DEVX ENERGY INC, 10-Q, 2000-11-14

DEVX ENERGY INC
10-Q, 2000-11-14
METAL MINING

Previous: ADVANCED PLANT PHARMACEUTICALS INC, 10QSB, EX-27.1, 2000-11-14

Next: DEVX ENERGY INC, 10-Q, EX-10.26, 2000-11-14

<PAGE> 1

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

----------

FORM 10-Q

----------

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___ TO ___

Commission File No. 0-21179

DEVX ENERGY, INC.
DEVX ENERGY, INC.
DEVX OPERATING COMPANY
CORRIDA RESOURCES, INC.
(Exact name of registrants as specified in their charter)

DELAWARE 75-2615565
NEVADA 75-2564071
NEVADA 75-2593510
NEVADA 75-2691594
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Nos.)

13760 NOEL ROAD, SUITE 1030
L.B. #31, DALLAS, TEXAS 75240-7336
(Address of principal executive offices) (Zip code)

(972) 233-9906
(Registrants' telephone number, including area code)

QUEEN SAND RESOURCES, INC.
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of November 10, 2000:
11,250,000

<PAGE> 2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DEVX ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)

<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
------------- -------------
Assets
<S> <C> <C>
Current assets:
Cash $ 2,003,000 $ 11,881,000
Other current assets 7,745,000 6,643,000
------------- -------------
Total current assets 9,748,000 18,524,000

Net property and equipment 94,401,000 92,525,000
Other assets 8,060,000 8,144,000
------------- -------------

$ 112,209,000 $ 119,193,000
============= =============

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other $ 6,261,000 $ 9,951,000
Current portion of long-term debt -- 584,000
------------- -------------
Total current liabilities 6,261,000 10,535,000

Long-term obligations, net of current portion 139,000,000 143,500,000

Derivatives 8,866,000 --

Commitments

Stockholders' deficit:
Preferred stock, $.01 par value, authorized 50,000,000 shares:
issued and outstanding 9,602,173 shares at
September 30 and June 30, 2000 96,000 96,000
Common stock, $.0015 par value, authorized 100,000,000 shares:
issued and outstanding 80,688,538 shares at
September 30 and June 30, 2000 135,000 135,000
Additional paid-in capital 65,112,000 65,112,000
Accumulated deficit (91,144,000) (92,934,000)
Accumulated other comprehensive loss (8,866,000) --
Treasury stock (7,251,000) (7,251,000)
------------- -------------

Total stockholders' deficit (41,918,000) (34,842,000)
------------- -------------

$ 112,209,000 $ 119,193,000
============= =============
</TABLE>

See accompanying notes to unaudited interim period consolidated condensed
financial statements.

Pg. 2
<PAGE> 3

DEVX ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
Three months ended September 30,
----------------------------------
2000 1999
------------- -------------
<S> <C> <C>
Revenues:
Oil and gas sales $ 1,317,000 $ 360,000
Net profits and royalties interests 8,944,000 5,162,000
Interest and other income 15,000 21,000
------------- -------------
Total revenues 10,276,000 5,543,000
------------- -------------

Expenses:
Oil and gas production expenses 464,000 158,000
Depreciation, depletion and amortization 2,074,000 2,270,000
General and administrative 924,000 720,000
Interest and financing expense 4,941,000 4,637,000
------------- -------------
Total expenses 8,403,000 7,785,000
------------- -------------
Operating income (loss) 1,873,000 (2,242,000)
Change in fair value of derivatives (496,000) --
------------- -------------
Income (loss) before cumulative effect of accounting change 1,377,000 (2,242,000)
Cumulative effect of accounting change, net of tax
413,000 --
------------- -------------
Net income (loss) $ 1,790,000 $ (2,242,000)
============= =============

Basic per share amounts:
Income before accounting change $ 0.02 $ (0.07)
============= =============
Cumulative effect of accounting change $ -- $ --
============= =============
Net income (loss) $ 0.02 $ (0.07)
============= =============

Diluted per share amounts:
Income before accounting change $ 0.01 Not applicable
=============
Cumulative effect of accounting change -- Not applicable
=============
Net Income $ 0.01 Not applicable
=============
Weighted average shares outstanding:
Basic 80,689,000 33,842,000
============= =============
Diluted 257,747,000 Not applicable
=============
</TABLE>

See accompanying notes to unaudited interim period consolidated
condensed financial statements.

Pg. 3
<PAGE> 4

DEVX ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
Three months ended September 30,
--------------------------------
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,790,000 $ (2,242,000)
Depreciation, depletion and amortization 2,500,000 2,721,000
Unrealized gains in foreign currencies (1,000) (45,000)
Net change in operating assets and liabilities (4,814,000) (5,174,000)
------------ ------------
Net cash used in operating activities (525,000) (4,740,000)
------------ ------------
Cash flows used in investing activities
Additions to property and equipment (3,948,000) (412,000)
------------ ------------

Cash flows from financing activities:
Debt issuance and other deferred costs -- (638,000)
Deferred recapitalization costs (342,000) --
Payments on long-term obligations (5,063,000) --
------------ ------------
Net cash used in financing activities (5,405,000) (638,000)
------------ ------------

Net decrease in cash (9,878,000) (5,790,000)
Cash at beginning of period 11,881,000 9,367,000
------------ ------------
Cash at end of period $ 2,003,000 $ 3,577,000
============ ============
</TABLE>

See accompanying notes to unaudited period consolidated condensed
financial statements.

Pg. 4
<PAGE> 5

DEVX ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2000
(unaudited)

(1) Basis of Presentation

The accompanying consolidated financial statements include the accounts
of DevX Energy, Inc. and its wholly owned subsidiaries (collectively,
the "Company") after elimination of all significant intercompany
balances and transactions. The financial statements have been prepared
in conformity with generally accepted accounting principles which
require management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes.
While management has based its assumptions and estimates on the facts
and circumstances currently known, final amounts may differ from such
estimates.

The interim financial statements contained herein are unaudited but, in
the opinion of management, include all adjustments (consisting only of
normal recurring entries) necessary for a fair presentation of the
financial position and results of operations of the Company for the
periods presented. The results of operations for the three months ended
September 30, 2000 are not necessarily indicative of the operating
results for the full fiscal year ending June 30, 2001. Moreover, these
financial statements do not purport to contain complete disclosure in
conformity with generally accepted accounting principles and should be
read in conjunction with the Company's Annual Report filed on Form 10-K
for the fiscal year ended June 30, 2000.

(2) Recapitalization

On October 31, 2000, the Company completed a public offering of
10,000,000 shares of its common stock at a price per share to the public
of $7.00. The aggregate net proceeds to the Company (after deducting
underwriter discount and estimated expenses) were approximately $63.5
million. The Company has granted the underwriters an option, exercisable
for 30 days from October 26, 2000, to purchase up to 1,500,000
additional shares of common stock to cover over-allotments, if any.
Simultaneously with the closing of the offering, the Company completed a
recapitalization which included: (a) a reverse stock split of every 156
outstanding shares of common stock into one share; (b) the exchange of
all preferred stock, all warrants exercisable for shares of common stock
and all unexercised common stock repricing rights for 732,500 shares of
post reverse-split common stock; and (c) the repurchase of $75 million
face value of 12 1/2% senior notes for approximately $52.5 million.
Additionally, the Company used proceeds from the offering to pay down
the balance on its revolving credit facility by $11 million.

(3) Accounting Change

The Company utilizes certain derivative financial instruments, primarily
swaps, floors and collars, to hedge future oil and gas prices. Effective
July 1, 2000, the Company adopted Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities (SFAS No. 133). SFAS No. 133 requires the Company to
recognize all derivatives on the balance sheet at fair value. The
Company estimates fair value based on quotes obtained from the
counterparties to the derivative contracts. The Company recognizes the
fair value of derivative contracts that expire in less than one year as
current assets or liabilities. Those that expire in more than one year
are recognized as long term assets or liabilities. Derivatives that are
not accounted for as hedges are adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge,
changes in fair value are either offset against the change in fair value
of the hedged assets, liabilities, or firm commitments through earnings
or recognized in other comprehensive income until the hedged item is
recognized in earnings.

