapping and analysis software. Additionally, the Company
owns one geophysical workstation employing SeisX 2-D and 3-D seismic
interpretation and analysis software. Through a strategic alliance with a
Denver-based 3-D seismic consulting firm (Interactive Earth Sciences
Corporation), the Company has full access to multiple UNIX-based seismic
interpretation workstations running the complete Schlumberger/GeoQuest seismic
analysis software package. Through this relationship, the Company also has full
access to GMA seismic modeling software as well as Paradigm Geophysical's
GeoDepth pre-stack depth migration software package.

<PAGE>

Drilling Activities

The Company drilled no gross or net wells in 1996. The Company does not
anticipate the drilling of any gross or net wells during the 1997 calendar year.
The Company does anticipate the drilling of an undetermined number of gross and
net wells during 1998, based on ongoing exploration efforts in California and
Colorado.

Production

The Company currently does not own any oil or gas production. The Company
has no immediate plans to acquire or purchase any production. The Company also
has no booked reserves at the current time and any near-term reserve additions
would result from successful exploration efforts.

Acreage

The Company currently controls, through lease, farmout, and option, the
following acreage position as detailed below:

State Gross Acres Net Acres
----- ----------- ---------
California 34,123 25,314
Colorado 9,000 900
Wyoming 2,080 2,080
------- ------ -------
TOTAL 45,203 28,294

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following is a discussion of the financial condition and results of
operations of the Company as of and for the seven months (from inception) ended
December 31, 1996 ("1996"), and as of and for the eight months ended August 31,
1997 ("1997"). This discussion should be read in conjunction with the Company's
Financial Statements, the notes related thereto and the other financial data
included elsewhere in this Registration Statement.

Overview

The Company is an independent oil and gas exploration company whose
strategic focus is the application of advanced seismic imaging and computer
aided exploration technologies in the systematic search for commercial
hydrocarbon reserves, primarily in the onshore western United States. The
Company attempts to leverage its technical experience and expertise with 3-D
seismic to identify exploration and exploitation projects with significant
potential economic return. The Company intends to participate in selected
exploration projects as a non-operating, working interest owner, sharing both
risk and rewards with its partners. The Company has pursued and will continue to
pursue exploration opportunities in regions where the Company believes
significant opportunity for discovery of oil and gas exists. By reducing
drilling risk through 3-D seismic technology, the Company seeks to improve the
expected return on investment in its oil and gas exploration projects.

<PAGE>

During 1996, the Company commenced its business operations and identified
specific initial projects for focus. The Company undertook no drilling and had
no revenues from oil and gas production during 1996.

During 1997, the Company incurred approximately $311,000 for various direct
costs and expenses relating to its identified exploration and exploitation
projects. The Company undertook no drilling and had no revenues from oil and gas
production during 1997. To finance its operations and obtain funds for
additional capital expenditures relating to its exploration projects, the
Company sold equity securities through private placement offerings raising
approximately $1,743,000 net to the Company.

The Company currently anticipates that it will participate in the drilling
of one to three gross exploratory wells during its fiscal year ending August 31,
1998 ("1998"), although the number of wells may increase as additional projects
are added to the Company's portfolio. However, there can be no assurance that
any such wells will be drilled and if drilled that any of these wells will be
successful. See "RISK FACTORS-Start-Up Nature Of The Company's Oil And Gas
Business; Absence Of Profits."

The Company's future financial results will depend primarily on (i) the
Company's ability to discover commercial quantities of hydrocarbons; (ii) the
market price for oil and gas; (iii) the Company's ability to continue to source
and screen potential projects; and (iv) the Company's ability to fully implement
its exploration and development program. There can be no assurance that the
Company will be successful in any of these respects or that the prices of oil
and gas prevailing at the time of production will be at a level allowing for
profitable production. See "RISK FACTORS - Start-Up Nature of The Company's Oil
And Gas Business; Absence Of Profits," "- Substantial Capital Requirements And
Liquidity" and "- Risks Of Exploratory Drilling Activities."

In connection with the implementation of its exploration and development
program, the Company intends to use a portion of its existing cash resources to
expand its technical and support staff. As a result, the Company anticipates
that its general and administrative expenses will increase in 1998. Further, the
Company anticipates incurring additional legal, administrative and accounting
costs in future periods as a result of being a public company.

Results of Operations

Inception (May 31, 1996) through December 31, 1996 ("1996") compared with
the eight months ended August 31, 1997 ("1997")

Oil and Gas Revenues and Expenses. At August 31, 1997 (and at the date of
this Prospectus), the Company did not own any producing or proved oil and gas
properties. No oil and gas revenues or expenses have been recorded by the
Company.

Depreciation, Depletion and Amortization. The Company recorded no depletion
expense from oil and gas properties in 1996 or 1997. At August 31, 1997 (and at
the date of this Prospectus), the Company did not own any proved reserves and
has no oil or gas production. The Company recorded nominal depreciation expense
associated with capitalized office furniture and equipment during 1996 and 1997.
The Company also recorded nominal amortization expense associated with
organization costs during 1996 and 1997.

General and Administrative Expense. The Company incurred $7,000 and
$101,000 in general and administrative expenses during 1996 and 1997,
respectively. The increase results from incurring costs associated with the

<PAGE>

hiring of technical personnel, leasing of office space, and legal and accounting
and other costs associated with administering and pursuing the development of
the Company's exploration and exploitation plan.

Consulting Fee Revenue. The Company generated $37,000 and $80,000 from
consulting fees in 1996 and 1997, respectively. These revenues are considered to
be ancillary to the Company's focus of generating revenues from oil and gas
production. These revenues may decrease or cease completely at any time in the
future.

Liquidity and Capital Resources

At August 31, 1997, the Company had working capital in the amount of
$1,376,000. To date, the Company has funded its oil and gas exploration
activities principally through cash provided by the sale of its equity
securities.

Cash used in investing activities during 1997 totaled $327,000. Of this
amount, $298,000 was used in conjunction with the Company's oil and gas
exploration and exploitation plan, and $29,000 was used for office furniture and
equipment.

The Company has no outstanding long-term debt and has not entered into any
commodity swap arrangements or hedging transactions. Although it has no current
plan to do so, it may incur long term debt in the future in order to fund
development of oil and gas producing properties, and it may also enter into
commodity swap and/or hedging transactions in the future in conjunction with oil
and gas production. Nevertheless, there can be no assurance that the Company
will ever have oil and gas production. See "RISK FACTORS - Risks Of Exploratory
Drilling Activities".

The future development of the Company's business will require substantial
capital expenditures. If all the outstanding Warrants are exercised, of which
there is no assurance, the Company would receive approximately $5,651,100, net
of sales commissions, from the exercise of outstanding warrants during the
fiscal year ending August 31, 1998. To the extent that these warrants expire
without being exercised, the Company will be limited or completely unable to
fund its exploration and exploitation activities until additional financing is
available. There can be no assurance such financing would be available. See
"RISK FACTORS - Substantial Capital Requirements And Liquidity". To the extent
sufficient funding is available, capital expenditures for the 12 month period
ending August 31, 1998 are expected to be up to $4,500,000. See "RISK FACTORS
Broad Discretion Over Use of Proceeds" and "USE OF PROCEEDS".

MANAGEMENT

The directors and executive officers of the Company, their respective
positions and ages, and the year in which each director was first elected, are
set forth in the following table. Each director has been elected to hold office
until the next annual meeting of stockholders and thereafter until his successor
is elected and has qualified. Additional information concerning each of these
individuals follows the table.

Name Age Position with the Company Director Since
---- --- ------------------------- --------------

<S> <C> <C> <C>
D. Scott Singdahlsen 39 Chief Executive Officer, 1997
President, and Chairman
of the Board

Robert B. Suydam 59 Secretary ---

Andrew P. Calerich 33 Chief Financial Officer ---

Gregory B. Barnett 36 Director 1997

Keith F. Carney 41 Director 1997
</TABLE>

<PAGE>

D. Scott Singdahlsen has served as President, Chief Executive Officer, and
Chairman of the Board of the Company since August 1997. Mr. Singdahlsen
co-founded PYR Energy, LLC in 1996, and served as General Manager and
Exploration Coordinator. In 1992, Mr. Singdahlsen co-founded Interactive Earth
Sciences Corporation, a 3-D seismic management and interpretation consulting
firm in Denver, where he served as officer and lead seismic interpretation
specialist from 1992 to 1996. Prior to forming Interactive Earth Sciences
Corporation, Mr. Singdahlsen was employed as a Development Geologist for Chevron
USA in the Rocky Mountain region. At Chevron, Mr. Singdahlsen was involved in
3-D seismic reservoir characterization projects and geostatistical analysis. Mr.
Singdahlsen started his career at UNOCAL as an Exploration Geologist in Midland,
Texas. Mr. Singdahlsen earned a B.A. in Geology from Hamilton College and a M.S.
in Structural Geology from Montana State University.