Pg. 5
<PAGE> 6

Upon adoption of SFAS No. 133, the Company had four open derivative
contracts. One contract, a natural gas swap, has been designated as a
cash flow hedge. For derivatives classified as cash flow hedges, changes
in fair value are recognized in other comprehensive income until the
hedged item is recognized in earnings. The ineffective portion of any
change in the fair value of a derivative designated as a hedge is
immediately recognized in earnings. Hedge effectiveness is measured
quarterly based on the relative fair value between the derivative
contract and the hedged item over time. At adoption, the Company
recognized a derivative liability and a reduction in other comprehensive
income of approximately $5,515,000 as a cumulative effect of accounting
change for this cash flow hedge. During the three months ended September
30, 2000, the Company recognized an increase in the derivative liability
and an associated other comprehensive loss totaling approximately
$3,351,000.

Additionally upon adoption, the Company recognized a net derivative
asset of approximately $651,000 for the remaining three open derivative
contracts, and a related gain of approximately $413,000 as a cumulative
effect of accounting change in earnings. During the three months ended
September 30, 2000, the Company recognized a loss in earnings of
approximately $496,000 related to the net change in the fair value of
these derivative contracts.

(4) Comprehensive Income

Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and
circumstances from non-owner sources. For the three months ended
September 30, 2000, the Company's comprehensive loss differed from net
income by approximately $8,860,000, due to the effect of adoption of
SFAS No. 133. There were no differences between comprehensive income and
net loss for the three months ended September 30, 1999.

(5) Hedging Activities

During the three months ended September 30, 2000 the Company paid
$44,000 in cash settlements on its crude oil hedges and $1,050,000 in
cash settlements on it natural gas hedges, which are included in net
profits and royalty interests.

(6) Income Taxes

Income tax expense is not reflected in the accompanying statement of
operations for the three months ended September 30, 2000, due to the
recognition of existing net operating loss carryforwards by the Company.

Pg. 6
<PAGE> 7

(7) Earnings Per Share

The following table sets forth the computation of basic and diluted
earnings per common share:

<TABLE>
<CAPTION>
Three months ended
September 30,
---------------------------------
2000 1999
------------ --------------
<S> <C> <C>
Numerator:
Numerator for basic earnings per
common share - net earnings $ 1,790,000 $ (2,242,000)
============ ==============
Denominator:
Denominator for basic earnings per
common share - weighted-average shares 80,689,000 33,842,000
Dilutive effect of convertible preferred
stock 35,112,000 --
Dilutive effect of common stock repricing
rights 141,946,000 --
------------ --------------
Denominator for diluted earnings per
common share - adjusted weighted-average
shares 257,747,000 33,842,000
============ ==============

Earnings per common share - basic $ 0.02 $ (0.07)
============ ==============
Earnings per common share - diluted $ 0.01 $ (0.07)
============ ==============
</TABLE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this document that are subject to
risks and uncertainties. These forward-looking statements include information
about possible or assumed future results of our operations. Also, when we use
any of the words "believes," "expects," "intends," "anticipates" or similar
expressions, we are making forward-looking statements. Examples of types of
forward-looking statements include statements on our oil and natural gas
reserves; future acquisitions; future drilling and operations; future capital
expenditures; future production of oil and natural gas; and future net cash
flow. You should understand that the following important factors, in addition
to those discussed elsewhere in this document, could affect our future
financial results and performance and cause our results or performance to
differ materially from those expressed in our forward-looking statements: the
timing and extent of changes in prices for oil and natural gas; the need to
acquire, develop and replace reserves; our ability to obtain financing to fund
our business strategy; environmental risks; drilling and operating risks; risks
related to exploration, development and exploitation projects; competition;
government regulation; and our ability to meet our stated business goals. We
claim the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995 for these
statements.

Pg. 7
<PAGE> 8

RECAPITALIZATION

On October 31, 2000, the Company completed a public offering of 10,000,000
shares of its common stock at a price per share to the public of $7.00. The
aggregate net proceeds to the Company (after deducting underwriter discount and
estimated expenses) were approximately $63.5 million. The Company has granted
the underwriters an option, exercisable for 30 days from October 26, 2000, to
purchase up to 1,500,000 additional shares of common stock to cover
over-allotments, if any. Simultaneously with the closing of the offering, the
Company completed a recapitalization which included: (a) a reverse stock split
of every 156 outstanding shares of common stock into one share; (b) the
exchange of all preferred stock, all warrants exercisable for shares of common
stock and all unexercised common stock repricing rights for 732,500 shares of
post reverse-split common stock; and (c) the repurchase of $75 million face
value of 12 1/2% senior notes for approximately $52.5 million. Additionally,
the Company used proceeds from the offering to pay down the balance on its
revolving credit facility by $11 million.

SELECTED FINANCIAL DATA

The following tables set forth selected financial data for the Company,
presented as if our net profits interests had been accounted for as working
interests. The financial data were derived from the Consolidated Financial
Statements of the Company and should be read in conjunction with the
Consolidated Financial Statements and related Notes thereto included herein.
The results of operations for the three months ended September 30, 2000 will
not necessarily be indicative of the operating results for the full fiscal year
ending June 30, 2001.

THREE MONTHS ENDED SEPTEMBER 30,
2000 1999
------------ ------------
<S> <C> <C>
Oil and gas sales (1) $ 11,394,000 $ 6,873,000
Oil and gas production expenses (1) 1,597,000 1,536,000
General and administrative expenses 924,000 720,000
------------ ------------
EBITDA (2) 8,873,000 4,617,000
Interest expense, excluding amortization of
deferred charges (3) 4,515,000 4,159,000
Depreciation, depletion and amortization (4) 2,500,000 2,721,000
Interest and other income (15,000) (21,000)
------------ ------------
Net income (loss) from operations $ 1,873,000 $ (2,242,000)
============ ============
</TABLE>
-----------------

(1) Oil and natural natural gas sales and production expenses related to net
profits interests have been presented as if such net profits interests had
been accounted for as working interests, net of cash settlements on
hedges.

(2) EBITDA represents earnings before interest expense, income taxes,
depreciation, depletion and amortization expense, write down of oil and
natural gas properties and extraordinary items and excludes interest and
other income, change in derivative fair value and cumulative effect of
accounting change. EBITDA is not a measure of income or cash flows in
accordance with generally accepted accounting principles, but is presented
as a supplemental financial indicator as to our ability to service or
incur debt. EBITDA is not presented as an indicator of cash available for
discretionary spending or as a measure of liquidity. EBITDA may not be
comparable to other similarly titled measures of other companies. Our
credit agreement requires the maintenance of specified EBITDA ratios.
EBITDA should not be considered in isolation or as a substitute for net
income, operating cash flow or any other measure of financial performance
prepared in accordance with generally accepted accounting principles or as
a measure of our profitability or liquidity

(3) Interest charges payable on outstanding debt obligations.

(4) Depreciation, depletion and amortization includes $426,000 and $478,000 of
amortized deferred charges related to debt obligations and $0 and $27,000
of amortized deferred charges related to the Company's natural gas price
hedging program for the three months ended September 30, 2000 and 1999,
respectively.

Pg. 8
<PAGE> 9

<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
2000 1999
------- -------
<S> <C> <C>
PRODUCTION VOLUMES:
Natural gas (MMcf) 2,413.9 2,668.9
Oil (MBbls) 51.1 59.6
Total natural gas equivalent (Mmcfe) 2,720.5 3,026.6

AVERAGE SALES PRICE:
Natural gas ($/Mcf) $ 4.10 $ 2.26
Oil ($/Bbl) $29.26 $13.93
Natural gas equivalent (per Mcfe) $ 4.19 $ 2.27

SELECTED EXPENSES (PER MCFE):
Lease operating expense $ 0.44 $ 0.42
Production taxes $ 0.14 $ 0.09
Depreciation, depletion and amortization of oil
and natural gas properties $ 0.76 $ 0.74
General and administrative expenses $ 0.34 $ 0.24
Interest and financing charges $ 1.66 $ 1.37
</TABLE>

The following discussion of the results of operations and financial condition
should be read in conjunction with the Consolidated Condensed Financial
Statements and related Notes thereto included herein.

THE THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1999

RESULTS OF OPERATIONS

The following discussion and analysis reflects the operating results as if the
net profits interest were working interests. We believe that this will provide
the readers of the report with a more meaningful understanding of the
underlying operating results and conditions for the period.

REVENUES: Our total revenues increased by $4.5 million, or 66%, to $11.4
million for the three months ended September 30, 2000, from $6.9 million during
the comparable period in 1999.

We produced 51,000 barrels of crude oil during the three months ended September
30, 2000, a decrease of 9,000 barrels, or 14%, from the 60,000 barrels produced
during the comparable period in 1999. The decrease in production of crude oil
from the properties owned during the comparative quarters is comprised of two
components:

o Oil production from our Segno field interests has not been
meeting production expectations. This under performance
represents approximately 38% of the overall decrease in
production. We are discussing alternatives with the operator
of the property.

o The final component of this decline is the result of the
natural depletion of the crude oil reservoirs.

We produced 2.4 Bcf of natural gas during the three months ended September 30,
2000, a decrease of 255,000 Mcf, or 10%, from the 2.7 Bcf produced during the
comparable period in 1999. This decrease consists of a decrease of 174,000 Mcf,
or 7%, from the properties that we owned during both periods and a decrease of
81,000 Mcf from the properties that we sold at the end of June 2000. The
decrease in production from the properties owned during the comparative
quarters is comprised of the following three components, in addition to natural
depletion:

Pg. 9
<PAGE> 10

o Capital projects in our Lopeno and Volpe fields conducted
during the quarter ended September 30, 2000 did not generate
expected results. This under performance represents
approximately 50% of the overall decrease in production.

o Our Moorewood field interests did not meet production
expectations, accounting for approximately 13% of the overall
production decrease. We are currently reviewing this
property.

o Our J.C. Martin field interests performed better than
expected, primarily due to results of wells drilled during
the past year.

On a thousand cubic feet of gas equivalent ("Mcfe") basis, production for the
three months ended September 30, 2000 was 2.7 Bcfe, down 0.3 Bcfe, or 10%, from
the 3.0 Bcfe produced during the comparable period in 1999. Production from
properties that we owned during both periods was down 226,000 Mcfe, or 8%,
during the three months ended September 30, 2000 when compared to production
during the three months ended September 30, 1999.

The increase in revenues was a combination of lower production volumes and a
significant, industry-wide increase in oil and natural gas prices. The average
price per barrel of crude oil sold by us during the three months ended
September 30, 2000 was $29.26, an increase of $15.33 per barrel, or 110%, over
the $13.93 per barrel during the three months ended September 30, 1999. The
average price per Mcf of natural gas sold by us was $4.10 during the three
months ended September 30, 2000, an increase of $1.84 per Mcf, or 81%, over the
$2.26 per Mcf during the comparable period in 1999. Crude oil and natural gas
prices have remained at these elevated levels subsequent to September 30, 2000.
On an Mcfe basis, the average price received by us during the three months
ended September 30, 2000 was $4.19, a $1.92 increase, or 84%, over the $2.27 we
received during the comparable period in 1999.

During the three months ended September 30, 2000 we paid $44,000 in cash
settlements pursuant to our crude oil price-hedging program. The effect on the
average crude oil prices we received during the period was a decrease of $0.86
per barrel, or 3%. We paid $358,000 on our oil price-hedging program during the
three months ended September 30, 1999, representing a reduction on the average
crude oil prices we received of $6.00 per barrel. During the three months ended
September 30, 2000 we paid $1,050,000 in cash settlements under our natural gas
price-hedging program. The net negative effect on the average natural gas
prices we received during the period was $0.44, or 10%. During the comparable
period in 1999 we paid $227,000 in cash settlements and amortized $27,000 of
deferred hedging costs regarding our natural gas price-hedging program. The net
negative effect on the average natural gas prices we received during the 1999
period was $0.08 per Mcf.

SEVERANCE AND PRODUCTION TAXES: Severance and production taxes, which are based
on the revenues derived from the sale of crude oil and natural gas, were
$391,000 during the three months ended September 30, 2000, as compared to
$258,000 during the comparable period in 1999. This increase of $134,000, or
52%, is primarily the result of the 87% increase in wellhead prices we received
during the three months ended September 30, 2000, offset by the 10% decline in
production from the three months ended September 30, 2000.

On a cost per Mcfe basis, severance taxes were $0.14 per Mcfe for the three
months ended September 30, 2000 compared to $0.09 per Mcfe for the comparable
period ending September 30, 1999, an increase of 69%. Average wellhead prices
rose by 87%, from $2.46 per Mcfe during the three months ended September 30,
1999 to $4.59 per Mcfe during the three months ended September 30, 2000.

PRODUCTION EXPENSES: Our lease operating expenses fell to $1.2 million for the
three months ended September 30, 2000, a decrease of $73,000, or 6%, from the
$1.3 million incurred during the comparable period in 1999. This decrease is
primarily the result of 10% reduction in volumes produced during the three
months ended September 30, 2000 as compared to the three months ended September
30, 1999. Lease operating expenses were $0.44 per Mcfe during the three months
ended September 30, 2000, an increase of $0.02, or 5%, from the $0.42 per Mcfe
incurred during the comparable period in 1999. This increase in production
expenses is within the normal range for our properties.

Pg. 10
<PAGE> 11

DEPLETION, DEPRECIATION AND AMORTIZATION EXPENSE: Depletion and oil field
equipment related depreciation costs were $2.1 million, or $0.76 per Mcfe,
during the three months ended September 30, 2000, a decrease of $175,000, or
8%, from the $2.2 million, or $0.74 per Mcfe, charged to income during the
comparable period in 1999. This decrease in the provision is primarily a result
of the 10% decline in our production for the three month period ended September
30, 2000, as compared to the same period for 1999. On a cost per Mcfe basis,
the increase of $0.02 per Mcfe, or 2%, is primarily the result of revisions we
have made to our expected capital expenditure programs, as part of our
quarterly review of our crude oil and natural gas reserves.

GENERAL AND ADMINISTRATIVE EXPENSES: The increase of $204,000, or 28%, in
general and administrative costs for the three months ended September 30, 2000
is primarily the result of a $200,000 severance payment made to the Company's
former chief financial officer during September 2000.

INTEREST EXPENSE: Interest expense increased by $304,000, to $4.9 million for
the three months ended September 30, 2000, compared to $4.6 million for the
three months ended September 30, 1999. The interest expense of $4.9 million is
comprised of $4.5 million in cash interest charges and $426,000 of amortized
deferred debt issuance costs. During the three months ended September 30, 1999
there were $478,000 of amortized deferred debt issuance costs included in the
interest expense of $4.6 million.

CHANGE IN DERIVATIVE FAIR VALUE: We adopted Statement of Financial Accounting
Standards No. 133, (Accounting for Derivative Instruments and Hedging
Activities), on July 1, 2000. As a result, we recorded a loss of $496,000
representing the change in fair value of our derivative contracts that are not
accounted for as hedges, during the quarter ended September 30, 2000. We also
recorded a gain of $413,000, representing the cumulative effect of adopting
SFAS No. 133.

NET LOSS: We incurred losses from inception through the end of the three months
ended March 31, 2000. Since that time we have recorded two consecutive quarters
of operating income, including $1.8 million, or $0.02 per common share, for the
three months ended September 30, 2000 compared to a loss of $2.2 million, or
$0.07 per common share, for the three months ended September 30, 1999. Our
profitability during these quarters is primarily attributable to significant
industry wide increases in oil and natural gas prices. The decline in oil and
natural gas prices between December 31, 1997 and December 31, 1998 caused us to
record non-cash write-downs of oil and gas properties of $28 million and $35
million for the years ended June 30, 1998 and June 30, 1999, respectively.
Future declines in oil and natural gas prices could lead to additional non-cash
write-downs of our oil and gas properties. During the three months ended
September 30, 2000 we produced 2.7 Bcfe, a decrease of 0.1 Bcfe, or 4%, from
the 2.8 Bcfe we produced during the three months ended June 30, 2000. Our
revenues, profitability and future rate of growth are substantially dependent
upon prevailing prices for crude oil and natural gas and the volumes of crude
oil and natural gas we produce (see `-Changes in Prices and Hedging
Activities'). In addition, our proved reserves will decline as crude oil and
natural gas are produced unless we are successful in acquiring additional
properties containing proved reserves or conducting successful exploration and
development activities.