Robert B. Suydam has served as Secretary of the Company since August 1997.
Mr. Suydam co-founded PYR Energy, LLC in 1996 and served as Chief Geologist.
Since 1985, Mr. Suydam served as exploration coordinator for Snyder Oil, Gerrity
Oil, and Energy Minerals in Denver. Prior to this employment, Mr. Suydam served
as Vice President of Exploration for National Oil Company, and as Exploration
Manager for Hamilton Brothers Oil Company in Denver and Calgary. Mr. Suydam
started his career as an exploration Geologist at Texaco in Denver, Calgary, and
New Orleans. Mr. Suydam earned a B.S. and M.S. in Geology from the University of
Wyoming.

Andrew P. Calerich has served as Chief Financial Officer of the Company
since August 1997. From 1993 to 1997, Mr. Calerich was a business consultant
specializing in accounting for private oil and gas producers in Denver. From
1990 to 1993, Mr. Calerich was employed as corporate Controller at Tipperary
Corporation, a public oil and gas company in Denver. Mr. Calerich began his
professional career in public accounting in the tax department at Arthur
Andersen & Company. Mr. Calerich is a Certified Public Accountant and earned
B.S. degrees in both Accounting and Business Administration at Regis College.

Gregory B. Barnett has served as a Director of the Company since August
1997. Mr. Barnett is President of EnerCOM, Inc., a Denver-based consulting firm
specializing in financial public relations for a variety of private and public
petroleum companies. From 1993 to 1994, Mr. Barnett served as Director of
Investor Relations at Gerrity Oil Corporation in Denver. From 1988 to 1993, Mr.
Barnett was employed as Director of Investor Relations at Maxus Energy
Corporation in Dallas. Mr. Barnett is past President of the Rocky Mountain
chapter of the Petroleum Investor Relations Association, a member of the
National Association of Petroleum Investment Analysts and National Investor
Relations Institute. Mr. Barnett received a B.B.A. degree from the University of
Texas-Arlington.

Keith F. Carney has served as a Director of the Company since August 1997.
Mr. Carney is Chief Financial Officer of Cheniere Energy, Inc., a Houston based
public oil and gas exploration company. From 1992 to 1996, Mr. Carney was
employed as a Securities Analyst in the oil and gas exploration/production
sector with Smith Barney, Inc. Mr. Carney began his career as an exploration
Geologist at Shell Oil after earning B.S. and M.S. degrees in Geology from
Lehigh University. Mr. Carney also received a M.B.A. from the University of
Denver in 1992.

<PAGE>

Other Key Employees - Other key employees of the Company include the following:

Kenneth R. Berry, Jr. has served as Land Manager for the Company since
October 1997. Mr. Berry is responsible for the management of all land issues
including leasing and permitting. Mr. Berry has 23 years of experience as an
independent landman. Prior to joining the Company, Mr. Berry served as the
managing land consultant for Swift Energy Company in the Rocky Mountain region.
Mr. Berry began his career in the land department with Tenneco Oil Company after
earning a B.A. degree in Petroleum Land Management at the University of
Texas-Austin.

Richard A. Castle has served as Senior Explorationist for the Company since
August 1997, and is currently exploration coordinator for the San Joaquin
project. Mr. Castle has 26 years of technical and management experience. Prior
to joining the Company, Mr. Castle was Project Geologist for WaveTech
Geophysical, a Denver based 3-D seismic service provider. From 1994 to 1996, Mr.
Castle was employed as a Senior Geologist for Ampolex, USA in Denver where he
served as new ventures coordinator. From 1989 to 1994, Mr. Castle was a
geological consultant in Denver. From 1974 to 1989, Mr. Castle was employed by
Union Pacific Resources Corporation where he served in various technical and
management roles including Regional Geologist and Exploration Manager for the
Pacific Division. Mr. Castle began his career at Shell Oil in Houston and Los
Angeles after earning a B.S. degree in Geology at the University of Illinois and
a M.S. degree in Geology from the Louisiana State University.

Lisa A. Mallin has served as Geologist-CAEX for the Company since August
1997. Ms. Mallin is responsible for all aspects of computer aided exploration
including mapping and geophysical workstation system administration. Prior to
joining the Company, Ms. Mallin served in various exploration and production
capacities with Amoco, Snyder Oil, Intera Information Technologies, Nicor Oil
and Gas, Louisiana Land and Exploration, and Amerada Hess. Ms. Mallin earned a
B.A. degree in Geology from the University of Northern Colorado.

Committees Of The Board Of Directors

The Board of Directors currently has a Compensation Committee. The
Compensation Committee has the authority to establish policies concerning
compensation and employee benefits for employees of the Company. The
Compensation Committee reviews and makes recommendations concerning the
Company's compensation policies and the implementation of those policies and
determines compensation and benefits for executive officers. The Compensation
Committee currently consists of Messrs. Barnett and Carney.

EXECUTIVE COMPENSATION

Summary Compensation Table
- --------------------------

The following table sets forth in summary form the compensation paid to the Company's current and former President during
the period from the Company's inception on May 31, 1996 until its fiscal year ended August 31, 1996, and during the fiscal year
ended August 31, 1997. No employee of the Company received total salary and bonus exceeding $100,000 during either of the fiscal
years ended August 31, 1996 and 1997.

Annual Compensation

Name and Fiscal Long-Term Other Annual
Principal Position Year Ended Salary ($)(1)(2) Bonus ($) Compensation Options Compensation ($)
- ------------------ ---------- ---------------- --------- -------------------- ----------------

<S> <C> <C> <C> <C> <C>
D. Scott Singdahlsen, 1997 $10,250 -0- -0- -0-
President 1996 $ -0- -0- -0- -0-

Buddy Young, 1997 $ -0- -0- -0- 15,800 (3)
Former President 1996 $ -0- -0- -0- 14,000 (3)

</TABLE>

<PAGE>

- ---------------------

(1) The dollar value of base salary (cash and non-cash) received.
(2) Includes $4,000 paid as consulting fees to Mr. Singdahlsen by PYR Energy,
LLC during the period from January 1, 1997 through August 6, 1997.
(3) The amount shown represents a consulting fee paid to Mr. Young.

The 1997 Stock Option Plan

In August 1997, the Board of Directors of the Company approved the
Company's 1997 Stock Option Plan (the "1997 Plan") which subsequently was
approved by the Company's stockholders effective as of November 12, 1997.
Pursuant to the 1997 Plan, the Company may grant options to purchase an
aggregate of 1,000,000 shares of the Company's Common Stock to key employees,
directors, and other persons who have or are contributing to the success of the
Company. The options granted pursuant to the 1997 Plan may be either incentive
options qualifying for beneficial tax treatment for the recipient or
nonqualified options. The 1997 Plan may be administered by the Board of
Directors or by an option committee that determines the terms of the options
subject to the requirements of the 1997 Plan. At November 10, 1997, options to
purchase 246,000 shares were outstanding under the 1997 Plan.

BENEFICIAL OWNERS OF SECURITIES

As of November 10, 1997, there were 9,154,804 shares of the Company's $.001
par value common stock (the "Common Stock") outstanding. The following table
sets forth certain information as of November 10, 1997, with respect to the
beneficial ownership of the Company's Common Stock by each director, by all
executive officers and directors as a group, and by each other person known by
the Company to be the beneficial owner of more than five percent of the
Company's Common Stock:

Name and Address of Number of Shares Percentage of
Beneficial Owner Beneficially Owned (1) Shares Outstanding
- ---------------- ---------------------- ------------------

<S> <C> <C>
D. Scott Singdahlsen 2,000,000 21.8%
1675 Broadway, Suite 1150
Denver, Colorado 80202

Robert B. Suydam 1,300,000(2) 14.2%
1675 Broadway, Suite 1150
Denver, Colorado 80202

Gregory B. Barnett 200,000 2.2%
1675 Broadway, Suite 1150
Denver, Colorado 80202

Keith F. Carney 200,000 (3) 2.2%
915 Bay Oaks Road
Houston, Texas 77008

All Officers and Directors as a group 3,700,000 40.0%
(five persons)

PinOak Inc. 1,300,000 (2) 14.2%
5037 South Oak Court
Littleton, Colorado 80127

Greyledge LLC 889,066 (3) 9.3%
237 Park Avenue
21st Floor
New York, New York 10017

BSR Investments 880,000 (3) 9.2%
97 Avenue Henri Martin
Paris, France 75016

Bernard Young and Rebecca Young 558,138 (4) 6.1%
as trustees for the Young Family Trust
dated October 1992
5269 Amestoy Avenue
Encino, California 91316

Gail D. Forster 501,600 (3) 5.3%
237 Park Avenue
New York, New York 10017
</TABLE>

<PAGE>

- -----------------

(1) "Beneficial ownership" is defined in the regulations promulgated by the
U.S. Securities and Exchange Commission as having or sharing, directly or
indirectly (i) voting power, which includes the power to vote or to direct
the voting, or (ii) investment power, which includes the power to dispose
or to direct the disposition, of shares of the common stock of an issuer.
Unless otherwise indicated, the beneficial owner has sole voting and
investment power.