LIQUIDITY AND CAPITAL RESOURCES

GENERAL

Consistent with our strategy of acquiring and developing reserves, we have an
objective of maintaining as much financing flexibility as is practicable. Since
we commenced our oil and natural gas operations, we have utilized a variety of
sources of capital to fund our acquisitions and development and exploitation
programs, and to fund our operations.

Our general financial strategy is to use cash flow from operations, debt
financings and the issuance of equity securities to service interest on our
indebtedness, to pay ongoing operating expenses, and to contribute toward
further development of our existing proved reserves as well as additional
acquisitions.

Pg. 11
<PAGE> 12

There can be no assurance that cash from operations will be sufficient in the
future to cover all such purposes.

We have planned development and exploitation activities for all of our major
operating areas. In addition, we are continuing to evaluate oil and natural gas
properties for future acquisition. Historically, we have used the proceeds from
the sale of our securities in the private equity market and borrowings under
our credit facilities to raise cash to fund acquisitions or repay indebtedness
incurred for acquisitions. We have also used our securities as a medium of
exchange for other companies' assets in connection with acquisitions. However,
there can be no assurance that such sources will be available to us to meet our
budgeted capital spending. Furthermore, our ability to borrow other than under
the amended and restated credit agreement dated as of October 22, 1999 with
Ableco Finance LLP and Foothill Capital Corporation is subject to restrictions
imposed by our credit agreement. If we cannot secure additional funds for our
planned development and exploitation activities, then we will be required to
delay or reduce substantially our development and exploitation efforts.

SOURCES OF CAPITAL

On October 31, 2000, we completed a public offering of 10,000,000 shares of our
common stock at a price per share to the public of $7.00. The aggregate net
proceeds to the Company (after deducting underwriter discounts and estimated
expenses) were approximately $63.5 million. We have granted the underwriters an
option, exercisable for 30 days from October 26, 2000, to purchase up to
1,500,000 additional shares of common stock to cover over-allotments, if any.

On October 31, 2000 we also completed a recapitalization that involved:

o a reverse stock split of every 156 outstanding share of our
common stock into one share;

o the exchange of all preferred stock, all warrants exercisable
for shares of common stock and all remaining unexercised
common stock repricing rights for 732,500 shares of post
reverse-split common stock;

o the repurchase of $75 million face value of our 12 1/2%
senior notes for approximately $52.5 million.

As a result of completing the offering and the recapitalization plan, our
company:

o obtained a discount on the repurchase of $75 million of our
senior notes, realizing a gain of approximately $21.8
million, net of taxes, during the quarter ending December 31,
2000;

o reduced our debt by $86 million, thereby increasing annual
cash flow available to fund growth by over $10.5 million;

o reduced our long-term debt to $53 million;

o eliminated all outstanding shares of preferred stock;

o eliminated the dilutive effects of current market price
conversion and repricing rights held by some of our
stockholders;

o improved our liquidity by using a portion of the proceeds
from the offering to pay down our senior working capital
facility and modified the indenture governing our senior
notes to permit us to increase our senior working capital
facility from $35 million to $49 million.

As a result of the recapitalization of our company in October 2000, in which we
reduced our long term interest bearing debt by $86 million, we currently
believe but cannot assure, that our future revenues from

Pg. 12
<PAGE> 13

crude oil and natural gas will continue to be sufficient to cover our
production costs and operating expenses, provided that the prevailing prices
for crude oil and natural gas do not decline significantly and production
volume is maintained.

On October 22, 1999, we entered into a restated credit agreement with Ableco
and Foothill. The restated credit agreement, in which we provide a first
secured lien on all of our assets, allows for borrowing of up to $50 million,
subject to borrowing base limitations, to fund, among other things, development
and exploitation expenditures, acquisitions and general working capital. The
restated credit agreement bears interest as follows:

o when the borrowings are less than $25 million, bank prime
plus 2%;

o when the borrowings are $25 million or greater, bank prime
plus 4.5%; and

o on amounts securing letters of credit issued on our behalf,
3%.

The interest rate as of September 30, 2000 under this agreement was 11.5% per
annum.

As of November 10, 2000, the maximum amount available to us under the credit
agreement was $43.5 million, of which $2 million in borrowings and $9.3 million
in letters of credit were outstanding. Under the credit agreement we must
obtain a release of the security interest held by our secured lenders before we
can sell any of our oil or natural gas properties. In addition, we are limited
to making capital expenditures of not more than $12 million in any 12 month
period and not more than $18 million between July 1, 1999 and October 22, 2001,
the maturity date of the credit agreement. As of September 30, 2000, we had
recorded capital expenditures totaling approximately $10.9 million against this
$18 million limitation.

USES OF CAPITAL

During the period since our inception in August 1994 through April 1998 our
primary method of replacing our production and increasing our reserves was
through acquisitions. Since that time our primary method of replacing production
and enhancing our reserves has been through the development and exploitation of
our oil and natural gas properties. In either case, these activities require
significant capital investments. While our earnings before non-cash charges have
been positive since 1997, we have not been able to generate sufficient cash from
this internal source to fund the replacement of our reserves consumed by
production without relying on external sources of capital. Subject to attaining
the required lender approval, we expect to spend $13.7 million on discretionary
capital expenditures during our fiscal year ending June 30, 2001, for
exploitation, development and exploration projects, depending on the
availability of funds. During the three months ended September 30, 2000, we
recorded $3.9 million in capital expenditures. As of September 30, 2000 we are
contractually obligated to fund $4.2 million in capital expenditures through
June 2001. During the quarter ending December 31, 2000, we expect to incur costs
and expenses associated with certain organizational changes.

We continue to evaluate acquisition opportunities, however there are no
existing agreements regarding any acquisitions. An acquisition may require the
issuance of additional debt and or equity securities. There are no assurances
that we will be able to obtain additional financing, or that such financing, if
obtained, will be on terms favorable to us.

HEDGING ARRANGEMENTS AND LETTERS OF CREDIT

Some of our hedging arrangements contain a "cap" whereby we must pay the
counter-party if oil or natural gas prices exceed the specified price in the
contract. We are required to maintain letters of credit with our
counter-parties, and we may be required to provide additional letters of credit
if prices for oil and natural gas futures increase above the "cap" prices. The
amount of letters of credit required under the hedging arrangements is a
function of the market value of oil and natural gas prices and the volumes of
oil and natural gas subject to the hedging contract. As a result, the amount of
the letters of credit will fluctuate with the market prices of oil and natural
gas. These letters of credit are issued pursuant to our credit

Pg. 13
<PAGE> 14

agreement and as a result utilize some of our borrowing capacity, reducing our
remaining available funds under our credit agreement. We recently amended our
credit agreement to permit up to $12 million in letters of credit. As of
September 30, 2000, we have provided $6.2 million in letters of credit to
Enron, the counter-party to our hedge contracts containing "caps". In early
October, 2000, in response to a margin call by Enron, we increased the amount
of the letters of credit to approximately $9.3 million.

INFLATION

During the past several years, we have experienced moderate increases in
property acquisition and development costs. During the fiscal year ended June
30, 2000 we received higher commodity prices for the natural resources produced
from our properties. Oil and natural gas prices have increased during the three
months ended September 30, 2000. Our results of operations and cash flow have
been, and will continue to be, affected to a certain extent by the volatility
in oil and natural gas prices. Should we experience a significant increase in
oil and natural gas prices that is sustained over a prolonged period, we could
expect that there would also be a corresponding increase in oil and natural gas
finding and development costs, lease acquisition costs and operating expenses,
and reduced availability of equipment and crews.

CHANGES IN PRICES AND HEDGING ACTIVITIES

Annual average oil and natural gas prices have fluctuated significantly over
the last two years. The table below sets out our weighted average price per
barrel of oil and the weighted average price per Mcf of natural gas, the impact
of our hedging programs and the related NYMEX indices.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30
2000 1999
------ ------
<S> <C> <C>
Gas (per Mcf)
Price received at wellhead $ 4.54 $ 2.34
Effect of hedge contracts $(0.44) $(0.08)
Effective price received, including hedge contracts $ 4.10 $ 2.26

Average NYMEX Henry Hub $ 4.31 $ 2.60
Average basis differential including hedge contracts $(0.21) $(0.34)
Average basis differential excluding hedge contracts $ 0.23 $(0.26)

Oil (per barrel)
Price received at wellhead $30.12 $19.93
Effect of hedge contracts $(0.86) $(6.00)
Effective price received, including hedge contracts $29.26 $13.93

Average NYMEX Sweet Light Oil $31.57 $21.72
Average basis differential including hedge contracts $(2.31) $(7.79)
Average basis differential excluding hedge contracts $(1.45) $(1.79)
</TABLE>

The operator of a significant natural gas producing property in which we hold a
net profits interest had placed a fixed price contract for the period January 1
through September 30, 1999. The prices for this contract, when compared to
Henry Hub prices, were favorable during the three months ended March 31, 1999
but became unfavorable for the following six months. Largely as a result of
this fixed price contract, our average wellhead price was reduced by $0.24 per
Mcf and the average basis differential excluding hedge contracts was increased
by approximately $0.24 per Mcf during the three months ended September 30,
1999. This fixed price contract expired during October 1999.

Pg. 14
<PAGE> 15

We have a commodity price risk management or hedging strategy that is designed
to provide protection from low commodity prices while providing some
opportunity to enjoy the benefits of higher commodity prices. We have a series
of natural gas futures contracts with Bank of Montreal and with an affiliate of
Enron. This strategy is designed to provide a degree of protection from
negative shifts in natural gas prices as reported on the Henry Heb Nymex Index,
on approximately 73% of our expected natural gas production from reserves
currently classified as proved developed producing during the fiscal year
ending June 30, 2001. At the same time, we are able to participate completely
in upward movements in the Henry Heb Nymex Index to the extent of approximately
76% of our expected natural gas production from reserves currently classified
as proved developed producing for the fiscal year ending June 30, 2001.

Effective May 1, 1998 through October 31, 1999 we had a contract with Bank of
Montreal involving the hedging of a portion of our future natural gas
production involving floor and ceiling prices as set out in the table below.
The volumes presented in this table are divided equally over the months during
the period.

Volume Floor Ceiling
Period Beginning Period Ending (MMBtu) Price Price
---------------- ---------------- --------- ----- -------
January 1, 1999 October 31, 1999 3,608,333 $2.00 $2.70

Effective November 1, 1999 we unwound the ceiling price limitation on our
natural gas price hedging contract with Bank of Montreal at a cost of $3.3
million. The table below sets out the volume of natural gas that remains under
contract with the Bank of Montreal at a floor price of $2.00 per MMBtu. The
volumes set out in this table are divided equally over the months during the
period:

Volume
Period Beginning Period Ending (MMBtu)
---------------- ----------------- ---------
November 1, 1999 December 31, 1999 721,667
January 1, 2000 December 31, 2000 3,520,000
January 1, 2001 December 31, 2001 2,970,000
January 1, 2002 December 31, 2002 2,550,000
January 1, 2003 December 31, 2003 2,250,000

The table below sets out volume of natural gas hedged with a floor price of
$1.90 per MMBtu with Enron. The volumes presented in this table are divided
equally over the months during the period:

Volume
Period Beginning Period Ending (MMBtu)
---------------- ----------------- ---------
January 1, 1999 December 31, 1999 1,080,000
January 1, 2000 December 31, 2000 880,000
January 1, 2001 December 31, 2001 740,000
January 1, 2002 December 31, 2002 640,000
January 1, 2003 December 31, 2003 560,000

The table below sets out volume of natural gas hedged with a swap at $2.40 per
MMBtu with Enron. The volumes presented in this table are divided equally over
the months during the period:

Volume
Period Beginning Period Ending (MMBtu)
---------------- ----------------- ---------
January 1, 1999 December 31, 1999 2,710,000
January 1, 2000 December 31, 2000 2,200,000
January 1, 2001 December 31, 2001 1,850,000
January 1, 2002 December 31, 2002 1,600,000
January 1, 2003 December 31, 2003 1,400,000

Pg. 15
<PAGE> 16

The table below sets out volume of crude oil hedged with a swap with Enron. All
of these contracts have expired. The volumes presented in this table are
divided equally over the months during the period:

Volume
Period Beginning Period Ending (Barrels) Price per barrel
---------------- ------------------ --------- ----------------

March 1, 1999 August 31, 1999 60,000 $13.50
April 1, 1999 September 30, 1999 30,000 $14.35
April 1, 1999 September 30, 1999 30,000 $14.82

The table below sets out the volume of oil hedged with a collar with Enron
involving floor and ceiling prices as set out in the table below. The volumes
presented in this table are divided equally over the months during the period.

Volume Floor Ceiling
Period Beginning Period Ending (MMBtu) Price Price
---------------- ----------------- --------- ------ -------
July 1, 2000 December 31, 2000 30,000 $22.00 $28.63

As of September 30, 2000 the fair market value of our hedging contracts,
measured as the estimated cost we would incur to terminate the arrangements,
was $8.7 million. As of September 30, 2000 a 10% increase in oil and natural
gas prices would have resulted in an unfavorable change of approximately $2.1
million in the fair market value of our hedging contracts and a 10% decrease in
oil and natural gas prices would have resulted in a favorable change of
approximately $2.1 million in the fair market value of hedging contracts.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Item 3. "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Changes in Prices and Hedging Activities".

Pg. 16
<PAGE> 17

PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5. OTHER INFORMATION

THE OFFERING. On October 31, 2000 we closed an underwritten public offering of
10,000,000 shares of our common stock at a price of $7.00 per share to the
public. We received net proceeds of approximately $63.5 million after deducting
underwriting discounts and commissions ($0.35 per share or $3,500,000 in the
aggregate) and estimated offering expenses of $3,000,000.

We used the net proceeds as follows:

o approximately $52.5 million to purchase at a discount $75
million original principal amount of our 12 1/2% senior
notes; and

o to repay approximately $11 million of the debt outstanding
under our credit agreement, which as of October 26, 2000, was
approximately $14 million.

THE RECAPITALIZATION. Simultaneously with the closing of the public offering,
we completed a recapitalization which included: (a) a reverse stock split of
every 156 outstanding shares of our common stock into one share; (b) the
exchange of 9,600,000 outstanding shares of our Series A preferred stock for
212,500 shares of post reverse-split common stock; (c) the exchange of 2,173
outstanding shares of our Series C preferred stock and warrants exercisable for
340,153 shares of common stock for 120,000 shares of post reverse-split common
stock; (d) the exchange of the 1,593,918 remaining unexercised common stock
repricing rights and warrants exercisable for 655,000 shares of common stock
for 400,000 shares of post reverse-split common stock; and (e) the repurchase
of $75 million face value of our 12 1/2% senior notes for approximately $52.5
million. At our stockholders meeting on September 18, 2000, our stockholders
approved the recapitalization.

Upon completion of the public offering we have outstanding (i) approximately
$57.5 million of funded indebtedness, (ii) no shares of preferred stock, and
(iii) 11,250,000 shares of common stock. In addition, all of the dilutive
repricing rights have been terminated. Our common stock is now quoted on the
Nasdaq National Market under the symbol "DVXE."

MANAGEMENT TEAM. In connection with the offering and the recapitalization, we
have made changes to our management team to add to our engineering, geology and
geophysical personnel. We have also added seasoned senior oil and gas industry
executives with experience in building stockholder value and in the management
of exploration and development projects. Joseph T. Williams was appointed as a
director and chairman on October 6, 2000. Edward J. Munden resigned as Chairman
on the same day and will remain as director, President and Chief Executive
Officer. Jerry B. Davis and Robert L. Keiser joined the board as of October 26,
2000. Bruce I. Benn and Robert P. Lindsay resigned from the Board effective as
of October 31, 2000. On September 15, 2000, Ronald I. Benn resigned from the
position of Chief Financial Officer, and William W. Lesikar was appointed Chief
Financial Officer.