(2) The shares shown for Mr. Suydam are owned of record by PinOak Inc.
("PinOak"). These shares are included twice in the table. They are listed
as being held beneficially by both PinOak and by Mr. Suydam. PinOak is
owned by Mr. Suydam's wife and Mr. Suydam is the President of PinOak.

(3) The number of shares indicated includes the following number of shares
underlying warrants that currently are exercisable and held by each of the
following persons: Keith F. Carney, 100,000; Greyledge LLC, 444,533; BSR
Investments 440,000; and Gail D. Forster, 250,800.

(4) The number of shares indicated does not include 30,000 shares owned by Mr.
and Mrs. Young and an aggregate of 16,917 additional shares held by the son
and daughter of Mr. and Mrs. Young and their spouses for themselves and as
custodians for their children. Pursuant to Rule 16a-1(a)(4), Mr. and Mrs.
Young disclaim beneficial ownership of shares held by their children and
the spouses of their children.

TRANSACTIONS BETWEEN THE COMPANY AND RELATED PARTIES

Acquisition Of PYR Energy, LLC.

The Company acquired all the ownership interest in PYR Energy, LLC on
August 6, 1997 in exchange for 4,000,000 shares of the Company's Common Stock.
Mr. Singdahlsen received 2,000,000 shares of the Company's Common Stock in that
transaction in exchange for the 50 percent of PYR Energy, LLC that he owned
immediately prior to the transaction. PinOak, a company of which Mr. Suydam is
the President and whose sole shareholder is Mr. Suydam's wife, received
1,300,000 shares of the Company's Common Stock in that transaction in exchange
for PinOak's ownership of 32.5 percent of the ownership interests in PYR Energy,
LLC immediately prior to the transaction. In connection with that transaction,
the Company agreed to appoint each of Messrs. Singdahlsen, Carney and Barnett to
constitute all the members of the Company's Board Of Directors.

Loan To PYR Energy
- ------------------

In June 1997, PYR Energy, LLC borrowed $275,000 from the Company in order
to fund certain of PYR Energy, LLC's obligations pursuant to PYR Energy, LLC's
lease and seismic option in the San Joaquin basin. See "BUSINESS AND
PROPERTIES". PYR Energy, LLC secured that loan with a pledge of PYR Energy,
LLC's interest in the lease and seismic option. The loan accrues interest at a
rate of eight percent per annum. Interest is payable at the end of each calendar
quarter. The loan was effectively eliminated upon consummation of the Company's
acquisition of PYR Energy, LLC.

<PAGE>

Sale Of Assets To former Director And Officer
- ---------------------------------------------

Effective as of August 6, 1997, the Company sold all the assets not related
to the Company's business of oil and gas exploration, development and
consulting, and not related to the Company's principal office in Denver,
Colorado to Buddy Young, a principal stockholder and a former director and
officer of the Company. The purchase price for the assets was $32,000, which was
paid in the form of a release from Mr. Young to the Company of the Company's
obligation to repay the $32,000 it owed to Mr. Young. The Company's approximate
$32,000 obligation to Mr. Young had been incurred through advances from Mr.
Young to the Company for working capital purposes. At August 6, 1997 there were
outstanding $17,852 of accounts receivable related to the assets that Mr. Young
obtained the right to receive. Mr. Young also assumed all liabilities related to
the assets. The Company also assigned to Mr. Young the lease for the Company's
office in Encino, California, and Mr. Young assumed the Company's obligations
under the lease. The Company obtained a release from the landlord for additional
obligations under the lease.

In addition to the accounts receivable described above, the assets sold to
Mr. Young consisted primarily of the Company's interests in three television
programs, "Heartstoppers . . . At The Movies", a two-hour television program
hosted by George Hamilton, "Christmas At The Movies", a one- hour television
program hosted by Gene Kelly, and "It's A Wonderful Life - A Personal
Remembrance", an approximately 15-minute television program hosted by Frank
Capra, Jr., and the office furniture and supplies in the Company's former office
in Encino, California. The television programs previously had been held by the
Company for licensing to various television and cable television operators.
During the year ended August 31, 1997, the Company received licensing fees of
$15,216 for the television programming assets sold to Mr. Young. The low revenue
amount was mainly due to the programs' previously having been licensed in most
major territories. Because, as a result of the Company's acquisition of PYR
Energy LLC, the Company determined to focus its activities on oil and gas
exploration, development and consulting and to locate its principal office in
Denver, Colorado, the Company determined that it was in its best interests to
sell the assets of the Company that were not related to this business and to
assign its office lease in Encino, California.

Placement Agent Of Warrants And Significant Stockholder Are Under Common Control

In connection with the exercise of the Warrants, the Company has agreed to
pay Stonington Partners Group ("Stonington"), which served as the placement
agent for the Warants, an amount equal to eight percent of the exercise price
paid in connection with the exercise of any of the Warrants. Stonington will be
entitled to receive an aggregate of $491,400 if all of the Warrants are
exercised. Greyledge LLC, which beneficially owns 9.3 percent of the Company's
Common Stock, is 100 percent owned by an individual who owns 50 percent of, and
is a managing director of Stonington. See "BENEFICIAL OWNERS OF SECURITIES".

DESCRIPTION OF SECURITIES

General

The Company's authorized capital consists of 30,000,000 shares of $.001 par
value Common Stock. The Company had 9,154,804 shares of Common Stock issued and
outstanding as of October 21, 1997 which were held by approximately 710
stockholders. The Company had outstanding Class A Warrants to purchase 2,047,500
shares of Common Stock and Class B Warrants to purchase 2,047,500 shares of
Common Stock as of October 6, 1997 which were held by 33 warrant holders. The
following is a description of the Company's Common Stock and Warrants.

Common Stock

Each share of the Common Stock is entitled to share equally with each other
shares of Common Stock in dividends from sources legally available therefore,
when, as, and if declared by the Board of Directors and, upon liquidation or
dissolution of the Company, whether voluntary or involuntary, to share equally

25
<PAGE>

in the assets of the Company that are available for distribution to the holders
of the Common Stock. Each holder of Common Stock of the Company is entitled to
one vote per share for all purposes, except that in the election of directors,
each holder shall have the right to vote such number of shares for as many
persons as there are directors to be elected. Cumulative voting shall not be
allowed in the election of directors or for any other purpose, and the holders
of Common Stock have no preemptive rights, redemption rights or rights of
conversion with respect to the Common Stock. All outstanding shares of Common
Stock and all shares underlying the Warrants when issued will be fully paid and
nonassessable by the Company. The Board of Directors is authorized to issue
additional shares of Common Stock within the limits authorized by the Company's
Certificate Of Incorporation and without stockholder action.

All shares of Common Stock have equal voting rights and voting rights are
not cumulative. The holders of more than 50 percent of the shares of Common
Stock of the Company could, therefore, if they chose to do so, elect all the
directors of the Company.

Upon liquidation, dissolution or winding up of the Company, the assets of
the Company, after satisfaction of all liabilities, will be distributed pro rata
to the holders of the Common Stock.

The Company has not paid any cash dividends since its inception.

The Company has reserved a sufficient number of shares of Common Stock for
issuance in the event that all the Warrants are exercised. In addition, the
Company has reserved a sufficient number of shares of Common Stock for issuance
upon the exercise of options under the Company's 1997 Stock Option Plan.

Warrants

The Class A Warrants entitle the registered holders thereof to purchase an
aggregate 2,047,500 shares of Common Stock on or before January 15, 1998 at an
exercise price of $1.25 per share. The Class B Warrants entitle the registered
holders thereof to purchase an aggregate 2,047,500 shares of Common Stock on or
before April 15, 1998 at an exercise price of $1.75 per share.

The exercise price of the Warrants was arbitrarily established and there is
no assurance that the price of the Common Stock will be at a level at which
exercise of the Warrants would be of any economic value to a holder of the
Warrants.

The Warrants may be exercised upon the surrender of the Warrant certificate
on or prior to the expiration of the exercise period, and accompanied by payment
of the full exercise price for the number of Warrants being exercised. No rights
of a stockholder inure to a holder of Warrants until such time as a holder has
exercised Warrants and has been issued shares of Common Stock.

Delaware Anti-Takeover Law

Generally, Section 203 of the Delaware General Corporation Law ("GCL"), to
which the Company is subject, prohibits a publicly held Delaware corporation
from engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (i) prior to the date of the business
combination, the transaction is approved by the board of directors of the
corporation, (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owns
at least 85 percent of the outstanding voting stock, or (iii) on or after such
date the business combination is approved by the board and by the affirmative
vote of at least 66 2/3 percent of the outstanding voting stock which is not
owned by the interested stockholder. A "business combination" includes a merger,
asset sale and other transactions resulting in a financial benefit to the
stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15 percent or
more of the corporation's voting stock.

<PAGE>

Transfer Agent And Registrar

The transfer agent and registrar of the Company is U.S. Stock Transfer
Corporation.

INACTIVE TRADING OF THE COMMON STOCK

Although the Company's common stock is publicly held, there currently is
not an active trading market for the common stock. See "RISK FACTORS - Inactive
Trading Of The Common Stock; Possible Volatility Of Stock Price".

To the extend that there is trading in the Company's common stock, of which
there is not assurance, the common stock trades in the over-the-counter market
and is quoted on the OTC Bulletin Board. It is not quoted on the NASDAQ system
or any exchange. The closing quotes for the Common Stock on November 28, 1997
were $..... bid and $..... asked. It should be assumed that even with this OTC
Bulletin Board quote, there is an extremely limited trading market - and very
little liquidity - for the Company's common stock.

SELLING SECURITY HOLDERS

The Company is registering (A) the transfer of 4,095,000 shares of Common
Stock received by the Selling Security Holders in the Private Placements, (B)
the exercise of Class A Warrants to purchase an aggregate 2,047,500 shares of
Common Stock and the exercise of Class B Warrants to purchase an aggregate
2,047,500 shares of Common Stock by the Selling Security Holders, and (C) the
transfer of the 4,095,000 shares of Common Stock that may be acquired by the
Selling Security Holders upon the exercise of their Warrants. The Selling
Security Holders may transfer their Common Stock at such prices as they are able
to obtain in the market. The Company will not receive any proceeds from the
transfer of the Common Stock by the Selling Security Holders. The following
table sets forth the name of each Selling Security Holder, the number of shares
of Common Stock underlying the Warrants held by the Selling Security Holders
before this Offering, the number of shares of Common Stock owned by the Selling
Security Holders before this Offering, the number of shares of Common Stock to
be sold by the Selling Security Holders assuming they exercise their Warrants,
and the number of shares owned by the Selling Security Holders after this
Offering. None of the Selling Security Holders has held any position or office,
or had any material relationship with the Company or its affiliates in the past
three years except for Keith F. Carney who has been a director of the Company
since August 1997.

27
<PAGE>

<TABLE>
<CAPTION>
Number Of
Shares Of
Common Stock Number Of Number Of
Owned Before Shares To Be Shares Owned
Name Offering (1) Offered (2) After Offering
- ---- ------------ ----------- --------------
<S> <C> <C> <C>
Greyledge LLC 889,066 889,066 0
Gail D. Forster 501,600 501,600 0
BSR Investments Ltd. 880,000 880,000 0
Ostis Ventures 440,000 440,000 0
Apex Investment Fund, Ltd. 400,000 400,000 0
Guildford Manor 400,000 400,000 0
Sandra J. Kessler 394,200 394,200 0
Paul L. Kessler, IRA 205,800 205,800 0
Marc Ezralow 140,000 140,000 0
Bryan Ezralow, TTEE 140,000 140,000 0
Cinco de Mayo 186,666 186,666 0
WillisWei Corp. 280,000 280,000 0
Ted Koutscubos 280,000 280,000 0
Andrew Lessman 280,000 280,000 0
Vivaldi, Ltd. 280,000 280,000 0
Peter T. Dixon, TTEE 100,000 100,000 0
Peter T. Dixon, TTEE 100,000 100,000 0
Joe Sam Robinson 200,000 200,000 0
Hugh F. Smisson, III 80,000 80,000 0
John S. Neel, Jr. 26,668 26,668 0
Ralph O. Hellmold 100,000 100,000 0
Richard Liipfert 80,000 80,000 0
Joseph F. Cullman III 136,000 136,000 0
Joe Weinberg 176,000 176,000 0
Marshall Ezralow, TTEE 64,000 64,000 0
Walter L. Williams 80,000 80,000 0
Keith F. Carney 200,000 200,000 0
G. Tyler Runnels 200,000 200,000 0
Holstem Securities 200,000 200,000 0
James E. Moore, TTEE 200,000 200,000 0
David Crockett 200,000 200,000 0
Kim Fuerst 200,000 200,000 0
Ronald Cochran 150,000 150,000 0
TOTALS 8,190,000 8,190,000 0

</TABLE>
- ----------

(1) Because the Warrants held by the Selling Security Holders currently are
exercisable, the shares issuable upon the exercise of the Warrants are
considered beneficially owned by the Selling Security Holder. The number of
shares underlying the Warrants held by each Selling Security Holder are
included in the "Number Of Shares Of Common Stock Owned Before Offering".

(2) The number of shares of Common Stock to be sold assumes that the Selling
Security Holders exercise all their Warrants and elect to sell all the
shares of Common Stock received upon the exercise of the Warrants and all
the shares of Common Stock received in the Private Placements.

PLAN OF DISTRIBUTION

<PAGE>

that may be acquired by the Selling Security Holders upon the exercise of the
Warrants. The Company has agreed to pay Stonington Partners Group, the placement
agent of the Warrants, an amount equal to eight percent of the exercise price
paid in connection with the exercise of any of the Class A Warrants or Class B
Warrants. Stonington will be entitled to receive an aggregate of $491,400 if all
of the Warrants are exercised. An individual who owns 50 percent of, and is a
managing director of, Stonington also owns 100 percent of Greyledge LLC, a
beneficial owner of 9.3 percent of the Company's Common Stock. See 'BENEFICIAL
OWNERS OF SECURITIES". The transfer of the Common Stock by the Selling Security
Holders covered by this Prospectus will be completed, if at all, by the Selling
Security Holders, and not by the Company. If any of these shares are transferred
by a Selling Security Holder, they will be transferred on behalf of that person.
It is anticipated that those securities may be offered pursuant to direct sales
to private persons and in open market transactions. The Selling Security Holders
may offer the shares to or through registered broker-dealers who will be paid
standard commissions or discounts by the Selling Securities Holder. The Company
has no agreements with brokers to transfer any or all of the securities which
may be offered hereby.

SHARES AVAILABLE FOR FUTURE SALE

Common Stock previously issued by the Company to certain stockholders in
private offerings will be "restricted" securities ("Restricted Common Stock")
for purposes of Rule 144 ("Rule 144") promulgated under the Securities Act and
may not be sold without registration under the Securities Act unless an
exemption from registration is available, including exemptions contained in Rule
144. See "RISK FACTORS-Shares Available For Future Sale Could Adversely Affect
Share Price".

In general, under Rule 144 as currently in effect, if one year has elapsed
since the date of acquisition of Restricted Common Stock either from the Company
or from any Affiliate of the Company, whichever is later, the acquiror or
subsequent holder thereof is entitled to sell within any three-month period a
number of shares of Restricted Common Stock that does not exceed the greater of
one percent of the then outstanding Common Stock or the average weekly trading
volume of the Common Stock during the four calendar weeks preceding the date on
which notice of the sale is filed with the Commission. Sales under Rule 144 also
are subject to certain manner of sale provisions, notice requirements, and the
availability of current public information about the Company. If two years have
elapsed since the date of acquisition of Restricted Common Stock from the
Company or from any affiliate of the Company, and the acquiror or subsequent
holder thereof is deemed not to have been an affiliate of the Company at any
time during the 90 days preceding a sale, that person would be entitled to sell
those shares in the public market under Rule 144(k) without regard to the volume
limitations, manner of sale provisions, public information requirements or
notice requirements of Rule 144.

No prediction can be made as to the effect, if any, that future sales of
Common Stock, or the availability of Common Stock for future sale, will have on
the market price prevailing from time to time. Sales of substantial amounts of
Common Stock, or the perception that such sales occur, could adversely affect
prevailing market prices of the Common Stock.

SECURITIES AND EXCHANGE COMMISSION POSITION
ON CERTAIN INDEMNIFICATION

Pursuant to Delaware law, the Company's Board of Directors has the power to
indemnify officers and directors, present and former, for expenses incurred by
them in connection with any proceeding they are involved in by reason of their
being or having been an officer or director of the Company. The person being
indemnified must have acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company. The
Company's Bylaws grant this indemnification to the Company's officers and
directors.

Insofar as indemnification for liability arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.

<PAGE>

LEGAL MATTERS

Bearman Talesnick & Clowdus Professional Corporation, Denver, Colorado, has
acted as counsel for the Company in connection with this Offering, including the
validity of the issuance of the securities offered hereby.

EXPERTS

The audited financial statements of the Company appearing in this
Prospectus have been examined by Wheeler Wasoff, P.C., independent certified
public accountants, as set forth in their report appearing elsewhere herein, and
are included in reliance upon such report and upon the authority of said firm as
experts in accounting and auditing.

CERTAIN DEFINITIONS

Unless otherwise indicated in this Prospectus, natural gas volumes are
stated at the legal pressure base of the state or area in which the reserves are
located at 60(degree)Fahrenheit. Oil equivalents are determined using the ratio
of 10 Mcf of natural gas to one barrel of crude oil, condensate or natural gas
liquids so that 10 Mcf of natural gas are referred to as one barrel of oil
equivalent or "BOE".

As used in this Prospectus, the following terms have the following specific
meanings: "Mcf" means thousand cubic feet, "Bcf" means billion cubic feet, "Bbl"
means barrel, "MBbl" means thousand barrels, "MMBoe" means million barrels of
oil equivalent, "MMBbl" means million barrels, and "MMBO " means million barrels
of oil.