REPURCHASE OF OUR SENIOR NOTES. On October 31, 2000 we purchased $75 million
principal amount of our 12 1/2% senior notes, on a pro rata basis among
tendering holders, for approximately $52.5 million. As a result of the tender,
$50 million of the 12 1/2% senior notes remain outstanding. We purchased the
notes pursuant to a tender offer we commenced on September 1, 2000, as amended
on October 6, 2000. Holders of approximately $104.3 million principal amount of
notes tendered their notes pursuant to the offer. For each $1,000 principal
amount of notes validly tendered and accepted for payment pursuant to the
tender offer and with respect to which a consent had been duly delivered and
accepted before 5:00 p.m. New York City time on September 18, 2000, the consent
date, we paid the registered holders $700, which included

Pg. 17
<PAGE> 18

$680 for the tender of notes and $20 for the holder's consent to the proposed
amendments to the indenture governing the senior notes.

In connection with the tender offer, we also solicited the consent of the
holders of notes to two amendments to the indenture. One of the amendments
altered the restrictive covenant that had limited our incurrence of debt to
instead provide for a dollar for dollar increase in the permitted indebtedness
up to a maximum of $60 million, to the extent that the equity raised pursuant
to the offering exceeded $50 million, net of all costs related to issuance. The
other amendment provided that a "Change of Control" would not be deemed to
occur as a result of the recapitalization or the offering. This amendment
permitted us to complete the recapitalization and the offering without
triggering the right of each holder to require us to repurchase all or any part
of the holder's notes at a cash price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest and liquidated damages, if any, to
the payment date. We received the consents of the requisite number of holders
to approve each of the two amendments. As a result, we executed a supplement to
the indenture effecting the proposed amendment, which became operative on
October 31, 2000 when we completed the tender offer.

ANNUAL MEETING OF STOCKHOLDERS We held our 2000 Annual Meeting of Stockholders
on September 18, 2000, at which our stockholders approved:

(1) the election of three directors to hold office until the next
Annual Meeting of Stockholders or until their successors have been
duly qualified and elected,

(2) an amendment to our restated articles of incorporation to effect
at anytime before October 31, 2000, a one-for-156 reverse stock split,
to maintain the number of authorized shares of common stock at
100,000,000 and to increase the par value of the common stock from
$0.0015 to $0.234 per share,

(3) a plan of recapitalization involving the exchange of the 9,600,000
outstanding shares of our Series A preferred stock for 212,500 shares
of post reverse-split common stock; the exchange of the 2,173
outstanding shares of Series C preferred stock and warrants
exercisable for 340,153 shares of common stock for 120,000 shares of
post reverse-split common stock; and the exchange of the 1,593,918
remaining unexercised common stock repricing rights and warrants
exercisable for 655,000 shares of common stock for 400,000 shares of
post reverse-split common stock,

(4) an amendment to our restated certificate of incorporation to
change the name of the company from Queen Sand Resources, Inc. to DevX
Energy, Inc., and

(5) the appointment of Ernst & Young LLP as our independent public
accountants for the fiscal year ending June 30, 2001.

As of July 21, 2000, the record date for the meeting, 90,288,538 shares of
voting capital stock, comprised of 80,688,538 shares of common stock and
9,600,000 shares of Series A preferred stock, and 2,173 shares of Series C
preferred stock, were issued and outstanding.

Edward J. Munden was elected as a director and received 71,183,520 votes for
his election, with 5,722,536 votes withheld. Robert P. Lindsay was elected as a
director and received 71,213,270 votes for his election, with 5,692,786 votes
withheld. Bruce I. Benn was elected as a director and received 58,075,008 votes
for his election, with 18,831,048 votes withheld.

The adoption of the proposal to effect the plan of recapitalization was
approved with the holders of our common stock and Series A preferred voting
together as a class casting 49,601,540 votes in favor of approval, 10,020,303
votes against and 204,891 votes abstaining. All of the shares of our Series A
preferred stock and 1,921 shares of our Series C preferred stock were voted in
favor of the recapitalization.

Pg. 18
<PAGE> 19

The proposal to amend our restated certificate of incorporation to effect a
one-for-156 reverse stock split, to maintain the number of authorized shares of
common stock at 100,000,000 and to increase the par value of the common stock
from $0.0015 to $0.234 per share was approved with the holders of our common
stock and Series A preferred voting together as a class casting 70,869,595
votes in favor of approval, 6,035,861 votes against and 156,200 votes
abstaining. All of the shares of our Series A preferred stock and 1,921 shares
of our Series C preferred stock were voted in favor of the reverse stock split.

The adoption of an amendment to the Restated Certificate of Incorporation to
change the name of the company from Queen Sand Resources, Inc. to DevX Energy,
Inc. was approved with the holders of our common stock and Series A preferred
voting together as a class casting 70,869,595 votes in favor of approval,
5,724,794 votes against and 164,800 votes abstaining. All of the shares of our
Series A preferred stock were voted in favor of the name change amendment. An
amendment effecting the name change was filed with the Secretary of State of
the State of Delaware on September 19, 2000.

Ernst & Young LLP was ratified as our independent public accountants for the
fiscal year ended June 30, 2001 by the vote of our common stock and our Series
A preferred stock voting together as a class. They received 71,825,995 votes
for their ratification, 4,931,694 votes against and 303,967 votes abstaining.

Pg. 19
<PAGE> 20

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) EXHIBITS.

3.1 Restated Certificate of Incorporation of the Company, filed as Exhibit
4.5 to the Company's Registration Statement on Form S-3 (No.
333-47577) filed with the Securities and Exchange Commission on March
9, 1998, which Exhibit is incorporated herein by reference.

3.2 Certificate of Designation of Series C Convertible Preferred Stock of
the Company, filed as an Exhibit to the Company's Current Report on
Form 8-K dated December 24, 1997, which Exhibit is incorporated herein
by reference.

3.3 Form of Amendment to Amended and Restated Certificate of Incorporation
of the Company filed as Exhibit 3.3 to the Company's Registration
Statement on Form S-2 (No. 333-41992) with the Securities and Exchange
Commission on October 6, 2000 which Exhibit is incorporated herein by
reference.

3.4 Certificate of Amendment to Amended and Restated Certificate of
Incorporation of the Company, filed as an Exhibit to the Company's
Registration Statement on Form S-2 (No. 333-41992) filed with the
Securities and Exchange Commission on October 6, 2000, which Exhibit
is incorporated herein by reference.

3.5 Amended and Restated Bylaws of the Company, filed as an Exhibit to the
Company's Current Report on Form 8-K dated March 27, 1997, which
Exhibit is incorporated herein by reference.

4.1 Stockholders' Agreement dated as of May 6, 1997, among the Company,
Bruce I. Benn, Edward J. Munden, Ronald I. Benn, Robert P. Lindsay,
EIBOC Investments Ltd. and Joint Energy Development Investments
Limited Partnership ("JEDI"), filed as an Exhibit to the Company's
Current Report on Form 8-K dated May 6, 1997, which Exhibit is
incorporated herein by reference.

4.2 Indenture, dated July 1,1998,in regard to 12 1/2 % Senior Notes due
2008 by and among the Company and certain of its subsidiaries and
Harris Trust and Savings Bank, as Trustee, filed as an Exhibit to the
Company's Current Report on Form 8-K dated July 8, 1998, which Exhibit
is incorporated herein by reference.

4.3 Form of 12% Notes due July 15, 2001, filed as an Exhibit to the
Company's Registration Statement on Form 10-SB filed with the
Securities and Exchange Commission on August 12, 1996, which Exhibit
is incorporated herein by reference.

4.4 Form of Common Stock Purchase Warrant issued to certain investors
effective December 24, 1997, filed as an Exhibit to the Company's
Current Report on Form 8-K dated December 24, 1997, which Exhibit is
incorporated herein by reference.