With respect to information concerning the Company's working interests in
wells or drilling locations, "gross" gas and oil wells or "gross" acres is the
number of wells or acres in which the Company has an interest, and "net" gas and
oil wells or "net" acres are determined by multiplying "gross" wells or acres by
the Company's working interest in those wells or acres. A "working interest" in
an oil and gas lease is an interest that gives the owner the right to drill,
produce, and conduct operating activities on the property and to receive a share
of production of any hydrocarbons covered by the lease. A working interest in an
oil and gas lease also entitles its owner to a proportionate interest in any
well located on the lands covered by the lease, subject to all royalties,
overriding royalties and other burdens, to all costs and expenses of
exploration, development and operation of any well located on the lease, and to
all risks in connection therewith.

A "development well" is a well drilled as an additional well to the same
horizon or horizons as other producing wells on a prospect, or a well drilled on
a spacing unit adjacent to a spacing unit with an existing well capable of
commercial production and which is intended to extend the proven limits of a
prospect. The latter type of development well drilling is known as "step-out
drilling". An "exploratory well" is a well drilled to find commercially
productive hydrocarbons in an unproved area, or to extend significantly a known
prospect.

"Reserves" means natural gas and crude oil, condensate and natural gas
liquids on a net revenue interest basis, found to be commercially recoverable.
"Proved developed reserves" includes proved developed producing reserves and
proved developed behind-pipe reserves. "Proved developed producing reserves"
includes only those reserves expected to be recovered from existing completion
intervals in casing of existing wells when the cost of making such reserves
available for production is relatively small compared to the cost of a new well.
"Proved undeveloped reserves" includes those reserves expected to be recovered
from new wells on proved undrilled acreage or from existing wells where a
relatively major expenditure is required for recompletion.

<PAGE>

"Infill drilling" means drilling of an additional well or additional wells
in order to more adequately drain a reservoir.

"Stratigraphic trap" means a barrier that impedes the migration of
hydrocarbons caused by either a nonporous formation sealing off the top edge of
a reservoir bed or by a change of porosity and permeability within the reservoir
bed itself. "Strategraphic play" means a prospect targeted to test a
strategraphic trap.

"API" means a measure of gravity based on standards set by the American
Petroleum Institute.

"Cretaceous D-Sand and J-Sand reservoirs" means sandstone reservoirs that
contain hydrocarbons of Cretaceous age that are found in the Denver basin of
Colorado, Wyoming and Nebraska.

"Cretaceous incised valley-filled reservoirs" means sandstone reservoirs of
Cretaceous age that were deposited in valleys carved into underlying strata
during a period of falling sea level.

"Cretaceous reservoirs" means rock reservoirs most commonly comprised of
sandstone that were deposited during the Cretaceous Period. The Cretaceous
Period occurred between 66 and 144 million years before present.

"Down-spaced drilling" means a method of development drilling whereby well
density in a given area is increased by drilling between existing wells.

"Palynology analysis" means an analysis of a rock sequence through
examination of contained spores and/or pollen. A method of age dating strata.

"Reserve capture" means the quantification of hydrocarbon reserves as a
result of drilling and testing a reservoir.

"Steam floods" means a secondary recovery technique whereby steam is
injected into a hydrocarbon reservoir in an effort to mobilize heavy (tarry)
oil.

"Subthrust structure" means a fold of strata which is found beneath a
thrust fault.

"Swept reservoir pods" means distinct sandstone units that have been
depleted of hydrocarbons through the secondary recovery method of waterflooding.

"Thrusted anticlinal feature" means a fold of geologic strata that is
bounded by a trust fault, which is a fault that results in older strata
overlying younger strata.

"Turbidite" means a stratigraphic sequence deposited by turbidity currents,
commonly associated with submarine canyons.

31
<PAGE>

PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A DEVELOPMENT STAGE COMPANY)

INDEX

PAGE
----

Independent Auditor's Report F-2

Balance Sheets
December 31, 1996 and August 31, 1997 F-3

Statements of Operations
Period from Inception (May 31, 1996) to
December 31, 1996 and Eight Months Ended
August 31, 1997 F-4

Statements of Members'/Stockholders' Equity
Period from Inception (May 31, 1996) to
December 31, 1996 and Eight Months Ended
August 31, 1997 F-5

Statements of Cash Flows
Period from Inception (May 31, 1996) to
December 31, 1996 and Eight Months Ended
August 31, 1997 F-6 - F-7

Notes To Financial Statements F-8 - F-14

F - 1

<PAGE>

INDEPENDENT AUDITOR'S REPORT

To The Board of Directors and Stockholders
PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)

We have audited the accompanying balance sheets of PYR Energy Corporation
(formerly Mar Ventures Inc.) (a development stage company) as of December 31,
1996 and August 31, 1997 and the related statements of operations,
members'/stockholders' equity and cash flows for the period from inception (May
31, 1996) to December 31, 1996 and for the eight months ended August 31, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits 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 audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PYR Energy Corporation
(formerly Mar Ventures Inc.) as of December 31, 1996 and August 31, 1997, and
the results of its operations and its cash flows for the period from inception
(May 31, 1996) to December 31, 1996 and for the eight months ended August 31,
1997 in conformity with generally accepted accounting principles.

WHEELER WASOFF, P.C.

Denver, Colorado
September 23, 1997
(except for Note 8, as to which
the date is November 12, 1997)

F - 2

<PAGE>

PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
BALANCE SHEETS

ASSETS
December 31, August 31,
1996 1997

CURRENT ASSETS
Cash $ 11,536 $ 1,432,281
Accounts Receivable 527 10,000
Prepaid expenses -- 4,196
----------- -----------

Total Current Assets 12,063 1,446,477
----------- -----------

PROPERTY AND EQUIPMENT, at cost
Furniture and equipment, net -- 28,540
Undeveloped oil and gas prospects -- 311,007
----------- -----------

-- 339,547
----------- -----------

OTHER ASSETS, net 427 3,642
----------- -----------

$ 12,490 $ 1,789,666
=========== ===========

LIABILITIES AND MEMBERS'/STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable $ 527 $ 60,064
Accrued payroll taxes -- 10,184
----------- -----------

Total Current Liabilities 527 70,248
----------- -----------

COMMITMENTS AND CONTINGENCIES (Note 5)

MEMBERS'/STOCKHOLDERS' EQUITY
Members equity 11,963 --
Common stock, $.001 par value
Authorized 30,000,000 shares
Issued and outstanding
9,154,804 shares -- 9,155
Capital in excess of par value -- 1,768,088
Deficit accumulated during the
development stage -- (57,825)
----------- -----------

11,963 1,719,418
----------- -----------

$ 12,490 $ 1,789,666
=========== ===========

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

F - 3

PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS

Inception Eight Months Cumulative
(May 31, 1996) Ended from
to December 31, August 31, Inception to
1996 1997 August 31, 1997

REVENUES
<S> <C> <C> <C>
Consulting fees $ 37,528 $ 80,000 $ 117,528
Interest -- 5,596 5,596
----------- ----------- -----------

37,528 85,596 123,124
----------- ----------- -----------

OPERATING EXPENSES
General and administrative 6,518 101,161 107,679
Interest -- 351 351
Depreciation and amortization 47 1,004 1,051
----------- ----------- -----------

6,565 102,516 109,081
----------- ----------- -----------

30,963 (16,920) 14,043

INCOME APPLICABLE TO PREDECESSOR LLC
(Note 1) (30,963) (40,905) (71,868)
----------- ----------- -----------

NET (LOSS) $ -- $ (57,825) $ (57,825)
=========== =========== ===========

PRO FORMA NET INCOME (LOSS) PER
COMMON SHARE (NOTE 2) $ .008 $ (.004) $ .003
=========== =========== ===========

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (NOTE 2) 4,000,000 4,644,351 4,343,654
=========== =========== ===========

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

F - 4
</TABLE>

PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
STATEMENTS OF MEMBERS'/STOCKHOLDERS' EQUITY
PERIOD FROM INCEPTION (MAY 31, 1996) TO DECEMBER 31, 1996
AND EIGHT MONTHS ENDED AUGUST 31, 1997
Deficit
Accumulated
Members' Common Stock Capital in During the
Equity ---------------------- Excess of Development
Shares Amount Par Value Stage

<S> <C> <C> <C> <C> <C>
Inception, May 31, 1996 $ -- -- $ -- $ -- $ --

Initial member contributions 5,000 -- -- -- --
Distributions to members (24,000) -- -- -- --
Net income 30,963 -- -- -- --
----------- ----------- ----------- ----------- -----------

Balance, December 31, 1996 11,963 -- -- -- --

Member contributions 23,000 -- -- -- --
Distributions to members (42,000) -- -- -- --
Net income - January 1, 1997 to August 5, 1997 40,905 -- -- -- --
Issuance of common stock to members of PYR
Energy, LLC upon merger ($.008 per share) (33,868) 4,000,000 4,000 29,868 --
Recapitalization of shares issued by Mar prior
to merger -- 1,059,804 1,060 (724) --
Sale of common stock pursuant to private placement
at $.25 per share -- 2,095,000 2,095 521,655 --
Sale of common stock pursuant to private placement
at $.75 per share -- 2,000,000 2,000 1,498,000 --
Costs of private placement offerings -- -- -- (280,711)
Net (loss) August 6, 1997 to August 31, 1997 -- -- -- -- (57,825)
----------- ----------- ----------- ----------- -----------