4.5 Form of Common Stock Purchase Warrant issued to certain investors
effective July 8, 1998, filed as an Exhibit to the Company's Current
Report on Form 8-K dated July 8, 1998, which Exhibit is incorporated
herein by reference.

4.6 Registration Rights Agreement among the Company and certain
institutional investors named therein, dated December 24, 1997, filed
as an Exhibit to the Company's Current Report on Form 8-K dated
December 24, 1997, which Exhibit is incorporated herein by reference.

4.7 Registration Rights Agreement by and between the Company and JEDI
dated May 6, 1997, filed as an Exhibit to the Company's Current Report
on Form 8-K dated May 6, 1997, which Exhibit is incorporated herein by
reference.

Pg. 20
<PAGE> 21

4.8 Registration Rights Agreement dated as of July 8, 1998 among the
Company and the buyers signatory thereto, filed as an Exhibit to the
Company's Current Report on Form 8-K dated July 8, 1998, which Exhibit
is incorporated herein by reference.

4.9 Registration Rights Agreement dated November 10, 1998, among the
Company and the buyers signatory thereto, filed as an Exhibit to the
Company's Current Report on Form 8-K dated November 24, 1998, which
Exhibit is incorporated herein by reference.

4.10 Form of Common Stock Purchase Warrant issued to certain investors as
of November 10, 1998, filed as an Exhibit to the Company's Current
Report on Form 8-K dated November 24, 1998,which Exhibit is
incorporated herein by reference.

4.11 Form of Common Stock Purchase Warrant issued to Northern Tier Asset
Management, Inc. issued by the Company on April 9, 1999, and filed as
an Exhibit to the Company's Registration Statement on Form S-3 (No.
333-78001) which Exhibit is incorporated by reference.

4.12 Registration Rights Agreement dated as of April 9, 1999 between the
Company and Northern Tier Asset Management, Inc. and filed as an
Exhibit to the Company's Registration Statement on Form S-3 (No.
333-78001) which Exhibit is incorporated by reference.

4.13 Settlement Agreement dated as of July 17, 2000 among the Company and
the stockholders named therein filed as an Exhibit to the Company's
Registration Statement on Form S-2 (No. 333-41992) filed with the
Securities and Exchange Commission on October 6, 2000, which Exhibit
is incorporated herein by reference.

4.14 Participation Agreement dated as of July 17, 2000 among the Company
and the holders of its 12 1/2% senior notes named therein, filed as an
Exhibit to the Company's Registration Statement on Form S-2 (No.
333-41992) filed with the Securities and Exchange Commission on
October 6, 2000, which Exhibit is incorporated herein by reference.

4.15 Amendment to the Participation Agreement, dated October 4, 2000, among
the Company and certain holders of its 12 1/2% senior notes named
therein filed as an Exhibit to the Company's Registration Statement on
Form S-2 (No. 333-41992) filed with the Securities and Exchange
Commission on October 6, 2000, which Exhibit is incorporated herein by
reference.

10.1 Purchase and Sale Agreement between Eli Rebich and Southern
Exploration Company, a Texas corporation, and DevX Energy, Inc.
(f.k.a. Queen Sand Resources, Inc.), a Nevada corporation, dated April
10, 1996, filed as an Exhibit to the Company's Registration Statement
on Form 10-SB filed with the Securities and Exchange Commission on
August 12, 1996, which Exhibit is incorporated herein by reference.

10.2 Purchase and Sale Agreement dated March 19, 1998 among the Morgan
commingled pension funds and DevX Energy, Inc. (f.k.a. Queen Sand
Resources, Inc.), a Nevada corporation, filed as an Exhibit to the
Company's Current Report on Form 8-K dated March 19, 1998, which
Exhibit is incorporated herein by reference.

10.3 Securities Purchase Agreement dated as of March 27, 1997 between Joint
Energy Development Investments LP and the Company, filed as an Exhibit
to the Company's Current Report on Form 8-K dated March 27, 1997,
which Exhibit is incorporated herein by reference.

10.4 Securities Purchase Agreement among the Company and certain
institutional investors named therein, dated December 22, 1997, filed
as an Exhibit to the Company's Current Report on Form 8-K dated
December 24, 1997, which Exhibit is incorporated herein by reference.

Pg. 21
<PAGE> 22

10.5 1997 Incentive Equity Plan filed as an Exhibit to the Company's
Registration Statement on Form S-4 filed with the Securities and
Exchange Commission on August 13, 1998, (No. 333-61403) which Exhibit
is incorporated herein by reference.

10.6 Employment Agreement dated December 15, 1997 between the Company and
Robert P. Lindsay, filed as an Exhibit to the Company's Registration
Statement on Form S-4 filed with the Securities and Exchange
Commission on August 13, 1998 (No. 333-61403) which Exhibit is
incorporated herein by reference.

10.7 Employment Agreement dated December 15, 1997 among the Company, Queen
Sand Resources (Canada)Inc. and Bruce I. Benn, filed as an Exhibit to
the Company's Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on August 13, 1998 (No. 333-61403)
which Exhibit is incorporated herein by reference.

10.9 Employment Agreement dated December 15, 1997 among the Company, Queen
Sand Resources (Canada) Inc. and Edward J. Munden, filed as an Exhibit
to the Company's Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on August 13, 1998 (No. 333-61403)
which Exhibit is incorporated herein by reference.

10.10 Directors' Non-Qualified Stock Option Plan filed as Appendix A to the
Company's Definitive Proxy Statement on Schedule 14A dated October 23,
1998, which Exhibit is incorporated herein by reference.

10.11 Amended and Restated Securities Purchase Agreement dated as of July 8,
1998 among the Company and the buyers signatory thereto, filed as an
Exhibit to the Company's Current Report on Form 8-K dated July 8,
1998, as amended by the Current Report on Form 8-K/A-1 dated July 8,
1998, which Exhibit is incorporated herein by reference.

10.12 Securities Purchase Agreement dated as of November 10, 1998, among the
Company and the buyers signatory thereto, filed as an Exhibit to the
Company's Current Report on Form 8-K dated November 24, 1998, which
Exhibit is incorporated herein by reference.

10.13 Amended and Restated Credit Agreement among the Company, DevX Energy,
Inc. (f.k.a. Queen Sand Resources, Inc.), a Nevada corporation, Ableco
Finance LLC, as Collateral Agent, and the lenders signatory thereto,
effective as of October 22, 1999, filed as an Exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1999, which Exhibit is incorporated herein by reference.

10.14 Second Amended And Restated Guaranty Agreement dated as of October 22,
1999 by DevX Energy, Inc. (f.k.a. Queen Sand Resources, Inc.) as
Guarantor in favor of Ableco Finance LLC, as Collateral Agent for the
lender group and the lenders signatory thereto, filed as an Exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999, which Exhibit is incorporated herein by reference.

10.15 Second Amended And Restated Guaranty Agreement dated as of October 22,
1999 by Queen Sand Operating Co., as Guarantor, in favor of Ableco
Finance LLC, as Collateral Agent for the lender group, and the lenders
signatory thereto, filed as an Exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1999, which
Exhibit is incorporated herein by reference.

10.16 Second Amended And Restated Guaranty Agreement dated as of October 22,
1999 by Corrida Resources, Inc. as Guarantor, in favor of Ableco
Finance LLC, as Collateral Agent for the lender group, and the lenders
signatory thereto, filed as an Exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1999, which
Exhibit is incorporated herein by reference.

Pg. 22
<PAGE> 23

10.17 Security Agreement dated as of October 22, 1999, by and among the
Company, DevX Energy, Inc. (f.k.a. Queen Sand Resources,
Inc.)(Nevada), Queen Sand Operating Co., Corrida Resources, Inc. and
Ableco Finance LLC, as collateral agent for the lender group, and the
lenders signatory thereto, filed as an Exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1999, which Exhibit is incorporated herein by reference.

10.18 Second Amended and Restated Pledge and Security Agreement dated as of
October 22, 1999, by DevX Energy, Inc. (f.k.a. Queen Sand Resources,
Inc.), a Nevada corporation in favor of Ableco Finance LLC, as
Collateral Agent for the lender group, and the lenders signatory
thereto, filed as an Exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999, which Exhibit is
incorporated herein by reference.