Balance, August 31, 1997 $ -- 9,154,804 $ 9,155 $ 1,768,088 $ (57,825)
=========== =========== =========== =========== ===========

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

F - 5

</TABLE>

<PAGE>

PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS

Inception Eight Months
(May 31, 1996) Ended Cumulative
to December 31, August 31, Amounts from
1996 1997 Inception

CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $ 30,963 $ (16,920) $ 14,043
Adjustments to reconcile net income (loss) to net
cash provided by operating activities
Depreciation and amortization 47 1,004 1,051
Changes in assets and liabilities
(Increase) in accounts receivable (527) (9,473) (10,000)
(Increase) in prepaids -- (2,591) (2,591)
Increase in accounts payable 527 45,103 45,630
Increase in accrued expenses -- 10,183 10,183
Other (474) (3,277) (3,751)
----------- ----------- -----------

Net cash provided by operating activities 30,536 24,029 54,565
----------- ----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture and equipment -- (29,481) (29,481)
Cash paid for undeveloped oil and gas properties -- (298,178) (298,178)
----------- ----------- -----------

Net cash (used) in investing activities -- (327,659) (327,659)
----------- ----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Members capital contributions 5,000 23,000 28,000
Distributions to members (24,000) (42,000) (66,000)
Cash from short-term borrowings -- 285,000 285,000
Repayments of short-term borrowings -- (285,000) (285,000)
Proceeds from sale of common stock -- 2,023,750 2,023,750
Cash paid for offering costs -- (280,711) (280,711)
Cash received upon recapitalization and merger -- 336 336
----------- ----------- -----------

Net cash (used) provided by financing activities (19,000) 1,724,375 1,705,375
----------- ----------- -----------

NET INCREASE IN CASH 11,536 1,420,745 1,432,281

CASH, BEGINNING OF PERIODS -- 11,536 --
----------- ----------- -----------

CASH, END OF PERIODS $ 11,536 $ 1,432,281 $ 1,432,281
=========== =========== ===========

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

F - 6
</TABLE>

<PAGE>

PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (CONTINUED)
PERIOD FROM INCEPTION (MAY 31, 1996) TO DECEMBER 31, 1996
AND EIGHT MONTHS ENDED AUGUST 31, 1997

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

During the eight months ended August 31, 1997 the Company paid cash for interest
on short-term borrowings of $351.

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

In August 1997, 4,000,000 shares of common stock were issued to the members of
PYR Energy, LLC ("PYR LLC") in exchange for 100 percent of the ownership
interests in PYR LLC, for which the net members equity in PYR LLC was $33,868.
These shares were issued pursuant to a plan of reorganization and merger
effective August 6, 1997 (Notes 1 and 3).

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

F - 7

<PAGE>

PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996 and August 31, 1997

NOTE 1 - ORGANIZATION AND BUSINESS COMBINATION

Mar Ventures Inc. ("Mar") was incorporated under the laws of the State
of Delaware on March 27, 1996 for the purpose of producing and
marketing traditional television programming and marketing its film
library. Mar is a public company which had no significant operations
as of July 31, 1997. On August 6, 1997 Mar acquired all the interests
in PYR Energy LLC ("PYR LLC") (a Colorado Limited Liability Company
organized on May 31, 1996), a development stage company as defined by
Statement of Financial Accounting Standards (SFAS) No. 7. PYR LLC, an
independent exploration company, is engaged in the acquisition of oil
and gas properties for exploration and exploitation in the Rocky
Mountain region and California. As of August 31, 1997 PYR LLC had only
acquired non-producing leases and acreage and no exploration had been
commenced on the properties. Effective August 6, 1997, Mar transferred
to its former president substantially all its assets and liabilities
that were related to its film library operations. The net assets of
Mar exchanged pursuant to the transaction with PYR LLC are as follows:

Cash $ 336
Assets 1,605
Liabilities (1,605)
-------

$ 336
=======

Upon completion of the acquisition of PYR LLC by Mar, PYR LLC ceased
to exist as a separate entity. Mar remained as the legal surviving
entity and, effective November 12, 1997, Mar changed its name to PYR
Energy Corporation (the "Company") (Note 8). For financial reporting
purposes, the business combination was accounted for as an additional
capitalization of Mar (a reverse acquisition with PYR LLC as the
acquirer). The accompanying financial statements as of December 31,
1996 and August 31, 1997 and for the periods then ended are those of
PYR LLC. The operations of PYR LLC will be the only continuing
operations of the Company.

Prior to the business combination, Mar loaned $275,000 to PYR LLC for
amounts owed by PYR LLC with respect to its oil and gas operations.
The loan was eliminated in conjunction with the successful completion
of the combination of PYR LLC and Mar.

The Company's fiscal year end is August 31.

F - 8

<PAGE>
PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996 and August 31, 1997

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY AND EQUIPMENT

Furniture and equipment is recorded at cost. Depreciation is provided
by use of the straight-line method over the estimated useful lives of
the related assets of three to five years.

Expenditures for replacements, renewals, and betterments are
capitalized. Maintenance and repairs are charged to operations as
incurred. Depreciation expense for 1997 was $941.

Undeveloped oil and gas properties consists of leases and acreage
acquired by the Company for its exploration and development
activities. The cost of these nonproducing leases is recorded at the
lower of cost or fair market value.

The Company has adopted SFAS No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed of" which
requires that long-lived assets to be held and used be reviewed for
impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. The adoption
of SFAS 121 has not had an impact on the Company's financial
statements, as the Company has determined that no impairment loss for
1997 need to be recognized for applicable assets of continuing
operations.

ORGANIZATION COSTS

Costs related to the organization of the Company have been capitalized
and are being amortized over a period of five years.

INCOME TAXES

The Company has adopted the provisions of SFAS No. 109, "Accounting
for Income Taxes". SFAS 109 requires recognition of deferred tax
liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax
returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement and
tax basis of assets and liabilities using enacted tax rates in effect
for the year in which the differences are expected to reverse.

PYR LLC was taxed as a Limited Liability Company until August 6, 1997,
and as such was not subject to federal and state income tax. Earnings
and losses through that date were included in the personal tax returns
of its members, and PYR LLC did not record an income tax provision.

F - 9

<PAGE>
PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996 and August 31, 1997

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

At August 31, 1997, the Company had a net operating loss carryforward
of approximately $33,000 that may be offset against future taxable
income through 2012.

The Company has fully reserved the tax benefits of these operating
losses because the likelihood of realization of the tax benefits
cannot be determined.

The $6,300 tax benefit of the loss carryforward has been offset by a
valuation allowance of the same amount. The total tax benefit is
attributable to 1997.

Temporary differences between the time of reporting certain items for
financial and tax reporting purposes are not considered significant by
management of the Company.

USE OF ESTIMATES

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 reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

INCOME (LOSS) PER SHARE

Income (loss) per common share at August 31, 1997 is computed based on
the weighted average number of common shares outstanding during the
period then ended. Common shares issued to the members of PYR LLC upon
completion of Mar's merger with PYR LLC (Note 1) are considered
outstanding for all periods presented. Common stock equivalents at
August 31, 1997, consisting of warrants and options, are not
considered in the calculation of net loss per share as their inclusion
would be antidilutive.

Pro forma income (loss) per share has been computed based on the
income (loss) of PYR LLC for the period from inception to December 31,
1996 and the eight months ended August 31, 1997 as if PYR LLC was a
corporation and not a limited liability company, which distributes its
earnings and losses to its members.

SHARE BASED COMPENSATION

In October 1995, SFAS No. 123 "Accounting for Stock-Based
Compensation" was issued. This new standard defines a fair value based
method of accounting for an employee stock option or similar equity

F - 10

<PAGE>
PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996 and August 31, 1997

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

instrument. This statement gives entities a choice of recognizing
related compensation expense by adopting the new fair value method or
to continue to measure compensation using the intrinsic value approach
under Accounting Principles Board (APB) Opinion No. 25. The Company
has elected to utilize APB No. 25 for measurement; and will, pursuant
to SFAS No. 123, disclose supplementally the pro forma effects on net
income and earnings per share of using the new measurement criteria.
During the eight months ended August 31, 1997, the Company issued
options to purchase shares of its common stock (Note 4). The effect of
this issuance on pro forma net income and earnings per share it not
material.

CASH EQUIVALENTS

For purposes of reporting cash flows, the Company considers as cash
equivalents all highly liquid investments with a maturity of three
months or less at the time of purchase. At August 31, 1997, there were
no cash equivalents.

NOTE 3 - COMMON STOCK

Effective August 6, 1997 Mar completed a merger with PYR LLC (Note 1).
In conjunction with the merger, the members of PYR LLC received
4,000,000 shares of common stock of Mar. These shares were recorded at
the net member equity of PYR LLC as of that date of $33,868. The
1,059,804 Mar shares outstanding as of the date of merger were
recapitalized to the net assets of Mar of $336. For financial
statement reporting purposes, this was treated as a reverse
acquisition whereby PYR LLC was considered the surviving and reporting
entity. For legal purposes, however, Mar remained as the surviving
entity, therefore the capital structure of the Company was accordingly
restated.

In July 1997, the Company completed the sale of common stock and
warrants pursuant to a private placement as follows:

o 2,095,000 units, at a price of $.25 per unit, consisting of
2,095,000 shares of common stock, warrants to purchase 1,047,500
shares of common stock at an exercise price of $1.25 per share
before October 31, 1997, and warrants to purchase 1,047,500
shares of common stock at an exercise price of $1.75 per share
before January 31, 1998. Subsequent to the offering, the warrant
expiration date of October 31, 1997 was extended to January 15,
1998, and the warrant expiration date of January 31, 1998 was
extended to April 15, 1998.

F - 11

<PAGE>
PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996 and August 31, 1997

NOTE 3 - COMMON STOCK (CONTINUED)

In August 1997, the Company completed the sale of common stock and
warrants pursuant to a private placement as follows:

o 2,000,000 units, at a price of $.75 per unit, consisting of
2,000,000 shares of common stock, warrants to purchase 1,000,000
shares of common stock at an exercise price of $1.25 per share
before October 31, 1997, and warrants to purchase 1,000,000
shares of common stock at an exercise price of $1.75 per share
before January 31, 1998. Subsequent to the offering, the warrant
expiration date of October 31, 1997 was extended to January 15,
1998, and the warrant expiration date of January 31, 1998 was
extended to April 15, 1998.

Proceeds from these offerings were $523,750 and $1,500,000,
respectively, before costs of the offerings of $280,711.

NOTE 4 - STOCK OPTION PLAN

In August 1997, the Board of Directors approved the 1997 Stock Option
Plan (the "1997 Plan"). Pursuant to the 1997 Plan, the Company may
grant options to purchase 1,000,000 shares of the Company's common
stock to key employees and other persons who have or are contributing
to the success of the Company. The options granted pursuant to the
1997 Plan may be either incentive options qualifying for beneficial
tax treatment for the recipient or non-qualified options. The 1997
Plan will be administered by the Option Committee, which may consist
of either (i) the Company's Board of Directors, or (ii) a Committee,
appointed by the Board of Directors, of two or more non-employee
directors. No option may be exercisable more than ten years after the
granting of the option, and no options may be granted under the 1997
Plan after August 13, 2007. The exercise price of incentive options
granted can not be less than the fair market value of the underlying
common stock on the date the options are granted. No options granted
under the 1997 Plan may be exercised until approval of the 1997 Plan
by the Company's stockholders has become effective, which will be on
or about November 12, 1997.

At August 31, 1997 the status of outstanding options granted pursuant
to the 1997 Plan was as follows:
<TABLE>
<CAPTION>

Unvested
Grant Options Options Options Exercise
Date Granted Vested Outstanding Price

<S> <C> <C> <C> <C> <C>
Executive Officer Aug. 13, 1997 75,000 - 75,000 $1.50

Employees Aug. 13, 1997 96,000 - 96,000 $1.50

</TABLE>

F - 12

<PAGE>

PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996 and August 31, 1997

NOTE 5 - COMMITMENTS AND CONTINGENCIES

The Company has entered into a non-cancelable lease, as amended, for
office facilities. Minimum payments due under this lease are as
follows:

Years ending August 31,

1998 $ 35,515
1999 38,685
2000 38,685
2001 38,685

Rent expense was $0 and $8,694 for the period from inception to
December 31, 1996 and for the eight months ended August 31, 1997,
respectively.

The Company has acquired leases covering 2,080 acres in Wyoming from
the Bureau of Land Management ("BLM"). In order to maintain its rights
to explore these properties, the Company is obligated to pay the BLM a
maximum aggregate $3,120 annually for the undeveloped acres under
lease. The amount due has been paid for the lease period October 1,
1997 to September 30, 1998.

The Company entered into an agreement with Chevron U.S.A. Production
Company ("Chevron") for the Company to farm-in oil and gas prospects
located in the San Joaquin basin of California. The Company paid
$275,000 upon execution of the agreement for certain rights including
access to certain proprietary 2D and 3D seismic data. The agreement
provides for exclusive rights to undertake oil and gas drilling and
development operations on lands owned in fee by Chevron. As part of
the agreement, the Company has an option to undertake the acquisition
of additional 3D seismic data and has agreed to drill a test well on a
portion of the prospect areas. In addition, as part of the agreement,
the Company has agreed to drill an additional test well on another
portion of the prospect areas. The Company has notified Chevron of its
intent to undertake the acquisition of additional 3D seismic data and
in September 1997 the Company paid $10,000 to Chevron as an earnest
money deposit in conjunction with the agreement.

The Company may be subject to various possible contingencies which are
primarily from interpretations of federal and state laws and
regulations affecting the oil and gas industry. Although management
believes it has complied with the various laws and regulations, new
rulings and interpretations may require the Company to make
adjustments.

F - 13

<PAGE>

PYR ENERGY CORPORATION
(Formerly Mar Ventures Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996 and August 31, 1997

NOTE 6 - RELATED PARTY TRANSACTIONS

In 1997 the Company paid an aggregate $14,000 in consulting fees to
its President and an entity owned by an officer of the Company; and
borrowed an aggregate $8,000 from two officers of the Company. The
amount borrowed was repaid with interest, at 8%, of $280 by August 31,
1997.

NOTE 7 - FINANCIAL INSTRUMENTS

FAIR VALUE

The carrying amount reported in the balance sheet for cash, prepaid
expenses, accounts payable and accrued liabilities approximates fair
value because of the immediate or short-term maturity of these
financial instruments.

CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to
concentrations of credit risk consist of cash. The Company maintains
cash accounts at one financial institution. At August 31, 1997, cash
on deposit at this financial institution exceeded federally insured
amounts by approximately $1,332,000. The Company periodically
evaluates the credit worthiness of financial institutions, and
maintains cash accounts only in large high quality financial
institutions, thereby minimizing exposure for deposits in excess of
federally insured amounts.

NOTE 8 - SUBSEQUENT EVENT

Effective November 12, 1997 the Company changed its name to PYR Energy
Corporation from Mar Ventures Inc.

F - 14

<PAGE>

======================================== ====================================

NO DEALER , SALESMAN OR OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE PYR ENERGY CORPORATION
COMPANY. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE 4,095,000 Shares Of Common Stock
UNLAWFUL PRIOR TO REGISTRATION OR 4,095,000 Shares Of Common Stock
QUALIFICATION UNDER THE SECURITIES LAWS Underlying Common Stock
OF ANY SUCH STATE. Purchase Warrants

TABLE OF CONTENTS

Page
----

PROSPECTUS SUMMARY.................. 1
RISK FACTORS........................ 3
USE OF PROCEEDS..................... 8
CAPITALIZATION...................... 9
PRICE RANGE OF COMMON STOCK......... 10
DIVIDEND POLICY..................... 10
BUSINESS AND PROPERTIES............. 10
MANAGEMENT'S DISCUSSION AND PROSPECTUS
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS......... 18
MANAGEMENT.......................... 20
EXECUTIVE COMPENSATION.............. 22
BENEFICIAL OWNERS OF SECURITIES..... 23
TRANSACTIONS BETWEEN THE
COMPANY AND RELATED PARTIES....... 24
DESCRIPTION OF SECURITIES........... 25
INACTIVE TRADING OF THE
COMMON STOCK...................... 27
SELLING SECURITY HOLDERS............ 27
PLAN OF DISTRIBUTION................ 29
SHARES AVAILABLE FOR FUTURE SALE.... 29
SECURITIES AND EXCHANGE
COMMISSION POSITION ON
CERTAIN INDEMNIFICATION........... 30
LEGAL MATTERS....................... 30 November , 1997
EXPERTS............................. 30
CERTAIN DEFINITIONS................. 30
FINANCIAL INFORMATION............... F-1

========================================= ===================================

<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification Of Directors And Officers.

The Delaware General Corporation Law provides for indemnification by a
corporation of costs incurred by directors, employees, and agents in connection
with an action, suit, or proceeding brought by reason of their position as a
director, employee, or agent. The person being indemnified must have acted in
good faith and in a manner that the person reasonably believed to be in or not
opposed to the best interests of the corporation.

In addition to the general indemnification section, Delaware law provides
further protection for directors under Section 102(b)(7) of the General
Corporation Law of Delaware. This section was enacted in June 1986 and allows a
Delaware corporation to include in its Certificate Of Incorporation a provision
that eliminates and limits certain personal liability of a director for monetary
damages for certain breaches of the director's fiduciary duty of care, provided
that any such provision does not (in the words of the statute) do any of the
following:

"eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
section 174 of this Title [dealing with willful or negligent violation
of the statutory provision concerning dividends, stock purchases and
redemptions], or (iv) for any transaction from which the director
derived an improper personal benefit. No such provision shall eliminate
or limit the liability of a director for any act or omission occurring
prior to the date when such provision becomes effective. . ."