10.19 Second Amended and Restated Pledge and Security Agreement dated as of
October 22, 1999, by DevX Energy, Inc. (f.k.a. Queen Sand Resources,
Inc.), a Delaware corporation, in favor of Ableco Finance LLC, as
Collateral Agent for the lender group, and the lenders signatory
thereto, filed as an Exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999, which Exhibit is
incorporated herein by reference.

10.20 Amendment No.1 to Credit Agreement dated as of May ___, 2000 among the
Company, DevX Energy, Inc. (f.k.a. Queen Sand Resources, Inc.), a
Nevada corporation, Ableco Finance LLC, as Collateral Agent, and the
lenders signatory thereto, filed as an Exhibit to the Company's
Registration Statement on Form S-2 (no. 333-41992) with the Securities
and Exchange Commission on July 21, 2000, which Exhibit is hereby
incorporated by reference.

10.21 Amendment No.2 to Credit Agreement dated as of June 30, 2000 among the
Company, DevX Energy, Inc. (f.k.a. Queen Sand Resources, Inc.), a
Nevada corporation, Ableco Finance LLC, as Collateral Agent, and the
lenders signatory thereto, filed as an Exhibit to the Company's
Registration Statement on Form S-2 (No. 333-41992) with the Securities
and Exchange Commission on July 21, 2000, which Exhibit is hereby
incorporated by reference.

10.22 Employment Agreement dated as of October 6, 2000 between the Company
and Joseph T. Williams filed as an Exhibit to the Company's
Registration Statement on Form S-2 (No. 333-41992) filed with the
Securities and Exchange Commission on October 6, 2000, which Exhibit
is incorporated herein by reference.

10.23 Release Agreement dated September 15, 2000 between the Company and
Ronald I. Benn, filed as an Exhibit to the Company's Registration
Statement on Form S-2 (No. 333-41992) filed with the Securities and
Exchange Commission on October 6, 2000, which Exhibit is incorporated
herein by reference.

10.24 Form of Indemnification Agreement to be entered into among DevX
Energy, Inc. and selected directors of DevX Energy, Inc. filed as an
Exhibit to the Company's Registration Statement on Form S-2 (No.
333-41992) filed with the Securities and Exchange Commission on
October 6, 2000, which Exhibit is incorporated herein by reference.

10.25 Amendment Number 3 to Amended and Restated Credit Agreement, dated
September 20, 2000, among DevX Energy, Inc. (f.k.a. Queen Sand
Resources, Inc.), a Delaware corporation, DevX Energy, Inc. (f.k.a.
Queen Sand Resources, Inc.), a Nevada corporation, Foothill Capital
Corporation, as administrative agent for the lending group, Ableco
Finance LLC, as collateral agent for the lending group, and each of
the lenders signatory thereto, filed as an Exhibit to the Company's
Registration Statement on Form S-2 (No. 333-41992) filed with the
Securities and Exchange Commission on October 6, 2000, which Exhibit
is incorporated herein by reference.

10.26 Amendment Number 4 to the Amended and Restated Credit Agreement, dated
October 24, 2000, among DevX Energy, Inc. (f.k.a. Queen Sand
Resources, Inc.), a Delaware corporation, DevX Energy, Inc. (f.k.a.
Queen Sand Resources, Inc.), a Nevada corporation, Foothill Capital

Pg. 23
<PAGE> 24

Corporation, as administrative agent for the lending group, Ableco
Finance LLC, as collateral agent for the lending group, and each of
the lenders signatory thereto.*

27.1 Financial Data Schedule.*

* Filed herewith.

(b) REPORTS ON FORM 8-K.

Current Report on Form 8-K dated September 18, 2000, filed September
21, 2000, pursuant to Item 5 reporting the results of the 2000 annual
meeting of stockholders and a change in management.

Pg. 24
<PAGE> 25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized this 14th day of November, 2000.

<TABLE>

<S> <C>
DEVX ENERGY, INC. (DELAWARE)

By: /s/ Edward J. Munden
---------------------------------------
Edward. J. Munden
President and Chief Executive Officer

By: /s/ William W. Lesikar
---------------------------------------
William W. Lesikar
Chief Financial Officer

DEVX ENERGY, INC. (NEVADA)

By: /s/ Edward J. Munden
---------------------------------------
Edward. J. Munden
President and Chief Executive Officer

By: /s/ William W. Lesikar
---------------------------------------
William W. Lesikar
Vice President (Principal Financial
Officer)

DEVX OPERATING COMPANY

By: /s/ Edward J. Munden
---------------------------------------
Edward. J. Munden
President and Chief Executive Officer

By: /s/ William W. Lesikar
---------------------------------------
William W. Lesikar
Vice President (Principal Financial
Officer)

CORRIDA RESOURCES, INC.

By: /s/ Edward J. Munden
---------------------------------------
Edward. J. Munden
President and Chief Executive Officer

By: /s/ William W. Lesikar
---------------------------------------
William W. Lesikar
Treasurer (Principal Financial Officer)
</TABLE>

Pg. 25

<PAGE> 26

EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------

<S> <C>
3.1 Restated Certificate of Incorporation of the Company, filed as Exhibit
4.5 to the Company's Registration Statement on Form S-3 (No.
333-47577) filed with the Securities and Exchange Commission on March
9, 1998, which Exhibit is incorporated herein by reference.

3.5 Amended and Restated Bylaws of the Company, filed as an Exhibit to the
Company's Current Report on Form 8-K dated March 27, 1997, which
Exhibit is incorporated herein by reference.

<PAGE> 27

<TABLE>
<S> <C>
4.8 Registration Rights Agreement dated as of July 8, 1998 among the
Company and the buyers signatory thereto, filed as an Exhibit to the
Company's Current Report on Form 8-K dated July 8, 1998, which Exhibit
is incorporated herein by reference.

4.15 Amendment to the Participation Agreement, dated October 4, 2000, among
the Company and certain holders of its 12 1/2 % senior notes named
therein filed as an Exhibit to the Company's Registration Statement on
Form S-2 (No. 333-41992) filed with the Securities and Exchange
Commission on October 6, 2000, which Exhibit is incorporated herein by
reference.

<PAGE> 28

<TABLE>
<S> <C>
10.5 1997 Incentive Equity Plan filed as an Exhibit to the Company's
Registration Statement on Form S-4 filed with the Securities and
Exchange Commission on August 13, 1998, (No. 333-61403) which Exhibit
is incorporated herein by reference.

<PAGE> 29

<TABLE>
<S> <C>
10.17 Security Agreement dated as of October 22, 1999, by and among the
Company, DevX Energy, Inc. (f.k.a. Queen Sand Resources,
Inc.)(Nevada), Queen Sand Operating Co., Corrida Resources, Inc. and
Ableco Finance LLC, as collateral agent for the lender group, and the
lenders signatory thereto, filed as an Exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1999, which Exhibit is incorporated herein by reference.

10.20 Amendment No.1 to Credit Agreement dated as of May ___, 2000 among the
Company, DevX Energy, Inc. (f.k.a. Queen Sand Resources, Inc.), a
Nevada corporation, Ableco Finance LLC, as Collateral Agent, and the
lenders signatory thereto, filed as an Exhibit to the Company's
Registration Statement on Form S-2 (No. 333-41992) with the Securities
and Exchange Commission on July 21, 2000, which Exhibit is hereby
incorporated by reference.

10.21 Amendment No.2 to Credit Agreement dated as of June 30, 2000 among the
Company, DevX Energy, Inc. (f.k.a. Queen Sand Resources, Inc.), a
Nevada corporation, Ableco Finance LLC, as Collateral Agent, and the
lenders signatory thereto, filed as an Exhibit to the Company's
Registration Statement on Form S-2 (no. 333-41992) with the Securities
and Exchange Commission on July 21, 2000, which Exhibit is hereby
incorporated by reference.

<PAGE> 30

Corporation, as administrative agent for the lending group, Ableco
Finance LLC, as collateral agent for the lending group, and each of
the lenders signatory thereto.*

27.1 Financial Data Schedule.*

* Filed herewith.