The Board Of Directors is empowered to make other indemnification as
authorized by the Certificate Of Incorporation, Bylaws or corporate resolution
so long as the indemnification is consistent with the Delaware General
Corporation Law. Under the Company's Bylaws, the Company is required to
indemnify its directors, officers, and other representatives of the Company for
costs incurred by each of them in connection with any action, suit, or
proceeding brought by reason of their position as a director, officer, or
representative.

Item 25. Other Expenses Of Issuance And Distribution.

The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by the Registrant in connection with
the registration of the securities being offered. The Selling Security Holders
will not pay any of the following expenses.

Registration and filing fee................................ $ 3,840
Printing(1)................................................ $ 5,000
Accounting fees and expenses(1)............................ $ 5,000
Legal fees and expenses(1)................................. $17,000
Miscellaneous(1)........................................... $ 4,160
Total(1) $35,000
=======
- -----------

(1) Estimated

<PAGE>

Item 26. Recent Sales Of Unregistered Securities.

The Company was organized as a wholly owned subsidiary of Bexy
Communications, Inc., a Delaware corporation ("Bexy"). The Company issued
452,000 shares of Common Stock to Bexy in April 1996 in exchange for certain
assets of Bexy valued at approximately $110,000. The Company also assumed
certain liabilities of Bexy valued at approximately $84,000 in that transaction.
Those shares were issued in reliance on an exemption from registration under ss.
4(2) of the Securities Act of 1933, as amended (the "Securities Act").

The Company issued 28,000 shares of Common Stock in August, 1996 to a
limited number of persons for services rendered to the Company valued at $2,800.
These shares were issued in reliance on an exemption from registration
underss.4(2) of the Securities Act.

The Company issued 358,654 shares of Common Stock in December 1996 to a
former president and principal stockholder in satisfaction of a $46,625
liability owed by the Company to that former president. These shares were issued
in reliance on an exemption from registration underss.4(2) of the Securities Act
of 1933, as amended (the "Securities Act").

The Company completed an offering to a limited number of offerees in July
1997 pursuant to an exemption from registration in accordance with Rule 506 of
Regulation D under the Securities Act. The Company sold in that offering an
aggregate of 2,095,000 units at $.25 per unit, with each unit consisting of one
share of Common Stock, a Class A Warrant, and a Class B Warrant.

The Company completed an offering to a limited number of offerees in August
1997 pursuant to an exemption from registration in accordance with Rule 506 of
Regulation D under the Securities Act. The Company sold in that offering an
aggregate of 2,000,000 units at $.75 per unit, with each unit consisting of one
share of Common Stock, a Class A Warrant, and a Class B Warrant.

Item 27. Exhibits.

The following is a complete list of Exhibits filed as part of this
Registration Statement, which Exhibits are incorporated herein.

Number Description

3.1 Certificate Of Incorporation filed with the Delaware Secretary
Of State on March 27, 1996 (1)

3.2 Certificate Of Amendment to the Certificate of Incorporation effective
as of November 12, 1997 filed with the Delaware Secretary Of State.(4)

3.3 Bylaws (1)

4.1 Specimen Common Stock Certificate (5)

4.2 Specimen Class A Warrant (5)

4.3 Specimen Class B Warrant (5)

5.1 Opinion of Bearman Talesnick & Clowdus Professional Corporation
concerning the legality of the securities being registered (5)

10.1 Asset Transfer, Assignment and Assumption Agreement dated April 16,
1996 between the Registrant and Bexy Communications, Inc. (2)

<PAGE>

10.2 Form of Purchase And Sale Agreement dated as of July 31, 1997 between
the Registrant and a member of PYR Energy, LLC (5)

10.3 Purchase And Sale Agreement effective as of August 6, 1997 between the
Registrant and Buddy Young (5)

10.4 1997 Stock Option Plan (3)

23.1 Consent of Bearman Talesnick & Clowdus Professional Corporation
(included in Opinion in Exhibit 5.1)

23.2 Consent of Wheeler Wasoff, P.C.

27.1 Financial Data Schedule (5)

- --------------------

(1) Incorporated by reference from the Company's Registration Statement on Form
10-SB filed with the Securities And Exchange Commission ("SEC") on June 18,
1996, File No. 0-20879.

(2) Incorporated by reference from the Company's Amendment No. 1 to
Registration Statement and Form 10-SB filed with the SEC on July 3, 1996,
File No. 0-20879.

(3) Incorporated by reference from the Company's Preliminary Information
Statement filed with the SEC on October 8, 1997.

(4) Incorporated by reference from the Company's Annual Report on Form 10-KSB
for the fiscal year ended August 31, 1997 filed with the SEC on November
13, 1997.

(5) Previously filed.

Item 28. Undertakings.

1. The Company hereby undertakes:

(a) to file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:

(1) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(2) to reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information
in Registration Statement (or the most recent post-effective amendment
thereof); and

(3) to include any additional or changed material information on the
plan of distribution.

(b) That for determining liability under the Securities Act of 1933, each
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of the securities
at that time shall be deemed to be the initial bona fide offering thereof;

(c) To file a post-effective amendment to remove from registration any of
the securities being registered which remain unsold at the end of the offering.

3. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company

<PAGE>

pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the option of the Securities And Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or a controlling person of the Company
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or a controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned, in
the City of Denver, State of Colorado, on November 21, 1997.

PYR ENERGY CORPORATION

By: /s/ D. Scott Singdahlsen
----------------------------------------------------
D. Scott Singdahlsen, Chief Executive Officer

In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement was signed by the following
persons in the capacities and on the dates indicated.

Signatures Title Date
---------- ----- ----

<S> <C> <C>
/s/ D. Scott Singdahlsen Chief Executive Officer; President November 21, 1997
- ---------------------------------- and Chairman Of The Board
D. Scott Singdahlsen

/s/ Keith F. Carney Director November 21, 1997
- -----------------------------------
Keith F. Carney

/s/ Gregory B. Barnett Director November 21, 1997
- -----------------------------------
Gregory B. Barnett

/s/ Robert B. Suydam Secretary November 21, 1997
- -----------------------------------
Robert B. Suydam

/s/ Andrew P. Calerich Chief Financial Officer November 21, 1997
- -----------------------------------
Andrew P. Calerich

</TABLE>

<PAGE>

EXHIBIT INDEX

The following is a complete list of Exhibits filed as part of this
Registration Statement, which Exhibits are incorporated herein.

Number Description
- ------ -----------

3.1 Certificate Of Incorporation filed with the Delaware Secretary Of State
on March 27, 1996 (1)

3.2 Certificate Of Amendment to the Certificate Of Incorporation effective
as of November 12, 1997 filed with the Delaware Secretary Of State (4)

3.3 Bylaws (1)

4.1 Specimen Common Stock Certificate (5)

4.2 Specimen Class A Warrant (5)

4.3 Specimen Class B Warrant (5)

5.1 Opinion of Bearman Talesnick & Clowdus Professional Corporation
concerning the legality of the securities being registered (5)

10.1 Asset Transfer, Assignment and Assumption Agreement dated April 16,
1996 between the Registrant and Bexy Communications, Inc. (2)

10.2 Form of Purchase And Sale Agreement dated as of July 31, 1997 between
the Registrant and a member of PYR Energy, LLC (5)

10.3 Purchase And Sale Agreement effective as of August 6, 1997 between the
Registrant and Buddy Young (5)

10.4 1997 Stock Option Plan (3)

23.1 Consent of Bearman Talesnick & Clowdus Professional Corporation
(included in Opinion in Exhibit 5.1)

23.2 Consent of Wheeler Wasoff, P.C.

27.1 Financial Data Schedule (5)
- --------------------

(1) Incorporated by reference from the Company's Registration Statement on Form
10-SB filed with the Securities And Exchange Commission ("SEC") on June 18,
1996, File No. 0-20879.

(2) Incorporated by reference from the Company's Amendment No. 1 to
Registration Statement and Form 10-SB filed with the SEC on July 3, 1996,
File No. 0-20879.

(3) Incorporated by reference from the Company's Preliminary Information
Statement filed with the SEC on October 8, 1997.

(4) Incorporated by reference from the Company's Annual Report on Form 10-KSB
for the fiscal year ended August 31, 1997 filed with the SEC on November
13, 1997.

(5) Previously filed.

INDEPENDENT AUDITOR'S CONSENT

We consent to the use of this Amendment No. 1 Registration Statement of PYR
Energy Corporation (formerly Mar Ventures Inc.) on Form SB-2 of our report dated
September 23, 1997 (except for Note 8, as to which date is November 12, 1997)
relating to the financial statements of PYR Energy Corporation (formerly Mar
Ventures Inc.) appearing in the Prospectus, which is part of this Registration
Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

WHEELER WASOFF, P.C.

Denver, Colorado
November 13, 1997